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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON D.C. 20549

FORM 10-Q

(Mark One)


☒	Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.

For the quarterly period ended March 31, 2026


☐	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 001-38783

VILLAGE FARMS INTERNATIONAL, INC.

(Exact name of Registrant as Specified in its Charter)

     Ontario

     98-1007671

     (State or other Jurisdiction of
Incorporation or Organization)

     (I.R.S. Employer
Identification No.)

90 Colonial Parkway

Lake Mary, Florida

32746

(Address of Principal Executive Offices) (Zip Code)

(407) 936-1190

Issuer’s phone number, including area code

N/A

(Former name, former address and former fiscal year, if changed since last report)

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, without par value	VFF	The Nasdaq Stock Market LLC

Indicate by checkmark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the 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 (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐ Not Applicable ☐

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 definition of “large accelerated filer,” “accelerated filer,” “small reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

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 ☒

As of May 7, 2026, 114,288,686 common shares of the registrant were outstanding.

TABLE OF CONTENTS


		Page
PART I - FINANCIAL INFORMATION
Item 1.	Financial Statements
	Condensed Consolidated Statements of Financial Position		2
	Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)		3
	Condensed Consolidated Statements of Changes in Shareholders’ Equity and Mezzanine Equity		4
	Condensed Consolidated Statements of Cash Flows		5
	Notes to Condensed Consolidated Financial Statements		6
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		18
Item 3.	Quantitative and Qualitative Disclosures About Market Risk		29
Item 4.	Controls and Procedures		29

PART II - OTHER INFORMATION			31
Item 1.	Legal Proceedings		31
Item 1A.	Risk Factors		31
Item 2.	Unregistered Sale of Securities and Use of Proceeds		31
Item 3.	Defaults Upon Senior Securities		31
Item 4.	Mine Safety Disclosures		31
Item 5.	Other Information		31
Item 6.	Exhibits		32

	Signatures		33

Forward Looking Statements

As used in this Quarterly Report on Form 10-Q, the terms “Village Farms”, “Village Farms International”, the “Company”, “we”, “us”, “our” and similar references refer to Village Farms International, Inc. and our consolidated subsidiaries, and the term “Common Shares” refers to our common shares, no par value. Our financial information is presented in U.S. dollars and all references in this Quarterly Report on Form 10-Q to “$” means U.S. dollars and all references to “C$” means Canadian dollars.

This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of the United States Private Securities Litigation Reform Act of 1995, Section 27A of the U.S. Securities Act of 1933, as amended, (the "Securities Act") and Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and is subject to the safe harbor created by those sections. This Quarterly Report on Form 10-Q also contains "forward-looking information" within the meaning of applicable Canadian securities laws. We refer to such forward-looking statements and forward-looking information collectively as "forward-looking statements". Forward-looking statements may relate to the Company's future outlook or financial position and anticipated events or results and may include statements regarding the financial position, business strategy, budgets, expansion plans, litigation, projected production, projected costs, capital expenditures, financial results, tariffs, taxes, plans and objectives of or involving the Company or statements regarding the anticipated benefits from the closing of the transaction involving Vanguard Food LP. Particularly, statements regarding future results, performance, achievements, prospects or opportunities for the Company, the greenhouse vegetable or produce industry, the cannabis industry and market and our energy segment are forward-looking statements. In some cases, forward-looking information can be identified by such terms as "can", "outlook", "may", "might", "will", "could", "should", "would", "occur", "expect", "plan", "anticipate", "believe", "intend", "try", "estimate", "predict", "potential", "continue", "likely", "schedule", "objectives", or the negative or grammatical variation thereof or other similar expressions concerning matters that are not historical facts. The forward-looking statements in this Quarterly Report on Form 10-Q are subject to risks that may include, but are not limited to: our limited operating history in the cannabis and cannabinoids industry, including that of Pure Sunfarms, Corp. (“Pure Sunfarms”), Rose LifeScience Inc. (“Rose” or “Rose LifeScience”), Balanced Health Botanicals, LLC (“Balanced Health”) and Village Farms International B.V ("VFN"); the limited operational history of the Delta RNG Project in our energy segment; the legal status of the cannabis business of Pure Sunfarms, Rose, and VFN and the hemp business of Balanced Health and uncertainty regarding the legality and regulatory status of cannabis and cannabinoid (CBD) products in the United States; risks relating to the implementation and enforcement of the Continuing Appropriations, Agriculture, Legislative Branch, Military Construction and Veterans Affairs, and Extension Act, 2026; risks relating to the integration of Balanced Health and Rose into our consolidated business; risks relating to obtaining additional financing on acceptable terms, including our dependence upon credit facilities and dilutive transactions; potential difficulties in achieving and/or maintaining profitability; variability of product pricing; risks inherent in the cannabis, hemp, CBD, cannabinoids, and agricultural businesses; our market position and competitive position; our ability to leverage current business relationships for future business involving hemp and cannabinoids; the ability of Pure Sunfarms and Rose to cultivate and distribute cannabis in Canada as well as exports; risks related to the start-up of international production at our Netherlands operations under Leli; existing and new governmental regulations, including risks related to regulatory compliance and regarding obtaining and maintaining licenses required under the Cannabis Act (Canada), the Criminal Code and other Acts, S.C. 2018, C. 16 (Canada) for our Canadian operational facilities, and changes in our regulatory requirements; legal and operational risks relating to expected conversion of our greenhouses to cannabis production in Canada and in the United States; risks related to rules and regulations at the U.S. Federal (Food and Drug Administration and United States Department of Agriculture), state and municipal levels with respect to produce and hemp, cannabidiol-based products commercialization; retail consolidation, technological advances and other forms of competition; transportation disruptions; product liability and other potential litigation; retention of key executives; labor issues; uninsured and underinsured losses; vulnerability to rising energy costs; inflationary effects on costs of cultivation and transportation; recessionary effects on demand of our products; environmental, health and safety risks, foreign exchange exposure, risks associated with cross-border trade and the potential for tariffs and other trade restrictions; difficulties in managing our growth; restrictive covenants under our credit facilities; natural catastrophes; elevated interest rates; and tax risks.

The Company has based these forward-looking statements on factors and assumptions about future events and financial trends that it believes may affect its financial condition, results of operations, business strategy and financial needs. Although the forward-looking statements contained in this Quarterly Report on Form 10-Q are based upon assumptions that management believes are reasonable based on information currently available to management, there can be no assurance that actual results will be consistent with these forward-looking statements. Forward-looking statements necessarily involve known and unknown risks and uncertainties, many of which are beyond the Company’s control, which may cause the Company’s or the industry’s actual results, performance, achievements, prospects and opportunities in future periods to differ materially from those expressed or implied by such forward-looking statements. These risks and uncertainties include, among other things, the factors contained in the Company's filings with securities regulators, including this Quarterly Report on Form 10-Q and the Company’s most recently filed annual report on Form 10-K.

When relying on forward-looking statements to make decisions, the Company cautions readers not to place undue reliance on these statements, as forward-looking statements involve significant risks and uncertainties and should not be read as guarantees of future results, performance, achievements, prospects and opportunities. The forward-looking statements made in this Quarterly Report on Form 10-Q relate only to events or information as of the date on which the statements are made in this Quarterly Report on Form 10-Q. Except as required by law, the Company undertakes no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, after the date on which the statements are made or to reflect the occurrence of unanticipated events.

