Quarterly Report (10-q)

Date : 11/07/2019 @ 10:13PM
Source : Edgar (US Regulatory)
Stock : Acorda Therapeutics Inc (ACOR)
Quote : 1.76  -0.08 (-4.35%) @ 11:49PM
After Hours
Last Trade
Last $ 1.78 ▲ 0.02 (1.13%)

Quarterly Report (10-q)

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 10-Q

 

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2019

OR

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from          to          

Commission File Number 001-31938

 

ACORDA THERAPEUTICS, INC.

(Exact name of registrant as specified in its charter)

 

 

Delaware

 

13-3831168

(State or other jurisdiction of incorporation

or organization)

 

(I.R.S. Employer

Identification No.)

 

420 Saw Mill River Road, Ardsley, New York

 

10502

(Address of principal executive offices)

 

(Zip Code)

Registrant’s telephone number, including area code: (914) 347-4300

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

 

Title of each class

 

Trading Symbol

 

Name of each exchange on which registered

 

 

Common Stock $0.001 par value

 

ACOR

 

Nasdaq Global Market

 

 

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 (§232.405 of this chapter) 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.

 

Large accelerated filer

 

  

Accelerated filer

 

Non-accelerated filer

 

  

  

Small reporting company

 

Emerging growth company

 

 

 

 

 

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  

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

 

Class

 

Outstanding at October 31, 2019

Common Stock, $0.001 par value per share

 

48,030,198 shares

 

 


 

ACORDA THERAPEUTICS, INC.

TABLE OF CONTENTS

 

 

 

Page

PART I—FINANCIAL INFORMATION

 

 

Item 1.

Financial Statements

 

1

 

Consolidated Balance Sheets as of September 30, 2019 (unaudited) and December 31, 2018

 

1

 

Consolidated Statements of Operations (unaudited) for the Three and Nine-month Periods Ended September 30, 2019 and 2018

 

2

 

Consolidated Statements of Comprehensive (Loss) Income (unaudited) for the Three and Nine-month Periods Ended September 30, 2019 and 2018

 

3

 

Consolidated Statements of Changes in Stockholders’ Equity (unaudited) for the Three and Nine-month Periods Ended September 30, 2019 and 2018

 

4

 

Consolidated Statements of Cash Flows (unaudited) for the Nine-month Periods Ended September 30, 2019 and 2018

 

6

 

Notes to Consolidated Financial Statements (unaudited)

 

7

Item 2.

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

 

22

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

 

35

Item 4.

Controls and Procedures

 

36

PART II—OTHER INFORMATION

 

 

Item 1.

Legal Proceedings

 

37

Item 1A.

Risk Factors

 

37

Item 6.

Exhibits

 

38

Signatures

 

 

39

 

 


 

This Quarterly Report on Form 10-Q contains forward‑looking statements relating to future events and our future performance within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Stockholders are cautioned that such statements involve risks and uncertainties, including: we may not be able to successfully market Inbrija or any other products under development; risks associated with complex, regulated manufacturing processes for pharmaceuticals, which could affect whether we have sufficient commercial supply of Inbrija to meet market demand; third party payers (including governmental agencies) may not reimburse for the use of Inbrija or our other products at acceptable rates or at all and may impose restrictive prior authorization requirements that limit or block prescriptions; competition for Inbrija, Ampyra and other products we may develop and market in the future, including increasing competition and accompanying loss of revenues in the U.S. from generic versions of Ampyra (dalfampridine) following our loss of patent exclusivity; the ability to realize the benefits anticipated from acquisitions, among other reasons because acquired development programs are generally subject to all the risks inherent in the drug development process and our knowledge of the risks specifically relevant to acquired programs generally improves over time; we may need to raise additional funds to finance our operations and may not be able to do so on acceptable terms; the risk of unfavorable results from future studies of Inbrija (levodopa inhalation powder) or from our other research and development programs, or any other acquired or in-licensed programs; the occurrence of adverse safety events with our products; the outcome (by judgment or settlement) and costs of legal, administrative or regulatory proceedings, investigations or inspections, including, without limitation, collective, representative or class action litigation; failure to protect our intellectual property, to defend against the intellectual property claims of others or to obtain third party intellectual property licenses needed for the commercialization of our products; and failure to comply with regulatory requirements could result in adverse action by regulatory agencies. These forward-looking statements are based on current expectations, estimates, forecasts and projections about the industry and markets in which we operate and management’s beliefs and assumptions. All statements, other than statements of historical facts, included in this report regarding our strategy, future operations, future financial position, future revenues, projected costs, prospects, plans and objectives of management are forward-looking statements. The words “anticipates,” “believes,” “estimates,” “expects,” “intends,” “may,” “plans,” “projects,” “will,” “would,” and similar expressions are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. Actual results or events could differ materially from the plans, intentions and expectations disclosed in the forward-looking statements we make, and investors should not place undue reliance on these statements. In addition to the risks and uncertainties described above, we have included important factors in the cautionary statements included in this report and in our Annual Report on Form 10-K for the year ended December 31, 2018, particularly in the “Risk Factors” section (as updated by the disclosures in our subsequent quarterly reports, including this report), that we believe could cause actual results or events to differ materially from the forward-looking statements that we make. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures or investments that we may make. Forward-looking statements in this report are made only as of the date hereof, and we do not assume any obligation to publicly update any forward-looking statements as a result of developments occurring after the date of this report.

