Company: XHG
Filing Date: 2025-01-22
Form Type: 20-F
Source: 0001213900-25-005499
Chunk: 31

Company: XChange TEC.INC
Filing Date: 2025-01-22
Form: 20-F
Item: Item 3
Chunk 31
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 is immaterial as of the date of this annual report.

However, continued development of business operations
by the Company could bring the Company within the scope of authority of the CAC rules, and future enacted or amended CAC rules may increase
compliance standards on our business operation, and thus may have a substantial impact on our business. There are substantial uncertainties
as to whether and how the CAC’s further actions and any amended version of the Cybersecurity Review Measures would impact U. S.
listed companies like us. It is likely that our data processing activities within China are regulated under any future enacted or amended
CAC rules, which may subject us to cybersecurity review if the PRC governmental authorities deem such activities have affected or may
affect national security. If we will be subject to increased scrutiny regarding data security and data protection, our business, operation,
reputation will be adversely affected. In addition, we could become subject to enhanced cybersecurity review or investigations launched
by PRC regulators in the future. Any failure or delay in the completion of the cybersecurity review procedures or any other non-compliance
with the related laws and regulations may result in fines or other penalties, including suspension of business, website closure, and
revocation of prerequisite licenses, as well as reputational damage or legal proceedings or actions against us, which may result in a
material change in our operations, the value of the securities registered or could significantly limit or completely hinder our ability
to offer or continue to offer securities to investors and cause the value of such securities to significantly decline or be worthless.

We may be subject to intellectual property infringement claims
or other allegations by third parties, which may materially and adversely affect our business, results of operations and prospects.

We cannot be certain that our operations do not
or will not infringe upon or otherwise violate intellectual property rights or other rights held by third parties. We may be from time
to time in the future subject to legal proceedings and claims relating to the intellectual property rights or other rights of third parties.

Additionally, there may be third-party intellectual
property rights or other rights that are infringed by our products, services or other aspects of our business without our awareness.
To the extent that our employees and the employees of the Current VIEs or consultants use intellectual property owned by others in their
work for us, disputes may arise as to the rights in related know-how and inventions or other proprietary assets. If any third-party infringement
claims are brought against us, we may be forced to divert management’s time and