Harmony Biosciences Holdings, Inc. 10-Q

Item 3. Quantitative and Qualitative Disclosures About Market Risk. Interest Rate Fluctuation Risk We are exposed to market risk related to changes in interest rates. As of March 31, 2022, our cash and cash equivalents consisted of cash and money market accounts. Our primary exposure to market risk is interest income sensitivity, which is affected by changes in the general level of U.S. interest rates. However, because of the short-term nature of the instruments in our portfolio, an immediate 10% change in market interest rates would not have a material impact on the fair market value of our investment portfolio or on our financial position or results of operations. As of March 31 2022, we had $199.0 million in borrowings outstanding. The term loan bears interest at an interest rate equal to LIBOR (subject to a 1.00% floor) plus 6.50%. Based on the $199.0 million of principal outstanding as of March 31, 2022, an immediate 10% change in the LIBOR would not have a material impact on our debt-related obligations, financial position or results of operations. Foreign Currency Fluctuation 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 foreign vendors that are located in Europe. Our operations may be subject to fluctuations in foreign currency exchange rates in the future. Inflation Fluctuation Risk Inflation generally affects us by increasing our cost of labor and clinical trial costs. We do not believe that inflation had a material effect on our business, financial condition or results of operations for the three months ended March 31, 2022 and 2021.