What changed in this filing

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Item 1. Financial Statements

2025-05-12 compared with 2024-11-07 · 256 added, 197 removed, 254 unchanged (64% of the section changed)

3 unchanged sentences

(In thousands of United States dollars, except share data)

September 30, 2024

March 31, 2025

December 31, 2024

1 unchanged sentence

Cash and cash equivalents

Restricted cash

Trade receivables

Income tax receivable

Trade receivables, net

Inventories, net

Other receivables

2 unchanged sentences

Non-current assets

Property, plant and equipment

Property, plant and equipment, net

Intangibles, net

Deferred tax asset

21 unchanged sentences

Common stock, no par value per share - unlimited shares authorized;

112,337,049 shares issued and outstanding at September 30, 2024 and 110,248,929 shares issued and outstanding at December 31, 2023.

112,337,049 shares issued and outstanding at March 31, 2025 and 112,337,049 shares issued and outstanding at December 31, 2024.

Additional paid in capital

1 unchanged sentence

Retained earnings

Total Village Farms International, Inc.

shareholders’ equity

Non-controlling interest

Total shareholders’ equity

4 unchanged sentences

(In thousands of United States dollars, except per share data)

Three Months Ended September 30,

Nine Months Ended September 30,

Three Months Ended March 31,

Cost of sales

2 unchanged sentences

Interest income

Foreign exchange gain (loss)

Other income (loss)

Goodwill and intangible asset impairments

Foreign exchange loss

Loss before taxes

(Provision for) recovery of income taxes

Provision for income taxes

Loss including non-controlling interests

net income attributable to non-controlling interests, net of tax

net loss (income) attributable to non-controlling interests, net of tax

Net loss attributable to Village Farms International, Inc.

6 unchanged sentences

Foreign currency translation adjustment

Comprehensive gain (loss) including non-controlling interests

Comprehensive loss including non-controlling interests

Comprehensive (income) loss attributable to non-controlling interests

Comprehensive gain (loss) attributable to Village Farms International, Inc.

Comprehensive loss attributable to Village Farms International, Inc.

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

2 unchanged sentences

(In thousands of United States dollars, except for shares outstanding)

Three Months Ended September 30, 2024

Three Months Ended March 31, 2025

Number of Common

3 unchanged sentences

Retained Earnings

Non-controlling Interest

Total Shareholders’

Mezzanine Equity

Balance July 1, 2024 as previously reported

Balance July 1, 2024

Balance December 31, 2024

Share-based compensation

Acquisition of non-controlling interest

Cumulative translation adjustment

Net loss income

Balance at September 30, 2024

Three Months Ended September 30, 2023

Balance at March 31, 2025

Three Months Ended March 31, 2024

Number of Common

7 unchanged sentences

Mezzanine Equity

Balance at July 1, 2023

Share-based compensation

Cumulative translation adjustment

Net (loss) income

Balance at September 30, 2023

Nine Months Ended September 30, 2024

Number of Common

Additional Paid in

Accumulated Other

Comprehensive Loss

Retained Earnings

Non-controlling Interest

Total Shareholders’ Equity

Mezzanine Equity

Balance at January 1, 2024 as previously reported

Balance January 1, 2024

Share-based compensation

Acquisition of Redeemable non-controlling interest

Acquisition of non-controlling interest

Cumulative translation adjustment

Net (loss) income

Balance at September 30, 2024

Nine Months Ended September 30, 2023

Number of Common

Additional Paid in

Accumulated Other

Comprehensive (Loss) Income

Retained Earnings

Non-controlling Interest

Total Shareholders’

Mezzanine Equity

Balance at January 1, 2023

Shares issued in public offering, net of issuance costs

Warrants issued in public offering

Shares issued on exercise of stock options

Balance at December 31, 2023 as previously reported

Balance at December 31, 2023

Share-based compensation

1 unchanged sentence

Net (loss) income

Balance at September 30, 2023

Balance at March 31, 2024

The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.

2 unchanged sentences

(In thousands of United States dollars)

Nine Months Ended September 30,

Three Months Ended March 31,

Cash flows provided by (used in) operating activities:

Net loss attributable to Village Farms International, Inc.

Loss including non-controlling interests

Adjustments to reconcile net loss attributable to Village Farms International, Inc.

2 unchanged sentences

Amortization of deferred charges

Net income attributable to non-controlling interest

Interest expense

1 unchanged sentence

Unrealized foreign exchange loss

Goodwill and intangible asset impairments

Non-cash lease expense

2 unchanged sentences

Changes in non-cash working capital items

Net cash provided by operating activities

Cash flows (used in) provided by investing activities:

Net cash used in operating activities

Cash flows used in investing activities:

Purchases of property, plant and equipment

Purchases of intangibles

Repayment of note receivable

Issuance of note receivable

Net cash used in investing activities

Cash flows (used in) provided by financing activities:

Cash flows provided by (used in) financing activities:

Proceeds from borrowings

Repayments on borrowings

Purchase of Non-controlling interest

Proceeds from issuance of common stock and warrants

Issuance costs

Proceeds from exercise of stock options

Net cash (used in) provided by financing activities

Net cash used in financing activities

Effect of exchange rate changes on cash and cash equivalents

Net (decrease) increase in cash, cash equivalents and restricted cash

Net decrease in cash, cash equivalents and restricted cash

Cash, cash equivalents and restricted cash, beginning of period

7 unchanged sentences

Village Farms International, Inc.

(“VFF” and, together with its subsidiaries, the “Company”, “we”, “us”, or “our”) is a corporation existing under the Business Corporations Act (Ontario).

