Item 7A. Quantitative and Qualitative Disclosures About Market Risk
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
The Company is primarily exposed to fluctuations in U.S. interest rates and their impact on the Company’s money market accounts and Term Loan Facility. Increases in interest rates will negatively affect the fair value of the Company’s money market accounts and increase the interest expense on the Company’s Term Loan Facility. We do not hedge against interest rate risk.
As part of our treasury management strategy, we hold non-operating cash in money market accounts to generate interest income. The interest on these accounts fluctuates with the general market for interest rates.
The interest rate on our Term Loan Facility is currently determined quarterly based on the applicable Term SOFR.
The following table sets forth annualized impacts on the Company’s interest income or expense that a 100 basis point change in the relevant interest rate would have on each of the Company’s material interest-bearing financial instruments as of December 31, 2025 (in thousands):
Financial Instrument
Prevailing Rate
Hypothetical Rate Change
Impact of Rate Change
Money market accounts Market interest rates
100 basis points decrease $ (1,507)
Term Loan Facility Term SOFR
100 basis points increase (180)
49
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