10q10k10q10k.net

What changed in Village Farms International, Inc.'s 10-K — 2024 vs 2025

vs

Paragraph-level year-over-year comparison of Village Farms International, Inc.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+660 added−669 removedSource: 10-K (2026-03-12) vs 10-K (2025-03-13)

Top changes in Village Farms International, Inc.'s 2025 10-K

660 paragraphs added · 669 removed · 455 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

273 edited+130 added−118 removed420 unchanged
Biggest changeThese risks and uncertainties include, but are not limited to, the following: Business and Operational Risk Factors • We may be unable to regain profitability or achieve future growth. • We are dependent on the success of our Canadian Cannabis business, which has a limited operating history in the cannabis industry. 18 • Our success depends on our ability to attract and retain customers. • We are subject to restrictive covenants under our Credit Facilities (as defined in Liquidity and Capital Resources below). • We will need additional financing to maintain and further develop our business. • We have identified material weaknesses in our internal controls over financial reporting.
Biggest changeThese risks and uncertainties include, but are not limited to, the following: Business and Operational Risk Factors • We may be unable to maintain profitability or continue future growth. • We are dependent on the success of our Canadian Cannabis business, which has a limited operating history in the cannabis industry. • Our international expansion, including Leli, may heighten our operational risks. 20 • There can be no assurance that our previous, current, or potential future acquisitions, joint ventures, investments or expansions of scope of existing relationships will have a beneficial impact on our business, financial condition and results of operations. • We may need additional financing to maintain and further develop our business. • We face risks associated with the use of debt, including refinancing risk. • Our success depends on our ability to attract and retain customers. • We are subject to restrictive covenants under our Credit Facilities (as defined in Liquidity and Capital Resources below).
The Delta RNG Project converts VFCE’s previous landfill gas-to-electricity business into a state-of-the-art landfill gas to high-demand renewable natural gas ("RNG") facility. Under the contract, Terreva Renewables sells the renewable natural gas and VFCE receives a portion of the revenue in the form of a royalty. Leli Holland B.V.
The Delta RNG Project converts VFCE’s previous landfill gas-to-electricity business into a state-of-the-art landfill gas to high-demand renewable natural gas ("RNG") facility. Under the contract, Terreva Renewables sells renewable natural gas and VFCE receives a portion of the revenue in the form of a royalty. Leli Holland B.V.
However, in October of 2022, the Biden Administration announced a mass pardon of persons who had been convicted of simple marijuana possession under federal law and also its intention to review the regulation of marijuana under the CSA by directing the Secretary of Health and Human Services and the Attorney General to initiate the administrative process to expeditiously review marijuana’s Schedule I status.
However, in October 2022, the Biden Administration announced a mass pardon of persons who had been convicted of simple marijuana possession under federal law and also its intention to review the regulation of marijuana under the CSA by directing the Secretary of Health and Human Services and the Attorney General to initiate the administrative process to expeditiously review marijuana’s Schedule I status.
Under this bill: 11 • a federal banking regulator is prohibited from penalizing a depository institution for providing banking services to a state-sanctioned marijuana business. • a federal banking regulator is prohibited from requesting or requiring a depository institution to terminate a deposit account unless o (1) there is a valid reason, such as the regulator has cause to believe that the depository institution is engaging in an unsafe or unsound practice; and o (2) reputational risk is not the dispositive factor. • proceeds from a transaction conducted by a state-sanctioned marijuana business are no longer considered proceeds from unlawful activity. • and, a financial institution, insurer, or federal agency may not be held liable or subject to asset forfeiture under federal law for providing a loan, mortgage, or other financial service to a state-sanctioned marijuana business.
Under this bill: • a federal banking regulator is prohibited from penalizing a depository institution for providing banking services to a state-sanctioned marijuana business. • a federal banking regulator is prohibited from requesting or requiring a depository institution to terminate a deposit account unless 11 o (1) there is a valid reason, such as the regulator has cause to believe that the depository institution is engaging in an unsafe or unsound practice; and o (2) reputational risk is not the dispositive factor. • proceeds from a transaction conducted by a state-sanctioned marijuana business are no longer considered proceeds from unlawful activity. • and, a financial institution, insurer, or federal agency may not be held liable or subject to asset forfeiture under federal law for providing a loan, mortgage, or other financial service to a state-sanctioned marijuana business.
The effects of these factors on the price of our goods and, therefore, the economic viability of our business, cannot accurately be predicted and may have a material adverse effect on our business, prospects, financial condition, results of operations and cash flows. The produce, cannabis and CBD industries are highly competitive and sensitive to changes in demand and supply.
The effects of these factors on the price of our goods and, therefore, the economic viability of our business, cannot accurately be predicted and may have a material adverse effect on our business, prospects, financial condition, results of operations and cash flows. The cannabis, CBD and produce industries are highly competitive and sensitive to changes in demand and supply.
The issuance of additional Common Shares upon exercise of outstanding options, warrants and other convertible securities will cause our existing shareholders to experience dilution of their ownership interests.
The issuance of additional Common Shares upon exercise of outstanding options, warrants and other convertible securities will cause our existing shareholders to experience dilution of their ownership interests.
Additions of new restrictions, amendments to current laws, regulations and guidelines governing the production, sales and use of cannabis-based and CBD products, more stringent implementation of enforcement thereof or other unanticipated events, including changes in political conditions, regimes or political instability, currency controls, changes in taxation laws, restrictions on foreign exchange and repatriation between U.S. and Canada, governmental regulations relating to foreign investment and changes in the attitudes toward cannabis, are beyond our control 35 and could require extensive changes to our operations, which in turn may result in a material adverse effect on or business, financial condition and results of operations.
Additions of new restrictions, amendments to current laws, regulations and guidelines governing the production, sales and use of cannabis-based and CBD products, more stringent implementation of enforcement thereof or other unanticipated events, including changes in political conditions, regimes or political instability, currency controls, changes in taxation laws, restrictions on foreign exchange and repatriation between U.S. and Canada, governmental regulations relating to foreign investment and changes in the attitudes toward cannabis, are beyond our control and could require extensive changes to our operations, which in turn may result in a material adverse effect on or business, financial condition and results of operations.
On November 18, 2024, the Company, in coordination with another Designated Participant (“DP”) of the hearing, filed a joint motion with the ALJ seeking the immediate disqualification and removal of the DEA from defending the Proposed Rule, moved to replace DEA with the Department DOJ as proponent, and ordered that the record include all requests for hearing and/or participation filed 12 with the DEA, as well as a record of the decisions made by the DEA regarding why certain parties were designated as participants and others were not, and any ex parte communications between DEA and third parties.
On November 18, 2024, the Company, in coordination with another Designated Participant (“DP”) of the hearing, filed a joint motion with the ALJ seeking the immediate disqualification and removal of the DEA from defending the Proposed Rule, moved to replace DEA with the Department DOJ as proponent, and ordered that the record include all requests for hearing and/or participation filed with the DEA, as well as a record of the decisions made by the DEA regarding why certain parties were designated as participants and others were not, and any ex parte communications between DEA and third parties.
Shortly after the revision of the Opium Act, the implementation of new guidelines resulted in a delegation of policy enforcement to be handled at the municipality level amongst the cooperation of a "local triangle" (consisting of the 13 municipality's mayor, public prosecutor, and chief of police) that would decide whether or not to prosecute small-scale sales of cannabis, reflecting what in the Dutch legal system is known as the expediency principle.
Shortly after the revision of the Opium Act, the implementation of new guidelines resulted in a delegation of policy enforcement to be handled at the municipality level amongst the cooperation of a "local triangle" (consisting of the municipality's mayor, public prosecutor, and chief of police) that would decide whether or not to prosecute small-scale sales of cannabis, reflecting what in the Dutch legal system is known as the expediency principle.
Used "off-the-record" since 1978, new guidelines stemming from the 1976 Opium Act were officially published in 1979. A key inclusion to the guidelines state, "Police would only interfere if small-scale trade was publicly advertised or otherwise provocatively effectuated." It is believed that these new guidelines provided the legal leeway for coffee shops to rapidly emerge.
Used "off-the-record" since 1978, new guidelines stemming from the 1976 Opium Act were officially published in 1979. A key inclusion to the guidelines state, "Police would only interfere if small-scale trade was publicly advertised or otherwise 14 provocatively effectuated." It is believed that these new guidelines provided the legal leeway for coffee shops to rapidly emerge.
If principal payments due at maturity cannot be refinanced, extended or repaid with proceeds from other sources, such as new equity capital, our cash flow may not be sufficient to repay all maturing debt in years when payments come due. The materialization of any of the foregoing risks would adversely affect our financial condition and results of operations.
If principal payments due at maturity cannot be refinanced, extended or repaid with proceeds from other sources, such as new 24 equity capital, our cash flow may not be sufficient to repay all maturing debt in years when payments come due. The materialization of any of the foregoing risks would adversely affect our financial condition and results of operations.
There can be no assurance that we will be able to meet any additional compliance requirements or regulatory restrictions, or remain competitive in the face of unexpected changes in market conditions. These actions, together with potential deterioration in the public’s perception of cannabis containing vaping liquids, may result in a reduced market for our vaping products.
There can be no assurance that we will be able to meet any additional compliance requirements or regulatory restrictions, or remain competitive in the face of unexpected changes in market conditions. 39 These actions, together with potential deterioration in the public’s perception of cannabis containing vaping liquids, may result in a reduced market for our vaping products.
Pursuant to the Ministry of Health’s Cannabis Tracking System Order (the “Order”), a holder of a federal license for cultivation, a license for processing or a license for sale for medical purposes that authorizes the possession of cannabis must report monthly to the Minister with specific information about their authorized activities with cannabis (e.g. cannabis inventory quantities), in the form and manner specified by the Minister.
Pursuant to the Ministry of Health’s Cannabis Tracking System Order (the “Order”), a holder of a federal license for cultivation, a license for processing or a license for sale for medical purposes that authorizes the possession of cannabis must report monthly to the Minister 5 with specific information about their authorized activities with cannabis (e.g. cannabis inventory quantities), in the form and manner specified by the Minister.
In addition, changes in regulations, government or judicial interpretation of regulations, or more vigorous enforcement thereof or other unanticipated events could require extensive changes to our Canadian cannabis operations, increase compliance costs or give rise to material liabilities or a revocation of its licenses and other permits, which could have a material adverse effect on our 33 business, results of operations and financial condition.
In addition, changes in regulations, government or judicial interpretation of regulations, or more vigorous enforcement thereof or other unanticipated events could require extensive changes to our Canadian cannabis operations, increase compliance costs or give rise to material liabilities or a revocation of its licenses and other permits, which could have a material adverse effect on our business, results of operations and financial condition.
Since the law went into effect on September 1, 2021, the patient count has risen to just over 102,500 patients and the participating physician count has to just over 830. On January 17, 2023, Texas announced it will open TCUP for more applications with the expectation that it will issue new medicinal licenses in 2023.
Since the law went 13 into effect on September 1, 2021, the patient count has risen to just over 102,500 patients and the participating physician count has risen to just over 830. On January 17, 2023, Texas announced it will open TCUP for more applications with the expectation that it will issue new medicinal licenses in 2023.
The development of our proprietary technology entails significant technical and business risks, and may require significant continuing costs, development efforts and third-party commitments. We may not be successful in using new technologies or exploiting niche markets effectively or adapting our cannabis business to evolving customer or medical 26 requirements or preferences or emerging industry standards.
The development of our proprietary technology entails significant technical and business risks, and may require significant continuing costs, development efforts and third-party commitments. We may not be successful in using new technologies or exploiting niche markets effectively or adapting our cannabis business to evolving customer or medical requirements or preferences or emerging industry standards.
Our Canadian Cannabis business also faces competition from existing entities licensed under the Cannabis Act . Certain of these competitors have significantly greater financial, production, marketing, research and development and technical and human resources than we do. As a result, our Canadian cannabis competitors may be more successful in gaining market penetration and market share.
Our Canadian Cannabis business also faces competition from existing entities licensed under the Cannabis Act . Certain of these competitors have significantly greater financial, marketing, research and development and technical and human resources than we do. As a result, our Canadian cannabis competitors may be more successful in gaining market penetration and market share.
Any failure by Pure Sunfarms or Rose LifeScience to comply with such standards could result in being downgraded, disqualified as a supplier, and could lead to the termination or cessation of orders under existing or future supply contracts. Further, provincial purchasers may terminate or cease ordering under existing contracts at their will.
Any failure by Pure Sunfarms or Rose LifeScience to comply with such standards could result in being downgraded, disqualified as a supplier, and could lead to the termination or cessation of orders under existing or future supply contracts. Further, provincial purchasers may terminate or cease ordering under existing contracts at 35 their will.
Violations of these FDA and USDA regulations, or allegations of such violations, could disrupt our business and result in a material adverse effect on our results of operations, as well as adverse publicity and potential harm to our reputation. We may be subject to product liability claims. As the cannabis products of our Canadian and U.S.
Violations of these FDA and USDA regulations, or allegations of such violations, could disrupt our business and result in a material adverse effect on our results of operations, as well as adverse publicity and potential harm to our reputation. We may be subject to product liability claims. As the cannabis products of our Canadian, Dutch and U.S.
In addition, as a producer of food products, we are subject to potential product liabilities connected with our operations and the marketing and distribution of these products, including liabilities and expenses associated with contaminated or unsafe products. We may also be contractually liable to indemnify and hold harmless third parties from the costs or consequences of contaminated or unsafety products.
In addition, as a producer of food products, we are subject to potential product liabilities connected with our operations and the marketing and distribution of these products, including liabilities and expenses associated with contaminated or unsafe products. We may also be contractually liable to indemnify and hold harmless third parties from the costs or consequences of contaminated or unsafe products.
If so, we may suffer damage to our reputation and become subject to proceedings or actions against it by governmental entities or others. Any such 38 proceeding or action could hurt our reputation, force us to spend significant amounts to defend our practices, distract our management or otherwise have an adverse effect on our business.
If so, we may suffer damage to our reputation and become subject to proceedings or actions against it by governmental entities or others. Any such proceeding or action could hurt our reputation, force us to spend significant amounts to defend our practices, distract our management or otherwise have an adverse effect on our business.
Any delays in obtaining, or failure to obtain the necessary regulatory approvals will significantly delay the development of the markets and for our products and could have a material adverse effect on our business, results of operations and financial condition. Our cannabis operations in Canada are subject to laws, regulations and guidelines related to the cannabis industry.
Any delays in obtaining, or failure to obtain the necessary regulatory approvals will significantly delay the development of the markets and for our products and could have a material adverse effect on our business, results of operations and financial condition. Our cannabis operations are subject to laws, regulations and guidelines related to the cannabis industry.
Investors should not assume that Canadian courts (i) would enforce judgments of United States courts obtained in actions against us or our directors and officers 43 predicated upon the civil liability provisions of the United States federal securities laws or the securities or “blue sky” laws of any state within the United States or (ii) would enforce, in original actions, liabilities against us or our directors and officers predicated upon the United States federal securities laws or any such state securities or “blue sky” laws.
Investors should not assume that Canadian courts (i) would enforce judgments of United States courts obtained in actions against us or our directors and officers predicated upon the civil liability provisions of the United States federal securities laws or the securities or “blue sky” laws of any state within the United States or (ii) would enforce, in original actions, liabilities against us or our directors and officers predicated upon the United States federal securities laws or any such state securities or “blue sky” laws.
Any such proceeding or action could hurt our reputation, force us to spend significant amounts in defense of these proceedings, distract our 34 management, increase our costs of doing business, decrease the use of our website and mobile applications by consumers and suppliers and may result in the imposition of monetary liabilities.
Any such proceeding or action could hurt our reputation, force us to spend significant amounts in defense of these proceedings, distract our management, increase our costs of doing business, decrease the use of our website and mobile applications by consumers and suppliers and may result in the imposition of monetary liabilities.
There can be no assurance that the insurance against all such potential liabilities we maintain will be adequate in all 36 cases. In addition, even if a product liability claim was not successful or was not fully pursued, the negative publicity surrounding any such assertion could harm our reputation.
There can be no assurance that the insurance against all such potential liabilities we maintain will be adequate in all cases. In addition, even if a product liability claim was not successful or was not fully pursued, the negative publicity surrounding any such assertion could harm our reputation.
In March 2023, Attorney General Merrick Garland stated during a senate hearing that “I think that it’s fair to expect what I said at my confirmation hearing with respect to 10 marijuana and policy, that it will be very close to what was done in the Cole Memorandum”.
In March 2023, Attorney General Merrick Garland stated during a senate hearing that “I think that it’s fair to expect what I said at my confirmation hearing with respect to marijuana and policy, that it will be very close to what was done in the Cole Memorandum”.
Although we strive to ensure that all of our service providers have implemented and adhered to high caliber quality control systems, any significant failure or deterioration of such quality control systems could have a material adverse effect on our business and operating results. 25 Our products may be subject to recalls.
Although we strive to ensure that all of our service providers have implemented and adhered to high caliber quality control systems, any significant failure or deterioration of such quality control systems could have a material adverse effect on our business and operating results. Our products may be subject to recalls.
Further, adverse publicity reports or other media attention regarding the safety, efficacy and quality of cannabis or CBD, our Canadian and U.S. Cannabis business’ current or future products, the use of cannabis or CBD for medical purposes or associating the consumption of cannabis or CBD with illness or other negative effects or events, could adversely affect us.
Further, adverse publicity reports or other media attention regarding the safety, efficacy and quality of cannabis or CBD, our Canadian, Dutch and U.S. Cannabis business’ current or future products, the use of cannabis or CBD for medical purposes or associating the consumption of cannabis or CBD with illness or other negative effects or events, could adversely affect us.
Disputes with customers may arise in the future relating to the non-payment of accounts receivable and may escalate to litigation or other dispute resolution processes, which could be protracted, time consuming and expensive, and there can be 31 no assurance that we will be successful in any such disputes.
Disputes with customers may arise in the future relating to the non-payment of accounts receivable and may escalate to litigation or other dispute resolution processes, which could be protracted, time-consuming and expensive, and there can be no assurance that we will be successful in any such disputes.
If we are unable to comply with our debt covenants in the future, we may seek a waiver and/or an 21 amendment(s) from the applicable lenders in respect of any such covenant in order to avoid any breach or default that might otherwise result therefrom.
If we are unable to comply with our debt covenants in the future, we may seek a waiver and/or an amendment(s) from the applicable lenders in respect of any such covenant in order to avoid any breach or default that might otherwise result therefrom.
The cannabis and CBD industries are undergoing rapid growth and substantial change, and the legal landscape for recreational cannabis and CBD is rapidly changing internationally. An increasing number of jurisdictions globally are passing legislation allowing for the production and distribution of recreational cannabis and other cannabinoid-containing product, such as 30 CBD, in some form.
The cannabis and CBD industries are undergoing rapid growth and substantial change, and the legal landscape for recreational cannabis and CBD is rapidly changing internationally. An increasing number of jurisdictions globally are passing legislation allowing for the production and distribution of recreational cannabis and other cannabinoid-containing product, such as CBD, in some form.
There can be no assurance that continuing fluctuations in price and volume will not occur. If such increased levels of volatility and market turmoil continue for a protracted period of time, our operations and the trading price of the Common Shares may be materially adversely affected.
There can be no assurance that continuing fluctuations in price and volume will not occur. If such 42 increased levels of volatility and market turmoil continue for a protracted period of time, our operations and the trading price of the Common Shares may be materially adversely affected.
To fulfill these requirements, the Minister of Health and the Minister of Mental Health and Addictions announced an independent Expert Panel to lead the legislative review, and provide independent, expert advice to both Ministers on progress made towards achieving the Act's objectives and will help identify priority areas for improving the functioning of the legislation.
To fulfill these requirements, the Minister of Health and the Minister of Mental Health and Addictions announced an independent Expert Panel to lead the legislative review, and provide independent, expert advice to both Ministers on progress made towards achieving the Act's objectives and help identify priority areas for improving the functioning of the legislation.
Although there are barriers to personal cultivation, including the start-up costs of obtaining equipment and materials to produce cannabis, depending on the number of consumers who choose to pursue personal cultivation, there could be significant competition from individual growers for our Canadian cannabis segment products.
Although there are barriers to personal cultivation, including the start-up costs of obtaining equipment and materials to produce cannabis, depending on the number of consumers who 30 choose to pursue personal cultivation, there could be significant competition from individual growers for our Canadian cannabis segment products.
There can be no assurance that consumption will increase or that present consumption levels will be maintained. If consumer demand for our products decreases, our financial condition and results of operations may be materially adversely affected. We may be negatively affected by the customer and vendor credit risk.
There can be no assurance that consumption will increase or that present consumption levels will be maintained. If consumer demand for our products decreases, our financial condition and results of operations may be materially adversely affected. 32 We may be negatively affected by the customer and vendor credit risk.