VFF’s principal operating subsidiaries as of September 30, 2024 were Village Farms Canada Limited Partnership, Village Farms, L.P.(together, “Village Farms Fresh” or “VF Fresh”), Pure Sunfarms Corp.

(“VFF” and, together with its subsidiaries, the “Company”, “we”, “us”, or “our”) is a corporation existing under the Ontario Business Corporations Act.

VFF’s principal operating subsidiaries as of March 31, 2025 were Village Farms Canada Limited Partnership, Village Farms, L.P.(together, “Village Farms Fresh” or “VF Fresh”), Pure Sunfarms Corp.

(“Pure Sunfarms”), Balanced Health Botanicals, LLC (“Balanced Health”) and VF Clean Energy, Inc.

4 unchanged sentences

The Company’s shares are listed on Nasdaq Capital Market (“Nasdaq”) under the symbol “VFF”.

Village Farms Fresh owns and operates sophisticated, highly intensive agricultural greenhouse facilities in British Columbia and Texas, where it produces, markets and sells premium-quality tomatoes, bell peppers and cucumbers.

On October 18, 2024, the Company received notification from Nasdaq that it is not in compliance with the minimum bid price requirement for continued listing on the Nasdaq (Nasdaq Listing Rule 5550(a)(2)) (the “Minimum Bid Requirement”) as the bid price for the Company’s common shares (the “Common Shares”) closed below US$ 1.00 from September 6, 2024 to October 17, 2024.

Pursuant to this notification, the Company had an initial 180-calendar day period to regain compliance with the Minimum Bid Requirement which ended on April 16, 2025.

On April 17, 2025, the Company received notification from Nasdaq that the Company’s did not regain compliance with the Minimum Bid Requirement during the initial 180 -calendar day period.

Following this notification, on April 21, 2025, the Company requested, and Nasdaq approved, a 180 -calendar day extension (the "Extension") to regain compliance with the Minimum Bid Requirement.

As a result of the Extension, the Company now has until October 13, 2025 (the “New Compliance Period”) to regain compliance with the Minimum Bid Requirement.

The Extension has no immediate effect on the listing of the Common Shares on the Nasdaq Capital Market.

During the New Compliance Period, the Common Shares will continue to trade on the Nasdaq Capital Market.

If at any time before the end of the New Compliance Period, the bid price of the Common Shares closes at or above US$ 1.00 per share for a minimum of 10 consecutive business days, it is expected that Nasdaq would notify the Company that it has regained compliance with the Minimum Bid Requirement.

In the event the Company does not regain compliance with the Minimum Bid Requirement by the end of the New Compliance Period, the Company may be subject to delisting of its Common Shares from the Nasdaq Capital Market, at which time the Company may request a review of the delisting determination by a Nasdaq Hearings Panel.

We can provide no assurance that the Company would receive a favorable decision from a Nasdaq Hearing Panel after the end of the Compliance Period or that the Common Shares will not be delisted from Nasdaq.

VFF owns and operates sophisticated, highly intensive agricultural greenhouse facilities in British Columbia and Texas, where it produces, markets and sells premium-quality tomatoes, bell peppers and cucumbers.

Its wholly owned subsidiary, Pure Sunfarms, is a vertically integrated licensed producer and supplier of cannabis products sold to customers throughout Canada and internationally.

Through its 80 % ownership interest of Rose, the Company has a substantial presence in the Province of Quebec as a cannabis supplier, producer and commercialization expert.

The Company’s wholly owned subsidiary, Balanced Health, develops and sells high quality, cannabidiol (“CBD”) based products including ingestible, edible and topical applications within the U.S.

Through its 80 % ownership of Rose, the Company has a substantial presence in the Province of Quebec as a cannabis supplier, producer and commercialization expert.

Its wholly owned subsidiary, Leli, is a vertically integrated licensed producer and supplier of cannabis products sold to coffee shops in the Netherlands.

Basis of Presentation

7 unchanged sentences

When necessary, certain prior year amounts have been reclassified to conform with the current period presentation.

Interim period operating results do not necessarily indicate the results that may be expected for any other interim period or for the full fiscal year.

Interim period operating results do not necessarily indicate the results that may be expected for any

VILLAGE FARMS INTERNATIONAL, INC.

Notes to Condensed Consolidated Interim Financial Statements

(In thousands of United States dollars, except per share amounts, unless otherwise noted)

other interim period or for the full fiscal year.

The Company believes that the disclosures made in these condensed consolidated financial statements are adequate to make the information not misleading.

7 unchanged sentences

For equity investees in which the Company has an undivided interest in the assets, liabilities and profits or losses of an unconsolidated entity, but does not exercise control over the entity, the Company consolidates its proportional interest in the accounts of the entity.

Revision of Prior-Period Condensed Consolidated Financial Statements

In connection with the preparation of our 2024 consolidated financial statements, the Company identified an immaterial misstatement in its estimate of its deferred tax asset valuation allowance as of Decembe r 31, 2023.

As a result, retained earnings as of December 31, 2023 decreased by $ 3,000 , reflecting the correction of this item.

Ou r revision had no impact to the Company’s consolidated statement of cash flows.

Additionally, our revision had no impact to the Company’s segment profit measures, compliance with debt covenants, or performance metrics used in the calculation of executive compensation as the impacted line items are excluded from these calculations.

We evaluated the materiality of the impact quantitatively and qualitatively and concluded it was not material to any of the prior periods.

Translations of Foreign Currencies

8 unchanged sentences

All other accounts are remeasured at current exchange rates, with both gains or losses from remeasurement and currency gains or losses from transactions executed in currencies other than the functional currency included in foreign exchange (loss) gain.

VILLAGE FARMS INTERNATIONAL, INC.

