What changed in this filing

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Item 2. Management’s Discussion and Analysis

2022-05-10 compared with 2021-11-12 · 105 added, 88 removed, 83 unchanged (70% of the section changed)

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The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited condensed financial statements and related notes appearing elsewhere in this Quarterly Report on Form 10-Q and our audited consolidated financial statements and the related notes and the discussion under the heading "Management’s Discussion and Analysis of Financial Condition and Results of Operations"

for the fiscal year ended December 31, 2020 included in the final prospectus for our IPO dated as of June 24, 2021 and filed with the Securities and Exchange Commission (the “SEC”), pursuant to Rule 424(b)(4) on June 28, 2021.

for the fiscal year ended December 31, 2021 included in the Annual Report on Form 10-K (the “2021 Annual Report”) and filed with the Securities and Exchange Commission (the “SEC”) on March 16, 2022.

This discussion, particularly information with respect to our future results of operations or financial condition, business strategy and plans, and objectives of management for future operations, includes forward-looking statements that involve risks and uncertainties as described under the heading "Special Note Regarding Forward-Looking Statements"

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Our research and development pipeline includes clinical stage and early stage antibiotic candidates that target Gram-positive bacteria for oral and/or parenteral treatment of infections caused by Clostridium difficile (“C.

difficile”), Enterococcus (including vancomycin-resistant strains (“VRE”)), Staphylococcus (including methicillin-resistant strains (“MRSA”)), and Streptococcus (including antibioticresistant strains).

Pol IIIC is required for the replication of DNA in certain Gram-positive bacterial species.

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difficile, MRSA, vancomycin-resistant Enterococcus, penicillin-resistant Streptococcus pneumonia (“PRSP”) and other resistant bacteria.

We intend to “de-risk” this new class of antibiotics through our drug development activities and potentially partner with a fully-integrated pharmaceutical company for late-stage clinical trials and commercialization.

Our lead antibiotic candidate, ibezapolstat (formerly named ACX-362E), has a novel mechanism of action that targets the Pol IIIC enzyme, a previously unexploited scientific target.

On December 3, 2021, we commenced enrollment in a double-blind, active controlled clinical trial of ibezapolstat versus vancomycin, the standard of care to treat C.

difficile infections (“CDI”).

Prior to that, we completed our Phase 2a clinical trial of ibezapolstat to treat patients with CDI and reported the top-line data in November 2020.

The Phase 2a clinical trial was terminated early based upon the recommendation of our Scientific Advisory Board (the “SAB”).

The SAB reviewed the study data presented by management, including adverse events and efficacy outcomes, and discussed its clinical impressions.

The SAB unanimously supported the early termination of the Phase 2a trial after 10 patients were enrolled in the trial instead of 20 patients as originally planned.

The early termination was further based on the evidence of meeting the treatment goals of eliminating the infection with an acceptable adverse event profile.

The SAB noted that 10 out of 10 patients enrolled in the Phase 2a trial reached the Clinical Cure endpoint, defined in the study protocol as the resolution of diarrhea in the 24-hour period immediately before the end of treatment that is maintained for 48 hours after end of treatment.

Such cure was sustained, meaning that the patients showed no sign of infection recurrence, for 30 days thereafter.

This constitutes a 100% response rate for the primary and secondary endpoints of the trial.

All 10 patients enrolled in the Phase 2a trial met the study’s primary and secondary efficacy endpoints, namely, Clinical Cure at end of treatment and Sustained Clinical Cure of no recurrence of CDI at the 28-day follow-up visit.

No treatment-related serious adverse events (“SAEs”) were reported by the investigators who enrolled patients in the trial.

We believe these results represent the first-ever clinical data showing Pol IIIC has potential as a therapeutically relevant antibacterial target.

Our Phase 2b clinical trial commenced enrollment on December 3, 2021.

The SAB is comprised of seven scientists and clinicians who have significant expertise in the scientific disciplines required for the research and development of antibiotics.

The members of the SAB serve at the pleasure of management, are paid in cash on an hourly basis for their services and do not receive equity compensation.

Generally, the SAB is consulted by management during the process of designing our preclinical and clinical trials as well as in the process of analyzing data generated from these trials, although the SAB’s services are not limited to such activities.

Currently available antibiotics used to treat CDI infections utilize other mechanisms of action.