We and our subsidiaries own several registered trademarks in the U.S. and in other countries. These registered trademarks include, in the U.S., the marks “Acorda Therapeutics,” our stylized Acorda Therapeutics logo, “Biotie Therapies,” “Ampyra,” “Inbrija,” and “ARCUS.”  Also, our mark “Fampyra” is a registered mark in the European Community Trademark Office and we have registrations or pending applications for this mark in other jurisdictions. Our trademark portfolio also includes several registered trademarks and pending trademark applications in the U.S. and worldwide for potential product names or for disease awareness activities. Third party trademarks, trade names, and service marks used in this report are the property of their respective owners.

 

 

 


 

PART I

Item 1.  Financial Statements

ACORDA THERAPEUTICS, INC. AND SUBSIDIARIES

Consolidated Balance Sheets

 

(In thousands, except share data)

 

September 30, 2019

 

 

December 31, 2018

 

 

 

(unaudited)

 

 

 

 

 

Assets

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

119,521

 

 

$

293,564

 

Restricted cash

 

 

387

 

 

 

532

 

Short term investments

 

 

133,636

 

 

 

151,989

 

Trade accounts receivable, net of allowances of $886 and $2,681, as of

   September 30, 2019 and December 31, 2018, respectively

 

 

17,553

 

 

 

23,430

 

Prepaid expenses

 

 

11,839

 

 

 

19,384

 

Inventory, net

 

 

27,396

 

 

 

29,014

 

Other current assets

 

 

4,005

 

 

 

10,194

 

Total current assets

 

 

314,337

 

 

 

528,107

 

Property and equipment, net of accumulated depreciation

 

 

130,585

 

 

 

60,519

 

Goodwill

 

 

 

 

 

282,059

 

Intangible assets, net of accumulated amortization

 

 

410,023

 

 

 

428,570

 

Right of use assets

 

 

24,675

 

 

 

 

Other assets

 

 

293

 

 

 

411

 

Total assets

 

$

879,913

 

 

$

1,299,666

 

Liabilities and Stockholders’ Equity

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Accounts payable

 

$

26,777

 

 

$

48,859

 

Accrued expenses and other current liabilities

 

 

43,235

 

 

 

76,882

 

Current portion of acquired contingent consideration

 

 

3,887

 

 

 

4,914

 

Current portion of lease liabilities

 

 

7,696

 

 

 

 

Current portion of loans payable

 

 

587

 

 

 

616

 

Current portion of liability related to sale of future royalties

 

 

9,811

 

 

 

8,985

 

Total current liabilities

 

 

91,993

 

 

 

140,256

 

Convertible senior notes (due 2021)

 

 

326,381

 

 

 

318,670

 

Non-current portion of acquired contingent consideration

 

 

107,313

 

 

 

163,086

 

Non-current portion of lease liabilities

 

 

24,393

 

 

 

 

Non-current portion of loans payable

 

 

24,518

 

 

 

24,470

 

Deferred tax liability

 

 

2,804

 

 

 

7,483

 

Non-current portion of liability related to sale of future royalties

 

 

16,437

 

 

 

21,731

 

Other non-current liabilities

 

 

4,732

 

 

 

11,987

 

Commitments and contingencies

 

 

 

 

 

