What changed in this filing

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Item 2. Management’s Discussion and Analysis

2003-02-13 compared with 2002-11-14 · 188 added, 211 removed, 290 unchanged (58% of the section changed)

12 unchanged sentences

Our critical accounting policies are those that are most important to the

portrayal of our financial condition and results of operation, and require our

portrayal of our financial condition and results of operations, and require our

management's significant judgments and estimates and such consistent application

42 unchanged sentences

As a result of the centralization and consolidation implementation, the net loss

declined to $1,229,151 from $2,676,913 and to $0.07 per share from $0.16 per

share in the three months ended September 30, 2002 versus 2001 and the net loss

declined to $571,944 from $1,970,399 and to $0.03 per share from $0.11 per share

in the three months ended December 31, 2002 versus 2001 and the net loss

declined to $2,835,651 from $8,577,130 and to $0.16 per share from $0.51 per

share in the six months ended September 30, 2002 versus 2001.

share in the nine months ended December 31, 2002 versus 2001.

Likewise, the

overall cash decline was reduced to $1,296,884 from $2,010,360 in the six months

ended September 30, 2002 versus 2001.

RESULTS OF OPERATIONS FOR THE THREE MONTHS AND SIX MONTHS ENDED SEPTEMBER 30,

overall cash decline was reduced to $1,598,836 from $2,758,876 in the nine

months ended December 31, 2002 versus 2001.

RESULTS OF OPERATIONS FOR THE THREE MONTHS AND NINE MONTHS ENDED DECEMBER 31,

2002 AND 2001

Revenues for the three months and six months ended September 30, 2002 were

Revenues for the three months and nine months ended December 31, 2002 were

$875,169 and $2,648,190, respectively, as compared to $935,975 and $3,459,101,

respectively, for the three and six months ended September 30, 2001.

respectively, for the three and nine months ended December 31, 2001.

Given the continued decline in economic activity and weakened capital and

consumer spending for technology products and services, Semotus experienced a

decline in revenues of 34% and 30% respectively in the three months and six

months ended September 30, 2002 versus 2001.

decline in revenues of 6% and 23% respectively in the three months and nine

months ended December 31, 2002 versus 2001.

All segments of the Company's

12 unchanged sentences

Wireless Services

The 22% and 7 % decline in revenues in the three and six months ended September

The 2% and 5% decline in revenues in the three and nine months ended December

31, 2002 respectively, versus 2001 result from the continued decline in

2 unchanged sentences

Global Market Pro and Equity Market Pro, have experienced a longer sale cycle,

which has delayed and postponed their purchases...

which has delayed and postponed their revenues.

Enterprise and Commerce Sales

The 54% and 22% decline in revenues in the three month and six month periods

ended September 30, 2002 versus 2001, respectively is primarily due to the

The 2% and 17% decline in revenues in the three month and nine month periods

ended December 31, 2002 versus 2001, respectively is primarily due to the

initial implementation of a customer loyalty software contract at WizShop in the

6 unchanged sentences

Professional and Related Services

Revenues were essentially the same in the three months ended September 30, 2002

versus 2001 and declined 87% in the six months ended September 30, 2002 versus

2001 due largely to the reduction in new professional service contracts at

Simkin and also directly the result of the sale of Simkin's Kinetidex 2.0

product in June 2001 for which certain services were performed.

Wares on the Web subsidiary was closed in August 2002 and since then has

Revenues declined 34% and 85% in the three and nine months ended December 31,

2002, respectively, versus 2001 due largely to the reduction in new professional

service contracts at Simkin and also directly the result of the sale of Simkin's

Kinetidex 2.0 product in June 2001 for which certain services were performed.

Further, the Wares subsidiary was closed in August 2002 and since then has

contributed minor amounts of revenue.

Logistic System Sales

The 17% and 32% decline in revenues in the three and six month periods ended

September 30, 2002 versus 2001 is a direct result of less capital spending on

system integration projects and the beverage industry reducing new capital

The 13% and 27% decline in revenues in the three and nine month periods ended

December 31, 2002 versus 2001, respectively, is a direct result of less capital

spending on system integration projects and the beverage industry reducing new

capital spending.

ADA received fewer system integration contracts.

Further, ADA is in

process of upgrading its core asset tracking and management software, which has

not been completed.