Notes to Condensed Consolidated Interim Financial Statements

(In thousands of United States dollars, except per share amounts, unless otherwise noted)

In these condensed consolidated financial statements, “$” means U.S.

dollars and “C$” means Canadians dollars, unless otherwise noted.

Revision of Prior-Period Consolidated Financial Statements

In connection with the preparation of our third quarter 2024 condensed consolidated interim financial statements, the Company identified an immaterial misstatement in its estimate of its deferred tax asset valuation allowance as of the year ended December 31, 2023.

As a result, we recorded a decrease to deferred tax assets as of December 31, 2023 and increase in income tax expense for the year ended December 31, 2023 for $ 3,000 , which decreased total assets and retained earnings as of December 31, 2023 and increased our net loss for the year ended December 31, 2023 by $ 3,000 .

Our revision had no impact to the Company’s consolidated statement of cash flows.

Additionally, our revision had no impact to the Company’s segment profit measure, compliance with debt covenants, or performance metrics used in the calculation of executive compensation as the impacted line items are excluded from these calculations.

We evaluated the materiality of the impact quantitatively and qualitatively and concluded it was not material to any of the prior periods.

The exchange rates used to translate from Canadian dollars to U.S dollars is shown below:

March 31, 2025

March 31, 2024

December 31, 2024

Three-month period ended

General Economic, Regulatory and Market Conditions

The Company has experienced, and may continue to experience, direct and indirect negative effects on its business and operations from negative economic, regulatory and market conditions, including inflationary effects on fuel prices, labor and materials costs, elevated interest rates, potential recessionary impacts and supply chain disruptions that could negatively affect demand for new projects and/or delay existing project timing or cause increased project costs.

The Company has experienced, and may continue to experience, direct and indirect negative effects on its business and operations from negative economic, regulatory and market conditions, including inflationary effects on fuel prices, labor and materials costs, elevated interest rates, tariffs, potential recessionary impacts and supply chain disruptions that could negatively affect demand for new projects and/or delay existing project timing or cause increased project costs.

The extent to which general economic, regulatory and market conditions could affect the Company’s business, operations and financial results is uncertain as it will depend upon numerous evolving factors that management may not be able to accurately predict, and, therefore, any future impacts on the Company’s business, financial condition and/or results of operations cannot be quantified or predicted with specificity.

1 unchanged sentence

No accounting pronouncements recently issued or newly effective have had, or are expected to have, a material impact on the Company’s condensed consolidated financial statements.

VILLAGE FARMS INTERNATIONAL, INC.

Notes to Condensed Consolidated Interim Financial Statements

(In thousands of United States dollars, except per share amounts, unless otherwise noted)

Inventories consisted of the following as of:

Classification

September 30, 2024

March 31, 2025

December 31, 2024

4 unchanged sentences

Purchased produce inventory

The Company’s produce and cannabis revenue transactions consist of a single performance obligation to transfer promised goods at a fixed price.

Quantities to be delivered to the customer are determined at a point near the date of delivery through purchase orders received from the customer.

The Company recognizes revenue when it has fulfilled a performance obligation, which is typically when the customer receives the goods.

Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring the goods.

The amount of revenue recognized is measured at the fair value of the consideration received or receivable, reduced for excise duty, returns, and other customer credits, such as trade discounts and volume rebates.

Payment terms are consistent with terms standard to the markets the Company serves.

The following table disaggregates the Company’s net revenue by major source for the three months ended:

Classification

March 31, 2025

March 31, 2024

International

Netherlands Cannabis

Total Revenue

(1) Branded revenues are shown net of excise tax on products.

For the three months ended March 31, 2025 and 2024 excise tax on products was $ 13,947 and $ 19,703 , respectively.

PROPERTY, PLANT AND EQUIPMENT

1 unchanged sentence

Classification

September 30, 2024

March 31, 2025

December 31, 2024

4 unchanged sentences

Property, plant and equipment, net

Depreciation expense on property, plant and equipment, was $ 3,517 and $ 3,728 for the three months ended March 31, 2025 and 2024, respectively.

Capitalized interest was $ 188 and $ 287 for the three months ended March 31, 2025 and 2024 , respectively.

VILLAGE FARMS INTERNATIONAL, INC.

1 unchanged sentence

(In thousands of United States dollars, except per share amounts, unless otherwise noted)

Depreciation expense on property, plant and equipment, was $ 4,360 and $ 12,108 for the three and nine months ended September 30, 2024, respectively, and $ 3,208 and $ 9,365 for the three and nine months ended September 30, 2023, respectively.

Capitalized interest was $ 260 and $ 825 for the three and nine months ended September 30, 2024 , respectively, and $ 323 and $ 965 for the three and nine months ended September 30, 2023, respectively .

On September 24, 2024 , the Company acquired the remaining 15 % equity ownership interest in Leli for a total cash purchase price of approximately $ 801 , which resulted in a reduction of non-controlling interest of ($ 489 ) and a decrease in additional paid in capital of ($ 312 ).

The Company's ownership interest in Leli is now 100 %.

On May 29, 2024 , the Company entered into a Share Purchase Agreement with Rose and non-controlling shareholders for the acquisition of an additional 10 % interest in Rose for a total cash purchase price of approximately $ 3,016 , which resulted in a reduction of mezzanine equity of ($ 5,209 ) and an increase in additional paid in capital of $ 2,193 .

The Company's ownership interest in Rose is now 80 %.

