Company: FSHPU
Filing Date: 2025-03-04
Form Type: 10-K
Source: 0001829126-25-001450
Chunk: 266

Company: Flag Ship Acquisition Corp
Filing Date: 2025-03-04
Form: 10-K
Item: Item 1A
Chunk 266
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 required to expend valuable resources to comply with Circular 59, Circular 698 and Circular 7 or to establish that we and our non-resident enterprises should not be taxed under these circulars, which may have a material adverse effect on our financial condition and results of operations.

The PRC tax authorities have the discretion under SAT Circular 59, Circular 698 and Circular 7 to make adjustments to the taxable capital gains based on the difference between the fair value of the taxable assets transferred and the cost of investment. We may pursue acquisitions in the future that may involve complex corporate structures. If we are considered a non-resident enterprise under the PRC corporate income tax law and if the PRC tax authorities make adjustments to the taxable income of the transactions under SAT Circular 59 or Circular 698 and Circular 7, our income tax costs associated with such potential acquisitions will be increased, which may have an adverse effect on our financial condition and results of operations.

65

Risks Related to Acquiring and Operating a Business Outside of the United States

If we effect our initial business combination with a company located outside of the United States, we would be subject to a variety of additional risks that may negatively impact our operations.

If we effect our initial
business combination with a company located outside of the United States, such as the Proposed GRT Business Combination, we would be subject
to any special considerations or risks associated with companies operating in the target business’ home jurisdiction, including
any of the following:

    ●
    rules and regulations or currency redemption or corporate withholding taxes on individuals; 

    ●
    laws governing the manner in which future business combinations may be effected; 

    ●
    tariffs and trade barriers; 

    ●
    regulations related to customs and import/export matters; 

    ●
    longer payment cycles; 

    ●
    tax issues, such as tax law changes and variations in tax laws as compared to the United States; 

    ●
    currency fluctuations and exchange controls; 

    ●
    rates of inflation; 

    ●
    challenges in collecting accounts receivable; 

    ●
    cultural and language differences; 

    ●
    employment regulations; 

    ●
    crime, strikes, riots, civil disturbances, terrorist attacks and wars; and 

    ●
    deterioration of political relations with the United States which could result in any number of difficulties, both normal course such as above or extraordinary such as sanctions being imposed. We may not be able to adequately address these additional risks.