Yukon : Yukon had initially limited the distribution and sale of recreational cannabis to government outlets and government-run online stores but has since opened up its retail market to permit licensed private retailers in the territory. Cannabis retail licenses are issued by the Cannabis Licensing Board.
Yukon : Yukon had initially limited the distribution and sale of recreational cannabis to government outlets and government-run online stores but has since opened up its retail market to permit licensed private retailers in the territory. Cannabis retail licenses are issued 8 by the Cannabis Licensing Board.
We maintain a “key person” insurance policy on one member of our management team. Our future success will depend on, among other things, our ability to keep the services of these key executives and to hire other highly qualified employees at all levels.
We maintain a “key person” insurance policy on one member of our management team. Our future success 40 will depend on, among other things, our ability to keep the services of these key executives and to hire other highly qualified employees at all levels.
Such issuance may cause a reduction in the proportionate ownership and voting power of all other shareholders. The dilution may result in a decline in the price of our Common Shares or a change in control. 42 We do not expect to pay dividends for the foreseeable future.
Such issuance may cause a reduction in the proportionate ownership and voting power of all other shareholders. The dilution may result in a decline in the price of our Common Shares or a change in control. We do not expect to pay dividends for the foreseeable future.
Although we anticipate and factor in certain periods of lower than optimal light levels, extended periods of severe or unusual light levels may adversely impact our financial results due to higher costs and missed sales opportunities arising from reduced production yields.
In addition, although we anticipate and factor in certain periods of lower than optimal light levels, extended periods of severe or unusual light levels may adversely impact our financial results due to higher costs and missed sales opportunities arising from reduced production yields.
Compliance with current and future environmental laws and regulations, which are likely to become more stringent over 37 time, including those governing greenhouse gas emissions, may impose additional capital costs and financial expenditures, which could adversely affect operational results and profitability.
Compliance with current and future environmental laws and regulations, which are likely to become more stringent over time, including those governing greenhouse gas emissions, may impose additional capital costs and financial expenditures, which could adversely affect operational results and profitability.
The loss of any of Canadian cannabis senior management or key employees could materially adversely affect our ability to execute our business plan and strategy, and our Canadian cannabis businesses may not be able to find adequate replacements on a timely basis, or at all.
The loss of any of cannabis senior management or key employees could materially adversely affect our ability to execute our business plan and strategy, and our cannabis businesses may not be able to find adequate replacements on a timely basis, or at all.
Moreover, cannabis is phytoremediative, meaning that it may extract toxins or other undesirable chemicals or compounds from the ground in which it is planted. Various regulatory agencies have established maximum limits for pathogens, toxins, chemicals, and other compounds that may be present in agricultural materials.
Moreover, cannabis is phytoremediative, meaning that it may extract toxins or other undesirable chemicals or compounds from the 28 ground in which it is planted. Various regulatory agencies have established maximum limits for pathogens, toxins, chemicals, and other compounds that may be present in agricultural materials.
Any prolonged disruption in the flow of our product across the U.S.-Canada and U.S-Mexico border (which would be exacerbated by tariffs and/or trade restrictions) could have an adverse effect on our financial condition and results of our produce operations.
Any prolonged disruption in the flow of our product across the U.S.-Canada border (which would be exacerbated by tariffs and/or trade restrictions) could have an adverse effect on our financial condition and results of our produce operations.
There can be no assurance that we will be able to obtain or maintain product liability insurance on acceptable terms or with adequate coverage against potential liabilities. Such insurance is expensive and may not be available on acceptable terms, or at all.
There can be no assurance that we will be able to obtain or maintain product liability insurance on 37 acceptable terms or with adequate coverage against potential liabilities. Such insurance is expensive and may not be available on acceptable terms, or at all.
On October 17, 2018, the Cannabis License Act, 2018 (Ontario) became law and other legislation, including the Cannabis Control Act, 2017 , the Ontario Cannabis Retail Corporation Act, 2017 and the Liquor Control Act were amended to create a private 7 retail framework for the sale of recreational cannabis in Ontario.
On October 17, 2018, the Cannabis License Act, 2018 (Ontario) became law and other legislation, including the Cannabis Control Act, 2017 , the Ontario Cannabis Retail Corporation Act, 2017 and the Liquor Control Act were amended to create a private retail framework for the sale of recreational cannabis in Ontario.
As a result, our effective income tax rate, as well as the cost and growth of our business could be materially and adversely affected, which could in turn have a material adverse effect on our financial condition and results of operations.
As a result, our 41 effective income tax rate, as well as the cost and growth of our business could be materially and adversely affected, which could in turn have a material adverse effect on our financial condition and results of operations.
It is also possible that we will fail to identify patentable aspects of inventions made in the course of their development and commercialization activities before it is too late to obtain patent protection for them.
It is also possible that we will fail to identify patentable 27 aspects of inventions made in the course of their development and commercialization activities before it is too late to obtain patent protection for them.
The mere presence of a cannabinoid (such as CBD) is not dispositive as to whether the product is legal or illegal. Under U.S. federal law, products containing CBD may be unlawful if derived from U.S.
The mere presence of a cannabinoid (such as CBD) is not dispositive as to whether 33 the product is legal or illegal. Under U.S. federal law, products containing CBD may be unlawful if derived from U.S.
There is no assurance that any of the existing personnel who presently or may in the future require a security clearance will be able to obtain or renew such clearances or that new personnel who require security clearance will be able to obtain one.
There is no assurance that any of the existing personnel or directors who presently or may in the future require a security clearance will be able to obtain or renew such clearances or that new personnel who require security clearance will be able to obtain one.
While the over production of cannabis has been curtailed more recently by Pure Sunfarms and Rose, due to the shelf life of cannabis there is no assurance that Pure Sunfarms or Rose LifeScience would be able to generate sufficient revenue from the sale of adult-use cannabis to be profitable and accordingly, it remains possible that the Company may record additional inventory write-downs in the future, which may materially and adversely affect our results of operations.
While the over production of cannabis has been curtailed more recently by Pure Sunfarms and Rose, due to the shelf life of cannabis there is no assurance that Pure Sunfarms or Rose LifeScience would be able to generate sufficient revenue from the sale of adult-use cannabis and exported medicinal cannabis to be profitable and accordingly, it remains possible that the Company may record additional inventory write-downs in the future, which may materially and adversely affect our results of operations.
While we maintain insurance coverage, we cannot predict that all potential insurable risks have been foreseen or that adequate coverage is maintained against known risks. 24 We may suffer from uninsured and underinsured losses.
While we maintain insurance coverage, we cannot predict that all potential insurable risks have been foreseen or that adequate coverage is maintained against known risks. We may suffer from uninsured and underinsured losses.
The provincial governments in Quebec, Alberta and Newfoundland and Labrador have imposed certain provincial regulatory restrictions on the sale of cannabis vape products, and Health Canada is seeking to limit the flavours of inhaled cannabis extracts.
The provincial governments in Quebec and Newfoundland and Labrador have imposed certain provincial regulatory restrictions on the sale of cannabis vape products, and Health Canada is seeking to limit the flavours of inhaled cannabis extracts.
This adverse publicity 29 could arise even if the adverse effects associated with cannabis or cannabinoid products resulted from consumers’ failure to use such products legally, appropriately, or as directed.
This adverse publicity could arise even if the adverse effects associated with cannabis or cannabinoid products resulted from consumers’ failure to use such products legally, appropriately, or as directed.
Balanced Health has established a diverse portfolio of CBD and other cannabinoid products, including ingestible, edible and topical applications that are distributed through its top-ranked e-commerce platform, CBDistillery TM ( www.theCBDistillery.com ), as well as through brick-and-mortar retail channels. Our Dutch Cannabis operations consists of wholly-owned Leli Holland subsidiary (“Leli”) in the Netherlands.
Balanced Health has established a diverse portfolio of CBD and other cannabinoid products, including ingestible, edible and topical applications that are distributed through its top-ranked e-commerce platform, CBDistillery TM ( www.theCBDistillery.com ), as well as through brick-and-mortar retail channels. Our Cannabis Netherlands operations consists of wholly-owned Leli Holland subsidiary in the Netherlands.
Historically, the Company sold its bulk flower inventory in both the retail (higher pricing) and wholesale channels (lower pricing) at an average price in excess of its historical cost.
Historically, the Company sold its bulk flower inventory in both the retail (higher pricing) and wholesale channels (lower pricing) at an average price in excess of its historical 29 cost.
In addition, we face additional 23 risks as we grow internationally. See “—Our international expansion, including through Leli, may increase our operational risks.” below. In particular, we may not have the capacity to meet customer demand or to meet future demand when it arises in respect of our Canadian and U.S. Cannabis businesses.
In addition, we face additional risks as we grow internationally. See “—Our international expansion, including through Leli, may increase our operational risks.” below. 25 In particular, we may not have the capacity to meet customer demand or to meet future demand when it arises in respect of our Canadian and U.S. Cannabis businesses.
The failure to execute on our low-cost structure in our produce business at favorable margins or an increase in cost of goods or operating costs will have a material adverse effect on the financial condition, results of operations, and cash available. One of our principal objectives is to pursue operational efficiencies.
The failure to execute on our low-cost structure in our cannabis business at favorable margins or an increase in cost of goods or operating costs will have a material adverse effect on the financial condition, results of operations, and cash available. One of our principal objectives is to pursue operational efficiencies.
In addition, we have implemented procedures to mitigate the spread of ToBRFV within our greenhouses. However, it will be several years before the negative impact of ToBRFV on the tomato industry is resolved and even with mitigation the virus may have a material adverse effect on our results of operations.
In addition, we have implemented procedures to mitigate the spread of ToBRFV within our tomato facility. However, it will be several years before the negative impact of ToBRFV on the tomato industry is resolved and even with mitigation the virus may have a material adverse effect on our results of operations.
In particular, because our Canadian Cannabis business is engaged in and operate within the cannabis industry, there are exclusions and additional difficulties and complexities associated with obtaining insurance coverage that could cause us to suffer uninsured losses, which could adversely affect our business, results of operations, and profitability.
In particular, because our Canadian Cannabis business is engaged in and operates within the cannabis industry, there are exclusions and additional difficulties and complexities associated with obtaining insurance coverage that could cause us to suffer uninsured losses, which could adversely affect our business, results of operations, and profitability.
BHB is focused on high quality standards and sources non-GMO and pesticide free hemp directly from U.S. Hemp Licensed farms through partnerships and contractual relationships. BHB collaborates with hemp extraction partners using advanced proprietary methods and rigorous testing to ensure product quality and concentration guidelines.
BHB is focused on high quality standards and sources non-GMO and contaminant-free hemp directly from U.S. Hemp Licensed farms through partnerships and contractual relationships. BHB collaborates with hemp extraction partners using advanced proprietary methods and rigorous testing to ensure product quality and concentration guidelines.
Because of the recent volatility in the nascent cannabis and CBD sector generally, certain customers and vendors of our Canadian and U.S.
Because of the recent volatility in the nascent cannabis and CBD sector generally, certain customers and vendors of our Canadian, Dutch and U.S.
To remain competitive, our Canadian Cannabis business will require a continued level of investment in research and development, marketing, sales, and operations. Our Canadian Cannabis business may not have sufficient resources to maintain research and development, marketing, sales, and operations efforts on a competitive basis which could materially and adversely affect our business, financial condition, and results of operations.
To remain competitive, our cannabis businesses will require a continued level of investment in research and development, marketing, sales, and operations. Our cannabis businesses may not have sufficient resources to maintain research and development, marketing, sales, and operations efforts on a competitive basis which could materially and adversely affect our business, financial condition, and results of operations.
Our Canadian Cannabis business exports certain products to international markets (currently Germany, the U.K., Australia and Israel) and may export products to other international markets in the future. International markets are subject to substantially similar regulatory and international demand and supply risks that our Canadian cannabis business is subject to in Canada.
Our Canadian Cannabis business exports certain products to international markets (currently Germany, the U.K., Australia, New Zealand and Israel) and may export products to other international markets in the future. International markets are subject to substantially similar regulatory and international demand and supply risks that our Canadian cannabis business is subject to in Canada.
Our Canadian cannabis business is focused on recreational (adult-use) sales which are primarily sold through the various Provincial boards who are effectively the sole wholesaler in their respective Provinces. As such, we had a concentration of adult-use branded sales to our three biggest provincial boards for the years ended December 31, 2024 and 2023 of 93% and 93%, respectively.
Our Canadian cannabis business is focused on recreational (adult-use) sales which are primarily sold through the various Provincial boards who are effectively the sole wholesaler in their respective Provinces. As such, we had a concentration of adult-use branded sales to our three biggest provincial boards for the years ended December 31, 2025 and 2024 of 82% and 93%, respectively.
Canadian Cannabis Industry Overview Legal History of Medical Cannabis in Canada Prior to October 17, 2018, the production, distribution, and use of cannabis for medical use was and has been legal in Canada since 2001, first under the federal Medical Marihuana Access Regulations , which established a legal regime for the licensing of cannabis producers and the sale of dried cannabis to registered patients pursuant to a medical document provided by a health care practitioner.
Canadian Cannabis Industry Overview Legal History of Medical Cannabis in Canada Prior to October 17, 2018, the production, distribution, and use of cannabis for medical use had been legal in Canada since 2001, first under the federal Medical Marihuana Access Regulations , which established a legal regime for the licensing of cannabis producers and the sale of dried cannabis to registered patients pursuant to a medical document provided by a health care practitioner.
Cannabis businesses, the successful implementation of a customer acquisition plan and the continued growth in the aggregate number of potential customers are critical to the ability to attract and retain customers. Even if the products of our Canadian and U.S.
For our Canadian, Dutch and U.S. cannabis businesses, the successful implementation of a customer acquisition plan and the continued growth in the aggregate number of potential customers are critical to the ability to attract and retain customers. Even if the products of our Canadian, Dutch and U.S.
Our revenues may be impacted by fluctuating demand for our products. Our revenues will in large part be derived from the production, sale, and distribution of agriculturally based consumer goods – specifically tomatoes, peppers, cucumbers, cannabis and hemp-derived cannabinoids.
Our revenues may be impacted by fluctuating demand for our products. Our revenues will in large part be derived from the production, sale, and distribution of agriculturally based consumer goods – specifically cannabis, hemp-derived cannabinoids and tomatoes.
Our current and future marketing programs may depend on our ability to collect, maintain, and use data and sensitive personal information on individuals, and our ability to do so is subject to evolving laws and enforcement trends in Canada and other jurisdictions.
Our current and future U.S. marketing programs may depend on our ability to collect, maintain, and use data and sensitive personal information on individuals, and our ability to do so is subject to evolving laws and enforcement trends in Canada and other jurisdictions.
There can be no assurance that we will be in compliance with the future financial covenants and that we will be able to obtain a future waiver from our creditors for any non-compliance in connection with the next testing date.
There can be no assurance that we will be in compliance with the future financial covenants or that we will be able to obtain a future waiver from our creditors for any non-compliance in connection with the next testing date.
A security breach at one of our facilities could result in a significant loss of available product and could expose us to additional liability under applicable regulations and to potentially costly litigation, increase expenses relating to the resolution and future prevention of these breaches and may deter potential patients from choosing the products of Pure Sunfarms or Rose LifeScience, any of which could have a material adverse effect on our business, financial condition, results of operations and prospects.
A security breach at one of our facilities could result in a significant loss of available product and could expose us to additional liability under applicable regulations and to potentially costly litigation, increase expenses relating to the resolution and future prevention of these breaches and may deter potential consumers from choosing the products of Pure Sunfarms, Rose LifeScience or Leli Holland any of which could have a material adverse effect on our business, financial condition, results of operations and prospects.
For example, the proliferation of unregulated, synthetic and intoxicating hemp-derived products in the U.S. market continues to challenge market share for the CBD industry and is causing certain states to impose significant restrictions on hemp-derived products.
For example, the proliferation of unregulated, synthetic and intoxicating hemp-derived products in the U.S. market continues to challenge market share for the CBD industry and is causing certain states to impose significant restrictions or bans on hemp-derived products.
However, the ability to access public capital for all legitimate cannabis-related companies could provide the industry with additional financing avenues not available today as well as reducing the overall cost of capital. U.S.
However, the ability to access public capital for all legitimate cannabis-related companies could provide the industry with additional financing avenues not available today as well as reducing the overall cost of capital.
Factors affecting our Common Share price include but are not limited to: (i) our ability to continue as a going concern; (ii) general market conditions; (iii) our ability to raise additional capital and/or secure additional financing on acceptable terms, or at all; (iv) market and/or industry developments in produce, cannabis or hemp that may directly or indirectly affect us; (v) regulatory and legislative developments, particularly with respect to cannabis and/or CBD, in Canada, the United States or elsewhere to the extent applicable; (vi) our ability to operate in the U.S. and Canada under the circumstances of current economic conditions, including as a result of the unfavorable interest rate environment, global supply chain issues, and inflation; (vii) potentially unfavorable report published by securities analysts; (viii) public concern as to the safety of the products that we and our competitors develop; (ix) our material weaknesses in our internal controls over financial reporting; and (x) fluctuations of shareholder interest in our Common Shares.
Factors affecting our Common Share price include but are not limited to: (i) our ability to continue as a going concern; (ii) general market conditions; (iii) our ability to raise additional capital and/or secure additional financing on acceptable terms, or at all; (iv) market and/or industry developments in produce, cannabis or hemp that may directly or indirectly affect us; (v) regulatory and legislative developments, particularly with respect to cannabis and/or CBD, in Canada, the Netherlands and the United States or elsewhere to the extent applicable; (vi) our ability to operate in Canada, the United States and the Netherlands under the circumstances of current economic and legal/regulatory conditions, including as a result of the November 2025 Appropriations Act, the unfavorable interest rate environment, global supply chain issues, and inflation; (vii) potentially unfavorable report published by securities analysts; (viii) public concern as to the safety of the products that we and our competitors develop; (ix) our material weaknesses in our internal controls over financial reporting; and (x) fluctuations of shareholder interest in our Common Shares.
(C) Greenhouse Industry — Canada Among the North American greenhouse vegetable producers, Canada is the largest supplier from April to October. Several factors, including climatic advantages (cooler summer temperatures) and the proximity of greenhouse producers to consumer markets, 15 contribute to Canada’s favorable positioning relative to the United States during that time period.
Greenhouse Vegetable Industry Overview Among the North American greenhouse vegetable producers, Canada is the largest supplier from April to October. Several factors, including climatic advantages (cooler summer temperatures) and the proximity of greenhouse producers to consumer markets, contribute to Canada’s favorable positioning relative to the United States during that time period.
In Controlled Environment Agriculture, soil erosion, air pollution, and greenhouse gas emissions are largely neutralized. In addition, our investments in the latest technological advancements, and our ability to produce higher yields per square meter, mean there are more GMO-free products grown with little impact to the environment.
In CEA, soil erosion, air pollution, and greenhouse gas emissions are largely neutralized. In addition, our investments in the latest technological advancements, and our ability to produce higher yields per square meter, mean there are more GMO-free products grown with little impact to the environment.
Our primary objective for Pure Sunfarms is to be the leading low-cost, high-quality cannabis producer in Canada and in selected international markets. Rose is a leading vertically integrated, branded cannabis producer, supplier and commercialization expert in the Province of Quebec and is the Quebec operational unit of our Canadian cannabis segment.
Our primary objective for Pure Sunfarms is to be the leading low-cost, high-quality cannabis producer in Canada and select international medicinal markets. Rose is a leading vertically integrated, branded cannabis producer, supplier and commercialization expert in the Province of Quebec and is the Quebec operational unit of our Canadian cannabis segment.
Leli - Regulatory Overview Leli Holland was formed, in 2020, as a "Besloten Vennootschap" with the intention of obtaining one of the ten cannabis cultivation licenses from the Dutch government. The Company entered into a purchase option agreement, September 2021, to buy 80% of the Leli Holland.
Our Cannabis Netherlands Segment Regulatory Overview Leli Holland was formed in 2020, as a "Besloten Vennootschap" with the intention of obtaining one of the ten cannabis cultivation licenses from the Dutch government. The Company entered into a purchase option agreement, September 2021, to buy 80% of the Leli Holland.
Our cannabis operations require licenses to grow, store and sell cannabis. Pure Sunfarms’ and Rose LifeScience’s ability to grow, store, sell and distribute cannabis in Canada is solely dependent on its ability to maintain licenses to cultivate and sell cannabis under the Cannabis Ac t (a “License”) for each of the greenhouses at which it proposes to grow cannabis.
Pure Sunfarms’ and Rose LifeScience’s ability to grow, store, sell and distribute cannabis in Canada is solely dependent on its ability to maintain licenses to cultivate and sell cannabis under the Cannabis Ac t (a “License”) for each of the greenhouses at which it proposes to grow cannabis.
Our marketing programs use customer information and other personal and confidential information as well as digital communications, which may subject us to liability if we misuse this information.
Our U.S. marketing programs use customer information and other personal and confidential information as well as digital communications, which may subject us to liability if we misuse this information.
We can provide no assurance that a cybersecurity incident could have a material adverse impact on financial performance and results of operations. Inflation may continue to rise and increase our operating costs. For the year ended December 2024, the US Bureau of Labor and Statistics reported that inflation increased 2.9 percent as against prices from December 2023.
We can provide no assurance that a cybersecurity incident could have a material adverse impact on financial performance and results of operations. Inflation may continue to rise and increase our operating costs. For the year ended December 2025, the US Bureau of Labor and Statistics reported that inflation increased 2.7 percent as against prices from December 2024.