GOODWILL AND INTANGIBLE ASSETS

The following table presents the changes in the carrying value of goodwill by reportable segment for the nine months ended September 30, 2024:

The following table presents the changes in the carrying value of goodwill by reportable segment for the three months ended March 31, 2025:

Cannabis - Canada

Cannabis - United States

Balance as of January 1, 2024

Balance as of December 31, 2024

Foreign currency translation adjustment

Balance as of September 30, 2024

Balance as of March 31, 2025

Intangible Assets

1 unchanged sentence

Classification

September 30, 2024

March 31, 2025

December 31, 2024

5 unchanged sentences

* Includes indefinite-lived intangible assets

The expected future amortization expense for definite-lived intangible assets as of September 30, 2024 was as follows:

The expected future amortization expense for definite-lived intangible assets as of March 31, 2025 was as follows:

Fiscal period

1 unchanged sentence

Intangibles, net

Amortization expense for intangibles for the three months ended March 31, 2025 and 2024 were $ 794 and $ 830 , respectively.

Assessment for Indicators of Impairment

1 unchanged sentence

The Company considers external and internal factors, including overall financial performance and relevant entity-specific factors, as part of this assessment.

VILLAGE FARMS INTERNATIONAL, INC.

Notes to Condensed Consolidated Interim Financial Statements

(In thousands of United States dollars, except per share amounts, unless otherwise noted)

During the nine months ended September 30, 2024 and 2023, the Company considered qualitative factors in assessing for impairment indicators for the Company’s U.S.

During the three months ended March 31, 2025 and 2024, the Company considered qualitative factors in assessing for impairment indicators for the Company’s U.S.

and Canadian Cannabis segments.

Cannabis - U.S.

At June 30, 2024, when the Company considered qualitative factors in assessing impairment indicators, it concluded that the Company's U.S.

- Cannabis segment more likely than not was impaired.

The Company reviewed the reportable segment's assets, including goodwill and intangible assets.

Based on recent historical performance during the quarter which underperformed relative to budget, a revised June 30, 2024 forecast which resulted in a shortfall compared to the March 31, 2024 forecast, the new restrictions on CBD sales in an additional eight states at July 1, 2024, and the proliferation of unregulated hemp-derived products on the market which continues to challenge market share for the CBD industry, the Company concluded that as of June 30, 2024, the fair value of the brand intangible asset and goodwill was fully impaired and an impairment charge to goodwill of $ 10,039 and a charge to intangibles of $ 1,900 was allocated to the U.S.

Cannabis reporting unit.

Cannabis - U.S.

The fair value of the reporting unit was determined based on a discounted cash flow projection using projections for the remainder of 2024 to 2028 with an average revenue growth rate of 6 % between 2025 to 2028 , followed by a terminal growth rate of 2 %.

Management concluded that as of June 30, 2024, the fair value was lower than its carrying amount and as a result, an impairment charge to goodwill of $ 10,039 was recorded to the reporting unit.

The significant assumptions applied to the determination of the fair value are described below:

Post-tax discount rate:

A market participant post-tax discount rate applied to the after-tax forecast cash flows was 12 %.

A decrease of 1 % to the discount rate, would not result in a material change to the impairment charge.

Terminal growth rate:

An increase of 1 % in the terminal growth rate would not result in a material change to the impairment charge.

Future cash flows:

An increase in future cash flows by 10 % would not result in a material change to the impairment charge.

Cannabis – U.S.

The fair value of the brand was determined based on a discounted cash flow projection.

Specifically, the Company utilized a relief from royalty valuation technique to arrive at the fair value of the brand.

Management concluded that as of June 30, 2024, the fair value was lower than its carrying value of $ 1,900 as the notional brand maintenance costs exceeded

At March 31, 2025 and 2024 , the Company concluded that no impairment indicators existed as no events or circumstances occurred that would, more likely than not, reduce the fair value of the reporting units to be below their carrying amounts.

VILLAGE FARMS INTERNATIONAL, INC.

1 unchanged sentence

(In thousands of United States dollars, except per share amounts, unless otherwise noted)

the incremental royalty of 3.5 %.

Therefore, an impairment charge to the brand intangible of $ 1,900 was allocated to the reporting unit.

Cannabis - Canada

At September 30, 2024, when the Company considered qualitative factors in assessing impairment indicators for Canadian Cannabis, it concluded that no impairment indicators existed as no events or circumstances occurred that would, more likely than not, reduce the fair value of the reporting units to be below their carrying amounts.

At September 30, 2023 , the Company concluded that no impairment indicators existed as no events or circumstances occurred that would, more likely than not, reduce the fair value of the reporting units to be below their carrying amounts.

LINE OF CREDIT AND LONG-TERM DEBT

The following table provides details for the carrying values of debt as of:

September 30, 2024

March 31, 2025

December 31, 2024

Term Loan - ("FCC Loan") - repayable by monthly principal payments of $ 164 and accrued interest at a rate of 8.81 %;

Term Loan - (“FCC Term Loan”) - repayable by monthly principal payments of $ 164 and accrued interest at Secured Overnight Financing Rate (“SOFR” ) plus an applicable margin per annum ( 7.87 % at March 31, 2025);

matures May 3, 2027

Term Loan - Pure Sunfarms - C$ 19.0 M - Canadian prime interest rate plus an applicable margin, repayable in quarterly payments equal to 2.50 % of the outstanding principal amount, interest rate of 8.45 %;

matures February 7, 2026

Term loan - Pure Sunfarms - C$ 25.0 M - Canadian prime interest rate plus an applicable margin, repayable in quarterly payments equal to 2.50 % of the outstanding principal amount, interest rate of 8.45 %;

matures February 7, 2026

BDC Facility - Pure Sunfarms - non-revolving demand loan repayable by monthly principal payments of C$ 52 and accrued interest at a rate of 10.20 %, matures December 31, 2031

The Company’s line of credit with Bank of Montreal ("Operating Loan") had $ 4,000 drawn on the facility as of September 30, 2024 and December 31, 2023.

