"Q1 2026 showed the value of discipline in a credit-constrained Brazilian agricultural market. Verde chose to prioritize liquidity, receivables quality and higher-quality counterparties over higher-risk volume. That approach reduced short-term sales, but it also supported a modest year-over-year improvement in EBITDA before non-cash events, a near-zero expected credit loss allowance and a stronger cash position following the brokered private placement completed in March 2026," stated Cristiano Veloso, Founder and CEO of Verde.
"We are also taking decisive actions to align the cost base with current market conditions while preserving the capabilities required to serve customers and advance strategic priorities. These actions include supplier contract reviews, contract renegotiations, workforce reductions and tighter discretionary-spend controls. Subject to timing, completion and market conditions, we expect these initiatives to generate approximately BRL 9.4 million of annualized savings over the 12 months following implementation," Mr. Veloso added.
First Quarter 2026 Financial Highlights
All figures are in Canadian dollars unless otherwise stated.
Revenue in Q1 2026 was $1.7 million compared to $2.9 million in Q1 2025 and sales volume totaled 26,795 tons in Q1 2026 compared to 47,829 tons in Q1 2025. The decline reflected three linked drivers: tighter agricultural credit across Brazil, weaker near-term grower and distributor liquidity, and Verde's more selective credit approvals in response to elevated sector insolvency risk. Management prioritized receivables quality and liquidity over higher-risk volume.
Allowance for expected credit losses declined to $0.02 million in Q1 2026 from $0.5 million in Q1 2025.
EBITDA before non-cash events improved modestly to $(1.36) million in Q1 2026 from $(1.43) million in Q1 2025, despite a 41% revenue decline, as lower expected credit losses and reduced sales and marketing expenses partly offset lower gross profit.
Net loss narrowed to $(3.7) million in Q1 2026 from $(3.8) million in Q1 2025.
As of March 31, 2026, the Company held $6.4 million in cash and $5.2 million in short-term receivables, compared to $2.5 million and $7.7 million, respectively, in the same period of 2025. The increase in cash position primarily reflects the brokered private placement completed in March 2026 for net proceeds of $4.0 million.
Q1 2026 Sustainability Results
In Q1 2026, product sold by Verde had the potential to capture up to 3,444 tons of CO₂ through Enhanced Rock Weathering, with an estimated net carbon removal of 2,372 tons, while also avoiding 1,354 tons of CO₂e emissions by replacing potassium chloride fertilizers. Since production began in 2018, the combined potential carbon removal and avoided emissions total approximately 342,517 tons of CO₂. Additionally, 2,121 tons of chloride were prevented from entering soils in Q1 2026, bringing the cumulative total avoided since inception to 194,434 tons.
Magnetic Rare Earth Program Highlights
During Q1 2026, Verde continued to advance the Minas Americas Global Alliance rare earth program through resource definition drilling, 3D geological modelling and metallurgical work. Results announced on March 17, 2026 provided additional technical support for the exploration model, including MAV_AD_0028, which returned 10.0 metres from surface averaging 8,439 ppm TREO and 1,965 ppm MREO, including 5.0 metres averaging 11,032 ppm TREO and 2,717 ppm MREO. The program remains at an exploration and technical de-risking stage and is focused on work required to support preparation of a maiden NI 43-101 mineral resource estimate, subject to further drilling, technical work and Qualified Person review. No mineral resource estimate, mineral reserve, production guidance or project economics is being provided in this release and there is no certainty that further exploration will result in the delineation of mineral resources or mineral reserves, or that any development decision will be made. Mineralization identified to date is not necessarily indicative of future results.
Leonardo Deringer Fraga, P.Geo, is the Company's designated "Qualified Person" for this news release within the meaning of National Instrument 43-101, Standards of Disclosure for Mineral Projects ("NI 43-101"). Mr. Fraga has reviewed and approved the technical information contained herein.
Strategic Initiatives And Recent Events
Liquidity Preservation and Creditor Engagement Strategy
As previously announced by the Company on April 15, 2025, the civil court homologated Verde's Debt Renegotiation Agreement, which provided for revised payment terms applicable to the Company's financial creditors. Following a review of the Company's liquidity position, working capital requirements, cash flow forecasts, debt-service obligations and available alternatives, the Board of Directors approved a liquidity preservation and creditor engagement strategy.
As part of this Board-approved strategy, the Company will suspend scheduled debt-service payments to its financial creditors under the Debt Renegotiation Agreement homologated by the Brazilian civil court and related financing agreements, as such payments become due going forward, while the Company engages with creditors regarding revised payment terms that are sustainable under current market conditions. The Company intends to seek waivers, standstill arrangements, amendments, extensions or other revised terms with such creditors.
The decision reflects the continued restrictive operating environment for Brazilian agriculture, limited credit availability, elevated interest rates, pressure on grower liquidity and the need to preserve working capital for the Company's operations. The suspension of scheduled debt-service payments may result in creditor notices, claims or proceedings under applicable financing and debt renegotiation arrangements. The Company has retained specialized legal and restructuring advisors in Brazil to support the creditor engagement process, represent the Company where necessary and assist management and the Board in implementing the strategy in an orderly manner.
Fertilizer Market Conditions
Q1 2026 was shaped less by agronomic need than by credit transmission. The Selic rate remained at 15.00% for most of the quarter, was reduced to 14.75% on March 18, 2026, and was further reduced to 14.50% after quarter-end on April 29, 2026, while the Central Bank of Brazil Focus survey dated April 24, 2026 showed the market's year-end 2026 Selic expectation at 13.00%, up from 12.50% four weeks earlier1. Financing conditions therefore remained restrictive for growers, distributors and cooperatives. Serasa Experian reported 1,990 agribusiness judicial recovery requests in 2025, up 56.4% from 2024, the highest level in its series2.
The agronomic backdrop remained constructive. On April 14, 2026, Companhia Nacional de Abastecimento raised its 2025/26 Brazilian grain harvest estimate to 356.3 million tons, including projected record soybean production of 179.2 million tons and total corn production of 139.6 million tons3. However, strong production potential did not immediately translate into stronger fertilizer purchasing capacity, as farmers continued to manage liquidity after a period of high interest rates, tight rural credit and compressed crop economics.
Input affordability worsened after quarter-end as global fertilizer markets tightened. World Bank commodity data showed fertilizer prices rising 14% in April4 and projected a 31% increase in 20265, while Reuters reported warnings of potential fertilizer supply disruptions linked to the Middle East conflict6. In Brazil, StoneX data showed local urea prices rising about 35% in two weeks, with buyers increasingly considering lower-cost alternatives7. For Verde, this volatility reinforces the strategic relevance of domestic potassium alternatives, but the principal near-term constraint remains financing capacity and counterparty quality rather than agronomic demand.
Management therefore continued to prioritize counterparty selection, receivables protection and liquidity preservation over short-term volume, while aligning commercial efforts toward higher-quality accounts and higher-margin regions. This approach may cap near-term volumes, but it is intended to protect cash conversion, reduce credit risk and preserve Verde's ability to capture demand if credit conditions and grower purchasing capacity improve.
_______________________1 Source: Banco Central do Brasil, Copom Minutes and Selic Rate Decisions. 2 Source: Serasa Experian, Judicial Reorganization: Agribusiness closes 2025 with almost 2,000 requests for this recourse and registers the highest accumulated total in the historical series, reveals Serasa Experian. 3 Source: Companhia Nacional de Abastecimento, Grain harvest could reach 356.3 million tons in 2025/26, influenced by good yields. 4 Source: World Bank - Commodity prices rose in April - Pink Sheet (May 5, 2026); 5 Source: World Bank - Commodity Markets Outlook, April 2026.6 Source: Reuters - Expanding Iran conflict threatens Brazil grain exports, fertilizer supplies (March 5, 2026).7 Source: Reuters - Brazil sounds alarm on fertilizers as price spike spurs cheaper alternatives (March 18, 2026);
Q1 2026 FINANCIAL RESULTS
The following table provides information about the three months ended March 31, 2026, as compared to the three months ended March 31, 2025.
All amounts in CAD $'000
3 months endedMar 31, 2026
3 months endedMar 31, 2025
Tons sold (‘000)
27
48
Average revenue per ton sold $
62
59
Average production cost per ton sold $
(23
)
(16
)
Average gross profit per ton sold $
39
44
Average gross margin
63%
73%
Revenue
1,677
2,852
Production costs
(628
)
(757
)
Gross Profit
1,049
2,095
Gross Margin
63%
73%
Sales and marketing expenses
(727
)
(851
)
Product delivery freight expenses
(625
)
(1,115
)
General and administrative expenses
(1,033
)
(1,050
)
Allowance for expected credit losses
(24
)
(513
)
EBITDA(1)
(1,360
)
(1,434
)
Share Based, Equity and Bonus Payments (Non-Cash Event)(2)
(68
)
(161
)
Depreciation and Amortization(3)
(836
)
(774
)
Operating (Loss) / Profit after non-cash events
(2,264
)
(2,369
)
Interest Income/Expense
(1,464
)
(1,408
)
Net (Loss) / Profit before tax
(3,728
)
(3,777
)
Income tax
(1
)
(4
)
Net (Loss) / Profit
(3,729
)
(3,781
)
(1) Non-GAAP measure. EBITDA before non-cash events is calculated as operating loss before depreciation, amortization and non-cash events. Refer to the section entitled "Non-GAAP and Other Financial Measures" below.(2) Included within General and Administrative expenses in the financial statements. (3) Included within General and Administrative expenses and Cost of Sales in the financial statements.
Sales Performance
Revenue for Q1 2026 was $1.7 million compared to $2.9 million in Q1 2025. The decline was primarily driven by lower volumes in a market where customers faced tighter credit, weaker near-term cash generation and more selective purchasing behavior. Verde maintained a rigorous credit approval process, particularly for specialty fertilizer sales that include third-party raw materials and chose not to extend higher-risk terms that were not adequately compensated.
Production costs8
Average production cost per ton sold increased to $23 in Q1 2026 from $16 in Q1 2025, primarily due to lower sales volumes, which reduced fixed-cost absorption, and a less favorable product and packaging mix. Specialty products represented 8% of sales in Q1 2026 compared to 3% in Q1 2025, while big bag products represented 12% of sales versus 9% in the prior-year period. As a result, average gross profit per ton declined to $39 from $44, contributing to the reduction in gross margin to 63% in Q1 2026 from 73% in Q1 2025.
_______________________8 Verde's production costs and sales price are based on the following assumptions:
Micronutrients added to the product increase production cost, rendering the applicable product more expensive to produce.
Production costs vary based on packaging type, with bulk being less expensive than Jumbo Bags.
Plant 1 produces The Product® Jumbo Bags and Low-Carbon Specialty Fertilizer Products, while Plant 2 exclusively produces The Product® Bulk. Therefore, Plant 2's production costs are lower than ...
