PTC 10-Q 2022-12-31

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

For the quarterly period ended December 31, 2022

OR

For the transition period from_ to_

Commission File Number: 0-18059

PTC Inc.

(Exact name of registrant as specified in its charter)

121 Seaport Boulevard**,** Boston**,** MA 02210

(Address of principal executive offices, including zip code)

(781) 370-5000

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and "emerging growth company" in Rule 12b-2 of the Exchange Act:

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑

There were 118,263,203 shares of our common stock outstanding on February 6, 2023.

PTC Inc.

INDEX TO FORM 10-Q

For the Quarter Ended December 31, 2022

PART I—FINANCI****AL INFORMATION

UNAUDITED CONDENSED CONSOLI****DATED FINANCIAL STATEMENTS

PTC Inc.

CONSOLIDATED B****ALANCE SHEETS

(in thousands, except per share data)

(unaudited)

The accompanying notes are an integral part of the condensed consolidated financial statements.

PTC Inc.

CONSOLIDATED STATEM****ENTS OF OPERATIONS

(in thousands, except per share data)

(unaudited)

The accompanying notes are an integral part of the condensed consolidated financial statements.

PTC Inc.

CONSOLIDATED STATEMENTS OF C****OMPREHENSIVE INCOME

(in thousands)

(unaudited)

The accompanying notes are an integral part of the condensed consolidated financial statements.

PTC Inc.

CONSOLIDATED STATEM****ENTS OF CASH FLOWS

(in thousands)

(unaudited)

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Business Overview

PTC is a global software company that provides a portfolio of innovative digital solutions that work together to transform how physical products are engineered, manufactured, and serviced.

Our software portfolio includes award-winning offerings that enable companies to author product data (our CAD portfolio solutions) and manage product data management and orchestrate processes (our PLM portfolio solutions). Our software can be delivered on premises, in the cloud, or in a hybrid model.

Our customer base includes some of the world's most innovative companies in the aerospace and defense, automotive, electronics and high tech, industrial machinery and equipment, life sciences, retail and consumer products industries.

We generate revenue through the sale of software subscriptions, which include license access and support (technical support and software updates); support for perpetual licenses; cloud services (hosting for our software and software-as-a-service (SaaS)); perpetual licenses; and professional services (consulting, implementation, and training).

Forward-Looking Statements

Statements in this document that are not historic facts, including statements about our future financial and growth expectations and targets, the expected effect of the ServiceMax acquisition on our business and future results, and potential stock repurchases, are forward-looking statements that involve risks and uncertainties that could cause actual results to differ materially from those projected. These risks include: the macroeconomic and/or global manufacturing climates may deteriorate sooner or to a greater extent than we expect due to, among other factors, the effects of the COVID-19 pandemic, including supply chain disruptions, increasing interest rates and inflation, volatile foreign exchange rates and the current strength of the U.S. dollar, and the effects of the Russia/Ukraine conflict, including the effect on energy supplies to Europe, all of which could cause customers to delay or reduce purchases of new software, reduce the number of subscriptions they carry, or delay payments to us, which would adversely affect ARR and/or our financial results, including cash flow; our businesses, including our ServiceMax and SaaS businesses, may not expand and/or generate the revenue, cash flow, or ARR we expect if customers are slower to adopt those technologies than we expect or if they adopt competing technologies; our strategic initiatives and investments, including our accelerated investments in our transition to SaaS and the acquisition of ServiceMax, may not deliver the results when or as we expect; we may be unable to integrate the ServiceMax technology when or as we expect; we may be unable to generate sufficient operating cash flow to return 50% of free cash flow to shareholders, and other uses of cash or our credit facility limits could preclude such repurchases; and foreign exchange rates may differ materially from those we expect. In addition, our assumptions concerning our future GAAP and non-GAAP effective income tax rates are based on estimates and other factors that could change, including the geographic mix of our revenue, expenses, and profits, as well as other risks and uncertainties described below throughout or referenced in Part II, Item 1A. Risk Factors of this report.

Operating and Non-GAAP Financial Measures

Our discussion of results includes discussion of our ARR (Annual Run Rate) operating measure, non-GAAP financial measures, and disclosure of our results on a constant currency basis. ARR and our non-GAAP financial measures, including the reasons we use those measures, are described below in Results of Operations - Operating Measure and Results of Operations - Non-GAAP Financial Measures, respectively. The methodology used to calculate constant currency disclosures is described in Results of Operations - Impact of Foreign Currency Exchange on Results of Operations. You should read those sections to understand our operating measure, non-GAAP financial measures, and constant currency disclosures.

Executive Overview

ARR of $1.66 billion at the end of Q1’23 represents 11% growth (15% on a constant currency basis) compared to Q1’22, including contribution from the Codebeamer™ business that we acquired in Q3’22. Organic constant currency ARR growth year over year was 14%. Although ARR grew in Q1’23 due to new bookings and churn improvement, we saw some incremental signs of a softening economy as new bookings came in below our expectations.

We generated $181 million of cash from operations in Q1’23 compared to $138 million in Q1’22, with the increase driven by strong operational execution based on a foundation of top line growth, solid collections and cost discipline. Free cash flow of $172 million in Q1'23 increased from $134 million in Q1'22, which includes capital expenditures of $9 million in Q1'23 and $3 million in Q1'22.

During Q1'23, we entered into an agreement to purchase ServiceMax, Inc. for $1.5 billion. The transaction subsequently closed in early Q2'23 and we made the first installment payment of $835 million, funded by new a new credit agreement that we entered into in connection with the closing of the acquisition. Refer to Note 15. Subsequent Events for additional discussion regarding the acquisition and the new credit agreement.

Results of Operations

The following table shows the financial measures that we consider the most significant indicators of our business performance. In addition to providing operating income, operating margin, diluted earnings per share and cash from operations as calculated under GAAP, we provide non-GAAP operating income, non-GAAP operating margin, non-GAAP diluted earnings per share, and free cash flow for the reported periods. We also provide a view of our actual results on a constant currency basis. These non-GAAP financial measures exclude the items described in Non-GAAP Financial Measures below. Investors should use these non-GAAP financial measures only in conjunction with our GAAP results.

(1)

See Non-GAAP Financial Measures below for a reconciliation of our GAAP results to our non-GAAP financial measures and Impact of Foreign Currency Exchange on Results of Operations below for a description of how we calculate our results on a constant currency basis.

(2)

Recurring revenue is comprised of subscription, perpetual support, and SaaS revenue.

(3)

Cash flow from operations for Q1'23 includes $0.6 million of restructuring payments and $4.3 million of acquisition and transaction-related payments. Cash flow from operations for Q1'22 includes $10.5 million of restructuring payments.

Impact of Foreign Currency Exchange on Results of Operations

Approximately 50% of our revenue and 30% of our expenses are transacted in currencies other than the U.S. Dollar. Because we report our results of operations in U.S. Dollars, currency translation, particularly changes in the Euro, Yen, Shekel, and Rupee relative to the U.S. Dollar, affects our reported results. Our constant currency disclosures are calculated by multiplying the results in local currency for the quarterly periods for FY’23 and FY’22 by the exchange rates in effect on September 30, 2022. Changes in foreign currency exchange rates were a headwind to reported results in Q1'23, compared to Q1'22, but were a tailwind for Q1'23 compared to the exchange rates in effect on September 30, 2022.

If reported results for Q1’23 were converted into U.S. dollars based on September 30, 2022 exchange rates, ARR would have been lower by $60 million, revenue would have been lower by $5 million and expenses would have been lower by $2 million. If reported results for Q1’22 were converted into U.S. dollars based on September 30, 2022 exchange rates, ARR would have been lower by $107 million, revenue would have been lower by $35 million and expenses would have been lower by $18 million.

