Village Farms International, Inc. 10-Q

Item 1. FINANCIAL STATEMENTS Village Farms International, Inc. Condensed Consolidated Sta tements of Financial Position (In thousands of United States dollars, except share data) (Unaudited) March 31, 2024 December 31, 2023 ASSETS Current assets Cash and cash equivalents $ 26,685 $ 30,291 Restricted cash 5,000 5,000 Trade receivables 38,826 30,561 Inventories 74,029 78,472 Other receivables 115 294 Prepaid expenses and deposits 6,197 7,150 Total current assets 150,852 151,768 Non-current assets Property, plant and equipment 201,020 205,613 Investments 2,656 2,656 Goodwill 54,942 55,918 Intangibles 30,778 32,275 Deferred tax asset 4,201 4,201 Right-of-use assets 11,944 12,596 Other assets 2,046 1,962 Total assets $ 458,439 $ 466,989 LIABILITIES Current liabilities Line of credit $ 4,000 $ 4,000 Trade payables 19,935 21,753 Current maturities of long-term debt 8,866 9,133 Accrued sales taxes 21,331 15,941 Accrued loyalty program 1,668 1,773 Accrued liabilities 12,024 15,076 Lease liabilities - current 2,243 2,112 Income tax payable 47 28 Other current liabilities 2,561 2,340 Total current liabilities 72,675 72,156 Non-current liabilities Long-term debt 37,217 38,925 Deferred tax liability 23,553 23,730 Lease liabilities - non-current 10,534 11,335 Other liabilities 2,044 1,902 Total liabilities 146,023 148,048 Commitments and contingencies MEZZANINE EQUITY Redeemable non-controlling interest 15,627 15,667 SHAREHOLDERS’ EQUITY Common stock, no par value per share - unlimited shares authorized; 110,248,929 shares issued and outstanding at March 31, 2024 and December 31, 2023. 386,719 386,719 Additional paid in capital 26,016 25,611 Accumulated other comprehensive loss ( 7,503 ) ( 3,540 ) Retained earnings ( 109,017 ) ( 106,165 ) Total Village Farms International, Inc. shareholders’ equity 296,215 302,625 Non-controlling interest 574 649 Total shareholders’ equity 296,789 303,274 Total liabilities, mezzanine equity and shareholders’ equity $ 458,439 $ 466,989 The accompanying notes are an integral part of these Condensed Consolidated Financial Statements. 2 Village Farms International, Inc. Condensed Consolidated Statements of O perations and Comprehensive Income (Loss) (In thousands of United States dollars, except per share data) (Unaudited) Three Months Ended March 31, 2024 2023 Sales $ 78,077 $ 64,656 Cost of sales ( 62,564 ) ( 52,356 ) Gross profit 15,513 12,300 Selling, general and administrative expenses ( 16,387 ) ( 17,405 ) Interest expense ( 917 ) ( 1,133 ) Interest income 206 196 Foreign exchange loss, net ( 878 ) ( 69 ) Other income (expense) 104 30 Loss before taxes ( 2,359 ) ( 6,081 ) Provision for income taxes ( 320 ) ( 634 ) Loss including non-controlling interests ( 2,679 ) ( 6,715 ) Less: net (income) loss attributable to non-controlling interests, net of tax ( 173 ) 79 Net loss attributable to Village Farms International, Inc. shareholders $ ( 2,852 ) $ ( 6,636 ) Basic loss per share attributable to Village Farms International, Inc. shareholders $ ( 0.03 ) $ ( 0.06 ) Diluted loss per share attributable to Village Farms International, Inc. shareholders $ ( 0.03 ) $ ( 0.06 ) Weighted average number of common shares used in the computation of net loss per share (in thousands): Basic 110,249 104,097 Diluted 110,249 104,097 Loss including non-controlling interests $ ( 2,679 ) $ ( 6,715 ) Other comprehensive (loss) income: Foreign currency translation adjustment ( 4,251 ) 862 Comprehensive loss including non-controlling interests ( 6,930 ) ( 5,853 ) Comprehensive loss (income) attributable to non-controlling interests 115 ( 42 ) Comprehensive loss attributable to Village Farms International, Inc. shareholders $ ( 6,815 ) $ ( 5,895 ) The accompanying notes are an integral part of these Condensed Consolidated Financial Statements. 