We believe ibezapolstat is the first antibiotic candidate to work by blocking the DNA Pol IIIC enzyme in C.

This enzyme is necessary for replication of the DNA of certain Gram-positive bacteria, like C.

We also have an early stage pipeline of antibiotic product candidates with the same previously unexploited mechanism of action which has established proof of concept in animal studies.

This pipeline includes ACX-375C, a potential oral and parenteral treatment targeting Gram-positive bacteria, including MRSA, VRE and PRSP.

Recent Developments

Initial Public Offering

On June 29, 2021, we completed our IPO, in which we issued and sold 2,875,000 shares of our common stock, including the full exercise by the underwriters of their option to purchase 375,000 additional shares of our common stock, at a public offering price of $6.00 per share, which resulted in net proceeds of $14.8 million after deducting underwriting discounts and commissions and offering expenses.

On June 29, 2021, we completed our IPO, in which we issued and sold 2,875,000 shares of our common stock, including the full exercise by the underwriters of their option to purchase 375,000 additional shares of our common stock, at a public offering price of $6.00 per share, which resulted in net cash proceeds of $14.8 million after deducting underwriting discounts and commissions and offering expenses.

The proceeds from the IPO are being used (i) to complete the Phase 2b clinical trial of ibezapolstat in patients with CDI, (ii) to complete pre-clinical development of ACX-375C and (iii) for general corporate purposes, which may include, without limitation, expenditures relating to research, development and clinical trials other than those specified above, manufacturing, capital expenditures, hiring additional personnel, acquisitions of new technologies or products, the payment, repayment, refinancing, redemption or repurchase of existing or future indebtedness, obligations or capital stock, and working capital.

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Effects of Coronavirus (COVID-19) on Our Business

The World Health Organization recognized COVID-19 as a public health emergency of international concern on January 30, 2020 and as a global pandemic on March 11, 2020.

Public health responses have included national pandemic preparedness and response plans, travel restrictions, quarantines, curfews, event postponements and cancellations and closures of facilities including local schools and businesses.

The World Health Organization (“WHO”) recognized COVID-19 as a public health emergency of international concern on January 30, 2020 and as a global pandemic on March 11, 2020.

The global pandemic and actions taken to contain COVID-19 have adversely affected the global economy and financial markets.

Since the start of the COVID-19 pandemic, we continued to enroll patients in our Phase 2a clinical trial of our lead antibiotic candidate, ibezapolstat, although enrollment rates decreased significantly at certain of our clinical trial sites.

Other areas of our business experienced no change, including our manufacturing and research and development activities, in each case, with key vendors.

Vaccines for COVID-19 continue to be administered in the United States and other countries around the world, but the extent and rate of vaccine adoption, the long-term efficacy of these vaccines and other factors remain uncertain.

Authorities throughout the world have implemented measures to contain or mitigate the spread of the virus, including physical distancing, travel bans and restrictions, closure of non-essential businesses, quarantines, work-from-home directives, mask requirements, shelter-in-place orders and vaccination programs.

While the rollout of vaccines has begun, the timing of vaccinations, herd immunity, and the lifting of shelter-in-place and similar restrictions and movement restrictions are unknown.

The impact of COVID-19 and its variants has been and remains unpredictable.

Since the start of the COVID-19 pandemic, we continued to enroll patients in our Phase 2a and Phase 2b clinical trial of our lead antibiotic candidate, ibezapolstat, although enrollment rates decreased significantly compared to expectations.

Other areas of our business experienced no change, including our research and development activities with key vendors.

We believe that the COVID-19 pandemic has highlighted the importance of antibiotic development in responding to global health issues particularly because many hospitalized COVID-19 patients were also prescribed antibiotics which only accelerates the current antimicrobial resistance crisis described by several regulatory bodies worldwide.

The extent to which the COVID-19 pandemic will ultimately impact our business, results of operations, financial condition and cash flows depends on future developments that are highly uncertain, rapidly evolving and difficult to predict at this time.

While we are not experiencing material adverse impacts at this time, given the global economic slowdown, the overall disruption of global supply chains and distribution systems and the other risks and uncertainties associated with the COVID-19 pandemic, our business, financial condition, results of operations and growth prospects could be materially and adversely affected.

The extent to which the COVID-19 pandemic will ultimately continue to impact our business, results of operations, financial condition and cash flows depends on future developments that are highly uncertain, rapidly evolving and difficult to predict at this time.

Given the global economic slowdown, the overall disruption of global supply chains and distribution systems and the other risks and uncertainties associated with the COVID-19 pandemic, our business, financial condition, results of operations and growth prospects could be materially and adversely affected.

While we believe that we are well positioned for the future as we navigate the crisis and prepare for an eventual return to a more normal operating environment, we continue to closely monitor the COVID-19 pandemic as we evolve our business continuity plans and response strategy.

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On April 13, 2021, the SBA authorized the full forgiveness of the PPP Loan.

Upon forgiveness of the PPP Loan, we reduced the liability and recorded a gain on extinguishment of debt in our statement of operations.

Health Holland Innovative Research Grant

In July 2021, Health Holland awarded an innovative research grant of approximately $500,000 to Leiden University Medical Center (“LUMC”)..

The Company is participating as a scientific collaborator in this research study, which is designed to further study the mechanism of action of DNA Pol IIIC inhibitors.

Upon forgiveness of the PPP Loan, we reduced the liability and recorded a gain on the forgiveness of the PPP Loan in our statement of operations.

Components of our Results of Operations

We have not generated any revenue since our inception and do not expect to generate any revenue from the sale of products in the near future, if at all.

Research and Development Expenses

To date, our research and development expenses have related primarily to development of ibezapolstat, preclinical studies and other preclinical activities related to our portfolio.

Research and development expenses are recognized as incurred and payments made prior to the receipt of goods or services to be used in research and development are capitalized until the goods or services are received.

Research and development expenses include:

● external research and development expenses incurred under agreements with contract research organizations, or CROs, and consultants to conduct our preclinical, toxicology and other preclinical studies;

● laboratory supplies;

● costs related to manufacturing product candidates, including fees paid to third-party manufacturers and raw material suppliers;

● license fees and research funding;

● facilities, depreciation and other allocated expenses, which include direct and allocated expenses for rent, maintenance of facilities, insurance, equipment and other supplies.

Clinical trial costs are a significant component of research and development expenses and include costs associated with third-party contractors.

We outsource a substantial portion of our clinical trial activities, utilizing external entities such as CROs, independent clinical investigators and other third-party service providers to assist us with the execution of our clinical trials.

We plan to substantially increase our research and development expenses for the foreseeable future as we continue the development of our product candidates and seek to discover and develop new product candidates.

Due to the inherently unpredictable nature of preclinical and clinical development, we cannot determine with certainty the timing of the initiation, duration or costs of future clinical trials and preclinical studies of product candidates.

Clinical and preclinical development timelines, the probability of success and the amount of development costs can differ materially from expectations.

We anticipate that we will make determinations as to which product candidates and development programs to pursue and how much funding to direct to each product candidate or program on an ongoing basis in response to the results of ongoing and future preclinical studies and clinical trials, regulatory developments and our ongoing assessments as to each product candidate’s commercial potential.

In addition, we cannot forecast which product candidates may be subject to future collaborations, when such arrangements will be secured, if at all, and to what degree such arrangements would affect our development plans and capital requirements.

Our future clinical development costs may vary significantly based on factors such as:

● per-patient trial costs;

● the number of trials required for regulatory approval;

● the number of sites included in the trials;

● the countries in which the trials are conducted;

● the length of time required to enroll eligible patients;

● the number of patients that participate in the trials;

● the number of doses that patients receive;

● the drop-out or discontinuation rates of patients;

● potential additional safety monitoring requested by regulatory agencies;

● the duration of patient participation in the trials and follow-up;

● the phase of development of the product candidate;

● the efficacy and safety profile of the product candidate.

General and Administrative Expenses

General and administrative expenses consist primarily of salaries and employee-related costs, including stock-based compensation, for personnel in our executive, finance and other administrative functions.

Other significant costs include facility-related costs, legal fees relating to intellectual property and corporate matters, professional fees for accounting and consulting services and insurance costs.

We anticipate that our general and administrative expenses will increase in the future to support our continued research and development activities, precommercialization and, if any product candidates receive marketing approval, commercialization activities.

We also anticipate increased expenses related to audit, legal, regulatory and tax-related services associated with maintaining compliance with exchange listing and SEC requirements, director and officer insurance premiums and investor relations costs associated with operating as a public company.

Results of Operations

Three Months Ended September 30, 2021 Compared to the Three Months Ended September 30, 2020

The following table presents a summary of the changes in our results of operations for the three months ended September 30, 2021 compared with the three months ended September 30, 2020:

Three Months Ended March 31, 2022 Compared to the Three Months Ended March 31, 2021

The following table presents a summary of the changes in our results of operations for the three months ended March 31, 2022 compared with the three months ended March 31, 2021:

Three Months Ended

September 30,

Increase (Decrease)

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Research and Development Expenses

Selling, General and Administrative Expenses

Total Operating Expenses

Research and Development Expenses

Research and development expenses were $1.1 million for the three months ended September 30, 2021, and $0.7 million for the three months ended September 30, 2020, an increase of $0.4 primarily due to the increase in Phase 2b clinical trial related costs.

Selling, General and Administrative Expenses

Selling, general and administrative expenses were $3.5 million for the three months ended September 30, 2021 and $0.7 million for the three months ended September 30, 2020, an increase of $2.8 million.

The increase was primarily due to a $2.0 million increase in stock-based compensation expense, a $0.2 million increase in professional fees, $0.3 million related to other employee related expenses, and $0.3 million increase in legal and insurance costs

Net loss was $4.6 million for the three months ended September 30, 2021, and $1.3 million for the three months ended September 30, 2020, an increase of $3.3 million, due to the reasons stated above.

Nine Months Ended September 30, 2021 Compared to the Nine Months Ended September 30, 2020

The following table presents a summary of the changes in our results of operations for the nine months ended September 30, 2021 compared with the nine months ended September 30, 2020:

Nine Months Ended

September 30,

Increase (Decrease)

(in thousands)

Research and Development Expenses

Selling, General and Administrative Expenses

General and Administrative Expenses

Total Operating Expenses

Gain on PPP Loan Forgiveness

Research and Development Expenses

Research and development expenses were $1.3 million for the nine months ended September 30, 2021, and $1.7 million for the nine months ended September 30, 2020, a decrease of $0.4 million primarily due to a decrease in Phase 2a clinical trial related costs which was completed in 2020.

Selling, General and Administrative Expenses

Selling, general and administrative expenses were $8.9 million for the nine months ended September 30, 2021, and $1.8 million for the nine months ended September 30, 2020, an increase of $7.1 million.

The increase in selling, general and administrative expenses is primarily attributable to a $4.5 million increase in stock-based compensation, $1.5 million increase in professional fees, $0.5 million of employee related expenses, a $0.3 million increase in stock-based director fees due to accelerated vesting, and $0.3 million increase in legal and insurance costs.

Gain on the Forgiveness of the Paycheck Protection Program Loan

We recorded a gain of $.07 million for the nine months ended September 30, 2021 associated with the forgiveness of the PPP Loan.

Net loss was $10.1 million for the nine months ended September 30, 2021, and $3.5 million for the nine months ended September 30, 2020, an increase of $6.6 million, primarily due to the reasons stated above.

Research and development expenses were $0.8 million for the three months ended March 31, 2022 and $0.1 million for the three months ended March 31, 2021, an increase of $0.7 due to Phase 2b clinical trial related costs and increased consulting costs.

General and Administrative Expenses

General and administrative expenses were $1.9 million for the three months ended March 31, 2022 and $1.4 million for the three months ended March 31, 2021, an increase of $0.5 million.

The increase was primarily due to a $0.4 million increase in professional fees, legal and insurance costs and a $0.1 million increase in compensation costs.

Net loss was $2.7 million for the three months ended March 31, 2022, and $1.5 million for the three months ended March 31, 2021, an increase of $1.1 million, due to the reasons stated above.

Liquidity and Capital Resources

Since inception, we have generated no revenue from operations and we have incurred cumulative losses of approximately $23.9 million since inception as of September 30, 2021.

Since inception, we have generated no revenue from operations and we have incurred cumulative losses of approximately $29.2 million as of March 31, 2022.

We have funded our operations primarily from equity issuances.

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Based upon our lack of revenue expected for the foreseeable future, and because of numerous risks and uncertainties associated with the research, development and future commercialization of our product candidates, we are unable to estimate with certainty the amounts of increased capital outlays and operating expenditures associated with our anticipated clinical trials and development activities.

These conditions raise substantial doubt about our ability to continue as a going concern within one year after the date that the financial statements included in this Quarterly Report on Form 10-Q were issued.

We may seek to raise capital through private or public equity offerings, debt financings, collaborations, other out-licensing arrangements, strategic alliances, federal and private grants, marketing, other distribution or licensing arrangements, or the sale of current or future assets.

If we raise additional funds through collaborations, strategic alliances or licensing arrangements with third parties, we might have to relinquish valuable rights to our technologies, future revenue streams, research programs or product candidates.

If we are not able to secure adequate additional funding, we may be forced to make reductions in spending, extend payment terms with suppliers, liquidate assets where possible or suspend or curtail planned programs.

Due to the uncertainty regarding future financings and/or other potential options to raise additional funds, management has concluded that substantial doubt exists with respect to our ability to continue as a going concern within one year after the date that the financial statements in this Quarterly Report on Form 10-Q were issued.

As of September 30, 2021, we had working capital of $14.3 million, consisting primarily of $14.5 million of cash, offset by $0.7 million of accounts payable and accrued expenses.

As of March 31, 2022, we had working capital of $10.7 million, consisting primarily of $11.1 million of cash, offset by $0.6 million of accounts payable and accrued expenses.

The following table sets forth selected cash flow information for the periods indicated:

For the nine months ended

September 30,

For the three months ended

Net cash used in operating activities

Net cash provided by financing activities

Net increase in cash

Net decrease in cash

Net Cash Used in Operating Activities

Net cash used in operating activities was $3.5 million for the nine months ended September 30, 2021.

The net loss was greater than the net cash used in operating activities by $6.6 million, primarily attributable to share-based compensation and share-based vendor payments of $6.9 million, an increase in accounts payable of $0.2 million, offset by an increase in prepaid expenses of $0.5 million.

Net cash used in operating activities was $2.4 million for the nine months ended September 30, 2020.

The net loss was greater than the net cash used in operating activities by $1.1 million, primarily attributable to share-based compensation and shared-based vendor payments of $1.8 million, offset by a decrease in accounts payable of $0.7 million.

Net cash used in operating activities was $1.9 million for the three months ended March 31, 2022.

The net loss was greater than the net cash used in operating activities by $0.8 million, primarily attributable to share-based compensation and share-based vendor payments of $0.9 million, offset by a decrease in accrued expenses of $0.2 million.

Net cash used in operating activities was $0.5 million for the three months ended March 31, 2021.

The net loss was greater than the net cash used in operating activities by $0.9 million, primarily attributable to executive compensation settled in membership interests of $0.9 million, share-based compensation and shared-based vendor payments of $0.3 million, offset by an increase in prepaid expenses and other assets of $0.3 million.

Net Cash Used in Financing Activities

Net cash provided by financing activities was $14.8 million for the nine months ended September 30, 2021, which was attributable to the net proceeds from the Company’s IPO.

Net cash provided by financing activities was $3.3 million for the nine months ended September 30, 2020, which was primarily attributable to the net proceeds from the Company’s private placement offerings.

There was no cash provided from financing activities for the three months ended March 31, 2022 and 2021, respectively.

Critical Accounting Policies and Estimates

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While our significant accounting policies are described in more detail in Note 2, “Summary of significant accounting policies”, we believe the following accounting policies and estimates to be most critical to the preparation of our financial statements.

Federal Income Taxes

The Company estimates an annual effective tax rate of 0% as the Company incurred losses for the nine months ended September 30, 2021 and is forecasting additional losses through year-end, resulting in an estimated net loss for both financial statement and tax purposes.

The Company estimates an annual effective tax rate of 0% as the Company incurred net losses for the three months ended March 31, 2022 resulting in an estimated net loss for both financial statement and tax purposes.

Therefore, no current federal or state income tax expense has been recorded in the financial statements.

Based on the Company’s history of generating operating losses and its anticipation of operating losses for the foreseeable future, the Company has determined that it is more likely than not that the tax benefits from those net operating losses would not be realized and a full valuation allowance against all deferred tax assets has been recorded.

Should the Company’s assessment change, tax benefits associated with the historic net operating loss carryforwards would be limited due to the ownership change.

Should the Company’s assessment change, tax benefits associated with the historic net operating loss carryforwards could be limited due to future ownership changes.

