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TRUBAR Inc. — Management Reports 2025
May 28, 2025
47671_rns_2025-05-28_2c0e5f07-1026-4bcf-a271-03a809fccda9.pdf
Management Reports
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TRUBAR INC.
(FORMERLY, SIMPLY BETTER BRANDS CORP.)
Management’s Discussion and Analysis
March 31, 2025
(Expressed in United States dollars unless otherwise specified)
Table of Contents
INTRODUCTION ... 3
FORWARD LOOKING STATEMENTS ... 3
COMPANY OVERVIEW ... 4
FACTORS AFFECTING THE COMPANY'S PERFORMANCE ... 5
CORPORATE DEVELOPMENTS ... 7
RESULTS OF OPERATIONS ... 8
SUMMARY OF QUARTERLY RESULTS ... 13
LIQUIDITY AND CAPITAL RESOURCES ... 14
OUTSTANDING SHARE DATA ... 16
OFF-BALANCE SHEET ARRANGEMENTS ... 17
TRANSACTIONS BETWEEN RELATED PARTIES ... 17
CRITICAL ACCOUNTING ESTIMATES ... 17
CHANGES IN ACCOUNTING POLICIES INCLUDING INITIAL ADOPTION ... 18
FINANCIAL INSTRUMENTS AND OTHER INSTRUMENTS ... 18
DISCLOSURE CONTROLS AND PROCEDURES ... 18
REVIEWED BY MANAGEMENT ... 19
RISKS AND UNCERTAINTIES ... 19
ADDITIONAL INFORMATION ... 19
TRUBAR Inc. (formerly, Simply Better Brands Corp.)
Management's Discussion and Analysis
For the three months ended March 31, 2025
(Expressed in United States Dollars unless otherwise specified)
INTRODUCTION
This Management's Discussion and Analysis ("MD&A") is intended to help the reader understand TRUBAR Inc. (formerly, Simply Better Brands Corp.) ("we", "our" or the "Company"), our operations, financial performance, and current and future business environment. This MD&A is intended to supplement and complement the consolidated interim financial statements and notes thereto prepared in accordance with IFRS Accounting Standards for the three months ended March 31, 2025 (the "Current Period"). This MD&A should be read in conjunction with the unaudited condensed consolidated interim financial statements of the Company and the notes relating thereto, for the Current Period, which are prepared in accordance with IFRS Accounting Standards which are available on the SEDAR+ website at www.sedarplus.com.
This MD&A is prepared as of May 28, 2025. All dollar amounts in this MD&A are expressed in thousands of United States dollars ("$", "US$" or "US dollar"), unless otherwise specified. Canadian dollars are referred to as "CA$".
Additional information relating to the Company is available on SEDAR+ at www.sedarplus.com.
FORWARD LOOKING STATEMENTS
Certain information provided in this MD&A constitutes forward-looking statements or information (collectively, "forward-looking statements"). Forward-looking statements are typically identified by words such as "may", "will", "should", "could", "anticipate", "expect", "project", "estimate", "forecast", "plan", "intend", "target", "believe" and similar words suggesting future outcomes or statements regarding an outlook. Although these forward-looking statements are based on assumptions the Company considers to be reasonable based on the information available on the date such statements are made, such statements are not guarantees of future performance and readers are cautioned against placing undue reliance on forward-looking statements. By their nature, these statements involve a variety of assumptions, known and unknown risks and uncertainties, and other factors which may cause actual results, levels of activity, and achievements to differ materially from those expressed or implied by such statements. The forward-looking statements contained in this MD&A are based on certain assumptions and analysis by management of the Company ("Management") in light of its experience and perception of historical trends, current conditions and expected future development and other factors that it believes are appropriate. The material factors and assumptions used to develop the forward-looking statements herein include, but are not limited to, the following: (i) the regulatory climate in which the Company operates; (ii) the continued sales success of the Company's products; (iii) the continued success of sales and marketing activities; (iv) there will be no significant delays in the development and commercialization of the Company's products; (v) there will be no significant reduction in the availability of qualified and cost-effective human resources; (vi) new products will continue to be added to the Company's portfolio; (vii) demand for holistic wellness products will continue to grow in the foreseeable future; (viii) there will be no significant barriers to the acceptance of the Company's products in the market; (ix) the Company will be able to maintain compliance with applicable contractual and regulatory obligations and requirements; (x) there will be adequate liquidity available to the Company to carry out its operations; and (xi) products do not develop that would render the Company's current and future product offerings undesirable and the Company is otherwise able to minimize the impact of competition and keep pace with changing consumer preferences; and (xii) the Company will be able to successfully manage and integrate acquisitions, if any.
The Company's forward-looking statements are subject to risks and uncertainties pertaining to, among other things, the adverse impact of the ongoing tariff uncertainty to our operations, our supply chain, our distribution chain, and to the broader market for our products, revenue fluctuations, nature of government regulations (both domestic and foreign), economic conditions, loss of key customers, retention and availability of executive talent, competing products, the effectiveness of e-commerce marketing strategies, loss of proprietary information, product acceptance, internet and system infrastructure functionality, information technology security, cash available to fund operations, availability of capital and, international and political considerations, the successful integration of acquired businesses, if any, as well as the risks and uncertainties discussed under the heading "Risks and Uncertainties" in this MD&A. The impact of any one risk, uncertainty, or factor on a particular forward-looking
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TRUBAR Inc. (formerly, Simply Better Brands Corp.)
Management's Discussion and Analysis
For the three months ended March 31, 2025
(Expressed in United States Dollars unless otherwise specified)
statement is not determinable with certainty as these are interdependent, and the Company's future course of action depends on Management's assessment of all information available at the relevant time. Except to the extent required by law, the Company assumes no obligation to publicly update or revise any forward-looking statements made in this MD&A, whether as a result of new information, future events, or otherwise. All subsequent forward-looking statements, whether written or oral, attributable to the Company or persons acting on the Company's behalf, are expressly qualified in their entirety by these cautionary statements.