PART I - FINANCIAL INFORMATION

Item 1. FINANCIAL STATEMENTS

Village Farms International, Inc.

Condensed Consolidated Statements of Financial Position

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

(Unaudited)


	March 31, 2026			December 31, 2025
ASSETS
Current assets
Cash and cash equivalents	$	50,468		$	81,189
Restricted cash		5,059			5,063
Trade receivables, net		26,643			23,151
Inventories, net		44,420			41,519
Other receivables		1,374			324
Prepaid expenses and deposits		3,965			3,191
Total current assets		131,929			154,437
Non-current assets
Property, plant and equipment, net		189,560			185,712
Investments		6,276			6,276
Goodwill		43,653			44,365
Intangibles, net		22,458			23,647
Deferred tax asset		611			694
Right-of-use assets		3,821			4,066
Other assets		2,576			3,899
Total assets	$	400,884		$	423,096
LIABILITIES
Current liabilities
Trade payables	$	9,948		$	15,747
Current maturities of long-term debt		4,973			4,885
Accrued sales taxes		7,409			8,695
Accrued liabilities		17,117			13,960
Lease liabilities - current		1,198			1,198
Income tax payable		—			12,151
Other current liabilities		2,456			1,950
Total current liabilities		43,101			58,586
Non-current liabilities
Long-term debt		30,776			28,769
Deferred tax liability		17,711			18,494
Lease liabilities - non-current		3,530			3,855
Other non-current liabilities		1,979			3,330
Total liabilities		97,097			113,034
MEZZANINE EQUITY
Redeemable non-controlling interest		9,819			10,164
SHAREHOLDERS’ EQUITY
Common stock, no par value per share - unlimited shares authorized; 114,048,023 shares issued and outstanding at March 31, 2026 and 115,722,312 shares issued and outstanding at December 31, 2025.		392,898			392,380
Additional paid in capital		23,382			29,374
Accumulated other comprehensive loss		(12,654	)		(9,281	)
Retained earnings		(109,658	)		(112,575	)
Total shareholders’ equity		293,968			299,898
Total liabilities, mezzanine equity and shareholders’ equity	$	400,884		$	423,096

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

Village Farms International, Inc.

Condensed Consolidated Statements of Operations and Comprehensive Income (Loss)

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

(Unaudited)


	Three Months Ended March 31,
	2026			2025
Sales	$	50,238		$	39,680
Cost of sales		(29,252	)		(25,501	)
Gross profit		20,986			14,179
Selling, general and administrative expenses		(15,942	)		(14,619	)
Interest expense		(523	)		(701	)
Interest income		608			75
Foreign exchange (loss) gain		(548	)		(84	)
Other (loss) income		(184	)		22
Income (loss) before taxes and equity method investment income		4,397			(1,128	)
Provision for income taxes		(1,668	)		(983	)
Equity method investment income, net of tax		—			—
Income (loss) from continuing operations		2,729			(2,111	)
Loss from discontinued operations, net of tax		—			(5,004	)
Income (loss) including non-controlling interests		2,729			(7,115	)
Less: net loss attributable to non-controlling interests, net of tax		188			412
Net income (loss) attributable to Village Farms International, Inc. shareholders	$	2,917		$	(6,703	)
Basic income (loss) per share attributable to Village Farms International, Inc. shareholders from:
Continuing operations	$	0.03		$	(0.02	)
Discontinued operations		-			(0.04	)
Basic income (loss) per share attributable to Village Farms International, Inc. shareholders	$	0.03		$	(0.06	)
Diluted income (loss) per share attributable to Village Farms International, Inc. shareholders from:
Continuing operations	$	0.02		$	(0.02	)
Discontinued operations		-			(0.04	)
Diluted income (loss) per share attributable to Village Farms International, Inc. shareholders	$	0.02		$	(0.06	)
Weighted average number of common shares used in the computation of net income (loss) per share (in thousands):
Basic		115,257			112,337
Diluted		127,057			112,337
Income (loss) including non-controlling interests	$	2,729		$	(7,115	)
Other comprehensive income (loss):
Foreign currency translation adjustment		(3,530	)		965
Comprehensive loss including non-controlling interests		(801	)		(6,150	)
Comprehensive loss attributable to non-controlling interests		346			339
Comprehensive loss attributable to Village Farms International, Inc. shareholders	$	(455	)	$	(5,811	)

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

Village Farms International, Inc.

Condensed Consolidated Statements of Changes in Shareholders’ Equity and Mezzanine Equity

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

(Unaudited)


	Three Months Ended March 31, 2026
	Number of Common Shares			Common Stock		Additional Paid in Capital			Accumulated Other Comprehensive (loss) income			Retained Earnings			Total Shareholders’ Equity			Mezzanine Equity
Balance January 1, 2026		115,722		$	392,380	$	29,374		$	(9,281	)	$	(112,575	)	$	299,898		$	10,164
Shares Repurchased		(2,065	)		-		(6,368	)		-			-			(6,368	)		-
Share-based compensation		—			—		376			—			—			376			—
Shares issued on exercise of warrants		221			130		—			—			—			130			—
Shares issued on exercise of options		170			388		—			—			—			388			—
Cumulative translation adjustment		—			—		—			(3,373	)		—			(3,373	)		(157	)
Net income (loss)		—			—		—			—			2,917			2,917			(188	)
Balance at March 31, 2026		114,048		$	392,898	$	23,382		$	(12,654	)	$	(109,658	)	$	293,968		$	9,819


	Three Months Ended March 31, 2025
	Number of Common Shares		Common Stock		Additional Paid in Capital		Accumulated Other Comprehensive Loss			Retained Earnings			Total Shareholders’ Equity			Mezzanine Equity
Balance January 1, 2025		112,337	$	387,349	$	30,604	$	(18,932	)	$	(145,016	)	$	254,005		$	9,953
Share-based compensation		—		—		145	—			—				145		—
Cumulative translation adjustment	—		—		—			890		—				890			75
Net (loss) income	—		—		—		—				(6,703	)		(6,703	)		(412	)
Balance at March 31, 2025		112,337	$	387,349	$	30,749	$	(18,042	)	$	(151,719	)	$	248,337		$	9,616

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

Village Farms International, Inc.

