What changed in this filing

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Item 2. Management’s Discussion and Analysis

2022-11-14 compared with 2022-08-15 · 79 added, 75 removed, 164 unchanged (48% of the section changed)

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Our licenses enable our customers to deploy haptically-enabled devices, content and other offerings, which they typically sell under their own brand names.

We and our wholly-owned subsidiaries hold more than 1,200 issued or pending patents worldwide as of June 30, 2022.

We and our wholly-owned subsidiaries hold more than 1,200 issued or pending patents worldwide as of September 30, 2022.

Our patents cover a wide range of digital technologies and ways in which touch-related technology can be incorporated into and between hardware products and components, systems software, application software, and digital content.

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Results of Operations

Total revenues for the three months ended June 30, 2022 was $8.0 million, a decrease of $3.0 million, or 27%, compared to the same period in 2021.

Total revenues for the six months ended June 30, 2022 was $15.3 million, a decrease of $2.9 million, or 16%, compared to the same period in 2021.

Total cost and operating expenses were $3.9 million in the three months ended June 30, 2022, a decrease of $1.3 million, or 25% compared to the same period in 2021.

Total cost and operating expenses were $7.6 million in the six months ended June 30, 2022, a decrease of $2.3 million, or 23% compared to the same period in 2021.

In the three months ended June 30, 2022, we had a net loss of $1.8 million compared to a net income of $5.3 million in the three months ended June 30, 2021.

In the six months ended June 30, 2022 and 2021 we had net income of $3.3 million and $7.4 million, respectively.

The following table sets forth our Condensed Consolidated Statements of Operations data as a percentage of total revenues:

Total revenues for the three months ended September 30, 2022 was $14.0 million, an increase of $6.8 million, or 95%, compared to the same period in 2021.

Total revenues for the nine months ended September 30, 2022 was $29.3 million, an increase of $4.0 million, or 16%, compared to the same period in 2021.

Total cost and operating expenses were $3.1 million in the three months ended September 30, 2022, a decrease of $0.4 million, or 12% compared to the same period in 2021.

Total cost and operating expenses were $10.7 million in the nine months ended September 30, 2022, a decrease of $2.7 million, or 20% compared to the same period in 2021.

In the three months ended September 30, 2022, we had net income of $7.7 million compared to a net income of $3.8 million in the three months ended September 30, 2021.

In the nine months ended September 30, 2022 and 2021 we had net income of $11.0 million and $11.1 million, respectively.

The following table sets forth our Condensed Consolidated Statements of Income and Comprehensive Income data as a percentage of total revenues:

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2022 2021 2022 2021

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Interest and other income (loss), net (17) 7 (22) 1

Income (loss) before benefit from (provision for) income taxes (24) 54 23 44

Benefit from (provision for) income taxes 2 (5) (3) (3)

Net income (loss) (22) % 49 % 20 % 41 %

Income before provision for income taxes 61 58 42 48

Provision for income taxes (6) (5) (4) (4)

Net income 55 % 53 % 38 % 44 %

Our revenue is primarily derived from fixed fee license agreements and per-unit royalty agreements, along with less significant revenue earned from development, services and other revenue.

Royalty and license revenue is composed of per unit royalties earned based on usage or net sales by licensees and fixed payment license fees charged for our IP and software.

Three Months Ended June 30, 2022 Compared to Three Months Ended June 30, 2021

A revenue summary for the three months ended June 30, 2022 and 2021 are as follows (in thousands, except for percentages):

Three Months Ended June 30,

Three Months Ended September 30, 2022 Compared to Three Months Ended September 30, 2021

A revenue summary for the three months ended September 30, 2022 and 2021 are as follows (in thousands, except for percentages):

Three Months Ended September 30,

2022 2021 $ Change % Change

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Royalty and license revenue

Fixed fee license revenue decreased $0.6 million or 32% in in the second quarter of 2022 compared to the same period in 2021 due to a $0.6 million decrease in automotive license revenue.

Per-unit royalty revenue decreased by $2.4 million, or 26%, in the second quarter of 2022 compared to the same period in 2021, primarily caused by a $2.1 million decrease in royalties from mobility licensees and a $0.6 million decrease in royalties from automotive licensees and a $0.4 million decrease in royalties from gaming licensees.

