Company: MYND
Filing Date: 2025-03-26
Form Type: 20-F
Source: 0001628280-25-014832
Chunk: 75

Company: Mynd.ai, Inc.
Filing Date: 2025-03-26
Form: 20-F
Item: Item 11
Chunk 75
---
ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Market risk represents the risk of loss that may impact our financial position due to adverse changes in financial market prices and rates. Management has identified our negative exposure due to changes in interest rates, foreign currency exchange rates, and inflation as areas of potential risk, which we have evaluated further below.

Interest Rate Risk

We do not enter into investments for trading or speculative purposes and have not used any derivative financial instruments to manage our interest rate risk exposure. We manage our interest rate risk exposure, predominantly by maintaining a balance of fixed and variable rate debt, while also maintaining cash balances that generate interest income.

More specifically, the convertible note issued at the end of 2023 has a fixed interest rate for its full 5-year term. Our revolving line of credit with Bank of America has a variable interest rate which, depending on the type of borrowing on the line we elect, is based on either the Federal Funds Rate or theSecured Overnight Financing Rate (“ SOFR”). However, we also maintain cash deposit balances with Bank of America which are indexed to similar interest rates. Therefore, a change in the variable interest rate on the line of credit would be offset at least partially by an increase on the interest rate on our cash holdings. These offsetting interest rate changes mitigate the risk of variable interest rate changes on our operating results and financial conditions.

For the year ended December 31, 2024, a 10% change in the interest rate on our revolving line of credit would increase or decrease our interest expense on our line of cred it by $0.2 million. However, as discu ssed above, this impact would be at least partially offset by interest income earned on our cash holdings (the extent of which is dependent on the balance of cash held).

Foreign Currency Risk

Our results of operations and cash flows are subject to fluctuations due to changes in foreign currency exchange rates. Most of our revenue is denominated in U. S. Dollars. However, as we have operations in foreign countries, primarily in the U. K. and Europe, a stronger U. S. Dollar could make our products and services more expensive in foreign countries and therefore reduce demand. A weaker U. S. Dollar could have the opposite effect. Such exposure to currency fluctuations is difficult to measure or predict because our sales are also influenced by many other factors.

For the year ended December 31, 2024, sales denominated in foreign currencies were approximately 33