What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-08-07 compared with 2025-05-08 · 88 added, 56 removed, 115 unchanged (56% of the section changed)

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• our manufacturing practices and ability to deliver both products and services consistent with our customers’ demands and expectations and to strengthen our market position, including our ability to source components, materials, and equipment due to supply chain delays or shortages;

• the proposed acquisition of Semilab USA LLC (“Semilab USA”);

• our expectations of the semiconductor market outlook;

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• our ability to be successful in managing our cost structure and cash expenditures and results of litigation.

Statements contained or incorporated by reference in this Form 10-Q that are not purely historical are forward-looking statements and are subject to safe harbors under Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the Private Securities Litigation Reform Act of 1995.

Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the Private Securities Litigation Reform Act of 1995.

Forward-looking statements may be identified by words such as, but not limited to, “anticipate,” “believe,” “continue,” “estimate,” “expect,” “intend,” “plan,” “should,” “may,” “could,” “will,” “would,” “forecast,” “project” and words or phrases of similar meaning, as they relate to our management or us.

Forward-looking statements contained herein reflect our current expectations, assumptions and projections with respect to future events and are subject to certain risks, uncertainties and assumptions, including, but not limited to, those identified in Part II, Item 1A.

“Risk Factors” and elsewhere in this Form 10-Q.

Actual results may differ materially and adversely from those included in such forward-looking statements.

Actual results may differ materially and adversely from those included in such forward-looking statements as a result of various factors, including risks and uncertainties, many of which are beyond Onto Innovation’s control.

Such factors include, but are not limited to, the Company’s ability to leverage its resources to improve its position in its core markets;

its ability to weather difficult economic environments;

its ability to open new market opportunities and target high-margin markets;

the strength/weakness of the back-end and/or front-end semiconductor market segments;

fluctuations in customer capital spending;

the Company’s ability to effectively manage its supply chain and adequately source components from suppliers to meet customer demand;

the effects of political, economic, legal, and regulatory changes, including tariffs and trade disputes, or conflicts on the Company’s global operations;

the Company’s ability to adequately protect its intellectual property rights and maintain data security;

the effects of natural disasters or public health emergencies on the global economy and on the Company’s customers, suppliers, employees, and business;

its ability to effectively maneuver global trade issues and changes in trade and export regulations, tariffs and license policies;

the Company’s ability to maintain relationships with its customers and manage appropriate levels of inventory to meet customer demands;

failure to consummate or a delay in consummating the acquisition of Semilab USA, including as a result of any failure to obtain the necessary regulatory approvals or to satisfy any of the other conditions to the proposed transaction on a timely basis or at all;

and the Company’s ability to successfully integrate acquired businesses and technologies, including the business of Semilab USA and to realize the anticipated benefits of such acquisitions.

Additional information and considerations regarding the risks faced by Onto Innovation are available in our Annual Report on Form 10-K for the fiscal year ended December 28, 2024 (the “2024 Form 10-K”) filed with the Securities and Exchange Commission (the “SEC”) on February 25, 2025, in Part II, Item 1A.

“Risk Factors” and elsewhere in this Form 10-Q, and in the other filings that we make with the SEC from time to time.

Forward-looking statements reflect our position as of the date of this Form 10-Q and we undertake no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

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In addition, management is periodically faced with uncertainties, the outcomes of which are not within our control and will not be known for prolonged periods of time.

Certain of these uncertainties are discussed in our Annual Report on Form 10-K for the fiscal year ended December 28, 2024 (the “2024 Form 10-K”) filed with the Securities and Exchange Commission (the “SEC”) on February 25, 2025 in the Items entitled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” There have been no material changes in our critical accounting estimates from the information presented in Part II, Item 7.

Certain of these uncertainties are discussed in the 2024 Form 10-K filed with the Securities and Exchange Commission (the “SEC”) on February 25, 2025 in the Items entitled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” There have been no material changes in our critical accounting estimates from the information presented in Part II, Item 7.

“Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the 2024 Form 10-K.

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Three Months Ended

December 28, 2024

(in thousands, except for percentages and per share data)

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Diluted earnings per share

• In the fiscal quarter ended March 29, 2025 (the “March 2025 quarter”), revenue increased 1% compared to the fiscal quarter ended December 28, 2024 (the “December 2024 quarter”), primarily due to higher sales of our metrology systems to DRAM and NAND customers, partially offset by lower sales of our inspection systems.

• Gross profit as a percentage of revenue for the March 2025 quarter increased by 4% compared to the December 2024 quarter primarily due to increased volume and favorable change in product mix in the 2025 period and inventory write-downs causing comparatively lower margins during the 2024 period.

• Operating expenses for the March 2025 quarter decreased by 10.9% compared to the December 2024 quarter primarily due to the write off of in process research and development in the December 2024 quarter.

Our cash, cash equivalents and marketable securities balance decreased to $850.6 million at March 29, 2025, compared to $852.3 million at December 28, 2024.

This decrease was primarily the result of cash used for purchases of our common stock of $75.0 million, $8.7 million for tax payments related to net share settlement of employee stock-based compensation plans, capital expenditures of $8.2 million and purchases of non-marketable equity securities of $8.0 million, partially offset by $92.0 million of cash generated from operating activities and $4.2 million of cash from issuance of shares through share-based compensation plans.

Employee headcount at March 29, 2025 was approximately 1,555.

In recent years, the United States government implemented additional export regulations for U.S.

semiconductor technology sold in China.

We have applied for export licenses to continue doing business with our customers that are affected by the export rules.

However, the export controls have contributed to lower net sales in China for the first fiscal quarter of 2025 compared to the same period in the prior year.

• In the fiscal quarter ended June 28, 2025 (the “June 2025 quarter”), revenue decreased 5% compared to the fiscal quarter ended March 29, 2025 (the “March 2025 quarter”), primarily due to lower sales to OSAT, foundry and power customers in the specialty device and advanced packaging market.

• Gross profit as a percentage of revenue for the June 2025 quarter decreased by 6% compared to the March 2025 quarter primarily due to the write down of excess and obsolete inventory.

• Operating expenses for the June 2025 quarter increased by 12% compared to the March 2025 quarter primarily due to an increase in restructuring expenses, research and development project costs, and compensation cost.

Our cash, cash equivalents and marketable securities balance increased to $894.9 million at June 28, 2025, compared to $852.3 million at December 28, 2024.

This increase was primarily the result of $149.9 million of cash generated from operating activities and $4.2 million of cash from issuance of shares through share-based compensation plans, partially offset by cash used for purchases of our common stock of $75.0 million, capital expenditures of $22.0 million, $12.4 million for tax payments related to net share settlement of employee stock-based compensation plans and purchases of non-marketable equity securities of $8.0 million.

Employee headcount at June 28, 2025 was approximately 1,589.

On June 27, 2025, we entered into a definitive agreement to acquire all the outstanding membership interests of Semilab USA from Semilab International Zrt.

(“Semilab”), for $475.0 million in cash (subject to certain customary purchase price adjustments) and 706,215 shares of our common stock.

Based on the closing price of Onto Innovation’s common stock on June 27, 2025, the total transaction value is approximately $545.0 million.

The transaction is expected to close in the second half of 2025, subject to the satisfaction of customary closing conditions, including U.S.

and Hungarian regulatory approvals.

See Note 2, “Acquisitions,” in the Notes to the Condensed Consolidated Financial Statements contained in Part I, Item 1 of this Quarterly Report on Form 10-Q for further information.

The United States government has implemented export regulations for U.S.

semiconductor technology sold or provided to customers in China, which have limited our ability to provide certain products and services to customers in China, over the past several years.

government continues to issue new export licensing requirements, and additional updates and other requirements that have had the effect of further limiting our ability to provide certain products and services to customers outside the U.S., including in China.

The recent imposition of tariffs by the U.S.

government, and countermeasures taken by foreign countries, are likely to have an adverse impact on our business in the near-term.

government, and countermeasures taken by foreign countries, has had and will likely continue to have an adverse impact on our business in the near-term.

The full extent of the impact is currently uncertain and will depend both on future developments in global trade policy and the extent to which our efforts to mitigate tariffs impacts are successful.

We are continuously assessing the impact of tariffs and related governmental actions on our business.

For a discussion of the risks related to our business and operations, see Part II, Item 1A – Risk Factors of this Form 10-Q.

Results of Operations for the Three Months Ended March 29, 2025 and March 30, 2024

For a discussion of the risks related to our business and operations, see Part I, Item 1A – Risk Factors of the 2024 Form 10-K and Part II, Item 1A – Risk Factors of this Form 10-Q.

Results of Operations for the Three and Six Months Ended June 28, 2025 and June 29, 2024

Our revenue is primarily derived from the sale of our systems, software licensing, services and spare parts.

Our revenue of $266.6 million increased 16.5% for the three months ended March 29, 2025 as compared to the three months ended March 30, 2024, for which revenue totaled $228.8 million.

Our revenue of $253.6 million increased 4.7% for the three months ended June 28, 2025 as compared to the three months ended June 29, 2024, for which revenue totaled $242.3 million.

For the six-months ended June 28, 2025 and June 29, 2024, our revenue totaled $520.2 million and $471.2 million, respectively, representing a year-over-year increase of 10.4%.

The following table lists, for the periods indicated, the different sources of our revenue in dollars and as percentages of our total revenue:

Three Months Ended

Six Months Ended

(in thousands, except for percentages)

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Total revenue

Total systems and software revenue increased $36.3 million for the three months ended March 29, 2025, as compared to the three months ended March 30, 2024.

The increase for the three months ended March 29, 2025 was primarily attributed to increased shipments of our metrology product lines to DRAM and NAND customers, partially offset by decline in shipments of our inspection and lithography products to specialty device and advanced packaging customers.

The increase in total parts and services revenue for the three months ended March 29, 2025, as compared to the three months ended March 30, 2024, was primarily due to higher service contract and system upgrade revenue, partially offset by lower parts sales.

Parts and services revenue is generated from part sales, maintenance service contracts, and system upgrades, as well as time and material billable service calls.

Total systems and software revenue increased $4.1 million and $40.4 million for the three and six months ended June 28, 2025, respectively, as compared to the three and six months ended June 29, 2024.

The increases for the three and six months ended June 28, 2025 were primarily attributable to higher sales to DRAM and NAND customers in the advanced node market, partially offset by decreased sales to DRAM, power and logic customers in the specialty device and advanced packaging market.

The increase in total parts and services revenue for the three and six months ended June 28, 2025, as compared to the three and six months ended June 29, 2024, was primarily due to higher parts sales as well as system upgrade and service contract revenue.

Gross Profit.

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Three Months Ended

Six Months Ended

(in thousands, except for percentages)

Gross profit as a percentage of revenue

The increase in gross profit as a percentage of revenue for the three months ended March 29, 2025 as compared to the three months ended March 30, 2024 was primarily due to increased volume and change in product mix.

The decrease in gross profit as a percentage of revenue for the three and six months ended June 28, 2025 as compared to the three and six months ended June 29, 2024 was primarily due to restructuring and other expenses for the write down of excess and obsolete inventory.

Operating Expenses.

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Research and development expenditures consist primarily of salaries and related expenses of employees engaged in research, design and development activities.

They also include consulting fees, the cost of related supplies and legal costs to defend our patents.

Our research and development expenses were $28.0 million for the three month period ended March 29, 2025, as compared to $26.6 million for the three month period ended March 30, 2024.

The increase in research and development expenses of $1.4 million for the three month period ended March 29, 2025, as compared to the three month period ended March 30, 2024 was primarily due to increases in compensation costs of $0.4 million, outside service costs of $0.5 million and depreciation and amortization costs of $0.5 million.

These expenditures also include consulting fees, the cost of related supplies and legal costs to defend our patents.

Our research and development expenses were $35.3 million and $63.3 million for the three and six-month periods ended June 28, 2025, respectively, as compared to $27.0 million and $53.6 million for the three and six-month periods ended June 29, 2024, respectively.

The increase in research and development expenses of $8.3 million for the three-month period ended June 28, 2025, as compared to the three-month period ended June 29, 2024 was primarily due to increases in compensation costs, production expenses and depreciation.

The increase in research and development expenses of $9.7 million for the six-month period ended June 28, 2025, as compared to the six-month period ended June 29, 2024 was primarily due to increases in compensation costs, production expenses, depreciation and outside service costs.

• Sales and Marketing .

Sales and marketing expenses are primarily comprised of salaries, commissions and related costs for sales and marketing personnel, as well as other non-personnel related expenses.

Our sales and marketing expenses were $19.7 million for the three month period ended March 29, 2025, compared to $18.3 million for the three month period ended March 30, 2024.

The increase in sales and marketing expenses of $1.4 million for the three month period ended March 29, 2025, as compared to the three month period ended March 30, 2024, was primarily due to increases in compensation costs of $1.1 million and travel costs of $0.3 million.

Our sales and marketing expenses were $14.9 million and $34.6 million for the three and six-month periods ended June 28, 2025, respectively, compared to $18.9 million and $37.2 million for the three and six-month periods ended June 29, 2024, respectively.

The decrease in sales and marketing expenses of $4.0 million for the three-month period ended June 28, 2025, as compared to the three-month period ended June 29, 2024, was primarily due to decreases in compensation and outside services costs, partially offset by an increase in production expenses.

The decrease in sales and marketing expenses of $2.6 million for the six-month period ended June 28, 2025, as compared to the six-month period ended June 29, 2024, was primarily due to a decrease in compensation costs, partially offset by an increase in production expense.

• General and Administrative .

General and administrative expenses are primarily comprised of salaries and related costs for corporate and administrative personnel, as well as other non-personnel related expenses.

Our general and administrative expenses were $23.9 million for the three month period ended March 29, 2025, as compared to $17.6 million for the three month period ended March 30, 2024.

The increase in general and administrative expenses of $6.3 million for the three month period ended March 29, 2025, as compared to the three month period ended March 30, 2024, was primarily due to increases in compensation costs of $4.9 million, outside service costs of $2.7 million,

and depreciation and amortization costs of $0.4 million, partially offset by a decrease in other general expenses of $1.7 million.

Our general and administrative expenses were $25.0 million and $47.8 million for the three and six-month periods ended June 28, 2025, respectively, as compared to $19.7 million and $37.1 million for the three and six-month periods ended June 29, 2024, respectively.

The increase in general and administrative expenses of $5.3 million for the three-month period ended June 28, 2025, as compared to the three-month period ended June 29, 2024, was primarily due to increases in compensation and outside service costs, partially offset by decreases in other general expenses.

The increase in general and administrative expenses of $10.7 million for the six-month period ended June 28, 2025, as compared to the six-month period ended June 29, 2024, was primarily due to increases in compensation and outside service costs, partially offset by decreases in other general expenses.

• Amortization of Identifiable Intangible Assets .

Amortization of identifiable intangible assets was $8.4 million for the three month period ended March 29, 2025, compared to $13.1 million for the three month period ended March 30, 2024.

The decreases in amortization of identifiable intangible assets of $4.7 million for the three month period ended March 29, 2025, as compared to the three month period ended March 30, 2024, was primarily due to certain assets becoming fully amortized.

Amortization of identifiable intangible assets was $8.4 million and $16.9 million for the three and six-month periods ended June 28, 2025, respectively, compared to $13.1 million and $26.2 million for the three and six-month periods ended June 29, 2024, respectively.

The decreases in amortization of identifiable intangible assets of $4.7 million and $9.3 million for the three and six-month periods ended June 28, 2025, as compared to the three and six-month periods ended June 29, 2024, was primarily due to certain assets becoming fully amortized.

Interest income, net .

Net interest income was $9.3 million for the three month period ended March 29, 2025, as compared to $7.4 million for the three month period ended March 30, 2024.

The increase in net interest income for the three month period ended March 29, 2025, as compared to the three month period ended March 30, 2024, was due to higher cash and marketable securities balances partially offset by lower interest rates during the 2025 period.

Net interest income was $8.6 million and $17.9 million for the three and six-month periods ended June 28, 2025, respectively, as compared to $8.5 million and $15.9 million for the three and six-month periods ended June 29, 2024, respectively.

The increases in net interest income for the three and six-month periods ended June 28, 2025, as compared to the three and six-month periods ended June 29, 2024, were due to higher cash and marketable securities balances, partially offset by lower interest rates during the 2025 period.

Other (expense) income, net .

Other expense, net was $0.7 million for the three month period ended March 29, 2025, as compared to other income, net of $0.8 million for the three month period ended March 30, 2024.

Foreign exchange losses during the 2025 period versus foreign exchange gains in the 2024 period were the primary drivers contributing to the period over period changes.

Other expense, net was $1.1 million for the three-month period ended June 28, 2025, as compared to other expense, net of $0.1 million for the three-month period ended June 29, 2024.

Other expense, net was $1.9 million for the six-month period ended June 28, 2025, as compared to other income, net of $0.7 million for the six-month period

ended June 29, 2024 Foreign exchange losses during the 2025 period versus foreign exchange gains in the 2024 period were the primary drivers contributing to the period over period changes.

Income Taxes .

We recorded an income tax provision of $7.6 million for the three month period ended March 29, 2025, as compared to $4.0 million for the three month period ended March 30, 2024.

Our effective tax rate of 10.6% for the three month period ended March 29, 2025 differed from the statutory rate of 21%, primarily due to (i) research and development tax credits, (ii) the deduction related to foreign derived intangible income (“FDII”), and (iii) excess tax benefits associated with equity compensation.

Our effective tax rate of 7.9% for the three month period ended March 30, 2024 differed from the statutory rate of 21%, primarily due to (i) research and development tax credits, (ii) the deduction related to FDII, and (iii) excess tax benefits associated with equity compensation.

We recorded an income tax provision of $5.8 million and $13.4 million for the three and six-month periods ended June 28, 2025, respectively, as compared to $4.3 million and $8.4 million for the three and six-month periods ended June 29, 2024, respectively.

Our effective tax rate of 14.7% and 12.0% for the three and six-month periods ended June 28, 2025, respectively, each differed from the statutory rate of 21%, primarily due to (i) research and development tax credits, (ii) the deduction related to foreign derived intangible income (“FDII”), and (iii) excess tax benefits associated with equity compensation.

Our effective tax rate of 7.5% and 7.7% for the three and six-month periods ended June 29, 2024, respectively, each differed from the statutory rate of 21%, primarily due to (i) research and development tax credits, (ii) the deduction related to FDII, and (iii) excess tax benefits associated with equity compensation.

Our future effective income tax rate depends on various factors, such as possible changes in tax legislation, the geographic composition of our pre-tax income, the amount of our pre-tax income as business activities fluctuate, non-deductible expenses incurred in connection with business combinations, and research and development tax credits as a percentage of aggregate pre-tax income.

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As these rules continue to evolve with new legislation and guidance, we will continue to monitor and account for the enactment of Pillar Two and the potential impacts such rules may have on our effective tax rate and cash flows in future years.

On July 4, 2025, the United States enacted tax reform legislation through the One Big Beautiful Bill Act.

Included in this legislation are provisions that allow for the immediate expensing of domestic United States research and development expenses, immediate expensing of certain capital expenditures, and other changes to the U.S.

taxation of profits derived from foreign operations.

As a result of the enactment of the legislation, we expect an increase to tax expense during the third and fourth quarters of 2025, primarily related to changes in the taxation of profits derived from foreign operations, and more specifically, the foreign-derived intangible income deduction.

We continue to evaluate the impact the new legislation will have on our Consolidated Financial Statements.

However, as the assessment is ongoing, we are not able to quantify the impact on our Consolidated Financial Statements at this time.

Liquidity and Capital Resources

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A summary of cash provided by (used in) operating, investing, and financing activities is as follows in dollars for the periods indicated:

Three Months Ended

Six Months Ended

(in thousands)

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Operating Activities

Net cash and cash equivalents provided by operating activities for the three months ended March 29, 2025 were $92.0 million.

The net cash and cash equivalents provided by operating activities during the three months ended March 29, 2025 resulted primarily from net income, adjusted to exclude the effect of non-cash operating charges, of $81.1 million.

Net cash and cash equivalents provided by operating activities for the six months ended June 28, 2025 were $149.9 million.

The net cash and cash equivalents provided by operating activities during the six months ended June 28, 2025 resulted primarily from net income, adjusted to exclude the effect of non-cash operating charges, of $151.1 million.

Significant non-cash operating charges included depreciation, amortization, share-based compensation, provision for inventory valuation and deferred income taxes.

Cash provided by operating activities for the first three months of fiscal 2025 increased compared to the corresponding period in fiscal 2024 primarily due to improved inventory management, higher cash collections and higher investment income.

Our working capital was $1,294.8 million at March 29, 2025 and $1.307.4 million at December 28, 2024.

Cash provided by operating activities for the first six months of fiscal 2025 increased compared to the corresponding period in fiscal 2024 primarily due to improved inventory management, higher cash collections and higher investment income.

Our working capital was $1,338.6 million at June 28, 2025 and $1,307.4 million at December 28, 2024.

Investing Activities

Net cash and cash equivalents used in investing activities for the three months ended March 29, 2025 were $21.8 million.

During the three months ended March 29, 2025, net cash and cash equivalents used in investing activities included purchases of marketable securities of $208.5 million, capital expenditures of $8.2 million and purchases of non-marketable equity securities of $8.0 million, partially offset by proceeds from maturities and sales of marketable securities of $203.0 million.

Net cash and cash equivalents used in investing activities for the six months ended June 28, 2025 were $64.8 million.

During the six months ended June 28, 2025, net cash and cash equivalents used in investing activities included purchases of marketable securities of $419.3 million, capital expenditures of $22.0 million and purchases of non-marketable equity securities of $8.0 million, partially offset by proceeds from maturities and sales of marketable securities of $384.6 million.

From time to time, we evaluate whether to acquire new or complementary businesses, products or technologies.

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Financing Activities

Net cash and cash equivalents used in financing activities for the three months ended March 29, 2025 were $79.5 million.

During the three months ended March 29, 2025, financing activities used cash primarily for purchases of common stock of $75.0 million and tax payments related to shares withheld to satisfy employee tax obligations in connection with the vesting of awards under share-based compensation plans of $8.7 million, partially offset by proceeds from sales of shares through share-based compensation plans of $4.2 million.

In February 2024, the Onto Innovation Board of Directors approved a share repurchase authorization, which allows the Company to repurchase up to $200 million worth of shares of its common stock.

Net cash and cash equivalents used in financing activities for the six months ended June 28, 2025 were $83.2 million.

During the six months ended June 28, 2025, financing activities used cash primarily for purchases of common stock of $75.0 million and tax payments related to shares withheld to satisfy employee tax obligations in connection with the vesting of awards under share-based compensation plans of $12.4 million, partially offset by proceeds from sales of shares through share-based compensation plans of $4.2 million.

In February 2024, the our Board of Directors approved a share repurchase authorization, which allows the Company to repurchase up to $200 million worth of shares of its common stock.

Repurchases may be made through both public market and private transactions from time to time.

During the three months ended March 29, 2025, we repurchased 492 thousand shares of common stock under this repurchase authorization.

As of March 29, 2025, there was $99.9 million available for future share repurchases under this share repurchase authorization.

During the three and six months ended June 28, 2025, we repurchased 0 and 492 thousand shares of common stock under this repurchase authorization, respectively.

As of June 28, 2025, there was $99.9 million available for future share repurchases under this share repurchase authorization.

We have a credit agreement with a bank that provides for a variable-rate line of credit that is secured by the marketable securities we have with the bank.

We are permitted to borrow up to 70% of the value of eligible securities held at the time the line of credit is accessed, up to a maximum of $100.0 million.

As of March 29, 2025, the available line of credit was $100.0 million with an available interest rate of 5.0%.

As of June 28, 2025, the available line of credit was $100.0 million with an available interest rate of 5.0%.

The credit agreement is available to us until such time that either party terminates the arrangement at its discretion.

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Our future capital requirements will depend on many factors, including the timing and amount of our revenue and our investment decisions, which will affect our ability to generate additional cash.

We expect that our existing cash, cash equivalents, marketable securities and availability under our line of credit will be sufficient to meet our anticipated cash requirements for working capital, capital expenditures and other cash needs for the next 12 months following the filing of this Form 10-Q.

We expect that our existing cash, cash equivalents, marketable securities and availability under our line of credit will be sufficient to meet our anticipated cash requirements for

working capital, capital expenditures and other cash needs for the next 12 months following the filing of this Form 10-Q.

Thereafter, if cash generated from operations and financing activities is insufficient to satisfy our working capital requirements, we may seek additional funding through bank borrowings, sales of securities or other means.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis