Company: SCAG
Filing Date: 2025-11-12
Form Type: 20-F
Source: 0001213900-25-109190
Chunk: 45

Company: Scage Future
Filing Date: 2025-11-12
Form: 20-F
Item: Item 3
Chunk 45
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ability to fund and expand business in China. On October 23, 2019, the SAFE promulgated the Circular of Further Facilitating Cross-border
Trade and Investment (the “ SAFE Circular 28”) which, among other things, allows all foreign-invested companies to use Renminbi
converted from foreign currency-denominated capital for equity investments in China, as long as the equity investment is genuine, does
not violate applicable laws, and complies with the negative list on foreign investment. On April 10, 2020, SAFE promulgated the
Circular on Optimizing Administration of Foreign Exchange to Support the Development of Foreign-related Business (the “ SAFE Circular
8”), under which eligible enterprises are allowed to make domestic payments by using their capital funds, foreign loans and the
income under capital accounts of overseas listing without providing the evidentiary materials concerning authenticity of each expenditure
in advance, provided that their capital use shall be authentic and conforms to the prevailing administrative regulations on the use of
income under capital accounts. Since the SAFE Circular 28 and SAFE Circular 8 are newly promulgated, the implementation of these regulations
may be evolving and subject to change.

In light of the various requirements
imposed by PRC regulations on loans to and direct investment in PRC entities by offshore holding companies, we cannot assure you that
we will be able to complete the necessary government registrations or obtain the necessary government approvals according to applicable
PRC laws and regulations on a timely basis, or at all, with respect to future loans by our Company to PRC Subsidiaries or with respect
to future capital contributions by our Company to the PRC Subsidiaries. If our Company or our offshore subsidiaries fail to complete
such registrations, our ability to use the proceeds of securities offering, and to capitalize its PRC operations may be negatively affected,
which could adversely affect our liquidity and ability to fund and expand its business.

PRC regulations relating to the establishment
of offshore special purpose companies by PRC residents may subject our PRC resident beneficial owners or PRC Subsidiaries to liability
or penalties, limit our ability to inject capital into PRC Subsidiaries, limit PRC Subsidiaries’ ability to increase their registered
capital or distribute profits to us, or may otherwise adversely affect us.

SAFE promulgated the SAFE
Circular on Relevant Issues Relating to Domestic Resident’s Investment and Financing and Roundtrip Investment through Special Purpose
Vehicles (the “ SAFE Circular 37