Company: NTCL
Filing Date: 2025-02-18
Form Type: 20-F
Source: 0001410578-25-000153
Chunk: 51

Company: NetClass Technology Inc
Filing Date: 2025-02-18
Form: 20-F
Item: Item 5
Chunk 51
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, Two Systems”. The Basic Law was officially adopted at the Third Session of the Seventh National People’s Congress on April 4, 1990. The Basic Law provides that Hong Kong will retain its own currency (the Hong Kong Dollar), legal system, parliamentary system and certain existing rights and freedom for fifty years from July 1, 1997. The Basic Law has given Hong Kong the freedom to function with a high degree of autonomy and to enjoy independent executive, legislative and judicial power, including that of final adjudication. Hong Kong is responsible for its own domestic affairs including, but not limited to, the judiciary and courts of last resort, immigration and customs, public finance, currencies and extradition. Hong Kong continues to use the English common law system together with laws and regulations made under its legislative framework.

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However, if the PRC attempts to alter its agreement to allow Hong Kong to function autonomously pursuant to the Sino-British Joint Declaration and the Basic Law, this could potentially impact Hong Kong’s common law legal system, which may in turn bring about uncertainty in, for example, the enforcement of the Hong Kong Subsidiaries’ contractual rights. This could, in turn, materially and adversely affect the Hong Kong Subsidiaries’ business and operations. Additionally, intellectual property rights and confidentiality protections in Hong Kong may not be as effective as in the United States or other countries. Accordingly, the effects of future developments in the Hong Kong legal system, including the promulgation of new laws, changes to existing laws or the interpretation or enforcement thereof, or the pre-emption of local regulations by national laws, may be unpredictable and such changes may occur rapidly with little or no advance notice. These uncertainties could limit the legal protections available to us, including the ability to enforce agreements with customers, suppliers and/or merchants.

The coming into effect of the MJCCREO may affect the legal position of our subsidiaries with business operations and assets located in Hong Kong and/or the PRC.

The MJCCREO, which was passed by the Hong Kong Legislative Council on October 26, 2022, came into force with effect from January 29, 2024, implementing the Arrangement on Reciprocal Recognition and Enforcement of Judgments in Civil and Commercial Matters by Courts of the Mainland and of the Hong Kong Special Administrative Region signed by the governments of the PRC and Hong Kong on January 18, 2019. The MJCCREO supersedes the Mainland Judgments (Recipro