… 441 more changes not shown on this page.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

5 edited+0 added−0 removed11 unchanged
Biggest changeWhile no organization is immune to attack attempts and we cannot eliminate all risks from cybersecurity threats or provide assurance that we have not experienced an undetected cybersecurity incident, in 2024 we did not identify any material cybersecurity events that have materially affected or are reasonably likely to materially affect our business strategy, results of operations or financial condition .
Biggest changeWhile no organization is immune to attack attempts and we cannot eliminate all risks from cybersecurity threats or provide assurance that we have not experienced an undetected cybersecurity incident, in 2025 we did not identify any material cybersecurity events that have materially affected or are reasonably likely to materially affect our business strategy, results of operations or financial condition.
Our cybersecurity team includes personnel that have obtained credentials from the International System Security Certification Consortium and the SANS Institute, such as Certified Information Systems Security Professional (CISSP), as well as experienced information systems security professionals and information security managers. 44 We recognize the ever-present global risk of cyberattacks from diverse threat actors, including nation-states, cybercriminals, hacktivists, insiders and organized crime.
Our cybersecurity team includes personnel that have obtained credentials from the International System Security Certification Consortium and the SANS Institute, such as Certified Information Systems Security Professional (CISSP), as well as experienced information systems security professionals and information security managers. We recognize the ever-present global risk of cyberattacks from diverse threat actors, including nation-states, cybercriminals, hacktivists, insiders and organized crime.
For additional information regarding risks from cybersecurity threats, including our business strategy, results of operations, or financial condition, please refer to Item 1A, “Risk Factors,” in this Annual Report on Form 10-K, including the risk factor entitled “We face risks related to cyber security attacks and other incidents.”
For additional information regarding risks from cybersecurity threats, including our business strategy, results of operations, or financial condition, please refer to Item 1A, “Risk Factors,” in this Annual Report on Form 10-K, including the risk factor entitled “We face risks related to cyber security attacks and other incidents.” 45
We routinely assess material risks from cybersecurity threats, including any potential unauthorized occurrence on or conducted through our information systems that may result in adverse effects on the confidentiality, integrity, or availability of our information systems or any information residing therein.
We routinely assess material risks from cybersecurity threats, including any potential unauthorized occurrence on or conducted through our information 44 systems that may result in adverse effects on the confidentiality, integrity, or availability of our information systems or any information residing therein.
We believe in continuous improvement as part of the effort to optimize security, and we work to foster that culture through various initiatives: • Cybersecurity Awareness Trainings: We educate employees on best practices for online safety and for identifying potential cybersecurity threats, including by initiating training programs for our entire workforce. • Security Monitoring: We monitor our information technology environment with both our internal cybersecurity resources and third-party service providers. • Proactive Reporting and Investigation: As part of our training initiatives, we educate employees on how to report any suspicious cyber activity or potential cybersecurity issues, and we investigate reported concerns.
We believe in continuous improvement as part of the effort to optimize security, and we work to foster that culture through various initiatives: • Cybersecurity Awareness Trainings: We educate employees on best practices for online safety and for identifying potential cybersecurity threats, including by initiating training programs for our entire employee base. • Security Monitoring: We monitor our information technology environment with both our internal cybersecurity resources and third-party service providers. • Proactive Reporting and Investigation: As part of our training initiatives, we educate employees on how to report any suspicious cyber activity or potential cybersecurity issues, and we investigate reported concerns.

Item 2. Properties

Properties — owned and leased real estate

1 edited+0 added−0 removed2 unchanged
Biggest changeGrowing Area Greenhouse Facility Square Feet Square Meters Acres Products Grown Marfa, TX (2 greenhouses) 2,527,312 234,795 60 Tomatoes on-the-vine, beefsteak and specialty tomatoes Fort Davis, TX (1 greenhouse) 1,684,874 156,530 40 Specialty tomatoes Monahans, TX (1 greenhouse) (Permian Basin facility) 1,272,294 118,200 30 For sale Delta, BC (Delta 1) (1 greenhouse) 2,588,860 240,513 60 Tomatoes on-the-vine, beefsteak and specialty tomatoes Delta, BC (Delta 2) (1/2 greenhouse) Leased to Pure Sunfarms 537,765 49,960 13 Tomatoes on-the-vine, beefsteak and specialty tomatoes Total produce operations 8,611,105 799,998 203 Delta, BC (Delta 2) (1/2 greenhouse) Leased to Pure Sunfarms 537,765 49,960 13 Cannabis Delta, BC (Delta 3) (1 greenhouse) Owned by Pure Sunfarms 1,100,000 100,000 25 Cannabis Huntingdon, Quebec (1 indoor controlled growing facility) owned by Rose LifeScience 55,000 2,300 1 Cannabis Total cannabis operations 1,692,765 152,260 39 We believe that our existing facilities are adequate for our needs.
Biggest changeGrowing Area Operating Facilities Square Feet Square Meters Acres Products Grown Delta, BC (Delta 2) (1 greenhouse) 1,075,530 99,920 25 Cannabis Delta, BC (Delta 3) (1 greenhouse) 1,100,000 100,000 25 Cannabis Huntingdon, Quebec (1 indoor controlled growing facility) 55,000 5,110 1 Cannabis Drachten, Netherlands (1 indoor controlled growing facility) 22,600 2,100 1 Cannabis Groningen, Netherlands (1 indoor controlled growing facility) 60,900 5,658 1 Under Construction Total cannabis operations 2,314,030 212,788 53 Marfa, TX (1 greenhouse) 871,200 80,937 20 Leased to Vanguard Monahans, TX (1 greenhouse) (Permian Basin facility) 1,272,294 118,200 30 Not in operation Delta, BC (Delta 1) (1 greenhouse) 2,588,860 240,513 60 Tomatoes on-the-vine, beefsteak and specialty tomatoes Total produce operations 4,732,354 439,650 110 We believe that our existing facilities are adequate for our needs.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

1 edited+1 added−1 removed1 unchanged
Biggest changeThe Company is not involved in any legal proceedings other than ordinary routine litigation arising in the normal course of business, none of which the Company believes will have a material adverse effect on the Company’s business, financial condition or results of operations.
Biggest changeThe Company is not involved in any legal proceedings other than ordinary routine litigation arising in the normal course of business, none of which the Company believes will have a material adverse effect on the Company’s business, financial condition or results of operations. Additionally, there were no environmental matters requiring disclosure pursuant to Item 103(c)(3) of Regulation S-K. ITEM 4.
Removed
Additionally, there were no matters requiring disclosure pursuant to the requirement to disclose certain environmental matters involving potential monetary sanctions in excess of $300,000. ITEM 4. MINE SAF ETY DISCLOSURES Not applicable. 45 PAR T II
Added
MINE SAF ETY DISCLOSURES Not applicable. 46 PAR T II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

7 edited+1 added−0 removed30 unchanged
Biggest changeDividend Policy We have not paid any cash dividends or distributions on any class of our securities, and we have no current plans to pay dividends as we are growth focused. Recent Sales of Unregistered Securities None. Repurchases of Equity Securities The Company did not repurchase any of its Common Shares during the three months ended December 31, 2024.
Biggest changeDividend Policy We have not paid any cash dividends or distributions on any class of our securities, and we have no current plans to pay dividends as we are growth focused. Recent Sales of Unregistered Securities None.
This 46 summary takes into account all specific proposals to amend the Tax Act publicly announced by or on behalf of the Minister of Finance (Canada) prior to the date hereof (the “Tax Proposals”) and assumes that all Tax Proposals will be enacted in the form proposed.
This summary takes into account all specific proposals to amend the Tax Act publicly announced by or on behalf of the Minister of Finance (Canada) prior to the date hereof (the “Tax Proposals”) and assumes that all Tax Proposals will be enacted in the form proposed.
Resident Holder at the time of the disposition and the U.S. Resident Holder is not entitled to relief under the Treaty. Generally, the Common Shares, Common Warrants and Common Warrant Shares of a particular U.S. Resident Holder will not be “taxable Canadian property” of such U.S.
Resident Holder at the time of the disposition and the U.S. Resident Holder is not entitled to relief under the Treaty. 48 Generally, the Common Shares, Common Warrants and Common Warrant Shares of a particular U.S. Resident Holder will not be “taxable Canadian property” of such U.S.
Notwithstanding the foregoing, the Common Shares, Common Warrants and Common Warrant Shares may otherwise be deemed to be “taxable Canadian property” in certain circumstances as set out in the Tax Act. 47 In the case of a U.S.
Notwithstanding the foregoing, the Common Shares, Common Warrants and Common Warrant Shares may otherwise be deemed to be “taxable Canadian property” in certain circumstances as set out in the Tax Act. In the case of a U.S.
Resident Holder”). This summary is not generally applicable to a U.S.
Resident Holder”). 47 This summary is not generally applicable to a U.S.
Exchange and Foreign Ownership Controls We are not aware of any Canadian federal or provincial laws, decrees, or regulations that restrict the export or import of capital, including foreign exchange controls, or that affect the remittance of dividends, interest, or other payments to non-Canadian holders of the Common Shares.
(b) Average price paid includes costs associated with the repurchases. Exchange and Foreign Ownership Controls We are not aware of any Canadian federal or provincial laws, decrees, or regulations that restrict the export or import of capital, including foreign exchange controls, or that affect the remittance of dividends, interest, or other payments to non-Canadian holders of the Common Shares.
Holders of Record As of March 6, 2025, there were approximately 10 shareholders of record of our Common Shares, which included Cede & Co., a nominee for Depository Trust Company, which represents two shareholders of record and CDS & Co., a nominee for The Canadian Depository for Securities Ltd.
Holders of Record As of March 6, 2026, there were approximately 11 shareholders of record of our Common Shares, which included Cede & Co., a nominee for Depository Trust Company, whose participants include CDS & Co., a nominee for The Canadian Depository for Securities Ltd.
Added
Repurchases of Equity Securities The table below provides information about Company purchases of its Common Shares during the three months ended December 31, 2025: Total Number of Shares Purchased (a) Average Price Paid per Share (b) Total Number of Shares Purchased as Part of Publicly Announced Program Approximate Dollar Value of Shares that May Yet be Purchased Under the Program (in thousands of U.S. dollars) October 1 - 31, 2025 — — — $ 10,000 November 1-30, 2025 536,523 $ 3.73 536,523 $ 8,001 December 1-31, 2025 276,400 $ 3.52 276,400 $ 7,029 Total 812,923 $ 3.66 812,923 $ 7,029 (a) On September 29, 2025, the Board of Directors authorized a $10 million share repurchase for up to 5,687,000 of the Company’s outstanding Common Shares.

Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

160 edited+72 added−94 removed73 unchanged
Biggest changeClean Energy Leli (1) Corporate Total Sales $ 151,243 $ 114,030 $ 20,330 $ — $ — $ — $ 285,603 Cost of sales (151,064 ) (78,090 ) (7,002 ) (21 ) — — (236,177 ) Selling, general and administrative expenses (10,625 ) (29,275 ) (13,118 ) (32 ) (1,265 ) (11,186 ) (65,501 ) Other expense, net 3,495 (2,136 ) (18 ) (133 ) — 1,519 2,727 Goodwill and intangible impairments — — (14,020 ) — — — (14,020 ) Loss before taxes and loss from equity method investments (6,951 ) 4,529 (13,828 ) (186 ) (1,265 ) (9,667 ) (27,368 ) ('Provision for) recovery of income taxes (4,284 ) (1,431 ) — — 48 (1,784 ) (7,451 ) (Loss) income from consolidated entities (11,235 ) 3,098 — (13,828 ) — (186 ) — (1,217 ) — (11,451 ) (34,819 ) Less: net (income) loss attributable to non-controlling interests, net of tax — (162 ) — — 183 — 21 Net (loss) income $ (11,235 ) $ 2,936 $ (13,828 ) $ (186 ) $ (1,034 ) $ (11,451 ) $ (34,798 ) Adjusted EBITDA (2) $ 506 $ 14,764 $ 861 $ (186 ) $ (157 ) $ (8,203 ) $ 7,585 Basic (loss) income per share $ (0.10 ) $ 0.03 $ (0.13 ) $ (0.00 ) $ (0.01 ) $ (0.11 ) $ (0.32 ) Diluted (loss) income per share $ (0.10 ) $ 0.03 $ (0.13 ) $ (0.00 ) $ (0.01 ) $ (0.11 ) $ (0.32 ) 56 For the Year Ended December 31, 2022 VF Fresh (Produce) Cannabis Canada (1) Cannabis U.S.
Biggest changeClean Energy Cannabis Netherlands (1) Corporate Total Sales $ 28,749 $ 114,030 $ 20,330 $ — $ — $ — $ 163,109 Cost of sales (30,044 ) (78,090 ) (7,002 ) (21 ) — — (115,157 ) Selling, general and administrative expenses (1,838 ) (29,275 ) (13,118 ) (32 ) (1,265 ) (11,186 ) (56,714 ) Other (expense) income, net (2,075 ) (2,136 ) (18 ) (133 ) — 1,519 (2,843 ) Goodwill and intangible asset impairments — — (14,020 ) — — — (14,020 ) Loss (income) before taxes and equity method investment income (5,208 ) 4,529 (13,828 ) (186 ) (1,265 ) (9,667 ) (25,625 ) (Provision for) recovery of income taxes (4,284 ) (1,431 ) — — 48 (1,784 ) (7,451 ) Equity method investment income, net of tax — — — — — — — Loss (income) from continuing operations (9,492 ) 3,098 (13,828 ) (186 ) (1,217 ) (11,451 ) (33,076 ) Loss from discontinued operations net of tax (1,743 ) — — — — — (1,743 ) (Loss) income including non-controlling interests (11,235 ) 3,098 (13,828 ) (186 ) (1,217 ) (11,451 ) (34,819 ) Less: net loss (income) attributable to non-controlling interests, net of tax — (162 ) — — 183 — 21 Net (loss) income $ (11,235 ) $ 2,936 $ (13,828 ) $ (186 ) $ (1,034 ) $ (11,451 ) $ (34,798 ) Adjusted EBITDA from continuing operations (2) $ 399 $ 14,764 $ 861 $ (186 ) $ (157 ) $ (8,203 ) $ 7,478 Basic (loss) income per share from continuing operations $ (0.09 ) $ 0.03 $ (0.13 ) $ (0.00 ) $ (0.01 ) $ (0.10 ) $ (0.30 ) Basic loss per share from discontinued operations (0.02 ) - - - - - (0.02 ) Basic (loss) income per share $ (0.10 ) $ 0.03 $ (0.15 ) $ (0.00 ) $ (0.01 ) $ (0.09 ) $ (0.32 ) Diluted (loss) income per share from continuing operations $ (0.09 ) $ 0.03 $ (0.13 ) $ (0.00 ) $ (0.01 ) $ (0.10 ) $ (0.30 ) Diluted loss per share from discontinued operations (0.02 ) - - - - - (0.02 ) Diluted (loss) income per share $ (0.10 ) $ 0.03 $ (0.15 ) $ (0.00 ) $ (0.01 ) $ (0.09 ) $ (0.32 ) (1) For the years ended December 31, 2025, 2024, and 2023, Rose LifeScience’s financial results are fully consolidated in the financial results of the Company with the non-controlling interest presented in net (income) loss attributable to non-controlling interests, net of tax.
Inflation has affected and continues to affect, amongst other items, supply chain and labor costs as well as purchasing decisions of consumers which may impact demand for our products.
Inflation has affected and continues to affect supply chain and labor costs as well as purchasing decisions of consumers, amongst other items, which may impact demand for our products.
The increase in sales was due to an 26% increase in branded sales, an 86% increase in non-branded, and a 33% increase in international sales, partially offset by an unfavorable impact of exchange rate fluctuations.
The increase in sales was due to a 26% increase in branded sales, an 86% increase in non-branded sales, and a 33% increase in international sales, partially offset by an unfavorable impact of exchange rate fluctuations.
Other (Expense) Income, net Other expense, net was $1,007 for the year ended December 31, 2024 compared to other to $2,136 for the year ended December 31, 2023, the decrease of $1,129 was due primarily to lower interest expense.
Other (Expense) Income, net Other expense, net was $1,007 for the year ended December 31, 2024 compared to $2,136 for the year ended December 31, 2023, the decrease of $1,129 was due primarily to lower interest expense.
The following table presents sales by Canadian Cannabis revenue stream, together with the impact of excise tax, in U.
The following table presents sales by Canadian Cannabis revenue stream, together with the impact of excise tax, in U.
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.
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 70 should not be considered as a substitute for, or superior to, the measures of financial performance prepared in accordance with U.S. GAAP.
Non-branded accounted for 19% and 57 international accounted 4% of Canadian Cannabis net sales in 2024, as compared to non-branded of 14% and international of 4% in 2023. The increase in non-branded sales was driven by increased demand for bulk flower products. The net average selling price of branded flower and pre-roll formats decreased in 2024 compared to 2023.
Non-branded accounted for 19% and international accounted 4% of Canadian Cannabis net sales in 2024, as compared to non-branded of 14% and international of 4% in 2023. The increase in non-branded sales was driven by increased demand for bulk flower products. The net average selling price of branded flower and pre-roll formats decreased in 2024 compared to 2023.
The loyalty liability represents a performance obligation to provide goods for free or at a discount to loyalty members in exchange for the redemptions of points earned from past activities. Judgment is required in determining whether the Company is the principal or agent in certain transactions.
The loyalty liability represents a performance obligation to provide goods for free or at a discount to loyalty members in exchange for the redemptions of points earned from past activities. 74 Judgment is required in determining whether the Company is the principal or agent in certain transactions.
Net Income (Loss) Net loss for the year ended December 31, 2024 was $3,181 and compared to net income of $2,936 for the year ended December 31, 2023. The change is primarily due to the inventory write down of $10,436 (C$15,000). Excluding the inventory write down, net income for the year ended December 31, 2024 was $7,255.
Net Income (Loss) Net loss for the year ended December 31, 2024 was $3,181 compared to net income of $2,936 for the year ended December 31, 2023. The change is primarily due to the inventory write down of $10,436 (C$15,000). Excluding the inventory write down, net income for the year ended December 31, 2024 was $7,255.
The decrease was due to a decrease in the overall borrowing base and a decrease in the Company's interest rates on its various debt instruments. Interest Income Interest income for the years ended December 31, 2024 and 2023 was $914 and $1,018, respectively.
The decrease was due to a decrease in the overall borrowing base and a decrease in the Company's interest rates on its debt instruments. Interest Income Interest income for the years ended December 31, 2024 and 2023 was $914 and $1,018, respectively.
Management concluded that as of December 31, 2023, the fair value was lower than its carrying amount and as a result, an impairment charge to the brand intangible of $2,720 was allocated to the reporting unit. 72 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 11%.
Management concluded that as of December 31, 2023, the fair value was lower than its carrying amount and as a result, an impairment charge to the brand intangible of $2,720 was allocated to the reporting unit. 75 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 11%.
Year Ended December 31, 2024 Compared to Year Ended December 31, 2023 Sales Canadian cannabis net sales for the years ended December 31, 2024 increased by $34,826, or 31%, to $148,856 from $114,030, for the year ended December 31, 2024.
Year Ended December 31, 2024 Compared to Year Ended December 31, 2023 Sales Canadian cannabis net sales for the year ended December 31, 2024 increased by $34,826, or 31%, to $148,856 from $114,030, for the year ended December 31, 2023.
The improvement in selling, general and administrative expenses when compared to the same prior year period is due to more efficient marketing and brand spending and contract renegotiation. 60 Goodwill and Intangible Asset Impairments Goodwill and Intangible Assets Impairments for the year ended December 31, 2024 was $11,939 compared to $14,020 for the year ended December 31, 2023.
The improvement in selling, general and administrative expenses when compared to the same prior year period is due to more efficient marketing and brand spending and contract renegotiation. 63 Goodwill and Intangible Asset Impairments Goodwill and intangible assets impairments for the year ended December 31, 2024 was $11,939 compared to $14,020 for the year ended December 31, 2023.
A decrease to the incremental royalty rate by approximately 0.2% would result in the recoverable amount being equal to the carrying value. • Future revenues: A decrease in future revenues by 4%would result in the fair value being equal to the carrying value, and each additional 10% decrease in the future revenues would result in an impairment of approximately $1,252. 71 Cannabis - U.S.
A decrease to the incremental royalty rate by approximately 0.2% would result in the recoverable amount being equal to the carrying value. • Future revenues: A decrease in future revenues by 4% would result in the fair value being equal to the carrying value, and each additional 10% decrease in the future revenues would result in an impairment of approximately $1,252. 73 Cannabis - U.S.
In addition, our business has been affected, and we expect will continue to be affected for the foreseeable future, by rising inflation, and indirectly, world conflicts (e.g., Russia/Ukraine) which may negatively affect our operating results.
In addition, our business has been affected, and we expect will continue to be affected for the foreseeable future, by inflation rates, and, indirectly, world conflicts (e.g., Russia/Ukraine), which may negatively affect our operating results.
The financing activities for the year ended December 31, 2024 consisted primarily of debt repayments of ($5,709) and cash used for the acquisition of an additional 10% ownership interest in Rose LifeScience and additional 15% ownership interest in Leli.
The financing activities for the year ended December 31, 2024 consisted primarily of debt repayments of ($5,709) and cash used for the acquisition of an additional 10% ownership interest in Rose LifeScience and additional 15% ownership interest in Leli of ($3,817).
We caution that our results of operations for the years ended December 31, 2024, 2023 and 2022 may not be indicative of our future performance. Discussion of Financial Results A discussion of our consolidated results for the years ended December 31, 2024, 2023 and 2022 is included below.
We caution that our results of operations for the years ended December 31, 2025, 2024 and 2023 may not be indicative of our future performance. Discussion of Financial Results A discussion of our consolidated results for the years ended December 31, 2025, 2024 and 2023 is included below.
Gross Margin U.S. Cannabis gross margin for the year ended December 31, 2024 was $11,035, or 63%, compared to $13,328, or 66% for the year ended December 31, 2023. Selling, General and Administrative Expenses U.S.
Gross Profit U.S. Cannabis gross profit for the year ended December 31, 2024 was $11,035, or a 63% gross margin, compared to $13,328, or a 66% gross margin, for the year ended December 31, 2023. Selling, General and Administrative Expenses U.S.
Therefore, Adjusted EBITDA presented for these segments may not be comparable to similar measures presented for comparable segments by other issuers. Management believes that Adjusted EBITDA is a useful supplemental measure in evaluating the performance of the Company because it excludes items that do not reflect our business performance.
Therefore, Adjusted EBITDA from continuing operations presented for these segments may not be comparable to similar measures presented for comparable segments by other issuers. Management believes that Adjusted EBITDA from continuing operations is a useful supplemental measure in evaluating the performance of the Company because it excludes items that do not reflect our business performance.
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 Rose LifeScience for the years ended December 31, 2024, 2023, and 2022. The Rose LifeScience minority interest is presented in Net Loss Attributable to Non-controlling Interests, Net of Tax.
CANADIAN CANNABIS SEGMENT RESULTS The Cannabis Canada segment consists of Pure Sunfarms and Rose LifeScience. The comparative analysis for Canadian Cannabis is based on the consolidated results of Pure Sunfarms and Rose LifeScience for the years ended December 31, 2025, 2024, and 2023. The Rose LifeScience minority interest is presented in Net Loss Attributable to Non-controlling Interests, Net of Tax.
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 items that do not reflect our business performance.
Therefore, Adjusted EBITDA from continuing operations may not be comparable to similar measures presented by other issuers. Management believes that Adjusted EBITDA from continuing operations is a useful supplemental measure in evaluating the performance of the Company because it excludes items that do not reflect our business performance.
Assessment for Indicators of Impairment 70 Goodwill Year Ended December 31, 2024 Cannabis – Canada – Goodwill The fair value of the reporting unit was determined based on a discounted cash flow projections from budgets approved for 2025, which was extended to 2029 with a compound annual revenue growth rate of 7.5% from 2025 to 2029, followed by terminal growth rate of 3%.
Year Ended December 31, 2024 Cannabis – Canada – Goodwill The fair value of the reporting unit was determined based on a discounted cash flow projections from budgets approved for 2025, which was extended to 2029 with a compound annual revenue growth rate of 7.5% from 2025 to 2029, followed by terminal growth rate of 3%.
(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.
(2) Adjusted EBITDA from continuing operations - Constant Currency is not a recognized earnings measure and does not have a standardized meaning prescribed by GAAP. Therefore, Adjusted EBITDA from continuing operations - Constant Currency may not be comparable to similar measures presented by other issuers.
(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.
(2) Adjusted EBITDA from continuing operations - Constant Currency is not a recognized earnings measure and does not have a standardized meaning prescribed by GAAP. Therefore, Adjusted EBITDA from continuing operations - Constant Currency may not be comparable to similar measures presented by other issuers.
See “Risk Factors—Industry Risk Factors—We face risks associated with cross-border trade and the potential for tariffs and other trade restrictions” and “Risk 49 Factors—Labor and Employment Risk Factors—“Our operations are dependent on labor availability which includes accessing government sponsored foreign labor programs in both the United States and Canada”.
See “Risk Factors—Industry Risk Factors—We face risks associated with cross-border trade and the potential for tariffs and other trade restrictions” and “Risk Factors—Labor and Employment Risk Factors—“Our operations are dependent on labor availability which includes accessing government sponsored foreign labor programs in Canada”.
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 March 2022, our Canadian Cannabis business received European Union Good Manufacturing Practice (“EU GMP”) certification for our 1.1 million square foot Delta 3 cannabis facility located in Delta, British Columbia (“B.C.”) 49 which permits us to export EU GMP-certified medical cannabis to importers and distributors in international markets that require EU GMP certification.
(2) 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.
(2) Adjusted EBITDA from continuing operations is not a recognized earnings measure and does not have a standardized meaning prescribed by GAAP. Therefore, Adjusted EBITDA from continuing operations may not be comparable to similar measures presented by other issuers.
The increase in sales, general and administrative expenses was due to an increase in operating expenses of $4,911, driven by higher commercial and marketing expenses at Canadian Cannabis, and an increase in share-based compensation of approximately $636. For additional information, refer to "Segmented Results of Operations" below.
The increase in selling, general and administrative expenses was due to an increase in operating expenses of $4,398, driven by higher commercial and marketing expenses at Canadian Cannabis, and an increase in share-based compensation of approximately $636. For additional information, refer to "Segmented Results of Operations" below.
Goodwill and Intangible Asset Impairments Goodwill and Intangible Assets Impairments for the year ended December 31, 2024 was $11,939 compared to $14,020 for the year ended December 31, 2023. The impairment was primarily related to the U.S.
Goodwill and Intangible Asset Impairments Goodwill and intangible assets impairments for the year ended December 31, 2024 were $11,939 compared to $14,020 for the year ended December 31, 2023. The impairments were primarily related to the U.S.
GAAP, we have presented constant currency adjusted financial measures for sales, cost of sales, selling, general and administrative, other income (expense), operating (loss) income, loss from consolidated entities, net loss, and Adjusted EBITDA for the year ended December 31, 2024 and 2023, which are 68 considered non-GAAP financial measures.
GAAP, we have presented constant currency adjusted financial measures for sales, cost of sales, selling, general and administrative, other income (expense), operating (loss) income, loss from consolidated entities, net loss, and Adjusted EBITDA from continuing operations for the year ended December 31, 2025 and 2024, which are considered non-GAAP financial measures.
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 65 compensation, gains and losses on asset sales and the other adjustments set forth in the table below.
Non-GAAP Measures References in this Management’s Discussion and Analysis to “Adjusted EBITDA from continuing operations” 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.
For the years ended December 31, 2024 and 2023 and for the period July 19, 2022 to December 31, 2022, Leli’s financial results are fully consolidated in the financial results of the Company with the minority non-controlling interest presented in net (income) loss attributable to non-controlling interests, net of tax.
For the years ended December 31, 2025, 2024 and 2023, Leli’s financial results are fully consolidated in the financial results of the Company with the minority non-controlling interest presented in net (income) loss attributable to non-controlling interests, net of tax.
Management believes that Adjusted EBITDA - Constant Currency is a useful supplemental measure in evaluating the performance of the Company because it excludes items that do not reflect our business performance. Adjusted EBITDA - Constant Currency includes the Company’s 70% interest in Rose LifeScience since acquisition, 85% interest in Leli since acquisition, and 65% interest in VFH.
Management believes that Adjusted EBITDA from continuing operations - Constant Currency is a useful supplemental measure in evaluating the performance of the Company because it excludes items that do not reflect our business performance. Adjusted EBITDA from continuing operations - Constant Currency includes the Company’s 70% interest in Rose LifeScience since acquisition, 85% interest in Leli since acquisition.
Management believes that Adjusted EBITDA - Constant Currency is a useful supplemental measure in evaluating the performance of the Company because it excludes non-recuring and other items that do not reflect our business performance.
Management believes that Adjusted EBITDA from continuing operations - 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 our business performance.
Management believes that Adjusted EBITDA is a useful supplemental measure in evaluating the performance of the Company because it excludes non-recuring and other items that do not reflect our business performance.
Management believes that Adjusted EBITDA from continuing operations 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., and 65% interest in VFH.
Adjusted EBITDA from continuing operations 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.
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., and 65% interest in VFH.
Adjusted EBITDA from continuing operations 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.
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 December 31, 2024 and 2023, borrowings under the FCC Term Loan agreement were subject to an interest rate of 8.12% and 8.96% per annum, respectively.
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 December 31, 2025 and 2024, borrowings under the FCC Term Loan agreement were subject to interest rates of 7.45% and 8.12% per annum, respectively.
Net Loss Attributable to Non-controlling Interests, Net of Tax For the year ended December 31, 2024, the add back for net income attributable to non-controlling interests, net of tax was $207 compared to a net loss of $21 for the year ended December 31, 2023. Net Loss Attributable to Village Farms International, Inc.
Net Loss (Income) Attributable to Non-controlling Interests, Net of Tax For the year ended December 31, 2025, the add back for net loss attributable to non-controlling interests, net of tax was $336 compared to net income of $207 for the year ended December 31, 2024. Net Income (Loss) Attributable to Village Farms International, Inc.
Other Income (Expense) Other income for the year ended December 31, 2024 was $4,015 as compared to $5,616 for the year ended December 31, 2023. Other income is primarily attributable to favorable vendor settlements relating to the partial recovery of operational losses from the Tomato Brown Rugose Fruit Virus (“ToBRFV”) infestation.
Other Income 54 Other income for the year ended December 31, 2025 was $4,173 as compared to $4,015 for the year ended December 31, 2024. Other income is primarily attributable to favorable vendor settlements relating to the partial recovery of operational losses from the Tomato Brown Rugose Fruit Virus (“ToBRFV”) infestation.
As collateral for the FCC Term Loan, the Company has provided promissory notes, a first mortgage on the VFF-owned Delta 1 and Texas greenhouse facilities, 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.
As collateral for the FCC Term Loan, the Company has provided a promissory note, 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.
We believe that cash generated from our operating activities, together with availability under the Operating Loan and Pure Sunfarms Loans (each as defined below), will provide sufficient liquidity to meet our working capital needs, repayments of long-term debt, future contractual obligations and planned capital expenditures for the next 12 months.
We believe that our existing cash, cash generated from our 65 operating activities, together with availability under the Pure Sunfarms Secured Credit Facilities (defined below), will provide sufficient liquidity to meet our working capital needs, repayments of our long-term debt, future contractual obligations and planned capital expenditures for the next 12 months.
Reconciliation of Segmented Net (Loss) Income to Adjusted EBITDA The following table reflects a reconciliation of segmented net loss to Adjusted EBITDA, as presented by the Company: For the Year Ended December 31, 2024 (in thousands of U.S. dollars) VF Fresh (Produce) Cannabis Canada (1) Cannabis U.S.
Reconciliation of Segmented Net (Loss) Income to Adjusted EBITDA from Continuing Operations The following table reflects a reconciliation of segmented net loss to Adjusted EBITDA from continuing operations, as presented by the Company: For the Year Ended December 31, 2025 (in thousands of U.S. dollars) Produce Cannabis Canada (1) Cannabis U.S.
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., and 65% interest in VFH.
Adjusted EBITDA from continuing operations includes 68 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.
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.
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. Inventories Inventories are valued at the lower of cost or net realizable value.
Our Operating Segments Canadian Cannabis Segment Our Canadian Cannabis segment includes wholly owned Pure Sunfarms and 80% owned Rose LifeScience. Pure Sunfarms is one of the single largest cannabis growing operations in the world, one of the lowest-cost greenhouse producers and the leading flower brand in Canada.
Our Operating Segments Cannabis Canada Segment Our Cannabis Canada ("Canadian Cannabis") segment is composed of wholly owned Pure Sunfarms and an 80% ownership interest in Rose LifeScience. 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.
This market positioning, combined with our cultivation expertise, has enabled us to evolve into the third 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.
This market positioning, combined with our cultivation expertise, has enabled us to evolve into a leading producer of dried flower nationally and one of the few Canadian licensed producers with consistently strong operating results. Through strategic organic growth, exports and/or acquisitions, we intend to participate in other international markets where cannabis attains legal status.
FCC Term Loan 63 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 $20,821 and $24,755 on December 31, 2024 and 2023, respectively.
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 balances of $15,855 and $20,821 on December 31, 2025 and 2024, respectively.
Inventories Inventories are valued at the lower of cost or net realizable value. The cost of inventory includes capitalized production costs, including labor, materials, post-harvest costs and depreciation. Inventoriable costs are expensed to cost of goods sold on the Consolidated Statement of Operations in the same period as finished products are sold.
The cost of inventory includes capitalized production costs, including labor, materials, post-harvest costs and depreciation. Inventoriable costs are expensed to cost of goods sold on the Consolidated Statement of Operations in the same period as finished products are sold.
In late 2022, Pure Sunfarms commenced exports to Israel and in 2023, Pure Sunfarms began exporting cannabis products to Germany and the United Kingdom for the medical markets in those countries.
In late 2022, we commenced exports to Israel. In 2023, we began exporting cannabis products to Germany and the United Kingdom for the medical markets in those countries. In 2025, we began exporting cannabis products to New Zealand.
Energy Segment Our Energy segment is comprised of wholly owned 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").
VFCE 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 previous landfill gas-to-electricity business into a state-of-the-art landfill gas to high-demand renewable natural gas ("RNG") facility. Terreva Renewables sells the renewable natural gas and VFCE will receive a portion of the revenue in the form of a royalty.
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 monthly royalty.
The increase in other income (expense) was primarily attributable to a favorable vendor settlement relating to the partial recovery of operational losses from the Tomato Brown Rugose Fruit Virus (“ToBRFV”) infestation of $5,585 in the year ended December 31, 2023.
Other Income (Expense) Other income for the year ended December 31, 2024 was $4,015 as compared to $32 for the year ended December 31, 2023. The increase in other income (expense) was primarily attributable to a favorable vendor settlement relating to the partial recovery of operational losses from the Tomato Brown Rugose Fruit Virus (“ToBRFV”).
Securities and Exchange Commission. See the reconciliation of Adjusted EBITDA to net income in “Non-GAAP Measures—Reconciliation of Net Earnings to Adjusted EBITDA”. SEGMENTED RESULTS OF OPERATIONS (In thousands of U.S. dollars, except per share amounts, and unless otherwise noted) 55 For the Year Ended December 31, 2024 VF Fresh (Produce) Cannabis Canada (1) Cannabis U.S.
See the reconciliation of Adjusted EBITDA from continuing operations to net income in “Non-GAAP Measures—Reconciliation of Net Earnings to Adjusted EBITDA from continuing operations”. SEGMENTED RESULTS OF OPERATIONS (In thousands of U.S. dollars, except per share amounts, and unless otherwise noted) For the Year Ended December 31, 2025 Produce Cannabis Canada (1) Cannabis U.S.
Leli Segment Our Leli operating segment is comprised of wholly owned Leli Holland, which we acquired during Q4 2024. Through Leli, we hold one of ten licenses to cultivate and distribute cannabis legally in the Netherlands under that country’s Closed Supply Chain Experiment program, with sales commencing in February 2025.
Cannabis Netherlands Segment (operating as Leli Holland) Our Cannabis Netherlands operating segment is composed of wholly owned subsidiary, Leli Holland B.V. 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.
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 consolidated statements of operations and comprehensive income (loss) and 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.
See “Risk Factors—Legal and Regulatory Risk Factors—We cannot predict when, if ever, cannabis will be federally legal in the United States and any rescheduling of U.S. Schedule I cannabis to Schedule III would have an uncertain impact on our business”.
See “Risk Factors—Legal and Regulatory Risk Factors—We cannot predict when, if ever, cannabis will be federally legal in the United States and any rescheduling of U.S. Schedule I cannabis to Schedule III would have an uncertain impact on our business”. Our business may also be materially affected by potential U.S./Canadian tariffs and/or other trade restrictions.
The decrease in gross margin was primarily attributable to a decrease in gross margin at Canadian Cannabis of $5,256 resulting from the non-cash inventory impairment in the fourth quarter of $10,436 (C$15,000), and a decrease in US Cannabis of $2,293, partially offset by an increase in gross margin at VF Fresh of $4,880.
The decrease was primarily attributable to a decrease in gross profit at Canadian Cannabis of $5,256 resulting from the non-cash inventory impairment in the fourth quarter of $10,436 (C$15,000), and a decrease in US Cannabis of $2,293, partially offset by an increase in gross margin at Produce of $4,754. For additional information, refer to "Segmented Results of Operations" below.
See “Risk Factors—Business and Operational Risk Factors—We are subject to restrictive covenants under our Credit Facilities.” Accrued interest payable on the Credit Facilities and Pure Sunfarms Loans as of December 31, 2024 and 2023 was $271 and $398, respectively, and these amounts are included in accrued liabilities in the Consolidated Statements of Financial Position.
See “Risk Factors—Business and Operational Risk Factors—We are subject to restrictive covenants under our Credit Facilities.” Accrued interest payable on all long term-debt as of December 31, 2025 and 2024 were $166 and $271, respectively. These amounts are included in accrued liabilities in the accompanying Consolidated Statements of Financial Position.
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 items that do not reflect our business performance.
Management believes that our non-GAAP measures are important measures in evaluating the historical performance of the Company because it excludes items that do not reflect our business performance.
Net Loss U.S. Cannabis net loss for the year ended December 31, 2024 was $13,333 compared to the loss of $13,828 for the prior year ended December 31, 2023. The decrease in U.S. Cannabis net loss was primarily due to a lower impairment cost in 2024 of $12,378 compared to an impairment cost of $14,020 for the calendar year 2023.
The decrease in net loss was primarily due to a lower impairment cost in the year ended December 31, 2024 of $12,378 compared to an impairment cost of $14,020 for the year ended December 31, 2023. Adjusted EBITDA from continuing operations U.S.
See the reconciliation of Adjusted EBITDA to net (loss) income in “Non-GAAP Measures—Reconciliation of Net Loss to Adjusted EBITDA.” LIQUIDITY AND CAPITAL RESOURCES Capital Resources As of December 31, 2024, we had $24,631 in cash and cash equivalents and $53,800 of working capital, compared to $35,291 in cash, cash equivalents and restricted cash and $79,612 of working capital as of December 31, 2023.
See the reconciliation of Adjusted EBITDA from continuing operations to net (loss) income in “Non-GAAP Measures—Reconciliation of Net Loss to Adjusted EBITDA from Continuing Operations.” LIQUIDITY AND CAPITAL RESOURCES Capital Resources As of December 31, 2025, we had $86,252 in cash, cash equivalents, and restricted cash, and $95,851 of working capital, compared to $24,631 in cash, cash equivalents and restricted cash and $53,800 of working capital as of December 31, 2024.
The improvement in net loss was primarily due to a favorable vendor settlement relating to the partial recovery of operational losses from the ToBRFV infestation of $5,585, a higher gross margin in 2023 and lower selling, general and administrative expenses.
The improvement in net loss was primarily due to a higher gross margin and a favorable vendor settlement relating to the partial recovery of operational losses from the ToBRFV infestation of $4,015.
Shareholders Net loss attributable to Village Farms International, Inc. shareholders for the year ended December 31, 2024 was $35,850 as compared to $34,798 for the year ended December 31, 2023, an increase of $1,052, or 3%.
Net Loss Attributable to Village Farms International, Inc. Shareholders Net loss attributable to Village Farms International, Inc. shareholders for the year ended December 31, 2024 was $35,851 as compared to $34,798 for the year ended December 31, 2023.
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 Q4 2024, we completed our acquisition of Leli Holland and we now report this business as a separate operating segment.
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.
The improvement was due primarily to increased sales, partially 58 offset by a lower margin, higher selling, general and administrative costs, and decrease in tax provision of $2,968 when compared to the prior year. Adjusted EBITDA Adjusted EBITDA was $7,282 for the year ended December 31, 2024 and $14,764 for the year ended December 31, 2023.
The improvement was due primarily to increased sales, partially offset by a lower margin, higher selling, general and administrative costs, and decrease in tax provision of $2,968 when compared to the prior year.
Refer to Note 1 - Business, Basis of Presentation and Significant Accounting Policies in the notes to the audited consolidated financial statements, which is included in this Annual Report on Form 10-K, for a more detailed discussion of our significant accounting policies and critical accounting estimates.
Refer to Note 1 - Business, Basis of Presentation and Significant Accounting Policies in the notes to the audited consolidated financial statements, which is included in this Annual Report on Form 10-K, for a more detailed discussion of our significant accounting policies and critical accounting estimates. 72 Assessment for Indicators of Impairment Goodwill Year Ended December 31, 2025 Cannabis – Canada – Goodwill There were no impairment indicators for the period ended December 31, 2025.
Clean Energy Leli (1) Corporate Total Net (loss) income $ (5,882 ) $ (3,181 ) $ (13,333 ) $ 754 $ (1,004 ) $ (13,204 ) $ (35,850 ) Add: Amortization and depreciation 5,373 11,790 204 — 1,275 196 18,838 Foreign currency exchange loss 317 42 — — — 2,276 2,635 Interest expense (income), net 2,232 629 — 16 — (426 ) 2,451 Provision for (recovery of) income taxes 100 (1,537 ) — — (391 ) 166 (1,662 ) Share-based compensation — 166 79 — — 3,502 3,747 Deferred financing fees — 10 — — — — 10 Goodwill and intangible impairments (2) — — 11,939 — — — 11,939 Other impairments — — 439 — — — 439 Loss on disposal of assets 17 — — — — — 17 Adjustments attributable to non-controlling interest — (637 ) — — (139 ) — (776 ) Adjusted EBITDA (3) $ 2,157 $ 7,282 $ (672 ) $ 770 $ (259 ) $ (7,490 ) $ 1,788 For the Year Ended December 31, 2023 (in thousands of U.S. dollars) VF Fresh (Produce) Cannabis Canada (1) Cannabis U.S.
Clean Energy Cannabis Netherlands (1) Corporate Total Net income (loss) from continuing operations $ 1,818 $ (2,814 ) $ (13,333 ) $ 755 $ (1,164 ) $ (13,204 ) $ (27,942 ) Add: Amortization and depreciation 3,258 11,790 204 — 1,275 196 16,723 Foreign currency exchange (gain) loss 317 42 — — — 2,276 2,635 Interest expense (income), net 2,232 629 — 16 — (426 ) 2,451 Provision for (recovery of) income taxes 100 (1,537 ) — — (391 ) 166 (1,662 ) Share-based compensation — 166 79 — — 3,502 3,747 Deferred financing fees — 10 — — — — 10 Goodwill and intangible impairments (2) — — 11,939 — — — 11,939 Other impairments — — 439 — — — 439 Other expense, net 17 — — — — — 17 Adjustments attributable to non-controlling interest — (1,004 ) — — 21 — (983 ) Adjusted EBITDA from continuing operations (3) $ 7,742 $ 7,282 $ (672 ) $ 771 $ (259 ) $ (7,490 ) $ 7,374 69 For the Year Ended December 31, 2023 (in thousands of U.S. dollars) Produce Cannabis Canada (1) Cannabis U.S.
(“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 Village Farms Canada Limited Partnership ("VFCLP"), Village Farms L.P. ("VFLP"), Pure Sunfarms Corp. (“Pure Sunfarms” or "PSF"), Balanced Health Botanicals, LLC (“Balanced Health”), Rose LifeScience 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.
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.
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.
For the year ended December 31, 2024 and 2023 and for the period July 19, 2022 to December 31, 2022, Leli’s financial results are fully consolidated in the financial results of the Company with the minority non-controlling interest presented in net (income) loss attributable to non-controlling interests, net of tax.
For the year ended December 31, 2025, 2024 and 2023 Leli’s financial results are fully consolidated in the financial results of the Company with the minority non-controlling interest presented in net (income) loss attributable to non-controlling interests, net of tax. (2) For the year ended December 31, 2024, impairments included impairments to goodwill of $10,039 and intangible assets of $1,900.
For the years ended December 31, 2024 and 2023 and for the period July 19, 2022 to December 31, 2022, Leli’s financial results are fully consolidated in the financial results of the Company with the minority non-controlling interest presented in net (income) loss attributable to non-controlling interests, net of tax.
For the years ended December 31, 2025, 2024 and 2023, Leli’s financial results are fully consolidated in the financial results of the Company with the minority non-controlling interest presented in net (income) loss attributable to non-controlling interests, net of tax. (2) For the year ended December 31, 2024, impairments included impairments to goodwill of $10,039 and intangible assets of $1,900.
Clean Energy Leli (1) Corporate Total Sales $ 169,183 $ 148,856 $ 17,390 $ 752 $ — $ — $ 336,181 Cost of sales (164,125 ) (118,172 ) (6,355 ) (129 ) — — (288,781 ) Selling, general and administrative expenses (12,249 ) (34,028 ) (11,990 ) (38 ) (1,555 ) (11,188 ) (71,048 ) Other expense, net 1,408 (1,007 ) — 170 — (1,850 ) (1,279 ) Goodwill and intangible impairments — — (11,939 ) — — — (11,939 ) Other impairments — — (439 ) — — — (439 ) (Loss) income before taxes and loss from equity method investments (5,783 ) (4,351 ) (13,333 ) 755 (1,555 ) (13,038 ) (37,305 ) (Provision for) recovery of income taxes (100 ) 1,537 — — 391 (166 ) 1,662 (Loss) income from consolidated entities (5,883 ) (2,814 ) (13,333 ) 755 (1,164 ) (13,204 ) (35,643 ) Less: net (income) loss attributable to non-controlling interests, net of tax — (367 ) — — 160 — (207 ) Net (loss) income $ (5,883 ) $ (3,181 ) $ (13,333 ) $ 755 $ (1,004 ) $ (13,204 ) $ (35,850 ) Adjusted EBITDA (2) $ 2,157 $ 7,282 $ (672 ) $ 770 $ (259 ) $ (7,490 ) $ 1,788 Basic (loss) income per share $ (0.05 ) $ (0.03 ) $ (0.12 ) $ 0.01 $ (0.01 ) $ (0.12 ) $ (0.32 ) Diluted (loss) income per share $ (0.05 ) $ (0.03 ) $ (0.12 ) $ 0.01 $ (0.01 ) $ (0.12 ) $ (0.32 ) For the Year Ended December 31, 2023 VF Fresh (Produce) Cannabis Canada (1) Cannabis U.S.
Clean Energy Cannabis Netherlands (1) Corporate Total Sales $ 28,909 $ 148,856 $ 17,390 $ 752 $ — $ — $ 195,907 Cost of sales (25,450 ) (118,172 ) (6,355 ) (129 ) — — (150,106 ) Selling, general and administrative expenses (2,949 ) (34,028 ) (11,990 ) (38 ) (1,555 ) (11,188 ) (61,748 ) Other income (expense), net 1,408 (1,007 ) 0 170 — (1,850 ) (1,279 ) Goodwill and intangible impairments — — (11,939 ) — — — (11,939 ) Other impairments — — (439 ) — — — (439 ) Income (loss) before taxes and loss from equity method investments 1,918 (4,351 ) (13,333 ) 755 (1,555 ) (13,038 ) (29,604 ) ('Provision for) recovery of income taxes (100 ) 1,537 — — 391 (166 ) 1,662 Equity method investment income, net of tax — — — — — — — Income (loss) from continuing operations 1,818 (2,814 ) — (13,333 ) — 755 — (1,164 ) — (13,204 ) (27,942 ) Loss from discontinued operations, net of tax (7,702 ) — — — — — (7,702 ) Income (loss) including non-controlling interests (5,884 ) (2,814 ) (13,333 ) 755 (1,164 ) (13,204 ) (35,644 ) Less: net (income) loss attributable to non-controlling interests, net of tax — (367 ) — — 160 — (207 ) Net (loss) income $ (5,884 ) $ (3,181 ) $ (13,333 ) $ 755 $ (1,004 ) $ (13,204 ) $ (35,851 ) Adjusted EBITDA from continuing operations (2) $ 7,742 $ 7,282 $ (672 ) $ 771 $ (259 ) $ (7,490 ) $ 7,374 Basic income (loss) per share from continuing operations $ 0.02 $ (0.03 ) $ (0.12 ) $ 0.01 $ (0.01 ) $ (0.12 ) $ (0.25 ) Basic loss per share from discontinued operations (0.07 ) - - - - - (0.07 ) Basic loss per share $ (0.05 ) $ (0.03 ) $ (0.12 ) $ 0.01 $ (0.01 ) $ (0.12 ) $ (0.32 ) Diluted income (loss) per share from continuing operations $ 0.02 $ (0.03 ) $ (0.12 ) $ 0.01 $ (0.01 ) $ (0.12 ) $ (0.25 ) Diluted loss per share from discontinued operations (0.07 ) (0.00 ) - - 0.00 - (0.07 ) Diluted loss per share $ (0.05 ) $ (0.03 ) $ (0.12 ) $ 0.01 $ (0.01 ) $ (0.12 ) $ (0.32 ) 58 For the Year Ended December 31, 2023 Produce Cannabis Canada (1) Cannabis U.S.
All references to “dollars” or “$” are to U.S. dollars. The assets and liabilities of our foreign operations are translated into dollars at the exchange rate in effect as of December 31, 2024, December 31, 2023, and December 31, 2022 for each of the fiscal years ending on such dates.
All references to “dollars” or “$” 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 December 31, 2025, December 31, 2024, and December 31, 2023. Transactions affecting the shareholders’ equity are translated at historical foreign exchange rates.
The decrease of $7,482, or 51%, between periods was due to an inventory impairment charge of $10,436 (C$15,000) during the year ended December 31, 2024. Excluding the inventory write down, adjusted EBITDA was $17,718, an increase of 20% compared to the year ended December 31, 2023.
Adjusted EBITDA from continuing operations Adjusted EBITDA from continuing operations was $7,282 for the year ended December 31, 2024 and $14,764 for the year ended December 31, 2023. The decrease of $7,482, or 51%, between periods was due to an inventory impairment charge of $10,436 (C$15,000) during the year ended December 31, 2024.
Management believes that Adjusted EBITDA is a useful supplemental measure in evaluating the performance of the Company because it excludes non-recuring and other items that do not reflect our business performance.
Therefore, Adjusted EBITDA from continuing operations may not be comparable to similar measures presented by other issuers. Management believes that Adjusted EBITDA from continuing operations 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.
There were no inventory impairments recognized for the year ended December 31, 2023. Revenue Recognition 73 The Company’s produce and cannabis revenue transactions consist of a single performance obligation to transfer promised goods at a fixed price.
There were no inventory impairments recognized for the year ended December 31, 2025. Revenue Recognition 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.
Presentation of Financial Results Our consolidated results of operations for each of the three years ended December 31, 2024, 2023 and 2022 presented below reflect the operations of our consolidated wholly-owned subsidiaries, our 70% ownership in Rose LifeScience through March 31, 2024, our 80% ownership in Rose LifeScience beginning on April 1, 2024, our 85% ownership in Leli through September 22, 2024, and our 100% ownership in Leli beginning on September 23, 2024.
Presentation of Financial Results Our consolidated results of operations for each of the three years ended December 31, 2025, 2024 and 2023 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. 52 Foreign Currency Exchange Rates All currency amounts in this Annual Report are stated in U.S. dollars, which is our reporting currency, unless otherwise noted.
Adjusted EBITDA U.S. Cannabis adjusted EBITDA for the year ended December 31, 2024 was ($672) compared to $861 for the year ended December 31, 2023. The decline in the adjusted EBITDA was due primarily to lower sales at a lower gross margin. See the reconciliation of Adjusted EBITDA to net income in “Non-GAAP Measures—Reconciliation of Net Earnings to Adjusted EBITDA”.
Cannabis Adjusted EBITDA from continuing operations for the year ended December 31, 2024 was ($672) compared to $861 for the year ended December 31, 2023. The decline in the Adjusted EBITDA from continuing operations was due primarily to lower sales at a lower gross margin.
S. dollars and Canadian dollars, for the years ended December 31, 2024 and 2023: For The Year Ended (in thousands of U.S. dollars) December 31, 2024 December 31, 2023 Branded sales $ 183,904 $ 149,929 International sales 6,137 4,600 Non-branded sales 28,827 15,457 Other 1,941 2,059 Less: excise taxes (71,953 ) (58,015 ) Net Sales $ 148,856 $ 114,030 For The Year Ended (in thousands of Canadian dollars) December 31, 2024 December 31, 2023 Branded sales $ 251,708 $ 202,367 International sales 8,417 6,208 Non-branded sales 39,625 20,967 Other 2,665 2,778 Less: excise taxes (98,442 ) (78,315 ) Net Sales $ 203,973 $ 154,005 Cost of Sales Cost of sales for the years ended December 31, 2024 increased $40,082, or 51%, to $118,172 from $78,090 for the year ended December 31, 2023.
S. dollars and Canadian dollars, for the years ended December 31, 2024 and 2023: For The Year Ended (in thousands of U.S. dollars) December 31, 2024 December 31, 2023 Branded sales $ 183,904 $ 149,929 International sales 6,137 4,600 Non-branded sales 28,827 15,457 Other 1,941 2,059 Less: excise taxes (71,953 ) (58,015 ) Net Sales $ 148,856 $ 114,030 61 For The Year Ended (in thousands of Canadian dollars) December 31, 2024 December 31, 2023 Branded sales $ 251,708 $ 202,367 International sales 8,417 6,208 Non-branded sales 39,625 20,967 Other 2,665 2,778 Less: excise taxes (98,442 ) (78,315 ) Net Sales $ 203,973 $ 154,005 Cost of Sales Cost of sales for the years ended December 31, 2024 increased $40,082, or 51%, to $118,172 from $78,090 for the year ended December 31, 2023, primarily due to an increase in volume (kilograms) packaged and sold of branded products, as well as the non-cash inventory impairment relative to its net realizable value of $10,436 (C$15,000) for the year ended December 31, 2024, resulting from older manufactured inventory products which required incremental rework costs that were higher than the resell value of the finished goods, so it was concluded to write off this inventory rather than to continue incurring incremental costs to sell it.

