Company: XHG
Filing Date: 2025-09-09
Form Type: F-3
Source: 0001213900-25-086186
Chunk: 38

Company: XChange TEC.INC
Filing Date: 2025-09-09
Form: F-3
Chunk 38
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 Commerce of the PRC (“MOFCOM”), or their authorized local counterparts,
before launching the value-added telecommunications business in the PRC. On March 29, 2022, the Decision of the State Council on Revising
and Repealing Certain Administrative Regulations, which took effect on May 1, 2022, was promulgated to amend certain provisions of regulations
including the Provisions on the Regulations for the Administration of Foreign-Invested Telecommunications Enterprises (2016 Revision),
the requirement for major foreign investor to demonstrate a good track record and experience in operating value-added telecommunications
businesses is deleted.

The Special Administrative Measures (Negative
List) for Access of Foreign Investment (2021 version) (the “Negative List”) was jointly promulgated by the National Development
and Reform Commission of the PRC (“NDRC”) and MOFCOM on December 27, 2021 and came into effect on January 1, 2022. According
to the Negative List, the proportion of foreign investments in an entity engages in value-added telecommunications business (except for
e-commerce, domestic multi-party communications, storage-forwarding and call centers) shall not exceed 50%.

Accordingly, none of our subsidiaries is eligible
to provide commercial internet content or other value-added telecommunication service, which foreign-owned companies are or restricted
from conducting in Mainland China. To comply with PRC laws and regulations, we have conducted such business activities to offer internet
access services through the VIEs in China. WFOE has entered into contractual arrangements with the VIE entities and their respective shareholders,
and such contractual arrangements enable us to exercise effective control over, receive substantially all of the economic benefits of,
and have an exclusive option to purchase all or part of the equity interest and assets in the VIE entities when and to the extent permitted
by PRC law. Because of these contractual arrangements, we are the primary beneficiary of the VIE entities in China for accounting purposes
for the effective period of these contractual arrangements. Accordingly, under U.S. GAAP, the financial statements of the VIE entities
are consolidated as part of our financial statements for the years ended September 31, 2022, 2023 and 2024 in this prospectus.

As we continued to evaluate our business
plan, we have decided to adjust our business model in China. On October 26, 2021, we transferred all of our equity interest in the
WFOE, to Wangxian