F&L RECAP SEPT '22

The first two weeks of September had a slow start due to the holiday and summer season but Foundry & Lux was able to turn that around with higher sales than anticipated. The last two weeks had great sales due to the high volume of onsite and offsite caterings. Foundry & Lux supported Chandlery with their first weekend buyout event and ended the month on a high note with CBRE’s employee celebration! Guest count also rose significantly during happy hour which made September a successful month!

BEVERAGE SPECIALS

Passion-tini

Mixed Berry Sangria

ONSITE CATERING & EVENTS

In September, we continued to host multiple groups from Genentech and Stripe for onsite events. We also worked with repeat tenant clients from Maze Therapeutics and GBT.

A variety of other repeat clients, new and old, returned to host events for Mammoth Bio Sciences, ZS Associates, Circle Pharma, Novo Construction, Bio Break.

Companies & their events

Maze Therapeutics party of 13 for lunch and bowling

Mammoth Biosciences party of 25 for happy hour

Genentech party of 15 for happy hour

CA Lifesciences party of 100 for happy hour in the cafe

Circle Pharma, repeat client, party of 10 for breakfast

Novo Construction, repeat client, party of 10 for breakfast meeting ThermoFisher party of 40 for happy hour

Prescient Design/Genentech party of 30 far workshop event

Genentech party of 20 for happy hour

Stripe party of 45 for a team off site

Dolby Laboratories party of 25 for team building

Genentech party of 20 for a business social BioBreak CBO Forum party of 40 for a forum

Azzur Group Science of Socializing™ party of 30 for BioTech networking

Lonza Networking Event Party of 50 for Biotech networking

Stripe party of 45 for happy hour

Bright Rental Sales Team party of 30 for team building

GBT Medical Affairs party of 40 for Happy Hour

CBRE NORCAL Company Picnic for 250 people

ZS Associates party of 20 for a plated dinner

CATERING & EVENTS

In September, we worked closely with CBRE and provided full-service off-site catering for two noteworthy events:

• Tue, 9/12 Full service lunch for the Cove tenant forum, hosted by CBRE in the AstraZeneca conference room. This was the first in-person meeting since 2019.

• Thur, 9/25 - Full-service event coordination and catering for the CBRE Northern California Region company picnic. The event primarily took place on the outdoor amenities court of the Cove, with overflow into the Foundry & Lux lounge.

The weekly off-site hot-boxed lunch service for Roblox continued through September, including two full-service outdoor BBQ lunch events for 200 people.

• Custom hot boxed lunches, every Tuesday Thursday

• Special outdoor lunch events on 9/15 & 9/27

Social

FOUNDRY & LUX

Sales: Sales for the five week period totaled ~$311.7k with a weekly average of ~$62.8k. Additionally, F&L has been producing catering two to three days every week to ROBLOX, totaling an estimated $10k to weekly revenue. ROBLOX has reduced services due to an encouraged hybrid work model. A weekend wedding event at the Chandlery and the large CBRE event contributed the most to revenue.

COGS: Cost of goods is at 22.1% against budgeted 30%. Cost of goods continues to be a moving target due to distribution and vendor challenges. The team has been actively targeting to reduce cost of goods to make up for the rising cost of labor.

Labor: Management monitored labor closely and made as many reductions as possible without impacting service levels. September labor is at 61% against revenue, There have been several resignations and employees out on leave, which has increased the need for temporary labor. Temp labor from an agency has become the industry ‘norm’ for food services and typically have a higher hourly rate to account for fees and the absence of taxes and benefits.

Other Expenses: Total other expenses were at ~20.1%, which is 7% less than the previous period. Expenses included services for the culinary garden, smallware replacements, computer expenses, catering vehicle expenses, insurance, bank and armored car services, computer and POS costs, safety equipment, and a $20k food truck event at ROBLOX. Other expenses were higher than forecasted due to the $25k food truck event at ROBLOX.

