What changed in this filing

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Item 2. Management’s Discussion and Analysis

2022-05-16 compared with 2021-11-12 · 69 added, 109 removed, 51 unchanged (78% of the section changed)

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion should be read in conjunction with our consolidated financial statements and related notes that appear elsewhere in this report as well as our Annual Report on Form 10-K for the year ended December 31, 2020 filed with the SEC on March 29, 2021, as amended on April 14, 2021.

In connection with, and because we desire to take advantage of, the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, we caution readers regarding certain forward looking statements in the following discussion and elsewhere in this report and in any other statement made by us, or on our behalf, whether or not in future filings with the SEC.

We caution readers regarding certain forward looking statements, within the meaning of the Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995 in the following discussion and elsewhere in this report.

Forward looking statements are statements not based on historical information and which relate to future operations, strategies, financial results or other developments.

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GrowGeneration Corp.

(together with all of its wholly-owned subsidiaries, collectively “GrowGeneration” or the “Company”) was incorporated in Colorado in 2014 and is the largest chain of hydroponic garden centers in North America and is a leading marketer and distributor of nutrients, growing media, advanced indoor and greenhouse lighting, environmental control systems and accessories for hydroponic gardening.

GrowGeneration also owns and operates e-commerce platforms www.growgeneration.com and www.agron.io, Canopy Crop Management Corp, CharCoir Inc, and several proprietary private-label brands across multiple product categories from LED lighting to nutrients and additives and environmental control systems for indoor cultivation.

(together with all of its direct and indirect wholly owned subsidiaries, collectively “GrowGeneration” or the “Company”) was incorporated in Colorado in 2014 and is the largest chain of hydroponic garden centers in North America and is a leading marketer and distributor of nutrients, growing media, advanced indoor and greenhouse lighting, environmental control systems and accessories for hydroponic gardening.

GrowGeneration also owns and operates an e-commerce platform, www.growgeneration.com, Mobile Media, a vertical racking and storage solutions business, Horticultural Rep Group, a horticultural products sales representative and distributor organization, and Power Si, CharCoir, and several other proprietary private-label brands across multiple product categories from LED lighting to nutrients and additives and environmental control systems for indoor cultivation.

GrowGeneration sells thousands of products, including nutrients, growing media, advanced indoor and greenhouse lighting, environmental control systems, vertical benching and accessories for hydroponic gardening, as well as other indoor and outdoor growing products, that are designed and intended for growing a wide range of plants.

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Our retail operations are driven by a wide selection of all hydroponic products, service and solutions driven staff and pick, pack and ship distribution and fulfillment capabilities.

We employed approximately 748 employees as of September 30, 2021, a majority of them we have branded as “Grow Pros.” Currently, our operations span over 950,000 square feet of retail and warehouse space.

We operate our business through the following business units:

61 operating hydroponic/gardening centers focused on serving growers and cultivators.

• Commercial :

Sales to commercial customers, including large multi-state operators and cultivators.

• E-Commerce/Omni-channel :

Our e-commerce operation, includes GrowGeneration.com and Agron.io, a business-to-business (B2B) online portal for commercial growers.

GrowGeneration.com is currently adding “Buy online/Pick up in store” same day pick up service.

• Proprietary Brands and Private Label :

GrowGeneration sells a variety of products, including nutrients, growing media, advanced indoor and greenhouse lighting, ventilation systems, vertical benching, environmental control systems and accessories for hydroponic gardening.

We employed approximately 660 employees as of March 31, 2022, a majority of them we have branded as “Grow Pros.” Currently, our operations span over 1,022,000 square feet of retail and warehouse space.

The Company has three primary reportable segments including retail operations, e-commerce and all other.

The Company has segmented its operations to reflect the manner in which management reviews and evaluates the results of its operations.

The structure reflects the manner in which the chief operating decision maker regularly assesses information for decision-making purposes, including the allocation of resources.

We recognize specifically identifiable operating costs such as cost of sales, distribution expenses, selling and general administrative expenses within each segment.

Certain general and administrative expenses, such as administrative and management expenses, salaries and benefits, share based compensation, director fees, legal expenses, accounting and consulting expenses and technology costs, are not allocated to the specific segments and are reflected in the enterprise results.

