What changed in this filing

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Item 2. Management’s Discussion and Analysis

2022-08-04 compared with 2022-05-06 · 122 added, 65 removed, 278 unchanged (40% of the section changed)

35 unchanged sentences

In 2020, we launched our DTC insurance offerings in our life vertical and in our health vertical via the acquisition of Crosspointe Insurance & Financial Services, LLC, or Crosspointe, which we later renamed Eversurance.

In August 2021, we launched our DTC insurance offerings in our auto and home and renters verticals via the acquisition of Policy Fuel LLC and its affiliates, or PolicyFuel.

In the three months ended March 31, 2022 and 2021, our total revenue was $110.7 million and $103.8 million, respectively, representing year-over-year growth of 6.6%.

We had net losses of $5.7 million and $3.8 million for the three months ended March 31, 2022 and 2021, respectively, and had $2.4 million and $4.8 million in adjusted EBITDA for the three months ended March 31, 2022 and 2021, respectively.

In 2021, we launched our DTC insurance offerings in our auto and home and renters verticals via the acquisition of Policy Fuel LLC and its affiliates, or PolicyFuel.

In the three months ended June 30, 2022 and 2021, our total revenue was $101.9 million and $105.1 million, respectively, representing year-over-year decrease of 3.0%.

We had net losses of $3.8 million and $1.9 million for the three months ended June 30, 2022 and 2021, respectively, and had $1.4 million and $6.6 million in adjusted EBITDA for the three months ended June 30, 2022 and 2021, respectively.

In the six months ended June 30, 2022 and 2021, our total revenue was $212.6 million and $208.9 million,

respectively, representing year-over-year growth of 1.8%.

We had net losses of $9.5 million and $5.7 million for the six months ended June 30, 2022 and 2021, respectively, and had $3.9 million and $11.4 million in adjusted EBITDA for the six months ended June 30, 2022 and 2021, respectively.

See the section titled “—Non-GAAP Financial Measure”

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To support the health and well-being of our employees, customers, partners and communities, a majority of our employees continue to work remotely, however our offices are open for use.

While such disruptions have not had a material adverse impact on our financial results through March 31, 2022, such disruptions may impact consumer insurance shopping behavior.

While such disruptions have not had a material adverse impact on our financial results through June 30, 2022, such disruptions may impact consumer insurance shopping behavior.

We continue to monitor and are managing our operations for the ongoing impact of COVID-19.

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As a result, our auto insurance carrier customers reduced marketing spend and cost per sale targets the following year, ultimately impacting our revenue growth in the auto insurance vertical in 2017.

More recently, and specifically starting in the third quarter of 2021, the auto insurance industry has experienced similar challenges, which is impacting our revenue growth in the auto insurance vertical.

We believe this trend will continue during 2022.

More recently, and specifically starting in the third quarter of 2021, the auto insurance industry has experienced similar challenges, which is impacting our financial performance in the auto insurance vertical.

Auto insurance carriers experienced a sudden rise in the severity of claims caused by inflationary increases in the cost to repair and replace vehicles and settle medical and injury claims.

The increase in claims severity has reduced underwriting performance for auto insurance carriers, causing them to implement policy premiums increases and reduce spending on new customer acquisition.

The reductions in new customer acquisition spending by auto insurance carriers has had a negative impact on the pricing and demand for consumer referrals in our marketplace.

We believe this trend will continue in the near term and could be prolonged by further cost inflation or insufficient policy premium increases.

Expanding consumer traffic

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the financial information we present on a GAAP basis.

We monitor and present Adjusted EBITDA because it is a key measure used by our management and board of directors to understand and evaluate our operating

performance, to establish budgets and to develop operational goals for managing our business.

We monitor and present Adjusted EBITDA because it is a key measure used by our management and board of directors to understand and evaluate our operating performance, to establish budgets and to develop operational goals for managing our business.

Adjusted EBITDA should not be considered in isolation from, or as an alternative to, measures prepared in accordance with GAAP.

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We also generate revenue from commission fees for the sale of policies, primarily in our health and automotive verticals.

Commission revenue represented approximately 13% of total revenue in the three months ended March 31, 2022 and less than 10% of total revenue in the three months ended March 31, 2021.

