Quantitative and Qualitative Disclosures about Market Risks
−Removed: Our primary exposure to market risk is interest rate sensitivity in connection with our money market funds and the 2022 Term Loan.
−Removed: As of December 31, 2022, our cash and cash equivalents included money market funds of $172.6 million.
−Removed: Our money market funds are short-term highly liquid investments, however, due to the short-term duration and the low risk profile of our investments, an immediate 10% change in interest rates would not have a material effect on the fair market value of our investment portfolio.
−Removed: The 2022 Term Loan has an underlying rate that is indexed to the 3-month LIBOR rate (subject to a floor of 1.20%), plus a margin of 7.5% per annum.
+Added: Our primary exposure to market risk is interest rate sensitivity in connection with our investment portfolio and the 2022 Term Loan.
+Added: None of these market risk sensitive instruments are held for trading purposes.
+Added: Investment Portfolio
+Added: Our investment portfolio includes financial instruments that are sensitive to interest rate risks.
+Added: Our investment portfolio is used to preserve capital, maintain liquidity sufficient to meet cash flow requirements, and maximize returns commensurate with our risk appetite.
+Added: We invest in instruments that meet the credit quality, diversification, liquidity, and maturity standards outlined in our investment policy.
+Added: As of December 31, 2023, our investment portfolio includes $82.0 million of cash equivalents and $71.6 million of marketable securities, which are primarily comprised of money market funds, U.S.
+Added: Treasury securities, corporate debt, and government-sponsored securities.
+Added: Our money market funds are short-term highly liquid investments, and our marketable securities have active secondary or resale markets to help ensure liquidity.
+Added: We account for marketable securities as available-for-sale, thus, no gains or losses are realized due to changes in the fair value of our marketable securities unless we sell our investments prior to maturity or incur a credit loss.
+Added: Furthermore, our investment policy includes guidelines limiting the term-to-maturity of our investments.
+Added: Due to the nature of our investments, we do not believe that the fair value of our investments has a material exposure to interest rate risk.
+Added: 2022 Term Loan
+Added: The 2022 Term Loan bears interest at a rate based upon the Secured Overnight Financing Rate (“SOFR”) plus a spread adjustment of 0.26% (subject to a floor of 1.20%), plus a margin of 7.5% per annum.
Based on the outstanding principal amount of the 2022 Term Loan as of December 31, 2023 of $412.5 million and the applicable interest rate, a hypothetical 1% increase or decrease in interest rates would increase or decrease future interest expense by approximately $4.1 million.
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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.