What changed in this filing

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Item 1. Business

2021-03-24 compared with 2020-03-26 · 215 added, 189 removed, 89 unchanged (82% of the section changed)

Recent Development

On March 16, 2020, Canterbury Park Holding Corporation (the “Company”) announced that, based on the advice of Minnesota state and regulatory bodies, it was temporarily suspending all card casino, simulcast, and special events operations at Canterbury Park at noon on March 16, 2020 in response to concerns about the COVID-19 coronavirus.

Canterbury Park determined this voluntary suspension of activities was in the best interest of the health and safety of its guests and team members and would provide the Company an opportunity to review and update operational best practices and strategies based on what was currently known about this public health situation and future developments.

The Company will continue to monitor developments with respect to the COVID-19 coronavirus and provide updated information on its website, or in press releases.

In a separate press also issued on March 16, 2020, the Company announced that in conjunction with its determination to temporarily shut down operations due to concerns and uncertainty about the effect of the COVID-19 coronavirus, the Company’s Board of Directors had suspended declaring and paying its $0.07 quarterly cash dividend, that would normally be paid in April 2020.

(a) General Development of the Business

Recent Reorganization - Canterbury Park Holding Corporation (the “Company”) was incorporated as a Minnesota corporation in October 2015.

The Company is a successor corporation to another corporation, also named Canterbury Park Holding Corporation, that was incorporated in 1994 (“CPHC”).

Effective as of the close of business on June 30, 2016 CPHC’s business and operations were reorganized into a holding company structure (the “Reorganization”) pursuant to an Agreement and Plan of Merger dated as of March 1, 2016 that was approved by CPHC’s shareholders on June 28, 2016.

Pursuant to the Reorganization:

The Company replaced CPHC as the public company owned by CPHC’s shareholders, with each shareholder at June 30, 2016 owning the same number of shares and having the same percentage ownership in the Company (and, indirectly, in all property and other assets then owned by CPHC) immediately after the Reorganization as that shareholder had in CPHC immediately before the Reorganization.

The Company became the holding company for and parent company of two subsidiaries, Canterbury Park Entertainment LLC (“EntertainmentCo”) and Canterbury Development LLC (“DevelopmentCo”).

EntertainmentCo was the surviving business entity in a merger with CPHC pursuant to the Reorganization and it became the direct owner of all land, facilities, and substantially all other assets related to the CPHC’s pari-mutuel wagering, Card Casino, concessions and other related businesses (“Racetrack Operations”), and EntertainmentCo continues to conduct these businesses consistent with CPHC’s past practices and the Racetrack operations continue to be subject to direct regulation by the Minnesota Racing Commission (“MRC”), a state regulatory commission whose board members are appointed by the Minnesota Governor and confirmed by the Minnesota State Senate .

DevelopmentCo continues CPHC’s efforts prior to June 30, 2016 to commercially develop approximately 140 acres of Company land that is not needed for Racetrack Operations.

DevelopmentCo is not subject to direct regulation by the MRC.

On July 1, 2016, the shares of the Company’s common stock began trading on the NASDAQ Global Market under the symbol “CPHC.”

For purposes of this Report on Form 10-K, when the term “Company”

is used with reference to information covering or related to periods up to and including June 30, 2016, the term refers to the operations of CPHC prior to the Reorganization.

Business Overview - Canterbury Park Holding Corporation (the “Company,”

“we,”

“our,”

or “us”) hosts pari-mutuel wagering on horse races and “unbanked”

card games at its Canterbury Park Racetrack and Card Casino facility (the “Racetrack”) in Shakopee, Minnesota.

The Company’s pari-mutuel wagering operations include both wagering on thoroughbred and quarter horse races during live meets at the Racetrack and year-round wagering on races held at out-of-state racetracks that are televised simultaneously at the Racetrack (“simulcasting”).

Unbanked card games, in which patrons compete against each other, are hosted in the Card Casino at the Racetrack.

The Company also derives revenues from related services and activities, such as food and beverage, parking, advertising signage, publication sales, and catering and events held at the Racetrack.

The ownership and operation of the Racetrack and the Card Casino are significantly regulated by MRC.

The Company acquired the Racetrack on March 29, 1994, commenced seven day a week simulcast operations on May 6, 1994, and, beginning in May 1995, launched live horse racing and related pari-mutuel wagering on a seasonal basis, generally from early May to early September.

The Card Casino opened on April 19, 2000 and, with authority to host card games at up to 80 tables, the Company currently hosts live play on approximately 70 tables on a daily basis.

The Company’s website is www.canterburypark.com.

Our Annual Reports on Form 10‑K, our Quarterly Reports on Form 10‑Q and our periodic reports on Form 8‑K (and any amendments to these reports) are available free of charge on our website.

(b) Financial Information About Segments

The Company divides its business into four segments:

horse racing, Card Casino, food and beverage, and development.

Available Information

The SEC maintains a website that contains reports, proxy and information statements, and other information regarding issuers, including Canterbury Park Holding Corporation, that file electronically with the SEC.

The public can obtain any documents that the Company files with the SEC at http://www.sec.gov.

The Company files annual reports, quarterly reports, proxy statements and other documents with the Securities and Exchange Commission (SEC) under the Securities Exchange Act of 1934 (Exchange Act).

We also make available free of charge through our website (www.canterburypark.com) our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and, if applicable, amendments to those reports filed or furnished pursuant to the Exchange Act as soon as reasonably practicable after we electronically file such material with, or furnishes it to, the SEC.

Canterbury Park Holding Corporation (the “Company,” “we,” “our,” or “us”) is the holding company for and parent company of two subsidiaries, Canterbury Park Entertainment LLC (“Canterbury Entertainment”) and Canterbury Development (“Canterbury Development”) and an indirect subsidiary Canterbury Park Concessions, Inc.

which is wholly-owned by Canterbury Entertainment.

As used herein, the term “Company” or “we” includes Canterbury Park Holding Corporation and its subsidiaries unless the context indicates otherwise.

We divide our business into four segments:

(i) horse racing, (ii) Card Casino, (iii) food and beverage, and (iv) real estate development.

The horse racing segment represents our pari-mutuel wagering operations on simulcast and live horse races;

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and the development segment represents our real estate development operations.

(i) Horse Racing Operations

The Company’s horse racing operations consist of year-round simulcasting of horse races from around the U.S.

and internationally, and wagering on live thoroughbred and quarter horse races (“live meets”) held on a seasonal basis beginning in May and generally concluding in September each year.

