What changed in this filing

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Item 7. Management’s Discussion and Analysis

2026-03-17 compared with 2025-03-14 · 228 added, 151 removed, 190 unchanged (67% of the section changed)

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Recent Developments

Unsolicited Proposal

On November 5, 2024, we announced that our board

of directors (our “Board”) determined, after careful and thorough consideration in consultation with the Company’s independent

financial and legal advisors, that the unsolicited proposal made on September 23, 2024 by Danone North America PBC (“Danone”)

to acquire all of the shares of the Company that it did not already own for $25.00 per share, substantially undervalued the Company and

was not in the best interests of the Company or its stockholders or other stakeholders.

In connection with that determination, we entered

into a Shareholder Rights Agreement with Computershare Trust Company, N.A., as rights agent (the “Rights Agreement”).

to the Rights Agreement, our Board declared a dividend of one preferred share purchase right (each a “Right”) for each outstanding

share of Company common stock to stockholders of record as of the close of business on November 18, 2024.

Each Right entitles its holder,

subject to the terms of the Rights Agreement, to purchase from the Company one one-thousandth of one share of Series A Junior Participating

Preferred Stock, no par value, of the Company at an exercise price of $130.00 per Right, subject to adjustment.

Rights also attach to

any shares of Company common stock that become outstanding after November 18, 2024 and prior to the earlier of the Distribution Time (as

defined in the Rights Agreement) and the redemption or expiration of the Rights, and in certain other circumstances described in the Rights

On November 15, 2024, Danone revised its offer

to acquire all of the shares of the Company that it did not already own from $25.00 per share to $27.00 per share.

On November 20, 2024,

we announced our Board’s determination that, after careful and thorough consideration in consultation with the Company’s independent

financial and legal advisors, the revised unsolicited proposal substantially undervalued the Company and was not in the best interests

of the Company or its stockholders or other stakeholders.

On November 26, we announced additional information regarding the information

the Board used to come to this determination.

Cooperation Agreement

On September 30, 2025, the Company and Danone entered into a Cooperation

Agreement (the “Cooperation Agreement”) pursuant to which, among other things:

· The Company refreshed its Board, electing four new directors (the “New Independent Directors”)

selected in accordance with the Cooperation Agreement who are (1) independent under Nasdaq rules and (2) unaffiliated with Julie Smolyansky,

the Company’s Chief Executive Officer, her spouse, Edward Smolyansky, Ludmila Smolyansky (the foregoing collectively, the

“Smolyansky Family”), Danone, the Company and any director of the Company.

Additionally, Jody Levy and Perfecto Sanchez, former

members of the Board, resigned and Pol Sikar was not nominated to stand for re-election at the Company’s 2025 annual meeting of

shareholders.

Additional changes to the Board during the quarter ended December 31, 2025, include the appointment of Dorri McWhorter as

Chairperson of the Board, resignation of Ms.

McWhorter from the Compensation Committee of the Board, the appointment of Andee Harris

as a member of the Audit and Corporate Governance Committee of the Board and the appointment of Susan Hultquist and Kirk Chartier to the

Compensation Committee of the Board.

· The Company and Danone jointly stayed the pending litigation relating to the Stockholders’ Agreement,

dated October 1, 1999, by and among the Company, Danone Foods, Inc., Michael Smolyansky, Ludmila Smolyansky, Julie Smolyansky and Edward

Smolyansky (as amended, the “Stockholders’ Agreement”).

· Danone waived certain of its right under that certain Stockholders’ Agreement,

including its right to Board representation, and agreed that its consent will not be required for the Company to issue bona fide equity-based

compensation to members of management (excluding Julie Smolyansky, her immediate family and their affiliates) so long as the grants are

on market terms and are approved by the Company’s Compensation Committee (a majority of which must be New Independent Directors);

· The Company agreed to hold its 2026 annual meeting of shareholders on or before June 30, 2026 and to include

as nominees for election a slate of seven individuals (unless the size of the Board is increased by adding any additional directors through

the process required in the Cooperation Agreement) that includes the New Independent Directors and that excludes Jason Scher.

agreed to vote all of the shares of Common Stock it beneficially owns in favor of this slate if nominated in accordance with the Cooperation

· Danone agreed that if, at any time prior to June 30, 2026, Edward Smolyansky or Ludmila Smolyansky or

any person with whom Edward Smolyansky or Ludmila Smolyansky has formed a group (as such term is defined under the Exchange Act, and the

rules and regulations promulgated thereunder) calls a special meeting of the Company’s shareholders or commences a consent solicitation,

Danone will vote or consent, as applicable, with respect to all shares of Common Stock it beneficially owns in accordance with the Board’s

recommendations on all matters relating to Board composition and, with certain exceptions, the Company’s organizational documents.