The new software should provide further incentives for

customers to upgrade and increase revenues at ADA.

is in process of upgrading its core asset tracking and management software,

which has not been completed.

The new software should provide further incentives

for customers to upgrade and increase revenues at ADA.

COST OF REVENUES AND GROSS MARGIN

The overall gross profit margin increased to 54% and 58% in the three and six

months ended September 30, 2002 from 52% and 48% in the same periods ended

September 30, 2001.

The overall gross profit margin increased to 65% and 61% in the three and nine

months ended December 31, 2002 from 56% and 50% in the same periods ended

December 31, 2001.

The increase is the result of continuing changes in product

6 unchanged sentences

Wireless Services

The gross profit margin for this segment declined to 61% from 71% in the three

months ended September 30, 2002 versus 2001, but increased to 71% from 54% in

the six months ended September 30, 2002 versus 2001.

The decline in the

three-month gross profit margin is due to the decline in revenues, which has

reduced the fixed cost coverage.

Such fixed costs include airtime, data feeds

and user fees.

Further, Semotus paid one-time settlements to certain data feed

suppliers whose services were no longer needed.

The increase in the six-month gross profit margin is due to:

i) increased higher

margin sales of enterprise products such as Global Market Pro, ii) the

introduction of a higher margin version of Hiplink, a field force automation

wireless product, and iii) the reduction and discontinuance of lower margin

consumer products.

The gross profit margin for this segment increased to 80% from 69% in the three

months ended December 31, 2002 versus 2001, and also increased to 74% from 59%

in the nine months ended December 31, 2002 versus 2001.

The increase in the

three and nine-month gross profit margins is due to:

i) increased higher margin

sales of enterprise products such as Global Market Pro, ii) the introduction of

a higher margin version of Hiplink, a field force automation wireless product,

and iii) the reduction and discontinuance of lower margin consumer products.

Enterprise and Commerce Sales

The gross profit margin in this segment icreased slightly to 42% and 44% in the

three and six months ended September 30, 2002 from 38% and 42% in the same

periods ended September 30, 2001.

After the elimination of unprofitable products

and services and the closing of the FiveStar and Wares operations, the gross

margin has stabilized in the 40% range.

The major portion of this segment's

gross margin comes from the customer loyalty software contract at WizShop.

Professional and Related Services

The gross profit margin in this segment increased to 42% and 43% in the three

and six month periods ended September 30, 2002 from 68% and 50% in the three and

six month periods ended September 30, 2001.

This is a direct result of the

elimination of unprofitable contracts and services.

The remaining professional

service business carries much higher margins since the services are extensions

of existing contracts that do not require as much start-up costs.

and nine months ended December 31, 2002 from 39% and 41% in the same periods

ended December 31, 2001.

This increase is due to the elimination of unprofitable

products and services and the closing of the FiveStar and Wares operations.

major portion of this segment's gross margin comes from the customer loyalty

software contract at WizShop.

Professional and Related Services

The gross profit margin in this segment declined to 77% in the three-month

period ended December 31, 2002 from 89% in the three-month period ended December

However, the gross profit margin increased to 89% in the nine-month

period ended December 31, 2002 from 52% in the nine-month period ended December

The decline in the three-month gross profit margin is primarily due to

the decline in revenues, which has reduced the fixed cost coverage.

nine-month period increase is a direct result of the elimination of unprofitable

contracts and services.

The remaining professional service business carries much

higher margins since the services are extensions of existing contracts that do

not require as much start-up costs.

Logistic System Sales

The gross profit margin was approximately the same at 53% for the three months

ended September 30, 2002 versus 54% for the three months ended September 30,

2001 and it increased to 55% from 48% in the six months ended September 30, 2002

This is principally due to a shift in the mix of services provided

in the system integration contracts.

ADA experienced more demand for higher

margin software and consulting services and less demand for lower margin

This services shift improved the overall gross profit margin and has

allowed ADA to maintain that gross margin in the most recent quarter.

The gross profit margin increased to 66% for the three months ended December 31,

2002 versus 55% for the three months ended December 31, 2001 and it increased to

58% from 50% in the nine months ended December 31, 2002 versus 2001.

principally due to a shift in the mix of services provided in the system

integration contracts.

