Company: MKDWW
Filing Date: 2025-04-03
Form Type: 20-F
Source: 0001641172-25-002607
Chunk: 27

Company: MKDWELL Tech Inc.
Filing Date: 2025-04-03
Form: 20-F
Item: Item 3
Chunk 27
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, financial condition and results of operations may be affected by potential economical
and/or military issues in Taiwan.

Taiwan
has a unique international political status due to historical reasons. Although significant economic and cultural relations have been
established during recent years between Taiwan and the People’s Republic of China (“ PRC”), the PRC government has refused
to renounce the possibility that it may at some point use force to gain control over Taiwan. For example, the PRC government adopted
an anti-secession law relating to Taiwan. Sanctions against Taiwan entities or persons, and military blockage or actions from the PRC,
may significantly harm Taiwan’s economy. Cross-Straits relations between Taiwan and the PRC have been strained in recent years
for a variety of reasons, including tensions concerning arms sales to Taiwan by the United States government and visits to Taiwan by
United States government officials. The financial markets have viewed certain past developments in relations between Taiwan and the PRC
as occasions to depress general market prices of the securities of Taiwan companies. Any tension between Taiwan and the PRC, or between
the United States and the PRC, could materially and adversely affect MKD’s business, financial condition and results of operations.

MKD
is subject to restrictions on paying dividends or making other payments, which may restrict the Company’s ability to satisfy the
liquidity requirements.

As
a company incorporated under the laws of the BVI structured as a holding company, the Company may need dividends and other distributions
on equity from its Taiwan subsidiaries to satisfy its liquidity requirements. Current Taiwan regulations permit Taiwan companies to pay
dividends to its shareholders only out of accumulated profits, if any, which shall first make up previous losses and set aside at least
10% of accumulated profits each year as a statutory reserve. These reserves are not distributable as cash dividends. Once the statutory
reserve has reached the total amount of the capital, MKD Taiwan is not required to continue setting aside any amounts for the purpose
of statutory reserve. Furthermore, if MKD Taiwan incurs debt on its own behalf in the future, the instruments governing the debt may
restrict the ability to pay dividends or make other payments to the Company. Any limitation on the ability of MKD Taiwan to distribute
dividends or to make payments to the Company may restrict the Company’s ability to satisfy its liquidity requirements. In addition,
the dividend or distribution payments by MKD Taiwan to MKD BVI shall be subject to a withholding tax of 21% under current Taiwan tax