Company: MASK
Filing Date: 2025-12-02
Form Type: POS AM
Source: 0001185185-25-001899
Chunk: 274

Company: 3 E Network Technology Group Ltd
Filing Date: 2025-12-02
Form: POS AM
Chunk 274
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istributable for dividend purposes.

In accordance with the PRC
regulations on Enterprises with Foreign Investment, a WFOE established in the PRC is required to provide certain statutory reserves,
namely general reserve fund, the enterprise expansion fund and staff welfare and bonus fund which are appropriated from net profit as
reported in the enterprise’s PRC statutory accounts. A WFOE is required to allocate at least 10% of its annual after-tax profit
to the general reserve until such reserve has reached 50% of its registered capital based on the enterprise’s PRC statutory accounts.
Appropriations to the enterprise expansion fund and staff welfare and bonus fund are at the discretion of the board of directors. The
aforementioned reserves can only be used for specific purposes and are not distributable as cash dividends. The Group’s WFOE is
subject to the above mandated restrictions on distributable profits.

As a result of these PRC
laws and regulations, the Group’s PRC subsidiary is restricted in its ability to transfer a portion of its net assets to the Company.
As of June 30, 2025 and 2024, net assets restricted in the aggregate, which include paid-in capital and statutory reserve of the Group’s
PRC subsidiaries, that is included in the Group’s consolidated net assets were approximately nil and $810,484, respectively.

14. Employee Defined Contribution Plan

Full time employees of the
Group’s subsidiaries in PRC participate in a government mandated defined contribution plan, pursuant to which certain pension benefits,
medical care, employee housing fund and other welfare benefits are provided to employees. The related labor regulations of PRC require
that the Group make contributions to the government for these benefits based on certain percentages of the employees’ salaries.
The Group has no legal obligation for the benefits beyond the contributions made. The total amounts for such employee benefits were US$96,963
and US$116,012 for the years ended June 30, 2025 and 2024, respectively.

15. Concentration of Risk

Credit risk

Financial instruments that potentially
subject the Group to significant concentrations of credit risk consist primarily of cash and cash equivalents, restricted cash, accounts
receivable and due from related parties. As of June 30, 2025, all of the Groups’ cash and cash equivalents and restricted cash was
held by major financial institutions located in Hong Kong. The Group believes that these financial institutions located in Hong Kong are
of high credit quality. For accounts receivable and due