Company: IMG
Filing Date: 2025-07-21
Form Type: 10-K
Source: 0001641172-25-020300
Chunk: 25

Company: CIMG Inc.
Filing Date: 2025-07-21
Form: 10-K
Item: Item 1A
Chunk 25
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 the closing of a future offering. We may be unable to use these proceeds to grow our business until the PRC Subsidiaries receive
such proceeds in the PRC. Any transfer of funds by us to the PRC Subsidiaries, either as a shareholder loan or as an increase in registered
capital, are subject to approval by or registration or filing with relevant governmental authorities in China. Any foreign loans procured
by the PRC Subsidiaries is required to be registered with China’s State Administration of Foreign Exchange (“SAFE”)
or its local branches or satisfy relevant requirements, and the PRC subsidiaries may not procure loans which exceed the difference between
their respective total project investment amount and registered capital or 2 times (which may be varied year by year due to the change
of PRC’s national macro-control policy) of the net worth of the PRC subsidiary. According to the relevant PRC regulations on foreign-invested
enterprises in China, capital contributions to the PRC subsidiaries are subject to the approval of or filing with State Administration
for Market Regulation in its local branches, the Ministry of Commerce in its local branches and registration with a local bank authorized
by SAFE.

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 assure you 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 by us to the PRC subsidiary or with respect to future capital contributions
by us to the PRC subsidiary. If we fail to complete such registrations or obtain such approvals, our ability to capitalize or otherwise
fund the PRC operations may be negatively affected, which could materially and adversely affect our liquidity, our ability to fund and
expand our business and our securities.

34

A
failure by the beneficial owners of our shares who are PRC residents to comply with certain PRC foreign exchange regulations could restrict
our ability to distribute profits, restrict our overseas and cross-border investment activities and subject us to liability under PRC
law.

SAFE
has promulgated regulations, including the Notice on Relevant Issues Relating to Domestic Residents’ Investment and Financing and
Round-Trip Investment through Special Purpose Vehicles (or SAFE Circular No. 37), effective on July 4, 2014, and its appendices, that
require PRC residents, including PRC institutions and individuals, to