{"url_path":"/sec/brqsf/10-k/2026/item-11","section_key":"item-11","section_title":"Item 11 QUANTITATIVE AND QUALITATIVE DISCLOSURES","topic":"sec","document":{"doc_type":"20-F","doc_date":"2026-05-15","source_url":"https://www.sec.gov/Archives/edgar/data/1650575/0001213900-26-057706-index.html","accession_number":"0001213900-26-057706","cik":"0001650575","ticker":"BRQSF","issuer_name":"Borqs Technologies, Inc.","edgar_url":"https://www.sec.gov/Archives/edgar/data/1650575/0001213900-26-057706-index.html","primary_entity_key":"0001650575","primary_entity_name":"Borqs Technologies, Inc."},"word_count":367,"has_tables":true,"body_markdown":"**ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES\nABOUT MARKET RISK**\n\n \n\n**Credit Risk**\n\n \n\nSee above “Item 5. Operating\nand Financial Review and Prospects – Quantitative and Qualitative Disclosures about Market Risk – Credit Risk”.\n\n \n\n**Liquidity Risk**\n\n \n\nSee above “Item 5. Operating\nand Financial Review and Prospects – Quantitative and Qualitative Disclosures about Market Risk – Liquidity Risk”.\n\n \n\n**Interest Rate Risk**\n\n \n\nThe Company currently does\nnot have any variable-rate borrowings, and has not entered into investments for trading or speculative purposes and have not used any\nderivative financial instruments to manage our interest rate risk exposure.\n\n** **\n\n**Foreign Currency Exchange Rate Risk**\n\n \n\nWe generate almost all of\nour revenue from the Connected Solutions BU in U.S. Dollars. The majority of our general and administrative expenses are in Chinese RMB\nYuan and Indian Rupees. We paid for our costs of goods in either US Dollars or Chinese RMB Yuan, depending on the source of the materials\nand components. For accounting purposes, non-US Dollars balance sheet items are converted to US Dollars at the mean exchange rate as of\nthe date of the balance sheet, and non-US dollar income and expense items are converted to US Dollars at the average exchange rate for\nthe period of the reporting. We do not consider the risk of exchange rate fluctuations to be material for our results of operations, as\nduring the year ended December 31, 2022, these foreign exchange fluctuations represented 2.7% of our revenues. However, the portion of\nour business conducted in other currencies could increase in the future, which could expand our exposure to losses arising from exchange\nrate fluctuations. We have not hedged currency exchange risks associated with our expenses.\n\n \n\n**Inflation Risk**\n\n \n\nWe do business globally with\ninternational customers and suppliers. Our gross margin and operations can be adversely affected by global inflationary situations such\nas rising costs for raw materials, components, shipping and labor. The Company faces challenges in maintaining the profitability of operations\nin economies experiencing high inflation rates caused by the global COVID pandemic and political tension between Russia and Ukraine. The\ninflation rate in the U.S. reached 40-year high in the beginning of 2022. It has affected the whole world economy, including our sourcing\ncosts and business operations."}