Item 1. Financial Statements
Item 1. FINANCIAL STATEMENTS
Village Farms International, Inc.
Condensed Consolidated Sta tements of Financial Position
(In thousands of United States dollars, except share data)
(Unaudited)
June 30, 2025
December 31, 2024
ASSETS
Current assets
Cash and cash equivalents
$
59,988
$
24,631
Restricted cash
5,000
—
Trade receivables, net
27,826
22,160
Inventories, net
39,476
41,256
Other receivables
225
247
Prepaid expenses and deposits
4,550
2,806
Current assets of discontinued operations
508
24,919
Total current assets
137,573
116,019
Non-current assets
Property, plant and equipment, net
181,837
175,226
Investments
6,268
2,656
Goodwill
44,544
42,315
Intangibles, net
24,980
25,105
Deferred tax asset
802
1,005
Right-of-use assets
3,728
4,372
Other assets
4,012
2,178
Non-current assets of discontinued operations
—
20,430
Total assets
$
403,744
$
389,306
LIABILITIES
Current liabilities
Line of credit
$
—
$
4,000
Trade payables
11,203
11,254
Current maturities of long-term debt
7,897
8,142
Accrued sales taxes
8,834
8,740
Accrued loyalty program
574
1,029
Accrued liabilities
14,343
8,972
Lease liabilities - current
1,113
1,060
Income tax payable
5,388
51
Other current liabilities
853
1,053
Current liabilities of discontinued operations
1,615
17,918
Total current liabilities
51,820
62,219
Non-current liabilities
Long-term debt
31,206
32,420
Deferred tax liability
19,800
19,940
Lease liabilities - non-current
3,649
4,199
Other liabilities
3,077
2,196
Non-current liabilities of discontinued operations
—
4,374
Total liabilities
109,552
125,348
MEZZANINE EQUITY
Redeemable non-controlling interest
9,855
9,953
SHAREHOLDERS’ EQUITY
Common stock, no par value per share - unlimited shares authorized;
112,644,169 shares issued and outstanding at June 30, 2025 and 112,337,049 shares issued and outstanding at December 31, 2024.
387,350
387,349
Additional paid in capital
30,878
30,604
Accumulated other comprehensive loss
( 8,669
)
( 18,932
)
Retained earnings
( 125,222
)
( 145,016
)
Total shareholders’ equity
284,337
254,005
Total liabilities, mezzanine equity and shareholders’ equity
$
403,744
$
389,306
The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.
2
Village Farms International, Inc.
Condensed Consolidated Statements of O perations and Comprehensive Income (Loss)
(In thousands of United States dollars, except per share data)
(Unaudited)
Three Months Ended June 30,
Six Months Ended June 30,
2025
2024
2025
2024
Sales
$
59,899
$
53,597
$
99,579
$
95,584
Cost of sales
( 37,557
)
( 39,960
)
( 63,057
)
( 70,730
)
Gross profit
22,342
13,637
36,522
24,854
Selling, general and administrative expenses
( 15,411
)
( 17,056
)
( 30,030
)
( 31,306
)
Interest expense
( 814
)
( 901
)
( 1,516
)
( 1,815
)
Interest income
109
322
184
528
Foreign exchange gain (loss)
1,792
( 403
)
1,708
( 1,281
)
Other income
4,430
45
4,451
149
Goodwill and intangible asset impairments
—
( 11,939
)
—
( 11,939
)
Income (loss) before taxes and equity method investment income
12,448
( 16,295
)
11,319
( 20,810
)
Provision for income taxes
( 2,503
)
( 260
)
( 3,486
)
( 580
)
Equity method investment income, net of tax
—
—
—
—
Income (loss) from continuing operations
9,945
( 16,555
)
7,833
( 21,390
)
Income (loss) from discontinued operations, net of tax
16,294
( 7,003
)
11,291
( 4,847
)
Income (loss) including non-controlling interests
26,239
( 23,558
)
19,124
( 26,237
)
Less: net loss (income) attributable to non-controlling interests, net of tax
258
9
670
( 164
)
Net income (loss) attributable to Village Farms International, Inc. shareholders
$
26,497
$
( 23,549
)
$
19,794
$
( 26,401
)
Basic income (loss) per share attributable to Village Farms International, Inc. shareholders from:
Continuing operations
$
0.09
$
( 0.15
)
$
0.08
$
( 0.20
)
Discontinued operations
0.15
( 0.06
)
0.10
( 0.04
)
Basic income (loss) per share attributable to Village Farms International, Inc. shareholders
$
0.24
$
( 0.21
)
$
0.18
$
( 0.24
)
Diluted income (loss) per share attributable to Village Farms International, Inc. shareholders from:
Continuing operations
$
0.10
$
( 0.15
)
$
0.08
$
( 0.20
)
Discontinued operations
0.14
( 0.06
)
0.10
( 0.04
)
Diluted income (loss) per share attributable to Village Farms International, Inc. shareholders
$
0.24
$
( 0.21
)
$
0.18
$
( 0.24
)
Weighted average number of common shares used
in the computation of net income (loss) per share (in thousands):
Basic
112,347
110,960
112,342
110,604
Diluted
112,736
110,960
112,607
110,604
Income (loss) including non-controlling interests
$
26,239
$
( 23,558
)
$
19,124
$
( 26,237
)
Other comprehensive income (loss):
Foreign currency translation adjustment
9,870
( 2,001
)
10,835
( 6,252
)
Comprehensive income (loss) including non-controlling interests
36,109
( 25,559
)
29,959
( 32,489
)
Comprehensive (income) loss attributable to non-controlling interests
( 239
)
117
100
232
Comprehensive income (loss) attributable to Village Farms International, Inc. shareholders
$
35,870
$
( 25,442
)
$
30,059
$
( 32,257
)
The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.
3
Village Farms International, Inc.
Condensed Consolidated Statements of Changes in Shareholders’ Equity and Mezzanine Equity
(In thousands of United States dollars, except for shares outstanding)
(Unaudited)
Three Months Ended June 30, 2025
Number of Common
Shares (in thousands)
Common Stock
Additional Paid in Capital
Accumulated Other Comprehensive (Loss) gain
Retained Earnings
Total Shareholders’
Equity
Mezzanine Equity
Balance April 1, 2025
112,337
$
387,349
$
30,749
$
( 18,042
)
$
( 151,719
)
$
248,337
$
9,616
Share-based compensation
306
—
123
—
—
123
—
Shares issued on exercise of warrants
1
1
6
—
—
7
—
Cumulative translation adjustment
—
—
—
9,373
—
9,373
497
Net income (loss)
—
—
—
—
26,497
26,497
( 258
)
Balance at June 30, 2025
112,644
$
387,350
$
30,878
$
( 8,669
)
$
( 125,222
)
$
284,337
$
9,855
Three Months Ended June 30, 2024
Number of Common
Shares (in thousands)
Common Stock
Additional Paid in Capital
Accumulated Other
Comprehensive Loss
Retained Earnings
Non-controlling Interest
Total Shareholders’
Equity
Mezzanine Equity
Balance at April 1, 2024
110,249
386,719
26,016
( 7,503
)
( 112,017
)
574
293,789
15,627
Share-based compensation
1,479
—
2,196
—
—
—
2,196
—
Acquisition of Redeemable non-controlling interest
—
—
2,193
—
—
—
2,193
( 5,209
)
Cumulative translation adjustment
—
—
—
( 1,891
)
—
( 6
)
( 1,897
)
( 102
)
Net (loss) income
—
—
—
—
( 23,549
)
( 51
)
( 23,600
)
42
Balance at June 30, 2024
111,728
$
386,719
$
30,405
$
( 9,394
)
$
( 135,566
)
$
517
$
272,681
$
10,358
Six Months Ended June 30, 2025
Number of Common
Shares
Common Stock
Additional Paid in
Capital
Accumulated Other
Comprehensive (loss) income
Retained Earnings
Total Shareholders’ Equity
Mezzanine Equity
Balance January 1, 2025
112,337
387,349
30,604
( 18,932
)
( 145,016
)
254,005
9,953
Share-based compensation
306
—
268
—
—
268
—
Shares issued on exercise of warrants
1
1
6
—
—
7
—
Cumulative translation adjustment
—
—
—
10,263
—
10,263
572
Net income (loss)
—
—
—
—
19,794
19,794
( 670
)
Balance at June 30, 2025
112,644
$
387,350
$
30,878
$
( 8,669
)
$
( 125,222
)
$
284,337
$
9,855
Six Months Ended June 30, 2024
Number of Common
Shares
Common Stock
Additional Paid in
Capital
Accumulated Other
Comprehensive Loss
Retained Earnings
Non-controlling Interest
Total Shareholders’
Equity
Mezzanine Equity
Balance at January 1, 2024
110,249
$
386,719
$
25,611
$
( 3,540
)
$
( 109,165
)
$
649
$
300,274
$
15,667
Share-based compensation
1,479
—
2,601
—
—
—
2,601
—
Acquisition of Redeemable non-controlling interest
—
—
2,193
—
—
—
2,193
( 5,209
)
Cumulative translation adjustment
—
—
—
( 5,854
)
—
( 26
)
( 5,880
)
( 369
)
Net (loss) income
—
—
—
—
( 26,401
)
( 106
)
( 26,507
)
269
Balance at June 30, 2024
111,728
$
386,719
$
30,405
$
( 9,394
)
$
( 135,566
)
$
517
$
272,681
$
10,358
The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.
4
Village Farms International, Inc.
Condensed Consolidated Statements of Cash Flows
(In thousands of United States dollars)
(Unaudited)
Six Months Ended June 30,
2025
2024
Cash flows provided by (used in) operating activities:
Income (loss) from continuing operations including non-controlling interests
$
7,833
$
( 21,390
)
Adjustments to reconcile net loss attributable to Village Farms International, Inc. shareholders to net cash provided by (used in) operating activities of continuing operations:
Depreciation and amortization
8,410
8,356
Amortization of deferred charges
47
10
Interest expense
1,516
1,815
Interest paid on long-term debt
( 1,613
)
( 2,172
)
Unrealized foreign exchange (gain) loss
( 87
)
172
Goodwill and intangible asset impairments
—
11,939
Non-cash lease expense
619
388
Share-based compensation
268
2,601
Deferred income taxes
( 935
)
589
Changes in non-cash working capital items
6,207
( 6,021
)
Net cash provided by (used in) operating activities from continuing operations
22,265
( 3,713
)
Cash flows provided by (used in) investing activities:
Purchases of property, plant and equipment
( 5,289
)
( 2,733
)
Purchases of intangibles
—
( 80
)
Net cash provided by (used in) investing activities from continuing operations
( 5,289
)
( 2,813
)
Cash flows (used in) provided by financing activities:
Repayments on borrowings
( 4,554
)
( 2,870
)
Purchase of Non-controlling interest
—
( 3,016
)
Other financing activities
( 432
)
—
Net cash used in financing activities from continuing operations
( 4,986
)
( 5,886
)
Discontinued Operations
Net cash (used in) provided by operating activities from discontinued operations
( 6,818
)
9,365
Net cash provided by (used in) investing activities from discontinued operations
38,710
( 2,146
)
Net cash used in financing activities from discontinued operations
( 4,000
)
—
Net cash flows (used in) provided by discontinued operations
27,892
7,219
Effect of exchange rate changes on cash and cash equivalents
475
( 441
)
Net increase (decrease) in cash, cash equivalents and restricted cash
40,357
( 5,634
)
Cash, cash equivalents and restricted cash, beginning of period
24,631
35,291
Cash, cash equivalents and restricted cash, end of period
$
64,988
$
29,657
The accompanying notes are an integral part of these Condensed Consolidated Financial Statements.
