Company: SCAG
Filing Date: 2025-01-06
Form Type: 424B3
Source: 0001213900-25-001215
Chunk: 174

Company: Scage Future
Filing Date: 2025-01-06
Form: 424B3
Chunk 174
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 subject to approval by or registration with relevant governmental authorities in China. According to the relevant PRC regulations on FIEs in China, capital contributions to the PRC Subsidiaries are subject to the information report requirement with MOFCOM or their respective local branches and registration with a local bank authorized by State Administration of Foreign Exchange (“SAFE”). In addition, any foreign loan procured by the PRC Subsidiaries cannot exceed statutory limits and is required to be registered with SAFE or the NDRC if the term of the loan exceeds one year, or their respective local branches. SAFE promulgated the Circular on Reforming of the Management Method of the Settlement of Foreign Currency Capital of Foreign -InvestedEnterprises (the “SAFE Circular 19”), effective from June 2015, in replacement of a former regulation. According to SAFE Circular19, the flow and use of the RMB capital converted from foreign currency -denominatedregistered capital of a foreign -investedcompany is regulated such that RMB capital may not be used for the issuance of RMB entrusted loans, the repayment of inter -enterpriseloans or the repayment of bank loans that have been transferred to a third party. Although SAFE Circular 19 allows RMB capital converted from foreign currency -denominatedregistered capital of a foreign -investedenterprise to be used for equity investments within China, it also reiterates the principle that RMB converted from the foreign currency -denominatedcapital of a foreign -investedcompany may not be directly or indirectly used for purposes beyond its business scope. Thus, it is unclear whether SAFE will permit such capital to be used for equity investments in China in actual practice. SAFE promulgated the Notice of the State Administration of Foreign Exchange on Reforming and Standardizing the Foreign Exchange Settlement Management Policy of Capital Account (the “SAFE Circular 16”), effective from June 2016, which reiterates some of the rules set forth in SAFE Circular19, but changes the prohibition against using RMB capital converted from foreign currency -denominatedregistered capital of a foreign -investedcompany to issue RMB entrusted loans to a prohibition against using such capital to issue loans to non -associatedenterprises. Violations of SAFE Circular 19 and SAFE Circular 16 could result in administrative penalties. The SAFE Circular 19 and SAFE Circular 16 regulate Scage International’s and PubCo’s transfer of any foreign currency they hold after the completion of the Business Combination, including proceeds of PubCo’s offshore fund -raisingactivities, to the P