What changed in this filing

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Item 7. Management’s Discussion and Analysis

2024-03-20 compared with 2023-03-27 · 189 added, 195 removed, 110 unchanged (78% of the section changed)

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion of the financial condition

and results of operations as of and for the years ended December 31, 2022 and 2021 should be read in conjunction with the audited consolidated

financial statements and the notes to those statements that are included elsewhere in this Annual Report on Form 10-K.

In addition to

historical information, the following discussion contains certain forward-looking statements within the “safe harbor” provisions

of the Private Securities Litigation Reform Act of 1995.

These statements relate to our future plans, objectives, expectations and intentions.

These statements may be identified by the use of words such as "may," "could," "believe," "future,"

"depend," "expect," "will," "result," "can," "remain," "assurance,"

"subject to," "require," "limit," "impose," "guarantee," "restrict," "continue,"

"become," "predict," "likely," "opportunities," "effect," "change," "future,"

"predict," and "estimate," and similar terms or terminology, or the negative of such terms or other comparable terminology.

Although we believe the expectations expressed in these forward-looking statements are based on reasonable assumptions within the bounds

of our knowledge of our business, our actual results could differ materially from those discussed in these statements.

Factors that could

contribute to such differences include, but are not limited to, those discussed in the “Risk Factors” section in Part I, Item

We undertake no obligation to update publicly any forward-looking statements for any reason even if new information becomes available

DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis of the

financial condition and results of operations as of and for the years ended December 31, 2023 and 2022 should be read in conjunction

with the audited consolidated financial statements and the notes to those statements that are included elsewhere in this Annual

Report on Form 10-K.

In addition to historical information, the following discussion contains certain forward-looking statements

within the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995.

These statements relate to

our future plans, objectives, expectations and intentions.

These statements may be identified by the use of words such as

“may,” “could,” “believe,” “future,” “depend,” “expect,”

“will,” “result,” “can,” “remain,” “assurance,” “subject to,”

“require,” “limit,” “impose,” “guarantee,” “restrict,” “continue,” “become,”

“predict,” “likely,” “opportunities,” “effect,” “change,” and “estimate,” and

similar terms or terminology, or the negative of such terms or other comparable terminology.

Although we believe the expectations

expressed in these forward-looking statements are based on reasonable assumptions within the bounds of our knowledge of our

business, our actual results could differ materially from those discussed in these statements.

Factors that could contribute to such

differences include, but are not limited to, those discussed in the “Risk Factors” section in Part I, Item 1A.

undertake no obligation to update publicly any forward-looking statements for any reason even if new information becomes available

or other events occur in the future.

Recent Developments

COVID-19 Pandemic Impact

We have seen increased customer and consumer demand

for our products during the pandemic as consumers increased their food purchases for in-home consumption.

We have not experienced significant

supply chain disruptions or labor supply shortages and have continued to satisfy customer and consumer demand for our products.

continues to proactively manage the supply and transportation of materials used to make and package our products, staffing, and transportation

of our products to customers.

This proactive planning has allowed the Company to avoid disruption to its manufacturing facilities and

production, transportation, and sales and to meet the increased demand.

The Company has maintained full production capacity available

at all locations and does not anticipate manufacturing or staffing disruptions in the near term.

However, the COVID-19

pandemic, or any future pandemic, may limit the availability of, or increase the cost of, employees, ingredients, packaging and other

inputs necessary to produce our products, and our operations may be negatively impacted.

In 2022, our costs increased primarily due to

inflationary price increases of milk, other ingredients, packaging materials, and transportation to our customers.

However, because of

market conditions or for competitive reasons, our pricing actions may sometimes lag input cost changes, or we may not be able to pass

along the full effect of increases in raw materials and other input costs as we incur them.

During 2022, social distancing, shelter-in-place

and work-from-home mandates and recommendations have continued to be reduced or eliminated.

The increased customer demand for our products

as consumers increased their at-home consumption and e-commerce purchasing during the COVID-19 pandemic may change or decrease due to

the decrease in social distancing and stay-at-home and work-from-home mandates and recommendations.

We are unable to predict the nature

and timing of when such change may occur, if at all.

