Company: SCAG
Filing Date: 2025-07-03
Form Type: 20-F
Source: 0001213900-25-061408
Chunk: 87

Company: Scage Future
Filing Date: 2025-07-03
Form: 20-F
Item: Item 5
Chunk 87
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 value, with net realized value represented by estimated selling prices in the ordinary course of business, less reasonably predictable costs of disposal and transportation. Cost of inventory is determined using the weighted average cost method. Inventories are written down to estimated net realizable value, which could be impacted by certain factors including historical usage, expected demand, anticipated sales price, new product development schedules, product obsolescence, and other factors. If business or economic conditions change, estimates and assumptions may be adjusted as deemed appropriate. Historically, actual required adjustments have not varied materially from estimated amounts. Inventory write-downs of US$93,451, US$0.9 million and US$0.2 million were recorded during the six months ended December 31, 2024, and the fiscal years ended June 30, 2024 and 2023, respectively.
 
Warranty reserve
 
We provided a manufacturer’s standard warranty on all vehicles and components sold. We accrued a warranty reserve for the vehicles sold by us, which included our best estimate of the future costs to be incurred in order to repair or replace items under warranties and recalls when identified. These estimates were made based on actual claims incurred to date and an estimate of the nature, frequency and magnitude of future claims with reference made to the past claim history. These estimates are inherently uncertain given our relatively short history of sales, and changes to our historical or projected warranty experience may cause material changes to the warranty reserve in the future. Warranty expense is recorded as a component of cost of sales in the consolidated statements of operations and comprehensive loss. Warranty reserve of US$0.4 million, US$0.1 million and US$25,597 were recorded as of December 31, 2024, and as of June 30, 2024 and 2023, respectively.
 
Quantitative and Qualitative Disclosures about Market Risk
 
Credit risk
 
Credit risk is controlled by the application of credit approvals, limits and monitoring procedures. We manage credit risk through in-house research and analysis of the worldwide economy and the underlying obligors and transaction structures. We consider many factors in assessing the collectability of our receivables, such as the age of the amounts due, the customer’s payment history, credit-worthiness and other specific circumstances related to the accounts.
 
Interest rate risk
 
We are exposed to interest rate risk on our interest-bearing assets and liabilities. As part of our asset and liability risk management, we review and take appropriate steps to manage our interest rate exposures on our interest-bearing assets