Company: EZOO
Filing Date: 2025-05-15
Form Type: 10-K
Source: 0001641172-25-010460
Chunk: 494

Company: Ezagoo Ltd
Filing Date: 2025-05-15
Form: 10-K
Item: Item 1
Chunk 494
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-invested company is regulated such that RMB capital may not be used
for the issuance of RMB entrusted loans, the repayment of inter-enterprise loans or the repayment of banks loans that have been transferred
to a third party. Although SAFE Circular 19 allows RMB capital converted from foreign currency-denominated registered capital of a foreign-invested
enterprise to be used for equity investments within China, it also reiterates the principle that RMB converted from the foreign currency-denominated
capital of a foreign-invested company may not be directly or indirectly used for purposes beyond its business scope. SAFE promulgated
the Notice of the State Administration of Foreign Exchange on Reforming and Standardizing the Foreign Exchange Settlement Management
Policy of Capital Account, or SAFE Circular 16, effective on June 9, 2016, which reiterates some of the rules set forth in SAFE Circular
19, but changes the prohibition against using RMB capital converted from foreign currency-denominated registered capital of a foreign-invested
company to issue RMB entrusted loans to a prohibition against using such capital to issue loans to non-associated enterprises. Violations
of SAFE Circular 19 and SAFE Circular 16 could result in administrative penalties. SAFE Circular 19 and SAFE Circular 16 may significantly
limit our ability to transfer any foreign currency we hold, including the net proceeds from this offering, to our PRC subsidiaries, which
may adversely affect our liquidity and our ability to fund and expand our business in China. On October 23, 2019, the SAFE promulgated
the Notice of the State Administration of Foreign Exchange on Further Promoting the Convenience of Cross-border Trade and Investment,
or 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. However, since the SAFE Circular 28 is newly promulgated, it is unclear how SAFE and competent
banks will implement the relevant rules in practice.

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 be certain that we will be able to complete the necessary government registrations or obtain the necessary government approvals
on a timely basis, if at all, with respect to future loans to our PRC subsidiaries or future capital contributions