What changed in this filing

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Item 2. Management’s Discussion and Analysis

2023-05-11 compared with 2022-11-10 · 74 added, 113 removed, 87 unchanged (68% of the section changed)

8 unchanged sentences

The following discussion should be read in conjunction with our unaudited condensed consolidated financial statements and notes thereto appearing elsewhere in this Quarterly Report on Form 10-Q with the understanding that our actual future results, levels of activity, performance and events and circumstances may be materially different from what we expect.

Interlink Electronics, Inc.

(“we”, “us”, “our”, “Interlink” or the “Company”) designs, develops, manufactures and sells a range of force-sensing technologies that incorporate our proprietary materials technology, firmware and software into a portfolio of standard products and custom solutions.

These include sensor components, subassemblies, modules and products that support effective, efficient cursor control and novel three-dimensional user inputs.

Our Human Machine Interface (“HMI”) technology platforms are deployed in a wide range of markets including consumer electronics, automotive, industrial, and medical.

We operate in two principal sensor technology divisions:

force/touch sensors, and gas sensors.

Our Force-Sensing Resistor (FSR®) and related technologies, including membrane keypads, graphic overlays and printed electronics, are used extensively in human-machine interface (“HMI”) devices, while our gas sensors and instruments are used in environmental and air quality monitoring across a broad range of applications.

We design, develop, manufacture and sell a range of technologies that incorporate our proprietary materials technology, firmware and software into a portfolio of standard products and custom solutions.

Force/Touch Sensors

HMI and Force-Sensing Technology .

Our HMI and force-sensing technology is used in sensor components, subassemblies, modules and products that support effective, efficient cursor control and novel three-dimensional user inputs and is deployed in a wide range of markets, including consumer electronics, automotive, industrial, and medical.

The application of our HMI technology platforms includes vehicle entry, vehicle multi-media control interface, rugged touch controls, presence detection, collision detection, speed and torque controls, pressure mapping, biological monitoring and others.

Interlink has been a leader in the printed electronics industry for over 35 years with the commercialization of our patented Force-Sensing Resistor (“FSR®”) technology that has enabled rugged and reliable HMI solutions.

Interlink has been a leader in the printed electronics industry for over 38 years with the commercialization of our patented FSR® technology that has enabled rugged and reliable HMI solutions.

Our solutions have focused on handheld user input, menu navigation, cursor control, and other intuitive interface technologies for the world’s top electronics manufacturers.

We invented FSR® technology and pioneered commercialization of printed electronics manufacturing, paving the way for industry-wide adoption of force sensing technology.

Our extensive knowledge and experience with this technology, along with the firmware we incorporate in our HMI solutions, differentiates us from other providers of HMI solutions.

We, along with our customers, incorporate our FSR® and force sensing sensors and modules into end user products.

Our sensors and modules are used in electronics devices and systems where user input must be converted into useful output data.

Our force sensing technology solution platforms enabled industry-first implementations in gaming, smartphone, rugged notebook, automotive cockpit and automotive entry applications.

Consumer and end-user demand for enhanced user experience is driving the need for innovative multi-modal HMI technologies and applications.

Force sensing input provides a critical novel modality that drives a paradigm shift in HMI.

Market requirements for innovative solutions that enable smaller, thinner devices, lower power consumption, highly refined designs, better navigation and more intuitive usability in all environments, are also driving increased demand for our products.

Industry is moving towards the use of multi-modal HMI in the home, industrial, medical and automotive spaces.

Interlink delivers cutting-edge, high-performance HMI solutions for customers who wish to replace outdated switches and knobs in these environments.

Significant market opportunities are rapidly emerging for us to improve upon the functionality of standard capacitive sensors which are widely available and competitively priced.

Inadvertent activation, where users unintentionally activate a control, is a common problem with capacitive technology.

In contrast, force sensing solutions require a deliberate application of force to operate.

We have had recent success in using our force sensing solutions in combination with capacitive technologies to minimize the latter’s performance issues, enabling force sensing solutions to complement competitive technologies and provide hybrid solutions and open up new opportunities for growth.

We continue to simultaneously expand our standard product portfolio and develop new technology platforms to grow existing markets and capture emerging markets.

This portfolio expansion will incorporate other complimentary sensing technologies.

