Item 3. Quantitative and Qualitative Disclosures About Market Risk
ITEM
3.
QUANTITATIVE
AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Foreign
Currency Risk
We
have foreign currency risks related to our revenue and operating expenses denominated in currencies other than the U.S. dollar, primarily
the euro, causing both our revenue and our operating results to be impacted by fluctuations in the exchange rates. Gains or losses from
the revaluation of certain cash balances, accounts receivable balances and intercompany balances that are denominated in these currencies
impact our net loss. A hypothetical decrease in all foreign currencies against the U.S. dollar of 1% would not result in a material foreign
currency loss on foreign-denominated balances, as of June 30, 2025. As our foreign operations expand, our results may be more materially
impacted by fluctuations in the exchange rates of the currencies in which we do business. At this time, we do not enter into financial
instruments to hedge our foreign currency exchange risk.
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