QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
−Removed: Market risk represents the risk of loss that may impact our financial position due to adverse changes in financial market prices and rates.
−Removed: Our market risk exposure is primarily a result of fluctuations in foreign currency exchange rates and interest rates.
−Removed: We do not hold or issue financial instruments for trading purposes.
+Added: We are exposed to financial market risk, including foreign currency exchange risk and interest rate risk.
+Added: Concentration of Revenue and Credit Risk
+Added: Financial instruments that potentially subject us to concentrations of credit risk consist principally of cash and cash equivalents and trade receivables.
+Added: Cash equivalents consist primarily of cash deposits and short-term, highly liquid investments that are readily convertible into cash, with original maturities of three months or less.
+Added: Cash equivalents consist primarily of bank deposits and certain investments, such as government securities, with maturities less than 90 days at the date of purchase.
+Added: Deposits of cash held outside the United States totaled approximately $3.4 million and $1.1 million at December 31, 2021 and 2020, respectively.
+Added: We grant credit to customers in the ordinary course of business.
+Added: Credit evaluations are performed on an ongoing basis to reduce credit risk, and no collateral is required from our customers.
+Added: An allowance for credit loss is provided for those accounts receivable considered to be uncollectible based upon historical experience and credit evaluation.
+Added: As of December 31, 2021, one company represented 18% of our gross accounts receivable.
+Added: As of December 31, 2020, one company represented 19% of our gross accounts receivable.
+Added: Due to the nature of our quarterly revenue streams derived from royalty revenue, it is not unusual for our accounts receivable balances to include a few customers with large balances.
+Added: Historically, we have not recorded material losses due to customers’ nonpayment.
+Added: For the years ended December 31, 2021 and 2019, no customer individually accounted for more than 10% of our total revenue.
+Added: For the year ended December 31, 2020, one company accounted for 13% of our total revenue.
+Added: For the quarter ended December 31, 2021, one company accounted for 14% of our total revenue.
Foreign Currency Exchange Risk
1 unchanged sentence
Historically, the substantial majority of our revenue has been denominated in U.S.
+Added: For the years ended December 31, 2021, 2020, and 2019, approximately 36%, 31% and 41%, respectively, of our total revenue was generated from customers located outside of North America.
Our expenses are generally denominated in the currencies in which our operations are located, which is primarily in the United States, with a portion of expenses incurred in Canada, Europe, Japan and China.
2 unchanged sentences
The effect of a 10% adverse change in exchange rates on foreign denominated cash, receivables and payables as of December 31, 2021 would not have been material.
+Added: The effect of a 10% adverse change in exchange rates on foreign denominated cash, receivables and payables as of December 31, 2022 would not be material.
To date, we have not entered into any material foreign currency hedging contracts although we may do so in the future.
−Removed: Interest Rate Sensitivity
+Added: Interest Rate Risk
We had cash and cash equivalents of $396.5 million as of December 31, 2021.
3 unchanged sentences
If overall interest rates had decreased by 10% during the periods presented, our interest income would not have been materially affected.
−Removed: As of December 31, 2020, the principal amount of our term debt outstanding with Hercules was $7.7 million.
−Removed: If overall interest rates had increased by 10% during the periods presented, our interest expense would have increased by approximately $0.1 million on an annualized basis.
+Added: If overall interest rates decrease by 10% during the year ending December 31, 2022, our interest income would not be materially affected.
+Added: We do not hold or issue financial instruments for trading purposes.
FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
3 unchanged sentences
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.