What changed in this filing

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Item 4. Controls and Procedures

2025-08-08 compared with 2025-05-06 · 135 added, 41 removed, 91 unchanged (66% of the section changed)

CONTROLS AND PROCEDURES

Disclosure Controls and Procedures

Our management, with the participation of our principal executive and principal financial officers, has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 ("Exchange Act")) as of the end of the period covered by this Quarterly Report on Form 10-Q.

Based on this evaluation, our principal executive and principal financial officers concluded that our disclosure controls and procedures were effective as of such time.

Limitations on Effectiveness of Controls

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports, filed or submitted under the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in the SEC's rules and forms, including, without limitation, controls and procedures designed to ensure that information required to be disclosed in such reports is accumulated and communicated to our management, including our principal executive officer, principal financial officer, and principal accounting officer, as appropriate, to allow timely decisions regarding required disclosure.

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Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

Our management, with the participation of our principal executive officer, principal financial officer and principal accounting officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act), as of the end of the period covered by this Quarterly Report on Form 10-Q.

Based on the foregoing, our principal executive officer, principal financial officer, and principal accounting officer concluded that our disclosure controls and procedures were effective as of such time.

Changes in Internal Control over Financial Reporting

There were no changes in our internal control over financial reporting that occurred during the quarter covered by this Quarterly Report on Form 10-Q that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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LEG AL PROCEEDINGS

Except as discussed below, there are no material changes from the legal proceedings previously disclosed in our most recently filed Annual Report on Form 10-K for the year ended December 31, 2024.

Except as discussed below, there are no material changes from the legal proceedings previously disclosed in our 2024 Annual Report during the three and six months ended June 30, 2025.

On August 4, 2023, the Company received a Notice Letter (the "Mylan August Notice") from Mylan Pharmaceuticals Inc.

(“Mylan”) advising that Mylan had submitted an abbreviated new drug application ("ANDA") to the FDA seeking approval to manufacture, use or sell a generic version of CINVANTI (“Mylan’s ANDA for a generic version of CINVANTI”) in the U.S.

("Mylan") advising that Mylan had submitted an ANDA to the FDA seeking approval to manufacture, use or sell a generic version of CINVANTI ("Mylan's ANDA for a generic version of CINVANTI") in the U.S.

prior to the expiration of U.S.

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District Court for the District of Delaware related to Mylan's ANDA for a generic version of CINVANTI.

Pursuant to the terms of the settlement agreement, the Company has granted Mylan a license under the Orange Book-listed patents for CINVANTI to market a generic version of CINVANTI in the United States beginning June 1, 2032, or earlier under certain customary circumstances.

In connection with the settlement, the Company and Mylan will file a proposed Stipulation and Order of Dismissal with the U.S.

Pursuant to the terms of the settlement agreement, the Company has granted Mylan a license under the Orange Book-listed patents for CINVANTI to market a generic version of CINVANTI in the U.S.

beginning June 1, 2032, or earlier under certain customary circumstances.

In connection with the settlement, on May 6, 2025, the Court granted the Stipulation and Order of Dismissal with the U.S.

District Court for the District of Delaware requesting that the Court dismiss the pending litigation between the parties.

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District Court for the District of Delaware related to Mylan's ANDA for a generic version of APONVIE.

Pursuant to the terms of the settlement agreement, the Company has granted Mylan a license under the Orange Book-listed patents for APONVIE to market a generic version of APONVIE in the United States beginning June 1, 2032, or earlier under certain customary circumstances.

In connection with the settlement, the Company and Mylan will file a proposed Stipulation and Order of Dismissal with the U.S.

Pursuant to the terms of the settlement agreement, the Company has granted Mylan a license under the Orange Book-listed patents for APONVIE to market a generic version of APONVIE in the U.S.

beginning June 1, 2032, or earlier under certain customary circumstances.

In connection with the settlement, on May 6, 2025, the Court granted the Stipulation and Order of Dismissal with the U.S.

District Court for the District of Delaware requesting that the Court dismiss the pending litigation between the parties.

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District Court for the District of Delaware.

On December 12, 2024, the Company filed a

complaint against Slayback, Azurity, and related entities in the U.S.

District Court for District of Delaware for patent infringement of the U.S.

On December 12, 2024, the Company filed a complaint against Slayback, Azurity, and related entities in the U.S.