ADA experienced more demand for higher margin software

and consulting services and less demand for lower margin hardware.

This services

shift has allowed ADA to increase the gross profit margin.

OPERATING EXPENSES

Operating expenses declined overall in the three month and six month periods

ended September 30, 2002 versus the same periods in the last fiscal year, due to

Operating expenses declined overall in the three month and nine month periods

ended December 31, 2002 versus the same periods in the last fiscal year, due to

the Centralization and Consolidation Plan, which has significantly reduced

6 unchanged sentences

the changes in these five categories of operating expenses (unaudited):

Three Months Ended Six Months Ended

September 30, September 30,

THREE MONTHS ENDED NINE MONTHS ENDED

DECEMBER 31, DECEMBER 31,

-------------------------- --------------------------

38 unchanged sentences

public relations, rent, administrative personnel, and other overhead related

These costs declined during the three months and six months ended

September 30, 2002 as personnel and offices were reduced and operating functions

These costs declined during the three months and nine months ended

December 31, 2002 as personnel and offices were reduced and operating functions

were consolidated.

The net impairment of goodwill is comprised of two components:

(i) the sale of

Simkin's Kinetidex technology for $350,000 and (ii) an impairment charge to

goodwill related to Simkin for $650,000.

As noted in footnote 4, "Sale of

Technology and Net Impairment of Goodwill", Semotus elected to sell the royalty

rights and software of Kinetidex 2.0 to Micromedex, Inc., the joint developer

and exclusive distributor of the product.

Semotus received $350,000 for the

product and all future royalty rights.

Semotus considered a variety of factors

for a potential impairment of goodwill, which included the sale of the

technology, future prospects of Simkin's business, and importantly, the

consideration paid for Simkin, which was substantially all common stock.

Subsequent to the acquisition, the price of the common stock of Semotus had

declined from $14.375 to $1.59 as of June 30, 2001.

Consequently, Semotus

elected to take a goodwill impairment charge of $650,000.

The net impairment of goodwill is related to an impairment charge to goodwill

related to Simkin for $650,000.

As noted in Note 5 of Semotus' Form 10K for the

year ended March 31, 2002, "Sale of Technology and Net Impairment of Goodwill",

Semotus elected to sell the royalty rights and software of Kinetidex 2.0 to

Micromedex, Inc., the joint developer and exclusive distributor of the product.

Semotus received $350,000 for the product and all future royalty rights.

considered a variety of factors for a potential impairment of goodwill, which

included the sale of the technology, future prospects of Simkin's business, and

importantly, the consideration paid for Simkin, which was substantially all

common stock.

Subsequent to the acquisition, the price of the common stock of

Semotus had declined from $14.375 to $1.59 as of June 30, 2001.

Consequently,

Semotus elected to take a goodwill impairment charge of $650,000.

Depreciation and amortization expense includes depreciation of computers and

18 unchanged sentences

decline in the stock and option grants to service providers, in the three months

and six months ended September 30, 2002.

and nine months ended December 31, 2002.

The common stock issued was valued at its fair market value at the time of

2 unchanged sentences

Certain employee stock options, which

have been repriced, are subject to the variable plan requirements of APB No.

have been repriced, are subject to the variable plan requirements of FIN No.

that requires the Company to record compensation expense for changes in the fair

1 unchanged sentence

While no compensation expense was required

to be recognized in the three months and six months ended September 30, 2002 or

to be recognized in the three months and nine months ended December 31, 2002 or

2001, expense will be recognized in the future if the stock price increases

1 unchanged sentence

NON-OPERATING INCOME AND EXPENSES

Non-operating income and expenses for the three and six months ended September

Non-operating income and expenses for the three and nine months ended December

31, 2002 and 2001 are primarily interest income from invested cash, interest

6 unchanged sentences

Net interest income declined as less cash was available for investment during

the three and six months period ended September 30, 2002 versus 2001 as Semotus

the three and nine month periods ended December 31, 2002 versus 2001 as Semotus

continues with operating losses.

Amortization of technology advances decreased

somewhat in the three months ended September 30, 2002, due to the application of

the effective interest method of amortization on the balances.

somewhat in the three months ended December 31, 2002, due to the application of

accelerated amortization on the balances.

