What changed in this filing

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Item 1. Financial Statements

2023-10-24 compared with 2023-07-25 · 90 added, 68 removed, 400 unchanged (28% of the section changed)

4 unchanged sentences

(Amounts in thousands, except share amounts) As of

September 30,

2023 December 31,

1 unchanged sentence

Cash and cash equivalents $ 95,207 $ 28,265

Accounts receivable and unbilled, net (includes $ 4.6 million and $ 7.7 million with related parties at June 30, 2023 and December 31, 2022, respectively)

Accounts receivable and unbilled, net (includes $ 2.2 million and $ 7.7 million with related parties at September 30, 2023 and December 31, 2022, respectively)

292,773 253,404

10 unchanged sentences

Current liabilities:

Accounts payable (includes $ 4.7 million and $ 0.3 million with related parties at June 30, 2023 and December 31, 2022, respectively)

Accounts payable (includes $ 3.1 million and $ 0.3 million with related parties at September 30, 2023 and December 31, 2022, respectively)

$ 29,023 $ 33,069

Accrued expenses 264,785 210,125

Advanced billings (includes $ 14.3 million and $ 8.8 million with related parties at June 30, 2023 and December 31, 2022, respectively)

Advanced billings (includes $ 13.4 million and $ 8.8 million with related parties at September 30, 2023 and December 31, 2022, respectively)

518,755 462,729

Short-term debt — 50,000

Other current liabilities (includes $ 9.0 million and $ 12.5 million with related parties at June 30, 2023 and December 31, 2022, respectively)

Other current liabilities (includes $ 12.5 million with related parties at December 31, 2022)

35,955 47,547

8 unchanged sentences

5,000,000 shares authorized;

no shares issued and outstanding at June 30, 2023 and December 31, 2022, respectively

no shares issued and outstanding at September 30, 2023 and December 31, 2022, respectively

Common stock - $ 0.01 par-value;

250,000,000 shares authorized at June 30, 2023 and December 31, 2022, respectively;

30,562,773 and 31,091,694 shares issued and outstanding at June 30, 2023 and December 31, 2022, respectively

Treasury stock - 70,573 and 71,573 shares at June 30, 2023 and December 31, 2022, respectively

250,000,000 shares authorized at September 30, 2023 and December 31, 2022, respectively;

30,682,157 and 31,091,694 shares issued and outstanding at September 30, 2023 and December 31, 2022, respectively

Treasury stock - 70,573 and 71,573 shares at September 30, 2023 and December 31, 2022, respectively

( 12,322 ) ( 12,497 )

9 unchanged sentences

(Amounts in thousands, except per share amounts) Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2023 2022 2023 2022

Revenue, net (includes $ 13.3 million and $ 17.2 million with related parties for the three months ended June 30, 2023 and 2022, respectively, and $ 29.1 million and $ 30.5 million with related parties for the six months ended June 30, 2023 and 2022, respectively)

Revenue, net (includes $ 15.5 million and $ 9.8 million with related parties for the three months ended September 30, 2023 and 2022, respectively, and $ 44.6 million and $ 40.3 million with related parties for the nine months ended September 30, 2023 and 2022, respectively)

$ 492,499 $ 383,744 $ 1,387,441 $ 1,065,898

26 unchanged sentences

(Amounts in thousands) Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2023 2022 2023 2022

25 unchanged sentences

BALANCE — June 30, 2022 $ 309 $ ( 14,243 ) $ 753,300 $ ( 446,142 ) $ ( 9,972 ) $ 283,252

Net income 66,027 66,027

Foreign currency translation ( 6,080 ) ( 6,080 )

Stock-based compensation expense 5,794 5,794

Stock options exercised 892 892

BALANCE — September 30, 2022 $ 309 $ ( 14,243 ) $ 759,986 $ ( 380,115 ) $ ( 16,052 ) $ 349,885

Treasury Stock

15 unchanged sentences

BALANCE — June 30, 2023 $ 306 $ ( 12,322 ) $ 785,292 $ ( 371,022 ) $ ( 11,194 ) $ 391,060

Net income 70,550 70,550

Foreign currency translation ( 1,676 ) ( 1,676 )

Stock-based compensation expense 5,007 5,007

Stock options exercised 1 5,695 5,696

Repurchases of common stock 275 275

BALANCE — September 30, 2023 $ 307 $ ( 12,322 ) $ 795,994 $ ( 300,197 ) $ ( 12,870 ) $ 470,912

See notes to condensed consolidated financial statements.

