Company: SCAG
Filing Date: 2025-11-12
Form Type: 20-F
Source: 0001213900-25-109190
Chunk: 205

Company: Scage Future
Filing Date: 2025-11-12
Form: 20-F
Item: Item 19
Chunk 205
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 liabilities, classification of current and deferred
income tax assets and liabilities, accounting for interest and penalties associated with tax positions, and related disclosures.

The
Group did not accrue any liability, interest or penalties related to uncertain tax positions in its provision for income taxes line
of its consolidated statements of operations and comprehensive loss for the years ended June 30, 2025, 2024 and 2023, respectively. The
Group does not expect that its assessment regarding unrecognized tax positions will materially change over the next 12 months. Penalties
and interest incurred related to underpayment of income tax are classified as income tax expense in the period incurred.

  (t)      Value added tax (“ VAT”)  

The
Group is subject to VAT and related surcharges on revenue generated from sales of products. The Group records revenue net of VAT. Entities
that are VAT general taxpayers are allowed to offset qualified input VAT paid to suppliers against their output VAT liabilities. The
net VAT balance between input VAT and output VAT is recorded as VAT payable if output VAT is larger than input VAT and is included in
prepaid expenses and other current assets if input VAT is larger than output VAT. All of the VAT returns filed by the Company’s
subsidiaries incorporated in the PRC, have been and remain subject to examination by the tax authorities.

F-18

SCAGE
FUTURE

NOTES
TO CONSOLIDATED FINANCIAL STATEMENTS

(In
U. S. dollars, except for share and per share data, or otherwise noted)

  SUMMARY                                     

  (u)      Related party transactions  

The
Group accounts for related party transactions in accordance with ASC 850, “ Related Party Disclosures”.

Parties,
which can be an entity or individual, are considered to be related if they have the ability, directly or indirectly, to control the Group
or exercise significant influence over the Group in making financial and operational decisions. Entities are also considered to be related
if they are subject to common control or common significant influence.

Transactions
involving related parties cannot be presumed to be carried out on an arm’s-length basis, as the requisite conditions of competitive,
free market dealings may not exist. Representations about transactions with related parties, if made, shall not imply that the related
party transactions were consummated on terms equivalent to those that prevail in arm’s-length transactions unless such representations
can be substantiated.

  (v)      Share-based compensation  

(w)
The Group applies ASC 718, Compensation