Village Farms International, Inc. 10-Q

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited condensed consolidated financial statements and related notes included in Item 1 of Part I of this Quarterly Report and the Management’s Discussion and Analysis of Financial Condition and Results of Operations and consolidated financial statements contained in our Annual Report on Form 10-K for the year ended December 31, 2024 (our "Annual Report on Form 10-K"). This discussion and analysis contains forward-looking statements about our plans and expectations of what may happen in the future. Forward-looking statements are based on assumptions and estimates that are inherently subject to significant risks and uncertainties, and our actual results could differ materially from the results anticipated by our forward-looking statements. We encourage you to review the risks and uncertainties described in “Risk Factors” in Part I, Item 1A in our Annual Report on Form 10-K, and in Part II, Item 1A of this Quarterly Report. These risks and uncertainties could cause actual results to differ materially from those projected or implied by our forward-looking statements contained in this report. These forward-looking statements are made as of the date of this management’s discussion and analysis, and we do not intend, and do not assume any obligation, to update these forward-looking statements, except as required by law. EXECUTIVE OVERVIEW Village Farms International, Inc. (“VFF”, together with its subsidiaries, the “Company”, “Village Farms”, “we” “us” or “our”) is a corporation existing under the Business Corporations Act (Ontario). The Company’s principal operating subsidiaries are Pure Sunfarms Corp. (“Pure Sunfarms” or “PSF”), Balanced Health Botanicals, LLC (“Balanced Health”), Rose LifeScience Inc. (“Rose LifeScience” or “Rose”), Leli Holland B. V. (“Leli” or “Leli Holland”), Village Farms Canada Limited Partnership (“VFCLP”), Village Farms L.P. (“VFLP”), and VF Clean Energy, Inc. (“VFCE”). The Company’s vision is to be recognized as an international leader in consumer products developed from plants, whereby we produce and market value-added products that are consistently preferred by consumers. To do so, we leverage decades of cultivation expertise, investment, and experience in fresh produce into branded and wholesale cannabis products within markets with legally permissible opportunities. In Canada, we converted two produce facilities to grow cannabis for the Canadian legal adult use (recreational) market. Our focus for our Canadian Cannabis segment is to produce high quality cannabis, leveraging our low-cost production to provide preferred products at an attractive price that address the preferred consumer segments in the market. This market positioning, combined with our cultivation expertise, has enabled us to evolve into the top-five best-selling producer nationally and one of the few Canadian licensed producers with consistently strong operating results. Additionally, through organic growth, exports and/or acquisitions, we have a strategy to participate in other international markets where cannabis attains legal status. In September 2021, our Canadian Cannabis business began exporting cannabis products to Australia for that country’s medical market. In March 2022, our Canadian Cannabis business received European Union Good Manufacturing Practice (“EU GMP”) certification for Pure Sunfarms’ 1.1 million square foot Delta 3 cannabis facility located in Delta, British Columbia (“B.C.”) which permits Pure Sunfarms to export EU GMP-certified medical cannabis to importers and distributors in international markets that require EU GMP certification. In late 2022, Pure Sunfarms commenced exports to Israel, in 2023 Pure Sunfarms began exporting cannabis products to Germany and the United Kingdom for the medical markets in those countries, and in 2025 it began exporting cannabis products to New Zealand. As a result of the typically higher margins in international medical markets, we expect international expansion to enhance our profitability while expanding our brand and experience into emerging legal cannabis markets. During September 2024, we completed our acquisition of the remaining 15% equity ownership interest in Leli Holland. Through our ownership of Leli Holland, we hold one of ten licenses to cultivate and distribute cannabis legally in the Netherlands under that country’s Controlled Cannabis Supply Chain Experiment, with sales beginning in the first quarter of 2025. In the U.S., Balanced Health is our industry-leading cannabinoid business, extending our portfolio into cannabidiol (“CBD”) and hemp-derived consumer products. We also cultivate tomatoes and market them through Village Farm Fresh (a Vanguard Holdings Company) under the Village Farms Fresh (“VF Fresh”) brand which sells to food distribution companies and mass retail stores. Our intention is to use our assets, expertise and experience (across cannabis, hemp, CBD and produce ecosystems) to participate in the global cannabis market subject to compliance with all applicable national laws and applicable stock exchange rules. Our Operating Segments Canadian Cannabis Segment Our Canadian Cannabis segment includes wholly owned Pure Sunfarms and an 80% ownership interest in Rose LifeScience. 21 Pure Sunfarms is one of the single largest cannabis growing operations in the world, one of the lowest-cost greenhouse producers and one of the leading flower brands in Canada. Pure Sunfarms leverages our 30 years of experience as a vertically integrated greenhouse grower for cannabis growth opportunities in Canada with commercial distribution in all Canadian provinces and territories. Our long-term objective for Pure Sunfarms is to be the leading low-cost, high-quality cannabis producer in Canada. Rose is one of the top-selling licensed producers of cannabis in the Province of Quebec, as well as a prominent cannabis products commercialization expert in Quebec, acting as the exclusive, direct-to-retail sales, marketing and distribution entity for some of the best-known brands in Canada, as well as Quebec-based micro and craft growers. Our long-term objective for our Canadian Cannabis segment is to garner and sustain a leading retail market share in Canada, as well as a leading exporter of medicinal cannabis, stemming from our position as a leading low-cost, high-quality cannabis producer in Canada and expand our Canadian success into growing international cannabis markets across the globe by becoming a leading exporter of medicinal cannabis. Netherlands Cannabis Segment (Leli Holland) Our Netherlands Cannabis operating segment is comprised of wholly owned subsidiary, Leli Holland. Through Leli, we hold one of ten licenses to cultivate and distribute recreational cannabis legally in the Netherlands under that country’s Closed Supply Chain Experiment program, with sales commencing in February 2025. U.S. Cannabis Segment Our U.S. Cannabis segment includes wholly owned subsidiary, Balanced Health. Balanced Health is one of the leading cannabinoid brands and e-commerce platforms in the United States. Balanced Health develops and sells high-quality CBD and hemp-based health and wellness products, distributing its diverse portfolio of consumer products through its top-ranked e-commerce platform, CBDistillery™. Produce Segment Our Produce segment currently consists of VFCLP after the sales transfer with Vanguard Holdings in May 2025. Through our produce segment, we grow premium-quality, greenhouse-grown tomatoes in Canada. The tomato products are grown in sophisticated, highly intensive agricultural greenhouse facilities located in British Columbia. On May 30, 2025, the Company closed on the transformative transaction to privatize certain assets and operations of its Produce segment, including its Marfa II and Fort Davis greenhouses, and all of its produce distribution centers, through a series of asset and lease transfers. The Company determined that the 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. For further information on the Transaction please refer to our Form 8-K filed with the SEC on June 5, 2025. The information contained within such Form 8-K is incorporated by reference herein. Clean Energy Segment Our Clean Energy segment is comprised of wholly owned subsidiary, VF Clean Energy Inc. VFCE, which has partnered with Terreva Renewables (formerly Mas Energy) for the Delta RNG Project based on VFCE’s 20-year contract (including a five-year option to extend) with the City of Vancouver to capture landfill gas at the Delta, B.C. landfill site (the "Delta RNG Project"). The Delta RNG Project, which commenced operations in 2024, converts VFCE’s landfill gas into high-demand renewable natural gas ("RNG") through a state-of-the-art facility. Terreva Renewables sells the renewable natural gas and VFCE receives a portion of the revenue in the form of a royalty. Recent Developments and Updates Canadian Cannabis • Company continues to maintain a top five overall market share position in Canada and the number two position in dried flower despite planned reductions in sales of lower-margin SKUs 1 ; • Significantly surpassed the high end of its targeted gross margin range of 30-40%, marking the third consecutive quarter meeting or exceeding the target range, contributing to record quarterly and YTD adjusted EBITDA performance; • Introduced several new and unique packaging innovations to the Canadian market, including the launch of a one-way aroma valve built directly into its dried flower packaging, windowed packaging for its flower products which enables 22 consumers to see product before purchase, and a proprietary built-in matchbox accessory for its pre-roll offerings to meet growing demand for ready-to-enjoy cannabis experiences • Published groundbreaking peer-reviewed research in Scientific Reports (Nature Portfolio), highlighting the natural variability of THC potency within cannabis plants, reinforcing a need for a greater focus on product quality versus potency and more transparent and accurate labeling across the industry; and, • Subsequent to quarter end, began expansion of cultivation capacity in its Delta 2 greenhouse to meet increasing demand in Canadian and international export markets. The expansion is being funded with existing cash on hand and is expected to yield an incremental 40 metric tons of annualized cannabis production, expanding capacity by approximately 33%. 