Condensed Consolidated Statements of Cash Flows

(In thousands of United States dollars)

(Unaudited)


	Three Months Ended March 31,
	2026			2025
Cash flows provided by (used in) operating activities:
Income (loss) from continuing operations including non-controlling interests	$	2,729		$	(2,111	)
Adjustments to reconcile net income (loss) attributable to Village Farms International, Inc. shareholders to net cash used in operating activities of continuing operations:
Depreciation and amortization		4,303			4,439
Amortization of deferred charges		72			—
Interest expense		523			701
Interest paid on long-term debt		(394	)		(794	)
Unrealized foreign exchange (gain) loss		71			49
Loss on disposal of assets		118			—
Non-cash lease expense		244			196
Share-based compensation		376			145
Deferred income taxes		(415	)		(663	)
Changes in non-cash working capital items		(24,390	)		(5,729	)
Net cash used in operating activities from continuing operations		(16,763	)		(3,767	)
Cash flows used in investing activities:
Purchases of property, plant and equipment		(9,227	)		(1,249	)
Other investing activities		—			(300	)
Net cash used in investing activities from continuing operations		(9,227	)		(1,549	)
Cash flows (used in) provided by financing activities:
Proceeds from borrowings		3,589			—
Repayments on borrowings		(1,208	)		(1,384	)
Share repurchases		(6,368	)		—
Proceeds from exercise of warrants and options		469			—
Other financing activities		(186	)		—
Net cash used in financing activities from continuing operations		(3,704	)		(1,384	)
Discontinued Operations
Net cash (used in) provided by operating activities from discontinued operations		—			(2,610	)
Net cash (used in) provided by investing activities from discontinued operations		—			(1,290	)
Net cash (used in) provided by financing activities from discontinued operations		—			1,000
Net cash flows used in discontinued operations		—			(2,900	)
Effect of exchange rate changes on cash and cash equivalents		(1,031	)		93
Net increase (decrease) in cash, cash equivalents and restricted cash		(30,725	)		(9,507	)
Cash, cash equivalents and restricted cash, beginning of period		86,252			24,631
Cash, cash equivalents and restricted cash, end of period	$	55,527		$	15,124

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

VILLAGE FARMS INTERNATIONAL, INC.

Notes to Condensed Consolidated Financial Statements

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

BUSINESS, BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES

Nature of Business

Village Farms International, Inc. (“VFF” and, together with its subsidiaries, the “Company”, “we”, “us”, or “our”) is a corporation existing under the Ontario Business Corporations Act. VFF’s principal operating subsidiaries as of March 31, 2026 were Pure Sunfarms Corp. (“Pure Sunfarms”), Balanced Health Botanicals, LLC (“Balanced Health”), Village Farms International, B.V. (“VFN”), Village Farms Canada Limited Partnership ("VFCLP"), Village Farms, L.P., and VF Clean Energy, Inc. (“VFCE”). VFF also owns an 80% interest in Rose LifeScience Inc. (“Rose”).

The address of the registered office of VFF is 79 Wellington Street West, Suite 3300, Toronto, Ontario, Canada, M5K 1N2.

The address of the principal executive office of VFF is 90 Colonial Center Pkwy, Lake Mary, Florida, United States, 32746.

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

VFF's wholly owned subsidiary, Pure Sunfarms, is a vertically integrated licensed producer and supplier of cannabis products sold to customers throughout Canada and internationally. Through its 80% ownership interest of Rose, the Company has a substantial presence in the Province of Quebec as a cannabis supplier, producer and commercialization expert. The Company’s wholly owned subsidiary, Balanced Health, develops and sells high quality, cannabidiol (“CBD”) based products including ingestible, edible and topical applications within the U.S. Its wholly owned subsidiary, VFN, is a vertically integrated licensed producer and supplier of cannabis products sold to coffee shops in the Netherlands. VFF also owns and operates a sophisticated, highly intensive agricultural greenhouse facility in British Columbia, where it produces premium-quality tomatoes.

Basis of Presentation

The accompanying condensed consolidated financial statements are unaudited and have been prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) for interim financial information and with the instructions for Form 10-Q and Rule 10-01 of Regulation S-X. Pursuant to these rules and regulations, certain information and footnote disclosures normally included in the annual audited consolidated financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. The accompanying Condensed Consolidated Statement of Financial Position as of December 31, 2025 is derived from the Company’s audited financial statements as of that date. Because certain information and footnote disclosures have been condensed or omitted, these condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements and notes thereto as of and for the year ended December 31, 2025 contained in the Company’s 2025 Annual Report on Form 10-K. In management’s opinion, all normal and recurring adjustments considered necessary for a fair presentation of the financial position, results of operations, and cash flows for the periods presented have been included. When necessary, certain prior year amounts have been reclassified to conform with the current period presentation. Interim period operating results do not necessarily indicate the results that may be expected for any other interim period or for the full fiscal year. The Company believes that the disclosures made in these condensed consolidated financial statements are adequate to make the information not misleading.

As of May 30, 2025, the Company determined that certain assets that had been disposed of met the criteria for discontinued operations presentation. For the three month period ended March 31, 2025, the operating results associated with the assets disposed of have been reclassified into net income (loss) from discontinued operations, net of income taxes, in the Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) and the cash flows from the Company’s discontinued operations are presented in the Condensed Consolidated Statements of Cash Flows for all periods presented.

Certain prior period balances related to the Company's reportable segments and discontinued operations have been reclassified to conform to the current presentation in the financial statements and accompanying notes. The notes to the condensed consolidated financial statements are presented on a continuing operations basis unless otherwise noted. Refer to Note 7 Discontinued Operations and Disposals for additional information on the Company's discontinued operations.

Principles of Consolidation

The accompanying condensed consolidated financial statements include Village Farms International, Inc. and its subsidiaries and include the accounts of all majority-owned subsidiaries over which the Company exercises control and, when applicable, entities in which the Company has a controlling financial interest. All significant intercompany balances and transactions have been eliminated in consolidation. Other parties’ interests in entities that the Company consolidates are reported as non-controlling interests within equity, except for mandatorily redeemable non-controlling interests, which are recorded within mezzanine equity. Net income or loss attributable to non-controlling interests is reported as a separate line item below net income or loss. The Company applies the equity method of accounting for its investments in entities for which it does not have a controlling financial interest, but over which it has the ability to exert significant influence.

Translations of Foreign Currencies

VILLAGE FARMS INTERNATIONAL, INC.

Notes to Condensed Consolidated Interim Financial Statements

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

The assets and liabilities of foreign subsidiaries with a functional currency other than the U.S. dollar are translated into U.S. dollars at period-end exchange rates, with resulting translation gains or losses included within other comprehensive income or loss. Revenue and expenses are translated into U.S. dollars at average rates of exchange during the applicable period. Substantially all of the Company’s foreign operations use their local currency as their functional currency. For foreign operations for which the local currency is not the functional currency, the operation’s non-monetary assets are remeasured into U.S. dollars at historical exchange rates. All other accounts are remeasured at current exchange rates, with both gains or losses from remeasurement and currency gains or losses from transactions executed in currencies other than the functional currency included in foreign exchange (loss) gain.

In these condensed consolidated financial statements, “$” means U.S. dollars and “C$” means Canadian dollars, unless otherwise noted.

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


	As of
	March 31, 2026		March 31, 2025		December 31, 2025
Spot rate		0.7177		0.6966		0.7294
Three-month period ended		0.7289		0.6965	N/A

General Economic, Regulatory and Market Conditions

The Company has experienced, and may continue to experience, direct and indirect negative effects on its business and operations from negative economic, regulatory and market conditions, including inflationary effects on fuel prices, labor and materials costs, elevated interest rates, tariffs, potential recessionary impacts and supply chain disruptions that could negatively affect demand for new projects and/or delay existing project timing or cause increased project costs. The extent to which general economic, regulatory and market conditions could affect the Company’s business, operations and financial results is uncertain as it will depend upon numerous evolving factors that management may not be able to accurately predict, and, therefore, any future impacts on the Company’s business, financial condition and/or results of operations cannot be quantified or predicted with specificity.