Current Macroeconomic Environment and Inflation Impact

During 2022, we experienced inflationary and cost

pressures due to volatility and disruption in the global economy which have increased our production and distribution costs.

we experienced some moderation of inflationary pressures and have experienced pricing declines in certain of our input costs, such as

conventional milk.

In response to these persistent inflationary and cost pressures, we instituted price increases in 2022 on many of our

These inflation-justified price increases mitigated a portion of our increased costs.

We have not experienced significant supply chain

disruptions or labor supply shortages and have continued to satisfy customer and consumer demand for our products.

Management continues

to proactively manage the supply chain of materials used to produce and transport our products to customers.

This proactive planning has

allowed the Company to avoid disruption to its manufacturing facilities, transportation, and sales, and to meet the increased demand.

The Company has maintained production at all locations and does not anticipate manufacturing or staffing disruptions in the near term.

Results of Operations

Comparison of Year Ended December 31, 2022 to Year

Ended December 31, 2021 (in 000’s)

Comparison of Year Ended December 31, 2023

to Year Ended December 31, 2022 (in 000’s)

The following table presents certain information

concerning our financial results, including information presented as a percentage of consolidated net sales:

Year Ended December 31,

Cost of goods sold

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Interest expense

Gain on investments

Loss on sale of property and equipment

Other Income, net

Gain (loss) on sale of property and equipment

Other income (expense)

Total other income (expense)

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The net sales increase was primarily driven by higher volumes of our branded

drinkable kefir and the impact of price increases implemented during the year, and to a lesser extent, the favorable impact of our acquisition

of Glen Oaks Farms during the third quarter of 2021.

Approximately 18% of the net sales increase results from the full year 2022 impact

of our acquisition of Glen Oaks Farms during the third quarter of 2021.

Gross profit as a percentage of net sales decreased

drinkable kefir, and to a lesser extent the impact of price increases implemented during the fourth quarter of 2022.

Gross profit as a percentage of net sales increased

to 26.5% during the year ended December 31, 2023 from 18.9% during the same period in 2022.

The decrease versus the prior year was primarily

due to the unfavorable impact of milk pricing, and the inflationary price increases of other ingredients, packaging materials, and freight,

partially offset by the decrease in depreciation expense and favorable labor efficiency due to increased volumes.

We took favorable pricing

actions during 2022 to recover a portion of the input and freight cost inflation.

However, for market conditions or competitive reasons,

our pricing actions may also lag input cost changes, or we may not be able to pass along the full effect of increases in raw materials

and other input costs as we incur them.

The increase versus the prior year was primarily

due to the higher volumes of our branded products and the favorable impact of milk pricing, and to a lesser extent the price increases

implemented during the fourth quarter of 2022 and decreased transportation costs.

Selling Expenses

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during the year ended December 31, 2023 from $11,304 during the same period in 2022.

The increase versus prior year is primarily due to

increased investment in advertising and marketing programs, increased broker expense, partially offset by lower compensation expense.

General and Administrative Expenses

The increase is primarily due to increased compensation

expense, partially offset by the reduction in royalty expense resulting from the termination of the endorsement agreement in September

General and Administrative Expenses

increased $982 to $12,593 during the year ended December 31, 2022 from $11,611 during the same period in 2021.

The increase is

primarily a result of increased legal and professional fees, which include expense related to non-routine stockholder action, the

fiscal year 2020 Form 10-K restatement, and incentive compensation, partially offset by lower consulting expense to our former

Chairperson of the Board of Directors.

General and administrative expenses increased

$537 to $13,130 during the year ended December 31, 2023 from $12,593 during the same period in 2022.

The increase is primarily a result

of increased incentive compensation expense, partially offset by the termination of the endorsement agreement in September 2022 and reduced

professional fees.

Provision for Income Taxes

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The provision for income taxes was $5,282 and $917 during the year ended December 31, 2023 and 2022, respectively.

Our effective income tax rate was 49.1% in 2022

The effective income tax rate was 31.7% in 2023

compared to 49.1% in 2022.

The statutory Federal and state tax rates remained consistent from 2022 to 2023.

The Company has a number of

items that are nondeductible or are discrete adjustments to tax expense.