For the years ended December 31, 2019 and 2018, the Racetrack hosted 66 days and 69 days, respectively, of live racing beginning in early May and concluding in September.

Currently, Minnesota law requires the Company to schedule a minimum of 125 days of live racing annually, unless the Minnesota Horsemen’s Benevolent and Protective Association (the “MHBPA”) agrees to a fewer number of live racing days.

Since 1995, the MHBPA has agreed to waive the 125‑day requirement and has allowed the Company to run a live meet of at least 50 days each year.

Pursuant to the CMA, the MHBPA entered into a Horse Association Agreement with the Company in which the MHBPA agreed to waive the 125‑day requirement if at least 65 days of live racing are scheduled each year during the term of the agreement.

If, for any reason, the MHBPA ceases to be bound by its obligations under the Horse Association Agreement, and the Company and the MHBPA are unable to agree on a live meet shorter than 125 days, the Company’s operations could be adversely affected by a decrease in the daily purses, potential reduction in the quality of horses, lower attendance, lower overall average amount wagered (“handle”), and substantially greater operating expenses.

Simulcasting is the process by which live horse races held at one facility (the “host track”) are transmitted simultaneously to other locations to allow patrons at each receiving location (the “guest track”) to place wagers on races transmitted from the host track.

We conduct our (i) horse racing, (ii) Card Casino, and (iii) food and beverage segments through Canterbury Entertainment.

We conduct our real estate development segment through Canterbury Development.

COVID-19 Impact on 2020 Racetrack Operations

Due to the COVID-19 coronavirus, our 2020 operating results were significantly different than in prior years and there is continuing uncertainty about the duration and the effect of COVID-19 coronavirus on our 2021 and future operations.

We temporarily suspended all Card Casino, simulcast, and food and beverage operations at Canterbury Park on March 16, 2020 in response to concerns about the COVID-19 coronavirus.

We determined this voluntary suspension of activities was in the best interest of the health and safety of our guests and team members and would provide us an opportunity to review and update operational best practices and strategies based on what was then known about this public health situation and future developments.

Our Card Casino, simulcast, and food and beverage operations remained closed until June 10, 2020.

We began our live thoroughbred and quarter horse racing season at Canterbury Park on Wednesday, June 10, 2020.

The 2020 live racing season was scheduled for 53 days of live racing Monday through Thursday between June 10 and September 16, 2020.

We hosted a limited number of spectators during live racing and also resumed simulcast wagering on Wednesday, June 10, 2020.

We reopened of the Canterbury Park Card Casino on June 13, 2020, subject to Minnesota state guidelines on capacity limitations, social distancing and cleaning protocols.

Pursuant to subsequent Executive Orders by Minnesota’s Governor, the Company’s Card Casino, simulcast, and food and beverage operations at Canterbury Park were temporarily closed again from November 21, 2020 through January 10, 2021.

We reopened our Card Casino, simulcast, and food and beverage operations on January 11, 2021, subject to current statewide COVID-19 pandemic-related restrictions.

In the Business Section and in the Management's Discussion and Analysis Section of this Form 10-K, the Company discusses how COVID-19 affected the Company's 2020 operations and how the Company expects it may affect 2021 operations.

While we temporarily suspended all Card Casino, simulcast, and special event operations at Canterbury Park for a total of approximately eighteen weeks in 2020, we continued to conduct our real estate development operations in 2020, which were not affected by the executive orders.

Canterbury Park Entertainment

Through Canterbury Entertainment, we host pari-mutuel wagering on thoroughbred and quarter horse races and “unbanked” card games at our Canterbury Park Racetrack and Card Casino facility (the “Racetrack”) in Shakopee, Minnesota, which is approximately 25 miles southwest of downtown Minneapolis.

The Racetrack is the only facility in the State of Minnesota that offers live pari-mutuel thoroughbred and quarter horse racing.

Our pari-mutuel wagering operations include both wagering on thoroughbred and quarter horse races during live meets at the Racetrack and year-round wagering on races held at out-of-state racetracks that are televised simultaneously at the Racetrack (“simulcasting”).

Unbanked card games, in which patrons compete against each other, are hosted in the Card Casino at the Racetrack.

The Card Casino has historically operated 24 hours a day, seven days a week and has historically offered both poker and table games at up to 80 tables.

We also derive revenues from related services and activities, such as food and beverage, parking, advertising signage, publication sales, and catering and events held at the Racetrack.

The ownership and operation of the Racetrack and the Card Casino are significantly regulated by the Minnesota Racing Commission (“MRC”).

Canterbury Entertainment is the direct owner of all land, facilities, and substantially all other assets related to our pari-mutuel wagering, Card Casino, concessions and other related businesses (“Racetrack Operations”), and is subject to direct regulation by the MRC.

We own approximately 330 acres of land as of December 31, 2020, in Shakopee, Minnesota where the Racetrack is located.

Traditionally, our revenues have been principally derived from three activities:

Card Casino operations, wagering on live and simulcast horse races, and food and beverage sales.

For the year ended December 31, 2020, revenues from Card Casino operations represented 60.1% of total revenues, wagering on horse races generated 32.4% of total revenues, and food and beverage revenue represented 7.5% of total revenues.

These components of revenue are described in more detail below.

Horse Racing Operations

The Company’s horse racing operations consist of year-round simulcasting of horse races from around the U.S.

and internationally, and wagering on live thoroughbred and quarter horse races (“live meets”) held on a seasonal basis beginning in May and generally concluding in September each year.

At the Racetrack, various aspects of our operations are subject to approval by the MRC and the organization that represents a majority of the owners and trainers of the horses who race at the Racetrack, which is the Minnesota Horsemen’s Benevolent and Protective Association (“MHBPA”).

All of the wagering on simulcast and live horse races at the Racetrack is pari-mutuel wagering.

In pari-mutuel wagering, bettors wager against each other in a pool, rather than against the operator of the facility or with preset odds.

From the total handle wagered, the Minnesota Pari-Mutuel Horse Racing Act (the “Minnesota Racing Act”) specifies the maximum percentage, referred to as the “takeout,” that may be withheld by the Racetrack, with the balance returned to the winning bettors.

Pari-mutuel wagering can be divided into two categories:

straight wagering pools and multiple wagering pools, which are also referred to as “exotic” wagering pools.