This broader portfolio of technologies will allow us to use our expertise in integrating multiple sensing technologies for applications in the rapidly growing Internet-of-Things (“IoT”).

Interlink serves our world-wide customer base from our corporate headquarters in Irvine, California (Orange County area) and from our facility in Camarillo, California (Ventura County), where we have established a Global Product Development and Materials Science Center.

This facility has a state-of-the-art printed electronics development laboratory as well as materials science lab.

Our engineering team is based in this center where we work with our U.S.

and global customers on developing, engineering, prototyping and implementing our advanced HMI and sensing solutions.

We also maintain a small embedded software and IoT application development center in Singapore, and we expect to launch an engineering, research and development center in the United Kingdom.

We manufacture all our products in our printed electronics manufacturing facility in Shenzhen, China, which has been in operation since 2006.

In addition, we maintain a global distribution and logistics center in Hong Kong, a technical sales office in Japan, and several manufacturer representatives and distributors in strategic locations in our key markets, all of which allows us to support our global customer base.

We sell our products in a wide range of markets, including consumer electronics, automotive, industrial and medical.

Membrane Keypads, Graphic Overlays and Printed Electronics .

Through our acquisition in March 2023 of Calman Technology Limited, we offer membrane keypads, graphic overlays and printed electronics for use in fields such as medical devices and defense systems.

Gas-Sensing Technology

Through our acquisition in December 2022 of the business assets of SPEC Sensors, LLC and KWJ Engineering, Inc., early pioneers in miniaturized, low-cost gas-sensing technologies, we also offer electrochemical gas-sensing technology products and solutions for industry, community, health and home, with uses in fields such as carbon monoxide and ozone detection and air quality monitoring.

We sell our products and solutions globally to a diverse array of customers that include the Fortune 500 as well as start-ups, design houses, original design manufacturers, OEMs and universities.

Our customers are some of the world’s largest companies and most recognizable brands.

Our technology has been deployed in the consumer electronics, industrial automation, automotive, medical, defense and environmental monitoring markets.

Our global presence in the United States, China, United Kingdom, Hong Kong, Singapore and Japan allows us to provide local sales and engineering support services to our existing and future customers.

We manufacture our products in a state-of-the-art facility in Shenzhen, China, and in our advanced and proprietary facilities in Newark,

California and Irvine, Scotland.

We control 100% of the manufacturing and shipping process which enables us to respond quickly to customer product demand and design requirements.

We have invested significantly in the expansion of our technology platforms through our own internal development to ensure we provide the market with leading-edge solutions that are seamless to deploy and perform flawlessly.

Having built a research and development (R&D) organization in Singapore to develop new product offerings that will meet the market’s growing demand for touch technology and smart surfaces, in 2020 we made the strategic decision to relocate a majority of R&D and product development efforts to Camarillo, California, where we have established a Global Product Development and Materials Science Center.

Combined with the advanced and proprietary facilities in Silicon Valley and Scotland that were acquired in connection with the SPEC/KWJ and Calman transactions, we believe this will allow us to grow our business and be more closely aligned with current and future large-tier customers.

We also plan to explore potential strategic relationships with companies and technology institutes that will support our growth initiatives.

We were incorporated in California in 1985.

In 1996, we re-incorporated into a Delaware corporation and, in 2012, we again changed our domicile from Delaware to Nevada by completing a merger with a newly formed Nevada corporation named Interlink Electronics, Inc.

Our principal executive office is located at 1 Jenner, Suite 200, Irvine, California 92618 and our telephone number is (805) 484-8855.

Our website address is www.interlinkelectronics.com.

We make available our annual financial statements, quarterly financial statements, and other significant reports and amendments to such reports, free of charge, on our website as soon as reasonably practicable after such reports are prepared.

Critical Accounting Policies and Estimates

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The percentages in the table are based on net revenues.

Three months ended September 30,

Nine months ended September 30,

Three months ended March 31

(in thousands, except percentages)

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Income (loss) before income taxes

Income tax expense (benefit)

Income tax expense

Net income (loss)

Comparison of Three Months Ended September 30, 2022 and 2021

Comparison of Three Months Ended March 31, 2023 and 2022

Revenue, net, by the markets we serve is as follows:

Three months ended September 30,

Three months ended March 31,

(in thousands, except percentages)

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We currently have products with life-cycles that have exceeded twenty years and are ongoing.