2 unchanged sentences

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

(Amounts in thousands) Six Months Ended

(Amounts in thousands) Nine Months Ended

September 30,

CASH FLOWS FROM OPERATING ACTIVITIES:

37 unchanged sentences

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

June 30, 2023

September 30, 2023

(1) Basis of Presentation

15 unchanged sentences

In 2018, the Board of Directors approved a stock repurchase program which has been amended several times to increase the aggregate amount of the stock repurchase authorization.

During the three and six months ended June 30, 2022, the Company repurchased 2,717,379 shares and 5,463,244 shares for $ 374.6 million and $ 800.5 million, respectively.

During the nine months ended September 30, 2022, the Company repurchased 5,463,244 shares for $ 800.5 million.

In the fourth quarter of 2022, the Board approved a new stock repurchase program of up to $ 500.0 million.

During the three and six months ended June 30, 2023, the Company repurchased 126,281 shares and 781,068 shares for $ 23.9 million and $ 144.0 million, respectively.

As of June 30, 2023, we have remaining authorization of $ 308.8 million under the new repurchase program.

The Company did no t execute any share repurchases during the three months ended September 30, 2023.

During the nine months ended September 30, 2023, the Company repurchased 781,068 shares for $ 144.0 million.

As of September 30, 2023, we have remaining authorization of $ 308.8 million under the new repurchase program.

Repurchases under the share repurchase program are executed in the open market or negotiated transactions under trading plans put in place pursuant to Rule 10b5-1.

7 unchanged sentences

The Company does not compute diluted EPS in cases where the inclusion of such additional shares would be anti-dilutive in effect.

The following table sets forth the computation of basic and diluted earnings per share for the three and six months ended June 30, 2023 and 2022 (in thousands, except for earnings per share):

The following table sets forth the computation of basic and diluted earnings per share for the three and nine months ended September 30, 2023 and 2022 (in thousands, except for earnings per share):

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2023 2022 2023 2022

12 unchanged sentences

Net income per common share—Diluted $ 2.22 $ 2.05 $ 6.42 $ 5.18

During the three and six months ended June 30, 2023, the Company had (in thousands) 16.7 stock options, respectively, that were excluded due to the exercise price exceeding the average fair value of the Company’s common stock during the period.

During the three and six months ended June 30, 2022, the Company had (in thousands) 274.4 stock options, respectively, that were excluded due to the exercise price exceeding the average fair value of the Company’s common stock during the period.

During the nine months ended September 30, 2023, the Company had (in thousands) 0.6 stock options that were excluded due to the exercise price exceeding the average fair value of the Company’s common stock during the period.

During the three and nine months ended September 30, 2022, the Company had (in thousands) 274.4 stock options, respectively, that were excluded due to the exercise price exceeding the average fair value of the Company’s common stock during the period.

(3) Fair Value Measurements

6 unchanged sentences

The fair value of financial instruments such as cash and cash equivalents, accounts receivable and unbilled, net, accounts payable, accrued expenses and advanced billings approximate their carrying amounts due to their short term maturities.

The Company does not have material recurring fair value measurements as of June 30, 2023.

There were no transfers between Level 1, Level 2 or Level 3 during the three and six months ended June 30, 2023 or June 30, 2022.

The Company does not have material recurring fair value measurements as of September 30, 2023.

There were no material transfers between Level 1, Level 2 or Level 3 during the three and nine months ended September 30, 2023 or September 30, 2022.

(4) Contract Assets and Contract Liabilities

6 unchanged sentences

Accounts receivable and unbilled, net consisted of the following (in thousands):

September 30,

2023 December 31,

6 unchanged sentences

Advanced billings consisted of the following (in thousands):

September 30,

2023 December 31,

Advanced billings $ 518,755 $ 462,729

As of June 30, 2023, we had approximately $ 2.9 billion of performance obligations remaining to be performed for active projects.

As of September 30, 2023, we had approximately $ 2.8 billion of performance obligations remaining to be performed for active projects.

