Company: XHG
Filing Date: 2025-01-22
Form Type: 20-F
Source: 0001213900-25-005499
Chunk: 218

Company: XChange TEC.INC
Filing Date: 2025-01-22
Form: 20-F
Item: Item 19
Chunk 218
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 were restricted from transferring its exercised ordinary shares during certain periods subsequent to the IPO date
(the “lock-up period”). If the grantee resigned from the Group before the IPO or during the lock-up period, the Group has
the right to repurchase the share options or ordinary shares at the exercise price. The Group believes that the repurchase feature is
effectively to require the employee to remain throughout the requisite period in order to receive any economic benefit from the award.
As such, the repurchase feature functions as a vesting condition that is contingent on the IPO, noshare-based compensation expense is
recognized until the date of IPO. As of September 30, 2023 and 2024, the Group had2,385,000,000and2,385,000,000share options outstanding, vested and exercisable. The remaining Stock Options B are exercisable into2,385,000,000Class A ordinary shares. Because the exercise
price is out of money, the weighted average intrinsic value of these share options were nil.

Binomial options pricing model was applied in determining the estimated
fair value of the options granted. The model requires the input of highly subjective assumptions including the estimated expected stock
price volatility and, the exercise multiple for which employees are likely to exercise share options. The estimated fair value of the
ordinary shares, at the option grants, was determined with assistance from an independent third party valuation firm. The Group’s
management is ultimately responsible for the determination of the estimated fair value of its ordinary shares.

The following table presents the assumptions used to estimate the fair
values of the share options granted in the years presented:

                                                April 2016                    October 2016                    July 2017                 
 ────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────────
  Risk-free rate of return                                          3.18                            3.18                          3.21  
  Contractual life of option                                    10 years                        10 years                     8.4 years  
  Estimated volatility rate                                           37                              37                            35  
  Expected dividend yield                                              0                               0                             0  
  Fair value of underlying ordinary shares      US$               0.0003      US$                 0.0004      US$               0.0005  

2019 Share Incentive Plan

The 2019 Share Incentive Plan became effective immediately upon the
completion of our initial public offering. The maximum number