Company: FSHPU
Filing Date: 2025-03-04
Form Type: 10-K
Source: 0001829126-25-001450
Chunk: 237

Company: Flag Ship Acquisition Corp
Filing Date: 2025-03-04
Form: 10-K
Item: Item 1A
Chunk 237
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 regarding certain risks and considerations that should be considered by investors regarding foreign
entities, specifically the limited ability of U.S. investors and regulatory agencies to rely upon or obtain information from foreign
based entities, specifically China based entities, under the laws and regulations of such foreign countries. As stated by the SEC
Staff, “[a]lthough China-based Issuers that access the U.S. public capital markets generally have the same disclosure
obligations and legal responsibilities as other non-U.S. issuers, the Commission’s ability to promote and enforce high-quality
disclosure standards for China-based Issuers may be materially limited. As a result, there is substantially greater risk that their
disclosures may be incomplete or misleading. In addition, in the event of investor harm, investors generally will have substantially
less access to recourse, in comparison to U.S. domestic companies and foreign issuers in other jurisdictions.” Among other
potential issues and risks cited by the SEC Staff, the SEC Staff identified restrictions in China which restricted the PCAOB’s
ability to inspect audit work and practices of PCAOB-registered public accounting firms in China and on the PCAOB’s ability to
inspect audit work with respect to China-based issuer audits by PCAOB-registered public accounting firms in Hong Kong.

Further, current laws and regulations in China as well as other potential target countries, can limit or restrict investigations and similar activities by U.S. regulatory agencies such as the SEC to gather information regarding the securities and other activities of issuers based in the foreign countries where such laws or regulations exist. According to Article 177 of the newly amended PRC Securities Law which became effective in March 2020 (the “Article 177”), the securities regulatory authority of the PRC State Council may collaborate with securities regulatory authorities of other countries or regions in order to monitor and oversee cross border securities activities. Article 177 further provides that overseas securities regulatory authorities are not allowed to carry out investigation and evidence collection directly within the territory of the PRC, and that any Chinese entities and individuals are not allowed to provide documents or materials related to securities business activities to overseas agencies without prior consent of the securities regulatory authority of the PRC State Council and the competent departments of the PRC State Council. Investors should be aware that the U.S. Holding Foreign Companies Accountable Act, which requires that the PCAOB be permitted to inspect an issuer’s public accounting firm within three years, may result in the delisting of the operating company in the future if the PCAOB is unable to inspect the firm