Company: STAK
Filing Date: 2025-02-26
Form Type: 424B4
Source: 0001493152-25-008310
Chunk: 52

Company: STAK Inc.
Filing Date: 2025-02-26
Form: 424B4
Chunk 52
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 assembly, testing, coordination with contract manufacturers, and related operations. However, due to various external factors, including disruptions to our daily operations caused by the COVID-19 pandemic, we did not establish a legally registered branch office for our operations in Shiyan, China, until September 2024. This non-compliance may expose us to potential administrative penalties and tax liabilities. Chinese local regulations require business operating within its jurisdictions to comply with all applicable registration procedures and maintain proper licensing. Our failure to adhere to these requirements could lead to fines, interest charges on any unpaid taxes, as well as potential operational restrictions imposed by the authorities. We have taken steps to rectify this situation by registering our branch office in Shiyan, China, and ensuring full compliance moving forward. Nonetheless, such failure may subject us to late fees and fines and our financial condition and results of operations may be adversely affected. Based on the advice of our PRC counsel, DeHeng Law Offices (Shenzhen), the likelihood of incurring penalties or tax liabilities is remote due to the relatively minor nature of the violations and our proactive measures to address the situation.

We do not hold a special vehicle production permission to produce special vehicles as requested by the Chinese Ministry of Industry and Information Technology. If the government does not allow outsourcing or if our business demand exceeds the outsourcing factory’s capacity in the future, it could severely restrict our growth and adversely affect the value of your investment.

We do not hold a
special vehicle production permission to produce special vehicles as requested by the Chinese Ministry of Industry and Information
Technology, so we rely on a collaborative outsourcing model to provide final products to customers. While this approach reduces the
initial operational investment in large fixed assets, it also brings policy risks and business expansion bottlenecks. If the
government does not allow outsourcing or if our business demand exceeds the outsourcing factory’s capacity in the future, it
could severely restrict our growth and adversely affect the value of your investment. We plan to use a part of the IPO proceeds to establish a qualified factory
and to obtain specialized vehicle permission, however, there is no guarantee that we can obtain the permission in a timely manner or whether
we can obtain the permission at all.

We face uncertainty with respect to indirect transfers of equity interests in PRC resident enterprises by their non-PRC holding companies.

On February 3, 2015, the SAT issued the Public Notice Regarding Certain Corporate Income Tax Matters on Indirect Transfer of Properties by Non-Tax Resident Enterprises, or SAT Bulletin 7. SAT Bulletin