Note Regarding Forward-Looking Statements

This ~~Quarterly Report on Form 10-Q~~report includes forward-looking statements within the meaning of the federal securities laws. We have based these forward-looking statements largely on our current opinions, expectations, beliefs, plans, objectives, assumptions and projections about future events and financial trends affecting the operating results and financial condition of our business. Forward-looking statements should not be read as a guarantee of future performance or results, and will not necessarily be accurate indications of the times at, or by, which such performance or results will be achieved. Forward-looking statements are based on information available at the time those statements are made and/or management’s good faith belief as of that time with respect to future events, and are subject to risks and uncertainties that could cause actual performance or results to differ materially from those expressed in or suggested by the forward-looking statements. Important factors that could cause such differences include, but are not limited to:

•the effects of the coronavirus (“COVID-19”) pandemic on our business, financial condition and results of operations, including on our supply chain, the demand for our products, and, in particular in our foodservice channel, our product and channel mix, the timing and level of retail purchasing, our manufacturing facilities and operations, our inventory levels, our ability to expand and produce in new geographic markets or the timing of such expansion efforts, the pace and success of new product introductions, the timing of new foodservice launches, and on overall economic conditions and consumer confidence and spending levels;

•the impact of adverse and uncertain economic and political conditions in the U.S. and international markets;

•the volatility of capital markets and other macroeconomic factors;

•estimates of our expenses, future revenues, capital expenditures, capital requirements and our needs for additional financing;

•our ability to effectively manage our growth;

•the failure of acquisitions and other investments to be efficiently integrated and produce the results we anticipate;

•the effects of increased competition from our market competitors and new market entrants;

•changes in the retail landscape, including the timing and level of trade and promotion discounts, our ability to grow market share and increase household penetration, repeat buying rates and purchase frequency, and our ability to maintain and increase sales velocity of our products;

•the success of distribution expansion and new product introductions in increasing revenues and market share;

•the timing and success of strategic partnership launches and limited time offerings resulting in permanent menu items;

•our estimates of the size of our market opportunities;

~~our ability to effectively manage our growth;~~

•our ability to effectively expand our manufacturing and production capacity;

•our ability to accurately forecast demand for our products and manage our inventory;

•variations in product selling prices and costs, and the mix of products sold;

•our ability to successfully enter new geographic markets, manage our international expansion and comply with any applicable laws and regulations;

•the effects of ~~increased competition from our market competitors;~~global outbreaks of pandemics or contagious diseases or fear of such outbreaks, such as the COVID-19 pandemic;

•the success of our marketing ~~efforts~~initiatives and the ability to grow brand awareness, ~~and~~ maintain, protect and enhance our ~~brand;~~brand, attract and retain new customers and grow our market share;

•our ability to attract, maintain and effectively expand our relationships with key strategic ~~restaurant and~~ foodservice partners;

•our ability to attract and retain our suppliers, distributors, co-manufacturers and customers;

•our ability to procure sufficient high quality, raw materials to manufacture our products;

•the availability of pea protein that meets our standards;

•our ability to diversify the protein sources used for our products;

•our ability to differentiate and continuously create innovative products, respond to competitive innovation and achieve speed-to-market;

•our ability to successfully execute our strategic initiatives;

•the volatility associated with ingredient, packaging and other input costs;

•real or perceived quality or health issues with our products or other issues that adversely affect our brand and reputation;

~~changes~~•our ability to accurately predict consumer taste preferences, trends and demand and successfully innovate, introduce and commercialize new products and improve existing products, including in ~~the tastes and preferences of our consumers;~~new geographic markets;

•significant disruption in, or breach in security of our information technology systems and resultant interruptions in service and any related impact on our reputation;

•the attraction and retention of qualified employees and key ~~personnel;~~personnel and our ability to maintain our company culture as we continue to grow;

•the effects of natural or man-made catastrophic events particularly involving our or any of our co-manufacturers’ manufacturing facilities or our suppliers’ facilities;

•the impact of marketing campaigns aimed at generating negative publicity regarding our products, brand and the plant-based industry category;

•the effectiveness of our internal controls;

•our indebtedness and ability to pay such indebtedness, as well as our ability to comply with covenants under our credit agreement;

•changes in laws and government regulation affecting our business, including the U.S. Food and Drug Administration (“FDA”) and the U.S. Federal Trade Commission (“FTC”) governmental regulation, and state, local and foreign regulation;

•new or pending legislation, or changes in laws, regulations or policies of governmental agencies or regulators, ~~relating to~~both in the U.S. and abroad, affecting plant-based meat, the labeling or naming of our ~~products;~~products, or our brand name;

~~the impact of adverse economic conditions;~~

•the financial condition of, and our relationships with our suppliers, co-manufacturers, distributors, retailers, and foodservice ~~customers;~~customers, and their future decisions regarding their relationships with us;

•the ability of our suppliers and co-manufacturers to comply with food safety, environmental or other laws or regulations;

•seasonality;

•the sufficiency of our cash and cash equivalents to meet our liquidity needs and service our indebtedness;

•economic conditions and ~~their~~the impact on consumer spending;

•outcomes of legal or administrative ~~proceedings; and~~proceedings, or new legal or administrative proceedings filed against us;

•our, our suppliers’ and our co-manufacturers’ ability to protect our proprietary technology, ~~and~~ intellectual property ~~adequately.~~and trade secrets adequately;

~~Forward-looking~~•the impact of tariffs and trade wars;

•foreign exchange rate fluctuations; and

•the risks discussed in Part I, Item 1A, “Risk Factors,” included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2019 filed with the Securities and Exchange Commission (“SEC”) on March 19, 2020 (the “2019 10-K”), Part II, Item 1A, “Risk Factors” included herein, and those discussed in other documents we file from time to time with the SEC.

In some cases, you can identify forward-looking statements ~~generally can be identified~~ by the use of words such as “believe,” “may,” “will,” “will continue,” “could,” “will likely result,” “estimate,” “continue,” “anticipate,” “intend,” “plan,” “predict,” “project,” “expect,” “potential” and variations of these terms and similar expressions, ~~as they relate to our company, our business and our management~~ ~~and include statements regarding our future operations, financial condition and prospects, and business strategies~~.or the negative of these terms or similar expressions. These forward-looking statements are based on our current expectations and assumptions that are subject to risks and uncertainties, which could cause our actual results to differ materially from those anticipated or implied in the forward-looking statements. ~~Factors that could cause or contribute~~

This report also contains estimates and other statistical data obtained from independent parties and by us relating to market size and growth and other data about our industry and ultimate consumers. The number of retail and foodservice outlets are derived from data through September 26, 2020. This data involves a number of assumptions and limitations, and you are cautioned not to give undue weight to such ~~differences include, but~~estimates and data.

All forward-looking statements attributable to us or persons acting on our behalf are ~~not limited to, those discussed~~expressly qualified in ~~this Quarterly Report on Form 10-Q, including, without limitation,~~their entirety by the ~~risks discussed in Part II, Item 1A, "Risk Factors," and those discussed in other documents we file from time to time with the Securities and Exchange Commission (“SEC”).~~

cautionary statements set forth above. Forward-looking statements speak only as of the

iii

date of this report. You should not put undue reliance on any forward-looking statements. We assume no obligation to publicly update or revise any forward-looking statements ~~to reflect actual results,~~because of new information, future events, changes in assumptions or ~~changes in other factors affecting forward-looking information,~~otherwise, except to the extent required by applicable laws. If we update one or more forward-looking statements, no inference should be drawn that we will make additional updates with respect to those or other forward-looking statements.

As used herein, the terms “Beyond Meat,” “we,” “us,” “our” and ~~“the Company”~~the “Company” refer to Beyond Meat, Inc., a Delaware ~~corporation.~~corporation, including its consolidated subsidiaries unless the context otherwise requires.

“Beyond Meat,” “Beyond Burger,” “Beyond Beef,~~” “Beyond Chicken,” “Beyond Meat,~~” “Beyond Sausage,” “Beyond Breakfast Sausage,” “Beyond Meatball,” the Caped Steer Logo, “GO BEYOND,” “Eat What You Love” and “The Cookout Classic,” ~~“The Future of Protein” and “The Future of Protein Beyond Meat” and design~~ are registered or pending trademarks of Beyond Meat, Inc. in the United States and, in some cases, in certain other countries. All other brand names or trademarks appearing in this ~~Quarterly Report on Form 10-Q~~report are the property of their respective holders. Solely for convenience, the trademarks and trade names contained herein are referred to without the ® and TM™ symbols, but such references should not be construed as any indicator that their respective owners will not assert, to the fullest extent under applicable law, their rights thereto.

~~iii~~

Part I. Financial Information

ITEM I. FINANCIAL STATEMENTS

~~BEYOND MEAT, INC.~~

~~Condensed Balance Sheets~~

~~(In thousands, except share and per share data)~~

~~(unaudited)~~


BEYOND MEAT, INC.
Condensed Consolidated Balance Sheets
(In thousands, except share and per share data)
(unaudited)
	September 26, 2020		December 31, 2019
Assets
Current assets:
Cash and cash equivalents	$	214,615	$	275,988
Accounts receivable	29,760		40,080
Inventory	132,359		81,596
Prepaid expenses and other current assets	14,195		5,930

Total current assets	$	390,929	$	403,594
Property, plant, and equipment, net	77,002		47,474
Operating lease right-of-use assets	13,736		—
Other non-current assets, net	4,970		855
Total assets	$	486,637	$	451,923
Liabilities and Stockholders’ Equity:
Current liabilities:
Accounts payable	$	30,531	$	26,923
Wages payable	2,289		1,768
Accrued bonus	43		4,129
Current portion of operating lease liabilities	2,481		—
Accrued expenses and other current liabilities	10,241		3,805
Short-term borrowings under revolving credit facility and bank term loan	0		11,000

Current portion of finance lease liabilities	72		72

Total current liabilities	$	45,657	$	47,697
Long-term liabilities:

Revolving credit facility	$	50,000	$	0
Operating lease liabilities, net of current portion	11,413		—
Long-term portion of bank term loan, net	0		14,637
Equipment loan, net	0		4,932
Finance lease obligations and other long-term liabilities	167		567
Total long-term liabilities	$	61,580	$	20,136
Commitments and Contingencies (Note 10)
(continued on the next page)

September 28,
2019 December 31,
2018
Assets
Current assets:
Cash and cash equivalents $ 312,451
$ 54,271
Accounts receivable 34,482
12,626
Inventory 60,270
30,257
Prepaid expenses and other current assets 11,742
5,672
Total current assets 418,945
102,826
Property, plant, and equipment, net 35,050
30,527
Other non-current assets, net 846
396
Total assets $ 454,841
$ 133,749
Liabilities, Convertible Preferred Stock and Stockholders’ Equity (Deficit):
Current liabilities:
Accounts payable $ 38,348
$ 17,247
Wages payable 1,433
1,255
Accrued bonus 3,181
2,312
Accrued expenses and other current liabilities 4,113
2,391
Short-term borrowings under revolving credit line and bank term loan 9,087
—
Short-term capital lease liabilities 30
44
Stock warrant liability —
1,918
Total current liabilities $ 56,192
$ 25,167
Long-term liabilities:
Revolving credit line $ —
$ 6,000
Long-term portion of bank term loan, net 16,503
19,388
Equipment loan, net 4,922
5,000
Capital lease obligations and other long-term liabilities 396
404
Total long-term liabilities $ 21,821
$ 30,792
Commitments and Contingencies (Note 9)

September 28,
2019 December 31,
2018
Convertible preferred stock:
Series A convertible preferred stock, par value $0.0001 per share—no shares and 3,333,500 shares authorized, issued and outstanding as of September 28, 2019 and December 31, 2018 $ —
$ 2,000
Series B convertible preferred stock, par value $0.0001 per share—no shares and 4,802,260 shares authorized; no shares and 4,680,565 shares issued and outstanding as of September 28, 2019 and December 31, 2018 —
4,999
Series C convertible preferred stock, par value $0.0001 per share—no shares and 8,076,643 shares authorized; no shares and 8,076,636 shares issued and outstanding as of September 28, 2019 and December 31, 2018 —
14,882
Series D convertible preferred stock, par value $0.0001 per share—no shares and 8,713,207 shares authorized; no shares and 8,713,201 shares issued and outstanding as of September 28, 2019 and December 31, 2018 —
24,948
Series E convertible preferred stock, par value $0.0001 per share—no shares and 4,740,531 shares authorized; no shares and 4,701,449 shares issued and outstanding as of September 28, 2019 and December 31, 2018 —
17,214
Series F convertible preferred stock, par value $0.0001 per share—no shares and 4,866,776 shares authorized; no shares and 4,866,758 shares issued and outstanding as of September 28, 2019 and December 31, 2018 —
29,840
Series G convertible preferred stock, par value $0.0001 per share—no shares and 5,140,257 shares authorized; no shares and 5,114,786 shares issued and outstanding as of September 28, 2019 and December 31, 2018 —
55,658
Series H convertible preferred stock, par value $0.0001 per share—no shares and 4,209,693 shares authorized; no shares and 2,075,216 shares issued and outstanding as of September 28, 2019 and December 31, 2018 —
49,999
Stockholders’ equity (deficit):
Preferred stock, par value $0.0001 per share—500,000 shares authorized, none issued and outstanding —
—
Common stock, par value $0.0001 per share—500,000,000 shares and 58,669,600 shares authorized at September 28, 2019 and December 31, 2018, respectively; 60,565,840 and 6,951,350 shares issued and outstanding at September 28, 2019 and December 31, 2018, respectively 6
1
Additional paid-in capital 518,485
7,921
Accumulated deficit (141,663 ) (129,672 )
Total stockholders’ equity (deficit) $ 376,828
$ (121,750 )
Total liabilities, convertible preferred stock and stockholders’ equity (deficit) $ 454,841
$ 133,749


BEYOND MEAT, INC.
Condensed Consolidated Balance Sheets
(In thousands, except share and per share data)
(unaudited)
	September 26, 2020		December 31, 2019
Stockholders’ equity:
Preferred stock, par value $0.0001 per share—500,000 shares authorized, NaN issued and outstanding	$	0	$	0
Common stock, par value $0.0001 per share—500,000,000 shares authorized; 62,625,629 and 61,576,494 shares issued and outstanding at September 26, 2020 and December 31, 2019, respectively	6		6
Additional paid-in capital	548,706		526,199

Accumulated deficit	(169,790)		(142,115)
Accumulated other comprehensive income	478		0
Total stockholders’ equity	$	379,400	$	384,090
Total liabilities and stockholders’ equity	$	486,637	$	451,923

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

BEYOND MEAT, INC.

Condensed Consolidated Statements of Operations

(In thousands, except share and per share data)

(unaudited)


	Three Months Ended						Nine Months Ended							Three Months Ended				Nine Months Ended
	September 28, 2019			September 29, 2018			September 28, 2019			September 29, 2018				September 26, 2020		September 28, 2019		September 26, 2020		September 28, 2019
Net revenues	$	91,961		$	26,277		$	199,418		$	56,420		Net revenues	$	94,436	$	91,961	$	304,848	$	199,418
Cost of goods sold	59,178			21,235			133,123			46,709			Cost of goods sold	68,908		59,178		207,978		133,123
Gross profit	32,783			5,042			66,295			9,711			Gross profit	25,528		32,783		96,870		66,295

Research and development expenses	5,951			2,165			14,661			6,267			Research and development expenses	8,278		5,951		20,488		14,661
Selling, general and administrative expenses	20,944			10,353			47,636			23,133			Selling, general and administrative expenses	33,560		20,944		95,167		47,636
Restructuring expenses	2,319			528			3,560			1,170			Restructuring expenses	2,146		2,319		6,028		3,560
Total operating expenses	29,214			13,046			65,857			30,570			Total operating expenses	43,984		29,214		121,683		65,857
Income (loss) from operations	3,569			(8,004		)	438			(20,859		)
(Loss) income from operations													(Loss) income from operations	(18,456)		3,569		(24,813)		438

Other income (expense), net:
Other (expense) income, net:													Other (expense) income, net:
Interest expense	(855		)	(313		)	(2,329		)	(388		)	Interest expense	(689)		(855)		(1,963)		(2,329)
Remeasurement of warrant liability	—			(994		)	(12,503		)	(1,253		)	Remeasurement of warrant liability	0		0		0		(12,503)
Other income (expense), net	1,385			(31		)	2,424			66
Total other income (expense), net	530			(1,338		)	(12,408		)	(1,575		)
Other, net													Other, net	(85)		1,385		(829)		2,424
Total other (expense) income, net													Total other (expense) income, net	(774)		530		(2,792)		(12,408)

Income (loss) before taxes	4,099			(9,342		)	(11,970		)	(22,434		)
(Loss) income before taxes													(Loss) income before taxes	(19,230)		4,099		(27,605)		(11,970)
Income tax expense	—			—			21			—			Income tax expense	55		0		70		21
Net income (loss)	$	4,099		$	(9,342	)	$	(11,991	)	$	(22,434	)
Net income (loss) per share available to common stockholders—basic	$	0.07		$	(1.45	)	$	(0.33	)	$	(3.68	)
Net (loss) income													Net (loss) income	$	(19,285)	$	4,099	$	(27,675)	$	(11,991)
Net (loss) income per share available to common stockholders—basic													Net (loss) income per share available to common stockholders—basic	$	(0.31)	$	0.07	$	(0.45)	$	(0.33)
Weighted average common shares outstanding—basic	60,415,866			6,441,838			35,806,520			6,103,756			Weighted average common shares outstanding—basic	62,487,152		60,415,866		62,114,399		35,806,520
Net income (loss) per share available to common stockholders—diluted	$	0.06		$	(1.45	)	$	(0.33	)	$	(3.68	)
Net (loss) income per share available to common stockholders—diluted													Net (loss) income per share available to common stockholders—diluted	$	(0.31)	$	0.06	$	(0.45)	$	(0.33)
Weighted average common shares outstanding—diluted	66,026,490			6,441,838			35,806,520			6,103,756			Weighted average common shares outstanding—diluted	62,487,152		66,026,490		62,114,399		35,806,520

BEYOND MEAT, INC.