Prior to the Company’s corporate conversion in June 2021, the Company was organized as a limited liability company.

As such, the Company was not a tax paying entity for federal income tax purposes, and therefore, no income tax expense has been

recorded in the financial statements.

As such, the Company was not a tax paying entity for federal income tax purposes and, therefore, no income tax expense had been recorded in the financial statements.

Income or losses of the Company was passed through to the members for inclusion in their respective income tax returns.

Concentration of Credit Risk

We maintain our cash balance in one financial institution.

The balance is insured up to the maximum allowable by the Federal Deposit Insurance Corporation (“FDIC”).

We have not experienced any losses in such accounts and do not believe we are exposed to any significant risk of loss on cash.

At times, the cash balance may exceed the maximum insured limit of the FDIC.

As of September 30, 2021, the Company had cash of $14.5 million in U.S.

bank accounts which were not fully insured by the FDIC.

Guaranteed Payments to Members

Guaranteed payments to members of the Company, prior to the corporate conversion, that were designated to represent reasonable compensation for services rendered, were accounted for as Company expenses rather than an allocation of the Company’s net income.

Research and Development

In accordance with Accounting Standards Codification Topic No.

730, Accounting for Research and Development Costs , we expense research and development costs when incurred.

At times, we may make cash advances for future research and development services.

The Company expenses research and development costs when incurred.

At times, the Company may make cash advances for future research and development services.

These amounts are deferred and expensed in the period the service is provided.

We incurred net research and development expenses in the amount of $2,202,979 and $3,510,088 for the years ended December 31, 2020 and 2019, respectively, and $1,313,954 and $1,745,446 for the nine months ended September 30, 2021 and 2020, respectively.

The Company incurred research and development expenses in the amount of $818,888 and $91,908 for the three months ended March 31, 2022 and 2021, respectively.

Share-Based Compensation

The Company accounts for the cost of services performed by officers and directors received in exchange for an award of Company membership interests, common stock or stock options, based on the grant-date fair value of the award.

The Company recognizes compensation expense based on the vesting period.

The Company recognizes compensation expense based on the requisite service period.

Compensation expense associated with stock option awards is recognized over the requisite service period based on the fair value of the option at the grant date determined based on the Black-Scholes option pricing model.

Option valuation models require the input of highly subjective assumptions including the expected price volatility.

The Company’s employee stock options have characteristics significantly different from those of traded options, and changes in the subjective input assumptions can materially affect the fair value computation using the Black-Scholes option pricing model.

Because there is no public market for the Company’s stock options and very little historical experience with the Company’s stock, similar public companies were used for the comparison of volatility and the dividend yield.

The risk-free rate of return was derived from U.S.

Treasury notes with comparable maturities.

Share-Based Payments to Vendors

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The Company recognizes the expense in the same period and in the same manner as if the Company had paid cash for the services.

Foreign Currency Transactions

The financial statements are presented in U.S.

dollars (“USD”), our reporting currency.

We may engage in transactions denominated in other foreign currencies.

These transactions were translated to USD at rates which approximate those in effect on the transaction dates.

Monetary assets and liabilities denominated in foreign currencies at year-end will be translated at exchange rates in effect as of those dates.

Nonmonetary assets and liabilities are translated at appropriate historical rates.

For the year ended December 31, 2020, we had a major vendor that accounted for approximately 40% of the research and development expenditures.

The same vendor also accounted for approximately 6% of the total accounts payable at December 31, 2020.

This vendor is a clinical research organization (“CRO”), and has been involved with managing our clinical trials of ibezapolstat since the fourth quarter 2019.

We anticipate working with the same vendor to perform CRO services in connection with our planned Phase 2b clinical trial.

Other Company Information

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Recent Accounting Pronouncements

The Financial Accounting Standards Board has issued certain accounting pronouncements as of September 30, 2021 that will become effective in subsequent periods;

however, we do not believe that any of those pronouncements would have significantly affected our financial accounting measurements or disclosures had they been in effect during 2021, or that they will have a significant impact on us at the time they become effective.

The Financial Accounting Standards Board has issued certain accounting pronouncements as of March 31, 2022 that will become effective in subsequent periods;

however, we do not believe that any of those pronouncements would have significantly affected our financial accounting measurements or disclosures had they been in effect, or that they will have a significant impact on us at the time they become effective.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis