{"url_path":"/sec/tc/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":"2026-05-08","source_url":"https://www.sec.gov/Archives/edgar/data/1743340/0001213900-26-053942-index.html","accession_number":"0001213900-26-053942","cik":"0001743340","ticker":"TC","issuer_name":"Token Cat Ltd","edgar_url":"https://www.sec.gov/Archives/edgar/data/1743340/0001213900-26-053942-index.html","primary_entity_key":"0001743340","primary_entity_name":"Token Cat Ltd"},"word_count":419,"has_tables":true,"body_markdown":"**  **\n\n**ITEM\n11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK**\n\n** **\n\n**Credit\nRisk**\n\n \n\nFinancial instruments that potentially subject us to the concentration\nof credit risk consist of cash and cash equivalents, restricted cash, accounts receivable and prepayment and other current assets. As\nof December 31, 2024 and 2025, all of our cash and cash equivalents, restricted cash were held in large reputable financial institutions\nlocated in the United States of America or China, which management considers being of high credit quality. Accounts receivable\nis typically unsecured and is derived from revenue earned from our businesses. We perform ongoing credit evaluations of the financial\ncondition of our customers. We establish a provision for credit losses based upon estimates, factors surrounding the credit risk of specific\ncustomers and other information.\n\n \n\n**Foreign\nExchange Risk**\n\n \n\nSubstantially\nall of our net revenues and expenses are denominated in Renminbi, which is the functional currency of our subsidiaries in China. Therefore,\nwe have limited exposure to foreign exchange risk for operating activities, and we have not entered into any hedging transactions in\nan effort to reduce our exposure to foreign currency exchange risk. Although in general, our exposure to foreign exchange risks should\nbe limited, the value of your investment in the ADSs will be affected by the foreign exchange rate between U.S. dollars and Renminbi\nbecause the value of our business is effectively denominated in Renminbi, while the ADSs will be traded in U.S. dollars.\n\n \n\nRenminbi is not freely convertible\ninto foreign currencies for capital account transactions. The value of the Renminbi against the U.S. dollar and other currencies is affected\nby, among other things, changes in China’s political and economic conditions and China’s foreign exchange policies. On July\n21, 2005, the PRC government changed its decade-old policy of pegging the value of the Renminbi to the U.S. dollar, and the Renminbi appreciated\nmore than 20% against the U.S. dollar over the following three years. Between July 2008 and June 2010, this appreciation halted and the\nexchange rate between the Renminbi and the U.S. dollar remained within a narrow band. Since June 2010, the Renminbi has fluctuated against\nthe U.S. dollar, at times significantly and unpredictably. It is difficult to predict how market forces or PRC or U.S. government policy\nmay impact the exchange rate between the Renminbi and the U.S. dollar in the future. Our cash and cash equivalents, restricted cash, and\nterm deposits denominated in RMB amounted to nil, nil and RMB0.2 million (US$30 thousand) as of December 31, 2023, 2024 and 2025 respectively. \n\n \n\n96"}