What changed in this filing

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Item 2. Management’s Discussion and Analysis

2023-11-13 compared with 2023-08-11 · 94 added, 58 removed, 137 unchanged (53% of the section changed)

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The following discussion and analysis of the results of operations and financial condition of Eyenovia, Inc.

(“Eyenovia,” the “Company,” “we,” “us” and “our”) as of June 30, 2023 and for the three and six months ended June 30, 2023 and 2022 should be read in conjunction with our unaudited condensed financial statements and the notes thereto included elsewhere in this Quarterly Report on Form 10-Q and with our audited financial statements and the notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2022 as filed with the Securities and Exchange Commission (“SEC”) on March 31, 2023, as amended by Amendment No.

1, as filed with the SEC on May 1, 2023.

(“Eyenovia,” the “Company,” “we,” “us” and “our”) as of September 30, 2023 and for the three and nine months ended September 30, 2023 and 2022 should be read in conjunction with our unaudited condensed financial statements and the notes thereto included elsewhere in this Quarterly Report on Form 10-Q and with our audited financial statements and the notes thereto included in our 2022 Form 10-K, as amended by our 2022 Form 10-K Amendment.

Forward Looking Statements

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Such forward-looking statements are subject to risks, uncertainties and other important factors that could cause actual results and the timing of certain events to differ materially from future results expressed or implied by such forward-looking statements.

Factors that could cause or contribute to such differences include, but are not limited to, those discussed in the sections titled “Summary Risk Factors” and “Risk Factors” included in Item 1A of Part I of our Annual Report on Form 10-K for the year ended December 31, 2022, as filed with the Securities and Exchange Commission (the “SEC”) on March 31, 2023, and as amended by Amendment No.

1, as filed with the SEC on May 1, 2023, and the risks discussed in our other SEC filings.

Factors that could cause or contribute to such differences include, but are not limited to, those discussed in the sections titled “Summary Risk Factors” and “Risk Factors” included in Item 1A of Part I of our 2022 Form 10-K, as amended by our 2022 Form 10-K Amendment, and the risks discussed in our other SEC filings.

Furthermore, such forward-looking statements speak only as of the date of this Quarterly Report on Form 10-Q.

Except as required by law, we undertake no obligation to update any forward-looking statements to reflect events or circumstances after the date of such statements.

License Agreement With Formosa

On August 15, 2023, we entered into a license agreement (the “License”) with Formosa Pharmaceuticals Inc.

(“Formosa”), whereby we acquired the exclusive U.S.

rights to commercialize any product related to a novel formulation of clobetasol propionate ophthalmic nanosuspension, 0.05% (the “Licensed Product”), which is currently under review by the U.S.

Food and Drug Administration (“FDA”), for ophthalmic use for inflammation and pain after ocular surgery and supplemental disease indications, if any, associated with the New Drug Application for the Licensed Product.

The License will remain in effect for ten years from the date of the first commercial sale of a Licensed Product, unless earlier terminated.

We paid Formosa an upfront payment in an aggregate amount of $2,000,000 which consisted of (a) cash in the amount of $1,000,000 and (b) 487,805 shares of common stock valued at $1,000,000.

We also capitalized $122,945 of transaction costs in connection with the License.

In addition, we must pay Formosa up to $4 million upon the achievement of certain development milestones and up to $80 million upon the achievement of certain sales milestones.

FDA Approval of Mydcombi™

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Those benefits may include better tolerability, more efficient use of office time and resources, and an overall improved doctor-patient experience.

We have begun the commercialization of Mydcombi, with the first commercial sale of the product on August 3, 2023 as part of a targeted launch, and are continuing to expand the manufacturing process in preparation for a broader launch in 2024, when internal manufacturing capabilities are expected to come on-line.

We are an ophthalmic technology company developing the Optejet® delivery system for use both in combination with our own drug-device therapeutic programs as well as out-licensing for additional indications.

Our aim is to improve the delivery of topical ophthalmic medication through ergonomic design that facilitates ease-of-use, delivery of more physiologically appropriate medication volume, with the goal to reduce side effects and improve tolerability, and introduce digital health technology to improve therapy compliance and ultimately medical outcomes.

We have begun the commercialization of Mydcombi, with the first commercial sale of the product occurring on August 3, 2023 as part of a targeted launch, and are continuing to expand the manufacturing process in preparation for a broader launch in 2024, when internal manufacturing capabilities are expected to come on-line.

We are an ophthalmic technology company commercializing Mydcombi™ (tropicamide and phenylephrine HCL ophthalmic spray) for mydriasis and developing the Optejet® delivery system both for use in combination with our own drug-device therapeutic programs and for out-licensing for use in combination with therapeutics for additional indications.

Our aim is to improve the delivery of topical ophthalmic medication through the ergonomic design of the Optejet which facilitates ease-of-use and delivery of more physiologically appropriate medication volume, with the goal to reduce side effects and improve tolerability, and introduce digital health technology to improve therapy compliance and ultimately medical outcomes.

The ergonomic and functional design of the Optejet allows for horizontal drug delivery and eliminates the need to tilt the head back or the manual dexterity to squeeze a bottle, to administer medications.

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In the United States, myopia is estimated to affect approximately 25 million children, with up to five million considered to be at high risk for progressive myopia.

In February 2019, the FDA accepted our IND to initiate the CHAPERONE study to reduce the progression of myopia in children.

In February 2019, the FDA accepted our Investigational New Drug application (“IND”) to initiate the CHAPERONE study to reduce the progression of myopia in children.

The first patient was enrolled in the CHAPERONE study in June 2019.

On October 9, 2020, we entered into the Bausch License Agreement with B+L, pursuant to which B+L may develop and commercialize MicroPine in the United States and Canada.

On October 9, 2020, we entered into a license agreement (the “Bausch License Agreement”) with B+L, pursuant to which B+L may develop and commercialize MicroPine in the United States and Canada.

Under the terms of the Bausch License Agreement, we received an upfront payment of $10.0 million and we may receive up to a total of $35.0 million in additional payments, based on the achievement of certain regulatory and launch-based milestones.

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We have also successfully expanded our manufacturing capabilities through a partnership with Coastline International, Inc.

located in Tijuana, Mexico, and the construction of our own fill and finish facility in Redwood City, California.

As of the date of filing, we are up-to-date supplying clinical product for the CHAPERONE and VISION Studies.

MicroLine is our investigational pharmacologic treatment for presbyopia.

Presbyopia is a non-preventable, age-related hardening of the lens, which causes the gradual loss of the eye’s ability to focus on near objects and impairs near visual acuity.

located in Tijuana, Mexico, as well as the construction of our new manufacturing facility in Reno, Nevada and the construction of our own fill and finish facility in Redwood City, California.

As of the date of filing, we are up-to-date supplying clinical product for the CHAPERONE study.

MicroLine is our investigational pharmacologic treatment for presbyopia, a non-preventable, age-related hardening of the lens, which causes the gradual loss of the eye’s ability to focus on near objects and impairs near visual acuity.

Allergan recently launched Vuity™, a pilocarpine drug product for the treatment of presbyopia.

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We released positive top-line results from VISION-2 in the fourth quarter of 2022.

We are now manufacturing registration batches for stability testing with the goal of filing a new drug application for MicroLine by the end of 2024.

Mydcombi is our fixed combination formulation of tropicamide-phenylephrine for inducing mydriasis for diagnostic procedures and in conditions where short term pupil dilation is desired.

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Those benefits may include better tolerability, more efficient use of office time and resources, and an overall improved doctor-patient experience.

As noted above in “FDA Approval of Mydcombi”, we received FDA approval on May 5, 2023, and are preparing to commercialize the product starting with a targeted launch and expanding in 2024 when we expect our internal manufacturing capabilities to come on-line.

On August 10, 2020, we entered into the Arctic Vision License Agreement with Arctic Vision, which was amended on September 14, 2021, pursuant to which Arctic Vision may develop and commercialize MicroPine, MicroLine and Mydcombi in Greater China (mainland China, Hong Kong, Macau and Taiwan) and South Korea.

As noted above in “FDA Approval of Mydcombi”, we received FDA approval on May 5, 2023, and are commercializing the product starting with a targeted launch and expanding in 2024 when we expect our internal manufacturing capabilities to come on-line.

On August 10, 2020, we entered into a license agreement with Arctic Vision (as amended on September 14, 2021, the “Arctic Vision License Agreement”) pursuant to which Arctic Vision may develop and commercialize MicroPine, MicroLine and Mydcombi in Greater China (mainland China, Hong Kong, Macau and Taiwan) and South Korea.

Under the terms of the Arctic Vision License Agreement, as amended, we received an upfront payment of $4.25 million before any payments to Senju Pharmaceutical Co., Ltd.

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Historically, we have financed our operations principally through equity offerings.

We have also generated cash through licensing arrangements and our credit facilities with SVB and Avenue.

However, based upon our current operating plan, there is substantial doubt about our ability to continue as a going concern for at least one year from the date that our financial statements are issued.

We have also generated cash through licensing arrangements and our credit facilities with Leerink Partners and Avenue.

Our ability to continue as a going concern depends on our ability to complete additional licensing or business development transactions or raise additional capital through the sale of equity or debt securities to support our future operations.

If we are unable to secure additional capital, we may be required to curtail our research and development initiatives and/or take additional measures to reduce costs.

Our net losses were $6.2 million and $12.0 million for the three and six months ended June 30, 2023.

As of June 30, 2023, we had working capital and an accumulated deficit of $19.2 million and $130.2 million, respectively.

Our net losses were $7.3 million and $19.3 million for the three and nine months ended September 30, 2023, respectively.

As of September 30, 2023, we had working capital and an accumulated deficit of $20.0 million and $137.5 million, respectively.

Financial Overview

Revenue and Cost of Sales

Revenue is earned from the sale of our product, Mydcombi.

The first commercial sale of the product occurred on August 3, 2023 as part of a targeted launch.

Cost of sales consisted of the cost of the production of the MydCombi ophthalmic spray that was sold.

Research and Development Expenses

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We anticipate that our general and administrative expenses will increase in the future as we increase our headcount to support our continued research and development and the potential commercialization of our product candidates.

Other Income (Expense), Net

Other income (expense), net consists of (a) other income (expense) related to our sales of clinical supply to our licensees;

(b) interest income earned on treasury bills;

and (c) interest expense incurred on our indebtedness.

Results of Operations

Three Months Ended June 30, 2023 Compared with Three Months Ended June 30, 2022

Three Months Ended September 30, 2023 Compared with Three Months Ended September 30, 2022

Revenue and Cost of Sales

Revenue for the three months ended September 30, 2023 totaled $1,198, which was offset by cost of revenues of $1,198.

We expect to generate flat gross margins (after writing inventories down to net realizable value) during the early stages of the commercialization process for Mydcombi until we can roll out our second generation Optejet device and scale up production.

Research and Development Expenses

For the Three Months Ended June 30,

For the Three Months Ended September 30,

Personnel-related expenses

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Total research and development expenses

Research and development expenses for the three months ended June 30, 2023 totaled $2.8 million, a decrease of $0.8 million, or 22%, as compared to $3.6 million recorded for the three months ended June 30, 2022.

Research and development expenses for the three months ended September 30, 2023 totaled $3.6 million, a decrease of $0.3 million, or 8%, as compared to $3.9 million recorded for the three months ended September 30, 2022.

The increase in personnel-related expenses was primarily due to salary increases and new staff additions made throughout 2023, primarily related to the anticipated Mydcombi launch.

The decrease in direct clinical and non-clinical expenses was primarily due to the VISION-2 Study being concluded in 2022.

The decrease in non-cash stock-based compensation expenses was primarily due to the change in the allocation percentages of a grant from research and development expenses to general and administrative expenses and adjustments for forfeitures and expirations resulting from the review of outstanding options.

The decrease in direct clinical and non-clinical expenses was primarily due to the VISION-2 study being concluded in 2022 and the decrease in the use of external consultants.

The decrease in non-cash stock-based compensation expenses was primarily due to the change in the allocation percentages applied to research and development expenses and general and administrative expenses beginning in late 2022.

This resulted primarily from a change in the role of an individual from a senior executive officer role to an advisory role.

General and Administrative Expenses

For the Three Months Ended June 30,

For the Three Months Ended September 30,

Salaries and benefits

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Director fees and expense

General and administrative expenses for the three months ended June 30, 2023 totaled $3.1 million, a decrease of $0.4 million, or 11%, as compared to $3.5 million recorded for the three months ended June 30, 2022.

The decrease was primarily attributable to a sharp decrease in professional fees which resulted from legal and recruiting expenses associated with the addition of new directors in 2022 that were not incurred in the first half of 2023.

General and administrative expenses for the three months ended September 30, 2023 totaled $2.9 million, a decrease of $0.4 million, or 12%, as compared to $3.4 million recorded for the three months ended September 30, 2022.

The decrease was primarily attributable to a decrease in professional fees which resulted from legal and recruiting expenses associated with the addition of new directors in 2022 that were not incurred in the first half of 2023.

The decrease in non-cash stock-based compensation expenses was primarily due to the ending of the amortization period for older grants.

The decrease in sales and marketing expenses primarily resulted from the decrease in promotional expenses.

Six Months Ended June 30, 2023 Compared with Six Months Ended June 30, 2022

Other Income (Expense), Net

Net other expense for the three months ended September 30, 2023 totaled $0.8 million, an increase of $0.7 million, or 939%, as compared to $0.1 million for the three months ended September 30, 2022.

The increase was primarily due to a $0.5 million increase in interest expense and a $0.4 million increase in the provision for clinical supply returns, partially offset by a $0.2 million increase in interest income.

Nine Months Ended September 30, 2023 Compared with Nine Months Ended September 30, 2022

Revenue and Cost of Sales

Revenue for the nine months ended September 30, 2023 totaled $1,198, which was offset by cost of revenues of $1,198.

Research and Development Expenses

For the Six Months Ended June 30,

For the Nine Months Ended September 30,

Personnel-related expenses

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Total research and development expenses

Research and development expenses for the six months ended June 30, 2023 totaled $5.3 million, a decrease of $2.0 million, or 27%, as compared to $7.3 million recorded for the six months ended June 30, 2022.

Research and development expenses for the nine months ended September 30, 2023 totaled $8.9 million, a decrease of $2.3 million, or 20%, as compared to $11.2 million recorded for the nine months ended September 30, 2022.

The increase in personnel-related expenses was primarily due to salary increases and costs related to staff additions made throughout 2022 mainly related to the ramp up for the Mydcombi launch.

The decrease in direct clinical and non-clinical expenses was primarily due to the VISION-2 Study being concluded in 2022.

The decrease in supplies and materials expenses resulted from the increase in the cost reimbursements for the clinical supplies that were supplied to our clinical partners (Arctic Vision and B+L).

The decrease in direct clinical and non-clinical expenses was primarily due to the VISION-2 study being concluded in 2022 and the decrease in the use of external consultants.

In addition, the decrease in direct clinical expenses related to an increase in supplies and materials expenses resulting from the prospective change in the nature of the accounting for the Gen 2.0 device from a clinical expense to a supply expense.The decrease in non-cash stock-based compensation expenses was primarily due to the change in the allocation percentages applied to research and development expenses and general and administrative expenses

beginning in January 2023.

This resulted primarily from a change in the role of an individual from a senior executive officer role to an advisory role.

General and Administrative Expenses

For the Six Months Ended June 30,

For the Nine Months Ended September 30,

Salaries and benefits

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Director fees and expense

General and administrative expenses for the six months ended June 30, 2023 totaled $6.1 million, a decrease of $0.9 million, or 13%, as compared to $7.0 million recorded for the six months ended June 30, 2022.

General and administrative expenses for the nine months ended September 30, 2023 totaled $9.0 million, a decrease of $1.3 million, or 13%, as compared to $10.4 million recorded for the nine months ended September 30, 2022.

The decrease in sales and marketing expense primarily resulted from the decrease in promotional expenses.

Other Income (Expense), Net

Net other expense for the nine months ended September 30, 2023 totaled $1.4 million, an increase of $1.0 million, or 289%, as compared to $0.3 million for the nine months ended September 30, 2022.

The increase was primarily due to a $1.2 million increase in interest expense and a $0.4 million increase in the provision for clinical supply returns, partially offset by a $0.5 million increase in interest income.

Liquidity and Capital Resources and Going Concern

We measure our liquidity in a number of ways, including the following:

September 30,

Cash and cash equivalents

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Since inception, we have experienced negative cash flows from operations.

As of June 30, 2023, our accumulated deficit since inception was $130.2 million.

As of June 30, 2023, we had a cash and cash equivalents balance of $17.5 million, working capital of $19.2 million and stockholders’ equity of $10.5 million.

As of June 30, 2023 and December 31, 2022, we had $15.8 million and $10.4 million, respectively, of debt outstanding.

