COGNITION THERAPEUTICS INC 10-Q

Item 3. Quantitative and Qualitative Disclosures about Market Risk Interest Rate Risk We are exposed to market risk related to changes in interest rates. We had cash and cash equivalents of $8.3 million as of September 30, 2021. Our exposure to interest rate risk is not significant and a hypothetical 1% change in interest rates during any of the periods presented would not have had a material impact on our financial statements included in this Quarterly Report. Foreign Currency Our functional currency is the U.S. dollar. As of the date of this Quarterly Report, we are exposed to foreign currency rate risk related to various third-party service contracts denominated in foreign currencies. On July 14, 2015 we established an Australian subsidiary to facilitate for the purpose of conducting research and development efforts. Transaction gains and losses are included in other income (expense), net on our statements of operations and comprehensive loss and were not material for any of the periods presented. A hypothetical 10% change in exchange rates during any of the periods presented would not have had a material impact on our financial statements included in this Quarterly Report. 44 Table of Contents Effects of Inflation Inflation generally affects us by increasing our cost of labor and clinical trial costs. We believe that inflation has not had a material effect on our financial statements included in this Quarterly Report.