Item 7A. Quantitative and Qualitative Disclosures About Market Risk
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We have limited exposure to financial market risks, including changes in
interest rates. At March 31, 2003, we had cash and cash equivalents of
$1,976,062. Cash and cash equivalents consisted of demand deposits and money
market accounts. Because of the cash equivalency of the money market accounts
and the liquidity thereof, there is no material exposure to interest rates for
these accounts.
The Company also has short-term notes payable in the amount of $56,224, at March
31, 2003. These notes are due and payable in less than one year. Because of the
short-term nature of the notes and the fixed rate on the notes, there is no
material exposure to changes in interest rates for these accounts. The Company
does not have any derivative or hedge instruments at March 31, 2003.
Semotus has a permanent engineering operation in Vancouver, B.C., Canada and
therefore has an exposure to the Canadian and U.S. dollar exchange rate. The
Company, in the ordinary course of its business, transfers funds to the Canadian
company and records the translation at the current exchange rate. The Company
records translation gains and losses in Comprehensive Income. At March 31, 2003,
the cumulative translation loss was $93,306. Given the relative stability of the
Canadian and U.S. dollar exchange rate, the Company has not deemed it necessary
to hedge this exposure. The Company does actively monitor the situation and as
of March 31, 2003 there has been a small but trending decline in the U.S. dollar
against the Canadian dollar. Should the trend continue, the Company would seek
to limit or hedge the exposure.
Text extracted from the filing as submitted to EDGAR. Formatting, tables and exhibits are simplified for reading; the original document is authoritative for anything you rely on.