1. Based on estimated retail sales from HiFyre, other third parties and provincial boards. International Medical Cannabis (Reported Within Canadian Cannabis) • International export sales increased 758% year-over-year, driven by continued strength of demand in Germany and steady performance across other international markets; • Company believes that it remains the largest exporter of medical cannabis to Europe, and that it has gained market share sequentially in Germany in each of the past four quarters 1 • Company continues to distribute several leading cultivars in Germany through third-party partners 2 1. Based on German government data and Company estimates 2. Based on Company estimates and rankings compiled by German outlet Flowzz Netherlands Cannabis (Leli Holland) • Operations in the Company’s Phase I facility in Drachten have now ramped up to full capacity, while demonstrating strong profitability and cash flow generation; • Leli Holland products are now represented in 91% of participating coffeeshops; representing increased market penetration sequentially as compared to the second quarter; • The Company has continued to introduce new products into the market, including hash offerings and pre-rolls and it expects to launch additional products for coffeeshops during the fourth quarter; • Construction of the Company’s Phase II facility in Groningen remains on track to be operational in Q1 2026. When completed, the Phase II facility is expected to quintuple total annualized production capacity to approximately 10,000 kilograms. U.S. Cannabis • The Company's application for a Texas medicinal marijuana license remains pending review by the Department of Public Services. New license awards are expected to be granted on December 1, 2025. If awarded, the Company plans to work with its listing authority to structure an acceptable ownership structure and comply with all applicable regulatory requirements. Corporate • On September 29, 2025, the Company’s Board of Directors unanimously approved a US$10 million share repurchase authorization for up to 5,687,000 common shares (five percent of the Company’s issued and outstanding common shares at the date of announcement). • On November 6, 2025, the Company announced the hiring of Brian Ellis to the role of Chief Information and Technology Officer (CITO) to lead the Company’s global technology and information strategy. Mr. Ellis brings over 25 years of enterprise architecture, IT strategy, and large-scale digital transformation experience across various global industries, including roles at Nike, Topgolf Callaway, and Booking.com. Presentation of Financial Results Our consolidated results of operations for the three and nine months ended September 30, 2025 and 2024 presented below reflect the operations of our consolidated wholly-owned subsidiaries, our 70% ownership interest in Rose LifeScience through March 31, 2024, our 80% ownership interest in Rose LifeScience beginning on April 1, 2024, our 85% ownership interest in Leli through September 22, 2024, and our 100% ownership interest in Leli beginning on September 23, 2024. 23 Foreign currency exchange rates All currency amounts in this Quarterly Report are stated in U.S. dollars, which is our reporting currency, unless otherwise noted. All references to “dollars” or “$” are to U.S. dollars. The assets and liabilities of our foreign operations are translated into dollars at the exchange rate in effect as of September 30, 2025, September 30, 2024, and December 31, 2024. Transactions affecting the shareholders’ equity (deficit) are translated at historical foreign exchange rates. The condensed consolidated statements of operations and comprehensive income (loss) and condensed consolidated statements of cash flows of our foreign operations are translated into dollars by applying the average foreign exchange rate in effect for the reporting period. The exchange rates used to translate from Canadian dollars to U.S. dollars is shown below: As of September 30, 2025 September 30, 2024 December 31, 2024 Spot rate 0.7185 0.7398 0.6957 Three-month period ended 0.7261 0.7331 N/A Nine-month period ended 0.7151 0.7352 N/A 24 RESULTS OF OPERATIONS Consolidated Financial Performance (In thousands of U.S. dollars, except per share amounts, and unless otherwise noted) Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 Sales $ 66,741 $ 54,938 $ 166,320 $ 150,522 Cost of sales (34,803 ) (41,301 ) (97,860 ) (112,031 ) Gross profit 31,938 13,637 68,460 38,491 Selling, general and administrative expenses (15,599 ) (14,565 ) (45,629 ) (45,871 ) Interest expense (646 ) (779 ) (2,162 ) (2,594 ) Interest income 360 229 544 757 Foreign exchange (loss) gain (238 ) 352 1,470 (929 ) Other (loss) income (282 ) 379 4,169 528 Goodwill and intangible asset impairments — — — (11,939 ) Income (loss) before taxes and equity method investment income 15,533 (747 ) 26,852 (21,557 ) Provision for income taxes (4,717 ) (94 ) (8,203 ) (674 ) Equity method investment income, net of tax — — — — Income (loss) from continuing operations 10,816 (841 ) 18,649 (22,231 ) (Loss) Income from discontinued operations, net of tax (276 ) 91 11,015 (4,756 ) Income (loss) including non-controlling interests 10,540 (750 ) 29,664 (26,987 ) Less: net (income) loss attributable to non-controlling interests, net of tax (323 ) (70 ) 347 (234 ) Net income (loss) attributable to Village Farms International, Inc. shareholders $ 10,217 $ (820 ) $ 30,011 $ (27,221 ) Adjusted EBITDA from continuing operations $ 20,686 $ 4,675 $ 41,246 $ 8,505 Adjustments attributable to discontinued operations (398 ) 627 (7,617 ) (3,171 ) Adjusted EBITDA (1) $ 20,288 $ 5,302 $ 33,629 $ 5,334 Basic income (loss) per share attributable to Village Farms International, Inc. shareholders from: Continuing operations $ 0.09 $ (0.01 ) $ 0.17 $ (0.21 ) Discontinued operations - - 0.10 (0.04 ) Basic income (loss) per share attributable to Village Farms International, Inc. shareholders $ 0.09 $ (0.01 ) $ 0.27 $ (0.25 ) Diluted income (loss) per share attributable to Village Farms International, Inc. shareholders from: Continuing operations $ 0.08 $ (0.01 ) $ 0.16 $ (0.21 ) Discontinued operations $ — $ — $ 0.10 $ (0.04 ) Diluted income (loss) per share attributable to Village Farms International, Inc. shareholders $ 0.08 $ (0.01 ) $ 0.26 $ (0.25 ) (1) Adjusted EBITDA is not a recognized earnings measure and does not have a standardized meaning prescribed by GAAP. Therefore, Adjusted EBITDA may not be comparable to similar measures presented by other issuers. Management believes that Adjusted EBITDA is a useful supplemental measure in evaluating the performance of the Company because it excludes non-recurring and other items that do not reflect our business performance. Adjusted EBITDA includes the Company’s 70% interest in Rose LifeScience through March 31, 2024, 80% interest in Rose LifeScience beginning on April 1, 2024, 85% interest in Leli through September 22, 2024, and our 100% interest in Leli beginning on September 23, 2024. We caution that our results of operations for the three and nine months ended September 30, 2025 and 2024 may not be indicative of our future performance. Discussion of Financial Results A discussion of our consolidated results for the three and nine months ended September 30, 2025 and 2024 is included below. The consolidated results include all five of our operating segments: Canadian Cannabis, U. S. Cannabis, Cannabis Netherlands, 25 Produce, and Clean Energy, along with public company expenses. For a discussion of our segmented results, please see “Segmented Results of Operations” below. CONSOLIDATED RESULTS Three Months Ended September 30, 2025 Compared to Three Months Ended September 30, 2024 Sales Sales for the three months ended September 30, 2025 were $66,741 compared with $54,938 for the three months ended September 30, 2024. The increase of $11,803, or 21%, was primarily due to an increase in Canadian Cannabis sales of $10,120 due to the growth of our international business, and first year sales from Leli of $3,587, partially offset by a decrease in Produce sales of $1,499, due to a commission charged on produce sales as a result of the supply agreement with Vanguard Food LP., and a decrease in U.S. Cannabis sales of $606. For additional information, refer to “Segmented Results of Operations” below. Cost of Sales Cost of sales for the three months ended September 30, 2025 were $34,803 compared with $41,301 for the three months ended September 30, 2024. The decrease of $6,498, or 16%, was primarily due to a decrease in Canadian Cannabis cost of sales of $6,236, a decrease in U.S. Cannabis cost of sales of $95, and a decrease in Produce cost of sales of $2,097, partially offset by the cost of first year sales of Leli of $1,928. For additional information, refer to “Segmented Results of Operations” below. Gross Profit Gross profit for the three months ended September 30, 2025 was $31,938 compared with $13,637 for the three months ended September 30, 2024. The increase of $18,301, or 134%, was primarily due to an increase in gross profit in Canadian Cannabis of $16,356, the gross profit on first year sales from Leli of $1,659, and an increase in gross profit in Produce of $598. For additional information, refer to “Segmented Results of Operations” below. Selling, General and Administrative Expenses Selling, general and administrative expenses for the three months ended September 30, 2025 were $15,599 (23% of sales) compared with $14,565 (27% of sales) for the three months ended September 30, 2024. For additional information, refer to “Segmented Results of Operations” below. For the Three Months Ended September 30, 2025 2024 Selling, general and administrative expenses $ 14,585 $ 13,690 Share-based compensation 1,014 875 Total selling, general and administrative expenses $ 15,599 $ 14,565 Interest Expense Interest expense for the three months ended September 30, 2025 was $646 compared with $779 for the three months ended September 30, 2024. Interest Income Interest income for the three months ended September 30, 2025 and was $360 compared with $229 for the three months ended September 30, 2024. Other (Loss) Income Other loss for the three months ended September 30, 2025 was $282 compared with other income of $379 for the three months ended September 30, 2024. Income (Loss) Before Taxes and Equity Method Investment Income Income before taxes for the three months ended September 30, 2025 was $15,533 compared with