Examples of straight wagers include:

“win,” “place,” and “show.” Examples of exotic wagers include:

“daily double,” “exacta,” ”trifecta,” and “pick four.”

The amount of takeout earned by the Company on pari-mutuel wagering depends on where the race is run and the form of wager (straight or exotic).

The total maximum takeouts are 17% from straight wagering pools and 23% from exotic wagering pools.

From this takeout, Minnesota law requires deductions for purses, pari-mutuel taxes, and payments to the Minnesota Breeders’ Fund (“MBF”).

The balance of the takeout remaining after these deductions is commonly referred to as the “retainage.”

While the Minnesota Racing Act regulates that a minimum of 8.4% of the live racing handle be paid as purses to the owners of the horses, purse contributions from other sources are governed by a Horse Association Agreement dated June 4, 2012 by and among the Company, the Shakopee Mdewakanton Sioux Community (“SMSC”), a federally recognized Indian tribe, and the horsepersons’ associations:

the MHBPA, the Minnesota Thoroughbred Association (“MTA”) and the Minnesota Quarter Horse Racing Association (“MQHRA”).

The MHBPA is the horseperson’s organization representing the majority of horsepersons at the Racetrack.

In addition, the MBF receives 1% of the handle.

The current pari-mutuel tax applicable to wagering on all simulcast and live races is 6% of takeout in excess of $12 million during the twelve-month period beginning July 1 and ending the following June 30.

Net revenues from pari-mutuel wagering on live races run at the Racetrack consist of the total amount wagered, less the amounts paid (i) to winning patrons, (ii) for purses, (iii) to the MBF and (iv) for pari-mutuel taxes to the State of Minnesota.

Net revenues from pari-mutuel wagering on races being run at out-of-state racetracks and simulcast to the Racetrack have similar expenses but also include a host fee payment to the host track.

The host fee, which is calculated as a percentage of monies wagered (generally 3.0% to 10.0%), is negotiated with the host track and must comply with state laws governing the host track.

Pari-mutuel revenues also include commission and breakage revenues on live on-track and simulcast racing, fees received from out-of-state racetracks for wagering on our live races and proceeds from unredeemed pari-mutuel tickets.

Additionally, Minnesota Advanced Deposit Wagering (“ADW”) legislation allows Minnesota residents to engage in pari-mutuel wagering on out-of-state horse races online with a prefunded account through an ADW provider.

The Company collects a percentage of monies wagered (generally 3.25% to 5.0%) by Minnesota residents through the ADW provider as a source market fee.

The Company pays 28% of the collected revenues to another Minnesota-based horse track, and records the remaining 72% as revenues and records expenses of at least 50% for purses and breeders’ awards.

For the years ended December 31, 2020 and 2019 , the Racetrack hosted 53 days and 66 days, respectively, of live racing beginning in May (in 2019) and June (in 2020) and concluding in September.

Currently, Minnesota law requires the Company to schedule a minimum of 125 days of live racing annually, unless a majority of horsepersons at the Racetrack agree to a fewer number of live racing days.

We are a party to a Cooperative Marketing Agreement (“CMA”) originally dated June 4, 2012 with the Shakopee Mdewakanton Sioux Community (“SMSC”), a federally recognized Indian tribe.

The primary purpose of the CMA is to increase purses paid during live horse racing at Canterbury Park’s Racetrack in order to strengthen Minnesota’s thoroughbred and quarter horse industry.

Pursuant to CMA, we also entered into a Horse Association Agreement with the horsepersons’ associations and SMSC in which the MHBPA agreed to waive the 125-day requirement if at least 65 days of live racing are scheduled each year beginning in 2013.

On June 1, 2020, we entered into a Fifth Amendment Agreement to the CMA, which became effective on June 8, 2020 upon MRC approval.

Under the Fifth Amendment, the SMSC agreed to provide up to $5,620,000 for the annual purse enhancement for the year 2020.

This amount was calculated by multiplying the expected 52 days of 2020 live horseracing times the amount of $108,077 per live horseracing day.

Consistent with the original CMA, the Company did not receive any part of the purse enhancement amount.

Under the Fifth Amendment, the SMSC also agreed to pay the $100,000 2020 Annual Horse Association Payment payable under the Horse Association Agreement.

The annual purse enhancement that the SMSC is obligated to pay under the CMA for 2021 and 2022 was not changed and remains at $7,280,000 per year.

The Fifth Amendment also provides that the SMSC was not required to pay the Company a 2020 annual marketing payment.

Instead, the First Amendment provides that the Company did use $1,248,343 of annual marketing payments from prior years that were unspent as of January 1, 2020 for joint marketing efforts for the mutual benefit of the Company and SMSC.

The Company used a portion of these funds to promote, improve, or assist in the operation of horse racing at the Racetrack upon approval by the SMSC.

The annual marketing payment that the SMSC is obligated to pay under the CMA for 2021 and 2022 was not changed and remains at $1,620,000 per year.

In connection with the Fifth Amendment, the MHBPA executed a Consent and Waiver on June 1, 2020 pursuant to the Horse Association Agreement.

Under the Consent, the MHBPA waived the 125-day requirement for live racing days conducted by the Company, with no minimum number of live racing days required in 2020, provided that there are at least 65 live racing days each year beginning in 2021.

If, for any reason, the MHBPA ceases to be bound by its obligations under the Horse Association Agreement, the Company’s operations could be adversely affected by a decrease in the daily purses, potential reduction in the quality of horses, lower attendance, lower overall average amount wagered (“handle”), and substantially greater operating expenses.

The Company has agreed for the term of the CMA that it would not promote or lobby the Minnesota legislature for expanded gambling authority and would support the SMSC’s lobbying efforts against expanding gambling authority.

Monies are collected at the guest track and the information with respect to the total amount wagered is electronically transmitted to the host track.

All of the amounts wagered at guest tracks are combined into the appropriate pools at the host track with the final odds and payouts based upon all the monies in the respective pools.

The Company offers simulcast racing from up to 20 racetracks per day, seven days a week, 364 days per year, including Churchill Downs, Santa Anita, Gulfstream Park, Belmont Park, and Saratoga Racecourse.

In addition, races of national interest, such as the Kentucky Derby, the Preakness Stakes, the Belmont Stakes, and the Breeders’

Cup supplement the regular simulcast program.

