Mr. Mitchell Scott reports

THE VERY GOOD FOOD COMPANY COMPLETES ACQUISITION OF THE CULTURED NUT

The Very Good Food Company Inc. has completed the acquisition of The Cultured Nut Inc., a highly popular artisan vegan cheese producer on the West Coast of Canada, with current sales distribution in several on-line and grocery retailers, including select Whole Foods stores.

Cultured Nut is a plant-based cheese company with multiple innovative products in the market, including block-style cheeses, cream cheese and a plant-based butter, along with numerous products in development. Very Good Food intends to rebrand Cultured Nut's product line under a new brand called The Very Good Cheese Company, which is expected to launch in Q2 2021 through Very Good Food's e-commerce and wholesale distribution networks.

Cultured Nut's products current average wholesale price is $4 per unit and Very Good Food intends to scale Cultured Nut's existing production facility to over 100,000 units per month in 2021, with plans to scale production further in 2022. To ensure a successful business integration, the founders of Cultured Nut and certain other key employees have entered into employment agreements with Very Good Food and the transaction structure includes conditional payments based on the achievement of production and product innovation milestones.

The dairy alternatives market, including the plant-based and vegan sector, is expected to grow at a CAGR (compound annual growth rate) of 11.2 per cent from 2020 to 2027 to reach $44.9-billion (U.S.) by 2027. With the entire plant-based food industry growing at a rapid pace, the acquisition of Cultured Nut is very timely and is an excellent complement to the company's existing product categories.

Mitchell Scott, chief executive officer of Very Good Food, commented: "The acquisition of Cultured Nut allows [Very Good Food] to efficiently enter into the dairy alternatives space. This is a significant milestone in the realization of our long-term strategy of owning several brands under the banner of The Very Good Food Company in all major food categories, providing consumers fun, innovative and healthier plant-based alternatives to everyday animal-based products."

Very Good Food completed the acquisition pursuant to a share purchase agreement with the shareholders of Cultured Nut for an aggregate purchase price of $3-million, comprising an equity payment of $1-million consisting of 139,676 Very Good Food common shares at a deemed price of approximately $7.15 per share and a cash portion of $2-million, of which $1-million is contingent on the successful achievement of certain milestones related to the integration of Cultured Nut's business over a 12-month period and $75,000 will serve as a holdback for indemnity purposes until Aug. 31, 2021.

About The Very Good Food Company Inc.

Very Good Food is an emerging plant-based food technology company. The company's mission is to use progressive food technology to create plant-based meat and other food products that are delicious while maintaining a wholesome nutritional profile. To date, the company has developed a core product line under The Very Good Butchers brand.

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