Revenues were up in the three months ended September 30, 2022 compared to the three months ended September 30, 2021 in the medical market, and were down in the industrial and consumer markets and for our standard products.

The increase in revenue from our medical market customers is due to a continued increase in orders from and shipments to our largest medical customer, whose purchasing volume has increased based on increases in installations at their hospital and medical center customer locations.

The decrease in revenue from our industrial market customers was due to decreased purchasing volume by these customers for use in their ongoing product lines resulting from changes in demand by their customers.

The decrease in revenue from our consumer market customers is primarily due to a design change by one of our largest consumer products customers, offset by shipments of our custom sensors to a new customer in this market.

In all markets, the timing of orders from our customers is not always predictable and can be concentrated in varying periods during the year to coincide with their project and building plans.

Three months ended September 30,

Revenues were up in the three months ended March 31, 2023 compared to the three months ended March 31, 2022 in the medical and industrial markets and for our standard products, and were down in the consumer market.

The increase in revenue from our medical market customers is primarily due to a continued increase in orders from and shipments to our largest medical customer, whose purchasing volume has increased as demand for installations of their products in hospital settings has continued to increase following the COVID-19 pandemic, and also in part to sales to new medical market customers resulting from our acquisitions of SPEC/KWJ and Calman.

The increase in revenue from our industrial market customers is due to increased shipments to these customers for use in their ongoing product lines resulting from increased demand by their customers, and also in part to sales to new industrial market customers resulting from our acquisitions of SPEC/KWJ and Calman.

The increase in revenue for our standard products is primarily due to the addition of new customers resulting from our acquisitions of SPEC/KWJ and Calman.

In all markets, the timing of orders from our customers is not always predictable and can be concentrated in varying periods during the year to coincide with their demand and production plans.

Three months ended March 31,

(in thousands, except percentages)

Our gross profit and gross margin percentage are impacted by various factors including product mix, customer mix, sales volume, and fluctuations in our cost of revenues, which are comprised of material costs, direct and indirect production labor costs, warehousing and logistics costs, facilities costs, and other costs related to production activities.

Gross profit and gross margin percentage during the three months ended September 30, 2022 were down compared to the three months ended September 30, 2021 due primarily to higher materials and components costs on certain orders, and unfavorable changes in product and customer mix.

Three months ended September 30,

Gross profit was up during the the three month ended March 31, 2023 compared to the three months ended March 31, 2022 due to increased revenues, while gross margin percentage was down in the current year compared to the prior year due primarily to changes in product and customer mix.

Three months ended March 31,

(in thousands, except percentages)

Engineering, research and development

Engineering and R&D expenses consist primarily of compensation expenses for employees engaged in research, design and product development activities, and the cost of those employees’ indirect supplies and allocation of facilities expenses.

Our R&D team focuses both on internal design development in order to develop our HMI solutions, as well as design development aimed at addressing our customers’ unique design challenges.

Engineering and R&D costs for the three months ended September 30, 2022 were up compared to the three months ended September 30, 2021 due to increased engineering employee headcount and increased prototyping and product-development activities, and also due to inclusion in the 2021 period of receipt of a $129 thousand research incentive grant from the Singapore government that reduced expenses in the prior year period.

Three months ended September 30,

Engineering and R&D expenses consist primarily of compensation expenses for employees engaged in research, design and development activities, plus the cost of those employees’ indirect supplies and allocation of facilities expenses.

Our R&D team focuses both on internal design development in order to develop our products and solutions, as well as custom design development aimed at addressing our customers’ unique design challenges.

Engineering and R&D costs for the three months ended March 31, 2023 were up compared to the three months ended March 31, 2022 due to increased engineering headcount resulting from the December 2022 acquisition of SPEC/KWJ.

Three months ended March 31,

(in thousands, except percentages)

Selling, general and administrative

Selling, general and administrative expenses consist primarily of compensation expenses, legal and other professional fees, facilities expenses and communication expenses.

Selling, general and administrative costs for the three months ended September 30, 2022 were down compared to the three months ended September 30, 2021 due to lower sales and marketing employee headcount, and lower legal and other professional fees.

Three months ended September 30,

Selling, general and administrative expenses consist primarily of compensation expenses for sales and administrative employees, legal and other professional fees, facilities expenses and communication expenses.

Selling, general and administrative costs for the three months ended March 31, 2023 were up compared to the three months ended March 31, 2022 due to increased selling, general and administrative headcount resulting from the December 2022 acquisition of SPEC/KWJ and, to a lesser extent, the March 2023 acquisition of Calman, increased professional services costs associated with the acquisition of Calman, and the additional facilities and other operating costs of these incremental operations.

Three months ended March 31,

(in thousands, except percentages)

Other income (expense), net

Other income (expense), net consists of non-operating income and expenses, such as gains and losses on marketable securities, foreign currency transaction gains and losses, interest income and expense, and other non-operating income and expenses.

Other income (expense), net for the three months ended September 30, 2022 was comprised of $181 thousand of gains on marketable securities, $24 thousand of foreign currency transaction gains, and $2 thousand of other non-operating income, while other income (expense), net for the three months ended September 30, 2021 was comprised of $6 thousand of foreign currency transaction losses.

Three months ended September 30,

Other income (expense) consists of non-operating income and expenses, such as gains and losses on marketable securities, foreign currency transaction gains and losses, interest income and expense, and other non-operating income and expenses.

Other income (expense) for the three months ended March 31, 2023 was comprised of $67,000 of interest income, and $3,000 of foreign currency transaction losses, while other income (expense) for the three months ended March 31, 2022 was comprised of $156,000 of gains on marketable securities, $2,000 of foreign currency transaction losses, and $1,000 of other non-operating income items.

Three months ended March 31,

(in thousands, except percentages)

Income tax expense (benefit)

Income tax expense (benefit) reflects statutory tax rates in the jurisdictions in which we operate, adjusted for permanent book/tax differences.

Our effective tax rate is directly affected by the relative proportions of earnings and losses in the jurisdictions in which we operate, including our current limitation on realizing tax benefits on domestic losses due to the valuation allowance on our domestic net operating loss carryforward.

Based on the expected mix of domestic and foreign earnings and losses, we anticipate our effective tax rate to remain higher than the U.S.

statutory rate of 21% primarily due to a significant portion of our consolidating earnings being recorded in the jurisdictions of China (25%), Singapore (17%), and Hong Kong (16.5%), while our domestic losses do not benefit the rate due to the valuation allowance.

Income tax expense

Income tax expense reflects statutory tax rates in the jurisdictions in which we operate adjusted for permanent book/tax differences.

Our effective tax rate is directly affected by the relative proportions of our pre-tax earnings and losses in the jurisdictions in which we operate.

The effective tax rate for the three months ended March 31, 2023 was impacted by having incurred tax expense on our foreign pre-tax income while not realizing a benefit on our domestic pre-tax loss due to the valuation allowance on our domestic NOLs.

Based on the expected mix of domestic and foreign earnings and losses, we anticipate our effective tax rate to remain similar to the U.S.

statutory rate of 21% primarily due to a significant portion of our earnings originating in the higher rate China jurisdiction (25%), offset by lower rate jurisdictions in the United Kingdom (19%), Singapore (17%) and Hong Kong (16.5%).

State income taxes also have an impact in the U.S.

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could have significant effects, positive and negative, on our effective tax rate, and on our deferred tax assets and liabilities.

Comparison of Nine Months Ended September 30, 2022 and 2021

Revenue, net by the markets we serve is as follows:

Nine months ended September 30,

(in thousands, except percentages)

Revenues were up in the nine months ended September 30, 2022 compared to the nine months ended September 30, 2021 in the industrial and medical markets, and were down in the consumer markets and for our standard products.

The increase in revenue from our industrial market customers was due to increased purchasing volume by and shipments to these customers.

The increase in revenue from our medical market customers is due to a continued increase in shipments to our largest medical customer, whose purchasing volume has increased as COVID-19 restrictions have begun to subside.

During 2022, we also sold products in the automotive market for the first time since 2018, as we are again pursuing a program with an automotive manufacturer.

In all markets, the timing of orders from our customers is not always predictable and can be concentrated in varying periods during the year to coincide with their project and building plans.

Nine months ended September 30

(in thousands, except percentages)

Gross profit and gross margin percentage during the nine months ended September 30, 2022 were down compared to the nine months ended September 30, 2021 due primarily to higher materials and components costs on certain orders, higher freight and tariff costs on certain transactions, unfavorable changes in product and customer mix, and changes in production efficiencies in our manufacturing operations.

Nine months ended September 30,

(in thousands, except percentages)

Engineering, research and development

Engineering and R&D costs for the nine months ended September 30, 2022 were up compared to the nine months ended September 30, 2021 due to increased engineering employee headcount and increased costs on prototyping and development activities, and also due to inclusion in the 2021 period of receipt of a $129 thousand research incentive grant from the Singapore government that reduced expenses in the prior year.

Nine months ended September 30,

(in thousands, except percentages)

Selling, general and administrative

Selling, general and administrative costs for the nine months ended September 30, 2022 were up slightly compared to the nine months ended September 30, 2021.

The prior year period included a $186 thousand benefit from forgiveness of the PPP loan.

When comparing selling, general and administrative costs for the periods exclusive of that benefit, costs for the nine month period in the current year were lower than in the prior year due to lower sales and marketing employee headcount, and lower legal and other professional fees.

Nine months ended September 30,

(in thousands, except percentages)

Other income (expense), net

Other income (expense), net for the nine months ended September 30, 2022 was comprised of $562 thousand of gains on marketable securities, $139 thousand of foreign currency transaction gains, and $3 thousand of other non-operating income, while other income (expense), net for

the nine months ended September 30, 2021 was comprised of $15 thousand of foreign currency transaction losses, and $10 thousand of other non-operating expenses.

Nine months ended September 30,

(in thousands, except percentages)

Income tax expense (benefit)

Income tax expense (benefit) reflects statutory tax rates in the jurisdictions in which we operate adjusted for permanent book/tax differences.

Our effective tax rate is directly affected by the relative proportions of earnings and losses in the jurisdictions in which we operate.

Liquidity and Capital Resources

Cash requirements for working capital and capital expenditures have been funded from cash balances on hand, cash generated from operations, and sales of equity securities.

As of September 30, 2022, we had cash and cash equivalents of $3.9 million, working capital of $12.0 million and no indebtedness.

As of March 31, 2023, we had cash and cash equivalents of $6.7 million, working capital of $8.2 million and no indebtedness.

Cash and cash equivalents consist of cash and money market funds.

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or foreign taxes to repatriate these funds.

We have outstanding 200,000 shares of our 8.0% Series A Convertible Preferred Stock that has an aggregate liquidation preference of $5.0 million, for which we pay, when, as and if declared by our board of directors, monthly cumulative cash dividends at an annual rate of 8.0%, which is equivalent to $0.16667 per month and $2.00 per annum per share, based on a per share liquidation preference of $25.00.

Dividends on the Series A Convertible Preferred Stock are payable monthly in arrears on the 15th day of each calendar month.

Our board of directors commenced paying dividends on our Series A Convertible Preferred Stock in November 2021, and we expect that our board of directors will continue to declare and pay monthly cash dividends on our Series A Convertible Preferred Stock, subject to the limitations to do so under Nevada law.

We have outstanding 200,000 shares of our 8.0% Series A Convertible Preferred Stock (the “Preferred Stock”) that have an aggregate liquidation preference of $5.0 million, for which we pay, when, as and if declared by our board of directors, monthly cumulative cash dividends at an annual rate of 8.0%;

this is equivalent to $0.16667 per month and $2.00 per annum per share, based on a per share liquidation preference of $25.00.

Dividends on the Preferred Stock are payable monthly in arrears on the 15th day of each calendar

Our board of directors has declared cash dividends on the Preferred Stock each month since the Preferred Stock was issued in October 2021, and we expect that the board will continue to declare, and we will continue to pay, cash dividends on the Preferred Stock each month while the Preferred Stock is outstanding, subject to applicable limitations under Nevada law.

We believe that our existing cash and cash equivalents balance will be sufficient to maintain our current operations considering our current financial condition, obligations, and other expected cash flows.

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Our cash flows from operating, investing and financing activities are summarized as follows:

Nine Months Ended

September 30,

Three Months Ended

(in thousands)

Net cash provided by (used in) operating activities

Net cash (used in) operating activities

Net cash (used in) investing activities

Net cash (used in) financing activities

Net Cash Provided By (Used In) Operating Activities

For the nine months ended September 30, 2022, the $385 thousand of cash used in operating activities was attributable to net income of $260 thousand, adjusted for non-cash charges of $201 thousand, unrealized and realized gains on marketable securities of $562 thousand, and cash used in changes in operating assets and liabilities of $284 thousand.