a loss before taxes of $747 for the three months ended September 30, 2024. The change of $16,280 was primarily due to the improved gross profit. Income (Loss) from Discontinued Operations, Net of Tax Income (loss) from discontinued operations, net consists of the following: For the Three Months Ended September 30, 2025 2024 (Loss) income from discontinued operations, net of tax $ (276 ) $ 91 Net (loss) income from discontinued operations, net of tax $ (276 ) $ 91 26 Net Income (Loss) Attributable to Village Farms International, Inc. Shareholders Net income attributable to Village Farms International, Inc. shareholders for the three months ended September 30, 2025 was $10,217 compared with a net loss of $820 for the three months ended September 30, 2024. The increase of $11,037 was primarily due to the improved gross margin, partially offset by an increase in the provision for income taxes of $4,623. Adjusted EBITDA Adjusted EBITDA for the three months ended September 30, 2025 was $20,288 compared with $5,302 for the three months ended September 30, 2024. The increase of $14,986, or 283%, was driven primarily by higher margins in Canadian Cannabis. For additional information, refer to the reconciliation of Adjusted EBITDA to net income (loss) in “Non-GAAP Measures—Reconciliation of Net Income (Loss) to Adjusted EBITDA”. Nine Months Ended September 30, 2025 Compared to Nine Months Ended September 30, 2024 Sales Sales for the nine months ended September 30, 2025 were $166,320 compared with $150,522 for the nine months ended September 30, 2024. The increase of $15,798, or 10%, was primarily due to an increase in Canadian Cannabis sales of $11,284, first year sales from Leli of $6,556, and an increase in Produce sales of $1,336, partially offset by a decrease in U.S. Cannabis sales of $1,695, For additional information, refer to “Segmented Results of Operations” below. Cost of Sales Cost of sales for the nine months ended September 30, 2025 were $97,860 compared with $112,031 for the nine months ended September 30, 2024. The decrease of $14,171, or 13%, was primarily due to a decrease in Canadian Cannabis cost of sales of $14,802, a decrease in Produce cost of sales of $1,852, and a decrease in U.S. Cannabis cost of sales of $889, partially offset by the cost of first year sales on Leli of $3,260. For additional information, refer to “Segmented Results of Operations” below. Gross Profit Gross profit for the nine months ended September 30, 2025 was $68,460 compared with $38,491 for the nine months ended September 30, 2024. The increase of $29,969, or 78%, was primarily due to an increase in gross profit in Canadian Cannabis of $26,086, and gross margin on the first year sales of Leli of $3,296, partially offset by a decrease in gross profit in U.S. Cannabis of $806. For additional information, refer to “Segmented Results of Operations” below. Selling, General and Administrative Expenses Selling, general and administrative expenses for the nine months ended September 30, 2025 were $45,629 (27% of sales) compared with $45,871 (30% of sales) for the nine months ended September 30, 2024. For additional information, refer to “Segmented Results of Operations” below. For the Nine Months Ended September 30, 2025 2024 Selling, general and administrative expenses $ 44,347 $ 42,395 Share-based compensation 1,282 3,476 Total selling, general and administrative expenses $ 45,629 $ 45,871 Interest Expense Interest expense for the nine months ended September 30, 2025 was $2,162 compared with $2,594 for the nine months ended September 30, 2024. The decrease of $432 or 17%, was due to a decrease in the overall borrowing base and a decrease in the interest rates on the Company's various debt instruments. Interest Income Interest income for the nine months ended September 30, 2025 and was $544 compared with $757 for the nine months ended September 30, 2024. Other Income (Expense) Other income for the nine months ended September 30, 2025 was $4,169 compared with other expense of $528 for the nine months ended September 30, 2024. Other income was primarily due to favorable vendor settlements relating to the partial recovery of operational losses from the Tomato Brown Rugose Fruit Virus ("ToBRFV") infestation. Goodwill and Intangible Asset Impairments 27 Goodwill and Intangible Assets Impairments for the nine months ended September 30, 2025 were $0 compared to $11,939 for the nine months ended September 30, 2024. The impairment in the prior year period was primarily related to the U.S. Cannabis reporting unit as a result of recent historical performance 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. Income (Loss) Before Taxes and Equity Method Investment Income Income before taxes for the nine months ended September 30, 2025 was $26,852 compared with a loss before taxes of $21,557 for the nine months ended September 30, 2024. The improvement of $48,409 was primarily due to the improved gross margins and a favorable vendor settlement during the nine months ended September 30, 2025 and an impairment charge of $11,939 during the nine months ended September, 2024. Income (Loss) From Discontinued Operations, Net of Tax Income (loss) from discontinued operations, net consists of the following: For the Nine Months Ended September 30, 2025 2024 Loss from discontinued operations, net of tax $ (8,970 ) $ (4,756 ) Gain on sale of assets, net of tax 19,985 — Net income (loss) from discontinued operations, net of tax $ 11,015 $ (4,756 ) Net Income (Loss) Attributable to Village Farms International, Inc. Shareholders Net income attributable to Village Farms International, Inc. shareholders for nine months ended September 30, 2025 was $30,011 compared with a net loss of $27,221 for the nine months ended September 30, 2024. The change of $57,232 was primarily due to the higher gross margin during the nine months ended September 30, 2025, a favorable vendor settlement during the nine months ended September 30, 2025, an improvement on income (loss) from discontinued operations, net of tax, of $15,771, which includes the gain on sale, net of tax, of $19,985, and an impairment charge of $11,939 during the nine months ended September 30, 2024. Adjusted EBITDA Adjusted EBITDA for the nine months ended September 30, 2025 was $33,629 compared with $5,334 for the nine months ended September 30, 2024. The increase of $28,295, or 530%, was due primarily to higher margins in Canadian Cannabis and the favorable vendor settlement in Produce. For additional information, refer to the reconciliation of Adjusted EBITDA to net income (loss) in “Non-GAAP Measures—Reconciliation of Net Income (Loss) to Adjusted EBITDA”. 28 SEGMENTED RESULTS OF OPERATIONS (In thousands of U.S. dollars, except per share amounts, and unless otherwise noted) For The Three Months Ended September 30, 2025 Produce Cannabis Canada Cannabis U.S. Clean Energy Cannabis Netherlands Corporate Total Sales $ 12,841 $ 46,583 $ 3,337 $ 393 $ 3,587 $ — $ 66,741 Cost of sales (10,833 ) (20,628 ) (1,348 ) (66 ) (1,928 ) — (34,803 ) Selling, general and administrative expenses (217 ) (9,140 ) (2,425 ) (22 ) (702 ) (3,093 ) (15,599 ) Other (expense) income, net (465 ) (328 ) (3 ) — (44 ) 34 (806 ) Income (loss) before taxes and equity method investment income 1,326 16,487 (439 ) 305 913 (3,059 ) 15,533 Provision for income taxes (26 ) (4,486 ) — (82 ) (123 ) — (4,717 ) Equity method investment income, net of tax — — — — — — — Income (loss) from continuing operations 1,300 12,001 (439 ) 223 790 (3,059 ) 10,816 Loss from discontinued operations net of tax (276 ) — — — — — (276 ) Income (loss) including non-controlling interests 1,024 12,001 (439 ) 223 790 (3,059 ) 10,540 Less: net income attributable to non-controlling interests, net of tax — (323 ) — — — — (323 ) Net income (loss) $ 1,024 $ 11,678 $ (439 ) $ 223 $ 790 $ (3,059 ) $ 10,217 Adjusted EBITDA from continuing operations $ 2,479 $ 19,310 $ (332 ) $ 305 $ 1,265 $ (2,341 ) $ 20,686 Adjustments attributable to discontinued operations (398 ) - - - - - (398 ) Adjusted EBITDA (1) $ 2,081 $ 19,310 $ (332 ) $ 305 $ 1,265 $ (2,341 ) $ 20,288 Basic income (loss) per share from continuing operations $ 0.01 $ 0.10 $ - $ - $ 0.01 $ (0.03 ) $ 0.09 Basic income per share from discontinued operations $ - $ - $ - $ - $ - $ - $ - Basic income (loss) per share $ 0.01 $ 0.10 $ - $ - $ 0.01 $ (0.03 ) $ 0.09 Diluted income (loss) per share from continuing operations $ 0.01 $ 0.10 $ - $ - $ 0.01 $ (0.03 ) $ 0.09 Diluted income per share from discontinued operations $ - $ - $ - $ - $ - $ - $ - Diluted income (loss) per share $ 0.01 $ 0.10 $ - $ - $ 0.01 $ (0.03 ) $ 0.09 29 For The Three Months Ended September 30, 2024 Produce Cannabis Canada Cannabis U.S. Clean Energy Cannabis Netherlands Corporate Total Sales $ 14,340 $ 36,463 $ 3,943 $ 192 $ — $ — $ 54,938 Cost of sales (12,930 ) (26,864 ) (1,443 ) (64 ) — — (41,301 ) Selling, general and administrative expenses (715 ) (7,983 ) (2,692 ) (1 ) (385 ) (2,789 ) (14,565 ) Other expense, net (383 ) (16 ) — 170 — 410 181 Goodwill and intangible asset impairments — — — — — — — Income (loss) before taxes and equity method investment income 312 1,600 (192 ) 297 (385 ) (2,379 ) (747 ) (Provision for) recovery of income taxes (27 ) (308 ) — — 239 2 (94 ) Equity method investment income, net of tax — — — — — — — Income (loss) from continuing operations 285 1,292 (192 ) 297 (146 ) (2,377 ) (841 ) Income from discontinued operations net of tax 91 — — — — — 91 Income (loss) including non-controlling interests 376 1,292 (192 ) 297 (146 ) (2,377 ) (750 ) Less: net (income) loss attributable to non-controlling interests, net of tax — (124 ) — — 54 — (70 ) Net income (loss) $ 376 $ 1,168 $ (192 ) $ 297 $ (92 ) $ (2,377 ) $ (820 ) Adjusted EBITDA from continuing operations $ 1,704 $ 4,752 $ (159 ) $ 313 $ (54 ) $ (1,881 ) $ 4,675 Adjustments attributable to discontinued operations 627 - - - - - 627 Adjusted EBITDA (1) $ 2,331 $ 4,752 $ (159 ) $ 313 $ (54 ) $ (1,881 ) $ 5,302 Basic income (loss) per share from continuing operations $ - $ 0.01 $ - $ - $ - $ (0.02 ) $ (0.01 ) Basic income per share from discontinued operations $ - $ - $ - $ - $ - $ - $ - Basic income (loss) per share $ - $ 0.01 $ - $ - $ - $ (0.02 ) $ (0.01 ) Diluted income (loss) per share from continuing operations $ - $ 0.01 $ - $ - $ - $ (0.02 ) $ (0.01 ) Diluted income per share from discontinued operations $ - $ - $ - $ - $ - $ - $ - Diluted income (loss) per share $ - $ 0.01 $ - $ - $ - $ (0.02 ) $ (0.01 ) 30 For The Nine Months Ended September 30, 2025 Produce Cannabis Canada Cannabis U.S. Clean Energy Cannabis Netherlands Corporate Total Sales $ 21,442 $ 125,938 $ 11,082 $ 1,302 $ 6,556 $ — $ 166,320 Cost of sales (20,277 ) (70,040 ) (4,064 ) (219 ) (3,260 ) — (97,860 ) Selling, general and administrative expenses (1,802 ) (26,506 ) (7,405 ) (23 ) (1,698 ) (8,195 ) (45,629 ) Other income (expense), net 3,478 (820 ) (220 ) — (44 ) 1,627 4,021 Income (loss) before taxes and equity method investment income 2,841 28,572 (607 ) 1,060 1,554 (6,568 ) 26,852 Provision for income taxes (26 ) (7,720 ) — (286 ) (171 ) — (8,203 ) Equity method investment income, net of tax — — — — — — — Income (loss) from continuing operations 2,815 20,852 (607 ) 774 1,383 (6,568 ) 18,649 Income from discontinued operations net of tax 11,015 — — — — — 11,015 Income (loss) including non-controlling interests 13,830 20,852 (607 ) 774 1,383 (6,568 ) 29,664 Less: net loss attributable to non-controlling interests, net of tax — 347 — — — — 347 Net income (loss) $ 13,830 $ 21,199 $ (607 ) $ 774 $ 1,383 $ (6,568 ) $ 30,011 Adjusted EBITDA from continuing operations $ 7,128 $ 37,868 $ (173 ) $ 1,060 $ 2,560 $ (7,197 ) $ 41,246 Adjustments attributable to discontinued operations (7,617 ) - - - - - (7,617 ) Adjusted EBITDA (1) $ (489 ) $ 37,868 $ (173 ) $ 1,060 $ 2,560 $ (7,197 ) $ 33,629 Basic income (loss) per share from continuing operations $ 0.02 $ 0.19 $ (0.01 ) $ 0.02 $ 0.01 $ (0.06 ) $ 0.17 Basic income per share from discontinued operations $ 0.10 $ - $ - $ - $ - $ - $ 0.10 Basic income (loss) per share $ 0.12 $ 0.19 $ (0.01 ) $ 0.02 $ 0.01 $ (0.06 ) $ 0.27 Diluted income (loss) per share from continuing operations $ 0.02 $ 0.18 $ (0.01 ) $ 0.02 $ 0.01 $ (0.06 ) $ 0.16 Diluted income per share from discontinued operations $ 0.10 $ - $ - $ - $ - $ - $ 0.10 Diluted income (loss) per share $ 0.12 $ 0.18 $ (0.01 ) $ 0.02 $ 0.01 $ (0.06 ) $ 0.26 31 For The Nine Months Ended September 30, 2024 Produce Cannabis Canada Cannabis U.S. Clean Energy Cannabis Netherlands Corporate Total Sales $ 22,778 $ 114,654 $ 12,777 $ 313 $ — $ — $ 150,522 Cost of sales (22,129 ) (84,842 ) (4,953 ) (107 ) — — (112,031 ) Selling, general and administrative expenses (2,274 ) (24,436 ) (9,058 ) (38 ) (1,089 ) (8,976 ) (45,871 ) Other expense (income), net (1,406 ) (687 ) — 170 — (315 ) (2,238 ) Goodwill and intangible asset impairments — — (11,939 ) — — — (11,939 ) (Loss) income before taxes and equity method investment income (3,031 ) 4,689 (13,173 ) 338 (1,089 ) (9,291 ) (21,557 ) (Provison for) recovery of income taxes (23 ) (896 ) — — 239 6 (674 ) Equity method investment income, net of tax — — — — — — — (Loss) income from continuing operations (3,054 ) 3,793 (13,173 ) 338 (850 ) (9,285 ) (22,231 ) Loss from discontinued operations net of tax (4,756 ) — — — — — (4,756 ) (Loss) income including non-controlling interests (7,810 ) 3,793 (13,173 ) 338 (850 ) (9,285 ) (26,987 ) Less: net (income) loss attributable to non-controlling interests, net of tax — (394 ) — — 160 — (234 ) Net (loss) income $ (7,810 ) $ 3,399 $ (13,173 ) $ 338 $ (690 ) $ (9,285 ) $ (27,221 ) Adjusted EBITDA from continuing operations $ 1,180 $ 13,643 $ (1,014 ) $ 354 $ (119 ) $ (5,539 ) $ 8,505 Adjustments attributable to discontinued operations (3,171 ) - - - - - (3,171 ) Adjusted EBITDA (1) $ (1,991 ) $ 13,643 $ (1,014 ) $ 354 $ (119 ) $ (5,539 ) $ 5,334 Basic (loss) income per share from continuing operations $ (0.03 ) $ 0.03 $ (0.12 ) $ - $ (0.01 ) $ (0.08 ) $ (0.21 ) Basic loss per share from discontinued operations $ (0.04 ) $ - $ - $ - $ - $ - $ (0.04 ) Basic (loss) income per share $ (0.07 ) $ 0.03 $ (0.12 ) $ - $ (0.01 ) $ (0.08 ) $ (0.25 ) Diluted (loss) income per share from continuing operations $ (0.03 ) $ 0.03 $ (0.12 ) $ - $ (0.01 ) $ (0.08 ) $ (0.21 ) Diluted loss per share from discontinued operations $ (0.04 ) $ - $ - $ - $ - $ - $ (0.04 ) Diluted (loss) income per share $ (0.07 ) $ 0.03 $ (0.12 ) $ - $ (0.01 ) $ (0.08 ) $ (0.25 ) (1) Adjusted EBITDA is not a recognized earnings measure and does not have a standardized meaning prescribed by GAAP. Therefore, Adjusted EBITDA may not be comparable to similar measures presented by other issuers. Management believes that Adjusted EBITDA is a useful supplemental measure in evaluating the performance of the Company because it excludes non-recurring and other items that do not reflect our business performance. Adjusted EBITDA includes the Company’s 70% interest in Rose LifeScience through March 31, 2024, 80% interest in Rose LifeScience beginning on April 1, 2024, 85% interest in Leli through September 22, 2024, and our 100% interest in Leli beginning on September 23, 2024. CANADIAN CANNABIS SEGMENT RESULTS The Canadian Cannabis segment consists of Pure Sunfarms and Rose LifeScience. The comparative analysis for Canadian Cannabis is based on the consolidated results of Pure Sunfarms and our interest in Rose LifeScience for the three and nine months ended September 30, 2025 and 2024. Beginning on April 1, 2024, our interest in Rose LifeScience increased from 70% to 80%, which is reflected in the results presented below. Three Months Ended September 30, 2025 Compared to Three Months Ended September 30, 2024 Sales Canadian Cannabis net sales for the three months ended September 30, 2025 were $46,583 compared with $36,463 for the three months ended September 30, 2024. The increase of $10,120, or 28%, was driven by an increase in international sales of $10,498, primarily driven by continued strength in export volumes to Germany, partially offset by a decrease in net branded sales of $431, reflecting a planned shift away from value-based product offerings. Canadian Cannabis continues to pay a burdensome excise tax on its branded sales (sales to provincial distributors). For the three months ended September 30, 2025, the Company incurred excise duties of $15,712 (C$21,647), or 37% of gross branded sales, compared with $17,674 (C$24,109), or 39% of gross branded sales, for the three months ended September 30, 2024. The decrease of $1,962 (C$2,462), or 11%, was due to a decrease in kilograms sold in the branded channel. The Canadian excise duty is our single largest cost of participating in the branded adult-use market in Canada. 32 For the three months ended September 30, 2025, 58% of net sales were generated from branded flower, pre-rolls and cannabis derivative products compared with 75% for the three months ended September 30, 2024. Non-branded, international, and other sales accounted for 42% of Canadian Cannabis net sales for the three months ended September 30, 2025, compared with 25% for the three months ended September 30, 2024. The net average selling price of branded flower and pre-roll formats increased in 2025 compared to 2024. Excluding pre-roll formats, the average net selling price of branded flower increased by 6% in 2025 due to a lower ratio of sales for our value brand Fraser Valley Weed Co. The net average selling price of bulk non-branded flower increased by 45%, due to a reduced need to move aged flower inventory compared to 2024. The net average selling price of International sales decreased by 13% due to a shift in product mix favoring bulk flower over packaged flower. The following table presents sales by Canadian Cannabis revenue stream, together with the impact of the excise tax, in U.S. dollars and Canadian dollars, for the three months ended September 30, 2025 and 2024: For the Three Months Ended September 30, (in thousands of U.S. dollars) 2025 2024 Branded sales $ 42,558 $ 44,951 Non-branded sales 7,344 7,402 International sales 11,858 1,360 Other 535 424 Less: excise taxes (15,712 ) (17,674 ) Net Sales $ 46,583 $ 36,463 For the Three Months Ended September 30, (in thousands of Canadian dollars) 2025 2024 Branded sales $ 58,616 $ 61,317 Non-branded sales 10,134 10,097 International sales 16,332 1,873 Other 737 578 Less: excise taxes (21,647 ) (24,109 ) Net Sales $ 64,172 $ 49,756 Cost of Sales Canadian Cannabis cost of sales for the three months ended September 30, 2025 was $20,628 compared with $26,864 for the three months ended September 30, 2024. The decrease of $6,236, or 23%, was primarily due to a decrease in volume (kilograms) packaged and sold of our branded products and a shift in International sales mix favoring bulk flower which has a lower average cost per gram over packaged flower. Gross Profit Canadian Cannabis gross profit for the three months ended September 30, 2025 was $25,955, a 170% increase compared to $9,599 for the three months ended September 30, 2024. Canadian Cannabis gross margin for the three months ended September 30, 2025 was 56% compared with 26% for the three months ended September 30, 2024. The increase in gross margin was due to higher sales volume of bulk flower in International sales, as well as lower sales of value brands within the branded sales category. Selling, General and Administrative Expenses Canadian Cannabis selling, general and administrative expenses for the three months ended September 30, 2025 were $9,140, or 20% of sales, compared with $7,983, or 22% of sales, for the three months ended September 30, 2024. Net Income Canadian Cannabis net income for the three months ended September 30, 2025 was $11,678 compared with net income of $1,168 for the three months ended September 30, 2024. The increase in net income was primarily due to the higher margin, partially offset by an increase in the tax provision expense of $4,178. Adjusted EBITDA Adjusted EBITDA for Canadian Cannabis for the three months ended September 30, 2025 was $19,310 compared with $4,752 for the three months ended September 30, 2024. The increase of $14,558, or 306%, was primarily due to higher sales at a higher margin. For additional information, refer to the reconciliation of Adjusted EBITDA to net income (loss) in “Non-GAAP Measures—Reconciliation of Net (Income) Loss to Adjusted EBITDA”. 33 Nine Months Ended September 30, 2025 Compared to Nine Months Ended September 30, 2024 Sales Canadian Cannabis net sales for the nine months ended September 30, 2025 were $125,938 compared with $114,654 for the nine months ended September 30, 2024. The increase of $11,284, or 10%, was driven by an increase in international sales of $24,871, primarily due to continued strength in export volumes to Germany, partially offset by a decrease in net branded sales, reflecting a shift away from value-based product offerings. Canadian Cannabis continues to pay a burdensome excise tax on its branded sales (sales to provincial distributors). For the nine months ended September 30, 2025, the Company incurred excise duties of $44,476 (C$62,167), or 37% of gross branded sales, compared with $57,193 (C$77,788), or 40% of gross branded sales, for the nine months ended September 30, 2024. The decrease of $12,717 (C$15,621), or 22%, was due to a decrease in kilograms sold in the branded channel and the impact of exchange rate fluctuations. The Canadian excise duty is our single largest cost of participating in the branded adult-use market in Canada. For the nine months ended September 30, 2025, 59% of net sales were generated from branded flower, pre-rolls and cannabis derivative products compared with 76% for the nine months ended September 30, 2024. Non-branded, international, and other sales accounted for 41% of Canadian Cannabis net sales for the nine months ended September 30, 2025, as compared with 24% for the nine months ended September 30, 2024. The net average selling price of branded flower and pre-roll formats increased in 2025 compared to 2024. Excluding pre-roll formats, the average net selling price of branded flower increased by 6% in 2025 due to a lower ratio of sales for our value brand Fraser Valley Weed Co. The net average selling price of bulk non-branded flower increased by 38%, due primarily to a reduced need to move aged flower inventory compared to 2024. The net average selling price of International sales decreased by 10% due to a shift in product mix favoring bulk flower over packaged flower. The following table presents sales by Canadian Cannabis revenue stream, together with the impact of the excise tax, in U.S. dollars and Canadian dollars, for the nine months ended September 30, 2025 and 2024: For the Nine Months Ended September 30, (in thousands of U.S. dollars) 2025 2024 Branded sales $ 119,030 $ 144,025 Non-branded sales 20,715 22,147 International sales 29,226 4,355 Other 1,443 1,320 Less: excise taxes (44,476 ) (57,193 ) Net Sales $ 125,938 $ 114,654 For the Nine Months Ended September 30, (in thousands of Canadian dollars) 2025 2024 Branded sales $ 166,342 $ 195,906 Non-branded sales 28,756 30,143 International sales 40,646 5,953 Other 2,014 1,796 Less: excise taxes (62,167 ) (77,788 ) Net Sales $ 175,591 $ 156,010 Cost of Sales Canadian Cannabis cost of sales for the nine months ended September 30, 2025 was $70,040 compared with $84,842 for the nine months ended September 30, 2024. The decrease of $14,802, or 17%, was primarily due to a decrease in volume (kilograms) packaged and sold of our branded and non-branded products and a shift in International sales mix favoring bulk flower which has a lower average cost per gram over packaged flower. Gross Profit Canadian Cannabis gross profit for the nine months ended September 30, 2025 was $55,898, a 88% increase compared to $29,812 for the nine months ended September 30, 2024. Canadian Cannabis gross margin for the nine months ended September 30, 2025 was 44% compared with 26% for the nine months ended September 30, 2024. The increase in gross margin was due to higher sales volume of bulk flower in International sales, as well as lower sales of value brands within the branded sales category. 34 Selling, General and Administrative Expenses Canadian Cannabis selling, general and administrative expenses for the nine months ended September 30, 2025 were $26,506, or 21%, of sales compared with $24,436, or 21%, of sales for the nine months ended September 30, 2024. The increase of $2,070 was primarily due to higher commercial and marketing expenses and incremental integration costs. Net Income Canadian Cannabis net income for the nine months ended September 30, 2025 was $21,199 compared with net income of $3,399 for the nine months ended September 30, 2024. The increase in net income was primarily due to the improved margins, partially offset by an increase in the tax provision expense of $6,824 and an increase in selling, general and administrative expenses. Adjusted EBITDA Adjusted EBITDA for Canadian Cannabis for the nine months ended September 30, 2025 was $37,868 compared with $13,643 for the nine months ended September 30, 2024. The increase of $24,225, or 178%, was primarily due to the higher margin. For additional information, refer to the reconciliation of Adjusted EBITDA to net income (loss) in “Non-GAAP Measures—Reconciliation of Net Income (Loss) to Adjusted EBITDA”. U.S. CANNABIS SEGMENT RESULTS The U.S. Cannabis segment consists of Balanced Health. For the three and nine months ended September 30, 2025 and 2024, U.S. Cannabis financial results are based on the results of Balanced Health. Three Months Ended September 30, 2025 Compared to Three Months Ended September 30, 2024 Sales U.S. Cannabis net sales for the three months ended September 30, 2025 were $3,337 compared with $3,943 for the three months ended September 30, 2024. The decrease of $606, or 15%, was primarily due to lower direct-to-consumer sales resulting from the proliferation of unregulated hemp-derived products on the market and changes in state regulations restricting sales. All U.S. Cannabis sales were generated in the United States, with gross sales composed of 94% e-commerce sales and 6% retail sales. Cost of Sales U.S. Cannabis cost of sales for the three months ended September 30, 2025 was $1,348 compared with $1,443 for the three months ended September 30, 2024. The decrease of $95, or 7%, was primarily due to lower sales. Gross Profit U.S Cannabis gross profit for the three months ended September 30, 2025 decreased $511, or 20%, to $1,989, or a 60% gross margin, compared with $2,500, or a 63% gross margin, for the three months ended September 30, 2024. Selling, General and Administrative Expenses U.S. Cannabis selling general and administrative expenses for the three months ended September 30, 2025 were $2,425 compared with $2,692 for the three months ended September 30, 2024. The decrease of $267, or 10%, was due to more efficient marketing and brand spending as well as favorable contract renegotiations. Net Loss U.S. Cannabis net loss for the three months ended September 30, 2025 was $439 compared with a net loss of $192 for the three months ended September 30, 2024. The increase of $247 was primarily due to lower sales at a lower margin. Adjusted EBITDA U.S. Cannabis adjusted EBITDA for the three months ended September 30, 2025 was ($332) compared with ($159) for the three months ended September 30, 2024. The decrease of $173 was primarily due lower sales at a lower margin . For additional information, refer to the reconciliation of Adjusted EBITDA to net income (loss) in “Non-GAAP Measures—Reconciliation of Net Income (Loss) to Adjusted EBITDA”. Nine Months Ended September 30, 2025 Compared to Nine Months Ended September 30, 2024 Sales U.S. Cannabis net sales for the nine months ended September 30, 2025 was $11,082 compared with $12,777 for the nine months ended September 30, 2024. The decrease of $1,695, or 13%, was primarily due to new restrictions on sales in an additional eight states beginning July 1, 2024 and lower direct-to-consumer sales resulting from the proliferation of unregulated hemp-derived products on the market. All U.S. Cannabis sales were generated in the United States, with gross sales composed of 94% e-commerce sales and 6% retail sales. 35 Cost of Sales U.S. Cannabis cost of sales for the nine months ended September 30, 2025 was $4,064 compared with $4,953 for the nine months ended September 30, 2024. The decrease of $889, or 18%, was primarily due to lower sales and cost efficiencies from the internalization of our gummy manufacturing. Gross Profit U.S Cannabis gross profit for the nine months ended September 30, 2025 decreased $806, or 10%, to $7,018, or a 63% gross margin, compared with $7,824, or a 61% gross margin, for the nine months ended September 30, 2024. Selling, General and Administrative Expenses U.S. Cannabis selling general and administrative expenses for the nine months ended September 30, 2025 were $7,405 compared with $9,058 for the nine months ended September 30, 2024. The decrease of $1,653, or 18%, is due to more efficient marketing and brand spending as well as favorable contract renegotiations. Net Loss U.S. Cannabis net loss for the nine months ended September 30, 2025 was $607 compared with a net loss of $13,173 for the nine months ended September 30, 2024. The decrease of $12,566 was primarily due to an impairment charge on goodwill and intangible assets taken in the nine months ended September 30, 2024 of ($11,939) that did not recur in 2025. Adjusted EBITDA U.S. Cannabis adjusted EBITDA for the nine months ended September 30, 2025 was ($173) compared with ($1,014) for the nine months ended September 30, 2024. The improvement of $841 was primarily due to the lower selling, general, and administrative expenses. For additional information, refer to the reconciliation of Adjusted EBITDA to net income (loss) in “Non-GAAP Measures—Reconciliation of Net Income (Loss) to Adjusted EBITDA”. NETHERLANDS CANNABIS SEGMENT RESULTS The Netherlands Cannabis segment consists of Leli Holland. Leli Holland commenced sales during the first quarter of 2025. Leli Holland was not operational during the comparable periods of 2024 and, as a result, comparative financial performance to the prior-year periods is not meaningful. Three Months Ended September 30, 2025 Sales Net sales for the three months ended September 30, 2025 were $3,587. Cost of Sales Cost of sales for the three months ended September 30, 2025 was $1,928. Gross Profit Gross profit for the three months ended September 30, 2025 was $1,659, or a 46% gross margin. Selling, General and Administrative Expenses Selling, general and administrative expenses for the three months ended September 30, 2025 were $702. Net Income Net income for the three months ended September 30, 2025 was $790. Adjusted EBITDA Adjusted EBITDA for the three months ended September 30, 2025 was $1,265. Nine Months Ended September 30, 2025 Sales Net sales for the nine months ended September 30, 2025 were $6,556. Cost of Sales Cost of sales for the nine months ended September 30, 2025 was $3,260. Gross Profit 36 Gross profit for the nine months ended September 30, 2025 was $3,296, or a 50% gross margin. Selling, General and Administrative Expenses Selling, general and administrative expenses for the nine months ended September 30, 2025 were $1,698. Net Income Net income for the nine months ended September 30, 2025 was $1,383. Adjusted EBITDA Adjusted EBITDA for the nine months ended September 30, 2025 was $2,560. PRODUCE SEGMENT RESULTS The produce segment consists of VFCLP. Produce’s comparative analysis are based on the consolidated results from continuing operations of VFLP and VFCLP for the three and nine months ended September 30, 2025 and 2024. Three Months Ended September 30, 2025 Compared to Three Months Ended September 30, 2024 Sales Produce sales for the three months ended September 30, 2025 were $12,841 compared with $14,340 for the three months ended September 30, 2024, a decrease of $1,499, or 10%, due to a commission charged on produce sales as a result of the supply agreement with Vanguard Food LP. Cost of Sales Produce cost of sales for the three months ended September 30, 2025 decreased by $2,097, or 16%, to $10,833 compared with $12,930 for the three months ended September 30, 2024, primarily due to a reduction in labor costs and favorable utility rates over the prior year. Gross Profit Produce gross profit for the three months ended September 30, 2025 was $2,008 compared with a gross profit of $1,410 for the three months ended September 30, 2024. Gross margin for the three months ended September 30, 2025 was 16% compared with 10% for the three months ended September 30, 2024. Selling, General and Administrative Expenses Produce selling, general and administrative expenses for the three months ended September 30, 2025 decreased by $498, or 70%, to $217 (2% of sales) compared with $715 (5% of sales) for the three months ended September 30, 2024. Net Income From Continuing Operations Produce net income from continuing operations for the three months ended September 30, 2025 was $1,300 compared with net income from continuing operations of $285 for the three months ended September 30, 2024. The change of $1,015 was primarily due to the improved margins and the lower SG&A. Net Income Produce net income for the three months ended September 30, 2025 was $1,024 compared with net income of $376 for the three months ended September 30, 2024. The increase of $648 was primarily due to the improved margins and the lower SG&A. Adjusted EBITDA Produce Adjusted EBITDA for the three months ended September 30, 2025 was $2,081 compared with $2,331 for the three months ended September 30, 2024. For additional information, refer to the reconciliation of Adjusted EBITDA to net income (loss) in “Non-GAAP Measures—Reconciliation of Net (Income) Loss to Adjusted EBITDA”. Nine Months Ended September 30, 2025 Compared to Nine Months Ended September 30, 2024 Sales Produce sales for the nine months ended September 30, 2025 were $21,442 compared with $22,778 for the nine months ended September 30, 2024, a decrease of $1,336, or 6% due to a commission charged on produce sales as a result of the supply agreement with Vanguard Food LP. Cost of Sales 37 Produce cost of sales for the nine months ended September 30, 2025 decreased by $1,852, or 8%, to $20,277 compared with $22,129 for the nine months ended September 30, 2024, primarily due to favorable utility rates over the prior year. Gross Profit Produce gross profit for the nine months ended September 30, 2025 was $1,165 compared with $649 for the nine months ended September 30, 2024. Gross margin for the nine months ended September 30, 2025 was 5% compared with 3% for the nine months ended September 30, 2024. Selling, General and Administrative Expenses Produce selling, general and administrative expenses for the nine months ended September 30, 2025 decreased by $472, or 21%, to $1,802 (8% of sales) compared with $2,274 (10% of sales) for the nine months ended September 30, 2024. Net Income (Loss) From Continuing Operations Produce net income from continuing operations for the nine months ended September 30, 2025 was $2,815 compared with a net loss from continuing operations of $3,054 for the nine months ended September 30, 2024. The change of $5,869 was primarily attributable to a favorable vendor settlements relating to the partial recovery of prior period operational losses from the ToBRFV infestation. Net Income (Loss) Produce net income for the nine months ended September 30, 2025 was $13,830 compared with a net loss of $7,810 for the nine months ended September 30, 2024. The change of $21,640 was primarily attributable to an improvement on income (loss) from discontinued operations, net of tax of $15,771 and a favorable vendor settlement relating to the partial recovery of operational losses from the ToBRFV infestation. Adjusted EBITDA Produce Adjusted EBITDA for the nine months ended September 30, 2025 was ($489) compared with ($1,991) for the nine months ended September 30, 2024. The change of $1,502 in Adjusted EBITDA was primarily due to an improvement in Adjusted EBITDA from continuing operations as a result of a favorable vendor settlement, partially offset by a decrease in Adjusted EBITDA from discontinued operations due to poor performance of the Texas Greenhouses in the first half of 2025. For additional information, refer to the reconciliation of Adjusted EBITDA to net income (loss) in “Non-GAAP Measures—Reconciliation of Net Income (Loss) to Adjusted EBITDA”. Liquidity and Capital Resources Capital Resources At September 30, 2025, cash, cash equivalents, and restricted cash were $87,561 and working capital was $100,219, compared with cash and cash equivalents of $24,631 and working capital of $53,800 at December 31, 2024. We believe that our existing cash, cash generated from our operating activities and the availability under our Pure Sunfarms Revolving Credit Facility, will provide us with sufficient liquidity to meet our working capital needs, repayments of our long-term debt and future contractual obligations and fund our planned capital expenditures for the next 12 months. An additional potential source of liquidity is access to capital markets for additional equity or debt financing. We intend to use our cash on hand for daily operational funding requirements. (in thousands of U.S. dollars unless otherwise noted) Maximum Availability Outstanding as of September 30, 2025 FCC Term Loan $ 16,345 $ 16,345 Pure Sunfarms Term Loan Facility $ 18,249 $ 18,249 Pure Sunfarm Revolving Credit Facility C$ 10,000 $ — The Company is required to comply with financial covenants. At December 31, 2024, the Company was not in compliance with financial covenants related to the fixed charge coverage ratio under the FCC Term Loan (as defined below) and the PSF Term Loan (as defined below), for which the Company received waivers. The covenants were reinstated at the end of the first quarter for the PSF Term Loan and at the end of the fiscal year for the FCC Term Loan. On April 10, 2025, the Company entered into an Amended and Restated Credit Agreement (the “A&R Credit Agreement”) with FCC as the lender, which amended and restated the FCC Term Loan. Among other things, the A&R Credit Agreement replaced the current financial covenants with more favorable financial covenants . Under the Pure Sunfarms Secured Credit Facilities entered into on April 17, 2025, the Company is also required to maintain certain financial covenants. We can provide no assurance that we will be in compliance, or receive a waiver, for any non-compliance of the financial covenants. See “Risk Factors—Business and Operational Risk Factors—We are subject to restrictive covenants under our Credit Facilities” in our most recently filed Annual Report on Form 10-K. 38 Accrued interest payable on the Credit Facilities and Pure Sunfarms Loans as of September 30, 2025 and December 31, 2024 was $183 and $271, respectively. These amounts are included in accrued liabilities in the accompanying Condensed Consolidated Statements of Financial Position. FCC Term Loan The Company has a term loan financing agreement with Farm Credit Canada ("FCC"), a Canadian creditor (the “FCC Term Loan”). The non-revolving variable rate term loan has a maturity date of May 3, 2027 and a balance of $16,345 on September 30, 2025 and $20,821 on December 31, 2024. The outstanding balance is repayable by way of monthly installments of principal and interest, with the balance and any accrued interest to be paid in full on May 3, 2027. As of September 30, 2025 and December 31, 2024, borrowings under the FCC Term Loan agreement were subject to an interest rate of 7.87% and 8.12% per annum, respectively. As collateral for the FCC Term Loan, the Company has provided promissory notes, a first mortgage on the VFF-owned Delta 1 and Monahans greenhouses, and general security agreements over its assets. In addition, the Company has provided full recourse guarantees and has granted security interests in respect of the FCC Term Loan. The carrying value of the assets and securities pledged as collateral as of September 30, 2025 and December 31, 2024 was $98,423 and $101,068, respectively. On April 10, 2025, the Company entered into the A&R Credit Agreement with respect to 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) replaces the fixed charged ratio covenant with a more favorable liquidity ratio covenant. Pure Sunfarms Loans 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 will be used for working capital and other general corporate purposes, and was used to replace, and repay remaining outstanding balances on, the Company’s (i) Pure Sunfarms Loans and (ii) the PSF Revolving Line of Credit. The credit and guarantee agreements related to the Pure Sunfarms Loans and the PSF Revolving Line of Credit were likewise terminated. The Pure Sunfarms Revolving Credit Facility can be drawn for advances of up to C$10.0 million. The outstanding amount of the Pure Sunfarms Term Loan Facility was $18,249 as of September 30, 2025 and is 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 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. Pure Sunfarms had a credit facility with the Business Development Bank of Canada (the "BDC Facility"), a non-revolving credit facility (the “PSF Non-Revolving Facility”) and a term loan (the “PSF Term Loan”) with two Canadian chartered banks (collectively, with the BDC Facility, the PSF Non-Revolving Facility, and the PSF Term Loan the “Pure Sunfarms Loans”). In addition, Pure Sunfarms has a revolving line of credit (the “PSF Revolving Line of Credit”) with a Canadian chartered bank. 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 PSF Revolving Line of Credit could be drawn for advances of up to C$15,000 and had an outstanding balance of $0 as of December 31, 2024. Interest under the PSF Revolving Line of Credit was payable at the Canadian prime rate plus an applicable margin per annum, payable monthly. The outstanding amount on the PSF Non-Revolving Facility was $6,262 on December 31, 2024. Interest under the PSF Non-Revolving Facility was payable at the Canadian prime rate plus an applicable margin per annum. The outstanding amount on the PSF Term Loan was $10,436 on December 31, 2024. Interest under the PSF Term Loan was payable at the Canadian prime rate plus an applicable margin per annum. The outstanding amount under the BDC Facility, a demand loan included in current liabilities was $3,043 on December 31, 2024. Interest under the BDC Facility was payable at an interest rate of 8.70%, payable monthly. 39 Summary of Cash Flows For the Nine Months Ended September 30, (in Thousands) 2025 2024 Cash, beginning of period $ 24,631 $ 35,291 Net cash flow provided by (used in): Operating activities 46,710 2,803 Investing activities (7,117 ) (5,607 ) Financing activities (3,611 ) (8,118 ) Discontinued operations 28,845 4,519 Net cash increase (decrease) for the period 64,827 (6,403 ) Effect of exchange rate changes on cash (1,897 ) (192 ) Cash, end of the period $ 87,561 $ 28,696 Operating Activities - Continuing Operations For the nine months ended September 30, 2025 and 2024, cash provided by (used in) operating activities were $46,710 and $2,803, respectively. The operating activities for the nine months ended September 30, 2025 consisted of $13,630 in changes in non-cash working capital items and $33,080 in changes before non-cash working capital items, while operating activities for the nine months ended September 30, 2024 consisted of ($3,911) in changes in non-cash working capital items and $6,714 in changes before non-cash working capital items. The improvement when comparing the change in before non-cash working capital items for 2025 with 2024 was primarily due to improvements in Canadian Cannabis gross margins in 2025 compared with 2024. Investing Activities - Continuing Operations For the nine months ended September 30, 2025 and 2024, cash used in investing activities were ($7,117) and ($5,607), respectively. The increase in investing activities for the nine months ended September 30, 2025 was primarily due to capital expenditures made for the Leli Phase II indoor cultivation facility in the town of Groningen. Financing Activities - Continuing Operations For the nine months ended September 30, 2025 and 2024, cash used in financing activities were ($3,611) and ($8,118), respectively. For the nine months ended September 30, 2025, cash used in financing activities consisted of debt repayments of ($6,612), partially offset by $3,544 in proceeds from the exercise of warrants and options. For the nine months ended September 30, 2024, cash flows used in financing activities consisted of debt repayments of ($4,301) and cash used for the acquisition of an additional 10% ownership of Rose LifeScience of ($3,817). Contractual Obligations and Commitments We expect to meet our contractual obligations and commitments using our working capital and our other resources described under “Capital Resources” above. Other than with respect to our long-term debt described above and our Canadian and Netherlands expansion projects, we currently do not have any material cash requirements in the near future. Non-GAAP Measures References in this Management’s Discussion and Analysis to “Adjusted EBITDA” are to earnings before interest, taxes, depreciation, and amortization (“EBITDA”), as further adjusted to exclude foreign currency exchange gains and losses, share-based compensation, gains and losses on asset sales and the other adjustments set forth in the table below. In addition, we present below “Adjusted EBITDA – Constant Currency” which excludes the effect of foreign currency rate fluctuations. See “—Constant Currency” below. Adjusted EBITDA and Adjusted EBITDA - Constant Currency are measures of operating performance that are not recognized under GAAP and do not have a standardized meaning prescribed by GAAP. Therefore, these non-GAAP measures may not be comparable to similar measures presented by other issuers. Investors are cautioned that our non-GAAP measures should not be construed as an alternative to net income or loss determined in accordance with GAAP as an indicator of our performance. Our non-GAAP measures are used as additional measures to evaluate the operating and financial performance of our segments. Management believes that our non-GAAP measures are important measures in evaluating the historical performance of the Company because it excludes non-recurring and other items that do not reflect our business performance. 40 Reconciliation of Net Income (Loss) to Adjusted EBITDA The following table reflects a reconciliation of net income (loss) to Adjusted EBITDA, as presented by the Company: For the Three Months Ended September 30, For the Nine Months Ended September 30, (in thousands of U.S. dollars) 2025 2024 2025 2024 Net income (loss) from continuing operations $ 10,493 $ (911 ) $ 18,996 $ (22,465 ) Add: Amortization and depreciation 4,162 4,578 12,572 12,934 Foreign currency exchange loss (gain) 224 (358 ) (1,537 ) 766 Interest expense, net 286 550 1,618 1,837 Provision for income taxes 4,717 94 8,203 674 Share-based compensation 1,014 875 1,282 3,476 Deferred financing fees 32 — 79 10 Goodwill and intangible impairments — — — 11,939 Other impairments — — 217 — Adjustments attributable to non-controlling interest (242 ) (153 ) (184 ) (666 ) Adjusted EBITDA from continuing operations 20,686 4,675 41,246 8,505 Adjustments attributable to discontinued operations (398 ) 627 (7,617 ) (3,171 ) Adjusted EBITDA (1) $ 20,288 $ 5,302 $ 33,629 $ 5,334 (1) Adjusted EBITDA is not a recognized earnings measure and does not have a standardized meaning prescribed by GAAP. Therefore, Adjusted EBITDA presented for these segments may not be comparable to similar measures presented by other issuers. Management believes that Adjusted EBITDA is a useful supplemental measure in evaluating the performance of the Company because it excludes non-recurring and other items that do not reflect the underlying business performance of the Company. Reconciliation of Segmented Net Income (Loss) to Adjusted EBITDA The following table reflects a reconciliation of segmented net income (loss) to Adjusted EBITDA, as presented by the Company: For The Three Months Ended September 30, 2025 (in thousands of U.S. dollars) Produce Cannabis Canada Cannabis U.S. Clean Energy Cannabis Netherlands Corporate Total Net income (loss) from continuing operations $ 1,300 $ 11,678 $ (439 ) $ 223 $ 790 $ (3,059 ) $ 10,493 Add: Amortization and depreciation 813 2,928 47 — 349 25 4,162 Foreign currency exchange (gain) loss (12 ) 19 — — — 217 224 Interest expense, net 345 192 — — — (251 ) 286 Provision for income taxes 26 4,486 — 82 123 — 4,717 Share-based compensation 7 217 60 — 3 727 1,014 Deferred financing fees — 32 — — — — 32 Adjustments attributable to non-controlling interest — (242 ) — — — — (242 ) Adjusted EBITDA from continuing operations 2,479 19,310 (332 ) 305 1,265 (2,341 ) 20,686 Adjustments attributable to discontinued operations (398 ) — — — — — (398 ) Adjusted EBITDA (2) $ 2,081 $ 19,310 $ (332 ) $ 305 $ 1,265 $ (2,341 ) $ 20,288 41 For The Three Months Ended September 30, 2024 (in thousands of U.S. dollars) Produce Cannabis Canada Cannabis U.S. Clean Energy Cannabis Netherlands Corporate Total Net income (loss) from continuing operations $ 285 $ 1,168 $ (192 ) $ 297 $ (92 ) $ (2,377 ) $ (911 ) Add: Amortization and depreciation 817 3,341 50 — 324 46 4,578 Foreign currency exchange loss (gain) 20 (28 ) — — — (350 ) (358 ) Interest expense, net 555 42 — 16 — (63 ) 550 Provision for (recovery of) income taxes 27 308 — — (241 ) — 94 Share-based compensation — 29 (17 ) — — 863 875 Adjustments attributable to non-controlling interest — (108 ) — — (45 ) — (153 ) Adjusted EBITDA from continuing operations 1,704 4,752 (159 ) 313 (54 ) (1,881 ) 4,675 Adjustments attributable to discontinued operations 627 — — — — — 627 Adjusted EBITDA (2) $ 2,331 $ 4,752 $ (159 ) $ 313 $ (54 ) $ (1,881 ) $ 5,302 For The Nine Months Ended September 30, 2025 (in thousands of U.S. dollars) Produce Cannabis Canada Cannabis U.S. Clean Energy Cannabis Netherlands Corporate Total Net income (loss) from continuing operations $ 2,815 $ 21,199 $ (607 ) $ 774 $ 1,383 $ (6,568 ) $ 18,996 Add: Amortization and depreciation 3,086 8,231 145 — 1,003 107 12,572 Foreign currency exchange gain (94 ) (116 ) — — — (1,327 ) (1,537 ) Interest expense, net 1,269 649 — — — (300 ) 1,618 Provision for income taxes 26 7,720 — 286 171 — 8,203 Share-based compensation 26 290 72 — 3 891 1,282 Deferred financing fees — 79 — — — — 79 Other impairments — — 217 — — — 217 Adjustments attributable to non-controlling interest — (184 ) — — — — (184 ) Adjusted EBITDA from continuing operations 7,128 37,868 (173 ) 1,060 2,560 (7,197 ) 41,246 Adjustments attributable to discontinued operations (7,617 ) — — — — — (7,617 ) Adjusted EBITDA (2) $ (489 ) $ 37,868 $ (173 ) $ 1,060 $ 2,560 $ (7,197 ) $ 33,629 42 For The Nine Months Ended September 30, 2024 (in thousands of U.S. dollars) Produce Cannabis Canada Cannabis U.S. Clean Energy Cannabis Netherlands Corporate Total Net (loss) income from continuing operations $ (3,054 ) $ 3,399 $ (13,173 ) $ 338 $ (690 ) $ (9,285 ) $ (22,465 ) Add: Amortization and depreciation 2,456 9,221 154 — 951 152 12,934 Foreign currency exchange loss (gain) 58 (6 ) — — — 714 766 Interest expense, net 1,697 524 — 16 — (400 ) 1,837 Provision for (recovery of) income taxes 23 896 — — (241 ) (4 ) 674 Share-based compensation — 126 66 — — 3,284 3,476 Deferred financing fees — 10 — — — — 10 Goodwill and intangible impairments (1) — — 11,939 — — — 11,939 Adjustments attributable to non-controlling interest — (527 ) — — (139 ) — (666 ) Adjusted EBITDA from continuing operations 1,180 13,643 (1,014 ) 354 (119 ) (5,539 ) 8,505 Adjustments attributable to discontinued operations (3,171 ) — — — — — (3,171 ) Adjusted EBITDA (2) $ (1,991 ) $ 13,643 $ (1,014 ) $ 354 $ (119 ) $ (5,539 ) $ 5,334 (1) Reflects impairment to goodwill and intangibles of $11,939 in U.S. Cannabis that was based on recent historical performance, near-term forecasts, and the state of the CBD industry in the United States. See “Critical Accounting Estimates and Judgments” below for more information. (2) Adjusted EBITDA is not a recognized earnings measure and does not have a standardized meaning prescribed by GAAP. Therefore, Adjusted EBITDA presented for these segments may not be comparable to similar measures presented by other issuers. Management believes that Adjusted EBITDA is a useful supplemental measure in evaluating the performance of the Company because it excludes non-recurring and other items that do not reflect the underlying business performance of the Company. Adjusted EBITDA – Constant Currency To supplement the consolidated financial statements presented in accordance with U.S. GAAP, we have presented constant currency adjusted financial measures for sales, cost of sales, selling, general and administrative, other income (expense), income (loss) from continuing operations, income (loss) from consolidated entities, net income (loss), and Adjusted EBITDA for the three and nine months ended September 30, 2025, which are considered non-GAAP financial measures. We present constant currency information to provide a framework for assessing how our underlying operations performed excluding the effect of foreign currency rate fluctuations. To present this information, current and comparative prior period income statement results in currencies other than U.S. dollars are converted into U.S. dollars using the average exchange rates from the three month comparative period in 2024 rather than the actual average exchange rates in effect during the current period. All growth comparisons relate to the corresponding period in 2024. We have provided this non-GAAP financial information to aid investors in better understanding the performance of our segments without taking into account the effect of exchange rate fluctuations. The non-GAAP financial measures presented in this Quarterly Report should not be considered as a substitute for, or superior to, the measures of financial performance prepared in accordance with U.S. GAAP. The tables below set forth certain measures of consolidated results from continuing operations on a constant currency basis for the three and nine months ended September 30, 2025 compared with the three and nine months ended September 30, 2024 on an as reported and constant currency basis (in thousands): 43 As Reported As Adjusted for Constant Currency For the Three Months Ended September 30, As Reported Change For the Three Months Ended September 30, Constant Currency Change 2025 2024 $ % 2025 $ % Sales $ 66,741 $ 54,938 $ 11,803 21 % $ 67,190 $ 12,252 22 % Cost of sales (34,803 ) (41,301 ) 6,498 16 % (35,002 ) 6,299 15 % Selling, general and administrative expenses (15,599 ) (14,565 ) (1,034 ) (7 %) (15,687 ) (1,122 ) (8 %) Other (expense) income, net (806 ) 181 (987 ) 545 % (809 ) (990 ) 547 % Income (loss) before taxes and equity method investment income 15,533 (747 ) 16,280 2179 % 15,692 16,439 2201 % Income (loss) from continuing operations 10,816 (841 ) 11,657 1386 % 10,932 11,773 1400 % Income (loss) from discontinued operations, net of tax (276 ) 91 (367 ) 403 % (276 ) (367 ) 403 % Income (loss) including non-controlling interests 10,540 (750 ) 11,290 1505 % 10,656 11,406 1521 % Net income (loss) attributable to Village Farms International, Inc. shareholders 10,217 (820 ) 11,037 1346 % 10,330 11,150 1360 % Adjusted EBITDA - Constant Currency (2) 20,288 5,302 14,986 (283 %) 20,474 15,172 (286 %) As Reported As Adjusted for Constant Currency For the Nine Months Ended September 30, As Reported Change For the Nine Months Ended September 30, Constant Currency Change 2025 2024 $ % 2025 $ % Sales $ 166,320 $ 150,522 $ 15,798 10 % $ 169,899 $ 19,377 13 % Cost of sales (97,860 ) (112,031 ) 14,171 13 % (99,836 ) 12,195 11 % Selling, general and administrative expenses (45,629 ) (45,871 ) 242 1 % (46,375 ) (504 ) (1 %) Other (expense) income, net 4,021 (2,238 ) 6,259 280 % 3,998 6,236 279 % Goodwill and intangible asset impairments (1) — (11,939 ) 11,939 100 % — 11,939 100 % Income (loss) before taxes and equity method investment income 26,852 (21,557 ) 48,409 225 % 27,685 49,242 228 % Income (loss) from continuing operations 18,649 (22,231 ) 40,880 184 % 19,257 41,488 187 % Income (loss) from discontinued operations, net of tax 11,015 (4,756 ) 15,771 332 % 11,015 15,771 332 % Income (loss) including non-controlling interests 29,664 (26,987 ) 56,651 210 % 30,272 57,259 212 % Net income (loss) attributable to Village Farms International, Inc. shareholders 30,011 (27,221 ) 57,232 210 % 30,629 57,850 213 % Adjusted EBITDA - Constant Currency (2) 33,629 5,334 28,295 530 % 34,724 29,390 551 % (1) Reflects impairment to goodwill and intangibles of $11,939 in U.S. Cannabis that was based on recent historical performance, near-term forecasts, and the state of the CBD industry in the United States. See “Critical Accounting Estimates and Judgments” below for more information. (2) Adjusted EBITDA - Constant Currency is not a recognized earnings measure and does not have a standardized meaning prescribed by GAAP. Therefore, Adjusted EBITDA - Constant Currency may not be comparable to similar measures presented by other issuers. Management believes that Adjusted EBITDA - Constant Currency is a useful supplemental measure in evaluating the performance of the Company because it excludes non-recurring and other items that do not reflect the underlying business performance of the Company. Recent Accounting Pronouncements Not Yet Adopted 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. Critical Accounting Estimates and Judgments Our discussion and analysis of our financial condition and results of operations are based upon our Unaudited Condensed Consolidated Interim Financial Statements, which have been prepared in accordance with U.S. GAAP and are included in Part I of this 44 Quarterly Report on Form 10-Q. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, sales and expenses and related disclosure of contingent assets and liabilities. As described in Note 5, Goodwill and Intangible Assets, in our Unaudited Condensed Consolidated Interim Financial Statements included in Part 1 of this Quarterly Report on Form 10-Q, during the nine months ended September 30, 2025 and 2024, the Company considered qualitative factors in assessing for impairment indicators for the Company’s U.S. and Canadian Cannabis segments. As part of this assessment, the Company considered both external and internal factors, including overall financial performance and outlook. At September 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 goodwill and intangible assets for its reporting units to be below their carrying amounts. At September 30, 2025, the carrying value of goodwill associated with our Cannabis – Canada segment was $43.7 million and the carrying value of intangible assets associated with our Cannabis – Canada segment was $20.5 million. We believe that the estimates, assumptions and judgments involved in the accounting policies described in the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section of our Annual Report on Form 10-K have the greatest potential impact on our financial statements, so we consider these to be our critical accounting policies. Actual results could differ from the estimates we use in applying our critical accounting policies. We are not currently aware of any reasonably likely events or circumstances that would result in materially different amounts being reported. 45 Item 3. Quantitative and Qualitati ve Disclosures About Market Risk Interest Rate Risk As of September 30, 2025, our variable interest rate debt was primarily related to our Credit Facilities and Term Loans. Outstanding borrowings under our Credit Facility and Term Loans bear interest at either the (a) Secured Overnight Financing Rate (“SOFR”) or (b) Canadian Prime Rate, as defined in the agreement, plus an applicable margin. As of September 30, 2025, we had approximately $34,594 in aggregate principal amounts of our Term Loans with a weighted average interest rate of 6.3%. The current interest rates for outstanding revolving loans under our Credit Facility and Term Loans reflect basis point decreases of approximately 3.1% over the comparable period in 2024. Our interest expense is affected by the overall interest rate environment. Our variable rate interest debt subjects us to risk from increases in prevailing interest rates. This risk increases in the current inflationary environment, in which the Federal Reserve may increase interest rates, resulting in an increase in our variable interest rates and related interest expense. An additional 50 basis point increase in the applicable interest rates under our Credit Facility and Term Loan would have increased our interest expense by approximately $47 and $141 for the three and nine months ended September 30, 2025, respectively, and $57 and $171 for the three and nine months ended September 30, 2024, respectively. While we cannot predict our ability to refinance existing debt or the significance of the impact that interest rate movements will have on our existing debt, management evaluates our financial position on an ongoing basis. Foreign Exchange Risk As of September 30, 2025 and 2024, the Canadian/U.S. foreign exchange rate was C$1.00 = US$0.7185 and C$1.00 = US$0.7398, respectively. If all other variables remain constant, an increase of $0.10 in the Canadian dollar would have the following impact on the ending balances of certain statements of financial position items at September 30, 2025 and 2024 with the net foreign exchange gain or loss directly impacting comprehensive income (loss): September 30, 2025 September 30, 2024 Financial assets Cash and cash equivalents $ 4,739 $ 2,847 Trade receivables 4,305 3,853 Inventories 4,257 6,760 Prepaid and deposits 289 285 Financial liabilities Trade payables and accrued liabilities (5,227 ) (4,306 ) Loan payable (2,571 ) (3,153 ) Net foreign exchange gain $ 5,792 $ 6,286 Our exposure to foreign exchange risk and the impact of foreign exchange rates are monitored by the Company’s management but generally the Company tries to match its sales (trade receivables) and vendor payments (trade payables) such that the net impact is not material. Other than the interest rate risk and foreign exchange risk discussed above, there have been no material changes to our market risks from those disclosed in Part II, Item 7A of our Annual Report on Form 10-K.