Company: XHG
Filing Date: 2025-09-09
Form Type: F-3
Source: 0001213900-25-086186
Chunk: 22

Company: XChange TEC.INC
Filing Date: 2025-09-09
Form: F-3
Chunk 22
---
 the threat of a trading prohibition, may materially and adversely affect the value of your investment. Additionally,
the inability of the PCAOB to conduct inspections of our auditors would deprive our investors of the benefits of such inspections”
of our Form 20-F for FY 2024.

As there are still uncertainties regarding these
new laws and regulations as well as the amendment, interpretation and implementation of the existing laws and regulations related to cybersecurity
and data protection, we cannot assure you that we will be able to comply with these laws and regulations in all respects. The regulatory
authorities may deem our activities or services non-compliant and therefore require us to suspend or terminate our business. We may also
be subject to fines, legal or administrative sanctions and other adverse consequences, and may not be able to become in compliance with
relevant laws and regulations in a timely manner, or at all. These may materially and adversely affect our business, financial condition,
results of operations and reputation.

Our Holding Company Structure and Contractual Arrangement with the VIEs and Their Shareholders

XChange TEC.INC is not an operating company but
a Cayman Islands holding company. Our operations are primarily conducted through our PRC subsidiaries and other consolidated entities.
Investors in our ADSs thus are purchasing equity interest in a Cayman Islands holding company and not in an operating entity. As a holding
company, XChange TEC.INC may rely on dividends from its subsidiaries for cash requirements, including any payment of dividends to our
shareholders. The ability of our subsidiaries to pay dividends to XChange TEC.INC may be restricted by laws and regulations applicable
to them or the debt they incur on their own behalf or the instruments governing their debt.

<div align='center'>8</div>

XChange TEC.INC conducts insurance agency businesses
in the PRC through Alpha Mind and its indirectly wholly-owned subsidiary, the WFOE and the VIEs. In April 2022, Alpha Mind, through the
WFOE, entered into contractual arrangements with VIEs, respectively. Via such contractual arrangements (the “VIE Structure”),
we are regarded as the primary beneficiary of the VIEs and consolidate the financial results of the VIEs under U.S. GAAP. The contractual
arrangements consist of powers of attorney, exclusive business cooperation agreements, exclusive option agreements, equity pledge agreements
and spousal consent letters. Terms contained in each set of contractual arrangements with each of the VIEs and