Item 7A. Quantitative and Qualitative Disclosures About Market Risk
ITEM
7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We
are exposed to certain market risks from transactions we enter into the normal course of business. Our primary market risk exposure relates
to interest rate risk, which currently is tied to the Prime Interest rate.
INTEREST
RATES
Our
Factoring Facility is priced at a variable interest rate of prime plus 2% with a 15-basis point advance rate with a floor of 4%. Accordingly,
future interest rate increases could potentially put us at risk for an adverse impact on future earnings and cash flows.
At
60 days our Factoring APR average in 2025 was approximately 10.3%. Given the current prime interest rate is 6.75% at a DSO of 53,
our current average APR as of March 7, 2026, is 9.78 %.
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