(5) Intangible Assets, Net

Intangible assets, net consisted of the following (in thousands):

September 30,

2023 December 31,

8 unchanged sentences

Total intangible assets, net $ 36,359 $ 38,008

As of June 30, 2023, estimated amortization expense of the Company’s intangible assets for each of the next five years and thereafter is as follows (in thousands):

As of September 30, 2023, estimated amortization expense of the Company’s intangible assets for each of the next five years and thereafter is as follows (in thousands):

Remainder of 2023

1 unchanged sentence

Accrued expenses consisted of the following (in thousands):

September 30,

2023 December 31,

5 unchanged sentences

Short-term debt consisted of the following (in thousands):

September 30,

2023 December 31,

1 unchanged sentence

Short-term debt $ — $ 50,000

Principal payments on Short-term debt are due as follows (in thousands):

2023 (remaining)

Total $ 55,000

The estimated fair value of the Company’s debt based on Level 2 inputs using the market approach, which is primarily based on rates at which the debt is traded among financial institutions, approximates the carrying value as of June 30, 2023 and December 31, 2022.

On September 30, 2019 (the “Closing Date”), the Company obtained an unsecured credit facility in an aggregate principal amount up to $ 50.0 million (as amended from time to time, the “Credit Facility”) through its wholly owned subsidiaries, Medpace, Inc., as borrower (the “Borrower”), and Medpace IntermediateCo, Inc., as guarantor (the “Guarantor”).

5 unchanged sentences

The Credit Facility bears interest at a rate of the sum of The Secured Overnight Financing Rate (SOFR) plus 125 basis points ( 1.25 %) or the highest of the Prime Rate, the sum of the Overnight Bank Funding Rate plus 50 basis points ( 0.50 %) and the sum of Daily Simple SOFR plus 100 basis points ( 1.00 %).

As of June 30, 2023, the Credit Facility interest rate was 6.3 %.

The Loan Agreement contains other customary loan terms, representations and warranties, and affirmative and negative covenants, in each case, subject to customary limitations, exceptions and exclusions.

The Loan Agreement contains certain events of default, including, among others, non-payment of principal or interest and breach of the covenants.

As of June 30, 2023, there were $ 0.2 million in letters of credit outstanding related to certain operating lease obligations, which are secured by the Credit Facility.

As of September 30, 2023, there were less than $ 0.1 million in letters of credit outstanding related to certain operating lease obligations, which are secured by the Credit Facility.

The Company enters into leases for real estate and equipment.

4 unchanged sentences

The components of lease expense were as follows (in thousands):

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2023 2022 2023 2022

2 unchanged sentences

Supplemental cash flow information related to the leases was as follows (in thousands):

Six Months Ended June 30,

Nine Months Ended September 30,

Cash paid for amounts included in the measurement of lease liabilities:

3 unchanged sentences

Supplemental balance sheet information related to the leases was as follows (in thousands):

September 30,

2023 December 31,

13 unchanged sentences

Operating leases 5.4 % 5.2 %

Lease payments due related to lease liabilities as of June 30, 2023 were as follows (in thousands):

Lease payments due related to lease liabilities as of September 30, 2023 were as follows (in thousands):

Related Party

13 unchanged sentences

Total $ 97,641 $ 65,676 $ 163,317

As of June 30, 2023, we have several additional leases with contractual obligations, which have not yet commenced, with future payments of $ 0.6 million.

As of September 30, 2023, we have several additional leases with contractual obligations, which have not yet commenced, with future payments of $ 4.6 million.

(9) Shareholder’s Equity and Stock-Based Compensation

The Company granted 28,412 awards to employees under the 2016 Incentive Award Plan during the six months ended June 30, 2023, consisting of 27,162 RSU and 1,250 stock option awards having four year vesting schedules.

The Company granted an additional 11,187 stock option awards to non-employee directors under the 2016 Incentive Award Plan, during the six months ended June 30, 2023.

The Company granted 38,188 awards to employees under the 2016 Incentive Award Plan during the nine months ended September 30, 2023, consisting of 36,938 RSU and 1,250 stock option awards having four year vesting schedules.

The Company granted an additional 11,187 stock option awards to non-employee directors under the 2016 Incentive Award Plan, during the nine months ended September 30, 2023.

These awards are scheduled to vest on the earlier of (a) the day immediately preceding the date of the first annual meeting following the date of grant and (b) the first anniversary of the date of grant, subject to the non-employee director continuing in service through the applicable vesting date.

1 unchanged sentence

The following table sets forth the Company’s stock option activity:

Six Months Ended June 30, 2023

Nine Months Ended September 30, 2023

Stock Options Weighted Average

7 unchanged sentences

The following table sets forth the Company’s RSA/RSU activity:

Six Months Ended

June 30, 2023

Nine Months Ended

September 30, 2023

Outstanding and unvested - beginning of period 523,377

5 unchanged sentences

Stock-based compensation expense recognized in the condensed consolidated statements of operations related to all outstanding stock based compensation awards is summarized below (in thousands):

Three Months Ended June 30, Six Months Ended June 30,

Three Months Ended September 30, Nine Months Ended September 30,

2023 2022 2023 2022

3 unchanged sentences

(10) Income Taxes

The Company’s effective income tax rate was 19.4 % and 20.4 % for the three months ended June 30, 2023 and 2022, respectively.

The Company's effective income tax rate was 17.2 % and 13.1 % for the six months ended June 30, 2023 and 2022, respectively.

The Company’s effective income tax rate for the three months ended June 30, 2023 and the six months ended June 30, 2023 varied from the U.S.

The Company’s effective income tax rate was 15.2 % and 19.4 % for the three months ended September 30, 2023 and 2022, respectively.

The Company's effective income tax rate was 16.5 % and 15.5 % for the nine months ended September 30, 2023 and 2022, respectively.

The Company’s effective income tax rate for the three months ended September 30, 2023 and the nine months ended September 30, 2023 varied from the U.S.

statutory rate of 21 % primarily due to the impact of the state taxes, which was favorably offset by excess tax benefits recognized from share-based compensation and tax benefits related to Foreign Derived Intangible Income (FDII).

2 unchanged sentences

The Company is involved in legal proceedings from time to time in the ordinary course of its business, including employment claims and claims related to other business transactions.

The Company cannot predict with certainty the outcome of such proceedings, but it believes that adequate reserves have been recorded and losses already recognized with respect to such proceedings, which were immaterial as of June 30, 2023 and December 31, 2022.

There is a reasonable possibility that a loss exceeding amounts already recognized may be incurred related to these actions;

however, the Company believes that such potential losses were immaterial as of June 30, 2023.

however, the Company believes that such potential losses were immaterial as of September 30, 2023.

Purchase Commitments

The Company has several minimum purchase commitments for project related supplies totaling $ 17.1 million as of June 30, 2023.

The Company has several minimum purchase commitments for project related supplies totaling $ 16.9 million as of September 30, 2023.

In return for the commitment, Medpace receives preferential pricing.

3 unchanged sentences

The Company periodically extends short term loans or advances to employees, typically upon commencement of employment.

Total receivables as a result of these employee advances of $ 0.3 million existed at June 30, 2023 and December 31, 2022, respectively, and are included in the Prepaid expenses and other current assets and Other assets line items of the condensed consolidated balance sheets, respectively, depending on the contractual repayment date.

Total receivables as a result of these employee advances of $ 0.3 million existed at September 30, 2023 and December 31, 2022, respectively, and are included in the Prepaid expenses and other current assets and Other assets line items of the condensed consolidated balance sheets, respectively, depending on the contractual repayment date.

Service Agreement

3 unchanged sentences

Subsequently, the Company and LIB have entered into several task orders for the Company to perform clinical trial related services.

The Company recognized total revenue from LIB of $ 9.7 million during the three months ended June 30, 2023 and 2022, respectively, and $ 23.0 million and $ 17.1 million during the six months ended June 30, 2023 and 2022, respectively, in the Company’s condensed consolidated statements of operations.

As of June 30, 2023 and December 31, 2022, respectively, the Company had Advanced billings from LIB of $ 11.6 million and $ 7.4 million in the condensed consolidated balance sheets.

In addition, as of June 30, 2023 and December 31, 2022, respectively, the Company had Accounts receivable and unbilled, net from LIB of $ 3.1 million and $ 5.5 million in the condensed consolidated balance sheets.

The Company had Other current liabilities with LIB of $ 9.0 million and $ 12.5 million in the consolidated balance sheets at June 30, 2023 and December 31, 2022.

The Company recognized total revenue from LIB of $ 10.1 million and $ 9.5 million during the three months ended September 30, 2023 and 2022, respectively, and $ 33.1 million and $ 26.6 million during the nine months ended September 30, 2023 and 2022, respectively, in the Company’s condensed consolidated statements of operations.

As of September 30, 2023 and December 31, 2022, respectively, the Company had Advanced billings from LIB of $ 10.6 million and $ 7.4 million in the condensed consolidated balance sheets.

In addition, as of September 30, 2023 and December 31, 2022, respectively, the Company had Accounts receivable and unbilled, net from LIB of $ 0.7 million and $ 5.5 million in the condensed consolidated balance sheets.

The Company had Other current liabilities with LIB of $ 12.5 million in the condensed consolidated balance sheets at December 31, 2022.

CinRX Pharma, subsidiaries and affiliates (“CinRx”)

1 unchanged sentence

The Company and CinRx have entered into several task orders for the Company to perform clinical trial related services.

The Company recognized total revenue from CinRx of $ 3.6 million and $ 7.5 million during the three months ended June 30, 2023 and 2022, respectively, and $ 6.1 million and $ 13.3 million during the six months ended June 30, 2023 and 2022, respectively, in the Company’s condensed consolidated statements of operations.

As of June 30, 2023 and December 31, 2022, respectively, the Company had Advanced billings from CinRx of $ 2.7 million and $ 1.4 million in the condensed consolidated balance sheets.

As of June 30, 2023 and December 31, 2022 the Company had Accounts receivable and unbilled, net from CinRx of $ 1.6 million and $ 2.2 million, respectively, in the condensed consolidated balance sheets.

The Company recognized total revenue from CinRx of $ 5.3 million and $ 0.5 million during the three months ended September 30, 2023 and 2022, respectively, and $ 11.4 million and $ 13.8 million during the nine months ended September 30, 2023 and 2022, respectively, in the Company’s condensed consolidated statements of operations.

As of September 30, 2023 and December 31, 2022, respectively, the Company had Advanced billings from CinRx of $ 2.8 million and $ 1.4 million in the condensed consolidated balance sheets.

As of September 30, 2023 and December 31, 2022 the Company had Accounts receivable and unbilled, net from CinRx of $ 1.5 million and $ 2.2 million, respectively, in the condensed consolidated balance sheets.

Certain affiliates of CinRx included in previous reported quarters are no longer disclosed due to changes in the affiliate relationships.

2 unchanged sentences

Medpace incurs travel lodging and meeting expenses at The Summit.

Medpace incurred expenses of $ 0.1 million and less than $ 0.1 million during the three months ended June 30, 2023 and 2022, respectively, and $ 0.2 million and $ 0.1 million during the six months ended June 30, 2023 and 2022 at The Summit, respectively.

Medpace incurred expenses of $ 0.1 million during the three months ended September 30, 2023 and 2022, respectively, and $ 0.3 million and $ 0.2 million during the nine months ended September 30, 2023 and 2022 at The Summit, respectively.

Leased Real Estate

5 unchanged sentences

Annual base rent for its corporate headquarters allows for adjustments to the rental rate annually for increases in the consumer price index.

Operating lease cost recognized for the three months ended June 30, 2023 and 2022 was $ 0.7 million and $ 0.5 million and $ 1.3 million and $ 1.1 million for the six months ended June 30, 2023 and 2022, respectively.

The Company has determined that the lease is an operating lease.

Operating lease cost recognized for the three months ended September 30, 2023 and 2022 was $ 0.7 million and $ 0.6 million and $ 2.0 million and $ 1.7 million for the nine months ended September 30, 2023 and 2022, respectively.

The operating lease cost was allocated between Total direct costs and Selling, general and administrative in the condensed consolidated statements of operations.

The Operating lease right-of-use assets at June 30, 2023 and December 31, 2022 were $ 20.2 million and $ 18.2 million, respectively, in the condensed consolidated balance sheets.

The current and long-term portions of the lease liabilities at June 30, 2023 were $ 1.4 million and $ 18.9 million, respectively, and were recognized in Other current liabilities and Operating lease liabilities in the condensed consolidated balance sheets.

The Operating lease right-of-use assets at September 30, 2023 and December 31, 2022 were $ 19.8 million and $ 18.2 million, respectively, in the condensed consolidated balance sheets.

The current and long-term portions of the lease liabilities at September 30, 2023 were $ 1.4 million and $ 18.5 million, respectively, and were recognized in Other current liabilities and Operating lease liabilities in the condensed consolidated balance sheets.

The current and long-term portions of the lease liabilities at December 31, 2022 were $ 1.5 million and $ 16.7 million, respectively, and were recognized in Other current liabilities and Operating lease liabilities in the condensed consolidated balance sheets.

6 unchanged sentences

The Company has determined that the lease is an operating lease.

Operating lease cost recognized for the three months ended June 30, 2023 and 2022 was $ 1.4 million and $ 2.8 million for the six months ended June 30, 2023 and 2022.

Operating lease cost recognized for the three months ended September 30, 2023 and 2022 was $ 1.5 million and $ 4.3 million for the nine months ended September 30, 2023 and 2022.

The operating lease cost was allocated between Total direct costs and Selling, general and administrative in the condensed consolidated statements of operations.

The Operating lease right-of-use assets at June 30, 2023 and December 31, 2022 were $ 52.7 million and $ 53.5 million, respectively, in the condensed consolidated balance sheets.

The current and long-term portions of the lease liabilities at June 30, 2023 were $ 1.2 million and $ 64.2 million, respectively, and were recognized in Other current liabilities and Operating lease liabilities in the condensed consolidated balance sheets.

The Operating lease right-of-use assets at September 30, 2023 and December 31, 2022 were $ 52.3 million and $ 53.5 million, respectively, in the condensed consolidated balance sheets.

The current and long-term portions of the lease liabilities at September 30, 2023 were $ 1.2 million and $ 63.9 million, respectively, and were recognized in Other current liabilities and Operating lease liabilities in the condensed consolidated balance sheets.

The current and long-term portions of the lease liabilities at December 31, 2022 were $ 1.1 million and $ 64.8 million, respectively and were recognized in Other current liabilities and Operating lease liabilities in the condensed consolidated balance sheets.

4 unchanged sentences

The Company has determined that the leases are operating leases.

Operating lease cost recognized for the three months ended June 30, 2023 and 2022 was $ 0.9 million and $ 1.8 million for the six months ended June 30, 2023 and 2022.

Operating lease cost recognized for the three months ended September 30, 2023 and 2022 was $ 0.9 million and $ 2.7 million for the nine months ended September 30, 2023 and 2022.

The operating lease cost was allocated between Total direct costs and Selling, general and administrative in the condensed consolidated statements of operations.

The Operating lease right-of-use assets at June 30, 2023 and December 31, 2022 were $ 13.3 million and $ 14.6 million, respectively, in the condensed consolidated balance sheets.

The current and long-term portions of the lease liabilities at June 30, 2023 were $ 2.9 million and $ 10.4 million, respectively, and were recognized in Other current liabilities and Operating lease liabilities in the condensed consolidated balance sheets.

The Operating lease right-of-use assets at September 30, 2023 and December 31, 2022 were $ 12.6 million and $ 14.6 million, respectively, in the condensed consolidated balance sheets.

The current and long-term portions of the lease liabilities at September 30, 2023 were $ 2.9 million and $ 9.7 million, respectively, and were recognized in Other current liabilities and Operating lease liabilities in the condensed consolidated balance sheets.

The current and long-term portions of the lease liabilities at December 31, 2022 were $ 2.8 million and $ 11.9 million, respectively, and were recognized in Other current liabilities and Operating lease liabilities in the condensed consolidated balance sheets.

1 unchanged sentence

The Company incurs expenses for travel services for company executives provided by private aviation charter companies which is a company controlled by the chief executive officer of the Company (each a “private aviation charter”).

The Company may contract directly with the private aviation charter for the use of its aircraft or indirectly through a third party aircraft management and jet charter company (the “Aircraft Management Company”).

The Company may contract directly with the private aviation charter for the use of its aircraft or indirectly through a third party

aircraft management and jet charter company (the “Aircraft Management Company”).

The travel services provided are primarily for business purposes, with certain personal travel paid for as part of the executives’ compensation arrangements.

The Aircraft Management Company also makes the private aviation charter aircraft available to third parties.

The Company incurred travel expenses of $ 0.4 million and $ 0.6 million during the three months ended June 30, 2023 and 2022, respectively, and $ 0.8 million and $ 1.0 million during the six months ended June 30, 2023 and 2022, respectively, related to these travel services.

The Company incurred travel expenses of $ 0.7 million and $ 0.6 million during the three months ended September 30, 2023 and 2022, respectively, and $ 1.5 million and $ 1.6 million during the nine months ended September 30, 2023 and 2022, respectively, related to these travel services.

These travel expenses are recorded in Selling, general and administrative in the Company’s condensed consolidated statements of operations.

As of June 30, 2023 and December 31, 2022, the Company had Accounts payable to the Aircraft Management Company of $ 0.4 million and $ 0.3 million, respectively, in the condensed consolidated balance sheets.

As of September 30, 2023 and December 31, 2022, the Company had Accounts payable to the Aircraft Management Company of $ 0.3 million, respectively, in the condensed consolidated balance sheets.

(13) Entity Wide Disclosures

2 unchanged sentences

Three Months Ended

June 30, Six Months Ended

September 30, Nine Months Ended

September 30,

2023 2022 2023 2022

8 unchanged sentences

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 1. Financial Statements