5
VILLAGE FARMS INTERNATIONAL, INC.
Notes to Condensed Consolidated Financial Statements
(In thousands of United States dollars, except per share amounts, unless otherwise noted)
1. BUSINESS, BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES
Nature of Business
Village Farms International, Inc. (“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 June 30, 2025 were Village Farms Canada Limited Partnership ("VFCLP"), Village Farms, L.P., Pure Sunfarms Corp. (“Pure Sunfarms”), Balanced Health Botanicals, LLC (“Balanced Health”), VF Clean Energy, Inc. (“VFCE”) and Leli Holland B.V. (“Leli”). VFF also owns an 80 % interest in Rose LifeScience Inc. (“Rose”).
The address of the registered office of VFF is 79 Wellington Street West, Suite 3300, Toronto, Ontario, Canada, M5K 1N2.
The address of the principal executive office of VFF is 90 Colonial Center Pkwy, Lake Mary, Florida, United States, 32746.
The Company’s shares are listed on the Nasdaq Capital Market (“Nasdaq”) under the symbol “VFF”.
VFF's wholly ow ned 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. Its wholly owned subsidiary, Leli, is a vertically integrated licensed producer and supplier of cannabis products sold to coffee shops in the Netherlands. VFF owns and operates sophisticated, highly intensive agricultural greenhouse facilities in British Columbia, where it produces, markets and sells premium-quality tomatoes, bell peppers and cucumbers.
Basis of Presentation
The accompanying condensed consolidated financial statements are unaudited and have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) for interim financial information and with the instructions for Form 10-Q and Rule 10-01 of Regulation S-X. Pursuant to these rules and regulations, certain information and footnote disclosures normally included in the annual audited consolidated financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. The accompanying condensed consolidated statement of financial position as of December 31, 2024 is derived from the Company’s audited financial statements as of that date. Because certain information and footnote disclosures have been condensed or omitted, these condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto as of and for the year ended December 31, 2024 contained in the Company’s 2024 Annual Report on Form 10-K. In management’s opinion, all normal and recurring adjustments considered necessary for a fair presentation of the financial position, results of operations, and cash flows for the periods presented have been included. 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. The Company believes that the disclosures made in these condensed consolidated financial statements are adequate to make the information not misleading.
As of June 30, 2025, the Company determined that certain assets that had been disposed of met the criteria for discontinued operations presentation. For all periods presented, the operating results associated with the assets disposed of have been reclassified into net income (loss) from discontinued operations, net of income taxes, in the Condensed Consolidated Statements of Operations and Comprehensive Income (Loss). The associated assets and liabilities have been reflected as current and long-term assets and liabilities of discontinued operations in the Condensed Consolidated Statements of Financial Position, and the cash flows from the Company’s discontinued operations are presented in the Condensed Consolidated Statements of Cash Flows for all periods presented.
Certain prior period balances related to the Company's reportable segments and discontinued operations have been reclassified to conform to the current presentation in the financial statements and accompanying notes. The notes to the Condensed Consolidated Financial Statements are presented on a continuing operations basis unless otherwise noted. Refer to Note 7 Discontinued Operations and Disposals for additional information on the Company's discontinued operations.
Principals of Consolidation
The accompanying Condensed Consolidated Financial Statements include Village Farms International, Inc. and its subsidiaries and include the accounts of all majority-owned subsidiaries over which the Company exercises control and, when applicable, entities in which the Company has a controlling financial interest. All significant intercompany balances and transactions have been eliminated in consolidation. Other parties’ interests in entities that the Company consolidates are reported as non-controlling interests within equity, except for mandatorily redeemable non-controlling interests, which are recorded within mezzanine equity. Net income or loss attributable to non-controlling interests is reported as a separate line item below net
6
VILLAGE FARMS INTERNATIONAL, INC.
Notes to Condensed Consolidated Interim Financial Statements
(In thousands of United States dollars, except per share amounts, unless otherwise noted)
income or loss. The Company applies the equity method of accounting for its investments in entities for which it does not have a controlling financial interest, but over which it has the ability to exert significant influence.
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, 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 , 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
The assets and liabilities of foreign subsidiaries with a functional currency other than the U.S. dollar are translated into U.S. dollars at period-end exchange rates, with resulting translation gains or losses included within other comprehensive income or loss. Revenue and expenses are translated into U.S. dollars at average rates of exchange during the applicable period. Substantially all of the Company’s foreign operations use their local currency as their functional currency. For foreign operations for which the local currency is not the functional currency, the operation’s non-monetary assets are remeasured into U.S. dollars at historical exchange rates. 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.
In these condensed consolidated financial statements, “$” means U.S. dollars and “C$” means Canadian dollars, unless otherwise noted.
The exchange rates used to translate from Canadian dollars to U.S dollars are shown below:
As of
June 30, 2025
June 30, 2024
December 31, 2024
Spot rate
0.7324
0.7310
0.6957
Three-month period ended
0.7226
0.7308
N/A
Six-month period ended
0.7096
0.7363
N/A
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, 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.
Recent Accounting Pronouncements
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.
7
VILLAGE FARMS INTERNATIONAL, INC.
Notes to Condensed Consolidated Interim Financial Statements
(In thousands of United States dollars, except per share amounts, unless otherwise noted)
2. INVENTORIES
Inventories consisted of the following as of:
Classification
June 30, 2025
December 31, 2024
Cannabis:
Raw materials
$
6,191
$
6,372
Work-in-progress
9,766
7,052
Finished goods
14,225
21,872
Packaging
5,000
3,100
Produce:
Crop inventory
4,294
2,860
Inventory
$
39,476
$
41,256
3. REVENUES
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 tables disaggregate the Company’s net revenues from continuing operations by major source.
For the Three Months Ended June 30,
Classification
June 30, 2025
June 30, 2024
Cannabis:
Branded (1)
$
24,962
$
30,535
Non-Branded
7,077
8,266
International
11,980
1,505
U.S. Cannabis
3,841
4,297
Netherlands Cannabis
2,483
—
Other
499
439
Produce
8,574
8,434
Clean Energy
483
121
Total Revenue
$
59,899
$
53,597
For the Six Months Ended June 30,
Classification
June 30, 2025
June 30, 2024
Cannabis:
Branded (1)
$
47,713
$
59,555
Non-Branded
13,367
14,736
International
17,368
3,003
U.S. Cannabis
7,745
8,834
Netherlands Cannabis
2,969
0
Other
907
896
Produce
8,601
8,438
Clean Energy
909
121
Total Revenue
$
99,579
$
95,584
(1) Branded revenues are shown net of excise tax on products. Excise tax on products was $ 14,812 and $ 28,759 for the three and six months ended June 30, 2025, respe ctively and $ 19,815 and $ 39,518 for the three and six months ended June 30, 2024 , respectively.
8
VILLAGE FARMS INTERNATIONAL, INC.
Notes to Condensed Consolidated Interim Financial Statements
(In thousands of United States dollars, except per share amounts, unless otherwise noted)
4. PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment consisted of the following as of:
Classification
June 30, 2025
December 31, 2024
Land
$
14,082
$
13,451
Leasehold and land improvements
9,750
8,799
Buildings
187,102
180,091
Machinery and equipment
58,926
55,637
Construction in progress
13,624
10,971
Less: Accumulated depreciation
( 101,647
)
( 93,723
)
Property, plant and equipment, net
$
181,837
$
175,226
Depreciation expense on property, plant and equipment, was $ 3,796 and $ 3,494 for the three months ended June 30, 2025 and 2024, respectively, and $ 6,779 and $ 6,706 for the six months ended June 30, 2025 and 2024, respectively.
Capitalized interest was $ 0 and $ 277 for the three months ended June 30, 2025 and 2024, respectively, and $ 188 and $ 564 for the six months ended June 30, 2025 and 2024 , respectively.
5. GOODWILL AND INTANGIBLE ASSETS
Goodwill
The following table presents the changes in the carrying value of goodwill by reportable segment for the six months ended June 30, 2025:
Cannabis - Canada
Balance as of December 31, 2024
$
42,315
Foreign currency translation adjustment
2,229
Balance as of June 30, 2025
$
44,544
Intangible Assets
Intangible assets consisted of the following as of:
Classification
June 30, 2025
December 31, 2024
Licenses
$
18,560
$
17,196
Brand and trademarks*
3,442
12,520
Customer relationships
13,190
12,530
Computer software
1,012
2,029
Other*
144
144
Less: Accumulated amortization
( 11,368
)
( 10,064
)
Less: Impairments*
—
( 9,250
)
Intangibles, net
$
24,980
$
25,105
* Includes indefinite-lived intangible assets
The expected future amortization expense for definite-lived intangible assets as of June 30, 2025 was as follows:
Fiscal period
Remainder of 2025
$
1,634
2026
3,249
2027
3,249
2028
1,888
2029
1,886
Thereafter
9,488
Intangibles, net
$
21,394
Amortization expense was $ 837 and $ 820 for the three months ended June 30, 2025 and 2024, respectively, and $ 1,631 and $ 1,650 for the six months ended June 30, 2025 and 2024, respectively.
9
VILLAGE FARMS INTERNATIONAL, INC.
Notes to Condensed Consolidated Interim Financial Statements
(In thousands of United States dollars, except per share amounts, unless otherwise noted)
Assessment for Indicators of Impairment
At the end of each reporting period, the Company assesses whether events or changes in circumstances have occurred that would indicate an impairment. The Company considers external and internal factors, including overall financial performance and relevant entity-specific factors, as part of this assessment.
During the six months ended June 30, 2025 and 2024, the Company considered qualitative factors in assessing for impairment indicators for the Company’s U.S. and Canadian Cannabis segments.
At June 30, 2025, 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.
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 reporting 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 showed 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 intangibles of $ 1,900 and goodwill of $ 10,039 was recorded to the U.S. Cannabis reporting unit.
Cannabis - U.S. - Goodwill
At June 30, 2024, the fair value of the reporting unit was determined based on a discounted cash flow projection using projections for 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. Brand
At June 30, 2024, 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 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 June 30, 2024, when the Company considered qualitative factors in assessing impairment indicators for Canadian Cannabis it concluded that as of June 30, 2024, 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.
10
VILLAGE FARMS INTERNATIONAL, INC.
Notes to Condensed Consolidated Interim Financial Statements
(In thousands of United States dollars, except per share amounts, unless otherwise noted)
6. LINE OF CREDIT AND LONG-TERM DEBT
The following table provides details for the carrying values of debt as of:
June 30, 2025
December 31, 2024
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 ( 7.83 % at June 30, 2025); matures May 3, 2027
$
19,837
$
20,821
Term loan - ("Pure Sunfarms Term Loan Facility") - C$ 27.4 M - repayable by quarterly principal payments of C$ 1.0 million and accrued interest at Canadian prime interest or Canadian Overnight Repo Rate Average (" CORRA ") plus an applicable margin ( 5.25 % at June 30, 2025), matures February 7, 2028 .
19,266
—
Term Loan - ("Pure Sunfarms Non-Revolving Facility") - 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, matures February 7, 2026 . Terminated on April 17, 2025 and replaced with the "Pure Sunfarms Secured Credit Facilities"
—
6,262
Term loan - ("Pure Sunfarms Term Loan") - 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, matures February 7, 2026 . Terminated on April 17, 2025 and replaced with the "Pure Sunfarms Secured Credit Facilities"
—
10,436
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, matures December 31, 2031 . Terminated on April 17, 2025 and replaced with the "Pure Sunfarms Secured Credit Facilities"
—
3,043
Total
$
39,103
$
40,562
Less current maturities
7,897
8,142
Total long-term debt
$
31,206
$
32,420
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 June 30, 2025 and December 31, 2024 was $ 90,997 and $ 101,068 , 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.
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 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
11
VILLAGE FARMS INTERNATIONAL, INC.
Notes to Condensed Consolidated Interim Financial Statements
(In thousands of United States dollars, except per share amounts, unless otherwise noted)
margin. The applicable margin for the Pure Sunfarms Secured Credit Facility is determined based upon Pure Sunfarms leverage ratio. The Pure Sunfarms Secured Credit Facilities can be drawn for advances of up to C$ 10.0 million.
The Pure Sunfarms Secured Credit Facilities also contain customary covenants, customary representations and warranties, affirmative covenants, financial covenants and events of default.
The weighted average annual interest rate on short-term borrowings as of June 30, 2025 and December 31, 2024 was 6.9 % and 9.4 % , respectively.
Accrued interest payable on all long-term debt as of June 30, 2025 and December 31, 2024 was $ 209 and $ 271 , respectively, and these amounts are included in accrued liabilities in the Condensed Consolidated Statements of Financial Position.
The aggregate annual principal maturities of long-term debt for the remainder of 2025 and thereafter are as follows:
Remainder of 2025
$
5,448
2026
4,897
2027
16,816
2028
11,942
Total
$
39,103
7. DI SCONTINUED OPERATIONS AND DISPOSALS
On May 30, 2025, the Company closed on a transaction with a newly-formed holding company, Vanguard Food, LP (“Vanguard”), backed by private investment firms, to privatize certain assets and operations of its Fresh Produce segment (the "Transaction"). As part of the Transaction, the Company received $ 40 million in cash proceeds, subject to working capital adjustments, and common units representing a 37.9 % equity ownership interest in Vanguard with an estimated fair value of $ 3.5 million. In accordance with ASC 810-10-40, the Company recognized a gain upon deconsolidation of the Produce operations, based on the fair value of consideration received and fair value of Vanguard common units, less the carrying amount of net assets disposed. The gain on sale was recorded based on available data and management estimates as of June 30, 2025 and is subject to post-closing selling price adjustments which could result in further adjustments to the gain on sale. The following table outlines the calculation of the initial gain on sale of the Transaction:
Cash proceeds
$
35,000
Cash held in indemnity escrow (Restricted cash)
5,000
Fair value of Vanguard common units
3,530
Carrying value of lease to Vanguard
1,245
Estimated future distributions for working capital adjustments and other obligations
( 4,290
)
Less: Carrying value of net assets disposed
( 20,500
)
Gain on sale
$
19,985
The Company concluded the Transaction met the criteria under ASC 205-20 to be classified as discontinued operations because the Transaction represented a strategic shift in the Company's business model that had a major effect on the Company’s operations and financial results. Accordingly, the Condensed Consolidated Statements of Operations and Comprehensive Income (loss) and the Condensed Consolidated Statements of Financial Position have been adjusted for all prior periods to reflect the historical results as discontinued operations.
The Company has entered into a Transition Services Agreement with Village Fresh, a Vanguard subsidiary, to provide certain transition services for specified fees and a multi-year Sales, Marketing & Distribution Agreement with Village Fresh, which sets forth the terms, conditions, rights and obligations governing the sales, marketing and distribution by Village Fresh of all hydroponically grown tomatoes produced at VFCLP's British Columbia greenhouse growing facilities. The price paid by Village Fresh to the Company is based on amounts paid by Village Fresh’s customers, net of a marketing fee to be received by Village Fresh.
Details of the net loss from discontinued operations, net of tax, were as follows:
12
VILLAGE FARMS INTERNATIONAL, INC.
Notes to Condensed Consolidated Interim Financial Statements
(In thousands of United States dollars, except per share amounts, unless otherwise noted)
Three Months Ended June 30,
Six Months Ended June 30,
2025
2024
2025
2024
Sales
$
25,358
$
38,586
$
62,753
$
74,675
Cost of sales
( 25,613
)
( 42,974
)
( 65,846
)
( 74,768
)
Gross loss
( 255
)
( 4,388
)
( 3,093
)
( 93
)
Selling, general and administrative expenses
( 2,568
)
( 2,611
)
( 4,729
)
( 4,747
)
Interest expense
( 3
)
( 4
)
( 7
)
( 7
)
Gain on sale of assets
19,985
—
19,985
—
Income (loss) from discontinued operations before income taxes
17,159
( 7,003
)
12,156
( 4,847
)
Provision for income taxes
( 865
)
—
( 865
)
—
Net income (loss) from discontinued operations, net of tax
16,294
( 7,003
)
11,291
( 4,847
)
The following table summarizes the assets and liabilities of the discontinued operations:
June 30, 2025
December 31, 2024
ASSETS
Current assets
Trade receivables, net
$
508
$
11,505
Inventories, net
—
11,881
Other Receivables
—
80
Prepaid expenses and deposits
—
1,453
Total current assets of discontinued operations
508
24,919
Non-current assets
Property, plant and equipment, net
—
15,037
Right-of-use assets
—
5,393
Total non-current assets of discontinued operations
—
20,430
Total assets of discontinued operations
$
508
$
45,349
LIABILITIES
Current liabilities
Trade payables
$
1,304
$
13,245
Accrued liabilities
311
3,236
Lease liabilities - current
—
1,437
Total current liabilities of discontinued operations
1,615
17,918
Non-current liabilities
Lease liabilities - non-current
—
4,374
Total liabilities of discontinued operations
$
1,615
$
22,292
8. EQUITY INVESTMENTS
On May 30, 2025, the Company closed on the Transaction with Vanguard to privatize certain assets and operations of its Fresh Produce segment (Note 7). As part of the Transaction, the Company received a 37.9 % equity ownership interest in Vanguard with an estimated fair value of $ 3,530 , included in investments within the Condensed Consolidated Statements of Financial Position . We account for our investment in Vanguard under the equity method of accounting in accordance with ASC 323, Investments – Equity Method and Joint Ventures. Under the equity method of accounting, the initial investment is recorded at cost and the investment is subsequently adjusted for, among other things, its proportionate share of earnings or losses. However, given the capital structure of the Vanguard arrangement, we apply the Hypothetical Liquidation Book Value ("HLBV") method to determine the allocation of profits and losses since our liquidation rights and priorities, as defined by the Amended and Restated Limited Partnership Agreement of Vanguard Food LP (the "Vanguard LPA"), differ from our underlying ownership interest. The HLBV method calculates the proceeds that would be attributable to each partner in an investment based on the liquidation provisions of the Vanguard LPA if the partnership was to be liquidated at book value as of the balance sheet date. Each partner’s allocation of income or loss in the period is equal to the change in the amount of net equity they are legally able to claim based on a hypothetical liquidation of the entity at the end of a reporting period compared to the beginning of that period, adjusted for any capital transactions. Based on the terms of the Vanguard LPA and related Transaction documents, we recorded income on equity method investments attributable to Vanguard of $ 0 for the three and six months ended June 30, 2025.
13
VILLAGE FARMS INTERNATIONAL, INC.
Notes to Condensed Consolidated Interim Financial Statements
(In thousands of United States dollars, except per share amounts, unless otherwise noted)
9. FINANCIAL INSTRUMENTS
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 June 30, 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 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 June 30, 2025 and December 31, 2024 , other than the minority investments. There were no transfers of assets or liabilities between levels during the six months ended June 30, 2025 and 2024 .
10. 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 six months ended June 30, 2025, the Company paid C $ 78 and C $ 114 , respectively, and for the three and six months ended June 30, 2024 the Company paid C $ 151 and C $ 190 , 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 $ 63 and $ 99 and in salary and benefits during the three and six months ended June 30, 2025 and $ 24 and $ 54 in salary and benefits during the three and six months ended June 30, 2024 .
11. INCOME TAXES
The Company has recorded a provision for income taxes of $ 2,503 and $ 3,486 for the three and six months ended June 30, 2025, respectively, compared with a provision for income taxes of $ 260 and $ 580 for the same periods last year.
The Company’s income tax provision is based on management’s estimate of the effective tax rate for the full year. The tax (provision) benefit in any period will be affected by, among other things, permanent, as well as discrete items, differences in the deductibility of certain items, changes in the valuation allowance related to net deferred tax assets, in addition to changes in tax legislation. As a result, the Company may experience significant fluctuations in the effective book tax rate (that is, tax expense divided by pre-tax book income) from period to period.
In order to fully utilize the net deferred tax assets, the Company will need to generate sufficient taxable income in future years. The Company analyzed all positive and negative evidence to determine if, based on the weight of available evidence, it is more likely than not to realize the benefit of the net deferred tax assets. The recognition of the net deferred tax assets and related tax benefits is based upon the Company’s conclusions regarding, among other considerations, estimates of future earnings based on information currently available and current and anticipated customers, contracts, and product introductions, as well as historical operating results and certain tax planning strategies.
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 $ 44,084 as of June 30, 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 June 30, 2025 , the Company’s net deferred tax assets totaled $ 802 a nd were primarily derived from a tax planning strategy to utilize a portion of its existing net operating loss carryforwards.
12. 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 from gross margin to operating income or loss. 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
14
VILLAGE FARMS INTERNATIONAL, INC.
Notes to Condensed Consolidated Interim Financial Statements
(In thousands of United States dollars, except per share amounts, unless otherwise noted)
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: Cannabis-Canada, Cannabis-U.S., Cannabis - Netherlands (previously Leli), Produce, and Clean Energy. 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 Cannabis - Netherlands segment produces and supplies cannabis products in the Netherlands, supplying designated coffee shops. The Produce segment produces, markets and sells premium quality tomatoes, bell peppers and cucumbers. 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 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.
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.
Discontinued operations are no t included in the applicable reportable segments.
The following tables reflect the reconciliation of segment revenue and significant segment expenses from continuing operations recon ciled to the consolidated income (loss) from continuing operations before income taxes and equity method investments:
For the Three Months Ended June 30, 2025
Produce
Cannabis Canada
Cannabis U.S.
Clean
Energy
Cannabis Netherlands
Total
Sales to external customers
$
8,574
$
44,518
$
3,841
$
483
$
2,483
$
59,899
Cost of sales
( 7,975
)
( 27,050
)
( 1,405
)
( 80
)
( 1,047
)
( 37,557
)
Selling, general and administrative expenses
( 870
)
( 8,604
)
( 2,445
)
27
( 557
)
( 12,449
)
Segment operating income (loss)
$
( 271
)
$
8,864
$
( 9
)
$
430
$
879
$
9,893
Reconciliation of segment operating (loss) income to income from continuing operations before taxes and income from equity method investments (1)
Other income, net (2)
5,517
Other corporate expenses (3)
( 2,962
)
Income from continuing operations before taxes and income from equity method investments
$
12,448
15
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 June 30, 2024
Produce
Cannabis Canada
Cannabis U.S.
Clean
Energy
Cannabis Netherlands
Total
Sales to external customers
$
8,434
$
40,745
$
4,297
$
121
$
—
$
53,597
Cost of sales
( 8,209
)
( 30,040
)
( 1,668
)
( 43
)
—
( 39,960
)
Selling, general and administrative expenses
( 1,003
)
( 8,749
)
( 2,960
)
( 17
)
( 341
)
( 13,070
)
Segment operating (loss) income
$
( 778
)
$
1,956
$
( 331
)
$
61
$
( 341
)
$
567
Reconciliation of segment operating (loss) income to loss from continuing operations before taxes and income from equity method investments (1)
Other expense, net (2)
( 937
)
Goodwill and intangible asset impairments
( 11,939
)
Other corporate expenses (3)
( 3,986
)
Loss from continuing operations before taxes and income from equity method investments
$
( 16,295
)
For the Six Months Ended June 30, 2025
Produce
Cannabis Canada
Cannabis U.S.
Clean
Energy
Cannabis Netherlands
Total
Sales to external customers
$
8,601
$
79,355
$
7,745
$
909
$
2,969
$
99,579
Cost of sales
( 9,444
)
( 49,412
)
( 2,716
)
( 153
)
( 1,332
)
( 63,057
)
Selling, general and administrative expenses
( 1,585
)
( 17,366
)
( 4,980
)
( 1
)
( 996
)
( 24,928
)
Segment operating (loss) income
$
( 2,428
)
$
12,577
$
49
$
755
$
641
$
11,594
Reconciliation of segment operating (loss) income to income from continuing operations before taxes and income from equity method investments (1)
Other income, net (2)
4,827
Other corporate expenses (3)
( 5,102
)
Income from continuing operations before taxes and income from equity method investments
$
11,319
For the Six Months Ended June 30, 2024
Produce
Cannabis Canada
Cannabis U.S.
Clean
Energy
Cannabis Netherlands
Total
Sales to external customers
$
8,438
$
78,191
$
8,834
$
121
$
—
$
95,584
Cost of sales
( 9,199
)
( 57,978
)
( 3,510
)
( 43
)
—
( 70,730
)
Selling, general and administrative expenses
( 1,559
)
( 16,453
)
( 6,366
)
( 37
)
( 704
)
( 25,119
)
Segment operating (loss) income
$
( 2,320
)
$
3,760
$
( 1,042
)
$
41
$
( 704
)
$
( 265
)
Reconciliation of segment operating (loss) income to loss from continuing operations before taxes and income from equity method investments (1)
Other expense, net (2)
( 2,419
)
Goodwill and intangible asset impairments
( 11,939
)
Other corporate expenses (3)
( 6,187
)
Loss from continuing operations before taxes and income from equity method investments
$
( 20,810
)
(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.
16
VILLAGE FARMS INTERNATIONAL, INC.
Notes to Condensed Consolidated Interim Financial Statements
(In thousands of United States dollars, except per share amounts, unless otherwise noted)
The following tables summarize our interest income, interest expense, depreciation and amortization, other significant noncash items, and expenditures for capital assets by reportable segment:
For the Six Months Ended June 30, 2025
Produce
Cannabis Canada
Cannabis U.S.
Clean
Energy
Cannabis Netherlands
Segment Totals
Corporate
Consolidated Totals
Interest income
1
134
—
—
—
135
49
184
Interest expense
924
592
—
—
—
1,516
—
1,516
Depreciation and amortization
2,273
5,303
98
—
654
8,328
82
8,410
Share based compensation
19
73
12
—
—
104
164
268
Other significant noncash items:
Non-cash lease expense
85
42
493
—
—
619
—
619
Expenditures for segment assets
708
1,230
7
—
3,344
5,289
—
5,289
For the Six Months Ended June 30, 2024
Produce
Cannabis Canada
Cannabis U.S.
Clean
Energy
Cannabis Netherlands
Segment Totals
Corporate
Consolidated Totals
Interest income
3
188
—
—
—
191
337
528
Interest expense
1,145
670
—
—
—
1,815
—
1,815
Depreciation and amortization
1,639
5,880
104
—
627
8,250
106
8,356
Share based compensation
—
97
83
—
—
180
2,421
2,601
Other significant noncash items:
Non-cash lease expense
62
43
283
—
—
388
—
388
Expenditures for segment assets
738
127
26
—
1,842
2,733
—
2,733
The following tables summarize our total assets by reportable segment:
June 30, 2025
December 31, 2024
Assets
Produce
$
64,327
$
51,983
Cannabis - Canada
280,945
266,433
Cannabis - United States
5,734
6,728
Clean Energy
577
360
Cannabis - Netherlands
17,024
11,093
Total assets for reportable segments
$
368,607
$
336,597
Corporate
34,629
7,360
Consolidated total assets from continuing operations
$
403,236
$
343,957
The Company’s primary operations are in the United States, Canada, and the Netherlands. The following tables summarizes our assets by geographic location:
17
VILLAGE FARMS INTERNATIONAL, INC.
