What changed in this filing

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Item 2. Management’s Discussion and Analysis

2022-11-07 compared with 2022-08-01 · 82 added, 73 removed, 184 unchanged (46% of the section changed)

4 unchanged sentences

We have seen adverse impacts as it relates to the decline in the number of patients that healthcare facilities and clinics are able to treat due to enhanced safety protocols, particularly during most of 2021 and during the first quarter of 2022.

We have also seen staffing challenges, both in our organization and at the clinics we serve, as another consequence of the COVID-19 pandemic.

While we saw some level of recovery in the second quarter of 2022, there are no reliable estimates of how long the pandemic will last, whether any recovery will be sustained or will reverse course, the severity of any resurgence of COVID-19 or variant strains of the virus, the effectiveness of vaccines and attitudes towards receiving them, or what ultimate effects the pandemic will have.

We have also seen staffing challenges, both in our organization and at the clinics we serve, as another lingering consequence of the COVID-19 pandemic.

While we saw some level of recovery in the second and third quarters of 2022, ongoing consequences of the pandemic remain uncertain.

There are no reliable estimates of how long the pandemic will last, whether any recovery will be sustained or will reverse course, the severity of any resurgence of COVID-19 or variant strains of the virus, the effectiveness of vaccines and attitudes towards receiving them, or what ultimate effects the pandemic will have.

For that reason, we are unable to reasonably estimate the long-term impact of the pandemic on our business at this time.

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The Entre system is sold or rented to patients who need a simple pump or who do not yet qualify for insurance reimbursement for an advanced compression device such as our Flexitouch system.

Sales and rentals of our lymphedema products represented 86% and 100% of our revenue in the six months ended June 30, 2022 and 2021, respectively.

On September 8, 2021, we acquired the assets of the AffloVest airway clearance product line from IBC, a privately-held company which developed and manufactures AffloVest.

AffloVest is a portable, wearable vest that provides airway clearance to treat patients with chronic respiratory conditions such as bronchiectasis or

conditions resulting from neuromuscular disorders.

For the six months ended June 30, 2022, sales of AffloVest represented 14% our revenue.

Sales and rentals of our lymphedema products represented 85% and 99% of our revenue in the nine months ended September 30, 2022 and 2021, respectively.

On September 8, 2021, we acquired the assets of the AffloVest airway clearance product line from IBC, a privately-held company which developed and manufactured AffloVest.

AffloVest is a portable, wearable vest

that provides airway clearance to treat patients with chronic respiratory conditions such as bronchiectasis or conditions resulting from neuromuscular disorders.

For the nine months ended September 30, 2022 and 2021 sales of AffloVest represented 15% and 1% of our revenue, respectively.

To support the growth of our business, we continue to invest in our commercial infrastructure, consisting of our direct sales force, training resources, reimbursement capabilities and clinical expertise.

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The AffloVest device is sold through respiratory durable medical equipment providers throughout the United States that service patients and bill third-party payers for the product.

We also employ a small group of respiratory specialists, who educate DME provider representatives, provide product demonstrations for targeted clinicians and support technical questions related to the AffloVest.

As of June 30, 2022, we employed a field staff of 286 Tactile employees, made up of sales representatives, as well as managers, who provide support throughout the United States for our lymphedema and respiratory therapies.

This compares to 234 as of June 30, 2021.

We also employ a small group of respiratory specialists, who educate DME representatives, provide product demonstrations for targeted clinicians and support technical questions related to the AffloVest.

As of September 30, 2022, we employed a field staff of 297 Tactile employees, made up of sales representatives, as well as managers, who provide support throughout the United States for our lymphedema and respiratory therapies.

This compares to 249 as of September 30, 2021.

We invest in our reimbursement function to improve operational efficiencies and enhance individual payer expertise, while continuing our strategic focus of payer development.

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We rely on third-party contract manufacturers for the sourcing of parts, the assembly of our controllers and the manufacturing of the garments used with our systems.

We conduct final assembly of the garments used with our products, perform quality assurance and ship our products from our facility in Minneapolis, Minnesota.

We conduct final assembly of the garments used with our products, perform quality assurance and ship our products from our facility in Minnesota.

The AffloVest device continued to be manufactured and shipped by IBC on our behalf pursuant to a Transition Services Agreement through April 30, 2022.

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In July 2022, we launched Kylee™ a free mobile app that makes it easier for patients to manage their conditions by tracking treatments and symptoms, as well as having direct access to educational resources.

For the three months ended June 30, 2022, we generated revenue of $59.6 million and had a net loss of $4.6 million, compared to revenue of $51.1 million and a net income of $1.3 million for the three months ended June 30, 2021.

For the six months ended June 30, 2022, we generated revenue of $107.6 million and had a net loss of $20.2 million, compared to revenue of $93.8 million and a net loss of $1.0 million for the six months ended June 30, 2021.

For the three months ended September 30, 2022, we generated revenue of $65.3 million and had a net loss of $2.3 million, compared to revenue of $52.5 million and a net loss of $3.4 million for the three months ended September 30, 2021.

For the nine months ended September 30, 2022, we generated revenue of $172.9 million and had a net loss of $22.5 million, compared to revenue of $146.3 million and a net loss of $4.3 million for the nine months ended September 30, 2021.

Our primary sources of capital since our initial public offering in 2016 have been from operating income and bank financing.

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Results of Operations

Comparison of the Three and Six Months Ended June 30, 2022 and 2021

Comparison of the Three and Nine Months Ended September 30, 2022 and 2021

The following table presents our results of operations for the periods indicated:

Three Months Ended

September 30,

(In thousands)

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Loss before income taxes

Income tax (benefit)

Net (loss) income

Income tax (benefit) expense

“N.M.” Not Meaningful

Six Months Ended

Nine Months Ended

September 30,

(In thousands)

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“N.M.” Not Meaningful

Revenue increased $8.6 million, or 17%, to $59.6 million in the three months ended June 30, 2022, compared to $51.1 million in the three months ended June 30, 2021.

The increase in total revenue was attributable to $8.0 million in sales of the airway clearance product line, which includes the AffloVest product acquired on September 8, 2021, and an increase of $0.6 million, or 1%, in sales and rentals of the lymphedema product line in the quarter ended June 30, 2022, compared to the 2021 second quarter.

Revenue increased $13.8 million, or 15%, to $107.6 million in the six months ended June 30, 2022, compared to $93.8 million in the six months ended June 30, 2021.

The increase in total revenue was attributable to $15.3 million in sales of the airway clearance product line, which includes the AffloVest product acquired on September 8, 2021, partially offset by a decrease of $1.5 million, or 2%, in sales and rentals of the lymphedema product line for the six months ended June 30, 2022.

The first six months of 2022 revenue from the lymphedema product line was adversely affected by the fact that first quarter 2022 revenue was negatively impacted by the prolonged recovery from COVID-19, including the resurgence due to the Omicron variant during the period, which resulted in restricted access to clinics and hospitals and disrupted the recovery in patient visits versus the pre-COVID environment.

Revenue increased $12.8 million, or 24%, to $65.3 million in the three months ended September 30, 2022, compared to $52.5 million in the three months ended September 30, 2021.

The increase in total revenue was attributable to an increase of $10.2 million in sales of the airway clearance product line, which includes the AffloVest product acquired on September 8, 2021, and an increase of $2.6 million, or 5%, in sales and rentals of the lymphedema product line in the quarter ended September 30, 2022, compared to the 2021 third quarter.

Revenue increased $26.6 million, or 18%, to $172.9 million in the nine months ended September 30, 2022, compared to $146.3 million in the nine months ended September 30, 2021.

The increase in total revenue was attributable to an increase of $25.5 million in sales of the airway clearance product line, which includes the AffloVest product acquired on September 8, 2021, and an increase of $1.0 million, or 1%, in sales and rentals of the lymphedema product line for the nine months ended September 30, 2022.

The first nine months of 2022 revenue from the lymphedema product line was adversely affected by the fact that first quarter 2022 revenue was negatively impacted by the prolonged recovery from COVID-19, including the resurgence due to the Omicron variant during the period, which resulted in restricted access to clinics and hospitals and disrupted the recovery in patient visits versus the pre-COVID environment.

In addition, the challenging labor market continued to impact our ability to recruit and retain quality candidates for our direct sales force, particularly during the first quarter of 2022.

Revenue from the Veterans Administration represented 11% and 14% of total revenue in the three months ended June 30, 2022 and 2021, respectively.

Revenue from the Veterans Administration represented 12% and 14% of total revenue in the six months ended June 30, 2022 and 2021, respectively.

Revenue from Medicare represented 17% and 16% of total revenue in the three months ended June 30, 2022 and 2021, respectively.

Revenue from Medicare represented 17% and 18% of total revenue in the six months ended June 30, 2022 and 2021, respectively.

The following table summarizes our revenue by product line for the three and six months ended June 30, 2022 and 2021, both in dollars and percentage of total revenue:

Revenue from the Veterans Administration represented 10% and 13% of total revenue in the three months ended September 30, 2022 and 2021, respectively.

Revenue from the Veterans Administration represented 11% and 14% of total revenue in the nine months ended September 30, 2022 and 2021, respectively.

Revenue from Medicare represented 17% of total revenue in each of the three months ended September 30, 2022 and 2021.

Revenue from Medicare represented 17% and 18% of total revenue in the nine months ended September 30, 2022 and 2021, respectively.

The following table summarizes our revenue by product line for the three and nine months ended September 30, 2022 and 2021, both in dollars and percentage of total revenue:

Three Months Ended

September 30,

(In thousands)

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“N.M.” Not Meaningful

Six Months Ended

Nine Months Ended

September 30,

(In thousands)

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Cost of Revenue and Gross Margin

Cost of revenue increased $1.6 million, or 11%, to $16.4 million in the three months ended June 30, 2022, compared to $14.8 million in the three months ended June 30, 2021.

Cost of revenue increased $3.1 million, or 11%, to $30.5 million in the six months ended June 30, 2022, compared to $27.4 million in the six months ended June 30, 2021.

Cost of revenue increased $3.0 million, or 19%, to $18.5 million in the three months ended September 30, 2022, compared to $15.5 million in the three months ended September 30, 2021.

Cost of revenue increased $6.1 million, or 14%, to $49.0 million in the nine months ended September 30, 2022, compared to $42.9 million in the nine months ended September 30, 2021.

The increase in cost of revenue in both periods was primarily attributable to the additional contribution of AffloVest sales and an increase in inbound freight costs.

The total gross margin was 73% and 71% of sales in the three months ended June 30, 2022 and 2021, respectively, and 72% and 71% of sales in the six months ended June 30, 2022 and 2021, respectively.

The total gross margin was 72% and 70% of revenue in the three months ended September 30, 2022 and 2021, respectively, and 72% and 71% of revenue in the nine months ended September 30, 2022 and 2021, respectively.

Sales and Marketing Expenses

Sales and marketing expenses increased $7.9 million, or 38%, to $28.8 million in the three months ended June 30, 2022, compared to $20.9 million in the three months ended June 30, 2021.

Sales and marketing expenses increased $4.4 million, or 20%, to $26.6 million in the three months ended September 30, 2022, compared to $22.2 million in the three months ended September 30, 2021.

The increase was primarily attributable to a:

● $4.3 million increase in personnel-related compensation expense as a result of the increased headcount in the collective field commercial team;

● $1.3 million increase in travel and entertainment expense due to eased restrictions on travel;

● $1.2 million increase related to our annual national sales training meeting ;

● $0.6 million increase for new product introduction.

Sales and marketing expenses increased $13.0 million, or 33%, to $52.7 million in the six months ended June 30, 2022, compared to $39.7 million in the six months ended June 30, 2021.

● $0.5 million increase in travel and entertainment expense;

● $0.1 million increase related to sales meetings and tradeshows .

These increases were p artially offset by a $0.5 million decrease in expenses for new product introduction.

Sales and marketing expenses increased $17.4 million, or 28%, to $79.3 million in the nine months ended September 30, 2022, compared to $61.9 million in the nine months ended September 30, 2021.

The increase was primarily attributable to a:

● $12.7 million increase in personnel-related compensation expense as a result of the increased headcount in the collective field commercial team;

● $2.2 million increase in travel and entertainment expense due to eased restrictions on travel;

● $2.6 million increase in travel and entertainment expense;

● $1.2 million increase related to our annual national sales training meeting;

● $0.9 million increase for new product introduction;

● $0.4 million increase in sales meetings and tradeshows.

● $0.5 million increase related to sales meetings and tradeshows;

● $0.4 million increase in expenses for new product introduction.