NON-IFRS FINANCIAL MEASURES
This MD&A makes reference to certain non-IFRS measures and ratios, hereafter, referred to as "non-IFRS measures". These measures are not recognized measures under IFRS, and do not have a standardized meaning prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other companies. Rather, these measures are provided as additional information to complement those IFRS measures by providing further understanding of the results of operations from management's perspective. Accordingly, these measures should not be considered in isolation nor as a substitute for analysis of the financial information reported under IFRS.
The Company uses non-IFRS measures including "EBITDA" and "Adjusted EBITDA". Management uses these non-IFRS measures to facilitate operating performance comparisons from period to period, to prepare annual operating budgets and forecasts and to determine components of management compensation. As required by Canadian securities laws, the Company reconciles these non-IFRS measures to the most comparable IFRS measures in this MD&A. For definitions and reconciliation of these non-IFRS measures to the relevant reported measures, see "Earnings before Interest, Taxes, Depreciation, and Amortization ("EBITDA") and Adjusted EBITDA (Non-IFRS Measures)".
COMPANY OVERVIEW
The Company was incorporated under the Business Corporations Act (British Columbia) on March 19, 2018 and changed its name from AF1 Capital Corp. to PureK Holdings Corp. On December 8, 2020 and from PureK Holdings Corp. to Simply Better Brands Corp. on May 3, 2021. Subsequent to the reporting period, on May 21, 2025, the Company changed its name from "Simply Better Brands Corp." to "TRUBAR Inc.".
The Company's common shares (the "Common Shares") are listed on the TSX Venture Exchange (the "Exchange" or "TSXV").
In connection with the name changes, on May 21, 2025, the Company's Common Shares commenced trading on the TSXV under the symbol "TRBR". Prior to May 21, 2025, the Company's Common Shares traded on the TSXV under the symbol "SBBC". Prior to May 3, 2021, the Company's Common Shares traded on the TSXV under the symbol "PKAN".
The Company is an international consumer products company with diversified assets in the emerging plant-based and holistic wellness consumer product categories. The Company focuses on high-growth consumer product categories including protein bars and skin care. The head office of the Company is 95 Wellington St. West, Suite 1400, Toronto, Ontario, M5J 2N7 and the registered office of the Company is 1800 - 510 West Georgia Street, Vancouver, BC, V6B 0M3 Canada.
The Company offers a selection of plant-based TRUBAR protein bars for health-conscious consumers under its Tru Brands, Inc. subsidiary. The TRUBAR™ line of nutritious, dairy-free, soy-free, non-GMO, gluten-free bars are sold across North America by a growing list of major retailers in the club, convenience and grocery channels including Costco, BJ's Wholesale and Whole Foods as well as Loblaws, Sobey's and Shoppers Drug Mart in Canada. TRUBAR products are also offered through Amazon and other online sites.
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TRUBAR Inc. (formerly, Simply Better Brands Corp.)
Management's Discussion and Analysis
For the three months ended March 31, 2025
(Expressed in United States Dollars unless otherwise specified)
The Company offers high quality skin care products to consumers through its No B.S. brand. No B.S. Life, LLC ("No B.S.") was founded to provide consumers a clean and environmentally friendly alternative to the excesses of the beauty industry.
The Company has followed an operating model that efficiently generates sales while maintaining tight control over its expenses. The Company has focused on developing key strategic relationships with its vendors to produce its products. The Company has strategic partners in fulfillment, marketing, and customer service that enable the Company to scale its business without significant need for capital investment.
FACTORS AFFECTING THE COMPANY'S PERFORMANCE
The Company's performance and future success depends on a number of factors. These factors are subject to several inherent risks and challenges, some of which are discussed below under Risk and Uncertainties.
Financial Reporting and Disclosure during Economic Uncertainty
The global financial climate and geopolitical instability are affecting current economic conditions and increasing economic uncertainty, which may impact the Company's operating performance, financial position and the Company's ability to raise funds at this time.
Branding
The Company believes that its brand image and awareness is built around consumer trust with a focus on quality. Maintaining and enhancing its brand image and increasing brand awareness in its current markets and in new markets where the Company has limited brand recognition is critical to its continued success.
Maintaining and enhancing the Company's brand image and increasing brand awareness may require the Company to make investments in areas such as marketing, product development, brand development, employee training and public relations, and may require the Company to incur other costs associated with continuing to expand e-commerce sales. These investments may be substantial, and the Company's efforts may not always fully achieve the desired result. The maintenance and enhancement of the Company's brand in any of its key markets is the Company's ongoing focus as lack of branding might materially and adversely affect the Company's business, results of operations or financial condition.
Product Innovation and Planning
The Company believes that product innovation is integral to its success. It continues to focus on innovation as it is a key pillar of growth. The Company's business is subject to changing consumer trends and preferences. The success of new product offerings depends upon a number of factors, including the Company's ability to: (i) accurately anticipate customer needs; (ii) develop new products that meet these needs; (iii) successfully commercialize new products in a timely manner; (iv) price products competitively; (v) deliver products in sufficient volumes within reasonable time; and (vi) differentiate product offerings from competitors.
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TRUBAR Inc. (formerly, Simply Better Brands Corp.)
Management's Discussion and Analysis
For the three months ended March 31, 2025
(Expressed in United States Dollars unless otherwise specified)
Management and Growth of E-Commerce Sales
Management and growth of the Company's e-commerce sales are an essential pillar to growth. The usability of and client experience is critical to the success and growth of its e-commerce sales. Any extended software disruption or failure to provide an attractive, effective, reliable, user-friendly e-commerce platform that offers a wide assortment of merchandise with rapid delivery options and that continually meets the changing expectations of online customers could place the Company at a competitive disadvantage. It could result in the loss of revenue or harm the Company's reputation with customers and have a material adverse effect on business. The Company also depends on third-party service providers for its e-commerce platform and any service disruption on their part could affect customers' ability to access the Company's website resulting in loss of revenue or harm to reputation.
The success of the Company's e-commerce sales depends on the Company's ability to successfully manage the costs, difficulties, and competitive pressures associated with shipping, inventory management, distribution, banking, credit card processing, and compliance with governing statutes, laws, regulations and regulatory policies in the jurisdictions to which products are shipped, including laws governing the operating and marketing of e-commerce websites, as well as the collection, storage and use of information on consumers interacting with these websites. The Company's IT efforts are directed towards expanding and updating its e-commerce site commensurately with competitors, managing shipping and successfully responding to the risks inherent to e-commerce. Without these activities the Company's financial position and results of operations may be negatively impacted.
Furthermore, if the Company is unable to successfully capitalize on digital marketing channels to drive client acquisition and retention, including search engine optimization, email marketing, improved product descriptions, data driven category naming, and the leveraging of social media, the Company's financial position and results of operations may be negatively impacted. Periodic changes to search engine algorithms, which retrieve data from search indices and deliver ranked search results, produce changes in search engine results pages (SERPs). Any changes to these algorithms and therefore search engine results pages could reduce visibility of, and traffic on, the Company's e-commerce website and negatively impact the Company's financial position and results of operations. The Company continues to improve its IT systems and digital marketing capabilities in order to minimize these risks.
Competition
The market for its consumer wellness products is highly competitive. The competition consists of publicly and privately-owned companies, which tend to be highly fragmented in terms of geographic market coverage, vertical integration and products offered. With the Company's brand status and innovative products, Management believes the Company is well-positioned to capitalize on favorable long-term trends in the consumer wellness products segment.
Growth Strategies
The Company has a successful history of growing revenue. It has a growth strategy aimed at meeting or exceeding industry growth rates. The Company's future depends, in part, on Management's ability to implement its growth strategy including (i) product innovations; (ii) management and growth of e-commerce sales; and (iii) growth in retail, wholesale and distributor partnerships and (iv) acquisitions of other brands related to its growth strategy. The ability of the Company to implement this growth strategy depends on, among other things, its ability to develop new products that appeal to consumers, maintain and expand brand loyalty, brand recognition, improve competitive position, and successfully enter new geographic areas and segments as well as the ability to successfully navigate legislative and regulatory uncertainties. See "Risks and Uncertainties".
Regulation
The Company is subject to the local, provincial, state, and federal laws in the jurisdictions in which it operates. Outside of the United States, the Company's products may be subject to tariffs, treaties, and various trade agreements as well as laws affecting the importation of consumer goods. Management believes the Company has
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TRUBAR Inc. (formerly, Simply Better Brands Corp.)
Management's Discussion and Analysis
For the three months ended March 31, 2025
(Expressed in United States Dollars unless otherwise specified)
relatively low exposure to tariffs as products are manufactured in the United States and over 95% of sales are generated in the United States. The Company is seeking alternative suppliers of ingredients that are sourced from outside of the United States.
CORPORATE DEVELOPMENTS
Business Developments during the Current Period
On January 15, 2025, the Company announced the nationwide rollout of TRUBAR™ in select Sam's Club warehouse stores across the U.S. This launch builds on the brand's successful online presence at SamsClub.com and further strengthens its North American distribution footprint with key retail partners. Gopuff E-Commerce Expansion: On January 21, 2025, the Company announced the launch of TRUBAR™ on Gopuff, the leading instant commerce platform with a presence in major U.S. markets. This partnership enhances TRUBAR™'s reach through Gopuff's micro-fulfillment centers and omnichannel retail locations across the U.S.
On January 23, 2025 the Company announced that it has qualified to trade on the OTCQX® Best Market under the symbol "SBBCF", effective immediately. This upgrade represents a move from the OTCQB® Venture Market and marks an important milestone for the Company.
On January 30, 2025 TRUBAR™ earned Seed Oil Free Certification, ensuring its products meet rigorous third-party testing standards and are free from all seed oils, reinforcing its commitment to clean, plant-based ingredients.
On February 1, 2025, Natasha Port joined the TRUBAR™ team as Vice President of Marketing. In this new role, Port will lead marketing strategy and execution for TRUBAR™ in North America building on the brand's momentum and growth through the development of a fully integrated marketing strategy that drives brand awareness, consumer engagement and long-term brand loyalty.
On February 6, 2025, the Company announced the launch of TRUBAR™ in GoMart, a regional convenience store chain with a major presence in West Virginia and additional locations in Ohio and Virginia. TRUBAR™ is now available in 124 GoMart stores.
On February 24, 2025, the Company announced the launch of TRUBAR™ in Costco Canada's West Region, marking a milestone in the brand's expansion across Canada and strengthening its strategic partnership with Costco. Additionally, The Company has expanded TRUBAR™'s retail footprint with the addition of Nature's Emporium, an Ontario-based health food market with six locations, and Freson Bros., an Alberta-based grocery chain with 16 locations.
Events Subsequent to March 31, 2025
On April 14, 2025, the Company announced the launch of TRUBARTM in select Target locations, marking further progress in expanding the brand's North American distribution footprint with key national retail partners.
On April 22, 2025, the Company announced its intention to change its name to TRUBAR™ Inc., marking a strategic shift to focus entirely on the growth and expansion of its flagship brand, TRUBAR™, subject to the acceptance of the TSX Venture Exchange. The purpose of the rebrand is to align the Company's identity with its core business and consumer-facing brand, while reinforcing its commitment to building long-term shareholder value.
On April 22, 2025, the Company also entered into a USD $10M Revolving credit facility with a related party of the Company. The facility is payable upon demand and bears interest at prime +5% per annum on any drawn amounts.
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TRUBAR Inc. (formerly, Simply Better Brands Corp.)
Management's Discussion and Analysis
For the three months ended March 31, 2025
(Expressed in United States Dollars unless otherwise specified)
On April 28, 2025 the Company announced the launch of TRUBARTM in Costco Warehouse Club locations across Mexico, representing the second international market launch for the brand following its recent introduction in Costco Canada.
Starting May 14, 2025, TRUBARTM will be featured in National MVM Promotion at Costco U.S. The MVM serves as one of Costco's flagship promotional tools – driving visibility and encouraging trial through exclusive savings offered to an engaged customer base.
On May 21, 2025, Simply Better Brands Corp. officially rebranded as TRUBAR Inc. and will begin trading on the TSXV under the new ticker symbol "TRBR" as of May 26, 2025. As part of the transition, the Company appointed Kingsley Ward as Executive Chairman, focusing on capital markets and strategic initiatives, and Erica Groussman as Chief Executive Officer, leading brand operations and growth.
RESULTS OF OPERATIONS
| expressed in millions * | For the three months ended | Change | ||||
|---|---|---|---|---|---|---|
| March 31, 2025 | March 31, 2024 | |||||
| $ | % (in terms of revenue) | $ | % (in terms of revenue) | $ | % | |
| Gross revenue | 13.9 | 136% | 16.65 | 121% | (2.75) | (17%) |
| Less: Vendor discount | (3.7) | 37% | (3.00) | 22% | (0.7) | 25% |
| Revenue | 10.20 | 100% | 13.70 | 100% | (3.50) | (26%) |
| Cost of goods sold | (7.00) | (69%) | (9.90) | (72%) | 2.90 | (29%) |
| Gross profit | 3.20 | 31% | 3.80 | 28% | (0.60) | (16%) |
Revenue
The Company, through its subsidiaries, Tru Brands and No B.S. Skincare, executed marketing initiatives in collaboration with its vendors. In compliance with IFRS 15, Revenue from Contracts with Customers, discounts and specific promotional expenditures related to these programs were recognized as a reduction in revenue. For the Current Period, the Company reported gross revenue of $13.9 million and net revenue of $10.2 million, compared to gross revenue of $16.65 million and net revenue of $13.7 million for the three months ended March 31, 2024 (the "Prior Period").
The $3.5M drop in Net Revenues was attributable to the timing of various marketing activities and promotional programs. TRUBARTM sales continue to be robust and expanding in the Protein Bars segment, which contributed significantly to overall revenue. The strong performance of TRUBARTM underscores its solid market position and the effectiveness of the Company's growth strategy.
Direct-to-Consumer (DTC) revenue played a vital role in the Company's revenue growth, representing 22% of total gross revenue. DTC sales grew impressively year-over-year, driven by a robust e-commerce strategy that specifically boosted TRUBARTM sales. The Company continues to focus on leveraging digital channels to further expand its reach and strengthen customer engagement.
Cost of goods sold ("COGS")
COGS includes product costs from co-manufacturers, merchant processing fees, fulfillment, and delivery expenses. The product costs for TRUBAR and No B.S are also influenced by fluctuations in raw material prices. Fulfillment costs are primarily driven by delivery fees charged by major courier companies. For the Current Period, COGS totaled $7.00 million, reflecting a decrease of $2.90 million (29%) compared to $9.90 million in the Prior Period. COGS for the Current Period represented 69% of net revenue, down from 72% in the Prior Period.
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TRUBAR Inc. (formerly, Simply Better Brands Corp.)
Management's Discussion and Analysis
For the three months ended March 31, 2025
(Expressed in United States Dollars unless otherwise specified)
The reduction in production costs for TRUBAR™, enabled by higher order volumes and optimized co-manufacturer agreements, was a key factor in this improvement.
The Company managed fulfillment costs efficiently while maintaining competitiveness in DTC sales, which typically had higher COGS percentages in the low to mid-70s range. Gross margins for Business-to-Business (B2B) sales were more favorable, ranging from the mid-30s to low-50s, contributing to the overall profitability.
Gross profit
Gross profit for the Current Period was $3.20 million, compared to $3.80 million in the Prior Period, resulting in a gross margin of 31%. This represents an increase of 300 bps from the Prior Period's gross margin of 28%.
The margin gains were largely attributed to lower production costs for TRUBAR™, driven by operational efficiencies and economies of scale.
Operating Expenses
The following presents a breakdown of the major operating expenses for the Current Period compared to the Prior Period:
| For the three months ended | Change | |||||
|---|---|---|---|---|---|---|
| March 31, 2025 | March 31, 2024 | |||||
| expressed in millions * | $ | $ | $ | % | ||
| Expenses | ||||||
| Amortization | - | - | 0.40 | 12% | (0.40) | (100%) |
| Consulting fees | - | - | 0.10 | 3% | (0.10) | (100%) |
| General and administrative expenses | 0.70 | 14% | 0.60 | 18% | 0.10 | 17% |
| Marketing expenses | 2.00 | 41% | 1.50 | 42% | 0.50 | 30% |
| Professional fees | 0.60 | 12% | 0.40 | 12% | 0.20 | 52% |
| Salaries and wages | 1.10 | 22% | 0.70 | 21% | 0.40 | 66% |
| Share-based payments | 0.40 | 8% | (0.40) | (12%) | 0.80 | (219%) |
| Miscellaneous | 0.10 | 3% | 0.10 | 4% | - | - |
| Total expenses | 4.90 | 100% | 3.40 | 100% | 1.50 | 47% |
Operating costs for the Current Period were $4.9 million, reflecting an increase of $1.5 million (47%) compared to $3.4 million in the Prior Period.
This increase reflects the Company's strategic investments and operational growth initiatives.
- Marketing Expenses: Representing 41% of operating costs in the Current Period, total expenses amounted to $2.00 million, reflecting an increase of $0.50 million (30%) compared to the Prior Period. Key drivers included enhancements in online advertising and promotional allowances supporting direct-to-consumer (DTC) and business-to-business (B2B) revenue growth.
- General and Administrative Expenses: Increased to $0.70 million (14% of total operating expenses) from $0.60 million (18% of total operating expenses) in the Prior Period. The increase reflects higher e-commerce platform fees, broker fees, and travel expenses. Professional Fees: Increased to $0.60 million (12% of total operating expenses) from $0.40 million (12% of total operating expenses) in the Prior Period. This was driven by incremental consulting expenses ($0.5 million) and the implementation of Board fees ($0.2 million) in 2024. Salaries and Wages: Increased to $1.10 million (22% of total operating expenses) from $0.70 million (21% of total operating expenses) in the Prior Period. The increase is mainly due to additional headcount to support business expansion.
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TRUBAR Inc. (formerly, Simply Better Brands Corp.)
Management’s Discussion and Analysis
For the three months ended March 31, 2025
(Expressed in United States Dollars unless otherwise specified)
- Share-based payments: Primarily related to the recognition of the fair value of options and Restricted Share Units (“RSUs”) granted during the vesting period. Previously recognized share-based payments for forfeited options are reversed as a recovery on the date of forfeiture. During the Current Period, the Company granted 280,000 options to its employees and 149,381 RSUs to certain directors. No options or RSUs were granted in the Prior Period. In the Prior Period, 1,311,112 RSUs were forfeited, resulting in a recovery of the share-based payments.
Overall, the cost increases were aligned with the Company's commitment to scaling operations and driving revenue growth.
TRUBAR Inc. (formerly, Simply Better Brands Corp.)
Management's Discussion and Analysis
For the three months ended March 31, 2025
(Expressed in United States Dollars unless otherwise specified)
Other income (expenses)
| For the three months ended | Change | |||||
|---|---|---|---|---|---|---|
| March 31, 2025 | March 31, 2024 | |||||
| expressed in millions * | $ | $ | $ | % | ||
| Other Income (Expenses) | ||||||
| Fair value adjustment of derivative liability | - | - | (0.10) | 14% | 0.10 | (100%) |
| Finance costs | (0.10) | (17%) | (0.30) | 43% | 0.20 | (58%) |
| Foreign exchange (loss) gain | (0.10) | (17%) | 0.10 | (14%) | (0.20) | (352%) |
| Gain (loss) on remeasurement of warrant liabilities | 0.80 | 133% | (0.30) | 43% | 1.10 | (352%) |
| Miscellaneous | - | 1% | (0.10) | 14% | 0.10 | (100%) |
| Total other income (expenses) | 0.60 | 100% | (0.70) | 100% | 1.30 | (187%) |
Other income of $0.60 million was recorded in the Current Period, representing an increase of $1.3 million compared to other expenses of $0.70 million in the Prior Period. Key drivers of this increase are detailed as follows:
- Fair Value Adjustment of Derivative Liability: Primarily related to fair value adjustments of outstanding derivative liabilities at each reporting period. There were no outstanding derivative liabilities during the Current Period.
- Finance Costs: Finance costs decreased by $0.20 million (58%), from $0.30 million in the Prior Period to $0.10 million in the Current Period. This reduction was primarily driven by improved financial structuring and lower borrowing costs.
- Foreign Exchange Gain: The Company recorded a foreign exchange loss of $0.10 million in the Current Period, representing an increase of $0.20 million compared to a gain of $0.10 million recorded in the Prior Period. The change was primarily driven by fluctuations in the foreign exchange rate between the US dollar (US$) and Canadian dollar (CA$).
- Gain (Loss) on Remeasurement of Warrant Liabilities: Primarily related to fair value adjustments of outstanding warrant liabilities at each reporting period. The change is mainly driven by market volatility and the Company's performance. A gain of $0.80 million was recorded in the Current Period, compared to a loss of $0.30 million in the Prior Period.
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TRUBAR Inc. (formerly, Simply Better Brands Corp.)
Management's Discussion and Analysis
For the three months ended March 31, 2025
(Expressed in United States Dollars unless otherwise specified)
Earnings before Interest, Taxes, Depreciation, and Amortization ("EBITDA") and Adjusted EBITDA (Non-IFRS Measures)
EBITDA and Adjusted EBITDA are non-IFRS measures used by management that are not defined by IFRS. EBITDA and Adjusted EBITDA do not have a standardized meaning prescribed by IFRS and therefore may not be comparable to similar measures presented by other issuers. Management believes that EBITDA and Adjusted EBITDA provide meaningful and useful financial information as these measures demonstrate the operating performance of a business excluding non-cash charges.
"EBITDA" is calculated as earnings before interest, taxes, depreciation, depletion and amortization. "Adjusted EBITDA" is calculated as EBITDA adjusted for non-cash, extraordinary, non-recurring and other items unrelated to the Company's core operating activities.
| For the three months ended | Change in | |||
|---|---|---|---|---|
| March 31, 2025 | March 31, 2024 | |||
| $ | $ | $ | % | |
| Income (loss) for the quarter from continuing operations | (1.20) | (0.20) | (1.00) | 444% |
| Amortization | - | 0.40 | (0.40) | (100)% |
| Finance costs | 0.10 | 0.30 | (0.20) | (58%) |
| EBITDA | (1.10) | 0.50 | (1.60) | (311%) |
| Fair value adjustment of derivative liability (Gain) loss on remeasurement of warrant liabilities | - | 0.10 | (0.10) | (100%) |
| Share-based payments | (0.80) | 0.30 | (1.10) | (352%) |
| Non-recurring expenses | 0.40 | (0.40) | 0.80 | (219%) |
| Adjusted EBITDA | (1.50) | 0.70 | (2.20) | (320%) |
For the current period, the Company had a negative EBITDA of 1.1 M compared to positive EBITDA of 0.5M in the prior period. The decrease is related to differences in timing of certain customer promotional programs.
Adjusted EBITDA decreased from $0.7M in the last reporting period to negative $1.5M in the current period. This is related to the changes in share-based payments and remeasurement of warrant liabilities. Both are non-cash items.
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TRUBAR Inc. (formerly, Simply Better Brands Corp.)