Competitive Advantages

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• We have a professional team for mergers and acquisitions, and to acquire and open new locations and successfully add them to our company portfolio.

• We offer a program of issuing credit to licensed commercial customers based on a credit evaluation process.

Growth Strategy - Store Acquisitions and New Store Openings

Core to our growth strategy is to expand the number of our retail garden centers throughout North America.

The hydroponic retail landscape is fragmented, which allows us to acquire the “best of breed” hydroponic operations.

In addition to the 12 states we are currently operating in, we have identified new market opportunities in states that include Ohio, Illinois, Pennsylvania, New York, New Jersey, Mississippi and Missouri.

In 2020, we opened a second hydroponic/gardening center in Tulsa, Oklahoma, a 40,000 square feet store operation and fulfillment center, and completed eight (8) acquisitions, adding 14 new locations.

The Company acquired 17 new locations in the first half of 2021, three additional locations in July 2021 and two in August 2021, and has an active target pipeline of acquisitions which are planned to close in 2021.

In addition to the 13 states in which we are currently operating, we have identified new market opportunities in states that include Connecticut, Ohio, Illinois, Pennsylvania, New York, New Jersey, Mississippi, Missouri and Virginia.

The Company acquired 23 new locations in 2021 and expects to open many new stores in 2022.

Secondary to this growth strategy is the expansion of distribution and sales capabilities for products that the company owns, distributes, or represents to independent retail garden centers for resale.

R ESULTS OF OPERATIONS

Comparison of the three months ended September 30, 2021 and 2020.

Net revenue for the three months ended September 30, 2021 was approximately $116.0 million, compared to $55.0 million for the three months ended September 30, 2020, an increase of approximately $61.0 million or 111%.

This increase included an increase of approximately $59.2 million related to same store sales which represented 15.7% growth year over year.

Distributed sales was $4.7 million from the acquisitions of Power Si and Charcoir.

E-commerce sales increased from $3.9 million to $10.5 million which can be explained by $6.0 million growth in owned e-commerce sites and $4.5 million from the Agron acquisition.

Cost of Goods Sold

Cost of goods sold for the three months ended September 30, 2021 was approximately $81.9 million, compared to approximately $40.4 million for the three months ended September 30, 2020, an increase of approximately $41.5 million or 103%.

The increase in cost of goods sold was primarily due to the 111% increase in sales comparing the three months ended September 30, 2021 to the three months ended September 30, 2020.

Gross profit was approximately $34.1 million for the three months ended September 30, 2021, compared to approximately $14.6 million for the three months ended September 30, 2020, an increase of approximately $19.5 million or 134%.

The increase in gross profit is primarily related to the 111% increase in revenues comparing the quarter ended September 30, 2021 to the quarter ended September 30, 2020.

Gross profit as a percentage of revenues was 29.4% for the three months ended September 30, 2021, compared to 26.5% for the three months ended September 30, 2020.

The increase in the gross profit margin percentage is primarily due to higher increases in revenues from both private label products and distributed products which were 8.7% of revenues for the quarter ended September 30, 2021 and approximately than 2% of revenues for the quarter ended September 30, 2020.

Operating Expenses

Operating expenses are comprised of store operations, selling, general, and administrative and depreciation and amortization.

Operating costs were approximately $29.4 million for the three months ended September 30, 2021 and approximately $9.5 million for the three months ended September 30, 2020, an increase of approximately $19.9 million or 210%.

Store operating costs were approximately $14.8 million for the three months ended September 30, 2021, compared to $5.0 million for the quarter ended September 30, 2020, an increase of $9.8 million or 196%.

The increase in store operating costs was directly attributable to the 111% increase in revenues, the addition of 32 locations that were added after September 30, 2020 contributed $5.0 million of additional operating costs, and 2 locations added during the quarter ended September 30, 2020 that were open for the entire quarter ended September 30, 2021.

We also incurred $0.9 million of pre-opening expenses related to new stores.

Total corporate overhead was approximately $14.5 million for the three months ended September 30, 2021, compared to $4.5 million for the quarter ended September 30, 2020, an increase of $10.1 million or 226%.

Selling, general, and administrative costs were approximately $11.0 million for the three months ended September 30, 2021, compared to approximately $4.0 million for the three months ended September 30, 2020.

