Amylyx Pharmaceuticals, Inc. 10-K

Item 7A. Quantitative and Qualitative Disclosures about Market Risk. Market risk is the potential loss that may result from market changes associated with our business or with an existing or forecasted financial transactions. We are exposed to various market risks in the ordinary course of our business which are discussed below. Interest Rate Risk We are exposed to market risk related to changes in interest rates. As of December 31, 2023, we had cash, cash equivalents and short-term investments of $371.4 million. Our cash equivalents are invested primarily in bank deposits and money market mutual funds. Our primary exposure to market risk is interest rate sensitivity, which is affected by changes in the general level of U.S. interest rates. Our investments are subject to interest rate risk and could fall in value if market interest rates increase. Due to the duration of our investment portfolio and the low risk profile of our investments, we do not believe an immediate 100 basis point change in interest rates would have a material effect on the fair market value of our portfolio. We have the ability to hold our investments until maturity, and therefore we would not expect our operating results or cash flows to be affected to any significant degree by the effect of a change in market interest rates on our investments. Foreign Currency and Currency Translation Risk We are not currently exposed to significant market risk related to changes in foreign currency exchange rates; however, we have contracted with and may continue to contract with vendors that are located outside of the U.S. As a result, our operations may be subject to fluctuations in foreign currency exchange rates in the future. In addition, we translate the assets and liabilities of our foreign subsidiaries from their respective functional currencies to U.S. dollars at the appropriate rates as of the balance sheet date. Changes in the carrying value of these assets and liabilities attributable to fluctuations in rates are included in accumulated other comprehensive income (loss) on our consolidated balance sheets. Income statement accounts are translated using the monthly average exchange rates during the year. Inflation Risk We do not believe that inflation had a material effect on our business, financial condition, or results of operations during the twelve months ended December 31, 2023 and 2022. However, inflation has had, and may continue to have, an impact on the labor costs we incur to attract and retain qualified personnel. Item 8 . Financial Statements and Supplementary Data. Our consolidated financial statements, together with the reports of our independent registered public accounting firms, appear beginning on page F-1 of this Annual Report. Item 9 . Changes in and Disagreements with Accountants on Accounting and Financial Disclosure. None.