Company: MKDWW
Filing Date: 2025-04-03
Form Type: 20-F
Source: 0001641172-25-002607
Chunk: 21

Company: MKDWELL Tech Inc.
Filing Date: 2025-04-03
Form: 20-F
Item: Item 3
Chunk 21
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 loans to and direct investment in PRC entities by offshore holding companies and governmental control of currency conversion
may delay or prevent us from using the proceeds from the Business Combination to make loans or additional capital contributions to our
PRC subsidiaries in China, which could materially and adversely affect our liquidity and our ability to fund and expand our business.

The
Company is an offshore holding company which following the Business Combination conducts its operations in China through its PRC subsidiaries.
The Company may make loans to our PRC subsidiaries, it may make additional capital contributions to such PRC subsidiaries, it may establish
new PRC subsidiaries and make capital contributions to these new PRC subsidiaries, or it may acquire offshore entities with business
operations in China in an offshore transaction. To the extent cash or assets in the business is in mainland China or a mainland China
entity, the funds and assets may not be available to fund operations or for other use outside of mainland China due to interventions
in or the imposition of restrictions and limitations on the ability of the Company or its subsidiaries by the PRC government to transfer
cash or assets.

Most
of these ways are subject to PRC regulations and approvals or registration. For example, loans to our wholly owned PRC subsidiaries to
finance their activities cannot exceed statutory limits and must be registered with the local counterpart of SAFE. If we decide to finance
our wholly owned PRC subsidiaries by means of capital contributions, these capital contributions are subject to registration with the
SAMR or its local branch, reporting of foreign investment information with the PRC Ministry of Commerce, or registration with other governmental
authorities in China. Due to the restrictions imposed on loans in foreign currencies extended to PRC domestic companies, we are not likely
to make such loans to our PRC domestic subsidiaries. Further, we are not likely to finance the activities of our PRC domestic subsidiaries
by means of capital contributions due to regulatory restrictions relating to foreign investment in PRC domestic enterprises engaged in
certain businesses.

SAFE
promulgated the Notice of the State Administration of Foreign Exchange on Reforming the Administration of Foreign Exchange Settlement
of Capital of Foreign-invested Enterprises, or SAFE Circular 19, effective June 2015, in replacement of the Circular on the Relevant
Operating Issues Concerning the Improvement of the Administration of the Payment and Settlement of Foreign Currency Capital of Foreign-Invested
Enterprises, the Notice from the State Administration of Foreign Exchange on Relevant Issues Concerning Strengthening the Administration
of Foreign Exchange Businesses, and the Circular