Accounts receivable decreased from $1.1 million at December 31, 2021 to $958 thousand at September 30, 2022 due to improved collections and days-sales-outstanding for the third quarter of 2022 compared to the fourth quarter of 2021.

Net Cash (Used In) Operating Activities

For the three months ended March 31, 2023, the $620,000 of cash used in operating activities was attributable to net loss of $191,000, adjusted for non-cash charges of $48,000 and cash used in changes in operating assets and liabilities of $477,000.

For the three months ended March 31, 2022, the $367,000 of cash used in operating activities was attributable to net income of $142,000, adjusted for non-cash charges of $64,000, unrealized gains on marketable securities of $156,000, and cash used in changes in operating assets and liabilities of $417,000.

Accounts receivable increased from $1.2 million at December 31, 2022 to $2.3 million at March 31, 2023 due to higher shipments during the first quarter of 2023 compared to the fourth quarter of 2022, and the addition of accounts receivable from our March 2023 acquisition of Calman.

Many of our customers pay promptly and accounts receivable is generally related to the most recent shipments.

Inventories increased from $814 thousand at December 31, 2021 to $1.1 million at September 30, 2022.

Inventory balances fluctuate depending on the timing of materials purchases and product shipments.

Prepaid expenses and other current assets increased from $391 thousand at December 31, 2021 to $453 thousand at September 30, 2022.

The balance of our prepaid expenses and other assets fluctuates with the timing of payments of insurance premiums, advances, and estimated income taxes.

Accounts payable and accrued liabilities decreased from $845 thousand at December 31, 2021 to $692 thousand at September 30, 2022, primarily due to the timing of payment for purchases of materials, compensation accruals, and other outside services.

For the nine months ended September 30, 2021, the $639 thousand of cash provided by operating activities was attributable to net income of $243 thousand, adjusted for non-cash charges of $229 thousand, non-cash gain on forgiveness of PPP loan of $186 thousand, and cash provided by changes in operating assets and liabilities of $353 thousand.

Inventories increased from $2.1 million at December 31, 2022 to $3.0 million at March 31, 2023.

Inventory balances fluctuate depending on the timing of materials purchases and product shipments, and also increased due to our March 2023 acquisition of Calman.

Prepaid expenses and other current assets increased from $321,000 at December 31, 2022 to $505,000 at March 31, 2023 due primarily to the increase in the amount to be collected from the SPEC/KWJ acquisition escrow resulting from the reduction in the purchase price upon finalization of their closing-date working capital.

Accounts payable and accrued liabilities increased from $841,000 at December 31, 2022 to $3.5 million at March 31, 2023, primarily due to purchase consideration that remains payable to the prior owners of Calman, and also due to the timing of payment for purchases of materials, compensation accruals, and other outside services, and the addition of Calman’s accounts payable and accrued liabilities to our consolidated balances.

Net Cash (Used In) Investing Activities

Net cash used in investing activities of $6.0 million for the nine months ended September 30, 2022 consisted of purchases of $6.0 million of marketable securities (net of sales) and $9 thousand of property, plant, and equipment.

Net cash used in investing activities of $142 thousand for the nine months ended September 30, 2021 consisted of purchases of property, plant, and equipment.

Net Used In Financing Activities

Net cash used in financing activities of $300 thousand for the nine months ended September 30, 2022 consisted of payment of dividends on our Series A Convertible Preferred Stock.

There was no cash provided by or used in financing activities during the nine months ended September 30, 2021.

Net cash used in investing activities of $2.8 million for the three months ended March 31, 2023 consisted of $2.7 million used to acquire the equity interests of Calman (which is net of $1.6 million of cash acquired), and a minor amount of purchases of property, plant, and equipment.

Net cash used in investing activities of $2.2 million for the three months ended March 31, 2022 consisted of purchases of $2.2 million of marketable securities and a minor amount of purchases of property, plant, and equipment.

Net Cash (Used In) Financing Activities

Net cash used in financing activities of $100,000 for the each of the three months ended March 31, 2023 and 2022 consisted of payment of dividends on our Preferred Stock.

Off-Balance Sheet Arrangements

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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