Company: SCAG
Filing Date: 2025-01-06
Form Type: 424B3
Source: 0001213900-25-001215
Chunk: 181

Company: Scage Future
Filing Date: 2025-01-06
Form: 424B3
Chunk 181
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 in force at the time. PRC tax authorities may determine that Circular 7 and the SAT Circular 37 are applicable to offshore restructuring transactions or sale of the shares of offshore subsidiaries where non -residententerprises, as the transferors, were involved. PRC tax authorities may pursue such non -residententerprises with respect to a filing regarding the transactions and request the PRC Subsidiaries to assist in the filing. 64 As a result, Scage International’s and following the consummation of the Business Combination, PubCo’s non -residentsubsidiaries in such transactions may risk being subject to filing obligations or being taxed under Circular 7 and the SAT Circular37, unless it can be justified that the transactions are of reasonable business purposes such as group restructuring or other allowed circumstances. Practically, there has been no major transaction of similar nature challenged by the PRC tax authorities. However, given the increasingly tightened tax administration in China, Scage International and PubCo cannot assure you that there is no tax reporting or settlement risk for such transactions. The custodians or authorized users of Nanjing Scage’s controlling non-tangible assets, including chops and seals, may fail to fulfill their responsibilities or misappropriate or misuse these assets. Under PRC laws, legal documents for corporate transactions are executed using the chop or seal of the signing entity or with the signature of a legal representative whose designation is registered and filed with the relevant branch of the State Administration for Market Regulation (the “SAMR”). Although Nanjing Scage usually utilizes chops to enter into contracts, the designated legal representatives of PRC Subsidiaries have the apparent authority to enter into binding contracts on behalf of these entities without chops. In order to maintain the physical security of Nanjing Scage’s chops, Nanjing Scage generally has them stored in secure locations accessible only to authorized employees. Although Nanjing Scage monitors such authorized employees, the procedures may not be sufficient to prevent all instances of abuse or negligence. There is a risk that Nanjing Scage’s employees could abuse their authority, for instance, by entering into a contract not approved by Nanjing Scage, or seeking to gain control of any of the PRC Subsidiaries. If any employee obtains, misuses or misappropriates corporate chops and seals or other controlling non -tangibleassets for whatever reason, the business operations of the relevant entities could be disrupted. Nanjing Scage may have to take corporate or legal action to seek the return of the chops, apply for new