Company: SCAG
Filing Date: 2025-01-06
Form Type: 424B3
Source: 0001213900-25-001215
Chunk: 116

Company: Scage Future
Filing Date: 2025-01-06
Form: 424B3
Chunk 116
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 from Nanjing Scage and its PRC subsidiaries has been used to fund operations of Scage International or its non -PRCsubsidiaries, and there has not been any cash flow or asset transfer between Scage International and the PRC Subsidiaries. In the future, cash proceeds raised from overseas financing activities may be transferred by PubCo through its subsidiaries outside China to its PRC subsidiaries via capital contribution and shareholder loans, as the case may be. Its PRC subsidiaries will pay dividends to their offshore shareholder to meet the capital needs of PubCo’s business operations out of the PRC. For details about the applicable PRC regulations and rules relating to such cash transfers through PubCo, Scage International and their respective subsidiaries and the associated risks, see “Risk Factors—Risks Related to Doing Business in China.” 22 In light of Scage International’s holding company structure, Scage International’s ability and, following the Business Combination, PubCo’s ability to pay dividends to the shareholders and to service any debt Scage International may incur may depend upon dividends paid by the PRC Subsidiaries to Scage International, despite that Scage International may obtain financing at the holding company level through other methods. However, the PRC Subsidiaries are subject to certain statutory reserve and solvency conditions before they can distribute dividends or make payment to Scage International, which, if failed, may restrict their ability to pay dividends or make payment to Scage International and PubCo following the Business Combination. Under PRC laws and regulations, the PRC Subsidiaries are permitted to pay dividends only out of their retained earnings, if any, as determined in accordance with PRC accounting standards and regulations. Furthermore, the PRC Subsidiaries are required to make appropriations to certain statutory reserve funds or may make appropriations to certain discretionary funds, which are not distributable as cash dividends except in the event of a solvent liquidation of the companies. The statutory reserve fund requires that annual appropriations of 10% of net after -taxincome should be set aside prior to payment of any dividends, until the aggregate amount of such fund reaches 50% of their registered capital. As a result of such restrictions under PRC laws and regulations, the PRC Subsidiaries are restricted in their ability to transfer a portion of their net assets to Scage International either in the form of dividends, loans or advances, which restricted portion amounted to nil and RMB21.6million as of June 30, 2024