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

Company: MKDWELL Tech Inc.
Filing Date: 2025-04-03
Form: 20-F
Item: Item 3
Chunk 25
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 to providing information needed for regulatory investigations or litigation initiated outside
China. Although PRC government authorities may establish a regulatory cooperation mechanism with the securities regulatory authorities
of another country or region to implement cross-border supervision and administration, such cooperation with the securities regulatory
authorities in the Unities States may not be efficient in the absence of mutual and practical cooperation mechanism. Furthermore, according
to Article 177 of the PRC Securities Law, or Article 177, which became effective in March 2020, no overseas securities regulator is allowed
to directly conduct investigation or evidence collection activities within the territory of the PRC. While detailed interpretation of
or implementation rules under Article 177 have yet to be promulgated, the inability for an overseas securities regulator to directly
conduct investigation or evidence collection activities within China may further increase difficulties faced by you in protecting your
interests.

Any
failure to comply with PRC regulations regarding the registration requirements for employee stock incentive plans may subject the relevant
PRC plan participants or us to fines and other legal and administrative sanctions.

Pursuant
to the Notice on Issues Concerning the Foreign Exchange Administration for Domestic Individuals Participating in Stock Incentive Plan
of Overseas Publicly Listed Company, issued by SAFE in February 2012, employees, directors, supervisors and other senior management 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, subject to exceptions, are required to register with SAFE through a domestic qualified
agent, which could be a PRC subsidiary of such overseas listed company, and complete certain other procedures. The Company’s and
MKD’s directors, executive officers and other employees who are PRC citizens or who reside in the PRC for a continuous period of
not less than one year and who have been granted restricted shares, restricted share units or options are subject to these regulations.
Failure to complete the SAFE registrations may result in fines and legal sanctions and may also limit MKD’s ability to contribute
additional capital into MKD’s subsidiaries in China and limit these subsidiaries’ ability to distribute dividends to the
Company. The Company also faces regulatory uncertainties that could restrict the Company’s ability to adopt additional incentive
plans for MKD’s directors and employees under PRC law.

If
MKD fails to obtain and maintain the requisite licenses and approvals required under the regulatory environment applicable to MKD’s
businesses in the PRC, or