The Company is able to offer simulcast racing from up to 20 racetracks per day, seven days a week, 364 days per year, including Churchill Downs, Santa Anita, Gulfstream Park, Belmont Park, and Saratoga Racecourse.

In addition, races of national interest, such as the Kentucky Derby, the Preakness Stakes, the Belmont Stakes, and the Breeders’ Cup supplement the regular simulcast program.

The Company regularly evaluates its agreements with other racetracks to offer the most popular simulcast signals of live horse racing that are reasonably available.

Under federal and state law, in order to conduct simulcast operations either as a host or guest track, the Company must obtain the consent of the state’s regulatory authority and the organization that represents a majority of the owners and trainers of the horses who race at the Racetrack.

In Minnesota, these consents must be obtained from the MRC and the MHBPA, respectively.

Under federal and state law, in order to conduct simulcast operations either as a host or guest track, the Company must obtain the consent of the MRC and the MHBPA as the organization that represents a majority of the owners and trainers of the horses who race at the Racetrack.

As these consents are obtained annually, no assurance can be given that the MRC and the MHBPA will allow the Company to conduct simulcast operations either as a host or guest track after 2020.

If either the MRC or the MHBPA does not consent, the Company’s operations could be adversely affected by a decrease in pari-mutuel revenue, potential reduction in the quality of horses, lower attendance, and lower overall handle.

(ii) Card Casino Operations

The Card Casino is typically open 24 hours per day, seven days per week, and offers two forms of unbanked card games:

Card Casino Operations

The Card Casino may offer gaming 24 hours per day, seven days per week, and offers two forms of unbanked card games:

poker and table games.

Poker games, including Texas Hold ‘Em, Stud, and Omaha, with betting limits per hand ranging between $2 and $100, are currently offered in the poker room.

A dealer employed by the Company regulates the play of the game at each table and deals the cards but does not participate in play.

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As of March 2021, the Card Casino was offering the following table games:

Blackjack, Mississippi Stud, Fortune Pai Gow, Three Card Poker, Ultimate Texas Hold ‘Em, EZ Baccarat, Criss Cross Poker, Free Bet Blackjack, and I Luv Suits.

The Company has the option to offer banked games under the Minnesota law governing Card Casino operations but currently only offers “unbanked”

“Unbanked”

refers to a wagering system or game where wagers lost in card games are accumulated into a player pool liability for purposes of enhancing the total amount paid back to winning players.

The Company can only serve as custodian of the player pool, may not have an active interest in any card game, and does not recognize amounts that dealers “win”

or “lose”

during the course of play as revenue.

Blackjack, Mississippi Stud, Fortune Pai Gow, Three Card Poker, Ultimate Texas Hold ‘Em, EZ Baccarat, Criss Cross Poker, Free Bet Blackjack, and I Luv Suits.

The Company has the option to offer banked games under the Minnesota law governing Card Casino operations but currently only offers “unbanked” games.

“Unbanked” refers to a wagering system or game where wagers lost in card games are accumulated into a player pool liability for purposes of enhancing the total amount paid back to winning players.

The Company can only serve as custodian of the player pool, may not have an active interest in any card game, and does not recognize amounts that dealers “win” or “lose” during the course of play as revenue.

The primary source of table games revenue is a percentage of the buy in received from the players, aggregated up to 20% per day, as defined by the MRC regulations, as compensation for providing the Card Casino facility and services, referred to as “collection revenue.” In addition, several table games offer a progressive jackpot.

The player has the option of playing the jackpot with the opportunity to win some or the entire jackpot amount, depending upon the player’s hand.

The primary source of poker revenue the Company collects is a “rake” of 5%-10%, depending on the limit of the game, of the poker pot up to a maximum of $4 per hand.

In addition, poker games offer progressive jackpots for most games.

In order to fund the poker jackpot pools, the dealer withholds $2 from each final pot in excess of the $15 minimum.

Under Minnesota law, the Company is required to pay 10% of the first $6 million of gross Card Casino revenues towards purses for live horse racing at the Racetrack.

After meeting the $6 million threshold, the Company must pay 14% of gross Card Casino revenues as purse monies.

Of funds allocated for purses, the Company pays 10% of the purse monies to the Minnesota Breeders’

Fund (the “MBF”), which is a fund apportioned by the MRC among various purposes related to Minnesota’s horse breeding and horse racing industries.

Of funds allocated for purses, the Company pays 10% of the purse monies to the Minnesota Breeders’ Fund (the “MBF”), which is a fund apportioned by the MRC among various purposes related to Minnesota’s horse breeding and horse racing industries.

The remaining 90% of purse monies are divided between thoroughbred (90%) and quarter horse (10%) purse funds.

Effective for 2019 only, the $6 million threshold was eliminated and the Company was required to pay 14% of gross Card Casino revenue as purse monies.

Of funds allocated for purses, the Company paid 10% of the purse monies to the MBF and the remaining 90% of purse monies were divided between thoroughbred (91%) and quarter horse (9%) purse funds.

(iii) Food and Beverage Operations

The Company’s food and beverage operations consist of concession stands, restaurant and buffet, bars, and other food venues.

The Company currently offers two, year-round café

style restaurants and full service bars within the Card Casino and simulcast area.

Food and Beverage Operations

We derive revenue from our food and beverage operations through sales at concession stands, restaurant and buffet, bars, and other food venues.

The Company currently offers two, year-round café style restaurants and full service bars within the Card Casino and simulcast area.

The Card Casino offers tableside menu service 24 hours a day.

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The food and beverage operations also include our catering and events services.

The Company is the fourth largest event space in the Twin Cities with more than 100,000 square feet of available space.

The Company’s facilities provide a variety of purposes for year-round events and other activities.

The Company’s event space has been used for craft shows, trade shows, pool and poker tournaments, automobile and other utility vehicle shows, major art shows, and fundraisers.

The Company’s outdoor spaces have been used for concerts, snowmobile races, and other competitions.

In 2016, the Company completed construction of a redesign of the infield of the Racetrack to use the space as a concert and event area.

In addition to event space, the Company rents space in its horse stable area for boat storage during the winter months.

(iv) Development Operations

The Company owns approximately 373 acres of land in Shakopee, Minnesota where the Racetrack is located.

Approximately 269 acres of this land is specifically designated as being subject to MRC regulation as part of the Company’s Class A license.

