Company: ATMCW
Filing Date: 2025-04-15
Form Type: 10-K
Source: 0001641172-25-004801
Chunk: 1761

Company: ALPHATIME ACQUISITION CORP
Filing Date: 2025-04-15
Form: 10-K
Item: Item 1A
Chunk 1761
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 the Administration of Certain Capital Account Foreign Exchange Businesses, or Circular 45. According to Circular 19, the flow
and use of the RMB capital converted from foreign currency-denominated registered capital of a foreign-invested company is regulated
such that RMB capital may not be used for the issuance of RMB entrusted loans, the repayment of inter-enterprise loans or the repayment
of banks loans that have been transferred to a third party. Although Circular 19 allows RMB capital converted from foreign currency-denominated
registered capital of a foreign-invested enterprise to be used for equity investments within the PRC, it also reiterates the principle
that RMB converted from the foreign currency-denominated capital of a foreign-invested company 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
the PRC 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, or Circular 16, effective on June 9, 2016, which reiterates some
of the rules set forth in Circular 19, but changes the prohibition against using RMB capital converted from foreign currency-denominated
registered capital of a foreign-invested company to issue RMB entrusted loans to a prohibition against using such capital to issue loans
to non-associated enterprises. Violations of SAFE Circular 19 and Circular 16 could result in administrative penalties.

As
such, Circular 19 and Circular 16 may significantly limit our ability to transfer the proceeds of our Initial Public Offering to a PRC
target company and the use of such proceeds by the PRC target company. In addition, following our initial business combination with a
PRC target company, we will be subject to the PRC’s rules and regulations on currency conversion. In the PRC, the SAFE regulates
the conversion of the Renminbi into foreign currencies. Currently, FIEs are required to apply to the SAFE for “Foreign Exchange
Registration Certificates for FIEs.” Following our initial business combination, we will likely be an FIE as a result of our ownership
structure. With such registration certificates, which need to be renewed annually, FIEs are allowed to open foreign currency accounts
including a “basic account” and “capital account.” Currency conversion within the scope of the “basic account,”
such as remittance of