Revenue

Under ASC 606, the volume, mix, and duration of contract types (support, SaaS, on-premises subscription) starting or renewing in any given period may have a material impact on revenue in the period, and as a result can impact the comparability of reported revenue period over period. We recognize revenue for the license portion of on-premises subscription contracts up front when we deliver the licenses to the customer, typically on the start date, and we recognize revenue on the support portion of on-premises subscription contracts and stand-alone support contracts ratably over the term. We continue to convert existing support contracts to on-premises subscriptions, resulting in a shift to up-front recognition of on-premises subscription license revenue in the period converted compared to ratable recognition for a perpetual support contract. Revenue from our cloud services (primarily SaaS) contracts is recognized ratably. We expect that over time a higher portion of our revenue will be recognized ratably as we expand our SaaS offerings, release additional cloud functionality into our products, and customers migrate from on-premises subscriptions to SaaS. Given the different mix, duration and volume of new and renewing contracts in any period, year-over-year or sequential revenue comparisons can vary significantly.

Revenue by Line of Business

Software revenue growth in Q1’23 was negatively impacted by the value of foreign currencies compared to the U.S. Dollar. Constant currency revenue growth was driven by our Windchill, IIoT, and Arena products.

Professional services revenue decreased in Q1’23 from Q1’22 as we continue to execute on our strategy of leveraging partners to deliver services rather than contracting to deliver services ourselves, including the Q3'22 sale of a portion of our PLM services business to ITC Infotech. Foreign currency exchange rates also represented a headwind to revenue in Q1'23 compared to Q1'22, as a majority of our professional services are in Europe and Asia.

Our expectation is that professional services revenue will continue to trend down over time as we execute on our partner strategy and deliver products that require less consulting and training services.

Software Revenue by Product Group

PLM software revenue growth in Q1’23 was negatively impacted by the value of foreign currencies compared to the U.S. Dollar. Constant currency revenue growth was driven by our Windchill, IIoT, and Arena products. Additionally, Q1’23 revenue benefited from the contribution from our Codebeamer business, which we acquired in Q3’22.

ARR for the PLM product group grew 16% (20% constant currency) from Q1’22 to Q1’23, driven by Windchill.

CAD software revenue in Q1’23 was negatively impacted by the value of foreign currencies compared to the U.S. Dollar. Constant currency revenue growth was driven by Creo.

ARR for the CAD product group grew 5% (10% constant currency) from Q1’22 to Q1’23, driven by Creo.

Software Revenue by Geographic Region

A significant portion of our software revenue is generated outside the U.S. In the first three months of FY'23 and FY'22 approximately 50% of software revenue was generated in the Americas, 35% in Europe, and 15% in Asia Pacific.

Americas software revenue growth in Q1’23 was driven by sales of IIoT, Creo and Arena products.

Americas ARR was up 16% actual and constant currency, driven by Windchill and Creo.

Europe software revenue growth in Q1'23 was negatively impacted by the value of foreign currencies compared to the U.S. Dollar. On a constant currency basis, year-over-year revenue growth was driven by the Windchill product group and contribution from the Codebeamer business (which we acquired in Q3’22).

Europe ARR was up 9% (15% constant currency), driven by Windchill, Codebeamer and Creo.

Asia Pacific software revenue in Q1’23 was negatively impacted by the value of foreign currencies compared to the U.S. Dollar. On a constant currency basis, year-over-year revenue growth was driven by Creo, offset by a decline in Windchill and IIoT revenue. For both Windchill and IIoT, the average duration of on-premises subscriptions starting in the period decreased from Q1'22 to Q1'23, resulting in a reduction of on-premises subscription revenue recognized in Q1’23.

Asia Pacific ARR was up 2% (12% constant currency), driven by Creo and Windchill.

Gross Margin

(1) Non-GAAP financial measures are reconciled to GAAP results under Non-GAAP Financial Measures below.

License gross margin increased in Q1’23 compared to Q1’22 due to a $3.6 million increase in license revenue, partially offset by a $3.0 million increase in cost of license revenue, which was driven by higher royalty expenses.