· The Company filed a “shelf” registration statement with the SEC covering the resale of all

shares of Common Stock beneficially owned by Danone and its affiliates, which registration statement was declared effective by the SEC.

The Cooperation Agreement provides that Danone may not request more than (a) two underwritten offerings not involving any “road

show,” which is commonly known as a “block trade” or (b) one underwritten offering that is not a block trade under the

registration statement of which this prospectus forms a part in any 60-day period.

The Company also agreed to use reasonable best efforts

to take such further action as Danone may reasonably request, all to the extent required from time to time, to enable Danone to sell shares

of Registrable Stock (as defined in the Stockholders’ Agreement) without registration under the Securities Act within the safe harbor

provided by Rule 144 thereunder.

· Both the Company and Danone, on behalf of themselves and their respective affiliates and representatives,

agreed to mutual non-disparagement provisions, effective until two years after Danone and its affiliates cease to beneficially own any

shares of Common Stock.

All of Danone’s obligations (other than

the non-disparagement covenants) cease to apply upon certain “triggering events,” including breaches of the Cooperation Agreement

by the Company or certain statements by the Company, Julie Smolyansky or any of their respective affiliates or representatives challenging

the validity of the Cooperation Agreement or the Stockholders’ Agreement.

Additionally, if Julie Smolyansky is deemed to have breached

the Cooperation Agreement while she is Chief Executive Officer of the Company, such breach will be a triggering event under the Cooperation

Agreement unless the Board terminates Julie Smolyansky for cause as a result of such breach within a specified time period.

All of the Company’s obligations under the Stockholders’

Agreement (other than those relating to Danone’s registration rights and rights with respect to inspection of our books and records)

cease to apply after Danone and its affiliates no longer collectively beneficially own at least 761,438 (as adjusted for any reverse stock

split or similar recapitalization).

The Company’s obligations under the Cooperation Agreement (other than the non-disparagement

covenants) cease to apply after Danone and its affiliates cease to beneficially own any shares of Common Stock.

Debt Refinancing

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The Company had no outstanding borrowings at the time of entry into the Fifth Modification.

In October 2024, we began to roll out our first

products with 100% lactose free labeling.

Our products were already up to 99% lactose free, so we are pleased to further attract consumers

with our new Organic Whole Milk Flavor Fusion items that have this added benefit, along with decreased sugar content.

In demand flavors

including Hot Honey, Matcha Latte, and Passionfruit Lychee are new additions to our portfolio.

The entire lineup is loaded with high-quality

bioavailable nutrients, and plays to our strengths, as our organic products have been incredibly successful to date.

We expect health and wellness trends to continue to

be a tailwind for our entire premium product portfolio.

We plan to continue to invest behind our key products to capture more and more

of this growing market,

Distribution Strategy

In September 2024, we announced our first expansion

of Kefir distribution in the South African market.

In November 2024, we announced our expansion within Dubai and the UAE.

of 32oz Lifeway Kefir, 8oz Lactose-Free Lifeway Kefir, ProBugs and farmer cheese, exported from the United States, is expected to begin

shipping in the first quarter of 2025 and will become available in supermarkets and hypermarkets in Dubai and across the Emirates.

are taking a measured, and thoughtful approach to global expansion, as we seek markets that are primed for success and can be accessed

without a major initial investment.

On December 29, 2025,

the Company entered into the Sixth Modification to the Amended and Restated Loan and Security Agreement (the “Sixth Modification”)

with its current lender.

The Sixth Modification, provides for, among other things, (i) modification of the Fixed Charge Coverage Ratio

only for the period from December 31, 2025 through June 30, 2027 to exclude the Waukesha, WI unfinanced capital expenditures attributable

to plant optimization and manufacturing capacity expansion as approved by Lender, up to $50,000 (ii) modification of the Change of Control

definition to reflect that specified changes to the Company’s board of directors do not constitute a Change of Control and (iii)

extended the termination date of the Credit Agreement to February 5, 2029.

