UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION

The following unaudited pro forma combined financial statements of Better Choice Company Inc. (“BCC”) have been prepared to give effect to the reverse acquisition of Better Choice and Bona Vida by TruPet and the April 2019 issuance of stock and warrants in a private placement .

On May 6, 2019, BCC completed the acquisition of TruPet pursuant to a Stock Exchange Agreement dated February 2, 2019 and amended May 6, 2019.  At the closing of the transaction, BCC issued 14,079,606 shares of Common Stock in exchange for 93% of the outstanding interests in TruPet, LLC.  Also, on May 6, 2019, BCC completed the acquisition of Bona Vida pursuant to an Agreement and Plan of Merger dated February 28, 2019 and amended May 3, 2019.  At the closing of the transaction, BCC issued 18,003,274 shares of Common Stock in exchange for all outstanding shares of Bona Vida.  The operations of Better Choice subsequent to the acquisitions will be those of TruPet and the transactions have been accounted for as a reverse acquisition whereby TruPet is considered the accounting acquirer of Better Choice and Bona Vida.  As such, these proforma financial statements reflect adjustments to record historical Better Choice and Bona Vida assets and liabilities at fair value.

The unaudited pro forma combined balance sheet as of March 31, 2019 gives effect to the acquisitions and the issuance of stock and warrants as if they had occurred on March 31, 2019 and combines the March 31, 2019 historical balance sheet of TruPet with the March 31, 2019 historical balance sheets of Bona Vida and Better Choice.  The unaudited pro forma combined statements of operations are presented as if the proposed acquisitions had occurred on January 1, 2018, and combines the historical results of operations of TruPet for the year ended December 31, 2018 with the historical results of operations of Better Choice and Bona Vida from the date of incorporation, March 29, 2018, to December 31, 2018, and combines the historical results of operations for the three month period ended March 31, 2019 of TruPet with the historical results of Bona Vida and Better Choice for the three month period ended March 31, 2019.  The historical financial information is adjusted to give effect to pro forma events that are (1) directly attributable to the acquisitions, (2) factually supportable and (3) with respect to the statement of operations, expected to have a continuing impact on the combined results of the combined entity.  The unaudited pro forma combined financial statements presented below are based on, and should be read together with, the historical financial statements and accompanying notes of TruPet and Bona Vida included in this Form 8-K, and the historical financial statements of Better Choice included in its Form 10-K for the period ended August 31, 2018 and its Quarterly Report for the six months ended February 28, 2019.

The unaudited pro forma adjustments related to the merger have been prepared using the acquisition method of accounting and are based on a preliminary purchase price allocation whereby the consideration exchanged to acquire Better Choice and Bona Vida was allocated to the assets acquired and the liabilities assumed, based upon their estimated fair values.  Actual adjustments will be based on analyses of fair values of identifiable tangible and intangible assets, deferred tax assets and liabilities and estimates of the useful lives of tangible and amortizable intangible assets, which will be completed after Better Choice obtains the final third-party valuation, performs its own assessments and reviews all available data.  Differences between the preliminary and final purchase price allocations could have a material impact on the unaudited pro forma combined financials statements and BCC’s future results of operations and financial position.

The unaudited pro forma combined financial statements do not reflect the realization of potential cost savings, or any related restructuring or integration costs that may result from the integration of the companies.  Although Better Choice believes that certain cost savings may result from the merger, there can be no assurance that these cost savings will be achieved.

The unaudited pro forma combined financial statements are based on estimates and assumptions, are presented for illustrative purposes only and are not necessarily indicative of the combined financial position or results of operations in future periods or the results that actually would have been realized if the merger had been completed as of the dates indicated.

NOTES TO UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS

The unaudited pro forma combined financial statements have been compiled from underlying financial statements of BCC prepared in accordance with U.S. GAAP and reflects the effects of the merger, prepared using the acquisition method of accounting under existing U.S. GAAP standards.

The merger will be accounted for by BCC under the acquisition method of accounting, with TruPet as the acquirer.  Under the acquisition method of accounting, the assets and liabilities of Better Choice and Bona Vida will be recorded as of the acquisition date, at their respective fair values, and combined with those of TruPet.  The reported combined financial condition and results of operations of BCC after completion of the merger will reflect these fair values.

The process for estimating the fair values of identifiable intangible assets requires the use of significant estimates and assumptions, including estimating future cash flows and developing appropriate discount rates.  The excess of the purchase price over the estimated fair value of identifiable assets and liabilities of Better Choice and Bona Vida as of May 6, 2019, the effective date of the acquisitions, will be allocated to goodwill.  Fair value is defined, in accordance with U.S. GAAP, as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.  The preliminary purchase price allocations are subject to finalizing the Company’s analysis of the fair value of Better Choice and Bona Vida’s assets and liabilities as of the effective date of the acquisitions and will be adjusted upon completion of the valuations.  The use of different estimates could yield materially different results.

These preliminary amounts were determined based upon certain valuations and studies that have yet to be finalized, and accordingly, the assets acquired, and liabilities assumed are subject to adjustment once the detailed analyses are completed.  These adjustments may be material.

The unaudited pro forma combined balance sheet excludes the tax impacts associated with the assets acquired and liabilities assumed in the merger as BCC has not completed a preliminary assessment of the tax attributes and as such does not have sufficient data to support adjustments as of the date of this filing.  Once the tax impacts for the acquisitions have been completed, there could be a material change to the tax asset and liability balances which would cause a corresponding adjustment to goodwill.

The unaudited pro forma combined financial statements are not intended to reflect the financial position or results of operations which would have actually resulted had the merger been effected on the date indicated.  Further, the results of operations are not necessarily indicative of the results of operations that may be obtained in the future.

The accompanying unaudited pro forma combined financial statements for Better Choice reflect an estimated purchase price of $43.1 million for the 93% of TruPet ownership interests acquired.

For accounting purposes and for purposes of this pro forma analysis, the estimated purchase price for Better Choice by TruPet has been allocated based on a preliminary estimate of the fair value of assets acquired and liabilities assumed.

The accompanying unaudited pro forma combined financial statements reflect an estimated purchase price of $55.1 million in BCC common stock shares issued to the shareholders of BonaVida.

For purposes of this pro forma analysis, the estimated purchase price for BonaVida has been allocated based on a preliminary estimate of the fair value of assets acquired and liabilities assumed.

The unaudited pro forma combined balance sheet as of March 31, 2019 includes adjustments and reclassifications summarized below:

The unaudited pro forma combined statements of profit and loss for the periods ended March 31, 2019 and December 31, 2018 include adjustments and reclassifications summarized below:

4.

Earnings per share

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