{"url_path":"/sec/cdtg/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":"2026-05-15","source_url":"https://www.sec.gov/Archives/edgar/data/1793895/0001731122-26-000740-index.html","accession_number":"0001731122-26-000740","cik":"0001793895","ticker":"CDTG","issuer_name":"CDT Environmental Technology Investment Holdings Ltd","edgar_url":"https://www.sec.gov/Archives/edgar/data/1793895/0001731122-26-000740-index.html","primary_entity_key":"0001793895","primary_entity_name":"CDT Environmental Technology Investment Holdings Ltd"},"word_count":411,"has_tables":true,"body_markdown":"**ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK**\n\n \n\n**Inflation risk**\n\n \n\nInflationary factors, such as increases\nin personnel and overhead costs, could impair our operating results. Although we do not believe that inflation has had a material impact\non our financial position or results of operations to date, a high rate of inflation in the future may have an adverse effect on our ability\nto maintain current levels of gross margin and operating expenses as a percentage of sales revenue if the revenues do not increase with\nsuch increased costs.\n\n \n\n**Interest Rate Risk**\n\n \n\nWe are exposed to interest rate\nrisk while we have short-term and long-term bank loans outstanding. Although interest rates for our short-term loans are typically fixed\nfor the terms of the loans, the terms are typically twelve (12) months and interest rates are subject to change upon renewal.\n\n \n\n**Credit Risk**\n\n \n\nCredit risk is controlled by the\napplication of credit approvals, limits and monitoring procedures. We manage credit risk through in-house research and analysis of the\nChinese economy and the underlying obligors and transaction structures. We identify credit risk collectively based on industry, geography\nand customer type. In measuring the credit risk of our sales to our customers, we mainly reflect the “probability of default”\nby the customer on its contractual obligations and consider the current financial position of the customer and the current and likely\nfuture exposures to the customer.\n\n \n\n**Liquidity Risk**\n\n \n\nWe are also exposed to liquidity\nrisk, which is risk that we will be unable to provide sufficient capital resources and liquidity to meet our commitments and business\nneeds. Liquidity risk is controlled by the application of financial position analysis and monitoring procedures. When necessary, we will\nturn to other financial institutions and related parties to obtain short-term funding to cover any liquidity shortage.\n\n \n\n**Foreign Exchange Risk**\n\n \n\nWhile our reporting currency is\nthe U.S. dollar, almost all of our consolidated revenues and consolidated costs and expenses are denominated in RMB. All of our assets\nare denominated in RMB. As a result, we are exposed to foreign exchange risk as our revenues and results of operations may be affected\nby 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\nRMB revenues, earnings and assets as expressed in our U.S. dollar financial statements will decline. We have not entered into any hedging\ntransactions in an effort to reduce our exposure to foreign exchange risk."}