Company: SCAG
Filing Date: 2025-11-12
Form Type: 20-F
Source: 0001213900-25-109190
Chunk: 52

Company: Scage Future
Filing Date: 2025-11-12
Form: 20-F
Item: Item 3
Chunk 52
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a material adverse effect on our results of operations and the value of your investment.

The conversion of Renminbi
into foreign currencies, including the U. S. dollar, is based on rates set by the People’s Bank of China. The Renminbi has
fluctuated against the U. S. dollar and other currencies, at times significantly and unpredictably. The value of Renminbi against
the U. S. dollar and other currencies is affected by changes in global political and economic conditions and by China’s foreign
exchange regulations, among other things. We cannot assure you that Renminbi will not appreciate or depreciate significantly in value
against the U. S. dollar and other currencies in the future. It is difficult to predict how market forces or PRC, or U. S. government
policy may impact the exchange rate between Renminbi and U. S. dollar in the future.

Any significant appreciation
or depreciation of Renminbi may materially and adversely affect our revenues, earnings and financial position, and the value of, and
any dividends payable on, our securities in U. S. dollars. For instance, to the extent that we needs to convert U. S. dollars
it receives into Renminbi to pay its operating expenses, appreciation of Renminbi against the U. S. dollar would have an adverse
effect on the RMB amount it would receive from the conversion. Conversely, a significant depreciation of Renminbi against the U. S. dollar
may significantly reduce the U. S. dollar equivalent of our earnings, which in turn could adversely affect the price of our securities.

Very limited hedging options
are available for us to reduce our exposure to exchange rate fluctuations at reasonable costs. As of the date of this annual report,
we have not entered into any hedging transactions in an effort to reduce its exposure to foreign currency exchange risk. While we may
decide to enter into hedging transactions in the future, the availability and effectiveness of these hedges may be limited and we may
not be able to adequately hedge exposure, or at all. In addition, our currency exchange losses may be magnified by PRC regulations over
currency conversions, which may restrict its ability to convert Renminbi into foreign currency.

The enforcement of the PRC Labor Contract
Law and other labor-related regulations in the PRC may adversely affect our business and results of operations. Failure to make adequate
contributions to employee benefit plans as required by PRC regulations may subject us to