Company: SCAG
Filing Date: 2025-01-06
Form Type: 424B3
Source: 0001213900-25-001215
Chunk: 179

Company: Scage Future
Filing Date: 2025-01-06
Form: 424B3
Chunk 179
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 a PRC enterprise group will be regarded as a PRC tax resident by virtue of having its “de facto management body” in China and will be subject to PRC enterprise income tax on its global income only if all of the following conditions are met: (1) the primary location of the day -to -dayoperational management is in China; (2) decisions relating to the enterprise’s financial and human 63 resource matters are made or are subject to approval by organizations or personnel in China; (3) the enterprise’s primary assets, accounting books and records, company seals, and board and shareholder resolutions, are located or maintained in China; and (4) at least 50% of voting board members or senior executives habitually reside in China. The tax resident status of an enterprise is subject to applicable PRC laws and regulations, and the interpretation of the term “de facto management body” may be subject to adjustment in the future. If Scage International, PubCo or any of their subsidiaries outside of China is deemed as a PRC resident enterprise for enterprise income tax purposes, Scage International and PubCo could be subject to PRC tax at a rate of 25% on their worldwide income, which could materially reduce their net income, and they will be required to comply with PRC enterprise income tax reporting obligations. In addition, non -residententerprise shareholders (including the holders of PubCo’s securities) may be subject to PRC tax at a rate of 10% on gains realized on the sale or other disposition of PubCo’s securities, if such income is treated as sourced from within China. Furthermore, if PubCo is deemed a PRC resident enterprise, dividends payable to its non -PRCindividual shareholders (including its securities holders) and any gain realized on the transfer of PubCo’s securities by such shareholders may be subject to PRC tax at a rate of 10% in the case of non -PRCenterprises or a rate of 20% in the case of non -PRCindividuals unless a reduced rate is available under an applicable tax treaty. It is unclear whether non -PRCshareholders of PubCo following the consummation of the Business Combination would be able to claim the benefits of any tax treaties between their country of tax residence and the PRC in the event that PubCo is treated as a PRC resident enterprise. Any such tax may reduce the returns on your investment in PubCo’s securities. Furthermore, taxation laws, rules and regulations may evolve, which may impose stricter