Salaries expense increased to $5.2 million from $2.2 million primarily due to an increase in corporate staff and general and administrative expenses increased to $3.7 million from $0.8 million to support expanding operations.

Share-based compensation increased to $2.1 million from $1.0 million primarily due to expanding corporate staff to support the increased operations.

Depreciation expense for the period was $0.9 million compared to $0.4 million in the prior year.

The increase in depreciation expense is attributable to the addition of new stores, an expanded fleet of vehicles to support commercial sales, and leasehold improvements to retail locations.

Amortization expense for the period was $2.6 million compared to $44.1 thousand which was driven by the acquisition of 32 retail stores.

Other income/expense

Total other income expense was approximately $0.4 million for the three months ended September 30, 2021, compared to $34 thousand for the quarter ended September 30, 2020.

This increase is primarily attributable to interest on notes receivable of $0.4 million.

Income tax expense was $1.1 million for the three months ended September 30, 2021, compared to $1.8 million for the quarter ended September 30, 2020.

Effective tax rate is impacted by differences in timing of expenses for share based compensation, depreciation, amortization and the impact of 162m on deductible wages.

As such, the Company’s taxable income varies from reported income in a material way.

In addition, 25.9% of revenue for the Company is in California with a significantly higher income tax rate than other USA jurisdictions.

Net income for the three months ended September 30, 2021 was approximately $4.0 million, compared to net income of approximately $3.3 million for the three months ended September 30, 2020, a increase of approximately $0.7 million.

Comparison of the nine months ended September 30, 2021 and 2020.

Net revenue for the nine months ended September 30, 2021 was approximately $331.9 million, compared to $131.4 million for the nine months ended September 30, 2020, an increase of approximately $200.5 million or 153%.

The increase included an increase of approximately $164.3 million related to same store sales which represented 38.6% growth year over year.

Distributed sales was $12.5 million from the acquisitions of Power Si and Charcoir.

E-commerce sales increased from $9.9 million to $28.5 million which can be explained by $17.9 million growth in owned e-commerce sites and $10.6 million from the Agron acquisition.

Comparison of the three months ended March 31, 2022 and 2021

Net revenue for the three months ended March 31, 2022 was approximately $81.8 million, compared to $90.0 million for the three months ended March 31, 2021, a decrease of approximately $8.3 million or 9%.

The decrease was attributed to a decrease of approximately $26.2 million related to same store sales, which represented 35.5% of the decrease year over year.

Overall sales in our retail segment declined from $81.2 million to $64.3 million.

Distributed sales were $12.2 million.

E-commerce sales decreased from $6.0 million to $5.3 million.

Cost of Goods Sold

Cost of goods sold for the nine months ended September 30, 2021 was approximately $236.8 million, compared to approximately $96.3 million for the nine months ended September 30, 2020, an increase of approximately $140.4 million or 146%.

The increase in cost of goods sold was primarily due to the 153% increase in sales comparing the nine months ended September 30, 2021 to the nine months ended September 30, 2020.

Gross profit was approximately $95.2 million for the nine months ended September 30, 2021, compared to approximately $35.1 million for the nine months ended September 30, 2020, an increase of approximately $60.1 million or 171%.

The increase in gross profit is primarily related to the 153% increase in revenues comparing the nine months ended September 30, 2021 to the nine months ended September 30, 2020.

Gross profit as a percentage of revenues was 28.7% for the nine months ended September 30, 2021, compared to 26.7% for the nine months ended September 30, 2020.

The increase in the gross profit margin

percentage is primarily due to higher increases in revenues from both private label products and distributed products which were 7.5% of revenues for the nine months ended September 30, 2021 and approximately 1% of revenues for the nine months ended September 30, 2020.

Cost of goods sold for the three months ended March 31, 2022 was approximately $59.6 million, compared to approximately $64.6 million for the three months ended March 31, 2021, a decrease of approximately $5.0 million or 8%.

The decrease in cost of goods sold was primarily due to the 9% decrease in sales comparing the three months ended March 31, 2022 to the three months ended March 31, 2021.

Gross profit was approximately $22.1 million for the three months ended March 31, 2022, compared to approximately $25.4 million for the three months ended March 31, 2021, a decrease of approximately $3.2 million or 13%.

