Derivative Financial Instruments

3 Months Ended

Mar. 31, 2019

Derivative Financial Instruments

Derivative Financial Instruments

NOTE 5. DERIVATIVE FINANCIAL INSTRUMENTS

Foreign Currency Exchange Rate Exposure

The Company uses forward foreign currency exchange contracts to secure a foreign currency exchange rate when a contract is executed involving payment in a foreign currency in order to minimize cash flow exposure to fluctuating exchange rates. Such exposure results from portions of the Company’s forecasted cash outflows being denominated in currencies other than the U.S. dollar, primarily the Swiss franc. The derivative instruments the Company uses to hedge this exposure are not designated as cash flow hedges, and as a result, changes in their fair value are recorded in other (expense) income, net, on the Company's condensed consolidated statements of operations and comprehensive loss.

The fair values of forward foreign currency exchange contracts are estimated using current exchange rates and interest rates and take into consideration the current creditworthiness of the counterparties. Information regarding the specific instruments used by the Company to hedge its exposure to foreign currency exchange rate fluctuations is provided below.

In March 2019, the Company settled its forward foreign currency exchange contract in the aggregate notional amount of Swiss francs 3.3 million and as of March 31, 2019 has no open forward foreign currency exchange contract. The net loss associated with the Company's derivative instrument of $60,558 is recognized in other (expense) income, net, on the condensed consolidated statement of operations and comprehensive loss for three months ended March 31, 2019.  There were no expenses related to such derivative instruments for three months ended March 31, 2018.