These decreases were partially offset by a $0.8 million increase in royalties from other licensees.

Fixed fee license revenue increased $6.4 million, or 514% in in the third quarter of 2022 compared to the same period in 2021 due to a $6.4 million increase in mobility license revenue.

Per-unit royalty revenue increased by $0.4 million, or 8%, in the third quarter of 2022 compared to the same period in 2021, primarily due to a $0.9 million increase in other royalties revenue partially offset by a $0.2 million decrease in royalties from mobility licensees and a $0.2 million decrease in royalties from gaming licensees.

We expect royalty and license revenue to continue to be a major component of our future revenue as our technology is included in products and we succeed in our efforts to monetize our IP.

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We also anticipate that our royalty revenue will fluctuate relative to our customers’ unit shipments.

Geographically, revenues generated in Asia, North America and Europe for the three months ended June 30, 2022 represented 80%, 13%, and 7%, respectively, of our total revenue as compared to 84%, 8%, and 8%, respectively, for the three months ended June 30, 2021.

Six Months Ended June 30, 2022 Compared to Six Months Ended June 30, 2021

A revenue summary for the three months ended June 30, 2022 and 2021 are as follows (in thousands, except for percentages):

Six Months Ended June 30,

Geographically, revenues generated in Asia, North America and Europe for the three months ended September 30, 2022 represented 43%, 54%, and 3%, respectively, of our total revenue as compared to 80%, 15%, and 5%, respectively, for the three months ended September 30, 2021.

Nine Months Ended September 30, 2022 Compared to Nine Months Ended September 30, 2021

A revenue summary for the three months ended September 30, 2022 and 2021 are as follows (in thousands, except for percentages):

Nine Months Ended September 30,

2022 2021 $ Change % Change

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Royalty and license revenue

Fixed fee license revenue was relatively flat in the first half of 2022 compared to the same period in 2021.

Per-unit royalty revenue decreased by $2.7 million, or 18%, in the first half of 2022 compared to the same period in 2021, primarily caused by a $2.5 million decrease in royalties from mobility licensees and a $0.8 million decrease royalties from automotive licensees partially offset by a $0.8 million increase in royalties from other licensees.

Geographically, revenues generated in Asia, North America and Europe for the six months ended June 30, 2022 represented 78%, 15%, and 8%, respectively, of our total revenue as compared to 80%, 12%, and 8%, respectively, for the six months ended June 30, 2021.

Fixed fee license revenue increased $6.3 million, or 145% in the first nine months of 2022 compared to the same period in 2021 primarily attributable to a $6.4 million increase in mobility revenue and a $0.1 million increase in other license revenue.

Per-unit royalty revenue decreased by $2.2 million, or 11%, in the first nine month of 2022 compared to the same period in 2021, primarily caused by a $2.4 million decrease in royalties from mobility licensees, a $1.0 million decrease in royalties from automotive licensees and a $0.3 million decrease in royalties from gaming licensees.

These decreases were partially offset by a $1.4 million increase in royalties from other licensees.

Geographically, revenues generated in Asia, North America and Europe for the nine months ended September 30, 2022 represented 61%, 33%, and 6%, respectively, of our total revenue as compared to 80%, 13%, and 7%, respectively, for the nine months ended September 30, 2021.

Operating Expenses

A summary of operating expenses for the three and six months ended June 30, 2022 and 2021 are as follows (in thousands, except for percentages):

Three Months Ended June 30,

A summary of operating expenses for the three and nine months ended September 30, 2022 and 2021 are as follows (in thousands, except for percentages):

Three Months Ended September 30,

2022 2021 $ Change % Change

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General and administrative 2,540 2,246 294 13 %

Six Months Ended June 30,

Nine Months Ended September 30,

2022 2021 $ Change % Change

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and allocated facilities costs.

Sales and marketing expenses decreased $1.0 million, or 82% and $1.6 million, or 69%, in the three and six months ended June 30, 2022, respectively, compared to the same periods in 2021.

The decreases in Sales and Marketing expenses were

primarily attributable to decreases in compensation, benefits and other personnel related costs due to lower headcount and decreases in stock-based compensation expense.

Sales and marketing expenses decreased $0.2 million, or 36% and $1.8 million, or 64%, in the three and nine months ended September 30, 2022, respectively, compared to the same periods in 2021.

