Company: NTCL
Filing Date: 2025-02-18
Form Type: 20-F
Source: 0001410578-25-000153
Chunk: 50

Company: NetClass Technology Inc
Filing Date: 2025-02-18
Form: 20-F
Item: Item 5
Chunk 50
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RC national laws which apply in Hong Kong. The Hong Kong National Security Law sets out the duties of the Hong Kong Police Force and governmental departments for safeguarding national security and defines four categories of offences, namely, secession, subversion, terrorist activities, and collusion with a foreign country or external elements to endanger national security, and their corresponding penalties. On July 14, 2020, the former U. S. President Donald Trump signed the Hong Kong Autonomy Act, or HKAA, into law, authorizing the U. S. administration to impose blocking sanctions against individuals and entities who are determined to have materially contributed to the erosion of Hong Kong’s autonomy. On August 7, 2020, the U. S. government imposed HKAA-authorized sanctions on eleven individuals, including the then HKSAR chief executive Carrie Lam. On October 14, 2020, the U. S. State Department submitted to relevant committees of Congress the report required under HKAA, identifying persons materially contributing to “the failure of the Government of China to meet its obligations under the Joint Declaration or the Basic Law.” The HKAA further authorizes secondary sanctions, including the imposition of blocking sanctions, against foreign financial institutions that knowingly conduct a significant transaction with foreign persons sanctioned under this authority. The imposition of sanctions may directly affect foreign financial institutions as well as any third parties or customers dealing with any foreign financial institution that is targeted. It is difficult to predict the full impact of the Hong Kong National Security Law and HKAA on Hong Kong and companies located or operating in Hong Kong. If the Hong Kong Subsidiaries are determined to be in violation of the Hong Kong National Security Law or the HKAA by competent authorities, the Hong Kong Subsidiaries’ business operations, financial position and results of operations could be materially and adversely affected.

The PRC laws and regulations that apply or are to be applied to Hong Kong, and the enforcement of the same, can change quickly with little or no advance notice. As a result, the Hong Kong legal system embodies uncertainties which could limit the availability of legal protections, which could result in a material change in the Hong Kong Subsidiaries’ operations and/or the value of our securities.

As one of the conditions for the handover of the sovereignty of Hong Kong to the PRC, the PRC agreed to the terms of Sino-British Joint Declaration, which set out, amongst other things, the basic policies of the PRC regarding Hong Kong, including the principle of “ One Country