Total Losses: Total losses were ~$11k against budgeted losses of ~$17k. YTD total losses are ~$253.1k against budgeted losses of ~$232.6k, Q4 is forecasted to beat budgeted losses and forecasting to finish the year at ~$235.6 in losses against budgeted ~274.2k in losses.

FOUNDRY & LUX ROLLING 3

ASSUMPTIONS FOR FOUNDRY & LUX:

OCTOBER

Four-week period and beginning of Q4. Business is expected to be busy with a large planned tenant event in W4.

NOVEMBER- Four-week period, F&L will be closed 1 day to execute a client event. Business is expected to be busy but are forecasting to be extremely slow W3 & W4 due to holiday season, the operation is planning to run abbreviated services from 11/21 to 11/28 to mitigate losses.

DECEMBER–

Five-week period and business is expected to ramp up. Tenant population at the Cove will reduce significantly the last two weeks of the period , F&L will abbreviate services for those two weeks to minimize operating costs.

Since opening, September has been Chandlery's busiest month, averaging at ~$13.7k per week and totaling ~$68.5k for the fiveweek period. A combination of events, an increase in tenant population, new grab and go offerings, a weekend wedding, and exciting new happy hour food specials contributed to this success. Chandlery used September to get ready to launch online orders, expand lunch and happy hour offerings and add seasonal cocktails & mocktails to the menu. Chandlery began recent marketing efforts to entice repeat business with a promotional drink special and added retail snack options. These add value to meet demand and help increase check averages.

FOOD SPECIALS

BEVERAGE & RETAIL SPECIALS

We added a promotional non-alcoholic beverage: a hibiscuslemonade cooler. This refreshing beverage includedChandlery's house-made lemonade,ginger beer, and hibiscus tea. Thiswas also available through happyhour to be enjoyed with any choiceof spirit.

This month, Chandleryadded 14 more retail optionsto add variety for thetenants. The most popularitems are bobo's oatbars,ocho coconut bars, and dailycrave veggie chips. Toptenant favorites are still chocolove bars and RX bars. Combined over 150+ units sold throughout the month of September.

&

SEPTEMBER MOMENTS

Chandlery hosted its first wedding on September 17th. The restaurant was perfectly suited to this type of event and we received lots of compliments from guests. The ceremony was held in the amenity court, and included live music from a local mariachi, a special menu featuing regional mexican cuisine from Zacatecas,

CHANDLERY

Sales: Sales for the five week period totaled ~$86.5k with a weekly average of ~$13.7k.

COGS: Cost of goods is at 31.8% against budgeted 28%. Cost of goods continues to be a moving target due to distribution challenges and the rising cost of goods. Paper goods are higher than anticipated due to the new law that requires all single use options to be certified compostable.

Labor: Labor is high because of the hourly temp labor. Finding qualified employees for the budgeted payrates is more challenging than ever with additional competing businesses in the area. Currently, Chandlery has 1 and a half salaried managers dedicated to the unit to minimize cost. Because this unit is lacking salaried labor, management has activated F&L’s management to help move the program forward.

Other Expenses: Total other expenses were at 33.3% against revenue. Other expenses include POS equipment, software, licenses, insurance, culinary garden maintenance, and smallwares.

Total Losses: Total losses were ~$47.4 k against budgeted losses of ~$28.1k. Management is working diligently on creating a Total losses YTD is at ~$162.8k against budgeted losses of ~$164.8k.

CHANDLERY ROLLING 3

ASSUMPTIONS FOR CHANDLERY:

OCTOBER Four week period and beginning of Q4. Business is expected to be busy with several catering events but additional operating costs to expand services.

NOVEMBER- Four-week period. Business is expected to be busy but are forecasting to be slower W3 & W4 due to holiday season, the operation is planning to run abbreviated services from 11/21 to 11/28 to mitigate losses.

DECEMBER Five week period and business is expected to ramp up. Tenant population at the Shore will significantly reduce occupancy weeks 4 and 5, Chandlery will be running an abbreviated service week of 12/19 and 12/26. Chandlery will be closed 2 days in week 4 and closed 2 days week 5, resulting is a 3 day work week, to minimize operating losses.