Recent Accounting Pronouncements

No accounting pronouncements recently issued or newly effective have had, or are expected to have, a material impact on the Company’s Condensed Consolidated Financial Statements.

2. INVENTORIES

Inventories consisted of the following as of:


Classification	March 31, 2026		December 31, 2025
Cannabis:
Raw materials	$	4,737	$	5,852
Work-in-progress		9,787		10,599
Finished goods		22,069		20,227
Packaging		3,932		2,965
Produce:
Crop inventory		3,895		1,876
Inventory	$	44,420	$	41,519

3. REVENUES

The Company’s revenue transactions consist of a single performance obligation to transfer promised goods at a fixed price. Quantities to be delivered to the customer are determined at a point near the date of delivery through purchase orders received from the customer. The Company recognizes revenue when it has fulfilled a performance obligation, which is typically when the customer receives the goods. Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring the goods. The amount of revenue recognized is measured at the fair value of the consideration received or receivable, reduced for excise duty, returns, and other customer credits, such as trade discounts and volume rebates. Payment terms are consistent with terms standard to the markets the Company serves.

The following tables disaggregate the Company’s net revenues from continuing operations by major source.

VILLAGE FARMS INTERNATIONAL, INC.

Notes to Condensed Consolidated Interim Financial Statements

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


	For the Three Months Ended March 31,
Classification	March 31, 2026		March 31, 2025
Cannabis:
Canadian Branded (1)	$	23,848	$	22,761
Canadian Non-Branded		5,377		6,279
International Exports		14,581		5,388
U.S. Cannabis		3,133		3,904
Netherlands Branded		2,663		486
Other		142		409
Total Cannabis		49,744		39,227
Other
Produce		108		27
Clean Energy		386		426
Total Revenue	$	50,238	$	39,680

(1)

Canadian Branded revenues are shown net of excise tax on products. Excise tax on products was $15,903 and $13,947 for the three months ended March 31, 2026 and 2025, respectively.

4. PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment consisted of the following as of:


Classification	March 31, 2026			December 31, 2025
Land	$	13,857		$	14,040
Leasehold and land improvements		9,269			9,388
Buildings		191,147			188,464
Machinery and equipment		59,406			58,672
Construction in progress		25,445			22,410
Less: Accumulated depreciation		(109,564	)		(107,262	)
Property, plant and equipment, net	$	189,560		$	185,712

Depreciation expense on property, plant and equipment, was $3,494 and $3,645 for the three months ended March 31, 2026 and 2025, respectively.

Capitalized interest was $0 and $260 for the three months ended March 31, 2026 and 2025.

5. GOODWILL AND INTANGIBLE ASSETS

Goodwill

The following table presents the changes in the carrying value of goodwill by reportable segment for the three months ended March 31, 2026:


	Cannabis
Balance as of December 31, 2025	$	44,365
Foreign currency translation adjustment		(712	)
Balance as of March 31, 2026	$	43,653

VILLAGE FARMS INTERNATIONAL, INC.

Notes to Condensed Consolidated Interim Financial Statements

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

Intangible Assets

Intangible assets consisted of the following as of:


Classification	March 31, 2026			December 31, 2025
Licenses	$	18,186		$	18,508
Brand and trademarks*		12,623			12,678
Customer relationships		12,927			13,137
Computer software		544			1,621
Other*		144			144
Less: Accumulated amortization		(12,716	)		(13,191	)
Less: Impairments*		(9,250	)		(9,250	)
Intangibles, net	$	22,458		$	23,647

* Includes indefinite-lived intangible assets

The expected future amortization expense for definite-lived intangible assets as of March 31, 2026 was as follows:


Fiscal period
Remainder of 2026	$	2,117
2027		3,199
2028		1,850
2029		1,850
2030		1,849
Thereafter		7,987
Intangibles, net	$	18,852

Amortization expense was $809 and $794 for the three months ended March 31, 2026 and 2025, respectively.

Assessment for Indicators of Impairment

At the end of each reporting period, the Company assesses whether events or changes in circumstances have occurred that would indicate an impairment. The Company considers external and internal factors, including overall financial performance and relevant entity-specific factors, as part of this assessment.

During the three months ended March 31, 2026 and 2025, the Company considered qualitative factors in assessing for impairment indicators for the Canadian Cannabis reporting unit.

At March 31, 2026 and March 31, 2025, the Company concluded that no impairment indicators existed as no events or circumstances occurred that would, more likely than not, reduce the fair value of the reporting unit to be below its carrying amounts.

6. LINE OF CREDIT AND LONG-TERM DEBT

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


	March 31, 2026		December 31, 2025
Term Loan - (“FCC Term Loan”) - repayable by monthly principal payments of $164 and accrued interest at Secured Overnight Financing Rate (“SOFR”) plus an applicable margin per annum (6.84% at March 31, 2026); matures February 3, 2031	$	15,365	$	15,855
Term loan - ("Pure Sunfarms Term Loan Facility") - C$27.4M - repayable by quarterly principal payments of C$1.0 million and accrued interest at Canadian prime interest or Canadian Overnight Repo Rate Average ("CORRA") plus an applicable margin (4.84% at March 31, 2026), matures February 7, 2029.		20,384		17,799
Total	$	35,749	$	33,654
Less current maturities		4,973		4,885
Total long-term debt	$	30,776	$	28,769

VILLAGE FARMS INTERNATIONAL, INC.

Notes to Condensed Consolidated Interim Financial Statements

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

As collateral for the FCC Term Loan, the Company has provided promissory notes and a first priority security interest over its accounts receivable and inventory. In addition, the Company has granted full recourse guarantees and security therein. The carrying value of the assets and securities pledged as collateral for the FCC Term Loan as of March 31, 2026 and December 31, 2025 was $66,682 and $84,653, respectively.

On April 10, 2025, the Company entered into an Amended and Restated Credit Agreement (the “A&R Credit Agreement”) with Farm Credit Canada (“FCC”) as the lender, which amended and restated the terms of the FCC Term Loan. Among other things, the A&R Credit Agreement (i) adds the Company as a new borrower, (ii) adds VF Clean Energy, Inc. as a new guarantor, and (iii) provides more favorable financial covenants. On March 30, 2026, the Company extended the maturity date of the FCC Term Loan to February 3, 2031 and reduced the applicable margin on the annual interest rate by 50 basis points.

The Company has a secured credit facility with a Canadian chartered bank as administrative agent with an aggregate borrowing capacity of C$37.4 million, consisting of a maximum C$10.0 million revolving credit facility (the "Pure Sunfarms Revolving Credit Facility"), and a C$27.4 million term loan facility (the "Pure Sunfarms Term Loan Facility", and collectively with the Pure Sunfarms Revolving Credit Facility, the "Pure Sunfarms Secured Credit Facilities"). The Pure Sunfarms Secured Credit Facilities are secured by the Delta 2 and Delta 3 greenhouse facilities.

On February 20, 2026, the Company amended and extended its Pure Sunfarms Secured Credit Facility, which increased loan commitments with existing lenders by C$15 million and extending maturities one year to February 2029. The incremental debt financing comes in the form of a delayed draw term loan, from which the Company drew an initial CAD $5 million on February 20, 2026. All other terms of the credit facility loans remain unchanged.

