What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2020-10-28 compared with 2020-08-05 · 157 added, 74 removed, 229 unchanged (50% of the section changed)

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In particular, the disclosure contained in Item 1A in our annual report, as updated by Part II, Item 1A in this quarterly report, may reflect trends, demands, commitments, events, or uncertainties that could materially impact our results of operations and liquidity and capital resources.

The following discussion contains forward-looking statements, such as statements regarding COVID-19's anticipated impacts on our business, our future operating results and financial position, our business strategy and

plans, and our objectives for future operations.

Please see "Note Regarding Forward-Looking Statements" for more information about relying on these forward-looking statements.

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• Backup Storage Systems :

high-performance, scalable storage for backup and multi-site disaster recovery.

We offer high-performance, scalable storage for backup and multi-site disaster recovery.

• Quantum Services :

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In light of these events, we have taken actions to protect the health and safety of our employees while continuing to serve our global customers as an essential business.

We have implemented more thorough sanitation practices as outlined by health organizations and instituted social distancing policies at our locations around the world, including working from home, limiting the number of employees attending meetings, reducing the number of people in our sites at any one time, and suspending employee travel.

We have implemented more thorough sanitation practices as outlined by health organizations and instituted social distancing policies at our locations around the world, including working from home, limiting the number of employees attending in person meetings, reducing the number of people in our sites at any one time, and suspending employee travel.

For many of our customers, the COVID-19 pandemic has significantly affected their business.

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The extent of the impact will depend, in part, on how long the negative trends in customer demand and supply chain levels will continue.

We expect COVID-19 to significantly impact our financial condition, results of operations, and liquidity through at least our second quarter and likely much longer.

We expect COVID-19 to significantly impact our financial condition, results of operations, and liquidity through at least our third quarter and likely much longer.

We will continue to actively monitor the situation and may take further actions altering our business operations that we determine are in the best interests of our employees, customers, partners, suppliers, and stakeholders, or as required by federal, state, or local authorities.

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GAAP financial measure, Net Loss (in thousands):

Three Months Ended

June 30, 2020 June 30, 2019

Three Months Ended Six Months Ended

September 30, 2020 September 30, 2019 September 30, 2020 September 30, 2019

Net loss $ (4,592) $ (2,315) $ (15,328) $ (6,122)

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GAAP financial measure, Net Loss (in thousands):

Three Months Ended

June 30, 2020 June 30, 2019

Three Months Ended Six Months Ended

September 30, 2020 September 30, 2019 September 30, 2020 September 30, 2019

Net loss $ (4,592) $ (2,315) $ (15,328) $ (6,122)

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Adjusted net income (loss) $ (213) $ 5,059 $ (6,973) $ 10,493

Adjusted net income per share:

Adjusted net income (loss) per share:

Basic $ (0.01) $ 0.14 $ (0.17) $ 0.29

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RESULTS OF OPERATIONS

Three Months Ended

(in thousands) June 30, 2020 June 30, 2019

Three Months Ended September 30, Six Months Ended September 30,

(in thousands) 2020 2019 2020 2019

Total revenue $ 85,821 $ 105,789 $ 159,126 $ 211,419

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Research and development (1)

10,233 9,350 24,723 17,733

Sales and marketing (1)

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Total operating expenses 35,234 39,324 69,580 82,402

Income (loss) from operations (3,495) 2,748

Income from operations 3,500 4,199 6 6,947

Other income (expense) (312) 76 (697) 165

Interest expense (7,578) (6,347) (14,015) (12,653)

Income (loss) before income taxes (10,317) (3,469)

Loss before income taxes (4,390) (2,072) (14,706) (5,541)

Income tax provision 202 243 622 581

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(1) Includes stock-based compensation as follows:

Three Months Ended

(in thousands) June 30, 2020 June 30, 2019

Three Months Ended September 30, Six Months Ended September 30,

(in thousands) 2020 2019 2020 2019

Cost of revenue $ 227 $ 81 $ 396 $ 173

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Total $ 2,591 $ 2,365 $ 4,549 $ 3,352

Comparison of the Three Months Ended June 30, 2020 and 2019

Three Months Ended

(dollars in thousands) June 30, 2020 % of

revenue June 30, 2019 1

Comparison of the Three Months Ended September 30, 2020 and 2019

Three Months Ended September 30,

(dollars in thousands) 2020 % of

revenue 2019 1

revenue $ Change % Change

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Total revenue $ 85,821 100 % $ 105,789 100 % $ (19,968) (19)

1 Primary and Secondary storage system revenue has been adjusted for June 30, 2019 due to certain reclassifications from Primary to Secondary storage systems.

1 Primary and Secondary storage system revenue has been adjusted for the three months ended September 30, 2019 due to certain reclassifications from Primary to Secondary storage systems.

Product revenue

In the three months ended June 30, 2020, product revenue decreased $26.1 million, or 40%, as compared to the same period in 2019.

In the three months ended September 30, 2020, product revenue decreased $17.3 million, or 25%, as compared to the same period in 2019.

Primary storage systems represented $0.7 million of the decrease, driven by declines in the media and entertainment industry as a result of the COVID-19 pandemic.

Secondary storage systems represented $9.9 million of the decrease, driven primarily by fluctuating purchase cycles with our hyperscale customers.

Devices and media represented $2.5 million of the decrease, driven by lower than expected volume of LTO media sold through our high-volume channel partners.

Devices and media represented $6.7 million of the decrease, driven by a lower volume of LTO media sold through our high-volume channel partners.

The prior year included a spike in volume as supply issues were resolved between two major vendors in the market.

Service revenue

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Standard service contracts may be extended or include enhanced service, such as faster service response times.

Service revenue decreased 9% in the three months ended June 30, 2020 compared to the same period in 2019 due to a combination of reduced new customer installations and reduced support renewals from our legacy customers.

Service revenue decreased 3% in the three months ended September 30, 2020 compared to the same period in 2019 due to a combination of reduced new customer installations and reduced support renewals from our legacy customers.

Royalty revenue

We receive royalties from third parties that license our LTO media patents through our membership in the LTO consortium.

Royalty revenue decreased $3.2 million, or 50%, in the three months ended June 30, 2020 compared to the same period in 2019 due to lower overall market volume .

Royalty revenue decreased $1.8 million, or 34%, in the three months ended September 30, 2020 compared to the same period in 2019 due to lower overall market volume .

Gross Profit and Margin

Three Months Ended

(dollars in thousands) June 30, 2020 Gross

margin % June 30, 2019 Gross

Three Months Ended September 30,

(dollars in thousands) 2020 Gross

margin % 2019 Gross

margin % $ Change Basis point change

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Product Gross Margin

Product gross margin decreased 490 basis points for the three months ended June 30, 2020, as compared with the same period in 2019.

This decrease was due primarily to a total product revenue decrease of 40%, with relatively flat operations departmental expense.

Product gross margin increased 380 basis points for the three months ended September 30, 2020, as compared with the same period in 2019.

This increase was due primarily to a more favorable mix of enterprise products sold, along with a relatively flat operations departmental expense.

Service Gross Margin

Service gross margin decreased 190 basis points for the three months ended June 30, 2020, as compared with the same period in 2019.

Service gross margin increased 110 basis points for the three months ended September 30, 2020, as compared with the same period in 2019.

This increase was primarily the effect of reduced repair costs.

Royalty Gross Margin

Royalties do not have significant related cost of sales.

Operating expenses

Three Months Ended September 30,

(dollars in thousands) 2020 % of

revenue 2019 % of

revenue $ Change % Change

Research and development $ 10,233 11.9 % $ 9,350 8.8 % $ 883 9 %

Sales and marketing 13,153 15.3 14,824 14.0 (1,671) (11)

General and administrative 10,263 12.0 14,329 13.5 (4,066) (28)

Restructuring charges 1,585 1.8 821 0.8 764 93

Total operating expenses $ 35,234 41.1 % $ 39,324 37.2 % $ (4,090) (10)

In the three months ended September 30, 2020, research and development expense increased $0.9 million, or 9%, as compared with the same period in 2019.

This increase was due in part to an increase in personnel costs due to increased headcount focused on new product development.

In the three months ended September 30, 2020, sales and marketing expenses decreased $1.7 million, or 11%, as compared with the same period in 2019.

This decrease was largely driven by an overall decrease in compensation and benefits as the result of lower headcount, a decrease in marketing programs and professional services costs, and suspended travel and entertainment expense due to current COVID-19 related restrictions.

In the three months ended September 30, 2020, general and administrative expenses decreased $4.1 million, or 28% as compared with the same period in 2019.

This decrease was due primarily to higher costs in 2019 related to the financial restatement and related activities.

In the three months ended September 30, 2020, restructuring expenses increased $0.8 million, or 93% as compared with the same period in 2019.

The increase was the result of a reduction in workforce to improve operational efficiency and rationalize our cost structure.

Other Income (Expense)

Three Months Ended September 30,

(dollars in thousands) 2020 % of

revenue 2019 % of

revenue $ Change % Change

Other income (expense) $ (312) 0 % $ 76 — % $ (388) 511 %

Interest expense (7,578) (9) (6,347) 6 (1,231) 19

Other income (expense), net during the three months ended September 30, 2020 and 2019 were related primarily to fluctuations in foreign currency exchange rates.

In the three months ended September 30, 2020, interest expense increased $1.2 million, or 19%, as compared with the same period in 2019 due primarily to a higher principal balance.

Three Months Ended September 30,

(dollars in thousands) 2020 % of

revenue 2019 % of

revenue $ Change % Change

Income tax provision $ 202 1 % $ 243 — % $ (41) (17) %

The income tax provision for the three months ended September 30, 2020 and 2019 is primarily influenced by foreign and state income taxes.

Due to our history of net losses in the United States, the protracted period for utilizing tax attributes in certain foreign jurisdictions, and the difficulty in predicting future results, we believe that we cannot rely on projections of future taxable income to realize most of our deferred tax assets.

Accordingly, we have established a full valuation allowance against our U.S.

and certain foreign net deferred tax assets.

Significant management judgement is required in assessing our ability to realize any future benefit from our net deferred tax assets.

We intend to maintain this valuation allowance until sufficient positive evidence exists to support its reversal.

Our income tax expense recorded in the future will be reduced to the extent that sufficient positive evidence materializes to support a reversal of, or decrease in, our valuation allowance.

Comparison of the Six Months Ended September 30, 2020 and 2019

Six Months Ended September 30,

(dollars in thousands) 2020 % of

revenue 2019 1

revenue $ Change % Change

Product revenue

Primary storage systems $ 30,824 19 % $ 35,922 17 % $ (5,098) (14) %

Secondary storage systems 37,395 24 66,516 31 (29,121) (44)

Devices and media 22,318 14 31,488 15 (9,170) (29)

Total product revenue $ 90,537 57 % $ 133,926 63 % $ (43,389) (32)

Service revenue 61,880 39 65,781 31 (3,901) (6)

Royalty revenue 6,709 4 11,712 6 (5,003) (43)

Total revenue $ 159,126 100 % $ 211,419 100 % $ (52,293) (25)

1 Primary and Secondary storage system revenue has been adjusted for the six months ended September 30, 2019 due to certain reclassifications from Primary to Secondary storage systems.

Product revenue

In the six months ended September 30, 2020, product revenue decreased $43.4 million, or 32%, as compared to the same period in 2019.

Secondary storage systems represented $29.1 million of the decrease, driven primarily by fluctuating purchase cycles with our hyperscale customers.

Devices and media represented $9.2 million of the decrease, driven by lower volume of LTO media sold through our high-volume channel partners.

The prior year included a spike in volume as supply issues were resolved between two major vendors in the market.

Primary storage systems represented $5.1 million of the decrease, driven by declines in the media and entertainment industry as a result of the COVID-19 pandemic.

Service revenue

We offer a broad range of services including maintenance, implementation, and training.

Service revenue is primarily comprised of customer field support contracts which provide standard support services for our hardware.

Standard service contracts may be extended or include enhanced service, such as faster service response times.

Service revenue decreased 6% in the six months ended September 30, 2020 compared to the same period in 2019 due to a combination of reduced new customer installations and reduced support renewals from our legacy customers.

Royalty revenue

We receive royalties from third parties that license our LTO media patents through our membership in the LTO consortium.

Royalty revenue decreased $5.0 million, or 43%, in the six months ended September 30, 2020 compared to the same period in 2019 due to lower overall market volume .

Gross Profit and Margin

Six Months Ended September 30,

(dollars in thousands) 2020 Gross

margin % 2019 Gross

margin % $ Change Basis point change

Product gross profit $ 25,157 27.8 % $ 37,260 27.8 % $ (12,103) —

Service gross profit 37,720 61.0 40,377 61.4 (2,657) (40)

Royalty gross profit 6,709 100.0 11,712 100.0 (5,003) —

Gross profit $ 69,586 43.7 % $ 89,349 42.3 % $ (19,763) 140

Product Gross Margin

Product gross margin was flat for the six months ended September 30, 2020, as compared with the same period in 2019.

Service Gross Margin

Service gross margin decreased 40 basis points for the six months ended September 30, 2020, as compared with the same period in 2019.

This decrease was due primarily to total service revenue decreases of 6% with relatively flat corresponding departmental expense.

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Operating expenses

Three Months Ended

(dollars in thousands) June 30, 2020 % of

revenue June 30, 2019 % of

Six Months Ended September 30,

(dollars in thousands) 2020 % of

revenue 2019 % of

revenue $ Change % Change

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Total operating expenses $ 69,580 43.7 % $ 82,402 39.0 % $ (12,822) (16)

In the three months ended June 30, 2020, research and development expense increased $1.8 million, or 21%, as compared with the same period in 2019.

This increase was partially attributable to an increase in research and development headcount focused on new product development.

In the three months ended June 30, 2020, sales and marketing expenses decreased $4.3 million, or 27%, as compared with the same period in 2019.

This decrease was largely driven by an overall decrease in compensation and benefits as the result of lower headcount, a decrease in marketing programs and professional services costs, and reduced travel and entertainment expense due to current COVID-19 related restrictions.

In the three months ended June 30, 2020, general and administrative expenses decreased $7.0 million, or 38% as compared with the same period in 2019.

This decrease was due primarily to higher costs in 2019 related to the financial restatement and related activities, IT infrastructure expense, and bad debt expense.

This was partially offset by an increase in headcount and stock compensation expense.

In the three months ended June 30, 2020, restructuring expenses increased $0.8 million, or 300% as compared with the same period in 2019.

The increase was the result of a reduction in force during the three months ended June 30, 2020 to improve operational efficiency and rationalized its cost structure

In the six months ended September 30, 2020, research and development expense increased $7.0 million, or 39%, as compared with the same period in 2019.

This increase was due in part to an increase in personnel costs due to increased headcount focused on new product development.

In the six months ended September 30, 2020, sales and marketing expenses decreased $8.9 million, or 29%, as compared with the same period in 2019.

This decrease was due primarily to a decrease in personnel costs due to lower headcount, a decrease in marketing programs and professional services costs, and suspended travel and entertainment expense due to current COVID-19 related restrictions.

In the six months ended September 30, 2020, general and administrative expenses decreased $12.5 million, or 38% as compared with the same period in 2019.

This decrease was due primarily to higher costs in 2019 related to the financial restatement and related activities.

In the six months ended September 30, 2020, restructuring expenses increased $1.6 million, or 143% as compared with the same period in 2019.

The increase was the result of a reduction in workforce to improve operational efficiency and rationalize our cost structure.

Other Income (Expense)

Three Months Ended

(dollars in thousands) June 30, 2020 % of

revenue June 30, 2019 % of

Six Months Ended September 30,

(dollars in thousands) 2020 % of

revenue 2019 % of

revenue $ Change % Change

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Interest expense (14,015) (9) (12,653) 6 (1,362) 11

Other income (expense), net during the three months ended June 30, 2020 and 2019 were related primarily to fluctuations in foreign currency exchange rates.

In the three months ended June 30, 2020, interest expense increased $0.1 million, or 2%, as compared with the same period in 2019 due primarily to a higher principal balance.

Three Months Ended

(dollars in thousands) June 30, 2020 % of

revenue June 30, 2019 % of

Other income (expense), net during the six months ended September 30, 2020 and 2019 were related primarily to fluctuations in foreign currency exchange rates.

In the six months ended September 30, 2020, interest expense increased $1.4 million, or 11%, as compared with the same period in 2019 due primarily to a higher principal balance.

Six Months Ended September 30,

(dollars in thousands) 2020 % of

revenue 2019 % of

revenue $ Change % Change

Income tax provision $ 622 — % $ 581 — % $ 41 7 %

The income tax provision for the three months ended June 30, 2020 is primarily influenced by foreign and state income taxes.

The income tax provision for the six months ended September 30, 2020 and 2019 is primarily influenced by foreign and state income taxes.

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We intend to maintain this valuation allowance until sufficient positive evidence exists to support its reversal.

income tax expense recorded in the future will be reduced to the extent that sufficient positive evidence materializes to support a reversal of, or decrease in, our valuation allowance.

Our income tax expense recorded in the future will be reduced to the extent that sufficient positive evidence materializes to support a reversal of, or decrease in, our valuation allowance.

LIQUIDITY AND CAPITAL RESOURCES

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We expect the impact of COVID-19 to have a significant impact on our liquidity and capital resources.

We had cash and cash equivalents of $23.3 million as of June 30, 2020, compared to $6.4 million as of March 31, 2020.

We had cash and cash equivalents of $12.5 million as of September 30, 2020, compared to $6.4 million as of March 31, 2020.

These amounts exclude, as of both dates, $5.0 million in restricted cash that we are required to maintain under the Credit Agreements (as defined below), and $0.8 million of short-term restricted cash.

Our outstanding long-term debt amounted to $169.7 million as of June 30, 2020, net of $24.6 million in unamortized debt issuance costs and $0.9 million in current portion of long-term debt, and $146.8 million as of March 31, 2020, net of $13.7 million in unamortized debt issuance costs and $7.3 million in current portion of long-term debt.

Included in long-term debt as of June 30, 2020 is $10.0 million borrowed under the Paycheck Protection Program which was included in the Coronavirus Aid, Relief, and Economic Security (CARES) Act.

As of June 30, 2020 we had $25.4 million of borrowing availability on our Amended PNC Credit Facility (subject to change based on certain financial metrics).

Our outstanding long-term debt amounted to $171.0 million as of September 30, 2020, net of $22.8 million in unamortized debt issuance costs and $1.4 million in current portion of long-term debt, and $146.8 million as of March 31, 2020, net of $13.7 million in unamortized debt issuance costs and $7.3 million in current portion of long-term debt.

Included in long-term debt as of September 30, 2020 is $10.0 million borrowed under the Paycheck Protection Program which was included in the Coronavirus Aid, Relief, and Economic Security (CARES) Act.

September 30, 2020, we had $21.8 million of borrowing availability on our Amended PNC Credit Facility (subject to change based on certain financial metrics).

See “—Debt Profile and Covenants” and “—Contractual Obligations” below for further information about our outstanding debt.

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The following table summarizes our consolidated cash flows for the periods indicated.

Three Months Ended June 30,

Six Months Ended September 30,

(Dollars in thousands) 2020 2019

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Net increase (decrease) in cash and cash equivalents and restricted cash $ 6,039 $ (4,919)

Cash Provided by (Used In) Operating Activities

Net cash used in operating activities was $9.0 million for the three months ended June 30, 2020.

This use of cash is primarily attributable to the net loss adjusted for non-cash items of $4.0 million and changes in working capital of

$4.9 million.

Cash used related to working capital was driven by a decrease of $21.0 million in accounts receivable more than offset by the increase in manufacturing and service inventory of $3.2 million and decreases in accounts payable, deferred revenue and other assets and liabilities of $9.9 million, $8.2 million and $4.2 million, respectively.

Cash Used In Operating Activities

Net cash used in operating activities was $19.3 million for the six months ended September 30, 2020.

This use of cash is primarily attributable to changes in working capital of $20.0 million driven by the increase in manufacturing and service inventory of $13.6 million and a decrease in deferred revenue of $12.6 million.

These were partially offset by an increase in accounts receivable of $7.6 million.

The decrease in deferred revenue reflects the seasonal nature of service contract renewals which peak in the fourth fiscal quarter.

Net cash provided by operating activities was $0.9 million for the three months ended June 30, 2019 which is primarily attributable to net loss adjusted for non-cash items of $1.1 million.

Cash Provided by (Used in) Investing Activities

Net cash used in investing activities was $0.5 million in the three months ended June 30, 2020, which was mostly flat compared to the same period in the prior year.

Net cash used in operating activities was $9.7 million for the six months ended September 30, 2019 which is primarily attributable to a decrease in deferred revenue related to the timing of service contract renewals which are historically more heavily weighted to our third and fourth fiscal quarters.

Cash Used in Investing Activities

Net cash used in investing activities was $1.4 million in the six months ended September 30, 2020, which was mostly flat compared to the same period in the prior year.

Our capital expenditures in both periods consisted primarily of tooling purchases and leasehold improvements.

Cash Provided by (Used in) Financing Activities

Net cash provided by financing activities was $26.3 million in the three months ended June 30, 2020 which included new Senior Secured Term Loan borrowings of $19.4 million (net of lender fees of $0.6 million), $10.0 million in borrowings under the Paycheck Protection Program and the net pay-down of our Amended PNC Credit Facility.

Cash Provided by Financing Activities

Net cash provided by financing activities was $26.9 million in the six months ended September 30, 2020 which included Senior Secured Term Loan borrowings of $19.4 million (net of lender fees of $0.6 million), $10.0 million in borrowings under the Paycheck Protection Program and the net pay-down of our Amended PNC Credit Facility.

Net cash provided by financing activities was $6.0 million in the six months ended September 30, 2019 related primarily to borrowings under our credit facility.

Debt Profile and Covenants

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We are party to the Amended PNC Credit Agreement, a senior secured revolving credit facility in an available principal amount equal to the lesser of (i) $45.0 million and (ii) the “borrowing base” (as defined under the Amended PNC Credit Agreement).

The Amended PNC Credit Facility had a borrowing base of $26.8 million as of June 30, 2020, $25.4 million of which was available to us at that date.

The Amended PNC Credit Facility had a borrowing base of $23.6 million as of September 30, 2020, $21.8 million of which was available to us at that date.

On June 16, 2020, we entered into an amendment to the Amended PNC Credit Facility.

The amendment, among other things, waived compliance with the total net leverage ratio, total leverage ratio, fixed charge coverage ratio, minimum average liquidity and minimum EBITDA financial covenants for the quarters ending on June 30, 2020, September 30, 2020, December 31, 2020, and March 31, 2021, added a financial covenant that requires a minimum monthly average undrawn availability level of $7.0 million for the period from June 30, 2020 through and including May 31, 2021, added a financial covenant that requires a minimum liquidity of not less than $10.0 million at the end of each quarter, beginning with the quarter ending June 30, 2021 and amended the covenant levels for the total net leverage ratio, total leverage ratio, fixed charge coverage ratio, and minimum EBITDA financial covenants, commencing with the quarter ending June 30, 2021.

The Amended PNC Credit Facility continues to include a covenant that requires a minimum of $5.0 million of PNC qualified cash at all times.

Senior Secured Term Loan

We are also party to a senior secured term loan facility in an aggregate principal amount of $185.2 million as of June 30, 2020 (the “Senior Secured Term Loan” and together with the Amended PNC Credit Agreement, the “Credit Agreements”).

We are also party to a senior secured term loan facility in an aggregate principal amount of $185.2 million as of September 30, 2020 (the “Senior Secured Term Loan” and together with the Amended PNC Credit Agreement, the “Credit Agreements”).

The Senior Secured Term Loan initially provided for borrowings of $165.0 million.

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The amendment, among other things, waived compliance with the total net leverage ratio, fixed charge coverage ratio, minimum liquidity and minimum EBITDA financial covenants for the quarters ending on June 30, 2020, September 30, 2020, December 31, 2020, and March 31, 2021, added a financial covenant that requires a minimum monthly average undrawn availability of $7.0 million under the Amended PNC Credit Facility during the period from June 30, 2020 through and including May 31, 2021 and amended the covenant levels for the total net leverage ratio, fixed charge coverage ratio, and minimum EBITDA financial covenants, commencing with the quarter ending June 30, 2021.

On June 16, 2020, we entered into an additional amendment to the Amended PNC Credit Facility.

The Amended PNC Credit Facility continues to include a covenant that requires a minimum of $5.0 million of PNC qualified cash at all times.

Paycheck Protection Program

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Under the terms of the PPP Note, we may apply for forgiveness of the amount due on the PPP Loan.

We used the proceeds from the PPP Loan for qualifying expenses and intend to apply for forgiveness of the PPP Loan in accordance with the terms of the CARES Act.

We used the proceeds from the PPP Loan for qualifying expenses and have applied for forgiveness of the PPP Loan in accordance with the terms of the CARES Act.

However, we cannot assure at this time that the PPP Loan will be forgiven partially, or in full.

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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