The remaining material terms and conditions of the Credit Agreement

remain substantially unchanged.

The Company had no outstanding borrowings at the time of entry into the Sixth Modification.

Organic Milk Supply

To increase the supply of organic milk available

to the Company for the manufacture of finished goods, the Company is purchasing mature dairy cows (or the “herd”) which will

be managed by a third-party dairy facility (the “Dairy”), and entered into a supply and purchase agreement (“SPA”)

with a COOP (the “COOP”) to purchase the milk produced by the herd.

The Company purchased 799 mature dairy cows during 2025

As amended in September 2025, the Company entered

into a sixty month agreement (the “Herd Agreement”) with a third-party Dairy who will manage care of the herd, milk the herd,

and sell the milk to the COOP under the SPA, with a right to purchase the herd at the end of the agreement period for a nominal amount.

Beginning December 1, 2025, the Dairy will make monthly payments to Lifeway over the five year agreement period in exchange for its right

to possess and control the herd, including the right to sell milk produced by the herd to the COOP.

The herd agreement is treated as a sale of non-financial

assets to a party that is not a customer.

The Company will recognize a sale upon the delivery of each herd to the Dairy, with interest

income recognized over the agreement period.

The Company has recorded $635 in prepaid and other current assets and $2,235 in other assets

as of December 31, 2025 related to the herd agreement with no recorded gain or loss on sale.

The Company records the purchases of dairy

cows as investing outflows, principal payments received as investing inflows and interest income as operating inflows on the statement

of cash flows.

Trends and Uncertainties

Current Macroeconomic Environment

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 and transportation of materials used to produce and package our products, staffing, and transportation of our products

to customers.

This proactive planning has allowed the Company to meet increased demand.

We continue to monitor

macroeconomic conditions and global trade developments, including inflation in key input costs, recently implemented tariffs, and the

potential for additional or modified tariffs or export controls.

These evolving global trade policies may contribute to increased supply

chain complexity, commodity cost volatility, and broader economic uncertainty.

We do not currently expect these conditions to have

a material adverse impact on our operations or financial results.

We are primarily a United States based manufacturer sourcing a vast

majority of our inputs domestically.

In addition, all our domestically produced products are sold to customers in the United States.

expect the accelerating consumer focus on health and wellness to drive increased demand for our products.

Results of Operations

Comparison of Year Ended December 31, 2024 to Year

Ended December 31, 2023 (in thousands)

The following table presents certain information concerning

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

Comparison of Year Ended December 31, 2025

to Year Ended December 31, 2024 (in thousands)

The following table presents certain information

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

Year Ended December 31,

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Total cost of goods sold

Selling expenses

General & administrative expenses

Selling expense

General & administrative expense

Amortization expense

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Interest expense

Gain (loss) on sale of property and equipment

Fair Value loss on investment

Gain on sale of investment

Gain (loss) on sale of equipment

Other income (expense), net

Total other income (expense)

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drinkable kefir.

Gross profit as a percentage of net sales decreased

The fiscal year 2024 benefited from a customer relationship we strategically exited in the third quarter of 2024, and

a significant distributor shifting from Lifeway delivered to customer pick-up in late 2024, which resulted in lower net sales and lower

freight out expense.

On a comparable basis adjusting for these two factors, the Company’s net sales increased approximately 19%

in the fiscal year 2025 compared to fiscal year 2024.

Gross profit as a percentage of net sales increased

to 27.4% during the year ended December 31, 2025 from 26.0% during the same period in 2024.

The decrease versus the prior year was driven

by the unfavorable impact of milk pricing, and to a lesser extent the increase in other input costs, partially offset by favorable transportation

The increase versus the prior year was driven

by higher volumes of our branded products, which provided manufacturing efficiencies and the favorable impact of conventional milk pricing.

Selling Expenses

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$2,164 to $21,603 during the year ended December 31, 2025 from $19,439 during the same period in 2024.

Legal and professional fees associated

with non-routine stockholder action and the Danone unsolicited purchase proposal, and the CEO retention bonus awarded in the fourth quarter

of 2024, account for approximately 75% of the increase.

General and administrative stock-based compensation expense increased $784 compared

to the same period in 2023.

The Company incurred approximately

$6,200 of legal and professional fees associated with Danone’s unsolicited purchase proposal and non-routine stockholder action

During 2024, the Company incurred approximately $4,500 of legal and professional fees associated with Danone’s unsolicited

purchase proposal, non-routine stockholder action, and the CEO retention bonus awarded in the fourth quarter of 2024.

Provision for Income Taxes

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state and local income taxes.

The provision for income taxes was $4,944 and $5,282 during the year ended December 31, 2024 and 2023, respectively.

The effective income tax rate was 35.4% in 2024

compared to 31.7% in 2023.

The provision for income taxes was $5,827 and $4,944 during the year ended December 31, 2025, and 2024,

respectively.

The effective income tax rate was 29.6% in 2025 compared to 35.4% in

The statutory federal and state tax rates remained consistent from 2024 to 2025.

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 2024, the percentage effect is different

primarily due to the increase in certain non-deductible compensation in 2024 compared to 2023.

The increase is partially offset by the

difference in pre-tax income in 2024 compared to 2023.

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 2025, the percentage effect is different primarily

due to the decrease in certain non-deductible compensation in 2025 compared to 2024.

The Company’s effective tax rate may change

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exceeds $1 million in any taxable year.

On July 4, 2025, the One Big Beautiful Bill Act

("OBBBA") was signed into law, which includes a broad range of tax reform provisions that may affect the Company’s financial

The OBBBA changes to corporate taxation include, but are not limited to, 100% bonus depreciation for purchases of qualified property,

an elective deduction for domestic research and experimental expenditures, changes to the definition of adjusted taxable income for purposes

of determining the interest deduction limitation under Internal Revenue Code Section 163(j), and a more favorable tax rate on Foreign-Derived

Deduction Eligible Income and income from non-U.S.

subsidiaries (Net CFC Tested Income).

The OBBBA does not have a material impact on

our estimated annual effective tax rate or cash flows in the current fiscal year.

Income taxes are discussed

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Liquidity and Capital Resources

assesses the Company’s liquidity in terms of its ability to generate cash to fund its operating, investing, and financing activities.

The Company remains in a strong financial position, and while it has been impacted by the macroeconomic challenges with commodity inflation

and other input cost increases, the Company believes that its cash flow from operations, revolving credit facility, and cash and cash

equivalents will continue to provide sufficient liquidity for its working capital needs, capital resource requirements, and growth initiatives

and to ensure the continuation of the Company as a going concern.

If additional

borrowings are needed, $5,000 was available under the Revolving Credit Facility as of December 31, 2024 (see Note 7, Debt).

compliance with the terms of the Credit Agreement and expect to meet foreseeable financial requirements.

The success of our business and

financing strategies will continue to provide us with the financial flexibility to take advantage of various opportunities as they arise.

To date, we have been successful in generating cash and obtaining financing as needed.

However, if a serious economic or credit market

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

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.

Management assesses the Company’s

liquidity in terms of its ability to generate cash to fund its operating, investing, and financing activities.

The Company remains in

a strong financial position, and believes that its cash flow from operations, revolving credit facility, and cash and cash equivalents

will continue to provide sufficient liquidity for its working capital needs, capital resource requirements, and growth initiatives and

to ensure the continuation of the Company as a going concern.

If additional borrowings are needed,

$25,000 was available under the Revolving Credit Facility as of December 31, 2025 (see Note 7, Debt).

We are in compliance with the terms

of the Credit Agreement and expect to meet foreseeable financial requirements.

The success of our business and financing strategies will

continue to provide us with the financial flexibility to take advantage of various opportunities as they arise.

To date, we have been

successful in generating cash and obtaining financing as needed.

However, if a serious economic or credit market crisis ensues, it could

have a negative effect on our liquidity, results of operations and financial condition.

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 tax liabilities) as well as expenditures for property, plant and

Long-term cash

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$10,948 in 2025 compared to $12,962 in 2024.

The decrease was primarily due to lower cash earnings driven by non-routine stockholder action, and

the change in working capital.

The decrease was primarily due to the change in working capital.