The Company consistently reflects non-deductible officer compensation

expense, non-deductible compensation expense related to equity incentive awards and separate state tax rates from year to year.

similar items were reflected in 2022, the percentage effect is different due to the difference in pre-tax income in 2022 compared to 2021.

Our effective tax rate may change from period

to period based on recurring and non-recurring factors including the relative mix of pre-tax earnings (or losses), the underlying income

tax rates applicable to various state and local taxing jurisdictions, enacted tax legislation, the impact of non-deductible items, changes

in valuation allowances, and the expiration of the statute of limitations in relation to unrecognized tax benefits.

We record discrete

income tax items such as enacted tax rate changes in the period in which they occur.

The Company consistently reflects

non-deductible items such as non-deductible officer compensation expense, non-deductible compensation expense related to equity incentive

awards and separate state tax rates from year to year.

Although similar items were reflected in 2023, the percentage effect is different

due to the difference in pre-tax income in 2023 compared to 2022.

The Company’s effective tax rate may change

from period to period based on recurring and non-recurring factors including the relative mix of pre-tax earnings (or losses), the underlying

income tax rates applicable to various state and local taxing jurisdictions, enacted tax legislation, the impact of non-deductible items,

changes in valuation allowances, settlement of tax audits, and the expiration of the statute of limitations in relation to unrecognized

tax benefits.

The Company records discrete income tax items such as enacted tax rate changes in the period in which they occur.

Section 162(m) of the Internal Revenue Code (the

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in Note 10 in the Notes to the Consolidated Financial Statements.

Net Income (Loss)

We reported net income of $924 or $0.06 per basic

and diluted common share for the year ended December 31, 2022 compared to net income of $3,311 or $0.21 per basic and diluted common share

in the same period in 2021.

Liquidity and Capital Resources

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crisis ensues, it could have a negative effect on our liquidity, results of operations and financial condition.

most significant ongoing short-term cash requirements relate primarily to funding operations (including expenditures for raw materials,

labor, manufacturing and distribution, trade and promotions, advertising and marketing, and income tax liabilities) as well as expenditures

for property, plant, and equipment.

The Company’s most significant

ongoing short-term cash requirements relate primarily to funding operations (including expenditures for raw materials, labor, manufacturing

and distribution, trade and promotions, advertising and marketing, and income tax liabilities) as well as expenditures for property, plant,

and equipment.

Long-term cash

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$16,941 in 2023 compared to $3,987 in 2022.

The decrease was primarily due to lower cash earnings, which reflect the impact of input and

freight cost inflation in 2022, and the change in working capital.

The increase was primarily due to higher cash earnings driven by increased product volumes

and declines in certain input costs, and the change in working capital.

Investing Activities

Net cash used in investing activities was $4,029 in

2022 compared to $7,142 in 2021.

The decrease in cash used reflects the August 2021 acquisition of GlenOaks Farms, Inc., partially offset

by increased capital spending in 2022.

Net cash used in investing activities was $4,410

in 2023 compared to $4,029 in 2022.

The increase in cash used reflects our planned capital spending increase during 2023 compared to 2022.

Our capital spending is focused in three core areas:

growth, cost reduction, and facility improvements.

Growth capital spending supports new product innovation and enhancements.

Cost reduction and facility improvements support manufacturing

efficiency, safety, and productivity.

Growth capital spending supports

new product innovation and enhancements.

Cost reduction and facility improvements support manufacturing efficiency, safety, and productivity.

Financing Activities

Net cash used in financing activities was $4,747

during 2022 compared to net cash provided by financing activities of $2,885 in 2021.

The decrease in cash used relates to the term loan

entered into during August 2021 in connection with the acquisition of GlenOaks Farms, Inc., partially offset by the quarterly principal

payments under the term loan.

On June 24, 2021, Lifeway’s Board authorized

a plan to repurchase up to 250 shares of Common Stock in the open market within 24 months at no more than $10 per share.

We repurchased

all 250 shares of common stock at a cost of $1,583 during the three-month period ended September 30, 2021.

We intend to hold repurchased

shares in treasury for general corporate purposes, including issuances under our 2015 Omnibus Incentive Plan.

