Company: FSHPU
Filing Date: 2025-03-04
Form Type: 10-K
Source: 0001829126-25-001450
Chunk: 262

Company: Flag Ship Acquisition Corp
Filing Date: 2025-03-04
Form: 10-K
Item: Item 1A
Chunk 262
---
 funds by us to any PRC subsidiaries,
either as a shareholder loan or as an increase in registered capital, is subject to approval by or registration or filing with relevant
governmental authorities in China. According to the relevant PRC regulations on foreign-invested enterprises in China, capital contributions
to PRC subsidiaries are subject to the approval of or filing with the MOFCOM in its local branches and registration with a local bank
authorized by SAFE. In addition, (i) any foreign loan procured by PRC subsidiaries is required to be registered with SAFE or its local
branches or filed with SAFE in its information system; and (ii) PRC subsidiaries may not procure loans which exceed the difference between
their total investment amount and registered capital or, as an alternative, only procure loans subject to the calculation approach and
limitation as provided in the People’s Bank of China Notice No. 9 (“PBOC Notice No. 9”). Any medium- or long-term loan
to be provided by us or our affiliated entities, if any, to our PRC subsidiary must be registered with the National Development and Reform
Commission and SAFE or its local branches. We may not be able to obtain these government approvals or complete such registrations on a
timely basis, if at all, with respect to future capital contributions or foreign loans by us to our PRC subsidiaries. If we fail to receive
such approvals or complete such registration or filing, our ability to capitalize on PRC operations may be negatively affected, which
could adversely affect our liquidity and ability to fund and expand our businesses.

The Circular on Reforming the Administration of Foreign Exchange Settlement of Capital of Foreign-Invested Enterprises (“SAFE Circular 19”), effective as of June 1, 2015, as amended by Circular of the State Administration of Foreign Exchange on Reforming and Regulating Policies on the Control over Foreign Exchange Settlement under the Capital Account (“SAFE Circular 16”), effective on June 9, 2016, allows certain entities to settle their foreign exchange capital at their discretion, but continues to prohibit them from using the Renminbi fund converted from their foreign exchange capitals for expenditure beyond their business scopes, and also prohibit such PRC based entities from using such Renminbi fund to provide loans to persons other than affiliates unless otherwise permitted under its business scope. As a result, SAFE Circular 19 and SAFE Circular 16 may significantly limit our future ability to use Renminbi converted from the net proceeds from our offshore financing activities to fund the establishment of