COMPREHENSIVE LOSS

The comprehensive loss of $574,024 or $0.03 per share and $2,835,444 or $0.16

per share for the three months and six months ended September 30, 2002,

per share for the three months and nine months ended December 31, 2002,

respectively, compared to $1,977,143 or $0.11 per share and $8,614,394 or $0.51

per share for the three months and six months ended September 30, 2001,

per share for the three months and nine months ended December 31, 2001,

respectively, is a direct result of the implementation of cost reduction

10 unchanged sentences

All segment financial information presented is unaudited.

Enterprise Professional Logistic

Wireless and commerce and related system Corporate

Services sales services sales and other Total

WIRELESS ENTERPRISE AND PROFESSIONAL AND LOGISTIC CORPORATE

SERVICES COMMERCE SALES RELATED SERVICES SYSTEM SALES AND OTHER TOTAL

----------- ----------- ----------- ----------- ----------- -----------

AS OF AND FOR THE THREE MONTHS

Ended September 30, 2002

ENDED DECEMBER 31, 2002

-----------------------------------

Revenue $ 338,970 $ 250,212 $ 11,475 $ 274,512 $ -- $ 875,169

3 unchanged sentences

Capital expenditures 2,567 -- -- -- -- 2,567

Total assets, September 30, 2002* 3,364,652 952,262 266,920 126,526 2,330,243 7,040,602

Six Months Ended September 30, 2002

Total assets, December 31, 2002* 3,614,285 713,951 263,530 134,168 1,628,812 6,354,746

NINE MONTHS ENDED DECEMBER 31, 2002

-----------------------------------

Revenue $ 962,773 $ 766,775 $ 51,744 $ 866,898 $ -- $ 2,648,190

3 unchanged sentences

Capital expenditures 22,083 -- -- -- -- 22,083

Total assets, September 30, 2002* 3,364,652 952,262 266,920 126,526 2,330,243 7,040,602

Total assets, December 31, 2002* 3,614,285 713,951 263,530 134,168 1,628,812 6,354,746

AS OF AND FOR THE THREE MONTHS

Ended September 30, 2001

ENDED DECEMBER 31, 2001

-----------------------------------

Revenue $ 346,421 $ 255,380 $ 17,512 $ 316,662 $ -- $ 935,975

3 unchanged sentences

Capital expenditures 4,172 -- -- -- -- 4,172

Total assets, September 30, 2001* 9,556,918 5,344,748 963,818 1,348,642 4,653,379 21,867,505

Six Months Ended September 30, 2001

Total assets, December 31, 2001* 8,797,980 4,802,917 828,350 1,417,831 4,153,816 20,000,894

NINE MONTHS ENDED DECEMBER 31, 2001

-----------------------------------

Revenue $ 1,017,190 $ 921,334 $ 334,274 $ 1,186,303 $ -- $ 3,459,101

3 unchanged sentences

Capital expenditures 14,992 -- -- 5,715 -- 20,707

Total assets, September 30, 2001* 9,556,918 5,344,748 963,818 1,348,642 4,653,379 21,867,505

Total assets, December 31, 2001* 8,797,980 4,802,917 828,350 1,417,831 4,153,816 20,000,894

* Certain corporate marketing, research and development and general and

1 unchanged sentence

included in "Corporate and other".

The $2,330,243 of assets at September 30,

2002 under "Corporate and other" is substantially comprised of the GMP

Intellectual Property asset and goodwill.

The $4,653,379 of assets under

"Corporate and other" at September 30, 2001 is substantially all comprised of

the GMP Intellectual Property asset.

Further, the selected profit and loss items in the three and six month periods

ended September 30, 2002 and 2001 and total assets at September 30, 2002 and

2001 respectively, have been adjusted for the discontinued operations of

FiveStar and Wares on the Web, which are categorized in the Enterprise and

Commerce Sales segment.

Further, the selected profit and loss items in the three and nine month periods

ended December 31, 2002 and 2001 and total assets at December 31, 2002 and 2001

respectively, have been adjusted for the discontinued operations of FiveStar and

Wares on the Web, which are categorized in the Enterprise and Commerce Sales

See Note 5, "Discontinued Operations".

5 unchanged sentences

products although a cash management and cost reduction program has been

implemented and has reduced the overall cash loss by 35% for the six month

period ended September 30, 2002 versus 2001.

implemented and has reduced the overall cash loss by 42% for the nine month

period ended December 31, 2002 versus 2001.

