Archer Aviation Inc. 10-Q

Item 3. Quantitative and Qualitative Disclosures about Market Risk We are exposed to market risks in the ordinary course of our business. Market risk represents the risk of loss that may impact our financial position due to adverse changes in financial market prices and rates. Our market risk exposure is primarily the result of fluctuations in interest rates. Interest Rate Risk At September 30, 2021, we had a $20.0 million balance outstanding under our Term Loans, which bears interest at a floating rate, as described in Note 7 - Notes Payable of our consolidated condensed financial statements included elsewhere in this Quarterly Report on Form 10-Q. If interest rates rise, our debt service obligations under the Term Loans would increase even if the amount borrowed remained the same, which would affect our results of operations. We have not used any derivative financial instruments to manage our interest rate risk exposure. At September 30, 2021, a hypothetical 100 basis point increase in the interest rates would have had an immaterial impact on interest expense under our Term Loans.