Ostin(US:OST)2026-01-26 21:06Financial Restrictions and Cash Transfers - As of September 30, 2023, the total amounts restricted for dividends from PRC subsidiaries include $37,621,838, $25,958,620, and $24,753,990 for the years 2025, 2024, and 2023 respectively[46]. - For the fiscal year ended September 30, 2025, cash transferred to subsidiaries from Jiangsu Austin amounted to $9,313,712, while cash transferred to Jiangsu Austin from its subsidiaries was $57,000[49]. - Ostin provided funding to its PRC subsidiaries of $4,635,000 for the fiscal year ended September 30, 2025, with no funding provided in the previous two years[48]. - Cash transfers from PRC subsidiaries to entities outside of China are subject to PRC government controls on currency conversion, which may limit the availability of cash for operations outside of China[47]. - The PRC subsidiaries are required to make appropriations to certain statutory reserve funds, which are not distributable as cash dividends except in the event of liquidation[46]. - The total cash transferred among PRC subsidiaries is regulated under the Provisions on Private Lending Cases, which govern financing activities between entities[49]. - The company relies on dividends and distributions from its PRC subsidiaries to fund offshore cash requirements, and any limitations on cash transfers could adversely affect liquidity[56]. - Limitations on remittance from PRC subsidiaries could hinder the company's ability to access cash for investments, acquisitions, or shareholder dividends[110]. - The company relies on dividends from its PRC subsidiaries for cash needs, and any limitations on these dividends could materially affect its ability to fund operations and pay dividends to shareholders[173]. Regulatory Environment and Compliance Risks - The PCAOB has secured complete access to inspect and investigate registered public accounting firms in mainland China and Hong Kong as of December 15, 2022[44]. - The Holding Foreign Companies Accountable Act may lead to the delisting of Class A Ordinary Shares if the PCAOB cannot inspect the auditors for three consecutive years[39]. - The SEC has established procedures for identifying "Commission-Identified Issuers" under the HFCA Act, which could affect trading of the company's shares[40]. - The company has not been identified by the SEC under the HFCA Act as of the date of the report, but future inspections by the PCAOB remain uncertain[41]. - The company is subject to uncertainties regarding the interpretation and enforcement of PRC laws, which could impact business operations and financial results[65]. - The company has applied for a security assessment regarding cross-border data transfers, but the interpretation and implementation of new regulations may change, introducing additional compliance risks[73]. - The company is not classified as a "data processor" under the Personal Information Protection Law and does not engage in data activities as defined by the law[74]. - The company may incur substantial costs to comply with the Measures for Cybersecurity Review (2021 version), which could adversely affect its business operations and financial position[75]. - The Overseas Listing Trial Measures became effective on March 31, 2023, requiring PRC domestic companies to fulfill filing procedures with the CSRC for overseas offerings[78]. - Companies that fail to complete the filing procedure or falsify information may face administrative penalties, including fines and warnings[89]. - The company must file with the CSRC within three business days after completing offerings related to its shelf registration statement on Form F-3[91]. - The 2021 Negative List for Foreign Investment Access, effective January 1, 2022, requires domestic companies in prohibited businesses to obtain government approval for overseas offerings[93]. - There are uncertainties regarding the interpretation and implementation of new regulatory requirements, which could materially affect the company's operations and financial condition[92]. - The company is subject to potential investigations and penalties if it fails to maintain compliance with filing procedures under PRC laws[91]. - The PRC government may strengthen oversight over overseas offerings, which could limit the company's ability to offer securities and affect their value[79]. - The company has not received any denial to list on U.S. exchanges but may face adverse effects from future regulatory changes[84]. - The CSRC released new regulations on overseas securities offerings, effective March 31, 2023, requiring domestic enterprises to complete approval and filing procedures if they disclose state secrets[94]. - Companies may face additional compliance costs and delays due to the new regulations, impacting their ability to raise capital[95]. - Future regulatory changes could impose further requirements on offshore offerings, potentially leading to sanctions or operational restrictions[96]. - Acquisitions in China are subject to significant regulatory approval, with transactions exceeding RMB 400 million requiring SAMR review, which may delay business expansion[99]. - PRC regulations on offshore investments may limit capital injection into PRC subsidiaries and restrict profit distributions, affecting financial operations[100]. - Non-compliance with SAFE registration requirements for beneficial owners could result in fines and limit the ability to distribute dividends[101]. - Employee share incentive plans must comply with SAFE regulations, and failure to do so may lead to legal sanctions and restrict capital contributions[102]. - Loans to PRC subsidiaries are subject to government approval and limitations, which may hinder liquidity and business expansion[103]. - Recent SAFE circulars may allow foreign-invested enterprises to make equity investments in China, but practical implementation remains uncertain[106]. - The PRC government may restrict access to foreign currencies, affecting the ability to fund PRC operations and complete necessary registrations[107]. Business Risks and Financial Performance - The company is subject to significant risks related to doing business in China, including potential adverse effects from changes in political and economic policies, which could impact growth and expansion strategies[56]. - A