The amount of land currently needed to conduct Racetrack operations (grandstand, racetrack, stable area, parking areas, and land for other facilities including the expo center) is approximately 243 acres.

As a result, approximately 130 acres are considered underutilized (the “Underutilized Land”).

This land is available for real estate development compatible with the Company’s Racetrack Operations.

For the past several years, the Company has explored various ways to develop the Underutilized Land.

The Company has reported on its plans to develop the Underutilized Land from time to time in reports to Securities and Exchange Commission and in press releases.

The Company continues to pursue various mixed use development opportunities, such as residential development, office, restaurants, hotel, entertainment, and retail operations.

See footnote 13 of the consolidated financial statements for more detailed information on recent transactions.

(v) Sources of Revenue

The Company’s revenues are principally derived from three activities:

Card Casino operations, wagering on live and simulcast horse races, and food and beverage sales.

For the year ended December 31, 2019, revenues from Card Casino operations represented 58.1% of total revenues, wagering on horse races generated 26.0% of total revenues, and food and beverage revenue represented 15.9% of total revenues.

Card Casino Operations

The Company currently receives collection revenue from poker and table games wagering in its Card Casino, which operates 24 hours per day, seven days per week.

The primary source of Card Casino revenue is a percentage of the wagers received from the players, aggregated up to 20% per day, as defined by the MRC regulations, as compensation for providing the Card Casino facility and services, referred to as “collection revenue.”

In addition, several table games offer a progressive jackpot.

The player has the option of playing the jackpot with the opportunity to win some or the entire jackpot amount, depending upon the player’s hand.

The Company collects a “rake”

of 5%‑10%, depending on the limit of the game, of each addition to the “pot”

up to a maximum of $5 per hand as its collection revenue.

In addition, poker games offer progressive jackpots for most games.

In order to fund the jackpot pools, the dealer withholds $1 from each final pot in excess of the $15 minimum.

Pari-Mutuel Wagering –

In pari-mutuel wagering, bettors wager against each other in a pool, rather than against the operator of the facility or with preset odds.

From the total handle wagered, the Minnesota Pari-Mutuel Horse Racing Act (the “Minnesota Racing Act”) specifies the maximum percentage, referred to as the “takeout,”

that may be withheld by the Racetrack, with the balance returned to the winning bettors.

From the takeout, funds are set aside for purses and paid to the State of Minnesota for pari-mutuel taxes and to the MBF.

The balance of the takeout remaining after these deductions is commonly referred to as the “retainage.”

Pari-mutuel wagering can be divided into two categories:

straight wagering pools and multiple wagering pools, which are also referred to as “exotic”

wagering pools.

Examples of straight wagers include:

“win,”

“place,”

and “show.”

Examples of exotic wagers include:

“daily double,”

“exacta,”

”trifecta,”

and “pick four.”

The amount of takeout earned by the Company depends on where the race is run and the form of wager (straight or exotic).

Net revenues from pari-mutuel wagering on races being run at out-of-state racetracks and simulcast to the Racetrack have similar expenses but also include a host fee payment to the host track.

The host fee, which is calculated as a percentage of monies wagered (generally 3.0% to 10.0%), is negotiated with the host track and must comply with state laws governing the host track.

The Company collects a percentage of monies wagered (generally 3.25% to 5.0%) by Minnesota residents through the ADW provider as a source market fee.

The Company pays 28% of the collected revenues to another Minnesota-based horse track, and records the remaining 72% as revenues and records expenses of at least 50% for purses and breeders’

Wagering on Live Races

The Minnesota Racing Act establishes the maximum takeout that may be deducted from the handle.

The takeout percentage on live races depends on the type of wager.

The total maximum takeouts are 17% from straight wagering pools and 23% from exotic wagering pools.

From this takeout, Minnesota law requires deductions for purses, pari-mutuel taxes, and payments to the MBF.

While the Minnesota Racing Act regulates that a minimum of 8.4% of the live racing handle be paid as purses to the owners of the horses, purse contributions from other sources are subject to an agreement with the MHBPA and the Minnesota Quarter Horse Association (the “horsepersons’

associations”).

In addition, the MBF receives 1% of the handle.

Food and Beverage Revenue

The Company earns revenue from sales in its restaurant, catering areas, and numerous concession stands located throughout the facility.

Food and beverage sales are also offered in the card room during live and simulcast racing and during events.

Other Revenue

The Company generates cash revenues from the receipt of reserved seating charges, preferred and valet parking, and the sales of various daily pari-mutuel publications.

Additional revenues are derived from special events and other space rentals.

The Company also generates revenue from providing advertising signage space.

(vi) Competition

The Company faces direct competition from North Metro Harness Initiative, LLC (“NMHI”), which operates the Running Aces Harness Park in Columbus Township, Anoka County, Minnesota, a racetrack and card room that is located approximately 50 miles from Canterbury Park.

NHMI offers pari-mutuel wagering on live races of standardbred (“harness”) horses on a seasonal basis and year round wagering on simulcasting of all breeds of horse races.

In addition to pari-mutuel wagering, NHMI operates a card room that directly competes with the Company’s Card Casino.

We are the fourth largest event space in the Twin Cities with more than 100,000 square feet of available space.

Our facilities provide a variety of purposes for year-round events and other activities.

Our event space has been used for craft shows, trade shows, pool and poker tournaments, automobile and other utility vehicle shows, major art shows, and fundraisers.

Our outdoor spaces have been used for concerts, snowmobile races, and other competitions.

In 2016, we completed construction of a redesign of the infield of the Racetrack to use the space as a concert and event area.

In addition to event space, we rent space in our horse stable area for boat storage during the winter months.

Development Operations

Beginning in 2015, we began executing our development plan for Company land that was not necessary to conduct our Racetrack Operations (grandstand, racetrack, stable area, parking areas, and land for other facilities including the expo center).

Canterbury Development is not subject to direct regulation by the MRC.

Originally, approximately 140 acres were considered underutilized and were targeted for real estate development by Canterbury Development complementary with our Racetrack Operations.

In 2020, Canterbury Development continued to pursue various development opportunities for the underutilized land in a project known as Canterbury Commons™.

Canterbury Development continues to pursue various mixed use development opportunities, such as residential development, office, restaurants, hotel, entertainment, and retail operations.

As of December 31, 2020, Canterbury Development has contributed approximately 36 acres of land to three separate joint ventures described below.

In addition, we have agreed to sell several parcels of land to third parties that will then develop the property as described below.

