What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2022-05-10 compared with 2021-11-09 · 47 added, 135 removed, 87 unchanged (68% of the section changed)

Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Forward-looking Statements

This Quarterly Report on Form 10-Q contains "forward-looking statements" that are based on current expectations, estimates, beliefs, assumptions and projections about our business.

Words such as "may," "will," "appears," "predicts," "continue," "expects," "anticipates," "intends," "plans," "believes," "seeks," "estimates" and the negative or other variations of such words and similar expressions are intended to identify such forward-looking statements.

These forward-looking statements include, but are not limited to, statements regarding:

the impact of the COVID-19 pandemic (including any changes in laws or regulations in reaction to same) on Company personnel, on revenue, on Company suppliers, and on Company customers and their respective end markets;

the redeemable non-controlling interests in our subsidiary, Pixelworks Semiconductor Technology (Shanghai) Co., Ltd.

(“ PWSH”), including the possible redemption thereof and the impact thereof, and any changes in carrying value of such interests that are attributable to foreign currency;

our strategic plan of re-aligning our mobile, projector, and video delivery businesses and timing and expectations related thereto, including the Listing and timing and benefits thereof, including improved access to new capital markets and the funding of our growth worldwide;

our international operations;

our strategy, including with respect to our intellectual property portfolio, research and development efforts and acquisition and investment opportunities;

our gross profit margin;

our restructuring programs, including estimates, timing and impact thereof, as well as any future restructuring programs;

our liquidity, capital resources and the sufficiency of our working capital and need for, or ability to secure, additional financing and the potential impact thereof;

our contractual obligations, exchange rate and interest rate risks;

our income taxes, including our ability to realize the benefit of net deferred tax assets, our uncertain tax position liability;

accounting policies and use of estimates and potential impact of changes thereto;

our revenue, the potential impact on our business of certain risks, including the concentration of our suppliers, risks of technological change, concentration of credit risk, changes in the markets in which we operate, our international operations, including in Asia and our exchange rate risks, our indemnification obligations and litigation risks and statements relating to our customer agreement that defrays R&D expenses, including amounts to be received thereunder, the accounting treatment thereof, the timing of the work thereunder, expenses related thereto and our expectations with respect to sales related thereto.

These statements are not guarantees of future performance and involve certain risks and uncertainties that are difficult to predict and which may cause actual outcomes and results to differ materially from what is expressed or forecasted in such forward-looking statements.

A detailed discussion of risks and uncertainties that could cause actual results and events to differ materially from such forward-looking statements, including risks related to COVID-19, risks related to our business, risks related to our industry, and risks related to our strategic plan and STAR Market listing is included in Part II, Item 1A of this Quarterly Report on Form 10-Q.

These forward-looking statements speak only as of the date on which they are made, and we do not intend to update any forward-looking statement to reflect events or circumstances after the date of this Quarterly Report on Form 10-Q unless required by law or regulation.

If we do update or correct one or more forward-looking statements, you should not conclude that we will make additional updates or corrections with respect thereto or with respect to other forward-looking statements.

Except where the context otherwise requires, in this Quarterly Report on Form 10-Q, the "Company," "Pixelworks," "we," "us" and "our" refer to Pixelworks, Inc., an Oregon corporation, and its wholly-owned subsidiaries.

The following discussion and analysis of our financial condition and results of operations (“MD&A”) should be read in conjunction with our condensed consolidated financial statements and related notes included elsewhere in this document.

In addition to historical information, the MD&A contains forward-looking statements that reflect our plans, estimates, and beliefs that involve significant risks and uncertainties.

Our actual results could differ materially from those discussed in the forward-looking statements.

Factors that could cause or contribute to those differences include those discussed below and elsewhere in this Quarterly Report on Form 10-Q, particularly in “Risk Factors,” and “Note Regarding Forward-Looking Statements.”

In March 2020, the World Health Organization declared the COVID-19 outbreak a pandemic, and the virus continues to exist in areas where we operate and sell our products and services.

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The spread of COVID-19 has caused us to modify our business practices, including implementing work-from-home policies and restricting travel by our employees.

For more information see “ Note Regarding COVID-19 ”.

The impact of the pandemic on the global economy and on our business, as well as on the business of our suppliers and customers, and the measures that may be needed in the future in response to it, will depend on many factors beyond our control and knowledge.

We will continually monitor the situation to determine what actions may be necessary or appropriate to address the impact of the pandemic, which may include actions mandated or recommended by federal, state or local authorities.

While we expect the impacts of COVID-19 to be temporary, the disruptions caused by the virus have negatively affected our revenue and results of operations in 2020 and 2021.

For example, our revenues for fiscal year 2020 were lower than initially anticipated and we expect our revenues for 2021 to continue to be negatively impacted by COVID-19.

While we expect the impacts of COVID-19 to be temporary, the disruptions caused by the virus have negatively affected our revenue and results of operations in 2020 and 2021, and we anticipate it will continue to do so in 2022.

Pixelworks is a leading provider of high-performance and power-efficient visual processing solutions that bridge the gap between video content formats and rapidly advancing display capabilities.

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We have operated our primary R&D center in Asia for over 15 years and feel that the time is right to take advantage of that existing footprint and develop PWSH as a full profit-and-loss center underneath Pixelworks, Inc., for the mobile, projector, and video delivery businesses.

Most of these steps have been completed or will be completed before the end of 2021.

This plan will further enable PWSH to seek qualification to file an application for an initial public offering on the Shanghai Stock Exchange’s Sci-Tech innovAtion boaRd, known as the STAR Market (the “Listing”).

Most of these steps were completed before the end of 2021.

This plan will further enable PWSH to seek qualification to file an application for an initial public offering on the Shanghai Stock Exchange’s Science and Technology Innovation Board, known as the STAR Market (the “Listing”).

We believe that the Listing will have many benefits, including improved access to new capital markets and the funding of our growth worldwide.

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There is no guarantee that PWSH will be approved for a Listing at any point in the future.

As of September 30, 2021, we had an intellectual property portfolio of 334 patents related to the visual display of digital image data.

We focus our research and development efforts on developing video algorithms that improve quality, and architectures that reduce system power, cost and bandwidth and increase overall system performance and device functionality.

As of March 31, 2022, we had an intellectual property portfolio of 334 patents related to the visual display of digital image data.

We focus our research and development efforts on developing video algorithms that improve quality and architectures that reduce system power, cost, bandwidth and increase overall system performance and device functionality.

We seek to expand our technology portfolio through internal development and co-development with business partners, and we continually evaluate acquisition opportunities and other ways to leverage our technology into other high-value markets.

Results of Operations

Net revenue for the three and nine month periods ended September 30, 2021 and 2020, was as follows (dollars in thousands):

Three Months Ended Nine Months Ended

September 30, September 30,

Net revenue for the three months ended March 31, 2022 and 2021, was as follows (dollars in thousands):

Three Months Ended

2022 2021 $ Change % Change

Revenue, net $ 16,628 $ 9,270 $ 7,358 79 %

Net revenue increased $7.0 million, or 86%, in the third quarter of 2021 compared to the third quarter of 2020 and increased $7.3 million, or 23% in the first nine months of 2021 compared to the first nine months of 2020.

Revenue recorded in the third quarter of 2021 consisted of $14.3 million in revenue from the sale of integrated circuit ("IC") products and $0.8 million in revenue related to engineering services, license revenue and other.

Revenue recorded in the third quarter of 2020 consisted of $8.0 million in revenue from the sale of IC products and $0.2 million in revenue related to engineering services, license revenue and other.

Revenue recorded in the first nine months of 2021 consisted of $36.0 million in revenue from the sale of IC products and $2.5 million in revenue related to engineering services, license revenue and other.

Revenue recorded in the first nine months of 2020 consisted of $30.0 million in revenue from the sale of IC products and $1.2 million in revenue related to engineering services, license revenue and other.

The increase in IC revenue over both periods presented is primarily due to increased unit sales into the digital projector market and increased unit sales into the mobile market as we experienced increased demand compared to the comparable period.

Net revenue increased $7.4 million, or 79%, in the first quarter of 2022 compared to the first quarter of 2021.

Revenue recorded in the first quarter of 2022 consisted of $16.4 million in revenue from the sale of integrated circuit ("IC") products and $0.2 million in revenue related to engineering services, license revenue and other.

Revenue recorded in the first quarter of 2021 consisted of $8.6 million in revenue from the sale of IC products and $0.6 million in revenue related to engineering services, license revenue and other.

The increase in IC revenue is primarily due to increased unit sales into the digital projector market, the mobile market and the video delivery market, as we experienced increased demand compared to the prior period.

Cost of revenue and gross profit

Cost of revenue and gross profit for the three and nine month periods ended September 30, 2021 and 2020, were as follows (dollars in thousands):

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

revenue 2020 % of

revenue 2021 % of

Cost of revenue and gross profit for the three months ended March 31, 2022 and 2021, were as follows (dollars in thousands):

Three Months Ended March 31,

revenue 2021 % of

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Amortization of acquired intangible assets 72 0 245 3

Stock-based compensation (138) (1) 117 1 17 0 345 1

Restructuring — 0 166 2 — 0 166 1

Inventory charges 2

— 0 (5) 0 — 0 80 0

Stock-based compensation 8 0 79 1

Total cost of revenue $ 7,865 47 % $ 5,545 60 %

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2 Includes charges to reduce inventory to lower of cost or market and a benefit for sales of previously written down inventory.

Gross profit margin was 53% in the third quarter of 2021 compared to 49% in the third quarter of 2020.

The increase in gross profit margin was primarily due to decreased stock-based compensation expense and decreased amortization of acquired intangible assets amount and as a percentage of revenue when comparing the third quarter of 2021 to the third quarter of 2020.

This was partially offset by an increase in direct product costs and related overhead primarily due to product mix and increased product costs.

Gross profit margin was 49% in the first nine months of 2021 compared to 51% in the first nine months of 2020.

The decrease in gross profit margin was primarily due to an increase in direct product costs and related overhead due to product mix and increased product costs.

Gross profit margin was 53% in the first quarter of 2022 compared to 40% in the first quarter of 2021.

The increase in gross profit margin was primarily due to product mix, absorption of fixed overhead costs, decreased stock-based compensation expense and decreased amortization of acquired intangible assets amount and as a percentage of revenue when comparing the first quarter of 2022 to the first quarter of 2021.

Pixelworks’ gross profit margin is subject to variability based on changes in revenue levels, product mix, average selling prices, startup costs, restructuring charges, amortization related to acquired intangible assets, and the timing and execution of manufacturing ramps as well as other factors.

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As amounts become due and payable, they are offset against research and development expense on a pro rata basis.

During the third quarter of 2021, we recognized an offset to research and development expense of $1.3 million.

During the remainder of 2021, we expect to record an offset to research and development expense of approximately $2.5 million of the remaining deferred research and development reimbursement.

Research and development expense for the three and nine month periods ended September 30, 2021 and 2020, was as follows (dollars in thousands):

Three Months Ended Nine Months Ended

September 30, September 30,

During the first quarter of 2022, we recognized an offset to research and development expense of approximately $1.0 million.

During the remainder of 2022, we expect to record an offset to research and development expense of approximately $0.9 million for the remaining deferred research and development reimbursement on the initial $5.8 million received and a reimbursement of approximately $2.2 million for the next payment milestone.

Research and development expense for the three months ended March 31, 2022 and 2021, was as follows (dollars in thousands):

Three Months Ended

2022 2021 $ Change % Change

Research and development $ 7,160 $ 6,785 $ 375 6 %

Research and development expense increased $0.7 million, or 12% in the third quarter of 2021 compared to the third quarter of 2020 and increased $1.6 million, or 9% in the first nine months of 2021 compared to the first nine months of 2020.

The increases in the 2021 periods compared to the 2020 periods were primarily due to an increase in compensation expense due to a COVID-19 relief benefit received in China in 2020 that was not received in 2021 as well as an increased management bonus accrual.

The 2021 periods also included an increase in non-recurring engineering expense due to the timing of development activities.

Research and development expense increased $0.4 million, or 6% in the first quarter of 2022 compared to the first quarter of 2021 primarily due to an increase in compensation expense due to annual merit salary increases and an increased headcount as well as an increase in non-recurring engineering expense due to the timing of development activities.

These increases were largely offset by a benefit related to the co-development agreement.

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Selling, general and administrative expense includes compensation and related costs for personnel, sales commissions, facilities and information technology expense allocations, travel, outside services and other general expenses incurred in our sales, marketing, customer support, management, legal and other professional and administrative support functions.

Selling, general and administrative expense for the three and nine month periods ended September 30, 2021 and 2020, was as follows (dollars in thousands):

Three Months Ended Nine Months Ended

September 30, September 30,

Selling, general and administrative expense for the three month periods ended March 31, 2022 and 2021, was as follows (dollars in thousands):

Three Months Ended

2022 2021 $ Change % Change

Selling, general and administrative $ 5,484 $ 4,854 $ 630 13 %

Selling, general and administrative expense increased $0.5 million, or 10%, in the third quarter of 2021 compared to the third quarter of 2020 primarily due to an increase in compensation expense due to a COVID-19 relief benefit received in China in 2020 that was not received in 2021 as well as an increased management bonus accrual and an increase in stock-based compensation expense due to the timing of awards granted.

Selling, general and administrative expense decreased $0.1 million, or 1% in the first nine month of 2021 compared to the first nine months of 2020 primarily due to a decrease in stock-based compensation expense due to the timing of awards granted, partially offset by increases in accounting and legal fees incurred as a result of the Capital Increase Agreement.

Restructurings

In August 2020, we executed a restructuring plan to make the operation of the Company more efficient (the "August 2020 Plan").

The August 2020 Plan included an approximately 14% reduction in workforce, primarily in the areas of operations, research and development, sales and marketing.

In January 2020, we executed a restructuring plan to make the operation of the Company more efficient (the "January 2020 Plan").

The January 2020 Plan included an approximately 4% reduction in workforce, primarily in the areas of research and development and sales.

Restructuring expense for the three and nine month periods ended September 30, 2021 and 2020, was as follows and was included in operating expenses (dollars in thousands):

Three Months Ended Nine Months Ended

September 30, September 30,

2021 2020 2021 2020

Employee severance and benefits

$ — $ 1,596 $ — $ 2,188

Total restructuring expense

$ — $ 1,596 $ — $ 2,188

Included in cost of revenue

$ — $ 166 $ — $ 166

Included in operating expenses

— 1,430 — 2,022

During the three and nine months ended September 30, 2021, we did not record any restructuring expense.

During the three months ended September 30, 2020, we recorded $1.6 million in restructuring expense related to the August 2020 Plan.

During the nine months ended September 30, 2020 we recorded $1.6 million in restructuring expense related to the August 2020 Plan and $0.6 million in restructuring expense related to the January 2020 Plan.

Selling, general and administrative expense increased $0.6 million, or 13%, in the first quarter of 2022 compared to the first quarter of 2021 primarily due to an increase in compensation expense due to annual merit salary increases and an increased headcount as well as an increase in accounting fees incurred related to our strategic plan with our PWSH subsidiary.

These increases were partially offset by a decrease in stock based compensation expense as a result of the resignation of our former Chief Financial Officer in January 2022.

Provision for income taxes

The provision for income taxes during the 2022 and 2021 periods is primarily comprised of current and deferred tax expense in profitable cost-plus foreign jurisdictions, accruals for tax contingencies in foreign jurisdictions and benefits for the reversal of previously recorded foreign tax contingencies due to the expiration of the applicable statutes of limitation.

We recorded a negligible benefit for the reversal of previously recorded foreign tax contingencies during the first nine months of 2021 and during the first nine months of 2020.

We recorded a benefit of $0.1 million for the reversal of previously recorded foreign tax contingencies during the first three months of 2022 and a negligible benefit for the reversal of previously recorded foreign tax contingencies during the first three months of 2021.

Liquidity and Capital Resources

Cash, cash equivalents and short-term marketable securities

Total cash and cash equivalents increased $35.3 million to $66.6 million at September 30, 2021 from $31.3 million at December 31, 2020.

Short-term marketable securities decreased $0.3 million to zero at September 30, 2021 from $0.3 million at December 31, 2020.

The net increase in cash, cash equivalents and short-term marketable securities of $35.0 million during the first nine months of 2021 was the result of $39.6 million in proceeds from equity interests issued to the redeemable non-controlling interest and certain entities owned by employees, $1.3 million in proceeds from the issuances of common stock under our employee equity incentive plans and $0.3 million in net proceeds from our "at the market" equity offering.

These increases were partially offset by $3.0 million used in operating activities, $2.3 million used for purchases of property and equipment and $0.9 million used for payments on other asset financings.

As of September 30, 2021, our cash and cash equivalents balance consisted of $18.8 million in cash equivalents held in U.S.

Cash and cash equivalents

Total cash and cash equivalents decreased $6.4 million to $55.2 million at March 31, 2022 from $61.6 million at December 31, 2021.

The net decrease during the first three months of 2022 was the result of $5.2 million used in operating activities, $0.5 million used for purchases of property and equipment, $0.5 million used for purchases of licensed technology and $0.4 million used for payments on other asset financings.

These decreases were partially offset by $0.2 million in proceeds from the issuances of common stock under our employee equity incentive plans.

As of March 31, 2022, our cash and cash equivalents balance consisted of $11.3 million in cash equivalents held in U.S.

dollar denominated money market funds and $43.9 million in cash.

Our investment policy requires that our portfolio maintain a weighted average maturity of less than 12 months.

Although we did not hold short- or long-term investments as of March 31, 2022, our investment policy requires that our portfolio maintain a weighted average maturity of less than 12 months.

Additionally, no maturities can extend beyond 24 months and concentrations with individual securities are limited.

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Accounts receivable, net

Accounts receivable, net increased to $6.1 million as of September 30, 2021 from $4.7 million as of December 31, 2020.

The average number of days sales outstanding decreased to 36 days as of September 30, 2021 from 44 days as of December 31, 2020.

The increase in accounts receivable was due to normal fluctuations in the timing of sales and customer receipts within the third quarter of 2021, and the fourth quarter of 2020.

Inventories were $1.6 million as of September 30, 2021 compared to $2.4 million at December 31, 2020.

Inventory turnover increased to 17.8 as of September 30, 2021 from 6.0 as of December 31, 2020 primarily due to lower average inventory balances and increased cost of goods sold during the third quarter of 2021 compared to the fourth quarter of 2020.

Accounts receivable, net decreased to $8.6 million as of March 31, 2022 from $8.7 million as of December 31, 2021.

The average number of days sales outstanding decreased to 46 days as of March 31, 2022 from 47 days as of December 31, 2021.

Inventories were $1.8 million as of March 31, 2022 compared to $1.5 million at December 31, 2021.

Inventory turnover decreased to 19.0 as of March 31, 2022 from 19.5 as of December 31, 2021.

Inventory turnover is calculated based on annualized quarterly operating results and average inventory balances during the quarter.

Capital resources

Short-term line of credit

On December 21, 2010, we entered into a Loan and Security Agreement with Silicon Valley Bank (the "Bank"), which has been amended over time, including as recently as December 14, 2020 (as amended, the "Revolving Loan Agreement").

The Revolving Loan Agreement provided a secured working capital-based revolving line of credit (the "Revolving Line") in an aggregate amount of up to the lesser of (i) $10.0 million, or (ii) $2.5 million plus 80% of eligible domestic accounts receivable and certain foreign accounts receivable of both Pixelworks and ViXS Systems, Inc., subject to certain limitations on the amount of accounts receivables attributable to ViXS.

In addition, the Revolving Loan Agreement provided for non-formula advances of up to $10.0 million which may have been made solely during the last five business days of any fiscal month or quarter and which were required to be repaid by us on or before the fifth business day after the applicable fiscal month or quarter end.

Due to their repayment terms, non-formula advances did not provide us with usable liquidity.

The Revolving Loan Agreement contained customary affirmative and negative covenants as well as customary events of default.

The occurrence of an event of default could have resulted in the acceleration of our obligations under the Revolving Loan Agreement, and an increase to the applicable interest rate, and would have permitted the Bank to exercise remedies with respect to its security interest.

The Revolving Line had a maturity date of March 26, 2021.

We did not renew the Revolving Loan Agreement upon its maturity.

As of December 31, 2020, we had no outstanding borrowings under the Revolving Line.

Paycheck Protection Program Loan

On April 25, 2020, we entered into a loan with Silicon Valley Bank as the lender in an aggregate principal amount of $0.8 million (the “Loan”) pursuant to the Paycheck Protection Program (the “PPP”) under the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”).

The Loan was evidenced by a promissory note (the “Note”) dated April 25, 2020 and matured 2 years from the disbursement date.

The Note had an interest rate of 1.000% per annum, with the first six months of interest deferred.

Principal and interest were payable monthly commencing 6 months after the disbursement date and were able to be prepaid by us at any time prior to maturity with no prepayment penalties.

The Note contained customary events of default relating to, among other things, payment defaults or breaches of the terms of the Note.

Upon the occurrence of an event of default, the Lender could require immediate repayment of all amounts outstanding under the Note.

Under the terms of the CARES Act, PPP loan recipients could apply for and be granted forgiveness for all or a portion of loans granted under the PPP.

The Loan was subject to forgiveness to the extent proceeds were used for payroll costs, including payments required to continue group health care benefits and certain rent, utility, and mortgage interest expenses (collectively, “Qualifying Expenses”), pursuant to the terms and limitations of the PPP.

We used the Loan amount for Qualifying Expenses.

During the fourth quarter of 2020, we applied for and received full forgiveness and recorded a gain of $0.8 million within other income in our consolidated statements of operations.

Equity Offering

On December 14, 2020, we completed the sale of 4,900,000 shares of common stock in an underwritten registered offering.

On December 16, 2020, an additional 735,000 shares were issued pursuant to the 30-day over-allotment option exercised by the underwriter.

With the over-allotment shares, a total of 5,635,000 shares of common stock were sold in the offering at a price to the public of $2.45 per share.

Net proceeds to the Company, after deducting underwriting discounts, commissions, and other expenses, were approximately $12.7 million.

Private Placement Investment

On December 7, 2020, we completed a private placement of 724,288 shares of common stock to a certain accredited investor at a purchase price of $2.071 per share.

On December 15, 2020, we completed a private placement of 2,475,712 shares of common stock to a certain accredited investor at a purchase price of $2.071.

Net proceeds to the Company, after deducting commissions and other expenses, were approximately $6.2 million.

At the Market Offering

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We are not obligated to sell any shares under the Sales Agreement.

During the year ended December 31, 2020, we sold an aggregate of 1,747,466 shares of our common stock under this at the market offering, resulting in aggregate net proceeds to us of approximately $4.4 million, and gross proceeds of approximately $4.9 million and paid Cowen commissions and fees of approximately $0.2 million, and other expenses of $0.3 million.

During the three and nine months ended September 30, 2021, we sold an aggregate of 61,018 shares of our common stock under this at the market offering, resulting in aggregate net proceeds to us of approximately $0.3 million, and gross proceeds of approximately $0.4 million, and paid Cowen commissions and fees and other expenses of approximately $0.1 million.

During the year ended December 31, 2021, we sold an aggregate of 61,018 shares of our common stock under this at the market offering, resulting in aggregate net proceeds to us of approximately $0.3 million, and gross proceeds of approximately $0.4 million, and paid Cowen commissions and fees and other expenses of approximately $0.1 million.

There was no activity under this at the market offering during the three months ended March 31, 2022.

Capital Increase Agreement

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Additional information is provided in "Note 13:

Redeemable Non-Controlling Interest and Shares of PWSH Sold to Employees", which is incorporated by reference into this section.

As of September 30, 2021, our cash and cash equivalents balance of $66.6 million was highly liquid.

We anticipate that our existing working capital will be adequate to fund our operating, investing and financing needs for at least the next twelve months.

Redeemable Non-Controlling Interest and Equity Interest of PWSH Sold to Employees", which is incorporated by reference into this section.

As of March 31, 2022, our cash and cash equivalents balance of $55.2 million was highly liquid.

We anticipate that our existing working capital will be adequate to fund our operating, investing and financing needs for the next twelve months and beyond.

We may pursue financing arrangements including the issuance of debt or equity securities or reduce expenditures, or both, to meet our cash requirements, including in the longer term.

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We can provide no assurance that additional financing will be available at all or, if available, that we would be able to obtain additional financing on terms favorable to us.

Contractual Payment Obligations

Our contractual obligations for 2021 and beyond are included in our Annual Report on Form 10-K for the year ended December 31, 2020, filed with the Securities and Exchange Commission on March 10, 2021.

Our obligations for 2021 and beyond have not changed materially as of September 30, 2021.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements that have, or are reasonably likely to have, a material current or future effect on our financial condition, results of operations, liquidity, capital expenditures or capital resources.

Other than as set forth above, there were no material changes to our liquidity and capital resources during the period ended March 31, 2022 from those set forth in our Annual Report on Form 10-K for the year ended December 31, 2021, filed with the Securities and Exchange Commission on March 9, 2022.

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