These conditions raise substantial doubt about our ability to continue as a going concern for at least one year from the date that the financial statements included elsewhere in this Quarterly Report on Form 10-Q are issued.

As of September 30, 2023, our accumulated deficit since inception was $137.5 million.

As of September 30, 2023, we had a cash and cash equivalents balance of $20.7 million, working capital of $20.0 million and stockholders’ equity of $15.8 million.

As of September 30, 2023 and December 31, 2022, we had $15.6 million and $10.4 million, respectively, of debt outstanding.

Our financial statements do not include adjustments to the amounts and classification of assets and liabilities that may be necessary should we be unable to continue as a going concern.

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Our operating needs include the planned costs to operate our business, including amounts required to fund research and development activities including clinical studies, working capital and capital expenditures.

Our future capital requirements and the adequacy of our available funds will depend on many factors, including our ability to successfully commercialize our products and services, competing technological and market developments, and the need to enter into collaborations with other companies or acquire other companies or technologies to enhance or complement our product and service offerings.

Our future capital requirements and the adequacy of our available funds will depend on many factors, including our ability to successfully

commercialize our products and services, competing technological and market developments, and the need to enter into collaborations with other companies or acquire other companies or technologies to enhance or complement our product and service offerings.

If we are unable to secure additional capital, we may be required to curtail our research and development initiatives and take additional measures to reduce general and administrative and sales and marketing costs in order to conserve our cash.

During the six months ended June 30, 2023 and 2022, our sources and uses of cash were as follows:

Net cash used in operating activities for the six months ended June 30, 2023 was $11.7 million, which includes cash used to fund a net loss of $12.0 million, reduced by $2.1 million of non-cash expenses, plus $1.8 million of cash used to fund changes in operating assets and liabilities.

Net cash used in operating activities for the six months ended June 30, 2022 was $12.9 million, which includes cash used to fund a net loss of $14.6 million, reduced by $2.1 million of non-cash expenses, plus $0.4 million of cash used to fund changes in operating assets and liabilities.

Cash used in investing activities for the six months ended June 30, 2023 was $2.1 million, which was related to purchases of property and equipment.

Cash used in investing activities for the six months ended June 30, 2022 was $0.4 million, which was related to purchases of and vendor deposits for property and equipment.

Net cash provided by financing activities for the six months ended June 30, 2023 totaled $8.4 million, which was attributable to $4.0 million of gross proceeds received from sales under our At-the-Market Offering Program and $5.0 million of gross proceeds from the additional tranche under the Loan and Security Agreement.

This was slightly offset by the repayment of $0.4 million of notes payable in connection with the D&O Loan, $0.1 million of the At-the-Market offering issuance costs relating to our At-the-Market Offering Program and $0.1 million of issuance costs related to the additional tranche under the Loan and Security Agreement.

Net cash provided by financing activities for the six months ended June 30, 2022 totaled $15.3 million, which was attributable to $15.9 million of gross proceeds received from the March 2022 Offering (as defined in our Annual Report on Form 10-K, as filed with the SEC on March 31, 2023, as amended by Amendment No.

1, as filed with the SEC on May 1, 2023) and the At-the-Market Offering Program.

This was slightly offset by the repayment of $0.4 million of notes payable in connection with the D&O Loan and the $0.1 million payment of issuance costs related to the March 2022 Offering.

During the nine months ended September 30, 2023 and 2022, our sources and uses of cash were as follows:

Net cash used in operating activities for the nine months ended September 30, 2023 was $17.5 million, which includes cash used to fund a net loss of $19.3 million, reduced by $3.7 million of non-cash expenses, plus $2.0 million of cash used to fund changes in operating assets and liabilities.

Net cash used in operating activities for the nine months ended September 30, 2022 was $19.7 million, which includes cash used to fund a net loss of $21.9 million, reduced by $3.4 million of non-cash expenses, plus $1.2 million of cash used to fund changes in operating assets and liabilities.

Cash used in investing activities for the nine months ended September 30, 2023 was $3.8 million, which was related to $2.7 million of purchases of property and equipment and a $1.1 million cash investment in an intangible asset.

Cash used in investing activities for the nine months ended September 30, 2022 was $0.6 million, which was related to purchases of and vendor deposits for property and equipment.