District Court for District of Delaware for patent infringement of

12,115,254 and 12,115,255.

The parties are currently entering into expert discovery.

On May 23, 2025, the Company filed an amended complaint against Slayback, Azurity, and related entities adding an allegation of patent infringement of U.S.

The parties are currently in expert discovery.

A four-day bench trial is currently scheduled for November 17, 2025.

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On April 14, 2025, the Petitions were accorded a filing date.

The Company’s Patent Owner Preliminary Response is due on July 14, 2025.

On June 16, 2025, the Company filed a brief requesting discretionary denial in the petitions in PGR2025-00035 and PGR2025-00036.

The briefing was completed on July 16, 2025, and the Company is awaiting a decision.

On July 14, 2025, the Company filed its Patent Owner Preliminary Response.

On February 7, 2025, the Company received a Notice Letter (the "Qilu Notice") from Qilu Pharmaceutical (Hainan) Co., Ltd and Qilu Pharma, Inc.

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The complaint seeks, among other relief, equitable relief enjoining Qilu from infringing the Noticed APONVIE Patents.

On June 11, 2025, the Company received a Notice Letter (the "Qilu CINVANTI Notice") from Qilu Pharmaceutical (Hainan) Co., Ltd and Qilu Pharma, Inc.

("Qilu") advising that Qilu had submitted an ANDA to the FDA seeking approval to manufacture, use or sell a generic version of CINVANTI in the U.S.

("Qilu's CINVANTI ANDA") prior to the expiration of U.S.

and 12,290,520 (the "Noticed CINVANTI Patents"), which are listed in the Orange Book for CINVANTI.

Qilu's CINVANTI ANDA alleges that the Noticed CINVANTI Patents are invalid, unenforceable, and/or will not be infringed by the commercial manufacture, use or sale of the generic product described in Qilu's CINVANTI ANDA.

On July 3, 2025, the Company filed a complaint for patent infringement of the Noticed CINVANTI Patents against Qilu in the U.S.

District Court for the District of Delaware in response to Qilu's CINVANTI ANDA.

The complaint seeks, among other relief, equitable relief enjoining Qilu from infringing the Noticed CINVANTI Patents.

On July 15, 2025, the Qilu CINVANTI and APONVIE litigations were consolidated.

A five-day bench trial is currently scheduled for November 16, 2026.

The case is in its early stages and a trial has not yet been scheduled.

The Company intends to vigorously enforce its intellectual property rights relating to APONVIE.

As a result of filing our complaint for patent infringement, the FDA may not approve Qilu’s ANDA for a generic version of APONVIE until the earlier of August 7, 2027 or resolution of the litigation.

The Company intends to vigorously enforce its intellectual property rights relating to CINVANTI and APONVIE.

As a result of filing our complaint for patent infringement, the FDA may not approve Qilu's ANDA for a generic version of APONVIE until the earlier of August 7, 2027 or resolution of the litigation, and the FDA may not approve Qilu's ANDA for a generic version of CINVANTI until the earlier of December 11, 2027 or resolution of the litigation.

RIS K FACTORS

Investing in our common stock involves risks.

We operate in a rapidly changing environment that involves a number of risks that could materially affect our business, financial condition or future results, some of which are beyond our control.

In addition to the other information set forth in this Quarterly Report on Form 10-Q, the risks and uncertainties that we believe are most important for you to consider are discussed in Part I, Item 1A.

"Risk Factors” in the 2024 Annual Report and in Part II, Item 1A.

"Risk Factors” in our subsequently filed Quarterly Reports on Form 10-Q.

Other than the factors set forth below, there have been no material changes to the risk factors described in the 2024 Annual Report.

In addition to the other information described below, the risks and uncertainties that we believe are most important for you to consider are discussed in Part I, Item 1A.

"Risk Factors" in our 2024 Annual Report, Quarterly Reports on Form 10-Q, and other reports, including our financial statements and the related notes thereto, "Management's Discussion and Analysis of Financial Condition and Results of Operations" and the information contained in the section entitled "Forward-Looking Statements." The occurrence of any of the events or developments described below could adversely our business, financial condition, results of operations and prospects.

In such an event, the market price of our common stock could decline and you may lose all or part of your investment.

Additional risks and uncertainties not presently known to us or that we currently deem immaterial also may impair our business operations.

Other than the factors described below, there are no material changes to the risk factors described in the 2024 Annual Report.

Certain of the components used in the manufacture of our Products are, or might be, sourced from a single vendor, and the loss or disruption of this vendor could significantly harm our business.

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Establishing additional or replacement suppliers for certain raw materials in our proprietary polymers, if required, may not be accomplished quickly, or at all, and may involve significant expense.

If we are able to find a replacement supplier, we would need to evaluate and qualify such replacement vendor and its ability

to meet quality and compliance standards.

If we are able to find a replacement supplier, we would need to evaluate and qualify such replacement vendor and its ability to meet quality and compliance standards.

Any change in suppliers or the manufacturing process for our Products could require additional regulatory approval and result in operational delays.

Some of our suppliers may experience disruption to their respective supply chains due to the adverse events or conditions, including the effects of a pandemic or disease outbreak, the imposition of tariffs and other trade protective measures, rising geopolitical tensions, armed conflict or other factors, which could delay, prevent or impair our development or commercialization efforts.

We obtain certain critical materials and components used in manufacturing our Products from third-party suppliers whose operations might be directly or indirectly affected by adverse events or conditions, including the effects of a pandemic or disease outbreak, the imposition of tariffs and other trade protective measures, rising geopolitical tensions, armed conflict or other factors (including, without limitation, adverse weather conditions, political instability, war, civil unrest, economic instability, outbreaks of disease, or other public health emergencies and the impact of any such U.S.

or foreign government response and public fears regarding any of the foregoing).

Some of our suppliers may experience disruption to their respective supply chains due to the adverse events or conditions, including the effects of a pandemic or disease outbreak, the imposition of tariffs and other trade protective measures, rising geopolitical tensions, armed conflict, regulatory and policy changes or other factors, which could delay, prevent or impair our development or commercialization efforts.

We obtain certain critical materials and components used in manufacturing our Products from third-party suppliers whose operations might be directly or indirectly affected by adverse events or conditions, including the effects of a pandemic or disease outbreak, the imposition of tariffs and other trade protective measures, rising geopolitical tensions and political instability, armed conflict, regulatory or policy changes, adverse weather conditions and public fears regarding any of the foregoing.

For example, the recent increase in retaliatory tariffs between the U.S.

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Similarly, operational changes at government agencies, including actions intended to reduce government spending at agencies that regulate significant parts of our business, such as the FDA and CMS, could have a significant impact on the implementation of laws and regulations that impact our business.

For example, in April 2025, the U.S.

administration conducted significant layoffs at several U.S.

health agencies, including the FDA, the Department of Health and Human Services (the “HHS”), the Centers for Disease Control and Prevention and the National Institutes of Health, which is expected to impact the FDA’s ability to review and approve new medicines and conduct necessary inspections.

The HHS has also proposed a potential major reorganization of the FDA by consolidating product centers for drugs, biologics, devices, tobacco and veterinary medicine, which regulate different product types under distinct rules and regulations and operate under different review processes and timelines for product approval.

For example, the recent layoffs and reorganizations at several U.S.

health agencies, including the FDA, the Department of Health and Human Services (the "HHS"), the Centers for Disease Control and Prevention and the National Institutes of Health, are expected to impact the FDA's ability to review and approve new medicines and conduct necessary inspections.

Over the last several years, the U.S.

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There is also a great degree of uncertainty related to the impact of recent U.S.

Supreme Court decisions and executive orders on the FDA’s enforcement and decision-making authority.

In February 2025, President Trump signed an executive order asserting greater authority over all federal agencies, including those established by Congress as independent from direct presidential control.

The executive order may lead to delays, if not cancellations, of pending and proposed regulations at federal agencies and introduces uncertainty as it subjects all significant regulatory actions by the agencies to the President’s supervision and control.

Supreme Court decisions and executive

orders on the enforcement and decision-making authority of regulatory agencies, including those in the FDA, which may lead to delays, if not cancellations, of pending and proposed regulations at federal agencies and subject significant regulatory actions by the agencies to presidential supervision and control.

Accordingly, any change in these laws or regulations, changes in their interpretation, or newly enacted laws or regulations and any failure by us to comply with these laws or regulations could require changes to certain of our business practices, negatively impact our operations, cash flow or financial condition, impose additional costs on us or otherwise adversely affect our business.

For example, U.S.

trade policy under the new administration, including potential new or increased tariffs, along with changing trade policies in China, Mexico, the U.K., Canada, and parts of Europe, may impact global trade, create sourcing challenges with respect to raw materials and instruments and increase our costs, potentially harming our business.

In April 2025, the U.S.

administration imposed increased tariffs on all countries and individualized “reciprocal” higher tariffs on certain countries, most notably China, for which other countries responded by announcing retaliatory tariffs on U.S.

The tariff increases have significantly disrupted the global markets and may significantly escalate geopolitical tensions between the U.S.

and other countries, especially China.

Further, in April 2025, the U.S.

Department of Commerce initiated national security investigations into the importation of pharmaceuticals and pharmaceutical ingredients pursuant to Section 232 of the Trade Expansion Act of 1962, which could result in the imposition of new tariffs on imports within the pharmaceutical industry.

For example, significant changes to U.S.

trade policy, including potential new or increased tariffs, along with countermeasures by China, Mexico, the U.K., Canada, and parts of Europe, may impact global trade, create sourcing challenges with respect to raw materials and instruments and increase our costs, potentially harming our business.

has recently imposed increased tariffs on certain countries, focusing on those with which it has the largest trade deficits.

Other countries have responded, and may continue to respond, by announcing retaliatory tariffs on U.S.

The tariffs have disrupted and may continue to disrupt the global markets and escalate geopolitical tensions between the U.S.

and other countries.

The extent of the impact of such tariffs and proposed regulations on our business specifically, or on the U.S.

market and global economy generally, are uncertain and unpredictable, and could adversely affect our business, financial condition and results of operations.

Moreover, uncertainty with respect to legislation, regulation and government policy at the federal, state and local levels, including as a result of the change in administration, has introduced new and difficult-to-quantify macroeconomic and geopolitical risks with potentially far-reaching implications.

With the change in the presidential administration, there are currently a number of laws and regulations in the U.S.

Further, the U.S.

may also enact other regulations or policies that affect trade or otherwise impact the pharmaceutical industry by restricting U.S.

pharmaceutical companies from contracting with certain countries for the development, research or manufacturing of pharmaceutical products.

For example, the U.S.

Moreover, uncertainty with respect to legislation, regulation and government policy at the federal, state and local levels, has introduced new and difficult-to-quantify macroeconomic and geopolitical risks with potentially far-reaching implications.

There are currently a number of laws and regulations in the U.S.

that have recently been adopted but not yet implemented, have been proposed or are being considered to which we or our customers may become subject, including healthcare reform initiatives and potential spending and tax proposals, but at this time their impact on our business and results of operations remains uncertain.

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administration, or estimate the overall impact of any such changes on our business, results of operations and financial condition.

If we cannot maintain satisfactory pricing of our Products that is also acceptable to the U.S.

government, insurance companies, managed care organizations and other payors, or arrange for favorable reimbursement policies, our product sales may be adversely affected and our future revenue may suffer.

The continuing efforts of the U.S.

government, insurance companies, managed care organizations and other payors of health care costs to contain or reduce costs of health care may adversely affect our ability to generate adequate revenues and gross margins to make our Products commercially viable.

Our ability to commercialize our Products successfully will depend in part on the extent to which governmental authorities, private health insurers and other organizations establish appropriate reimbursement levels for the cost of such products and related treatments and for what uses reimbursement will be provided.

Adoption of our Products by the medical community may be limited if third-party payors will not offer adequate coverage.

In addition, third-party payors often challenge the price and cost-effectiveness of medical products and services, and such pressure may increase in the future.

In many cases, uncertainty exists as to the adequate reimbursement status of newly approved healthcare products.

Accordingly, our Products may not be considered cost-effective and adequate third-party reimbursement may not be available to enable us to maintain price levels sufficient to realize a profit.

Further, coverage policies and third-party payor reimbursement rates may change at any time.

Even if favorable coverage and reimbursement status is attained for one or more of our Products or product candidates for which we receive regulatory approval, less favorable coverage policies and reimbursement rates may be implemented in the future.

Legislation and regulations affecting the pricing of pharmaceuticals may change and any such changes could further limit reimbursement.