Notes to Unaudited Condensed Consolidated Financial Statements (continued)

options and 85,121 RSUs outstanding at September 28, 2019 because their inclusion would be anti-dilutive.


(in thousands, except share and per share amounts)	Three Months Ended				Nine Months Ended
	September 26, 2020		September 28, 2019		September 26, 2020		September 28, 2019
Numerator:
Net (loss) income available to common stockholders	$	(19,285)	$	4,090	$	(27,675)	$	(11,991)
Undistributed net income available to unvested restricted stockholders	0		9		0		0
Net (loss) income available to common stockholders—basic	(19,285)		4,099		(27,675)		(11,991)
Denominator:
Weighted average common shares outstanding—basic	62,487,152		60,415,866		62,114,399		35,806,520
Dilutive effect of shares issuable under stock options	0		5,608,822		0		0
Dilutive effect of RSUs	0		1,802		0		0

Weighted average common shares outstanding—diluted	62,487,152		66,026,490		62,114,399		35,806,520
Net (loss) income per share available to common stockholders—basic	$	(0.31)	$	0.07	$	(0.45)	$	(0.33)
Net (loss) income per share available to common stockholders—diluted	$	(0.31)	$	0.06	$	(0.45)	$	(0.33)

(in thousands, except share and per share amounts) Three Months Ended Nine Months Ended
September 28,
2019 September 29,
2018 September 28,
2019 September 29,
2018
Numerator:
Undistributed net income (loss) available to common stockholders $ 4,090
$ (9,342 ) $ (11,991 ) $ (22,434 )
Undistributed net income available to nonvested restricted stockholders 9
—
—
—
Net income (loss) available to common stockholders—basic 4,099
(9,342 ) (11,991 ) (22,434 )
Denominator:
Weighted average common shares outstanding—basic 60,415,866
6,441,838
35,806,520
6,103,756
Dilutive effect of shares issuable under stock options 5,608,822
—
—
—
Dilutive effect of RSUs 1,802
—
—
—
Weighted average common shares outstanding—diluted 66,026,490
6,441,838
35,806,520
6,103,756
Net income (loss) per common share available to common stockholders—basic $ 0.07
$ (1.45 ) $ (0.33 ) $ (3.68 )
Net income (loss) per common share available to common stockholders—diluted $ 0.06
$ (1.45 ) $ (0.33 ) $ (3.68 )

Note 13. Subsequent Event

Subsequent to the quarter ended September 26, 2020, on October 30, 2020, the Company acquired certain assets including land, building, vehicles, machinery and equipment and certain workforce from one of its former co-manufacturers for cash consideration of $14.5 million, subject to adjustment for customary prorations, transfer taxes, escrow holdbacks and other adjustments. As of September 26, 2020, the Company had incurred $0.7 million of related acquisition costs which are reflected in prepaid expenses and other current assets on the Company’s condensed consolidated balance sheet. As part of this transaction, the Company hired approximately 180 employees. The Company intends to use this manufacturing facility for the production of its finished goods.

The Company will record the preliminary effects of this asset acquisition during the fourth quarter of 2020 and has engaged a valuation firm to value the acquired assets and workforce for which the valuation is not complete as of the date of this filing due to the limited time since the acquisition date.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion contains forward-looking statements that involve risks and uncertainties. Our actual results may differ materially from those discussed in the forward-looking statements as a result of various factors, including those set forth in Part I, Item 1A, “Risk Factors,” of our 2019 Form 10-K and Part II, Item ~~1A.~~1A, “Risk Factors” and “Note Regarding Forward-Looking Statements” included ~~elsewhere~~ in this ~~report.~~report and those discussed in other documents we file from time to time with the SEC. The following discussion of our financial condition and results of operations should be read in conjunction with our unaudited condensed consolidated financial statements and the related notes and other financial information included ~~elsewhere~~ in this quarterly report and our audited financial statements and notes thereto included in our 2019 10-K. Our historical results are not necessarily indicative of the ~~prospectus dated May 1, 2019 filed with the Securities~~results to be expected for any future periods and ~~Exchange Commission (“SEC”) on May 3, 2019 (the “Prospectus”). The interim~~our operating results for the three and nine months ended September ~~28, 2019~~26, 2020 are not necessarily indicative of the results to be expected for the fiscal year ending December 31, ~~2019~~2020 or for any other interim period or for any other future ~~fiscal year.~~year or period.

Overview

Beyond Meat is one of the fastest growing food companies in the United States, offering a portfolio of revolutionary plant-based meats. We build meat directly from plants, an innovation that enables consumers to experience the taste, texture and other sensory attributes of popular animal-based meat products while enjoying the nutritional and environmental benefits of eating our plant-based meat products. Our brand commitment, ~~“Eat~~Eat What You Love,” represents a strong belief that ~~by eating~~there is a better way to feed our future and that the positive choices we all make, no matter how small, can have a great impact on our personal health and the health of our planet. By shifting from animal-based meat to plant-based ~~meats, consumers~~meat, we can ~~enjoy more, not less, of their favorite meals, and by doing so help address concerns related to~~positively impact four growing global issues: human health, climate change, ~~resource conservation,~~constraints on natural resources and animal welfare. The success of our breakthrough innovation model and products has allowed us to appeal to a broad range of consumers, including those who typically eat animal-based meats, positioning us to compete directly in the $1.4 trillion global meat industry.

We sell a range of plant-based products across the three main meat platforms of beef, pork and poultry. ~~They are offered~~As of September 26, 2020, our products were available at approximately 122,000 retail and foodservice outlets in ready-to-cook formats (primarily merchandised in the meat case), which we refer to as our “fresh” platform, and ready-to-heat formats (merchandised in the freezer), which we refer to as our “frozen” platform. Our products are currently available in approximately 58,000 points of distribution primarily in the United States and Canada as well as several othermore than 80 countries worldwide, across mainstream grocery, mass merchandiser, club, convenience store, and natural retailer channels, direct to consumer, and various food-away-from-home channels, including restaurants, foodservice outlets and schools.

On May 6, 2019, we completed our initial public offering (“IPO”) of common stock, in which we sold 11,068,750 ~~shares, including 1,443,750 shares pursuant to the underwriters’ over-allotment option.~~shares. The shares began trading on the Nasdaq Global Select Market on May 2, 2019. The shares were sold at ~~an IPO~~a public offering price of $25.00 per share for net proceeds of approximately $252.4 million, after deducting underwriting discounts and commissions of $19.4 million and ~~offering expenses~~issuance costs of approximately $4.9 million payable by us. Upon the closing of the IPO, all outstanding shares of our convertible preferred stock automatically converted into 41,562,111 shares of common stock on a one-for-one basis, and warrants exercisable for convertible preferred stock were automatically converted into warrants exercisable for 160,767 shares of common stock.

On August 5, 2019, we completed our secondary public offering (“Secondary Offering”) of common stock, in which we sold 250,000 ~~shares and the selling stockholders sold 3,487,500 shares, including 487,500 shares pursuant to the underwriters’ over-allotment option.~~shares. The shares were sold at a public offering price of $160.00 per share for net proceeds to ~~the Company~~us of approximately ~~$37.5~~$37.4 million, after deducting underwriting discounts and commissions of $1.5 million and ~~offering expenses~~issuance costs of approximately ~~$1.0~~$1.1 million payable by us. We did not receive any proceeds from the sale of common stock by the selling ~~stockholders.~~stockholders in the Secondary Offering.

On January 14, 2020, we registered our new subsidiary, Beyond Meat EU B.V., in the Netherlands. On April 28, 2020, we registered our new subsidiary, Beyond Meat (Jiaxing) Food Co., Ltd. (“BYND JX”), in the Zhejiang Province in China. The condensed consolidated financial statements for the periods ended September 26, 2020 include the accounts of the Company and these subsidiaries. All inter-company balances and transactions have been eliminated.

Our primary production facilities are located in Columbia, Missouri, and research and development and administrative offices are located in El Segundo, California. In addition to our own production facilities, we use co-manufacturers in various locations in the United States, Canada and the Netherlands. In the second quarter of 2020, we acquired our first manufacturing facility in Europe located in Enschede, the Netherlands. This facility is expected to be operational by the end of 2020. In addition, in June 2020 we announced the official opening of a new co-manufacturing facility to be used for Beyond Meat production built by our distributor in the Netherlands. In the third quarter of 2020, we and BYND JX entered into an investment agreement and related factory leasing contract to design and develop manufacturing facilities in the Jiaxing Economic & Technological Development Zone to manufacture plant-based meat products under the Beyond Meat brand in China. Renovations in the leased facility have commenced, with trial production expected by the end of 2020 and full-scale production expected in early 2021.

Subsequent to the quarter ended September 26, 2020, on October 30, 2020, we acquired certain assets including land, building, vehicles, machinery and equipment and certain workforce from one of our former co-manufacturers for cash consideration of $14.5 million, subject to adjustment for customary prorations, transfer taxes, escrow holdbacks and other adjustments. As part of this transaction we hired approximately 180 employees. We intend to use this manufacturing facility for the production of our finished goods.

We operate on a fiscal calendar year, and each interim quarter is comprised of one 5-week period and two 4-week periods, with each week ending on a Saturday. Our fiscal year always begins on January 1 and ends on December 31. As a result, our first and fourth fiscal quarters may have more or fewer days included than a traditional 91-day fiscal quarter.

Impact of COVID-19 on Our Business

The COVID-19 pandemic has had, and we expect will continue to have certain negative impacts on our business. As government authorities around the world continue to implement significant measures intended to control the spread of the virus and institute restrictions on commercial operations, while at the same time implementing multi-step policies with the goal of re-opening certain markets, we are working to ensure our compliance while also maintaining business continuity for essential operations in our facilities.

While our manufacturing facilities remain operational, beginning in March 2020 employees at our corporate headquarters began working remotely. For essential activities at our Manhattan Beach Project Innovation Center, we are strictly limiting the number of employees allowed in the building and have implemented physical distancing protocols, mandatory face coverings, temperature screening of all personnel entering the site, and comprehensive preventative hygienic measures to support the health and safety of our employees. We expect our corporate headquarters employees to remain working remotely pending further notice and guidelines from local, state and federal agencies. At our manufacturing facilities, we have implemented a series of physical distancing and hygienic practices to further support the health and safety of our manufacturing employees. Our manufacturing employees are all being monitored for COVID-19 symptoms, including temperature screening of all personnel entering the site; and are following strict COVID-19 suggested Personal Protective Equipment guidelines per United States Centers for Disease Control and World Health Organization, including mandatory face coverings, increased hand washing and significantly increased sanitation of hard surfaces. All non-essential company-sponsored travel has been suspended and field marketing activities have been curbed due to the COVID-19-related restrictions.

We have established a cross-functional task force that meets regularly and continually monitors and tracks relevant data including guidance from local, national, and international health agencies. This task force works closely with our senior leadership and is instrumental in making critical, timely decisions and is committed to continuing to communicate to our employees as more information is available to share.

We have experienced a significant slowdown in our foodservice business since the latter half of March 2020 due to the ongoing COVID-19 pandemic as various regions around the world implemented stay-at-home orders, social distancing measures and various restrictions on commercial operations, resulting in the closure or limited operations of many of our foodservice customers. Such closures or scaled back operations have also resulted in delays in tests or launches of our products among our foodservice customers and negatively impacted the rate of our growth. Additionally, while we were able to increase our total foodservice distribution points globally

by approximately 2,000 outlets during the third quarter of 2020, such increase in distribution has not offset decreased demand in the channel due to the conditions described above.

The COVID-19 pandemic had a significant negative impact on our foodservice channel net revenues in the second and third quarters of 2020 relative to what we experienced in the first quarter of 2020. For the first, second and third quarters of 2020, we generated foodservice channel net revenues of $41.2 million, $13.7 million and $24.4 million, respectively. Although the foodservice channel net revenues improved 78.1% in the third quarter of 2020 compared to the second quarter of 2020, they were 40.8% lower than the foodservice channel net revenues in the first quarter of 2020. In response to the recent COVID-19 resurgence in some markets, new lockdowns, curfews and other restrictive measures are being imposed which have slowed, halted or reversed the reopening process altogether, and may adversely impact the foodservice recovery. We continue to partner with our QSR and foodservice customers during this challenging environment, and during the quarter offered promotional programs to many of our foodservice partners to allow them to offer our products to consumers at reduced price points or on other promotional terms. While we began to see some improvement in demand in our foodservice business during the third quarter of 2020, amid relaxed stay-at-home orders in some states, the environment remains highly uncertain given the ongoing pandemic and COVID-19 resurgence. As a result, it is unclear how long it will take for foodservice demand to return to pre-pandemic levels, if at all. We expect revenues in our foodservice channel will continue to be significantly negatively impacted through at least the remainder of 2020, and likely into 2021.

At the same time, during the second quarter of 2020, we experienced a meaningful increase in retail demand as consumers shifted toward more at-home consumption. In response to the deterioration in the foodservice business and the significant shift in consumer preferences to retail, beginning in the second quarter of 2020 and continuing into the beginning of the third quarter of 2020, we re-purposed and re-routed a certain portion of our existing foodservice inventory into retail SKUs. These activities led to increased net revenues in our retail channel and at the same time negatively impacted our gross profit and gross margin in the second and third quarters of 2020 due to increased expenses associated with such activities, additional inventory reserves and the write-off of unrecoverable portions of the original foodservice inventory items.

Following the retail surge in the second quarter of 2020 amid panic buying in response to COVID-19, the level of retail demand meaningfully slowed during the third quarter of 2020 consistent with broader market trends across grocery foodstuffs and the plant-based meat category as stay-at-home orders and commercial restrictions were relaxed. Our net revenues in the retail channel during the third quarter of 2020, as compared to the prior-year period, were primarily driven by our expansion in total retail outlets, higher sales velocity at existing retail outlets and new product introductions. We also continued to offer promotional and reduced pricing to certain of our retail customers and higher trade discounts in the third quarter of 2020 to encourage greater consumer trial and adoption of our products. For the three months ended September 26, 2020 and June 27, 2020, we generated retail channel net revenues of $70.0 million and $99.6 million, respectively, representing a decrease of 29.7%. As COVID-19 rates surge in numerous regions of the world, the environment is continuously evolving and remains highly uncertain. It is therefore difficult to predict retail demand levels going forward.

For the year ended December 31, 2019, our U.S. retail and U.S. foodservice channels accounted for approximately 43.4% and 23.6% of our net revenues, respectively. For the quarter ended September 26, 2020, our U.S. retail and U.S. foodservice channels accounted for approximately 65.7% and 17.3% of our net revenues, respectively. For the three months ended September 26, 2020, retail net revenues increased 38.8%, while foodservice net revenues declined 41.2% compared to the prior-year period. The change in mix of our distribution channels has been significant since the start of the COVID-19 pandemic and is likely to continue to cause fluctuation in our quarterly results pending the duration, magnitude and effects of the COVID-19 pandemic.

In response to the COVID-19 pandemic, in the second quarter of 2020 we undertook our Feed A Million + campaign, where we, with the support of our brand ambassadors and other partners, donated and distributed more than one million Beyond Burgers at no cost to food banks, healthcare workers, frontline responders and communities in need across the country.

In the third quarter of 2020, we experienced a $10.7 million reduction in inventory balances compared to the end of the second quarter of 2020, primarily due to a reduction in finished goods partially offset by increases in

raw materials, specifically our core pea protein inputs, and work in process inventory levels during the quarter. We also incurred $1.1 million in costs attributable to COVID-19 from inventory write-offs and reserves associated with foodservice products determined to be unsalable.

We source ingredients from multiple suppliers from around the world. We also maintain inventory positions near our manufacturing operations, as well as floor stock agreements with many of our vendors. With respect to pea protein, given the nature of our contractual commitments, our volume deliveries are front loaded during the year in anticipation of higher demand levels during the summer season. Given that we scaled back our production in response to the COVID-19 pandemic and to reduce our existing finished goods and work in process inventory levels, we have seen an increase in our pea protein stocks. However, in light of the expected shelf life of our pea protein raw materials, we do not believe there is a risk of inventory obsolescence of these raw materials at this time.

