Company: XHG
Filing Date: 2025-10-29
Form Type: F-3/A
Source: 0001213900-25-103499
Chunk: 47

Company: XChange TEC.INC
Filing Date: 2025-10-29
Form: F-3/A
Chunk 47
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-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 Wangxiancai Limited, which is beneficially owned by the legal representative and executive director of one of our
subsidiaries, a related party (the “Equity Transfer”). As a result of the Equity Transfer, we no longer conduct any
operation through the variable interest entity. See “Item 4. Information on the Company—A. History and Development of
the Company” in our Form 20-F for FY 2024, which is incorporated herein by reference.

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Although we no longer conduct any operation through
the variable interest entity, there are uncertainties regarding the interpretation and application of current and future PRC laws, regulations,
and rules relating to the agreements that established the VIE structure for our operations in China, including potential future actions
by the PRC government, which may retroactively affect the enforceability and legality of our historical contractual arrangements with
the VIE entities and, consequently, significantly affect the historical financial condition and results of operations of the VIE entities,
and our ability to consolidate the results of the VIE entities into our consolidated financial statements for