The carrying value of the assets and securities pledged as collateral for the FCC Loan as of September 30, 2024 and December 31, 2023 was $ 74,942 and $ 117,293 , respectively.

The carrying value of the assets pledged as collateral for the Operating Loan as of September 30, 2024 and December 31, 2023 was $ 23,233 and $ 28,034 , respectively.

The Pure Sunfarms line of credit had a balance of $ 0 as of September 30, 2024 and December 31, 2023.

The Company is required to comply with financial covenants, measured either quarterly or annually depending on the covenant.

The Company was in compliance with all its credit facility covenants as of September 30, 2024.

The weighted average annual interest rate on short-term borrowings as of September 30, 2024 and December 31, 2023 was 9.21 % and 9.44 % , respectively.

Accrued interest payable on all long-term debt as of September 30, 2024 and December 31, 2023 was $ 405 and $ 390 , respectively, and these amounts are included in accrued liabilities in the Condensed Consolidated Statements of Financial Position.

Term Loan - ("Pure Sunfarms Non-Revolving Facility") - C$ 19.0 M - Canadian prime interest rate plus an applicable margin ( 6.95 % as of March 31, 2025), repayable in quarterly payments equal to 2.50 % of the outstanding principal amount, matures February 7, 2026

Term loan - ("Pure Sunfarms Term Loan") - C$ 25.0 M - Canadian prime interest rate plus an applicable margin ( 6.95 % as of March 31, 2025), repayable in quarterly payments equal to 2.50 % of the outstanding principal amount, matures February 7, 2026

Term Loan - (Pure Sunfarms "BDC Facility") - non-revolving demand loan repayable by monthly principal payments of C$ 52 and accrued interest at Canadian prime interest rate plus an applicable margin ( 8.70 % at March 31, 2025), matures December 31, 2031

Less current maturities

Total long-term debt

As collateral for the FCC Term Loan, the Company has provided promissory notes and a first priority security interest over its accounts receivable and inventory.

In addition, the Company has granted full recourse guarantees and security therein.

The carrying value of the assets and securities pledged as collateral for the FCC Term Loan as of March 31, 2025 and December 31, 2024 was $ 69,613 and $ 77,682 , respectively.

On April 10, 2025, the Company entered into an Amended and Restated Credit Agreement (the “A&R Credit Agreement”) with Farm Credit Canada (“FCC”) as the lender, which amended and restated the terms of the FCC Term Loan.

Among other things, the A&R Credit Agreement (i) adds the Company as a new borrower, (ii) adds VF Clean Energy, Inc.

as a new guarantor, and (iii) provides more favorable financial covenants.

As of March 31, 2025, the PSF Non-Revolving Facility was secured by the Delta 2 and Delta 3 greenhouse facilities and contained customary financial and restrictive covenants.

The Company has a revolving line of credit agreement with a Canadian chartered bank (the "Operating Loan") maturing May 2027.

The Operating Loan can be drawn in advances of up to C$ 10,000 , had an outstanding balance of $ 5,000 and $ 4,000 drawn on the facility as of March 31, 2025 and December 31, 2024, respectively, and future availability of $ 2,588 on March 31, 2025 .

Interest under the Operating Loan is payable at the Canadian prime rate plus an applicable margin per annum ( 7.87 % at March 31, 2025), payable monthly.

The carrying value of the assets pledged as collateral for the Operating Loan as of March 31, 2025 and December 31, 2024 was $ 23,755 and $ 27,136 , respectively.

As of March 31, 2025, Pure Sunfarms had a revolving line of credit (the “PSF Revolving Line of Credit”) with a Canadian chartered bank.

The PSF Revolving Line of Credit could be drawn for advances of up to C$ 15,000 and had an outstanding balance of C$ 0 as of March 31, 2025 and December 31, 2024 .

Interest under the PSF Revolving Line of Credit was payable at the Canadian prime rate plus an applicable margin per annum ( 6.95 % at March 31, 2025), payable monthly.

As described below, on April 17, 2025, Pure Sunfarms replaced the Pure Sunfarms Loans and the PSF Revolving Line of Credit with the Pure Sunfarms Secured Credit Facilities (as defined below).

The Company was required to comply with financial covenants, measured either quarterly or annually depending on the covenant.

The Company was in compliance with all its covenants as of March 31, 2025.

VILLAGE FARMS INTERNATIONAL, INC.

1 unchanged sentence

(In thousands of United States dollars, except per share amounts, unless otherwise noted)

The weighted average annual interest rate on short-term borrowings as of March 31, 2025 and December 31, 2024 was 7.81 % and 9.44 % , respectively.

Accrued interest payable on all long-term debt as of March 31, 2025 and December 31, 2024 was $ 353 and $ 271 , respectively, and these amounts are included in accrued liabilities in the Condensed Consolidated Statements of Financial Position.

On April 17, 2025, the Company entered into a secured credit facility with a Canadian chartered bank as administrative agent with an aggregate borrowing capacity of C$ 37.4 million, consisting of a maximum C$ 10.0 million revolving credit facility (the "Pure Sunfarms Revolving Credit Facility"), and a C$ 27.4 million term loan facility (the "Pure Sunfarms Term Loan Facility", and collectively with the Pure Sunfarms Revolving Credit Facility, the "Pure Sunfarms Secured Credit Facilities").

The Pure Sunfarms Secured Credit Facilities are secured by the Delta 2 and Delta 3 greenhouse facilities.