The decreases in Sales and Marketing expenses were primarily attributable to decreases in compensation, benefits and other personnel related costs primarily due to lower headcount, decreases in variable compensation and stock-based compensation expense.

Research and Development - Our research and development expenses primarily consisted of employee compensation and benefits, including stock-based compensation;

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and allocated facilities costs.

Research and development expenses decreased $1.0 million, or 73% and $1.8 million, or 67%, in the three and six months ended June 30, 2022, respectively, compared to the same periods in 2021.

The decreases in Research and Development costs were primarily attributable to decreases in compensation, benefits and other personnel related costs due to lower headcount and decreases in stock-based compensation expense.

Research and development expenses decreased $0.5 million, or 68% and $2.3 million, or 68%, in the three and nine months ended September 30, 2022, respectively, compared to the same periods in 2021.

General and Administrative - Our general and administrative expenses primarily consisted of employee compensation and benefits including stock-based compensation;

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and allocated facilities costs.

General and administrative expenses increased $0.7 million, or 25%, in the second quarter of 2022 as compared to the same period in 2021 primarily due to a $0.6 million increase in compensation, benefits and other personnel related costs.

General and administrative expenses increased $1.2 million, or 24%, in the first half of 2022 as compared to the same period in 2021 primarily due to a $1.7 million increase in compensation, benefits and other personnel related costs, a $0.2 million increase in Annual Stockholders' Meeting related costs partially offset by a $0.3 million decrease in legal costs.

The increases in compensation, benefits and other personnel related costs were driven by increases in stock-based compensation expense and higher variable compensation the three and six months ended June 30, 2022 compared to the same periods in 2021.

The decrease in legal expense in the six months ended June 30, 2022 compared to the same period in 2021was primarily attributable to reduced activities, as well as a decrease in patent maintenance and prosecution costs.

General and administrative expenses increased $0.3 million, or 13%, in the third quarter of 2022 as compared to the same period in 2021 primarily due to a $0.8 million increase in compensation, benefits and other personnel related costs partially offset by a $0.3 million decrease in consulting and professional services and a $0.3 million decrease in legal costs.

General and administrative expenses increased $1.4 million, or 20%, in the first nine months of 2022 as compared to the same period in 2021 primarily due to a $2.1 million increase in compensation, benefits and other personnel related costs and a $0.3 million increase in Annual Stockholders' Meeting and other public company related costs.

These increases were partially offset by a $0.6 million decrease in legal costs and a $0.4 million decrease in consulting and professional services.

The increases in compensation, benefits and other personnel related costs were driven by increases in stock-based compensation expense and higher variable compensation during the three and nine months ended September 30, 2022 compared to the same periods in 2021.

The decrease in legal expense in the three and nine months ended September 30, 2022 compared to the same period in 2021was primarily attributable to reduced activities, as well as a decrease in patent maintenance and prosecution costs.

We may be required to engage in litigation to protect our IP, in which case our general and administrative expenses could substantially increase reflecting such litigation costs.

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Interest and Other Income (loss) - Interest and other income consists primarily of interest and dividend income from cash and cash equivalents and marketable debt and equity securities, short-term investments realized and unrealized gains (losses) on our marketable equity securities and derivative instruments and realized gains (losses) on our marketable debt securities.

Interest and other income (loss) decreased $6.1 million during the three months ended June 30, 2022 compared to the same period in 2021 primarily driven by a $7.1 million net loss on marketable securities partially offset by a $1.2 million increase in interest and dividend income.

The net loss on marketable securities for the three months ended June 30, 2022 primarily consisted of $6.9 million in unrealized losses on marketable equity securities and $1.9 million unrealized loss on derivative instruments.

Interest and other income (loss) decreased $3.8 million during the six months ended June 30, 2022 compared to the same period in 2021 primarily driven by a $6.4 million net loss on marketable securities partially offset by a $2.7 million increase in interest and dividend income.

The net loss on marketable securities for the six months ended June 30, 2022 largely consisted of $4.8 million in unrealized loss on marketable equity securities, a $4.6 million net unrealized loss on derivative instruments partially offset by $1.9 million realized in realized gains from derivative instruments and $0.8 million in realized gains from marketable equity securities.

The increase in interest and dividend income in the three and six months ended June 30, 2022 compared to the same periods in 2021 was largely attributable to higher interest and dividend income from investments as well as interest income from a Korean tax litigation settlement.

Benefit From (Provision For) Income Taxes

A summary of benefit from (provision for) income taxes and effective tax rates for the three and six months ended June 30, 2022 and 2021 are as follows (in thousands):

Three Months Ended June 30,

Interest and other income (loss) decreased $2.8 million during the three months ended September 30, 2022 compared to the same period in 2021 primarily driven by a $4.0 million net loss on marketable securities partially offset by a $1.0 million increase in interest and dividend income.

The net loss on marketable securities for the three months ended September 30, 2022 primarily consisted of a $10.1 million increase in net losses on marketable equity securities partially offset by a $6.1 million net gains on derivative instruments.

Interest and other income (loss) decreased $6.6 million during the nine months ended September 30, 2022 compared to the same period in 2021 primarily driven by a $10.4 million increase in net loss on marketable securities partially offset by a $3.7 million increase in interest and dividend income.

The increase in net loss on marketable securities for the nine months ended September 30, 2022 largely consisted of a $13.8 million increase in net loss on marketable securities partially offset by a $3.4 million increase in net gains derivative instruments.

The increase in interest and dividend income in the three and nine months ended September 30, 2022 compared to the same periods in 2021 was largely attributable to higher interest and dividend income from investments as well as interest income from a Korean tax litigation settlement.

A summary of provision for income taxes and effective tax rates for the three and nine months ended September 30, 2022 and 2021 are as follows (in thousands):

Three Months Ended September 30,

2022 2021 $ Change % Change

Income (loss) before benefit from (provision for) income taxes $ (1,993) $ 5,847

Benefit from (provision for) income taxes 174 (506) 680 (134) %

Income before provision for income taxes $ 8,582 $ 4,111

Provision for income taxes (877) (340) (537) 158 %

Effective tax rate (10.2) % (8.3) %

Six Months Ended June 30,

Nine Months Ended September 30,

2022 2021 $ Change % Change

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Effective tax rate (10.3) % (8.1) %

Benefit from (provision for) income taxes for the three months ended June 30, 2022 and 2021 resulted primarily from estimated foreign taxes included in the calculation of the effective tax rate.

Provision for income taxes for the six months ended June 30, 2022 and 2021 resulted primarily from estimated foreign taxes included in the calculation of the effective tax rate.

Provision for income taxes for the three and nine months ended September 30, 2022 and 2021 resulted primarily from estimated domestic and foreign taxes included in the calculation of the effective tax rate.

We continue to maintain a full valuation allowance against all of our federal and state deferred tax assets in the United States as well as federal tax assets in Canada.

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We also maintain liabilities for uncertain tax positions.

As of June 30, 2022, we had unrecognized tax benefits under ASC 740 Income Taxes of approximately $6.3 million and applicable interest of $0.1 million.

As of September 30, 2022, we had unrecognized tax benefits under ASC 740 Income Taxes of approximately $6.4 million and applicable interest of $0.1 million.

The total amount of unrecognized tax benefits that would affect our effective tax rate, if recognized, is $1.3 million.

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Liquidity and Capital Resources

Our cash equivalents and marketable equity securities consist primarily of money-market funds, investment in equity marketable securities (including mutual funds).

All marketable equity securities are stated at market value.

Realized gains and losses on marketable equity securities and marketable debt securities are recorded in Other income (expense), net on the Condensed Consolidated Statements of Operations and Comprehensive Income (Loss).

Unrealized gains and losses on marketable equity securities (including mutual funds) are reported as Other income (expense), net on our Condensed Consolidated Statement of Operations and Comprehensive Income (Loss).

Our cash equivalents, investments - current and investments - noncurrent consist primarily of money-market funds, investment in equity and debt marketable securities (including mutual funds) and certificates of deposit.

All marketable securities are stated at market value.

Unrealized gains and losses on marketable equity securities (including mutual funds) are reported as Other income (expense), net on our Condensed Consolidated Statement of Income and Comprehensive Income.

Unrealized gains and losses on marketable debt securities reported as a component of Accumulated other comprehensive income on our Condensed Consolidated Balance Sheets .

