{"url_path":"/sec/kwmww/10-k/2026/item-11","section_key":"item-11","section_title":"Item 11 QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS**","topic":"sec","document":{"doc_type":"20-F","doc_date":"2026-05-15","source_url":"https://www.sec.gov/Archives/edgar/data/2000756/0001829126-26-005357-index.html","accession_number":"0001829126-26-005357","cik":"0002000756","ticker":"KWM","issuer_name":"Nexus Advanced Technologies Inc.","edgar_url":"https://www.sec.gov/Archives/edgar/data/2000756/0001829126-26-005357-index.html","primary_entity_key":"0002000756","primary_entity_name":"K Wave Media Ltd."},"word_count":414,"has_tables":true,"body_markdown":"**ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS**\n\n \n\nAs of December 31, 2025, we had no material exposure to market risk.\n\n \n\n**Interest Rate Risk**\n\n \n\nK Wave holds cash and cash equivalents for working capital purposes. We do not have material interest rate risk exposure with respect to investments, as any investments that we enter into are primarily highly liquid investments. As of December 31, 2025, we had a cash balance of KRW 4,267 million (USD $3.0 million), consisting of operating accounts which are not affected by changes in the general level of U.S. interest rates.\n\n \n\nWith respect to its liabilities, K Wave is exposed to interest rate\nrisk arising from certain variable-rate borrowings denominated in KRW. These borrowings of total KRW 4,290 million (USD $3.2 million)\nbear interest at rates linked to market benchmarks, including the certificate of deposit (“CD”) rate and the Cost of Funds\nIndex (“COFIX”) (6-month), and generally have short-term maturities. Accordingly, increases in prevailing market interest\nrates may result in higher interest expense associated with these borrowings.\n\n \n\n**Foreign Currency Risk**\n\n \n\nK Wave conducts its\noperations through two branches, one located in the United States and one in Korea, which includes its subsidiaries in Korea. The\ntransactions of each branch and subsidiary are primarily denominated in the U.S. dollar and the Korean Won, respectively, the\nfunctional currency. We have elected to use a reporting currency of the Korean Won. As foreign exchange rates change, the Korean Won\nequivalent of K Wave’s existing foreign currency assets, liabilities, commitments and forecasted foreign currency revenues and\nexpenses will change. A 10.0% increase in the exchange rate between the Won and USD would result in an increase in net loss of Korean\nwon 92 million, with a decrease of 10.0% in the exchange rate having the opposite effect, as of December 31, 2025. We are\nevaluating the best method to manage K Wave’s exposure to foreign currency fluctuations to reduce volatility of earnings and\ncash flow in order to allow management to focus on core business issues and challenges.\n\n \n\nThe economic and political conditions in the countries we are currently in and plan to operate in could impact K Wave’s ability to manage K Wave’s exposure to foreign currency fluctuations in those countries or repatriate cash from those countries.\n\n \n\n**Inflation Risk**\n\n \n\nWe do not believe that inflation currently has a material effect on K Wave’s business. Inflation may become a greater risk in the event of changes in current economic and governmental fiscal policy."}