Notes to Condensed Consolidated Interim Financial Statements
(In thousands of United States dollars, except per share amounts, unless otherwise noted)
Total assets from continuing operations
June 30, 2025
December 31, 2024
United States
$
55,684
$
46,922
Canada
330,528
285,942
Netherlands
17,024
11,093
$
403,236
$
343,957
Long-lived assets from continuing operations
June 30, 2025
December 31, 2024
United States
$
30,400
$
26,930
Canada
222,104
216,061
Netherlands
13,666
9,866
$
266,171
$
252,857
13. INCOME (LOSS) PER SHARE
Basic and diluted net income (loss) per common share is calculated as follows:
Three months ended June 30,
Six Months Ended June 30,
2025
2024
2025
2024
Numerator:
Net income (loss) attributable to Village Farms International, Inc. shareholders from continuing operations
$
10,203
$
( 16,546
)
$
8,503
$
( 21,554
)
Income (loss) from discontinued operations, net of tax
$
16,294
$
( 7,003
)
$
11,291
$
( 4,847
)
Denominator:
Weighted average number of common shares - basic
112,347
110,960
112,342
110,604
Effect of dilutive securities- share-based employee options and awards
389
—
265
—
Weighted average number of common shares - diluted
112,736
110,960
112,607
110,604
Antidilutive options and awards
6,501
6,572
6,625
6,572
Net income (loss) per ordinary share:
Basic income (loss) per share attributable to Village Farms International, Inc. shareholders from:
Continuing operations
$
0.09
$
( 0.15
)
$
0.08
$
( 0.20
)
Discontinued operations
0.15
( 0.06
)
0.10
( 0.04
)
Basic income (loss) per share attributable to Village Farms International, Inc. shareholders
$
0.24
$
( 0.21
)
$
0.18
$
( 0.24
)
Diluted income (loss) per share attributable to Village Farms International, Inc. shareholders from:
Continuing operations
$
0.10
$
( 0.15
)
$
0.08
$
( 0.20
)
Discontinued operations
0.14
( 0.06
)
0.10
( 0.04
)
Diluted income (loss) per share attributable to Village Farms International, Inc. shareholders
$
0.24
$
( 0.21
)
$
0.18
$
( 0.24
)
18
VILLAGE FARMS INTERNATIONAL, INC.
Notes to Condensed Consolidated Interim Financial Statements
(In thousands of United States dollars, except per share amounts, unless otherwise noted)
14. SHAREHOLDERS’ EQUITY AND SHARE-BASED COMPENSATION
Share-based compensation expense was $ 123 and $ 268 for the three and six months ended June 30, 2025 , respectively, and $ 2,196 and $ 2,601 for the three and six months ended June 30, 2024, respectively.
Stock option activity for the six months ended June 30, 2025 was as follows:
Number of
Options
Weighted
Average
Exercise Price
Weighted
Average
Remaining
Contractual
Term (years)
Aggregate
Intrinsic
Value
Outstanding at December 31, 2024
6,968,409
$
3.30
6.79
$
90
Granted
450,000
$
0.76
4.80
$
—
Forfeited/expired
( 78,000
)
$
3.41
Outstanding at June 30, 2025
7,340,409
$
3.15
6.07
$
731
Exercisable at June 30, 2025
4,988,752
$
4.17
5.81
$
288
Restricted shares activity for the six months ended June 30, 2025 was as follows:
Number of
Restricted Stock Grants
Weighted Average Grant Date Fair Value
Outstanding at December 31, 2024
700,860
$
0.86
Granted
2,358,198
0.60
Vested and issued
( 306,120
)
0.98
Forfeited
( 73,566
)
0.60
Outstanding at June 30, 2025
2,679,372
$
0.62
Exercisable at June 30, 2025
—
$
-
15. CHANGES IN NON-CASH WORKING CAPITAL ITEMS AND SUPPLEMENTAL CASH FLOW INFORMATION
Six Months Ended June 30,
2025
2024
Trade receivables
$
( 4,180
)
$
( 6,549
)
Inventories
3,473
7,946
Lease liabilities
( 506
)
( 2,759
)
Other receivables
3
( 122
)
Prepaid expenses and deposits
( 1,628
)
2,988
Trade payables
546
( 4,529
)
Accrued liabilities
9,788
( 1,278
)
Other assets, net of other liabilities
( 1,289
)
( 1,718
)
$
6,207
$
( 6,021
)
The Company paid income taxes of $ 0 for the three and six months ended June 30, 2025 and 2024.
The Company paid interest expense of $ 1,613 and $ 2,172 for the three and six months ended June 30, 2025 and 2024 , respectively.
16. 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 July 4, 2025, the One Big Beautiful Bill Act ("OBBBA") was enacted in the U. S. The OBBBA includes significant provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, modifications to the international tax framework, and the restoration of favorable tax treatment for certain business provisions. The legislation
19
VILLAGE FARMS INTERNATIONAL, INC.
Notes to Condensed Consolidated Interim Financial Statements
(In thousands of United States dollars, except per share amounts, unless otherwise noted)
has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027. We are currently assessing its impact on our consolidated financial statements.
On August 4, 2025, the Company made a principal payment of approximately $ 3 million on the FCC Term Loan.
On August 4, 2025, the Company announced that it will be converting the remaining 550,000 sq. ft. of its Delta 2 greenhouse in Delta, British Columbia to cannabis production.
20