The decrease in gross profit is primarily related to the 9% decrease in revenues comparing the three months ended March 31, 2022 to the three months ended March 31, 2021.

Gross profit as a percentage of revenues was 27.1% for the three months ended March 31, 2022, compared to 28.2% for the three months ended March 31, 2021.

Gross profit in our retail segment declined from $21.9 million to $15.5 million.

Gross profit from distributed sales was $4.9 million and was $1.7 million from e-commerce sales for the three months ended March 31, 2022.

Operating Expenses

Operating expenses are comprised of store operations, selling, general, and administrative, and depreciation and amortization.

Operating costs were approximately $73.1 million for the nine months ended September 30, 2021 and approximately $29.3 million for the nine months ended September 30, 2020, an increase of approximately $43.8 million or 150%.

Store operating costs were approximately $35.6 million for the nine months ended September 30, 2021, compared to $12.5 million for the nine months ended September 30, 2020, an increase of $23.1 million or 185%.

The increase in store operating costs was directly attributable to the 153% increase in revenues, the addition of 32 locations that were added after September 30, 2020, and 16 locations added during the nine months ended September 30, 2020 that were open for the entire quarter ended September 30, 2021 generated an additional $11.5 million of store operating expenses.

We also incurred $0.9 million of pre-opening expenses for new stores opened during the period.

Total corporate overhead was approximately $37.5 million for the nine months ended September 30, 2021, compared to $16.8 million for the nine months ended September 30, 2020, an increase of $20.7 million or 123%.

Selling, general, and administrative costs were approximately $29.0 million for the nine months ended September 30, 2021, compared to approximately $15.5 million for the nine months ended September 30, 2020.

Salaries expense increased to $14.9 million from $5.9 million primarily due to an increase in corporate staff and general and administrative expenses increased to $8.8 million from $3.2 million to support expanding operations.

These increases were partially offset by a decrease in share-based compensation to $5.3 million from $6.3 million primarily due to new executive compensation agreements effective January 1, 2020 that had front loaded vesting provisions for shares and options that vested January 1, 2020 for which the remaining vesting was over a two-year period.

Operating costs were approximately $29.4 million for the three months ended March 31, 2022 and approximately $17.6 million for the three months ended March 31, 2021, an increase of approximately $11.7 million or 66%.

Store operating costs were approximately $14.5 million for the three months ended March 31, 2022, compared to $8.2 million for the three months ended March 31, 2021, an increase of $6.4 million or 78%.

The increase in store operating costs was directly attributable to the addition of 23 locations that were added during 2021, including 16 stores that were added subsequent to March 31, 2021.

Total corporate overhead, which is comprised of Selling, general, and administrative expense and Depreciation and amortization expense, was approximately $14.8 million for the three months ended March 31, 2022, compared to $9.5 million for the three months ended March 31, 2021, an increase of $5.4 million or 57%.

Selling, general, and administrative costs were approximately $10.3 million for the three months ended March 31, 2022, compared to approximately $7.4 million for the three months ended March 31, 2021.

Salaries expense increased to $5.2 million from $4.0 million primarily due to an increase in corporate staff.

General administrative expenses increased to $3.6 million from $2.1 million to support expanding operations.

Other Income/Expense

Total other income/expense was approximately $0.4 million for the nine months ended September 30, 2021, compared to expense of $22.0 thousand for the nine months ended September 30, 2020.

This increase is primarily attributable to interest on notes receivable of $0.4 million.

Income tax expense was $5.6 million for the nine months ended September 30, 2021, compared to $2.0 million for the nine months ended September 30, 2020.

Total other income was approximately $0.4 million for the three months ended March 31, 2022, compared to expense of $36.0 thousand for the three months ended March 31, 2021.

This increase is primarily attributable to a gain recorded related to an earnout revaluation adjustment related to The Harvest Company acquisition.

Segment Operating Income

Operating income in our retail segment dropped from $6.3 million to an operating loss of $7.2 million as a result of lower sales volume, lower gross margins and higher expenses at existing stores combined with operating losses at nine stores not in operation in the same period in 2021, including acquired and new retail locations.

Operating income in our e-commerce segment declined from $0.4 million to a loss of $0.4 million as a result of lower revenue and higher operating expenses as well as integration costs of Agron.IO that was consolidated with our core e-commerce webstore in the period.