3 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, 2024 Number of Common Shares (in thousands) Common Stock Additional Paid in Capital Accumulated Other Comprehensive Loss Retained Earnings Non-controlling Interest Total Shareholders’ Equity Mezzanine Equity Balance January 1, 2024 110,249 $ 386,719 $ 25,611 $ ( 3,540 ) $ ( 106,165 ) $ 649 $ 303,274 $ 15,667 Share-based compensation — — 405 — — — 405 — Cumulative translation adjustment — — — ( 3,963 ) — ( 21 ) ( 3,984 ) ( 267 ) Net (loss) income — — — — ( 2,852 ) ( 54 ) ( 2,906 ) 227 Balance at March 31, 2024 110,249 $ 386,719 $ 26,016 $ ( 7,503 ) $ ( 109,017 ) $ 574 $ 296,789 $ 15,627 Three Months Ended March 31, 2023 Number of Common Shares (in thousands) Common Stock Additional Paid in Capital Accumulated Other Comprehensive (Loss) Income Retained Earnings Non-controlling Interest Total Shareholders’ Equity Mezzanine Equity Balance at January 1, 2023 91,789 $ 372,429 $ 13,372 $ ( 8,371 ) $ ( 74,367 ) $ 767 $ 303,830 $ 16,164 Shares issued in public offering, net of issuance costs 18,350 14,207 — — — — 14,207 — Warrants issued in public offering — — 9,128 — — — 9,128 — Shares issued on exercise of stock options 100 83 — — — — 83 — Share-based compensation — — 1,732 — — — 1,732 — Cumulative translation adjustment — — — 862 — — 862 — Net loss — — — — ( 6,636 ) ( 49 ) ( 6,685 ) ( 30 ) Balance at March 31, 2023 110,239 $ 386,719 $ 24,232 $ ( 7,509 ) $ ( 81,003 ) $ 718 $ 323,157 $ 16,134 The accompanying notes are an integral part of these Condensed Consolidated Financial Statements. 4 Village Farms International, Inc. Condensed Consolidated Statements of Cash Flows (In thousands of United States dollars) (Unaudited) Three Months Ended March 31, 2024 2023 Cash flows provided by (used in) operating activities: Net loss attributable to Village Farms International, Inc. shareholders $ ( 2,852 ) $ ( 6,636 ) Adjustments to reconcile net loss attributable to Village Farms International, Inc. shareholders to net cash provided by (used in) operating activities: Depreciation and amortization 4,558 3,986 Amortization of deferred charges 10 34 Net loss attributable to non-controlling interest 173 ( 79 ) Interest expense 917 1,133 Interest paid on long-term debt ( 1,062 ) ( 1,511 ) Unrealized foreign exchange loss 130 ( 13 ) Loss on disposal of assets — 4 Non-cash lease expense 631 ( 4 ) Share-based compensation 405 1,732 Deferred income taxes 330 ( 734 ) Changes in non-cash working capital items ( 3,290 ) ( 1,580 ) Net cash used in operating activities ( 50 ) ( 3,668 ) Cash flows used in investing activities: Purchases of property, plant and equipment ( 1,876 ) ( 1,076 ) Net cash used in investing activities ( 1,876 ) ( 1,076 ) Cash flows (used in) provided by financing activities: Repayments on borrowings ( 1,442 ) ( 4,788 ) Proceeds from issuance of common stock and warrants — 24,772 Issuance costs — ( 1,437 ) Proceeds from exercise of stock options — 83 Net cash (used in) provided by financing activities ( 1,442 ) 18,630 Effect of exchange rate changes on cash and cash equivalents ( 238 ) ( 678 ) Net (decrease) increase in cash, cash equivalents and restricted cash ( 3,606 ) 13,208 Cash, cash equivalents and restricted cash, beginning of period 35,291 21,676 Cash, cash equivalents and restricted cash, end of period $ 31,685 $ 34,884 The accompanying notes are an integral part of these Condensed Consolidated Financial Statements. 5 VILLAGE FARMS INTERNATIONAL, INC. Notes to Condensed Consolidated Financial Statements (In thousands of United States dollars, except per share amounts, unless otherwise noted) 1. 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, 2024 are Village Farms Canada Limited Partnership, Village Farms, L.P., Pure Sunfarms Corp. (“Pure Sunfarms”), and Balanced Health Botanicals, LLC (“Balanced Health”) and VF Clean Energy, Inc. ("VFCE"). VFF also owns a 70 % interest in Rose LifeScience Inc. (“Rose”) and an 85 % interest in Leli Holland B.V. ("Leli"). The address of the registered office of VFF is 4700-80th Street, Delta, British Columbia, Canada, V4K 3N3. The Company’s shares are listed on Nasdaq Capital Market (“Nasdaq”) under the symbol “VFF”. Village Farms owns and operates sophisticated, highly intensive agricultural greenhouse facilities in British Columbia and Texas, where it produces, markets and sells premium-quality tomatoes, bell peppers and cucumbers. Its wholly owned subsidiary, Pure Sunfarms, is a vertically integrated Licensed Producer ("LP") and supplier of cannabis products sold to customers throughout Canada and internationally. 