ThredUp Inc. 10-Q

Item 3. Quantitative and Qualitative Disclosures About Market Risk We are exposed to market risks in the ordinary course of our business. These risks primarily include: Interest Rate Risk As of March 31, 2021, we had unrestricted cash and cash equivalents of $246.5 million, consisting primarily of money market funds, which carry a degree of interest rate risk. Fluctuations in interest rates have not been significant to date. The primary objective of our investment activities is to preserve principal while maximizing income without significantly increasing risk. We do not enter into investments for trading or speculative purposes and have not used any derivative financial instruments to manage our interest rate risk exposure. Due to the short-term nature of our investments, we have not been exposed to, nor do we anticipate being exposed to, material risks due to changes in interest rates. Fluctuations in interest rates have not been significant to date. Interest rates under our loan and security agreement with Western Alliance Bank are tied to the prime rate with a floor of 5.75% and therefore carry interest rate risk. As of March 31, 2021 , we had borrowed $40.0 million under our loan and security agreement, with $40.0 million principal outstanding as of such date, at an interest rate of 5.75%. Fluctuations in interest rates have not been significant to date. A hypothetical 100 basis point change in interest rates would not have a material impact on our financial condition or results of operations for the periods presented. Inflation Risk We do not believe that inflation has had a material effect on our business, results of operations or financial condition. Nonetheless, if our costs were to become subject to significant inflationary pressures, we may not be able to fully offset such higher costs. Our inability or failure to do so could harm our business, results of operations or financial condition. 27