Cost control initiatives may decrease coverage and payment levels for our Products and, in turn, the reimbursement

that we receive.

We are unable to predict all changes to the coverage or reimbursement methodologies that will be applied by private or government payors to our Products.

If our Products do not receive adequate reimbursement, our revenue could be severely limited.

In the U.S., given recent federal and state government initiatives directed at lowering the total cost of health care, the U.S.

Congress and state legislatures will likely continue to focus on health care reform, reducing the cost of prescription pharmaceuticals and reforming the Medicare and Medicaid systems.

The Patient Protection and Affordable Care Act of 2010, as amended by the Health Care and Education Affordability Reconciliation Act (collectively, the "PPACA") has resulted in sweeping changes to broaden access to health insurance, reduce or constrain the growth of healthcare spending, enhance remedies against fraud and abuse, add new transparency requirements for the healthcare and health insurance industries, impose taxes and fees on the health industry and impose additional health policy reforms.

Since its enactment, there have been judicial, executive and Congressional challenges to certain aspects of the ACA.

The OBBBA has enacted, among others, changes to eligibility requirements for premium tax credits, which is expected to result in less coverage in the ACA's health insurance marketplace ("Marketplace") over the next few years.

The ACA premium tax credits will expire at the end of 2025, which is expected to result in an additional loss of coverage for approximately 24 million people currently enrolled in insurance plans obtained through the Marketplace.

In addition, the OBBBA has made other changes to the enrollment and eligibility requirements for Medicaid, which is expected to result in the loss of coverage for certain individuals currently enrolled in Medicaid programs.

The SUPPORT Act of 2018 established policies to encourage the prevention and treatment of opioid addiction and the development of non-opioid pain management treatments.

Due to the SUPPORT Act, Medicare pays separately for certain non-opioid pain management drugs in ambulatory surgical centers ("ASC") but not in the hospital outpatient setting ("OPPS").

However, under the Consolidated Appropriations Act of 2023, the prior payment policy was replaced by a new three-year period of separate payment for non-opioid pain relief products in the OPPS and ASC settings for 2025 through 2027.

As of January 1, 2025, Medicare has implemented this new payment methodology, which remains in effect through December 31, 2027.

For 2025, ZYNRELEF is included in this new policy, effective April 1, which means continued separate Medicare payment in the OPPS and ASC settings.

While this change may improve access to ZYNRELEF, it may also lead to greater competition.

The American Rescue Plan Act of 2021 removed the statutory cap on rebates that manufacturers pay to state Medicaid programs pursuant to the Medicaid Drug Rebate Program.

The Infrastructure Investment and Jobs Act of 2021 also included a provision requiring drug manufacturers to pay CMS a refund for certain amounts of Part B drugs that are discarded from a single-dose container or single-use package.

Under the law, and a CMS Proposed Rule issued in July 2022, this refund program became effective on January 1, 2023.

Neither of these pieces of legislation have had a material impact on the Company, through December 31, 2024.

Further, the Inflation Reduction Act of 2022 ("IRA"), includes various provisions intended to address drug-pricing issues, which requires manufacturers to engage in the drug price negotiation program with Medicare (beginning in 2026) or face steep penalties if they don’t agree to provide their drug at the government-set price subject to a cap;

imposes rebates under Medicare Part B and Medicare Part D to penalize price increases that outpace inflation;

establishes an out-of-pocket maximum for beneficiaries in Part D;

and replaces the Part D coverage gap discount program with a new discounting program.

To date, CMS has selected ten Medicare Part D drugs with prices to go into effect on January 1, 2026 and another 15 Part D drugs with prices to go into effect on January 1, 2027.

Another 15 drugs from Medicare Part B or Medicare Part D will be selected by February 1, 2026, for the maximum price to be set and in effect by January 1, 2028.

If any of our approved products are subject to price negotiations, it could, among other things, lead to lower revenues prior to the expiry of intellectual property protections.

In addition, developments in Medicare hospital outpatient reimbursement for 340B-acquired drugs may further drive 340B hospital business for Heron.

The 340B program allows certain hospitals and safety net providers to purchase Part B outpatient drugs from manufacturers at federally mandated discounted rates.

Due to the June 2022 Supreme Court decision in American Hospital Association et al.

