VETANOVA INC. Management’s discussion and analysis of the financial position or operating plan (Form 10-Q)

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Unless the context indicates otherwise, references in this Form 10-Q to “we”, “our”, “our” and similar terms refer to VÉTANOVA INC.

Note on forward-looking statements

This Form 10-Q contains forward-looking statements, such as statements relating to our financial condition, results of operations, plans, objectives, future performance and business operations. These statements relate to expectations regarding matters which are not historical facts. These forward-looking statements reflect our current beliefs and expectations based in large part on information currently available to us and are subject to inherent risks and uncertainties. Although we believe that our expectations are based on reasonable assumptions, they are not guarantees of future performance and there are a number of important factors that could cause actual results to differ materially from those expressed or implied. through these forward-looking statements, including the risks described in point 1A. Risk factors in our annual report on Form 10-K for the year ended December 31, 2020. In making these forward-looking statements, we do not undertake to update them in any way, except as required by our disclosure obligations in the documents that we file with the Security and Trade Commission under federal securities laws. Our actual results may differ materially from our forward-looking statements.


Overview


The company is in its development phase and intends to build and operate solar-powered and carbon-negative greenhouses using artificial intelligence-assisted technologies to control the growing environment if it can. get funding. The Company’s income is expected to come from growing farm-fresh fruits and vegetables for sale in local markets.

The Company intends to produce farm-fresh fruits and vegetables for local delivery to historically productive agricultural regions with high solar indices and close to large urban areas of United States, as the Colorado Front Range and Central valley of California.

At August 4, 2021, the Company has entered into an agreement with Mastronardi Produce Limited (Mastronardi), under which Mastronardi was granted the exclusive right to sell and market all No. 1 American grade fresh fruit and vegetables produced from all of the company’s greenhouses that exist or can be built in North America.

At August 17, 2021, the Company acquired from a related party approximately 118 contiguous acres located near the Arkansas River in Avondale, Colorado, for 25,000,000 ordinary shares of the Company, which were issued on October 29, 2021, and $ 657,895 in cash to be paid by December 31, 2022. The property is just minutes from I-25, which dissects Colorado from North to South, allowing daily deliveries of fresh farm produce within hours of harvest.

At November 8, 2021, the Company acquired from a related party approximately 39 acres for 70,000,000 common shares of the Company, which were not issued, and $ 1,842,105 in cash to be paid by December 31, 2022. The property abuts the 118 acres that the Company purchased on August 17, 2021, and together define the Avondale Complex. The November 8, 2021 the purchase contains 90,000 square feet of greenhouse and 15,000 square feet of warehouse. The property was purchased for 70,000,000 common shares of the Company, which were issued, and $ 1,842,105 in cash to be paid by December 31, 2022.

If the Company can obtain financing, it plans to renovate the existing 90,000 square foot greenhouse and 15,000 square foot warehouse to run exclusively on electrical power supplied by a 2 MW solar panel to be built with batteries. The Avondale complex a redeveloped greenhouse and warehouse, once constructed, will grow tomatoes for marketing by Mastronardi. After operational testing of the renovated existing cultivation facilities, the Company plans to expand the
Avondale Complex to 25 acres of growing facilities powered by a 25 MW solar field with batteries to produce various fruits and vegetables that will be marketed by Mastronardi.

The existing greenhouse facility has conventional 1,500 kVA electrical service provided by the local utility, which will be used initially for operations and later used as a back-up electrical network after the shutdown. Avondale Complex is suitable for solar energy.

The estimated cost to install the solar system needed to power the existing 90,000 square foot greenhouse is $ 1,125,000 and will take six months to complete once construction begins. The estimated cost to convert the existing greenhouse from carbon-based equipment to electrical appliances and equipment is $ 750,000 and will take six months to complete once construction begins.

The Company plans to finance the cost of building the solar field and modernizing the Avondale Project from sources of private equity and loans from
from Colorado Clean Energy Program Rated for Commercial Properties (C-PACE).


Results of Operations


For three months ended September 30, 2021 and September 30, 2020

The Company did not begin operations until July 2020. For the three months ended September 30, 2020, the Company has recognized $ 7,875 through a land sublease contract with a direct cost associated with income from $ 7,875. During the three months ended September 30, 2020, the Company has recognized $ 278,541 in general and administrative expenses, producing a loss of $ 22,021.

For the three months ended September 30, 2021, the Company had no sales. During this period, the Company recognized $ 278,584 in general and administrative expenses, $ 5,357,895 losses due to land acquisition, and $ 4,934 in interest charges. This produced a loss of $ 5,641,413, of which $ 52,695 was attributable to a minority stake; as a result, the shareholders of the Company recorded a
$ 5,588,718 loss.

For nine months ended September 30, 2021 and September 30, 2020

The Company did not begin operations until July 2020. During the nine months ended September 30, 2020, the Company has recognized $ 22, 021 in general and administrative expenses, producing a loss of $ 22,021.

For the nine months ended September 30, 2021, the Company had no sales. During this period, the Company recognized $ 651,509 in general and administrative expenses, $ 5,357,895 losses resulting from land acquisitions and $ 4,934 in interest charges. This produced a loss of $ 6,014,338, of which $ 52,695 was attributable to a minority stake; as a result, the shareholders of the Company recorded a $ 5,961,643
loss.

Liquidity and capital resources

We started our operations relying on external investors. Since its creation and through September 2021, we raised $ 1,118,801 in capital.

See Note 1 to the financial statements included in this report for a discussion of our anticipated capital requirements and plans to fund our anticipated capital requirements.

The Company has received preliminary approval from C-PACE, a Colorado specialized solar financing program developed by federal, state and county governments. The Company is in the process of developing the engineering necessary to complete the C-Pace financing request.

We believe that with additional capital from third party investors, we will have sufficient capital to meet our anticipated cash flow requirements for at least the next twelve months.


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To date, we have had only limited income, which has occurred in the last six months of 2020 via a sublet of farmland. Therefore, current activities are not sufficient to support our activities without additional sources of capital. From September 30, 2021, we had cash and cash equivalents of $ 87,798. We used
$ 1,066,427 cash in our operating activities during the nine months ended
September 30, 2021.



Critical Accounting Policies



We have identified the policies below as essential to our business operations and to understanding our results of operations. The impact and all associated risks associated with these policies on our business operations are discussed throughout “Management’s Discussion and Analysis of Financial Conditions and Operating Results” where these policies affect our reported and expected financial results. . For a detailed discussion of the application of these and other accounting policies, see Note 2 of the Notes to the Condensed Consolidated Financial Statements included elsewhere in this Form 10-Q. Our preparation of these condensed consolidated financial statements and Form 10-Q requires management to make estimates and assumptions that affect the reported amount of assets and liabilities, disclosure of contingent assets and liabilities as of the date of our financial statements. , and the reported amounts of income and expenses during the reporting period. There can be no assurance that actual results will not differ from these estimates.


Impairment Policy


At least annually, management reviews all of our assets for an appropriate valuation and to determine if impairment is necessary. With regard to property held, this impairment control also includes cumulative depreciation. Management reviews market valuations and if further impairment is required to reduce cost or the market, then an impairment charge is recognized.

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