The Pure Sunfarms Secured Credit Facilities were used to replace, and repay remaining outstanding balances on, the Company's (i) Pure Sunfarms Term Loan, (ii) the Pure Sunfarms Non-Revolving Facility, (iii) the BDC Facility, and (iv) the PSF Revolving Line of Credit.

The credit and guarantee agreements related to the Pure Sunfarms Loan, the Pure Sunfarms Non-Revolving Credit Facility, the BDC Facility, and the PSF Revolving Line of Credit were terminated.

The Pure Sunfarms Secured Credit Facilities can be drawn for advances of up to C$ 10.0 million.

The outstanding amount of the Pure Sunfarms Term Loan Facility will be repayable , on a quarterly basis, in an amount equal to C$ 1.0 million.

Any amount remaining unpaid will be due and payable in full on the maturity date, which is on February 7, 2028 .

The loans under the Pure Sunfarms Secured Credit Facilities will accrue interest at a rate equal to, at the company's option, (a) the Canadian Prime Rate plus the applicable margin, or (b) the Canadian Overnight Repo Rate Average plus the applicable margin.

The applicable margin for the Pure Sunfarms Secured Credit Facility is determined based upon the leverage ratio.

The Pure Sunfarms Secured Credit Facilities also contain customary covenants, customary representations and warranties, affirmative covenants, financial covenants and events of default.

In accordance with ASC 470-10-45, Debt, Other Presentation Matters , because the Pure Sunfarms Secured Credit Facilities were issued subsequent to the balance sheet date of March 31, 2025, and because a portion of the Pure Sunfarms Secured Credit Facilities proceeds were used to pay off the Pure Sunfarms Term Loans and the BDC Facility, the Company reclassified the short-term portion of the of the Pure Sunfarms Term Loan, the Pure Sunfarms Non-Revolving Facility, and the BDC Facility on the balance sheet as of March 31, 2025 to long-term, except for the C$ 4.0 million ($ 2.9 million as of March 31, 2025) in current-maturities of long-term debt (which represents payments due in the next 12 months under the Pure Sunfarms Secured Credit Facilities).

The aggregate annual principal maturities of long-term debt for the remainder of 2025 and thereafter are as follows:

1 unchanged sentence

FINANCIAL INSTRUMENTS

The Company’s financial instruments include cash and cash equivalents, trade receivables, minority investments, line of credit, trade payables, accrued liabilities, lease liabilities, note payables and debt.

Financial assets and liabilities are recognized on the consolidated statements of financial position at fair value in a hierarchy for those assets and liabilities measured at fair value on a recurring basis.

At March 31, 2025 and December 31, 2024, the Company’s financial instruments included cash and cash equivalents, trade receivables, minority investments, line of credit, trade payables, accrued liabilities, lease liabilities, and note payables.

The carrying value of cash and cash equivalents, trade receivables, trade payables, and accrued liabilities approximate their fair values due to the short-term maturity of these financial instruments.

The carrying value of line of credit, lease liabilities, notes payable, and debt approximate their fair values due to insignificant changes in credit risk.

Carrying amounts of other long-term financial instruments, excluding the Company's term loans, approximate fair value, since the instruments bear interest at variable or fixed rates which approximate market rates.

For its investments, the Company has selected the practicability election to fair value measurement, under which the investment is measured at cost, less impairment, plus or minus observable price changes of an identical or similar investment.

The carrying value of line of credit, lease liabilities, notes payable, and debt approximate their fair values due to the short-term nature of these instruments or the use of market interest rates for debt instruments.

There were no financial instruments categorized as Level 3 at March 31, 2025 and December 31, 2024 , other than the minority investments.

There were no transfers of assets or liabilities between levels during the three months ended March 31, 2025 or March 31, 2024 .

VILLAGE FARMS INTERNATIONAL, INC.

Notes to Condensed Consolidated Interim Financial Statements

(In thousands of United States dollars, except per share amounts, unless otherwise noted)

RELATED PARTY TRANSACTIONS AND BALANCES

The Company leases its Rose office building from a Company employee who also owns a minority interest in Rose.

For the three and nine months ended September 30, 2024, the Company paid C $ 40 and C $ 230 , respectively and for the three and nine months ended September 30, 2023 the Company paid C $ 80 and C $ 172 , respectively, to lease this office space.

One of the Company’s employees is related to a member of the Company’s executive management team and received approximately $ 45 and $ 130 in salary and benefits during the three and nine months ended September 30, 2024, respectively, and $ 42 and $ 103 in salary and benefits during the three and nine months ended September 30, 2023, respectively.

On May 29, 2024, the Company entered into a Share Purchase Agreement with Rose and non-controlling shareholders, which includes two company employees, for the acquisition of an additional 10 % interest in Rose for a total cash purchase price of approximately $ 3,016 (note 4).

The Company has recorded a provision for income taxes of ($ 94 ) and ($ 674 ) for the three and nine months ended September 30, 2024, respectively, compared with a recovery of (provision for) income taxes of $ 1,664 and ($ 269 ) for the same periods last year.

For the three months ended March 31, 2025, the Company paid C $ 36 and for the three months ended March 31, 2024 the Company paid C $ 39 to lease this office space.

One of the Company’s employees is related to a member of the Company’s executive management team and received approximately $ 36 in salary and benefits during the three months ended March 31, 2025 and $ 30 in salary and benefits during the three months ended March 31, 2024 .

The Company has recorded a provision for income taxes of $ 983 for the three months ended March 31, 2025, compared with a provision for income taxes of $ 320 for the same period last year.

The Company’s income tax provision is based on management’s estimate of the effective tax rate for the full year.

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Based on the analysis of all available evidence, both positive and negative, the Company has concluded that it does not have the ability to generate sufficient taxable income in the necessary periods to utilize the entire benefit for its deferred tax assets.

