Replimune Group, Inc. 10-K

Item 7A. Quantitative and qualitative disclosures about market risks Interest rate sensitivity As of March 31, 2022, we had cash and cash equivalents and short-term investments of $395.7 million, which consisted of cash equivalents, U.S. Treasury securities and U.S. government agency securities. Interest income is sensitive to changes in the general level of interest rates; however, due to the nature of these investments, an immediate 10% change in interest rates would not have a material effect on the fair market value of our investment portfolio. Foreign currency exchange risk Our headquarters are located in the United States, where the majority of our selling, general and administrative expenses are incurred in U.S. dollars. The majority of our research and development costs are incurred by our subsidiary in Oxfordshire, United Kingdom, whose functional currency is the British pound. We are exposed to foreign exchange rate risk. During the years ended March 31, 2022 and 2021, we recognized net foreign currency transaction losses of $1.1 million and $0.7 67 TABLE OF CONTENTS million, respectively. These losses are primarily related to unrealized and realized foreign currency gains and losses as a result of transactions entered into by our United Kingdom subsidiary in currencies other than the British pound, primarily the euro. These foreign currency transaction losses were recorded as a component of other income (expense), net in our consolidated statements of operations. We believe that a 10% change in the exchange rate between the British pound and the euro would not have a material impact on our financial position or results of operations. As we continue to grow our business, our results of operations and cash flows will be subject to fluctuations due to changes in foreign currency exchange rates, which could adversely impact our results of operations. To date, we have not entered into any foreign currency hedging contracts to mitigate our exposure to foreign currency exchange risk. Item 8. Financial statements and supplementary data See the consolidated financial statements filed as part of this Annual Report on Form 10-K as listed under Item 15 below. Item 9. Changes in and disagreements with accountants on accounting and financial disclosures None.