Company: SCAG
Filing Date: 2025-11-12
Form Type: 20-F
Source: 0001213900-25-109190
Chunk: 41

Company: Scage Future
Filing Date: 2025-11-12
Form: 20-F
Item: Item 3
Chunk 41
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 funds until the total amount set aside
reaches 50% of its registered capital. As a result of these laws, rules and regulations, Our PRC subsidiaries are restricted in their
ability to transfer a portion of their respective net assets to their shareholders as dividends.

While there are currently
no such restrictions on foreign exchange and our ability to transfer cash or assets between VVS International Limited and Scage (Hong Kong)
Limited, if certain PRC laws and regulations, including existing laws and regulations and those enacted or promulgated in the future
were to become applicable to Scage (Hong Kong) Limited in the future, and to the extent our cash or assets are in Hong Kong
or a Hong Kong entity, such funds or assets may not be available due to interventions in or the imposition of restrictions and limitations
on our ability to transfer funds or assets by the PRC government. Furthermore, we cannot assure you that the PRC government will not
intervene or impose restrictions on us and its subsidiaries to transfer or distribute cash within the organization, which could result
in an inability of or prohibition on making transfers or distributions to entities outside of mainland China and Hong Kong.

Furthermore, if our PRC subsidiaries
incur debt on their own behalf in the future, the instruments governing their debt may affect their ability to pay dividends or make
other distributions to us. Any limitation on the ability of our PRC subsidiaries to pay dividends or make other distributions to us could
materially and adversely limit its ability to grow, make investments or acquisitions that could be beneficial to our business, pay dividends,
or otherwise fund and conduct its business.

The Enterprise Income Tax
Law enacted by the National People’s Congress, which became effective on January 1, 2008, and its implementation rules provide
that a withholding tax at a rate of 10% will be applicable to dividends payable by Chinese companies to non-PRC-resident enterprises
unless reduced under treaties or arrangements between the PRC central government and governments of other countries or regions where
the non-PRC resident enterprises are tax resident. See “ - If we are classified as a PRC resident enterprise for PRC income
tax purposes, such classification could result in unfavorable tax consequences to us and our non-PRC shareholders or warrant holders.”

Any restriction on currency
exchange may limit the ability of our PRC subsidiaries to use their Renminbi revenues to pay dividends to us. The PRC government may
continue to strengthen its capital controls or management and PRC