Company: XHG
Filing Date: 2025-01-22
Form Type: 20-F
Source: 0001213900-25-005499
Chunk: 56

Company: XChange TEC.INC
Filing Date: 2025-01-22
Form: 20-F
Item: Item 3
Chunk 56
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ited by a firm not subject to PCAOB inspection, disclosure on governmental entities
in the Relevant Jurisdiction’s ownership in and controlling financial interest in the issuer, the names of Chinese Communist Party,
or CCP, members on the board of the issuer or its operating entities, and whether the issuer’s articles include a charter of the
CCP, including the text of such charter.

There are uncertainties under the PRC laws relating to the procedures
for U. S. regulators to investigate and collect evidence from companies located in the PRC.

Shareholder claims or regulatory investigation
that are common in the United States generally are difficult to pursue as a matter of law or practicality in China. For instance, in
China, there are significant legal and other obstacles to providing information needed for regulatory investigations or litigations initiated
outside China. Although the authorities in China may establish a regulatory cooperation mechanism with the securities regulatory authorities
of another country or region to implement cross-border supervision and administration, such cooperation with the securities regulatory
authorities in the Unities States may not be efficient in the absence of mutual and practical cooperation mechanism.

According to Article 177 of the PRC Securities
Law (the “ Article 177”), which became effective in March 2020, no overseas securities regulator is allowed to directly conduct
investigation or evidence collection activities within the territory of the PRC. Accordingly, without PRC government approval, no entity
or individual in China may provide documents and information relating to securities business activities to overseas regulators when it
is under direct investigation or evidence discovery conducted by overseas regulators, which could present significant legal and other
obstacles to obtaining information needed for investigations and litigation conducted outside of China. The inability for an overseas
securities regulator to directly conduct investigation or evidence collection activities within China may further increase difficulties
faced by you in protecting your interests. Furthermore, as of the date of this annual report, there have not been implementing rules
or regulations regarding the application of Article 177, and, accordingly, it remains unclear as to how it will be interpreted, implemented
or applied by relevant government authorities. As such, there are also uncertainties as to the procedures and requisite timing for the
overseas securities regulatory agencies to conduct investigations and collect evidence within the territory of the PRC. If the U. S. securities
regulatory agencies are unable to conduct such investigations, there exists a risk that they may determine to suspend or de-register
our registration with the SEC and may also delist our securities from trading