The loans under the Pure Sunfarms Secured Credit Facilities will accrue interest at a rate equal to, at the company's option, (a) the Canadian Prime Rate plus the applicable margin, or (b) the Canadian Overnight Repo Rate Average plus the applicable margin. The applicable margin for the Pure Sunfarms Secured Credit Facility is determined based upon Pure Sunfarms leverage ratio. The Pure Sunfarms Secured Credit Facilities can be drawn for advances of up to C$10.0 million.

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

At March 31, 2026, the Company was compliant with all of its financial covenants.

The weighted average annual interest rate on short-term borrowings as of March 31, 2026 and December 31, 2025 was 5.7% and 8.2%, respectively.

Accrued interest payable on all long-term debt as of March 31, 2026 and December 31, 2025 was $172 and $166, respectively, and these amounts are included in accrued liabilities in the Condensed Consolidated Statements of Financial Position.

The aggregate annual principal maturities of long-term debt for the remainder of 2026 and thereafter are as follows:


Remainder of 2026	$	3,673
2027		5,026
2028		4,832
2029		14,210
2030		1,961
After		6,047
Total	$	35,749

7. DISCONTINUED OPERATIONS AND DISPOSALS

On May 30, 2025, the Company closed on a transaction with a newly-formed holding company, Vanguard Food, LP (“Vanguard”), backed by private investment firms, to privatize certain assets and operations of its Produce operations (the "Transaction"). As part of the Transaction, the Company received $40 million in cash proceeds, subject to working capital adjustments, and common units representing a 37.9% equity ownership interest in Vanguard with an estimated fair value of $3.5 million. In accordance with ASC 810-10-40, the Company recognized a gain upon deconsolidation of the Produce operations, based on the fair value of consideration received and fair value of Vanguard common units, less the carrying amount of net assets disposed. The gain on sale was recorded based on available data and management estimates as of March 31, 2026 and is subject to post-closing selling price adjustments which could result in further adjustments to the gain on sale. The following table outlines the calculation of the initial gain on sale of the Transaction:

VILLAGE FARMS INTERNATIONAL, INC.

Notes to Condensed Consolidated Interim Financial Statements

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


Cash proceeds	$	35,000
Cash held in indemnity escrow (Restricted cash)		5,000
Fair value of Vanguard common units		3,530
Carrying value of lease to Vanguard		1,245
Estimated future distributions for working capital adjustments and other obligations		(4,290	)
Less: Carrying value of net assets disposed		(20,500	)
Gain on sale	$	19,985

The Company concluded the Transaction met the criteria under ASC 205-20 to be classified as discontinued operations because the Transaction represented a strategic shift in the Company's business model that had a major effect on the Company’s operations and financial results. Accordingly, the Condensed Consolidated Statements of Operations and Comprehensive Income (loss) have been adjusted for the prior period to reflect the historical results as discontinued operations.

Details of the net income (loss) from discontinued operations, net of tax, were as follows for the:


	Three Months Ended March 31,
	2026		2025
Sales	$	—	$	37,394
Cost of sales		—		(40,233	)
Gross loss		—		(2,839	)
Selling, general and administrative expenses		—		(2,161	)
Interest expense		—		(4	)
Gain on sale of assets		—		—
(Loss) income from discontinued operations before income taxes		—		(5,004	)
Recovery of (provision for) income taxes		—		—
Net (loss) income from discontinued operations, net of tax	$	-	$	(5,004	)

8. EQUITY INVESTMENTS

On May 30, 2025, the Company closed on the Transaction with Vanguard (Note 7). As part of the Transaction, the Company received a 37.9% equity ownership interest in Vanguard with an estimated fair value of $3,530, included in investments within the Condensed Consolidated Statements of Financial Position. We account for our investment in Vanguard under the equity method of accounting in accordance with ASC 323, Investments – Equity Method and Joint Ventures. Under the equity method of accounting, the initial investment is recorded at cost and the investment is subsequently adjusted for, among other things, its proportionate share of earnings or losses. However, given the capital structure of the Vanguard arrangement, we apply the Hypothetical Liquidation Book Value ("HLBV") method to determine the allocation of profits and losses since our liquidation rights and priorities, as defined by the Amended and Restated Limited Partnership Agreement of Vanguard Food LP (the "Vanguard LPA"), differ from our underlying ownership interest. The HLBV method calculates the proceeds that would be attributable to each partner in an investment based on the liquidation provisions of the Vanguard LPA if the partnership was to be liquidated at book value as of the balance sheet date. Each partner’s allocation of income or loss in the period is equal to the change in the amount of net equity they are legally able to claim based on a hypothetical liquidation of the entity at the end of a reporting period compared to the beginning of that period, adjusted for any capital transactions. Based on the terms of the Vanguard LPA and related Transaction documents, we recorded income on equity method investments attributable to Vanguard of $0 for three months ended March 31, 2026.

9. FINANCIAL INSTRUMENTS

Financial assets and liabilities are recognized on the Condensed Consolidated Statements of Financial Position at fair value in a hierarchy for those assets and liabilities measured at fair value on a recurring basis.

At March 31, 2026 and December 31, 2025, the Company’s financial instruments included cash and cash equivalents, restricted cash, trade receivables, other receivables, line of credit, trade payables, income tax payables, accrued liabilities, lease liabilities, and long-term debt. The carrying value of cash, cash equivalents, and restricted cash, trade receivables, other receivables, trade payables, income tax payables, and accrued liabilities approximate their fair values due to the short-term maturity of these

VILLAGE FARMS INTERNATIONAL, INC.

Notes to Condensed Consolidated Interim Financial Statements

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

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

There were no financial instruments categorized as Level 3 at March 31, 2026 and December 31, 2025. There were no transfers of assets or liabilities between levels during the three months ended March 31, 2026 and 2025.

10. RELATED PARTY TRANSACTIONS AND BALANCES

The Company leases its Rose office building from a former Company employee who also owns a minority interest in Rose. For the three months ended March 31, 2026 and 2025, the Company paid C$35 and C$36 respectively, to lease this office space.

The Company has entered into a Transition Services Agreement with Village Fresh, a Vanguard subsidiary, to provide certain transition services for specified fees and a multi-year Sales, Marketing & Distribution Agreement with Village Fresh, which sets forth the terms, conditions, rights and obligations governing the sales, marketing and distribution by Village Fresh of all hydroponically grown tomatoes produced at VFCLP's British Columbia greenhouse growing facilities. The price paid by Village Fresh to the Company is based on amounts paid by Village Fresh’s customers, net of a marketing fee. Under this agreement, the Company recorded revenues of $108 for the three months ended March 31, 2026 and had outstanding receivables of $108 as of March 31, 2026 and $637 as of December 31, 2025.

11. INCOME TAXES

The Company has recorded a provision for income taxes of $1,668 for the three months ended March 31, 2026, compared with a provision for income taxes of $983 for the same period last year.

The Company’s income tax provision is based on management’s estimate of the effective tax rate for the full year. The tax (provision) benefit in any period will be affected by, among other things, permanent, as well as discrete items, differences in the deductibility of certain items, changes in the valuation allowance related to net deferred tax assets, in addition to changes in tax legislation. As a result, the Company may experience significant fluctuations in the effective book tax rate (that is, tax expense divided by pre-tax book income) from period to period.

