Company: FEBO
Filing Date: 2025-05-14
Form Type: 20-F
Source: 0001641172-25-010075
Chunk: 53

Company: Fenbo Holdings Ltd
Filing Date: 2025-05-14
Form: 20-F
Item: Item 3
Chunk 53
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for the publication of, negative opinions and allegations regarding the relevant issuer and its business prospects in order to create
negative market momentum and generate profits for themselves after selling the shares short. These short attacks have, in the past, led
to the selling of shares in the market. If we were to become the subject of any unfavorable publicity, whether such allegations are proven
to be true or untrue, we could have to expend a significant amount of resources to investigate such allegations and/or defend ourselves.
While we would strongly defend against any such short seller attacks, we may be constrained in the manner in which we can proceed against
the relevant short seller by principles of freedom of speech, applicable state law or issues of commercial confidentiality.

There are uncertainties with respect to indirect
transfers of assets (including equity interests) of our Operating Subsidiaries in the PRC.

The Announcement of the State
Administration of Taxation on Issues Relating to Withholding at Source of Income Tax of Non-resident Enterprises (“ Announcement
No. 37”) and the Announcement on Certain Issues Concerning Enterprise Income Tax for Indirect Transfer of Assets by Non-Resident
Enterprises (“ Circular 7”) issued by The State Administration of Taxation (“ SAT”), provide comprehensive guidelines
in relation to, and also heighten the PRC tax authorities scrutiny over, indirect transfers by a non-resident enterprise of assets (including
equity interests) of a PRC resident enterprise (“ PRC Taxable Assets”).

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Announcement No. 37 and Circular
7 specify that the PRC tax authorities are entitled to reclassify the nature of an indirect transfer of PRC Taxable Assets when a non-resident
enterprise transfers PRC Taxable Assets indirectly by disposing of equity interests in an overseas holding company directly or indirectly
holding such PRC Taxable Assets by disregarding the existence of such overseas holding company and considering the transaction to be a
direct transfer of PRC Taxable Assets if such transfer is deemed to have been conducted for the purposes of avoiding PRC enterprise income
taxes and without any other reasonable commercial purposes. It is unclear whether any exemptions specified under Circular 7 will be applicable
to the transfer of our Shares on a public market by our non-resident enterprise Shareholders or to any future acquisition by us outside
of the PRC involving PRC Taxable Assets. Therefore, the PRC tax authorities may deem any transfer of our Shares by our Shareholders that
are non-resident enterprises, or any future acquisition