It is challenging to estimate the extent of the adverse impact of the COVID-19 pandemic on our results of operations, due to continued uncertainty regarding the duration, magnitude and effects of the COVID-19 pandemic, further spread and resurgences of the disease, potential supply chain or manufacturing disruptions, and the magnitude of reduced customer traffic at our foodservice customers, or the extent to which they may be offset by increased retail demand, or increasing consumer awareness of the benefits of plant-based meat products. We also are unable to predict whether the increase in demand by our retail customers will resume at the levels experienced in the second quarter of 2020 or continue to be subject to the downward pressure seen in the third quarter of 2020. While the ultimate health and economic impact of the COVID-19 pandemic is highly uncertain, we expect that our business operations and results of operations, including our net revenues, gross profit, gross margin, earnings and cash flows, will be adversely impacted through at least the remainder of 2020, and likely into 2021, including as a result of:

•continued weak demand in the foodservice channel from decreased foot traffic in foodservice establishments and the level of demand shift from foodservice to retail business;

•increased cost of goods sold and increased promotional programs and trade discounts to our retail and foodservice customers resulting in negative impacts on our gross margins;

•potential disruption to the supply chain caused by distribution and other logistical issues;

•potential disruption or closure of our facilities or those of our suppliers or co-manufacturers due to employee contraction of COVID-19;

•the timing and success of strategic partnership launches and resumption of any expansion plans for our product lines for those quick-service restaurant (“QSR”) customers who are in trial or test phase;

•reduced consumer confidence and consumer spending (including as a result of lower discretionary income due to unemployment or reduced or limited work as a result of measures taken in response to the pandemic), including spending to purchase our products; and negative trends in consumer purchasing patterns due to consumers’ disposable income, credit availability and debt levels;

•continued foodservice customer closures (including re-closures in connection with resurgences of COVID-19) or further reduced operations;

•our ability to introduce new foodservice products as QSR and other partners look to simplify menu offerings as a result of the pandemic;

•the pace and success of new product introductions;

•the uncertain economic and political outlook in the U.S. and worldwide;

•uncertainty in the length of recovery time for the U.S. and world economies; and

•disruptions in our ability to expand to new international locations.

We are focused on navigating these recent challenges presented by COVID-19 through offensive measures, such as switching foodservice production lines over to retail products, selling retail value packs and

offering aggressive pricing with a strategic opportunity to encourage consumer trials, as well as defensive measures focused on reducing or delaying discretionary spending in areas where effectiveness has been impeded by the pandemic, and streamlining operations, including furloughs and headcount reductions in light of inventory levels, demand shifts and company-wide capacity planning. We expect these actions will continue to negatively impact our gross margins and profitability through at least the remainder of 2020, and likely into 2021. Future events and effects related to the COVID-19 pandemic cannot be determined with precision and actual results could significantly differ from estimates or forecasts.

Components of Our Results of Operations and Trends and Other Factors Affecting Our Business

Net Revenues

We generate net revenues primarily from sales of our products ~~including the Beyond Burger, Beyond Sausage and other plant-based meat products~~ to our customers ~~which include~~across mainstream grocery, mass merchandiser, club, convenience store, and natural ~~retailers, as well as~~retailer channels, and various food-away-from-home channels, including restaurants, ~~and other~~ foodservice outlets and schools, mainly in the United States. To make plant-based meat accessible to more consumers, in August 2020, we launched an e-commerce site and began offering our products direct to consumers in bulk packs, mixed product bundles, limited-time offers, and trial packs.

~~We continue to experience substantial growth in~~Effective January 1, 2020, we began presenting net revenues ~~over prior periods.~~ by geography and distribution channel as follows:


Distribution Channel						Description
U.S. Retail						Net revenues from retail sales to the U.S. market
U.S. Foodservice						Net revenues from restaurant and foodservice sales to the U.S. market
International Retail						Net revenues from retail sales to international markets, including Canada
International Foodservice						Net revenues from restaurant and foodservice sales to international markets, including Canada

Net revenues from sales to the Canadian market, previously included with net revenues from sales to the U.S. market, have been reclassified to International net revenues. Prior period amounts have been recast to conform to the current period presentation. The foregoing change in presentation had no impact on our net revenues, results of operations or cash flows.

Effective January 1, 2020, we also eliminated the presentation of net revenues by platform as it is no longer material to an understanding of our financial results. Previously, we presented net revenues by platform for our “ready-to-cook” or fresh platform, and “ready-to-heat” or frozen platform. Gross revenues from sales of products in our frozen platform were 5.5% of gross revenues in the year ended December 31, 2019, as compared to 16.3% of gross revenues in the year ended December 31, 2018.

The following table presents our 2019 quarterly net revenues by channel (unaudited):


	Three Months Ended
(in thousands)	March 30, 2019		June 29, 2019		September 28, 2019		December 31, 2019
U.S.:
Retail	$	19,461	$	30,531	$	44,170	$	35,221
Foodservice	8,834		16,504		18,359		26,675
U.S. net revenues	28,295		47,035		62,529		61,896
International:
Retail	118		3,589		6,295		5,424
Foodservice	11,793		16,627		23,137		31,159
International net revenues	11,911		20,216		29,432		36,583

Net revenues	$	40,206	$	67,251	$	91,961	$	98,479

The following factors and trends in our business have driven net revenue growth over prior periods and are expected to be key drivers of our net revenue growth, ~~for~~subject to the ~~foreseeable future:~~duration, magnitude and effects of the COVID-19 pandemic:

•increased penetration across our retail channel, including mainstream grocery, mass merchandiser, club, convenience store, and natural retailer ~~customers,~~channels, and our ~~restaurant and~~ foodservice channel, including increased desire by foodservice establishments, including large full service restaurants ~~foodservice outlets~~and/or global QSR customers, to add plant-based products to their menus and ~~schools;~~to highlight these offerings;

•distribution expansion, increased sales velocity, ~~of our fresh product sales~~household penetration and repeat buying rates across our ~~channels, by which we mean that the volume~~channels;

•increased international sales of our products ~~sold per outlet has generally increased period-over-period due~~across geographies, markets and channels as we continue to ~~greater adoption~~grow our numbers of ~~and demand for our products;~~international customers;

•our continued innovation and product commercialization, including enhancing existing products and introducing new products, such as Beyond Meatballs and Beyond Breakfast Sausage Links, across our plant-based platforms that appeal to a broad range of consumers, including those who typically eat animal-based meat;

~~impact of~~•enhanced marketing efforts as we continue to build our brand, amplify our value proposition around taste, health and sustainability, serve as a best-in-class partner to strategic and other QSR customers to support product development and category management, and drive consumer adoption of our ~~products;~~products, including scaling our GO BEYOND marketing campaign, which seeks to mobilize our ambassadors to welcome consumers to the brand, define the category and remain its leader, and the launch of our What if We all Go Beyond? brand anthem, inviting consumers to see how over time through small changes, such as what you put at the center of your plate, there can be a meaningful collective impact on human health and the health of our planet;

•overall market trends, including growing consumer awareness and demand for nutritious, convenient and high protein plant-based ~~foods.~~foods; and

~~In addition to the factors and trends above, we expect the following to positively impact net revenues going forward:~~

•increased production levels as we scale production to meet demand for our products across our distribution channels both domestically and ~~internationally, including Australia, Europe, Hong Kong, Israel, South Africa, South Korea~~internationally.

In addition to the factors and ~~parts~~trends above, we expect the following to positively impact net revenues going forward, subject to the duration, magnitude and effects of the ~~Middle East;~~COVID-19 pandemic:

•expansion of our own internal production facilities domestically and abroad to produce our woven proteins, blends of flavor systems and binding systems, and finished goods, while forming additional strategic relationships with co-manufacturers; and

~~increased desire by restaurant~~•localized production and ~~foodservice establishments~~third-party partnerships to ~~add plant-based~~increase the availability and speed with which we can get our products to ~~their menus~~customers internationally.

We distribute our products internationally in more than 80 countries worldwide as of September 26, 2020. In addition to our own production facilities, we use co-manufacturers in various locations in the United States, Canada and ~~to highlight these offerings.~~

~~Net~~the Netherlands. International net revenues ~~from sales in our retail channel increased by 211.5%~~decreased 45.5% in the three months ended September ~~28, 2019 to $50.5 million from $16.2 million in the three months ended September 29, 2018. Net revenues from sales in our restaurant~~26, 2020, and ~~foodservice channel increased by 311.8% in the three months ended September 28, 2019 to $41.5 million from $10.1 million in the three months ended September 29, 2018.~~

~~Net revenues from sales in our retail channel increased by 180.2%~~6.8% in the nine months ended September 28, 2019 to $104.2 million from $37.2 million in the nine months ended September 29, 2018. Net revenues from sales in our restaurant and foodservice channel increased by 394.9% in the nine months ended September 28, 2019 to $95.3 million from $19.2 million in the nine months ended September 29, 2018. We expect further growth in both channels26, 2020 as ~~we increase our production capacity in response to demand and add new customers.~~

We distribute our products internationally, using distributors in 53 countries as of November 11, 2019, including Australia, Chile, the European Union, Hong Kong, Ireland, Israel, the Middle East, New Zealand, the Philippines, Singapore, South Africa, South Korea, Taiwan and the United Kingdom. Our international net revenues (excluding revenues from Canada) are included in our restaurant and foodservice channel and were approximately 14% and 4%, respectively, of our net revenues in the three months ended September 28, 2019 and September 29, 2018 and were approximately 12% and 3%, respectively, of our net revenues in the nine months ended September 28, 2019 and September 29, 2018. All of our long-lived assets are in the United

~~States and we have no long-lived assets in any international locations. Net revenues from sales~~compared to the ~~Canadian market are included with net revenues from sales to the United States market. Net revenues from international sales are expected to continue to grow.~~

~~Over the next few years, the main driver of growth in our net revenues is expected to be sales of our fresh products,~~respective prior-year periods, primarily the Beyond Burger, in both our retail channel and our restaurant and foodservice channel predominantly in the United States, as well as internationally. We also expect net revenues and gross margin to benefit from increased sales of our fresh products due to the ~~higher~~decline in international foodservice net ~~selling price per pound of our fresh platform products compared~~revenues attributable to ~~our frozen platform products.~~the COVID-19 pandemic.

As we seek to continue to rapidly grow our net revenues, we face several challenges. ~~In 2017, continuing into 2018, demand for~~The COVID-19 pandemic has continued to spread and has already caused severe global disruptions. The extent of COVID-19’s effect on our ~~products exceeded~~operational and financial performance will depend on future developments, including the duration, spread and intensity of the pandemic, all of which are uncertain and difficult to predict considering the rapidly evolving landscape. For example, the impact of COVID-19 on any of our ~~expectations~~suppliers, co-manufacturers, distributors or transportation or logistics providers may negatively affect the price and availability of our ingredients and/or packaging materials and impact our supply chain. Additionally, if we are forced to scale back hours of production ~~capacity, significantly constraining our net revenue growth relative to our total demand opportunity. While we have significantly expanded~~or close our production ~~capacity~~facilities or our Manhattan Beach Project Innovation Center in response to ~~address production shortfall,~~the pandemic, we ~~may experience a lag in production relative to customer demand if~~expect our business, financial condition and results of operations would be materially adversely affected. In addition, our growth ~~rate exceeds~~strategy to expand our ~~expectations.~~operations internationally may be impeded. We expect to also continue to be impacted by decreased customer and consumer demand as a result of event cancellations and social distancing, government-imposed restrictions on public gatherings and businesses, shelter-in place orders and temporary restaurant and retail store closures and operating restrictions. Due to its global spread and unprecedented impact, the pandemic could have a material adverse effect on our business, results of operations, financial condition and cash flows and adversely impact the trading price of our common stock.

We routinely offer sales discounts and promotions through various programs to customers and consumers. These programs include rebates, temporary on-shelf price reductions, buy-one-get-one-free programs, off-invoice discounts, retailer advertisements, product coupons and other trade activities. We anticipate that we will need to continue to offer more trade and promotion discounts to both our retail and foodservice customers, to drive increased consumer trial and in response to the COVID-19 pandemic. The expense associated with these discounts and promotions is estimated and recorded as a reduction in total gross revenues in order to arrive at reported net revenues. We anticipate that these promotional activities ~~could~~will impact our net revenues as well as negatively impact our gross margins and profitability and that changes in such activities ~~could~~will impact period-over-period results.

In addition, because we do not have any purchase commitments from our distributors or customers, the amount of net revenues we recognize will vary from period to period depending on the volume, and ~~mix of our products sold, particularly between products in our fresh and frozen platforms, and~~ the channels through which our products are sold, causing variability in our results.

We expect to face increasing competition across all channels, especially as additional plant-based protein product brands continue to enter the marketplace.

Gross Profit

Gross profit consists of our net revenues less cost of goods sold. Our cost of goods sold primarily consists of the cost of raw materials and ingredients for our products, direct labor and certain supply costs, co-manufacturing fees, in-bound and internal shipping and handling costs incurred in manufacturing our products, plant and equipment overhead, depreciation and amortization expense, as well as the cost of packaging our products. In order to keep pace with demand, we have had to very quickly scale production and we have not always been able to meet all demand for our products. As a result, we have had to quickly expand our sources of supply for our core protein inputs such as pea protein. Our growth has also significantly increased facility and warehouse utilization rates.

We intend to continue to increase our production capabilities at our two in-house manufacturing facilities in Columbia, ~~Missouri.~~Missouri, while expanding our co-manufacturing capacity and exploring additional production facilities domestically and abroad. In the second quarter of 2020, we acquired our first manufacturing facility in Europe located in Enschede, the Netherlands. This facility is expected to be operational by the end of 2020. In addition,

in June 2020 we announced the official opening of a new co-manufacturing facility to be used for Beyond Meat production built by our distributor in the Netherlands. In the third quarter of 2020, we and BYND JX entered into an investment agreement and related factory leasing contract to design and develop manufacturing facilities to manufacture plant-based meat products under the Beyond Meat brand in China. Renovations in the leased facility have commenced, with trial production expected by the end of 2020 and full-scale production expected in early 2021. Subsequent to the quarter ended September 26, 2020, on October 30, 2020, we acquired certain assets including land, building, vehicles, machinery and equipment and certain workforce from one of our former co-manufacturers. We intend to use this manufacturing facility for the production of our finished goods. See Note 13, Subsequent Event, to the Notes to Unaudited Condensed Consolidated Financial Statements included in Part I, Item 1 of this report. As a result of these expansion initiatives, we expect our cost of goods sold ~~to increase~~ in absolute dollars to increase to support our growth. ~~However,~~

In addition, in response to the deterioration in the foodservice business and the significant shift in consumer preferences to retail, beginning in the second quarter of 2020 and continuing into the beginning of the third quarter of 2020, we ~~expect~~re-purposed and re-routed a certain portion of our existing foodservice inventory into retail SKUs. These activities increased our costs of goods sold and negatively impacted our gross profit and gross margin in the second and third quarters of 2020 due to increased expenses associated with such ~~expenses to decrease as a percentage~~activities, additional inventory reserves and the write-off of ~~net revenues over time as we continue to scale our business.~~unrecoverable portions of the original foodservice inventory items.

Over the next several years, subject to the duration, magnitude and effects of the COVID-19 pandemic, we continue to expect that gross profit improvements will be delivered primarily through improved volume leverage and throughput, greater internalization and geographic localization of our manufacturing footprint, including co-manufacturing in Canada and the Netherlands and expansion of our own internal production facilities domestically and abroad to produce our woven proteins, blends of flavor systems and binding systems, and finished goods, materials and packaging input cost reductions, tolling fee efficiencies, and improved supply chain logistics and distribution costs.

~~Gross margin improved by 1,640 basis points~~ We intend to ~~35.6%~~pass some of these cost savings on to the consumer as we pursue our goal to achieve price parity with animal protein in the three months ended September 28, 2019 from 19.2% in the three months ended September 29, 2018. Gross margin improved by 1,600 basis points to 33.2% in the nine months ended September 28, 2019 from 17.2% in the nine months ended September 29, 2018. Gross margin benefited from an increase in the amount of products sold, improved production efficiencies and from a greater proportion of revenues from products in our fresh platform which have a higher net selling price per pound. As we continue to expand production and are able to increase manufacturing efficiency and leverage the costat least one of our ~~fixed production and staff costs, we expect~~product categories by 2024.

We are also working to ~~increase our gross margin. We also expect to continue to increase~~improve gross margin through ingredient cost savings achieved through scale of purchasing and through expanding our co-manufacturing network and negotiating lower tolling fees.

However, in the near term, margin improvements were impacted by repacking costs as we repurposed a certain portion of our existing foodservice inventory into retail SKUs in response to shifts in consumer demand due to COVID-19 and inventory write-offs and reserves associated with unsalable foodservice products attributable to COVID-19. Margin improvement may, however, be negatively impacted by our focus on growing our customer base, volume deleveraging, aggressive pricing strategies and increased discounting, expanding into new geographies and markets, enhancing our production infrastructure, improving our innovation capabilities, enhancing our product offerings and increasing consumer engagement.

Operating Expenses

Research and Development Expenses

Research and development expenses consist primarily of personnel and related expenses for our research and development staff, including salaries, benefits, bonuses, and share-based ~~compensation.~~compensation, scale-up expenses, and depreciation and amortization expense on research and development assets. Our research and development efforts are focused on enhancements to our product formulations and production processes in addition to the development of new products. We expect to continue to invest substantial amounts in research and development, as ~~most recently evidenced in the build-out of our state-of-the-art Manhattan Beach Project Innovation Center. Research~~research and development and innovation are core elements of our business strategy, asand we believe they represent a critical competitive advantage for us. We believe that we need to continue to rapidly innovate in order to ~~be able to~~ continue to capture a larger market share of consumers who typically eat animal-based meats. WeOver time and subject to the duration, magnitude and effects of the COVID-19 pandemic, we expect these expenses to increase ~~somewhat~~ in absolute dollars, but to decrease as a percentage of net revenues as we continue to scale ~~production.~~production volume.

SG&A Expenses

SG&A expenses consist primarily of selling, marketing ~~selling~~ and administrative expenses, including personnel and related expenses, share-based compensation, outbound shipping and handling costs, non-manufacturing ~~rent~~lease expense, depreciation and amortization expense on non-manufacturing assets and other ~~miscellaneous~~non-production operating ~~items.~~expenses. Marketing and selling expenses include share-based compensation awards to brand ambassadors, advertising costs, costs associated with consumer promotions, product samples and sales aids incurred to acquire new customers, retain existing customers and build our brand awareness. Administrative expenses include the expenses related to management, accounting, legal, IT, and other office functions.

We expect SG&A expenses ~~to increase~~ in absolute dollars to increase as we increase our domestic and international expansion efforts, ~~to meet~~expand our ~~product demand~~marketing efforts, and incur costs related to our status as a public company.

~~Our selling and marketing expense is expected~~ In response to increase, both through a greater focus on marketing and through additions to our sales organizations. We expect to significantly expand our marketing efforts to achieve greater brand awareness, attract new customers and increase market penetration. We have historically had a very small sales force, with only nine full-time sales employees as of December 31, 2017 growing to 31 full-time sales employees as of September 28, 2019. As we continue to grow,the COVID-19 pandemic, we expect to expand our sales force to address additional opportunities, which could substantially increase our selling expense. Our administrative expenses are expected to increase as a public company with increased personnel costundertake measures focused on reducing or delaying discretionary spending in ~~accounting, IT~~areas where effectiveness has been impeded by the pandemic, and ~~compliance-related expenses.~~streamlining operations, including furloughs and headcount reductions, in light of inventory levels, demand shifts and company-wide capacity planning.

Restructuring Expenses

In May 2017, management approved a plan to terminate an exclusive supply agreement with one of our co-manufacturers. See “—“Results of ~~Operations—~~Operations—Three and Nine Months Ended September 26, 2020 Compared to Three and Nine Months Ended September 28, 2019 ~~Compared to Three and Nine Months ended September 29, 2018—~~—Restructuring Expenses” for a discussion of these expenses.

Seasonality

Generally, we expect to experience greater demand for certain of our products during the summer grilling season. As our business continues to grow, we expect to see additional seasonality effects, especially within our retail channel, with revenue ~~growth~~contribution from this channel tending to be greater in the second and third quarters of the year. In an environment of uncertainty from the impact of COVID-19, we are unable to assess the ultimate impact on the demand for our products as a result of seasonality.

Results of Operations

The following table sets forth selected items in our condensed consolidated statements of operations for the periods presented:


	Three Months Ended				Nine Months Ended
(in thousands)	September 26, 2020		September 28, 2019		September 26, 2020		September 28, 2019
Net revenues	$	94,436	$	91,961	$	304,848	$	199,418
Cost of goods sold	68,908		59,178		207,978		133,123
Gross profit	25,528		32,783		96,870		66,295
Research and development expenses	8,278		5,951		20,488		14,661
Selling, general and administrative expenses	33,560		20,944		95,167		47,636
Restructuring expenses	2,146		2,319		6,028		3,560
Total operating expenses	43,984		29,214		121,683		65,857
(Loss) income from operations	$	(18,456)	$	3,569	$	(24,813)	$	438

Three Months Ended Nine Months Ended
(in thousands) September 28,
2019 September 29,
2018 September 28,
2019 September 29,
2018
Net revenues $ 91,961
$ 26,277
$ 199,418
$ 56,420
Cost of goods sold 59,178
21,235
133,123
46,709
Gross profit 32,783
5,042
66,295
9,711
Research and development expenses 5,951
2,165
14,661
6,267
Selling, general and administrative expenses 20,944
10,353
47,636
23,133
Restructuring expenses 2,319
528
3,560
1,170
Total operating expenses 29,214
13,046
65,857
30,570
Income (loss) from operations $ 3,569
$ (8,004 ) $ 438
$ (20,859 )

The following table presents selected items in our condensed consolidated statements of operations as a percentage of net revenues for the ~~respective~~ periods presented:


	Three Months Ended				Nine Months Ended
	September 26, 2020		September 28, 2019		September 26, 2020		September 28, 2019
Net revenues	100.0	%	100.0	%	100.0	%	100.0	%
Cost of goods sold	73.0		64.4		68.2		66.8
Gross profit	27.0		35.6		31.8		33.2
Research and development expenses	8.8		6.5		6.7		7.3
Selling, general and administrative expenses	35.5		22.8		31.2		23.9
Restructuring expenses	2.3		2.5		2.0		1.8
Total operating expenses	46.6		31.8		39.9		33.0
(Loss) income from operations	(19.5)	%	3.9	%	(8.1)	%	0.2	%

Three Months Ended Nine Months Ended
September 28,
2019 September 29,
2018 September 28,
2019 September 29,
2018
Net revenues 100.0 % 100.0 % 100.0 % 100.0 %
Cost of goods sold 64.4
80.8
66.8
82.8
Gross profit 35.6
19.2
33.2
17.2
Research and development expenses 6.5
8.2
7.3
11.1
Selling, general and administrative expenses 22.8
39.4
23.9
41.0
Restructuring expenses 2.5
2.0
1.8
2.1
Total operating expenses 31.8
49.6
33.0
54.2
Income (loss) from operations 3.9 % (30.5 )% 0.2 % (37.0 )%

Three and Nine Months Ended September ~~28, 2019~~26, 2020 Compared to Three and Nine Months Ended September ~~29, 2018~~28, 2019

Net Revenues

Three Months Ended Change Nine Months Ended Change
(in thousands) September 28,
2019 September 29,
2018 Amount % September 28,
2019 September 29,
2018 Amount %
Net revenues:
Gross Fresh Platform $ 97,995
$ 26,815
$ 71,180
265.4 % $ 204,523
$ 51,530
$ 152,993
296.9 %
Gross Frozen Platform 4,007
2,295
1,712
74.6 % 14,158
11,549
2,609
22.6 %
Less: Discounts (10,041 ) (2,833 ) (7,208 ) 254.4 % (19,263 ) (6,659 ) (12,604 ) 189.3 %
Net revenues $ 91,961
$ 26,277
$ 65,684
250.0 % $ 199,418
$ 56,420
$ 142,998
253.5 %

Three Months Ended Change Nine Months Ended Change
(in thousands) September 28,
2019 September 29,
2018 Amount % September 28,
2019 September 29,
2018 Amount %
Net revenues:
Retail $ 50,465
$ 16,201
$ 34,264
211.5 % $ 104,164
$ 37,173
$ 66,991
180.2 %
Restaurant and Foodservice 41,496
10,076
31,420
311.8 % 95,254
19,247
76,007
394.9 %
Net revenues $ 91,961
$ 26,277
$ 65,684
250.0 % $ 199,418
$ 56,420
$ 142,998
253.5 %

Net revenues increased by ~~$65.7~~$2.5 million, or ~~250.0%~~2.7%, and ~~$143.0~~$105.4 million, or ~~253.5%~~52.9%, in the three and nine months ended September ~~28, 2019,~~26, 2020, respectively, as compared to the prior-year periods primarily due to ~~strong growth~~an increase in ~~sales volumes~~volume sold, partially offset by lower net price per pound driven by our strategic investments in promotional activity intended to encourage greater consumer trial and adoption and, to a lesser extent, product mix shifts as larger-pack items carrying a lower net price per unit volume accounted for a greater proportion of ~~products in our fresh platform across both~~ our retail net revenues compared to the prior-year period. Growth in net revenues was primarily due to increased retail channel sales, resulting from distribution gains both domestically and ~~our restaurant~~abroad, higher sales velocities at existing retail customers, and contribution from new product introductions. The increase in retail channel sales was largely offset by a decline in foodservice ~~channels, driven by expansion~~channel sales as a result of the ongoing COVID-19 pandemic and the impact of widespread domestic and international stay-at-home orders, social distancing measures and various restrictions on commercial operations, resulting in the ~~number~~closure or limited operations of ~~retail and~~many of our foodservice ~~points of distribution, including new strategic customers, international customers and greater demand from~~customers.

The following table presents our ~~existing customers.~~ net revenues by channel in the three months ended September 26, 2020 as compared to the prior-year period:


	Three Months Ended				Change
(in thousands)	September 26, 2020		September 28, 2019		Amount		%
U.S.:
Retail	$	62,057	$	44,170	$	17,887	40.5	%
Foodservice	16,325		18,359		(2,034)		(11.1)	%
U.S. net revenues	78,382		62,529		15,853		25.4	%
International:
Retail	7,975		6,295		1,680		26.7	%
Foodservice	8,079		23,137		(15,058)		(65.1)	%
International net revenues	16,054		29,432		(13,378)		(45.5)	%

Net revenues	$	94,436	$	91,961	$	2,475	2.7	%

Net revenues from ~~international customers (excluding the Canadian market)~~U.S. retail sales in the three ~~and nine~~ months ended September 28, 2019 were approximately 14% and 12% of net revenues, respectively, as compared to approximately 4% and 3% of net revenues, respectively, in the prior-year periods. We discontinued our frozen chicken strips product line during the first quarter of 2019.

~~Gross revenues from sales of products in our fresh platform in the three and nine months ended September 28, 2019~~26, 2020 increased ~~$71.2~~$17.9 million, or ~~265.4%~~40.5%, ~~and $153.0 million, or 296.9%, respectively,~~ primarily due to increases in sales of ~~fresh platform products.~~ Beyond Burger, Beyond Sausage and Beyond Beef.

Approximately 16% of the increase in U.S. retail sales was due to the introduction of Beyond Breakfast Sausage during the second quarter of 2020.

Net revenues from U.S. foodservice sales in the three months ended September 26, 2020 decreased $2.0 million, or 11.1%, primarily due to decreases in sales of Beyond Burger, Beyond Beef Crumble, Beyond Meatball and Beyond Sausage, primarily due to the impact of COVID-19, partially offset by an increase in sales of Beyond Breakfast Sausage. Our products were available at approximately 28,000 U.S. retail outlets and 42,000 U.S. foodservice outlets as of September 26, 2020.

Net revenues from international retail sales in the three months ended September 26, 2020 increased $1.7 million, or 26.7%, primarily due to increase in sales of Beyond Beef.

Net revenues from international foodservice sales in the three months ended September 26, 2020 decreased $15.1 million, or 65.1%, primarily due to the impact of COVID-19. Our products were available at approximately 52,000 international retail and foodservice outlets as of September 26, 2020.

The following table presents our net revenues by channel in the nine months ended September ~~28, 2019~~26, 2020 as compared to the prior-year period:


	Nine Months Ended				Change
(in thousands)	September 26, 2020		September 28, 2019		Amount		%
U.S.:
Retail	$	202,019	$	94,162	$	107,857	114.5	%
Foodservice	45,442		43,697		1,745		4.0	%
U.S. net revenues	247,461		137,859		109,602		79.5	%
International:
Retail	23,499		10,002		13,497		134.9	%
Foodservice	33,888		51,557		(17,669)		(34.3)	%
International net revenues	57,387		61,559		(4,172)		(6.8)	%

Net revenues	$	304,848	$	199,418	$	105,430	52.9	%

Net revenues from U.S. retail sales in the nine months ended September 26, 2020 increased ~~$34.3~~$107.9 million, or ~~211.5%~~114.5%, ~~and $67.0 million, or 180.2%, respectively,~~ primarily due to increases in sales of Beyond Beef, Beyond Burger, Beyond Sausage, and Beyond Beef Crumble. Approximately 5% of the ~~Beyond Burger. Net revenues from~~increase in U.S. retail sales ~~through our restaurant and foodservice channel~~ in the ~~three and~~ nine months ended September ~~28, 2019~~26, 2020 was due to the introduction of Beyond Breakfast Sausage during the second quarter of 2020.

Net revenues from U.S. foodservice sales in the nine months ended September 26, 2020 increased ~~$31.4~~$1.7 million, or ~~311.8%~~4.0%, ~~and $76.0 million, or 394.9%, respectively,~~ primarily due to increases in sales of ~~the~~ Beyond ~~Burger, which was being served~~Breakfast Sausage and Beyond Beef, partially offset by decreases in ~~approximately 18,200 restaurant and foodservice outlets worldwide as of October 23, 2019, and due to increased~~ sales of Beyond ~~Sausage.~~Burger, Beyond Beef Crumble and Beyond Meatball, primarily due to the impact of COVID-19.

Net revenues from international retail sales in the nine months ended September 26, 2020 increased $13.5 million, or 134.9%, primarily due to increases in sales of Beyond Beef and Beyond Sausage, partially offset by decreases in Beyond Breakfast Sausage, Beyond Burger, and Beyond Beef Crumble. Net revenues from international foodservice sales in the nine months ended September 26, 2020 decreased $17.7 million, or 34.3%, primarily due to the impact of COVID-19.

The following ~~tables present~~table presents consolidated volume of our products sold in ~~pounds:~~pounds for the periods presented:


	Three Months Ended		Change			Nine Months Ended		Change
(in thousands)	September 26, 2020	September 28, 2019	Amount	%		September 26, 2020	September 28, 2019	Amount	%
Volume of products sold:
U.S.:
Retail	11,089	7,622	3,467	45.5	%	34,746	15,368	19,378	126.1	%
Foodservice	2,636	3,085	(449)	(14.6)	%	8,068	7,267	801	11.0	%
International:
Retail	1,681	1,115	566	50.8	%	4,391	1,639	2,752	167.9	%
Foodservice	2,309	4,195	(1,886)	(45.0)	%	7,079	10,077	(2,998)	(29.8)	%
Volume of products sold	17,715	16,017	1,698	10.6	%	54,284	34,351	19,933	58.0	%

Three Months Ended Change Nine Months Ended Change
(in thousands) September 28,
2019 September 29,
2018 Amount % September 28,
2019 September 29,
2018 Amount %
Retail:
Fresh Platform 8,308
2,284
6,024
263.7 % 15,544
4,521
11,023
243.8 %
Frozen Platform 429
389
40
10.3
1,463
1,826
(363 ) (19.9 )
Total 8,737
2,673
6,064
226.9 % 17,007
6,347
10,660
168.0 %

Three Months Ended Change Nine Months Ended Change
(in thousands) September 28,
2019 September 29,
2018 Amount % September 28,
2019 September 29,
2018 Amount %
Restaurant and Foodservice:
Fresh Platform 6,915
1,488
5,427
364.7 % 15,981
2,757
13,224
479.7 %
Frozen Platform 365
84
281
334.5
1,363
490
873
178.2
Total 7,280
1,572
5,708
363.1 % 17,344
3,247
14,097
434.2 %

Cost of Goods Sold


	Three Months Ended				Change				Nine Months Ended				Change
(in thousands)	September 26, 2020		September 28, 2019		Amount		%		September 26, 2020		September 28, 2019		Amount		%
Cost of goods sold	$	68,908	$	59,178	$	9,730	16.4	%	$	207,978	$	133,123	$	74,855	56.2	%

Three Months Ended Change Nine Months Ended Change
(in thousands) September 28,
2019 September 29,
2018 Amount % September 28,
2019 September 29,
2018 Amount %
Cost of goods sold $ 59,178
$ 21,235
$ 37,943
178.7 % $ 133,123
$ 46,709
$ 86,414
185.0 %

Cost of goods sold increased by ~~$37.9~~$9.7 million, or ~~178.7%~~16.4%, ~~and $86.4~~to $68.9 million, ~~or 185.0%, respectively,~~ in the three ~~and nine~~ months ended September ~~28, 2019~~26, 2020 as compared to the prior-year ~~periods,~~period. Cost of goods sold in the three months ended September 26, 2020 increased to 73.0% of net revenues from 64.4% of net revenues in the prior-year period. The increase in cost of goods sold during the three months ended September 26, 2020, was primarily due to increase in volume of products sold, lower absorption of fixed overhead costs as we scaled back production to reduce inventory levels and higher in-bound and internal shipping and handling costs. In addition, $1.8 million in costs attributable to COVID-19 from inventory write-offs and reserves associated with foodservice products determined to be unsalable and product repacking activities to repurpose certain foodservice inventory into retail products also contributed to the increase in cost of goods sold during the three months ended September 26, 2020.

Cost of goods sold increased by $74.9 million, or 56.2%, to $208.0 million, in the nine months ended September 26, 2020 as compared to the prior-year period. Cost of goods sold in the nine months ended September 26, 2020 increased to 68.2% of net revenues from 66.8% of net revenues in the prior-year period. The increase in cost of goods sold in the nine months ended September 26, 2020 was primarily due to the increase in ~~the sales~~ volume of ~~our products.~~product sold, lower absorption of fixed overhead costs as we scaled back production to reduce inventory levels, increases in in-bound and internal shipping and handling costs and tolling fees. In addition, $7.7 million in costs attributable to COVID-19 from inventory write-offs and reserves associated with foodservice products determined to be unsalable and product repacking activities to repurpose certain foodservice inventory into retail products also contributed to the increase in cost of goods sold in the nine months ended September 26, 2020.