Management's Discussion and Analysis
For the three months ended March 31, 2025
(Expressed in United States Dollars unless otherwise specified)
SUMMARY OF QUARTERLY RESULTS
| expressed in millions except for earnings (loss) per share | March 31, 2025 | December 31, 2024 | September 30, 2024 | June 30, 2024 |
|---|---|---|---|---|
| $ | $ | $ | $ | |
| Revenue from continuing operations | 10.16 | 12.73 | 12.13 | 6.76 |
| Income (loss) from continuing operations | (1.19) | (8.26) | 4.14 | (7.19) |
| Net income (loss) | (1.19) | (8.29) | 4.19 | 4.68 |
| Earnings (loss) per share | ||||
| - Continuing operations | ||||
| - Basic | (0.01) | (0.09) | 0.04 | (0.09) |
| - Diluted | (0.01) | (0.09) | 0.04 | (0.09) |
| - Total | ||||
| - Basic | (0.01) | (0.10) | 0.05 | (0.01) |
| - Diluted | (0.01) | (0.10) | 0.05 | (0.01) |
| expressed in millions except for earnings (loss) per share | March 31, 2024 | December 31, 2023 | September 30, 2023 | June 30, 2023 |
| --- | --- | --- | --- | --- |
| $ | $ | $ | $ | |
| Revenue from continuing operations | 13.67 | 4.52 | 5.38 | 6.36 |
| Income (loss) from continuing operations | (0.22) | (2.75) | 0.38 | (2.59) |
| Net income (loss) | (0.96) | (14.66) | (0.57) | (6.34) |
| Earnings (loss) per share | ||||
| - Continuing operations | ||||
| - Basic | (0.00) | (0.04) | 0.01 | (0.03) |
| - Diluted | (0.00) | (0.04) | 0.01 | (0.03) |
| - Total | ||||
| - Basic | (0.01) | (0.17) | (0.01) | (0.09) |
| - Diluted | (0.01) | (0.17) | (0.01) | (0.09) |
For the Current Period, the Company demonstrated steady revenues compared to 2024. reflecting strong and consistent performance. This was achieved by robust distribution expansion, particularly with its flagship TRUBAR™ brand, which continued to experience heightened demand across major retail partnerships.
The fluctuations in revenues on a quarterly basis are due primarily to certain customer promotional programs. These activities provide overall growth outside of these specific marketing campaigns, which demonstrate the effectiveness of these programs. The changes in the Company's net income (loss) from continuing operations across the presented quarters were primarily attributed to variations in operating expenses, including general and administrative costs, marketing expenditures, professional fees, salaries and wages. Changes in marketing expenses were directly correlated with quarterly revenue fluctuations, as the Company strategically invested in brand awareness and customer acquisition initiatives. Similarly, variations in general and administrative expenses, professional fees, and salaries and wages were driven by the Company's evolving business activities. As the Company continues to expand its operations, these costs have increased accordingly, particularly in areas such as administrative infrastructure development and workforce expansion. These operational investments have contributed to the financial results observed during the reporting periods, underscoring the Company's commitment to growth and scalability.
Page 13 of 19
TRUBAR Inc. (formerly, Simply Better Brands Corp.)
Management's Discussion and Analysis
For the three months ended March 31, 2025
(Expressed in United States Dollars unless otherwise specified)
The variation in net income (loss) across the presented quarters was also influenced by gains and losses from the remeasurement of the Company's derivative instruments. These remeasurements are subject to various external and internal factors, including the Company share price fluctuations, changes in interest rates, exchange rate volatility, market uncertainty and performance trends. These valuation adjustments reflect market-driven financial dynamics that impact non-operational income and loss.
LIQUIDITY AND CAPITAL RESOURCES
| As at | March 31, 2025 | December 31, 2024 | |
|---|---|---|---|
| expressed in millions * | $ | $ | |
| ASSETS | |||
| Current assets | |||
| Cash and cash equivalents | 1.65 | 7.10 | |
| Accounts receivable | 5.60 | 10.30 | |
| Other receivable | 0.10 | 0.20 | |
| Prepaid expenses | 0.30 | 0.40 | |
| Inventory | 8.80 | 3.90 | |
| Total current assets | 16.50 | 21.90 | |
| Non-current assets | 3.90 | 3.90 | |
| TOTAL ASSETS | 20.40 | 25.80 | |
| LIABILITIES | |||
| --- | --- | --- | |
| Current liabilities | |||
| Accounts payable and accrued liabilities | 6.70 | 10.40 | |
| Bank overdraft | 2.20 | 4.10 | |
| Deferred revenue | - | 0.10 | |
| Current portion of promissory note | 2.20 | 3.10 | |
| Warrant liabilities | 1.90 | 6.40 | |
| Total current liabilities | 13.10 | 24.10 | |
| Non-current liabilities | 0.20 | 0.30 | |
| TOTAL LIABILITIES | 13.30 | 24.40 | |
| WORKING CAPITAL (DEFICIENCY) | 3.40 | (2.20) | |
| --- | --- | --- |
The Company's working capital requirements fluctuate from period to period due to various factors, including key consumer holidays (third, second, and first quarters each year), new product introductions, and vendor lead times. The Company's principal working capital needs encompass accounts receivable, inventory, prepaid expenses, short-term loans, and accounts payable.
As of March 31, 2025, the Company had a cash balance of $1.65 million, reflecting a decrease of $5.55 million from $7.10 million as of December 31, 2024. The Company's primary liquidity and capital requirements are for inventory and general working capital purposes.
Working capital increased to $3.40 million as of March 31, 2025, representing an improvement of $5.60 million from a working capital deficiency of $2.20 million as of December 31, 2024. Excluding warrant liabilities, working capital was $5.3M as of March 31, 2025, and $4.1M as of December 31, 2024.
The Company continues its efforts to improve its working capital position through a variety of initiatives, including Accounts Receivable and Accounts Payable ongoing planning and management, and private placements.
Page 14 of 19
TRUBAR Inc. (formerly, Simply Better Brands Corp.)
Management's Discussion and Analysis
For the three months ended March 31, 2025
(Expressed in United States Dollars unless otherwise specified)
Line of Credit Facilities
On November 8, 2024, the Company, through its subsidiary, Tru Brands Snack, entered into a credit agreement referred to as the "TBS Overdraft Facility" with a banking institution. This facility provides the Company with overdraft protection of $10,000,000 for operational purposes and is repayable on demand. The facility bears an interest rate equivalent to the bank's prime rate plus 3.5%, or the US base rate plus 3.5% per annum. Interest accrues monthly in arrears and is payable on the last day of each month.
Promissory Notes
During the fiscal year ending December 31, 2023, the Company entered into two separate loan agreements, with a combined principal amount of $1.7 million. During the year ended December 31, 2024, the Company decided to consolidate the two loan agreements into a single comprehensive agreement. Under the amended agreement, the Company is obligated to make monthly interest payments. The remaining principal balance of $1,144,128 will be repaid as follows:
$100,000 payable in May 2025.
$100,000 payable each month from August 2025 to April 2026, for a total of $900,000.
The remaining balance of $144,128 will be paid in May 2026.
During the year ended December 31, 2024, the Company issued four promissory notes totaling $2,313,847 (CA$3.2 million). Of this amount, $1,591,617 (CA$2.2 million) was issued to the Company's directors, while the remaining note was issued to a shareholder. These promissory notes bear an interest rate of 15% per annum, compounded and payable monthly, with a one-year term from the date of issuance. The notes are secured by a general securities agreement, backed by the Company's assets. As of the date of this MD&A, the Company has made a total principal payment of CA$1.2 million.
Cash flow
The following is the breakdown of the cash flow from operating activities:
| March 31, 2025 | March 31, 2024 | Change | |
|---|---|---|---|
| expressed in millions | $ | $ | $ |
| Cash flow (used in) provided by operating activities | (5.60) | 6.50 | (12.10) |
| Cash flow provided by investing activities | 0.10 | - | 0.10 |
| Cash flow provided by (used in) financing activities | 0.10 | (6.90) | 7.00 |
| Decrease in cash | (5.40) | (0.40) | (5.00) |
Cash Flow from Operating Activities
In the Current Period, the Company reported cash used in operating activities of $5.60 million, compared to a cash provided of $6.50 million in the Prior Period. This is primarily attributed to changes in working capital of increased inventory purchases and an increased payment of accounts payable. The Company was building additional inventory to facilitate the sales volumes for its next promotional program that will occur in the second quarter of 2025.
Cash Flow from Investing Activities
In the Current Period, the Company received $100,000 from a related party following the sale of Redemption Group LLC, a wholly owned subsidiary, which was completed in December 2024.
Page 15 of 19
TRUBAR Inc. (formerly, Simply Better Brands Corp.)
Management's Discussion and Analysis
For the three months ended March 31, 2025
(Expressed in United States Dollars unless otherwise specified)
Cash Flow from Financing Activities
In the Current Period, cash flow provided by financing activities totaled $0.1 million, compared to a cash outflow of $6.9 million in the Prior Period. During the Current Period, the Company received $2.90 million in proceeds from the exercise of warrants and repaid 0.98 million of promissory note and $1.88 million of the TBS Overdraft Facility. In the Prior Period, the Company made a net cash payment of $6.37 million on its revolving credit facilities.
SEGMENTED RESULTS
The breakdown of net sales by products during the Quarter ended March 31, 2025 and 2024 was as follows:
| March 31, 2025 ($) | March 31, 2024 ($) | Change $ | Change % | |
|---|---|---|---|---|
| Protein Bar | 9.9 | 13.0 | (3.1) | (24%) |
| Wholesale club | 5.4 | 12.2 | (6.8) | (56%) |
| Retail* | 1.5 | 0.3 | 1.2 | 373% |
| DTC ** | 3.0 | 0.4 | 2.6 | 593% |
| Beauty products | 0.3 | 0.7 | (0.4) | (63%) |
| 10.2 | 13.7 | (3.5) | (26%) |
*Retail includes Mass Merchandisers, convenience, grocery and drug stores
** DTC (Direct-to-consumer) and Ecommerce
For the current period Protein bar net sales decreased by 24% compared to previous reporting period. As previously noted, this is related to timing of promotional activities with certain customers. However, Retail net revenue increased by 373% and DTC net sales increased by 593%, which shows the effectiveness of the marketing campaigns creating exceptional and consistent growth of revenue.
OUTSTANDING SHARE DATA- UPDATE
As of March 31, 2025, the Company had 107,180,253 common shares (December 31, 2024 – 97,750,165) common shares issued and outstanding.
In addition, as of December 31, 2024, the Company had 5,621,424 warrants, 5,667,500 stock options and 2,834,789 RSUs issued and outstanding.
During the Current Period:
9,281,108 warrants were exercised, generating proceeds of $2,899,580.
125,000 stock options were exercised, resulting in proceeds of $23,415.
23,980 common shares were issued pursuant to the Earnout Agreement, with a fair value of $18,297.
280,000 options were granted to employees, with an exercise price of CA$0.97 per share.
149,381 RSUs were granted to certain directors and consultants.
Subsequent to the Current Period:
71,666 stock options were exercised for proceeds of CA$25,400
298,392 RSUs cancelled.
67,500 shares issued for vested RSUs
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TRUBAR Inc. (formerly, Simply Better Brands Corp.)
Management's Discussion and Analysis
For the three months ended March 31, 2025
(Expressed in United States Dollars unless otherwise specified)
OFF-BALANCE SHEET ARRANGEMENTS
As of March 31, 2025 and the date of this MD&A, the Company did not have any off-balance sheet financing arrangements.
TRANSACTIONS BETWEEN RELATED PARTIES
Key management personnel include those persons having the authority and responsibility of planning, directing, and executing the activities of the Company. The Company has determined that its key management personnel consist of the Company's officers and directors.
During the three months ended March 31, 2025, and 2024, the key management compensation was:
| For the three months ended | ||
|---|---|---|
| March 31, 2025 | March 31, 2024 | |
| $ | $ | |
| Salaries and benefits | 256,956 | 167,717 |
| Share-based payments | 296,419 | (438,936) |
| 553,375 | (271,219) |
In addition to the compensation above, the Company granted 49,381 RSUs with a fair value of $38,814 to certain directors during the three months ended March 31, 2025. All RSUs will fully vest one year from the grant date
No options and RSUs were granted to the Company's officers and directors during the three months ended March 31, 2024.
In addition, the Company made a principal payment of $697,107 (CA$1,000,000) to fully settle a promissory note issued to one of its directors during the year ended December 31, 2024.
As of March 31, 2025 and December 31, 2024, the balances due to the Company's directors and officer are as follows:
| March 31, 2025 | December 31, 2024 | |
|---|---|---|
| $ | $ | |
| Accounts payables and accrued liabilities* | 436,250 | 806,992 |
| Promissory notes (Note 10) ** | 765,164 | 1,459,448 |
| 1,201,414 | 2,266,440 |
- These amounts are unsecured, non-interest bearing, and payable on demand.
** The balance as of March 31, 2025 is denominated in Canadian dollars of CA$1,100,000 (December 31, 2024 – CA$2,100,000).
CRITICAL ACCOUNTING ESTIMATES
The preparation of our consolidated financial statements requires management to use judgment and make estimates and assumptions that affect the reported amounts assets and liabilities and disclosures of contingent liabilities at the date of the financial statements and the reported amount of expenses during the period. Actual results could materially differ from these estimates. Refer to note 2 of our annual audited consolidated financial statements for the year ended December 31, 2024 for a more detailed discussion of the critical accounting estimates and judgments.
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TRUBAR Inc. (formerly, Simply Better Brands Corp.)
Management's Discussion and Analysis
For the three months ended March 31, 2025
(Expressed in United States Dollars unless otherwise specified)
CHANGES IN ACCOUNTING POLICIES INCLUDING INITIAL ADOPTION
New accounting standards issued and not yet effective
The IASB has issued IFRS 18, Presentation and Disclosure in Financial Statements, replacing IAS 1, Presentation of Financial Statements. IFRS 18 introduces revised requirements for presenting and disclosing financial information, with the objective of improving consistency and comparability across entities. The updates include the definition of subtotals in the statement of profit or loss, such as operating profit and profit before financing and income taxes. Furthermore, it requires the disclosure of management-defined performance measures (MPMs), which are subtotals not specified by IFRS but represent Management's view of performance. In addition, IFRS 18 enhances the principles of aggregation and disaggregation to ensure that material information is not obscured. This new standard is effective for annual reporting periods beginning on or after January 1, 2027, with early application permitted. The Company is currently evaluating the potential effects of IFRS 18 on its financial statements. Although the adoption of IFRS 18 is expected to improve the presentation and disclosure of financial information, it is not anticipated to have a material impact on the Company's financial position or performance.
FINANCIAL INSTRUMENTS AND OTHER INSTRUMENTS
In the normal course of business, the Company is inherently exposed to certain financial risks, including market risk, credit risk and liquidity risk, through the use of financial instruments. The timeframe and manner in which the Company manages these risks varies based upon management's assessment of the risk and available alternatives for mitigating risk. The Company does not acquire or issue derivative financial instruments for trading or speculative purposes. All transactions undertaken are to support the Company's operations. These financial risks and the Company's exposure to these risks are provided in various tables in note 20 of our unaudited condensed consolidated interim financial statements for the three months ended March 31, 2025. For a discussion on the significant assumptions made in determining the fair value of financial instruments, refer also to note 2 of the financial statements for the year ended December 31, 2024.
DISCLOSURE CONTROLS AND PROCEDURES
Management of the Corporation has established processes to provide them sufficient knowledge to support representations that they have exercised reasonable diligence that (i) the consolidated financial statements do not contain any untrue statement of material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it is made, as of the date of and for the periods presented by the consolidated financial statements; and (ii) the consolidated financial statements fairly present in all material respects the financial condition, financial performance and cash flows of the Corporation, as of the date of and for the periods presented.
Pursuant to National Instrument 52-109 - Certification of Disclosure in Issuers' Annual and Interim Filings ("NI 52-109"), the Chief Executive Officer and Chief Financial Officer of the Company have filed Venture Issuer Basic Certificates with respect to the financial information contained in the unaudited condensed consolidated interim financial statements for the three months ended March 31, 2025, and this accompanying MD&A (together, the "Filings"). In contrast to the full certificate under NI 52-109, the Venture Issuer Basic Certificate does not include representations relating to the establishment and maintenance of disclosure controls and procedures and internal control over financial reporting, as defined in NI 52-109. For further information, the reader should refer to the Venture Issuer Basic Certificates filed by the Company with the Interim Filings on SEDAR+ at www.sedarplus.com.
The Company's certifying officers are responsible for ensuring that processes are in place to provide them with sufficient knowledge to support the representations they are making in the Venture Issuer Basic Certificates. Investors should be aware that inherent limitations on the ability of certifying officers of a venture issuer to design and implement on a cost-effective basis disclosure controls and procedures and internal control over financial
TRUBAR Inc. (formerly, Simply Better Brands Corp.)
Management's Discussion and Analysis
For the three months ended March 31, 2025
(Expressed in United States Dollars unless otherwise specified)
reporting, as such terms are defined in NI 52-109, may result in additional risks to the quality, reliability, transparency and timeliness of interim and annual filings and other reports provided under securities legislation.
REVIEWED BY MANAGEMENT
This MD&A and the unaudited condensed consolidated interim financial statements for the three months ended March 31, 2025 (the "Filings") had been reviewed by the Company Executive Officer ("CEO") and Chief Financial Officer ("CFO") and certified the followings:
No misrepresentations: Based on CEO's and CFO's knowledge, having exercised reasonable diligence, the Filings do not contain any untrue statement of a material fact or omit to state a material fact required to be stated or that is necessary to make a statement not misleading in light of the circumstances under which it was made, with respect to the period covered by the Filings.
Fair presentation: Based on CEO's and CFO's knowledge, having exercised reasonable diligence, the financial report together with the other financial information included in Filings fairly presented in all material respects the financial condition, financial performance and cash flows of the issuer, as of the date of and for the periods presented in the Filings.
RISKS AND UNCERTAINTIES
The Company faces a number of risks that could materially adversely affect the Company's future business, operations and financial condition and could cause them to differ materially from the estimates described in the MD&A. Current and prospective investors should carefully consider the risk factors listed in the Company's Annual Information Form for the year ended December 31, 2024, which is available under the Company's profile on SEDAR+ at www.sedarplus.com as well as the risk factors listed under the heading "Forward-Looking Statements" in this MD&A when making investment decisions.
ADDITIONAL INFORMATION
Additional information relating to the Company's operations and activities can be found under the Company's profile on SEDAR+ at www.sedarplus.com.
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