Item 7A. Quantitative and Qualitative Disclosures About Market Risk
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
We are exposed to risks associated with changes in interest rates that could adversely affect our results of operations and financial condition. We do not hedge against interest rate risk.
The interest rate on our Term Loan is determined quarterly based on the 3-month U.S. dollar LIBOR rate, subject to a floor of 1.5%. As of December 31, 2022, the interest rate on our Term Loan was 11.5%. A 100 basis point change in LIBOR, to the extent that such change would not cause LIBOR to be below the 1.5% minimum, would change interest expense by $0.5 million on an annualized basis.
During the year ended December 31, 2022, we incurred $0.4 million in incremental interest expense as a result of increases in LIBOR during the year.
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