19 unchanged sentences
These derivative financial instruments are utilized to hedge economic exposures as well as reduce earnings and cash flow volatility resulting from shifts in market rates.
−Removed: Certain of the Company’s PRC subsidiaries held approximately RMB 690.7 million ($99.8 million) in cash and cash equivalents as of March 31, 2026 (December 31, 2025 — RMB 678.2 million or $96.5 million) and are required to transact locally in RMB.
+Added: Certain of the Company’s PRC subsidiaries held approximately RMB 749.7 million ($110.1 million) in cash and cash equivalents as of June 30, 2026 (December 31, 2025 — RMB 678.2 million or $96.5 million) and are required to transact locally in RMB.
Foreign currency exchange transactions, including the remittance of any funds into and out of the PRC, are subject to controls and require the approval of the China State Administration of Foreign Exchange to complete.
7 unchanged sentences
There are no concentrations of cash and cash equivalents in any regional banking institutions, such that management considers there to be any material risk in this regard.
−Removed: For the three months ended March 31, 2026, the Company recorded a foreign exchange net loss of $0.6 million, resulting from changes in exchange rates related to foreign currency denominated monetary assets and liabilities (2025 — net loss of $0.4 million).
+Added: For the three and six months ended June 30, 2026, the Company recorded a foreign exchange net gain of $0.4 million and net loss of $0.2 million respectively, resulting from changes in exchange rates related to foreign currency denominated monetary assets and liabilities (2025 — net gain of $0.2 million and net loss of $0.2 million, respectively).
The Company has entered into a series of foreign currency forward contracts to manage the risks associated with the volatility of foreign currencies.
−Removed: Certain of these foreign currency forward contracts met the criteria required for hedge accounting under the Derivatives and Hedging Topic of the FASB ASC at inception, and continue to meet hedge effectiveness tests as of March 31, 2026, with settlement dates throughout 2026 and 2027.
+Added: Certain of these foreign currency forward contracts met the criteria required for hedge accounting under the Derivatives and Hedging Topic of the FASB ASC at inception, and continue to meet hedge effectiveness tests as of June 30, 2026, with settlement dates throughout 2026 and 2027.
Foreign currency derivatives are recognized and measured on the Condensed Consolidated Balance Sheets at fair value.
3 unchanged sentences
Any ineffective portion is recognized immediately in the Condensed Consolidated Statements of Operations.
−Removed: The notional value of foreign currency cash flow hedging instruments that qualify for hedge accounting as of March 31, 2026 was $38.5 million (December 31, 2025 — $48.4 million).
−Removed: Losses of $0.6 million was recorded to Other Comprehensive Income with respect to the change in fair value of these contracts for the three months ended March 31, 2026 (March 31, 2025 — losses of $0.7 million).
−Removed: Gains of $0.3 million were reclassified from Accumulated Other Comprehensive Income to Selling, General and Administrative Expenses for the three months ended March 31, 2026 (March 31, 2025 — losses of $1.3 million).
+Added: The notional value of foreign currency cash flow hedging instruments that qualify for hedge accounting as of June 30, 2026 was $46.3 million (December 31, 2025 — $48.4 million).
+Added: Losses of $0.8 million and losses of $1.4 million were recorded to Other Comprehensive Loss with respect to the change in fair value of these contracts for the three and six months ended June 30, 2026, respectively (2025 — gains of $2.5 million and gains of $1.8 million, respectively).
+Added: Gains of $0.1 million and $0.4 million were reclassified from Accumulated Other Comprehensive Loss to Selling, General and Administrative Expenses for the three and six months ended June 30, 2026, respectively (2025 — Losses of $0.3 million and $1.6 million, respectively).
The Company currently does not hold any derivatives which are not designated as hedging instruments.
1 unchanged sentence
To manage this risk, the Company enters into derivative transactions only with major financial institutions.
−Removed: As of March 31, 2026, the Company’s Financing Receivables and working capital items denominated in Canadian Dollars, RMB, Japanese Yen, Euros and other foreign currencies translated into U.S.
+Added: As of June 30, 2026, the Company’s Financing Receivables and working capital items denominated in Canadian Dollars, RMB, Japanese Yen, Euros and other foreign currencies translated into U.S.
Dollars was $132.1 million.
−Removed: Assuming a 10% appreciation or depreciation in foreign currency exchange rates from the quoted foreign currency exchange rates as of March 31, 2026, the potential change in the fair value of foreign currency-denominated financing receivables and working capital items would have been $15.2 million.
+Added: Assuming a 10% appreciation or depreciation in foreign currency exchange rates from the quoted foreign currency exchange rates as of June 30, 2026, the potential change in the fair value of foreign currency-denominated financing receivables and working capital items would have been $13.2 million.
A significant portion of the Company’s Selling, General, and Administrative Expenses is denominated in Canadian Dollars.
−Removed: Assuming a 1% change appreciation or depreciation in foreign currency exchange rates as of March 31, 2026, the potential change in the amount of Selling, General, and Administrative Expenses would be $0.1 million.
+Added: Assuming a 1% change appreciation or depreciation in foreign currency exchange rates as of June 30, 2026, the potential change in the amount of Selling, General, and Administrative Expenses would be $0.2 million.
Interest Rate Risk Management
The Company’s earnings may also be affected by changes in interest rates due to the impact those changes have on its interest income from cash, and its interest expense from variable-rate borrowings that may be made under the Credit Facility.
−Removed: As of March 31, 2026, the Company had drawn down $49.0 million on its Credit Facility (December 31, 2025 — $37.0 million), and $nil on its HSBC China Facility (December 31, 2025 — $nil) and $nil on its Bank of China Facility (December 31, 2025 — $nil), which are subject to variable effective interest rates.
+Added: As of June 30, 2026, the Company had drawn down $41.0 million on its Credit Facility (December 31, 2025 — $37.0 million), and $nil on its HSBC China Facility (December 31, 2025 — $nil) and $nil on its Bank of China Facility (December 31, 2025 — $nil), which are subject to variable effective interest rates.
If the interest rates available to the Company increased by 10%, the Company’s interest expense would increase by $0.2 million and interest income from cash would increase by $0.3 million.
−Removed: The Company had variable rate debt instruments representing 11% and 8% of its total liabilities as of March 31, 2026 and December 31, 2025, respectively.
−Removed: These amounts are determined by considering the impact of the hypothetical interest rates on the Company’s variable rate debt and cash balances as of March 31, 2026.
+Added: The Company had variable rate debt instruments representing 9% and 8% of its total liabilities as of June 30, 2026 and December 31, 2025, respectively.
+Added: These amounts are determined by considering the impact of the hypothetical interest rates on the Company’s variable rate debt and cash balances as of June 30, 2026.
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.