Net cash provided by financing activities for the nine months ended September 30, 2023 totaled $19.2 million, which was attributable to $12.0 million of gross proceeds received from the August 2023 Offering, $4.1 million of gross proceeds from our At-the-Market Offering Program and $5.0 million of gross proceeds from the additional tranche under the Loan and Security Agreement.

This was slightly offset by the repayment of $0.6 million of notes payable in connection with the D&O Loan, $1.1 million of August 2023 Offering cash issuance costs, $0.1 million of the At-the-Market offering issuance costs and $0.1 million of issuance costs related to the additional tranche under the Loan and Security Agreement.

Net cash provided by financing activities for the nine months ended September 30, 2022 totaled $18.2 million, which was attributable to $19.1 million of gross proceeds received from the March 2022 Offering (as defined in our 2022 Form 10-K, as amended by our 2022 Form 10-K Amendment) and the At-the-Market Offering Program.

This was slightly offset by the repayment of $0.7 million of notes payable in connection with the D&O Loan and the $0.2 million payment of issuance costs related to the March 2022 Offering and the At-the-Market Offering Program.

Contractual Obligations and Commitments

During the next twelve months we have commitments to pay:

(a) $2.7 million to settle our June 30, 2023 accounts payable, accrued compensation, and accrued expenses and other current liabilities;

(a) $3.1 million to settle our September 30, 2023 accounts payable, accrued compensation, and accrued expenses and other current liabilities;

(b) $0.4 million relating to our non-cancelable operating lease commitments;

and (c) $3.3 million of potential payments due under our notes payable.

In addition, we would be required to pay an aggregate of $1.5 million of executive severance pay under the provisions of the Executive Employment Agreements with three executive officers, in the event that their respective employment with us were to be terminated without cause or if there is an involuntary termination (as defined in the agreement).

In addition, we would be required to pay an aggregate of $1.5 million of executive severance pay under the provisions of our executive employment agreements with three executive officers, in the event that their respective employment with us were to be terminated without cause or if there is an involuntary termination (as defined in the agreement).

After twelve months we have commitments to pay an additional $1.4 million relating to our non-cancelable operating lease commitments and notes payable in the amount of $12.3 million.

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Critical Accounting Policies and Estimates

For a description of our critical accounting policies, including critical accounting estimates, see Item 7 – Critical Accounting Policies in our Annual Report on Form 10-K, as filed with the SEC on March 31, 2023, as amended by Amendment No.

1, as filed with the SEC on May 1, 2023.

For a description of our critical accounting policies, including critical accounting estimates, see Item 7 – Critical Accounting Policies in our 2022 Form 10-K, as amended by our 2022 Form 10-K Amendment.

Our management’s discussion and analysis of our financial condition and results of operations is based on our condensed consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America.

The preparation of financial statements requires us to make estimates and judgements that affect the reported amounts of assets, liabilities, revenues, costs and expenses and related disclosures.

We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances.

We base our estimates on historical experience and on various

other assumptions that we believe to be reasonable under the circumstances.

Changes in estimates are reflected in reported results for the period in which they become known.

Actual results could differ significantly from the estimates made by our management.

There have been no material changes to our critical accounting policies and estimates from those disclosed in our financial statements and the related notes and other financial information included in our Annual Report on Form 10-K for the year ended December 31, 2022, as filed with the SEC on March 31, 2023, as amended by Amendment No.

1, as filed with the SEC on May 1, 2023.

There have been no material changes to our critical accounting policies and estimates from those disclosed in our financial statements and the related notes and other financial information included in our 2022 Form 10-K, as amended by our 2022 Form 10-K Amendment, except as disclosed below:

Inventories - Inventories are stated at the lower of cost or net realizable value.

Cost is determined using the first-in, first-out method.

The cost of inventory that is sold to third parties is included within cost of sales.

The Company will periodically review for slow-moving, excess or obsolete inventories.

Intangible Assets - The application of the guidance in ASC 805 (“Business Combinations”) on accounting for business combinations can differ significantly depending on whether the acquired entity is considered a “business” or an “asset.” A determination of whether the transaction represented an asset acquisition or a business combination must be made.

Pursuant to ASC 350 (“Intangibles – Goodwill and Other”), the payment made for the intangible asset will be capitalized as an intangible asset over the useful life of the intangible asset.

Recently Adopted Accounting Standards

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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