The sources and uses of cash are

summarized as follows (unaudited):

SIX MONTHS ENDED

SEPTEMBER 30,

NINE MONTHS ENDED

-----------------------------------------------------------------------------

1 unchanged sentence

Cash used in operating activities $ (1,656,049) $ (4,084,588)

Cash (used in) provided by investing activities (20,019) 1,429,937

Cash provided by investing activities 188,856 1,425,765

Cash used in financing activities (161,809) (188,625)

5 unchanged sentences

principally of a net loss of $2,835,651 offset somewhat by non-cash charges of

$685,823 of depreciation and amortization and $22,921 of stock based

$1,015,745, of depreciation and amortization, $574,647 of amortization of notes

receivable, $165,215 of settlement of liabilities and $24,283 of stock based

compensation.

4 unchanged sentences

This largely resulted from decreases in accrued liabilities and

deferred revenue of $161,752 and $97,879 respectively, offset somewhat by

increases in accounts payable of $140,571.

Cash used in investing activities consisted principally of capital expenditures

of $19,516 largely for computer hardware and software.

accounts payable of $189,041 and $97,186 respectively and increases in accounts

receivable of $116,828, offset somewhat by increases in deferred revenue of

Cash provided by investing activities consisted principally of the continuing

investment in ADA of $210,379, by the 49% owner of ADA, Global Beverage Group.

This was offset somewhat by capital expenditures of $22,083.

Cash flows from financing activities produced a net decrease in cash of

which resulted from repayments on notes payable and capital leases.

As of September 30, 2002, the Company had cash and cash equivalents amounting to

$161,809, which resulted primarily from the repurchase by the Company of its

preferred stock for $100,000 in cash as part of the consideration (see Note 6,

"Repurchase of Preferred Stock"), as well as from repayments on notes payable

and capital leases.

As of December 31, 2002, the Company had cash and cash equivalents amounting to

$2,505,467, a decrease of $2,292,122 from the balance at March 31, 2002.

capital decreased to $1,175,269 from $2,064,396 at the fiscal 2002 year end.

decrease in working capital is from the resources used in the operations of

Semotus as explained above.

The Company has not yet generated sufficient

revenues to cover the costs of continued product development and support, sales

and marketing efforts and general and administrative expenses.

material commitments for capital expenditures at September 30, 2002.

capital decreased to $1,252,372 at December 31, 2002 from $2,064,396 at the

fiscal 2002 year end.

The decrease in working capital is from the resources used

in the operations of Semotus as explained above.

The Company has not yet

generated sufficient revenues to cover the costs of continued product

development and support, sales and marketing efforts and general and

administrative expenses.

There are no material commitments for capital

expenditures at December 31, 2002.

Management believes that it has adequate working capital for the next 12 months.

RECENT PRONOUNCEMENTS:

In June 2001, the Financial Accounting Standards Board finalized FASB Statements

141, Business Combination (SFAS 141), and No.

142, "Goodwill and Other

Intangible Assets" (SFAS 142).

SFAS 141 requires the use of the purchase method

of accounting and prohibits the use of the pooling-of-interests method of

accounting for business combinations initiated after June 30, 2001.

also requires that the Company recognize acquired intangible assets apart from

goodwill if the acquired intangible assets meet certain criteria.

applies to all business combinations initiated after June 30, 2001 and for

purchase business combinations completed on or after July 1, 2001.

requires, upon adoption of SFAS 142 that the Company reclassify the carrying

amounts of intangible assets and goodwill based on the criteria in SFAS 141.

SFAS 142 requires, among other things that companies no longer amortize

goodwill, but instead test goodwill for impairment at least annually.

addition, SFAS 142 requires that the Company identify reporting units for the

purposes of assessing potential future impairments of goodwill, reassess the

useful lives of other existing recognized intangible assets, and cease

amortization of intangible assets with an indefinite useful life.

An intangible

asset with an indefinite useful life should be tested for impairment in

accordance with the guidance in SFAS 142.

SFAS 142 is required to be applied in

fiscal years beginning after December 15, 2001 to all goodwill and other

intangible assets recognized at that date, regardless of when those assets were

initially recognized.

