The Company is exposed to the financial risk related to the fluctuation of foreign exchange rates and the degree of volatility of those rates. The foreign currency risk is limited to the portion of the Company’s business transactions denominated in currency other than U.S. dollars.

The Company incurs a portion of its expenses in Canadian dollars, as well as other currencies to a lesser extent. A change in the currency exchange rates between the U.S. dollars relative to the Canadian dollar could have a significant effect on the Company’s consolidated results of operations, financial position, or cash flows. The Company does not enter into arrangements to hedge its currency risk exposure, although it maintains expected Canadian dollar cash requirements in Canadian dollars to form a natural hedge.

The Company is exposed to currency risk through its cash, other receivables, accounts payable, accrued expenses and other current liabilities, as well as right-of-use lease liabilities denominated in Canadian dollars as follows:


	December 31,
	2022			2021
	(in thousands)
Cash	$	1,904		$	3,583
Research and development tax credits receivable		—			3,261
Other receivables		851			745
Accounts payable		(324	)		(665	)
Accrued expenses and other current liabilities		(2,289	)		(2,116	)
Lease liabilities		(4,392	)		(5,564	)
Net financial position exposure	$	(4,250	)	$	(756	)

Based on the above net exposure at December 31, 2022, and assuming that all other variables remain constant, a 10% depreciation of the U.S. dollar against the Canadian dollar would result in an increase of $0.3 million in the Company’s net loss for the year ended December 31, 2022.

The Company is also exposed to currency risk through the Ono Agreement as the Company has a collaboration revenue receivable balance as of December 31, 2022, and any future payments receivable under the Ono Agreement, if any, are denominated in Japanese yen.