Company: DSWL
Filing Date: 2025-07-29
Form Type: 20-F
Source: 0001174947-25-001096
Chunk: 27

Company: DESWELL INDUSTRIES INC
Filing Date: 2025-07-29
Form: 20-F
Item: Item 3
Chunk 27
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 material adverse effect on our financial condition and the trading price of our common shares.

Risks Related to Doing Business in China

The Chinese government may intervene in or influence our operations at any time and could change its policies toward or even nationalize private enterprise, which could result in the total loss of our investment in that country and materially and adversely affect the value of our securities.

Our manufacturing facilities are located in China. The Chinese government has exercised and continues to exercise substantial control over virtually every sector of the Chinese economy through regulation and state ownership. The Chinese government may intervene or influence the operations of our PRC subsidiaries at any time with little or no advance notice to us. As a result, our operations and assets are subject to significant political, economic, legal and other uncertainties associated with doing business in China. Over the past several years, the Chinese government has pursued economic reform policies including the encouragement of private economic activity and greater economic decentralization. The Chinese government may not continue to pursue these policies or may significantly alter them to our detriment from time to time without notice. Changes in policies by the Chinese government resulting in changes in laws, regulations, or their interpretation, or the imposition of confiscatory taxation, restrictions on currency conversion or imports and sources of supply could materially and adversely affect us. The nationalization or other expropriation of private enterprises by the Chinese government, including our PRC subsidiaries, could result in the total loss of our investment in that country, which could occur quickly and without advance notice to us and would materially and adversely affect our manufacturing capabilities and cause the value of our securities to significantly decline or be worthless.

All of our directors and officers have ties to Hong Kong. The Chinese government may intervene in or influence their conduct or may exert more control over them, which could result in a material adverse change in our operations.

Because all of our directors and officers have ties to Hong Kong, the Chinese government may intervene in or influence or may exert control over them and their conduct as it relates to our business. The Chinese government may interfere with our operations at any time through our directors and officers who have ties to Hong Kong, which could result in a material change in our results of operation. Changes in the policies, regulations, rules, and the enforcement of laws of the PRC government may be adopted quickly with little advance notice and could have a significant impact upon our ability to operate and on the value of our securities.

Adverse changes in political and economic policies of the PRC government could have a material adverse effect on the overall economic growth of China