Company: XHG
Filing Date: 2025-01-22
Form Type: 20-F
Source: 0001213900-25-005499
Chunk: 18

Company: XChange TEC.INC
Filing Date: 2025-01-22
Form: 20-F
Item: Item 3
Chunk 18
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 to continue as a going concern or achieve or maintain profitability, we may have
to liquidate our assets, and the value we receive for our assets in liquidation or dissolution could be significantly lower than the
values reflected in our audited consolidated financial statements. If we cease operations, it is likely that all of our investors would
lose their investment. Our inability to continue as a going concern may materially and adversely affect the price of our ADSs and our
ability to raise new capital or to continue our operations.

In addition, we will need to generate increased
revenue levels in future periods to become profitable, and, even if we do, we may not be able to maintain or improve profitability as
we intend to continue to spend significant funds to expand our operations, including expanding our sales network, and developing and
enhancing our technology systems and infrastructure. Our efforts to grow our business may be more costly than we expect, and we may not
be able to increase our revenue immediately or significantly to offset our operating expenses. We may incur significant losses in the
future for a number of reasons, including the other risks described in this annual report, and unforeseen expenses, difficulties, complications
and delays and other unknown events.

We have a limited operating history in the insurance agency
market, which makes it difficult to evaluate our future prospects and results of operations and may increase the risk that we will not
be successful. In addition, our historical growth and financial condition may not be indicative of our future growth, profitability,
and financial condition.

Prior to our acquisition of Alpha Mind in December
2023, we operated in the long-term apartment rental business. We had limited operating history in the insurance agency market. Alpha
Mind’s historical performance may not be indicative of our future financial results. Our growth may continue to become negative,
and revenue and net profit may decline for a number of possible reasons, including the risk factors set forth in this annual report.
We may not continue our growth or maintain our historical growth rates or financial condition. You should not consider our historical
growth or financial condition as indicative of our future performance.

In addition, we may not successfully or efficiently
operate and manage our newly acquired insurance agency business due to the limited experience of our management in the insurance agency
industry. Although we are committed to leveraging our collective knowledge and skills to compete in the emerging and rapidly evolving
market, and we are actively engaging in acquiring industry-specific expertise, our limited experience in the insurance agency industry
may adversely impact our future performance and