Company: FSHPU
Filing Date: 2025-03-04
Form Type: 10-K
Source: 0001829126-25-001450
Chunk: 248

Company: Flag Ship Acquisition Corp
Filing Date: 2025-03-04
Form: 10-K
Item: Item 1A
Chunk 248
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 part of our business following a business combination with a PRC entity may be conducted through VIE entities or in a VIE structure. At the present time, such structures and arrangements would allow us to be considered the primary beneficiary, enabling us to consolidate the financial results of VIE entities in our consolidated financial statements. In the event that in the future a company we hold as a VIE would no longer meet the definition of a VIE, or we are deemed not to be the primary beneficiary, we would not be able to consolidate line by line that entity’s financial results in our consolidated financial statements for PRC purposes. Also, if in the future an affiliate company becomes a VIE and we become the primary beneficiary, we would be required to consolidate that entity’s financial results in our consolidated financial statements for PRC purposes. If such entity’s financial results were negative, this could have a corresponding negative impact on our operating results for PRC purposes. However, any material variations in the accounting principles, practices, and methods used in preparing financial statements for PRC purposes from the principles, practices, and methods generally accepted in the U.S. and in the SEC accounting regulations must be discussed, quantified, and reconciled in financial statements for the U.S. GAAP and SEC purposes.

55

The Chinese government may exert substantial interventions and influences on our combined company’s operations at any time. Any new policies, regulations, rules, actions or laws by the PRC government may subject our combined company to material changes in operations, may cause the value of our securities significantly decline or be worthless, and may completely hinder our ability to offer or continue securities to investors.

Though we currently do not have any RPC subsidiary or China operation
and a majority of our management are located outside China, we may pursue a business combination with a company doing business in China
(excluding any target company whose financial statements are audited by an accounting firm that PCAOB is unable to inspect for two consecutive
years beginning in 2021 and any target company that consolidates financial results of PRC operating entities through a VIE structure in
the PRC instead of direct holdings). Notwithstanding the foregoing, the Chinese government has exercised and continues to exercise substantial
control over virtually every sector of the Chinese economy through regulation and state ownership. Our combined company’s ability
to operate in China may be harmed by changes in its laws and regulations, including those relating to securities, taxation, environmental
regulations, land use rights, property and other matters. The central or local governments