 

 

 

Stockholders’ equity:

 

 

 

 

 

 

 

 

Preferred stock, $0.001 par value. Authorized 20,000,000 shares at September 30,

   2019 and December 31, 2018; no shares issued as of September 30,

   2019 and December 31, 2018, respectively

 

 

 

 

 

 

Common stock, $0.001 par value. Authorized 80,000,000 shares at September 30,

   2019 and December 31, 2018; issued 47,539,910 and 47,508,505 shares,

   including those held in treasury, as of September 30, 2019 and

   December 31, 2018, respectively

 

 

48

 

 

 

48

 

Treasury stock at cost (29,304 shares at September 30, 2019 and 87,737 shares

  at December 31, 2018)

 

 

(638

)

 

 

(2,133

)

Additional paid-in capital

 

 

1,015,037

 

 

 

1,005,105

 

Accumulated deficit

 

 

(732,469

)

 

 

(393,843

)

Accumulated other comprehensive (loss) income

 

 

(636

)

 

 

2,806

 

Total stockholders’ equity

 

 

281,342

 

 

 

611,983

 

Total liabilities and stockholders’ equity

 

$

879,913

 

 

$

1,299,666

 

 

 

See accompanying Unaudited Notes to Consolidated Financial Statements

1


 

ACORDA THERAPEUTICS, INC. AND SUBSIDIARIES

Consolidated Statements of Operations

(unaudited)

 

(In thousands, except per share data)

 

Three-month period ended September 30, 2019

 

 

Three-month period ended September 30, 2018

 

 

Nine-month period ended September 30, 2019

 

 

Nine-month period ended September 30, 2018

 

Revenues:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net product revenues

 

$

44,800

 

 

$

139,973

 

 

$

133,325

 

 

$

393,388

 

Royalty revenues

 

 

2,922

 

 

 

2,841

 

 

 

8,586

 

 

 

8,893

 

Total net revenues

 

 

47,722

 

 

 

142,814

 

 

 

141,911

 

 

 

402,281

 

Costs and expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of sales

 

 

7,986

 

 

 

25,152

 

 

 

26,183

 

 

 

76,164

 

Research and development

 

 

16,073

 

 

 

22,855

 

 

 

51,060

 

 

 

79,325

 

Selling, general and administrative

 

 

48,702

 

 

 

43,571

 

 

 

151,622

 

 

 

135,435

 

Goodwill impairment

 

 

277,561

 

 

 

 

 

 

277,561

 

 

 

 

Amortization of intangible assets

 

 

7,692

 

 

 

239

 

 

 

17,945

 

 

 

1,670

 

Changes in fair value of acquired contingent consideration

 

 

(50,942

)

 

 

22,700

 

 

 

(56,342

)

 

 

21,900

 

Total operating expenses

 

 

307,072

 

 

 

114,517

 

 

 

468,029

 

 

 

314,494

 

Operating (loss) income

 

 

(259,350

)

 

 

28,297

 

 

 

(326,118

)

 

 

87,787

 

Other (expense) income, net:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Interest and amortization of debt discount expense

 

 

(4,500

)

 

 

(5,415

)

 

 

(16,302

)

 

 

(16,326

)

Interest income

 

 

333

 

 

 

1,176

 

 

 

3,327

 

 

 

2,412

 

Realized loss on foreign currency transactions

 

 

(1

)

 

 

(1

)

 

 

(17

)

 

 

(8

)

Other income

 

 

 

 

 

 

 

 

 

 

 

24

 

Total other expense, net

 

 

(4,168

)

 

 

(4,240

)

 

 

(12,992

)

 

 

(13,898

)

(Loss) income before taxes

 

 

(263,518

)

 

 

24,057

 

 

 

(339,110

)

 

 

73,889

 

Benefit from (Provision for) income taxes

 

 

(17

)

 

 

(37,968

)

 

 

484

 

 

 

(49,802

)

Net (loss) income

 

$

(263,535

)

 

$

(13,911

)

 

$

(338,626

)

 

$

24,087

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net (loss) income per share—basic

 

$

(5.55

)

 

$

(0.29

)

 

$

(7.13

)

 

$

0.51

 

Net (loss) income per share—diluted

 

$

(5.55

)

 

$

(0.29

)

 

$

(7.13

)

 

$

0.51

 

Weighted average common shares outstanding used in

   computing net (loss) income per share—basic

 

 

47,511

 

 

 

47,184

 

 

 

47,491

 

 

 

46,840

 

Weighted average common shares outstanding used in

   computing net (loss) income per share—diluted

 

 

47,511

 

 

 

47,184

 

 

 

47,491

 

 

 

47,251

 

 

See accompanying Unaudited Notes to Consolidated Financial Statements

2


 

ACORDA THERAPEUTICS, INC. AND SUBSIDIARIES

Consolidated Statements of Comprehensive (Loss) Income

(unaudited)

 

(In thousands)

 

Three-month period ended September 30, 2019

 

 

Three-month period ended September 30, 2018

 

 

Nine-month period ended September 30, 2019

 

 

Nine-month period ended September 30, 2018

 

Net (loss) income

 

$

(263,535

)

 

$

(13,911

)

 

$

(338,626

)

 

$

24,087

 

Other comprehensive (loss) income, net of tax:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translation adjustment

 

 

(3,190

)

 

 

(721

)

 

 

(3,671

)

 

 

(2,703

)

Unrealized (loss) income on available for sale debt securities

 

 

(63

)

 

 

35

 

 

 

229

 

 

 

(42

)

Other comprehensive loss, net of tax

 

 

(3,253

)

 

 

(686

)

 

 

(3,442

)

 

 

(2,745

)

Comprehensive (loss) income

 

$

(266,788

)

 

$

(14,597

)

 

$

(342,068

)

 

$

21,342

 

 

See accompanying Unaudited Notes to Consolidated Financial Statements

3


 

ACORDA THERAPEUTICS, INC. AND SUBSIDIARIES

Consolidated Statements of Changes in Stockholders’ Equity

(unaudited)

 

 

 

Common stock

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(In thousands)

 

Number

of

shares

 

 

Par

value

 

 

Treasury stock

 

 

Additional

paid-in

capital

 

 

Accumulated

deficit

 

 

Accumulated

other

comprehensive

income

 

 

Total

stockholders

equity

 

Balance at December 31, 2018

 

 

47,508

 

 

$

48

 

 

$

(2,133

)

 

$

1,005,105

 

 

$

(393,843

)

 

$

2,806

 

 

$

611,983

 

Compensation expense for

   issuance of stock options

   to employees

 

 

 

 

 

 

 

 

 

 

 

2,745

 

 

 

 

 

 

 

 

 

2,745

 

Compensation expense for

   issuance of restricted

   stock to employees

 

 

49

 

 

 

 

 

 

 

 

 

922

 

 

 

 

 

 

 

 

 

922

 

Exercise of stock options

 

 

2

 

 

 

 

 

 

 

 

 

24

 

 

 

 

 

 

 

 

 

24

 

Purchase of Treasury Stock

 

 

4

 

 

 

 

 

 

(52

)

 

 

 

 

 

 

 

 

 

 

 

(52

)

Other comprehensive loss,

   net of tax

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1,431

)

 

 

(1,431

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(47,605

)

 

 

 

 

 

(47,605

)

Balance at March 31, 2019

 

 

47,563

 

 

$

48

 

 

$

(2,185

)

 

$

1,008,796

 

 

$

(441,448

)

 

$

1,375

 

 

$

566,586

 

Compensation expense for

   issuance of stock options

   to employees

 

 

 

 

 

 

 

 

 

 

 

3,180

 

 

 

 

 

 

 

 

 

3,180

 

Compensation expense for

   issuance of restricted

   stock to employees

 

34

 

 

 

 

 

 

 

 

 

1,354

 

 

 

 

 

 

 

 

 

1,354

 

Adjustments to Treasury Stock

 

 

(65

)

 

 

 

 

 

1,586

 

 

 

(1,586

)

 

 

 

 

 

 

 

 

 

Purchase of Treasury Stock

 

 

3

 

 

 

 

 

 

(39

)

 

 

 

 

 

 

 

 

 

 

 

(39

)

Other comprehensive income,

   net of tax

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

1,242

 

 

 

1,242

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(27,486

)

 

 

 

 

 

(27,486

)

Balance at June 30, 2019

 

 

47,535

 

 

$

48

 

 

$

(638

)

 

$

1,011,744

 

 

$

(468,934

)

 

$

2,617

 

 

$

544,837

 

Compensation expense for

   issuance of stock options

   to employees

 

 

 

 

 

 

 

 

 

 

 

2,057

 

 

 

 

 

 

 

 

 

2,057

 

Compensation expense for

   issuance of restricted

   stock to employees

 

 

5

 

 

 

 

 

 

 

 

 

1,236

 

 

 

 

 

 

 

 

 

1,236

 

Other comprehensive loss,

   net of tax

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(3,253

)

 

 

(3,253

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(263,535

)

 

 

 

 

 

(263,535

)

Balance at September 30, 2019

 

 

47,540

 

 

$

48

 

 

$

(638

)

 

$

1,015,037

 

 

$

(732,469

)

 

$

(636

)

 

$

281,342

 

 

See accompanying Unaudited Notes to Consolidated Financial Statements

 

4


 

ACORDA THERAPEUTICS, INC. AND SUBSIDIARIES

Consolidated Statements of Changes in Stockholders’ Equity (Continued)

(unaudited)

 

 

 

Common stock

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(In thousands)

 

Number

of

shares

 

 

Par

value

 

 

Treasury stock

 

 

Additional

paid-in

capital

 

 

Accumulated

deficit

 

 

Accumulated

other

comprehensive

income

 

 

Total

stockholders

equity

 

Balance at December 31, 2017

 

 

46,441

 

 

$

46

 

 

$

(389

)

 

$

968,580

 

 

$

(455,108

)

 

$

6,858

 

 

$

519,987

 

Adjustment to accumulated deficit

   (pursuant to adoption of

   ASU 2014-09)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

27,582

 

 

 

 

 

 

27,582

 

Compensation expense for

   issuance of stock options

   to employees

 

 

 

 

 

 

 

 

 

 

 

4,095

 

 

 

 

 

 

 

 

 

4,095

 

Compensation expense for

   issuance of restricted

   stock to employees

 

 

100

 

 

 

 

 

 

 

 

 

1,840

 

 

 

 

 

 

 

 

 

1,840

 

Exercise of stock options

 

 

137

 

 

 

1

 

 

 

 

 

 

 

3,366

 

 

 

 

 

 

 

 

 

3,367

 

Purchase of Treasury Stock

 

 

47

 

 

 

 

 

 

 

(1,202

)

 

 

 

 

 

 

 

 

 

 

 

(1,202

)

Other comprehensive income,

   net of tax

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2,455

 

 

 

2,455

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(8,199

)

 

 

 

 

 

(8,199

)

Balance at March 31, 2018

 

 

46,725

 

 

$

47

 

 

$

(1,591

)

 

$

977,881

 

 

$

(435,725

)

 

$

9,313

 

 

$

549,925

 

Compensation expense for

   issuance of stock options

   to employees

 

 

 

 

 

 

 

 

 

 

 

3,797

 

 

 

 

 

 

 

 

 

3,797

 

Compensation expense for

   issuance of restricted

   stock to employees

 

16

 

 

 

 

 

 

 

 

 

1,457

 

 

 

 

 

 

 

 

 

1,457

 

Exercise of stock options

 

458

 

 

 

 

 

 

 

 

 

10,157

 

 

 

 

 

 

 

 

 

10,157

 

Purchase of Treasury Stock

 

 

24

 

 

 

 

 

 

(385

)

 

 

 

 

 

 

 

 

 

 

 

(385

)

Other comprehensive loss, net of tax

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(4,514

)

 

 

(4,514

)

Net income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

46,197

 

 

 

 

 

 

46,197

 

Balance at June 30, 2018

 

 

47,223

 

 

$

47

 

 

$

(1,976

)

 

$

993,292

 

 

$

(389,528

)

 

$

4,799

 

 

$

606,634

 

Compensation expense for

   issuance of stock options

   to employees

 

 

 

 

 

 

 

 

 

 

 

3,866

 

 

 

 

 

 

 

 

 

3,866

 

Compensation expense for

   issuance of restricted

   stock to employees

 

 

5

 

 

 

 

 

 

 

 

 

1,269

 

 

 

 

 

 

 

 

 

1,269

 

Exercise of stock options

 

 

82

 

 

 

 

 

 

 

 

 

1,454

 

 

 

 

 

 

 

 

 

1,454

 

Other comprehensive loss, net of tax

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(686

)

 

 

(686

)

Net loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(13,911

)