{"url_path":"/sec/bgm/10-k/2026/item-11","section_key":"item-11","section_title":"Item 11 QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK**","topic":"sec","document":{"doc_type":"20-F","doc_date":"2026-07-21","source_url":"https://www.sec.gov/Archives/edgar/data/1779578/0001104659-26-085247-index.html","accession_number":"0001104659-26-085247","cik":"0001779578","ticker":"BGM","issuer_name":"BGM Group Ltd.","edgar_url":"https://www.sec.gov/Archives/edgar/data/1779578/0001104659-26-085247-index.html","primary_entity_key":"0001779578","primary_entity_name":"BGM Group Ltd."},"word_count":486,"has_tables":true,"body_markdown":"**ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK**\n\nForeign Exchange Risk\n\nThe WFOE and the VIE and its subsidiaries’ business is conducted in the PRC, and almost all of our consolidated revenues and consolidated costs and expenses are denominated in RMB. All of our assets are denominated in RMB. The financial statements that we file with the SEC and provide to our shareholders are presented in U.S. dollars. As a result, we are exposed to foreign exchange risk, as our revenues and results of operations may be affected by fluctuations in the exchange rate between the U.S. dollar and RMB. If the RMB depreciates against the U.S. dollar, the value of our RMB revenues, earnings and assets as expressed in our U.S. dollar financial statements will decline. We have not entered into any hedging transactions in an effort to reduce our exposure to foreign exchange risk.\n\nInterest Rate Risk\n\nInterest rates fluctuate, mainly due to uncertain future market behavior. The Group’s entities are all located in China, and the main raw materials required for the production of each company are procured within China, except for soybeans. Domestic soybeans are mainly sourced from foreign suppliers, the price of which will be affected by exchange rate fluctuations, but soybeans account for a very small proportion of the raw materials, so the interest rate risk associated with exchange rate fluctuations is negligible to the enterprise. The Group’s production of hygromycin APIs, pharmaceutical preparations, organic fertilizers, etc., and its main sales market are in China. Products that can be exported include hygromycin APIs, heparin sodium, and fine enteric coating. BGM did not directly export such products, which were sold by the downstream trade customers. Therefore, the sales of such products may be affected by foreign exchange price changes, but such income accounted for a small proportion of the overall income. We believe we have not been exposed to material risks due to changes in market interest rates.\n\n151\n\n[Table of Contents](#TOC)\n\nCredit Risk\n\nFinancial instruments that potentially subject us to significant concentrations of credit risk consist primarily of cash, As of September 30, 2025, 2024 and 2023, $8,668,747, $6,902,275 and $6,197,461 of our cash was on deposit at financial institutions in the PRC, where there currently is no rule or regulation requiring such financial institutions to maintain insurance to cover bank deposits in the event of bank failure. As of September 30, 2025, 2024 and 2023, $10,989, $1,856,344 and $277,218 of our cash was on deposit at financial institutions in the U.S. which were insured by the Federal Deposit Insurance Corporation subject to certain limitations. While management believes that these financial institutions are of high credit quality, it also continually monitors their credit worthiness.\n\nAccounts receivable are typically unsecured and derived from revenue earned from customers, thereby exposed to credit risk, The risk is mitigated by our assessment of its customers’ creditworthiness and its ongoing monitoring of outstanding balances."}