Treasury shares are accounted

for using the cost method.

Net cash used in financing activities

was $3,777 in 2023 compared to $4,747 in 2022.

The Company paid the outstanding line of credit balance of $2,777 in full on October 6,

There were no amounts outstanding under the line of credit after October 6, 2023, through December 31, 2023.

On November 7, 2022, the Company entered into

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The shares were repurchased during the fourth quarter of 2022.

Pursuant to the Stock Purchase Agreement, the

Company and Ms.

Smolyansky have agreed, among other things, that (i) Ms.

Smolyansky will sell the shares at a purchase price of $4.70

per share, which represents a twenty percent (20.0%) discount to the average closing price of the common stock on Nasdaq over the five

(5) trading day period ended on the trading day immediately preceding the date of the Stock Purchase Agreement and (ii) Ms.

will use a portion of the proceeds to satisfy in full certain obligations of Ms.

Smolyansky, which are secured by previously disclosed

pledges of common stock, causing all such pledges to be released.

The purchased shares will be held in treasury by the Company.

Pursuant to the Stock Purchase Agreement, (i)

Smolyansky sold the shares at a purchase price of $4.70 per share, which represents a twenty percent (20.0%) discount to the average

closing price of the common stock on Nasdaq over the five (5) trading day period ended on the trading day immediately preceding the date

of the Stock Purchase Agreement and (ii) Ms.

Smolyansky used a portion of the proceeds to satisfy in full certain obligations of Ms.

which are secured by previously disclosed pledges of common stock, causing all such pledges to be released.

The purchased shares are held

in treasury by the Company.

Debt Obligations

On August 18, 2021, Lifeway entered into the Fourth

Modification (the “Fourth Modification”) to the Amended and Restated Loan and Security Agreement (as amended and modified

from time to time, the “Credit Agreement”) with its existing lender and certain of its subsidiaries.

The Fourth Modification

amends the Credit Agreement to provide for, among other things, a $5 million term loan by the existing lender to the borrowers to be repaid

in quarterly installments of principal and interest over a term of five years (the “Term Loan”).

The termination date

of the Term Loan is August 18, 2026, unless earlier terminated.

Except for the addition of the Term Loan, the Credit Agreement remains

substantively unchanged and in full force and effect.

As of December 31, 2022, we had $2,777 outstanding

The Company is party to an Amended and Restated

Loan and Security Agreement (as amended and modified from time to time, the “Credit Agreement”) with its existing lender and

certain of its subsidiaries.

The Credit Agreement provides for, among other things, a $5 million term loan to be repaid in quarterly installments

of principal and interest over a term of five years, a revolving line of credit up to a maximum of $5 million (the “Revolving Credit

Facility”) and an incremental facility not to exceed $5 million.

The termination date of the term loan is August 18, 2026, unless

earlier terminated.

The termination date of the revolving credit facility is June 30, 2025, unless earlier terminated.

As of December 31, 2023, the Company had $0 outstanding

under the Revolving Credit Facility and $2,733 outstanding under the note payable, net of $17 of unamortized deferred financing fees.

We had $2,223 available for future borrowings under the Revolving Credit Facility as of December 31, 2022.

As amended, all outstanding

amounts under the Loans bear interest, at Lifeway’s election, at either the lender Base Rate (the Prime Rate minus 1.00%) or the

LIBOR plus 1.95%, payable monthly in arrears.

Lifeway is also required to pay a quarterly unused line fee of 0.20% on the Revolving Credit

Facility and, in conjunction with the issuance of any letters of credit, a letter of credit fee of 0.20%.

The Company’s interest rate on debt outstanding

under the revolving line of credit and note payable as of December 31, 2022 was 6.17% and 6.29%, respectively.

We are in compliance with all applicable financial

debt covenants as of December 31, 2022.

See Note 7 to our Consolidated Financial Statements for additional information regarding our indebtedness

and related agreements.

The Company had $5,000 available for future borrowings under the Revolving Credit Facility as of December 31, 2023.

All outstanding amounts under the loans bear interest

at the Secured Overnight Financing Rate (“SOFR”), plus 2.07%.

The Company’s interest rate on debt outstanding under

the note payable as of December 31, 2023 was 6.29%.