Accordingly, the Company established a valuati on allowance of $ 48,742 as of September 30, 2024 and $ 42,530 as of December 31, 2023.

Accordingly, the Company established a valuati on allowance of $ 50,832 as of March 31, 2025 and $ 48,561 as of December 31, 2024.

The Company cannot presently estimate what, if any, changes to the valuation of its deferred tax assets may be deemed appropriate in the future.

As of March 31, 2025 , the Company’s net deferred tax assets totaled $ 918 a nd were primarily derived from a tax planning strategy to utilize a portion of its existing net operating loss carryforwards.

SEGMENT AND GEOGRAPHIC INFORMATION

The Company regularly monitors its reportable segments to determine if changes in facts and circumstances would indicate whether changes in the determination or aggregation of operating segments are necessary.

In the fourth quarter of 2024, the Company determined that Leli had met the quantitative threshold to be a reportable segment.

In addition, during the fourth quarter of 2024, the chief operating decision-maker (“CODM”) changed the segment profit measure to operating income or loss from gross margin.

We believe that segment operating (loss) income is a more useful measure because it allows management, analysts, investors, and other interested parties to evaluate the profitability of our business operations before the effects of certain expenses that directly arise from non-operating activities (other income/expense), financing decisions (interest), and tax strategies (income taxes).

These changes have been applied to all periods presented.

Segment reporting is prepared on the same basis that the Company’s Chief Executive Officer , who is the CODM, manages the business, makes operating decisions and assesses performance.

Management has determined that the Company operates in five reportable segments:

Produce, Cannabis-Canada, Cannabis-U.S., Clean Energy, and Cannabis - Netherlands (previously Leli).The Produce segment produces, markets and sells premium quality tomatoes, bell peppers and cucumbers.

The Cannabis-Canada segment produces and supplies cannabis products to be sold to other licensed providers and provincial governments across Canada and internationally.

The Cannabis-U.S.

segment develops and sells high-quality, CBD-based health and wellness products including ingestible, edible and topical applications across the United States.

The Clean Energy business receives a royalty representing a portion of the natural gas that is sold to one customer pursuant to its long-term contract.

The Cannabis - Netherlands segment produces and supplies cannabis products in the Netherlands, supplying designated coffee shops.

The accounting policies of the segments are the same as those described in the summary of business, basis of presentation and significant accounting policies.

The Company evaluates performance for all of its reportable segments based on segment operating (loss) income from operations.

VILLAGE FARMS INTERNATIONAL, INC.

1 unchanged sentence

(In thousands of United States dollars, except per share amounts, unless otherwise noted)

As of September 30, 2024, the Company’s net deferred tax assets totaled $ 1,201 a nd were primarily derived from a tax planning strategy to utilize a portion of its existing net operating loss carryforwards.

SEGMENT AND GEOGRAPHIC INFORMATION

Segment reporting is prepared on the same basis that the Company’s Chief Executive Officer, who is the Company’s Chief Operating Decision Maker, assesses performance and allocates resources.

As of September 30, 2024 , the Company’s four segments are as follows:

The Produce segment produces, markets, and sells premium quality tomatoes, bell peppers and cucumbers.

For all of its reportable segments, the CODM uses segment operating (loss) income to allocate resources (including employees, property, and financial or capital resources) for each segment, predominantly in the annual budget and forecasting process.

The CODM considers budget-to-actual variances on a monthly basis for the (loss) income when making decisions about allocating capital and personnel to the segments.

The CODM also uses segment (loss) income to assess the performance for each segment by comparing the results with one another.

The following tables reflect the reconciliation of segment revenue, measures of a segments profit or loss, and significant segment expenses reconciled to the consolidated loss before income taxes:

For the Three Months Ended March 31, 2025

Cannabis Canada

The Cannabis – Canada segment produces and supplies cannabis products to be sold to other licensed providers and provincial governments across Canada and internationally.

Cannabis – United States

The Cannabis – United States segment develops and sells high-quality, CBD-based health and wellness products including ingestible, edible and topical applications.

The Energy business receives a royalty from a renewable natural gas facility that is located in Delta, B.C.

The Company’s primary operations are in the United States and Canada.

Segment information is summarized below:

Three months ended September 30,

Nine Months Ended September 30,

Cannabis U.S.

Cannabis Netherlands

Sales to external customers

Cost of sales

Selling, general and administrative expenses

Segment operating (loss) income

Reconciliation of segment operating (loss) income to net loss before taxes

Other expense, net (2)

Other corporate expenses (3)

Loss before taxes

For the Three Months Ended March 31, 2024

Cannabis Canada

Cannabis - United States

Cannabis U.S.

Cannabis Netherlands

Sales to external customers

Cost of sales

Selling, general and administrative expenses

Segment operating income (loss)

Reconciliation of segment operating (loss) income to net loss before taxes

Other expense, net (2)

Other corporate expenses (3)

Loss before taxes

(1) The significant expense categories and amounts align with the segment-level information that is regularly provided to the CODM.

(2) Other income (expense), net is comprised of interest expense, interest income, foreign exchange (loss) gain, other income (expense).

(3) Other corporate expenses are comprised of expenses related to centralized corporate functions such as accounting, treasury, information technology, legal, human services, and internal audit expenses.

The following tables summarizes our interest income, interest expense, depreciation and amortization, other significant noncash items, and expenditures for capital assets by reportable segment:

For the Three Months Ended March 31, 2025

Cannabis Canada

Cannabis - United States

Income (loss) before taxes

Cannabis U.S.

