What changed in this filing

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Item 2. Management’s Discussion and Analysis

2024-05-09 compared with 2023-11-09 · 70 added, 109 removed, 88 unchanged (67% 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.

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.

Interlink Electronics, Inc.

is a global sensor and printed electronics company operating in two principal sensor technology divisions:

force/touch sensors, and gas and environmental sensors.

Our force/touch sensors, including our Force-Sensing Resistor (“FSR®”) technology and related technologies, and our membrane keypads, graphic overlays and printed electronics, are used extensively in Human-Machine Interface (“HMI”) devices, while our gas and environmental 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.

On March 1, 2024, the Board of Directors declared a 50% common stock dividend that was paid on March 22, 2024.

For all years presented, all share and per share data have been retroactively adjusted for the effect of the 50% common stock dividend, which is accounted for as a stock split effected in the form of a stock dividend.

Our principal products are:

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.

We design, develop, manufacture and sell 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 HMI technology platforms are 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 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.

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.

Additionally, through our acquisition of Calman Technology Limited in March 2023, we offer customized membrane keypads, graphic overlays, printed electronics and industrial label products for use in a wide range of fields, from industrial instrumentation, process control and monitoring to medical and diagnostic devices and defense systems.

With over 25 years as a leading HMI provider, Calman Technology has developed to also become a specialized provider of printed electronics for the medical sector in the UK and Europe.

Gas and Environmental Sensors .

We entered the gas and environmental sensing market in 2022 through our acquisition of the business assets of SPEC Sensors, LLC (“SPEC”) and KWJ Engineering, Inc.

(“KWJ”), early pioneers in miniaturized, low-cost gas and environmental sensing technologies.

Following our acquisition of these operations, we now offer electrochemical gas-sensing technology products and solutions for industry, community, health and home, with uses in fields such as safety, personal wellness and air quality monitoring.

We sell our products and solutions globally to a diverse array of customers that include Fortune Global 500 companies with the world’s most recognizable brands, as well as start-ups, design houses, original design and equipment manufacturers, and universities.

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

environmental monitoring markets.

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

We manufacture our products in a state-of-the-art facility in Shenzhen, China, and in our advanced and proprietary facilities in Silicon Valley, 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 have invested significantly in the expansion of our technology platforms through our own internal development to ensure we continue to provide the market with leading-edge solutions that are seamless to deploy and perform flawlessly.

Having previously built an R&D organization in Singapore to develop new product offerings that will meet the market’s growing demand for touch technology and smart surfaces, we relocated a majority of our 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 acquisitions of SPEC and KWJ and Calman, we believe this will allow us to grow our business and be more closely aligned with current and future top-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 15707 Rockfield Boulevard, Suite 105, 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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Net income (loss)

Comparison of Three Months Ended September 30, 2023 and 2022

Comparison of Three Months Ended March 31, 2024 and 2023

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

Three Months Ended September 30,

Three months ended March 31,

(in thousands, except percentages)

We sell our custom products into the industrial, medical, and consumer markets.

We sell our standard products through various distribution networks.

The ultimate customer for standard products may come from different markets which are often unknown to us at the time of sale.

We sell our standard products to customers in many markets through various distribution networks.

The ultimate customer for our products may come from different markets which are often unknown to us at the time of sale.

Each market has different product design cycles.

Products with longer design cycles often have much longer product life-cycles.

Products for the industrial, medical and automotive markets generally have longer design and life-cycles than consumer products.

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, 2023 compared to the same quarter in 2022 in the industrial and medical markets and for our standard products, and were down in the consumer and automotive markets.

The increase in revenue from our industrial market customers is due to increased demand from customers in this market and also due to sales to new industrial market customers resulting from our acquisitions of SPEC/KWJ and Calman.

The increase in revenue from our medical market customers is primarily due to sales to new medical market customers resulting from our acquisitions of SPEC/KWJ and Calman.

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

The decrease in revenue from our consumer market customers is primarily due to fluctuations in the timing of receipt and

fulfilment of orders from some of our larger consumer products customers.

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 September 30,

Products with longer design cycles often

have much longer product life cycles.

Industrial, medical, and environmental monitoring products generally have longer design and life cycles than consumer products.

We currently have products with life cycles that have exceeded 20 years and are ongoing.

Revenues were down in the three months ended March 31, 2024 as compared to the three months ended March 31, 2023 for sales to customers in the industrial, medical, and consumer markets into which we sell our custom products, while revenues for sales of our standard products were up in the first quarter of 2024 compared to the prior year.

Fluctuations in our revenue result from variations in the trends and timing of shipments of our products which are impacted by fluctuations in customer demand.

