1 unchanged sentence
Market risk is the risk of loss arising from adverse changes in market rates and prices.
−Removed: We are primarily exposed to equity price risk and foreign exchange risk.
−Removed: The following is a discussion of our equity market risk
−Removed: and foreign exchange risk.
−Removed: Equity price risk arises from exposure to securities that represent an ownership interest in our portfolio
−Removed: The value of our equity securities and our other investments are based on quoted market prices or our Board of Directors good faith determination of their fair value (which is based, in part, on quoted market prices).
−Removed: Market prices
−Removed: of common equity securities, in general, are subject to fluctuations, which could cause the amount to be realized upon sale or exercise of the instruments to differ significantly from the current reported value.
−Removed: The fluctuations may result from
−Removed: perceived changes in the underlying economic characteristics of our portfolio companies, the relative price of alternative investments, general market conditions and supply and demand imbalances for a particular security.
−Removed: We are also subject to risk from changes in foreign exchange rates with respect to our subsidiaries that use a foreign currency as their functional
−Removed: Such changes could result in cumulative translation gains or losses that are included in our net assets.
−Removed: Revenue from foreign subsidiaries as a percentage of total revenue was 8% for the year ended December 31, 2008.
−Removed: subsidiaries are based in the United Kingdom and Israel.
−Removed: Exchange rate fluctuations between the U.S.
−Removed: dollar and the currencies of these countries result in positive or negative fluctuations in the amounts relating to foreign operations reported in
−Removed: our consolidated financial statements.
−Removed: We generally do not use foreign currency options and forward contracts to hedge against the earnings effect of such fluctuations.
−Removed: While we do not expect to incur material losses as a result of this currency
−Removed: risk, there can be no assurance that losses will not result.
+Added: We are primarily exposed to market risks from
+Added: changes in foreign exchange rates, changes in the market value of our investments and changes in our stock price.
+Added: Approximately 17% of our revenues and expenses are generated internationally in the United Kingdom and are typically denominated in the local currency.
+Added: Accordingly, our U.K.
+Added: subsidiary uses the local currency as their functional currency.
+Added: Our international business is subject to risks typical of any international business, including, but not limited to, differing economic conditions, changes in political climate, differing tax structures, other regulations and restrictions and
+Added: foreign exchange rate volatility.
+Added: Our future results could be materially adversely impacted by changes in these or other factors.
+Added: The financial statements of our U.K.
+Added: business are denominated in the local currency.
+Added: As a result, we are also exposed to foreign exchange rate fluctuations as the financial results of foreign subsidiaries are translated into
+Added: dollars in consolidation.
+Added: As exchange rates fluctuate, these results, when translated, may vary from expectations and adversely impact overall expected results and profitability.
+Added: We have not historically used hedging instruments to protect
+Added: ourselves against foreign exchange risk because the effect on the Company has been immaterial to our operating results.
+Added: performed a sensitivity analysis as of December 31, 2009 assuming a hypothetical 10% adverse change in foreign currency exchange rates.
+Added: Holding all other variables constant, the analysis indicated that such a market movement would affect our
+Added: income from operations by approximately $216,000.
+Added: However, actual gains and losses in the future could differ materially from this analysis based on the timing and amount of both foreign currency exchange rate movements and our actual exposure.
+Added: Equity price risk arises from exposure to securities that represent an ownership interest in our investments.
+Added: our marketable equity securities are based on quoted market prices.
+Added: Market prices of common equity securities, in general, are subject to fluctuations, which could cause the amount to be realized upon the sale of the instruments to differ
+Added: significantly from the current reported value.
+Added: The fluctuations may result from perceived changes in the underlying economic characteristics of our investments, the relative price of alternative investments, general market conditions and supply
+Added: and demand imbalances for a particular security.
+Added: The Company invests its cash in highly liquid investments with original
+Added: maturities of three months or less as well as in other short-term debt instruments.
+Added: We have not used derivative financial instruments in fiscal year 2009 to alter the interest rate characteristics of our investment holdings.
+Added: We have concluded that
+Added: we do not have material market risk exposure with regard to these investments.
+Added: In connection with the Note and Warrant
+Added: Purchase Agreement we entered into on October 22, 2009 as further discussed in Note 7 to the consolidated financial statements contained elsewhere in this annual report on Form 10-K, we issued warrants to allow the Lender to purchase up to
+Added: 437,500 shares of our common stock at any time until October 22, 2014.
+Added: These warrants are considered an embedded derivative instrument.
+Added: US GAAP requires bifurcation of embedded derivative instruments and measure of their fair value for
+Added: accounting purposes.
+Added: We estimate the fair value of this derivative instrument using the Black-Scholes option pricing model, which takes into account a variety of factors, including historical stock price volatility, risk-free interest rates,
+Added: remaining term and the closing price of our common stock.
+Added: Changes in the assumptions used to estimate the fair value of these derivative instruments could result in a material change in the fair value of the instruments.
+Added: We performed an analysis as of December 31, 2009 assuming a hypothetical $1, $2 and $3 change in our stock price.
+Added: Holding all other
+Added: variables constant, the analysis indicated that such market movements would affect our income from operations by approximately $324,000, $677,000 and $1,050,000, respectively.
+Added: However, actual gains and losses in the future could differ materially
+Added: from this analysis.
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.