Item 7A. Quantitative and Qualitative Disclosures About Market Risk
Item 7A.
Quantitative and Qualitative Disclosures About Market Risk
Interest Rate Risk
Our
operating results are subject to risk from interest rate fluctuations on our $42.2 million term loan and our $55.0 million revolving
line of credit. Our term loan and revolving line of credit both bear interest at variable rates, which exposes us to market risks relating
to changes in interest rates. Interest rate risk is highly sensitive due to many factors, including U.S. monetary and tax policies, U.S.
and international economic factors and other factors beyond our control. As of December 31, 2021, we had $97.2 million of variable
rate debt outstanding under our term loan and revolving line of credit combined. Based on these debt levels, an increase of 100 basis
points in the effective interest rate on our outstanding debt at December 31, 2021 would result in an increase in interest expense of
approximately $1.0 million over the next 12 months. We do not use derivative financial instruments for speculative or trading purposes,
but this does not preclude our adoption of specific hedging strategies in the future.
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