Company: FSTWF
Filing Date: 2025-07-25
Form Type: 424B3
Source: 0001213900-25-067790
Chunk: 63

Company: FST Corp.
Filing Date: 2025-07-25
Form: 424B3
Chunk 63
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 recorded the software service income as revenue according to ASC 606 and recorded the software purchase fee as cost of sales accordingly, This reclassification resulted in the decrease in FST’s R&D expenses and reflects the FST’s evolving role from a software user to a distributor.

42

Other Income Other income increased by $664,415, or 340.5%, from $201,227 for the year ended December31, 2023 to $886,410 for the year ended December31, 2024. The increase was mainly due to (i) the increase of investment gain recognized in the fiscal year of 2024; (ii) the increase of other miscellaneous incomes; and offset by: (i) the decrease of software service income, since we contracted with PTC to act as its software distributor in 2024, such income has been recorded as revenue, whereas it was recorded as other income in 2023; (ii) the increase of interest expense due to the increase of borrowings. Income Tax Expense (benefit) Income tax expense was $456,246 for the year ended December31, 2024 and income tax benefit was $751,071 for the year ended December31, 2023. This was mainly due to the change in deferred tax asset valuation allowance in the fiscal year of 2024. Liquidity and Capital Resources Historically, we have financed our operations mainly through equity contributions from the Group’s shareholders and cash flow from operating activities in ordinary course of business. As of December31, 2024 and December 31, 2023, we had cash and cash equivalents of $5,098,420 and $8,904,618, which consisted of cash, bank deposits and short -term, highly liquid investments that are readily convertible to known amounts of cash. We maintain good credit relationships with multiple banks and has sufficient unused credit facilities to meet its operating capital needs. The Group began to generate positive operating cashflow in 2024, and our sales and cash collections in Q1 2025 also showed relatively strong performance. As of December31, 2024, the Group had unused credit facilities of approximately $8,238,823. The consolidated financial statements have been prepared on a going concern basis, which assumes that the Company will be able to continue operating in the normal course of business and will be able to realize its assets and discharge its liabilities as they become due. As of December31, 2024, the Company has continued to incur operating losses and is