Commission revenue represented approximately 13% of total revenue in the three and six months ended June 30, 2022 and less than 10% of total revenue in the three and six months ended June 30, 2021.

We recognize revenue from commission fees based on our constrained estimate of commission payments we expect to receive over the lifetime of the policies sold, which we refer to as constrained lifetime values, or constrained LTVs, of commission payments.

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For the periods presented, our total revenue consisted of revenue generated from our automotive and other insurance verticals, which includes home and renters, life and health insurance verticals, as follows:

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

(in thousands)

Total Revenue

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To supplement our consolidated financial statements presented in accordance with GAAP and to provide investors with additional information regarding our financial results, we present in this Quarterly Report on Form 10-Q

adjusted EBITDA as a non-GAAP financial

adjusted EBITDA as a non-GAAP financial measure.

Adjusted EBITDA is not based on any standardized methodology prescribed by GAAP and is not necessarily comparable to similarly titled measures presented by other companies.

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Reconciliation of Net Loss to Adjusted EBITDA:

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

(in thousands)

Stock-based compensation

4 unchanged sentences

Results of Operations

Comparison of the Three Months Ended March 31, 2022 and 2021

Comparison of the Three and Six Months Ended June 30, 2022 and 2021

The following tables set forth our results of operations for the periods shown:

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

(in thousands)

Statement of Operations Data:

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Interest income

Other expense, net

Total other expense, net

Other income (expense), net

Total other income (expense), net

Other Financial and Operational Data:

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Comprised of revenue from the following distribution channels:

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

Direct channels

1 unchanged sentence

Includes stock-based compensation expense as follows:

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

(in thousands)

Cost of revenue

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financial measure and a reconciliation of adjusted EBITDA to its comparable GAAP financial measure.

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

(dollars in thousands)

Revenue increased by $6.9 million from $103.8 million for the three months ended March 31, 2021 to $110.7 million for the three months ended March 31, 2022.

The increase in revenue was due to increases of $3.2 million and $3.7 million in revenue from our automotive and other insurance marketplace verticals, respectively.

The increase in revenue from our automotive vertical was primarily due to an increase in commission revenue of $5.2 million, partially offset by a decrease in carrier spend for referrals.

The increase in revenue from our other marketplace verticals was primarily due to an increase of $6.6 million in commission revenue, partially offset by a decrease in number of referrals sold.

(dollars in thousands)

Revenue decreased by $3.1 million from $105.1 million for the three months ended June 30, 2021 to $101.9 million for the three months ended June 30, 2022.

The decrease in revenue was due to a decrease of $5.0 million in revenue from our automotive vertical, partially offset by an increase of $1.8 million in our other insurance verticals.

The decrease in revenue from our automotive vertical was primarily due to a decrease in carrier spend for referrals of $10.5 million, partially offset by an increase of $5.5 million in commission revenue.

The increase in revenue from our other insurance verticals was due to an increase of $4.7 million in commission revenue, partially offset by a decrease in carrier spend for referrals of $2.8 million.

Revenue increased by $3.7 million from $208.9 million for the six months ended June 30, 2021 to $212.6 million for the six months ended June 30, 2022.

The increase in revenue was due to an increase of $5.5 million in revenue from our other insurance verticals, partially offset by a decrease of $1.8 million in revenue from our automotive vertical.

The increase in revenue from our other verticals was primarily due to an increase of $11.1 million in commission revenue, partially offset by a decrease in carrier spend for referrals of $5.6 million.

The decrease in revenue from our automotive vertical was primarily due to decrease in carrier spend for referrals of $12.7 million, partially offset by an increase in commission revenue of $10.9 million.

Cost of Revenue

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

(dollars in thousands)

Cost of revenue

Percentage of revenue

Cost of revenue was relatively consistent for the three months ended March 31, 2022 and 2021.

Cost of revenue increased due primarily to increased third-party call center costs of $0.4 million, which were primarily related to increased volume of call referrals and to increased amortization expense of $0.2 million.

These increases were partially offset by a decrease in hosting costs of $0.5 million.

Cost of revenue increased by $0.2 million from $5.8 million for the three months ended June 30, 2021 to $6.1 million for the three months ended June 30, 2022.