Support and cloud services gross margin increased in Q1’23 compared to Q1’22 due to increases in support and cloud services revenue of $13.2 million, partially offset by increases in cost of support and cloud services of $4.3 million, which were driven by higher hosting, travel and maintenance costs.

Professional services gross margin decreased in Q1’23 compared to Q1’22, primarily due to decrease in professional services revenue of $8.6 million, partially offset by decrease in professional services costs of $6.6 million.

Operating Expenses

Headcount increased 2% in Q1'23 compared to Q1'22, primarily driven by our acquisition of the Codebeamer business.

Operating expenses in Q1'23 compared to operating expenses in Q1'22 decreased primarily due to the following:

a $34 million decrease in restructuring charges primarily related to the restructuring plan initiated in Q1’22;

a $5 million decrease in compensation expense (including benefit costs) largely driven by foreign currency; and

a $3 million decrease in stock-based compensation.

partially offset by:

a $5 million increase in acquisition and transaction-related costs;

a $3 million increase in travel expenses; and

a $2 million increase in software subscriptions.

Interest Expense

Interest expense includes interest on our credit facility and senior notes. We had $1.4 billion of total debt at the end of Q1'23, compared to $1.5 billion at the end of Q1'22. The average interest rate on borrowings outstanding was 4.2% for Q1'23, compared to 3.2% for Q1'22.

We expect that interest expense will increase over the remainder of the year, driven by incremental debt incurred in connection with the ServiceMax acquisition in Q2'23 and increasing interest rates under our variable-rate revolving credit facility.

Other Income (Expense)

Interest income represents earnings on the investment of our available cash and marketable securities.

The $8.3 million decrease in Other income (expense), net, for Q1'23 compared to Q1'22 was driven by a $9.8 million unrealized gain related to an equity investment in a publicly-traded company recorded in Q1’22.

Income Taxes

In Q1’23 and Q1’22, our effective tax rate differed from the statutory federal income tax rate of 21% due to U.S. tax reform, our corporate structure in which our foreign taxes are at a net effective tax rate lower than the U.S. rate and the excess tax benefit related to stock-based compensation. A significant amount of our foreign earnings is generated by our subsidiaries organized in Ireland and the Cayman Islands. In Q1’23 and Q1’22, the foreign rate differential predominantly relates to these earnings.

In Q1’23 and Q1’22, in addition to the foreign rate differential, the effective tax rate was impacted by the net effects of the Global Intangible Low-Taxed Income (GILTI) and Foreign Derived Intangible Income (FDII) regimes and the excess tax benefit related to stock-based compensation.

Critical Accounting Policies and Estimates

The financial information included in Item 1 reflects no material changes in our critical accounting policies and estimates as set forth under the heading Critical Accounting Policies and Estimates in Part II, Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations of our 2022 Annual Report on Form 10-K.

Recent Accounting Pronouncements

In accordance with recently issued accounting pronouncements, we will be required to comply with certain changes in accounting rules and regulations. Refer to Note 1. Basis of Presentation to the Condensed Consolidated Financial Statements of this Quarterly Report on Form 10-Q, which is incorporated herein by reference, for all recently issued accounting pronouncements.

Liquidity and Capital Resources

Cash, Cash Equivalents and Restricted Cash

We invest our cash with highly rated financial institutions. Cash and cash equivalents include highly liquid investments with original maturities of three months or less. At December 31, 2022, cash and cash equivalents totaled $388 million, compared to $272 million at September 30, 2022.

A significant portion of our cash is generated and held outside the U.S. As of December 31, 2022, we had cash and cash equivalents of $125 million in the U.S., $95 million in Europe, $142 million in Asia Pacific (including India) and $26 million in other non-U.S. countries. We have substantial cash requirements in the U.S., but we believe that the combination of our existing U.S. cash and cash equivalents, our ability to repatriate cash to the U.S., future U.S. operating cash flows and cash available under our credit facility will be sufficient to meet our ongoing U.S. operating expenses and known capital requirements.

Cash Provided by Operating Activities

Cash provided by operating activities was $181 million in Q1'23, compared to $138 million in Q1'22. The increase in cash from operations in Q1'23 compared to Q1'22 was primarily driven by an increase in collections as our ARR (which generates customer billings) has grown year-over-year and lower salary-related payments. Cash from operations for Q1'23 included $0.6 million of restructuring payments, compared to $10.5 million of restructuring payments in Q1'22. In Q1'23 cash from operations also included $4.3 million of acquisition-related payments.

Cash (Used In) Provided by Investing Activities

Cash (used in) provided by investing activities in Q1’23 reflects settlement of net investment hedges of $10.8 million and additions to property and equipment of $9.2 million. Cash provided by investing activities in Q1’22 reflects settlement of net investment hedges of $6.5 million, offset by additions to property and equipment of $3.4 million.

Cash Used in Financing Activities

Cash used in financing activities in Q1'23 reflects payments of withholding taxes related to stock-based awards of $52 million and credit facility origination costs of $1.4 million. Cash used in financing activities in Q1'22 include the repurchase of common stock of $120 million and payments of withholding taxes related to stock-based awards of $49 million.

Outstanding Debt

As of December 31, 2022, we were in compliance with all financial and operating covenants of our then existing credit facility and the note indentures.

At the beginning of Q2'23, we entered into a new credit agreement which consisted of a $500 million term loan and a $1.25 billion credit facility revolver, which replaced our previous $1.0 billion credit facility revolver. Refer to Note 15. Subsequent Events and Note 12. Debt to the Condensed Consolidated Financial Statements of this Quarterly Report on Form 10-Q for additional discussion of our credit agreements.

Future Expectations

We believe that existing cash and cash equivalents, together with cash generated from operations and amounts available under the credit facility, will be sufficient to meet our working capital and capital expenditures requirements (which we expect to be approximately $20 million in FY’23) through at least the next twelve months and to meet our known long-term capital requirements.

On January 3, 2023, in conjunction with the ServiceMax acquisition, we terminated and repaid our prior credit facility and borrowed $630 million under the revolving credit line of the new credit facility and $500 million under a new term loan portion of the new credit facility. By the end of Q2’23, we anticipate reducing the amounts owed under the new credit facility revolver to approximately $450 million. During the remainder of FY'23 and FY'24, we expect to use a substantial portion of our cash generated from operating activities to repay debt outstanding under our new credit facility revolver, and expect that we will not repurchase shares in those periods as we seek to reduce our debt.

Our expected uses and sources of cash could change, our cash position could be reduced, and we could incur additional debt obligations if we decide to retire debt, engage in strategic transactions, or repurchase shares, any of which could be commenced, suspended or completed at any time. Any such repurchases or retirement of debt will depend on prevailing market conditions, our liquidity requirements, contractual restrictions and other factors. The amounts involved in any debt retirement or issuance, share repurchases, or strategic transactions may be material.

Operating Measure

ARR

We provide an ARR (Annual Run Rate) operating measure to help investors understand and assess the performance of our business as a SaaS and on-premises subscription company. ARR represents the annualized value of our portfolio of active subscription software, cloud, SaaS and support contracts as of the end of the reporting period.

We believe ARR is a valuable operating metric to measure the health of a subscription business because it captures expected subscription and support cash generation from customers.

Non-GAAP Financial Measures

Our non-GAAP financial measures and the reasons we use them and the reasons we exclude the items identified below are described in Management's Discussion and Analysis of Financial Condition and Results of Operations in our Annual Report on Form 10-K for the year ended September 30, 2022.

The non-GAAP financial measures presented in the discussion of our results of operations and the respective most directly comparable GAAP measures are:

free cash flow—cash flow from operations

non-GAAP gross margin—GAAP gross margin

non-GAAP operating income—GAAP operating income

non-GAAP operating margin—GAAP operating margin

non-GAAP net income—GAAP net income

non-GAAP diluted earnings or loss per share—GAAP diluted earnings or loss per share

We provide information on free cash flow to enable investors to assess our ability to generate cash without incurring additional external financings and to evaluate our performance against our announced long-term goals and intent to return approximately 50% of our free cash flow to shareholders via stock repurchases. Free cash flow is cash flow from operations net of capital expenditures, which are expenditures for property and equipment and consist primarily of facility improvements, office equipment, computer equipment, and software.

The non-GAAP financial measures other than free cash flow exclude, as applicable, stock-based compensation expense; amortization of acquired intangible assets; acquisition and transaction-related charges included in general and administrative expenses; restructuring and other charges, net; non-operating charges (credits), including those associated with the sale of a portion of our PLM services business and gains or losses on equity investments; and income tax adjustments as defined in our Annual Report on Form 10-K for the fiscal year ended September 30, 2022.

We use these non-GAAP financial measures, and we believe that they assist our investors, to make period-to-period comparisons of our operational performance because they provide a view of our operating results without items that are not, in our view, indicative of our core operating results. We believe that these non-GAAP financial measures help illustrate underlying trends in our business, and we use the measures to establish budgets and operational goals (communicated internally and externally) for managing our business and evaluating our performance. We believe that providing non-GAAP financial measures also affords investors a view of our operating results that may be more easily compared to the results of other companies in our industry that use similar financial measures to supplement their GAAP results.

The items excluded from the non-GAAP financial measures often have a material impact on our financial results, certain of those items are recurring, and other such items often recur. Accordingly, the non-GAAP financial measures included in this Quarterly Report on Form 10-Q should be considered in addition to, and not as a substitute for or superior to, the comparable measures prepared in accordance with GAAP. The following tables reconcile each of these non-GAAP financial measures to its most closely comparable GAAP measure on our financial statements.

(1)

In Q1’23, we recognized a $0.5 million financing charge for a debt commitment agreement associated with our anticipated acquisition of ServiceMax. In Q1'22, we recorded a $9.8 million gain on an investment in a publicly-traded company.

(2)

Income tax adjustments reflect the tax effects of non-GAAP adjustments which are calculated by applying the applicable tax rate by jurisdiction to the non-GAAP adjustments listed above.

Operating margin impact of non-GAAP adjustments:

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

There have been no significant changes in our market risk exposure as described in Item 7A. Quantitative and Qualitative Disclosures about Market Risk of our 2022 Annual Report on Form 10-K.

CONTROLS AND PROCEDURES

Evaluation of Effectiveness of Disclosure Controls and Procedures

Our management maintains disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) that are designed to provide reasonable assurance that information required to be disclosed in our reports filed or submitted under the Exchange Act is processed, recorded, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer (our principal executive officer and principal financial officer, respectively), as appropriate, to allow for timely decisions regarding required disclosure.

We evaluated, under the supervision and with the participation of management, including our principal executive and principal financial officers, the effectiveness of the design and operation of our disclosure controls and procedures as of the end of the period covered by this quarterly report. Based on this evaluation, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures were effective at the reasonable assurance level as of December 31, 2022.

Changes in Internal Control over Financial Reporting

There was no change in our internal control over financial reporting identified in management's evaluation pursuant to Rules 13a or 15(d) of the Exchange Act that occurred during the period ended December 31, 2022 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

PART II—OTHE****R INFORMATION

ITEM 1. LEGAL PROCEEDINGS

Information on legal proceedings can be found in Note 14. Commitments and Contingencies – Legal Proceedings – 401(k) Plan of Notes to Consolidated Financial Statements in this Form 10-Q, which information is incorporated herein by reference.

In addition to other information set forth in this report, you should carefully consider the risk factors described in Part I. Item 1A. Risk Factors in our 2022 Annual Report on Form 10-K, which could materially affect our business, financial condition or future results. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially and adversely affect our business, financial condition and/or operating results.

• Indicates that the exhibit is being furnished, not filed, with this report.

SIGNA****TURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: February 9, 2023