Company: IMG
Filing Date: 2025-07-21
Form Type: 10-K
Source: 0001641172-25-020300
Chunk: 179

Company: CIMG Inc.
Filing Date: 2025-07-21
Form: 10-K
Item: Item 1
Chunk 179
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-control policy) of the net worth of the PRC subsidiary. According to the relevant PRC regulations on foreign-invested
enterprises in China, capital contributions to the PRC subsidiaries are subject to the approval of or filing with State Administration
for Market Regulation in its local branches, the Ministry of Commerce in its local branches and registration with a local bank authorized
by SAFE.

In
light of the various requirements imposed by PRC regulations on loans to, and direct investment in, PRC entities by offshore holding
companies, we cannot assure you that we will be able to complete the necessary government registrations or obtain the necessary government
approvals on a timely basis, if at all, with respect to future loans by us to the PRC subsidiary or with respect to future capital contributions
by us to the PRC subsidiary. If we fail to complete such registrations or obtain such approvals, our ability to capitalize or otherwise
fund the PRC operations may be negatively affected, which could materially and adversely affect our liquidity, our ability to fund and
expand our business and our securities.

34

A
failure by the beneficial owners of our shares who are PRC residents to comply with certain PRC foreign exchange regulations could restrict
our ability to distribute profits, restrict our overseas and cross-border investment activities and subject us to liability under PRC
law.

SAFE
has promulgated regulations, including the Notice on Relevant Issues Relating to Domestic Residents’ Investment and Financing and
Round-Trip Investment through Special Purpose Vehicles (or SAFE Circular No. 37), effective on July 4, 2014, and its appendices, that
require PRC residents, including PRC institutions and individuals, to register with local branches of SAFE in connection with their direct
establishment or indirect control of an offshore entity, for the purpose of overseas investment and financing, with such PRC residents’
legally owned assets or equity interests in domestic enterprises or offshore assets or interests, referred to in SAFE Circular No. 37
as a “special purpose vehicle.” SAFE Circular No. 37 further requires amendment to the registration in the event of any significant
changes with respect to the special purpose vehicle, such as increase or decrease of capital contributed by PRC individuals, share transfer
or exchange, merger, division or other material event. In the event that a PRC shareholder holding interests in a special purpose vehicle
fails to fulfill the required SAFE registration, the PRC subsidiaries of that special purpose vehicle may be prohibited from making profit
distributions