Company: XHG
Filing Date: 2025-01-22
Form Type: 20-F
Source: 0001213900-25-005499
Chunk: 123

Company: XChange TEC.INC
Filing Date: 2025-01-22
Form: 20-F
Item: Item 5
Chunk 123
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 primarily through our subsidiaries in the PRC. In utilizing the proceeds from the initial public
offering, as an offshore holding company, we are permitted, under PRC laws and regulations, to provide funding to our PRC subsidiaries
only through loans or capital contributions. Subject to satisfaction of applicable government registration and approval requirements,
we may extend inter-company loans to our PRC subsidiaries or make additional capital contributions to our PRC subsidiaries to fund their
capital expenditures or working capital. For an increase in the registered capital of any of our PRC subsidiaries, we need to complete
certain filing and/or registration procedures with competent authorities, which typically take us one or two months. Some local authorities
in the PRC require prior approval before such procedures, according to which we shall file requested documents related to the proposed
capital increased on the online integrated registration system. If we provide funding to any of our PRC subsidiaries through loans, the
total amount of such loans may not exceed the difference between the total investment as approved by the foreign investment authorities
and the registered capital of such PRC subsidiary. Such loans should be registered with the SAFE which usually takes no more than 20 working
days to complete. The cost of obtaining such approvals or completing such registration is minimal. We cannot assure you that we will be
able to obtain these government registrations or approvals on a timely basis, if at all. See “ Item 3. Key Information - D. Risk
Factors - Risks Related to Doing Business in China - Governmental control of currency conversion may limit the ability of us,
the PRC subsidiaries to utilize our net revenues effectively and our ability to transfer cash among the group, across borders, and to
investors and affect the value of your investment.”

As a holding company, we rely upon dividends paid
to us by our subsidiaries in the PRC to pay dividends and to finance any debt we may incur. If our subsidiaries or other consolidated
entities or any newly formed subsidiaries or other consolidated entities incur debt on their own behalf in the future, the instruments
governing their debt may restrict their ability to pay dividends to us. In addition, our subsidiaries and other consolidated entities
are permitted to pay dividends to us only out of their accumulated profits, if any, as determined in accordance with PRC accounting standards
and regulations. Pursuant to laws applicable to entities incorporated in the PRC, each of our subsidiaries and other consolidated entities
in the PRC must make appropriations from after tax profit to a statutory surplus reserve fund.