← Back to BWAY filing summaryOriginal filing text · Part I
Item 11 — Quantitative and Qualitative Disclosures About Market Risk
Brainsway Ltd. · 20-F · FY 2025 · Period ended Dec 31, 2025
View complete filing on SEC EDGAR ↗This is the extracted source text from the SEC filing. Formatting may differ from the original document.
Market risk is the risk of loss related to changes in market
prices, including interest rates and foreign exchange rates, of financial instruments that may adversely impact our financial position,
results of operations or cash flows. Our overall risk management program focuses on the unpredictability of financial markets and seeks
to minimize potential adverse effects on our financial performance.
Risk of Interest Rate Fluctuation and Credit Exposure Risk
At present, our credit and interest risk arise from cash and
cash equivalents, deposits with banks as well as accounts receivable. A substantial portion of our liquid instruments is invested in short-term
deposits.
We estimate that because the liquid instruments are invested
mainly for the short-term, the credit, and interest risk associated with these balances is low. The primary objective of our investment
activities is to preserve principal while maximizing the income we receive from our investments without significantly increasing risk
and loss. Our investments are exposed to market risk due to fluctuations in interest rates, which may affect our interest income and the
fair market value of our investments. We manage this exposure by performing ongoing evaluations of our investments.
Foreign Currency Exchange Risk
The U.S. dollar is our functional and reporting currency. Although a substantial portion of our
expenses (mainly salaries and related costs) are denominated in NIS, accounting for approximately 21.4% of our expenses in the year ended
December 31, 2025, all of our financing has been in U.S. dollars, and the substantial majority of our liquid assets are held in U.S. dollars.
Furthermore, while we anticipate that a portion of our expenses, principally salaries and related personnel expenses in Israel will continue
to be denominated in NIS, we expect to incur an increasing amount of expenses in U.S. dollars as we increase our marketing and sales personnel
and enhance our clinical studies in the United States. Changes of 5% in the U.S. dollar/NIS exchange rate would have increased/decreased
operating expenses by approximately $522 thousand during the year ended December 31, 2025. We also have expenses, although to a much lesser
extent, in other non-U.S. dollar currencies, in particular the Euro.
Moreover, for the next few years we expect that the substantial
majority of our revenues from the sale or lease of our systems in the United States, if any, will be denominated in U.S. dollars. As a
portion of our expenses is denominated in NIS and other non-U.S. currencies, we are exposed to risk associated with exchange rate fluctuations
vis-à-vis the non-U.S. currencies.
We do not hedge our foreign currency
exchange risk. In the future, we may enter into formal currency hedging transactions to decrease the risk of financial exposure from fluctuations
in the exchange rates of our principal operating currencies. These measures, however, may not adequately protect us from the material
adverse effects of such fluctuations.