JustKitchen Reports Financial Results for Fiscal Quarter Ended March 31, 2022

The Company's Total Revenue and Retail Order Volume Increased in Q2 2022 by 127% and 151%, Respectively, as its Number of Ghost Kitchen Locations Grew From 14 to 28 Locations on a Year-Over-Year Basis

VANCOUVER, BC, May 31, 2022 /CNW/ - Just Kitchen Holdings Corp. ("JustKitchen" or the "Company") (TSXV: JK) (OTC: JKHCF) (Frankfurt: 68Z), an operator of ghost kitchens specializing in the development of delivery-only food brands, is pleased to announce that it has filed its unaudited financial results for the second fiscal quarter ending March 31, 2022, the highlights of which are included in this news release. The full set of Condensed Consolidated Interim Financial Statements and Management Discussion and Analysis can be viewed by visiting the Company's website at en.justkitchen.com or its profile page on SEDAR at www.sedar.com.

Financial Highlights

• Total revenue of $5,039,338 and $9,206,021 for the three- and six-month periods ended March 31, 2022, respectively as compared to $2,224,281 and $4,135,451 for the three-and six-month periods ended March 31, 2021, respectively;
• Retail order volume grew by 151% to 321,914 and by 139% to 587,663 orders for the three- and six-month periods ended March 31, 2022, respectively, from 128,400 and 246,200 orders for the three- and six-month periods ended March 31, 2021, respectively;
• Number of ghost kitchens doubled to 28 with an average retail delivery size of $14.42 per order in the first six months of 2022, from 14 ghost kitchens with a similar average retail delivery size of $14.80 per order for the same period in 2021;
• Adjusted EBITDA losses were $4,583,681 and $7,169,122 for the three- and six-month periods ended March 31, 2022, respectively, as compared to losses of $1,746,675 and $3,121,930 for the same three and six-month periods of the prior year, respectively. The increase is primarily as the result of an overall increase in business activities; an increase in general and administrative costs due to salaries increasing as the result of an higher number of employees and consultants; professional fees increasing due to international business expansions, regulatory compliance as well as tax, legal and accounting due diligence completed in Q1 2022 related to potential business acquisition; and advertising and marketing increasing due to overall increase in business activities; and
• Net losses were $5,442,157 and $9,013,760 for the three- and six-month periods ended March 31, 2022, respectively, as compared to $2,530,157 and $4,959,959 for the same three-and six-month periods of the prior year, respectively, due to the same primary reasons listed above.

Management Commentary

"Exceeding five million dollars in total revenue for the first time in a quarter is a significant achievement for JustKitchen. I am proud of our entire team for working so hard to reach this milestone and am very grateful to our customers and third-party stakeholders in a growing list of jurisdictions for their support," said Jason Chen, Co-Founder and Chief Executive Officer of JustKitchen. "As we grow beyond 30 ghost kitchen locations in multiple countries, expand our portfolio of proprietary and partner brands, increase the size and scope of our business network, as well as strengthen our JKOS tech stack, we are widening JustKitchen's competitive moat and proving that there is an increasing level of demand for high-quality food delivered to consumers in densely populated areas," added Mr. Chen.

Summary of Key Financial Measures

	Quarter ended March 31, 2022 $	Quarter ended March 31, 2021 $
Number of kitchens	28	14
Revenue from retail customers	$4,662,519	$1,975,110
Revenue from business	$376,819	$249,171
Total Revenue	$5,039,338	$2,224,281
Number of retail deliveries	321,914	128,400
Average retail delivery size	$14.48	$15.38
Net loss	$(5,442,157)	$(2,530,157)
Comprehensive loss	$(4,826,520)	$(2,387,038)
Basic loss per share	$(0.07)	$(0.06)
Diluted loss per share	$(0.07)	$(0.06)

The following is a reconciliation of Adjusted EBITDA to Income (Loss) from Operations:

	Quarter ended March 31, 2022 $	Quarter ended March 31, 2021 $
Loss for the period	(5,442,157)	(2,530,157)
Interest expense	30,760	26,581
Depreciation expense	474,612	223,735
Amortization expense	19,932	-
EBITDA	(4,916,853)	(2,279,841)
Stock-based compensation	333,172	533,166
Adjusted EBITDA1	(4,583,681)	(1,746,675)

1.

Adjusted EBITDA is a financial measure that does not have a standardized meaning under IFRS. Adjusted EBITDA is defined as earnings before interest expense, depreciation, amortization, and stock-based compensation.  As there is no standardized method of calculating Adjusted EBITDA, it may not be directly comparable with similarly titled measures used by other companies.  The Company considers Adjusted EBITDA to be a relevant indicator for measuring trends in performance and its ability to generate funds to service its debt and to meet its future working capital and capital expenditure requirements. Adjusted EBITDA is not a generally accepted earnings measure and should not be considered in isolation or as an alternative to net income (loss), cash flows or other measures of performance prepared in accordance with IFRS.

 

Corporate Highlights Subsequent to March 31, 2022

The Company:

• Entered the Singapore market by opening two ghost kitchen locations;
• Entered Philippine market through its joint venture entity with TDG Ventures, Inc., signing an agreement to open two ghost kitchen locations in the Philippines' capital city of Manila;
• Opened an exclusive ghost kitchen location at Jialong Technology Inc. within the Taoyuan Environmental Science and Technology Park;
• Signed an agreement with Dine Brands International to sell IHOP's world-famous pancakes, breakfast combos, omelets, burritos, bowls and more in Taiwan;
• Launched its exclusive new Mr. Chili menu in Taiwan with the Mr. Hot instant noodle brand and celebrity singer Hsiao Ching-Teng; and
• Had its proprietary Go Lean food brand be the first ghost kitchen brand to be deemed eco-friendly by Foodpanda.

Similar to the statement provided in the announcement of the Company's previous financial results, and despite the significant increase in revenues and order volume on a year-over-year basis, the Company anticipates that operating costs will remain proportionally elevated in the near term to support its continued expansion in its home market of Taiwan as well as in Hong Kong, Japan, Malaysia, the Philippines, Singapore and elsewhere.

ABOUT JUSTKITCHEN

JustKitchen is primarily an operator of ghost kitchens specializing in the development and marketing of proprietary and franchised delivery-only food brands for customers. The Company currently operates in Taiwan and Hong Kong with plans to expand operations to other Asian countries. JustKitchen uniquely utilizes a hub-and-spoke operating model, which features advanced food preparation taking place at larger hub kitchens and final meal preparation taking place at smaller spoke kitchens located in areas with higher population densities. The Company combines this operating model with online and mobile application-based food ordering fulfilled by third-party delivery companies, to minimize capital investments and operating expenses and reach more customers in underserved markets. The Company's other business, JustMarket, is an e-commerce grocery delivery platform that allows customers to purchase groceries for delivery or add select grocery items to meals ordered through JustKitchen.

For more information about the Company, please visit investors.justkitchen.com. JustKitchen's final prospectus, financial statements and management's discussion and analysis, among other documents, are all available on the Company's profile page on SEDAR at www.sedar.com.

Neither the TSXV nor its Regulation Services Provider (as that term is defined in the policies of the TSXV) accepts responsibility for the adequacy or accuracy of this release.

CONTACT INFORMATION

FORWARD-LOOKING STATEMENTS

This news release contains certain "forward-looking statements" within the meaning of such statements under applicable securities law. Forward-looking statements are frequently characterized by words such as "anticipates", "plan", "continue", "expect", "project", "intend", "believe", "anticipate", "estimate", "may", "will", "potential", "proposed", "positioned" and other similar words, or statements that certain events or conditions "may" or "will" occur including but not limited to the Company's comments regarding growing beyond 30 ghost kitchen locations in multiple countries; expanding its portfolio of proprietary and partner brands; increasing the size and scope of its business network; strengthening its JKOS tech stack; widening its competitive moat; and expanding its operational footprint in the Philippines, Japan, Malaysia, Singapore and elsewhere. These statements are only predictions. Various assumptions were used in drawing the conclusions or making the projections contained in the forward-looking statements throughout this news release. Forward-looking statements are based on the opinions and estimates of management at the date the statements are made and are subject to a variety of risks, including those risk factors identified in the Company's prospectus dated March 26, 2021, and uncertainties and other factors that could cause actual events or results to differ materially from those projected in the forward-looking statements. The Company is under no obligation, and expressly disclaims any intention or obligation, to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as expressly required by applicable law.

SOURCE Just Kitchen Holdings Corp.

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