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Item 3. Quantitative and Qualitative Disclosures About Market Risk

2021-05-17 compared with 2020-11-13 · 21 added, 25 removed, 2 unchanged (96% of the section changed)

QUANTITATIVE AND QUALITATIVE

DISCLOSURES ABOUT MARKET RISK

Market risk is the

risk of loss from adverse changes in market prices and interest rates.

AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

risk is the risk of loss from adverse changes in market prices and interest rates.

Our future earnings, cash flows and fair values relevant

to financial instruments are dependent upon prevailing market interest rates.

Our primary market risk results from our indebtedness,

which bears interest at both fixed and variable rates.

Subject to maintaining our status as a REIT for federal income tax purposes,

we may manage our market risk on variable rate debt through the use of derivative instruments such as interest cap agreements

to, in effect, cap the interest rate on all or a portion of the debt for varying periods up to maturity.

In the future, we may

use interest rate swaps or other derivatives that fix the rate on all or a portion of our variable rate debt for varying periods

up to maturity.

This in turn, reduces the risks of variability of cash flows created by variable rate debt and mitigates the risk

of increases in interest rates.

Our objective when undertaking such arrangements will be to reduce our floating rate exposure.

However, we provide no assurance that our efforts to manage interest rate volatility will successfully mitigate the risks of such

volatility in our portfolio and we do not intend to enter into hedging arrangements for speculative purposes.

We may utilize swap

arrangements in the future.

As of September 30,

2020, our total indebtedness was approximately $65.8 million, consisting of approximately $49.0 million of variable-rate debt

and approximately $16.8 million of fixed rate debt.

Assuming no increase in the amount of our outstanding variable-rate indebtedness,

if the one-month LIBOR were to increase or decrease by 0.50%, our cash flows would decrease or increase by approximately $245,000

on an annualized basis.

Our primary market risk results from our indebtedness, which

bears interest at both fixed and variable rates.

Subject to maintaining our status as a REIT for federal income tax purposes, we may manage

our market risk on variable rate debt through the use of derivative instruments such as interest cap agreements to, in effect, cap the

interest rate on all or a portion of the debt for varying periods up to maturity.

In the future, we may use interest rate swaps or other

derivatives that fix the rate on all or a portion of our variable rate debt for varying periods up to maturity.

This in turn, reduces

the risks of variability of cash flows created by variable rate debt and mitigates the risk of increases in interest rates.

Our objective

when undertaking such arrangements will be to reduce our floating rate exposure.

However, we provide no assurance that our efforts to

manage interest rate volatility will successfully mitigate the risks of such volatility in our portfolio and we do not intend to enter

into hedging arrangements for speculative purposes.

We may utilize swap arrangements in the future.

of March 31, 2021, our indebtedness was approximately $97.8 million, consisting of approximately $64.5 million of variable-rate debt and

approximately $33.3 million of fixed rate debt.

Assuming no increase in the amount of our outstanding variable-rate indebtedness, if the

one-month LIBOR were to increase or decrease by 0.50%, our cash flows would decrease or increase by approximately $0.3 million on an annualized

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 3. Quantitative and Qualitative Disclosures About Market Risk