EATV Q4 2023 Results: Strong Performance and Beating Non-Impact Food Indexes

Dear Valued Investors,

Reflecting on the final quarter of 2023, we see that plant-based innovation has carved out unprecedented investment opportunities. The EATV fund's performance not only surpassed the Non-impact Food Index Composite for the quarter but also highlighted the compelling valuation metrics of our portfolio companies. As the Chief Investment Officer at VegTech Invest and Portfolio Manager of the EATV ETF, I'm excited to report that EATV has been thriving amidst a global pivot towards sustainability. Join me as I delve deeper into our fourth quarter (Q4) achievements that set EATV apart.

EATV's Q4 2023 Performance and Resilience

EATV has demonstrated impressive resilience and strong performance throughout 2023, consistently outperforming the Non-impact Food Index Composite in the three months of Q4 and across the 1, 9 and 12 month (Year to Date) periods. This success is largely due to our companies achieving higher earnings and increasing their revenues. These gains were driven by improvements in supply chain efficiency, rising demand, and the benefits of operating at a larger scale.

Performance is historical and does not guarantee. Current performance may be higher or lower than quoted. Investment returns and principle value of an investment will fluctuate so that an investor's shares, when redeemed, may be worth more or less than their original costs. Performance of EATV takes into account the annual operating expense, the unitary fee, which is 0.75%. SEC Standardized Performance data for the most recent month-end is available at https://EATVetf.com. Indexes track an underlying basket of securities and cannot be invested in directly. The S&P 500 Index tracks the total returns of roughly 500 US large-cap companies. The Non-Impact Food Index Composite is the average performance of two indexes: (1) The Solactive AgTech & Food Innovation, and (2) Morningstar Global Food Innovation Index is a float-adjusted market cap reflecting the price returns of global companies in the Food Innovation theme.

Delving deeper into aspects driving the performance, a key trend in the fourth quarter of 2023 was the increasing profitability of plant-based companies. Companies reported higher earnings growth (EBITDA Growth) compared to their counterparts in major indices like the Nasdaq 100 and S&P 500. This suggests that previous investments in scaling operations and modernizing supply chains are yielding positive financial results. Moreover, these efforts have enabled companies to grow their earnings despite the inflationary pressures that typically escalate costs and challenge profitability.

Additionally, these firms are not only improving their bottom lines but also experiencing top-line revenue growth that outpaces tech-heavy indices. The revenue growth rate is approximately double that of the S&P 500 and Nasdaq 100, per the below table. A key factor behind this sustained revenue growth is the average allocation of 69.3% of the fund's investments in the GICS Consumers Staples sector in the fourth quarter (source: Bloomberg). This sector includes essential consumer goods such as food and beverages, which tend to have more stable demand than discretionary products.

As illustrated in the table below, despite these strong revenue and EBITDA growth figures, the valuation metrics of EATV companies remain attractive. They demonstrate lower ratios in critical financial indicators like Price to Sales, Enterprise Value to Sales, Price to Book, and Price to Earnings compared to the broader indices of the S&P 500 and Nasdaq 100. This offers investors the chance to invest in high-growth companies at price typically associated with lower-growth companies. It's important to note that EATV, besides offering exposure to high-growth innovations at competitive prices, is also certified as Carbon Neutral by Ethos ESG. Thus, investing in EATV represents not only a financial opportunity but also a commitment to sustainable innovation, and a chance to lower the carbon footprint of your portfolio.

Highlighting Q4 Returns

In the final quarter of the year, notable companies within our fund's top 10 holdings, including Givaudan - Taste & Wellbeing , SunOpta , and Ingredion Incorporated , delivered strong returns. Sunopta, recognized for its focus on plant-based products, witnessed a remarkable 62% increase in its share price. While these companies operate across various revenue streams, they share a commitment to producing plant proteins, particularly protein powders. Our research indicates that plant-based proteins, in particular protein powders, are nearing cost parity with traditional meat sources on a per protein unit basis. Notably, raw legumes have already surpassed this parity, presenting a more affordable alternative. The demand for protein powders has surged, with a 39% sales growth over the past three years, according to data from GFI. This growth has been a factor in the overall performance of the fund.

Fund holdings are subject to change at any time.

In conclusion, the fourth quarter of 2023 underscored the EATV fund's strong performance, surpassing Non-impact Food Index Composite and showcasing the investment opportunity of plant-based innovation. EATV presents an unparalleled opportunity to invest in high-growth companies at low-growth prices. We encourage you to further your investment journey with EATV, delve into the dynamics of this evolving sector, and consider the strategic advantages of investing in EATV.

For more information and standardized performance and full holdings, visit https://EATVetf.com, and for an EATV Fact Sheet, click here.

Sincerely,

Sasha Goodman

Chief Investment Officer, Co-Founder of VegTech Invest, and Portfolio Manager of the EATV ETF

To watch Dr. Sasha Goodman ’s video version of these results, please join us on February 21st at 1:30p ET, streaming on the VegTech Invest Linkedin Page. Register here.

Exchange Traded Funds (ETF) are bought and sold through exchange trading at market price (not NAV), and are not individually redeemed from the fund. Shares may trade at a premium or discount to their NAV in the secondary market. Brokerage commissions will reduce returns.

The fund's investment objectives, risks, charges and expenses must be considered carefully before investing. The prospectus and summary prospectus (if available) contains this and other important information about the investment company, and it may be obtained by calling 1-424-237-8393, emailing [email protected] or visiting EATV.VegTechInvest.com. Read it carefully before investing.

The compound annual growth rate (CAGR) is the rate of return (RoR) that would be required for an investment to grow from its beginning balance to its ending balance, assuming the profits were reinvested at the end of each period of the investment's life span.

Investing involves risk including the possible loss of principal. Past performance does not guarantee future results.

Alpha refers to excess returns earned on an investment above the benchmark return when adjusted for risk.

The fund is an actively managed ETF that does not seek to replicate the performance of a specified index.

Foreign securities may be more volatile and less liquid than domestic (U.S.) securities, which could affect the Fund's investments.

Stocks of companies will small and mid-market capitalizations involve a higher degree of risk than investments in the broad-based equities market.

The fund is non-diversified and may hold large positions in a small number of securities. A price change in any one of those securities may have a greater impact on the fund's share price than if it were diversified.

The Fund is newly organized and has a limited operating history to judge.

ESG investing is defined as utilizing environmental, social and governance (ESG) criteria as a set of standards for a company's operations that socially conscious investors use to screen potential investments. The Fund's policy of investing in companies as a means to promote positive climate change could cause the Fund to perform differently compared to similar funds that do not have such a policy.

The fund EATV was carbon neutral during the third and fourth quarters of 2022, based on data provided by VegTech? Invest and an independent assessment conducted by Ethos Impact Inc. ("Ethos ESG").

In order to identify emissions reduction potential, Ethos reviewed a variety of lifecycle analyses (assessments of the carbon footprint of a product over its entire "lifecycle") from the University of Michigan, Boston Consulting Group, and others. These analyses quantify the typical emissions reduction associated with converting from beef to plant-based meat, implementing green vertical farming, investing in plant-based products and innovations, and making other transitions to plant-based industry.

Ethos compared the estimated carbon footprint of the holdings in EATV (the Scope 1, 2, and 3 emissions that EATV is responsible for through its investment in each holding) with the expected impact of emissions that are avoided for each holding. Based on this analysis, Ethos determined that the aggregate carbon avoidance potential of all EATV holdings was greater than the estimated carbon footprint -- i.e., an investment in EATV results in a net reduction of carbon (AKA Carbon Negative), when considering the expected emissions avoided.

The certification is not intended to indicate "absolute" zero emissions, but rather the relative impact when compared to meat and other alternatives.

EATV is distributed by Quasar Distributors, LLC.

Quasar is a subsidiary of the group of companies doing business as ACA Group and is an affiliate of Ethos ESG. Neither Quasar, nor any of its directors, officers, or staff, are involved in Ethos ESG's certification process or pay for accreditation, nor does Ethos ESG consider affiliation as part of its certification analysis.