What changed in this filing

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Item 7. Management’s Discussion and Analysis

2026-03-12 compared with 2025-03-12 · 82 added, 106 removed, 160 unchanged (54% of the section changed)

7 unchanged sentences

Our homes range in price, at retail, from approximately $47,000 to $200,000.

During 2024, we sold 2,471 home sections (which are entire homes or single floors that are combined to create complete homes) and in 2023, we sold 2,877 home sections.

The Company has one reportable segment.

All of our activities are interrelated, and each activity is dependent and assessed based on how each of the activities of the Company supports the others.

During 2025, we sold 1,703 units (comprising 2,253 floors) (which are entire homes or single floors that are combined to create complete homes) and in 2024, we sold 2,129 units (comprising 2,471 floors).

We have one reportable segment.

All of our activities are interrelated, and each activity is dependent and assessed based on how each of the activities of our company supports the others.

For example, the sale of manufactured homes includes coordinating or providing transportation for dealers.

We also provide financing options for customers to facilitate home sales.

Accordingly, all significant operating and strategic decisions by the chief operating decision maker, the Chief Executive Officer, are based upon analyses of our company as one operating segment.

Accordingly, all significant operating and strategic decisions by the co-chief operating decision makers, the Executive Chairman and Chief Executive Officer, are based upon analyses of our company as one operating segment.

We believe our company is one of the most vertically integrated in the manufactured housing industry, allowing us to offer a complete solution to our customers.

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Our homes are marketed under our premier “Legacy” brand name and currently are sold primarily across 15 states through a network of over 80 independent retail locations, 14 company-owned retail locations and through direct sales to owners of manufactured home communities.

Our 13 company-owned retail locations, including 12 Heritage Housing stores and one Tiny House Outlet stores exclusively sell our homes.

Of our 14 company-owned retail locations, 13 Heritage Housing stores and one Tiny House Outlet stores exclusively sell our homes.

One company-owned location operates under the AmeriCasa name and sells both our homes and those of several other manufacturers.

During the years ended December 31, 2025 and 2024, no independent retailer accounted for 10% or more of our product sales.

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Approximately 38% of our 2024 product sales were attributable to our independent retail distributors, 17% to our company- owned retail locations and 45% directly to owners of manufactured housing communities.

The following table shows the states in which we sold most of our manufactured homes and the approximate percentage of this sales to our total product sales:

The following table shows the states in which we sold most of our manufactured homes and the approximate percentage of their sales to our total product sales:

Product Sales

North Carolina

South Carolina

We offer three types of financing solutions to our customers.

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● We acquired several properties in our market area for the purpose of developing manufactured housing communities and subdivisions.

As of December 31, 2024, these properties include the following ($’s in thousands):

As of December 31, 2025, these properties include the following ($ in thousands):

Date of Acquisition

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Bonham, Texas

December, 2024

December 2024 & Sept 2025

Balch Springs, Texas

December, 2024

December 2024 & July 2025

Austin, Texas (Travis County)

(1) Land and improvement values do not include the value of Company owned homes located in this community

● We also may provide financing solutions to certain manufactured housing community-owner customers in a manner that includes developing new sites for products in or near urban locations where there is a shortage of sites to place our products.

These solutions are structured to give us an attractive return on

investment when coupled with the gross margin we expect to make on products specifically targeted for sale to these new manufactured housing communities.

shortage of sites to place our products.

These solutions are structured to give us an attractive return on investment when coupled with the gross margin we expect to make on products specifically targeted for sale to these new manufactured housing communities.

● Inflation rates have been high in the U.S.

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We continue to explore opportunities to minimize the impact of inflation on our future profitability.

● Finally, our financial performance may be impacted by our ability to fulfill current orders for our manufactured homes from dealers and customers.

● Our financial performance may be impacted by our ability to fulfill current orders for our manufactured homes from dealers and customers.

Our Georgia manufacturing facility has space available and with additional investment can add capacity to increase the number of homes that can be manufactured.

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We actively review organic and inorganic opportunities to add production capacity in attractive regions to meet future demand.

● Finally, during the year, the Company experienced higher input costs attributable in part to increased tariffs on goods imported from China.

Certain materials and components used in the manufacture of our homes, including electrical fixtures, hardware, and other finished products, are sourced either directly from China or through domestic suppliers affected by these tariffs.

The resulting cost increases have placed pressure on our gross margins and may continue to do so if tariff levels remain elevated or expand to additional product categories.

While management is taking steps to mitigate these effects through supplier diversification and selective price adjustments, the full impact of the current tariff environment remains uncertain and could affect our cost structure and profitability in the future.

Critical Accounting Policies and Estimates

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We determine the allowance by considering several factors including the aging of the past due balance, the customer’s payment history, and our previous loss history.

We establish an allowance reserve composed of specific and general reserve amounts that are deemed to be uncollectible.

We establish an allowance reserve composed of specific and general reserve amounts that are deemed to be at risk.

Historically we have not experienced material losses on the MHP Notes.

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Other notes receivable are stated at amounts due from customers net of allowance for loan losses.

We determine the allowance by considering several factors including the aging of the past due balance, the customer’s payment history,

and our previous loss history.

We establish an allowance reserve composed of specific and general reserve amounts that are deemed to be uncollectible.

We determine the allowance by considering several factors including the aging of the past due balance, the customer’s payment history, and our previous loss history.

We establish an allowance reserve composed of specific and general reserve amounts that are deemed to be at risk.

Historically we have not experienced material losses on the Other notes receivable.

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We determine the allowance by considering several factors including the aging of the past due balance, the customer’s payment history, and our previous loss history.

We establish a general reserve for amounts that are deemed to be uncollectible.

We establish a general and specific reserves for amounts that are deemed to be at risk.

Historically we have not experienced material losses on the Dealer financed receivables.

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Revenue Recognition

Revenue from homes sold to independent retailers that are not financed and not under an inventory finance arrangement generally is recognized upon execution of a sales contract and when the home is shipped, at which time title passes to the independent retailer and collectability is reasonably assured.

These types of homes are generally either paid for prior to shipment or floor plan financed through a third party lender by the independent retailer through standard industry arrangements, which can include repurchase agreements.

Commercial Sales

Revenue from homes sold to mobile home parks under commercial loan programs involving funds provided by our company is recognized when the home is shipped, at which time title passes to the customer and a sales and financing contract is executed, down payment received, and collectability is reasonably assured.

Inventory Finance Sales

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Retail Store Sales

Revenue from direct retail sales through company-owned retail locations generally is recognized when the customer has entered into a legally binding sales contract, payment is received, the home is delivered at the customer’s site, title has transferred, and collection is reasonably assured.

Retail sales financed by us are recognized as revenue upon the execution of a sales and financing contract, receipt of a down payment and delivery of the home to the final customer, at which time title passes and collectability is reasonably assured.

Revenue is recognized net of sales taxes.

Results of Operations

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Selling, general administrative expenses

Dealer incentive

Total operating expenses

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Net revenue per unit sold

In 2024, our net revenue per product sold increased primarily because of a moderate increase in unit prices, as rising material and labor costs were passed on to our customers.

We had decreases in direct sales, inventory finance sales and other product sales.

We believe the market for mobile homes in 2024 remained slow due to the economic environment, including higher inflation and rising home costs.

Direct sales decreased $8.4 million, or 47.8% from 2023 to 2024, mainly due to general slowdown in the market for mobile homes.

Commercial sales increased $0.2 million, or 0.3% from 2023 to 2024 reflecting steady purchases of mobile homes by mobile home park operators.

Retail store sales increased $0.9 million, or 4.5% from 2023 to 2024 as our continued efforts to focus on our own retail sales channel helped moderate the impact of market conditions.

Inventory finance sales decreased $7.4 million, or 16.8% from 2023 to 2024, primarily due to dealers continuing to sell through their existing inventories.

During 2025, our net revenue per product sold increased by 13% compared to 2024 as we raised home prices to offset rising raw material costs.

Product sales decreased $12.4 million or 9.6% during 2025 compared to 2024.

The market for manufactured homes lacked growth during 2025 due to economic conditions characterized by inflationary pressures, continued higher interest rates coupled with tighter credit, and consumer affordability fatigue.

Commercial sales to MHP customers declined $16.8 million or 30% as MHP operators faced several headwinds in 2025.

These included capital caution following sharp rent and cost inflation, already high occupancy rates limiting available pads, and tighter financing conditions – all of which dampened new home orders even as underlying tenant demand remains stable.

The decline in commercial sales was offset by an increase in our retail store sales which grew $2.5 million, or 12.7% from 2024 to 2025 as we focused efforts to increase sales through our company owned retail outlets.

Also, direct sales of homes to dealers for cash increased $2.3 million or 25% from 2024 to 2025.

Inventory finance sales to independent dealers were essentially flat during 2025, increasing just 1.4% compared to 2024.

Other product sales, which include freight income and part sales, declined $1.0 million or 11.7%.

Consumer, MHP, and dealer loans interest income increased $2.5 million, or 6.1%, from 2024 to 2025 due to growth in our loan portfolios.

Between December 31, 2024 and December 31, 2023 our consumer loan portfolio increased by $17.6 million, our MHP loan portfolio increased by $24.5 million, and our dealer finance notes balance did not change.

The change in the balance of our MHP loan portfolio is primarily due a settlement agreement we reached with a significant borrower, as discussed in Note 5, Notes Receivable from Mobile Home Parks, to our December 31, 2024 financial statements included in Part II, Item 8, Financial Statements and Supplementary Data, of this Form-10K, which resulted in reclassifying balances from Other notes receivable, net to Notes receivable from mobile home parks on our balance sheet.

Other revenue primarily consists of contract deposit forfeitures, consignment fees, commercial lease rents, land sales, service fees and other miscellaneous income and increased $7.0 million, or 106.3%, primarily due to $8.9 million in land sales related to the Forest Hollow mobile home community and the property in Marble Falls, Texas, $0.5 million in rental income from our mobile home park properties, partially offset by a $1.5 million decrease in forfeited deposits, a $0.6 million decrease in rental income from leased mobile homes and a $0.3 million decrease in other miscellaneous revenue.

From December 31, 2024 to December 31, 2025, our consumer loan portfolio increased by $24.7 million, our MHP loan portfolio decreased by $9.9 million, and our dealer finance notes decreased by $5.9 million.

The change in the balance of our MHP loan portfolio is primarily due to parks paying off their notes early, and current loans consisting of fewer homes per loan.

Other revenue primarily consists of contract deposit forfeitures, consignment fees, commercial lease rents, land sales, service fees, and other miscellaneous income and decreased $9.7 million, or 71.0%, primarily due to $8.8 million decrease in land sales, and a $1.0 million decrease in forfeited deposits.

The cost of product sales decreased $5.2 million, or 5.8%, in 2025 as compared to 2024.

The decrease in costs is primarily related to a decrease in units sold.

The cost of other sales was $8.2 million in 2024 and primarily reflects the cost associated with our land sales.

Selling, general and administrative expenses decreased $1.1 million, or 4.4%, in 2024 as compared to 2023.

This decrease was primarily due to a $1.4 million decrease in warranty costs, a $0.4 million decrease in consulting and professional fees, and a $0.4 million decrease in salaries and benefits costs, partially offset by a $0.4 million increase in real estate taxes and a net $0.7 million increase in other miscellaneous costs.

Dealer incentive expense decreased $1.5 million, or 258.7% in 2024 as compared to 2023.

Other income (expense), net increased by $8.3 million in 2024, as compared to 2023.

We had a $8.5 million increase in Miscellaneous, net primarily due to (i) gains related to the settlement agreement described above, (ii) a gain on the sale of property in Georgia, (iii) gains related to properties acquired through foreclosure and (iv) reversals of certain balance sheet liabilities.

We had a $0.4 million decrease in interest income on Other notes and a $0.2 million decrease in interest expense.

Income tax expense was $14.4 million for 2024 compared to $14.3 million for 2023.

The effective tax rate for the year ended December 31, 2024 was 18.9% and primarily differs from the federal statutory rate of 21% primarily due to a federal tax credit for energy efficient construction and partially offset by state income taxes.

The effective tax rate for the year ended December 31, 2023 was 20.8% and primarily differs from the federal statutory rate of 21% primarily due to a federal tax credit for energy efficient construction and partially offset by state income taxes.

The decrease in costs is primarily related to a decrease in the number of units sold offset by increases to raw material costs and the impact of tariffs.

The cost of other sales was $1.7 million in 2025 which is a $6.5 million decrease from 2024 primarily related to significant 2024 land sale revenue.

Selling, general and administrative expenses increased $6 million, or 26% , in 2025 as compared to 2024, not including dealer incentive expense added to SG&A in 2025.

This increase was primarily due to a $500,000 increase in warranty costs, a $400,000 increase in consulting and professional fees, a $1.0 million increase in legal costs, and a $4.5 million increase in loan loss provision, partially offset by a net $800,000 decrease in payroll cost and a net $300,000 increase in other miscellaneous costs.

Dealer incentive expense increased $1.3 million, or 136% in 2025 as compared to 2024.

Beginning in 2025, dealer incentive expense is reported as a component of SG&A (previously classified separately).

Other income (expense), net decrease by $9.3 million in 2025, as compared to 2024.

We had an $8.3 million decrease in Miscellaneous, Net primarily due to increases specific to 2024 gains related to the settlement agreement described in Note 7, a gain from the sale of property in Georgia, gains related to properties acquired through foreclosure and reversals of certain balance sheet liabilities.

We had a $1.2 million decrease in interest income on Other notes and a $700 increase in interest expense.

Income tax expense was $9.8 million for 2025 compared to $14.4 million for 2024, mirroring the decline in pre-tax income.

Book Value per Share

“Book Value per Share” is a financial measure that management uses to evaluate the Company’s capital adequacy and to assess trends in shareholder value.

Management believes this measure is useful to investors because it provides a per‑share view of the Company’s net asset value attributable to common shareholders, excluding items that may introduce period‑to‑period volatility and are not indicative of ongoing operations.

We define “Book Value per

Share” as total stockholders’ equity, the most directly comparable GAAP financial measure, divided by the number of common shares outstanding as of December 31, 2025.

The following table calculates Book Value per Share as of December 31, 2025 and 2024.

December 31, 2025

December 31, 2024

Total Stockholders’ Equity

Total number of common shares outstanding

Book value per share

(in thousands, except share and per share data)

Liquidity and Capital Resources

We believe that cash flow from operations and cash at December 31, 2025 and availability on our lines of credit will be sufficient to fund our operations and provide for growth for the next 12 to 18 months and into the foreseeable future.

On July 28, 2023, we terminated our credit agreement with Capital One, N.A.

and entered into a new credit agreement with Prosperity Bank that expanded and extended our credit availability (see Lines of Credit , below).

(See Lines of Credit , below.)

We maintain cash balances in bank accounts that may, at times, exceed federally insured limits.

We have not incurred any losses from such accounts, and management considers the risk of loss to be minimal.

As of December 31, 2024, we had approximately $1.1 million in cash, compared to $0.7 million as of December 31, 2023.

As of December 31, 2025, we had approximately $8.5 million in cash and cash equivalents, compared to $1.1 million as of December 31, 2024.

We consider all cash and highly liquid investments with an original maturity of three months or less to be cash equivalents.

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Comparison of Cash Flow Activities from 2025 to 2024

Net cash provided by operating activities was $36.0 million during the year ended December 31, 2024, compared to net cash of $13.5 million used in operating activities during 2023.

This change was primarily a result of increased cash provided by operating income before non-cash adjustments, decreased volume of MHP loan originations net of principal collections, decreased inventories, decreased other assets – leased mobile homes, increased accounts payable, increased customer deposits and increased escrow liability.

The increase in cash provided by operating activities was partially offset by decreased accrued liabilities and decreased dealer incentive liability.

Net cash used in investing activities of $6.7 million in 2024 was primarily attributable to $5.5 million of originations related to loans we made to third parties for the development of manufactured housing parks, and $9.2 million in improvements and development related to property, plant and equipment.

These were offset by $6.4 million of collections related to loans we made to third parties for the development of manufactured housing parks and proceeds of $1.6 million from the sale of property.

Net cash used in financing activities of $28.9 million in 2024 was attributable to net uses of $23.7 million to pay down our lines of credit and $5.4 million of stock repurchases offset by $0.2 million received from the exercise of stock options.

Net cash provided by financing activities of $21.2 million in 2023 was attributable to net proceeds from our lines of credit.

Net cash provided by operating activities was $37.2 million during the year ended December 31, 2025, compared to net cash of $36.0 million provided by operating activities during 2024.

This change was primarily a result of cash provided from net income of $41.8 million in 2025 and augmented by positive non-cash adjustments of $3.6 million.

Non-cash adjustments included increases to operating cash due to increased loan loss reserves and depreciation and amortization expense offset by a decrease in the 2024 deferred income tax liability and establishment of a deferred tax asset in 2025 as well as amortization of deferred revenue associated with loan portfolios.

Changes in assets and liabilities reduced net cash provided by operations by $8.2 million.

Decreases to net cash provided by operations were primarily the result of increases to accounts receivable, the consumer loan portfolio, inventories, and other assets as well as a decrease to dealer incentive liability offset by increases to net cash provided by operations from reductions to both the MHP and dealer inventory finance loan portfolios as well as increases to accounts payable, accrued liabilities, and the consumer loan escrow liability balance.

Net cash used in investing activities of $22.1 million in 2025 was primarily attributable to $19.0 million associated with the AmeriCasa acquisition, $9.0 million used for property, plant, equipment, and development as well as notes receivable originations and advances of $1.6 million.

This was offset by $7.2 million associated with collections of notes receivable.

Net cash used in financing activities of $7.7 million in 2025 was primarily attributable to stock repurchases of $7.6 million.

In November 2022, our Board of Directors approved a share repurchase program to authorize the repurchase of up to $10.0 million of the Company’s common stock.

On August 6, 2024, our Board of Directors authorized the repurchase of an additional $10.0 million of the Company’s common stock under the share repurchase program.

We repurchased 262,530 shares of common stock for $5,398 in the open market during the year ended December 31, 2024.

As of December 31, 2024, we had a remaining authorization of approximately $14,602.

Between January 1, 2025 and March 10, 2025 we repurchased 29,385 shares of common stock for $674 in the open market

We purchased 346,406 shares of common stock for $7.6 million in the open market during the year ended December 31, 2025.

All repurchase programs have expired as of October 31, 2025.

Lines of Credit

On July 28, 2023, the Company entered into a new Credit Agreement (the “Revolver”), by and among the Company as borrower, the financial institutions from time to time party thereto, as lenders, and Prosperity Bank as administrative agent.

Subsequently, the Company repaid in full the balance due on its prior line of credit with Capital One, N.A.

and all commitments under this prior line of credit were terminated.

The Revolver provides for a four-year senior secured revolving credit facility with an initial commitment of $50,000 and an additional $25,000 commitment under an accordion feature.

On July 28, 2023, the Company entered into a Credit Agreement (the “Revolver”), by and among the Company as borrower, the financial institutions from time to time party thereto, as lenders, and Prosperity Bank as administrative agent.

The Revolver provides for a four-year senior secured revolving credit facility with an initial commitment of $50.0 million and an additional $25.0 million commitment under an accordion feature.

The Revolver is secured by the Company’s consumer loans receivables and all escrow accounts associated with the consumer loans receivables.

At the Company's option, borrowings will bear interest at a per annum rate equal to, (i) Term Secured Overnight Financing Rate (“SOFR”) plus an applicable margin of 2.5% or 2.75% based upon the Company's average quarterly borrowings under the Revolver or (ii) a base rate plus an applicable margin of 2.5% or 2.75% based upon the Company's average quarterly borrowings under the Revolver.

The Company paid certain arrangement fees and other fees in connection with the Revolver of approximately $271, which were capitalized

as unamortized debt issuance costs and included in Prepaid expenses and other current assets in the accompanying balance sheets and are amortized to interest expense over the life of the Revolver.

The Company paid certain arrangement fees and other fees in connection with the Revolver of approximately $271,000, which were capitalized as unamortized debt issuance costs and included in Prepaid expenses and other current assets in the accompanying balance sheets and are amortized to interest expense over the life of the Revolver.

The Revolver matures July 28, 2027.

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The interest rate in effect as of December 31, 2025 and 2024 for the Revolver was 6.69% and 7.61%, respectively.

The amount of available credit under the Revolver was $50,000 and $26,320 as of December 31, 2024 and 2023, respectively.

The amount of available credit under the Revolver was $50.0 million as of December 31, 2025 and 2024, respectively.

The Revolver requires the Company to comply with certain financial and non-financial covenants.

As of December 31, 2024, the Company was in compliance with all financial covenants, including that it maintain a maximum leverage ratio of no more than 1.00 to 1.00 and a minimum fixed charge coverage ratio of no less than 1.75 to 1.00.

As of December 31, 2025, the Company was in compliance with all financial covenants, including that it maintains a maximum leverage ratio of no more than 1.00 to 1.00 and a minimum fixed charge coverage ratio of no less than 1.75 to 1.00.

As part of the AmeriCasa Acquisition, we assumed a line of credit with 21 st Mortgage in the amount of $1.3 million at the time of acquisition.

As of December 31, 2025, the balance of the line of credit was $1.2 million which we subsequently paid off in January 2026.

Contractual Obligations

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Contractual Obligations

Lines of credit

Lines of credit - 21st Mortgage-AmeriCasa

Operating lease obligations

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Recent Accounting Pronouncements

In June 2016, the FASB issued ASU 2016 13 Financial Instruments—Credit Losses (Topic 326):

Measurement of Credit Losses on Financial Instruments, which amends guidance on reporting credit losses for assets held at amortized cost basis and available for sale debt securities.

For assets held at amortized cost basis, Topic 326 eliminates the probable initial recognition threshold in current GAAP and, instead, requires an entity to reflect its current estimate of all expected credit losses.

The allowance for credit losses is a valuation account that is deducted from the amortized cost basis of the financial assets to present the net amount expected to be collected.

For available for sale debt securities, credit losses should be measured in a manner similar to current GAAP, however Topic 326 will require that credit losses be presented as an allowance rather than as a write down and affects entities holding financial assets and net investment in leases that are not accounted for at fair value through net income.

The amendments affect loans, debt securities, trade receivables, net investments in leases, off balance sheet credit exposures, reinsurance receivables, and any other financial assets not excluded from the scope that have the contractual right to receive cash.

The Company used the longer phase in period for adoption, and accordingly this ASU became effective for the Company’s fiscal year beginning January 1, 2023.

The adoption of ASU 2016-13 resulted in an increase in portfolio allowances of $900 at transition.

The $900 was comprised of a $225 increase for MHP notes, a $187 increase for dealer financed contracts and a $488 increase for other

notes receivable.

The cumulative effect of the adoption was a net decrease of $698 to beginning retained earnings at January 1, 2023.

In December 2022, the FASB issued ASU 2022-06, Reference Rate Reform (Topic 848):

Deferral of the Sunset Date of Topic 848.

The amendments in this update extend the transition relief period for reference rate reform from December 31, 2022 to December 31, 2024.

The amendments in ASU 2022-06 apply to all entities, subject to meeting certain criteria, that have contracts, hedging relationships, and other transactions that reference LIBOR or another reference rate expected to be discontinued because of reference rate reform.

ASU 2022-06 was effective upon issuance.

The new standard has had no material impact on the Company's financial statements.

In November, 2023 the FASB issued ASU 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures (“ASU 2023-07”).

ASU 2023-07 enhances current and interim annual reportable segment disclosures and requires additional disclosures about significant segment expenses.

Public entities with a single reportable segment are required to apply the disclosure requirements in ASU 2023-07, as well as existing segment disclosures and reconciliation requirements in ASC 280 – Segment Reporting on an interim and annual basis.

In 2024, we adopted ASU 2023-07 on a retrospective basis for annual periods starting with this Annual Report on Form 10-K.

For additional information, refer to “Note 18 Segment Information.”

Pronouncements Issued But Not Yet Adopted

In December 2023, the FASB issued Accounting Standard Update 2023-09, Income taxes (Topic 740):

Improvements to Income Tax Disclosures which requires entities to disclose disaggregated information about their effective tax rate reconciliation as well as expanded information on income taxes paid by jurisdiction.

The disclosure requirements will be applied on a prospective basis, with the option to apply them retrospectively.

The standard is effective for fiscal years beginning after December 15, 2024, with early adoption permitted.

We are currently evaluating the disclosure requirements related to the new standard.

In November 2024, the FASB issued ASU 2024-03, Income Statement Reporting-Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40), Disaggregation of Income Statement Expenses.

The standard update improves the disclosures about a public business entity’s expenses by requiring more detailed information about certain types of costs and expenses in the notes to the financial statements.

The guidance will be effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027.

Early adoption is permitted.

The standard updates are to be applied prospectively with the option for retrospective application.

We are currently evaluating the impact of disclosure requirements related to the new standard on our financial statements.

From time to time, new accounting pronouncements are issued by the FASB and other regulatory bodies that are adopted by the Company as of the specified effective dates.

Unless otherwise discussed, management believes that the impact of recently issued standards, which are not yet effective, will not have a material impact on the Company’s Financial Statements upon adoption.

See Note 2 to the Financial Statements for a discussion of recently issued and adopted accounting pronouncements.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

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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-K

Item 7. Management’s Discussion and Analysis