UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-Q

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the quarterly period ended September 28, 2024
	For the quarterly period ended March 29, 2025
	OR
☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the transition period from to .

Commission file number: 001-34198

SUNOPTA INC.

(Exact name of registrant as specified in its charter)

CANADA		Not Applicable
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

7078 Shady Oak Road Eden Prairie, Minnesota, 55344		(952) 820-2518
(Address of principal executive offices)		(Registrant's telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer ☒☐ Accelerated filer ☐☒ Non-accelerated filer ☐ Smaller reporting company ☐ (Do not check if a smaller reporting company) Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Yes ☐ No ☒

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Shares	STKL	The Nasdaq Stock Market
Common Shares	SOY	The Toronto Stock Exchange

The number of the registrant's common shares outstanding as of ~~October~~May 312, ~~2024~~2025 was ~~116~~117,~~923~~542,~~545~~316.

SUNOPTA INC.

FORM 10-Q

For the Quarterly Period Ended ~~September~~March 2829, ~~2024~~2025

TABLE OF CONTENTS

PART I	FINANCIAL INFORMATION
Item 1.	Financial Statements (unaudited)
	Consolidated Statements of Operations for the quarters and three quarters ended September 28, 2024 and September 30, 2023	5
	Consolidated Statements of Operations for the quarters ended March 29, 2025 and March 30, 2024	5
	Consolidated Balance Sheets as at September 28, 2024 and December 30, 2023	6
	Consolidated Balance Sheets as at March 29, 2025 and December 28, 2024	6
	Consolidated Statements of Shareholders' Equity as at and for the quarters and three quarters ended September 28, 2024 and September 30, 2023	7
	Consolidated Statements of Shareholders' Equity as at and for the quarters ended March 29, 2025 and March 30, 2024	7
	Consolidated Statements of Cash Flows for the three quarters ended September 28, 2024 and September 30, 2023	9
	Consolidated Statements of Cash Flows for the quarters ended March 29, 2025 and March 30, 2024	8
	Notes to Consolidated Financial Statements	109
Item 2	Management's Discussion and Analysis of Financial Condition and Results of Operations	2118
Item 3	Quantitative and Qualitative Disclosures about Market Risk	3526
Item 4	Controls and Procedures	3526
PART II	OTHER INFORMATION
Item 1	Legal Proceedings	3728
Item 1A	Risk Factors	3728
Item 5	Other Information	3728
Item 6	Exhibits	3728

Basis of Presentation

Except where the context otherwise requires, all references in this Quarterly Report on Form 10-Q ("Form 10-Q") to the "Company," "SunOpta," "we," "us," "our" or similar words and phrases are to SunOpta Inc. and its subsidiaries, taken together.

In this report, all currency amounts presented are expressed in thousands of United States ("U.S.") dollars ("$"), except per share amounts, unless otherwise stated.

Forward-Looking Statements

This Form 10-Q contains forward-looking statements that are based on management's current expectations and assumptions and involve a number of risks and uncertainties. Generally, forward-looking statements do not relate strictly to historical or current facts and are typically accompanied by words such as "anticipate," "estimate," "target," "intend," "project," "potential," "predict," "continue," "believe," "expect," "can," "could," "would," "should," "may," "might," "plan," "will," "budget," "forecast," the negatives of such terms, and words and phrases of similar impact and include, but are not limited to, references to future financial and operating results, plans, objectives, expectations, and intentions; our expectations regarding the future profitability of our business, including anticipated results of operations, revenue trends, and gross margin profile~~, and cash flows~~; our expectations regarding customer demand, consumer preferences, competition, sales pricing, ~~and~~ availability and pricing of raw material inputs, and timing and cost of capital expenditures; the impact of new or increased U.S. tariffs on macroeconomic conditions and our business; the expected gross margin impact from our supply chain investments and output from our existing capital infrastructure; the adequacy of internally generated funds and existing sources of liquidity, such as the availability of bank financing; the anticipated sufficiency of future cash flows to enable the payments of interest and repayment of debt, working capital needs, and planned capital expenditures; ~~and~~ our ability to obtain additional financing or issue additional debt or equity securities; our ~~estimates~~estimate ~~for~~of ~~losses~~duties and ~~related~~interest ~~insurance~~owed ~~recoveries~~in ~~associated~~connection with the ~~withdrawal~~revised tariff classification of certain ~~batches~~fruit snack products; our estimate of ~~aseptically-packaged~~insurance ~~product~~recoveries inassociated with the ~~second~~withdrawal ~~quarter~~of certain batches of ~~2024~~aseptically-packaged products; the outcome of litigation to which we may, from time to time, be a party; and other statements that are not historical facts. These forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements are based on certain assumptions, expectations and analyses we make in light of our experience and our interpretation of current conditions, historical trends and expected future developments, as well as other factors that we believe are appropriate in the circumstances. Whether actual results and developments will be consistent with and meet our expectations and predictions is subject to many risks and uncertainties, including those set forth under Part I, Item 1A "Risk Factors" of our Annual Report on Form 10-K for the fiscal year ended December 3028, ~~2023~~2024, under Item 1A. "Risk Factors" of this report, and in our other filings with the U.S. Securities and Exchange Commission and the Canadian Securities Administrators.

SUNOPTA INC. 3 ~~September~~March 2829, ~~2024~~2025 Form 10-Q

All forward-looking statements made herein are qualified by these cautionary statements, and our actual results or the developments we anticipate may not be realized. Our forward-looking statements are based only on information currently available to us and speak only as of the date on which they are made. We do not undertake any obligation to publicly update our forward-looking statements, whether written or oral, after the date of this report for any reason, even if new information becomes available or other events occur in the future, except as may be required under applicable securities laws. The foregoing factors should not be construed as exhaustive and should be read in conjunction with the other cautionary statements that are included in this report.

SUNOPTA INC. 4 ~~September~~March 2829, ~~2024~~2025 Form 10-Q

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

SunOpta Inc. Consolidated Statements of ~~OperationsFor~~Operations For the quarters ~~and three quarters~~ ended ~~September~~March 2829, ~~2024~~2025 and ~~September~~March 30, ~~2023~~2024 (Unaudited) (All dollar amounts expressed in thousands of U.S. dollars, except per share amounts)

	Quarter ended				~~Three quarters ended~~
	September 28,		September 30,		September 28,		September 30,
	March 29,2025		March 30,2024
	2024		2023		2024		2023
	$		$
	$		$		$		$
Revenues (note 14)	201,628		184,422
Revenues (note 15)	176,216		152,541		530,059		448,673
Cost of goods sold	171,309		153,370
Cost of goods sold	152,632		132,273		452,880		385,697
Gross profit	30,319		31,052
Gross profit	23,584		20,268		77,179		62,976
Selling, general and administrative expenses	19,196		22,334
Selling, general and administrative expenses	21,052		18,377		61,824		58,403
Intangible asset amortization	446		446
Intangible asset amortization	446		446		1,338		1,338
Other expense (income), net	75		(1,800	)
Other expense (income), net	450		-		(1,654	)	(20	)
Foreign exchange loss (gain)	115		(51	)
Foreign exchange loss (gain)	113		(37	)	1,372		44
Operating income	10,487		10,123
Operating income	1,523		1,482		14,299		3,211
Interest expense, net	5,107		6,050
Interest expense, net	6,762		7,162		19,222		19,391
Other non-operating expense	422		-
Other non-operating expense	236		-		236		-
Earnings from continuing operations before income taxes	4,958		4,073
Loss from continuing operations before income taxes	(5,475	)	(5,680	)	(5,159	)	(16,180	)
Income tax expense (note 10)	147		277
Income tax expense (note 11)	23		-		283		3,978
Earnings from continuing operations	4,811		3,796
Loss from continuing operations	(5,498	)	(5,680	)	(5,442	)	(20,158	)
Net loss from discontinued operations (note 2)	-		(917	)
Net loss from discontinued operations (note 2)	-		(140,143	)	(2,314	)	(143,126	)
Net earnings	4,811		2,879
Net loss	(5,498	)	(145,823	)	(7,756	)	(163,284	)
Dividends and accretion on preferred stock	(140	)	(433	)
Dividends and accretion on preferred stock	(137	)	(426	)	(401	)	(1,552	)
Earnings attributable to common shareholders	4,671		2,446
Loss attributable to common shareholders	(5,635	)	(146,249	)	(8,157	)	(164,836	)
Basic and diluted earnings (loss) per share (note 11)
Basic and diluted loss per share (note 12)
Earnings from continuing operations attributable to common shareholders	0.04		0.03
Loss from continuing operations attributable to common shareholders	(0.05	)	(0.05	)	(0.05	)	(0.19	)
Loss from discontinued operations	-		(0.01	)
Loss from discontinued operations	-		(1.21	)	(0.02	)	(1.26	)
Earnings attributable to common shareholders	0.04		0.02
Loss attributable to common shareholders	(0.05	)	(1.26	)	(0.07	)	(1.45	)
Weighted-average common shares outstanding (000s) (note 11)
Weighted-average common shares outstanding (000s) (note 12)
Basic	117,201		116,033
Basic	116,841		115,616		116,504		113,700
Diluted	125,007		117,558
Diluted	116,841		115,616		116,504		113,700

(See accompanying notes to consolidated financial statements)

SUNOPTA INC. 5 ~~September~~March 2829, ~~2024~~2025 Form 10-Q

SunOpta Inc. Consolidated Balance ~~SheetsAs~~Sheets As at ~~September~~March 2829, ~~2024~~2025 and December 3028, ~~2023~~2024 (Unaudited) (All dollar amounts expressed in thousands of U.S. dollars)

	September 28, 2024		December 30, 2023
	March 29, 2025		December 28, 2024
	$		$
ASSETS
Current assets
Cash and cash equivalents	2,~~933~~299		~~306~~1,552
Accounts receivable, net of allowance for credit losses of $137 and $303, respectively	63,163		64,862
Accounts receivable, net of allowance for credit losses of $164 and $134, respectively (note 3)	64,099		46,314
Inventories (note 5)	107,001		83,215
Inventories (note 4)	99,407		92,798
Prepaid expenses and other current assets	15,~~845~~189		2514,~~235~~680
Income taxes recoverable	~~3,980~~696		4,~~717~~114
Current assets held for sale (note 2)	-		5,910
Total current assets	181,690		159,458
Total current assets	192,922		184,245
Restricted cash (note 5)	7,442		7,460
Restricted cash (note 6)	7,703		8,448
Property, plant and equipment, net	343,465		343,618
Property, plant and equipment, net	339,651		319,898
Operating lease right-of-use assets	103,323		105,692
Operating lease right-of-use assets	107,115		105,919
Intangible assets, net	22,566		20,077
Intangible assets, net	20,523		21,861
Goodwill	3,998		3,998
Deferred income taxes	52		-
Other long-term assets	28,201		28,224
Other assets	27,362		25,055
Total assets	690,685		668,527
Total assets	699,326		669,424
LIABILITIES
Current liabilities
Accounts payable	82113,~~835~~649		7593,~~761~~362
Accrued liabilities	1921,~~176~~501		2017,~~889~~876
Notes payable (note 7)	12,991		17,596
Notes payable (note 6)	9,772		11,110
Current portion of long-term debt (note 8)	29,796		24,346
Income taxes payable	670		638
Current portion of operating lease liabilities	16,605		15,808
Current portion of long-term debt (note 7)	28,429		29,393
Total current liabilities	161,403		154,400
Current portion of operating lease liabilities	16,835		17,055
Long-term debt (note 8)	260,130		238,883
Total current liabilities	190,856		169,434
Operating lease liabilities	101,306		100,102
Long-term debt (note 7)	232,153		235,798
Deferred income taxes	325		505
Operating lease liabilities	97,348		99,328
Total liabilities	523,164		493,890
Deferred income taxes	325		325
Series B-1 Preferred Stock (note 9)	14,910		14,509
Total liabilities	520,682		504,885
Series B-1 Preferred Stock (note 8)	15,188		15,048
SHAREHOLDERS' EQUITY
Common shares, no par value, unlimited shares authorized,116,881,836 shares issued (December 30, 2023 - 115,953,287)	470,248		464,169
Common shares, no par value, unlimited shares authorized, 117,242,316 shares issued (December 28, 2024 - 117,102,745)	472,763		471,792
Additional paid-in capital	2931,~~839~~354		2730,~~534~~775
Accumulated deficit	(~~340~~351,~~844~~311	)	(~~332~~355,~~687~~982	)
Accumulated other comprehensive income	2,009		2,009
Total shareholders' equity	~~161~~154,~~252~~815		~~161~~148,~~025~~594
Total liabilities and shareholders' equity	~~699~~690,~~326~~685		~~669~~668,~~424~~527
Commitments and contingencies (note 14)
Commitments and contingencies (note 13)

(See accompanying notes to consolidated financial statements)

SUNOPTA INC. 6 ~~September~~March 2829, ~~2024~~2025 Form 10-Q

SunOpta Inc. Consolidated Statements of Shareholders' ~~EquityAs~~Equity As at and for the quarters ended ~~September~~March 2829, ~~2024~~2025 and ~~September~~March 30, ~~2023~~2024 (Unaudited) (All dollar amounts expressed in thousands of U.S. dollars)

	Common shares		Additionalpaid-in capital		Accumulateddeficit		Accumulatedothercomprehensiveincome	Total
	000s	$	$		$		$	$
Balance at June 29, 2024	116,796	469,719	27,816		(335,209	)	2,009	164,335
Balance at December 28, 2024	117,103	471,792	30,775		(355,982	)	2,009	148,594
Employee stock purchase plan	1916	99109	-		-		-	99109
Stock incentive plan	67123	~~430~~862	(~~359~~603	)	-		-	71259
Withholding taxes on stock-based awards	-	-	(~~145~~361	)	-		-	(~~145~~361	)
Stock-based compensation	-	-	21,~~527~~543		-		-	21,~~527~~543
Net loss	-	-	-		(5,498	)	-	(5,498	)
Net earnings	-	-	-		4,811		-	4,811
Accretion on preferred stock	-	-	-		(~~137~~140	)	-	(~~137~~140	)
Balance at September 28, 2024	116,882	470,248	29,839		(340,844	)	2,009	161,252
Balance at March 29, 2025	117,242	472,763	31,354		(351,311	)	2,009	154,815

	Common shares			Additionalpaid-in capital		Accumulateddeficit		Accumulatedothercomprehensiveincome	Total
	000s	$		$		$		$	$
Balance at July 1, 2023	115,580	462,290		22,715		(174,275	)	1,363	312,093
Balance at December 30, 2023	115,953	464,169		28,188		(338,050	)	2,009	156,316
Share issuance costs	-	(68	)	-		-		-	(68	)
Employee stock purchase plan	21	111		-		-		-	111
Employee stock purchase plan	42	154		-		-		-	154
Stock incentive plan	111	537		(334	)	-		-	203
Stock incentive plan	29	254		(153	)	-		-	101
Withholding taxes on stock-based awards	-	-		(86	)	-		-	(86	)
Withholding taxes on stock-based awards	-	-		(114	)	-		-	(114	)
Stock-based compensation	-	-		4,645		-		-	4,645
Stock-based compensation	-	-		3,068		-		-	3,068
Net earnings	-	-		-		2,879		-	2,879
Net loss	-	-		-		(145,823	)	-	(145,823	)
Dividends on preferred stock	-	-		-		(305	)	-	(305	)
Accretion on preferred stock	-	-		-		(~~121~~128	)	-	(~~121~~128	)
Balance at September 30, 2023	115,651	462,630		25,516		(320,524	)	1,363	168,985
Balance at March 30, 2024	116,085	464,817		32,413		(335,604	)	2,009	163,635

SUNOPTA INC. 7 September 28, 2024 Form 10-Q

SunOpta Inc.Consolidated Statements of Shareholders' Equity (continued)As at and for the three quarters ended September 28, 2024 and September 30, 2023(Unaudited)(All dollar amounts expressed in thousands of U.S. dollars)

	Common shares		Additionalpaid-in capital		Accumulateddeficit		Accumulatedothercomprehensiveincome	Total
	000s	$	$		$		$	$
Balance at December 30, 2023	115,953	464,169	27,534		(332,687	)	2,009	161,025
Employee stock purchase plan	68	342	-		-		-	342
Stock incentive plan	861	5,737	(5,160	)	-		-	577
Withholding taxes on stock-based awards	-	-	(2,804	)	-		-	(2,804	)
Stock-based compensation	-	-	10,269		-		-	10,269
Net loss	-	-	-		(7,756	)	-	(7,756	)
Accretion on preferred stock	-	-	-		(401	)	-	(401	)
Balance at September 28, 2024	116,882	470,248	29,839		(340,844	)	2,009	161,252

	Common shares		Additionalpaid-in capital		Accumulateddeficit		Accumulatedothercomprehensiveincome	Total
	000s	$	$		$		$	$
Balance at December 31, 2022	107,910	440,348	33,184		(155,688	)	1,363	319,207
Exchange of Series B-1 Preferred Stock, net of share issuance costs of $191	6,089	13,915	-		-		-	13,915
Employee stock purchase plan	92	463	-		-		-	463
Stock incentive plan	1,560	7,904	(7,536	)	-		-	368
Withholding taxes on stock-based awards	-	-	(9,121	)	-		-	(9,121	)
Stock-based compensation	-	-	8,989		-		-	8,989
Net loss	-	-	-		(163,284	)	-	(163,284	)
Dividends on preferred stock	-	-	-		(1,123	)	-	(1,123	)
Accretion on preferred stock	-	-	-		(429	)	-	(429	)
Balance at September 30, 2023	115,651	462,630	25,516		(320,524	)	1,363	168,985

(See accompanying notes to consolidated financial statements)

SUNOPTA INC. 87 ~~September~~March 2829, ~~2024~~2025 Form 10-Q

SunOpta Inc. Consolidated Statements of Cash ~~FlowsFor~~Flows For the ~~three~~quarter ~~quarters~~ ended ~~September~~March 2829, ~~2024~~2025 and ~~September~~March 30, ~~2023~~2024 (Unaudited) (Expressed in thousands of U.S. dollars)

