Company: SCAG
Filing Date: 2025-11-12
Form Type: 20-F
Source: 0001213900-25-109190
Chunk: 47

Company: Scage Future
Filing Date: 2025-11-12
Form: 20-F
Item: Item 3
Chunk 47
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 or related SAFE rules, or
other outbound investment related regulations. Failure by such shareholders or beneficial owners to comply with such regulations, or
failure by us to amend the foreign exchange registrations of PRC Subsidiaries, could subject us to fines or penalties, restrict our overseas
or cross-border investment activities, limit the ability of PRC Subsidiaries to make distributions or pay dividends to us or affect our
ownership structure, which could adversely affect our business and prospects.

If we fail to comply with PRC regulations
regarding the registration requirements for employee stock ownership plans or share option plans, the PRC plan participants or we could
be subject to fines and other legal or administrative penalties.

In February 2012, SAFE
promulgated the Notices on Issues Concerning the Foreign Exchange Administration for Domestic Individuals Participating in Stock Incentive
Plan of Overseas Publicly Listed Company (the “ SAFE Circular 7”). Pursuant to SAFE Circular 7, directors, supervisors,
senior management and other employees participating in any stock incentive plan of an overseas publicly listed company who are PRC citizens
or who are non-PRC citizens residing in China for a continuous period of not less than one year, are required to register with SAFE through
a domestic qualified agent, which could be the PRC subsidiary of such overseas-listed company, and complete certain other procedures,
unless certain exceptions are available. In addition, an overseas-entrusted institution must be retained to handle matters in connection
with the exercise or sale of stock options and the purchase or sale of shares and interests. We and our executive officers and other
employees who are PRC citizens or non-PRC citizens living in China for a continuous period of not less than one year that are granted
options going forward will be subject to these regulations as our company becomes an overseas-listed company. Failure to complete SAFE
registrations may subject them to fines of up to RMB50,000 for individuals and may also limit our ability to contribute additional capital
into PRC Subsidiaries and their ability to distribute dividends to us. The SAFE regulations may evolve, which may restrict our ability
to adopt additional incentive plans for our directors, executive officers and employees under PRC law.

In addition, the Ministry
of Finance and the State Administration of Taxation (the “ SAT”) have issued certain circulars concerning employee share options
and restricted shares. Under these circulars, our employees working in China who exercise share options or are granted restricted shares