Gross Profit and Gross Margin


	Three Months Ended		Change		Nine Months Ended		Change
(in thousands)	September 26, 2020	September 28, 2019	Amount	%	September 26, 2020	September 28, 2019	Amount	%
Gross profit	$25,528	$32,783	$(7,255)	(22.1)%	$96,870	$66,295	$30,575	46.1%
Gross margin	27.0%	35.6%	(860) bps	N/A	31.8%	33.2%	(140) bps	N/A

Three Months Ended Change Nine Months Ended Change
(in thousands) September 28,
2019 September 29,
2018 Amount % September 28,
2019 September 29,
2018 Amount %
Gross profit $ 32,783
$ 5,042
$ 27,741
550.2 % $ 66,295
$ 9,711
$ 56,584
582.7 %
Gross margin 35.6 % 19.2 % 1,640
N/A
33.2 % 17.2 % 1,600
N/A

Gross profit in the three months ended September ~~28, 2019~~26, 2020 was ~~$32.8~~$25.5 million as compared to gross profit of ~~$5.0~~$32.8 million in the prior-year period, a decline of $7.3 million. Gross margin in the three months ended September 26, 2020 declined to 27.0% from 35.6% in the prior-year period. The decline in gross profit and gross margin in the three months ended September 26, 2020 was primarily due to lower net price realization as a result of higher trade discounts and lower absorption of fixed overhead production costs as we scaled back production to reduce inventory levels. Gross profit and gross margin were also impacted by $1.8 million in costs attributable to COVID-19 including $1.1 million in inventory write-offs and reserves associated with foodservice products determined to be unsalable and $0.7 million in costs associated with product repacking activities driven by our efforts to repurpose certain foodservice inventory into retail products.

Gross profit in the nine months ended September 26, 2020 was $96.9 million as compared to gross profit of $66.3 million in the prior-year period, an improvement of ~~$27.7~~$30.6 million. Gross ~~profit~~margin in the nine months ended September ~~28, 2019, was $66.3 million as compared~~26, 2020 decreased to ~~gross profit of $9.7 million~~31.8% from 33.2% in the ~~nine months ended September 29, 2018, an improvement of $56.6 million.~~prior-year period. The ~~improvement~~increase in gross profit was primarily due to the increase in volume of products sold in the retail channel, and variable cost and direct labor efficiencies, partially offset by higher trade discounts, repacking costs, and inventory write-offs and reserves associated with unsalable foodservice products attributable to COVID-19. The decrease in gross margin was primarily due to ~~an increase in the amount~~higher trade discounts and lower absorption of ~~products sold, with resulting operating leverage, and improved~~fixed overhead production ~~efficiencies. The greater proportion of product revenues from our fresh platform also contributed~~costs as we scaled back production to ~~the improvement in gross margin, due to a higher net selling price per pound of products in our fresh versus frozen platform.~~reduce inventory levels. We include outbound shipping and handling costs within SG&A

expenses. As a result, our gross profit and gross margin may not be comparable to other entities that present ~~all~~ shipping and handling costs as a component of cost of goods sold.

Research and Development Expenses


	Three Months Ended				Change				Nine Months Ended				Change
(in thousands)	September 26, 2020		September 28, 2019		Amount		%		September 26, 2020		September 28, 2019		Amount		%
Research and development expenses	$	8,278	$	5,951	$	2,327	39.1	%	$	20,488	$	14,661	$	5,827	39.7	%

Three Months Ended Change Nine Months Ended Change
(in thousands) September 28,
2019 September 29,
2018 Amount % September 28,
2019 September 29,
2018 Amount %
Research and development expenses $ 5,951
$ 2,165
$ 3,786
174.9 % $ 14,661
$ 6,267
$ 8,394
133.9 %

Research and development expenses increased ~~$3.8~~$2.3 million, or ~~174.9%~~39.1%, and ~~$8.4~~$5.8 million, or ~~133.9%~~39.7%, in the three and nine months ended September ~~28, 2019,~~26, 2020, respectively, as compared to the prior-year periods. Research and development expenses increased to 8.8% of net revenues in the three months ended September 26, 2020 from 6.5% of net revenues in the prior-year period, and declined to 6.7% of net revenues in the nine months ended September 26, 2020, from 7.3% of net revenues in the prior-year period. Research and development expenses in the three and nine months ended September 26, 2020 increased primarily due to ~~higher~~a 95% increase in headcount, higher scale-up expenses and higher depreciation and amortization expense compared to the ~~respective~~ prior-year periods.

SG&A Expenses


	Three Months Ended				Change				Nine Months Ended				Change
(in thousands)	September 26, 2020		September 28, 2019		Amount		%		September 26, 2020		September 28, 2019		Amount		%
Selling, general and administrative expenses	$	33,560	$	20,944	$	12,616	60.2	%	$	95,167	$	47,636	$	47,531	99.8	%

Three Months Ended Change Nine Months Ended Change
(in thousands) September 28,
2019 September 29,
2018 Amount % September 28,
2019 September 29,
2018 Amount %
Selling, general and administrative expenses $ 20,944
$ 10,353
$ 10,591
102.3 % $ 47,636
$ 23,133
$ 24,503
105.9 %

SG&A expenses increased ~~by $10.6~~$12.6 million, or ~~102.3%~~60.2%, in the three months ended September ~~28, 2019 as compared~~26, 2020. SG&A expenses increased to 35.5% of net revenues in the three months ended September 26, 2020, from 22.8% of net revenues in the prior-year period. The increase was primarily due to ~~$3.0~~$4.1 million in higher marketing-related expenses, $3.8 million in higher share-based compensation expense, $2.2 million in higher salaries and related expenses resulting from higher headcount, ~~$2.2~~$1.7 million in higher ~~share-based compensation expense, $1.3~~legal expenses and $0.6 million in higher ~~outbound shipping and handling expenses and $1.3 million in higher broker and distributor commissions, and continued investment in marketing capabilities.~~general insurance costs.

SG&A expenses increased ~~by $24.5~~$47.5 million, or ~~105.9%~~99.8%, in the nine months ended September ~~28, 2019, as compared~~26, 2020. SG&A expenses increased to 31.2% of net revenues in the nine months ended September 26, 2020, from 23.9% of net revenues in the prior-year period. The increase was primarily due to ~~$7.9~~$13.9 million in higher share-based compensation expense, $10.4 million in higher salaries and related expenses resulting from higher headcount, ~~$3.3~~$9.7 million in higher ~~share-based compensation expense, $2.5~~marketing-related expenses, $3.6 million in higher ~~outbound shipping and handling~~legal expenses, ~~$2.3~~$2.7 million in higher expense related to product donations for our Feed A Million+ campaign attributable to COVID-19 relief efforts, $2.6 million in higher broker and distributor commissions, ~~$1.1~~$2.0 million in higher general insurance ~~cost~~costs and ~~continued investment~~$1.3 million in ~~marketing capabilities.~~higher public company-related expenses. The increase in share-based compensation expense in the three and nine months ended September 26, 2020 was primarily due to appreciation in our stock price as well as substantially higher staffing levels versus the prior-year periods.

Restructuring Expenses

As a result of the termination in May 2017 of an exclusive supply agreement with one of our co- manufacturers due to non-performance under the agreement, we recorded restructuring expenses of ~~$2.3~~$2.1 million and ~~$0.5~~$2.3 million in the three months ended September 26, 2020 and September 28, 2019, ~~and September 29, 2018,~~ respectively, and ~~$3.6~~$6.0 million and ~~$1.2~~$3.6 million in the nine months ended September 26, 2020 and September 28, 2019, ~~and September 29, 2018, respectively,~~respectively. The restructuring expenses were primarily related to legal and other expenses associated with the dispute. The amount incurred in the nine months ended September 26, 2020 includes transition costs associated with our substitution of legal counsel during the first quarter of 2020. As of September ~~28, 2019~~26, 2020 and December 31, ~~2018,~~2019, there were ~~$0.7~~$1.1 million ~~and $0, respectively,~~ in accrued and unpaid ~~liabilities associated with this contract termination representing legal fees.~~restructuring expenses. We continue to incur legal fees and other costs in connection with our ongoing efforts to resolve this dispute. See Note 3, Restructuring, to the Notes to Unaudited Condensed Consolidated Financial Statements included in Part I, Item 1 of this report and Legal Proceedings in Part II, Item 1 of this report.

Total Other ~~Income (Expense), Net~~Expense (Income)

Total other expense, net in the three months ended September 26, 2020 of $0.8 million consisted primarily of interest expense on our debt balances. Total other income ~~(expense),~~of $0.5 million in the prior-year period consisted primarily of $1.4 million in interest income partially offset by $0.9 million in interest expense on our debt balances.

Total other expense, net in the nine months ended September 26, 2020 of $2.8 million consisted primarily ~~includes~~of interest expense on our debt balances and loss on extinguishment of debt, partially offset by interest income.

Total other expense in the prior-year period of $12.4 million consisted primarily of expense associated with the remeasurement of our ~~preferred stock~~ warrant liability and common stock warrant liability. On May 6, 2019, in connection with the IPO, the warrants exercisable for convertible preferred stock were automatically converted into warrants exercisable for common stock. We remeasured and reclassified the common stock warrant liability to additional-paid-in-capital in connection with the IPO and recorded $12.5 million in expense associated with the remeasurement of warrant liability in the six months ended June 29, 2019.interest on our debt balances partially offset by interest income.

Subsequent to the closing of the IPO, all outstanding warrants to purchase shares of common stock were cashless exercised. No warrants were outstanding as of September 28, 2019 and no expense associated with the remeasurement of warrant liability was recorded(Loss) Income from Operations

Loss from operations in the three months ended September ~~28, 2019.~~

~~Income (Loss) from Operations~~

~~Income from operations in the third quarter of 2019~~26, 2020 was ~~$3.6~~$18.5 million compared to ~~loss~~income from operations of $8.0 million in the third quarter of the prior year. Income from operations in the first nine months of 2019 was $0.4 million compared to loss from operations of $20.9 million in the first nine months of the prior year. This improvement was driven entirely by the year-over-year increase in gross profit, partially offset by higher operating expenses to support our expanded manufacturing and supply chain operations, higher administrative costs associated with being a public company, and continued investment in innovation and marketing capabilities.

~~Income Tax Expense~~

For the three months ended September 28, 2019 and September 29, 2018, we recorded no income tax expense in our condensed statements of operations. For the nine months ended September 28, 2019 and September 29, 2018, we recorded income tax expense of $21,000 and $0, respectively, in our condensed statements of operations.No tax benefit was provided for losses incurred because those losses are offset by a full valuation allowance.

~~Net Income (Loss)~~

~~Net income was $4.1 million in the three months ended September 28, 2019 compared to a net loss of $9.3~~$3.6 million in the prior-year period. ~~Net loss was $12.0 million~~Loss from operations in the nine months ended September ~~28, 2019~~26, 2020 was $24.8 million compared to ~~a net loss~~income from operations of ~~$22.4~~$0.4 million in the prior-year period. The decrease in income from operations in the three and nine months ended September 26, 2020 was driven by the year-over-year increase in cost of goods sold, higher operating expenses from increased personnel levels to support our long-term growth, increases in our marketing initiatives, higher share-based compensation expense, investments in international expansion and continued investments in innovation. The decrease in income from operations in the nine months ended September 26, 2020 was also due to product donation costs related to our COVID-19 relief campaign and higher restructuring expenses. In the nine months ended September 26, 2020, the increase in operating expenses was partially offset by the increase in gross profit.

Net Loss

Net loss was $19.3 million and $27.7 million in the three and nine months ended September 26, 2020, respectively, compared to net income of $4.1 million and net loss of $12.0 million in the prior-year periods. The increase in net loss during the three months ended September 26, 2020 was ~~primarily the result of the higher~~due to lower gross profit and higher operating expenses compared to the prior-year period. The increase in net loss during the ~~first~~ nine months ~~of 2019,~~ended September 26, 2020 was due to higher operating expenses partially offset by higher ~~operating expenses, expenses~~gross profit. During the three months ended September 26, 2020, net loss included $1.8 million in costs attributable to COVID-19 including inventory write-offs and reserves associated with foodservice products determined to be unsalable and costs associated with product repacking activities. During the ~~remeasurement~~nine months ended September 26, 2020, net loss included $10.4 million in costs attributable to COVID-19 including $6.6 million in costs associated with product repacking activities, $1.1 million in inventory write-offs and reserves associated with foodservice products determined to be unsalable and $2.7 million in product donation costs related to our COVID-19 relief efforts, and $1.5 million of debt extinguishment costs associated with our ~~common stock warrant liability in connection with the IPO, and higher interest expense.~~refinanced credit arrangements.

Non-GAAP Financial Measures

We use the ~~following~~ non-GAAP financial measures set forth below in assessing our operating performance and in our financial ~~communications:~~

“~~Adjusted EBITDA” is defined as net income (loss) adjusted~~communications. Management believes these non-GAAP financial measures provide useful additional information to ~~exclude, when applicable, income tax expense, interest expense, depreciation~~investors about current trends in our operations and ~~amortization expense, restructuring expenses, share-based compensation expense, inventory losses from termination~~are useful for period-over-period comparisons of an exclusive supply agreement with a co-manufacturer, costs of termination of an exclusive supply agreement with the same co-manufacturer, and expenses primarily associated with the conversion of our convertible notes and remeasurement of our preferred stock warrant liability and common stock warrant liability.

“~~Adjusted EBITDA as a % of net revenues~~” ~~is defined~~ ~~as Adjusted EBITDA divided by net revenues.~~

~~We use Adjusted EBITDA and Adjusted EBITDA as a % of net revenues because they are important~~operations. In addition, management uses these non-GAAP financial measures ~~upon which our management assesses our operating performance. We use Adjusted EBITDA and Adjusted EBITDA as a % of net revenues as key performance measures because we believe these measures facilitate~~to assess operating performance ~~comparison from period-to-period by excluding potential differences primarily caused by the impact of restructuring, asset depreciation~~ and ~~amortization, non-cash share-based compensation~~

and non-operational charges including the impact to cost of goods sold and SG&A expenses related to the termination of an exclusive co-manufacturing agreement, early extinguishment of convertible notes and remeasurement of warrant liability. Because Adjusted EBITDA and Adjusted EBITDA as a % of net revenues facilitate internal comparisons of our historical operating performance on a more consistent basis, we also use those measures for ~~our~~ business planning purposes. ~~In addition, we believe Adjusted EBITDA and Adjusted EBITDA as a % of net revenues~~Management also believes these measures are widely used by investors, securities analysts, ~~ratings~~rating agencies and other parties in evaluating companies in our industry as a measure of our operational performance. These non-GAAP financial measures should not be considered in isolation or as a substitute for the comparable GAAP measures. In addition, these non-GAAP financial measures may not be computed in the same manner as similarly titled measures used by other companies.

“Adjusted EBITDA” is defined as net (loss) income adjusted to exclude, when applicable, income tax expense (benefit), interest expense, depreciation and amortization expense, restructuring expenses, share-based compensation expense, expenses attributable to COVID-19, remeasurement of our warrant liability, and Other, net, including interest income, loss on extinguishment of debt and foreign currency transaction gains and losses.

“Adjusted EBITDA as a % of net revenues” is defined as Adjusted EBITDA divided by net revenues.

There are a number of limitations related to the use of Adjusted EBITDA rather than net (loss) income, ~~(loss),~~ which is the most directly comparable GAAP measure. Some of these limitations are:

•Adjusted EBITDA excludes depreciation and amortization expense and, although these are non-cash expenses, the assets being depreciated may have to be replaced in the future increasing our cash requirements;

•Adjusted EBITDA does not reflect interest expense, or the cash required to service our debt, which reduces cash available to us;

•Adjusted EBITDA does not reflect income tax payments that reduce cash available to us;

•Adjusted EBITDA does not reflect restructuring expenses that reduce cash available to us;

•Adjusted EBITDA does not reflect expenses attributable to COVID-19 that reduce cash available to us;

•Adjusted EBITDA does not reflect share-based compensation ~~expenses~~expense and therefore does not include all of our compensation costs;

•Adjusted EBITDA does not reflect ~~other~~Other, net, including investment income, ~~(expense)~~loss on extinguishment of debt and foreign currency transaction gains and losses, that may increase or decrease cash available to us; and

•other companies, including companies in our industry, may calculate Adjusted EBITDA differently, which reduces its usefulness as a comparative measure.

These non-GAAP financial measures should not be considered in isolation or as a substitute for financial information provided in accordance with GAAP. These non-GAAP financial measures may not be computed in the same manner as similarly titled measures used by other companies.

