Disc Medicine, Inc. 10-Q

Item 3. Quantitative and Qualitative Disclosures About Market Risk. We are exposed to market risk in the ordinary course of our business. These risks primarily relate to changes in interest rates. Our cash and cash equivalents as of June 30, 2021 consisted of cash and a money market fund account. Because of the short-term nature of our money market fund, a sudden change in market interest rates would not be expected to have a material impact on our financial position or results of operations. As of June 30, 2021, the principal amount of our term loan was $7.9 million. The following table is an estimate of our interest expense based upon our floating rate term loan that could result from hypothetical interest rate changes, based on debt levels as of June 30, 2021: Hypothetical Change in Interest Rates (i) Annual Impact to Interest Expense 1-percent increase $80,000 increase 1-percent decrease No Impact (i) We pay a floating rate per annum equal to the greater of 3.75% or the prime rate minus 1.5%. See Note 7 to our unaudited condensed consolidated financial statements for further information. 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. Our operations may be subject to fluctuations in foreign currency exchange rates in the future. Inflation would generally affect 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 during the three and six months ended June 30, 2021 and the year ended December 31, 2020.