Cost of revenue increased primarily due to increased personnel-related costs of $0.4 million, increased third-party call center costs of $0.2 million related to volume increases of call referrals and increased amortization of intangible assets of $0.1 million, partially offset by a decrease in hosting costs of $0.3 million and a decrease in technical service costs of $0.2 million.

Cost of revenue increased by $0.3 million from $11.8 million for the six months ended June 30, 2021 to $12.0 million for the six months ended June 30, 2022.

Cost of revenue increased primarily due to increased third-party call center costs of $0.5 million related to volume increases of call referrals, increased personnel-related costs of $0.4 million and increased amortization of intangible assets of $0.3 million, partially offset by a decrease in technical service costs of $0.7 million and a decrease in hosting costs of $0.3 million.

Sales and Marketing

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

(dollars in thousands)

Sales and marketing expense

Percentage of revenue

Sales and marketing expenses increased by $8.6 million from $87.6 million for the three months ended March 31, 2021 to $96.2 million for the three months ended March 31, 2022.

The increase in sales and marketing expense was primarily due to an increase in advertising expenditures of $4.0 million and an increase in personnel-related costs of $4.0 million.

Sales and marketing expenses increased by $2.2 million from $85.6 million for the three months ended June 30, 2021 to $87.9 million for the three months ended June 30, 2022.

The increase in sales and marketing expense was primarily due to an increase in personnel-related costs of $4.4 million, an increase in referral verification services of $0.3 million, an increase in office and occupancy costs of $0.3 million, and an increase of $0.2 million in licensing fees related to DTC, partially offset by a decrease in advertising costs of $3.4 million.

The increase in personnel-related costs was primarily due to an increase in headcount, a significant portion of which was in DTC agency.

Personnel-related costs for the three months ended June 30, 2022, and 2022 included stock-based compensation expense of $3.0 million and $2.5 million, respectively.

The increase in office and occupancy costs was primarily due to additional DTC sales offices.

Sales and marketing expenses increased by $10.8 million from $173.2 million for the six months ended June 30, 2021 to $184.0 million for the six months ended June 30, 2022.

The increase in sales and marketing expense was primarily due to an increase in personnel-related costs of $8.1 million, an increase in referral verification services of $0.6 million, an increase in advertising costs of $0.6 million, an increase of $0.5 million in licensing fees related to DTC, an increase in office and occupancy costs of $0.4 million and an increase in amortization of intangible assets of $0.2 million.

The increase in personnel-related costs was primarily due to an increase in headcount, a significant portion of which was in DTC agency.

Personnel-related costs for the six months ended June 30, 2022 and 2021 included stock-based compensation expense of $6.2 million and $5.9 million, respectively.

The increase in office and occupancy costs was primarily due to additional DTC sales offices.

Research and Development

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

(dollars in thousands)

Research and development expense

Percentage of revenue

Research and development expenses decreased by $0.4 million from $8.6 million for the three months ended March 31, 2021 to $8.2 million for the three months ended March 31, 2022.

The decrease in research and development expense was primarily due to a decrease in personnel-related costs of $0.5 million.

Research and development expenses decreased by $0.8 million from $9.1 million for the three months ended June 30, 2021 to $8.2 million for the three months ended June 30, 2022.

The decrease in research and development expense was primarily due to a decrease in personnel-related costs of $0.7 million and a decrease in consulting costs of $0.2 million, partially offset by an increase in technology services of $0.2 million.

Personnel-related costs for the three months ended June 30, 2022 and 2021 included stock-based compensation expense of $2.6 million and $2.3 million, respectively.

Research and development expenses decreased by $1.2 million from $17.6 million for the six months ended June 30, 2021 to $16.4 million for the six months ended June 30, 2022.

The decrease in research and development expense was primarily due to a decrease in personnel-related costs of $1.3 million and a decrease in consulting costs of $0.3 million, partially offset by an increase in technology services of $0.6 million.

Personnel-related costs for the six months ended June 30, 2022 and 2021 included stock-based compensation expense of $5.1 million and $4.6 million, respectively.