Cash, cash equivalents and short-term investments - As of June 30, 2022, our cash, cash equivalents, and short-term investments totaled $136.9 million, a decrease of $1.1 million from $137.9 million on December 31, 2021.

A summary of select cash flow information for the six months ended June 30, 2022 and 2021 (in thousands):

Six Months Ended June 30,

Certificates of deposit are report as Investment - current or Investment -noncurrent based on their

remaining maturity days.

Interest income from certificates of deposit are reported as Interest and other income (loss), net on the Condensed Consolidated Statement of Income and Comprehensive Income.

Cash, cash equivalents and investments-current - As of September 30, 2022, our cash, cash equivalents, and investments- current totaled $133.5 million, a decrease of $4.4 million from $137.9 million on December 31, 2021.

A summary of select cash flow information for the nine months ended September 30, 2022 and 2021 (in thousands):

Nine Months Ended September 30,

Net cash provided by operating activities $ 32,080 $ 10,722

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stock-based compensation expense, deferred income taxes and the effect of changes in operating assets and liabilities.

Net cash provided by operating activities was $18.6 million in the first half of 2022, a $9.6 million increase compared to the same period in 2021.

Net cash provided by operating activities was $32.1 million in the nine months ended September 30, 2022, a $21.4 million increase compared to the same period in 2021.

This cash increase was primarily attributable to a $11.1 million increase from changes in net operating assets and a $10.5 million increase from changes in non-cash items partially offset by a $0.2 million decrease in net income.

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payments made to settle derivative instruments and purchases of computer equipment, furniture and leasehold improvements.

Net cash used in investing activities during the first half of 2022 was $6.7 million primarily consisting of $80.9 million in cash used to purchase marketable securities and in the settlement of derivative instrument partially offset by $74.1 million in proceeds from selling marketable securities and derivatives.

Net cash used in investing activities during the first half of 2021 was $0.1 million consisting of property and equipment purchases.

Cash provided by (used in) financing activities — Our financing activities primarily consist of cash proceeds from issuance of common stock, proceeds from stock option exercises and stock purchases under our employee stock purchase plan and cash paid for repurchases of our common stock.

Net cash used by financing activities during the first half of 2022 was $6.0 million primarily consisting of cash paid for stock repurchases.

Net cash provided by financing activities during the first half of 2021 was $38.8 million primarily consisting of $35.8 million of net proceeds from common stock issuances and $3.0 million cash proceeds from stock option exercises and stock purchases under our employee stock purchase plan.

Total cash, cash equivalents, and marketable equity securities were $136.9 million as of June 30, 2022 of which approximately 18%, or $24.8 million, was held by our foreign subsidiaries and subject to repatriation tax effects.

Net cash used in investing activities during the nine months ended September 30, 2022 was $35.6 million primarily consisting of $141.9 million in cash used to purchase marketable securities and in the settlement of derivative instrument partially offset by $106.4 million in proceeds from selling marketable securities and derivatives.

Net cash used in investing activities during the nine months ended September 30, 2021 was $32.8 million primarily consisting of $34.4 million of purchases marketable securities partially offset by $1.8 million of proceeds from sale of derivative instruments.

Net cash used by financing activities during the nine months ended September 30, 2022 was $11.2 million primarily consisting of cash paid for stock repurchases.

Net cash provided by financing activities during the nine months ended September 30, 2021 was $53.1 million primarily consisting of $50.1 million of net proceeds from common stock issuances and $3.0 million cash proceeds from stock option exercises and stock purchases under our employee stock purchase plan.

Total cash, cash equivalents, and short-term investments were $133.5 million as of September 30, 2022 of which approximately 22%, or $30.0 million, was held by our foreign subsidiaries and subject to repatriation tax effects.

Our intent is to permanently reinvest a majority of our earnings from foreign operations, and current plans do not anticipate that we will need funds generated from foreign operations to fund our domestic operations.

On November 14, 2022, our Board of Directors declared a quarterly dividend.

The first dividend, in the amount of $0.03 per share, will be payable, subject to any revocation, on January 30, 2023, to stockholders of record on January 15, 2023.

Future dividends will be subject to further review and approval by the Board in accordance with applicable law.

