On November 15, 2021, the Company acquired a 70% interest in Rose. Under the terms of the agreement, 2,411,280 Common Shares of the Company were issued to the owners of Rose as part of the consideration.

On August 16, 2021, the Company acquired Balanced Health. Under the terms of the Acquisition Agreement, 4,707,113 Common Shares of the Company were issued to the owners of Balanced Health as part of the consideration.

On January 20, 2021, the Company closed a registered direct offering with certain institutional investors for the purchase and sale of an aggregate of 10,887,097 Common Shares at a purchase price of $12.40 per common share for gross proceeds of approximately $135 million before placement agent fees and other offering expenses.

On September 10, 2020, the Company sold 9,396,226 units through a registered direct offering. Each unit that was sold consisted of one common share of the Company and one-half (0.5) of a warrant to purchase a common share of the Company at a price of $5.80. On March 10, 2021, the warrants became exercisable and will expire on September 10, 2025. As of December, 2021, 3,188,680 of the warrants have been exercised. ASC 480, Distinguishing Liabilities from Equity, requires that these warrants are classified as equity. The fair value of these warrants was determined using the Black-Sholes Merton valuation model.

The Company’s Share-Based Compensation Plan (the “Plan”) dated January 1, 2010 was most recently approved by Shareholders on June 10, 2021. The Plan provides that the number of Common Shares reserved for issuance upon the exercise or redemption of awards granted under the Plan is a rolling maximum of ten percent (10%) of the outstanding Common Shares at any point in time. Approximately 4,970,835 shares remain available for issuance at December 31, 2021.

Stock options have been granted with an exercise price equal to the fair market value of the common stock on the date of grants and have a ten-year contractual term. The stock options vest ratably over a 3- year period. Compensation expense is recognized on a straight-line basis.

The fair market value of stock options is estimated using the Black-Scholes-Merton valuation model and the Company uses the following methods to determine its underlying assumptions: expected volatilities are based on the historical volatilities of the weekly closing price of the Company’s common stock; the expected term of options granted is based historical exercises and forfeitures; the risk-free interest rate is based on Canadian Treasury bonds issued with similar life terms to the expected life of the grant; and the expected dividend yield is based on the current annual dividend amount divided by the stock price on the date of grant. Forfeitures are recorded when incurred.

The following key assumptions were used in the valuation model to value stock option grants for each respective period:

	2021	2020			2019
Expected volatility	68.3% - 75.7%		71.1	%		60.7	%
Dividend	$nil	$nil			$nil
Risk-free interest rate	1.07% - 1.54%		0.52	%		1.86	%
Expected life	4.5 years - 6.9 years	7.1 years			5.7 years
Fair value	CA$5.45 - CA$9.28	CA$5.83			CA$9.73

Stock option transactions under the Company’s plan for the years ended December 31, 2021, 2020 and 2019 are summarized as follows:

	Number of Options			Weighted Average Exercise Price	Weighted Average Remaining Contractual Term (years)		Aggregate Intrinsic Value
Outstanding at January 1, 2019		2,164,999		CA$2.10		5.69	$	5,553
Granted during 2019		510,000		CA$16.32		9.19
Exercised during 2019		(212,332	)	CA$1.29		4.85
Forfeited/expired during 2019		(10,001	)	CA$2.20
Outstanding at December 31, 2019		2,452,666		CA$5.12		5.60	$	11,435
Exercisable at December 31, 2019		1,707,337		CA$1.78		4.18	$	10,736
Granted during 2020		1,081,488		CA$8.77		9.75
Exercised during 2020		(425,166	)	CA$1.36		1.62
Forfeited during 2020		(41,666	)	CA$6.93
Outstanding at December 31, 2020		3,067,322		CA$6.91		6.82	$	20,051
Exercisable at December 31, 2020		1,618,168		CA$3.91		4.58	$	15,119
Granted during 2021		792,236		CA$10.62		9.78
Exercised during 2021		(177,000	)	CA$1.34		1.14
Forfeited during 2021		(60,000	)	CA$13.41
Outstanding at December 31, 2021		3,622,558		CA$7.88		7.89	$	8,293
Exercisable at December 31, 2021		2,042,663		CA$6.09		5.14	$	7,621

The weighted-average grant-date fair value of options granted during the years 2021, 2020 and 2019 was $7.52 , $5.83 and $9.58, respectively. The total intrinsic value of options exercised during the years ended December 31, 2021, 2020 and 2019, was $2,273, $2,732 and $1,999, respectively.

A summary of the status of the Company’s non-vested stock options, and the changes during the year ended December 31, 2021 is presented below:

As of December 31, 2021, there was $10,941 of total unrecognized compensation cost related to non-vested share-based compensation arrangements granted under the stock option plan; that cost is expected to be recognized over a period of three years.

The Company has also issued performance-based restricted share units to Village Farms employees involved with future developments of the Company. Once a performance target is met and the share units are deemed earned and vested, compensation expense is recognized, based on the fair value of the share units on the grant date.

Performance-based restricted share unit activity for the years ended December 31, 2021, 2020 and 2019 is as follows:

	Number of Performance-based Restricted Share Units			Weighted Average Grant Date Fair Value
Outstanding at January 1, 2019		1,056,666		CA$5.56
Granted		355,000		CA$14.94
Received		(442,666	)	CA$7.82
Forfeited/expired		(230,000	)	CA$12.90
Outstanding at December 31, 2019		739,000		CA$7.92
Exercisable at December 31, 2019		30,000		CA$12.87
Granted		1,068,000		CA$6.36
Issued		(840,000	)	CA$6.47
Forfeited		(98,000	)	CA$9.59
Outstanding at December 31, 2020		869,000		CA$7.51
Exercisable at December 31, 2020		75,000		CA$6.10
Granted		158,000		CA$9.68
Exercised		(487,000	)	CA$7.14
Forfeited/expired		(310,000	)	CA$8.35
Outstanding at December 31, 2021		230,000		CA$8.67
Exercisable at December 31, 2021		200,000		CA$8.24

A summary of the status of the Company’s non-vested performance-based restricted share units, and the changes during the year ended December 31, 2021, is presented below:

Total share-based compensation expense for the years ended December 31, 2021, 2020 and 2019 of $7,533, $6,142 and $4,714, respectively, was recorded in selling, general and administrative expenses and the corresponding amount credited to additional paid in capital.