SFAS 142 requires the Company to complete a transitional

goodwill impairment test six months from the date of adoption.

The Company is

also required to reassess the useful lives of other intangible assets within the

first interim quarter after adoption of SFAS 142.

The Company adopted SFAS 142

as of April 1, 2002 and is no longer amortizing goodwill.

The effect of the

adoption of these Statements resulted in the net loss for the three months ended

June 30, 2002 being smaller by $179,735 due to not amortizing goodwill.

In August 2001, the FASB issued SFAS No.

143 (SFAS 143) "Accounting for

Obligations Associated with the Retirement of Long-Lived Assets".

addresses financial accounting and reporting for the retirement obligation of an

SFAS 143 states that companies should recognize the asset retirement

cost, at its fair value, as part of the cost of the asset and classify the

accrued amount as a liability in the balance sheet.

The asset retirement

liability is then accreted to the ultimate payout as interest expense.

initial measurement of the liability would be subsequently updated for revised

estimates of the discounted cash outflows.

SFAS 143 will be effective for fiscal

years beginning after June 15, 2002.

At this time, the Company does not expect

that the implementation of SFAS 143 will have any material impact on its

financial position, results of operations, or cash flows.

In October 2001, the FASB issued SFAS No.

144 (SFAS 144) "Accounting for the

Impairment or Disposal of Long-Lived Assets".

SFAS 144 supersedes the SFAS No.

121 by requiring that one accounting model be used for long-lived assets to be

disposed of by sale, whether previously held and used or newly acquired, and by

broadening the presentation of discontinued operations to include more disposal

transactions.

SFAS 144 was adopted effective April 1, 2002.

In accordance with

the adoption, the Company has classified the operations of FiveStar and Wares on

the Web as discontinued operations, see Note 5, " Discontinued Operations".

In June 2002, the FASB issued SFAS No.

146, "Accounting for Exit or Disposal

Activities" ("SFAS 146").

SFAS 146 addresses significant issues regarding the

recognition, measurement, and reporting of costs that are associated with exit

and disposal activities, including restructuring activities that are currently

accconted for under EITF No.

94-3, "Liability Recognition for Certain Employee

Termination Benefits and Other Costs to Exit and Activity (including Certain

Costs Incurred in a Restructuring)." The scope of SFAS 146 also includes costs

related to terminating a contract that is not a capital lease and termination

benefits that employees who are involuntarily terminated receive under the terms

of a one-time benefit arrangement that is not an ongoing benefit arrangement or

an individual deferred-compensation contract.

SFAS 146 is effective for exit or

disposal activities that are initiated after December 31, 2002 and early

application is encouraged.

The Company's adoption of SFAS 146 on January 1, 2003

had no impact on the Company's financial position or results of operations.

In November 2002, the FASB issued FASB Interpretation NO.

45 ("FIN 45"),

"GUARANTOR'S ACCOUNTING AND DISCLOSURE REQUIREMENTS FOR GUARANTEES, INCLUDING

INDIRECT GUARANTEES OF INDEBTEDNESS OF OTHERS, AN INTERPRETATION OF FASB

STATEMENTS NO.

5, 57, AND 107 AND RESCISSION OF FASB INTERPRETATION NO.

45 clarifies the requirements of FASB Statement No.

5, "ACCOUNTING FOR

CONTINGENCIES" relating to to the guarantor's accounting for, and disclosure of

the issuance of certain types of guarantees.

The disclosure provisions of the

Interpretation are effective for financial statements of interim or annual

reports that end after December 15, 2002, irrespective of the guarantor's

The Company's adoption of FIN 45 did not have a material impact in the

Company's financial position or results of operations.

In December 2002, the FASB issued SFAS No.

148, "Accounting for Stock-Based

Compensation, Transition and Disclosure." SFAS No.

148 amends SFAS No.

requires prominent disclosures in both annual and interim financial statements

about the method of accounting for stock-based employee compensation and the

effect of the method used on reported results.

148 is effective for

fiscal years ending after December 15, 2002 and is effective for interim periods

beginning after December 15, 2002.

The Company's adoption of SFAS NO.

January 1, 2003 did not have a material effect on the Company's financial

position or results of operations.

FORWARD LOOKING STATEMENTS AND RISK FACTORS

24 unchanged sentences

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