… 246 more changes not shown on this page.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

8 edited+1 added−1 removed0 unchanged
Biggest changeOutstanding 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.
Biggest changeOutstanding 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 December 31, 2025, we had approximately $33,654 in aggregate principal amounts of our Term Loans with a weighted average interest rate of 6.0%.
Assuming that 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 December 31, 2024 and 2023 with the net foreign exchange gain or loss directly impacting net income (loss).
Assuming that 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 December 31, 2025 and 2024 with the net foreign exchange gain or loss directly impacting net income (loss).
ITEM 8. FINANCIAL STATEMEN TS AND SUPPLEMENTARY DATA The financial statements required by this item are included beginning on page 80 of this Annual Report on Form 10-K. See also Item 15, “Exhibits, Financial Statement Schedules.”
ITEM 8. FINANCIAL STATEMEN TS AND SUPPLEMENTARY DATA The financial statements required by this item are included beginning on page 90 of this Annual Report on Form 10-K. See also Item 15, “Exhibits, Financial Statement Schedules.”
ITEM 7A. QUALITATIVE AND QUANTITAT IVE DISCLOSURES ABOUT MARKET RISK Interest Rate Risk As of December 31, 2024, our variable interest rate debt was primarily related to our Credit Facilities and Term Loans.
ITEM 7A. QUALITATIVE AND QUANTITAT IVE DISCLOSURES ABOUT MARKET RISK Interest Rate Risk As of December 31, 2025, our variable interest rate debt was primarily related to our Credit Facilities and Term Loans.
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. 74 Foreign Exchange Risk As of December 31, 2024 and 2023, the Canadian/U.S. foreign exchange rate was C$1.00 = US$0.7301 and C$1.00 = US$0.7543, 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 December 31, 2025 and 2024, the Canadian/U.S. foreign exchange rate was C$1.00 = US$0.7156 and C$1.00 = US$0.7301, respectively.
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 $222 and $254 for the years ended December 31, 2024 and 2023, respectively.
An additional 50 basis 76 point increase in the applicable interest rates under our Credit Facility and Term Loan would have increased our interest expense by approximately $186 and $222 for the years ended December 31, 2025 and 2024, respectively.
The current interest rates for outstanding revolving loans under our Credit Facility and Term Loans reflect basis point decrease of approximately 0.7% over the comparable period in 2023. 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.
The current interest rates for outstanding revolving loans under our Credit Facility and Term Loans reflect basis point decreases of approximately 2.4% 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.
December 31, 2024 December 31, 2023 Financial assets Cash and cash equivalents $ 2,260 $ 1,686 Trade receivables 3,557 3,005 Inventories 3,929 8,211 Prepaid and deposits 198 667 Financial liabilities Trade payables and accrued liabilities (4,025 ) (5,623 ) Loan payable (2,883 ) (3,378 ) Net foreign exchange gain $ 3,036 $ 4,568 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.
December 31, 2025 December 31, 2024 Financial assets Cash and cash equivalents $ 6,086 $ 2,260 Trade receivables 3,799 3,557 Inventories 5,165 3,929 Prepaid and deposits 321 198 Financial liabilities Trade payables and accrued liabilities (7,301 ) (4,025 ) Loan payable (2,466 ) (2,883 ) Net foreign exchange gain $ 5,604 $ 3,036 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.
Removed
As of December 31, 2024, we had approximately $4,000 aggregate principal amount of outstanding revolving loans under our Operating Loan with an interest rate of 8.0% and we had approximately $40,562 in aggregate principal amounts with Term Loans with a weighted average interest rate of 8.4%.
Added
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.

Other VFF 10-K year-over-year comparisons