Becerra et al, since January 1, 2023, the Medicare Part B hospital outpatient payment rate for 340B-acquired drugs has returned to being at the same rate as the rate for non-340B hospitals, Average Selling Price (ASP) + 6% methodology.

We expect that other healthcare reform measures that may be adopted in the future may result in additional reductions in Medicare and other healthcare funding, more rigorous coverage criteria, new payment methodologies and additional downward pressure on drug prices, which may affect prices of our Products in the future.

Any reduction in reimbursement from Medicare or other government programs may result in a similar reduction in payments from private payors.

The implementation of cost containment measures or other healthcare reforms may prevent us from being able to price our Products at what we consider to be a fair or competitive price, generate revenue, attain profitability, or commercialize our product candidates, if approved.

Moreover, there has recently been heightened governmental scrutiny over the manner in which manufacturers set prices for their marketed products.

Economic pressure on state budgets have resulted in states increasingly seeking to achieve budget savings through mechanisms that limit coverage or payment for drugs.

For example, individual states in the U.S.

have become increasingly active in implementing regulations through state Pharmacy Drug Review Boards designed to contain drug pricing, including price or patient reimbursement constraints, discounts, restrictions on certain product access and marketing cost disclosure and transparency measures.

State Medicaid programs are increasingly asking manufacturers to pay supplemental rebates and requiring prior authorization by the state program for use of any drug for which supplemental rebates are not being paid.

Regional healthcare authorities and individual hospitals are increasingly using bidding procedures to determine what pharmaceutical products and which suppliers will be included in their prescription drug and other healthcare programs.

In addition, the trend toward managed health care in the U.S., which could significantly influence the purchase of health care services and products, may result in lower prices for our Products.

Further, executive orders were signed to implement Most Favored Nation drug pricing policies designed to align certain prescription drug prices in the U.S.

to lower prices available in other countries.

Investigations are being conducted to examine price differentials and consider policy approaches for implementation, including through administrative action.

If such Most Favored Nation policies are implemented, changes to drug pricing are expected to affect the profitability of pharmaceutical and biotech companies in the U.S.

as well as in other countries, as a price referencing policy to the U.S.

market could make it commercially unviable to commercialize a drug product in a price constrained market.

The details of the proposed policies are unclear and the final terms and impact remain uncertain, and may pose long-term risks to our business and our future commercialization plans of our Products and product candidates.

While we cannot predict the impact of such legislative or regulatory changes on our business, the announcement or adoption of these proposals could have a material and adverse effect on our potential revenues and gross margins.

Changes to existing tax laws, or challenges to our tax positions could adversely affect our business and financial condition.

The tax regimes to which we are subject or under which we operate may be subject to significant change.

There is uncertainty regarding future legislative and regulatory changes and policies related to matters such as taxation and importation, and any such proposed or enacted regulations by the current or a future U.S.

administration, Congress, or taxing authorities in other jurisdictions could materially affect our tax obligations and operating results.

For example, beginning in 2022, the Tax Cuts and Jobs Act of 2017 eliminated the option to deduct research and development expenditures in the year incurred and instead requires taxpayers to capitalize and subsequently amortize such expenditures over five years for research activities conducted in the U.S.

and over 15 years for research activities conducted outside the U.S.

The One Big Beautiful Bill Act ("OBBBA") reinstates the option to deduct domestic research and development expenditures in the year incurred, commencing with tax years beginning after December 31, 2024.

Foreign research and development expenditures remain subject to the 15-year capitalization and amortization requirement.

The OBBBA also includes other significant provisions, including tax cut extensions and modifications to the international tax framework.

While we continue to evaluate the impact of these legislative changes as additional guidance becomes available, uncertainty remains regarding the timing and interpretation by tax authorities in affected jurisdictions.

To the extent that such changes have a negative impact on us, including as a result of related uncertainty, these changes could adversely impact our business, results of operations and financial position.

In addition, U.S.

federal, state and local tax laws are extremely complex and subject to various interpretations.

Although we believe that our tax estimates and positions are reasonable, there can be no assurance that our tax positions will not be challenged by relevant tax authorities.

If the relevant tax authorities assess additional taxes on us, this could result in adjustments to, or impact the timing or amount of, taxable income, deductions or other tax allocations, which may adversely affect our results of operations and financial position.

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 4. Controls and Procedures