1 unchanged sentence
Market risk represents the risk of loss that may impact our financial position due to adverse changes in financial market prices and rates.
−Removed: We are subject to interest rate risk in connection with the Notes, and we hold derivative financial instruments and have outstanding warrants that are subject to market risk.
−Removed: We also have foreign currency exchange rate risk from our global operations, although we do not believe this risk to be significant.
+Added: As of December 31, 2020, we were subject to interest rate risk in connection with the Notes, and we hold derivative financial instruments and have outstanding warrants that are subject to market risk.
+Added: We also have foreign currency exchange rate risk from our global operations.
Interest rate risk
−Removed: As a result of having $204.0 million aggregate principal amount of the Notes outstanding, which are convertible into shares of Common Stock at a conversion price of $31.29 per share (the "Conversion Price"), we are subject to interest rate risk.
−Removed: As of December 31, 2019, the interest rate on the Notes was 12.0% per year.
−Removed: The interest rate reset on January 30, 2020 and will remain at 12.0% (subject to certain conditions) until February 1, 2021 (the "Interest Reset Date").
−Removed: On the Interest Reset Date, the interest
−Removed: rate will reset based on the then-applicable Conversion Premium, which is calculated by dividing the Conversion Price by the arithmetic average of the volume-weighted average trading prices of our Common Stock on each of the ten consecutive trading days immediately preceding the Interest Reset Date (the "VWAP").
−Removed: The interest rate is then determined in accordance with the table below, which includes theoretical VWAP calculations:
−Removed: If the Conversion Premium
−Removed: (as of the applicable
−Removed: Interest Reset Date) is:
−Removed: Then the Interest Rate from
−Removed: the applicable Interest Reset
−Removed: Date until the next
−Removed: subsequent Interest Reset
−Removed: Date shall be:
−Removed: $31.29 or higher
−Removed: 1.45 or higher
−Removed: $21.58 or less
−Removed: If the Conversion Premium is between two Conversion Premium amounts in the table above, the interest rate is determined by straight-line interpolation between the interest rates for the higher and lower Conversion Premium amounts.
−Removed: As discussed in Footnote 4 , Long-term Debt , we have the ability, subject to certain conditions, to pay interest on the Notes through the issuance of PIK Interest Shares, and we elected to do so for the interest payments made on April 1, 2019, July 1, 2019 and October 1, 2019.
+Added: As a result of having $204.0 million aggregate principal amount of the Notes outstanding, which are convertible into shares of Common Stock at a conversion price of $31.29 per share, we were subject to interest rate risk as of December 31, 2020.
+Added: As of such date, the interest rate on the Notes was 12.0% per year.
+Added: On February 1, 2021, the interest rate was determined to remain at 12.0% (subject to certain conditions) until the maturity of the Notes.
+Added: As discussed in Footnote 4 , Debt , we have the ability, subject to certain conditions, to pay interest on the Notes through the issuance of PIK Interest Shares.
+Added: We elected to pay the interest due on January 2, 2020, April 1, 2020 and July 1, 2020 in cash.
+Added: We elected to pay the interest due on October 1, 2020 through a combination of cash and the issuance of PIK Interest Shares.
+Added: For the amount due for the fourth quarter of 2020 we elected to pay through the issuance of PIK Interest Shares which were delivered on January 25, 2021.
+Added: As described in Footnote 1 , Organization, and Footnote 16 , Subsequent Events, on March 9, 2021, our stockholders approved Transactions to issue preferred securities.
+Added: The proceeds of the Transactions will be used to repay the Notes prior to maturity.
+Added: For the remaining interest payment from January 1, 2021 through the closing of the Transactions, we intend to pay interest due through the issuance of PIK Interest Shares.
Derivative financial instrument risk
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We determine the fair value of our derivative financial instrument, relying in part on the work of an independent valuation firm engaged by us to provide inputs as to the fair value of the liability, including the valuation models and assumptions used to determine its fair value.
−Removed: For additional information on the determination of fair value, including the assumptions used in those determinations, refer to Footnote 4 , Long-term Debt and Footnote 6 , Fair Value Measurements .
As of December 31, 2020, the fair value of our interest rate reset derivative financial instrument of $11.3 million was recorded in financing derivatives within the Consolidated Balance Sheets.