Operating income in all other decreased to $0.4 million in the three months ended March 31, 2022 compared to $1.0 million in the three months ended March 31, 2021.

Increase in the operating income of the other segment was primarily attributable to the addition of HRG and MMI.

Income tax benefit was $1.6 million for the three months ended March 31, 2022, compared to income tax expense of $1.6 million for the three months ended March 31, 2021.

Effective tax rate is impacted by differences in timing of expenses for share based compensation, depreciation, amortization and the impact of 162(m) on deductible wages.

As such, the Company’s taxable income varies from reported income in a material way.

In addition, 26.4% of revenue for the company is in California with a significantly higher income tax rate than other USA jurisdictions.

Net income for the nine months ended September 30, 2021 was approximately $16.9 million, compared to a net income of approximately $3.8 million for the nine months ended September 30, 2020, a increase of approximately $13.1 million.

Net loss for the three months ended March 31, 2022 was approximately $5.2 million, compared to net income of approximately $6.1 million for the three months ended March 31, 2021, a decrease of approximately $11.3 million.

Operating Activities

Net cash provided by operating activities for nine months ended September 30, 2021 was approximately $1.9 million compared to $3.7 million for the nine months ended September 30, 2020.

Cashed used in inventory increase was primarily attributable to our additional store count, $13.0 million associated with growing the offerings of private label.

In addition, we have used our capital capabilities to secure production of product overseas through prepaid inventory purchase commitments with long lead times in advance of spring 2022 needs.

Cash used in accounts and notes receivable increases were primarily driven by our increased store count and related increase in store count.

The increase in cash used for prepaids and other assets is primarily driven by an increase in prepayments for inventory not yet received at warehouse or store locations.

Net cash used in investing activities was approximately $114.8 million for the nine months ended September 30, 2021 and approximately $6.9 million for the nine months ended September 30, 2020.

Investing activities in 2021 were primarily attributable to acquisitions of $71.8 million, purchase of marketable securities of $75.0 million, vehicles and store equipment

purchases $10.8 million and intangible asset purchases of $2.3 million.

Investing activities for the nine months ended September 30, 2020 were primarily related to store acquisitions of $4.0 million, the purchase of vehicles and store equipment to support new store operations of $2.1 million and intangible assets of $0.8 million.

Net cash used in financing activities for the nine months ended September 30, 2021 was approximately $1.9 million and was primarily attributable to stock redemptions partially offset by the proceeds from the sales of common stock and exercise of warrants.

Net cash provided by financing activities for nine months ended September 30, 2020 was $45.6 million and was primarily from proceeds from the sale of common stock and exercise of warrants.

Net cash used by operating activities for three months ended March 31, 2022 was approximately $2.2 million compared to $0.7 million provided for the three months ended March 31, 2021.

The Company reduced prepaid inventory by $9.1 million in the quarter as well as retail store inventory by $3.8 million, which was more that offset by payments for accounts payable and deferred compensation, including annual cash bonuses.

Net cash provided by investing activities was approximately $9.5 million for the three months ended March 31, 2022 compared to cash used of approximately $82.7 million for the three months ended March 31, 2021.

Investing activities in 2022 were primarily attributable to acquisitions of $6.8 million and vehicles and store equipment purchases of $4.5 million partially offset by the maturity of marketable securities of $20.8 million.

Investing activities for the three months ended March 31, 2021 were primarily related to store acquisitions of $39.3 million, purchase of marketable securities of $41.1 million, the purchase of vehicles and store equipment to support new store operations of $1.7 million, and intangible assets of $0.7 million.

Net cash used in financing activities for the three months ended March 31, 2022 was approximately $1.4 million and was primarily attributable to stock redemptions.

Net cash used by financing activities for three months ended March 31, 2021 was $3.9 million and was primarily attributable to stock redemptions.

