Surmodics(SRDX) - 2022 Q2 - Quarterly Report

PART I. FINANCIAL INFORMATION This section presents Surmodics' unaudited condensed consolidated financial statements and management's analysis Item 1. Unaudited Condensed Consolidated Financial Statements Surmodics reported a net loss and comprehensive loss, driven by lower Medical Device license fees and increased operating expenses Condensed Consolidated Balance Sheets The balance sheet shows a decrease in total assets, liabilities, and stockholders' equity, alongside reduced cash and cash equivalents Condensed Consolidated Balance Sheet Highlights (In thousands) | Metric | March 31, 2022 | September 30, 2021 | | :-------------------------------- | :------------- | :----------------- | | Total Assets | $184,187 | $194,592 | | Total Liabilities | $50,924 | $54,507 | | Total Stockholders' Equity | $133,263 | $140,085 | | Cash and cash equivalents | $24,712 | $31,153 | Condensed Consolidated Statements of Operations The statements reflect a shift from prior-year income to a net loss, driven by decreased total revenue and operating losses Condensed Consolidated Statements of Operations Highlights (In thousands, except per share data) | Metric | Three Months Ended Mar 31, 2022 | Three Months Ended Mar 31, 2021 | Six Months Ended Mar 31, 2022 | Six Months Ended Mar 31, 2021 | | :-------------------------------- | :------------------------------ | :------------------------------ | :---------------------------- | :---------------------------- | | Total revenue | $26,106 | $34,995 | $49,109 | $57,292 | | Operating (loss) income | $(4,900) | $9,483 | $(8,341) | $9,576 | | Net (loss) income | $(4,083) | $8,087 | $(6,895) | $7,813 | | Basic net loss (income) per share | $(0.29) | $0.59 | $(0.50) | $0.57 | | Diluted net loss (income) per share | $(0.29) | $0.58 | $(0.50) | $0.56 | Condensed Consolidated Statements of Comprehensive (Loss) Income The statements show a shift from comprehensive income to a significant comprehensive loss, driven by net loss and other comprehensive losses Condensed Consolidated Statements of Comprehensive (Loss) Income Highlights (In thousands) | Metric | Three Months Ended Mar 31, 2022 | Three Months Ended Mar 31, 2021 | Six Months Ended Mar 31, 2022 | Six Months Ended Mar 31, 2021 | | :-------------------------------- | :------------------------------ | :------------------------------ | :---------------------------- | :---------------------------- | | Net (loss) income | $(4,083) | $8,087 | $(6,895) | $7,813 | | Other comprehensive (loss) income | $(1,509) | $(1,775) | $(3,161) | $57 | | Comprehensive (loss) income | $(5,592) | $6,312 | $(10,056) | $7,870 | - Foreign currency translation adjustments contributed significantly to other comprehensive loss, with a $(3,150)K adjustment for the six months ended March 31, 2022, compared to a $64K gain in the prior-year period[11] Condensed Consolidated Statements of Stockholders' Equity Stockholders' equity decreased, primarily driven by net loss and other comprehensive loss, partially offset by stock-based compensation Condensed Consolidated Statements of Stockholders' Equity Highlights (In thousands) | Metric | September 30, 2021 | March 31, 2022 | | :-------------------------------- | :----------------- | :------------- | | Total Stockholders' Equity | $140,085 | $133,263 | | Net loss (6 months) | N/A | $(6,895) | | Other comprehensive loss, net of tax (6 months) | N/A | $(3,161) | | Stock-based compensation (6 months) | N/A | $3,399 | - The decrease in total stockholders' equity was primarily driven by the net loss and other comprehensive loss, partially offset by stock-based compensation and common stock issuances[13] Condensed Consolidated Statements of Cash Flows Cash flows from operations shifted from positive to negative, leading to a net decrease in cash and cash equivalents for the period Condensed Consolidated Statements of Cash Flows Highlights (Six Months Ended March 31, In thousands) | Activity | 2022 | 2021 | | :-------------------------------- | :----- | :----- | | Operating activities | $(11,226) | $11,745 | | Investing activities | $5,663 | $5,470 | | Financing activities | $(660) | $143 | | Net change in cash and cash equivalents | $(6,441) | $17,374 | - Cash used in operating activities for the first six months of fiscal 2022 was primarily due to the net loss of $(6.9) million, cash used in deferred revenue $(2.5) million, inventories $(2.7) million, and prepaids and other $(1.9) million[14][106][109] Notes to Condensed Consolidated Financial Statements These notes provide detailed explanations and disclosures for the condensed consolidated financial statements, including accounting policies and key financial items 1. Basis of Presentation This section outlines the company's business model as a provider of surface modification technologies and its growth strategy in medical devices - Surmodics is a leading provider of surface modification technologies for intravascular medical devices and chemical components for in vitro diagnostic (IVD) immunoassay tests and microarrays[17] - The company's key growth strategy involves developing and commercializing highly differentiated medical devices that leverage its expertise in proprietary surface technologies and enhanced device design, development, and manufacturing capabilities[17] 2. Revenue This section disaggregates revenue by segment and type, highlighting a significant decline in Medical Device license fees despite growth in product sales Revenue Disaggregation by Segment and Type (In thousands) | Revenue Type | Three Months Ended Mar 31, 2022 | Three Months Ended Mar 31, 2021 | Six Months Ended Mar 31, 2022 | Six Months Ended Mar 31, 2021 | | :-------------------------------- | :------------------------------ | :------------------------------ | :---------------------------- | :---------------------------- | | Medical Device Revenue: | | | | | | Product sales | $6,441 | $5,410 | $13,229 | $9,971 | | Royalties | $8,358 | $7,474 | $15,244 | $15,383 | | License fees | $1,486 | $12,578 | $2,699 | $14,003 | | R&D and other | $2,168 | $2,445 | $4,189 | $4,746 | | Total Medical Device Revenue | $18,453 | $27,907 | $35,361 | $44,103 | | In Vitro Diagnostics Revenue: | | | | | | Product sales | $7,523 | $6,373 | $13,079 | $11,914 | | R&D and other | $130 | $715 | $669 | $1,275 | | Total In Vitro Diagnostics Revenue | $7,653 | $7,088 | $13,748 | $13,189 | | Total Revenue | $26,106 | $34,995 | $49,109 | $57,292 | - Total revenue decreased by 25.4% for the three months and 14.3% for the six months ended March 31, 2022, primarily due to an 88% decline in Medical Device license fees[23] - Medical Device product sales increased by 32.7% for the six months ended March 31, 2022, and In Vitro Diagnostics revenue increased by 4.2% for the same period[23] 3. Collaborative Arrangement This section details the exclusive commercialization agreement with Abbott for the SurVeil DCB, including potential milestone payments and deferred revenue - Surmodics has an exclusive worldwide commercialization agreement with Abbott Vascular, Inc. for its SurVeil™ drug-coated balloon (DCB), with a premarket approval (PMA) application under FDA evaluation[25] - The company may receive an additional contingent milestone payment of up to $30 million upon FDA PMA approval of the SurVeil DCB, which was excluded from the contract price due to high uncertainty as of March 31, 2022[27] Revenue from Abbott Agreement (In thousands) | Period | 2022 | 2021 | | :-------------------------------- | :----- | :----- | | Three Months Ended March 31 | $1,400 | $12,500 | | Six Months Ended March 31 | $2,600 | $13,800 | - Deferred revenue from the Abbott Agreement totaled $12.3 million as of March 31, 2022, expected to be recognized over the next four years through fiscal 2025[29][30] 4. Fair Value Measurements This section outlines the fair value measurements for assets and liabilities, primarily cash equivalents, available-for-sale securities, and contingent consideration Assets and Liabilities Measured at Fair Value (In thousands) | Metric | March 31, 2022 | September 30, 2021 | | :-------------------------------- | :------------- | :----------------- | | Total assets at fair value | $5,022 | $15,027 | | Total liabilities at fair value (Contingent consideration) | $823 | $817 | - Cash equivalents and available-for-sale securities are measured using Level 2 inputs, while contingent consideration liabilities are measured using Level 3 inputs (discount rates, probabilities of payment, projected payment dates)[32][33] - Contingent consideration liabilities increased slightly due to interest accretion, associated with the fiscal 2021 acquisition of Vetex Medical Limited[34] 5. Supplemental Balance Sheet Information This section provides additional details on selected balance sheet items, including available-for-sale securities, inventories, prepaids, intangible assets, and goodwill Selected Balance Sheet Information (In thousands) | Metric | March 31, 2022 | September 30, 2021 | | :-------------------------------- | :------------- | :----------------- | | Available-for-sale securities | $2,007 | $9,719 | | Inventories, net | $9,471 | $6,760 | | Prepaids and other current assets | $7,907 | $6,453 | | Total intangible assets, net | $33,511 | $37,054 | | Goodwill | $44,248 | $45,606 | - Inventories increased by $2.7 million, driven by raw materials, work-in-process, and finished products[36] - Goodwill decreased by $1.358 million, primarily due to a currency translation adjustment in the Medical Device segment[40] - A $3.577 million CARES Act employee retention credit receivable was recorded in prepaids and other current assets[37] 6. Debt This section details the company's secured revolving credit facility, including its outstanding balance, maturity date, and financial covenants - The company has a secured revolving credit facility of up to $25 million with Bridgewater Bank[44] - The outstanding balance on the Revolving Credit Facility was $10.0 million as of both March 31, 2022, and September 30, 2021[44] - The maturity date was extended to September 14, 2022, with an option for one additional 12-month extension, subject to certain conditions[45] - The facility includes customary financial covenants, such as minimum liquidity, current ratio, quarterly revenue, and tangible net worth[46] 7. Stock-based Compensation Plans This section outlines stock-based compensation expenses and unrecognized costs, along with details on awards granted during the period Stock-based Compensation Expense (In thousands) | Category | Three Months Ended Mar 31, 2022 | Three Months Ended Mar 31, 2021 | Six Months Ended Mar 31, 2022 | Six Months Ended Mar 31, 2021 | | :-------------------------------- | :------------------------------ | :------------------------------ | :---------------------------- | :---------------------------- | | Product costs | $78 | $32 | $108 | $69 | | Research and development | $296 | $305 | $731 | $589 | | Selling, general and administrative | $1,345 | $1,092 | $2,560 | $2,204 | | Total | $1,719 | $1,429 | $3,399 | $2,862 | - Approximately $12.8 million of total unrecognized compensation costs related to non-vested awards is expected to be recognized over a weighted average period of approximately 2.5 years[48] - The company awarded 283,000 stock options, 83,000 restricted stock shares, and 14,000 restricted stock units during the six months ended March 31, 2022[49][50][51] 8. Net (Loss) Income Per Share Data This section details basic and diluted net loss per share, noting that potentially dilutive shares were anti-dilutive due to the net loss incurred - Basic and diluted net loss per share were the same for the three and six months ended March 31, 2022, because the effect of potentially dilutive common shares was anti-dilutive due to the net loss incurred[53] Weighted Average Number of Shares Outstanding (In thousands) | Metric | Three Months Ended Mar 31, 2022 | Three Months Ended Mar 31, 2021 | Six Months Ended Mar 31, 2022 | Six Months Ended Mar 31, 2021 | | :-------------------------------- | :------------------------------ | :------------------------------ | :---------------------------- | :---------------------------- | | Basic weighted average shares outstanding | 13,917 | 13,746 | 13,896 | 13,699 | | Diluted weighted average shares outstanding | 13,917 | 13,981 | 13,896 | 13,915 | 9. Income Taxes This section presents the income tax benefit or provision, explaining the effective tax rate's deviation from the statutory rate and unrecognized tax benefits Income Tax Benefit (Provision) (In thousands) | Period | 2022 | 2021 | | :-------------------------------- | :----- | :----- | | Three Months Ended March 31 | $919 | $(1,438) | | Six Months Ended March 31 | $1,625 | $(1,606) | - The effective income tax rate differs from the U.S. federal statutory rate of 21% primarily due to U.S. federal R&D tax credits, operating results of an Irish subsidiary (offset by valuation allowance), and effects of equity compensation[56] - Total unrecognized tax benefits, excluding interest and penalties, were $3.0 million as of March 31, 2022[57] 10. Commitments and Contingencies This section outlines the company's contractual obligations, including remaining payments for clinical trials and acquisition-related installments and contingent payments - The company has estimated $9 million remaining to be paid on contracts for the TRANSCEND pivotal clinical trial for the SurVeil DCB, with the total cost estimated between $37 million and $40 million from inception to completion[59] - Under the Embolitech Transaction, the company is obligated to pay additional installments totaling $2.0 million in fiscal 2023 through fiscal 2024, and a contingent $1.0 million payment upon achievement of certain regulatory milestones by 2033[61] 11. Acquisitions This section details the acquisition of Vetex Medical Limited, including the purchase consideration, allocation of assets, and amortization of intangible assets - On July 2, 2021, Surmodics acquired Vetex Medical Limited for an upfront cash payment of $39.9 million, expanding its thrombectomy portfolio[63][64] - The acquisition included additional guaranteed installments of $3.5 million (FY2024-2027) and contingent payments of $3.5 million, tied to product development and regulatory milestones[64] Preliminary Allocation of Vetex Purchase Consideration (In thousands) | Asset (Liability) | Amount | | :-------------------------------- | :----- | | Intangible assets | $27,600 | | Goodwill | $19,089 | | Total purchase consideration, net of cash acquired | $43,624 | - The acquired intangible assets (developed technology) are amortized over 12 years, and the goodwill is not deductible for tax purposes[68][69] 12. Segment Information This section disaggregates operating results by segment, highlighting the Medical Device segment's operating loss and the In Vitro Diagnostics segment's sustained operating income Segment Operating (Loss) Income (In thousands) | Segment | Three Months Ended Mar 31, 2022 | Three Months Ended Mar 31, 2021 | Six Months Ended Mar 31, 2022 | Six Months Ended Mar 31, 2021 | | :-------------------------------- | :------------------------------ | :------------------------------ | :---------------------------- | :---------------------------- | | Medical Device | $(5,612) | $8,564 | $(9,404) | $7,971 | | In Vitro Diagnostics | $3,720 | $3,809 | $6,875 | $7,029 | | Corporate | $(3,008) | $(2,890) | $(5,812) | $(5,424) | - The Medical Device segment reported an operating loss for the current periods, a significant decline from prior-year operating income, primarily due to decreased license fee revenue and increased operating expenses[70][103] - The In Vitro Diagnostics segment maintained operating income, though slightly decreased, with product gross margins of 68.4% for the six months ended March 31, 2022[70][104] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This section discusses Surmodics' business strategy, financial performance, and liquidity, highlighting revenue decline and increased commercialization expenses Overview This overview describes Surmodics' core business as a provider of surface modification technologies and its strategic focus on developing differentiated medical devices - Surmodics is a leading provider of surface modification technologies for intravascular medical devices and chemical components for in vitro diagnostic (IVD) immunoassay tests and microarrays[75] - The company's key growth strategy is the development and commercialization of highly differentiated medical devices to address unmet clinical needs and capture more revenue and operating margin[75][78] Acquisition of Vetex Medical Limited This section details the fiscal 2021 acquisition of Vetex Medical Limited, which expanded the company's thrombectomy portfolio with new FDA-cleared devices - In fiscal 2021, Surmodics acquired Vetex Medical Limited for an upfront cash payment of $39.9 million, expanding its thrombectomy portfolio[76] - The acquisition added the Pounce™ Venous Thrombectomy Catheter, an FDA 510(k)-cleared and CE Mark approved device for venous clot removal[77] Vascular Intervention Device Platforms This section details the company's vascular intervention device platforms, including Pounce, Sublime, and various DCBs, outlining their regulatory status and commercialization - The Pounce Thrombectomy Platform includes two FDA 510(k) approved mechanical thrombectomy devices; commercial sales for Pounce Arterial began in Q1 FY2022, and clinical evaluation for Pounce Venous is expected in H2 FY2022[80][85] - The Sublime Radial Access Platform consists of FDA 510(k) approved devices for vascular intervention via radial access, with commercial sales for the guide sheath and .014 RX PTA catheter starting in Q4 FY2021, and the .018 RX PTA catheter in Q1 FY2022[82][85] - The SurVeil™ DCB, a paclitaxel-coated DCB for PAD, is awaiting FDA PMA, which could trigger a $30 million (or $27 million) milestone payment from Abbott[83][84] - The Sundance™ DCB (sirolimus-coated for below-the-knee PAD) has completed its SWING clinical study, and the Avess™ DCB (paclitaxel-coated for AV fistulae) strategy for further clinical investment will be evaluated in fiscal 2022[84][86] COVID Pandemic Update This section addresses the ongoing impact of the COVID-19 pandemic on the company's revenue, operations, and clinical studies, noting future uncertainties - The COVID-19 pandemic continues to impact the company's revenue, operations, and clinical studies in fiscal 2022[87] - The extent of future impacts remains highly uncertain, depending on the severity and longevity of COVID variants, economic activity, and public health responses[87] Results of Operations This section analyzes the company's revenue performance and operating costs, highlighting the impact of decreased license fees and increased commercialization expenses Revenue Performance by Segment (In thousands) | Segment | Three Months Ended Mar 31, 2022 | Three Months Ended Mar 31, 2021 | Six Months Ended Mar 31, 2022 | Six Months Ended Mar 31, 2031 | | :-------------------------------- | :------------------------------ | :------------------------------ | :---------------------------- | :---------------------------- | | Medical Device Revenue | $18,453 | $27,907 | $35,361 | $44,103 | | In Vitro Diagnostics Revenue | $7,653 | $7,088 | $13,748 | $13,189 | | Total Revenue | $26,106 | $34,995 | $49,109 | $57,292 | - Total revenue decreased by 25% for the three months and 14% for the six months ended March 31, 2022, primarily due to an 88% decline in Medical Device license fees from the Abbott Agreement, which included a $10.8 million milestone payment in Q2 FY2021[90][94] - Medical Device product sales increased 32.7% for the first six months of fiscal 2022, driven by contract-manufactured balloon catheters, specialty catheters, and recently commercialized Pounce and Sublime products[94] - IVD product revenue increased 9.8% for the first six months of fiscal 2022, benefiting from favorable order timing of distributed antigen products and growth in protein stabilization and colorimetric substrate products[95] Operating Costs and Expenses as % of Total Revenue | Expense Category | Three Months Ended Mar 31, 2022 | Three Months Ended Mar 31, 2021 | Six Months Ended Mar 31, 2022 | Six Months Ended Mar 31, 2021 | | :-------------------------------- | :------------------------------ | :------------------------------ | :---------------------------- | :---------------------------- | | Product costs | 20% | 12% | 20% | 14% | | Research and development | 53% | 37% | 52% | 42% | | Selling, general and administrative | 43% | 23% | 41% | 26% | | Acquired intangible asset amortization | 4% | 2% | 4% | 2% | - R&D expense increased 6.8% for the first six months of fiscal 2022, with the Vetex acquisition adding $1.0 million[97] - SG&A expense increased 36.0% for the first six months of fiscal 2022, driven by investments in sales and marketing personnel and infrastructure to support the commercialization of Pounce and Sublime products[98] Cash Flow Operating Results This section analyzes cash flows, noting a shift to cash used in operating activities due to net loss, increased inventories, and higher prepaids Cash Flow Summary (Six Months Ended March 31, In thousands) | Activity | 2022 | 2021 | | :-------------------------------- | :----- | :----- | | Operating activities | $(11,226) | $11,745 | | Investing activities | $5,663 | $5,470 | | Financing activities | $(660) | $143 | | Net change in cash and cash equivalents | $(6,441) | $17,374 | - Cash used in operating activities for the first six months of fiscal 2022 was primarily due to the net loss of $(6.9) million, cash used in deferred revenue $(2.5) million, inventories $(2.7) million, and prepaids and other $(1.9) million[106][109] - Net cash provided by investing activities was $5.7 million, mainly from maturities of available-for-sale securities ($7.6 million)[107] - Net cash used in financing activities was $(0.7) million, primarily related to payments for taxes associated with net share settlement of equity awards[108] Liquidity and Capital Resources This section assesses the company's liquidity, highlighting decreases in working capital and cash, and its dependence on new product adoption and milestone payments Liquidity Metrics (In thousands) | Metric | March 31, 2022 | September 30, 2021 | | :-------------------------------- | :------------- | :----------------- | | Working capital | $36,300 | $40,400 | | Cash and cash equivalents and available-for-sale investments | $26,700 | $40,900 | | Revolving credit facility outstanding balance | $10,000 | $10,000 | - Working capital decreased by $4.1 million, and cash and cash equivalents decreased by $14.2 million, driven by annual bonus payments and operational expenditures for commercialization of Pounce and Sublime platforms[110] - The company anticipates an increase in SG&A expenditures of $13 million to $15 million and capital expenditures of up to $3 million for fiscal 2022 to support commercialization efforts[115] - Future liquidity is significantly dependent on the timing of market introduction and acceptance of medical device products, including the potential $30 million (or $27 million) PMA milestone payment for the SurVeil DCB[111][116] Customer Concentrations This section identifies key customer revenue concentrations, specifically highlighting Abbott and Medtronic as significant contributors to consolidated revenue Customer Revenue Concentration | Customer | % of Consolidated Revenue (FY2021) | % of Consolidated Revenue (6 months ended Mar 31, 2022) | | :-------------------------------- | :--------------------------------- | :------------------------------------------------------ | | Abbott | 21% | 10% | | Medtronic | 13% | 12% | - Revenue generated under the SurVeil DCB license agreement with Abbott represented 5% of total revenue for the six months ended March 31, 2022[118] Critical Accounting Policies and Significant Estimates This section confirms that there were no significant changes in the company's critical accounting policies during the six months ended March 31, 2022 - There were no significant changes in the company's critical accounting policies for the six months ended March 31, 2022[119] Forward-looking Statements This section outlines forward-looking statements regarding future impacts of the COVID-19 pandemic, growth strategies, financial performance, and associated key risk factors - The report contains forward-looking statements regarding the impacts of the COVID-19 pandemic, growth strategies, clinical and regulatory developments, financial performance, and liquidity[120] - Key risk factors include reliance on significant customers (Abbott, Medtronic), clinical and regulatory developments for paclitaxel-coated products, general economic conditions, and risks associated with acquisitions[120][121][124] Item 3. Quantitative and Qualitative Disclosures About Market Risk The company's primary market risk is interest rate risk from short-term debt securities, deemed insignificant, and Euro currency risk from Irish operations - The primary market risk is interest rate risk associated with interest-bearing corporate debt securities, which are high credit quality and generally mature within one year[124] - As of March 31, 2022, the company held $2.0 million in available-for-sale debt securities with maturity dates of less than one year, indicating an insignificant impact from interest rate fluctuations[124] - The company is exposed to increasing Euro currency risk due to its manufacturing operations in Ireland but has not entered into foreign currency forward exchange contracts or other derivative financial instruments to hedge these effects[126] Item 4. Controls and Procedures Management concluded that disclosure controls and procedures were effective as of March 31, 2022, ensuring timely and accurate financial reporting Evaluation of Disclosure Controls and Procedures This section confirms that the company's certifying officers concluded the disclosure controls and procedures were effective as of March 31, 2022 - The company's Certifying Officers concluded that disclosure controls and procedures were effective as of March 31, 2022, ensuring timely and accurate reporting of information[127] Changes in Internal Controls over Financial Reporting This section states that no material changes in internal control over financial reporting occurred during the three months ended March 31, 2022 - There were no material changes in internal control over financial reporting during the three months ended March 31, 2022[128] PART II. OTHER INFORMATION This section provides additional information not covered in the financial statements, including legal proceedings, risk factors, equity sales, and exhibits Item 1. Legal Proceedings The company is periodically involved in various legal actions, including intellectual property and employment disputes - The company has been involved in various legal actions involving its operations, products, technologies, intellectual property, and employment disputes[130] Item 1A. Risk Factors The company refers to the comprehensive list of risk factors detailed in its Annual Report on Form 10-K for the fiscal year ended September 30, 2021 - The risks identified in the Annual Report on Form 10-K for the fiscal year ended September 30, 2021, could affect financial performance and cause actual results to differ materially from expectations[131] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds During the three months ended March 31, 2022, 1,112 shares were purchased for tax withholding, with $25.3 million remaining for repurchases Common Stock Purchases (Three Months Ended March 31, 2022) | Period | Total Number of Shares Purchased | Average Price Paid Per Share | | :-------------------------------- | :----------------------------- | :--------------------------- | | February 1 – 28, 2022 | 1,112 | $41.67 | | Total | 1,112 | $41.67 | - All shares purchased were delivered by employees to satisfy tax withholding obligations related to the vesting of restricted stock[133] - As of March 31, 2022, $25.3 million remained available for future common stock repurchases under existing Board-approved authorizations[134] Item 3. Defaults Upon Senior Securities No defaults upon senior securities were reported - No defaults upon senior securities were reported[135] Item 4. Mine Safety Disclosures This item is not applicable to the company - This item is not applicable[136] Item 5. Other Information No other information was reported under this item - No other information was reported[137] Item 6. Exhibits This section lists all exhibits filed with the Form 10-Q, including various agreements, organizational documents, and certifications - The exhibits include merger agreements, share purchase agreements, restated articles of incorporation and bylaws, a lease agreement, and certifications from the CEO and CFO[139] SIGNATURES The report was officially signed by the Senior Vice President of Finance and Chief Financial Officer on April 27, 2022 - The report was signed on April 27, 2022, by Timothy J. Arens, Senior Vice President of Finance and Chief Financial Officer[142]