−Removed: Any changes in fair value of financing derivatives are recorded to earnings and could affect our financial position and results of operations.
−Removed: A change in fair value of the interest rate reset derivative liability of 10% in either direction would result in a $1.9 million gain or loss recorded in earnings in our consolidated financial statements.
The fair value of our interest rate reset derivative liability relates to the interest rate reset feature of the Notes.
Changes in the fair value of the interest rate reset derivative liability are primarily driven by changes in the price and volatility of a share of our Common Stock.
−Removed: Generally, as our stock price decreases, the fair value of the derivative liability will increase, although not in a linear relationship.
−Removed: Similar to an option, over time, and at each of the Interest Reset Dates, the value of the interest rate reset derivative liability will decrease as the time to maturity shortens and each Interest Reset Date passes.
+Added: As described above, the interest rate on the Notes will remain at 12.0% (subject to certain conditions) until the maturity of the Notes.
+Added: As a result, changes in our stock price no longer affect the fair value of the interest rate reset derivative liability.
+Added: The value of the interest rate reset derivative liability will decrease as the time to maturity shortens and interest on the Notes is paid.
+Added: For additional information on the determination of fair value, including the assumptions used in those determinations, refer to Footnote 4 , Debt and Footnote 6 , Fair Value Measurements .
Warrants liability financial instrument risk
As a result of having $2.8 million in liability related to outstanding warrants as of December 31, 2020, which warrants are exercisable for shares of Common Stock under certain conditions, we are subject to market risk.
−Removed: The value of each warrant, and the number of shares likely to be issued under the warrants, is impacted by changes in the market price of our Common Stock.
−Removed: As of December 31, 2019, a 10% increase in our stock price would result in a $1.4 million increase in the fair value of the warrants and a 90,924 increase in shares likely to be issued under the warrants, while a 10% decrease in our stock price would result in a $1.3 million decrease in fair value of the warrants and a 77,007 decrease in shares likely to be issued under the warrants, in each case on an aggregate basis.
+Added: The value of the warrants, and the number of shares likely to be issued under the warrants, is impacted by changes in the market price of our Common Stock.
+Added: As described in Footnote 1 , Organization, and Footnote 16 , Subsequent Events, on March 9, 2021 our stockholders approved Transactions to issue preferred securities.
+Added: The exercise price of our Series A Warrants is subject to anti-dilution adjustment in certain circumstances, including upon certain issuances of capital stock.
+Added: As a result of the Transactions, we expect to adjust the exercise price of the Series A Warrants to the closing price of the Transactions.
+Added: If the Series A Warrants had been measured as of December 31, 2020 based on the closing price of the Transactions of $2.4719, then the estimated fair value of the warrants would have increased from $2.8 million to $7.5 million.
+Added: Thereafter, a 10% increase in the market price of our Common Stock would result in a $1.0 million increase in the fair value of the Series A Warrants, while a 10% decrease in the market price of our Common Stock would result in a $1.1 million decrease in fair value of the Series A Warrants.
For further information regarding our outstanding warrants, see Footnote 5 , Stockholders' Equity .
4 unchanged sentences
We have not engaged in any transactions that hedge foreign currency exchange rate risk.
+Added: Table of Conte nt s
There can be no guarantee that exchange rates will remain constant in future periods.
4 unchanged sentences
We performed a sensitivity analysis, assuming a 10% decrease or increase in the value of foreign currencies in which we operate.
−Removed: Our analysis has determined that a 10% decrease in value would have resulted in a decrease to our operating loss of approximately $6.0 million for 2019, and a 10% increase in value would have resulted in an increase to our operating loss of approximately $5.2 million for the year ended December 31, 2019.
+Added: Our analysis has determined that a 10% decrease in value would have resulted in a decrease to our net loss of approximately $6.8 million for 2020, and a 10% increase in value would have resulted in an increase to our net loss of approximately $6.0 million for the year ended December 31, 2020.
As of December 31, 2020, of the total $50.7 million in cash and cash equivalents, including restricted cash, $25.5 million was held by foreign subsidiaries.
Of this amount, we believe $3.4 million could be subject to income tax withholding of 5% to 15% if the funds were repatriated to the U.S.
+Added: Table of Conte nt s
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.