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 US. Through its 70 % ownership of Rose, the Company has a substantial presence in the Province of Quebec as a cannabis supplier, producer and commercialization expert. 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, 2023 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, 2023 contained in the Company’s 2023 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 consolidated financial statements are adequate to make the information not misleading. Principals 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. For equity investees in which the Company has an undivided interest in the assets, liabilities and profits or losses of an unconsolidated entity, but does not exercise control over the entity, the Company consolidates its proportional interest in the accounts of the entity. Translations of Foreign Currencies 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. Gains or losses from remeasurement are included in foreign exchange loss, net. Currency gains or losses resulting from transactions executed in currencies other than the functional currency are included in foreign exchange gain (loss). In these condensed consolidated financial statements, “$” means U.S. dollars unless otherwise noted. 6 VILLAGE FARMS INTERNATIONAL, INC. Notes to Condensed Consolidated Interim Financial Statements (In thousands of United States dollars, except per share amounts, unless otherwise noted) 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 recent inflationary effects on fuel prices, labor and materials costs, rising interest rates, 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, 2024 December 31, 2023 Cannabis: Raw materials $ 1,017 $ 985 Work-in-progress 8,014 6,543 Finished goods 38,058 47,084 Packaging 8,291 7,641 Produce: Crop inventory 18,057 15,492 Purchased produce inventory 592 727 Inventory $ 74,029 $ 78,472 3. PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment consisted of the following as of: Classification March 31, 2024 December 31, 2023 Land $ 14,397 $ 14,641 Leasehold and land improvements 5,510 5,525 Buildings 214,838 217,384 Machinery and equipment 90,061 86,674 Construction in progress 11,289 13,619 Less: Accumulated depreciation ( 135,075 ) ( 132,230 ) Property, plant and equipment, net $ 201,020 $ 205,613 Depreciation expense on property, plant and equipment, was $ 3,728 and $ 3,204 for the three months ended March 31, 2024 and 2023 , respectively. 4. 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, 2024: Cannabis - Canada Cannabis - United States Total Balance as of January 1, 2024 $ 45,879 $ 10,039 $ 55,918 Foreign currency translation adjustment ( 976 ) — ( 976 ) Balance as of March 31, 2024 $ 44,903 $ 10,039 $ 54,942 7 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 Intangibles consisted of the following as of: Classification March 31, 2024 December 31, 2023 Licenses $ 18,118 $ 18,540 Brand and trademarks* 12,720 12,795 Customer relationships 13,296 13,586 Computer software 1,955 1,974 Other* 144 144 Less: Accumulated amortization ( 8,105 ) ( 7,414 ) Less: Impairments ( 7,350 ) ( 7,350 ) Intangibles, net $ 30,778 $ 32,275 * Indefinite-lived intangible assets The expected future amortization expense for definite-lived intangible assets as of March 31, 2024 was as follows: Fiscal period Remainder of 2024 $ 2,480 2025 3,220 2026 3,131 2027 3,131 2028 1,880 Thereafter 11,422 Intangibles, net $ 25,264 Assessment for Indicators of Impairment During the three months ended March 31, 2024 and 2023, the Company considered qualitative factors in assessing for impairment indicators for the Company’s U.S. and Canadian Cannabis segments. As part of this assessment, the Company considered both external and internal factors, including overall financial performance and outlook. At March 31, 2024 , 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 units to be below their carrying amounts. 5. LINE OF CREDIT AND LONG-TERM DEBT The following table provides details for the carrying values of debt as of: March 31, 2024 December 31, 2023 Term Loan - ("FCC Loan") - repayable by monthly principal payments of $ 164 and accrued interest at a rate of 8.84 %; matures May 3, 2027 $ 22,296 $ 22,788 Term Loan - Pure Sunfarms - C$ 19.0 M - Canadian prime interest rate plus an applicable margin, repayable in quarterly payments equal to 2.50 % of the outstanding principal amount, interest rate of 8.95 %; matures February 7, 2026 7,752 8,298 Term loan - Pure Sunfarms - C$ 25.0 M - Canadian prime interest rate plus an applicable margin, repayable in quarterly payments equal to 2.50 % of the outstanding principal amount starting June 30, 2021 , interest rate of 8.95 %; matures February 7, 2026 12,458 13,201 BDC Facility - Pure Sunfarms - non-revolving demand loan repayable by monthly principal payments of C$ 52 and accrued interest at a rate of 10.95 %, matures December 31, 2031 3,577 3,771 Total $ 46,083 $ 48,058 8 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 Company’s line of credit ("Operating Loan") had $ 4,000 amount drawn on the facility as of March 31, 2024 and December 31, 2023. The carrying value of the assets and securities pledged as collateral for the FCC Loan as of March 31, 2024 and December 31, 2023 was $ 97,614 and $ 117,293 , respectively. The carrying value of the assets pledged as collateral for the Operating Loan as of March 31, 2024 and December 31, 2023 was $ 30,032 and $ 28,034 , respectively. The Pure Sunfarms line of credit had a balance of $ 0 as of March 31, 2024 and December 31, 2023, respectively. The Company is required to comply with financial covenants, measured either quarterly or annually depending on the covenant. The Company was in compliance with all its credit facility covenants as of March 31, 2024. The weighted average annual interest rate on short-term borrowings as of March 31, 2024 and December 31, 2023 was 9.73 % and 9.44 % , respectively. Accrued interest payable on all long-term debt as of March 31, 2024 and December 31, 2023 was $ 442 and $ 390 , 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 2024 and thereafter are as follows: Remainder of 2024 $ 4,313 2025 5,751 2026 16,825 2027 17,347 2028 461 Thereafter 1,386 Total $ 46,083 6. FINANCIAL INSTRUMENTS The Company’s financial instruments include cash and cash equivalents, trade receivables, minority investments, line of credit, trade payables, accrued liabilities, lease liabilities, note payables and debt. The carrying value of cash and cash equivalents, trade receivables, trade payables, and accrued liabilities approximate their fair values due to the short-term maturity of these financial instruments. The carrying value of line of credit, lease liabilities, notes payable, and debt approximate their fair values due to insignificant changes in credit risk. For its investments, the Company has selected the practicability election to fair value measurement, under which the investment is measured at cost, less impairment, plus or minus observable price changes of an identical or similar investment. 7. RELATED PARTY TRANSACTIONS AND BALANCES The Company leases its Rose office building from a company employee who also owns a minority interest in Rose. For the three months ended March 31, 2024 and 2023, the Company paid C$ 39 and C$ 45 , respectively, to lease this office space. One of the Company’s employees is related to a member of the Company’s executive management team and received approximately $ 30 in salary and benefits during the three months ended March 31, 2024 and 2023 , respectively. 8. INCOME TAXES The Company has recorded a provision for income taxes of ($ 320 ) for the three months ended March 31, 2024, compared with a provision for income taxes of ($ 634 ) 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 temporary, 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. 9 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 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 period to utilize the entire benefit for the deferred tax assets. Accordingly, the Company established a valuation allowance of $ 40,203 as of March 31, 2024 and $ 39,530 as of December 31, 2023. The Company cannot presently estimate what, if any, changes to the valuation of its deferred tax assets may be deemed appropriate in the future. If the Company incurs future losses, it may be necessary to record additional valuation allowance related to the deferred tax assets recognized as of March 31, 2024. As of March 31, 2024 , the Company’s net deferred tax assets totaled approximately $ 4,201 and were primarily derived from net operating loss carryforwards. 9. SEGMENT AND GEOGRAPHIC INFORMATION Segment reporting is prepared on the same basis that the Company’s Chief Executive Officer, who is the Company’s Chief Operating Decision Maker, manages the business, makes operating decisions and assesses performance. As of March 31, 2024 , the Company’s four segments are as follows: Segment Description Produce The Produce segment produces, markets, and sells premium quality tomatoes, bell peppers and cucumbers. Cannabis – Canada The Cannabis – Canada segment produces and supplies cannabis products to be sold to other licensed providers and provincial governments across Canada and internationally. Cannabis – United States The Cannabis – United States segment develops and sells high-quality, CBD-based health and wellness products including ingestible, edible and topical applications. Energy The Energy business produces renewable natural gas that it sells per a long-term contract to one customer. The Company’s primary operations are in the United States and Canada. Segment information is summarized below: Three months ended March 31, 2024 2023 Sales Produce $ 36,094 $ 34,567 Cannabis - Canada 37,446 25,112 Cannabis - United States 4,537 4,977 $ 78,077 $ 64,656 Gross profit Produce $ 3,310 $ 614 Cannabis - Canada 9,508 8,455 Cannabis - United States 2,695 3,238 Energy — ( 7 ) $ 15,513 $ 12,300 10 VILLAGE FARMS INTERNATIONAL, INC. Notes to Condensed Consolidated Interim Financial Statements (In thousands of United States dollars, except per share amounts, unless otherwise noted) 10. LOSS PER SHARE Basic and diluted net loss per common share is calculated as follows: Three months ended March 31, 2024 2023 Numerator: Net loss attributable to Village Farms International, Inc. shareholders $ ( 2,852 ) $ ( 6,636 ) Denominator: Weighted average number of common shares - basic 110,249 104,097 Effect of dilutive securities- share-based employee options and awards — — Weighted average number of common shares - diluted 110,249 104,097 Antidilutive options and awards 6,572 6,157 Net loss per ordinary share: Basic $ ( 0.03 ) $ ( 0.06 ) Diluted $ ( 0.03 ) $ ( 0.06 ) 11. SHAREHOLDERS’ EQUITY AND SHARE-BASED COMPENSATION Share-based compensation expense for the three months ended March 31, 2024 was $ 405 , and $ 1,732 for the three months ended March 31, 2023, respectively. Stock option activity for the three months ended March 31, 2024 was as follows: Number of Options Weighted Average Exercise Price Weighted Average Remaining Contractual Term (years) Aggregate Intrinsic Value Outstanding at January 1, 2023 6,946,576 $ 3.50 7.54 $ 83 Granted 50,000 $ 0.83 9.80 $ 3 Forfeited/expired ( 424,167 ) $ 3.43 Outstanding at March 31, 2024 6,572,409 $ 3.49 7.64 $ 1,061 Exercisable at March 31, 2024 3,392,739 $ 5.44 6.32 $ 141 12. CHANGES IN NON-CASH WORKING CAPITAL ITEMS Three Months Ended March 31, 2024 2023 Trade receivables $ ( 7,095 ) $ 1,193 Inventories 3,216 ( 4,169 ) Other receivables ( 1 ) 8 Prepaid expenses and deposits 836 63 Trade payables ( 2,993 ) ( 5,971 ) Accrued liabilities 3,431 3,869 Lease liabilities ( 664 ) — Other assets, net of other liabilities ( 20 ) 3,427 $ ( 3,290 ) $ ( 1,580 ) 11