Innovative Food Holdings, Inc. Reports Financial Results

Total Revenue Increased 35% YoY to a Third Quarter Record
Specialty Foodservice Increased 79% YoY
Third Quarter E-Commerce Revenue up 69% on a Two-Year Basis

BONITA SPRINGS, Fla., Nov. 23, 2021 (GLOBE NEWSWIRE) -- Innovative Food Holdings, Inc. (OTCQB: IVFH) (“IVFH” or the “Company”), a leading end-to-end DTC e-commerce platform and direct-to-chef platform that provides high-quality, unique specialty foods through e-commerce offerings and multichannel partnerships, today reported its financial results for the third quarter and first nine months of 2021.

“We achieved record third quarter revenue, demonstrating the power of our platforms. Specialty foodservice revenue accelerated from the second quarter as reopening activity increased. In addition, as supply chain issues continue to create challenges for many foodservice establishments, our agile direct-to-chef platform enables IVFH to provide high quality, reliable, specialty food products that meet the needs of our customers,” stated Sam Klepfish, CEO of Innovative Food Holdings.

“I am excited by the progress we are making growing our aggregated e-commerce businesses. Compared to pre-COVID levels, third quarter e-commerce sales were up 69% from the 2019 third quarter and have grown 100% from the 2019 first nine months. Our strong DTC e-commerce platform, and innovative end-to-end capabilities are resonating with consumers, as well as business and channel partners. Throughout the year we have increased the number of partners and sales channels, while investing in new, compelling assets to further enhance the capabilities of our e-commerce platform. As a result, our e-commerce business is heading into the fourth quarter very well positioned for top and bottom-line growth.”

“I believe we have significant growth opportunities to rapidly scale our business and our brands, and to leverage the investments we have made over the past several years to build, grow and enhance our leading end-to-end e-commerce platform. As a result, given favorable current demand trends and continued market shifts towards e-commerce, I believe we are well positioned to unlock meaningful value for our shareholders,” concluded Mr. Klepfish.

Financial Results
Revenues in the 2021 third quarter increased 35% to a third quarter record of $15.2 million, compared to $11.2 million for the three months ended September 30, 2020. Third-quarter revenue benefitted from a 79% increase in specialty foodservice revenue, which was partially driven by the nationwide opening of restaurants and other foodservice establishments previously affected by COVID-19. In addition, the Company’s unique supply chain capabilities continue to provide reliable, consistently high-quality specialty foodservice solutions for its customers. Third quarter e-commerce revenue was up 69% from 2019 pre-Covid third quarter, reflecting robust organic growth, notwithstanding a 36% decrease in e-commerce revenues as a result of heightened COVID-19 driven demand in 2020 compared to 2021. For the first nine months of fiscal 2021, total revenue was $41.3 million, a 13% increase from $36.5 million for the same period last year.

The following table sets forth IVFH’s revenue by business category for the three and nine months ended September 30, 2021, and September 30, 2020 (unaudited):

	Three Months Ended
	September 30, 2021		% of Net Sales	September 30, 2020		% of Net Sales	% Change
Specialty Foodservice	$	12,060,000	79%	$	6,733,000	60%	79%
E-commerce		2,652,000	17%		4,158,000	37%	-36%
National Brand Management		261,000	2%		254,000	2%	3%
Logistics		234,000	2%		90,000	1%	161%
Total IVFH	$	15,207,000	100%	$	11,235,000	100%	35%

	Nine Months Ended
	September 30, 2021		% of Net Sales	September 30, 2020		% of Net Sales	% Change
Specialty Foodservice	$	29,049,000	70%	$	20,751,000	57%	40%
E-commerce		10,917,000	26%		14,490,000	40%	-25%
National Brand Management		752,000	2%		787,000	2%	-5%
Logistics		645,000	2%		510,000	1%	26%
Total IVFH	$	41,363,000	100%	$	36,538,000	100%	13%

For the 2021 third quarter, selling, general, and administrative (SG&A) expenses were $5.0 million, compared to $4.5 million for the same period last year. The $0.5 million increase was primarily due to higher operating costs, including increases in advertising costs and other costs associated with enhancing and expanding the Company’s platforms.

