Company: SCAG
Filing Date: 2025-11-12
Form Type: 20-F
Source: 0001213900-25-109190
Chunk: 104

Company: Scage Future
Filing Date: 2025-11-12
Form: 20-F
Item: Item 4A
Chunk 104
---
 fees, (2) employee compensation, (3) entertainment expense(i. e., expenses for business hospitality such as client meals and receptions),
(4) provision for credit losses of financial assets, and (5) other expenses related to general and administrative personnel.

Research and
development expenses

Our research and development
(“ R& D”) expenses mainly consist of (1) employee compensation, (2) materials and supplies expenses related to our R& D
functions, and (3) depreciation and rental expenses related to our R& D functions.

Selling and
marketing expenses

Our selling and marketing
expenses mainly consist of (1) employee compensation, (2) marketing and advertising expenses, and (3) depreciation and other expenses
related to our marketing functions.

Impairment
loss of long-lived assets

If the fair value is less
than the carrying amount of the long-lived assets, we would recognize an impairment loss, which is the excess of carrying amount over
the fair value of the assets, using the market approach.

Other income/(loss), net

Other income/ (loss) consists
of interest expenses, net, gain on long-term investments, fair value change in derivative liability and other income, net. Interest expenses,
net mainly consist of interest income and expenses, bank charges and exchange gain or loss. Gain on long-term investments mainly consists
of changes in the fair value of long-term investments. Fair value change in derivative liability measures the fair value change of convertible
debts. Other income, net primarily consists of government subsidy and gain from disposal of property and equipment.

Taxation

Cayman Islands

We are incorporated in the
Cayman Islands. Under the current laws of the Cayman Islands, we are not subject to income or capital gains taxes. In addition, dividend
payments are not subject to withholdings tax in the Cayman Islands.

British Virgin Islands

Under the current laws of
the British Virgin Islands, entities incorporated in British Virgin Islands are not subject to tax on their income or capital gains.

Hong Kong

According to Tax Amendment
No. 3 Ordinance 2018 published by the Hong Kong government, effective April 1, 2018, under the two-tiered profits tax rates regime, the
first 2.0 million Hong Kong Dollar (“ HKD”) of profits of the qualifying group entity will be taxed at 8.25%, and profits
above HKD2.0 million will be taxed at 16.5%. Under Hong Kong