Company: DSWL
Filing Date: 2025-07-29
Form Type: 20-F
Source: 0001174947-25-001096
Chunk: 18

Company: DESWELL INDUSTRIES INC
Filing Date: 2025-07-29
Form: 20-F
Item: Item 3
Chunk 18
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 amount involved, affect our ability to continue in business.

At March 31, 2025, we had cash on hand of $28.1 million and time deposits with original maturity over three months of $19.4 million, and time deposits with original maturities over twelve months of $2.8 million, which were invested in interest bearing investments at banks or other financial institutions. Of that amount, approximately $12.6 million was held in banks and other financial institutions in Hong Kong, $18.6 million in Macao and $19.1 million in the PRC. The Hong Kong government provides deposit protection up to a maximum amount of HK$800,000 (approximately U. S. $101,915 based on the average exchange rate for June 30, 2025 reported at http://www. oanda. com/currency-converter) for each depositor in any individual bank in Hong Kong, and the Macao government provides deposit protection up to a maximum amount of MOP$800,000 (approximately U. S. $98,947 based on the average exchange rate for June 30, 2025 reported at http://www. oanda. com/currency-converter) for each depositor with any individual bank in Macao. We understand that in the event of a bank failure of a bank in the PRC, a PRC-governmentagency is to provide some, unspecified, protections of deposit accounts to individual depositors. After three interest rate hikes in 2011, there were recommendations in early 2012 from China’s economists that a formal insurance system from China’s central bank is necessary to protect depositors’ assets. The “ Deposit Insurance Regulations” in the PRC provide that the maximum protection is up to RMB500,000 (approximately U. S.$69,715 based on the average exchange rate for June 30, 2025 reported at http://www. oanda. com/currency-converter) (including principal and interest) per depositor per insured financial institution. Depending upon the amounts of funds we have on deposit in a

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Hong Kong, Macao or PRC financial institution that fails, our inability to have immediate access to our cash, and the lack of deposit protection in excess of applicable protection limits, could impair our operations, and, if we are not able to access needed funds to pay our suppliers, employees and other creditors, we may be unable to continue in business.

Our industry is extremely competitive, with aggressive pricing