Interest is payable monthly in arrears.

Lifeway is also required to pay a quarterly

unused line fee of 0.20% on the Revolving Credit Facility, and in conjunction with the issuance of any letters of credit, a letter of

credit fee of 0.20%.

The Company is in compliance with all applicable

financial debt covenants as of December 31, 2023.

See Note 7 to our Consolidated Financial Statements for additional information regarding

our indebtedness and related agreements.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet financing arrangements

as defined in Item 303(a)(4) of Regulation S-K.

Contractual Obligations

Not applicable.

We do not have any off-balance sheet financing

arrangements as defined in Item 303(a)(4) of Regulation S-K.

Critical Accounting Estimates

Critical accounting estimates are those estimates

made in accordance with U.S.

GAAP that involve a significant level of estimation uncertainty and have had or are reasonably likely to

have a material impact on the financial condition or results of operations of the registrant.

In many cases, the accounting treatment

of a particular transaction is specifically dictated by U.S.

GAAP with no need for the application of our judgement.

In certain circumstances,

the preparation of our Consolidated Financial Statements in conformity with U.S.

GAAP requires us to use our judgment to make certain

estimates and assumptions.

These estimates affect the reported amounts of assets and liabilities and disclosures of contingent assets

and liabilities at the date of the Consolidated Financial Statements and the reported amounts of net sales and expenses during the reporting

We believe in the quality and reasonableness of our critical accounting estimates;

however, materially different amounts might

be reported under different conditions or using assumptions, estimates or making judgments different from those that we have applied.

Management has discussed the development and selection of these critical accounting policies, as well as our significant accounting policies

(see Note 2 to the Consolidated Financial Statements), with the Audit Committee of our Board of Directors.

We have identified the policies

described below as our critical accounting policies.

Critical accounting estimates are defined as those

most important to the portrayal of a company’s financial condition and results, and require the most difficult, subjective, or complex

In many cases, the accounting treatment of a particular transaction is specifically dictated by U.S.

GAAP with no need for

the application of our judgement.

In certain circumstances, the preparation of our Consolidated Financial Statements in conformity with

GAAP requires us to use our judgment to make certain estimates and assumptions.

These estimates affect the reported amounts of assets

and liabilities and disclosures of contingent assets and liabilities at the date of the Consolidated Financial Statements and the reported

amounts of net sales and expenses during the reporting period.

We believe in the quality and reasonableness of our critical accounting

however, materially different amounts might be reported under different conditions or using assumptions, estimates or making

judgments different from those that we have applied.

Management has discussed the development and selection of these critical accounting

policies, as well as our significant accounting policies (see Note 2 to the Consolidated Financial Statements), with the Audit and Corporate

Governance Committee of our Board of Directors.

We have identified the policies described below as our critical accounting policies that

require us to make subjective or complex judgments.

Goodwill impairment

Goodwill totaled $11,704 as of December 31, 2023.

The Company completed its annual goodwill impairment analysis as of December 31, 2022.

Our assessment did not result in an impairment.

Goodwill represents the excess purchase price over the fair value of the net tangible and other identifiable intangible assets acquired.

We estimate the fair value of our one reporting unit annually (as of December 31), or more frequently if certain conditions exist, using

a combination of the fair values derived from both the income approach and the market approach.

Under the income approach, we calculate

the fair value of a reporting unit based on the present value of estimated future cash flows.

Cash flow projections are based on our estimates

of revenue growth rates and operating margins, taking into consideration industry and market conditions.

The discount rate used to determine

the present value of future cash flows is based on the weighted-average cost of capital adjusted for the relevant risk associated with

business-specific characteristics and the uncertainty related to the business's ability to execute on the projected cash flows.

approach estimates fair value based on market multiples of revenue and earnings derived from comparable publicly-traded companies with

similar operating and investment characteristics.

The resulting fair value, based on the income and market approaches, is then compared

to the carrying value to determine if impairment is necessary.

Goodwill is not amortized.

The Company has one reporting unit within its

single reportable segment.

We review and evaluate our goodwill for potential impairment at a minimum annually, as of December 31, or more

frequently if circumstances indicate that impairment is possible.