The Board reserves the right to adjust or withdraw the quarterly dividend in future periods as it reviews the capital allocation strategy from time-to-time.

We may continue to invest in, protect, and defend our extensive IP portfolio, which can result in the use of cash in the event of litigation.

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Any stock repurchases may be made through open market and privately negotiated transactions, at such times and in such amounts as management deems appropriate, including pursuant to one or more Rule 10b5-1 trading plans adopted in accordance with Rule 10b5-1 of the Securities Exchange Act of 1934.

Additionally, the Board authorized the use of any derivative or similar instrument to effect stock repurchase transactions, including without limitation, accelerated share repurchase contracts, equity forward transactions, equity option transactions, equity swap transactions, cap transactions, collar transactions, naked put options, floor transactions or other similar transactions or any combination of the

foregoing transactions.

The stock repurchase program was implemented as a method to return value to our stockholders.

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The stock repurchase program does not obligate us to repurchase any dollar amount or number of shares, and the program may be suspended or discontinued at any time.

In the first half of 2022, we repurchased 316,047 shares of our common stock for $1.7 million at an average cost of $5.37 per share.

As of June 30, 2022, we have $28.3 million available for future repurchase under the stock repurchase program.

At June 30, 2022, we had a liability for unrecognized tax benefits totaling $0.2 million, none of which could be payable in cash.

We did not have any other significant non-cancellable purchase commitments as of June 30, 2022.

In the nine months ended September 30, 2022, we repurchased 1,270,294 shares of our common stock for $7.0 million at an average purchase price of 5.50 per share.

As of September 30, 2022, we have $23.0 million available for future repurchase under the stock repurchase program.

At September 30, 2022, we had a liability for unrecognized tax benefits totaling $0.2 million, none of which could be payable in cash.

We did not have any other significant non-cancellable purchase commitments as of September 30, 2022.

We anticipate that capital expenditures for property and equipment for the remainder of 2022 will be less than $1.0 million.

While the unprecedented public health and governmental efforts to contain the spread of COVID-19 have created significant uncertainty as to general economic and capital market conditions in 2022 and beyond, as of August 15, 2022, the date of this Quarterly Report on Form 10-Q, we believe we have sufficient capital resources to meet our working capital needs for the next twelve months and beyond.

While the unprecedented public health and governmental efforts to contain the spread of COVID-19 have created significant uncertainty as to general economic and capital market conditions in 2022 and beyond, as of November 14, 2022, the date of this Quarterly Report on Form 10-Q, we believe we have sufficient capital resources to meet our working capital needs for the next twelve months and beyond.

Critical Accounting Estimates

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Due to the COVID-19 pandemic, there has been uncertainty and disruption in the global economy and financial markets.

We are not aware of any specific event or circumstance that would require updates to our estimates or judgments or require us to revise the carrying value of our assets or liabilities as of August 15, 2022 the date of issuance of this Quarterly Report on Form 10-Q.

We are not aware of any specific event or circumstance that would require updates to our estimates or judgments or require us to revise the carrying value of our assets or liabilities as of November 14, 2022 the date of issuance of this Quarterly Report on Form 10-Q.

These estimates may change as new events occur and additional information is obtained.

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Control and Procedures

Based on their evaluation as of June 30, 2022, our management, with the participation of our Chief Executive Officer and Chief Financial Officer, has concluded that our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) were effective to ensure that the information required to be disclosed by us in this Quarterly Report on Form 10-Q was (i) recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and regulations and (ii) accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.

There were no changes to internal controls over financial reporting that occurred during the quarter ended June 30, 2022 that have materially affected or are reasonably likely to materially affect our internal controls over financial reporting.

Based on their evaluation as of September 30, 2022, our management, with the participation of our Chief Executive Officer and Chief Financial Officer, has concluded that our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) were effective to ensure that the information required to be disclosed by us in this Quarterly Report on Form 10-Q was (i) recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and regulations and (ii) accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.

There were no changes to internal controls over financial reporting that occurred during the quarter ended September 30, 2022 that have materially affected or are reasonably likely to materially affect our internal controls over financial reporting.

Our management, including our Chief Executive Officer and Chief Financial Officer, does not expect that our disclosure controls and procedures or our internal controls over financial reporting will prevent all error and all fraud.

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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