majority of the company's revenues are sourced from the PRC, making its financial condition highly sensitive to economic, political, and legal developments in China[61]. - The company is dependent on a few major customers without long-term contracts, and the loss of any could lead to a significant decline in revenues[57]. - The company faces cyclical industry risks, including price fluctuations due to supply and demand imbalances, which could harm operational results[57]. - The company is still in the process of obtaining necessary manufacturing facility certifications in Chengdu, China, and failure to do so could materially affect its business[57]. - The company may need to raise additional capital or obtain loans, and inability to secure funding could curtail operations[57]. - The trading price of the company's Class A Ordinary Shares has recently declined significantly, and there is a risk of delisting from Nasdaq, which could adversely affect investment value[57]. - The company incurred a net loss of $10,311,035 for the year ended September 30, 2025, resulting in an accumulated deficit of $28,543,211[132]. - As of September 30, 2025, the company had approximately $26 million of debt outstanding, which may restrict operations and cash flows[135]. - The display panel industry is cyclical, with potential price declines due to supply and demand imbalances, which could adversely affect results of operations[130]. - The company does not enter into long-term agreements with customers, increasing the risk of revenue fluctuations[128]. - The company relies heavily on a key equipment supplier, Shanghai Inabata, for polarizer manufacturing, which poses risks if the agreement is terminated[136]. - The company may face significant liabilities if its products or manufacturing processes are found to infringe upon third-party rights, which could materially affect its operations and financial condition[166]. - The company must develop or acquire advanced manufacturing process technologies to remain competitive, and failure to do so may adversely affect its profitability[169]. - The enforcement of labor-related regulations in China may lead to fines and operational disruptions if the company fails to comply with the Labor Dispatch Provisions[171]. - The market price of the Class A Ordinary Shares has significantly declined, leading to a notification from Nasdaq regarding non-compliance with the minimum bid price requirement of $1.00 per share[188]. - The Company was provided 180 calendar days until July 17, 2024, to regain compliance with the minimum bid price requirement, with an additional 180 days granted until January 13, 2025[188]. - Trading of Class A Ordinary Shares has been suspended since September 12, 2025, pending a response to Nasdaq's request for information related to a DOJ investigation[192]. - The halt of trading has eliminated liquidity in the Class A Ordinary Shares, potentially leading to a significant decline in market price when trading resumes[194]. - If the Class A Ordinary Shares are delisted from Nasdaq, they may be classified as penny stocks, which could severely limit market liquidity and impede sales in the secondary market[195]. - The Company does not expect to pay dividends in the foreseeable future, relying instead on price appreciation for returns on investment[199]. - The board of directors has complete discretion over dividend distribution, which will depend on future results of operations and other financial factors[200]. - The Company may be classified as a passive foreign investment company (PFIC), which could result in adverse U.S. federal income tax consequences for U.S. taxpayers holding its shares[201]. Corporate Governance and Shareholder Rights - The Fifth Amended and Restated Memorandum and Articles of Association contain anti-takeover provisions that may adversely affect the rights of Class A Ordinary Shareholders[205]. - Tao Ling, the CEO, holds 32.04% of the voting power, including 100% of Class B Ordinary Shares, which may lead to conflicts of interest with other shareholders[206]. - The company is incorporated under Cayman Islands law, limiting shareholders' rights to inspect corporate records and potentially complicating legal actions in the U.S.[207][208]. - The company is classified as an "emerging growth company," allowing it to take advantage of reduced reporting requirements, including exemptions from certain accounting standards[213][214]. - The company completed its initial public offering on April 29, 2022, raising gross proceeds of $15,525,000 from the sale of 3,881,250 Ordinary Shares at $4.00 per share[226]. - As of January 2023, Nanjing Aosa directly holds 92.56% of Jiangsu Austin's issued shares, with an additional 7.44% held indirectly through Suhong Yuanda[228]. - On June 18, 2023, Austin Optronics Technology Co., Ltd. acquired a majority ownership of Pintura.Life LLC, promoting and selling Pintura products in the U.S. market[229]. - Jiangsu Austin transferred its entire share ownership in Austin Optronics Technology Co., Ltd. to Ostin Technology Limited on July 24, 2023, aligning with strategic adjustments[230]. - The company consolidated the financial results of Jiangsu Austin and its subsidiaries in accordance with U.S. GAAP due to the VIE Arrangements, which were fully terminated in February 2022[222][225]. - The company has a less developed body of securities laws compared to the U.S., which may afford shareholders less protection[210]. - The company’s Articles of Association allow shareholders holding at least 10% of the share capital to requisition a general meeting, but advance notice of at least 5 clear days is required[211]. - Sichuan Ausheet transferred 71.43% equity interest in Sichuan Auniu to Nanjing Oni, resulting in ownership of 28.57% and 71.43% respectively[231]. - Following a capital injection agreement, Sichuan Ausheet and Nanjing Oni now hold 20% and 52% of shares in Sichuan Auniu respectively[232]. - The Company's authorized share capital increased from US$50,000 to US$500,000, with a total of 4,991,000,000 class A ordinary shares and 8,000,000 class B ordinary shares[233]. - The Company approved the repurchase of 2,000,000 Class A Ordinary Shares at an aggregate par value of US$200, maintaining unchanged issued share capital[234].