General and Administrative

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

(dollars in thousands)

General and administrative expense

Percentage of revenue

General and administrative expenses increased by $1.3 million from $5.6 million for the three months ended March 31, 2021 to $6.9 million for the three months ended March 31, 2022.

The increase in general and administrative expenses was primarily due to an increase in personnel-related costs of $0.7 million.

Other increases included legal fees of $0.2 million and hosting, insurance and credit card fees of $0.1 million each.

General and administrative expenses increased by $1.2 million from $6.2 million for the three months ended June 30, 2021 to $7.4 million for the three months ended June 30, 2022.

The increase in general and administrative expenses was primarily due to an increase in personnel-related costs of $0.4 million and an increase in consulting costs of $0.3 million.

Other increases included recruiting fees, insurance and credit card fees of $0.1 million each, partially offset by a decrease in legal fees of $0.1 million.

General and administrative expenses increased by $2.5 million from $11.8 million for the six months ended June 30, 2021 to $14.3 million for the six months ended June 30, 2022.

The increase in general and administrative expenses was primarily due to an increase in personnel-related costs of $1.1 million, an increase in consulting fees of $0.4 million and an increase in liability insurance costs and credit card fees of $0.2 million each.

Technology services and recruiter fees also increased by $0.1 million each.

Acquisition-related

Acquisition-related costs for the three months ended March 31, 2022 and 2021 consisted solely of the change in fair value of our contingent consideration liabilities recorded as the result of our acquisitions, which were comprised of income of $0.9 million and $0.1 million for the three months ended March 31, 2022 and 2021, respectively.

The decrease in our contingent consideration liability for the three months ended March 31, 2022 related primarily to our future revenue forecasts.

Acquisition-related costs for the three and six months ended June 30, 2022 solely consisted of the change in fair value of our contingent consideration liabilities recorded as the result of our acquisitions.

We recorded a credit to acquisition-related costs for the three and six months ended June 30, 2022 of $3.8 million and $4.7 million, respectively, related to the decrease in the fair value of our

contingent consideration liability.

The decrease was related to our future revenue forecasts and to a lesser extent, change in market value of our Class A common stock.

Acquisition-related costs for the three and six months ended June 30, 2021 included expenses associated with third-party professional services utilized of $0.5 million and the change in fair value of our contingent consideration liabilities, which resulted in a credit to acquisition-related costs of $0.2 million and $0.3 million, respectively.

Other Income (Expense)

Other expense, net was not significant for either of the three months ended March 31, 2022 or 2021.

Other expense, net was not significant for either of the three and six months ended June 30, 2022 or 2021.

Variable Marketing Margin

Three Months Ended March 31,

Three Months Ended June 30,

Six Months Ended June 30,

(dollars in thousands)

total advertising expense (a component of sales and marketing expense)

1 unchanged sentence

Percentage of revenue

The increase in variable marketing margin was due primarily to growth in commissions revenue.

The increase in variable marketing margin was due primarily to growth in commissions revenue and decreased advertising spend.

Liquidity and Capital Resources

At March 31, 2022, our principal sources of liquidity were cash and cash equivalents of $46.1 million and availability of $25.0 million under our revolving line of credit, which availability expires in August 2022.

Borrowings under our revolving line of credit are collateralized by substantially all of our assets and property.

Additionally, we are subject under our revolving line of credit to affirmative and negative covenants to which we will remain subject until maturity.

These covenants include limitations on our ability to incur additional indebtedness and engage in certain fundamental business transactions, such as mergers or acquisitions of other businesses.

As of March 31, 2022, we were in compliance with these covenants.

In addition, we are required to maintain a minimum asset coverage ratio of 1.5 to 1 calculated as the sum of unrestricted cash and qualified accounts receivable divided by borrowings outstanding under the revolving line of credit.

Events of default under our revolving line of credit include failure to make payments when due, insolvency events, failure to comply with covenants and material adverse events with respect to us.

In the event of a default, the lender may declare all borrowings immediately due and payable.

Our principal sources of liquidity are cash and cash equivalents of $41.3 million as of June 30, 2022 and availability of up to $45.0 million under our revolving line of credit and term loan, each of which were amended in July 2022.

On July 15, 2022, we entered into the Loan and Security Modification Agreement, which amended our existing Loan and Security Agreement, or the 2020 Loan Agreement, with Western Alliance Bank, or the Lender, to extend the maturity date of the revolving line of credit to July 15, 2025, increase the revolving line of credit from $25.0 million to $35.0 million, and provide us with access to a term loan of up to $10.0 million.

We refer to the 2020 Loan Agreement, as amended by the Loan and Security Modification Agreement, as the Amended Loan Agreement.

Pursuant to the Amended Loan Agreement, borrowings under the revolving line of credit cannot exceed 85% of eligible accounts receivable balances, bear interest at the greater of 4.25% or the prime rate as published in the Wall Street Journal and mature on July 15, 2025.

The term loan may be drawn through December 31, 2023 and borrowings bear interest at 0.25% plus the greater of 4.25% or the prime rate as published in the Wall Street Journal.

Borrowings under the term loan of the Amended Loan Agreement are repayable in monthly interest-only payments through December 31, 2023.

Commencing on January 1, 2024, the term loan is payable in 42 equal monthly installments of the then outstanding principal and accrued interest through June 2027.

We may prepay all, but not less than all, of any outstanding principal with respect to advances made under the term loan provided that such outstanding principal is paid in full along with any accrued but unpaid interest to date plus any fees that become payable under the Amended Loan Agreement.

In an event of default, as defined in the Amended Loan Agreement, and until such event is no longer continuing, the annual interest rate to be charged would be the annual rate otherwise applicable to borrowings under the Amended Loan Agreement plus 5.00%.

Borrowings are collateralized by substantially all of our assets and property.

Under the Amended Loan Agreement, we agreed to affirmative and negative covenants to which we will remain subject until maturity.

The covenants include limitations on our ability to incur additional indebtedness and engage in certain fundamental business transactions, such as mergers or acquisitions of other businesses.

In addition, under the Amended Loan Agreement and through December 31, 2023, we are required to maintain a minimum asset coverage ratio of 1.5 to 1 calculated as the sum of unrestricted cash held at the Lender and eligible accounts receivable divided by all borrowings outstanding under the Amended Loan Agreement.

Commencing December 31, 2023, we are required to maintain, and test on a quarterly basis, a fixed charge coverage ratio and a leverage ratio.

The fixed charge coverage ratio is measured as the ratio of (i) our trailing twelve-month adjusted “EBITDA” (as defined in the Amended Loan Agreement) less capital expenditures, less cash taxes, to (ii) our trailing twelve-month interest and principal payments to the Lender, of at least 1.25 to 1.00.

The leverage ratio is measured as the ratio of (i) our outstanding obligations owing to the Lender, to (ii) our trailing twelve-month adjusted EBITDA (as defined in the Amended Loan Agreement), of not more than 3.00 to 1.00.

Previously, under the 2020 Loan Agreement, we were subject to specified affirmative and negative covenants and were in compliance with these covenants as of June 30, 2022.

Since our inception, we have incurred operating losses and may continue to incur losses in the foreseeable future.

1 unchanged sentence

Additionally, a significant portion of the commission revenue we record will be collected over a multi-year time frame as policyholders renew their policies, and we are paid commissions on those renewals.

As of March 31, 2022, $18.9 million of our $28.1 million commissions receivable contract asset was classified as long-term.

We believe our existing cash and cash equivalents will be sufficient to fund our operating expenses and capital expenditure requirements for at least the next 12 months, without considering the borrowing availability under our revolving line of credit.

As of June 30, 2022, $24.6 million of our $34.1 million commissions receivable contract asset was classified as long-term.

Our future capital requirements may vary materially from those currently planned and will depend on many factors, including our rate of revenue growth, the timing and extent of spending on business initiatives, purchases of capital equipment to support our growth, the expansion of sales and marketing activities, expansion of our business through acquisitions or our investments in complementary offerings, technologies or businesses, market acceptance of our platform and overall economic conditions.

1 unchanged sentence

If we need additional funds and are unable to obtain funding on a timely basis, we may need to significantly curtail our operations in an effort to provide sufficient funds to continue our operations, which could adversely affect our business prospects.