Investing Activities

Net cash used in investing activities was $6,682 in

2024 compared to $4,410 in 2023.

Net cash used in investing activities was $22,040

in 2025 compared to $6,682 in 2024.

The increase in cash used reflects our planned capital spending increase during 2025 compared to 2024.

Our capital spending is focused in three core areas:

The increase in purchases of property and equipment

is primarily driven by the expansion of manufacturing capacity and modernization of our Waukesha, Wisconsin facility.

This project will

enable Lifeway to meet increasing sales demand and will double the facility’s manufacturing capacity and improve packaging efficiency,

as well as other operational improvements.

The Company currently estimates investing approximately $48,000.

As of December 31, 2025, $21,547

is included on the consolidated balance sheet in property, plant and equipment, with cumulative cash paid of $20,926.

The project will

be funded primarily through cash on-hand and cash flow from operations, with further requirements available under the Company’s

revolving credit facility.

The project is expected to be completed during the fourth fiscal quarter of 2026.

The increase in cash used was partially offset

by cash proceeds of $5,152 received in the first quarter and $54 in the second quarter of 2025 from the sale of our Simple Mills investment.

Our capital spending is focused in three core

growth, cost reduction, and facility improvements.

Growth capital spending supports

increased production capacity, new product innovation and enhancements.

Cost reduction and facility improvements support manufacturing

efficiency, safety, and productivity.

We continue to make capital expenditures primarily to modernize manufacturing facilities and support

productivity initiatives.

Growth capital spending supports capacity expansion and new product innovation

and enhancements.

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

We continue to

make capital expenditures primarily to modernize manufacturing facilities and support productivity initiatives.

Financing Activities

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in 2025 compared to $2,750 in 2024.

The cash used represents the quarterly principal payments under the term loan.

paid the outstanding term loan balance of $2,250 in full during the second quarter of 2024.

The cash used in 2025 represents credit agreement amendment expenses incurred during the first quarter.

The cash used in 2024 represented the quarterly principal payments under the term loan, which was paid in full during the second quarter

Debt Obligations

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certain of its subsidiaries.

The Credit Agreement provides for, among other things, a $5,000 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 $5,000 (the “Revolving Credit

Facility”) and an incremental facility not to exceed $5,000.

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

The term loan was terminated during the second quarter of 2024 upon payment of the outstanding loan balance in full.

The termination

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

The Credit Agreement provides for, among other things, a revolving line of credit up to a maximum of $25,000

(the “Revolving Credit Facility”) and an incremental facility not to exceed $5,000.

The termination date of the revolving

credit facility is February 5, 2029, unless earlier terminated.

As of December 31, 2025, the Company had $0 outstanding

under the Revolving Credit Facility and note payable.

The Company had $5,000 available for future borrowings under the Revolving Credit

Facility as of December 31, 2024.

All outstanding amounts under the loans bear interest

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

under the Revolving Credit Facility.

The Company had $25,000 available for future borrowings under the Revolving Credit Facility as of

December 31, 2025.

All outstanding amounts under the revolving line

of credit bear interest at the Secured Overnight Financing Rate (“SOFR”), plus 1.75%.

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%.

Lifeway is also required to pay a quarterly unused line fee of 0.25% on the Revolving Credit Facility, and in conjunction with the issuance

of any letters of credit, a letter of credit fee of 1.00%.

The Credit Agreement includes customary representations,

warranties, and covenants, including financial covenants requiring the Company to maintain a fixed charge coverage ratio of no less than

1.25 to 1.00, and a maximum cash flow leverage ratio of no greater than 2.00 to 1.00 for each fiscal quarter commencing with the fiscal

quarter ending March 31, 2025.

The Company is in compliance with all applicable

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We do not have any off-balance sheet financing

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

arrangements.

Critical Accounting Estimates

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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.

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

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”).

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.

Our assessment did not result in 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

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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 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

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Share-based compensation

Certain employees and non-employee directors receive

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

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.

Certain members of management and non-employee

directors receive various forms of share-based payment awards, and we recognize compensation expense for these awards based on their grant

date fair values.

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 2025 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.

The PSU 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 management’s 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.

See Note 11 to our consolidated

financial statements for further detail.

We pay income taxes based on tax statutes, regulations,

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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