Company: NTCL
Filing Date: 2025-12-29
Form Type: F-3
Source: 0001104659-25-124826
Chunk: 34

Company: NetClass Technology Inc
Filing Date: 2025-12-29
Form: F-3
Chunk 34
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 subsidiaries, or to investors. For the foreseeable future, the Company intends to use the earnings
for research and development (“R&D”), to develop new products and to expand its operations. As a result, we do not expect
to pay any cash dividends. Also, as of the date of this prospectus, no cash generated from one subsidiary is used to fund another subsidiary’s
operations and we do not anticipate any difficulties or limitations on our ability to transfer cash between subsidiaries. We have not
installed any cash management policies that dictate the amount of such funding.

Our PRC subsidiaries’ ability to distribute
dividends is based upon their distributable earnings. Current PRC regulations permit our PRC subsidiaries to pay dividends to their respective
shareholders only out of their accumulated profits, if any, determined in accordance with PRC accounting standards and regulations. In
addition, each of our PRC subsidiaries is required to set aside at least 10% of its after-tax profits each year, if any, to fund
a statutory reserve until such reserve reaches 50% of each of their registered capitals. These reserves are not distributable as cash
dividends.

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Furthermore, cash transfers from our PRC subsidiaries
to entities outside of China are subject to PRC government controls on currency conversion. To the extent cash in our business is in the
PRC or a PRC entity, such cash may not be available to fund operations or for other use outside of the PRC due to restrictions and limitations
imposed by the governmental authorities on the ability of us or our PRC subsidiaries to transfer cash outside of the PRC. Shortages in
the availability of foreign currency may temporarily delay the ability of our PRC subsidiaries to remit sufficient foreign currency to
pay dividends or other payments to us, or otherwise satisfy their foreign currency denominated obligations. In view of the foregoing,
to the extent cash in our business is held in China or by a PRC entity, such cash may not be available to fund operations or for other
use outside of the PRC.

Similarly, in accordance with the provisions of
the Companies Ordinance (Chapter 622 of the Laws of Hong Kong), each of our Hong Kong Subsidiaries is only able to make distributions
(whether in cash or otherwise) to NetClass only out of its accumulated, realized profits (so far as not previously utilized by distribution
or capitalization), less its accumulated, realized losses (so far as not previously written off in a