The following table shows a summary of our cash flows for the three months ended March 31, 2022 and 2021:

Three Months Ended March 31,

The following table shows a summary of our cash flows for the six months ended June 30, 2022 and 2021:

Six Months Ended June 30,

(in thousands)

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Net cash provided by operating activities

Operating activities used $3.8 million during the three months ended March 31, 2022 primarily resulting from our net loss of $5.7 million and net cash used by operating activities of $6.4 million, partially offset by net non-cash

Operating activities used $7.4 million during the six months ended June 30, 2022 primarily resulting from our net loss of $9.5 million and net cash used by operating activities of $11.3 million, partially offset by net non-cash

charges of $13.4 million.

Net cash used by changes in our operating assets and liabilities consisted primarily of an $11.0 million decrease in accounts receivable and a $5.6 million increase in other assets, partially offset by a $10.4 million increase in accounts payable and accrued expenses and other current liabilities.

Operating activities provided $3.5 million during the three months ended March 31, 2021 primarily resulting from the offset of net non-cash

charges of $8.6 million to our net loss of $3.8 million and net cash used by changes in our operating assets and liabilities of $1.3 million.

Net cash used by changes in our operating assets and liabilities consisted primarily of a $2.9 million increase in accounts receivable and a $0.7 million increase in other assets, partially offset by an aggregate $2.1 million increase in accounts payable and accrued expenses and other current liabilities.

Net cash used by changes in our operating assets and liabilities consisted primarily of an $11.3 million increase in other assets and a $1.0 million increase in accounts receivable, partially offset by a net $1.4 million increase in accounts payable and accrued expenses and other current liabilities.

Operating activities provided $11.2 million during the six months ended June 30, 2021 primarily resulting from the offset of net non-cash

charges of $16.6 million to our net loss of $5.7 million and net cash provided by changes in our operating assets and liabilities of $0.3 million.

Net cash provided by changes in our operating assets and liabilities consisted primarily of an aggregate $0.4 million increase in accounts payable and accrued expenses and other current liabilities and a $0.3 million decrease in accounts receivable, partially offset by a $0.3 million increase in other assets.

Changes in accounts receivable, accounts payable and accrued expenses and other current liabilities were generally due to growth in our business and timing of customer and vendor invoicing and payments.

2 unchanged sentences

Net cash used in investing activities

Net cash used in investing activities was $0.7 million and $0.8 million for the three months ended March 31, 2022 and 2021, respectively.

Net cash used in investing activities for the three months ended March 31, 2022 and 2021 included the acquisition of property and equipment, which included the capitalization of certain software development costs.

During the three months ended March 31, 2022 and 2021, we capitalized $0.5 million and $0.7 million, respectively, of software development costs.

Net cash used in investing activities was $2.0 million and $1.3 million for the six months ended June 30, 2022 and 2021, respectively.

Net cash used in investing activities for the six months ended June 30, 2022 and 2021 included the acquisition of property and equipment, which included the capitalization of certain software development costs.

During the six months ended June 30, 2022 and 2021, we capitalized $1.3 million and $1.1 million, respectively, of software development costs.

Net cash provided by financing activities

During the three months ended March 31, 2022 and 2021, net cash provided by financing activities was $15.6 million and $1.3 million, respectively.

Net cash provided by financing activities during the three months ended March 31, 2022 consisted of $15.0 million of proceeds from the issuance and sale of shares of common stock in a private placement with Recognition Capital, LLC, an entity which is owned and controlled by David Blundin, Chairman of the Board of Directors and co-founder

During the six months ended June 30, 2022 and 2021, net cash provided by financing activities was $15.6 million and $1.7 million, respectively.

Net cash provided by financing activities during the six months ended June 30, 2022 consisted of $15.0 million of proceeds from the issuance and sale of shares of common stock in a private placement with Recognition Capital, LLC, an entity which is owned and controlled by David Blundin, Chairman of the Board of Directors and co-founder

of the Company, and $0.6 million from the exercise of common stock options.

Net cash provided by financing activities during the three months ended March 31, 2021 consisted of proceeds received from the exercise of common stock options.

Net cash provided by financing activities during the six months ended June 30, 2021 consisted of proceeds received from the exercise of common stock options.

Contractual Obligations and Commitments

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis