Company: YSXT
Filing Date: 2025-07-31
Form Type: 20-F
Source: 0001410578-25-001545
Chunk: 43

Company: YSX Tech Co., Ltd
Filing Date: 2025-07-31
Form: 20-F
Item: Item 3
Chunk 43
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ating to Our Corporate Structure

We control and receive the economic benefits of the business operations of the VIEs through the VIE Agreements among our WFOE, the VIEs and the VIEs’ shareholders to operate our business solely because we met the conditions for consolidation of the VIE under U. S. GAAP for accounting purpose; however, the VIE Agreements have not been tested in a court of law in China and are subject to significant risks, as set forth in the following risk factors.

If the PRC government finds that the agreements that establish the structure for operating our businesses in China do not comply with PRC regulations relating to the relevant industries, or if these regulations or the interpretation of existing regulations change in the future, we could be subject to severe penalties and our Class A Ordinary Shares may decline in value or become worthless if we are unable to assert our contractual control rights over the assets of the VIEs that conduct all of our operations.

We are a holding company incorporated in the Cayman Islands and operate our business through the VIEs, via a series of contractual arrangements, as a result of which, under United States generally accepted accounting principles, the assets and liabilities of the VIEs are treated as our assets and liabilities and the results of operations of the VIEs are treated in all aspects as if they were the results of our operations. For a description of these contractual arrangements, see “ Item 4. Information on the Company - A. History and Development of the Company - The VIE Agreements.”

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In the opinion of our PRC legal counsel, based on its understandings of the relevant PRC laws and regulations, (i) the ownership structures of the VIEs and WFOE are not in violation of applicable PRC laws and regulations currently in effect; and (ii) each agreement under the VIE Agreements is legal, valid, binding and enforceable in accordance with its terms and applicable PRC laws. The PRC regulatory authorities may ultimately take a view that is contrary to the opinion of our PRC legal counsel. It is uncertain whether any new PRC laws or regulations relating to VIE structures will be adopted or if adopted, what they would provide. If we or the VIEs are found to be in violation of any PRC laws or regulations, if VIE Agreements are determined to be illegal or invalid by the PRC court, arbitral tribunal or regulatory authorities, or if we or the VIEs fail to