Company: YSXT
Filing Date: 2025-07-31
Form Type: 20-F
Source: 0001410578-25-001545
Chunk: 137

Company: YSX Tech Co., Ltd
Filing Date: 2025-07-31
Form: 20-F
Item: Item 5
Chunk 137
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 in Hengding Technology Co., Ltd. (“ Hengding”), in exchange for a 17.5% ownership interest in Hengding. On May 4, 2023, Xinjiang YSX passed a board resolution and agreed to sell the 17.5% ownership interest to Hengding’s remaining shareholders at the historical cost of RMB3.5 million plus any investment income generated within our investment period. We received the payment in full from Hengding by June 16, 2023.

Net cash used in investing activities amounted to $1,980,200 for the fiscal year ended March 31, 2023, primarily consisting of (i) purchase of short-term investments of $3,649,262, because we purchased certain wealth management financial products from financial institutions in order to earn investment income, (ii) proceeds upon maturity of short-term investment of $2,181,758, and (iii) a long-term investment in an equity investee of $513,213 (RMB3.5 million). In August 2022, we invested approximately $0.5 million (RMB3.5 million) in Hengding, to facilitate credit card processing and payment solution services, in exchange for 17.5% ownership interest in Hengding. We consider that we can exert certain influence but do not own a majority equity interest or otherwise control over Hengding’s business operations. We are not deemed to be the primary beneficiary of Hengding, as we have no power to direct the activities that most significantly affect the economic performance of Hengding. We accounted for this investment using the measurement alternative in accordance with ASC 321 and records the cost method investment at historical cost and subsequently records any dividends received from the net accumulated earnings of the investee as income. Based on the investment agreement, Hengding’s remaining shareholders are required to contribute RMB16.5 million into Hengding as a capital contribution before April 30, 2023. However, Hengding’s remaining shareholders failed to make such capital contribution as originally planned. In addition, our management assessed that the investment income generated from such investment did not meet our original expectations. As a result, on May 4, 2023, Xinjiang YSX passed a board resolution and agreed to sell the 17.5% ownership interest to Hengding’s remaining shareholders at the historical cost of RMB3.5 million plus any investment income generated within our investment period. We received the