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, 2004, we had cash and cash equivalents of
$1,717,052. 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.
We have no notes payable at March 31, 2004.
We have a permanent engineering operation in Vancouver, B.C., Canada and
therefore we have an exposure to the Canadian and U.S. dollar exchange rate. In
the ordinary course of business, we transfer funds to the Canadian company and
record the translation at the current exchange rate. We record translation gains
and losses in comprehensive income (loss). At March 31, 2004, the cumulative
translation loss was $74,328. Given the relative stability of the Canadian and
U.S. dollar exchange rate, we have not deemed it necessary to hedge this
exposure. We actively monitor the situation and as of March 31, 2004 there has
been a small but trending decline in the U.S. dollar against the Canadian
dollar. Should the trend continue, we would seek to limit or hedge the exposure.
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