We completed our annual goodwill impairment analysis as of December

Our assessment did not result in an impairment.

In testing goodwill for impairment, the Company

has the option to perform a qualitative test (also known as “Step 0”) or a quantitative test (“Step 1”).

the Step 0 test, the Company first assesses qualitative factors to determine whether it is more likely than not that the fair value of

the reporting unit is less than its carrying value.

Qualitative factors may include, but are not limited to, economic conditions, industry

and market considerations, cost factors, overall financial performance of the reporting unit and other entity and reporting unit specific

If after assessing these qualitative factors, the Company determines it is “more-likely-than-not” that the fair value

of the reporting unit is less than the carrying value, then performing the Step 1 quantitative test is necessary.

Step 1 of the quantitative test requires comparison

of the fair value of the Company’s one reporting unit to the carrying value.

If the carrying value of the reporting unit is less

than the fair value, no impairment exists.

Otherwise, the Company would recognize an impairment charge for the amount by which the carrying

amount of the reporting unit exceeds its fair value up to the amount of goodwill allocated to the reporting unit.

Under a Step 1 quantitative test, we estimate

the fair value of our one reporting unit using a combination of the fair values derived from both the income approach and the market approach.

Under the income approach, the Company uses a discounted cash flow methodology which requires management to make significant estimates

and assumptions related to forecasted revenues, gross profit margins, operating income margins, working capital cash flow, perpetual growth

rates, and long-term discount rates, among others.

The discount rate used to determine the present value of future cash flows is based

on the weighted-average cost of capital adjusted for the relevant risk associated with business-specific characteristics and the uncertainty

related to the business’s ability to execute on the projected cash flows.

For the market approach, the Company uses the guideline public

company method.

The market approach estimates fair value based on market multiples of revenue and earnings derived from comparable publicly

traded companies with similar operating and investment characteristics.

The Company also reconciles the fair value of its reporting unit

to its current market capitalization, allowing for a reasonable control premium.

Sales discounts & allowance

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various forms of share-based payment awards, and we recognize compensation expense for these awards based on their grant date fair values.

The grant fair value of Restricted Stock Units (“RSUs”) and Performance Share Unit (“PSUs”) awards is equal to

the Company’s closing stock price on the grant date.

The Company granted RSU and PSU awards during 2022 to employees under the 2022

long-term incentive-based plan, and RSU awards to non-employee Directors under the 2022 Non-Employee Director Equity and Deferred Compensation

We do not estimate forfeitures in measuring the grant date fair value, but rather account for forfeitures as they occur.

11 to our consolidated financial statements for further detail.

The grant date fair value of Restricted Stock Units (“RSUs”) and Performance Share Unit (“PSUs”) awards is equal

to the Company’s closing stock price on the grant date.

The Company granted RSU and PSU awards during 2023 to employees.

awards are contingent upon the achievement of strategic milestones during a three-year measurement period.

The expense recognition of

PSU awards therefore requires management to make judgements and estimates at the end of each reporting period as to the cumulative three-year

milestone achievements.

Changes in managements estimate of the three-year cumulative milestone achievements are recognized as change in

management estimate in a subsequent period.

We do not estimate forfeitures in measuring the grant date fair value of RSUs and PSUs, but

rather account for forfeitures as they occur.

Forfeitures have historically been immaterial.

See Note 11 to our consolidated financial

statements for further detail.

We pay income taxes based on tax statutes, regulations,

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the years in which the differences are expected to reverse.

The assumptions about future taxable income require the use of significant judgment and are consistent with the

plans and estimates we are using to manage our underlying businesses.

The assumptions about future taxable income require the use of significant

judgment and are consistent with the plans and estimates we are using to manage our underlying businesses.

We recognize an income tax benefit from an uncertain

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Recent Accounting Pronouncements .

See Note 2, Summary of Significant Accounting Policies,

in the Notes to the Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K for information regarding

recent accounting pronouncements.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

See Note 2, Summary of Significant Accounting

Policies, in the Notes to the Consolidated Financial Statements included in Item 8 of this Annual Report on Form 10-K for information

regarding recent accounting pronouncements.

QUANTITATIVE AND

QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not applicable

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