Although we will have no continuing ownership in these land sales, we believe the future developments of this property contribute to the overall vitality of Canterbury Commons.

The following is a summary of our real estate development projects within Canterbury Commons as of December 31, 2020:

● Our first real estate development project in Canterbury Commons began in 2018 with the first of two joint venture agreements between Canterbury Development and an affiliate of Doran Companies (“Doran”) for the development of the upscale Triple Crown Residences at Canterbury Park.

Construction of the 321-unit first phase, which is being developed pursuant to the first joint venture agreement, began in late 2018 with initial occupancy on June 1, 2020.

As of the end of December 2020, all 321 units were available for occupancy.

In August 2020, Doran exercised its option for Phase II of the project, which will include an additional 300 residential units, and the Company entered into a second joint venture agreement with Doran.

Pursuant to this second agreement, in early August 2020, the Company transferred roughly 10 acres of land to the second joint venture with Doran.

In addition to receiving 27.4% ownership in the Doran Phase II joint venture, the exchange resulted in the repayment of a $2.9 million note receivable which was on the Company’s balance sheet as a related party receivable as of June 30, 2020.

Groundwork on the Doran Canterbury II site began in October 2020, paving the way for the ground-up construction of the second phase of apartments, which is anticipated to begin in the summer of 2021.

○ As a result of these joint ventures, Canterbury Development holds a 27.4% equity interest in Doran Canterbury I, LLC governed by an operating agreement effective as of March 1, 2018 with Doran Shakopee LLC, and Canterbury Development holds a 27.4% equity interest in Doran Canterbury II, LLC governed by an operating agreement effective as of July 30, 2020 with Doran Shakopee LLC.

● Development work related to the Company’s joint venture with Greystone Construction (“Greystone”) was also underway on the southwest portion of the Canterbury Commons site.

Pursuant to this joint venture, Greystone is developing a 13-acre land parcel with potential uses expected to include hospitality, dining, residential, commercial and service-oriented retail.

Greystone’s development work to date is primarily for a new 28,000 square foot office building, with Greystone committed to occupy the second floor as its new corporate headquarters.

The project is expected to be completed by July 2021.

○ As a result of this joint venture, Canterbury Development entered into an operating agreement with an affiliate of Greystone Construction, as the two members of a Minnesota limited liability company named Canterbury DBSV Development, LLC (Canterbury DBSV).

Canterbury Development’s equity contribution to Canterbury DBSV was approximately 13 acres of land, which were contributed to Canterbury DBSV on July 1, 2020.

In connection with its contribution, Canterbury Development became a 61.87% equity member in Canterbury DBSV.

● Development work by Pulte Homes of Minnesota on 109 new row homes and townhome residences at Canterbury Commons is expected to start in the spring of 2021 following approvals.

Lifestyle Communities is working on its approvals with the City of Shakopee for a new cooperative community featuring a 56-unit, four-story building with over 5,000 square feet of amenity spaces that is expected to begin construction in the fall of 2021.

○ In April 2020, Canterbury Development entered into two agreements to sell approximately 14 acres of land on the west side of the Racetrack to Pulte Homes of Minnesota and Lifestyle Communities for total consideration of approximately $3,500,000.

Closing of each of these transactions is subject to the satisfaction of certain customary conditions and we expect these transactions to close in 2021.

In addition to the approximately 50 acres under development or under contract, the Company continues to make progress with developer and partner selection for the remaining approximately 90 acres of the Canterbury Commons development.

While most of the development that is underway is residential, the focus will be on entertainment, office, retail, hotel and restaurant uses for the next phase of Canterbury Commons.

Canterbury expects to make additional announcements of new partners for this phase in the future.

See footnote 12 of the consolidated financial statements for more detailed information on recent transactions and development activity.

The Company faces direct competition from Running Aces Harness Park ("Running Aces") in Columbus Township, Anoka County, Minnesota, a racetrack and card room that is located approximately 50 miles from Canterbury Park.

Running Aces offers pari-mutuel wagering on live races of standardbred (“harness”) horses on a seasonal basis and year round wagering on simulcasting of all breeds of horse races.

In addition to pari-mutuel wagering, Running Aces operates a card room that directly competes with the Company’s Card Casino.

The Company operates in a highly competitive wagering and gaming environment with a large number of participants.

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and other jurisdictions.

The Company competes with a number of tribal casinos in the State of Minnesota that offer video slot machines, table games, and unbanked card games, including Minnesota’s largest casino, Mystic Lake, which is located approximately four miles from the Racetrack and which is owned by the SMSC.

The Company competes with a number of tribal casinos in the State of Minnesota that offer video slot machines, table games, and both banked and unbanked card games, including Minnesota’s largest casino, Mystic Lake, which is located approximately four miles from the Racetrack and which is owned by the Shakopee Mdewakanton Sioux Community (the "SMSC").

Additionally, Internet-based interactive gaming and wagering is growing rapidly and adversely affects all forms of wagering offered by the Company.

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We expect this competition to continue for the foreseeable future.

(vii) Regulation

Canterbury Development and its joint ventures face competition from developers of other residential, mixed use, office, retail, hotel and entertainment spaces around Shakopee, Minnesota and elsewhere in Minnesota.

These other developers may be larger and have more resources than Canterbury Development or than Canterbury Development and its developer partners on a combined basis.

The leasing of real estate is highly competitive.

The principal competitive factors are rent, location, lease term, lease concessions, services provided and the nature and condition of the property to be leased.

The Canterbury Development joint ventures will directly compete with all owners, developers and operators of similar space in the areas in which our properties are located.

The number of competitive multifamily properties in our particular market could adversely affect lease rates at residential properties in Canterbury Commons, as well as the rents able to be charged.

In addition, other forms of residential properties, including single family housing and town homes, provide housing alternatives to potential residents of luxury apartment communities like our Triple Crown Residences at Canterbury Park.

Likewise, the competition for high quality tenants for retail, office and other spaces is intense.

In order to be successful, our real estate joint ventures must have high lease rates, competitive rental rates, and maintain high occupancy rates with a financially stable tenant base.

We may again in the future seek developers or other partners for joint venture arrangements or opportunities for Canterbury Development to develop our properties.

We will be competing with other property owners, both around Shakopee and elsewhere, for high quality builders, commercial and residential real estate firms, and developers that share our vision for Canterbury Commons.