	Three quarters ended
	Quarters ended
	September 28,2024		September 30,2023
	March 29,2025		March 30,2024
	$		$
CASH PROVIDED BY (USED IN)
Operating activities
Net loss	(7,756	)	(163,284	)
Net earnings	4,811		2,879
Net loss from discontinued operations	~~(2,314~~-	)	(~~143,126~~917	)
Loss from continuing operations	(5,442	)	(20,158	)
Earnings from continuing operations	4,811		3,796
Items not affecting cash:
Depreciation and amortization	279,~~005~~726		228,~~873~~576
Amortization of debt issuance costs	~~686~~249		~~1,093~~229
Deferred income taxes	(105	)	4,260
Stock-based compensation	1,543		4,645
Stock-based compensation	10,269		8,989
Gain on sale of smoothie bowls product line	-		(1,800	)
Gain on sale of smoothie bowls product line (note 3)	(1,800	)	-
Other	(97	)	(97	)
Other	(249	)	410
Changes in operating assets and liabilities, net of divestitures (note 12)	6,049		(7,947	)
Changes in operating assets and liabilities, net of divestitures (note 13)	(11,143	)	(25,852	)
Net cash provided by operating activities of continuing operations	22,281		7,402
Net cash provided by (used in) operating activities of continuing operations	19,221		(8,385	)
Net cash used in operating activities of discontinued operations	-		(2,133	)
Net cash provided by (used in) operating activities of discontinued operations	(2,310	)	18,798
Net cash provided by operating activities	22,281		5,269
Net cash provided by operating activities	16,911		10,413
Investing activities
Additions to property, plant and equipment	(2212,~~800~~735	)	(377,~~272~~548	)
Proceeds from sale of smoothie bowls product line (note 3)	6,336		-
Addition to intangible assets	(2,419	)	-
Net cash used in investing activities of continuing operations	(16,464	)	(37,272	)
Proceeds from sale of smoothie bowls product line	-		3,336
Net cash provided by (used in) investing activities of discontinued operations	6,300		(1,085	)
Net cash used in investing activities of continuing operations	(15,154	)	(4,212	)
Net cash used in investing activities	(10,164	)	(38,357	)
Net cash provided by investing activities of discontinued operations	-		6,300
Net cash provided by (used in) investing activities	(15,154	)	2,088
Financing activities
Increase in borrowings under revolving credit facilities	18,350		22,718
Increase (decrease) in borrowings under revolving credit facilities	(1,437	)	250
Repayment of long-term debt	(1712,~~565~~115	)	(314,~~435~~782	)
Borrowings of long-term debt	18,~~145~~485		~~19,840~~-
Proceeds from notes payable (note 7)	99,270		77,602
Proceeds from notes payable (note 6)	41,750		33,424
Repayment of notes payable (note 7)	(103,875	)	(33,156	)
Repayment of notes payable (note 6)	(43,088	)	(34,373	)
Proceeds from the exercise of stock options and employee share purchases	~~919~~368		~~831~~314
Payment of withholding taxes on stock-based awards	(~~2,804~~361	)	(~~9,121~~86	)
Payment of cash dividends on preferred stock	~~(305~~-	)	(~~1,427~~305	)
Payment of share issuance costs	-		(191	)
Net cash used in financing activities of continuing operations	(6,398	)	(5,558	)
Net cash provided by (used in) financing activities of continuing operations	(4,865	)	45,661
Increase in cash, cash equivalents and restricted cash in the period	729		1,799
Net cash used in financing activities of discontinued operations	-		(14,852	)
Cash, cash equivalents and restricted cash, beginning of the period	9,012		8,754
Net cash provided by (used in) financing activities	(4,865	)	30,809
Cash, cash equivalents and restricted cash, end of the period	9,741		10,553
Increase in cash, cash equivalents and restricted cash in the period	1,882		2,865
Non-cash investing and financing activities (note 12)
Cash, cash equivalents and restricted cash, beginning of the period	8,754		679
Cash, cash equivalents and restricted cash, end of the period	10,636		3,544
Non-cash investing and financing activities (note 13)

(See accompanying notes to consolidated financial statements)

SUNOPTA INC. 98 ~~September~~March 2829, ~~2024~~2025 Form 10-Q

SunOpta Inc. Notes to Consolidated Financial Statements For the quarters ~~and three quarters~~ ended ~~September~~March 2829, ~~2024~~2025 and ~~September~~March 30, ~~2023~~2024 (Unaudited) (All tabular amounts expressed in thousands of U.S. dollars, except per share amounts)

1. Significant Accounting Policies

Basis of Presentation

These interim consolidated financial statements of SunOpta Inc. (the "Company" or "SunOpta") have been prepared in accordance with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X promulgated under the Securities Exchange Act of 1934, as amended, and in accordance with United States ("U.S.") generally accepted accounting principles ("U.S. GAAP") for interim financial information. Accordingly, these condensed interim consolidated financial statements do not include all of the disclosures required by U.S. GAAP for annual financial statements. In the opinion of management, all adjustments considered necessary for the fair presentation of the interim periods presented have been included, and all such adjustments are of a normal, recurring nature. Operating results for the quarter ~~and three quarters~~ ended ~~September~~March 2829, ~~2024~~2025 are not necessarily indicative of the results that may be expected for the full fiscal year ending ~~December~~January 283, ~~2024~~2026 or for any other period. The interim consolidated financial statements include the accounts of the Company and its subsidiaries and have been prepared on a basis consistent with the annual consolidated financial statements for the year ended December 3028, ~~2023~~2024. For further information, refer to the consolidated financial statements, and notes thereto, included in the Company's Annual Report on Form 10-K for the fiscal year ended December 3028, ~~2023~~2024 (the "2024 Form 10-K").

Reclassification

Commencing in the third quarter of 2024, the Company is reporting accrued liabilities as a separate line on the consolidated balance sheet, rather than combined with accounts payable. Accrued liabilities as at December 30, 2023, have been reclassified from the previously reported accounts payable and accrued liabilities line item to conform to the current period presentation.

Segment Information

The Company manages its continuing operations on a company-wide basis, rather than at a product category or business unit level, thereby making determinations as to the allocation of resources as one operating and reportable segment. The Company's Chief Executive Officer, who has been identified as the Chief Operating Decision Maker ("CODM"), is supported by a centralized management team based on functional area, including sales, marketing, supply chain, and research and development, as well as finance, IT and administration. Only the CODM has overall responsibility and accountability for the profitability and cash flows of the Company. Using financial information at the consolidated level, the CODM makes key operating decisions, including approving annual operating plans, expanding into new markets or product categories, pursuing business acquisitions or divestitures, and initiating major capital expenditure programs. In addition, the CODM determines the allocation of resources and capital investments to optimize operations and maximize opportunities for the Company as a whole without regard to specific product categories or business units. The CODM also uses consolidated information to assess performance against the annual operating plan and to set company-wide incentive compensation targets. The majority of the Company's products are shelf-stable packaged food and beverage products and share similar customers and distribution. Refer to note 15 for a disaggregation of the Company's revenues by product category.

Fiscal Year

The fiscal year of the Company consists of a 52- or 53-week period ending on the Saturday closest to December 31. Fiscal year ~~2024~~2025 is a 5253-week period ending on ~~December~~January 283, ~~2024~~2026, with quarterly periods ending on March 3029, ~~2024~~2025, June 2928, ~~2024~~2025 and September 2827, ~~2024~~2025. Fiscal ~~2023~~2024 was a 52-week period ending on December 3028, ~~2023~~2024, with quarterly periods ending on ~~April~~March 130, ~~2023~~2024, ~~July~~June 129, ~~2023~~2024 and September 3028, ~~2023~~2024.

Recent Accounting Pronouncements

In December 2023, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which requires public entities, on an annual basis, to provide disclosure of specific categories in the rate reconciliation, as well as disclosure of income taxes paid disaggregated by jurisdiction. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024,. ~~with~~ASU ~~early~~2023-09 ~~adoption~~will ~~permitted~~be effective for the Company for its 2025 fiscal year ending January 3, 2026. The Company is currently evaluating the ~~impact~~potential ofeffect ~~adopting~~that ASU 2023-09 will have on its financial statement disclosures.

~~SUNOPTA~~In ~~INC.~~November 102024, ~~September~~the 28FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, which requires disclosure, in the notes to financial statements, of specified information about certain costs and expenses. ASU 2024-03 ~~Form~~will 10be effective for annual periods beginning after December 15, 2026, and interim periods beginning after December 15, 2027. Early adoption is permitted. The Company is currently evaluating the potential effect that ASU 2024-Q03 will have on its financial statement disclosures.

SunOpta Inc.Notes to Consolidated Financial StatementsFor the quarters and three quarters ended September 28, 2024 and September 30, 2023(Unaudited)(All tabular amounts expressed in thousands of U.S. dollars, except per share amounts)

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which requires public entities to disclose information about their reportable segments' significant expenses and other segment items on an interim and annual basis. Public entities with a single reportable segment are required to apply the disclosure requirements in ASU 2023-07, as well as all existing segment disclosures and reconciliation requirements in ASC 280 on an interim and annual basis. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and for interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. The Company is currently evaluating the impact of adopting ASU 2023-07.

2. Discontinued Operations

Divestiture of Frozen Fruit

On October 12, 2023 (the "Closing Date"), the Company, ~~together with its subsidiaries Sunrise Growers, Inc. ("Sunrise Growers"), Sunrise Growers Mexico, S. de R.L. de C.V. ("Sunrise Mexico") and SunOpta Mx, S.A. de C.V. ("SunOpta Mexico"),~~ completed the sale of certain assets and liabilities of its frozen fruit business ("Frozen Fruit") ~~pursuant~~ to ~~the terms of an Asset Purchase Agreement ("APA") with~~ Natures Touch Mexico, S. de R.L. de C.V. and Nature's Touch Frozen Fruits, LLC (the "Purchasers"). Atfor ~~the~~an ~~Closing Date, the~~ estimated aggregate purchase price that comprised (i) cash consideration of $95.3 million; (ii) a short-term note receivable of $10.5 million, which was paid in five consecutive monthly installments of $2.1 million beginning 30 days following the Closing Date; (iii) secured seller promissory notes ~~due in three years and~~ with a stated principal ~~amounts~~amount of $1520.0 million ~~entered~~in ~~into~~the byaggregate ~~Sunrise Growers~~ and ~~$5.0~~due ~~million~~three ~~entered~~years ~~into~~from bythe ~~SunOpta~~Closing ~~Mexico~~Date (the "Seller Promissory Notes"); and (iv) the assumption by the Purchasers of $15.7 million of accounts payable and accrued liabilities of Frozen Fruit. The estimated aggregate purchase price was subject to post-closing adjustments based on a determination of the final net working capital as of the Closing Date. In the fourth quarter of 2024, the parties resolved certain disputed items in connection with the determination of the final net working capital, resulting in a net reduction in the aggregate purchase price in favor of the Purchasers of $5.1 million.

~~The~~SUNOPTA estimated aggregate purchase price is subject to post-closing adjustments based on a determination of the final net working capital and resulting aggregate purchase price as of the Closing Date (the "Closing Statement"), with adjustments to the aggregate purchase price determined on a separate and individual basis for each of Sunrise Growers, Sunrise Mexico and SunOpta MexicoINC. ~~Any~~9 ~~downward~~March ~~adjustment will be deducted from the principal amount of the Seller Promissory Notes entered into by Sunrise Growers and/or SunOpta Mexico~~29, as2025 ~~the~~Form case may be, in an amount up to $5.0 million in the aggregate, with any additional downward adjustment payable by the Company to the Purchasers in cash. The portion of any upward adjustment in the aggregate purchase price not paid to the Company by the Purchasers in cash will be added to the principal amount of the Seller Promissory Notes entered into by Sunrise Growers and/or SunOpta Mexico, as applicable. As at September 28, 2024 and December 30, 2023, the Company recorded a $0.5 million net receivable from the Purchasers based on the Company's estimate of the final net working capital and post10-closing adjustments, which is included in other current assets on the consolidated balance sheets. However, this estimate may be subject to change, which could be material, as the parties are currently in the process of reconciling the final aggregate purchase price, including the resolution of certain disputed items in accordance with the procedures set forth in the APA.Q

~~The~~SunOpta ~~Seller Promissory~~ Inc.Notes ~~bear interest at a rate per annum equal~~ to ~~the~~Consolidated ~~Secured~~Financial ~~Overnight~~StatementsFor ~~Financing Rate ("SOFR"), determined quarterly in advance, plus a margin of 4.00% for~~ the ~~first~~quarters ~~year~~ended ~~and~~March ~~7.00% for the second and third years. Interest is payable quarterly in-kind. The Seller Promissory Notes mature on October 12~~29, ~~2026,~~2025 and ~~outstanding~~March ~~principal and accrued and unpaid interest is payable on the maturity date. As at September 28~~30, 2024(Unaudited)(All ~~and~~tabular ~~December~~amounts ~~30,~~expressed ~~2023, the principal amount of the Seller Promissory Notes of $20.0 million, together with paid~~ in ~~kind~~thousands ~~interest~~ of $1U.~~4 million and $0~~S.3 ~~million~~dollars, ~~respectively,~~except ~~was~~per ~~recorded~~share in other long-term assets on the consolidated balance sheets. As described above, the final principal amount of the Sellers Promissory Notes may change as a result of any upward or downward adjustment to the aggregate purchase price in connection with the resolution of the Closing Statement. As at September 28, 2024 and December 30, 2023, the Company had not recorded any allowance for credit losses related to the Seller Promissory Notes. The Seller Promissory Notes are secured by a second-priority lien on certain assets of Frozen Fruit acquired by the Purchasers.amounts)

~~SUNOPTA~~The ~~INC~~Seller Promissory Notes bear interest at a rate per annum equal to the Secured Overnight Financing Rate ("SOFR"), determined quarterly in advance, plus a margin of 4.00% 11for ~~September~~the first year and 7.00% for the second and third years. Interest is payable quarterly in-kind. The Seller Promissory Notes mature on October 12, 2026, and outstanding principal and accrued and unpaid interest is payable on the maturity date. Upon initial recognition, the Company determined that the fair value of the Seller Promissory Notes approximated their stated principal amount and no premium or discount was recognized. As at March 29, 2025 and December 28, 2024, ~~Form~~the 10principal amount of the Seller Promissory Notes, together with accumulated accrued and unpaid in-Qkind interest of $3.2 million and $2.5 million, respectively, is recorded in other long-term assets on the consolidated balance sheets. The Seller Promissory Notes are secured by a second-priority lien on certain assets of Frozen Fruit acquired by the Purchasers. As at March 29, 2025 and December 28, 2024, the Company had not recorded any allowance for credit losses related to the Seller Promissory Notes.

~~SunOpta~~The ~~Inc.Notes~~table tobelow ~~Consolidated~~presents ~~Financial StatementsFor~~ the ~~quarters~~major ~~and~~components ~~three~~of ~~quarters~~the ~~ended~~results ~~September~~of ~~28,~~discontinued ~~2024~~operations ~~and~~reported ~~September~~in ~~30,~~the ~~2023(Unaudited)(All~~consolidated ~~tabular~~statement ~~amounts~~of ~~expressed~~operations infor ~~thousands~~the ofquarter ~~U.S.~~ended ~~dollars~~March 30, ~~except per share amounts)~~2024.

The table below presents the major components of the results of discontinued operations reported in the consolidated statement of operations for the quarters and three quarters ended September 28, 2024 and September 30, 2023.

	Quarter ended
	March 30, 2024
	$
Cost of goods sold	553
Selling, general and administrative expenses	621
Other income, net	(73	)
Foreign exchange gain	(101	)
Interest expense	23
Loss from discontinued operations before income taxes	(1,023	)
Income tax benefit	(106	)
Net loss from discontinued operations	(917	)

	Quarter ended			Three quarters ended
	September 28,2024	September 30,2023		September 28,2024		September 30,2023
	$	$		$		$
Revenues	-	58,614		-		194,171
Cost of goods sold(1)	-	68,760		553		202,443
Selling, general and administrative expenses(2)	-	2,370		621		7,347
Intangible asset amortization	-	2,000		-		6,000
Other expense, net(3)	-	5,885		427		5,713
Foreign exchange loss (gain)	-	912		(101	)	(3,757	)
Interest expense	-	840		23		1,392
Loss before loss on divestiture	-	(22,153	)	(1,523	)	(24,967	)
Pre-tax loss on divestiture	-	(118,795	)	-		(118,795	)
Loss from discontinued operations before income taxes	-	(140,948	)	(1,523	)	(143,762	)
Income tax expense (benefit)(4)	-	(805	)	791		(636	)
Net loss from discontinued operations	-	(140,143	)	(2,314	)	(143,126	)

3. Receivables Sales Program

~~(1) For~~On August 28, 2024, the ~~three~~Company ~~quarters~~entered ~~ended~~into ~~September~~a ~~28,~~Master ~~2024~~Receivables Purchase Agreement, ~~cost~~as ofamended ~~goods~~on ~~sold~~February ~~reflects~~11, 2025 (the ~~write~~"Agreement"), ~~down~~with ina third-party financial institution (the ~~carrying~~"Purchaser"), ~~value~~for the sale of designated trade receivables of certain eligible customers in exchange for cash proceeds (the ~~frozen~~"Receivables ~~fruit~~Sales ~~inventory~~Program"). ~~that~~Under ~~was~~the ~~not~~Receivables ~~acquired~~Sales byProgram, the ~~Purchasers~~maximum toaggregate ~~its~~amount ~~estimated~~of ~~net~~outstanding ~~realizable~~receivables ~~value.~~that ~~Prior~~can be sold to the ~~third~~Purchaser ~~quarter~~at ofany ~~2024,~~time ~~the~~is ~~Company~~$42.0 ~~completed~~million ~~the~~(December ~~disposal~~28, of2024 ~~the~~- $530.90 million). ofThe ~~frozen~~Agreement ~~fruit~~may ~~inventory~~be ~~held-for-sale~~terminated asby the Purchaser at ~~December~~any time with 30, ~~2023~~days' notice.

~~(2) For~~The receivables sold under the ~~three~~Receivables ~~quarters~~Sales ~~ended~~Program ~~September~~are ~~28,~~without ~~2024,~~recourse ~~selling,~~to ~~general~~the ~~and~~Company ~~administrative~~for ~~expenses~~any ~~include~~customer ~~additional~~credit ~~severance~~risk. ~~costs~~The ~~for~~Company ~~former~~does ~~employees~~not ofretain ~~Frozen~~any ~~Fruit~~ongoing ~~not~~financial ~~ultimately~~interest ~~retained~~in bythe receivables sold under the ~~Purchasers,~~Receivables Sales Program other than cash collection and administrative services. The Company has not recognized any servicing asset or liability as ~~well~~at March 29, 2025, as the ~~true-up~~fair values of ~~pre-divestiture~~the ~~profit-sharing~~servicing ~~bonuses~~arrangement ~~payable~~and tothe ~~certain~~fees ~~Mexican~~earned ~~employees~~are ofnot ~~Frozen~~considered ~~Fruit~~material to the consolidated financial statements.

~~(3) For~~Receivables sold under the ~~three~~Receivables ~~quarters~~Sales ~~ended~~Program ~~September~~are ~~28,~~accounted ~~2024,~~for ~~other~~as ~~expense~~sales ~~mainly~~of ~~related~~financial assets. The sold receivables are derecognized from accounts receivable on the Company's consolidated balance sheet at the time of sale to anthe ~~additional~~Purchaser. ~~self-insured~~The ~~retention~~loss ~~amount~~on ~~paid~~sale of the sold receivables, representing the discount taken by the Purchaser, together with upfront transaction costs incurred by the Company in connection with the ~~settlement~~Agreement, ofamounted ~~certain~~to ~~claims~~$0.4 ~~related~~million tofor the ~~recall~~quarter ofended ~~specific~~March ~~frozen~~29, ~~fruit~~2025, ~~products~~which ~~initiated~~is included in other non-operating expense on the ~~second~~consolidated ~~quarter~~statements of ~~2023~~operations ~~(see~~for ~~note~~the ~~14)~~quarter ended March 29, ~~partially~~2025. ~~offset~~Cash byproceeds ~~gains~~received onfrom the ~~settlement~~Purchaser ofare ~~certain~~classified ~~pre-existing~~as ~~legal~~an ~~matters~~operating ~~related~~activity toin ~~Frozen~~the ~~Fruit~~consolidated statements of cash flows.

~~(4) For~~SUNOPTA ~~the~~INC. ~~three~~10 ~~quarters~~March ~~ended September 28~~29, ~~2024,~~2025 ~~income~~Form ~~tax expense reflects the final determination of the tax bases for the net assets of Frozen Fruit divested in Mexico.~~10-Q

3SunOpta Inc.Notes ~~Sale~~to Consolidated Financial StatementsFor the quarters ended March 29, 2025 and March 30, 2024(Unaudited)(All tabular amounts expressed in thousands of ~~Assets~~U.S. dollars, except per share amounts)

On March 4, 2024, the Company completed the sale of the net assets related to its smoothie bowls product line, including inventories and equipment, for a cash purchase price of $6.3 million. The Company recognized a pre-tax gain on sale of $1.8 million, which is recorded in other income of continuing operations on the consolidated statement of operations for the three quarters ended September 28, 2024.

4. Receivables Sales Program

On August 28, 2024, the Company entered into a Master Receivables Purchase Agreement (the "Agreement") with a third-party financial institution (the "Purchaser"), for the sale of designated trade receivables of certain eligible customers in exchange for cash proceeds (the "Receivables Sales Program"). Under the Receivables Sales Program, the maximum aggregate amount of outstanding receivables that can be sold to the Purchaser at any time is $30.0 million. The Agreement may be terminated by the Purchaser at any time with 30 days' notice.

