MANNKIND CORP 10-K

Item 7A. Quantitative and Qualitative Disclosures about Market Risk Interest Rate Risk Interest on borrowings under the MidCap Credit Facility is determined, for any one-month period, on the basis of one-month LIBOR in effect at the beginning of such period plus 6.75%, subject to a one-month LIBOR floor of 2.00%. Accordingly, our interest expense under the MidCap Credit Facility is subject to changes in the one-month LIBOR rate. All other debt has fixed interest rates, so the interest expense associated with such debt is not exposed to changes in market interest rates. Specifically, the interest rate on amounts borrowed under the Mann Group promissory notes is fixed at 7.00%, the interest rate under the 2024 convertible notes was fixed at 5.75%, and the interest rate under the PPP Loan is fixed at 0.98%. See Note 7 – Borrowings for information about the principal amount of outstanding debt. If a change in one-month LIBOR interest rates equal to 10% of the one-month LIBOR interest rates on December 31, 2020 were to have occurred, this change would not have had a material effect on our interest payment obligation. Foreign Currency Exchange Risk We incur and will continue to incur significant expenditures for insulin supply obligations under our Insulin Supply Agreement with Amphastar. Such obligations are denominated in Euros. At the end of each reporting period, the recognized gain or loss on purchase commitment is converted to U.S. dollars at the then-applicable foreign exchange rate. As a result, our business is affected by fluctuations in exchange rates between the U.S. dollar and the Euro. For the year ended December 31, 2020, we realized an $8.0 million currency loss, which was included in loss on foreign currency translation in the accompanying consolidated statements of operations. Exchange rate fluctuations may adversely affect our expenses, results of operations, financial position and cash flows. If a change in the U.S. dollar to Euro exchange rate equal to 10% of the U.S. dollar to Euro exchange rate on December 31, 2020 were to have occurred, this change would have resulted in a foreign currency impact to our pre-tax loss of approximately $9.5 million. Item 8. Financial Statements and Supplementary Data The information required by this Item is included in Items 15(a) (1) and (2) of Part IV of this Annual Report on Form 10-K. 46 Item 9. Changes in and Disagreements with Accou ntants on Accounting and Financial Disclosure None.