Company: DSWL
Filing Date: 2025-07-29
Form Type: 20-F
Source: 0001174947-25-001096
Chunk: 7

Company: DESWELL INDUSTRIES INC
Filing Date: 2025-07-29
Form: 20-F
Item: Item 3
Chunk 7
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, see “ ITEM 5. Operating and Financial Review and Prospects - Liquidity and Capital Resources - Restricted net assets” To the best of our knowledge, current PRC regulations do not prohibit or limit using cash generated from one subsidiary to fund another subsidiary’s operations. We currently do not have our own cash management policy and procedures that dictate how funds are transferred.

For the years ended March 31, 2023, 2024 and 2025, no dividend or distribution was made to Deswell or the Intermediate Holding Companies by our PRC subsidiaries. Accordingly, no withholding tax was recorded in the corresponding period.

For more details, see “ ITEM 3. Key Information - Risk Factors - Risks Related to Doing Business in China - Due to restrictions under PRC law on distributions of dividends by our subsidiaries in the PRC, we may be forced to reduce the amount of, or not be able to pay, dividends to our shareholders.”, “ ITEM 3. Key Information - Risk Factors - Risks Related to Doing Business in China - PRC regulation of loans to and direct investment in PRC entities by offshore holding companies and governmental control of currency conversion may delay or prevent us from making loans to our PRC subsidiaries or making additional capital contributions to our wholly foreign-ownedsubsidiaries in China, which could materially and adversely affect our liquidity and our ability to fund and expand our business.” and “ ITEM 3. Key Information - Risk Factors - Risks Related to Doing Business in China - Restrictions on the convertibility of RMB into foreign currency may limit our ability to transfer excess funds or dividends to the Company’s subsidiaries outside China.”

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Enforceability of Civil Liabilities

We are incorporated under the laws of the BVI. As a result, it may be difficult or impossible to effect service of process on Deswell within the United States or to recover on judgments rendered by United States courts against us. There is currently no arrangement providing for the reciprocal enforcement of judgements between the BVI and the United States. A judgment obtained in United States federal or state courts under which a definite sum of money is payable as compensatory damages may be brought as a separate cause of action to collect a debt in the BVI. The judgment for which enforcement is sought must be final and conclusive and from a foreign court of competent jurisdiction. This means enforcing a judgment rendered by United States courts in the BVI will require a separate cause of action in the BVI, which will lead to additional expenses and delays for the party seeking