Cannabis Netherlands

Segment Totals

Consolidated Totals

Interest income

Interest expense

Depreciation and amortization

Share based compensation

Other significant noncash items:

Non-cash lease expense

Expenditures for segment assets

VILLAGE FARMS INTERNATIONAL, INC.

Notes to Condensed Consolidated Interim Financial Statements

(In thousands of United States dollars, except per share amounts, unless otherwise noted)

For the Three Months Ended March 31, 2024

Cannabis Canada

Cannabis U.S.

Cannabis Netherlands

Segment Totals

Consolidated Totals

Interest income

Interest expense

Depreciation and amortization

Share based compensation

Other significant noncash items:

Non-cash lease expense

Expenditures for segment assets

The following tables summarizes our total assets by reportable segment:

March 31, 2025

December 31, 2024

Cannabis - Canada

Cannabis - United States

A reconciliation of the Company’s segment Income (loss) before taxes to the Condensed Consolidated Statements of Operations is summarized below:

Three months ended September 30,

Nine Months Ended September 30,

Segment operating income

Other corporate expenses, net

Total income (loss) before taxes

Cannabis - Netherlands

Total assets for reportable segments

Consolidated total

The Company’s primary operations are in the United States and Canada.

The following tables summarizes our assets by geographic location:

March 31, 2025

December 31, 2024

United States

Long-lived assets

March 31, 2025

December 31, 2024

United States

VILLAGE FARMS INTERNATIONAL, INC.

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Basic and diluted net loss per common share is calculated as follows:

Three months ended September 30,

Nine Months Ended September 30,

Three months ended March 31,

Net loss attributable to Village Farms International, Inc.

5 unchanged sentences

SHAREHOLDERS’ EQUITY AND SHARE-BASED COMPENSATION

Share-based compensation expense was $ 875 and $ 3,476 for the three and nine months ended September 30, 2024, respectively, and $ 747 and $ 3,135 for the three and nine months ended September 30, 2023, respectively.

Stock option activity for the nine months ended September 30, 2024 was as follows:

Share-based compensation expense was $ 145 and $ 405 for the three months ended March 31, 2025 and 2024, respectively.

Stock option activity for the three months ended March 31, 2025 was as follows:

Exercise Price

Outstanding at January 1, 2024

Outstanding at December 31, 2024

Forfeited/expired

Outstanding at September 30, 2024

Exercisable at September 30, 2024

Restricted shares activity for the nine months ended September 30, 2024 was as follows:

Outstanding at March 31, 2025

Exercisable at March 31, 2025

Restricted shares activity for the three months ended March 31, 2025 was as follows:

Restricted Stock Grants

Weighted Average Grant Date Fair Value

Outstanding at January 1, 2024

Outstanding at December 31, 2024

Vested and Issued

Outstanding at September 30, 2024

Exercisable at September 30, 2024

On September 3, 2024, the Company granted 600,000 shares to a director of the Company.

Outstanding at March 31, 2025

Exercisable at March 31, 2025

VILLAGE FARMS INTERNATIONAL, INC.

2 unchanged sentences

CHANGES IN NON-CASH WORKING CAPITAL ITEMS AND SUPPLEMENTAL CASH FLOW INFORMATION

Nine Months Ended September 30,

Three Months Ended March 31,

Trade receivables

Lease liabilities

Other receivables

2 unchanged sentences

Accrued liabilities

Lease liabilities

Other assets, net of other liabilities

The Company paid income taxes of $ 0 for the three and nine months ended September 30, 2024 and 2023.

The Company paid interest expense of $ 955 and $ 3,128 for the three and nine months ended September 30, 2024 , respectively, and $ 1,008 and $ 3,645 for the three and nine months ended September 30, 2023 , respectively.

The Company paid income taxes of $ 0 for the three months ended March 31, 2025 and 2024.

The Company paid interest expense of $ 794 and $ 1,062 for the three months ended March 31, 2025 and 2024 , respectively.

SUBSEQUENT EVENTS

The Company evaluated subsequent events and transactions that occurred after the balance sheet date up to the date the condensed consolidated financial statements were available to be issued.

On April 10, 2025, the Company entered into the A&R Credit Agreement with FCC as the lender, which amended and restated the terms of the FCC Term Loan.

Among other things, the A&R Credit Agreement (i) adds the Company as a new borrower, (ii) adds VF Clean Energy, Inc.

as a new guarantor, and (iii) provides more favorable financial covenants.

The Pure Sunfarms Secured Credit Facilities are secured by the Delta 2 and Delta 3 greenhouse facilities.

The Pure Sunfarms Secured Credit Facilities were used to replace, and repay remaining outstanding balances on, the Company's (i) Pure Sunfarms Term Loan, (ii) the Pure Sunfarms Non-Revolving Credit Facility, (iii) the BDC Facility, (iv) and the PSF Revolving Line of Credit.

The credit and guarantee agreements related to the Pure Sunfarms Loan, the Pure Sunfarms Non-Revolving Credit Facility, the BDC Facility, and the PSF Revolving Line of Credit were terminated.

On April 22, 2025, the Company received a favorable settlement of approximately $ 4.4 million, net of transaction costs, relating to the partial recovery of historical operational losses due to the Tomato Brown Rugose Fruit Virus infestation.

On May 12, 2025, the Company entered into a definitive framework agreement with a newly-formed holding company (“Vanguard”), backed by private investment firms, to privatize certain assets and operations of its Fresh Produce segment.

The transaction will create a new, privately held joint venture with Village Farms as a minority owner.

Village Farms is expected to receive $ 40 million in cash proceeds, as well as a 37.9 % equity ownership interest in Vanguard upon closing of the transaction, which is expected to occur during the second quarter of 2025.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements