美国
证券及交易委员会

华盛顿，DC 20549

20-F 表格

¨      根据1934年证券交易法第12(b)或(g)节的规定，此为交易所交易申报。

或者

¨      根据《1934年证券交易所法》第13或第15(d)条的年度报告

截至财政年度末

或者

¨      根据1934年证券交易所法的第13或15(d)条报告

x      SHELL 根据《1934年证券交易所法》第13或15(d)条的要求提交的公司报告

需要提交此壳公司报告的事件日期 2024年6月28日

备案文件编号333-275005

上食品原料公司。

(根据其宪章规定的注册人的确切名称。)

不适用

(将注册人的姓名翻译成英语)

加拿大

(组建或设立管辖权)

2305维多利亚大道＃001

萨斯喀彻温市，S4P 0S7

306-779-2268

(首席执行官办公室地址)

公司服务公司

251 Little Falls Drive

威明顿，DE 19808

(公司联系人的姓名、电话、电子邮件和/或传真号码 以及地址)

根据法案第12（b）条注册或拟注册的证券:

根据法案第12(g)条设立或即将设立注册证券：无

根据法案第15(d)条的规定，需要报告义务的证券：无

请在外壳公司报告期结束时标明每个发行人股本或普通股类别的未流通股份数量：

2024年6月28日，发行人共有27,804,607股普通股流通，在没有票面价值或面值的情况下。

如果注册人符合证券法规则405条定义的知名季度发行人，请用勾号表示。是 ¨ 不x

如果这份报告是年度报告或过渡报告，请在注册人不需要根据1934年证券交易法第13或15(d)条的规定提交报告的情况下用勾号表示。是¨ 不x

请在复选框中标明，即属于交易所法案1934年第13或15(d)节要求提交的全部报告已提交，不得以前12个月(或注册人要求提交该等报告的更短期间)和(2)过去90天一直受到此类提交要求的约束。是x 不¨

请用复选标记表示，注册者在过去12个月内（或者在注册者需要提交和发帖这些文件的更短期间内）是否按照S-t规则405条要求提交了每个互动数据文件。是x 不¨

请用复选标记表示注册人是大型加速存款人、加速存款人、非加速存款人还是新兴成长公司。

如果一家新兴成长型公司根据美国通用会计准则编制其基本报表，如果注册者选择不使用根据《交易法》第13(a)条规定提供的任何新的或修订的财务会计准则的延期过渡期，请在对勾处标明。 ¨ 

† “新的或修订的财务会计准则”一词是指财务会计准则委员会在2012年4月5日后发布的任何更新。

请勾选表示，公司是否根据《萨班斯-豪利法案》第404(b)条的规定，由准备或发布其审计报告的注册会计师事务所对其财务报告内部控制的有效性进行评估，并提交管理层对此评估的陈述。¨

如果证券根据法案第12（b）条进行注册，请用核对标记表示申报人文件中包含的基本报表是否反映了以往已发布的基本报表的更正。¨

请通过复选标记表明，这些错误更正中是否有需要根据第240.10D-1(b)条对其执行官在相关恢复期间收到的基于激励的补偿进行恢复分析的重述。¨

请用复选标记表明注册者用于编制本提交文件中包括的基本报表的会计基础。

如果在前一个问题中选择了"其他"，请用复选标记指示注册人选择遵循的财务报表项目。项目17¨如果在上一个问题的回答中勾选了“其他”，请勾选出注册人选定遵从的财务报表项目。¨

如果 这是一份年度报告，请通过复选标记指示注册者是否是外壳公司（如《交易所法》第120亿.2条所定义）。是¨否¨

目录

解释说明

2024 年 6 月 28 日（”闭幕 日期”），Above Food Ingredients Inc.，一家根据加拿大艾伯塔省法律组建的公司（”上面的新内容 食物” 或”TopCo”）完成了先前宣布的业务合并（”商业 组合”）根据该协议修订的截至2023年4月29日的某些业务合并协议 2024 年 3 月 12 日的《企业合并协议》第 1 号某些修正案（经修订后的”业务组合 协议”），在 New Above Food 中，特拉华州的一家公司 Bite Acquisition Corp.（”咬伤”）， Above Food Corp.，一家根据加拿大艾伯塔省法律成立的公司（”在食物之上”) 及以上合并 特拉华州的一家公司 Sub, Inc.（”合并子公司”)。本文中使用但未另行定义的大写术语 壳牌公司20-F表格报告具有委托书/招股说明书中对这些术语的相应含义（”代理 声明/招股说明书”），构成经修订的《新上述食品F-4表格注册声明》（注册）的一部分 第 333-275005 号），美国证券交易委员会于 2024 年 4 月 8 日宣布生效（”注册声明”).

Prior to the closing of the Business Combination (the “Closing”), Above Food continued from the laws of Saskatchewan to a corporation under the laws of the Province of Alberta pursuant to the Business Corporations Act (Alberta) and the regulations made thereunder, as now in effect and as they may be promulgated or amended from time to time (“ABCA”). On the Closing Date, several transactions were completed pursuant to the Business Combination Agreement and the plan of arrangement under the laws of Alberta, Canada that was effected pursuant to the terms of the Business Combination Agreement, including:

Prior to the Business Combination, New Above Food did not conduct any material activities other than those incidental to its formation and the matters contemplated by the Business Combination Agreement, such as the making of certain required securities law filings and the establishment of certain subsidiaries. Upon the closing of the Business Combination, New Above Food became the direct parent of Above Food, an Alberta-based innovative food company leveraging its vertically integrated supply chain to deliver differentiated ingredients and consumer products.

New Above Food Common Shares and New Above Food Listed Warrants are currently listed on the Nasdaq Global Market (“Nasdaq”) under the symbols “ABVE” and “ABVE.W”, respectively.

Except as otherwise indicated or required by context, references in this Shell Company Report on Form 20-F (the “Report”) to “we”, “us”, “our”, “TopCo,” “New Above Food” or the “Company” refer to Above Food Ingredients Inc., a corporation organized under the laws of Alberta, Canada, and its consolidated subsidiaries.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

Certain statements made in this Report, including the description of the transactions, agreements and other information contained herein and the exhibits hereto, as well as information incorporated by reference herein are not historical facts but are “forward-looking statements” for purposes of the safe harbor provisions under The Private Securities Litigation Reform Act of 1995. Forward-looking statements generally are accompanied by words such as “believe,” “may,” “will,” “estimate,” “continue,” “anticipate,” “intend,” “expect,” “should,” “could,” “would,” “plan,” “predict,” “potential,” “seem,” “seek,” “future,” “outlook,” “suggests,” “targets,” “projects,” “forecast” and similar expressions that predict or indicate future events or trends or that are not statements of historical matters. These forward-looking statements include, but are not limited to, statements regarding future events, the estimated or anticipated future results and benefits of New Above Food following the Business Combination, future opportunities for New Above Food, future planned products and services, business strategy and plans, objectives of management for future operations of New Above Food, market size and growth opportunities, competitive position, technological and market trends, and other statements that are not historical facts. These statements are based on the current expectations of New Above Food’s management and are not predictions of actual performance.

These forward-looking statements are provided for illustrative purposes only and are not intended to serve as, and must not be relied on, by any investor as a guarantee, an assurance, a prediction or a definitive statement of fact or probability. Actual events and circumstances are difficult or impossible to predict and will differ from assumptions. All forward-looking statements are based upon estimates and forecasts and reflect the views, assumptions, expectations, and opinions of New Above Food, which are all subject to change due to various factors. Any such estimates, assumptions, expectations, forecasts, views or opinions, whether or not identified in this Report, should be regarded as indicative, preliminary and for illustrative purposes only and should not be relied upon as being necessarily indicative of future results.

Many actual events and circumstances are beyond the control of New Above Food. These statements are subject to a number of risks and uncertainties regarding New Above Food’s businesses and the Business Combination, and actual results may differ materially. These risks and uncertainties include, but are not limited to, general economic, political and business conditions; changes in domestic or foreign business, market, financial, political and legal conditions; failure to realize the anticipated benefits of the Business Combination, including difficulty in integrating the businesses of Bite and Above Food; the risk that the Business Combination disrupts current plans and operations or the ability of New Above Food to grow and manage growth profitably and retain its key employees including its executive team; costs related to the Business Combination; the overall level of demand for New Above Food’s services; general economic conditions and other factors affecting New Above Food’s business; New Above Food’s ability to implement its business strategy; New Above Food’s ability to manage expenses; changes in applicable laws and governmental regulation and the impact of such changes on New Above Food’s business, New Above Food’s exposure to litigation claims and other loss contingencies; the risks associated with negative press or reputational harm; New Above Food’s ability to protect patents, trademarks and other intellectual property rights; any breaches of, or interruptions in, New Above Food’s technology infrastructure; changes in tax laws and liabilities and other factors discussed under the section titled “Risk Factors” in this Report.

Forward-looking statements are subject to known and unknown risks and uncertainties and are based on potentially inaccurate assumptions that could cause actual results to differ materially from those expected or implied by the forward-looking statements. Actual results could differ materially from those anticipated in forward-looking statements for many reasons, including the factors discussed under the “Risk Factors” section in this Report. Accordingly, you should not rely on these forward-looking statements, which speak only as of the date of this Report. We undertake no obligation to publicly update or revise any forward-looking statement contained in this Report to reflect circumstances or events after the date of this Report or to reflect the occurrence of unanticipated events. You should, however, review the factors and risks described in the reports we will file from time to time with the SEC after the date of this Report.

Although we believe the expectations reflected in the forward-looking statements were reasonable at the time made, we cannot guarantee future results, level of activity, performance or achievements. Moreover, neither we nor any other person assume responsibility for the accuracy or completeness of any of these forward-looking statements. You should carefully consider the cautionary statements contained or referred to in this section in connection with the forward looking statements contained in this Report and any subsequent written or oral forward-looking statements that may be issued by New Above Food or persons acting on its behalf.

PART I.

ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS

A. Directors and Senior Management

Unless otherwise indicated, the address of each New Above Food director and executive officer is c/o Above Food Ingredients Inc., 2305 Victoria Avenue #001, Regina, Saskatchewan, S4P 0S7.

The board of directors of New Above Food (“New Above Food Board”) after the closing of the Business Combination consists of seven members:

Chief Executive Officer and Executive Chairman

Lionel Kambeitz is a Founder, President, Chief Executive Officer and Executive Chairman of Above Food. He has served as Above Food’s Chief Executive Officer and as a member of the Above Food board of directors (“Above Food Board”) since September 2020. Mr. Kambeitz is also a Founder of KF Kambeitz Farms Inc. and served as the Executive Chairman of the board of directors from January 2013 to January 2023. Mr. Kambeitz has also been a director of HTC Purenergy Inc. since 1996. He is also a director on the board of Kingsland Energy Corp. and has served as a director on the board of directors since 1995. Mr. Kambeitz is also Chairman of the board of Carbon RX Inc. and a director on the board of directors of Delta CleanTech Inc. Mr. Kambeitz has over three-decades of experience in agriculture, manufacturing, energy and process design as well as extensive executive leadership experience in the agriculture industry. Age 71.

Executive Vice President, Chief Financial Officer and Director

Jason Zhao has served as Above Food’s Chief Financial Officer since October 2021. He founded Odyssey Advisory Services Ltd. in January 2021. Mr. Zhao has also been the Chief Executive Officer of ISTDC Canada Inc. since 2008. From April 2018 to January 2021, Mr. Zhao served as Principal of Virtus Group, Chartered Professional Accountants & Business Advisors LLP, the largest independent Chartered Professional Accountant and Business Advisory firm in Saskatchewan, Canada. He is a Chartered Professional Accountant and a Chartered Business Valuator. Mr. Zhao received a Bachelor’s degree in Business from the University of Alberta. Mr. Zhao has over 20 years of experience building and leading finance teams in accounting firms, private equity, and international companies with significant operating scale and complexity. Age 41.

Non-Executive Directors

Felipe Gomez Garcia has spent the last 27 years of his career with Grupo Industrial Vida S.A. de C.V. (“Grupo Vida”), where he has served as a Member of the board of directors and Chief Executive Officer since January 2017. Grupo Vida, the largest oat milling company in Latin America, has its headquarters in México and also has operations in Canada and Chile. He has been President of the Food Industry Chamber in the State of Jalisco, Mexico; VP of the Confederation of Industrial Chambers in Mexico; and Member of the board of directors of Food Bank in Guadalajara among other positions dedicated to support the most needed communities in Jalisco and Mexico. Mr. Gomez has extensive executive leadership experience and experience serving on various boards of directors for companies in the agriculture industry. Age 50.

Garth Fredrickson is Lead Independent Director of New Above Food. He was an industrial and commercial property developer and a recognized business builder. Mr. Fredrickson has worked at Bison Properties Limited since 1990 as a co-owner and its Vice President. He has also been the President and Owner of Friona Development & Consulting Ltd since 1982. He serves on the board of directors for various private companies, including Atlantis Research Labs, where he has served since January 2015, Pure Jet, Inc., where he has served since June 2019, Bison Properties Limited, where he has served since 1997, and Friona Development & Consulting Ltd, where he has served since 1982. He also served on the Board of Governors of the University of Regina from 1998 to 2004, and as the Chairman of the Board of Governors during that period. Mr. Fredrickson received a Bachelor of Arts degree from the University of Regina in 1979. Age 68.

Alberto Ardura González served as Bite’s Chief Executive Officer from Bite’s inception and served on the Bite board of directors (“Bite Board”), and has served as the Chairman of the Bite Board since December 31, 2022, through the Closing of the Business Combination. He has more than 35 years of experience in the financial industry and has advised numerous companies on M&A transactions and on structuring and underwriting public and private issuances of equity and debt. From 2002 to 2009, Mr. Ardura was the Chief Country Manager and Head of Fixed Income Currencies and Commodities at Merrill Lynch Mexico, S.A. de C.V., the leading investment bank in Mexico at the time. In 2009, Mr. Ardura joined Deutsche Bank, A.G. in New York City as Head of Latin America Capital Markets and Treasury Solutions, advising over 350 clients in raising several hundred billion dollars in debt and equity financing in the public and private markets, as well as advising several clients in restructurings transactions. During such time, Mr. Ardura was also responsible for Deutsche Bank’s local operations in Brazil, Mexico, Chile, Perú and Argentina, and was a member of Deutsche Bank’s Global Emerging Markets Committee, Latin America Investment Committee, and Americas Investment Banking Executive Committee. He was later appointed as Vice Chairman of Corporate Finance for Latin America. From 2017 to 2019, he was a Managing Director leading the Latin America Investment Banking and Client Coverage division at Nomura Securities, Inc. In 2019, Mr. Ardura founded his own advisory firm, Pier A Capital Solutions, Inc., focusing on M&A and private debt and equity financing transactions for clients across Latin America. Mr. Ardura has served on several boards of directors including Banca Promex, S.A. de C.V., Valores Finamex, S.A. de C.V. Merrill Lynch México, and Casa de Bolsa, S.A. de C.V. He currently serves as an independent board member of HSBC México, S.A., the banking subsidiary of Grupo HSBC, and also serves on the boards of its insurance, broker dealer and asset manager subsidiaries. Mr. Ardura is also an independent board member of Dimex Capital, SA deCV and FinMédica, S.A, and is also a board member of Eric Kayser México, S.A.P.I. de C.V. Mr. González has over three-decades of experience in the financial industry as well as his extensive executive leadership experience and board service positions. Age 61.

Chief Reginald Bellerose is a political leader and business leader. Mr. Bellerose has served as a director and a member of the Audit & Finance Committees of Encanto Potash Corp. since 2020 and 2022, respectively. Mr. Bellerose is also a director at five private companies, including Carbon RX Inc., where he has served since November 2022, Atamipek, where he has served since December 2018, 102005647 Saskatchewan Ltd, where he has served since January 2017, KDM Business Development Corp., where he has served since 2009, and Saskatchewan Indian Gaming Authority, where he has served as the Chairman of the board since February 2008. Mr. Bellerose has served as the President of both Muskowekwan Resources Ltd. since 2010 and of KDM Business Development Corp. since 2009. He served for 17 consecutive years, until 2021, as Chief of Muskowekwan First Nation. Mr. Bellerose holds a Master’s Certificate in Project Management from the University of Saskatchewan and a Bachelor of Arts in History and Political Science from Concordia University in Edmonton. Mr. Bellerose has served in various leadership positions in politics, business and has extensive board service positions. Age 56.

Agustin Tristan Aldave is a consultant for an array of companies in the financial industry and develops restaurants, franchises, ready-to-eat and ready-to-drink products, including developing a bottling company, as well as a food delivery platform to take healthy food and beverages to industrial areas. Mr. Tristan has served as a director and the CEO at the Agrinam Acquisition Corporation since August 2021. Further, Mr. Tristan also serves as a director and the CEO of two private companies, including Lexington Capital, S.A.P.I. de C.V. (“Lexington”), where he has served since April 2017, and Demeter Capital, S.A.P.I. de C.V., where he has served since August 2016. Mr. Tristan received a Bachelor of Science in Industrial Engineering in 2008 from the University of Alabama and a Master of Business Administration from the same university in 2010. Mr. Tristan has extensive experience serving on various boards, working on food product development and consulting in the financial and manufacturing industries. Age 38.

The executive officers of New Above Food after the closing of the Business Combination consists of two additional individuals:

Vice President of Consumer Brands

Martin Williams is a Co-Founder of Above Food and the President and Chief Innovation Officer of AFBI, a wholly owned subsidiary of Above Food. He has served as the President and Chief Innovation Officer of AFBI since January 2021. Mr. Williams has been a visiting professor at CEDIM México since December 2018, where he teaches a class on adaptive strategy as part of the Master’s in Business Innovation program. Before founding Above Food, Mr. Williams held various leadership roles at global management consulting firms, such as Fahrenheit 212, which was acquired by Capgemini SE (PA: CAP), and Idea Couture Inc., which was acquired in 2016 by Cognizant Technology Solutions (NASDAQ: CTSH), until July 2019, including Senior Vice President and Global Head of Strategy. Mr. Williams attended OCAD University in Toronto where he studied industrial design with a specialization in applied innovation.

Vice President of Origination and Regenerative Agriculture

Tyler West is a Founder of Above Food and, since 2016, a Founder and President and Chief Executive Officer of Purely Canada Foods Corp. (“PCFC”), now a wholly owned subsidiary of Above Food. He has served as a member of the PCFC board of directors since October 2016 and as a member of the Above Food Board since January 2023 and as President and Chief Executive Officer of PCFC since October 2017. Mr. West received a Bachelor of Science degree in Agricultural Business and Management at the University of Missouri-Columbia.

Corporate Governance

New Above Food Common Shares and New Above Food Listed Warrants are currently listed on Nasdaq under the symbols “ABVE” and “ABVE.W,” respectively. As of the Closing, New Above Food is subject to the Nasdaq corporate governance requirements (the “Nasdaq Listing Rules”) on an ongoing basis.

The Canadian Securities Administrators (the “CSA”) have issued corporate governance guidelines pursuant to National Policy 58-201 — Corporate Governance Guidelines (the “Corporate Governance Guidelines”), together with certain related disclosure requirements pursuant to National Instrument 58-101 — Disclosure of Corporate Governance Practices (“NI 58-101”). The Corporate Governance Guidelines are recommendations respecting reporting issuer corporate governance, including the CSA’s recommendations on the composition of a company’s board of directors (or similar body for a non-corporate entity), director independence, board mandates and position descriptions for the board chair, committee chairs, and the Chief Executive Officer, orientation and continuing education, written codes of conduct or ethics, nomination of directors, compensation and regulator board assessments.

New Above Food recognizes that good corporate governance plays an important role in its overall success and in enhancing shareholder value and, accordingly, has adopted, certain corporate governance policies and practices that reflect its consideration of the recommended Corporate Governance Guidelines.

The disclosure set out below includes disclosure required by NI 58-101 describing New Above Food’s anticipated approach to corporate governance in relation to the Corporate Governance Guidelines and the Nasdaq Listing Rules.

Election and Appointment of Directors

Under the New Above Food Articles, the New Above Food Board shall consist of a minimum of 1 and a maximum of 15 directors. Under the provisions of the ABCA if New Above Food is a “reporting issuer” in any jurisdiction of Canada the New Above Food Board shall not have less than 3 directors.

Unless otherwise required by the ABCA or the New Above Food Articles, at all meetings of shareholders, every question will be decided by a majority of the votes cast on the question. In case of an equality of votes on any question, the chair of the meeting will not be entitled to a second or casting vote.

A resolution in writing signed by all the directors entitled to vote on that resolution at a meeting of directors or committee of directors is as valid as if it had been passed at a meeting of directors or committee of directors, as the case may be. A resolution in writing dealing with all matters required by the ABCA to be dealt with at a meeting of directors, and signed by all the directors entitled to vote at that meeting, satisfies all the requirements of the ABCA relating to meetings of directors.

Each director shall hold office until the next annual general meeting and until his or her successor is elected and duly qualified, subject to prior death, resignation, retirement, disqualification or removal from office.

Director Independence

The New Above Food Board has determined that each of Felipe Gomez Garcia, Garth Frederickson, Chief Reginald Bellerose, Alberto Ardura González and Agustin Tristan Aldave qualify as “independent directors”, as defined under the rules of Nasdaq and NI 58-101 and the New Above Food Board consists of a majority of “independent directors”, as defined under the rules of the SEC and Nasdaq relating to director independence requirements. In addition, the New Above Food Board is subject to the rules of the SEC and Nasdaq relating to the membership, qualifications, and operations of the audit committee, as discussed below.

Committees of the New Above Food Board of Directors

As of the Closing of the Business Combination, New Above Food Board established three standing committees: an audit and risk committee, nominating committee and a compensation committee. The written charter for each of the New Above Food Board committees is posted on our website at https://abovefood.com/investors/.

Audit and Risk Committee

We have established an audit and risk committee comprised of Garth Frederickson, Alberto Ardura González and Agustin Tristan Aldave, with Alberto Ardura González serving as chairperson, each of whom meet the independence requirements set forth in Rule 10A-3 under the Exchange Act and applicable Nasdaq Listing Rules. Each member of the audit committee is financially literate, and the New Above Food Board has determined that Alberto Ardura González qualifies as the “audit committee financial expert,” as such term is defined in Item 407 of Regulation S-K and qualifies as an “audit committee financial expert”, as such term is defined in the rules of the SEC and applicable Nasdaq Listing Rules.

The audit and risk committee is, among other things, directly responsible for the appointment, compensation, retention and oversight of the work of New Above Food’s independent auditor, including overseeing the qualifications and independence of our outside auditor, overseeing management’s conduct of our financial reporting process (including the development and maintenance of systems of internal accounting and financial controls), overseeing the integrity of our financial statements, overseeing the performance of the internal audit functions, preparing certain reports required by the rules and regulations of the SEC, reviewing the results and scope of the audit and other accounting related services, and overseeing New Above Food’s compliance with legal and regulatory requirements.

Compensation Committee

We have established a compensation committee comprised of Garth Frederickson and Agustin Tristan Aldave, with Agustin Tristan Aldave serving as chairperson, each of whom meet the independence requirements set forth in Rule 10C-1 under the Exchange Act and applicable Nasdaq Listing Rules.

The compensation committee is, among other things, directly responsible for reviewing and approving, or recommending to the New Above Food Board for approval, compensation of the Chief Executive Officer and other executive officers, making recommendations to the New Above Food Board with respect to director compensation, overseeing the succession planning process, overseeing the administration of New Above Food’s incentive compensation plans, and preparing any report on executive compensation required by the rules and regulations of the SEC.

Nominating and Governance Committee

We have established a nominating and governance committee comprised of independent directors, Chief Reginald Bellerose and Felipe Gomez Garcia, with Chief Reginald Bellerose serving as chairperson.

The nominating and governance committee is, among other things, directly responsible for overseeing the selection of persons to be nominated to serve on the New Above Food Board, making recommendations to the New Above Food Board with respect to committee members and chairs, annually evaluating the committees, and overseeing and developing New Above Food’s corporate governance practices.

Diversity

The New Above Food Board has not adopted any policies that address the identification and nomination of women or other diverse candidates to the New Above Food Board or to management of New Above Food. The New Above Food Board recognizes the importance and benefit of having a board of directors and senior management composed of highly talented and experienced individuals having regard to the need to foster and promote diversity among board members and senior management with respect to attributes such as gender, ethnicity and other factors. In support of this goal, the compensation committee intends to, when identifying candidates to nominate for election to the New Above Food Board or appoint as senior management or in its review of senior management succession planning and talent management:

· consider individuals who are highly qualified, based on their talents, experience, functional expertise and personal skills, character and qualities having regard to New Above Food’s current and future plans and objectives, as well as anticipated regulatory and market developments;

· consider criteria that promote diversity, including with regard to gender, ethnicity, and other considerations;

· consider the level of representation of women on its board of directors and in senior management positions, along with other markers of diversity, when making recommendations for nominees to the New Above Food Board or for appointment as senior management and in general with regard to succession planning for the New Above Food Board and senior management; and

· as required, engage qualified independent external advisors to assist the New Above Food Board in conducting its search for candidates that meet the board of directors’ criteria regarding skills, experience and diversity.

At the present time, there are no women serving on the New Above Food Board.

B. Advisers

Latham & Watkins LLP, 811 Main Street, Suite 3700, Houston, TX 77002, has acted as U.S. securities counsel for New Above Food and Above Food and is continuing to act as U.S. securities counsel to New Above Food following the closing of the Business Combination.

Gowling WLG (Canada) LLP, 1600, 421 7th Avenue SW, Calgary, Alberta, T2P 4K9, Canada, has acted as counsel for New Above Food and Above Food with respect to Canadian law and is continuing to act as counsel for New Above Food with respect to Canadian law following the closing of the Business Combination.

C. Auditors

For the fiscal years ended January 31, 2024 and 2023, Ernst & Young LLP, Chartered Professional Accountants, 409 — 3rd Ave S, Saskatoon, SK S7K 5R5, Canada, has acted and will act going forward as independent registered public accounting firm for Above Food and New Above Food, respectively.

ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE

Not applicable.

ITEM 3. KEY INFORMATION

A. [Reserved]

B. Capitalization and Indebtedness

The following table sets forth the capitalization of New Above Food on an unaudited pro forma combined basis as of January 31, 2024, after giving effect to the Business Combination.

C. Reasons for the Offer and Use of Proceeds

Not applicable.

D. Risk Factors

The risk factors related to the business and operations of New Above Food are described in the Proxy Statement/Prospectus under the section titled “Risk Factors,” which is incorporated herein by reference.

On December 27, 2022, the U.S. Department of the Treasury issued a notice that provides interim operating rules for the excise tax, including rules governing the calculation and reporting of the excise tax, on which taxpayers may rely until the forthcoming proposed Treasury Regulations addressing the excise tax are published. Although such notice clarifies certain aspects of the excise tax, the interpretation and operation of other aspects of the excise tax remain unclear, and such interim operating rules are subject to change.

ITEM 4. INFORMATION ON THE COMPANY

A. History and Development of the Company

The legal name of the company is Above Food Ingredients Inc. New Above Food was incorporated as a corporation organized under the laws of Alberta, Canada (formerly known as 2510169 Alberta Inc.) on April 18, 2023. The address of the registered office of New Above Food is 2305 Victoria Avenue #001, Regina, Saskatchewan, S4P 0S7 and the telephone number of New Above Food is +1 (306) 779-2268.

See “Explanatory Note” in this Report for additional information regarding New Above Food and the Business Combination. Certain additional information about New Above Food is included in the Proxy Statement/Prospectus under the section titled “Information Related to New Above Food” and is incorporated herein by reference. The material terms of the Business Combination are described in the Proxy Statement/Prospectus under the section titled “The Business Combination Proposal,” which is incorporated herein by reference.

New Above Food is subject to certain of the informational filing requirements of the Securities Exchange Act of 1934, as amended (“Exchange Act”). Since New Above Food is a “foreign private issuer”, it is exempt from the rules and regulations under the Exchange Act prescribing the furnishing and content of proxy statements, and the officers, directors and principal shareholders of New Above Food are exempt from the reporting and “short-swing” profit recovery provisions contained in Section 16 of the Exchange Act with respect to their purchase and sale of New Above Food Common Shares. In addition, New Above Food is not required to file reports and financial statements with the SEC as frequently or as promptly as U.S. public companies whose securities are registered under the Exchange Act. However, New Above Food is required to file with the SEC an Annual Report on Form 20-F containing financial statements audited by an independent accounting firm. The SEC also maintains a website at http://www.sec.gov that contains reports and other information that New Above Food files with or furnishes electronically to the SEC.

The website address of New Above Food is https://abovefood.com. The information contained on the website does not form a part of, and is not incorporated by reference into, this Report.

B. Business Overview

Prior to the Business Combination, New Above Food did not conduct any material activities other than those incidental to its formation and the matters contemplated by the Business Combination Agreement, such as the making of certain required securities law filings and the establishment of certain subsidiaries. Upon the closing of the Business Combination, New Above Food became the direct parent of, and conducts its business through Above Food, an Alberta-based innovative food company leveraging its vertically integrated supply chain to deliver differentiated ingredients and consumer products.

Information regarding the business of Above Food is included in the Proxy Statement/Prospectus under the sections titled “Business of Above Food and Certain Information about Above Food” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations of Above Food,” which are incorporated herein by reference.

C. Organizational Structure

Upon the closing of the Business Combination, Above Food became a direct, wholly owned subsidiary of New Above Food. The organizational chart of New Above Food is included on page 36 of the Proxy Statement/Prospectus and is incorporated herein by reference.

D. Property, Plant and Equipment

New Above Food’s property, plants and equipment are held through Above Food and its subsidiaries. Information regarding New Above Food’s property, plants and equipment is included in the Proxy Statement/Prospectus under the sections titled “Business of Above Food and Certain Information about Above Food—‍Manufacturing” and “Business of Above Food and Certain Information about Above Food—‍Facilities” and are incorporated herein by reference.

ITEM 4A. UNRESOLVED STAFF COMMENTS

None.

ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS

Following and as a result of the Business Combination, the business of New Above Food is conducted through Above Food, its direct, wholly owned subsidiary, as well as the direct, and indirect subsidiaries of Above Food.

The following discussion and analysis of the financial condition and results of operations of Above Food for the years ended January 31, 2024 and January 31, 2023, is based on Above Food’s financial information prepared in accordance with United States generally accepted accounting principles (“U.S. GAAP”). Some of the information contained in this discussion and analysis or set forth elsewhere in this Proxy Statement/Prospectus, including information with respect to Above Food’s plans and strategy for its business, includes forward-looking statements that involve risks and uncertainties.

Company Overview

Above Food is a regenerative ingredient company with a vertically integrated supply chain that produces products made with carefully sourced ingredients, with a priority on chain of custody, nutrition, flavor and transparency. Above Food’s vision is to create a healthier world – one seed, one field, and one bite at a time. With a priority on chain of custody plant proteins, enabled by scaled operations and infrastructure in primary agriculture and ingredient processing, Above Food aims to deliver food to business and consumers with traceability, quantifiable sustainability, and nutrient density.

Above Food’s ingredients are inside some of the most successful branded consumer products, with products available online and in natural grocers across Canada and the USA. Our railway infrastructure, grain storage terminals, private railcar fleet, and strategic farm acres provide reliability and agility across the supply chain. From partnering to purchase next year’s planting seed to measuring the results of regenerative farming practices, we take the long view. We believe Above Food is poised to expand its platform through innovation and organic growth along with acquisition opportunities in the regenerative ingredient space.

Above Food has three main product lines and operates in two reportable segments: Disruptive Agriculture and Rudimentary Ingredients, and Consumer Packaged Goods (“CPG”). The Disruptive Agriculture and Rudimentary Ingredients segment concentrates on the provisioning of discrete genetics, origination, purchasing, grading, primary processing and sale of regeneratively grown grain, as well as the origination, purchase, and sale of bespoke ingredients products, processed primarily through the Company-owned ingredient facilities. The CPG segment formulates, manufactures, sells, distributes, and markets proprietary consumer product formulations in owned brands and focuses on manufacturing and distribution for private-labeled retail owned brands. The Company also has a corporate department that carries out the centralized functions of accounting, treasury, information technology, legal, and human resources. Given that this department does not undertake business activities and does not recognize revenue that are more than incidental to the Company’s activities, it is not considered to be a separate operating segment.

Above Food has experienced a decrease in sales for the year ended January 31, 2024 (“FY24”) in comparison to the year ended January 31, 2023 (“FY23”), with both years having a large increase over the year ended January 31, 2022 (“FY22”). Revenues decreased to $368.4 million for FY24 from $396.5 million for FY23. Revenues for FY22 were $198.9 million. Disruptive Agriculture and Rudimentary Ingredients revenues decreased to $356.4 million in FY24 from $387.0 million in FY23, which increased from $198.7 million in FY22. CPG revenues increased to $11.6 million in FY24 from $9.4 million FY23, largely due to acquisitions that closed in May and June 2022 being included in the full FY24, compared to partial inclusion in FY23 (from the respective dates of acquisition to January 31, 2023). CPG revenues in FY22 were approximately $0.2 million, as the Company launched this division towards the end of calendar 2021.

We have generated a net loss in each of FY24, FY23, and FY22. Net losses in FY24, FY23, and FY22 were $53.3 million, $45.5 million, and $5.8 million, respectively. The Company incurred significant losses in FY24 and FY23 due to significant professional fees relating to consulting and accounting as the Company prepared to go public, expenditures in order to fulfill sales contracts, continued investment in innovation and growth of our business, and implementation of the systems, processes and tools necessary to be publicly traded. The loss in FY22 was largely related to expenses incurred in scaling up the business and beginning the process to go public. These losses specifically relate to operations, interest, and income taxes and do not reflect specific capital expenditures or acquisitions.

Growth Strategy and Outlook

A key component of Above Food’s growth strategy is organic or internal growth with the intent of delivering profitable and sustainable revenue growth through the sale of existing higher margin products; expanding into new channels and attracting new customers; introducing higher margin products; building strategic partnerships through consumer and customer insights and investing in continuous improvement in our plants and our organization to improve efficiencies and simplify the business; growth through acquisitions; and securing long-term contracts. A significant percentage of the Disruptive Agriculture and Rudimentary Ingredients revenue is contracted over 3 to 12 months with our customers. Our contracts have terms that allow for cancellation upon events of force majeure. While we believe contractual relationships with our customers will result in revenues being stable over time, we have experienced and may experience fluctuations in our revenues.

The Business Combination and Public Company Costs

On April 29, 2023, Above Food, New Above Food and Merger Sub, entered into the Business Combination Agreement with Bite to consummate the Business Combination. Existing Above Food shareholders, including management rolled over 100% of their equity into the combined company. Following the closing of the Business Combination, Above Food shareholders remained majority shareholders with an approximate 59.74% ownership. Above Food shareholders received common shares valued at US $10.00 per share of New Above Food in the Business Combination. Upon consummation of the Business Combination, New Above Food became listed on Nasdaq, and Bite’s listing on the NYSE was terminated.

The Business Combination was structured as follows:

(a)             Prior to the Closing, Above Food continued from the laws of Saskatchewan to a corporation under the laws of the Province of Alberta pursuant to the ABCA;

(b)             On the Closing Date and pursuant to a court-approved plan of arrangement, Above Food’s shareholders effected the Share Exchange, pursuant to which, among other things, Above Food’s shareholders contributed to New Above Food all of the issued and outstanding equity of Above Food in exchange for newly issued New Above Food Common Shares, New Above Food’s Class A Earnout Shares and New Above Food’s Class B Earnout Shares, and after giving effect to the Share Exchange, Above Food became a direct, wholly owned subsidiary of New Above Food. The New Above Food Class A Earnout Shares and New Above Food Class B Earnout Shares are convertible into common shares of New Above Food if certain vesting conditions are met. In addition, the New Above Food Common Shares issued as part of the consideration of the Merger that were issued to Smart Dine, LLC, a Delaware limited liability company (“Sponsor”), at the Closing in exchange for Bite founder shares that were held by the Sponsor, will be subject to vesting conditions identical to the New Above Food Class A Earnout Shares and New Above Food Class B Earnout Shares, and will be forfeited if such conditions are not satisfied; and

(c)             On the Closing Date and following the completion of the Share Exchange, Merger Sub merged with and into Bite, with Bite surviving as a direct, wholly owned subsidiary of New Above Food. As a result of the Merger, (i) each issued and outstanding share of Bite’s common stock is no longer outstanding and was automatically converted into and exchanged for one New Above Food Common Share and (ii) each issued and outstanding warrant to purchase shares of Bite’s common stock is no longer outstanding and was, pursuant to the terms of the Warrant Agreement, automatically converted into and became one warrant to purchase New Above Food Common Shares, and all rights with respect to shares of Bite’s common stock underlying such warrants were automatically converted into rights with respect to New Above Food Common Shares, in each case, with New Above Food issuing a number of New Above Food Common Shares and warrants in accordance with the Warrant Agreement.

(d)             Prior to the Closing Date, Above Food issued Above Food common shares in exchange for cash proceeds of USD $5.0 million and USD $5.3 million to Brotalia, S.L. (“Brotalia”) and Veg House Holdings Inc. (“Veghouse”) stockholders, respectively, and for prepaid deposit of USD $3.2 million to Veghouse for future goods or services to be provided to New Above Food. Upon completion of the Business Combination, Above Food’s existing shareholders, Bite’s public stockholders, Bite’s initial stockholders (including the Sponsor), Brotalia stockholders, Veghouse stockholders, the ANF stockholders and the lenders (“Lenders”) own the following percentages of New Above Food Common Shares, not including the Above Food Earnout Shares. The amount of New Above Food Common Shares to be owned by the Lenders represents the conversion of the USD $4.9 million of lender financing outstanding and the associated USD $1.2 million of interest accrued up to January 31, 2024 into New Above Food Common Shares at a deemed value of USD $10 per share, excluding 36,681 New Above Food Common Shares expected to be issued for the interest accrued from February 1, 2024 to the Closing Date. The equity value outlined below is calculated assuming a share price of USD $10 per share issued.

As a result of the Business Combination, New Above Food became an SEC-registered and Nasdaq-listed company, and its operations represent a continuity of Above Food’s operations. As a public company, New Above Food will be implementing additional procedures and processes for the purpose of addressing the standards and requirements applicable to public companies. We expect to incur additional annual expenses related to being a publicly listed company including, among other things, additional directors’ and officers’ liability insurance, director fees, reporting requirements of the SEC, transfer agent fees, hiring additional accounting, legal and administrative personnel, increased auditing and legal fees and similar expenses.

Business Trends

Year Ended January 31, 2024, January 31, 2023, and January 31, 2022

We generated a $7.8 million greater net loss in FY24 as compared to FY23, and a $47.5 million greater net loss in FY24 as compared to FY22. The biggest drivers of the increased loss as compared to FY23 were the following:

Our decreased net loss in FY22 when compared to FY23 and FY24 is largely due to the Company having a stronger gross margin (fewer write-downs/write-offs and costs incurred to exit contracts), lesser selling, general, and administrative costs overall as we had not yet completed acquisitions, no equity method investment loss as compared to FY24 ($3.8 million) and FY23 ($0.8 million), and a lack of impairment of intangible assets as compared to FY24 ($1.8 million) and FY23 ($6.9 million).

Supply chains

We have historically experienced corresponding unfavorable effects of higher raw material costs, higher freight and logistics costs, and supply chain challenges, including supply chain disruptions resulting from labor shortages and disruptions in ingredients. These cost pressures and supply chain challenges have continued through the years ended January 31, 2024 and 2023. We expect these challenges to continue in the 2025 fiscal year. We also continued to see manufacturer and logistics challenges, largely related to ingredient shortages that have contributed to lower sales of our products due to periodic out-of-stock situations. We could experience additional lost sale opportunities if our products are not available for purchase because of continued or expanded disruptions in our supply chain relating to an inability to obtain ingredients or packaging, labor challenges at our logistics providers or our contract manufacturers, or if our customers experience delays in stocking our products.

We have actively engaged with our customers, suppliers, and logistics and transportation providers, to meet demand for our products and to remain informed of any challenges within our business operations. We have also instituted price increases throughout the year ended January 31, 2024. Management believes these price increases and additional cost savings initiatives will enable us to continue to invest in projects that drive growth.

Climate related trends

Our business, industry, customers and others in the agriculture value chain face long-term challenges from climate change, including increasing expectations for climate actions and reductions of GHG emissions. Physical risks from a changing climate can have an impact on our operations, our customers and our supply chain. These include more intense weather events, longer droughts, rising sea levels, and changes in average temperature and precipitation patterns. Global decarbonization ambitions and the resulting energy transition are driving carbon regulations and informing capital allocation priorities of investors. Above Food faces evolving risks related to potential regulatory changes, including carbon pricing. At the same time, a transition to a low-carbon economy could create significant opportunities for Above Food to help growers manage these impacts and improve their resilience by facilitating the adoption of climate-smart agriculture practices and developing products that can improve yields in more challenging conditions. To date, our operations have not been significantly affected by weather related risks, though prices for inputs such as pulses and grains have fluctuated as a result of weather impacts in the past. We mitigate the impact of these changes in pricing in part by using back-to-back forward contracts with price discovery mechanisms, and locking in margins in advance under a merchandising model. These derivative contracts have not been designated as accounting hedges, and thus changes in their fair value affect our earnings immediately.

The impact of climate changes in the operations of our customers is uncertain and may be negative due to changes in rainfall patterns and intensity, shortage of water, changes in sea levels and changes in temperature, among others. These impacts may vary depending on the location and intensity of events, comprising acute risks, including increased severity of extreme climate events, and chronic risks, deriving from long-term changes in climate patterns. The risks of climate change also depend on political, regulatory, legal, technological and market responses. Further, climate change laws could also increase our costs and have an impact on our financial condition and results of operations. We cannot assure that the loss caused by these climate effects on the crops of our growers will be recovered, even in following seasons. As a result, we may be materially adversely affected, and our financial results may significantly vary in each year.

Climate change may also adversely affect our transportation infrastructure and that of logistics and transportation partners. Logistics bottlenecks resulting from poor highway conditions, which are aggravated during certain key planting periods, or resulting from adverse weather conditions or other causes, may delay or prevent the delivery of our products and may have an impact on our financial condition and results of operations.

Acquisitions

The Company has completed certain acquisitions (the “Acquisitions”) in FY24, FY23, and FY22, as described below. The acquisitions were funded with a combination of cash and shares. The results of operations for these years might not be comparable as a result of these Acquisitions. Refer to Note 4 of the Financial Statements for details regarding these acquisitions.

Discovery Seed Labs

On March 23, 2023, the Company entered into a contract to acquire 100% of the issued and outstanding common shares of Discovery Seed Labs Ltd. (“DSL”), a seed testing and genomics laboratory in Saskatoon, Saskatchewan, for $3,213,563 (the “Purchase Price”). The acquisition of control was considered to be a business combination and accounted for using the acquisition method. The Company paid the Purchase Price by paying $2 million cash and issuing 502,088 class A common shares valued at $1,213,563.

The aggregate consideration of this acquisition has been allocated to the fair values of the acquired assets and assumed liabilities as follows:

The following table sets forth the fair values and the useful lives of the intangible assets acquired:

ANF

ANF produces a variety of branded foods under its various proprietary labels. On September 7, 2021, Above Food entered into a Membership Interest Purchase and Option Agreement with ANF’s majority owner, ANF Holdco LLC, to acquire all membership interests of ANF in four separate tranches.

As part of the first tranche, on September 7, 2021, Above purchased 51.86 units of ANF representing 5.0% of the  membership interests, for CAD $1,500,566 (US $1,185,000).

On December 31, 2021, under the second tranche, Above increased its membership interests of ANF to 13.40% by purchasing 87.54 units representing 8.4% membership interests, for CAD $2,550,479 (US $2,000,000).

On January 20, 2023, under the third tranche, Above acquired an additional 19.66% of ANF’s membership interest for CAD $6,255,400 (USD $4,650,000), bringing Above’s total membership interest to 33.06%. The Company accounted for its investment in ANF using the equity method of accounting, until June 2024, when it acquired the remaining 66.94% interest in ANF for 1,604,253 New Above Food Common Shares.

FDO

On June 3, 2022 the Company acquired 100% of the issued and outstanding common shares of Farmer Direct Organic Foods Ltd. (“FDO”), in exchange for 1,065,305 common shares of the Company. Of these shares, 432,780 were placed in escrow pending meeting certain milestones based on a combination of revenue and EBITDA as defined within the contract.

The aggregate consideration of this acquisition has been allocated to the fair values of the acquired assets and assumed liabilities as follows:

NorQuin

On May 18, 2022 the Company entered into a contract to acquire 100% of the issued and outstanding common shares of NorQuin, North America’s largest supplier of quinoa, for $3,163,610 (the “Purchase Price”) plus or minus any working capital adjustments. The acquisition of control was considered to be a business combination and accounted for using the acquisition method. The Company paid the Purchase Price by issuing 1,565,595 class A common shares valued at $2,672,790 and 682,061 warrants with a total estimated fair value of $490,820.

The aggregate consideration of this acquisition has been allocated to the fair values of the acquired assets and assumed liabilities as follows:

The following table sets forth the fair values and the useful lives of the intangible assets acquired:

Wood & Water

On July 13, 2021, the Company obtained control of Wood & Water Foods Inc., doing business as “Culcherd” (“Wood & Water”), a dairy alternative company. The consideration payable of $3,250,000 (which was reduced by a working capital adjustment of $16,590) was payable in shares of the Company, the number of which was based on the value of the Company at the time of issuance and subject to further adjustment if they were released as a result of a going public transaction. Taking into account the probability of a going public transaction, applicable share restrictions, and the working capital adjustment, the fair value of the consideration was determined to be $2,901,494 on acquisition and revalued to be $2,753,761 as at January 31, 2022, with a resulting gain on revaluation of $147,733 recorded in our consolidated statements of operations for the year ended January 31, 2022. On April 13, 2022, the Company issued 1,616,705 voting common shares to settle the consideration liability.

The following table describes the fair value of the assets acquired and liabilities assumed in this acquisition.

The following table sets forth the fair values and the useful lives of the intangible assets acquired:

Comparability of Financial Information

Above Food’s results of operations and financial position in the fiscal years ended January 31, 2024, 2023, and 2022 may not be comparable as a result of the factors provided above under Business Trends, and the Acquisitions outlined above.

Key Financial Definitions/Components of Results

Revenue

Revenue consists primarily of commodity contracts related to forward sales of commodities such as grain and pulses, rudimentary ingredients, subleasing of farmlands, and sale of other products through consumer-packaged goods. Our main source of revenue is forward sales of commodity and ingredient contracts. As a result, our revenue levels tend to fluctuate alongside commodity prices, which are directly affected by numerous factors, including supply and demand, weather trends, geopolitical events, and government policies. These contracts generally require significant working capital, therefore limitations on working capital may also restrict revenue.

Cost of sales

Cost of goods sold consists primarily of the costs we pay to our contract growers and manufacturing partners to produce the products sold. These costs include the purchase of raw ingredients, packaging, shipping and handling, warehousing, and brokerages paid on contracts. In addition, any inventory write-down and/or spoilage are reflected as a component of cost of sales. For inventories of marketable agricultural commodities being stated at fair value, changes in the fair values of the inventory and gains/losses, both realized and unrealized, on related contracts are recognized as cost of sales. While forward commodity and foreign exchange contracts are entered into as a mechanism to hedge against fluctuations in commodity prices and foreign exchange, we are not perfectly hedged, and as such open the Company up to the possibility of significant gains or losses as a result. We anticipate our cost of goods sold to grow as a smaller proportion of our revenues as we achieve increased efficiencies and utilization within our Specialty Ingredient Centre and manage our exposures to commodity price and foreign exchange fluctuations.

Selling, general and administrative (“SG&A”) expenses

SG&A expenses are primarily comprised of wages and salaries, professional fees, selling and marketing expenses, and other non-production operating expenses. As a publicly traded company, we expect to incur higher costs related to salaries and wages, advertising and marketing fees, as well as other legal, compliance, and administrative costs. We also expect to continue to increase our selling, marketing and advertising costs as we invest in growing our revenues and our market reach. We incurred significant expenses, consisting of professional fees, diligence fees and related costs, in connection with the Business Combination and capital raising efforts in the fiscal years ended January 31, 2024 and 2023. We also incurred significant costs relating to our go-public process, an employee stock-based compensation plan, and increased rental costs associated with expansion. We anticipate significant expenditures relating to many of these costs going forward as we work to complete our transition to a public company. We have also identified and have begun to realize a number of synergies from the operations we acquired resulting from restructuring of the management teams, sharing resources, brand consolidation, and leveraging our robust supply chain in product formulations.

Research and Development

Research & Development (“R&D”) costs consist of costs incurred to enhance our existing products and new product developments. R&D costs are expensed as incurred. We expect to continue to be active in R&D as we invest in growing our intellectual property, product offerings and expanding our market reach. However, in the near term, we expect to reduce our relative R&D cost significantly as we work to commercialize existing intellectual property in which we have already invested. We recognize the value in continuing as the leader in regenerative agriculture, and we believe the refinement of our current operations and intellectual property is crucial to our long-term growth and strategy.

Financing Costs / Interest Expense

Financing costs consist of gains and losses on swap derivatives, as well as interest expense. Interest expense represents the actual cash interest costs incurred plus any accrued interest payable at a future date. There is no certainty that these rates or instruments will continue to be available to the Company.

Results of Operations

Years Ended January 31, 2024, January 31, 2023, and January 31, 2022

The following discussion presents an analysis of our consolidated results of operations for the year ended January 31, 2024, 2023, and 2022.

Revenue

During FY24, revenue decreased $28.0 million, or 7.1%. The revenue decrease is almost entirely attributable to working capital constraints that capped growth, as our disruptive agriculture and rudimentary ingredients segment revenues are driven off of available working capital. As we maximized our asset backed lending line, we were unable to make additional purchases and sales as we lacked the available capital to do so. Additionally, although durum volumes increased significantly (refer to the Processed Volumes by Product table below), we saw price decreases in durum that offset this volume increase. The average price of durum in FY24 was $482.92 per metric ton, compared to $529.98 for FY23. Additionally, other high-volume commodities also saw price decreases, including peas ($567.69 in 2024 vs. $578.65 in 2023), wheat ($410.02 vs. $454.37), canary seed ($877.28 vs. $946.49), and canola ($763.33 vs. $929.17). The only high-volume commodity traded that saw a price increase was lentils ($1,095.41 vs. $991.15).

During FY23, revenue increased $197.6 million, or 99.4%, from $198.9 million to $396.5 million. The increase in revenue was primarily due to volume growth (162.4 thousand metric tons increase over FY22), the continued build out of our durum program (94.4 thousand metric tons of the above-noted increase) and pea ingredients in the Disruptive Ag and Rudimentary Ingredients division, as well as the Company starting to record consolidated operations from acquired companies. Further to volume increases, many commodity prices also saw increases in FY23, largely due to an enhanced focus on the importance of food and commodities coming out of the COVID-19 pandemic, the ongoing war in Ukraine, and a drought in Western Canada. Several high-volume commodities saw price increases per metric ton, including durum ($671.95 for FY23 vs. $489.77 for FY22), peas ($780.05 vs. $617.30), lentils ($1,184.77 vs. $865.85), wheat ($579.58 vs. $207.87), canary seed ($1,218.51 vs. $990.71), and canola ($1,030.27 vs. $884.74). Other factors contributing to the increase are the launch of our oat program, which contributed $2.2 million of new revenue, the acquisition of our ingredient centre facility, which contributed $3.7 million of new revenue, and our entrance into the organic CPG and bulk market, which contributed $1.7 million of new revenue. Contrarily, revenues of the CPG segment were negatively impacted due to downtime relating to the acquisition and subsequent move of FDO into our ingredient center.

Cost of sales

Cost of sales decreased $23.4 million, or 5.9%, for FY24 as compared to FY23. The Company experienced inventory write-offs of approximately $3.0 million in FY24, as well as significant costs to exit unfavorable commodity contracts that are captured within cost of sales. Both of these factors resulted in cost of sales decreasing at a lesser rate relative to the decrease in revenue.

Cost of sales increased $206.8 million, or 108.3%, for FY23, compared to $190.9 million for FY22. The biggest factor in our COGS increase was sales volume growth noted above, as well as higher raw material, freight, and logistics costs, and supply chain challenges. Raw material costs largely increased throughout the year as they are dependent on commodity prices at any given time – refer to the above discussion on revenue for price variances in high-volume commodities. Freight costs increased approximately $22.8 million from FY22, while logistical costs (i.e., cleaning, spoilage, brokerage fees, etc.) increased approximately $3.5 million from FY22.

Further to this, there were significant mark-to-market and foreign exchange losses that had a significant negative impact on our cost of goods sold in FY23. Cost of sales in FY23 includes realized losses of $3.8 million on commodity forward contracts, $1.3 million on commodity futures contracts, and $2.4 million on foreign exchange forward contracts. In comparison, FY22 had a $14.4 million gain on commodity forward contracts, which was offset by losses of $3.3 million and $1.8 million on commodity futures and foreign exchange forward contracts, respectively. Losses in FY23 were largely related to overly aggressive positions on certain commodity contracts, as well as timing differences on foreign exchange contracts. Above Food continues to implement more robust processes and controls to manage and mitigate exposures to these risks.

Gross profit (loss)

Gross loss increased $4.6 million, or 361.0%, for FY24 compared to FY23. The negative margins in the current period were largely the result of inventory impairment and write-offs of inventory. The negative margins in FY23 were largely due to losses of $13.9 million on mark-to-market and foreign exchange included in cost of sales.

Gross profit (loss) decreased $9.2 million (from a gross profit to a gross loss), or (116.2%), for FY23 compared to FY22, which was primarily driven by mark-to-market and foreign exchange losses included in cost of sales of $13.9 million in FY23, as noted above.

Selling, general, and administrative (“SG&A”) expenses

SG&A expenses increased only $3.1 million, or 10.0%, for FY24 compared to FY23 due to the following fluctuations:

SG&A expenses increased $19.4 million, or 166.0%, for FY23 compared to FY22 due to the following:

Impairment of goodwill and other intangible assets. Impairment expense decreased from $6.9 million to $1.8 million for FY24 compared to FY23. The assets impaired in the comparative period include goodwill relating to the acquisitions of Culcherd and FDO, as well as assets relating to trademarks/patents and brand of FDO. After these businesses were acquired, the revenues and profitability for these subsidiaries were lower than the amounts forecasted at the time of the acquisition, and as a result it was determined that the carrying value of these assets may exceed their recoverable amount. The goodwill acquired in both acquisitions was fully impaired, while the intangible assets relating to the FDO brand and trademarks/patents were partially impaired based on a discounted cash flows analysis of the business. In the current period, assets impaired included the goodwill relating to the Discovery purchase and intangible assets relating to Culcherd. This impairment was recorded due to each of the respective entities falling short of projections used in the purchase price allocations of each.

Impairment expense in FY22 was nil as there were no indicators of impairment in any investments or intangibles as at or during the year ended January 31, 2022.

Interest expense. Interest expense increased $2.3 million to $7.7 million for FY24 compared to FY23, primarily due to the new credit facilities obtained, as well as market interest rate increases on variable rate facilities. Similarly, interest expense increased from $3.3 million for FY23 compared to FY22, due to similar factors (i.e., new facilities and increased rates).

Equity method investment loss. The equity method investment loss increased $3.0 million to $3.8 million for FY24 compared to FY23. This increase is attributable to $3.3 million of impairment in the investment in ANF presented within this line item. This impairment was noted and recorded at the end of FY24, after ANF’s revenue and EBITDA targets used in formulating the fair value at acquisition were not being met.

Analysis of Results of Operations

Year Ended January 31, 2024, January 31, 2023, and January 31, 2022

Processed (sales) volumes by product for FY24, FY23, and FY22 are as follows (in 000s of metric tons):

We actively manage our inventory related to demand in the market. The overall decrease in processed volumes was primarily related to working capital constraints, as the majority of our revenue is dependent on available working capital.

Segment Information

Above Food operates in two reportable segments: Disruptive Agriculture and Rudimentary Ingredients, and CPG. The Disruptive Agriculture and Rudimentary Ingredients segment concentrates on the provisioning of discrete genetics, origination, purchasing, grading, primary processing and sale of regeneratively grown grain, as well as the origination, purchase, and sale of bespoke ingredients products, processed primarily through the Company-owned ingredient facilities. The CPG segment formulates, manufactures, sells, distributes, and markets proprietary consumer product formulations in owned brands and focuses on manufacturing and distribution for private-labeled retail owned brands. The Company also has a corporate department that carries out the centralized functions of accounting, treasury, information technology, legal, and human resources. Given that this department does not undertake business activities and does not recognize revenue that are more than incidental to the Company’s activities, it is not considered to be a separate operating segment.

Above Food determines the composition of the reportable segments based on factors including risks and returns, internal organization, and internal reports and allocates certain expenses across segments based on reasonable considerations such as production capacities.

We monitor our segment results primarily by reviewing net loss. Disruptive Agriculture and Rudimentary Ingredients net loss increased from $16.1 million in FY23 to $20.4 million in FY24. The increased loss is largely due to inventory write-offs and unfavorable contract positions. CPG’s net loss decreased from $14.9 million in FY23 to $12.9 million in FY24, driven primarily by the significant impairment of intangible assets and goodwill in FY23, which was offset by increased operating expenses that were not present in FY23, incurred as a result of a full year ownership of FDO and NorQuin. Corporate and Other’s net loss increased from $14.5 million in FY23 to $20.0 million in FY24. This increased loss is attributable to a smaller proportion of stock-based compensation expenses, offset by the increased headcount within the Corporate Group and increased professional fees, as discussed above, as well as $3.3 million of impairment relating to the investment in ANF that was incurred in FY24.

Disruptive Agriculture and Rudimentary Ingredients net loss increased from $1.7 million in FY22 to $16.1 million in FY23, driven primarily by realized and unrealized losses on forward contracts and foreign exchange. The overly aggressive positions and timing differences discussed in the Results of Operations section above are what caused this significant change. Realized losses totaling approximately $7.5 million were recorded by this segment. At year-end, mark-to-market adjustments of inventories and contracts held at fair value resulted in an additional $6.4 million of unrealized losses on these instruments that was included in the net loss of this segment.

CPG’s net loss increased from $1.2 million in FY22 to $14.9 million in FY23, driven primarily by significant impairment losses on goodwill and intangible assets, as well as operating expenses that were not present in FY22, incurred as a result of the acquisitions of FDO and NorQuin, and a full year of ownership of Culcherd. The losses on goodwill and intangible assets in FY23 total $6.9 million in the CPG segment, made up of impairment of $1.8 million relating to an intangible asset acquired relating to an acquisition that ultimately did not occur, $2.5 million relating to goodwill on the Culcherd acquisition and $2.6 million relating to goodwill, customer relationships, and the brand name acquired in the FDO acquisition. These impairments were recorded as the revenues and net profits of these entities did not align with projections that the valuations of each were based on.

Corporate and Other’s net loss increased from $2.8 million in FY22 to $14.5 million in FY23, driven primarily by the increased employee headcount in FY23 and increased professional fees as Above Food continues to grow. Salaries and wages increased $8.0 million from FY22 to FY23. Approximately $1.1 million of this increase is related to increased staff levels as the result of acquisitions in both FY22 and FY23, as well as additional employees necessary to supplement the growing business of Above Food. The remaining $6.9 million relates to the implementation of a stock-based compensation plan. Professional fees increased $1.6 million from FY22 to FY23, relating to due diligence and acquisitions, as well as the go-public transaction which remains ongoing.

For Above Food’s reportable operating segments during the years ended January 31, 2024, 2023, and 2022, net losses are as follows:

Between the two reported segments, we produce three main product lines. Revenue by product line for FY24, FY23, and FY22 are as follows:

Liquidity and capital resources

Above Food’s primary sources of liquidity are cash generated from operations, cash generated from equity issuances, and borrowings from various debt issuances. Above Food had an accumulated deficit of $103.9 million as of January 31, 2024 compared to an accumulated deficit of $50.6 million as at January 31, 2023 due in part to many of the activities we incurred significant expenditures on during the year to become public ready, as well as the stock-based and general compensation, and other expenses discussed above. As of January 31, 2024, Above Food had $1.0 million in cash and cash equivalents and a deficit in working capital of $85.4 million. The Company believes that the proceeds from the Business Combination, together with current available funds, will provide sufficient liquidity to fully fund future operations and any potential planned expansion of the business. Furthermore, as of January 31, 2024, the Company was in violation of restrictive covenants related to approximately $66 million of its aggregate borrowings as more fully described in the Financial Statements.

There can be no assurance the Company will be successful in obtaining further equity and debt financing. While the Company remains in constant contact with these lenders, and as of the date of this Management’s Discussion and Analysis of Financial Condition and Results of Operations of Above Food (“MD&A”) these debts have not been called, there can be no assurance that the Company will be able to maintain the support of these lenders, particularly as it relates to the indebtedness currently in default of restrictive covenants. The Company also expects to continue to incur recurring losses as it continues to grow its business and incurred significant costs in preparation for the go public transaction with Bite.

In addition, Above Food seeks to continue growing the business aggressively, requiring significant working capital and access to a larger credit facility. Above Food has incurred significant costs (including professional costs) related to the Business Combination with Bite. Management believes that the proceeds from the Business Combination, together with current available funds, will provide sufficient liquidity to fully fund future operations and any potential planned expansion of the business

The Company also intends to expand its existing credit facility in order to accommodate the growth in its business and to provide additional liquidity. This expansion is dependent, in part, on additional financing being raised by the Company (including in connection with the Business Combination) and there is no assurance that this additional financing will be raised.

If the Company is not successful in expanding the credit facility, the Company will seek additional financing, and may be forced to reduce the extent of its operations and idle certain assets.

The Company’s main sources of liquidity are its operations, equity issuances, and debt issuances. The funds are primarily used to finance working capital and capital expenditure requirements. The Company believes that the proceeds from the Business Combination, together with current available funds, will provide sufficient liquidity to fully fund future operations and any potential planned expansion of the business. We believe our sources of liquidity and capital will be sufficient to finance our continued operations, growth strategy and additional expenses we expect to incur for at least the next twelve months. As circumstances warrant, we may issue debt and/or equity securities from time to time on an opportunistic basis, dependent upon market conditions and available pricing. We make no assurance that we can issue and sell such securities on acceptable terms or at all.

Credit Agreement; Subordinated Convertible Loan

On July 23, 2021, we entered into a credit agreement with the Royal Bank of Canada (the “Credit Agreement”). The Credit Agreement was amended on July 1, 2023 and at that time provided for a revolving facility of $40.0 million. This was subsequently amended to $36.0 million. The interest rate on the loan is Royal Bank Prime rate plus 0.25% per annum and is secured by inventory and accounts receivables. As of January 31, 2024, the outstanding balance of the credit facility was $36.0 million.

On December 29, 2022, Above Food entered into a convertible subordinated loan agreement with Smart Dine, LLC and Lexington to fund the acquisition of all the outstanding shares in ANF, expenses regarding the closing of the Business Combination and working capital. Additional lenders (Grupo Vida Canada and OrionSea Enterprises (“OrionSea”)) have also advanced funds under this agreement. The term of the loan is one year and is funded in three tranches. During the year ended January 31, 2024, the Company received additional advances relating to this agreement totaling $4.3 million. As of January 31, 2024, the outstanding balance on this loan, including accrued interest, was $14.3 million. Upon the closing of the Business Combination, all the outstanding principal and unpaid interest were converted into a number of the New Above Food’s common shares equal to the outstanding balance at conversion divided by US $10. On or after the maturity date, until such time that the Business Combination is closed, the lender could have elected to convert the outstanding balance into Above Food’s shares at their discretion.

As a result of the closing of the Business Combination on June 28, 2024, the convertible subordinated loans from each of Lexington, Sponsor, and OrionSea have all been converted to equity, and the Company no longer has an obligation to these lenders. The remaining convertible subordinated loan from Grupo Vida remains outstanding as of the date of this filing, but could be subject to conversion or settlement in the weeks proceeding the business combination.

Additionally, in relation to the asset-backed lending line of credit with Royal Bank of Canada that currently has covenant violations, because the loan is secured against commoditized inventory and accounts receivable, Royal Bank of Canada has continued to work with the Company on updating terms, and have continued to extend this line. Subsequent to January 31, 2024, this line of credit limit was lowered to $35,000,000, and the maturity date has been extended to July 31, 2024.

Above is also looking at alternative asset-based lenders to increase the working capital available to the Company, and are currently in negotiations with lenders. Should these plans not be successful, Above would liquidate inventory as necessary, pay down the outstanding balance of the asset-backed lending line, and once working capital allows, utilize the line once again.

Private Placement

On January 19, 2021, Above Food completed its private placement of 20,216,656 Above Food Units, at a price of $2.00 per Above Food Unit for gross proceeds of $40,433,312. Each Above Food Unit consists of one Above Food Common Share and one-half of one Above Food Warrant with an exercise price of $3.75 per share and a term of the earlier of three years following a liquidity event or five years from the closing of the financing. The issue price allocated to the share portion of the Above Food Unit was $1.50 and $0.50 was allocated to each half Above Food Warrant and recorded within Above Food Common Shares and Above Food Warrants respectively. Total share issuance costs of amounted to $8,068,177 and comprises of non-cash and cash share issuances costs. Amounts of $6,051,133 and $2,017,044 have been allocated to Share Capital and Warrants respectively.

Broker Warrants

The Company also has outstanding at January 31, 2024, 1,609,332 Above Food Warrants to acquire Above Food Units for $2.00 per Unit (2022 – 1,609,332 units at $2.00) as a result of the private placement that took place on January 19, 2021. Each Above Food Unit consists of one Above Food Common Share and one-half of one Above Food Warrant with an exercise price of $3.75 per share and a term of the earlier of three years following a liquidity event or five years from the closing of the financing. Refer to Note 16, Share Capital of the Financial Statements for additional details regarding the broker warrants.

Derivatives

Currently, Above Food does not designate its derivative financial instruments as hedges for accounting purposes and does not use hedge accounting. Thus changes in fair value of derivative instruments are reflected in net loss. Refer to the “Critical accounting policies and estimates” and “Quantitative and Qualitative Disclosures About Market Risk” sections of this MD&A, as well as the Notes of the Financial Statements for further details.

The Company classifies the cash effects of its derivatives within the “Cash Flows From Operating Activities” section of the consolidated statements of cash flows.

Cash flows for the years ended January 31, 2024, 2023, 2022

The following table summarizes Above Food’s cash flows from operating, investing and financing activities for the years ended January 31, 2024 and 2023:

Cash flows from operating activities

Net cash provided by operating activities includes net loss adjusted for non-cash expenses and movements in operating assets and liabilities. Our operating cashflows are primarily generated by revenues less cash paid for expenses, and cash used in or provided by working capital requirements.

The Company has incurred positive cash flows from operating activities of $7.1 million in the current year, compared to cash flows of $17.9 million used in FY24. The change compared to FY23 comes primarily from improved accounts receivable collections, significantly increased inventory turnover, and increased days in accounts payable as the Company works to manage liquidity. The comparative period saw decreased turnover in both accounts receivable and inventory, which largely contributed to the amount used in operating activities.

During FY23, operating activities used $17.9 million of cash. The decrease compared to FY22 comes primarily from improved accounts receivable collections and significantly increased inventory turnover. During FY22, operating activities used $27.6 million of cash, primarily consisting of changes in working capital, specifically a significant decrease in inventory turnover. Refer to the “Liquidity and Capital Resources” section of this Registration Statement/Proxy Statement for additional discussion on how the Company intends to meet cash requirements and maintain operations.

Cash flows from investing activities

During FY24, net cash used in investing activities was $4.5 million. These cash outflows consisted primarily of $3.6 million of acquisitions of property plant and equipment, largely relating to the cleaning facility and equipment being developed for the disruptive agriculture and rudimentary ingredients segment. Additionally, a net of $1.6 million of cash was used to acquire (i.e., $2.0 million paid less $0.4 million of cash in the company acquired).

During FY23, net cash used in investing activities was $6.7 million. This was largely the result of the purchase of property, plant, and equipment and intangible assets, as well as the investment in ANF as discussed above.

During FY22, net cash used in investing activities was $30.6 million. These cash outflows consisting primarily of $22.0 million of purchase in property, plant, and equipment, partially offset by $1.0 million received in proceeds from sale of existing assets. During the year, we also issued $5.4 million in loans primarily made to businesses we were planning to acquire, as well as purchased investments of $4.1 million related to the acquisition of our investment in ANF.

Cash flows from financing activities

During FY24, net cash used in financing activities was $4.0 million. During the year, we received loans totaling $6.5 million from Bank of Nova Scotia and a group of strategic investors. This was netted against the repayment of short-term debt and credit facilities ($4.9 million), the repayment of long-term debt ($2.2 million), and the repayment of amounts due to related parties ($2.2 million). There were also finance lease liability repayments of $1.2 million.

During FY23, net cash received from financing activities was $24.8 million. Cash inflows in this period primarily consist of $11 million received from the Bank of Nova Scotia, $8.1 million received from strategic investors, a net of $6.9 million in short-term debt and credit facilities received, and $1.1 million in net advances from related parties. These amounts were offset by $1.1 million in long-term debt repayment and $1.2 million in finance lease liability repayments.

During FY22, net cash received from financing activities was $27.2 million, primarily consisting of $30 million received from credit facilities, partially offset by $3.1 million in repayments on existing lease liabilities and amounts due to related parties.

Purchase of property, plant, and equipment

For the year ended January 31, 2024, purchases of property, plant, and equipment increased to $3.6 million compared to $2.4 million in the year ended January 31, 2023, an increase of $1.2 million. The increase was largely due to purchases of $2.5 million in the year ended January 31, 2024 relating to the cleaning facility discussed above. In the year ended January 31, 2023, the majority of purchases of property, plant, and equipment related to terminal equipment additions.

Contractual Obligations and Commitments

The following table summarizes our contractual obligations and other commitments for cash expenditures as of January 31, 2024, and the years in which these obligations are due (in 000s).

Related Party Transactions and Balances

Related party transactions include transactions with corporate investors who have representation on the Above Food Board. Refer to Note 22, “Related Party transactions and balances” of the Financial Statements for additional details regarding the related party transactions.

Off balance sheet arrangements

As of the date of this Report, Above Food does not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors. The term “off-balance sheet arrangement” generally means any transaction, agreement or other contractual arrangement to which an entity unconsolidated with Above Food is a party, under which it has any obligation arising under a guarantee contract, derivative instrument or variable interest or a retained or contingent interest in assets transferred to such entity or similar arrangement that serves as credit, liquidity or market risk support for such assets.

Currently, Above Food does not engage in off-balance sheet financing arrangements.

Critical accounting policies and estimates

Our Financial Statements are prepared in accordance with U.S. GAAP. Critical accounting policies are those that are the most important to the preparation of our financial condition and results of operations and that require our most difficult, subjective and complex judgments as a result of the need to make estimates about the effect of matters that are inherently uncertain. While our significant accounting policies are described in more detail in Note 2 to our Financial Statements, our most critical accounting policies are discussed below. The preparation of the Financial Statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in our Financial Statements and the accompanying notes. Management believes that the estimates utilized in preparing the Financial Statements are reasonable and prudent. Actual results could differ from those estimates.

Inventory

Inventories of marketable agricultural commodities, which include inventories acquired under deferred pricing contracts, are stated at fair value due to their interchangeability, immediate marketability at quoted prices, and difficulty in obtaining appropriate costs. These agricultural commodity inventories have quoted market prices in active markets, may be sold without significant further processing, and have predictable and insignificant disposal costs. Management estimates fair value for its commodity-related assets and liabilities based on exchange-quoted prices, adjusted for differences in local markets. Inventory and commodity derivative fair value measurements are mainly based on observable market quotations.

Changes in the fair values of the inventory are recognized in earnings as a component of cost of sales. If management used different methods or factors to estimate market value, amounts reported could differ materially. In addition, if market conditions change subsequent to year-end, amounts reported in future periods could differ materially.

In addition, Above Food values inventories that are not considered to be readily marketable using the first-in, first-out (FIFO) method at the lower of cost or net realizable value because of their commodity characteristics as these commodities are not blended, nor do they have basis contracts associated with them. The Company values its consumer-packaged goods inventory at the lower of cost or net realizable value, with cost being determined using the specific lot identification method.

Refer to the below section “Quantitative and Qualitative Disclosures about Market Risk” for further information on commodity price risk, and sensitivity analysis therein.

Derivative Valuation

Above Food enters into derivative instruments to manage its exposure to movements associated with agricultural commodity prices and foreign currency exchange rates. Above Food’s use of these instruments is generally intended to mitigate the exposure to market variables. Additionally, commodity contracts relating to forward sales of commodities are accounted for as derivatives at fair value under ASC 815 Derivatives and Hedging.

The Company recognizes all of its derivative instruments as either assets or liabilities at fair value in its consolidated balance sheet and are reported as either foreign exchange forward contract or commodity forward contract assets or liabilities. The accounting for changes in the fair value (i.e., gains or losses) of a derivative instrument depends on whether it has been designated and qualifies as part of a hedging relationship and on the type of hedging relationship. None of the Company’s derivatives have been designated as hedging instruments in the periods presented, and as such, changes in fair value of these derivatives are recognized in loss immediately.

Management estimates fair value for its commodity-related derivatives based on exchange quoted prices, adjusted for differences in local markets. Foreign currency exchange-related derivatives have their fair values estimated based on the value of the underlying currency. The changes in market value of such contracts have a high correlation to the price changes of the commodity/currency of the contract. If market conditions change subsequent to year-end, amounts reported in future periods could differ materially.

Refer to the below section “Quantitative and Qualitative Disclosures about Market Risk” for further information on both commodity price and foreign exchange risk, and sensitivity analysis therein.

Goodwill and Other Intangible Assets

The Company records goodwill when the purchase price of a business combination exceeds the estimated fair value of net identified tangible and intangible assets acquired. Goodwill is tested for impairment at the reporting unit level at least annually, or more frequently when events or changes in circumstances indicate that the fair value of a reporting unit has more likely than not declined below its carrying value. The Company performs an annual goodwill impairment test in the fourth quarter.

In assessing impairment, the reporting unit’s fair value is compared with its carrying amount, and an impairment charge, if any, is recognized for the amount by which the carrying amount exceeds the reporting unit’s fair value, limited to the amount of goodwill associated with the reporting unit. The Company determines fair values for each of the reporting units using a discounted cash flow model (a form of the income approach) or the market approach. Under the income approach, fair value is determined based on the present value of estimated future cash flows, discounted at an appropriate risk-adjusted rate. Judgement is applied in determining appropriate discount rates, and forecasting cashflows.

Finite-lived intangible assets include trademarks, customer relationships and lists, and website development costs that are amortized on a straight-line basis over their contractual or legal lives, or their estimated useful lives where such lives are not determined by law or contract. The amortization period depends on the contractual terms of such agreements and management’s best estimate of their useful lives. Finite-lived intangible assets and other long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the asset might be impaired or that the estimated useful life should be changed prospectively. If impairment indicators are present, the recoverability of these assets is measured by a comparison of the carrying amount of the asset to estimated undiscounted future cash flows expected to be generated by the asset. If the carrying amount of the asset exceeds its estimated undiscounted future cash flows, an impairment charge is recognized by the amount by which the carrying amount of the asset exceeds the fair value of the asset, which is determined using a discounted cash flow approach.

Equity-based compensation

Equity-based compensation represents the cost related to equity-based awards granted to employees and non-employee consultants and provides for the granting of restricted stock units, stock options, warrants, and broker warrants. The Company recognizes compensation expenses based on the grant date fair value of the award granted.

Awards with time-based vesting generally vest over a two to three year period after the grant date or the date the Company’s shares start trading on a stock exchange in the United States. The resulting compensation expense related to equity awards are recognized on a straight-line basis over the requisite service period and is included within SG&A expense. We have not recorded any equity-based compensation expense related to the equity-based awards that begin vesting upon the date the Company’s shares start trading on a stock exchange in the United States in the Financial Statements.

The fair value of each option granted under the stock option plan of Above Food is estimated on the grant date using the Black-Scholes option pricing model, which requires the input of subjective assumptions, including the fair value of underlying shares at grant date, expected volatility, expected dividend yield, risk-free rate, and an expected life. Since we were privately held, we calculated expected volatility using comparable peer companies with publicly traded shares over a term similar to the expected term of the underlying award. At the time of grant, we had no intention to pay dividends on our common units, and therefore, the dividend yield percentage is zero. In order to estimate the fair value of our common shares, we reviewed recent transactions involving Above Food common shares where their estimated fair value was established with a third party.

Recent accounting pronouncements

See Note 3 to the Financial Statements for more information about recent accounting pronouncements, the timing of their adoption and Above Food’s assessment, to the extent it has made one, of their potential impact on Above Food’s financial condition and its results of operations and cash flows.

Internal Control Over Financial Reporting

We are not currently required to comply with SEC rules that implement Section 404(a) (“Section 404(a)”) of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”) and are therefore not required to make a formal assessment of the effectiveness of our internal controls over financial reporting for that purpose. We will not be required to formally assess our internal controls until we file our second annual report on Form 20-F and we will not be required to have our independent registered public accounting firm formally assess our internal controls for as long as we remain an “emerging growth company” as defined in the Jumpstart Our Business Startups Act of 2012, as amended (“JOBS Act”).

Material weakness in internal control over financial reporting

Section 404(a)  of the Sarbanes-Oxley Act requires that, beginning with the second annual report following the Business Combination, management of New Above Food assess and report annually on the effectiveness of internal control over financial reporting and identify any material weaknesses in internal control over financial reporting. Management may not be able to effectively and timely implement controls and procedures that adequately respond to the increased regulatory compliance and reporting requirements that apply to us as a public company. If we are not able to implement the additional requirements of Section 404(a) in a timely manner or with adequate compliance, we may not be able to assess whether our internal control over financial reporting is effective, which may subject New Above Food to adverse regulatory consequences and could harm investor confidence and the market price of New Above Food’s securities.

In connection with the preparation of Above Food’s consolidated financial statements, management identified material weaknesses in our internal control over financial reporting as of January 31, 2024. Management has concluded that this material weakness is due to the fact that Above Food is a private company with limited resources. The material weakness relates to not appropriately designing and implementing controls, including maintaining sufficient written formal policies, procedures and written analyses related to complex accounting matters, including the use of appropriate technical expertise in the areas of business combinations, deferred share issuance costs, share based compensation, goodwill impairment and equity accounting, as well as the determination of fair value measurement of commodity inventory and contracts. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis. These material weaknesses have not been remediated at the time of filing this Report.

In order to improve the effectiveness of our internal control over financial reporting, we have expended, and anticipate that we will continue to expend, significant resources, including accounting-related costs and significant management oversight, including hiring additional financial and accounting personnel, engaging outside consultants and adopting a detailed work plan to assess and document the adequacy of internal control over financial reporting, continue steps to improve control processes as appropriate, validate through testing that controls are functioning as documented and implement a continuous reporting and improvement process for internal control over financial reporting. New Above Food’s independent registered public accounting firm will not be required to formally attest to the effectiveness of its internal control over financial reporting until after it is no longer an “emerging growth company” as defined in Section 2(a)(19) of the Securities Act, as modified by the JOBS Act. At such time, New Above Food’s independent registered public accounting firm may issue a report that is adverse in the event it is not satisfied with the level at which our internal control over financial reporting is documented, designed, or operating. Any failure to maintain effective disclosure controls and internal control over financial reporting could adversely affect New Above Food’s business and operating results and could cause a decline in investor confidence and the price of New Above Food’s securities.

Emerging Growth Company Status

We qualify as an “emerging growth company,” as defined in the JOBS Act. An emerging growth company may take advantage of specified reduced reporting and other requirements that are otherwise applicable generally to public companies. These provisions include:

We may take advantage of these provisions until the last day of the fiscal year following the fifth anniversary of the completion of this offering or such earlier time that we no longer qualify as an emerging growth company. We would cease to qualify as an emerging growth company upon the earliest of (a) the last day of the first fiscal year in which our annual gross revenue is $1.235 billion USD or more, (b) the date on which we have, during the previous rolling three-year period, issued more than $1.0 billion in non-convertible debt securities and (c) the last day of the fiscal year in which the market value of our common stock held by non-affiliates exceeded $700.0 million USD as of July 31 of such fiscal year.

Under the JOBS Act, emerging growth companies also can delay adopting new or revised accounting standards until such time as those standards would otherwise apply to private companies. We currently intend to take advantage of this exemption.

Foreign Private Issuer Status

Above Food qualifies as a “foreign private issuer” as defined under SEC rules. Even after Above Food no longer qualifies as an emerging growth company, as long as Above Food continues to qualify as a foreign private issuer under SEC rules, Above Food is exempt from certain SEC rules that are applicable to U.S. domestic public companies, including:

Notwithstanding these exemptions, Above Food intends to file with the SEC, within four months after the end of each fiscal year, or such applicable time as required by the SEC, an annual report on Form 20-F containing financial statements audited by an independent registered public accounting firm.

Above Food may take advantage of these exemptions until such time as Above Food is no longer a foreign private issuer. Above Food would cease to be a foreign private issuer at such time as more than 50% of its outstanding voting securities are held by U.S. residents and any of the following three circumstances applies: (i) the majority of its executive officers or directors are U.S. citizens or residents, (ii) more than 50% of its assets are located in the United States or (iii) its business is administered principally in the United States.

Both foreign private issuers and emerging growth companies also are exempt from certain more stringent executive compensation disclosure rules. Thus, even if Above Food no longer qualifies as an emerging growth company, but remains a foreign private issuer, Above Food will continue to be exempt from the more stringent compensation disclosures required of companies that are neither an emerging growth company nor a foreign private issuer.

In addition, because Above Food qualifies as a foreign private issuer under SEC rules, Above Food is permitted to follow the corporate governance practices of Canada (the jurisdiction in which Above Food is organized) in lieu of certain Nasdaq corporate governance requirements that would otherwise be applicable to Above Food.

If at any time Above Food ceases to be a foreign private issuer, Above Food will take all action necessary to comply with the SEC and Nasdaq Listing Rules, including by appointing a majority of independent directors to the Above Food Board and having compensation and nominating committees that are comprised solely of independent directors, subject to a permitted “phase-in” period.

Quantitative and Qualitative Disclosures About Market Risk

We are exposed to market risk, including the effects of adverse changes in commodity prices and exchange rates. Market risk refers to the risk of loss from adverse changes in market prices and interest rates. The disclosures are not meant to be precise indicators of expected future losses, but rather indicators of reasonably possible losses. All of our market risk sensitive instruments were entered into for purposes other than speculative trading.

Foreign currency risk. The Company is exposed to currency risk as a certain portion of sales and expenses are incurred in U.S. Dollars resulting in US denominated accounts receivable, accounts payable, some commodity derivatives, and long-term debt. These balances are, therefore, subject to gains and losses due to fluctuations in that currency in relation to the Canadian Dollar.

The Company entered into foreign exchange derivative contracts to mitigate these risks. This strategy minimizes the impact of U.S. Dollar fluctuations on the operating results of the Company. The Company’s derivative instruments have not been designated as hedging instruments and gain/losses are recorded within cost of sales in the consolidated statements of operations. The effect of a 5% increase in the exchange rate for the U.S. Dollar and the Canadian Dollar would have had an impact of a decrease of $0.1M on net loss for FY24, and an impact of a decrease of $2.2M on net loss for FY23, considering outstanding USD monetary asset and liability balances, as well as derivative and contracts as at the period and year ends, and assuming all other variables remain constant.

Credit risk. The risk of financial loss in the event of failure of a customer or counterparty to a financial instrument to meet its contractual obligation is defined as credit risk. The Company’s principal exposure to credit risk is in respect to its accounts receivable. A substantial portion of the Company’s accounts receivable is with customers in the agriculture industry and is subject to normal industry credit risks. A portion of the Company’s sales and related accounts receivable are also generated from transactions with customers in overseas markets.

Accounts receivable are subject to credit risk exposure and the carrying values reflect management’s assessment of the associated maximum exposure to such credit risk. The Company regularly monitors customers for changes in credit risk. The Company’s credit exposure is mitigated through the use of credit practices that limit transactions according to the customer’s credit quality and due to the accounts receivable being spread over a large number of customers. Trade receivables from international customers are insured for events of non-payment through third-party export insurance to mitigate against credit risk. In cases where the credit quality of a customer does not meet the Company’s requirements, a cash deposit or letter of credit is received before goods are shipped.

As of the year ended January 31, 2024, 2023, and 2022, there were no customers that represented more than 10% of revenues. The Company does not believe that any single customer group represents a significant concentration of credit risk.

Commodity price risk. Commodity price risk is the risk that the value of inventory and related contracts will fluctuate due to changes in market prices. A change in price and quality will have a direct affect on the value of inventory. As a grain and pulse commodity trading company, the Company has significant exposure to changes in various agricultural commodity prices. Prices for these commodities are volatile and are influenced by numerous factors beyond the Company’s control, such as supply and demand fundamentals, as well as the weather. A substantial change in prices may affect the Company’s comprehensive income and operating cash flows, if not properly managed.

To mitigate the risks associated with the fluctuations in the market price for agricultural commodities, the Company has a policy that commodities be hedged, when possible, through the use of purchase and sales contracts. The Company may employ derivative commodity instruments (primarily futures and options) for the purpose of managing its exposure to commodity price risk, however, they are not used for speculative or trading purposes. The Company’s actual exposure to these price risks is constantly changing as the Company’s inventories and commodity contracts change. The effect of a 10% increase in the price of various commodities traded would have had an impact of a $1.2 million increase in net loss for FY24, and a $0.7 million increase in net loss for FY23, considering outstanding contracts as at the reporting dates and assuming all other variables remain constant.

Liquidity risk. Liquidity risk is the risk that the Company cannot meet its financial obligations associated with financial liabilities in full. The Company’s main sources of liquidity are its operations its credit facility and other debt financing. The funds are primarily used to finance working capital and capital expenditure requirements and are adequate to meet the Company’s financial obligations associated with financial liabilities. Risk associated with debt financing is mitigated by having negotiating terms over several years and renegotiating terms before they are due.

Interest rate risk. Interest rate risk is the risk that the Company will be unable to finance existing debt with similar terms, as well as potential changes in the future cash flows of financial instruments. The Company’s principal exposure to interest rate risk is with respect to its short-term debt and credit facilities, long-term debt and lease liability, which bear interest at fixed and floating interest rates.

The effect of a 1% increase in interest rates relating to the bank indebtedness, long-term debt and lease liability of the Company would be an increase in interest expense for FY24 of approximately $1.0 million, and $1.7 million for FY23. Exposure to interest rate risk is managed through normal operating and financing activities.

Other risks. Although we perform services for customers located in a number of jurisdictions, we have not experienced any material difficulties in receiving funds remitted from foreign countries. However, new or modified exchange control restrictions could have an adverse effect on our ability to repatriate cash to fund our operations and make principal and interest payments, when necessary.

ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES

A. Directors and Senior Management

Information regarding the board practices of New Above Food is included in the Proxy Statement/Prospectus under the section titled “Management of New Above Food Following the Business Combination” and is incorporated herein by reference.

B. Compensation

Compensation of New Above Food’s Directors and Executive Officers

Information regarding the compensation of the directors and executive officers of New Above Food for the year ended January 31, 2024, which compensation was paid for services prior to the closing of the Business Combination is included in the Proxy Statement/Prospectus under the sections titled “Executive and Director Compensation-Above Food-Historical Compensation of Above Food’s Directors” and “Executive and Director Compensation-Above Food-Historical Compensation of Above Food’s Executive Officers” and is incorporated herein by reference.

Executive Officer Agreements

In connection with the closing of the Business Combination, Above Food assigned its existing employment and consulting agreements with the executive officers of New Above Food to New Above Food. Information regarding these agreements is included in the Proxy Statement/Prospectus under the sections titled “Executive and Director Compensation-Above Food-Employment Agreements". New Above Food expects that it may enter into new employment or other agreements to supersede and replace such existing agreements, although the precise terms and conditions of such agreements have not yet been determined.

Equity Compensation

New Above Food adopted the Above Food Ingredients Inc. 2024 Incentive Award Plan (the “2024 Incentive Award Plan”) on June 28, 2024, which became immediately effective upon the consummation of the Business Combination. The 2024 Incentive Award Plan initially reserved up to 83,854,489 for issuance pursuant to awards that may be granted under the 2024 Incentive Award Plan, which amount is subject to adjustment and an annual increase as set forth under the terms of the 2024 Incentive Award Plan. No awards have yet been granted under the 2024 Incentive Award Plan. Further information regarding the 2024 Incentive Award Plan is included in the Proxy Statement/Prospectus under the section titled “New Above Food Equity Incentive Plan” and is incorporated herein by reference.

Prior to the Business Combination, Above Food made grants of share options and restricted share units to its executive officers, which awards have been assumed by New Above Food in connection with the Business Combination. Further information is included in the Proxy Statement/Prospectus under the section titled “Executive and Director Compensation-Above Food-Equity Compensation” and is incorporated herein by reference.

Indemnification

The Amended and Restated By-Law No. 1 of New Above Food provides for the indemnification of the executive officers and directors of New Above Food on the terms set forth therein and expressly provide that the indemnification provisions set forth therein are not exclusive, and thereby contemplate that contracts may be entered into between the Company and its directors, executive officers, and other persons with respect to indemnification and advancement of expenses. New Above Food has entered into an indemnification agreements with all of its current directors and executive officers.

C. Board Practices

Information regarding the board practices of New Above Food is included in the Proxy Statement/Prospectus under the section titled “Management of New Above Food Following the Business Combination” and is incorporated herein by reference.

D. Employees

Following and as a result of the Business Combination, the business of New Above Food is conducted through Above Food, its direct, wholly owned subsidiary, as well as the direct and indirect subsidiaries of Above Food.

Information regarding the employees of Above Food is included in the Proxy Statement/Prospectus under the section titled “Business of Above Food and Certain Information about Above Food—Employees” and is incorporated herein by reference.

E. Share Ownership

Ownership of the Company’s shares by its directors and executive officers upon consummation of the Business Combination is set forth in Item 7.A of this Report.

F. Disclosure of a registrant’s action to recover erroneously awarded compensation

Not applicable.

ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS

A. Major Shareholders

The following table sets forth the beneficial ownership of New Above Food Common Shares following the Business Combination:

(a)           each person, or group of affiliated persons, known by us to beneficially own more than 5% of outstanding New Above Food Common Shares immediately following the consummation of the Business Combination;

(b)           each of New Above Food’s named executive officers, or directors; and

(c)           all executive officers and directors of New Above Food as a group.

Beneficial ownership is determined in accordance with the rules and regulations of the SEC. Each person named in the table has sole voting and investment power with respect to all of the common shares shown as beneficially owned by such person, except as otherwise indicated in the table or footnotes below.

The beneficial ownership of New Above Food Common Shares post-Business Combination is based on 28,532,715 New Above Food Common Shares issued and outstanding as of July 5, 2024, on a non-fully diluted basis, immediately following the Business Combination.

Unless otherwise indicated, New Above Food believes that all persons named in the table below have sole voting and investment power with respect to all shares of capital stock beneficially owned by them. To New Above Food’s knowledge, no New Above Food Common Shares beneficially owned by any executive officer or director have been pledged as security.

Unless otherwise indicated, the address of each New Above Food director and executive officer is c/o Above Food Ingredients Inc., 2305 Victoria Avenue #001, Regina, Saskatchewan, S4P 0S7.

* Less than one percent.

                Immediately following the consummation of the Business Combination, there were 87 record holders, of which 53 record holders holding approximately 58.9% of New Above Food Common Shares had registered addresses in Canada. These numbers are not representative of the number of beneficial holders of our Common Shares nor are they representative of where such beneficial holders reside, since many of these New Above Food Common Shares are held of record by brokers or other nominees (including one Canadian. nominee company, CDS & Co., which held approximately 14.4% of our outstanding New Above Food Common Shares immediately following the consummation of the Business Combination).

B. Related Party Transactions

Information regarding certain related party transactions is included in the Proxy Statement/Prospectus under the section titled “Certain Relationships and Related Transactions” and is incorporated herein by reference.

C. Interests of Experts and Counsel

Not Applicable.

ITEM 8. FINANCIAL INFORMATION.

A. Consolidated Statements and Other Financial Information.

See Item 18 of this Report for consolidated financial statements and other financial information.

Information regarding legal proceedings involving New Above Food and Above Food is included in the Proxy Statement/Prospectus under the section “Business of Above Food and Certain Information About Above Food— Legal Proceedings,” and is incorporated herein by reference.

B. Significant Changes

A discussion of significant changes since January 31, 2024, is provided under Item 4 and Item 5 of this Report and is incorporated herein by reference.

ITEM 9. THE OFFER AND LISTING

A. Offer and Listing Details

Nasdaq Listing of New Above Food Common Shares

New Above Food Common Shares and New Above Food Listed Warrants are currently listed on Nasdaq under the symbols “ABVE” and “ABVE.W,” respectively. Holders of New Above Common Shares and warrants should obtain current market quotations for their securities.

There can be no assurance that the New Above Food Common Shares will remain listed on Nasdaq. If New Above Food fails to comply with the Nasdaq listing requirements, the New Above Food Common Shares could be delisted from Nasdaq. A delisting of the New Above Food Common Shares will likely affect the liquidity of the New Above Food Common Shares and could inhibit or restrict the ability of New Above Food to raise additional financing.

Lock-up Agreements

Information regarding the lock-up restrictions applicable to some of the New Above Food Common Shares is included in the Proxy Statement/Prospectus under the section titled “Certain Relationship and Related Person Transaction—Lock-Up Agreements” and is incorporated herein by reference.

Above Food and Grupo Empresarial Enhol, S.L. (“Enhol”) entered into Common Share Subscription Agreement (“Enhol Subscription Agreement”), dated June 13, 2024, included in this Report as Exhibit 10.23, under which Enhol agreed to purchase 2,377,082 Above Food common shares at a price of $2.103419 per share ($10.00 per share of New Above Food Common Shares), which Above Food common shares converted into 500,000 New Above Food Common Shares at closing of the Business Combination, and 50% of Enhol’s shares (250,000 shares) are locked up for 60 days and the remaining 50% of Enhol’s shares (250,000 shares) are locked up for 180 days after the Closing Date, as further described in that certain Lock-Up Agreement, dated June 19, 2024, by and between Above Food and Enhol, included in this Report as Exhibit 10.26.

Above Food entered into subscription agreements with several investors (“PIPE Subscription Agreements”), under which the investors agreed to purchase 550,000 units of Above Food at a purchase price of $10.00 per unit for a total purchase price of $5,500,000, which units included one Above Food common share and one additional Above Food common share provided from the Sponsor or from treasury (the “Advantage Shares”), which Above Food common shares, besides the Advantage Shares, converted into 530,000 New Above Food Common Shares, and 25% are locked up for 90 days from July 1, 2024. The form of PIPE Subscription Agreement is included in this Report as Exhibit 10.24.

Above Food, Enhol, and Gonzalo Agorreta Preciado entered into the Shares Sale and Purchase and Exchange Agreement (“Enhol SPA”), dated June 13, 2024, included in this Report as Exhibit 10.25, under which Above Food agreed that Enhol and Mr. Preciado’s shares under the Enhol Subscription Agreement would participate in the Share Exchange. The parties agreed that the shares issued pursuant to the Enhol SPA will be locked up for 12 months.

Other Transfer Restrictions

Pursuant to the terms of the plan of arrangement (the “Plan of Arrangement”) approved by the Court of King’s Bench of Alberta in the Final Order dated June 18, 2024, all New Above Food Common Shares issued to former Above Food shareholders in exchange for their Above Food common shares held immediately prior to the effective time of the Plan of Arrangement are subject to certain restrictions on transfer and exceptions, whereby 90% of each such former Above Food shareholder’s New Above Food Common Shares issued under the Plan of Arrangement may not be transferred without the consent of New Above Food, except in certain circumstances, until the earlier of the date that is: (a) (i) the six month anniversary of the effective date of the Plan of Arrangement (the “Effective Date”), or (ii) in the case of certain designated holders, the twelve month anniversary of the Effective Date; (b) such time, if ever, after 150 calendar days after the Effective Date that the volume-weighted average trading price of the New Above Food Common Shares on the national stock exchange on which such security is trading equals or exceeds $12.50 per share (as adjusted for share splits, share dividends, rights issuances, subdivisions, reorganizations, recapitalizations and similar corporate events) for any 20 trading days within any 30-trading day period commencing at least 150 calendar days after the Effective Date; and (c) such date on which New Above Food completes a liquidation, merger, stock exchange or other similar transaction which results in all of the shareholders of New Above Food having the right to exchange their New Above Food Common Shares for cash, securities or other property.

B. Plan of Distribution

Not applicable.

C. Markets

New Above Food Common Shares and New Above Food Listed Warrants are currently listed on the Nasdaq under the symbols “ABVE” and “ABVE.W”.

D. Selling Shareholders

Not applicable.

E. Dilution

Not applicable.

F. Expenses of the Issue

Not applicable.

ITEM 10. ADDITIONAL INFORMATION

A. Share Capital

As of the date of this Report, New Above Food has an issued share capital in the amount of 34,646,457 shares, consisting of 28,532,715 New Above Common Shares, 3,056,871 New Above Food Class A Earnout Shares and 3,056,871 New Above Food Class B Earnout Share.

New Above Food is authorized to issue (a) an unlimited number of New Above Food Common Shares without nominal or par value, and (b) an unlimited number of New Above Food Class A Earnout Shares and New Above Food Class B Earnout Shares, each without nominal or par value.

B. New Above Food Articles

Information regarding certain material provisions of the articles of New Above Food is included in the Proxy Statement/Prospectus under the section titled “Description of New Above Food Securities” and is incorporated herein by reference.

C. Material Contracts

Information regarding certain material contracts is included in the Proxy Statement/Prospectus under the sections titled “Certain Relationships and Related Person Transactions,” and “Business of Above Food and Certain Information about Above Food,” and are incorporated herein by reference.

On June 13, 2024, Above Food Cop, acquired all the shares of Brotalia, S.L. from Grupo Empresarial Enhol, S.L. and Mr. Gonzalo Agorreta Preciado. Brotalia, S.L. ("Brotalia") is (A) a subsidiary of Enhol which is engaged in (a) the development, production and commercialization of (i) precooked processed animal protein products and (ii) products made with alternative protein, for human consumption, (b) the development and research of new products, technologies or processes for the manufacture of edible products for human consumption, and (c) food tech project acceleration consultancy, (the “Business”) and (B) the sole shareholder of Naturcook Innovaciones, S.L. (the “Subsidiary” and jointly with the Company, the “Companies”). The purchase price for the shares is USD $13,000,000, on the assumption that the net debt of the acquired business will be zero. The purchase price was paid by the delivery of 6,180,413 Above Food common shares at Closing pursuant to:

New Above Food and Enhol entered into a Nomination Rights Agreement dated June 19, 2024 (“Nomination Agreement”), included in this Report as Exhibit 10.27, under which New Above Food granted Enhol the right to designate one nominee to the New Above Food Board upon the closing of the Business Combination, so long as Enhol holds at least 50% of Enhol’s common shares.

Above Food entered into PIPE Subscription Agreements, under which the investors agreed to purchase 550,000 units of Above Food at a purchase price of $10.00 per unit for a total purchase price of $5,500,000, which units included one Above Food common share and one additional Above Food common share provided from the Sponsor or from treasury (the “Advantage Shares”), which Above Food common shares, besides the Advantage Shares, converted into 530,000 New Above Food Common Shares. In addition, at Closing, the investors received 530,000 New Above Food Common Shares in the form of Advantage Shares from the Sponsor. The form of PIPE Subscription Agreement is included in this Report as Exhibit 10.24.

Promissory Note, dated June 27, 2024, issued by Bite in favor of the Sponsor (“Bite Promissory Note”), included in this Report as Exhibit 10.28, amended, replaced and superseded that certain promissory note, dated January 22, 2024 between Bite and the Sponsor for $3,250,000 of cash owed to the Sponsor for working capital loans provided by the Sponsor to Bite for purposes of completing the Business Combination. Under the Bite Promissory Note, Bite promised to pay Sponsor an interest-free, principle amount of $3,500,000, but Sponsor could elect to convert the outstanding principle into Working Capital Units upon consummation of Bite's initial business combination. Sponsor converted $1,500,000 principal amount into Working Capital Units concurrently with the Closing of the Business Combination.

Arcadia Biosciences, Inc. (“Arcadia”), Arcadia Wellness, LLC, (“Sellers”), Above Food, and Above Food Ingredients Corp. (“Above Food Arcadia Sub”) entered into an Asset Purchase Agreement, dated May 14, 2024, included in this Report as Exhibit 10.29, under which Above Food Arcadia Sub purchased assets, including, among others, inventory and intellectual property, in exchange for a $6,000,000 promissory note to Sellers. Sellers agreed to pay $2,000,000 USD.

Under the Promissory Note, dated May 14, 2024, by and among Arcadia Biosciences, Inc., Arcadia Wellness, LLC, Above Food and Above Food Arcadia Sub (“Arcadia Promissory Note”), included in this Report as Exhibit 10.34, Above Food Arcadia Sub promised to pay Arcadia $6,000,000 USD by the third anniversary of the effective date of the Acadia Promissory Note, payable in yearly installments of $2,000,000 USD with interest payable on each anniversary of the effective date of the Arcadia Promissory Note at the Prime Rate. Arcadia also has the right to obtain publicly traded New Above Food Common Shares in the amount of $2,000,000 USD until the second anniversary of the Promissory Note, instead of receiving one of the installment payments in cash, and New Above Food is required to file a resale registration statement on Form F-1 within 20 days of such share issuance.

Above Food, NRGene Technologies Ltd. and NRGene Canada Inc. ("NRGene Canada" and together with NRG Technologies Ltd., the “Sellers”), entered into an Amendment to Asset Purchase Agreement, dated June 26, 2024, included in this Report as Exhibit 10.31, to amend that certain Asset Purchase Agreement, dated August 28, 2023, included in this Report as Exhibit 10.10, pursuant to which Above Food agreed to participate in the private financial round of NRGene Canada and allocate up to CAD $1,000,000 of excess proceeds from any sale of New Above Food Common Shares to an investment under a SAFE investment agreement. Above Food agreed to provide the Sellers a non-recourse loan in the amount of CAD$ 2,362,500, for a period of six (6) months from the date of disbursement, bearing an interest rate of 3% per annum. Above Food also agreed to deliver to the Sellers 250,000 New Above Food Common Shares.

New Above Food and Sponsor entered into a Secured Convertible Promissory Note, dated June 27, 2024, included in this Report as Exhibit 10.32, under which New Above Food promised to pay Sponsor $2,000,000 in principle on the maturity date of June 27, 2026, with interest accruing on the unpaid principal amount at a rate equal to six percent (6%) per quarter, compounded quaterly. The entire principle amount is convertible into New Above Food Common Shares at Sponsor’s election.

Above Food, New Above Food, Sponsor, Enhol and Mr. Preciado entered into the Joinder to Registration Rights Agreement, dated June 19, 2024, included in this Report as Exhibit 10.33, under which Enhol and Mr. Preciado agreed to be bound by and become parties to the Registration Rights Agreement, dated June 28, 2024, by and among Above Food, New Above Food, Sponsor, and certain other investors set forth therein.

Material Contracts Relating to the Business Combination

Business Combination Agreement

A description of the Business Combination Agreement is set forth in the Proxy Statement/Prospectus under the sections titled “The Business Combination Proposal—Business Combination Agreement” and is incorporated herein by reference.

Related Agreements

A description of the material provisions of certain additional agreements entered into pursuant to the Business Combination Agreement is set forth in the Proxy Statement/Prospectus under the sections titled “The Business Combination Proposal—Ancillary Agreements” and “Description of New Above Food Securities—New Above Food Warrants,” and is incorporated herein by reference.

D. Exchange Controls and Other Limitations Affecting Security Holders

Canada has no system of exchange controls. There are no Canadian governmental laws, decrees, or regulations relating to restrictions on the repatriation of capital or earnings of the Company to non-resident investors. There are no laws in Canada or exchange control restrictions affecting the remittance of dividends or other payments made by the Company in the ordinary course to non-resident holders of the New Above Food Common Shares by virtue of their ownership of such New Above Food Common Shares, except as discussed below in under “Item 10.E. - Taxation”.

There are no limitations under the laws of Canada or in the organizing documents of the Company on the right of foreigners to hold or vote securities of the Company, except that the Investment Canada Act may require that a “non-Canadian” not acquire “control” of the Company without prior review and approval by the Minister of Innovation, Science and Economic Development, where applicable thresholds are exceeded. The acquisition of one-third or more of the voting shares of the Company would give rise a rebuttable presumption of an acquisition of control, and the acquisition of more than fifty percent of the voting shares of the Company would be deemed to be an acquisition of control. In addition, the Investment Canada Act provides the Canadian government with broad discretionary powers in relation to national security to review and potentially prohibit, condition or require the divestiture of, any investment in the Company by a non-Canadian, including non-control level investments. “Non-Canadian” generally means an individual who is neither a Canadian citizen nor a permanent resident of Canada within the meaning of the Immigration and Refugee Protection Act (Canada) who has been ordinarily resident in Canada for not more than one year after the time at which he or she first became eligible to apply for Canadian citizenship, or a corporation, partnership, trust or joint venture that is ultimately controlled by non-Canadians.

Amendments to the Investment Canada Act have been passed by the Canadian government but have not yet come into force. Among other things, the amendments will broaden and strengthen the national security review provisions and require, under certain circumstances to be prescribed in regulations that have not yet been published, pre-closing notification of certain foreign investment transactions.

E. Taxation

Information regarding certain U.S. tax consequences of owning and disposing of New Above Food Common Shares and New Above Food Warrants is included in the Proxy Statement/Prospectus under the section titled “Material U.S. Federal Income Tax Considerations of the Business Combination” and is incorporated herein by reference.

F. Dividends and Paying Agents

New Above Food has never declared or paid any cash dividends and has no plan to declare or pay any dividends on New Above Food Common Shares in the foreseeable future. New Above Food currently intends to retain any earnings for future operations and expansion.

Subject to the rights of any other shares of New Above Food which are expressed to rank prior to the New Above Food Common Shares, the holders of New Above Food Common Shares are entitled to receive dividends at such times and in such amounts as the New Above Food Board may determine from time to time. The holders of the New Above Food Class A Earnout Shares and the New Above Food Class B Earnout Shares shall not be entitled to any dividends or other distributions other than in the event of a distribution of assets of the Company among its shareholders arising on the liquidation, dissolution or winding up of the Company, whether voluntary or involuntary, or any other distribution of the assets of the Company among its shareholders for the purpose of winding up its affairs.

Under the ABCA, New Above Food may not pay a dividend in money or other property if there are reasonable grounds for believing that New Above Food is, or would after the payment be, unable to pay its liabilities as they become due, or the realizable value of New Above Food’s assets would thereby be less than the aggregate of its liabilities and stated capital of all classes.

Since New Above Food is a holding company, its ability to pay dividends will be dependent upon the financial condition, liquidity and results of operations of, and the receipt of dividends, loans or other funds from, its subsidiaries. The subsidiaries are separate and distinct legal entities and have no obligation to make funds available to New Above Food. In addition, there are various statutory, regulatory and contractual limitations and business considerations on the extent, if any, to which the subsidiaries of New Above Food may pay dividends, make loans or otherwise provide funds to New Above Food.

G. Statement by Experts

The consolidated balance sheet of New Above Food as of January 31, 2024, incorporated by reference in this Report has been audited by Ernst & Young LLP, independent registered public accounting firm, as set forth in their report thereon, appearing elsewhere herein, and are included in reliance upon such report given on the authority of such firm as experts in accounting and auditing. The consolidated financial statements of Above Food at January 31, 2024 and 2023, and for each of the three years in the period ended January 31, 2024, appearing in this Report have been audited by Ernst & Young LLP, independent registered public accounting firm, as set forth in their report thereon (which contains an explanatory paragraph describing conditions that raise substantial doubt about Above Food’s ability to continue as a going concern as described in Note 2 to the consolidated financial statements) appearing elsewhere herein, and are included in reliance upon such report given on the authority of such firm as experts in accounting and auditing.

The financial statements of Bite as of and for the fiscal years ended December 31, 2023 and 2022, incorporated by reference in this report, have been audited by Marcum LLP, independent registered public accounting firm, as set forth in their report thereon appearing elsewhere herein, which includes an explanatory paragraph as to Bite’s ability to continue as a going concern, and are included in reliance on such report given on the authority of such firm as an expert in accounting and auditing.

H. Documents on Display

We are subject to certain of the informational filing requirements of the Exchange Act. Because we are a “foreign private issuer,” we are exempt from the rules and regulations under the Exchange Act prescribing the furnishing and content of proxy statements, and our officers, directors and principal shareholders are exempt from the reporting and “short-swing” profit recovery provisions contained in Section 16 of the Exchange Act, with respect to their purchase and sale of our shares. In addition, we are not required to file reports and financial statements with the SEC as frequently or as promptly as U.S. companies whose securities are registered under the Exchange Act. However, we are required to file with the SEC an Annual Report on Form 20-F containing financial statements audited by an independent accounting firm. We may, but are not required, to furnish to the SEC, on Form 6-K, unaudited financial information after each of our first three fiscal quarters. The SEC also maintains a website at http://www.sec.gov that contains reports and other information that we file with or furnish electronically with the SEC. You may read and copy any report or document we file, including the exhibits, at the SEC’s public reference room located at 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information on the public reference room.

I. Subsidiary Information.

Not applicable.

ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Information regarding quantitative and qualitative disclosure about market risk is included in the audited consolidated financial statements of Above Food for the year ended January 31, 2024, which form part of this Report.

ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES

Information regarding New Above Food Warrants is included in the Proxy Statement/Prospectus under the section titled “Description of New Above Food Securities—New Above Food Warrants” and is incorporated herein by reference.

PART II.

Item 16A. Audit Committee Financial Expert

The New Above Food Board has determined that Alberto Ardura González is an “audit committee financial expert,” within the meaning of the current rules of the U.S. Securities and Exchange Commission. Alberto Ardura González is “independent” as required by the Nasdaq Listing Rules.

Item 16B. Code of Ethics

We have adopted a code of ethics that applies to our principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions. Pursuant to our Code of Ethics, officers of New Above Food covered by New Above Food’s Code of Ethics are required to promptly bring to the attention of the appropriate personnel, including officers, the General Counsel, outside counsel for the Company and the New Above Food Board or the relevant committee thereof, any information concerning any violations of the Code of Ethics.

Item 16G. Corporate Governance

Our common shares and warrants are listed on Nasdaq and as a Nasdaq-listed company, we are required to comply with certain corporate governance standards under applicable Nasdaq Listing Rules. However, as a foreign private issuer, pursuant to Nasdaq Listing Rule 5615(a)(3), we are permitted to follow home country practice in lieu of certain provisions of the Nasdaq Listing Rules.

Our corporate governance practices differ in certain significant respects from those that U.S. companies must adopt in order to maintain a Nasdaq listing and, in accordance with Nasdaq Listing Rule 5615(a)(3), we provide a brief, general summary of such differences.

Pursuant to Nasdaq Listing Rule 5615(a)(3), the Company has elected to follow certain Canadian practices consistent with the requirements of the ABCA in lieu of the requirements of (i) NASDAQ Listing Rule 5620(c) (Quorum Rule) and (ii) Nasdaq Rule 5635, which sets forth the circumstances under which shareholder approval is required prior to an issuance of securities in certain circumstances as set out therein.

Nasdaq Listing Rule 5620(c) requires that the minimum quorum requirement for a shareholder meeting is one-third of the outstanding common shares. In addition, a company listed on Nasdaq is required to state its quorum requirement in its bylaws. New Above Food’s quorum requirement is set forth in its organizational documents, which provides that if the Company has more than 15 shareholders, quorum for the transaction of business at a meeting of shareholders is shareholders holding not less than twenty five (25%) percent of the shares of the Company entitled to vote at that meeting being present in person or represented by proxy, where two or more joint holders are counted as one shareholder.

The shareholder approval requirements set forth in Nasdaq Listing Rule 5635 are different than those required by the Canadian Rules. New Above Food intends to comply with such Canadian Rules in lieu of the requirements set forth in Nasdaq Listing Rule 5635.

Other than the home country practices described above, we are not aware of any significant ways in which our corporate governance practices differ from those followed by U.S. domestic companies under the Nasdaq listing rules.

PART III.

ITEM 17. FINANCIAL STATEMENTS

We have elected to provide financial statements and related information pursuant to “Item 18 Financial Statements.”

ITEM 18. FINANCIAL STATEMENTS

The audited consolidated financial statements of Bite for the fiscal year ended December 31, 2023, are incorporated by reference to pages F 3–F 24 in Amendment No. 4 to the Registration Statement on Form F-4, filed with the SEC on April 2, 2024 (“Amendment No. 4”).

The audited consolidated financial statements of Above Food for the fiscal year ended January 31, 2024, form part of this Report.

The audited consolidated financial statements of New Above Food for the fiscal year ended January 31, 2024, are incorporated by reference to pages F 116–F 119 in Amendment No. 4.

The unaudited pro forma condensed combined financial statements of New Above Food as of and for the year ended January 31, 2024 are attached as Exhibit 15.1 to this Report.

ITEM 19. EXHIBITS.

SIGNATURES

The registrant certifies that it meets all of the requirements for filing on Form 20-F and has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.

Above Food Corp.

Consolidated Financial Statements

as of January 31, 2024 and 2023 and for the years ended January 31, 2024, 2023 and 2022

CONTENTS

Report of Independent Registered Public Accounting Firm

To the Shareholders and Board of Directors of Above Food Corp.

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheets of Above Food Corp. (the “Company”), as of January 31, 2024 and 2023, the related consolidated statements of operations and comprehensive loss, changes in equity and cash flows, for each of the years in the three year period ended January 31, 2024, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at January 31, 2024 and 2023, and the results of its operations and its cash flows for each of the years in the three year period ended January 31, 2024, in conformity with U.S. generally accepted accounting principles.

The Company’s ability to Continue as a Going Concern

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the consolidated financial statements, the Company has suffered recurring losses from operations, has a working capital deficiency, has violated covenant requirements under its lending agreements as at January 31, 2024 and has stated that substantial doubt exists about the Company’s ability to continue as a going concern. Management's evaluation of the events and conditions and management’s plans regarding these matters are also described in Note 2. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

/s/ Ernst & Young LLP

Charterred Professional Accountants

We have served as the Company’s auditor since 2021.

Saskatoon, Canada

May 31, 2024, except for Note 26, as to which the date is July 8, 2024.

Consolidated Balance Sheets

(Expressed in Canadian dollars)

The accompanying notes are an integral part of these consolidated financial statements.

Consolidated Statements of Operations and Comprehensive Loss

(Expressed in Canadian dollars)

The accompanying notes are an integral part of these consolidated financial statements.

Consolidated Statements of Changes in Shareholders’ Equity

(Expressed in Canadian dollars)

¹ In connection with the acquisition of FDO (Note 4), 432,780 shares are held in escrow and to be released contingently upon the satisfaction of certain conditions.

The accompanying notes are an integral part of these consolidated financial statements.

Consolidated Statements of Cash Flows

(Expressed in Canadian dollars)