−Removed: QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
−Removed: We are exposed to financial market risk, including foreign currency exchange risk and interest rate risk.
−Removed: Concentration of Revenue and Credit Risk
−Removed: Financial instruments that potentially subject us to concentrations of credit risk consist principally of cash and cash equivalents and trade receivables.
−Removed: Cash equivalents consist primarily of cash deposits and short-term, highly liquid investments that are readily convertible into cash, such as government securities with original maturities of less than 90 days at the date of purchase.
−Removed: Deposits of cash held outside the United States totaled approximately $3.6 million and $3.4 million at December 31, 2022 and 2021, respectively.
−Removed: We grant credit to customers in the ordinary course of business.
−Removed: Credit evaluations are performed on an ongoing basis to reduce credit risk, and no collateral is required from our customers.
−Removed: An allowance for credit loss is provided for those accounts receivable considered to be uncollectible based upon historical experience and credit evaluation.
−Removed: As of December 31, 2022, no customer individually accounted for more than 10% of our gross accounts receivable.
−Removed: As of December 31, 2021, one company represented 18% of our gross accounts receivable.
−Removed: 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.
−Removed: There were no material losses recorded due to customers’ non-payment for the years ended December 31, 2022, or 2021.
−Removed: For the year ended December 31, 2022, only one company accounted for more than 10% of our total revenue at 13%.
−Removed: For the year ended December 31, 2021, no customers individually accounted for more than 10% of our total revenue.
+Added: QUANTITATIVE AND QUALITATIVE D ISCLOSURES ABOUT MARKET RISK
+Added: We are exposed to a variety of market risks, including fluctuations in foreign currency exchange rates and interest rates affecting the return on our cash, cash equivalents, and marketable securities.
Foreign Currency Exchange Risk
−Removed: As we expand internationally our results of operations and cash flows will become increasingly subject to fluctuations due to changes in foreign currency exchange rates.
−Removed: For the years ended December 31, 2022 and 2021, approximately 38% and 36%, respectively, of our total revenue was generated from customers located outside of North America.
+Added: As we expand internationally, our results of operations and cash flows will become increasingly subject to foreign exchange rate fluctuations.
+Added: For the years ended December 31, 2023 and 2022, approximately 37% and 38%, respectively, of our total revenue was generated from customers located outside of the United States.
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.
−Removed: Our results of operations and cash flows are, therefore, subject to fluctuations due to changes in foreign currency exchange rates.
−Removed: Fluctuations in currency exchange rates could harm our business in the future.
−Removed: The effect of a 10% adverse change in exchange rates on foreign denominated cash, receivables and payables as of December 31, 2022 would not have been material.
−Removed: 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.
−Removed: To date, we have not entered into any material foreign currency hedging contracts although we may do so in the future.
+Added: Our results of operations and cash flows are, therefore, subject to fluctuations due to changes in foreign exchange rates in Canadian dollars, Euros, British pounds, Swedish krona, Japanese yen, Chinese yuan, and other foreign currencies.
+Added: Fluctuations in exchange rates could harm our business in the future.
+Added: As of December 31, 2023, the effect of a hypothetical 10% adverse change in exchange rates on foreign denominated cash and payables would not have been material and a similar adverse change on foreign denominated receivables would decrease potential cash inflows by $0.8 million.
+Added: To date, we have not entered into any foreign currency hedging contracts although we may do so in the future.
Interest Rate Risk
−Removed: We had cash and cash equivalents of $338.7 million as of December 31, 2022.
−Removed: These amounts were held primarily in cash on deposit with banks.
−Removed: Due to the short-term nature of these investments, we believe that we do not have any material exposure to changes in the fair value of our investment portfolio as a result of changes in interest rates.
−Removed: Declines in interest rates, however, will reduce future investment income.
−Removed: If overall interest rates had decreased by 10% during the years ended December 31, 2022 and 2021, our interest income would not have been materially affected.
−Removed: We do not hold or issue financial instruments for trading purposes.
−Removed: FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
−Removed: The financial statements required to be filed pursuant to this Item 8 are appended to this Annual Report on Form 10-K beginning on page F-1.
−Removed: CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
+Added: We had cash and cash equivalents of $174.4 million and marketable securities of $146.9 million as of December 31, 2023.
+Added: All cash, cash equivalents, and marketable securities are held at large commercial banks.
+Added: Marketable securities consisted entirely of highly rated debt securities including commercial paper, U.S.
+Added: Treasuries, corporate notes and bonds, U.S.
+Added: Government agency bonds, certificates of deposit, and similar types of debt securities.
+Added: Due to the short-term nature and investment grade quality of these investments, we do not believe we have material exposure to changes in interest rates.
+Added: Additionally, if needed, we have the ability to hold our marketable securities until
+Added: maturity (without giving effect to any future acquisitions or mergers) and we do not hold or issue financial instruments for trading purposes.
+Added: Therefore, we do not expect our operating results or cash flows to be affected materially by a sudden change in market interest rates.
+Added: Declines in interest rates, however, would reduce future investment income.
+Added: If overall interest rates had decreased by a hypothetical 10% during the year ended December 31, 2023, our interest income would have decreased income by approximately $1.3 million.
+Added: FINANCIAL STATEMENTS AND SUPPLEMENTARY D ATA
+Added: The financial statements required to be filed pursuant to Item 8 are included in this Annual Report on Form 10-K beginning on page F-1.
+Added: CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON A CCOUNTING AND FINANCIAL DISCLOSURE
Not applicable.
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.