SUNOPTA INC. 12 September 28, 2024 Form 10-Q

The receivables sold under the Receivables Sales Program are without recourse to the Company for any customer credit risk. The Company does not retain any ongoing financial interest in the receivables sold under the Receivables Sales Program other than cash collection and administrative services. The Company has not recognized any servicing asset or liability as at September 28, 2024, as the fair values of the servicing arrangement and the fees earned are not considered material to the consolidated financial statements.

Receivables sold under the Receivables Sales Program are accounted for as sales of financial assets. The sold receivables are derecognized from accounts receivable on the Company's consolidated balance sheet at the time of sale to the Purchaser. The loss on sale of the sold receivables, representing the discount taken by the Purchaser, together with upfront transaction costs incurred by the Company in connection with the Agreement, amounted to $0.2 million for the period from August 28, 2024 to September 28, 2024, which is included in other non-operating expense on the consolidated statements of operations for the quarter and three quarters ended September 28, 2024. Cash proceeds received from the Purchaser are classified as an operating activity in the consolidated statements of cash flows.

The following table summarizes activity related to the Receivables Sales Program:

	Quarter ended
	September 28, 2024
	March 29, 2025
	$
Opening receivables balance sold to the Purchaser	-
Receivables balance sold to the Purchaser, beginning of the period	24,986
Sale of receivables	1946,~~999~~425
Cash collected and remitted to the Purchaser	-(35,494	)
Closing receivables balance sold to the Purchaser(1)	19,999
Receivables balance sold to the Purchaser, end of the period(1)	35,917
Cash collected and not remitted to the Purchaser(2)	(1125,~~102~~229	)
Outstanding receivables sold	8,897
Outstanding receivables sold, end of the period	10,688

(1) For the quarter ended ~~September~~March 2829, ~~2024~~2025, the Company recorded an increase of $2010.09 million to cash flows from operating activities of continuing operations from receivables sold under the Receivables Sales Program, which is reflected in the consolidated statement of cash flows for the ~~three~~quarter ~~quarters~~ ended ~~September~~March 2829, ~~2024~~2025.

(2) Cash collected from customers on behalf of but not yet remitted to the Purchaser is included in accounts payable on the consolidated balance sheet as at ~~September~~March 2829, ~~2024~~2025, with changes in such obligations reflected as operating activities in the consolidated statements of cash flows. There are no restrictions under the Agreement on the Company's use of the cash collected prior to the time it is due to be remitted to the Purchaser.

54. Inventories

	September 28, 2024		December 30, 2023
	March 29, 2025		December 28, 2024
	$		$
Raw materials and work-in-process	6157,~~532~~437		5251,~~419~~422
Finished goods	4945,~~967~~729		3746,~~606~~843
Inventory reserves	(43,~~498~~759	)	(65,~~810~~467	)
	107,001		83,215
	99,407		92,798

~~SUNOPTA INC~~5. 13Restricted ~~September 28, 2024 Form 10-Q~~Cash

~~SunOpta~~Restricted ~~Inc.Notes~~cash relates to ~~Consolidated~~certain ~~Financial~~bank ~~StatementsFor~~accounts in Mexico that were retained following the ~~quarters~~divestiture ~~and~~of ~~three~~Frozen ~~quarters~~Fruit, ~~ended~~which ~~September~~are 28subject to a judicial hold in connection with a litigation matter. Restricted cash has been classified as non-current on the consolidated balance sheets as at March 29, ~~2024~~2025 and ~~September~~December 3028, ~~2023(Unaudited)(All~~2024, ~~tabular~~as ~~amounts~~the ~~expressed~~Company incannot ~~thousands~~predict the timing of ~~U.S.~~when ~~dollars,~~this ~~except~~matter ~~per~~may ~~share~~be ~~amounts)~~resolved.

6. ~~Restricted~~Notes ~~Cash~~Payable

~~Restricted~~The ~~cash~~Company ~~relates~~finances to certain ~~bank~~purchases ~~accounts~~of intrade ~~Mexico~~goods ~~that~~and ~~were~~services ~~retained~~through ~~following~~third-party ~~the~~extended ~~divestiture~~payables offacilities. ~~Frozen~~Under ~~Fruit~~these facilities, ~~which~~third-party ~~are~~intermediaries ~~subject~~advance the amount of the scheduled payment to athe ~~judicial~~supplier ~~hold~~based inon ~~connection~~the ~~with~~invoice due date and issue a ~~litigation~~short-term ~~matter.~~note ~~Restricted~~payable ~~cash~~to ~~has~~the ~~been~~Company ~~classified~~for asthe ~~non-current~~face amount of the supplier invoice. Interest accrues on the ~~consolidated~~note ~~balance~~payable ~~sheets~~from the contractual payment date of the supplier invoice to the extended due date of the note payable, as specified by the negotiated terms of each facility. The Company does not maintain any form of security with the third-party intermediaries. As at ~~September~~March 29, 2025 and December 28, 2024, the Company had outstanding principal payment obligations to the third-party intermediaries of $9.8 million and ~~December~~$11.1 30million in the aggregate, ~~2023~~respectively, which is recorded as notes payable on the Company's ~~cannot~~consolidated ~~predict~~balance ~~the~~sheets. ~~timing~~Proceeds from, and repayments of ~~when~~the ~~this~~notes ~~matter~~payable ~~may~~associated bewith, ~~resolved~~these facilities are reported as financing cash flows on the Company's consolidated statements of cash flows.

7SUNOPTA INC. ~~Notes~~11 ~~Payable~~March 29, 2025 Form 10-Q

~~The~~SunOpta ~~Company finances certain purchases of trade goods and services through third-party extended payables facilities~~Inc.Notes ~~Under these facilities, third-party intermediaries advance the amount of the scheduled payment~~ to ~~the~~Consolidated ~~supplier~~Financial ~~based~~StatementsFor on the ~~invoice~~quarters ~~due~~ended ~~date~~March and issue a short-term note payable to the Company for the face amount of the supplier invoice. Interest accrues on the note payable from the contractual payment date of the supplier invoice to the extended due date of the note payable29, as2025 ~~specified by the negotiated terms of each facility. The Company does not maintain any form of security with the third-party intermediaries. As at September 28, 2024~~ and ~~December~~March 30, ~~2023,~~2024(Unaudited)(All ~~the~~tabular ~~Company~~amounts ~~had~~expressed ~~outstanding~~in ~~principal~~thousands ~~payment obligations to the third-party intermediaries~~ of ~~$13~~U.~~0 million and $17~~S.6 ~~million in the aggregate~~dollars, ~~respectively,~~except ~~which~~per isshare recorded as notes payable on the Company's consolidated balance sheets. Proceeds from, and repayments of the notes payable associated with, these facilities are reported as financing cash flows on the Company's consolidated statements of cash flows.amounts)

87. Long-Term Debt

	September 28, 2024		December 30, 2023
	March 29, 2025		December 28, 2024
	$		$
Term loan facility	~~175~~171,~~500~~000		~~180~~173,~~000~~250
Revolving credit facility	5032,~~100~~500		3133,~~751~~937
Less: Unamortized debt issuance costs	(977	)	(1,152	)
Less: unamortized debt issuance costs	(860	)	(917	)
Total credit facilities	~~224~~202,~~623~~640		~~210~~206,~~599~~270
Finance lease liabilities	6557,~~303~~942		5258,~~630~~921
Total debt	~~289~~260,~~926~~582		~~263~~265,~~229~~191
Less: current portion	2928,~~796~~429		2429,~~346~~393
Total long-term debt	~~260~~232,~~130~~153		~~238~~235,~~883~~798

Credit Facilities

On December 8, 2023, the Company entered into a five-year Credit Agreement (the "Credit Agreement") providing for (i) a $180.0 million term loan credit facility (the "Term Loan Credit Facility") and (ii) an $85.0 million revolving credit facility (the "Revolving Credit Facility" and together with the Term Loan Credit Facility, the "Credit Facilities"). The Revolving Credit Facility includes $30.0 million of borrowing capacity available for letters of credit and provides for borrowings of up to $10.0 million on same-day notice including in the form of swingline loans. As at ~~September~~March 2829, ~~2024~~2025, $56.93 million in letters of credit were issued but undrawn under the Revolving Credit Facility.

The Credit Facilities mature on December 8, 2028. Borrowings under the Term Loan Credit Facility are repayable in quarterly principal installments of $2.3 million from the fiscal quarter ending March 31, 2024 to the fiscal quarter ending December 31, 2025, $3.4 million from the fiscal quarter ending March 31, 2026 to the fiscal quarter ending December 31, 2027, and $4.5 million from the fiscal quarter ending March 31, 2028 to the fiscal quarter ending September 30, 2028, with the remaining principal balance of $121.5 million due on the maturity date.

Borrowings under the Credit Facilities bear interest at a margin over various reference rates, including a base rate (as defined in the Credit Agreement) and SOFR, selected at the option of the Company. The margin for the Credit Facilities is set quarterly based on the consolidated total net leverage ratio for the preceding fiscal quarter and will range from 1.00% to 2.25% with respect to base rate loans and from 2.00% to 3.25% for SOFR loans. For the ~~three~~quarter ~~quarters~~ ended ~~September~~March 2829, ~~2024~~2025, the weighted-average interest rate on outstanding borrowings under the Credit Facilities was 7.59% (March 30, 2024 - 8.2920%). In addition, the Company is required to pay an undrawn fee under the Revolving Credit Facility quarterly based on the consolidated total net leverage ratio for the preceding fiscal quarter ranging from 0.20% to 0.40% on the undrawn revolving commitments thereunder. The Company is also required to pay customary letter of credit fees, to the extent letters of credit are issued and outstanding under the Revolving Credit Facility.

~~SUNOPTA~~As ~~INC.~~at 14March ~~September~~29, 282025, ~~2024~~the ~~Form~~Company 10was in compliance with all financial and non-Qfinancial covenants under the Credit Agreement.

~~SunOpta Inc~~8.~~Notes~~ toSeries ~~Consolidated~~B-1 ~~Financial~~Preferred ~~StatementsFor the quarters and three quarters ended September 28, 2024 and September 30, 2023(Unaudited)(All tabular amounts expressed in thousands of U.S. dollars, except per share amounts)~~Stock

As at ~~September~~March 2829, ~~2024~~2025, the Company's ~~was~~subsidiary, inSunOpta ~~compliance~~Foods Inc. ("SunOpta Foods"), had 15,000 shares of Series B-1 Preferred Stock ("Series B-1 Preferred Stock") issued and outstanding with ~~all~~Oaktree ~~financial~~Organics, L.P. and ~~non~~Oaktree Huntington Investment Fund II, L.P. (collectively, "Oaktree"). As at March 29, 2025, the aggregate liquidation preference of the Series B-~~financial~~1 ~~covenants~~preferred ~~under~~stock was $15.2 million, or approximately $1,015 per share. On April 17, 2024, the ~~Credit~~Company, SunOpta Foods and Oaktree entered into an Amending Agreement related to the elimination of the dividend rights attached to the Series B-1 Preferred Stock effective from and after December 31, 2023. The Series B-1 Preferred Stock previously paid a cumulative dividend of 8.0% per year that could be paid in-kind or in cash at the Company's option.

Finance Lease Liabilities

During the first three quarters of 2024, the Company recognized an additional finance lease liability of $25.7 million, in exchange for $24.6 million of right-of-use assets recorded in property, plant and equipment, related to an expansion of the Company's oat-based ingredient extraction operations, and $1.1 million in cash. The finance lease has an implicit rate of interest of 11.29% and a lease term of five years.

9. Series B-1 Preferred Stock

As at September 28, 2024, the Company's subsidiary, SunOpta Foods Inc. ("SunOpta Foods"), had 15,000 shares of Series B-1 Preferred Stock ("Series B-1 Preferred Stock") issued and outstanding with Oaktree Organics, L.P. and Oaktree Huntington Investment Fund II, L.P. (collectively, "Oaktree"). As at September 28, 2024, the aggregate liquidation preference of the Series B-1 preferred stock was $15.2 million, or approximately $1,015 per share. The carrying value of the Series B-1 Preferred Stock, net of unamortized issuance costs, is being accreted to the liquidation preference through charges to accumulated deficit, which amounted to $0.4 million for the three quarters ended September 28, 2024 (September 30, 2023 - $0.4 million).

In the first quarter of 2024, the Company paid cash dividends on the Series B-1 Preferred Stock of $0.3 million related to the fourth quarter of 2023. On April 17, 2024, the Company, SunOpta Foods and Oaktree entered into an Amending Agreement related to the elimination of the dividend rights attached to the Series B-1 Preferred Stock effective from and after December 31, 2023. The Series B-1 Preferred Stock previously paid a cumulative dividend of 8.0% per year that could be paid in-kind or in cash at the Company's option, which dividend would have increased from 8.0% to 10.0% per year and become payable only in cash at the end of the Company's third quarter in 2029. All other rights and obligations of the Company, SunOpta Foods, and Oaktree in connection with the Series B-1 Preferred Stock remain unchanged. The Company is accounting for the elimination of the dividend rights on a prospective basis.

At any time, Oaktree may exchange the Series B-1 Preferred Stock, in whole or in part, into the number of shares of the Company's common stock ("Common Shares") equal to, per share of Series B-1 Preferred Stock, the quotient of the liquidation preference divided by the exchange price of $2.50, while, at any time, SunOpta Foods may cause Oaktree to exchange all of their shares of Series B-1 Preferred Stock if the volume-weighted average price of the Common Shares during the then preceding 20 trading day period is greater than 200% of the exchange price then in effect. In addition, at any time on or after April 24, 2025, SunOpta Foods may redeem all of the Series B-1 Preferred Stock for an amount per share equal to the value of the liquidation preference at such time.

AsSUNOPTA ~~at September 28, 2024, the Company had 2,932,453 Special Shares, Series 2 issued and outstanding, all of which are held by Oaktree~~INC. ~~The~~12 ~~Special~~March ~~Shares~~29, ~~Series~~2025 2Form ~~serve as a mechanism for attaching exchanged voting rights to the Series B~~10-1 Preferred Stock and entitle the holder thereof to one vote per Special Share, Series 2 on all matters submitted to a vote of the holder of the Common Shares, voting together as a single class, subject to certain exemptions. As a result of a permanent voting cap, the number of Special Shares, Series 2 issued to Oaktree at any time, when taken together with any other voting securities Oaktree then controls, cannot exceed 19.99% of the votes eligible to be cast by all security holders of the Company.Q

10SunOpta Inc.Notes ~~Stock-Based~~to ~~Compensation~~Consolidated Financial StatementsFor the quarters ended March 29, 2025 and March 30, 2024(Unaudited)(All tabular amounts expressed in thousands of U.S. dollars, except per share amounts)

As at March 29, 2025, the Company had 2,932,453 Special Shares, Series 2 issued and outstanding, all of which are held by Oaktree. The Special Shares, Series 2 serve as a mechanism for attaching exchanged voting rights to the Series B-1 Preferred Stock and entitle the holder thereof to one vote per Special Share, Series 2 on all matters submitted to a vote of the holder of the Common Shares, voting together as a single class, subject to certain exemptions. As a result of a permanent voting cap, the number of Special Shares, Series 2 issued to Oaktree at any time, when taken together with any other voting securities Oaktree then controls, cannot exceed 19.99% of the votes eligible to be cast by all security holders of the Company.

9. Stock-Based Compensation

Short-Term Incentive Plan

On ~~April~~March 424, ~~2024~~2025, the Company granted ~~638~~643,~~602~~880 performance share units ("PSUs") to selected employees under the Company's ~~2024~~2025 Short-Term Incentive Plan ("STIP"), which vest subject to the Company achieving a predetermined measure of adjusted earnings before interest, taxes, depreciation and amortization ("EBITDA") for fiscal ~~2024~~2025 and subject to the employee's continued employment with the Company through ~~April~~March 124, ~~2025~~2026 (the requisite service period). The grant-date fair value of each PSU was estimated to be $65.4214 based on the closing price of the Common Shares on the date of grant. ~~For~~Each ~~the~~reporting period, ~~from~~ the ~~grant~~number ~~date~~of unvested PSUs that are expected to ~~September~~vest ~~28,~~is ~~2024,~~redetermined and the ~~Company~~aggregate ~~recognized~~grant-date ~~compensation~~fair ~~expense~~value of ~~$1.9~~the ~~million~~redetermined ~~related~~number toof PSUs is amortized on a straight-line based over the ~~PSUs~~remaining ~~that~~requisite ~~are~~service ~~currently~~period ~~expected~~less toamounts ~~vest~~previously recognized. As at March 29, ~~with~~2025, the remaining compensation cost not yet recognized as an expense related to these PSUs was determined to be $23.03 million ~~as at September 28, 2024, which will be amortized over the remaining requisite service period~~.

~~SUNOPTA INC~~10. 15Income ~~September 28, 2024 Form 10-Q~~Taxes

~~SunOpta~~Income ~~Inc.Notes~~taxes towere ~~Consolidated~~recognized ~~Financial~~at ~~StatementsFor~~an ~~the~~effective ~~quarters~~rate ~~and~~of ~~three~~3.0% ~~quarters~~for the quarter ended ~~September~~March 2829, ~~2024~~2025, ~~and~~compared ~~September~~with 6.8% recognized for the quarter ended March 30, ~~2023(Unaudited)(All~~2024. ~~tabular~~The ~~amounts~~Company's ~~expressed~~effective intax ~~thousands~~rate reflects the jurisdictional mix of ~~U.S.~~earnings ~~dollars,~~and ~~except~~recognition ~~per~~of ~~share~~a ~~amounts)~~full valuation allowance against certain deferred tax assets.

OnSUNOPTA ~~April~~INC. 113 ~~2024,~~March ~~the Company issued 474~~29,~~228~~ ~~Common~~2025 ~~Shares,~~Form net of 344,276 Common Shares withheld for taxes, in connection with the vesting of 818,504 PSUs previously granted to selected employees under the Company's 2023 STIP. The total intrinsic value of these vested PSUs was $5.6 million.10-Q

~~Long-Term~~SunOpta ~~Incentive~~Inc.Notes ~~Plan~~to Consolidated Financial StatementsFor the quarters ended March 29, 2025 and March 30, 2024(Unaudited)(All tabular amounts expressed in thousands of U.S. dollars, except per share amounts)

~~On April 30, 2024, the Company granted 157,070 restricted stock units ("RSUs"), 252,656 PSUs and 243,660 stock options to selected employees under the Company's 2024 Long-Term Incentive Plan ("LTIP")~~11. ~~The~~Earnings RSUs vest in three equal annual installments beginning on April 30, 2025, and each vested RSU entitles the employee to receive one Common Share without payment of additional consideration. The vesting of one-half of the PSUs is contingent on the achievement of compound annual growth rate (~~"CAGR"~~Loss) ~~benchmarks~~Per for revenue during the three-year performance period commencing January 1, 2024 and continuing through December 31, 2026, and the vesting of the other one-half of the PSUs is contingent on the achievement of return on invested capital ("ROIC") benchmarks within the same performance period, and subject to the employee's continued employment with the Company through April 30, 2027. The percentage of vested PSUs may range from 0% to 200% based on the Company's achievement of the predetermined CAGR and ROIC benchmarks. Each vested PSU entitles the employee to receive one Common Share without payment of additional consideration. The stock options vest ratably on each of the first through third anniversaries of the grant date and expire on the tenth anniversary of the grant date. Each vested stock option entitles the employee to purchase one Common Share at an exercise price of $6.55, which was the closing price of the Common Shares on April 30, 2024.

~~The~~Basic ~~grant-date~~and ~~fair~~diluted ~~values~~earnings of(loss) ~~each~~per ~~RSU~~share ~~and PSU~~ were ~~estimated~~calculated toas befollows ~~$6.55~~(shares ~~based~~in on the closing price of the Common Shares on the date of grant. A grant-date fair value of $4.18 was estimated for each stock option using the Black-Scholes option pricing model with the following assumptionsthousands):

Grant-date stock price	$	6.55
		Quarter ended
Exercise price	$	6.55
		March 29, 2025			March 30, 2024
Dividend yield		0%
Numerator
Expected volatility(a)		65.9%
Earnings from continuing operations	$	4,811		$	3,796
Risk-free interest rate(b)		4.7%
Less: dividends and accretion on preferred stock		(140	)		(433	)
Expected life (in years)(c)		6.0
Earnings from continuing operations attributable to common shareholders		4,671			3,363
Net loss from discontinued operations		-			(917	)
Earnings attributable to common shareholders	$	4,671		$	2,446
Denominator
Basic weighted-average number of shares outstanding		117,201			116,033
Dilutive effect of the following:
Stock options and restricted stock units(1)		1,717			1,525
Series B-1 Preferred Stock(2)		6,089			-
Diluted weighted-average number of shares outstanding		125,007			117,558
Basic and Diluted Earnings (Loss) Per Share
Earnings from continuing operations attributable to common shareholders	$	0.04		$	0.03
Net loss from discontinued operations		-			(0.01	)
Earnings attributable to common shareholders	$	0.04		$	0.02

(a1) For ~~Determined~~the ~~based~~quarter onended ~~the~~March ~~historical~~29, ~~volatility~~2025, ofstock options and RSUs to purchase or receive 709,443 (March 30, 2024 - 2,399,822) potential common shares were anti-dilutive because the ~~Common~~assumed ~~Shares~~proceeds ~~over~~exceeded ~~expected~~the ~~life~~average market price of the ~~stock~~Common ~~options~~Shares for the respective periods.

(b2) For ~~Determined~~the ~~based~~quarter onended ~~U.S.~~March ~~Treasury~~30, ~~yields~~2024, ~~with~~it awas ~~remaining~~more ~~term~~dilutive ~~equal~~to earnings per share from continuing operations to assume the ~~expected~~Series ~~life~~B-1 Preferred Stock was not converted into Common Shares and, therefore, the numerator of the ~~stock~~diluted ~~options~~earnings per share calculation was not adjusted to add back the dividends and accretion on the Series B-1 Preferred Stock and the denominator was not adjusted to include the 6,089,333 Common Shares issuable on an if-converted basis as at March 30, 2024.

~~(c)~~SUNOPTA ~~Determined~~INC. ~~based~~14 onMarch ~~the~~29, ~~mid-point~~2025 ofForm ~~vesting (three years) and expiration (ten years) for the stock options.~~10-Q

~~The~~SunOpta ~~aggregate~~Inc.Notes ~~grant-date~~to ~~fair~~Consolidated ~~value~~Financial ofStatementsFor the ~~RSUs,~~quarters ~~PSUs~~ended ~~and~~March ~~stock~~29, ~~options~~2025 ~~granted~~and ~~under~~March ~~the~~30, 2024(Unaudited)(All ~~LTIP~~tabular ~~was~~amounts ~~determined~~expressed toin bethousands $5of U.4S. ~~million~~dollars, ~~which~~except ~~will~~per beshare ~~recognized on a straight-line basis over the requisite service period ending April 30, 2027.~~amounts)

~~Special~~12. ~~Awards~~Supplemental Cash Flow Information

On January 2, 2024, the Company granted special one-time awards of 144,404 restricted stock units ("RSUs"), 288,808 performance share units ("PSUs") and 230,804 stock options to Brian Kocher in connection with his appointment as the Company's Chief Executive Officer effective January 2, 2024. On March 13, 2024, the Company granted Mr. Kocher an additional 74,000 RSUs, equal to the number of Common Shares purchased by Mr. Kocher on the open market within the 75-day period after his employment began. The RSUs vest in three equal annual installments beginning on the first anniversary of the grant date, and each vested RSU entitles Mr. Kocher to receive one Common Share without payment of additional consideration. The vesting of the PSUs is dependent on the Company's total shareholder return ("TSR") performance relative to food and beverage companies in a designated index during the three-year period commencing January 1, 2024 and continuing through December 31, 2026, and subject to Mr. Kocher's continued employment with the Company through April 15, 2027. The TSR for the Company and each of the companies in the designated index will be calculated using a 20-trading day average closing price as of December 31, 2026. The percentage of vested PSUs may range from 0% to 200% based on the Company's achievement of predetermined TSR thresholds. Each vested PSU entitles Mr. Kocher to receive one Common Share without payment of additional consideration. The stock options vest ratably on each of the first through third anniversaries of the grant date and expire on the tenth anniversary of the grant date. Each vested stock option entitles Mr. Kocher to purchase one Common Share at an exercise price of $5.54, which was the closing price of the Common Shares on January 2, 2024.

	Quarters ended
	March 29, 2025		March 30, 2024
	$		$
Changes in Operating Assets and Liabilities, Net of Divestitures
Accounts receivable	(17,785	)	(2,027	)
Inventories	(6,609	)	(10,165	)
Accounts payable	24,294		5,917
Other operating assets and liabilities	6,149		(1,672	)
	6,049		(7,947	)

Non-Cash Investing and Financing Activities
Change in additions to property, plant and equipment included in accounts payable	(4,007	)	(1,283	)
Right of use assets obtained in exchange for lease liabilities:
Finance leases	(399	)	-
Operating leases	-		(2,832	)
Promissory note receivable from sale of smoothie bowls product line⁽¹⁾	-		(3,000	)

~~SUNOPTA~~(1) Reflects ~~INC.~~the 16receipt ~~September~~of 28a secured promissory note in connection with the Company's sale of its smoothie bowls product line on March 4, 2024. ~~Form~~The ~~10-Q~~promissory note matured on August 1, 2024.

~~SunOpta Inc~~13.~~Notes~~ toCommitments ~~Consolidated Financial StatementsFor the quarters~~ and ~~three quarters ended September 28, 2024 and September 30, 2023(Unaudited)(All tabular amounts expressed in thousands of U.S. dollars, except per share amounts)~~Contingencies

The weighted-average grant-date fair value of the RSUs was estimated to be $6.05 based on the closing prices of Common Shares on the dates of grant. A grant-date fair value of $3.47 was estimated for the stock options using the Black-Scholes option pricing model, and a grant-date fair value of $7.73 was estimated for the PSUs using a Monte Carlo valuation model. The following table summarizes the inputs to the Black-Scholes option-pricing and Monte Carlo valuation models:

		Stock Options		PSUs
Grant-date stock price	$	5.54	$	5.54
Exercise price	$	5.54		NA
Dividend yield		0%		0%
Expected volatility(a)		65.6%		58.4%
Risk-free interest rate(b)		3.9%		4.1%
Expected life (in years)(c)		6.0		3.0

(a) Determined based on the historical volatility of the Common Shares over the expected life of the stock options and performance period of the PSUs.

(b) Determined based on U.S. Treasury yields with a remaining term equal to the expected life of the stock options and performance period of the PSUs.

(c) Determined based on the mid-point of vesting (three years) and expiration (ten years) for the stock options and the performance period for the PSUs.

The aggregate grant-date fair value of the stock options, RSUs and PSUs awarded to Mr. Kocher was determined to be $4.4 million, which will be recognized on a straight-line basis over the vesting period for the stock options and RSUs and the performance period for the PSUs.

11. Income Taxes

Income taxes were recognized at an effective rate of (0.4)% and (5.5)% for the quarter and three quarters ended September 28, 2024, respectively, compared with 0.0% and (24.6)% recognized for the quarter and three quarters ended September 30, 2023, respectively. The changes in the effective tax rate were primarily driven by the recognition of a full valuation allowance against U.S. deferred tax assets in excess of deferred tax liabilities beginning in the second quarter of 2023, based on the Company's assessment that the related tax benefits were no longer more likely than not to be realized in the future.

SUNOPTA INC. 17 September 28, 2024 Form 10-Q

12. Loss Per Share

Basic and diluted loss per share were calculated as follows (shares in thousands):

		Quarter ended						Three quarters ended
		September 28,2024			September 30,2023			September 28,2024			September 30,2023
Numerator
Loss from continuing operations	$	(5,498	)	$	(5,680	)	$	(5,442	)	$	(20,158	)
Less: dividends and accretion on preferred stock		(137	)		(426	)		(401	)		(1,552	)
Loss from continuing operations attributable tocommon shareholders		(5,635	)		(6,106	)		(5,843	)		(21,710	)
Net loss from discontinued operations		-			(140,143	)		(2,314	)		(143,126	)
Loss attributable to common shareholders	$	(5,635	)	$	(146,249	)	$	(8,157	)	$	(164,836	)
Denominator
Basic weighted-average number of shares outstanding		116,841			115,616			116,504			113,700
Dilutive effect of the following:
Stock options, restricted stock units and performance share units(1)		-			-			-			-
Series B-1 Preferred Stock(2)		-			-			-			-
Diluted weighted-average number of shares outstanding		116,841			115,616			116,504			113,700
Basic and Diluted Loss Per Share
Loss from continuing operations attributable to common shareholders	$	(0.05	)	$	(0.05	)	$	(0.05	)	$	(0.19	)
Net loss from discontinued operations		-			(1.21	)		(0.02	)		(1.26	)
Loss attributable to common shareholders	$	(0.05	)	$	(1.26	)	$	(0.07	)	$	(1.45	)

(1) For the quarter and three quarters ended September 28, 2024, 656,831 (September 30, 2023 - 535,747) and 869,143 (September 30, 2023 - 1,454,775) potential common shares, respectively, were excluded from the calculation of diluted loss per share due to their effect of reducing the loss per share from continuing operations. Dilutive potential common shares consist of stock options, RSUs, and certain contingently issuable PSUs. For the quarter and three quarters ended September 28, 2024, stock options and RSUs to purchase or receive 2,550,555 (September 30, 2023 - 3,181,357) and 2,694,555 (September 30, 2023 - 2,779,778) potential common shares, respectively, were anti-dilutive because the assumed proceeds exceeded the average market price of the Common Shares for the respective periods.

(2) For the quarters and three quarters ended September 28, 2024 and September 30, 2023, it was more dilutive to the loss per share from continuing operations to assume the Series B-1 Preferred Stock was not converted into Common Shares and, therefore, the numerator of the diluted loss per share calculation was not adjusted to add back the dividends and accretion on the Series B-1 Preferred Stock and the denominator was not adjusted to include the 6,089,333 Common Shares issuable on an if-converted basis as at September 28, 2024 and September 30, 2023.

SUNOPTA INC. 18 September 28, 2024 Form 10-Q

13. Supplemental Cash Flow Information

	Three quarters ended
	September 28,2024		September 30,2023
	$		$
Changes in Operating Assets and Liabilities, Net of Divestitures
Accounts receivable	4,472		(405	)
Inventories	(24,479	)	(9,893	)
Accounts payable	11,945		(10,288	)
Other operating assets and liabilities	(3,081	)	(5,266	)
	(11,143	)	(25,852	)
Non-Cash Investing and Financing Activities
Change in additions to property, plant and equipment included in accounts payable	(981	)	(1,058	)
Right of use assets obtained in exchange for lease liabilities:
Operating leases	(8,009	)	(12,372	)
Finance leases (see note 8)	(24,591	)	(9,651	)
Change in short-term note receivable from divestiture of Frozen Fruit(1)	6,300		-
Paid in kind interest on Seller Promissory Notes	(1,095	)	-
Change in accrued dividends on preferred stock	(305	)	(304	)
Change in proceeds receivable from divestiture of sunflower business(2)	-		385

(1) Reflects the receipt of the final three installments on the short-term note receivable related to the divestiture of Frozen Fruit (see note 2), which amount is included in investing activities of discontinued operations on the consolidated statement of cash flows for the three quarters ended September 28, 2024.

(2) Reflects the settlement of the final working capital adjustment related to the divestiture of the Company's sunflower business in October 2022, which is included in investing activities of discontinued operations on the consolidated statement of cash flows for the three quarters ended September 30, 2023.

14. Commitments and Contingencies

Legal Proceedings

Various current and potential claims and litigation arising in the ordinary course of business are pending against the Company. The Company believes it has established adequate accruals for liabilities that are probable and reasonably estimable that may be incurred in connection with any such currently pending matter. In the Company's opinion, the eventual resolution of such matters, either individually or in the aggregate, is not expected to have a material impact on the Company's financial position, results of operations, or cash flows. However, litigation is inherently unpredictable and resolutions or dispositions of claims or lawsuits by settlement or otherwise could have an adverse impact on the Company's financial position, results of operations, and cash flows for the reporting period in which any such resolution or disposition occurs.

U.S. Customs and Border Protection Matter

On February 3, 2025, the Company delivered a voluntary disclosure letter to U.S. Customs and Border Protection ("CBP") regarding the tariff classification of certain fruit snack products produced at the Company's Niagara, Ontario, facility. The Company disclosed to CBP that a revised tariff classification should have been utilized for previously reported shipments, resulting in the underpayment of duties to CBP for the period from January 2022 to December 2024. As at March 29, 2025 and December 28, 2024, the Company had recognized $7.8 million and $7.4 million, respectively, for the duties and interest thereon believed to be owed, which is included in accounts payable on the consolidated balance sheets. The Company submitted its final report to CBP on April 3, 2025. As the matter is subject to review by CBP, it is possible that the actual amount of duties and interest owed may differ from the amount presently accrued by the Company, and CBP may assess additional fines, penalties or enact other measures.

Product Withdrawal

In the second quarter of 2024, the Company conducted a voluntary withdrawal from customers of certain batches of aseptically-packaged products that may have had the potential for non-pathogenic microbial contamination. None of the withdrawn product made it into the consumer marketplace. InThe ~~the second and third quarters of 2024, the~~ Company recognized direct costs related to the withdrawal of $2.1 million, net of expected insurance recoveries, in cost of goods sold in the consolidated statement of operations. The Company is seeking to recover a portion of the withdrawal-related costs through its insurance coverage, and such recoveries are recorded in the period in which the recoveries are determined to be probable of realization. As at ~~September~~March 29, 2025 and December 28, 2024, the Company has recognized expected insurance recoveries related to the withdrawal of $7.57 million and $7.6 million, respectively, which is included in prepaid expenses and other current assets on the consolidated balance sheet. The Company does not expect to incur any additional significant costs related to ~~the~~this withdrawal.

SUNOPTA INC. 1915 ~~September~~March 2829, ~~2024~~2025 Form 10-Q

SunOpta Inc.Notes to Consolidated Financial StatementsFor the quarters ~~and three quarters~~ ended ~~September~~March 2829, ~~2024~~2025 and ~~September~~March 30, ~~2023~~2024(Unaudited)(All tabular amounts expressed in thousands of U.S. dollars, except per share amounts)

~~Product~~14. ~~Recall~~Segment Information

OnSegment ~~June~~Profit ~~21,~~or 2023, the Company announced its subsidiary, Sunrise Growers Inc., had issued a voluntary recall of specific frozen fruit products linked to pineapple provided by a third-party supplier due to possible contamination by Listeria monocytogenes. Sunrise Growers Inc. is a component of the operations of Frozen Fruit. In connection with the divestiture of Frozen Fruit, the recall-related costs and estimated insurance recoveries are included in the loss from discontinued operations in the consolidated statements of operations. There were no significant direct costs associated with the recall recognized in the first three quarters of 2024, and any additional costs are expected to be minimal. As at September 28, 2024 and December 30, 2023, estimated insurance recoveries of $1.2 million and $4.8 million, respectively, are included in prepaid expenses and other current assets on the consolidated balance sheet.Loss

15The Company manages its continuing operations on a company-wide basis, rather than at a product category or business unit level, thereby making determinations as to the allocation of resources as one operating and reportable segment. ~~Disaggregation~~Earnings from continuing operations as reported on the Company's consolidated statements of ~~Revenue~~operations is the measure of segment profit or loss utilized by Company's Chief Executive Officer, who has been identified as the Chief Operating Decision Maker ("CODM"), when assessing performance and allocating resources. The significant segment-level expense information provided to the CODM is consistent with the Company's consolidated statements of operations, as supplemented by the specified expense items disclosed in the table below. The measure of segment assets is the same as total assets reported on the Company's consolidated balance sheet. There are no differences from the 2024 Form 10-K in the Company's basis for segmentation or basis for measurement of segment profit or loss.

~~The~~Disaggregation ~~principal~~of ~~products that comprise the Company's product categories are as follows:~~Revenue

~~Category~~The ~~Principal~~majority ~~Products~~of ~~Beverages~~the ~~and~~Company's ~~broths~~products ~~Plant-based~~are ~~beverages utilizing oat, almond, soy, coconut, rice, hemp, and other bases, including Dream® and West Life™ brands; oat~~shelf-~~based~~stable ~~creamers, including SOWN® brand; ready-to-drink protein shakes;~~ packaged ~~teas~~food and ~~concentrates;~~beverage ~~meat~~products and ~~vegetable~~share ~~broths~~similar ~~and~~customers ~~stocks. Fruit snacks Ready-to-eat fruit snacks made from apple purée~~ and ~~juice concentrate in bar, bit, twist, strip and sandwich formats; cold pressed fruit bars~~distribution. ~~Ingredients~~The ~~Liquid~~principal ~~and~~products ~~powder~~that ~~ingredients~~comprise ~~utilizing~~the ~~oat,~~Company's ~~soy~~product ~~and~~categories ~~hemp~~are ~~bases.~~as ~~Smoothie bowls Ready-to-eat fruit smoothie and chia bowls topped with frozen fruit.~~follows:

Category	Principal Products
Beverages and broths	Plant-based beverages utilizing oat, almond, soy, coconut, rice, hemp, and other bases, including Dream^® and West Life™ brands; oat-based creamers, including SOWN^® brand; ready-to-drink protein shakes; packaged teas and concentrates; meat and vegetable broths and stocks.
Fruit snacks	Ready-to-eat fruit snacks made from apple purée and juice concentrate in bar, bit, twist, strip and sandwich formats; cold pressed fruit bars.
Ingredients	Liquid bases utilizing oat and soy.

Revenue disaggregated by product category is as follows:

	Quarter ended		~~Three quarters ended~~
	September 28, 2024	September 30, 2023	September 28, 2024	September 30, 2023
	March 29, 2025	March 30, 2024
	$	$	$	$
Product Category
Beverages and broths(1)	137,816	120,522	420,571	355,425
Beverages and broths	164,165	148,039
Fruit snacks	3433,~~452~~073	2429,~~315~~409	~~93,796~~	~~70,853~~
Ingredients(1)	3,948	4,207	13,386	13,146
Ingredients	4,390	4,668
Smoothie bowls(2)	-	3,497	2,306	9,249
Smoothie bowls(1)	-	2,306
Total revenues	~~176~~201,~~216~~628	~~152~~184,~~541~~422	~~530,059~~	~~448,673~~

(1) ~~For~~ ~~the~~On ~~quarter~~March ~~and three quarters ended September 30~~4, ~~2023~~2024, the Company ~~reclassified~~completed ~~certain~~the ~~product~~sale ~~sales~~of ~~that~~its ~~were~~smoothie ~~previously~~bowl ~~reported~~product inline ~~Beverages~~ and ~~Broths~~exited ~~to Ingredients to conform with~~ the ~~current year presentation~~category.

~~(2) Revenues~~SUNOPTA ~~reported~~INC. ~~for~~16 ~~the three quarters ended September 28, 2024, reflect sales of smoothie bowls prior to~~ March 429, ~~2024~~2025 ~~(see~~Form ~~note 3).~~10-Q

~~SUNOPTA~~SunOpta ~~INC~~Inc.Notes 20to ~~September~~Consolidated 28Financial StatementsFor the quarters ended March 29, 2025 and March 30, 2024(Unaudited)(All ~~Form~~tabular ~~10-Q~~amounts expressed in thousands of U.S. dollars, except per share amounts)

Specified Expense Items

The following table presents details of specified expenses provided to the CODM and included in earnings from continuing operations:

	Quarter ended
	March 29, 2025		March 30, 2024
	$		$
Depreciation and Amortization
Depreciation expense included in cost of goods sold	7,957		6,929
Depreciation expense included in selling, general and administrative expenses	1,323		1,201
Intangible asset amortization expense	446		446
Total depreciation and amortization	9,726		8,576

Stock-Based Compensation
Stock-based compensation expense included in selling, general and administrative expenses	1,543		4,645

Interest Expense, Net
Interest expense	6,008		6,182
Amortization of debt issuance costs	249		229
Interest income	(1,150	)	(361	)
Interest expense, net	5,107		6,050

SUNOPTA INC.

March 29, 2025 Form 10-Q

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations

Forward-Looking Financial Information

The following Management's Discussion and Analysis of Financial Condition and Results of Operations ("MD&A") should be read in conjunction with the interim consolidated financial statements, and notes thereto, for the quarter ended ~~September~~March 2829, ~~2024~~2025 contained under Item 1 of this Quarterly Report on Form 10-Q (the "Interim Consolidated Financial Statements") and in conjunction with the annual consolidated financial statements, and notes thereto, contained in the Annual Report on Form 10-K for the fiscal year ended December 3028, ~~2023~~2024 (the "2024 Form 10-K"). Unless otherwise indicated herein, the discussion and analysis contained in this MD&A includes information available to ~~November~~May 57, ~~2024~~2025.

Certain statements contained in this MD&A may constitute forward-looking statements as defined under securities laws. Forward-looking statements may relate to our future outlook and anticipated events or results and may include statements regarding our future financial position, business strategy, budgets, litigation, projected costs, capital expenditures, financial results, taxes, plans, and objectives. In some cases, forward-looking statements can be identified by terms such as "anticipate," "estimate," "target," "intend," "project," "potential," "predict," "continue," "believe," "expect," "can," "could," "would," "should," "may," "might," "plan," "will," "budget," "forecast," or other similar expressions concerning matters that are not historical facts, or the negative of such terms are intended to identify forward-looking statements; however, the absence of these words does not necessarily mean that a statement is not forward-looking. To the extent any forward-looking statements contain future-oriented financial information or financial outlooks, such information is being provided to enable a reader to assess our financial condition, material changes in our financial condition, our results of operations, and our liquidity and capital resources. Readers are cautioned that this information may not be appropriate for any other purpose, including investment decisions.

Forward-looking statements contained in this MD&A are based on certain factors and assumptions regarding expected growth, results of operations, performance, and business prospects and opportunities. While we consider these assumptions to be reasonable based on information currently available, they may prove to be incorrect. These factors are more fully described in the "Risk Factors" section at Item 1A of the 2024 Form 10-K and Item 1A of Part II of this report.

Forward-looking statements contained in this commentary are based on our current estimates, expectations, and projections, which we believe are reasonable as of the date of this report. Forward-looking statements are not guarantees of future performance or events. You should not place undue importance on forward-looking statements and should not rely upon this information as of any other date. Other than as required under securities laws, we do not undertake to update any forward-looking information at any particular time. Neither we nor any other person assumes responsibility for the accuracy and completeness of these forward-looking statements, and we hereby qualify all our forward-looking statements by these cautionary statements.

Unless otherwise noted herein, all currency amounts in this MD&A are expressed in U.S. dollars. All tabular dollar amounts are expressed in thousands of U.S. dollars, except per share amounts.

Overview

WeSunOpta ~~operate~~delivers ascustomized ansupply ~~innovation~~chain ~~partner,~~ solutions ~~provider,~~ and ~~value-added~~innovation ~~manufacturer~~ for ~~leading~~top brands, ~~and produce our own brands~~retailers, ~~including SOWN®, Dream®,~~ and ~~West~~foodservice ~~LifeTM.~~providers ~~Our~~across ~~product~~a broad portfolio ~~comprises~~of ~~plant-based~~ beverages, ~~fruit snacks, nutritional beverages,~~ broths, and ~~teas,~~better-for-you ~~which~~snacks. Our products are ~~sold~~distributed through retail, club, foodservice, and e-commerce channels. Weacross ~~also~~North ~~produce liquid and dry ingredients for internal use and for sale to other food and beverage manufacturers~~America.

OnBusiness ~~March~~Environment ~~4, 2024, we completed the sale of the net assets related to our smoothie bowls product line~~ and ~~exited~~Fiscal ~~the~~2025 ~~category.~~Outlook

~~Fiscal~~As ~~2024~~we ~~Outlook~~operate in a highly dynamic tariff environment, we are focused on developing action plans to mitigate the impact on our business.

~~For~~In ~~full~~March ~~fiscal year 2024~~2025, wethe ~~are~~U.S. ~~projecting~~imposed ~~higher~~25% ~~year-over-year~~additional ~~revenues~~duties ~~driven~~on bygoods ~~organic volume growth~~ from ~~our~~Canada ~~beverages, broth~~ and ~~fruit~~Mexico ~~snacks~~that ~~categories,~~are ~~partially~~not ~~offset~~exempt byunder the ~~impact~~U.S.-Mexico-Canada ofAgreement ~~our~~("USMCA"). ~~exit~~On ~~from~~April ~~the~~2, ~~smoothie~~2025, ~~bowls~~the ~~category~~U.S. Weannounced ~~anticipate~~a anminimum ~~improved~~10% ~~gross~~tariff ~~margin profile~~ on aall ~~reported~~imports ~~basis,~~and ~~compared~~significant ~~with~~new ~~the~~"reciprocal ~~prior~~tariffs" ~~year,~~on ~~reflecting~~imports ~~higher~~from ~~production~~a ~~volumes~~wide ~~and~~range ~~plant~~of ~~utilization~~countries. toOn ~~support~~April ~~sales~~9, ~~together~~2025, ~~with~~the ~~lower~~U.S. ~~start-up~~announced ~~costs~~that ~~and~~the ~~improved~~effective ~~operating~~date ~~efficiencies~~of atthe ~~our~~reciprocal ~~Midlothian,~~tariffs ~~Texas,~~would ~~facility.~~be ~~The~~delayed ~~resulting~~for ~~increase~~90 ~~in gross profit~~days, ~~together~~except ~~with~~for ~~stable selling~~China, ~~general~~but ~~and~~the ~~administrative~~minimum ~~("SG&A")~~10% ~~spending~~tariff asand aadditional ~~percentage~~duties ofon ~~revenue,~~goods isfrom ~~expected~~Canada ~~to drive year-over-year operating income growth~~ and ~~improved~~Mexico ~~cash~~remain ~~flows~~in effect.

SUNOPTA INC. 2118 ~~September~~March 2829, ~~2024~~2025 Form 10-Q

~~Consolidated~~While ~~Results~~our employees, production facilities, and customers are predominately located in the U.S., we source a portion of ~~Operations~~our raw material ingredients and packaging globally, including from Canada and Mexico. Additionally, a portion of our total revenues, less than 8%, are generated from the sale of fruit snack products imported into the U.S. from our Niagara, Ontario, facility. As a result, the imposition of tariffs by the U.S. will result in additional costs for us, as well as our suppliers, and increase the ~~Quarters~~landed ~~Ended~~cost ~~September~~in 28the U.S. of our products produced in Canada that are not exempt under the USMCA. In response to these tariffs, ~~2024~~we intend to implement targeted pricing actions to pass-through substantially all of the incremental costs of tariffs to our customers, which may reduce the competitiveness and ~~September~~level 30of consumption for certain of our products and negatively impact our profitability. Additionally, ~~2023~~the timing of our pass-through pricing adjustments may lag the impacts from these tariffs, which may result in gross margin and earnings variability. The potential inflationary impact of tariffs may also slow economic growth and reduce household savings, which may impact the level of consumption of certain of our products in the event consumers reduce overall spending and/or shift to lower-cost product alternatives.

	September 28,2024		September 30,2023		Change		Change
For the quarter ended	$		$		$		%
Revenues	176,216		152,541		23,675		15.5%
Cost of goods sold	152,632		132,273		20,359		15.4%
Gross profit	23,584		20,268		3,316		16.4%
Gross margin(1)	13.4%		13.3%				0.1%
Operating expenses
Selling, general and administrative expenses	21,052		18,377		2,675		14.6%
Intangible asset amortization	446		446		-		0.0%
Other expense, net	450		-		450		*
Foreign exchange loss (gain)	113		(37	)	150		*
Total operating expenses	22,061		18,786		3,275		17.4%
Operating income	1,523		1,482		41		2.8%
Interest expense, net	6,762		7,162		(400	)	-5.6%
Other non-operating expense	236		-		236		*
Loss from continuing operations before income taxes	(5,475	)	(5,680	)	205		3.6%
Income tax expense	23		-		23		*
Loss from continuing operations	(5,498	)	(5,680	)	182		3.2%
Net loss from discontinued operations	-		(140,143	)	140,143		100.0%
Net loss(2),(3)	(5,498	)	(145,823	)	140,325		96.2%
Dividends and accretion on preferred stock	(137	)	(426	)	289		67.8%
Loss attributable to common shareholders(4)	(5,635	)	(146,249	)	140,614		96.1%
* Percentage not meaningful

To date, none of the preceding actions have had a material impact on our results of operations, financial condition or cash flows. However, any future impact cannot currently be determined as tariffs continue to represent a significant source of uncertainty. We will continue to monitor the evolving political and macroeconomic environment and evaluate any potential impacts to our business.

~~(1) Gross~~Although ~~margin~~the isfull aimpact ~~measure~~ of ~~gross~~the ~~profit~~tariff ~~(equal~~matters tonoted ~~revenues~~above ~~less~~on ~~cost~~our ofbusiness ~~goods~~and ~~sold)~~the asoverall aeconomy ~~percentage~~remains ofuncertain, ~~revenues.~~we Weare ~~use~~currently aprojecting ~~measure~~higher ofyear-over-year ~~adjusted~~revenues ~~gross~~for ~~margin~~fiscal ~~that~~2025, ~~excludes~~driven ~~non-capitalizable~~by ~~start-up~~organic ~~costs~~volume ~~included~~growth infrom ~~cost~~our ofbeverages ~~goods~~and ~~sold~~snacks ~~that~~categories. ~~are~~We ~~incurred~~anticipate inan ~~connection~~improved ~~with~~gross ~~capital~~margin ~~expansion~~profile ~~projects.~~on ~~Start-up~~a ~~costs~~reported ~~have~~basis, ~~had~~reflecting ainvestments ~~significant~~in ~~impact~~our onsupply ~~the~~chain ~~comparability~~process ofto ~~reported~~improve ~~gross~~efficiency ~~margins,~~and ~~which~~output ~~may~~from ~~obscure~~our ~~trends~~existing capital infrastructure in ~~our~~order ~~margin~~to ~~performance~~reduce per unit costs. ~~Additionally~~However, ~~our~~the ~~measure~~impact of ~~adjusted~~the ~~gross~~pass-through ~~margin~~of ~~may~~incremental ~~exclude~~tariff ~~other~~costs ~~unusual~~may ~~items~~result ~~that~~in ~~are~~an ~~identified~~increase ~~and~~in ~~evaluated~~revenues onand ana ~~individual~~decrease ~~basis,~~in ~~which~~gross ~~due~~margin. toAn ~~their~~increase ~~nature~~in orgross ~~size~~profit, wetogether ~~would~~with ~~not~~lower ~~expect~~SG&A tospending ~~occur~~ as ~~part~~a percentage of ~~our~~revenue, ~~normal~~is ~~business~~expected onto adrive ~~regular~~operating ~~basis~~income growth and increased cash flows.

WeConsolidated ~~use~~Results ~~the measure~~ of ~~adjusted~~Operations ~~gross~~for ~~margin to evaluate~~ the ~~underlying~~Quarters ~~profitability~~Ended ofMarch ~~our revenue-generating activities within each reporting period. We believe that disclosing this non-GAAP measure provides investors with a meaningful~~29, ~~consistent~~2025 ~~comparison~~and ofMarch ~~our profitability measure for the periods presented. However~~30, the non-GAAP measure of adjusted gross margin should not be considered in isolation or as a substitute for gross margin calculated based on gross profit determined in accordance with U.S. GAAP. The following table presents a reconciliation of adjusted gross margin from reported gross margin calculated in accordance with U.S. GAAP.2024

For the quarter ended	September 28,2024		September 30,2023
	March 29,2025		March 30,2024		Change		Change
Reported gross margin	13.4%		13.3%
For the quarter ended	$		$		$		%
Start-up costs(a)	2.4%		3.1%
Revenues	201,628		184,422		17,206		9.3%
Wastewater haul-off charges(b)	1.2%		-
Cost of goods sold	171,309		153,370		17,939		11.7%
Adjusted gross margin	17.0%		16.4%
Gross profit	30,319		31,052		(733	)	-2.4%
Gross margin	15.0%		16.8%				-1.8%
Operating expenses
Selling, general and administrative expenses	19,196		22,334		(3,138	)	-14.1%
Intangible asset amortization	446		446		-		0.0%
Other expense (income), net	75		(1,800	)	1,875		*
Foreign exchange loss (gain)	115		(51	)	166		*
Total operating expenses	19,832		20,929		(1,097	)	-5.2%
Operating income	10,487		10,123		364		3.6%
Interest expense, net	5,107		6,050		(943	)	-15.6%
Other non-operating expense	422		-		422		*
Earnings from continuing operations before income taxes	4,958		4,073		885		21.7%
Income tax expense	147		277		(130	)	-46.9%
Earnings from continuing operations	4,811		3,796		1,015		26.7%
Net loss from discontinued operations	-		(917	)	917		100.0%
Net earnings	4,811		2,879		1,932		67.1%
Dividends and accretion on preferred stock	(140	)	(433	)	293		67.7%
Earnings attributable to common shareholders	4,671		2,446		2,225		91.0%

~~(a) For~~* ~~the~~Percentage ~~third~~not quarter of 2024, start-up costs of $4.1 million were recorded in costs of goods sold, which were mainly related to the scale-up of production at our plant-based beverage facility in Midlothian, Texas, including the start-up of a new high-speed Edge line. For the third quarter of 2023, start-up costs of $4.7 million included in cost of goods sold mainly related to the initial ramp-up of production at our Midlothian, Texas, facility, and the addition of a new extrusion line at our fruit snacks facility in Omak, Washington.meaningful

~~(b) For~~SUNOPTA ~~the third quarter of 2024, we incurred temporary third-party haul-off charges of $2~~INC.2 ~~million~~19 ~~for~~March ~~excess wastewater produced at our Midlothian~~29, ~~Texas,~~2025 ~~facility,~~Form ~~due to volume constraints within our current treatment system.~~10-Q

~~SUNOPTA~~Revenues ~~INC~~for the quarter ended March 29, 2025 increased by 9.3% 22to ~~September~~$201.6 28million from $184.4 million for the quarter ended March 30, 2024. ~~Form~~The ~~10-Q~~change in revenues from the first quarter of 2024 to the first quarter of 2025 was due to the following:

(2) When assessing our financial performance, we use an internal measure of adjusted earnings from continuing operations that excludes specific items that are identified and evaluated on an individual basis, which due to their unusual nature or size, we would not expect to occur as part of our normal business on a regular basis. We believe that the identification of these excluded items enhances the analysis of the financial performance of our business when comparing those operating results between periods, as we do not consider these items to be reflective of normal business operations. The following table presents a reconciliation of adjusted earnings from continuing operations from loss from continuing operations which we consider to be the most directly comparable U.S. GAAP financial measure.

	$		%
2024 revenues	184,422
Volume/Mix	22,570		12.2%
Price	(3,058	)	-1.7%
Exit from smoothie bowls	(2,306	)	-1.3%
2025 revenues	201,628		9.3%

	September 28, 2024				September 30, 2023
			PerShare				PerShare
For the quarter ended	$		$		$		$
Loss from continuing operations	(5,498	)			(5,680	)
Dividends and accretion on preferred stock	(137	)			(426	)
Loss from continuing operations attributable to common shareholders	(5,635	)	(0.05	)	(6,106	)	(0.05	)
Adjusted for:
Start-up costs(a)	4,980				4,733
Wastewater haul-off charges(b)	2,180				-
Unrealized foreign exchange loss on restricted cash(c)	525				-
Business development costs(d)	-				928
Severance costs(e)	-				897
Other(f)	450				-
Adjusted earnings from continuing operations	2,500		0.02		452		0.00

(a) Refer to footnote (1)(a) above for a description of start-up costs included in cost of goods sold. Additionally, for the third quarter of 2024, start-up costs included $0.8 million of professional fees related to operational productivity initiatives, which are recorded in SG&A expenses.

(b) Refer to footnote (1)(b) above for a description of wastewater haul-off charges included in cost of goods sold.

(c) For the third quarter of 2024, reflects an unrealized foreign exchange loss associated with peso-denominated bank accounts in Mexico that were retained following the divestiture of our frozen fruit business ("Frozen Fruit") in October 2023. These accounts are currently subject to a judicial hold in connection with a litigation matter.

(d) For the third quarter of 2023, reflects business development costs related to the divestiture of Frozen Fruit, which are recorded in SG&A expenses.

(e) For the third quarter of 2023, reflects employee severance costs accrued in connection with the consolidation of our continuing operations following the divestiture of Frozen Fruit, which are recorded in SG&A expenses.

(f) For the third quarter of 2024, other reflects accrued demolition costs related to our former roasted snack facility, which was abandoned in 2018. These costs are recorded in other expense.

We believe that investors' understanding of our financial performance is enhanced by disclosing the specific items that we exclude to compute adjusted earnings from continuing operations. However, adjusted earnings from continuing operations is not, and should not be viewed as, a substitute for loss from continuing operations prepared under U.S. GAAP. Adjusted earnings from continuing operations is presented solely to allow investors to more fully understand how we assess our financial performance.

(3) We use a measure of adjusted EBITDA from continuing operations when assessing the performance of our operations, which we believe is useful to investors' understanding of our operating profitability because it excludes non-operating expenses, such as interest, loss on sale of receivables, and income taxes, as well as non-cash expenses, such as depreciation, amortization, and stock-based compensation. In addition, our measure of adjusted EBITDA excludes other unusual items that affect the comparability of our operating performance, as identified in the determination of adjusted earnings from continuing operations (refer above to footnote (2)). We also use this measure of adjusted EBITDA to assess operating performance in connection with our employee incentive programs. The following table presents a reconciliation of adjusted EBITDA from continuing operations from loss from continuing operations, which we consider to be the most directly comparable U.S. GAAP financial measure.

SUNOPTA INC. 23 September 28, 2024 Form 10-Q

	September 28, 2024		September 30, 2023
For the quarter ended	$		$
Loss from continuing operations	(5,498	)	(5,680	)
Interest expense, net	6,762		7,162
Loss on sale of receivables*	236		-
Income tax expense	23		-
Depreciation and amortization	9,319		7,983
Stock-based compensation	2,527		3,068
Adjusted for:
Start-up costs(a)	4,980		4,733
Wastewater haul-off charges(b)	2,180		-
Unrealized foreign exchange loss on restricted cash(c)	525		-
Business development costs(d)	-		928
Severance costs(e)	-		897
Other(f)	450		-
Adjusted EBITDA from continuing operations	21,504		19,091

* Included in other non-operating expense.

(a)-(f) Refer to footnote (2) above.

Although we use adjusted EBITDA from continuing operations as a measure to assess the performance of our business and for the other purposes set forth above, this measure has limitations as an analytical tool, and should not be considered in isolation, or as a substitute for an analysis of our results of operations as reported in accordance with U.S. GAAP. Some of these limitations are:

adjusted EBITDA from continuing operations does not reflect interest expense, or the cash requirements necessary to service interest payments on our indebtedness;

adjusted EBITDA from continuing operations excludes the discount taken on trade receivables sold to a third-party factor, which is a strategic means for us to improve working capital efficiency, while reducing our indebtedness and interest expense;

adjusted EBITDA from continuing operations does not include the payment or recovery of income taxes, which is a necessary element of our operations;

although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and adjusted EBITDA from continuing operations does not reflect any cash requirements for such replacements; and

adjusted EBITDA from continuing operations does not include non-cash stock-based compensation, which is an important component of our total compensation program for employees and directors.

Because of these limitations, adjusted EBITDA from continuing operations should not be considered as a measure of discretionary cash available to us to invest in the growth of our business. Management compensates for these limitations by not viewing adjusted EBITDA from continuing operations in isolation, and specifically by using other U.S. GAAP and non-GAAP measures, such as consolidated revenues, gross profit, gross margin, operating income, loss from continuing operations, and adjusted earnings from continuing operations to measure our operating performance. Adjusted EBITDA from continuing operations is not a measurement of financial performance under U.S. GAAP and should not be considered as an alternative to our results of operations or cash flows from operations determined in accordance with U.S. GAAP, and our calculation of adjusted EBITDA from continuing operations may not be comparable to the calculation of a similarly titled measure reported by other companies.

SUNOPTA INC. 24 September 28, 2024 Form 10-Q

(4) In order to evaluate our results of operations, we use certain non-GAAP measures that we believe enhance an investor's ability to derive meaningful period-over-period comparisons and trends from our results of operations. For example, as described above under footnote (1), we evaluate our adjusted gross margins on a basis that excludes the impact of start-up costs and other unusual items. In addition, we exclude specific items from our reported results that due to their nature or size, we do not expect to occur as part of our normal business on a regular basis. These items are identified above under footnote (2), and in the discussion of our results of operations below. These non-GAAP measures are presented solely to allow investors to more fully assess our results of operations and should not be considered in isolation of, or as substitutes for an analysis of our results as reported under U.S. GAAP.

Revenues for the quarter ended September 28, 2024 increased by 15.5% to $176.2 million from $152.5 million for the quarter ended September 30, 2023. The change in revenues from the third quarter of 2023 to the third quarter of 2024 was due to the following:

	$		%
2023 revenues	152,541
Volume/Mix	31,447		20.6%
Price	(4,275	)	-2.8%
Exit from smoothie bowls	(3,497	)	-2.3%
2024 revenues	176,216		15.5%

For the quarter ended September 28, 2024, the 15.5% increase in revenues reflected a favorable volume/mix impact of 20.6%, partially offset by a 2.8% overall price reduction due to the pass-through of lower commodity costs for certain raw materials, together with a 2.3% revenue loss related to our exit from the smoothie bowls category in March 2024. The favorable volume/mix reflected the incremental output from our capital expansion projects, together with new product innovation launches, which produced sales volume growth with existing and new customers across our fruit snack, broth, plant-based beverage, and protein shake product lines.

Gross profit increased $3.3 million, or 16.4%, to $23.6 million for the quarter ended September 28, 2024, compared with $20.3 million for the quarter ended September 30, 2023. Gross margin was 13.4% for the quarter ended September 28, 2024, compared with 13.3% for the quarter ended September 30, 2023, an increase of 10 basis points.

For the third quarter of 2024, we incurred start-up costs included in cost of goods sold of $4.1 million (2.4% gross margin impact), compared with start-up costs of $4.7 million (3.1% gross margin impact) for the third quarter of 2023. Start-up costs for the third quarter of 2024, were mainly related to the scale-up of production at our plant-based beverage facility in Midlothian, Texas, including the start-up of a new high-speed Edge line. In addition, for the third quarter of 2024, we incurred temporary third-party haul-off charges of $2.2 million (1.2% gross margin impact) for excess wastewater produced at our plant-based beverage facility in Midlothian, Texas, due to volume constraints within our current treatment system. Excluding the impact of start-up costs and wastewater charges, adjusted gross margin was 17.0% for the quarter ended September 28, 2024, compared with 16.4% for the quarter ended September 30, 2023, an increase of 60 basis points. See footnote (1) to the “Consolidated Results of Operations for the Quarters Ended September 28, 2024 and September 30, 2023” table for a reconciliation of adjusted gross margin from gross margin calculated in accordance with U.S. GAAP.

The 60-basis point increase in adjusted gross margin reflected higher sales and production volumes for fruit snacks, broths and beverages driving improved plant utilization, partially offset by the impact of incremental depreciation of new production equipment related to capital expansion projects ($1.3 million or 0.8% gross margin impact), together with manufacturing inefficiencies resulting from the excess wastewater issue.

Operating income was $1.5 million for each of the quarters ended September 28, 2024 and September 30, 2023. Operating income for the third quarter of 2024, compared with the third quarter of 2023, reflected higher gross profit, as described above, together with lower business development and employee severance costs following the divestiture of Frozen Fruit and related consolidation of our continuing operations in 2023, offset by higher employee variable compensation accruals based on performance, and increased professional fees related to operational productivity initiatives.

(Further details on the changes in revenue, gross profit and operating income are provided in the rollforward tables below.)

Net interest expense decreased by $0.4 million to $6.8 million for the quarter ended September 28, 2024, compared with $7.2 million for the quarter ended September 30, 2023, which reflected lower average outstanding debt in the third quarter of 2024 following the divestiture of Frozen Fruit, partially offset by the impact of higher market interest rates.

SUNOPTA INC. 25 September 28, 2024 Form 10-Q

Other non-operating expense of $0.2 million for the quarter ended September 28, 2024, reflected the loss on sale of certain trade receivables to a third-party financial institution under the Receivables Sales Program that we entered into in the third quarter of 2024 (as described below under "Liquidity and Capital Resources").

Income taxes were recognized at effective tax rates of (0.4)% and 0.0% for the quarters ended September 28, 2024 and September 30, 2023, respectively, which reflected the recognition of a full valuation allowance against U.S. deferred tax assets in excess of deferred tax liabilities beginning in the second quarter of 2023.

Loss from continuing operations was $5.5 million for the quarter ended September 28, 2024, compared with a loss of $5.7 million for the quarter ended September 30, 2023. Diluted loss per share from continuing operations attributable to common shareholders (after accretion on preferred stock) was $0.05 for the quarter ended September 28, 2024, compared with a diluted loss per share (after dividends and accretion on preferred stock) of $0.05 for the quarter ended September 30, 2023.

We recognized a loss from discontinued operations of $140.1 million (diluted loss per share of $1.21) for the quarter ended September 30, 2023, which included an estimated pre-tax loss on the divestiture of Frozen Fruit of $118.8 million. Refer to note 2 to the unaudited consolidated financial statements included in this report for additional details.

We realized a loss attributable to common shareholders of $5.6 million (diluted loss per share of $0.05) for the quarter ended September 28, 2024, compared with a loss attributable to common shareholders of $146.2 million (diluted loss per share of $1.26) for the quarter ended September 30, 2023.

Adjusted earnings from continuing operations were $2.5 million, or $0.02 earnings per diluted share, for the quarter ended September 28, 2024, compared with adjusted earnings from continuing operations of $0.5 million, or $0.00 earnings per diluted share, for the quarter ended September 30, 2023.

Adjusted EBITDA from continuing operations increased $2.4 million, or 12.6%, to $21.5 million for the quarter ended September 28, 2024, compared with $19.1 million for the quarter ended September 30, 2023.

Adjusted earnings from continuing operations and adjusted EBITDA from continuing operations are non-GAAP financial measures. See footnotes (2) and (3) to the "Consolidated Results of Operations for the Quarters Ended September 28, 2024 and September 30, 2023" table for a reconciliation of adjusted earnings from continuing operations and adjusted EBITDA from continuing operations from loss from continuing operations, which we consider to be the most directly comparable U.S. GAAP financial measure.

Rollforward of Revenue, Gross Profit and Operating Income

For the quarter ended		September 28,2024		September 30,2023		Change	% Change
Revenues	$	176,216	$	152,541	$	23,675	15.5%
Gross profit		23,584		20,268		3,316	16.4%
Gross margin		13.4%		13.3%			0.1%
Operating income	$	1,523	$	1,482	$	41	2.8%
Operating margin		0.9%		1.0%			-0.1%

SUNOPTA INC. 26 September 28, 2024 Form 10-Q

Revenues

The table below explains the $23.7 million increase in revenues from $152.5 million for the third quarter of 2023 to $176.2 million for the third quarter of 2024:

Revenues for the quarter ended September 30, 2023		$152,541
	Sales volume growth for broths, plant-based beverages, and protein shakes, partially offset by the impact of lower pass-through pricing to customers due to lower costs for certain raw materials	17,035
	Sales volume growth of over 40% for fruit snacks, reflecting the addition of new production and packaging capacity in 2023 to meet unfilled demand	10,137
	Impact of the exit from the smoothie bowls category in March 2024	(3,497)
Revenues for the quarter ended September 28, 2024		$176,216

Gross Profit

The table below explains the $3.3 million increase in gross profit from $20.3 million for the third quarter of 2023 to $23.6 million for the third quarter of 2024:

Gross profit for the quarter ended September 30, 2023		$20,268
	Higher sales and production volumes for fruit snacks, broths, and beverages	6,241
	Decrease in start-up costs related to capital expansion projects	586
	Excess wastewater haul-off charges, due to volume constraints within the current treatment system at our Midlothian, Texas, facility	(2,180)
	Incremental depreciation related to capital expansion projects	(1,331)
Gross profit for the quarter ended September 28, 2024		$23,584

Operating Income

The table below explains the increase in operating income from the third quarter of 2023 to the third quarter of 2024:

Operating income for the quarter ended September 30, 2023		$1,482
	Increase in gross profit, as explained above	$3,316
	Higher employee variable compensation accruals based on performance, together with increased professional fees related to operational productivity initiatives, partially offset by lower business development and employee severance costs following the divestiture of Frozen Fruit and consolidation of our continuing operations in 2023	(3,275)
Operating income for the quarter ended September 28, 2024		$1,523

SUNOPTA INC. 27 September 28, 2024 Form 10-Q

Consolidated Results of Operations for the Three Quarters Ended September 28, 2024 and September 30, 2023

	September 28,2024		September 30,2023		Change		Change
For the three quarters ended	$		$		$		%
Revenues	530,059		448,673		81,386		18.1%
Cost of goods sold	452,880		385,697		67,183		17.4%
Gross profit	77,179		62,976		14,203		22.6%
Gross margin(1)	14.6%		14.0%				0.6%
Operating expenses
Selling, general and administrative expenses	61,824		58,403		3,421		5.9%
Intangible asset amortization	1,338		1,338		-		0.0%
Other income, net	(1,654	)	(20	)	(1,634	)	*
Foreign exchange loss	1,372		44		1,328		*
Total operating expenses	62,880		59,765		3,115		5.2%
Operating income	14,299		3,211		11,088		345.3%
Interest expense, net	19,222		19,391		(169	)	-0.9%
Other non-operating expense	236		-		236		*
Loss from continuing operations before income taxes	(5,159	)	(16,180	)	11,021		68.1%
Income tax expense	283		3,978		(3,695	)	-92.9%
Loss from continuing operations	(5,442	)	(20,158	)	14,716		73.0%
Net loss from discontinued operations	(2,314	)	(143,126	)	140,812		98.4%
Net loss(2),(3)	(7,756	)	(163,284	)	155,528		95.2%
Dividends and accretion on preferred stock	(401	)	(1,552	)	1,151		74.2%
Loss attributable to common shareholders(4)	(8,157	)	(164,836	)	156,679		95.1%
* Percentage not meaningful

(1) The following table presents a reconciliation of adjusted gross margin from reported gross margin calculated in accordance with U.S. GAAP (refer to footnote (1) to the "Consolidated Results of Operations for the Quarters Ended September 28, 2024 and September 30, 2023" table regarding the use of this non-GAAP measure).

For the three quarters ended	September 28, 2024	September 30, 2023
Reported gross margin	14.6%	14.0%
Start-up costs(a)	1.3%	3.6%
Wastewater haul-off charges(b)	0.7%	-
Product withdrawal costs(c)	0.4%	-
Adjusted gross margin	16.9%	17.7%
Note: percentages may not add due to rounding

(a) For the first three quarters of 2024, start-up costs of $6.8 million were recorded in costs of goods sold, which were mainly related to the scale-up of production at our plant-based beverage facility in Midlothian, Texas, including the start-up of a new high-speed Edge line, together with the ramp-up of oat-base extraction operations at our Modesto, California, facility. For the first three quarters of 2023, start-up costs of $16.3 million included in cost of goods sold mainly related to the initial ramp-up of production at our Midlothian, Texas, facility, and the addition of new extrusion and high-speed packaging lines at our fruit snacks facility in Omak, Washington.

(b) For the first three quarters of 2024, we incurred temporary third-party haul-off charges of $3.6 million for excess wastewater produced at our Midlothian, Texas, facility, due to volume constraints within our current treatment system.

(c) In the second quarter of 2024, we conducted a voluntary withdrawal from customers of certain batches of aseptically-packaged products that may have had the potential for non-pathogenic microbial contamination. None of the withdrawn product made it into the consumer marketplace. In the second and third quarters of 2024, we recognized direct costs related to the withdrawal of $2.1 million, net of expected insurance recoveries, which included finished goods inventory write-offs, product return and logistic costs, and costs related to investigative and remedial actions taken in response to the withdrawal, which corrective actions have been completed. These charges are incremental to our normal course reserves and have had an unfavorable impact on our reported gross profit and gross margin for the first three quarters of 2024.

SUNOPTA INC. 28 September 28, 2024 Form 10-Q

(2) The following table presents a reconciliation of adjusted earnings from loss from continuing operations, which we consider to be the most directly comparable U.S. GAAP financial measure (refer to footnote (2) to the "Consolidated Results of Operations for the Quarters Ended September 28, 2024 and September 30, 2023" table regarding the use of this non-GAAP measure).

	September 28, 2024				September 30, 2023
			Per Share				Per Share
For the three quarters ended	$		$		$		$
Loss from continuing operations	(5,442	)			(20,158	)
Dividends and accretion on preferred stock	(401	)			(1,552	)
Loss from continuing operations attributable to common shareholders	(5,843	)	(0.05	)	(21,710	)	(0.19	)
Adjusted for:
Start-up costs(a)	7,655				17,855
Wastewater haul-off charges(b)	3,606				-
Product withdrawal costs(c)	2,145				-
Unrealized foreign exchange loss on restricted cash(d)	1,363				-
Business development costs(e)	-				2,390
Severance costs(f)	-				897
Gain on sale of smoothie bowls product line(g)	(1,800	)			-
Other(h)	146				(20	)
Change in valuation allowance for deferred tax assets(i)	-				3,978
Adjusted earnings from continuing operations	7,272		0.06		3,390		0.03

(a) Refer to footnote (1)(a) above for a description of start-up costs included in cost of goods sold. Additionally, for the first three quarters of 2024 and 2023, start-up costs included $0.8 million and $1.5 million, respectively, of professional fees related to operational productivity initiatives, which are recorded in SG&A expenses.

(b) Refer to footnote (1)(b) above for a description of wastewater haul-off charges included in cost of goods sold.

(d) For the first three quarters of 2024, reflects an unrealized foreign exchange loss associated with peso-denominated bank accounts in Mexico that were retained following the divestiture of Frozen Fruit. These accounts are currently subject to a judicial hold in connection with a litigation matter.

(e) For the first three quarters of 2023, reflects business development costs related to the divestiture of Frozen Fruit, which are recorded in SG&A expenses.

(f) For the first three quarters of 2023, reflects employee severance costs accrued in connection with the consolidation of our continuing operation following the divestiture of Frozen Fruit, which are recorded in SG&A expenses.

(g) For the first three quarters of 2024, reflects the pre-tax gain on sale of the smoothie bowls product line recognized in the first quarter of 2024, which is recorded in other income.

(h) For the first three quarters of 2024, other reflects accrued demolition costs related to our former roasted snack facility, which was abandoned in 2018, partially offset by gains on the settlement of certain legal matters. These amounts are recorded in other expense/income.

(i) For the first three quarters of 2023, reflects an increase to the valuation allowance for U.S. deferred tax assets based on an assessment of the future realizability of the related tax benefits.

SUNOPTA INC. 29 September 28, 2024 Form 10-Q

(3) The following table presents a reconciliation of adjusted EBITDA from loss from continuing operations, which we consider to be the most directly comparable U.S. GAAP financial measure (refer to footnote (3) to the "Consolidated Results of Operations for the Quarters Ended September 28, 2024 and September 30, 2023" table regarding the use of this non-GAAP measure).

		September 28, 2024		September 30, 2023
For the three quarters ended		$		$
Loss from continuing operations		(5,442	)	(20,158	)
Interest expense, net		19,222		19,391
Loss on sale of receivables*		236		-
Income tax expense		283		3,978
Depreciation and amortization		27,005		22,873
Stock-based compensation		10,269		8,989
Adjusted for:
	Start-up costs(a)	7,655		17,855
	Wastewater haul-off charges(b)	3,606		-
	Product withdrawal costs(c)	2,145		-
	Unrealized foreign exchange loss on restricted cash(d)	1,363		-
	Business development costs(e)	-		2,390
	Severance costs(f)	-		897
	Gain on sale of smoothie bowls product line(g)	(1,800	)	-
	Other(h)	146		(20	)
Adjusted EBITDA from continuing operations		64,688		56,195

* Included in other non-operating expense.

(a)-(h) Refer to footnote (2) above.

(4) Refer to footnote (4) to the "Consolidated Results of Operations for the Quarters Ended September 28, 2024 and September 30, 2023" table regarding the use of certain other non-GAAP measures in the discussion of our results of operations below.

Revenues for the three quarters ended September 28, 2024 increased by 18.1% to $530.1 million from $448.7 million for the three quarters ended September 30, 2023. The change in revenues from the first three quarters of 2023 to the first three quarters of 2024 was due to the following:

	$		%
2023 revenues	448,673
Volume/Mix	105,805		23.6%
Price	(17,476	)	-3.9%
Exit from smoothie bowls	(6,943	)	-1.5%
2024 revenues	530,059		18.1%

Note: percentages may not add due to rounding

For the ~~three~~quarter ~~quarters~~ ended ~~September~~March 2829, ~~2024~~2025, the 189.13% increase in revenues reflected a favorable volume/mix impact of 2312.62%, partially offset by a 31.97% overall price reduction ~~due~~mainly toreflecting ~~the~~lower pass-through ofpricing ~~lower commodity costs~~ for certain raw ~~materials~~material cost savings, together with a 1.53% revenue loss related to our exit from the smoothie bowls category in March 2024. The favorable volume/mix ~~reflected the incremental output from our capital expansion projects, together with new product innovation launches, which produced sales volume~~ growth ~~with~~reflected ~~existing~~increases ~~and new customers~~ across our ~~fruit snack~~beverage, broth, ~~tea, protein shake,~~ and ~~plant-based~~fruit ~~beverage~~snack product ~~lines~~categories.

Gross profit ~~increased~~decreased $140.28 million, or 222.64%, to $7730.23 million for the ~~three~~quarter ~~quarters~~ ended ~~September~~March 2829, ~~2024~~2025, compared with $6331.01 million for the ~~three~~quarter ~~quarters~~ ended ~~September~~March 30, ~~2023~~2024. Gross margin was 1415.60% for the ~~three~~quarter ~~quarters~~ ended ~~September~~March 2829, ~~2024~~2025, compared with 1416.08% for the ~~three~~quarter ~~quarters~~ ended ~~September~~March 30, ~~2023~~2024, ana ~~increase~~decrease of 60180 basis points.

For the first ~~three~~quarter ~~quarters~~ of ~~2024~~2025, we incurred start-up costs included in cost of goods sold of $6.8 million (1.3% gross margin impact), compared with start-up costs of $16.3 million (3.6% gross margin impact) for the first three quarters of 2023. Start-up costs for the first three quarters of 2024, were mainly related to the scale-up of production at our plant-based beverage facility in Midlothian, Texas, including the start-up of a new high-speed Edge line, together with the ramp-up of oat-base extraction operations at our Modesto, California, facility. In addition, for the first three quarters of 2024, we incurred temporary third-party haul-off charges of $30.65 million ~~(0.7% gross margin impact)~~ for excess wastewater produced at our plant-based beverage facility in Midlothian, Texas, due to volume constraints within our current treatment system,. ~~and,~~For in the ~~second~~first ~~and~~quarter ~~third quarters~~ of 2024, we ~~recognized~~incurred ~~direct~~start-up costs of $~~2.1 million (~~0.4%3 ~~gross margin impact)~~million, ~~net~~mainly ~~of expected insurance recoveries,~~ related to ~~our voluntary withdrawal in~~ the ~~second~~scale-up ~~quarter~~ of ~~2024,~~production ofat ~~certain~~our ~~batches of aseptically~~plant-~~packaged~~based ~~products~~beverage ~~that~~facility ~~may~~in ~~have~~Midlothian, ~~had the potential for non-pathogenic microbial contamination~~Texas. Excluding the impact of ~~start-up costs,~~ wastewater charges and ~~product~~start-up ~~withdrawal~~ costs, adjusted gross margin was 1615.93% for the ~~three~~quarter ~~quarters~~ ended ~~September~~March 2829, ~~2024~~2025, compared with 17.70% for the ~~three~~quarter ~~quarters~~ ended ~~September~~March 30, ~~2023~~2024, a decrease of 80170 basis points. See ~~footnote~~below ~~(1)~~under to"Non-GAAP ~~the~~Measures" ~~“Consolidated Results of Operations~~ for ~~the Three Quarters Ended September 28, 2024 and September 30, 2023” table for~~ a reconciliation of adjusted gross margin from gross margin calculated in accordance with U.S. GAAP.

~~SUNOPTA~~The ~~INC~~170-basis point decrease in adjusted gross margin reflected investments in labor and infrastructure to improve long-term margins, together with inefficiencies related to temporary volume limitations resulting from the excess wastewater issue at our Midlothian, Texas, facility, and incremental depreciation related to assets recently placed in service but not fully utilized as production ramps up. 30These ~~September~~factors 28were partially offset by higher sales and production volumes for beverages, ~~2024~~broths ~~Form~~and ~~10-Q~~fruit snacks driving improved plant utilization.

~~The~~Operating ~~80-basis~~income ~~point~~increased ~~decrease~~$0.4 inmillion ~~adjusted~~to ~~gross~~$10.5 ~~margin~~million ~~reflected~~for the ~~impact~~quarter ofended ~~incremental~~March ~~depreciation~~29, of2025, ~~new~~compared ~~production~~with ~~equipment~~$10.1 ~~related~~million tofor ~~capital~~the ~~expansion~~quarter ~~projects~~ended ~~completed~~March 30, 2024. The increase in ~~2023~~operating (income mainly reflected a $43.21 million ordecrease ~~0.8%~~in ~~gross~~stock-based ~~margin~~compensation ~~impact),~~expense ~~together~~in ~~with~~the ~~manufacturing~~first ~~inefficiencies~~quarter ~~resulting~~of ~~from~~2025, partially offset by the ~~excess~~inclusion ~~wastewater~~of ~~and~~a ~~product~~non-recurring ~~withdrawal~~gain ~~issues,~~of ~~and~~$1.8 ~~higher~~million ~~inventory~~on ~~reserves,~~the ~~partially~~sale ~~offset~~of bysmoothie ~~higher~~bowl ~~sales~~product ~~and~~line ~~production~~in ~~volumes~~the ~~for~~first ~~beverages~~quarter of 2024, ~~fruit~~together ~~snacks~~with ~~and~~the ~~broths~~impact ~~driving~~of ~~improved~~the ~~plant~~$0.8 ~~utilization~~million decrease in gross profit, as described above.

Operating income increased $11.1 million to $14.3 million for the three quarters ended September 28, 2024, compared with $3.2 million for the three quarters ended September 30, 2023. The increase in operating income reflected higher gross profit, as described above, together with a gain on sale of the smoothie bowls product line of $1.8 million, and lower business development and employee severance costs following the divestiture of Frozen Fruit and related consolidation of our continuing operations in 2023. These factors were partially offset by higher variable employee compensation accruals based on performance, together with higher stock-based compensation expense due to the timing of our annual incentive plan grants and the accelerated vesting of certain previously granted awards in connection with the retirement of our former Chief Executive Officer ("CEO"). In addition, in the first three quarters of 2024, we recognized an unrealized foreign exchange loss of $1.4 million on peso-denominated restricted cash held in Mexico.

(Further details on the changes in revenue, gross profit and operating income are provided in the rollforward tables below.)

Net interest expense decreased by $01.20 million to $195.21 million for the ~~three~~quarter ~~quarters~~ ended ~~September~~March 2829, ~~2024~~2025, compared with $196.41 million for the ~~three~~quarter ~~quarters~~ ended ~~September~~March 30, ~~2023~~2024, which mainly reflected ~~lower~~interest ~~average~~received ~~outstanding~~on ~~debt~~a tax refund in the first ~~three~~quarter ~~quarters~~ of ~~2024 following the divestiture of Frozen Fruit, partially offset by the impact of higher market interest rates~~2025.

Other non-operating expense of $0.24 million for the ~~three~~quarter ~~quarters~~ ended ~~September~~March 2829, ~~2024~~2025, reflected the loss on sale of certain trade receivables to a third-party financial institution under the Receivables Sales Program that we entered into in the third quarter of 2024 (as described below under "Liquidity and Capital Resources").

Income taxes were recognized at an effective ~~rate~~tax rates of (53.5)0% ~~for~~and ~~the three quarters ended September 28, 2024, compared with (24.~~6).8% ~~recognized~~ for the ~~three~~ quarters ended ~~September~~March 3029, ~~2023.~~2025 ~~The~~and ~~change~~March in30, ~~the~~2024, respectively. Our effective tax rate ~~was~~reflects ~~primarily~~the ~~driven~~jurisdictional bymix ~~the~~of earnings and recognition of a full valuation allowance against ~~U.S.~~certain deferred tax assets ~~in excess of deferred tax liabilities beginning in the second quarter of 2023~~.

~~Loss~~Earnings from continuing operations ~~was~~were $5.4.8 million for the ~~three~~quarter ~~quarters~~ ended ~~September~~March 2829, ~~2024~~2025, compared with aearnings ~~loss~~ of $203.28 million for the ~~three~~quarter ~~quarters~~ ended ~~September~~March 30, ~~2023~~2024. Diluted ~~loss~~earnings per share from continuing operations attributable to common shareholders (after accretion on preferred stock) ~~was~~were $0.0504 for the ~~three~~quarter ~~quarters~~ ended ~~September~~March 2829, ~~2024~~2025, compared with a diluted ~~loss~~earnings per share (after dividends and accretion on preferred stock) of $0.1903 for the ~~three~~quarter ~~quarters~~ ended ~~September~~March 30, ~~2023~~2024.

WeSUNOPTA ~~recognized a loss from discontinued operations related to Frozen Fruit of $2~~INC.3 ~~million~~20 ~~(diluted~~March ~~loss per share of $0.02) for the three quarters ended September 28~~29, ~~2024,~~2025 ~~compared~~Form ~~with a loss of $143.1 million (diluted loss per share of $1.26) for the three quarters ended September 30, 2023, which included an estimated pre~~10-tax loss on the divestiture of Frozen Fruit of $118.8 million recognized in the third quarter of 2023. Refer to note 2 to the unaudited consolidated financial statements included in this report for additional details.Q

We ~~realized~~recognized a loss ~~attributable~~from todiscontinued ~~common~~operations ~~shareholders~~related ofto ~~$8.2~~our ~~million~~divested ~~(diluted~~frozen ~~loss~~fruit ~~per~~business ~~share~~("Frozen ~~of $0.07~~Fruit") ~~for the three quarters ended September 28, 2024, compared with a loss attributable to common shareholders~~ of $~~164~~0.89 million (diluted loss per share of $10.4501) for the ~~three~~quarter ~~quarters~~ ended ~~September~~March 30, ~~2023~~2024.

~~SUNOPTA~~We ~~INC~~realized earnings attributable to common shareholders of $4.7 31million ~~September~~(diluted 28earnings per share of $0.04) for the quarter ended March 29, ~~2024~~2025, ~~Form~~compared ~~10-Q~~with earnings attributable to common shareholders of $2.4 million (diluted earnings per share of $0.02) for the quarter ended March 30, 2024.

Adjusted earnings from continuing operations were $75.3 million, or $0.0604 earnings per diluted share, for the ~~three~~quarter ~~quarters~~ ended ~~September~~March 2829, ~~2024~~2025, compared with adjusted earnings from continuing operations of $31.49 million, or $0.0302 earnings per diluted share, for the ~~three~~quarter ~~quarters~~ ended ~~September~~March 30, ~~2023~~2024.

Adjusted EBITDA from continuing operations increased $80.5 million, ~~or 15.1%,~~ to $6422.74 million for the ~~three~~quarter ~~quarters~~ ended ~~September~~March 2829, ~~2024~~2025, compared with $5621.29 million for the ~~three~~quarter ~~quarters~~ ended ~~September~~March 30, ~~2023~~2024.

Adjusted earnings from continuing operations and adjusted EBITDA from continuing operations are non-GAAP financial measures. See ~~footnotes~~below ~~(2)~~under ~~and (3) to the~~ "~~Consolidated~~Non-GAAP ~~Results of Operations for the Three Quarters Ended September 28, 2024 and September 30, 2023~~Measures" ~~table~~ for a reconciliation of adjusted earnings from continuing operations and adjusted EBITDA from continuing operations from ~~loss~~earnings from continuing operations, which we consider to be the most directly comparable U.S. GAAP financial measure.

Rollforward of Revenue, Gross Profit and Operating Income

For the three quarters ended

September 28,2024

September 30,2023

Change

% Change

For the quarter ended

March 29, 2025

March 30, 2024

Change

% Change

Revenues

~~530~~201,~~059~~628

~~448~~184,~~673~~422

8117,~~386~~206

189.13%

Gross profit

7730,~~179~~319

6231,~~976~~052

~~14,203~~(733

)

22-2.64%

Gross margin

1415.60%

1416.08%

0-1.68%

Operating income

1410,~~299~~487

310,~~211~~123

~~11,088~~364

~~345.~~3.6%

Operating margin

25.72%

05.75%

2.-0.3%

Revenues

The table below explains the $8117.42 million increase in revenues from $~~448~~184.74 million for the first ~~three~~quarter ~~quarters~~ of ~~2023~~2024 to $~~530~~201.16 million for the first ~~three~~quarter ~~quarters~~ of ~~2024~~2025:

Revenues for the three quarters ended September 30, 2023		$448,673
Revenues for the quarter ended March 30, 2024	$184,422
	Sales volume growth for broths, teas, protein shakes, and plant-based beverages, partially offset by the impact of lower pass-through pricing to customers due to lower costs for certain raw materials	65,386
Sales volume increases for plant-based beverages, broths, protein shakes, and teas, partially offset by lower pass-through pricing for certain raw material cost savings	15,848
	Sales volume growth of over 30% for fruit snacks, reflecting the addition of new production and packaging capacity in 2023 to meet unfilled demand	22,943
Higher sales of fruit snacks driven by volume growth	3,664
Impact of the exit from the smoothie bowls category in March 2024	~~Impact of the exit from the smoothie bowls category in March 2024~~(2,306)	~~(6,943)~~
Revenues for the three quarters ended September 28, 2024		$530,059
Revenues for the quarter ended March 29, 2025	$201,628

SUNOPTA INC. 3221 ~~September~~March 2829, ~~2024~~2025 Form 10-Q

Gross Profit

The table below explains the $140.28 million ~~increase~~decrease in gross profit from $6331.01 million for the first ~~three~~quarter ~~quarters~~ of ~~2023~~2024 to $7730.23 million for the first ~~three~~quarter ~~quarters~~ of ~~2024~~2025:

Gross profit for the three quarters ended September 30, 2023		$62,976
Gross profit for the quarter ended March 30, 2024	$31,052
	Higher sales and production volumes for beverages, fruit snacks, and broths, together with lower commodity costs for certain raw materials, partially offset by higher inventory reserves	14,662
Incremental investments in labor and infrastructure to improve long-term margins	(1,780)
	Decrease in start-up costs related to capital expansion projects	9,509
Incremental depreciation related to capital expansion projects	(1,028)
	Incremental depreciation related to capital expansion projects	(4,217)
Temporary excess wastewater haul-off charges, due to volume constraints within the current treatment system at our Midlothian, Texas, facility, partially offset by a decrease in start-up costs related to capital expansion projects	(216)
	Excess wastewater haul-off charges, due to volume constraints within the current treatment system at our Midlothian, Texas, facility	(3,606)
Higher sales and production volumes for beverages, broths, and fruit snacks	2,291
	Direct costs, net of expected insurance recoveries, related to the voluntary withdrawal in the second quarter of 2024, of specific batches of aseptically-packaged product that may have had the potential for non-pathogenic microbial contamination	(2,145)
Gross profit for the quarter ended March 29, 2025	$30,319
Gross profit for the three quarters ended September 28, 2024		$77,179

Operating Income

The table below explains the ~~$11.1 million~~ increase in operating income from ~~$3.2 million for~~ the first ~~three~~quarter ~~quarters~~ of ~~2023~~2024 to ~~$14.3 million for~~ the first ~~three~~quarter ~~quarters~~ of ~~2024~~2025:

Operating income for the three quarters ended September 30, 2023		$3,211
Operating income for the quarter ended March 30, 2024	$10,123
	Increase in gross profit, as explained above	$14,203
Lower stock-based compensation expense due to a reduced equity component within our short-term incentive plan, together with increased forfeitures related to employee turnover in the first quarter of 2025, and the non-recurring impact of the accelerated vesting of certain awards in connection with the retirement of our former Chief Executive Officer in the first quarter of 2024	3,102
	Gain on sale of smoothie bowls product line	1,800
Non-recurring gain on sale of smoothie bowl product line in the first quarter of 2024	(1,800)
	Higher employee variable compensation accruals based on performance, together an unrealized foreign exchange loss of $1.4 million on peso-denominated restricted cash held in Mexico, partially offset by lower business development and employee severance costs following the divestiture of Frozen Fruit and consolidation of our continuing operations in 2023	(3,635)
Decrease in gross profit, as explained above	(733)
	Higher variable stock-based compensation expense based on performance, together with the accelerated vesting of certain previously granted awards in connection with the retirement of our former CEO, and the earlier timing of annual equity grants under our incentive plans	(1,280)
Higher employee incentive compensation accruals based on performance and higher foreign exchange transaction losses, partially offset by lower employee recruitment and relocation costs	(205)
Operating income for the three quarters ended September 28, 2024		$14,299
Operating income for the quarter ended March 29, 2025	$10,487

Liquidity and Capital Resources

On December 8, 2023, we entered into a five-year Credit Agreement providing for a $180.0 million term loan credit facility (the "Term Loan Credit Facility") and an $85.0 million revolving credit facility (the "Revolving Credit Facility") (collectively, the "Credit Facilities"). As at ~~September~~March 2829, ~~2024~~2025, $~~175~~171.50 million remained outstanding under the Term Loan Credit Facility and we had utilized $5638.08 million of the Revolving Credit Facility, including $56.93 million in letters of credit. For more information on our Credit Facilities, see note 87 to the unaudited consolidated financial statements included in this report.

InWe ~~connection~~are ~~with~~able ~~our~~to ~~efforts~~strategically tomanage ~~extend~~customer payment terms ~~with~~by ~~our~~selling, ~~major~~from ~~suppliers~~time to ~~enhance~~time, ~~cash~~on ~~flows,~~a werevolving ~~are~~basis, ~~financing~~up ~~certain~~to ~~purchases~~$42.0 ofmillion ~~goods~~aggregate ~~and~~amount ~~services~~of ~~through~~trade ~~extended~~receivables ~~payables~~of ~~facilities,~~eligible bycustomers ~~which~~to a third-party ~~intermediaries~~financial ~~settle~~institution ~~the~~in ~~supplier~~exchange ~~invoice~~for oncash proceeds (the ~~contractual~~"Receivables ~~due~~Sales ~~date~~Program" ~~and~~- ~~issue~~see usnote a3 ~~short-term~~to ~~note~~the ~~payable~~unaudited ~~for~~consolidated ~~the~~financial ~~face~~statements ~~amount~~included ofin ~~the~~this ~~invoice~~report). Additionally, ~~which~~ we ~~repay~~utilize, ~~together~~from ~~with~~time ~~interest~~to time, atsupply achain ~~later~~finance ~~date.~~("SCF") Asprograms atoffered ~~September~~by ~~28,~~some ~~2024~~of ~~and~~our ~~December~~major ~~30,~~customers ~~2023,~~that weallow ~~had~~us ~~$13~~to sell our receivables from those customers to such customers' financial institutions.0 ~~million~~We utilize our Receivables Sales Program and ~~$17.6~~our ~~million~~customers' ~~principal~~SCF ~~amount~~programs ~~outstanding~~in ~~under~~order ~~these~~to ~~facilities~~be paid earlier than our payment terms with the customers provide, ~~respectively~~and at a discount rate that leverages those customers' favorable credit ratings. ~~Proceeds~~Utilizing ~~from,~~these programs accelerates our cash flows and ~~repayments~~improves ofworking capital efficiency, while providing a lower cost access to liquidity when compared to the ~~notes~~Revolving ~~payable~~Credit Facility. All cash flows associated with these ~~facilities~~programs are reported as ~~financing~~operating ~~cash~~activities ~~flows~~ on our consolidated statements of cash flows.

SUNOPTA INC. 3322 ~~September~~March 2829, ~~2024~~2025 Form 10-Q

OnIn ~~August~~connection ~~28,~~with ~~2024,~~our weefforts ~~entered~~to ~~into~~extend anpayment ~~agreement~~terms towith ~~sell,~~our ~~from~~major ~~time~~suppliers to ~~time,~~enhance oncash ~~a revolving basis~~flows, upwe toare ~~$30.0~~financing ~~million~~certain ~~aggregate~~purchases ~~amount~~ of ~~trade~~goods ~~receivables~~and ofservices ~~eligible~~through ~~customers~~extended topayables afacilities, by which third-party ~~financial~~intermediaries ~~institution~~settle inthe ~~exchange~~supplier ~~for~~invoice ~~cash~~on ~~proceeds (~~the ~~"Receivables~~contractual ~~Sales~~due ~~Program"~~date -and ~~see~~issue ~~note~~us 4a toshort-term ~~the~~note ~~unaudited~~payable ~~consolidated~~for ~~financial~~the ~~statements~~face ~~included~~amount inof ~~this~~the ~~report for more information). Additionally~~invoice, which we ~~utilize~~repay, ~~from~~together ~~time~~with ~~to time~~interest, ~~supply~~at ~~chain~~a ~~finance~~later ~~("SCF") programs offered by some of our major customers that allow us to sell our receivables from those customers to such customers' financial institutions~~date. WeAs ~~utilize~~at ~~our~~March ~~Receivables~~29, ~~Sales Program and our customers' SCF programs in order to be paid earlier than our payment terms with the customers provide~~2025, ~~and~~we athad a$9.8 ~~discount~~million ~~rate~~principal ~~that~~amount ~~leverages~~outstanding ~~those~~under ~~customers'~~these ~~favorable credit ratings~~facilities. ~~Utilizing~~Proceeds ~~these~~from, ~~programs accelerates our cash flows~~ and ~~improves~~repayments ~~working capital efficiency~~of, ~~while providing a lower cost access to liquidity when compared to~~ the ~~Revolving~~notes ~~Credit~~payable ~~Facility. All cash flows~~ associated with these ~~programs~~facilities are reported as ~~operating~~financing ~~activities~~cash flows on our consolidated statements of cash flows.

OnFor ~~April~~the 17quarter ended March 29, ~~2024~~2025, we ~~eliminated~~incurred ~~the~~capital ~~dividend~~expenditures ~~rights~~of ~~attached~~$12.7 tomillion, including the ~~shares~~payment of ~~Series~~$4.0 ~~B-1~~million ~~Preferred~~of ~~Stock~~capital ofexpenditures ~~our~~related ~~subsidiary,~~to ~~SunOpta~~fiscal ~~Foods~~2024 ~~Inc.,~~that ~~effective~~were ~~from~~included ~~and~~in ~~after~~accounts payable as at December 3128, ~~2023~~2024. ~~(see~~For ~~note~~fiscal 92025, we estimate total capital expenditures of approximately $30 million to ~~the~~$35 ~~unaudited~~million, ~~consolidated~~mainly ~~financial~~consisting ~~statements~~of ~~included~~productivity inand ~~this~~maintenance ~~report)~~projects. ~~The~~We ~~elimination~~intend ofto fund the ~~cumulative~~majority ~~dividend~~ of ~~8.0%~~our ~~per~~capital ~~year~~expenditures ~~will~~through ~~result~~operating incash ~~annual~~flows ~~savings~~and ofthe ~~$1.2~~Revolving ~~million~~Credit Facility, with the balance through long-term finance leases.

~~For~~On ~~the~~May ~~three quarters ended September 28~~5, ~~2024~~2025, weour ~~incurred~~Board ~~capital expenditures~~ of ~~$22.8~~Directors ~~million.~~approved ~~For~~a ~~fiscal~~share ~~2024~~repurchase program, weauthorizing ~~estimate~~the ~~total~~purchase ~~capital expenditures~~ of ~~approximately~~up ~~$15~~to ~~million~~an ~~for~~aggregate ~~discretionary investments in growth and productivity projects, and approximately~~ $1525 million of ~~non-discretionary~~our ~~maintenance~~common ~~projects~~shares. WeThe ~~are~~size ~~funding our capital expenditures using operating cash flows~~ and ~~borrowings~~timing ~~under~~of ~~our~~repurchases, ~~Revolving~~if ~~Credit Facility. In addition~~any, inwill ~~the~~be ~~first~~determined ~~three~~by ~~quarters~~management ofand ~~2024,~~will wedepend ~~added~~upon ~~$24.6~~a ~~million~~multitude of ~~finance~~factors, ~~lease~~including ~~right-of-use~~our ~~assets~~progress ~~related~~towards toour ~~the~~leverage ~~expansion~~target, offinancial ~~our~~position, ~~ingredient~~capital ~~extraction~~allocation ~~operations~~priorities, atmarket ~~our Modesto~~conditions, ~~California~~regulatory requirements, ~~facility~~and other considerations.

We believe that our operating cash flows, including the selective use of our Receivables Sales Program and customer SCF programs to improve collection terms, together with available borrowings under the Revolving Credit Facility and extended payable facilities, will be adequate to meet our operating, investing, and financing needs for the foreseeable future, including the 12-month period following the issuance of our financial statements. However, in order to finance significant investments in our existing businesses, or significant business acquisitions, if any, that may arise in the future, we may need additional sources of cash that we could attempt to obtain through a combination of additional bank or subordinated financing, a private or public offering of debt or equity securities, or the issuance of common stock. There can be no assurance that these types of financing would be available at all or, if so, on terms that are acceptable to us.

Cash Flows

Summarized cash flow information for the ~~three~~quarter ~~quarters~~ ended ~~September~~March 2829, ~~2024~~2025 and ~~September~~March 30, ~~2023~~2024, is as follows:

			For the three quarters ended
		For the quarter ended
			September 28,2024			September 30,2023			Change
		March 29,2025			March 30,2024			Change
		$	$		$	$		$	$
Net cash flows provided by (used in):
Continuing operations:
Operating activities	~~Operating activities~~	22,281	~~19,221~~		7,402	~~(8,385~~	)	14,879	~~27,606~~
Investing activities	~~Investing activities~~	(15,154	~~(16,464~~)	)	(4,212	~~(37,272~~)	)	(10,942	~~20,808~~)
Financing activities	~~Financing activities~~	(6,398	~~(4,865~~)	)	(5,558	~~45,661~~)		(840	~~(50,526~~)	)
Discontinued operations		-	~~3,990~~		4,167	~~2,861~~		(4,167	~~1,129~~)

Operating Activities of Continuing Operations

Cash provided by operating activities of continuing operations increased $2714.69 million from the first ~~three~~quarter ~~quarters~~ of ~~2023~~2024 to the first ~~three~~quarter ~~quarters~~ of ~~2024~~2025. The increase in cash provided mainly reflected improved working capital efficiency attributable to our Receivables Sales Program, together with ~~improved~~the ~~profitability,~~receipt ~~driven~~of bya ~~revenue~~$3.7 ~~volume~~million ~~growth~~tax ~~and~~refund ~~lower~~in ~~start-up~~the ~~costs~~first ~~related~~quarter ~~to our Midlothian, Texas, facility, partially offset by a pre-season build~~ of ~~broth inventories, together with unrecovered product withdrawal costs~~2025.

SUNOPTA INC. 34 September 28, 2024 Form 10-Q

Investing Activities of Continuing Operations

Cash used in investing activities of continuing operations ~~decreased~~increased $2010.89 million from the first ~~three~~quarter ~~quarters~~ of ~~2023~~2024 to the first ~~three~~quarter ~~quarters~~ of ~~2024,~~2025. ~~which~~The ~~mainly~~increase ~~reflected~~in ~~lower~~cash ~~capital~~used ~~expenditures~~mainly ~~following~~reflected the ~~completion~~payment ofin ~~certain~~the ~~major~~first ~~capital~~quarter ~~projects~~of in2025 ~~2023,~~of ~~including~~$4.0 ~~the~~million ~~construction~~ of ~~our~~accrued ~~new~~capital ~~plant-based~~expenditures ~~beverage~~from ~~facility~~fiscal ~~in Midlothian~~2024, ~~Texas.~~and Inan addition, into ~~the~~intangible ~~first~~assets ~~three~~for ~~quarters~~the purchase of ~~2024~~an increased wastewater allowance at our Modesto, weCalifornia, ~~received~~facility, ~~cash~~together ~~proceeds~~with the non-recurring receipt of $63.3 million from the sale of the smoothie bowls product line in the first quarter of 2024.

Financing Activities of Continuing Operations

Cash used in financing activities of continuing operations was $46.94 million for the first ~~three~~quarter ~~quarters~~ of ~~2024~~2025, which mainly reflected repayments of long-term debt ~~related to completed capital projects~~, ~~together~~partially ~~with~~offset ~~net~~by ~~repayments~~borrowings of ~~notes~~long-term ~~payable~~debt inrelated ~~connection~~to ~~with~~proceeds ~~our~~from ~~extended~~the ~~payables~~sale ~~facilities,~~and ~~partially~~leaseback ~~offset~~of bycertain ~~borrowings~~recently ~~under~~acquired ~~our Revolving Credit Facility to fund capital expenditures~~assets. Cash ~~provided~~used byin financing activities of continuing operations was $455.76 million for the first ~~three~~quarter ~~quarters~~ of ~~2023~~2024, which mainly reflected ~~net proceeds from notes payable, together with borrowings under our Revolving Credit Facility to fund working capital and capital expenditures, partially offset by~~ repayments of long-term debt ~~related to completed capital projects, and the payment of withholding taxes on employee stock-based awards~~.

SUNOPTA INC.

March 29, 2025 Form 10-Q

Discontinued Operations

Net cash provided by discontinued operations of $4.02 million for the first ~~three~~quarter ~~quarters~~ of 2024, reflected proceeds of $6.3 million from the remaining short-term note receivable related to the Frozen Fruit divestiture, partially offset by the settlement of pre-divestiture obligations.

Critical Accounting Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities, related revenues and expenses, and disclosure of gain and loss contingencies at the date of the financial statements. The estimates and assumptions made require us to exercise our judgment and are based on historical experience and various other factors that we believe to be reasonable under the circumstances. We continually evaluate the information that forms the basis of our estimates and assumptions as our business and the business environment generally changes.

There have been no material changes to the critical accounting estimates disclosed under the heading "Critical Accounting Estimates" in Item 7, "Management's Discussion and Analysis of Financial Condition and Results of Operations," of the 2024 Form 10-K.

Non-GAAP Measures

Adjusted Gross Margin

Gross margin is a measure of gross profit (equal to revenues less cost of goods sold) as a percentage of revenues. We use a measure of adjusted gross margin that excludes unusual items that are identified and evaluated on an individual basis, which due to their nature or size, we would not expect to occur as part of our normal business on a regular basis. We use the measure of adjusted gross margin to evaluate the underlying profitability of our revenue-generating activities within each reporting period. We believe that disclosing this non-GAAP measure provides users with a meaningful, consistent comparison of our profitability measure for the periods presented. However, the non-GAAP measure of adjusted gross margin should not be considered in isolation or as a substitute for gross margin calculated based on gross profit determined in accordance with U.S. GAAP. The following table presents a reconciliation of adjusted gross margin from reported gross margin calculated in accordance with U.S. GAAP.

First Quarter Ended	Revenues	Cost of Goods Sold		Gross Profit
March 29, 2025	$	$		$
As reported	201,628	171,309		30,319
Adjusted for:
Wastewater haul-off charges^(a)	-	(543	)	543
As adjusted	201,628	170,766		30,862

Reported gross margin				15.0%
Adjusted gross margin				15.3%

First Quarter Ended	Revenues	Cost of Goods Sold		Gross Profit
March 30, 2024	$	$		$
As reported	184,422	153,370		31,052
Adjusted for:
Start-up costs^(b)	-	(327	)	327
As adjusted	184,422	153,043		31,379

Reported gross margin				16.8%
Adjusted gross margin				17.0%

SUNOPTA INC.

March 29, 2025 Form 10-Q

Adjusted Earnings

When assessing our financial performance, we use an internal measure of adjusted earnings that excludes specific items recognized in other income or expense, and other unusual items that are identified and evaluated on an individual basis, which due to their nature or size, we would not expect to occur as part of our normal business on a regular basis. We believe that the identification of these excluded items enhances the analysis of the financial performance of our business when comparing those operating results between periods, as we do not consider these items to be reflective of normal business operations. The following table presents a reconciliation of adjusted earnings from earnings from continuing operations, which we consider to be the most directly comparable U.S. GAAP financial measure.

	First Quarter Ended
	March 29, 2025			March 30, 2024
			Per Share			Per Share
	$		$	$		$
Earnings from continuing operations	4,811			3,796
Dividends and accretion on preferred stock	(140	)		(433	)
Earnings from continuing operations attributable to common shareholders	4,671		0.04	3,363		0.03
Adjusted for:
Wastewater haul-off charges^(a)	543			-
Start-up costs^(b)	-			327
Other^(c)	94			-
Gain on sale of smoothie bowls product line^(d)	-			(1,800	)
Adjusted earnings from continuing operations	5,308		0.04	1,890		0.02

Adjusted EBITDA

We use a measure of adjusted EBITDA from continuing operations when assessing the performance of our operations, which we believe is useful to users' understanding of our operating profitability because it excludes non-operating expenses, such as interest, loss on sale of receivables, and income taxes, as well as non-cash expenses, such as depreciation, amortization, and stock-based compensation. In addition, our measure of adjusted EBITDA excludes other unusual items that affect the comparability of our operating performance, as identified in the preceding determination of adjusted earnings from continuing operations. We also use this measure of adjusted EBITDA to assess operating performance in connection with our employee incentive programs.

Although we use adjusted EBITDA as a measure to assess the performance of our business and for the other purposes set forth above, this measure has limitations as an analytical tool, and should not be considered in isolation, or as a substitute for an analysis of our results of operations as reported in accordance with U.S. GAAP. Some of these limitations are:

adjusted EBITDA from continuing operations does not reflect interest expense, or the cash requirements necessary to service interest payments on our indebtedness;

adjusted EBITDA from continuing operations excludes the discount taken on trade receivables sold to a third-party factor, which is a strategic means for us to improve working capital efficiency, while reducing our indebtedness and interest expense;

adjusted EBITDA from continuing operations does not include the payment or recovery of income taxes, which is a necessary element of our operations;

although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and adjusted EBITDA from continuing operations does not reflect any cash requirements for such replacements; and

adjusted EBITDA from continuing operations does not include non-cash stock-based compensation, which is an important component of our total compensation program for employees and directors.

SUNOPTA INC.

March 29, 2025 Form 10-Q

Because of these limitations, adjusted EBITDA should not be considered as a measure of discretionary cash available to us to invest in the growth of our business.

The following table presents a reconciliation of adjusted EBITDA from continuing operations from earnings from continuing operations, which we consider to be the most directly comparable U.S. GAAP financial measure.

	First Quarter Ended
	March 29, 2025	March 30, 2024
	$	$
Earnings from continuing operations	4,811	3,796
Interest expense, net	5,107	6,050
Loss on sale of receivables*	422	-
Income tax expense	147	277
Depreciation and amortization	9,726	8,576
Stock-based compensation	1,543	4,645
Adjusted for:
Wastewater haul-off charges^(a)	543	-
Start-up costs^(b)	-	327
Other^(c)	94	-
Gain on sale of smoothie bowls product line^(d)	-	(1,800	)
Adjusted EBITDA from continuing operations	22,393	21,871

* Included in other non-operating expense.

Footnotes

(a) For the first quarter of 2025, reflects temporary third-party haul-off charges for excess wastewater produced at our Midlothian, Texas, facility due to volume constraints within our current treatment system.

(b) For the first quarter of 2024, start-up costs mainly related to the scale-up of production at our plant-based beverage facility in Midlothian, Texas.

(c) For the first quarter of 2025, other reflects an unrealized foreign exchange loss associated with peso-denominated restricted cash held in Mexico and an unrelated legal settlement, which are recorded in foreign exchange loss and other expense, respectively.

(d) For the first quarter of 2024, reflects the pre-tax gain on sale of the smoothie bowls product line, which is recorded in other income.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

For quantitative and qualitative disclosures about market risk, see Part II, Item 7A, "Quantitative and Qualitative Disclosures about Market Risk," of the 2024 Form 10-K. There have been no material changes to our exposures to market risks since December 3028, ~~2023~~2024.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Our management has established disclosure controls and procedures designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Securities Exchange Act of 1934, as amended (the "Exchange Act") is recorded, processed, summarized and reported within time periods specified in the Securities and Exchange Commission's rules and forms. Such disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Exchange Act is accumulated and communicated to our management to allow timely decisions regarding required disclosure.

~~Under~~SUNOPTA the supervision and with the participation of our management, including our Chief Executive Officer ("CEO") and Chief Financial Officer ("CFO"), we conducted an evaluation of our disclosure controls and procedures (as such term is defined under Rule 13a-15(e) promulgated under the Exchange Act) as of the end of the period covered by this quarterly reportINC. ~~Based~~26 onMarch ~~this evaluation~~29, ~~our~~2025 ~~CEO~~Form ~~and our CFO concluded that our disclosure controls and procedures were effective as of September 28, 2024.~~10-Q

~~SUNOPTA~~Under ~~INC.~~the 35supervision ~~September~~and 28with the participation of our management, ~~2024~~including ~~Form~~our 10Chief Executive Officer ("CEO") and Chief Financial Officer ("CFO"), we conducted an evaluation of our disclosure controls and procedures (as such term is defined under Rule 13a-Q15(e) promulgated under the Exchange Act) as of the end of the period covered by this quarterly report. Based on this evaluation, our CEO and our CFO concluded that our disclosure controls and procedures were effective as of March 29, 2025.

Changes in Internal Control Over Financial Reporting

Our management, with the participation of our CEO and CFO, has evaluated whether any change in our internal control over financial reporting (as such term is defined under Rule 13a-15(f) promulgated under the Exchange Act) occurred during the quarter ended ~~September~~March 2829, ~~2024~~2025. Based on that evaluation, management concluded that there were no changes in our internal control over financial reporting during the quarter ended ~~September~~March 2829, ~~2024~~2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

SUNOPTA INC. 3627 ~~September~~March 2829, ~~2024~~2025 Form 10-Q

PART II - OTHER INFORMATION

Item 1. Legal Proceedings

For a discussion of legal proceedings, see note 1413 to the unaudited consolidated financial statements included under Part I, Item 1 of this report.

Item 1A. Risk Factors

Certain risks associated with our operations are discussed in Item 1A "Risk Factors" of our Annual Report on Form 10-K for the year ended December 3028, ~~2023~~2024. Except ~~There~~as set forth below, there have been no material changes to the previously reported risk factors as of the date of this quarterly report. Our previously reported risk factors should be carefully reviewed in connection with an evaluation of our Company.

Risks Related to Our Company, Business and Operations

The imposition of new or increased tariffs could have a material adverse effect on our business, financial condition and results of operations

In March 2025, the U.S. imposed 25% additional duties on goods from Canada and Mexico that are not exempt under the U.S.-Mexico-Canada Agreement ("USMCA"). On April 2, 2025, the U.S. announced a minimum 10% tariff on all imports and significant new "reciprocal tariffs" on imports from a wide range of countries. On April 9, 2025, the U.S. announced that the effective date of the reciprocal tariffs would be delayed for 90 days, except for China, but the minimum 10% tariff and additional duties on goods from Canada and Mexico remain in effect. We source a portion of our raw material ingredients and packaging globally, including from Canada and Mexico. Additionally, a portion of our total revenues are generated from the sale of fruit snack products imported into the U.S. from our Niagara, Ontario, facility. As a result, the imposition of tariffs by the U.S. will result in additional costs for us, as well as our suppliers, and increase the landed cost in the U.S. of our products produced in Canada that are not exempt under the USMCA, which could have a material adverse effect on our business, financial condition and results of operations.

In addition, the imposition of tariffs, the uncertainty about tariff implementation and tariff rates, and the actual or potential imposition of retaliatory tariffs could weaken the U.S. economy, resulting in lower demand for our products, which could have a material adverse effect on our business, financial condition and results of operations.

Item 5. Other Information

During the quarter ended ~~September~~March 2829, ~~2024~~2025, none of our directors or officers adopted or terminated a "Rule 10b5-1 trading arrangement" or "non-Rule 10b5-1 trading arrangement," as each term is defined in Item 408 of Regulation S-K.

Item 6. Exhibits

The following exhibits are included as part of this report.

Exhibit	Description
4.1	Third Amended and Restated Certificate of Incorporation of SunOpta Foods, Inc. (incorporated by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K filed on April 18, 2024).
31.1*	Certification by Brian Kocher, Chief Executive Officer, pursuant to Rule 13a - 14(a) under the Securities Exchange Act of 1934, as amended.
31.2*	Certification by Greg Gaba, Chief Financial Officer, pursuant to Rule 13a - 14(a) under the Securities Exchange Act of 1934, as amended.
32*	Certifications by Brian Kocher, Chief Executive Officer, and Greg Gaba, Chief Financial Officer, pursuant to 18 U.S.C. Section 1350.
101.INS*	XBRL Instance Document - the instance document does not appear in the Interactive Data File as its XBRL tags are embedded within the Inline XBRL document
101.SCH*	Inline XBRL Taxonomy Extension Schema Document
101.CAL*	Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF*	Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB*	Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE*	Inline XBRL Taxonomy Extension Presentation Linkbase Document
104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

SUNOPTA INC.

March 29, 2025 Form 10-Q

101.SCH*	Inline XBRL Taxonomy Extension Schema Document

101.CAL*	Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF*	Inline XBRL Taxonomy Extension Definition Linkbase Document

101.LAB*	Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE*	Inline XBRL Taxonomy Extension Presentation Linkbase Document

104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

* Filed herewith.

SUNOPTA INC. 3729 ~~September~~March 2829, ~~2024~~2025 Form 10-Q

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	SUNOPTA INC.
Date: November 5, 2024	/s/ Greg Gaba
Date: May 7, 2025	/s/ Greg Gaba
	Greg Gaba
	Chief Financial Officer (Authorized Signatory and Principal Financial Officer)

SUNOPTA INC. 3830 ~~September~~March 2829, ~~2024~~2025 Form 10-Q

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