In the first quarter of 2024, we experienced lower demand from certain of our larger force-sensor customers in the industrial and medical markets compared to the first quarter of 2023.

In all markets, the timing of orders from our customers is not always predictable and can be concentrated in varying periods to coincide with our customers’ project and building 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 during the three months ended September 30, 2023 was up compared to the three months ended September 30, 2022 due primarily to higher revenues (resulting from our acquisitions of SPEC/KWJ and Calman).

Gross margin percentage declined slightly due to changes in product and customer mix.

Three Months Ended September 30,

Gross profit and gross margin percentage were down during the three months ended March 31, 2024 compared to the three months ended March 31, 2023 due primarily to changes in product and customer mix and also in part to lower revenues.

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 support of our technology roadmap and in order to develop our standard sensor 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 September 30, 2023 were up compared to the three months ended September 30, 2022 due to increased engineering employee headcount following our acquisition of SPEC/KWJ in December 2022, the inclusion in the current year period of approximately $26,000 of non-cash amortization expense on intangible assets acquired in the SPEC/KWJ acquisition, and increased prototyping and product-development activities this year as compared to the prior year.

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, 2024 were up compared to the three months ended March 31, 2023 due to increased engineering employee and consultation compensation costs and increased intangible asset amortization expense.

Three months ended March 31,

(in thousands, except percentages)

Selling, general and administrative

Selling, general and administrative expenses consist primarily of compensation expenses for employees in the sales, marketing, finance and executive functions, legal and other professional fees, communication expenses and facilities costs.

Selling, general and administrative expenses for the three months ended September 30, 2023 were up compared to the three months ended September 30, 2022 due to increased employee headcount following our acquisitions of SPEC/KWJ in December 2022 and Calman in March 2023.

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, 2024 were up compared to the three months ended March 31, 2023 due to increased intangible asset amortization expense due to the Calman acquisition and the inclusion of Calman’s operating costs, partly offset by lower sales and administrative compensation expense on lower headcount and lower professional services expenses.

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, 2023 was comprised of $31,000 of interest income and $5,000 of foreign

currency transaction losses, while other income (expense), net for the three months ended September 30, 2022 was comprised of $181,000 of gains on marketable securities, $24,000 of foreign currency transaction gains, and $2,000 of other non-operating income.

Three Months Ended September 30,

(in thousands, except percentages)

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 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 generally 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% tax rate) and the United Kingdom (25% tax rate), while our domestic losses do not benefit our effective tax rate due to the valuation allowance.

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

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, 2024 was comprised of $18,000 of interest income, and $14,000 of foreign currency transaction gains, while 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.

Income tax expense as a percentage of pre-tax loss was 3.1% for the three months ended March 31, 2024 versus 75.2% for the comparable period in the prior year.

Our income tax expense is primarily impacted by the mix of domestic and foreign pre-tax earnings, permanent differences between book income/loss and taxable income/loss, and our ability to utilize prior net operating loss carryovers (“NOLs”).

Accordingly, our effective tax rate can vary from the U.S.

statutory tax rate of 21% from quarter to quarter.

The effective tax rates for each of the three-month periods ended March 31, 2024 and 2023 were impacted by the amount of our foreign pre-tax income and the tax expense thereon while not realizing a benefit on our domestic pre-tax loss due to the valuation allowance on our domestic NOLs.

Discrete tax events may cause our effective rate to fluctuate on a quarterly basis.

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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, 2023 and 2022

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, 2023 compared to the first nine months of 2022 in the industrial and medical markets, and for our standard products, and were down in the consumer and automotive markets.

The increase in revenue from our industrial market customers is due to increased shipments resulting from increased demand by customers in this market, and also due to sales to new industrial market customers resulting from our acquisitions of SPEC/KWJ and Calman.

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 increased following the COVID-19 pandemic, and also due to sales of our force-sensing technologies to new medical market customers and also due to sales of our new gas-sensing and membrane keypads products 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.

The decrease in revenue from our consumer market customers is primarily due to fluctuations in the timing of receipt and fulfilment of orders from some of our larger consumer products customers, and cyclicality in their product designs that cause our products to be included in or excluded from their programs from time to time.

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.

Nine Months Ended September 30,

(in thousands, except percentages)

Gross profit during the nine months ended September 30, 2023 was up compared to the nine months ended September 30, 2022 due to higher revenues (resulting in large part from our acquisitions of SPEC/KWJ and Calman), while gross margin percentage was down due to higher materials and components costs on certain orders and unfavorable changes in product and customer mix.

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, 2023 were up compared to the nine months ended September 30, 2022 due to increased engineering employee headcount following our acquisition of SPEC/KWJ in December 2022, the inclusion in the current year period of approximately $108,000 of non-cash amortization expense on intangible assets acquired in the SPEC/KWJ acquisition, and increased prototyping and product-development activities this year as compared to the prior year.