We have in the past and may agree in the future to sell parcels of land to third parties that will then develop the properties and in that case, we will also be in competition with other sellers of properties for purchasers.

Although we will have no continuing ownership in these land sales, we believe that the ability to effectively compete for tenants will be a factor in the purchasers’ selection of our property over other competing properties for their developments.

The ownership and operation of the Racetrack in Minnesota is subject to significant regulation by the MRC under the Minnesota Racing Act and the rules adopted by the MRC.

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The MRC, among other things, grants operating licenses to racetracks after an application process and public hearings, licenses all racetrack employees, jockeys, trainers, veterinarians, and other participants, regulates the transfer of ownership interests in licenses, allocates live race days and simulcast-only race days, approves race programs, regulates the conduct of races, sets specifications for the racing ovals, animal facilities, employee quarters and public areas of racetracks, regulates the types of wagers on horse races, and approves significant contractual arrangements with racetracks, including management agreements, simulcast arrangements, and totalizator contracts.

A federal statute, the Interstate Horse Racing Act of 1978, also requires that a racetrack must obtain the consent of the group representing the horsepersons (owners and trainers) racing the breed of horses that race a majority of the time at the racetrack (the MHBPA), and the consent of the state agency regulating the racetrack (in Minnesota, the MRC), in order to transmit simulcast signals of its live races or to receive and use simulcast signals from other racetracks.

A federal statute, the Interstate Horse Racing Act of 1978, also requires that a racetrack must obtain the consent of the group representing the horsepersons (owners and trainers) racing the breed of horses that race a majority of the time at the racetrack (which is the MHBPA), and the consent of the state agency regulating the racetrack (in Minnesota, the MRC), in order to transmit simulcast signals of its live races or to receive and use simulcast signals from other racetracks.

Issuance of Class A and Class B Licenses to the Company

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However, the Racing Act provides that the MRC may issue an additional Class A License within the seven-county metropolitan area, if the additional license is issued for a facility that, among other conditions, is located more than 20 miles from the Racetrack, contains a track no larger than five-eighths of a mile in circumference, and is used exclusively for harness racing.

In January 2005, this additional Class A license was issued to NMHI (see “Competition”

In January 2005, this additional Class A license was issued for the location that later became known as Running Aces (see “Competition” above).

Limitation on Ownership and Management of an Entity that holds a Class A or Class B License

The Racing Act requires prior MRC approval of all officers, directors, 5% shareholders or other persons having a present or future direct or indirect financial or management interest in any person applying for a Class A or Class B license, and if a change of ownership of more than 5% of the licensee’s shares is made after an application is filed or the license issued, the applicant or licensee must notify the MRC of the changes within five days of this occurrence and provide the information required by the Racing Act.

Local Regulation

The Company’s operations are subject to state and local laws, regulations, ordinances, and other provisions affecting zoning, public health, and other matters that may have the effect of restricting the uses to which the Company’s land and other assets may be used.

Also, any development of the Racetrack site is, among other things, subject to applicable zoning ordinances and requires approval by the City of Shakopee and other authorities.

Also, any development of the Racetrack site and Canterbury Commons is, among other things, subject to applicable zoning ordinances and requires approval by the City of Shakopee and other authorities.

There can be no assurance these approvals will be obtained for any future development the Company proposes.

(viii) Recent Legislation

Recent Legislation

Minimum Wage Legislation

In 2014, Minnesota legislation enacted into law an increase in the minimum wage that must be paid to most Company employees.

On January 1, 2018, the minimum wage was set to increase at the beginning of each year by the rate of inflation with a maximum increase of up to 2.5% per year.

The minimum wage for 2020 will be $10.00 per hour.

Beginning January 1, 2018, the minimum wage was set to increase at the beginning of each year by the rate of inflation with a maximum increase of up to 2.5% per year.

The minimum wage for 2021 is $10.08 per hour.

Prior to August 1, 2014, the Company employed a large number of individuals who received an hourly wage equal to or slightly above $7.25 per hour.

As a result, this legislation had an adverse financial impact in 2014 through 2019, and will continue to have an adverse impact.

As a result, this legislation had an adverse financial impact on the Company in 2014 through 2020, and will continue to have an adverse impact on the Company.

We have implemented measures to partially mitigate the impact of this increase by raising our prices and reducing our employee count.

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As part of the agreement, 50% of source market fees is allocated to purse accounts and the MBF.

(ix) Cooperative Marketing Agreement

Cooperative Marketing Agreement

On June 4, 2012, the Company entered into the CMA with the SMSC.

The primary purpose of the CMA is to increase purses paid during live horse racing at Canterbury Park’s Racetrack in order to strengthen Minnesota’s thoroughbred and quarter horse through horse industry.

Under the CMA, as amended, this is achieved through “Purse Enhancement Payments to Horsemen”

paid directly to the MHBPA.

These payments have no direct impact on the Company’s consolidated financial statements or operations.

Under the CMA, as amended, the SMSC paid the horsemen $7.3 million for purse enhancements for each of the years ended December 31, 2019 and 2018.

Under the CMA, the SMSC also agreed to make “Marketing Payments”

to the Company relating to joint marketing efforts for the mutual benefit of the Company and the SMSC, including signage, joint promotions, player benefits and events.

Under the CMA, the SMSC paid the Company $1.6 million for marketing purposes for each of the years ended December 31, 2019 and 2018.

The CMA was amended in January 2015, January 2016, January 2018, and March 2018 to adjust the payment amounts between the “Purse Enhancement Payments to Horsemen”

and “Marketing Payments to Canterbury Park.”

Under the CMA as most recently amended, the SMSC has agreed to make the following purse enhancement and marketing payments for 2020 through 2022:

Purse Enhancement Payments to

Marketing Payments to Canterbury

1 - Includes $100,000 each year payable to various horsemen associations

The amounts received from the marketing payments are recorded as a component of other revenue and the related expenses are recorded as a component of advertising and marketing expense and depreciation in the Company’s consolidated statements of operations.

For the year ended December 31, 2019, the Company recorded $1,114,000 in other revenue and incurred $888,000 in advertising and marketing expense and $226,000 in depreciation related to the SMSC marketing payment.

For the year ended December 31, 2018, the Company recorded $1,275,000 in other revenue and incurred $1,049,000 in advertising and marketing expense and $226,000 in depreciation related to the SMSC marketing payment.

The excess of amounts received over revenue is reflected as deferred revenue on the company’s consolidated balance sheets.

Under the CMA, the Company agreed for the term of the CMA that it would not promote or lobby the Minnesota legislature for expanded gambling authority and will support the SMSC’s lobbying efforts against expanding gambling authority.

If the Company breaches its obligations under the terms of the agreement, the Company is obligated to repay (1) all amounts paid by SMSC pursuant to the agreement;

(2) pay to the SMSC an amount equal to all Horse Association Payments paid by SMSC;

and (3) pay to SMSC any additional amounts for any other damages SMSC incurs.

The Company has not violated and does not intend to violate its obligations with respect to the agreement.

The Company believes the likelihood of a breach of obligations is remote.

(x) Marketing

The Company’s primary market is the seven-county Minneapolis-Saint Paul metropolitan area (Hennepin, Ramsey, Anoka, Washington, Dakota, Scott, and Carver) plus the two counties to the south of the Racetrack and Card Casino (Le Sueur and Rice).

Under the CMA, as amended, this is achieved through “Purse Enhancement Payments to Horsemen” paid directly to the MHBPA.

On June 1, 2020, we entered into a Fifth Amendment Agreement to the CMA, which became effective on June 8, 2020 upon MRC approval.

Under the Fifth Amendment, the SMSC agreed to provide up to $5,620,000 for the annual purse enhancement for the year 2020.

This amount was calculated by multiplying the expected 52 days of 2020 live horseracing times the amount of $108,077 per live horseracing day.

Consistent with the original CMA, the Company will not receive any part of the purse enhancement amount.

Under the Fifth Amendment, the SMSC also agreed to pay the $100,000 2020 Annual Horse Association Payment payable under the Horse Association Agreement.

The annual purse enhancement that the SMSC is obligated to pay under Agreement for 2021 and 2022 was not changed and remains at $7,280,000 per year.

The Fifth Amendment also provides that the SMSC is not required to pay the Company a 2020 annual marketing payment.

Instead, the First Amendment provides that the Company will use $1,248,343 of annual marketing payments from prior years that were unspent as of January 1, 2020 for joint marketing efforts for the mutual benefit of the Company and SMSC.

The Company may also use a portion of these funds to promote, improve, or assist in the operation of horse racing at the Racetrack upon approval by the SMSC.

The annual marketing payment that the SMSC is obligated to pay under the CMA for 2021 and 2022 was not changed and remains at $1,620,000 per year.

The purse enhancement payments to horsemen have no direct impact on the Company’s consolidated financial statements or operations.

See the Management's Discussion and Analysis Section of this Form 10-K and footnote 11 of the consolidated financial statements for more detailed information on the CMA.

The City of Shakopee, located in the southwestern portion of the metropolitan area, is one of the fastest growing communities in the region, and Scott County is one of the fastest growing counties in the country.

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This includes delivering great customer service, developing new food and beverage offerings, creating fan education programs, and providing entertainment opportunities that go beyond the traditional pari-mutuel wagering and card playing activities.

(xi) Employees

At December 31, 2019, the Company had 281 full-time employees and 649 part-time employees.

The Company adds approximately 350 employees on a seasonal basis for live racing operations from early May until early September.

The Company’s management believes its employee relations are good.

(xii) Executive Officers

Human Capital and Team Members

Talent Management

At December 31, 2020 , the Company had 227 full-time team members and 383 part-time team members.

The Company adds approximately 350 team members on a seasonal basis for live racing operations from early May until early September.

During 2020, in an effort to reduce current and future costs in response to the negative impact of the COVID-19 pandemic on our business, we made difficult decisions that impacted our team members.

During the temporary closures and suspension of the Company’s operations described above, all Canterbury Park team members, except for a limited number of key personnel required for basic ongoing maintenance, security, and management needs, were placed on an unpaid furlough.

The Company also implemented a salary reduction for all remaining non-furloughed team members based on a combination of the team member’s salary and the team member’s responsibilities during the temporary shutdown.

Upon the Company’s reopening of operations, the Company implemented a salary reduction for the management team, which was in effect through 2020.

Additionally, pandemic-related restrictions on our special events and group sales operations impacted our non-gaming business for the remainder of 2020 and continues to impact us today.

To address this challenge, the Company made the very difficult decision to align staffing levels with the current level of our non-gaming business.

These actions included leaving vacant positions unfilled, furloughing team members, pay reductions for senior leadership, and some job eliminations.

Our success depends in large part upon our ability to attract, retain, train, lead, and motivate skilled team members.

To facilitate the recruitment, development, and retention of our valuable team members, we strive to make Canterbury Park a diverse, inclusive, and safe workplace, with opportunities for our team to grow and develop.

The Company offers training and development opportunities for team members to enhance leadership and communication skills.

The Company also has created various internal committees, including a specific rewards and recognition committee to support our team member recognition programs.

To help retain talent, we measure team member engagement, including conducting regular engagement surveys to all team members.

The most recent survey was conducted in 2019 and reflected an engagement level among our team members that exceeded the average engagement levels of benchmarked companies.

Health and Safety

During 2020, we focused significant attention on the effective handling of the COVID-19 Pandemic.

We implemented new protocols and processes designed to limit the spread of the virus.

These include the use of hand sanitizers and face masks, new cleaning and disinfecting regimes, the implementation of social distancing measures in restaurants, bars, gaming, recreation, and back of the house areas, and a detailed contact tracing protocol.

We have made physical changes to our properties, such as the installation of thermal screening points at entrances and changes to our heating, ventilation and air conditioning (“HVAC”) systems.

We have also enabled employees to work from home where possible.

Our employee guidelines and policies are founded on our cornerstones of safety, service, courtesy, cleanliness, and integrity.

We are committed to equal opportunity employment and prohibit harassment or discrimination of any kind.

We have adopted an open door policy to encourage an honest employer-associate relationship which includes a confidential hotline available to all employees.

Executive Officers

The executive officers of the Company, their ages and their positions with the Company at March 15, 2021 are as follows:

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(NASDAQ:JCS), a manufacturer of telecommunications and data communications products based in Minnetonka, Minnesota.

Sampson is the son of Curtis A.

Sampson, who is the Company’s non-executive Chairman of the Board and the beneficial owner of approximately 20 % of the Company’s common stock.

Dehmer was hired as Vice President of Finance and Chief Financial Officer in May 2019.

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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-K

Item 1. Business