Item 3. Quantitative and Qualitative Disclosures About Market Risk
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Our future income, cash flows and fair value relevant to our financial instruments depends upon prevailing market interest rates. Market risk refers to the risk of loss from adverse changes in market prices and interest rates. Based upon the nature of our operations, the principal market risk to which we are exposed is the risk related to interest rate fluctuations. As of September 30, 2020, we had total indebtedness of approximately $175.0 million, which is floating rate debt with a variable interest rate.
Effective September 28, 2020, the Company entered into an interest rate derivative in order to hedge its market interest risk. The interest rate derivative converts its variable rate debt on its Term Loan to a fixed interest rate of 0.21%, plus a margin of 1.25% as of September 30, 2020.
Off-Balance Sheet Arrangements
As of September 30, 2020 and December 31, 2019, we did not have any off-balance sheet arrangements that have had or are reasonably likely to have a material effect on our financial condition, revenues or expenses, results of operations, liquidity, capital resources or capital expenditures.
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