Research and Development Expenses

Research and development (“R&D”) expenses increased $0.6 million, or 53%, to $1.8 million in the three months ended June 30, 2022, compared to $1.2 million in the three months ended June 30, 2021, which was primarily attributable to an increase in personnel-related compensation expense, R&D supplies and professional services.

R&D expenses increased $0.9 million, or 36%, to $3.4 million in the six months ended June 30, 2022, compared to $2.5 million in the six months ended June 30, 2021, which was primarily attributable to an increase in personnel-related compensation expense, R&D supplies and professional services.

Research and development (“R&D”) expenses increased $0.2 million, or 12%, to $1.6 million in the three months ended September 30, 2022, compared to $1.4 million in the three months ended September 30, 2021, which was primarily attributable to an increase in personnel-related compensation expense and R&D supplies.

R&D expenses increased $1.1 million, or 27%, to $5.0 million in the nine months ended September 30, 2022, compared to $3.9 million in the nine months ended September 30, 2021, which was primarily attributable to an increase in personnel-related compensation expense, R&D supplies, and professional services.

Reimbursement, General and Administrative Expenses

Reimbursement, general and administrative expenses increased $0.8 million, or 6%, to $14.9 million in the three months ended June 30, 2022, compared to $14.1 million in the three months ended June 30, 2021.

Reimbursement, general and administrative expenses increased $1.8 million, or 12%, to $16.3 million in the three months ended September 30, 2022, compared to $14.5 million in the three months ended September 30, 2021.

This increase was primarily attributable to a:

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● $1.3 million increase in occupancy costs, depreciation expense, and legal and professional fees.

Reimbursement, general and administrative expenses increased $2.8 million, or 10%, to $31.1 million in the six months ended June 30, 2022, compared to $28.3 million in the six months ended June 30, 2021.

These increases were partially offset by a $0.8 million decrease in acquisition costs.

Reimbursement, general and administrative expenses increased $4.6 million, or 11%, to $47.4 million in the nine months ended September 30, 2022, compared to $42.8 million in the nine months ended September 30, 2021.

This increase was primarily attributable to a:

1 unchanged sentence

● $2.6 million increase in personnel-related compensation expense as a result of increased headcount in our reimbursement operations, payer relations and corporate functions;

● $0.1 million increase in travel and entertainment expenses.

These increases were partially offset by a $0.8 million decrease in acquisition costs.

Intangible Asset Amortization and Earn-out Expense

Intangible asset amortization and earn-out expense increased $1.7 million to $1.7 million in the three months ended June 30, 2022, compared to $48 thousand in the three months ended June 30, 2021.

The increase in intangible asset amortization and earn-out expense was primarily attributable to the increase in the estimated fair value of our earn-out liability.

Intangible asset amortization and earn-out expense increased $8.7 million to $8.8 million in the six months ended June 30, 2022, compared to $0.1 million in the six months ended June 30, 2021.

Intangible asset amortization and earn-out expense increased $3.8 million to $4.0 million in the three months ended September 30, 2022, compared to $0.2 million in the three months ended September 30, 2021.

The increase in intangible asset amortization and earn-out expense was partially attributable to the increase in the estimated fair value of our earn-out liability and partially attributable to a full quarter of amortization in the 2022 period versus a half month of amortization in the 2021 period.

Intangible asset amortization and earn-out expense increased $12.5 million to $12.8 million in the nine months ended September 30, 2022, compared to $0.3 million in the nine months ended September 30, 2021.

The increase in intangible asset amortization and earn-out expense was primarily attributable to the increase in the estimated fair value of our earn-out liability.

Other Expense, Net

Other expense, net was $0.6 million and $24 thousand for the three months ended June 30, 2022 and 2021, respectively, and was $1.0 million and $34 thousand for the six months ended June 30, 2022 and 2021, respectively.

Other expense was primarily attributable to an increase in interest expense .

We recorded an income tax benefit of $20 thousand and $1.4 million for the three months ended June 30, 2022 and 2021, respectively.

We recorded an income tax expense of $0.2 million and an income tax benefit of $3.2 million for the six months ended June 30, 2022 and 2021, respectively.

The difference relates to a full valuation allowance being recorded against all deferred tax assets in the current year periods and a tax benefit related to a research and development credit recognized in the second quarter of 2021.

Other expense, net was $0.7 million and $0.1 million for the three months ended September 30, 2022 and 2021, respectively, and was $1.8 million and $0.2 million for the nine months ended September 30, 2022 and 2021, respectively.

The increase in both periods was primarily attributable to an increase in interest expense .

We recorded an income tax benefit of $77 thousand and an income tax expense of $1.9 million for the three months ended September 30, 2022 and 2021, respectively.

We recorded an income tax expense of $0.1 million and an income tax benefit of $1.4 million for the nine months ended September 30, 2022 and 2021, respectively.

The differences relate to a full valuation allowance being recorded for net deferred tax assets for the current year periods, whereas no valuation allowance was recorded for the 2021 periods.

Liquidity and Capital Resources

At June 30, 2022, our principal sources of liquidity were cash and cash equivalents of $ 23.4 million and net accounts receivable of $ 64.5 million.

This compares to cash and cash equivalents of $28.2 million and net accounts receivable of $62.3 million at December 31, 2021.

At September 30, 2022, our principal sources of liquidity were cash and cash equivalents of $ 23.4 million and net accounts receivable of $ 69.5 million.

This compares to cash and cash equivalents of $22.4 million and net accounts receivable of $44.3 million at September 30, 2021.

The following table summarizes our cash flows for the periods indicated:

Six Months Ended

Nine Months Ended

September 30,

(In thousands)

Net cash (used in) provided by:

Net cash provided by (used in):

Operating activities

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Financing activities

Net (decrease) increase in cash and cash equivalents

Net decrease in cash and cash equivalents

Operating Activities

Net cash used in operating activities during the six months ended June 30, 2022, was $0.9 million, resulting from a net loss of $20.2 million, which was partially offset by a net increase in operating assets and liabilities of $3.5 million and non-cash net (loss) income adjustments of $15.8 million.

The non-cash net (loss) income adjustments consisted primarily of $7.6 million related to a change in fair value of earn-out liability, $5.1 million of stock-based compensation expense, $3.0 million of depreciation and amortization expense and $0.1 million of deferred income tax expense.

The uses of cash related to changes in operating assets primarily consisted of increases in accounts receivable of $2.2 million, net investment in leases of $0.9 million and inventories of $0.7 million, partially offset by decreases in prepaid expenses and other assets of $1.9 million.

The changes in operating liabilities consisted of increases in accounts payable of $4.1 million and accrued expenses and other liabilities of $1.2 million.

Net cash used in operating activities during the six months ended June 30, 2021, was $1.9 million, resulting from a net loss of $1.0 million and a net decrease in operating assets and liabilities of $3.7 million, which was partially offset by non-cash net income (loss) adjustments of $2.8 million.

The non-cash net income (loss) adjustments consisted primarily of $5.1 million of stock-based compensation expense, $3.6 million in deferred taxes and $1.3 million of depreciation and amortization expense.

The uses of cash related to changes in operating assets primarily consisted of increases in inventories of $2.6 million, accounts receivable of $1.2 million, net investment in leases of $1.0 million and income taxes of $0.8 million, partially offset by a decrease in prepaid expenses and other assets of $0.5 million.

The changes in operating liabilities consisted of increases in accrued expenses of $1.7 million and accounts payable of $0.9 million, partially offset by a decrease in accrued payroll and related taxes of $1.3 million.

Net cash provided by operating activities during the nine months ended September 30, 2022 was $1.4 million, primarily resulting from non-cash net (loss) income adjustments of $23.3 million and a net increase in operating assets and liabilities of $0.6 million, partially offset by a net loss of $22.5 million.

The non-cash net (loss) income adjustments consisted primarily of $10.9 million related to a change in fair value of earn-out liability, $7.7 million of stock-based compensation expense and $4.7 million of depreciation and amortization expense.

The uses of cash related to changes in operating assets primarily consisted of increases in net investment in leases of $2.6 million, accounts receivable of $2.3 million, inventories of $3.8 million, and prepaid expenses and other assets of $0.3 million.

The changes in operating liabilities consisted of increases in accrued expenses and other liabilities of $6.8 million, accounts payable of $6.1 million, and accrued payroll and related taxes of $1.4 million.

Net cash used in operating activities during the nine months ended September 30, 2021, was $3.0 million, resulting from a net loss of $4.3 million and a net decrease in operating assets and liabilities, net of acquisition, of $6.8 million, which was partially offset by non-cash net income (loss) adjustments of $8.1 million.

The non-cash net income (loss) adjustments consisted primarily of $7.7 million of stock-based compensation

expense, $2.1 million of depreciation and amortization expense and a $1.7 million increase in deferred taxes.

The uses of cash related to changes in operating assets primarily consisted of increases in inventories of $3.6 million, in accounts receivable of $3.4 million, in net investment in leases of $1.7 million, in income taxes of $1.2 million, and in prepaid expenses and other assets of $1.1 million.

The changes in operating liabilities consisted of increases in accrued expenses and other liabilities of $2.9 million and accounts payable of $2.0 million, partially offset by a decrease in accrued payroll and related taxes of $1.3 million.

Investing Activities

Net cash used in investing activities during the six months ended June 30, 2022, was $0.4 million, consisting of purchases of property and equipment, and patent costs.

Net cash used in investing activities during the six months ended June 30, 2021, was $0.7 million, consisting of purchases of property and equipment, and patent costs.

Net cash used in investing activities during the nine months ended September 30, 2022, was $1.8 million, consisting of purchases of property and equipment, and patent costs.

Net cash used in investing activities during the nine months ended September 30, 2021, was $81.2 million, primarily consisting of acquisition-related payments of $79.8 million associated with the purchase of the AffloVest business and $1.4 million in purchases of property and equipment, and patent costs.

Financing Activities

Net cash used by financing activities during the six months ended June 30, 2022, was $3.6 million, primarily consisting of payments of $4.5 million made on our term loan, slightly offset by $1.0 million in proceeds from exercise of common stock options and the issuance of common stock under the ESPP.

Net cash provided by financing activities during the six months ended June 30, 2021, was $3.8 million, consisting of $4.9 million in proceeds from exercise of common stock options and the issuance of common stock under the ESPP, partially offset by $1.1 million in taxes paid for the net share settlement of performance and restricted stock units.

Net cash used in financing activities during the nine months ended September 30, 2022, was $4.3 million, primarily consisting of payments of $5.3 million made on our term loan, slightly offset by $1.0 million in proceeds from exercise of common stock options and the issuance of common stock under the ESPP.

Net cash provided by financing activities during the nine months ended September 30, 2021, was $58.8 million, primarily consisting of borrowings of $54.8 million net of debt issuance costs incurred and $5.1 million in proceeds from the exercise of common stock options and the issuance of common stock under the ESPP, partially offset by $1.2 million in taxes paid for the net share settlement of performance and restricted stock units.

Credit Agreement

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Pursuant to the Second Amendment, we made a mandatory principal prepayment of the term loan of $3.0 million on February 22, 2022.

As of June 30, 2022, the outstanding balance of the term loan was $25.5 million and the outstanding balance under the revolving credit facility was $25.0 million.

As of June 30, 2022, there was no availability under our Credit Agreement.

As of September 30, 2022, the outstanding balance of the term loan was $24.8 million and the outstanding balance under the revolving credit facility was $25.0 million.

As of September 30, 2022, there was no availability under our Credit Agreement.

Our obligations under the Credit Agreement are secured by a security interest in substantially all of our and our subsidiaries’ assets and are also guaranteed by our subsidiaries.

The Credit Agreement contains a number of restrictions and covenants, including that we maintain compliance with a maximum leverage ratio, a

minimum fixed charge coverage ratio, a minimum consolidated EBITDA covenant and a minimum liquidity covenant.

As of June 30, 2022, we were in compliance with all financial covenants under the Credit Agreement.

The Credit Agreement contains a number of restrictions and covenants, including that we maintain compliance with a maximum leverage ratio, a minimum fixed charge coverage ratio, a minimum consolidated EBITDA covenant and a minimum liquidity covenant.

As of September 30, 2022, we were in compliance with all financial covenants under the Credit Agreement.

For additional information regarding the Credit Agreement, including interest rates, fees and maturities, see Note 9 – “Credit Agreement” of the condensed consolidated financial statements contained in this report.

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There have been no material changes since December 31, 2021.

As discussed in Note 4 – “Acquisitions” of the condensed consolidated financial statements contained in this report, t he initial earn-out payment under the AffloVest Acquisition is $10.0 million, of which we will pay $5.0 million on or before November 28, 2022, and of which we will pay $5.0 million, plus an imputed interest payment of $250,000, on or before May 26, 2023.

Adequacy of Resources

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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