In order to fully utilize the net deferred tax assets, the Company will need to generate sufficient taxable income in future years. The Company analyzed all positive and negative evidence to determine if, based on the weight of available evidence, it is more likely than not to realize the benefit of the net deferred tax assets. The recognition of the net deferred tax assets and related tax benefits is based upon the Company’s conclusions regarding, among other considerations, estimates of future earnings based on information currently available and current and anticipated customers, contracts, and product introductions, as well as historical operating results and certain tax planning strategies.

Based on the analysis of all available evidence, both positive and negative, the Company has concluded that it does not have the ability to generate sufficient taxable income in the necessary periods to utilize the entire benefit for its deferred tax assets. Accordingly, the Company established a valuation allowance of $50,039 as of March 31, 2026 and $47,425 as of December 31, 2025. The Company cannot presently estimate what, if any, changes to the valuation of its deferred tax assets may be deemed appropriate in the future.

As of March 31, 2026, the Company’s net deferred tax assets totaled $611 and were primarily derived from a tax planning strategy to utilize a portion of its existing net operating loss carryforwards.

12. SEGMENT AND GEOGRAPHIC INFORMATION

The Company regularly monitors its reportable segments to determine if changes in facts and circumstances would indicate whether changes in the determination or aggregation of operating segments are necessary. During the first quarter of 2026, the Company realigned our structure toward a unified cannabis operating model, including changes and additions to our leadership team, to gain operational efficiencies and better align our resources with customer and market opportunities. As a result of the reorganization, the Company revised its reportable segment structure to reflect how the Chief Executive Officer, as chief operating decision maker ("CODM"), manages the business, allocates resources, and assesses performance.

Therefore, the Company's operations are now organized, managed and classified into one reportable segment - Cannabis. The Company’s remaining operations are not reportable segments, as defined by the applicable accounting standard, and are classified as Other.

We have recast certain prior period amounts to conform to the way we internally manage and monitor our business.

VILLAGE FARMS INTERNATIONAL, INC.

Notes to Condensed Consolidated Interim Financial Statements

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

Segment reporting is prepared on the same basis that the Company’s Chief Executive Officer, who is the CODM, manages the business, makes operating decisions and assesses performance. The Cannabis segment, which is comprised of the previously reported Canadian Cannabis, U. S. Cannabis, and Cannabis - Netherlands segments, produces and supplies cannabis and CBD-based health and wellness products to be sold to consumers via provincial governments, coffee shops, licensed providers, and direct to consumers in the United States.

Other is comprised of the previously reported Produce and Clean Energy segments and includes operations that are not reported in the Company’s Cannabis segment.

Corporate expenses reflect the operations costs that are not allocated to the Company's operating units.

The accounting policies of the Cannabis segment are the same as those described in the summary of business, basis of presentation and significant accounting policies. The Company evaluates segment performance based on segment operating income (loss).

The CODM uses segment operating income (loss) to allocate resources (including employees, property, and financial or capital resources), predominantly in the annual budget and forecasting process. The CODM considers budget-to-actual variances and current-to-prior year variances on a monthly basis for the operating income (loss) when making decisions about allocating capital and personnel to the Cannabis segment.

Discontinued operations are not included in the applicable reportable segment.

The following tables reflect the reconciliation of segment revenue and significant segment expenses from continuing operations reconciled to the consolidated income (loss) from continuing operations before income taxes and equity method investments:


	For the Three Months Ended March 31, 2026
	Cannabis			Segment Totals			Other			Corporate			Total
Sales to external customers	$	49,744		$	49,744		$	494		$	—		$	50,238
Cost of sales		(28,436	)		(28,436	)		(816	)		—			(29,252	)
Selling, general and administrative expenses		(14,820	)		(14,820	)		(512	)		(610	)		(15,942	)
Segment operating income (loss)	$	6,488		$	6,488		$	(834	)	$	(610	)	$	5,044
Reconciliation of segment operating income to income from continuing operations before taxes and income from equity method investments(1)
Other expense, net (2)														(647	)
Income from continuing operations before taxes and income from equity method investments													$	4,397


	For the Three Months Ended March 31, 2025
	Cannabis			Segment Totals			Other			Corporate			Total
Sales to external customers	$	39,227		$	39,227		$	453		$	—		$	39,680
Cost of sales		(23,958	)		(23,958	)		(1,543	)		—			(25,501	)
Selling, general and administrative expenses		(11,736	)		(11,736	)		(743	)		(2,140	)		(14,619	)
Segment operating income (loss)	$	3,533		$	3,533		$	(1,833	)	$	(2,140	)	$	(440	)
Reconciliation of segment operating income to loss from continuing operations before taxes and income from equity method investments(1)
Other expense, net (2)														(688	)
Loss from continuing operations before taxes and income from equity method investments													$	(1,128	)

(1)

The significant expense categories and amounts align with the segment-level information that is regularly provided to the chief operating decision maker.

(2)

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

(3)

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

VILLAGE FARMS INTERNATIONAL, INC.

Notes to Condensed Consolidated Interim Financial Statements

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

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


	For the Three Months Ended March 31, 2026
	Cannabis		Segment Totals		Other		Corporate		Consolidated Totals
Interest income		222		222		105		281		608
Interest expense		239		239		284		—		523
Depreciation and amortization		3,331		3,331		785		15		4,131	^
Share based compensation		77		77		—		299		376	^
Other significant noncash items:
Non-cash lease expense		190		190		—		54		244
Expenditures for segment assets		7,981		7,981		1,246		—		9,227


	For the Three Months Ended March 31, 2025
	Cannabis		Segment Totals		Other		Corporate		Consolidated Totals
Interest income		51		51		—		24		75
Interest expense		191		191		510		—		701
Depreciation and amortization		2,938		2,938		1,457		44		4,439	^
Share based compensation		48		48		13		84		145	^
Other significant noncash items:
Non-cash lease expense		156		156		—		40		196
Expenditures for segment assets		1,232		1,232		17		—		1,249

The following tables summarize our total assets by reportable segment:


	March 31, 2026		December 31, 2025
Assets
Cannabis	$	330,926	$	335,428
Total assets for reportable segment	$	330,926	$	335,428
Other		49,199		49,038
Corporate		20,759		38,630
Consolidated total assets from continuing operations	$	400,884	$	423,096

The Company’s primary operations are in the United States, Canada, and the Netherlands. The following tables summarizes our assets by geographic location:


Total assets from continuing operations	March 31, 2026		December 31, 2025
United States	$	34,021	$	36,039
Canada		337,811		363,702
Netherlands		29,052		23,355
	$	400,884	$	423,096

Long-lived assets from continuing operations	March 31, 2026		December 31, 2025
United States	$	26,786	$	28,970
Canada		216,279		218,582
Netherlands		25,890		21,107
	$	268,955	$	268,659

VILLAGE FARMS INTERNATIONAL, INC.

Notes to Condensed Consolidated Interim Financial Statements

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

13. INCOME (LOSS) PER SHARE

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


	Three months ended March 31,
	2026		2025
Numerator:
Net income (loss) attributable to Village Farms International, Inc. shareholders from continuing operations	$	2,917	$	(1,699	)
Loss from discontinued operations, net of tax	$	—	$	(5,004	)
Denominator:
Weighted average number of common shares - basic		115,257		112,337
Effect of dilutive securities- share-based employee options and awards		11,800		—
Weighted average number of common shares - diluted		127,057		112,337
Antidilutive options and awards		14,360		6,692
Net income (loss) per ordinary share:
Basic income (loss) per share attributable to Village Farms International, Inc. shareholders from:
Continuing operations	$	0.03	$	(0.02	)
Discontinued operations		-		(0.04	)
Basic income (loss) per share attributable to Village Farms International, Inc. shareholders	$	0.03	$	(0.06	)
Diluted income (loss) per share attributable to Village Farms International, Inc. shareholders from:
Continuing operations	$	0.02	$	(0.02	)
Discontinued operations		-		(0.04	)
Diluted income (loss) per share attributable to Village Farms International, Inc. shareholders	$	0.02	$	(0.06	)

14. SHAREHOLDERS’ EQUITY AND SHARE-BASED COMPENSATION

Share-based compensation

Share-based compensation expense was $376 and $145 for the three months ended March 31, 2026 and March 31, 2025, respectively.

Stock option activity for the three months ended March 31, 2026 was as follows:


	Number of Options			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (years)		Aggregate Intrinsic Value
Outstanding at December 31, 2025		6,462,746		$	3.42		6.79	$	90
Granted		—		$	—		—	$	—
Exercised		(170,001	)	$	1.06
Forfeited/expired		(255,000	)	$	5.59
Outstanding at March 31, 2026		6,037,745		$	3.38		5.37	$	7,143
Exercisable at March 31, 2026		4,854,220		$	3.98		5.43	$	4,865

VILLAGE FARMS INTERNATIONAL, INC.

Notes to Condensed Consolidated Interim Financial Statements

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

Restricted shares activity for the three months ended March 31, 2026 was as follows:


	Number of Restricted Stock Grants			Weighted Average Grant Date Fair Value
Outstanding at December 31, 2025		2,545,524		$	0.73
Granted		—			—
Vested and issued		—			—
Forfeited		(439,148	)		0.60
Outstanding at March 31, 2026		2,106,376		$	0.76
Exercisable at March 31, 2026		—		$	-

Share buyback program

On September 29, 2025, the Board of Directors authorized a $10 million share repurchase for up to 5,687,000 of the Company’s outstanding common stock. Such purchases may be made on the open market, in private transactions and/or pursuant to purchase plans designed to comply with Rule 10b5-1 under the Securities Exchange Act of 1934, as amended. The Company is not obligated to repurchase any specific number of shares, and the timing and actual number of shares repurchased will depend on a variety of factors, including the Company’s stock price, general economic, business and market conditions, and alternative investment opportunities. The Company may discontinue any repurchases of its common stock at any time without prior notice. During the three months ended March 31, 2026, the Company repurchased 2,064,626 shares for an aggregate amount of $6,368 (excluding the 2% Canadian excise tax on stock repurchases). As of March 31, 2026, $661 remains available for repurchases. Shares repurchased by the Company are accounted for when the transaction is settled. As of March 31, 2026, there were 149,229 unsettled share repurchases. Direct costs incurred to acquire the shares are included in the total cost of the shares.

Warrants

Warrant activity for the three months ended March 31, 2026 was as follows:


	Number of Shares Underlying the Warrants			Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (years)
Outstanding at December 31, 2025		15,533,900		$	1.65		2.50
Exercised		(235,000	)	$	1.65
Issued		—		$	-		-
Expired		—		$	-		-
Outstanding at March 31, 2026		15,298,900		$	1.65		2.25

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


	Three Months Ended March 31,
	2026			2025
Trade receivables	$	1,129		$	(4,430	)
Inventories		(3,864	)		(3,947	)
Lease liabilities		(323	)		(249	)
Other receivables		(8	)		4
Prepaid expenses and deposits		(782	)		634
Trade payables		(8,353	)		(3,581	)
Accrued liabilities		3,111			4,528
Taxes payable		(12,741	)		1,639
Other assets, net of other liabilities		(2,559	)		(327	)
	$	(24,390	)	$	(5,729	)

The Company paid income taxes of $15,054 and $0 for the three months ended March 31, 2026 and 2025, respectively.

VILLAGE FARMS INTERNATIONAL, INC.

Notes to Condensed Consolidated Interim Financial Statements

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

16. SUBSEQUENT EVENTS

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

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

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited condensed consolidated financial statements and related notes included in Item 1 of Part I of this Quarterly Report and the Management’s Discussion and Analysis of Financial Condition and Results of Operations and consolidated financial statements contained in our Annual Report on Form 10-K for the year ended December 31, 2025 (our "Annual Report on Form 10-K"). This discussion and analysis contains forward-looking statements about our plans and expectations of what may happen in the future. Forward-looking statements are based on assumptions and estimates that are inherently subject to significant risks and uncertainties, and our actual results could differ materially from the results anticipated by our forward-looking statements. We encourage you to review the risks and uncertainties described in “Risk Factors” in Part I, Item 1A in our Annual Report on Form 10-K, and in Part II, Item 1A of this Quarterly Report. These risks and uncertainties could cause actual results to differ materially from those projected or implied by our forward-looking statements contained in this report. These forward-looking statements are made as of the date of this management’s discussion and analysis, and we do not intend, and do not assume any obligation, to update these forward-looking statements, except as required by law.

EXECUTIVE OVERVIEW

Village Farms International, Inc. (“VFF”, together with its subsidiaries, the “Company”, “Village Farms”, “we” “us” or “our”) is a corporation existing under the Business Corporations Act (Ontario). The Company’s principal operating subsidiaries are Pure Sunfarms Corp. (“Pure Sunfarms” or “PSF”), Balanced Health Botanicals, LLC (“Balanced Health”), Rose LifeScience Inc. (“Rose LifeScience” or “Rose”), Village Farms International B.V. (“VFN”), Village Farms Canada Limited Partnership (“VFCLP”), Village Farms L.P. (“VFLP”), and VF Clean Energy, Inc. (“VFCE”).

Village Farms' mission is to apply decades of innovation in intensive agriculture to lead a sustainable path forward for the global cannabis industry. To do so, we leverage a proven track record of asset investment and development and cultivation expertise and experience in controlled environment agriculture to produce branded and wholesale cannabis products for global markets with legally permissible regulatory frameworks.

In Canada, we converted two large-scale, advanced greenhouse facilities to cannabis production to serve the Canadian legal adult use (recreational) market and international medical markets through exportation. Through our ownership of VFN, we hold one of ten licenses to cultivate and distribute cannabis legally in the Netherlands under that country’s Controlled Cannabis Supply Chain Experiment. In the U.S., Balanced Health is our industry-leading cannabinoid business, extending our portfolio into cannabidiol (“CBD”) and hemp-derived consumer products, and the Company also owns 2.2 million square feet of advanced greenhouse facilities in Texas which may be converted to cannabis production in the future if and when permissible by all regulatory authorities.

Our focus for Cannabis is to produce high quality cannabis, leveraging our low-cost production to provide preferred products at an attractive price that address the preferred consumer segments in the market. This market positioning, combined with our cultivation expertise, has enabled us to evolve into a leading producer of dried flower nationally and one of the few Canadian licensed producers with consistently strong operating results.