Nine Months Ended September 30,

(in thousands, except percentages)

Selling, general and administrative

Selling, general and administrative expenses for the nine months ended September 30, 2023 were up compared to the nine months ended September 30, 2022 due to increased employee headcount following our acquisitions of SPEC/KWJ in December 2022 and Calman in March 2023, and increased 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, 2023 was comprised of $129,000 of interest income, $19,000 of foreign currency transaction gains, and $6,000 of other non-operating income, while other income (expense), net for the nine months ended September 30, 2022 was comprised of $562,000 of gains on marketable securities, $139,000 of foreign currency transaction gains, and $3,000 of other non-operating income.

Nine Months Ended September 30,

(in thousands, except percentages)

Income tax expense

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

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, 2023, we had cash and cash equivalents of $5.2 million, working capital of $8.0 million and no indebtedness.

As of March 31, 2024, we had cash and cash equivalents of $4.4 million, working capital of $7.2 million and no indebtedness.

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

Of our $4.4 million of cash, $2.7 million was held by foreign subsidiaries.

If these funds are needed for our operations in the U.S., we have several methods to repatriate without significant tax effects, including repayment of intercompany loans or distributions of previously taxed income.

If these funds are needed for our operations in the U.S.

or for acquisitions, we have several methods to repatriate without significant tax effects, including repayment of intercompany loans or distributions of previously taxed income.

Other distributions may require us to incur U.S.

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

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.

Our board of directors has declared, and we have paid, 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, such cash dividends 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)

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Net Cash Provided By (Used In) Operating Activities

For the nine months ended September 30, 2023, the $155,000 of cash provided by operating activities was attributable to net income of $65,000, adjusted for non-cash charges of $292,000 and offset by cash used in changes in operating assets and liabilities of $202,000.

Accounts receivable increased from $1.2 million at December 31, 2022 to $1.6 million at September 30, 2023 due to higher shipments during the third quarter of 2023 compared to the third 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 are generally related to the most recent shipments.

Inventories increased from $2.1 million at December 31, 2022 to $2.9 million at September 30, 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 decreased from $321,000 at December 31, 2022 to $226,000 at September 30, 2023 due primarily to the receipt of the amount 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 $1.4 million at September 30, 2023, primarily due to purchase consideration that remains payable to the prior owners of Calman, offset by other factors such as 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.

For the nine months ended September 30, 2022, the $385,000 of cash used in operating activities was attributable to net income of $260,000, adjusted for non-cash charges of $201,000 and unrealized gains on marketable securities of $562,000 and cash used in changes in operating assets and liabilities of $284,000.

For the three months ended March 31, 2024, the $222,000 of cash provided by operating activities was attributable to net loss of $741,000, adjusted for non-cash charges of $188,000 and cash provided by changes in operating assets and liabilities of $775,000.

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.

Accounts receivable decreased from $2.2 million at December 31, 2023 to $1.8 million at March 31, 2024 due to lower shipments during the first quarter of 2024 compared to the fourth quarter of 2023.

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

Inventories increased slightly from $2.5 million at December 31, 2023 to $2.6 million at March 31, 2024.

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

Prepaid expenses and other current assets decreased slightly from $381,000 at December 31, 2023 to $368,000 at March 31, 2024 due primarily to the timing of making prepayments versus when the benefits of those prepayments are consumed.

Accounts payable, accrued liabilities, and accrued income taxes increased from $1.2 million at December 31, 2023 to $1.7 million at March 31, 2024, primarily due to the timing of purchases and payments on inventories and other accruals of employee compensation and outside services.

Net Cash (Used In) Investing Activities

Net cash used in investing activities of $4.3 million for the nine months ended September 30, 2023 consisted of $4.3 million used to acquire the equity interests of Calman (which is net of $1.6 million of cash acquired), and $44,000 used for purchases of property, plant, and equipment.

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 $9,000 of property, plant, and equipment.

Net cash used in investing activities for the three months ended March 31, 2024 consisted of $18,000 of purchases of property, plant, and equipment.

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 $10,000 of purchases of property, plant, and equipment.

Net Cash (Used In) Financing Activities

Net cash used in financing activities of $650,000 for the nine months ended September 30, 2023 consisted of $350,000 used for repurchases of 32,120 shares of common stock and $300,000 used for payments of dividends on our Preferred Stock.

Net cash used in financing activities of $300,000 for the nine months ended September 30, 2022 was for payments of dividends on our Preferred Stock.

Net cash used in financing activities of $100,000 for the each of the three months ended March 31, 2024 and 2023 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