The Company reported GAAP net income for the 2021 third quarter of $0.4 million, or $0.01 per share, compared to a net loss of $(1.6 million), or $(0.05) per share, in the prior year’s third quarter. For the first nine months of 2021, the Company reported a net loss of $(2.4 million), or $(0.06) per share, compared to a net loss of $(6.6 million), or $(0.19) per share, for the first nine months of 2020.

Adjusted net income a non-GAAP metric (see tables below) for the 2021 third quarter was a loss of $(1.1 million), or $(0.028) per share, compared to an adjusted net loss of $(1.5 million), or $(0.042) per share, for the same period last year. For the first nine months of 2021, adjusted net income was a loss of $(3.4 million), or $(0.091) per share, compared to an adjusted net loss of $(4.0 million), or $(0.116) per share, for the same period last year.

Cash EBITDA, a non-GAAP metric (see tables below), for the 2021 third quarter was a loss of $(0.9 million), compared to a Cash EBITDA loss of $(1.3 million), in the prior year quarter. For the 2021 first nine months, Cash EBITDA was a loss of $(2.7 million), compared to a Cash EBITDA loss of $(3.5 million) for the same period a year ago.

About Innovative Food Holdings, Inc.
IVFH’s leading end-to-end direct-to-consumer e-commerce platform and direct-to-chef platform connect the world’s best artisan food makers with top chefs and epicurean consumers nationwide. Our unique ability to reach both specialty foodservice B2B customers, and consumers positions IVFH as a compelling resource for artisanal food producers, CPG brands, chefs, and consumers. IVFH’s owned online retailer brands on its leading DTC e-commerce platform include www.igourmet.com and www.mouth.com.

Additional information is available at www.ivfh.com.

Forward-Looking Statements
This release contains certain forward-looking statements and information relating to Innovative Food Holdings, Inc. (the “Company”) that are based on the current beliefs of the Company’s management, as well as assumptions made by, and information currently available to, the Company. Such statements reflect the current views of the Company with respect to future events and are subject to certain assumptions, including those described in this release. Should one or more of these underlying assumptions prove incorrect, actual results may vary materially from those described herein as “should,” “could,” “will,” “anticipate,” “believe,” “intend,” “plan,” “might,” “potentially” “targeting” or “expect.” Additional factors that could also cause actual results to differ materially relate to the global COVID-19 crisis and other risk factors described in our public filings. The Company does not intend to update these forward-looking statements. The content of the websites referenced above are not incorporated herein.

Innovative Food Holdings, Inc.
Condensed Consolidated Balance Sheets

	September 30,			December 31,
	2021			2020
	(unaudited)
ASSETS
Current assets
Cash and cash equivalents	$	4,018,396		$	5,060,015
Accounts receivable, net		3,580,246			2,380,305
Inventory		2,809,303			3,719,786
Other current assets		350,513			286,815
Total current assets		10,758,458			11,446,921

Property and equipment, net		8,266,851			8,550,401
Investments		286,725			496,575
Right to use assets, operating leases, net		259,091			246,737
Right to use assets, finance leases, net		697,592			776,439
Other amortizable intangible assets, net		91,770			100,380
Goodwill and other unamortizable intangible assets		1,532,822			1,532,822
Total assets	$	21,893,309		$	23,150,275

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable and accrued liabilities	$	4,322,900		$	5,098,523
Accrued interest, current portion		36,069			28,873
Deferred revenue		1,056,011			2,917,676
Line of Credit		2,000,000			2,000,000
Notes payable - current portion, net of discount		487,339			1,741,571
Lease liability - operating leases, current		83,483			87,375
Lease liability - finance leases, current		157,371			146,004
Contingent liability - current portion		187,000			187,000
Total current liabilities		8,330,173			12,207,022

Accrued interest, long term portion		5,643			-
Lease liability - operating leases, non-current		175,608			159,362
Lease liability - finance leases, non-current		540,127			638,137
Contingent liability - long-term		108,600			116,600
Note payable - long term portion, net		7,213,214			6,151,345
Total liabilities		16,373,365			19,272,466

Commitments & Contingencies (see note 16)		-			-

Stockholders' equity
Common stock: $0.0001 par value; 500,000,000 shares authorized; 48,510,881 and 38,209,060 shares issued, and 45,673,301 and 35,371,480 shares outstanding at September 30, 2021 and December 31, 2020, respectively		4,849			3,817
Additional paid-in capital		41,470,627			37,415,155
Treasury stock: 2,623,171 and 2,623,171 shares outstanding at September 30, 2021 and December 31, 2020, respectively.		(1,141,370	)		(1,141,370	)
Accumulated deficit		(34,814,162	)		(32,399,793	)
Total stockholders' equity		5,519,944			3,877,809

Total liabilities and stockholders' equity	$	21,893,309		$	23,150,275

Innovative Food Holdings, Inc.
Condensed Consolidated Statements of Operations
(unaudited)

	For the Three			For the Three			For the Nine			For the Nine
	Months Ended			Months Ended			Months Ended			Months Ended
	September 30,			September 30,			September 30,			September 30,
	2021			2020			2021			2020


Revenue	$	15,207,353		$	11,234,626		$	41,362,816		$	36,538,195
Cost of goods sold		11,427,343			8,367,565			30,471,401			27,237,525
Gross margin		3,780,010			2,867,061			10,891,415			9,300,670

Selling, general and administrative expenses		4,998,673			4,466,631			14,512,803			13,974,822
Impairment of intangible assets		-			-			-			1,698,952
Total operating expenses		4,998,673			4,466,631			14,512,803			15,673,774

Operating loss		(1,218,663	)		(1,599,570	)		(3,621,388	)		(6,373,104	)

Other income (expense:)
Gain on forgiveness of debt		1,665,818			-			1,665,818			-
Impairment of investment		-			-			(209,850	)		-
Other leasing income		1,900			10,977			8,940			32,833
Interest expense, net		(82,029	)		(54,749	)		(257,889	)		(211,815	)
Total other income (expense)		1,585,689			(43,772	)		1,207,019			(178,982	)

Net (loss) income before taxes		367,026			(1,643,342	)		(2,414,369	)		(6,552,086	)

Income tax expense		-			-			-			-

Net (loss) income	$	367,026		$	(1,643,342	)	$	(2,414,369	)	$	(6,552,086	)

Net (loss) income per share - basic	$	0.01		$	(0.05	)	$	(0.06	)	$	(0.19	)

Net (loss) income per share - diluted	$	0.01		$	(0.05	)	$	(0.06	)	$	(0.19	)

Weighted average shares outstanding - basic		40,253,543			35,260,060			37,254,290			34,739,378

Weighted average shares outstanding - diluted		40,253,543			35,260,060			37,254,290			34,739,378

Innovative Food Holdings, Inc.
Condensed Consolidated Statements of Cash Flows
(unaudited)

	For the Nine			For the Nine
	Months Ended			Months Ended
	September 30,			September 30,
	2021			2020

Cash flows from operating activities:
Net loss	$	(2,414,369	)	$	(6,552,086	)
Adjustments to reconcile net loss to net cash used in operating activities:
Gain on forgiveness of debt		(1,665,818	)		-
Impairment of intangible assets		-			1,698,952
Impairment of investment		209,850			-
Depreciation and amortization		407,704			567,803
Amortization of right-of-use asset		76,005			137,712
Amortization of prepaid loan fees		9,368			9,403
Stock based compensation		476,132			378,006
Provision for doubtful accounts		32,443			226,254

Changes in assets and liabilities:
Accounts receivable, net		(1,254,764	)		1,291,467
Inventory and other current assets, net		869,165			(1,049,069	)
Accounts payable and accrued liabilities		(747,187	)		47,645
Deferred revenue		(1,861,665	)		(159,991	)
Contingent liabilities		(8,000	)		(32,000	)
Operating lease liability		(76,005	)		(137,712	)
Net cash used in operating activities		(5,947,141	)		(3,573,616	)

Cash flows from investing activities:
Cash paid for website development		-			(14,000	)
Acquisition of property and equipment		(14,812	)		(128,618	)
Net cash used in investing activities		(14,812	)		(142,618	)

Cash flows from financing activities:
Proceeds from line of credit		-			2,000,000
Proceeds from Payroll Protection Plan Loan		1,748,414			1,650,221
Proceeds from sale of common stock, net of costs		3,580,372			-
Principal payments on debt		(299,924	)		(149,705	)
Principal payments financing leases		(108,528	)		(32,787	)
Net cash provided by financing activities		4,920,334			3,467,729

Decrease in cash and cash equivalents		(1,041,619	)		(248,505	)

Cash and cash equivalents at beginning of period		5,060,015			3,966,050

Cash and cash equivalents at end of period	$	4,018,396		$	3,717,545

Supplemental disclosure of cash flow information:

Cash paid during the period for:
Interest	$	250,967		$	196,392

Taxes	$	-		$	-

Non-cash investing and financing activities:
Transfer asset from property and equipment to right to use asset, financing lease	$	-		$	8,344
Building improvements financed under note payable	$	21,885		$	1,900,000
Increase in right to use assets & liabilities	$	88,359		$	214,930
Reclassification of accounts receivable to other assets	$	22,380		$	45,675
Capital lease for purchase of fixed assets	$	21,885		$	152,548

	Three Months Ended (unaudited)				Nine Months Ended (unaudited)
	September 30, 2021		September 30, 2020		September 30, 2021		September 30, 2020
Adjusted Net Income and EPS ⁽¹⁾
Revenue	$	15,207,353	$	11,234,626	$	41,362,816	$	36,538,195
Net Income (loss)		367,026		(1,643,342)		(2,414,369)		(6,552,086)
Amortization of intangible assets⁽²⁾		2,870		-		8,610		210,032
One-time charges		-		-		209,850		1,917,891
One-time gain		(1,665,818)		-		(1,665,818)		-
Stock related expenses ⁽³⁾		160,752		156,897		476,132		378,006
Adjusted Net Income	$	(1,135,170)	$	(1,486,445)	$	(3,385,595)	$	(4,046,157)
Weighted Avg. Shares Outstanding Diluted ⁽⁴⁾		40,253,545		35,260,060		37,254,290		34,739,378
Adjusted Fully Diluted EPS	$	(0.028)	$	(0.042)	$	(0.091)	$	(0.116)

	Three Months Ended (unaudited)				Nine Months Ended (unaudited)
	September 30, 2021		September 30, 2020		September 30, 2021		September 30, 2020
Cash EBITDA ⁽¹⁾
Net Income (loss)	$	367,026	$	(1,643,342)	$	(2,414,369)	$	(6,552,086)
Interest expense, taxes & other income		80,129		43,772		248,949		178,982
Depreciation & amortization		135,733		125,338		407,676		567,804
One-time charges		-		-		209,850		1,917,891
One-time gain		(1,665,818)		-		(1,665,818)		-
Stock related expenses ⁽³⁾		160,752		156,897		476,132		378,006
Cash EBITDA	$	(922,178)	$	(1,317,335)	$	(2,737,580)	$	(3,509,403)

(1)	Adjusted Net Income and Cash EBITDA are each a non-GAAP metric. Management believes that the presentation of these non-GAAP financial measures provides useful information to investors because the information may allow investors to better evaluate ongoing business performance and certain components of the Company’s results. In addition, the Company believes that the presentation of these financial measures enhances an investor’s ability to make period-to-period comparisons of the Company’s operating results. This information should be considered in addition to the results presented in accordance with GAAP, and should not be considered a substitute for the GAAP results.
(2)	Includes non-cash amortization charges related to assets acquired
(3)	Includes stock and options-based compensation and expenses
(4)	Full Year GAAP weighted fully diluted share count

Company Contact:	Investor and Media Contact:
Ronit Wallerstein	Andrew M. Berger
Investor Relations	Managing Director
Innovative Foods Holdings, Inc.	SM Berger & Company, Inc.
(954) 881-9158	(216) 464-6400
rwallerstein@IVFH.com	andrew@smberger.com

Innovative Food Holdings, Inc. Reports Financial Results for Third Quarter and First Nine Months of 2021