Item 7A. Quantitative and Qualitative Disclosures About Market Risk
ITEM 7A QUANTITATIVE
AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Interest Rate Risk
We
invest our excess cash in investment-grade, interest-bearing securities. The primary objective of our investment policy is to preserve
principal and liquidity. To achieve this objective, our investment policy allows for investments in domestic money market certificates,
certificates of deposit, money market funds, commercial papers, bonds or commercial papers, and establishes diversification and credit
quality requirements and limits investments by maturity and issuer. At September 30, 2022 and 2021, the majority of our excess cash was
held in a JP Morgan Chase Prime Money Market Fund. The average amount invested at any given time throughout the year ended September
30, 2022 was $132.7 million (high: $133.2 million; low: $132.2 million) and the average rate of return was 0.74%. A hypothetical 100
basis point change in interest rates during any of the periods presented would not have a material impact on the fair market value of
our cash and cash equivalents as of September 30, 2022 and 2021. To date, we have not experienced a loss of principal on any of our investments
and as of September 30, 2022 we did not have any allowance for credit losses from our cash and cash equivalents.
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Foreign Exchange Risk
We face foreign exchange risk as a result of entering into
transactions denominated in currencies other than U.S. dollars and as a result of the existence of sales and tax incentive receivables
denominated in other than U.S. dollars. Due to the uncertain timing of expected payments in foreign currencies, we do not utilize any
forward exchange contracts. All foreign transactions settle on the applicable spot exchange basis at the time such payments are made.
Volatile market conditions and supply chain shortages may result in significant changes in exchange rates, and in particular a change
in foreign currencies values relative to the U.S. dollar may affect our operating expenses as expressed in U.S. dollars. An adverse movement
in foreign exchange rates could have a material effect on payments made to foreign suppliers.
For the year ended September 30, 2022,
a majority of our expenses were denominated in U.S. dollars. A hypothetical 10% change in foreign exchange rates applied to foreign currency
transactions for the year ended September 30, 2022 would not have had a material impact on our consolidated financial statements.
At
September 30, 2022, we held net assets of $6.4 million (AUD $9.9 million) denominated in Australian dollars. A
hypothetical 10% change in foreign exchange rates at September 30, 2022 would result in a change in reported net assets of +/-
$0.6 million.
Inflation Risk
Inflation generally may affect us by
increasing our cost of labor and clinical trial costs. We do not believe that inflation has had a material impact on our results
of operations during the periods presented.