Through strategic and disciplined organic growth, expansion of export markets and/or acquisitions, we intend to participate in other international markets where cannabis attains legal status. In September 2021, our Canadian Cannabis business began exporting cannabis products to Australia for that country’s medical market. In March 2022, our Canadian business received European Union Good Manufacturing Practice (“EU GMP”) certification for our 1.1 million square foot Delta 3 cannabis facility located in Delta, British Columbia (“B.C.”) which permits us to export EU GMP-certified medical cannabis to importers and distributors in international markets that require EU GMP certification. In late 2022, we commenced exports to Israel. In 2023, we began exporting cannabis products to Germany and the United Kingdom for the medical markets in those countries. In 2025, we began exporting cannabis products to New Zealand. As a result of the typically higher margins in international markets (predominantly due to lower taxation compared with Canada), we expect international expansion to enhance our profitability while expanding our brand and experience into emerging legal cannabis markets.

We also cultivate tomatoes and market them through Village Farms Fresh (a Vanguard Holdings Company) under the Village Farms Fresh (“VF Fresh”) brand, which sells to mass retail grocery stores and food distribution companies.

Change in Our Operating Segments

During the first quarter of 2026, the Company realigned our structure toward a unified cannabis operating model, including changes and additions to our leadership team, to gain operational efficiencies and better align our resources with customer and market opportunities. As a result of the reorganization, the Company revised its reportable segment structure to reflect how the Chief Executive Officer, as chief operating decision maker ("CODM"), manages the business, allocates resources, and assesses performance.

Cannabis Segment

Our Cannabis segment includes wholly owned Pure Sunfarms, VFN, Balanced Health, and an 80% ownership interest in Rose LifeScience.

Pure Sunfarms is one of the single largest cannabis growing operations in the world, one of the lowest-cost greenhouse producers and owns several of the leading flower brands in Canada. We leverage our 30 years of experience as a vertically integrated greenhouse grower for cannabis growth opportunities in Canada with commercial distribution in all Canadian provinces and territories. Our long-term objective for Canada is to be the leading low-cost, high-quality cannabis producer.

Our Netherlands cannabis reporting unit is comprised of wholly owned subsidiary, VFN. Through VFN, we hold one of ten licenses to cultivate and distribute recreational cannabis legally in the Netherlands under that country’s Closed Supply Chain Experiment program, with sales commencing in February 2025.

Rose is one of the top-selling licensed producers of cannabis in the Province of Quebec, as well as a prominent cannabis products commercialization expert in Quebec, acting as the exclusive, direct-to-retail sales, marketing and distribution entity for some of the best-known brands in Canada, as well as Quebec-based micro and craft growers.

Balanced Health is one of the leading cannabinoid brands and e-commerce platforms in the United States. Balanced Health develops and sells high-quality CBD and hemp-based health and wellness products, distributing its diverse portfolio of consumer products through its top-ranked e-commerce platform, CBDistillery™.

Corporate and Other

Other is comprised of the previously reported Produce and Clean Energy segments and includes operations that are not reported in the Company’s Cannabis segment.

Corporate expenses reflect the operations costs that are not allocated to our reporting units.

Recent Developments and Updates

Cannabis

•

Surpassed the high end of its targeted gross margin range for cannabis of 30-40% for the fourth consecutive quarter; and recorded positive EPS from continuing operations for the fourth consecutive quarter.

•

Maintained a top five overall market share position in the Canadian market, and continued to hold the number one market share position in dried flower. The Company’s Pure Sunfarms brand expanded its market share position for the 15th consecutive month in April, reflecting improving consumer preference for the Company’s strains following recent introductions of packaging innovations that showcase the Company’s flower quality and aromas1.

•

International export sales from Canada increased 171% year-over-year to a record high of $14.6 million. The Company believes it remains the largest exporter of medical cannabis to Europe, with three of the top five leading cultivars in Germany and four of the top 10 through our distribution partners2.

•

The Company recently completed facility upgrades at its 4.8 million square foot production campus in Delta, British Columbia, the Company now believes it operates the world’s largest EU-GMP certified cannabis facility.

•

Began planting the first half of its Delta 2 greenhouse expansion in Canada, which is expected to begin contributing to sales late in the second quarter of 2026. The full expansion is expected to yield an incremental 40 metric tonnes of annualized cannabis production, expanding Canadian capacity by approximately 33% once completed in 2027.

•

The Company expects to commence all operations at its Phase II facility in the Netherlands during Q2 and ramp to full capacity by the end of 2026. Once operating at full capacity, the Phase II facility is expected to quintuple total Netherlands production to approximately 10 metric tonnes annually.

Based on estimated retail sales from HiFyre, other third parties and provincial boards.

Based on Company estimates and rankings compiled by German outlet Flowzz.

Corporate and Other

•

Began a succession planning process for our Chief Financial Officer, Steve Ruffini, who will remain as CFO until a permanent replacement has been identified. Mr. Ruffini will remain an employee of the Company to help ensure a smooth transition of his CFO responsibilities, and he is expected to be appointed to a new leadership position focused on evaluating strategic M&A opportunities.

•

Favorably amended and extended its loan with its long-term lender, Farm Credit Canada (FCC). The Company improved the interest rate on the loan by 50 basis points and extended the maturity date by four years to February 3, 2031. The FCC

loan carries a variable interest rate currently below 7.0%, with a current balance of US $15.4 million. All other material terms of the loan remain unchanged.

•

On April 23, 2026, President Trump issued an executive order to (1) immediately place both FDA-approved products containing marijuana and marijuana products regulated by a state medical marijuana license in Schedule III of the Controlled Substances Act, and (2) initiate an expedited administrative hearing process to consider the broader rescheduling of marijuana from Schedule I to Schedule III, which is expected to commence on June 29, 2026. We believe we are poised to benefit from President Trump's Executive Order, which, if the broader rescheduling is enacted as anticipated, would represent a consequential step in modernizing U.S. cannabis policy and support the development of a regulatory framework more aligned with international drug policies.

Presentation of Financial Results

Our results of operations for the three months ended March 31, 2026 and 2025 presented below reflect the operations of our consolidated wholly-owned subsidiaries and our 80% ownership interest in Rose LifeScience.

Foreign Currency Exchange Rates

All currency amounts in this Quarterly Report are stated in U.S. dollars, which is our reporting currency, unless otherwise noted. All references to “dollars” or “$” are to U.S. dollars. The assets and liabilities of our foreign operations are translated into dollars at the exchange rate in effect as of March 31, 2026, March 31, 2025, and December 31, 2025. Transactions affecting the shareholders’ equity (deficit) are translated at historical foreign exchange rates. The condensed consolidated statements of operations and comprehensive income (loss) and condensed consolidated statements of cash flows of our foreign operations are translated into dollars by applying the average foreign exchange rate in effect for the reporting period.

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


	As of
	March 31, 2026		March 31, 2025		December 31, 2025
Spot rate		0.7177		0.6966		0.7294
Three-month period ended		0.7289		0.6965	N/A

Consolidated Results of Operations

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

Village Farms International, Inc. 10-Q