Use of Non-GAAP Financial Information

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Set forth below is a reconciliation of Adjusted EBITDA to net income (loss):

Three Months Ended September 30,

Net income $ 4,027 $ 3,338

Income taxes 1,096 1,799

Interest expense 25 —

Depreciation and Amortization 3,539 443

EBITDA $ 8,687 $ 5,580

Share based compensation (option compensation, warrant compensation, stock issued for services) 2,106 1,022

Adjusted EBITDA $ 10,793 $ 6,602

Adjusted EBITDA per share, basic $ 0.18 $ 0.14

Adjusted EBITDA per share, diluted $ 0.18 $ 0.13

Set forth below is a reconciliation of Adjusted EBITDA to net income (loss):

Nine Months Ended

September 30,

Three Months Ended

Net income $ (5,177) $ 6,147

Income taxes (1,636) 1,553

Interest 31 20

Depreciation and Amortization 4,506 2,054

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LIQUIDITY AND CAPITAL RESOURCES

As of September 30, 2021, we had working capital of approximately $179.2 million, compared to working capital of approximately $222.9 million as of December 31, 2020, a decrease of approximately $43.7 million.

The decrease in working capital from December 31, 2020 to September 30, 2021 was due primarily to business acquisition completed during the nine months ended September 30, 2021 for which the cash consideration was approximately $71.8 million.

This decrease in working capital related to business acquisitions was partially offset by an increase in inventory associated with more locations and our ability to leverage greater bulk purchasing due to our growth.

At September 30, 2021, we had cash and cash equivalents of approximately $63.0 million and available for sale debt securities of $30.0 million.

As of March 31, 2022, we had working capital of approximately $157.9 million, compared to working capital of approximately $169.8 million as of December 31, 2021, a decrease of approximately $11.9 million.

The decrease in working capital from December 31, 2021 to March 31, 2022 was due primarily to a decrease in marketable securities, inventory and prepaid inventory partially offset by decreases in current liabilities.

At March 31, 2022, we had cash and cash equivalents of approximately $47.3 million and available for sale debt securities of $19.0 million.

Currently, we have no extraordinary demands, commitments or uncertainties that would reduce our current working capital.

Our core strategy continues to focus on expanding our geographic reach across the United States through organic growth and acquisitions.

Our core strategy continues to focus on expanding our geographic reach across the United States and building our brand portfolio through organic growth and acquisitions.

Based on our strategy we may need to raise additional capital in the future through equity offerings and/or debt financings.

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Critical Accounting Policies, Judgements and Estimates

For a summary of the Company’s significant accounting policies, please refer to Note 2 to our Consolidated Financial Statements filed on our Form 10-K for the year ended December 31, 2020.

Business Combinations

Note 1 - Operations and Summary of Significant Accounting Policies to the consolidated financial statements included in Part II.

Item 8 of our Form 10-K for the year ended December 31, 2021 describes the significant accounting policies used in preparation of these consolidated financial statements.

We believe the following critical accounting policy and assumptions may have a material impact on reported financial condition and operating performance and involve significant levels of judgment to account for highly uncertain matters or are susceptible to significant change.

In each of these areas, management makes estimates based on historical results, current trends and future projections.

Therefore, these are considered to be our critical accounting policies and estimates.

We account for transactions that represent business combinations under the acquisition method of accounting, which requires us to allocate the total consideration paid for each acquisition to the assets we acquire and liabilities we assume based on their fair values as of the date of acquisition, including identifiable intangible assets.

The allocation of the purchase price utilizes significant estimates in determining the fair values of identifiable assets acquired and liabilities assumed, especially with respect to intangible assets.

We may refine our estimates and make adjustments to the assets acquired and liabilities assumed over a measurement period, not to exceed one year.

The Company has financial liabilities resulting from our business combinations, including contingent consideration arrangements.

We estimate the fair value of these financial liabilities using Level 3 inputs that require the use of numerous assumptions, which may change based on the occurrence of future events and lead to increased or decreased operating income in future periods.

Estimating the fair value at an acquisition date and in subsequent periods involves significant judgments, including projecting the future financial performance of the acquired businesses.

The Company will update its assumptions each reporting period based on new developments and record such amounts at fair value based on the revised assumptions.

Changes in the fair value of these financial liabilities are recorded in the Consolidated Statements of Operations within other income (expense).

OFF-BALANCE SHEET ARRANGEMENTS

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QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

We are a smaller reporting company and are not required to provide the information under this item pursuant to Regulation S-K.

For a summary of the Company’s quantitative and qualitative disclosures about market risk, please refer to Item 7A of our Form 10-K for the year ended December 31, 2021.

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