The following table presents the reconciliation of Adjusted EBITDA to its most comparable GAAP measure, net (loss) income, ~~(loss),~~ as reported (unaudited):


	Three Months Ended						Nine Months Ended							Three Months Ended						Nine Months Ended
(in thousands)	September 28, 2019			September 29, 2018			September 28, 2019			September 29, 2018			(in thousands)	September 26, 2020			September 28, 2019			September 26, 2020			September 28, 2019
Net income (loss), as reported	$	4,099		$	(9,342	)	$	(11,991	)	$	(22,434	)
Net (loss) income, as reported													Net (loss) income, as reported	$	(19,285)		$	4,099		$	(27,675)		$	(11,991)
Income tax expense	—			—			21			—			Income tax expense	55			—			70			21
Interest expense	855			313			2,329			388			Interest expense	689			855			1,963			2,329
Depreciation and amortization expense	2,023			1,426			5,980			3,046			Depreciation and amortization expense	3,421			2,023			9,276			5,980
Restructuring expenses⁽¹⁾	2,319			528			3,560			1,170			Restructuring expenses(1)	2,146			2,319			6,028			3,560
Share-based compensation expense	3,129			380			5,807			1,090			Share-based compensation expense	6,842			3,129			20,377			5,807
Expenses attributable to COVID-19(2)													Expenses attributable to COVID-19(2)	1,761			—			10,418			—
Remeasurement of warrant liability	—			994			12,503			1,253			Remeasurement of warrant liability	—			—			—			12,503
Other (income) expense, net	(1,385		)	31			(2,424		)	(66		)
Other, net(3)													Other, net(3)	85			(1,385)			829			(2,424)
Adjusted EBITDA	$	11,040		$	(5,670	)	$	15,785		$	(15,553	)	Adjusted EBITDA	$	(4,286)		$	11,040		$	21,286		$	15,785

Net income (loss) as a % of net revenues	4.5		%	(35.6		)%	(6.0		)%	(39.8		)%
Net (loss) income as a % of net revenues													Net (loss) income as a % of net revenues	(20.4)		%	4.5		%	(9.1)		%	(6.0)		%
Adjusted EBITDA as a % of net revenues	12.0		%	(21.6		)%	7.9		%	(27.6		)%	Adjusted EBITDA as a % of net revenues	(4.5)		%	12.0		%	7.0		%	7.9		%

In the United States, we are subject to regulation by various government agencies, including the FDA, Federal Trade Commission, or FTC, Occupational Safety and Health Administration and the Environmental Protection Agency, as well as various state and local agencies. We are also regulated outside the United States by various international regulatory bodies. In addition, we are subject to certain standards, such as Global Food Safety Initiative, or GFSI, standards and review by voluntary organizations, such as the Council of Better Business Bureaus’ National Advertising Division. We could incur costs, including fines, penalties and third-party claims, because of any violations of, or liabilities under, such requirements, including any competitor or consumer challenges relating to compliance with such requirements. For example, in connection with the marketing and advertisement of our products, we could be the target of claims relating to false or deceptive advertising, including under the auspices of the FTC and the consumer protection statutes of some states.

The regulatory environment in which we operate could change significantly and adversely in the future. Any change in manufacturing, labeling or packaging requirements for our products may lead to an increase in costs or interruptions in production, either of which could adversely affect our operations and financial condition. New or revised government laws and regulations could result in additional compliance costs and, in the event of non-compliance, civil remedies, including fines, injunctions, withdrawals, recalls or seizures and confiscations, as well as potential criminal sanctions, any of which may adversely affect our business, results of operations and financial condition. In particular, recent federal, state and foreign attention to the naming of plant-based meat products could result in standards or requirements that mandate changes to our current labeling.

Any changes in, or changes in the interpretation of, applicable laws, regulations or policies of the FDA or U.S. Department of Agriculture, or USDA, state regulators or similar foreign regulatory authorities that relate to the use of the word “meat” or other similar words in connection with plant-based protein products could adversely affect our business, prospects, results of operations or financial condition.

The FDA and the USDA, state regulators or similar foreign regulatory authorities, such as Health Canada or the ~~Canadian Food Inspection Agency,~~CFIA, or authorities of the EU or the ~~CFIA,~~EU member states, could take action to impact our ability to use the term “meat” or similar words (such as “beef”, “burger” or “sausage”) to describe or advertise our products. In addition, a food may be deemed misbranded if its labeling is false or misleading in any particular way, and the FDA, CFIA, EU member state authorities or other regulators could interpret the use of the term “meat” or any similar phrase(s) to describe our plant-based protein products as false or misleading or likely to create an erroneous impression regarding their composition.

For example, in 2018, the state of Missouri passed a law prohibiting any person engaged in advertising, offering for sale, or sale of food products from misrepresenting a product as meat that is not derived from harvested production livestock or poultry. ~~While the~~The state of Missouri Department of Agriculture has clarified its interpretation that products which include prominent disclosure that the product is “made from plants,” or comparable disclosure such as through the use of the phrase “plant-based,” are not misrepresented under the Missouri ~~law, additional~~law. Additional states, including Mississippi, Louisiana, and Georgia, have ~~recently~~subsequently passed similar laws, and ~~other regulators could always take~~legislation, that would impose additional requirements on plant-based meat products is currently pending in a ~~different position. Canadian Food and Drug Regulations also provide requirements for “simulated meat” products, including requirements around composition and naming.~~number of states. More recently, ~~a bill was~~in late 2019, bills were introduced ~~into~~in both the US House and the Senate of ~~Representatives~~the U.S. Congress (titled the Real MEAT Act) that would require the ~~use of the~~ word “imitation” into appear as part of the name of plant-based meat products, and that would give USDA certain oversight over the labeling of plant-based meat products. If ~~this bill gains~~these bills gain traction and ultimately ~~becomes~~become law, it could require us to identify our products as “imitation” in our product labels.

~~In addition, a food may be deemed misbranded if its labeling is false or misleading in any particular way, and~~ Further, the FDA, CFIA, or other regulators could interpret the use of the term “meat” or any similar phrase(s) to describe our plant-based protein products as false or misleading or likely to create an erroneous impression regarding their composition. Recently, the FDA announced that it will reexamine its enforcement of the standard of identity for milk, the official definition of which involves “lacteal secretion,” which may result in the restriction of the use of the term “milk” to only those products that are animal-based (we note there is no comparable FDA

~~standard of identity for “meat” or other terms that we use to label our products). The~~ USDA has ~~also~~ received a petition from the cattle industry requesting that ~~the~~ USDA exclude products not derived from the tissue or flesh of animals that have been harvested in the traditional manner from being labeled and marketed as “meat,” and exclude products not derived from cattle born, raised and harvested in the traditional manner from being labeled and marketed as “beef.” The USDA has not yet responded substantively to this petition but has indicated that the petition is being considered as a petition for a policy change under the USDA’s regulations. We do not believe that USDA has the statutory authority to regulate plant-based products under the current legislative framework. ~~However, should~~Canadian Food and Drug Regulations also provide requirements for “simulated meat” products, including requirements around composition and naming.

In Europe, the Agriculture Committee of the European Parliament proposed in May 2019 to reserve the use of “meat” and meat-related terms and names for products that are manufactured from the edible parts of animals. In October 2020, the European Parliament rejected the adoption of this provision. In the absence of European Union legislation, Member States remain free to establish national restrictions on meat-related names. In June 2020, France adopted a prohibition on using names to indicate foodstuffs of animal origin to describe, market, or promote foodstuffs containing vegetable proteins. An implementing decree will be adopted late 2020 to define e.g. the sanctions in case of non-compliance. We do not believe that the new French bill complies with the laws of the European Union, in particular the principle of free movement of goods. We also note that this prohibition has not been appropriately notified to the European Commission, and that as a result the prohibition is in principle non-enforceable. Should regulatory authorities take action with respect to the use of the term “meat” or similar terms, such that we are unable to use those terms with respect to our plant-based products, we could be subject to enforcement action or recall of our products marketed with these terms, we may be required to modify our marketing strategy, or require us to identify our products as “imitation” in our product labels, and our business, prospects, results of operations or financial condition could be adversely affected.

~~Failure by our suppliers~~ Competitors may also try to bring legal action against us. In late September 2020, three meat trade associations announced that they had initiated a lawsuit against a French plant-based meat company for unfair competition and violating the prohibition on meaty names of ~~raw materials or co-manufacturers to comply with food safety, environmental or other laws and regulations, or with~~June 2020. To the ~~specifications and requirements~~best of our ~~products, may disrupt our supply of products and adversely affect our business.~~knowledge, the lawsuit has not been filed yet.

If our suppliers or co-manufacturers fail to comply with food safety, environmental or other laws and regulations, or face allegations of non-compliance, their operations may be disrupted. Additionally, our co-manufacturers are required to maintain the quality of our products and to comply with our product specifications. In the event of actual or alleged non-compliance, we might be forced to find an alternative supplier or co-manufacturer and we may be subject to lawsuits related to such non-compliance by our suppliers and co-manufacturers. As a result, our supply of raw materials or finished inventory could be disrupted or our costs could increase, which would adversely affect our business, results of operations and financial condition. The failure of any co-manufacturer to produce products that conform to our standards could adversely affect our reputation in the marketplace and result in product recalls, product liability claims and economic loss. For example, some of our co-manufacturers also process products with textured vegetable protein, a GMO product, and while we require them to process our products in separate designated quarters in their facilities, cross-contamination may occur and result in genetically modified organisms in our supply chain. Additionally, actions we may take to mitigate the impact of any disruption or potential disruption in our supply of raw materials or finished inventory, including increasing inventory in anticipation of a potential supply or production interruption, may adversely affect our business, results of operations and financial condition.

~~Risks Related to Our Intellectual Property~~

~~We may not be able to protect our proprietary technology adequately, which may impact our commercial success.~~

Our commercial success depends in part on our ability to protect our intellectual property and proprietary technologies. We rely on a combination of patent protection, where appropriate and available, copyrights, trade secrets and trademarks laws, as well as confidentiality and other contractual restrictions to protect our proprietary technology. However, these legal means afford only limited protection and may not adequately protect our proprietary technology or permit us to gain or keep any competitive advantage. As of September 28, 2019, we had one issued U.S. patent and 18 pending patent applications, including five in the United States and 13 international patent applications.

We cannot offer any assurances about which, if any, patents will issue from these applications, the breadth of any such patents, or whether any issued patents will be found invalid and unenforceable or will be threatened by third parties. Any successful opposition to these patents or any other patents owned by or, if applicable in the future, licensed to us could deprive us of rights necessary for the successful commercialization of products that we may develop. Since patent applications in the United States and most other countries are confidential for a period of time after filing (in most cases 18 months after the filing of the priority application), we cannot be certain that we were the first to file on the technologies covered in several of the patent applications related to our technologies or products. Furthermore, a derivation proceeding can be provoked by a third party, or instituted by the U.S. Patent and Trademark Office, or USPTO, to determine who was the first to invent any of the subject matter covered by the patent claims of our applications.

Patent law can be highly uncertain and involve complex legal and factual questions for which important principles remain unresolved. In the United States and in many international jurisdictions, policy regarding the breadth of claims allowed in patents can be inconsistent and/or unclear. The U.S. Supreme Court and the Court of Appeals for the Federal Circuit have made, and will likely continue to make, changes in how the patent laws of the United States are interpreted. Similarly, international courts and governments have made, and will continue to make, changes in how the patent laws in their respective countries are interpreted. We cannot predict future changes in the interpretation of patent laws by U.S. and international judicial bodies or changes to patent laws that might be enacted into law by U.S. and international legislative bodies.

Moreover, in the United States, the Leahy-Smith America Invents Act, or the Leahy-Smith Act, enacted in September 2011, brought significant changes to the U.S. patent system, including a change from a “first to invent” system to a “first to file” system. Other changes in the Leahy-Smith Act affect the way patent applications are prosecuted, redefine prior art and may affect patent litigation. The USPTO developed new regulations and procedures to govern administration of the Leahy-Smith Act, and many of the substantive changes to patent law associated with the Leahy-Smith Act became effective on March 16, 2013. The Leahy-Smith Act and its implementation could increase the uncertainties and costs surrounding the prosecution of our patent applications and the enforcement or defense of our issued patents, which could have a material adverse effect on our business and financial condition.

~~We may not be able to protect our intellectual property adequately, which may harm the value of our brand.~~

We believe that our intellectual property has substantial value and has contributed significantly to the success of our business. Our trademarks, including the Beyond Burger, Beyond Beef, Beyond Chicken, Beyond Meat, Beyond Sausage, Beyond Breakfast Sausage, The Cookout Classic, The Future of Protein and The Future of Protein Beyond Meat, are valuable assets that reinforce our brand and consumers’ favorable perception of our products. We also rely on unpatented proprietary expertise, recipes and formulations and other trade secrets and copyright protection to develop and maintain our competitive position. Our continued success depends, to a significant degree, upon our ability to protect and preserve our intellectual property, including our trademarks, trade dress, trade secrets and copyrights. We rely on confidentiality agreements and trademark, trade secret and copyright law to protect our intellectual property rights.

Our confidentiality agreements with our employees and certain of our consultants, contract employees, suppliers and independent contractors, including some of our co-manufacturers who use our formulations to manufacture our products, generally require that all information made known to them be kept strictly confidential. Nevertheless, trade secrets are difficult to protect. Although we attempt to protect our trade secrets, our confidentiality agreements may not effectively prevent disclosure of our proprietary information and may not provide an adequate remedy in the event of unauthorized disclosure of such information. In addition, others may independently discover our trade secrets, in which case we would not be able to assert trade secret rights against such parties. Further, some of our formulations have been developed by or with our suppliers and co-manufacturers. As a result, we may not be able to prevent others from using similar formulations.

We cannot assure you that the steps we have taken to protect our intellectual property rights are adequate, that our intellectual property rights can be successfully defended and asserted in the future or that third parties will not infringe upon or misappropriate any such rights. In addition, our trademark rights and related registrations may be challenged in the future and could be canceled or narrowed. Failure to protect our trademark rights could prevent us in the future from challenging third parties who use names and logos similar to our trademarks, which may in turn cause consumer confusion or negatively affect consumers’ perception of our brand and products. In addition, if we do not keep our trade secrets confidential, others may produce products with our recipes or formulations. Moreover, intellectual property disputes and proceedings and infringement claims may result in a significant distraction for management and significant expense, which may not be recoverable regardless of whether we are successful. Such proceedings may be protracted with no certainty of success, and an adverse outcome could subject us to liabilities, force us to cease use of certain trademarks or other intellectual property or force us to enter into licenses with others. Any one of these occurrences may have a material adverse effect on our business, results of operations and financial condition.

~~Risks Related to Being a Public Company~~

If we fail to maintain proper and effective internal controls, our ability to produce accurate financial statements on a timely basis could be impaired, investors may lose confidence in our financial reporting and the trading price of our common stock may decline.

Ensuring that we have adequate internal financial and accounting controls and procedures in place to produce accurate financial statements on a timely basis is a costly and time-consuming effort that needs to be re-evaluated frequently. We are in the process of upgrading our information technology systems and implementing additional financial and management controls, reporting systems and procedures in order to keep up with the requirements of being a reporting company under the Exchange Act. Additionally, the rapid growth of our operations and the IPO have created a need for additional resources within the accounting and finance functions due to the increasing need to produce timely financial information and to ensure the level of segregation of duties customary for a U.S. public company. We have hired additional resources in the accounting and finance function and continue to reassess the sufficiency of finance personnel in response to these increasing demands and expectations.

If we cease to be an “emerging growth company” as defined in the JOBS Act, commencing with our second annual report on Form 10-K that we will file after becoming a public reporting company, we must perform system and process evaluation and testing of our internal control over financial reporting to allow management to report on the effectiveness of our internal control over financial reporting in our Form 10‑K filing for that year, as required by Section 404 of the Sarbanes Oxley Act. The rules governing the standards that must be met for management to assess our internal control over financial reporting are complex and require significant documentation, testing and possible remediation. We expect to expend significant resources in developing the necessary documentation and testing procedures required by Section 404. We cannot be certain that the actions we will be taking to improve our internal controls over financial reporting will be sufficient, or that we will be able to implement our planned processes and procedures in a timely manner.

Any failure to maintain internal control over financial reporting could severely inhibit our ability to accurately report our financial condition, results of operations or cash flows. If we are unable to conclude that our internal control over financial reporting is effective, or if our independent registered public accounting firm determines we have a material weakness or significant deficiency in our internal control over financial reporting once that firm begin its Section 404 reviews, investors may lose confidence in the accuracy and completeness of our financial reports, the market price of our common stock could decline, and we could be subject to sanctions or investigations by NASDAQ, the SEC or other regulatory authorities. Failure to remedy any material weakness in our internal control over financial reporting, or to implement or maintain other effective control systems required of public companies, could also restrict our future access to the capital markets.

~~Our disclosure controls and procedures may not prevent or detect all errors or acts of fraud.~~

Our disclosure controls and procedures are designed to reasonably assure that information required to be disclosed by us in reports we file or submit under the Exchange Act is accumulated and communicated to management, recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC. We believe that any disclosure controls and procedures or internal controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met.

These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because of simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people or by an unauthorized override of the controls. Accordingly, because of the inherent limitations in our control system, misstatements or insufficient disclosures due to error or fraud may occur and not be detected.

~~We are an emerging growth company and we cannot be certain if the reduced disclosure requirements applicable to emerging growth companies will make our common stock less attractive to investors.~~

We are an “emerging growth company” as defined in the JOBS Act. Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards until such time as those standards apply to

private companies. We have elected to use this extended transition period for complying with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date we (i) are no longer an emerging growth company or (ii) affirmatively and irrevocably opt out of the extended transition period provided in the JOBS Act. As a result, our financial statements may not be comparable to companies that comply with new or revised accounting pronouncements as of public company effective dates.

For as long as we continue to be an emerging growth company, we also intend to take advantage of certain other exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation and exemptions from the requirements of holding non-binding advisory votes on executive compensation and stockholder approval of any golden parachute payments not previously approved. If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock and our stock price may be more volatile.

The requirements of being a public company will require us to incur increased costs and may strain our resources, divert management’s attention and affect our ability to attract and retain qualified board members.

As a public company, we have incurred and will continue to incur significant legal, accounting and other expenses that we did not incur as a private company. We are subject to the reporting requirements of the Exchange Act which requires, among other things, that we file with the SEC annual, quarterly and current reports with respect to our business and financial condition. In addition, the Sarbanes-Oxley Act, as well as related rules adopted by the SEC and the Nasdaq Global Select Market, impose significant requirements on public companies, including requiring establishment and maintenance of effective disclosure and financial controls and changes in corporate governance practices. Further, under the Dodd-Frank Wall Street Reform and Consumer Protection Act, or the Dodd-Frank Act, the SEC adopted rules and regulations related to corporate governance and executive compensation, such as “say on pay” and proxy access. Emerging growth companies are permitted to implement many of these requirements over a longer period and up to five years following the completion of its initial public offering. We intend to take advantage of this legislation for as long as we are permitted to do so. Once we become required to implement these requirements, we will incur additional compliance-related expenses. Additionally, the SEC and other regulators have continued to adopt new rules and regulations and make additional changes to existing regulations that require our compliance. Stockholder activism, the current political environment and the current high level of government intervention and regulatory reform may lead to substantial new regulations and disclosure obligations, which may lead to additional compliance costs and impact, in ways we cannot currently anticipate, the manner in which we operate our business. We expect the rules and regulations applicable to public companies to continue to increase our legal and financial compliance costs and to make some activities more time-consuming and costly. If these requirements divert the attention of our management and personnel from other business concerns, they could have a material adverse effect on our business, financial condition and results of operations. The increased costs will decrease our net income or increase our net loss and may require us to reduce costs in other areas of our business. Furthermore, these rules and regulations could make it more difficult or more costly for us to obtain certain types of insurance, including director and officer liability insurance, and we may be forced to accept reduced policy limits and coverage or incur substantially higher costs to obtain the same or similar coverage. The impact of these requirements could also make it more difficult for us to attract and retain qualified persons to serve on our board of directors, our board committees or as executive officers. We cannot predict or estimate the amount or timing of additional costs we may incur to respond to these requirements.

~~Risks Related to Ownership of Our Common Stock~~

~~Our share price has been and may continue to be highly volatile, and you could lose all or part of your investment.~~

The market price of our common stock following our IPO has been and is likely to continue to be highly volatile and could be subject to wide fluctuations in response to many factors discussed in this “Risk Factors” section, including:

~~actual or anticipated fluctuations in our financial condition and operating results, including fluctuations in our quarterly and annual results;~~

~~announcements of innovations by us or our competitors;~~

~~overall conditions in our industry and the markets in which we operate;~~

~~market conditions or trends in the packaged food sales industry or in the economy as a whole;~~

~~addition or loss of significant customers or other developments with respect to significant customers;~~

~~adverse developments concerning our manufacturers or suppliers;~~

~~changes in laws or regulations applicable to our products;~~

~~our ability to effectively manage our growth;~~

~~actual or anticipated changes in our growth rate relative to our competitors;~~

~~announcements by us or our competitors of significant acquisitions, strategic partnerships, joint ventures or capital commitments;~~

~~additions or departures of key personnel;~~

~~competition from existing products or new products that may emerge;~~

~~issuance of new or updated research or reports about us or our industry, or positive or negative recommendations or withdrawal of research coverage by securities analysts;~~

~~our failure to meet the estimates and projections of the investment community or that we may otherwise provide to the public;~~

~~fluctuations in the valuation of companies perceived by investors to be comparable to us;~~

~~disputes or other developments related to proprietary rights, including patents, and our ability to obtain intellectual property protection for our products;~~

~~litigation or regulatory matters;~~

~~announcement or expectation of additional financing efforts;~~

~~our cash position;~~

~~sales of our common stock by us or our stockholders;~~

~~share price and volume fluctuations attributable to inconsistent trading volume levels of our common stock;~~

~~the expiration of contractual lock-up agreements with our executive officers, directors and stockholders;~~

~~changes in accounting practices;~~

~~ineffectiveness of our internal controls;~~

~~general economic, market and political conditions; and~~

~~other events or factors, many of which are beyond our control.~~

Furthermore, the stock markets have experienced price and volume fluctuations that have affected and continue to affect the market prices of equity securities of many companies. These fluctuations often have been unrelated or disproportionate to the operating performance of those companies. These broad market and industry fluctuations, as well as general economic, political and market conditions such as recessions, interest rate changes, tariffs or international currency fluctuations, may negatively impact the market price of our common stock. In the past, companies that have experienced volatility in the market price of their stock have been subject to securities class action litigation. We may be the target of this type of litigation in the future. Securities litigation against us could result in substantial costs and divert our management’s attention from other business concerns, which could seriously harm our business and adversely affect our results of operations.

~~An active trading market may not be sustained.~~

You may not be able to sell your shares quickly or at a recently reported market price if trading in our common stock does not remain active. The lack of an active market may also reduce the fair market value of your shares. An inactive market may also impair our ability to raise capital to continue to fund operations by selling shares and may impair our ability to acquire other companies or technologies by using our shares as consideration.

~~Future sales of our common stock in the public market could cause our share price to fall.~~

Sales of a substantial number of shares of our common stock in the public market could occur at any time. These sales, or the perception in the market that the holders of a large number of shares of common stock intend to sell shares, could reduce the market price of our common stock. Moreover, holders of a substantial number of shares of our common stock have rights, subject to certain conditions, to require us to file registration statements covering their shares or to include their shares in registration statements that we may file for ourselves or other stockholders. We also have registered all shares of common stock that we may issue under our equity compensation plans or that are issuable upon exercise of outstanding options. These shares can be freely sold in the public market upon issuance and once vested, subject to volume limitations applicable to affiliates. If any of these additional shares are sold, or if it is perceived that they will be sold, in the public market, the market price of our common stock could decline.

If securities or industry analysts issue an adverse or misleading opinion regarding our business or do not publish research or publish unfavorable research about our business, our stock price and trading volume could decline.

The trading market for our common stock will be influenced by the research and reports that industry or securities analysts publish about us or our business. If one or more of these analysts does not initiate coverage over us, ceases coverage of our company or fails to publish reports on us regularly, we could lose visibility in the financial markets, which in turn could cause our stock price or trading volume to decline. Moreover, if any of the analysts who cover us issue an adverse or misleading opinion regarding us, our business model or our stock performance, or if our operating results fail to meet the expectations of the investor community, one or more of the analysts who cover our company may change their recommendations regarding our company, and our stock price could decline.

We have never paid dividends on our capital stock and we do not intend to pay dividends for the foreseeable future. Consequently, any gains from an investment in our common stock will likely depend on whether the price of our common stock increases.

We have never declared or paid any dividends on our common stock and do not intend to pay any dividends in the foreseeable future. We anticipate that we will retain all of our future earnings for use in the operation of our business and for general corporate purposes. Accordingly, investors should rely on sales of their common stock after price appreciation, which may never occur, as the only way to realize any future gains on their investments.

~~Our charter documents and Delaware law could prevent a takeover that stockholders consider favorable and could also reduce the market price of our stock.~~

Our restated certificate of incorporation and our amended and restated bylaws contain provisions that could delay or prevent a change in control of our company. These provisions could also make it more difficult for stockholders to elect directors and take other corporate actions. These provisions include:

~~providing for a classified board of directors with staggered, three-year terms;~~

~~authorizing our board of directors to issue preferred stock with voting or other rights or preferences that could discourage a takeover attempt or delay changes in control;~~

~~prohibiting cumulative voting in the election of directors;~~

~~providing that vacancies on our board of directors may be filled only by a majority of directors then in office, even though less than a quorum;~~

prohibiting the adoption, amendment or repeal of our amended and restated bylaws or the repeal of the provisions of our restated certificate of incorporation regarding the election and removal of directors without the required approval of at least 66.67% of the shares entitled to vote at an election of directors;

~~prohibiting stockholder action by written consent;~~

~~limiting the persons who may call special meetings of stockholders; and~~

~~requiring advance notification of stockholder nominations and proposals.~~

These provisions may frustrate or prevent any attempts by our stockholders to replace or remove our current management by making it more difficult for stockholders to replace members of our board of directors, which is responsible for appointing the members of our management. In addition, the provisions of Section 203 of the Delaware General Corporate Law, or the DGCL, govern us. These provisions may prohibit large stockholders, in particular those owning 15% or more of our outstanding voting stock, from merging or combining with us for a certain period of time without the consent of our board of directors.

These and other provisions in our restated certificate of incorporation and our amended and restated bylaws and under Delaware law could discourage potential takeover attempts, reduce the price investors might be willing to pay in the future for shares of our common stock and result in the market price of our common stock being lower than it would be without these provisions.

~~Insiders’ stock ownership could have an impact on matters requiring stockholder approval.~~

Our directors and executive officers and their affiliates beneficially own, in the aggregate, approximately 11.0% of our outstanding capital stock as of November 11, 2019. As a result, these stockholders may be able to exercise influence over matters requiring stockholder approval, including the election of directors and approval of significant corporate transactions, such as a merger or other sale of our company or its assets. This concentration of ownership could limit stockholders’ ability to influence corporate matters and may have the effect of delaying or preventing a third party from acquiring control over us.

Our restated certificate of incorporation provides that the Court of Chancery of the State of Delaware and the federal district courts of the United States of America will be the exclusive forums for substantially all disputes between us and our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers, or employees.

~~Our restated certificate of incorporation provides that the Court of Chancery of the State of Delaware is the exclusive forum for:~~

~~any derivative action or proceeding brought on our behalf;~~

~~any action asserting a claim of breach of a fiduciary duty owed by, or other wrongdoing by, any of our directors, officers, employees or agents or our stockholders;~~

~~any action asserting a claim against us arising under the DGCL, our restated certificate of incorporation, or our amended and restated bylaws; and~~

~~any action asserting a claim against us that is governed by the internal-affairs doctrine;~~

provided, that with respect to any derivative action or proceeding brought on our behalf to enforce any liability or duty created by the Exchange Act or the rules and regulations thereunder, the exclusive forum will be the federal district courts of the United States of America. Our restated certificate of incorporation further provides that the federal district courts of the United States of America will be the exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act.

These exclusive forum provisions may limit a stockholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with us or our directors, officers, or other employees, which may discourage lawsuits against us and our directors, officers and other employees. If a court were to find either exclusive forum provision in our restated certificate of incorporation to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving the dispute in other jurisdictions, which could seriously harm our business. For example, the Court of Chancery of the State of Delaware determined in December 2018 that the exclusive forum provision of federal district courts of the United States of America for resolving any complaint asserting a cause of action arising under the Securities Act is not enforceable. However, this decision may be reviewed and ultimately overturned by the Delaware Supreme Court. If the Court of Chancery’s decision were to be overturned, we would enforce the federal district court exclusive forum provision in our amended and restated certificate of incorporation.

~~Our ability to utilize our federal net operating loss and tax credit carryforwards may be limited under Sections 382 and 383 of the Internal Revenue Code of 1986, as amended, or the Code.~~

The limitations apply if a corporation undergoes an “ownership change,” which is generally defined as a greater than 50 percentage point change (by value) in its equity ownership by certain stockholders over a three-year period. If we have experienced an ownership change at any time since our incorporation, we may already be subject to limitations on our ability to utilize our existing net operating losses and other tax attributes to offset taxable income. In addition, future changes in our stock ownership, which may be outside of our control, may trigger an ownership change and, consequently, Section 382 and 383 limitations. Similar provisions of state tax law may also apply to limit our use of accumulated state tax attributes. As a result, if we earn net taxable income, our ability to use our pre-change net operating loss carryforwards and other tax attributes to offset such taxable income may be subject to limitations, which could potentially result in increased future income tax liability to us.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

~~Unregistered Sales of Equity Securities~~

None.

~~Use of Proceeds from our Initial Public Offering of Common Stock~~

~~As previously reported, we received approximately $252.4 million of net proceeds from our initial public offering which closed on May 6, 2019.~~

On August 5, 2019, we closed our secondary offering, in which we sold 250,000 shares of common stock and the selling stockholders sold 3,487,500 shares, including 487,500 shares sold in connection with the exercise of the underwriters' option to purchase additional shares, at a price to the public of $160.00 per share. We received approximately $37.5 million in net proceeds after deducting underwriting discounts and commissions and offering expenses of approximately $2.5 million. None of the expenses associated with the secondary offering were paid to directors, officers, persons owning ten percent or more of any class of equity securities, or to their associates, or to our affiliates. Goldman Sachs & Co. LLC, J.P. Morgan Securities LLC, Credit Suisse Securities (USA) LLC, BofA Securities, Inc., Jefferies LLC, William Blair & Company, L.L.C. and Raymond James & Associates, Inc. acted as underwriters for the secondary offering.

Net proceeds from our IPO and secondary offering have been invested in short-term, interest-bearing, investment grade securities. There has been no material change in the expected use of the net proceeds from our IPO as described in our registration statement on Form S-1 (File. No. 333-228453) filed with the SEC which became effective on May 1, 2019 and in the expected use of the net proceeds to us from our secondary offering as described in our registration statement on Form S-1 (File. No. 333-232876) filed with the SEC which became effective on July 31, 2019.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

None.

ITEM 4. MINE SAFETY DISCLOSURES.

Not applicable.

ITEM 5. OTHER INFORMATION.

None.

ITEM 6. EXHIBITS.

EXHIBIT INDEX

Exhibit No.

Exhibit Description

Incorporated by Reference

Filed Herewith

Form

Date

Number

3.1

Restated Certificate of Incorporation.

10-Q

6/12/2019

3.1

3.2

Amended and Restated Bylaws.

10-Q

6/12/2019

3.2

4.1

Form of Common Stock Certificate.

S-1/A

3/27/2019

4.1

4.2

Amended and Restated Investors’ Rights Agreement, dated as of October 5, 2018, by and among the Registrant and the other parties thereto.

S-1

11/16/2018

4.2

31.1

Certification of Chief Executive Officer pursuant to Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

31.2

Certification of Chief Financial Officer pursuant to Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

32.1*

Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

32.2*

Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

101

The following financial statements from the Company's Quarterly Report on Form 10-Q for the quarter ended September 26, 2020 formatted in Inline XBRL: (i) Condensed Consolidated Balance Sheets, (ii) Condensed Consolidated Statements of Operations, (iii) Condensed Consolidated Statements of Comprehensive (Loss) Income, (iv) Condensed Consolidated Statements of Preferred Stock and Stockholders' Equity (Deficit), (v) Condensed Consolidated Statements of Cash Flows, and (vi) Notes to Unaudited Condensed Consolidated Financial Statements, tagged as blocks of text and including detailed tags.

104

Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

_________________

* This certification is deemed not filed for purpose of section 18 of the Exchange Act or otherwise subject to the liability of that section, nor shall it be deemed incorporated by reference into any filing under the Securities Act or the Exchange Act.

EXHIBIT INDEX
Exhibit No. Exhibit Description Incorporated by Reference Filed Herewith
Form Date Number
3.1
Restated Certificate of Incorporation.
10-Q 6/12/2019 3.1

3.2
Amended and Restated Bylaws.
10-Q 6/12/2019 3.2

4.1
Form of Common Stock Certificate.
S-1/A 3/27/2019 4.1

10.1
Amendment No. 1 to PURIS Master Supply Agreement.
X
10.2
Offer Letter dated August 1, 2019 with Sanjay Shah.*
8-K 9/19/2019 10.1

31.1
Certification of Chief Executive Officer pursuant to Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
X
31.2
Certification of Chief Financial Officer pursuant to Rules 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
X
32.1**
Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
X
32.2**
Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
X
101
The following financial statements from the Company's Quarterly Report on Form 10-Q for the quarter ended September 28, 2019 formatted in Inline XBRL: (i) Condensed Balance Sheets, (ii) Condensed Statements of Operations, (iii) Condensed Statements of Convertible Preferred Stock and Stockholders' Equity (Deficit) and (vi) Notes to Condensed Financial Statements, tagged as blocks of text and including detailed tags.

X
104
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

X
_________________
* Indicates management contract or compensatory plan or arrangement.
** This certification is deemed not filed for purpose of section 18 of the Exchange Act or otherwise subject to the liability of that section, nor shall it be deemed incorporated by reference into any filing under the Securities Act or the Exchange Act.

SIGNATURES

Pursuant to the requirements ~~of Section 13 or 15(d)~~ of the Securities Exchange Act of 1934 the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

BEYOND MEAT, INC.

~~Date:~~

~~November 12, 2019~~

~~By:~~

~~/s/ Ethan Brown~~

~~Ethan Brown~~

~~President and Chief Executive Officer~~

~~(Principal Executive Officer)~~

~~Date:~~

Date:

November ~~12, 2019~~9, 2020

By:

/s/ Ethan Brown

Ethan Brown

President and Chief Executive Officer

(Principal Executive Officer)

Date:

November 9, 2020

By:

/s/ Mark J. Nelson

Mark J. Nelson

Chief Financial Officer and Treasurer

(Principal Financial and Accounting Officer)



Delaware			26-4087597
(State or other jurisdiction of ~~Incorporation~~incorporation or organization)			(I.R.S. Employer Identification No.)




TABLE OF CONTENTS
			Page
Part I. Financial Information
Item 1. Financial Statements (Unaudited):			1
Condensed Consolidated Balance Sheets			1
Condensed Consolidated Statements of Operations			3
Condensed Consolidated Statements of Comprehensive (Loss) Income			4
Condensed Consolidated Statements of Convertible Preferred Stock and Stockholders’ Equity (Deficit)			45
Condensed Consolidated Statements of Cash Flows			6
Notes to Unaudited Condensed Consolidated Financial Statements			8
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			2532
Item 3. Quantitative and Qualitative Disclosures About Market Risk			4054
Item 4. Controls and Procedures			4156
Part II. Other Information
Item 1. Legal Proceedings			4257
Item 1A. Risk Factors			4366
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			6567
Item 3. Defaults Upon Senior Securities			6667
Item 4. Mine Safety Disclosures			6667
Item 5. Other Information			6667
Item 6. Exhibits			6768
~~Exhibit Index~~Signatures			6769
~~Signatures~~			68



BEYOND MEAT, INC.
Condensed Statements of Cash Flows
(In thousands)
(unaudited)
	Nine Months Ended
	September 28, 2019			September 29, 2018
Cash flows from operating activities:
Net loss	$	(11,991	)	$	(22,434	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	5,980			3,046
Share-based compensation expense	5,807			1,090
Loss on sale of fixed assets	—			76
Amortization of debt issuance costs	124			51
Change in preferred and common stock warrant liabilities	12,503			1,253

Net change in operating assets and liabilities:
Accounts receivable	(21,856		)	(8,499		)
Inventories	(30,013		)	(9,627		)
Prepaid expenses and other assets	(1,878		)	(615		)
Accounts payable	20,206			7,670
Accrued expenses and other current liabilities	2,768			3,573
Long-term liabilities	11			39
Net cash used in operating activities	$	(18,339	)	$	(24,377	)

Cash flows used in investing activities:
Purchases of property, plant and equipment	$	(9,515	)	$	(18,250	)
Proceeds from sale of fixed assets	307			104
Purchases of property, plant and equipment held for sale	(7,403		)	—
Payment of security deposits	(542		)	(59		)
Net cash used in investing activities	$	(17,153	)	$	(18,205	)

Cash flows from financing activities:
Proceeds from issuance of common stock pursuant to the initial public offering, net of issuance costs	$	254,868		$	—
Proceeds from issuance of common stock pursuant to the secondary public offering, net of issuance costs	37,937			—
Proceeds from advance deposit for Series H preferred stock offering	—			25,000
Proceeds from Series G preferred stock offering, net of offering costs	—			1,347
Proceeds from bank term loan borrowing	—			20,000
Repayments on revolving credit line	—			(2,500		)
Repayment on term loan	—			(1,000		)
Proceeds from payoff of notes receivable for restricted stock purchase	—			951
(continued on the next page)



BEYOND MEAT, INC.
Condensed Statements of Cash Flows
(In thousands)
(unaudited)
	Nine Months Ended
	September 28, 2019			September 29, 2018
Proceeds from revolving credit line	—			6,000
Proceeds from equipment loan borrowing	—			5,000
Repayment of Missouri Note	—			(1,450		)
Payments of capital lease obligations	(31		)	(143		)
Proceeds from exercise of stock options	898			1,128
Payments of deferred offering costs	—			(492		)
Payment for repurchase of common stock	—			(514		)
Net cash provided by financing activities	$	293,672		$	53,327
Net increase in cash and cash equivalents	$	258,180		$	10,745
Cash and cash equivalents at the beginning of the period	54,271			39,035
Cash and cash equivalents at the end of the period	$	312,451		$	49,780

Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest	$	2,261		$	356
Taxes	$	21		$	3
Non-cash investing and financing activities:
Capital lease obligations for the purchase of property, plant and equipment	$	—		$	85
Issuance of convertible preferred stock warrants in connection with debt	$	—		$	248
Non-cash additions to property, plant and equipment	$	1,280		$	730
Offering costs, accrued not yet paid	$	487		$	1,301
Non-cash additions to property, plant and equipment held for sale	$	1,019		$	—
Reclassification of warrant liability to additional paid-in capital in connection with the initial public offering	$	14,421		$	—
Conversion of convertible preferred stock to common stock upon initial public offering	$	199,540		$	—
(concluded)


BEYOND MEAT, INC.
Condensed Consolidated Statements of Cash Flows
(In thousands)
(unaudited)
	Nine Months Ended
	September 26, 2020		September 28, 2019
Cash flows from operating activities:
Net loss	$	(27,675)	$	(11,991)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	9,276		5,980
Non-cash lease expense	1,573		—
Share-based compensation expense	20,377		5,807
Loss on sale of fixed assets	218		0
Amortization of debt issuance costs	195		124
Loss on extinguishment of debt	1,538		0
Change in preferred and common stock warrant liabilities	0		12,503
Net change in operating assets and liabilities:
Accounts receivable	10,365		(21,856)
Inventories	(50,263)		(30,013)
Prepaid expenses and other assets	(9,444)		(1,878)
Accounts payable	2,442		20,206
Accrued expenses and other current liabilities	245		2,768
Operating lease liabilities	(1,584)		—
Long-term liabilities	0		11
Net cash used in operating activities	$	(42,737)	$	(18,339)

Cash flows from investing activities:
Purchases of property, plant and equipment	$	(38,048)	$	(9,515)
Proceeds from sale of fixed assets	0		307
Purchases of property, plant and equipment held for sale	(2,288)		(7,403)
Proceeds from note receivable on assets previously held for sale	599		0
Payment of security deposits	(9)		(542)
Net cash used in investing activities	$	(39,746)	$	(17,153)

Cash flows from financing activities:

Proceeds from issuance of common stock pursuant to the initial public offering, net of issuance costs	$	0	$	254,868
Proceeds from issuance of common stock pursuant to the secondary public offering, net of issuance costs	0		37,937






Proceeds from revolving credit facility	50,000		0
Debt issuance costs	(1,224)		0
Debt extinguishment costs	(1,200)		0
Repayment of revolving credit line	(6,000)		0
Repayment of term loan	(20,000)		0







Repayment of equipment loan	(5,000)		0
Principal payments under finance lease obligations	(52)		(31)

(continued on the next page)



☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES ~~AND~~ EXCHANGE ACT OF 1934



☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934



	September 28, 2019		December 31, 2018
Assets
Current assets:
Cash and cash equivalents	$	312,451	$	54,271
Accounts receivable	34,482		12,626
Inventory	60,270		30,257
Prepaid expenses and other current assets	11,742		5,672
Total current assets	418,945		102,826
Property, plant, and equipment, net	35,050		30,527
Other non-current assets, net	846		396
Total assets	$	454,841	$	133,749
Liabilities, Convertible Preferred Stock and Stockholders’ Equity (Deficit):
Current liabilities:
Accounts payable	$	38,348	$	17,247
Wages payable	1,433		1,255
Accrued bonus	3,181		2,312
Accrued expenses and other current liabilities	4,113		2,391
Short-term borrowings under revolving credit line and bank term loan	9,087		—
Short-term capital lease liabilities	30		44
Stock warrant liability	—		1,918
Total current liabilities	$	56,192	$	25,167
Long-term liabilities:
Revolving credit line	$	—	$	6,000
Long-term portion of bank term loan, net	16,503		19,388
Equipment loan, net	4,922		5,000
Capital lease obligations and other long-term liabilities	396		404
Total long-term liabilities	$	21,821	$	30,792
Commitments and Contingencies (Note 9)



	September 28, 2019			December 31, 2018
Convertible preferred stock:
Series A convertible preferred stock, par value $0.0001 per share—no shares and 3,333,500 shares authorized, issued and outstanding as of September 28, 2019 and December 31, 2018	$	—		$	2,000
Series B convertible preferred stock, par value $0.0001 per share—no shares and 4,802,260 shares authorized; no shares and 4,680,565 shares issued and outstanding as of September 28, 2019 and December 31, 2018	—			4,999
Series C convertible preferred stock, par value $0.0001 per share—no shares and 8,076,643 shares authorized; no shares and 8,076,636 shares issued and outstanding as of September 28, 2019 and December 31, 2018	—			14,882
Series D convertible preferred stock, par value $0.0001 per share—no shares and 8,713,207 shares authorized; no shares and 8,713,201 shares issued and outstanding as of September 28, 2019 and December 31, 2018	—			24,948
Series E convertible preferred stock, par value $0.0001 per share—no shares and 4,740,531 shares authorized; no shares and 4,701,449 shares issued and outstanding as of September 28, 2019 and December 31, 2018	—			17,214
Series F convertible preferred stock, par value $0.0001 per share—no shares and 4,866,776 shares authorized; no shares and 4,866,758 shares issued and outstanding as of September 28, 2019 and December 31, 2018	—			29,840
Series G convertible preferred stock, par value $0.0001 per share—no shares and 5,140,257 shares authorized; no shares and 5,114,786 shares issued and outstanding as of September 28, 2019 and December 31, 2018	—			55,658
Series H convertible preferred stock, par value $0.0001 per share—no shares and 4,209,693 shares authorized; no shares and 2,075,216 shares issued and outstanding as of September 28, 2019 and December 31, 2018	—			49,999
Stockholders’ equity (deficit):
Preferred stock, par value $0.0001 per share—500,000 shares authorized, none issued and outstanding	—			—
Common stock, par value $0.0001 per share—500,000,000 shares and 58,669,600 shares authorized at September 28, 2019 and December 31, 2018, respectively; 60,565,840 and 6,951,350 shares issued and outstanding at September 28, 2019 and December 31, 2018, respectively	6			1
Additional paid-in capital	518,485			7,921
Accumulated deficit	(141,663		)	(129,672		)
Total stockholders’ equity (deficit)	$	376,828		$	(121,750	)
Total liabilities, convertible preferred stock and stockholders’ equity (deficit)	$	454,841		$	133,749



	Preferred Stock					Common Stock			Additional Paid-in Capital		Accumulated Deficit			Total
	Shares		Amount			Shares	Amount		Additional Paid-in Capital		Accumulated Deficit			Total
Balance at December 31, 2018	41,562,111		$	199,540		6,951,350	$	1	$	7,921	$	(129,672	)	$	(121,750	)
Net loss	—		—			—	—		—		(6,649		)	(6,649		)
Issuance of common stock through equity incentive plans	—		—			169,583	—		366		—			366
Share-based compensation	—		—			—	—		855		—			855
Balance March 30, 2019	41,562,111		$	199,540		7,120,933	$	1	$	9,142	$	(136,321	)	$	(127,178	)
Net loss	—		—			—	—		—		(9,441		)	(9,441		)
Issuance of common stock pursuant to the initial public offering, net of issuance costs of $4.9 million	—		—			11,068,750	1		252,452		—			252,453
Issuance of common stock upon conversion of convertible preferred stock	(41,562,111	)	(199,540		)	41,562,111	4		199,536		—			199,540
Issuance of common stock upon exercise of common stock warrants	—		—			214,875	—		—		—			—
Reclassification of warrant liability to additional paid-in capital in connection with the initial public offering	—		—			—	—		14,421		—			14,421
Issuance of common stock through equity incentive plans	—		—			200,852	—		167		—			167
Share-based compensation	—		—			—	—		1,823		—			1,823
Balance at June 29, 2019	—		$	—		60,167,521	$	6	$	477,541	$	(145,762	)	$	331,785
Net income	—		—			—	—		—		4,099			4,099
Issuance of common stock pursuant to the secondary public offering, net of issuance costs of $2.5 million	—		—			250,000	—		37,450		—			37,450
Issuance of common stock through equity incentive plans	—		—			148,319	—		365		—			365
Share-based compensation	—		—			—	—		3,129		—			3,129
Balance at September 28, 2019	—		$	—		60,565,840	$	6	$	518,485	$	(141,663	)	$	376,828


Land						Not amortized
Buildings						30 years
Leasehold improvements						Shorter of lease term or estimated useful life
Furniture and fixtures						3 years
Manufacturing equipment						5 to 10 years
Research and development equipment						5 to 10 years
Software and computer equipment						3 years
Vehicles						5 years


•			~~Level 1~~—Unadjusted quoted prices in active markets accessible by the reporting entity for identical assets or liabilities. Active markets are those in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis.


•	~~Level 2~~—Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active and model-derived valuations in which significant value drivers are observable.


•	~~Level 3—Valuations derived from valuation techniques in which significant value drivers are unobservable.~~



	December 31, 2018
	Level 1		Level 2		Level 3		Total
Financial Liabilities:
Preferred stock warrant liability	$	—	$	—	$	1,441	$	1,441
Common stock warrant liability	—		—		477		477
Total	$	—	$	—	$	1,918	$	1,918



	For the Nine Months Ended
(in thousands)	September 28, 2019			September 29, 2018
Beginning balance	$	1,918		$	550
Fair value of warrants issued during the period	—			248
Change in fair value of warrant liability	12,503			1,253
Reclassification of warrant liability to additional paid-in capital in connection with the IPO	(14,421		)	—
Ending balance	$	—		$	2,051


	Nine Months Ended
(in thousands)	September 26, 2020		September 28, 2019
Beginning balance	$	0	$	1,918
Fair value of warrants issued during the period	0		0
Change in fair value of warrant liability	0		12,503
Reclassification of warrant liability to additional paid-in capital in connection with the IPO	0		(14,421)
Ending balance	$	0	$	0



	For the Three Months Ended						For the Nine Months Ended
(in thousands)	September 28, 2019			September 29, 2018			September 28, 2019			September 29, 2018
Net revenues:
Gross Fresh Platform	$	97,995		$	26,815		$	204,523		$	51,530
Gross Frozen Platform	4,007			2,295			14,158			11,549
Less: Discounts	(10,041		)	(2,833		)	(19,263		)	(6,659		)
Net revenues	$	91,961		$	26,277		$	199,418		$	56,420


	September 26, 2020
(in thousands)	Operating Leases		Finance Leases
Remainder of 2020	$	681	$	21
2021	2,886		80
2022	2,814		71
2023	2,331		58
2024	1,495		30
2025	1,281		0
Thereafter	3,913		0
Total undiscounted future minimum lease payments	15,401		260
Less imputed interest	(1,507)		(21)
Total discounted future minimum lease payments	$	13,894	$	239


(in thousands)	Capital Lease Obligations		Operating Lease Obligations
2020	$	86	$	1,878
2021	80		1,813
2022	71		1,817
2023	58		1,840
2024	30		1,353
Thereafter	0		5,167
Total minimum lease payments			$	13,868
Total minimum lease payments	$	325
Less: imputed interest (4.1% to 15.9%)	(34)
Total capital lease obligations	$	291
Less: current portion of capital lease obligations	(72)
Long-term capital lease obligations	$	219



	Number of Stock Options		Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (Years)	Aggregate Intrinsic Value (in thousands)⁽¹⁾
Outstanding at December 31, 2018	5,120,293		$	3.13	7.3	$	81,371
Granted	1,493,105		$	36.61	—	$	—
Exercised	(442,604	)	$	2.06	—	$	33,440
Cancelled/Forfeited	(83,625	)	$	8.67	—	$	—
Outstanding at September 28, 2019	6,087,169		$	11.34	7.3	$	838,191
Vested and exercisable at September 28, 2019	3,233,150		$	1.72	5.7	$	474,955
Vested and expected to vest at September 28, 2019	4,503,505		$	6.27	6.6	$	641,908



	Number of Shares		Weighted Average Grant Date Fair Value Per Share
Unvested at January 1, 2019	—		$	—
Granted	85,222		$	169.48
Vested	(101	)	$	176.04
Unvested at September 28, 2019	85,121		$	169.49


	Number of Shares	Weighted Average Grant Date Fair Value Per Share
Unvested at December 31, 2019	149,004	$	132.73
Granted	198,706	$	105.30
Vested(1)	(52,250)	$	132.99
Cancelled/Forfeited	(11,762)	$	0
Unvested at September 26, 2020	283,698	$	113.73


	Number of Shares of Restricted Stock	Weighted Average Remaining Contractual Life (Years)	Weighted Average Grant Date Fair Value Per Share
Unvested at December 31, 2019	88,988	1.2	$	19.49
Granted	0	—	$	0
Vested/Released	(67,208)	—	$	19.42
Cancelled/Forfeited	0	—	$	0
Unvested at September 26, 2020	21,780	0.7	$	20.00



(1)			Primarily comprised of legal and other expenses associated with the dispute with a co-manufacturer with whom an exclusive supply agreement was terminated in May 2017.
(2)			Comprised of $1.8 million in costs attributable to COVID-19, consisting of $1.1 million in inventory write-offs and reserves associated with foodservice products determined to be unsalable and $0.7 million in repacking costs in the three months ended September 26, 2020, and $10.4 million in costs attributable to COVID-19 consisting of $1.1 million in inventory write-offs and reserves associated with foodservice products determined to be unsalable, $6.6 million in repacking costs and $2.7 million in product donation costs related to our COVID-19 relief efforts in the nine months ended September 26, 2020. Expenses attributable to COVID-19 in the nine months ended September 26, 2020 include $1.2 million in product donation costs related to our COVID-19 relief efforts in the first quarter of 2020, which were not previously included in our Adjusted EBITDA calculation for the three months ended March 28, 2020 as these were deemed immaterial to our first quarter 2020 financial results. Given the significant increase in COVID-19-related expenses in the second and third quarters of 2020, and to facilitate better comparison from period to period, management determined that it was appropriate to recast its previous first quarter 2020 Adjusted EBITDA calculation to include these costs.
(3)			Includes $1.5 million in loss on extinguishment of debt in the nine months ended September 26, 2020.