Company: XHG
Filing Date: 2025-01-22
Form Type: 20-F
Source: 0001213900-25-005499
Chunk: 2

Company: XChange TEC.INC
Filing Date: 2025-01-22
Form: 20-F
Item: Item 3
Chunk 2
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 to act as his
or her exclusive agents, exercising all associated rights regarding their equity interest in the Current VIEs, and the power of attorney
remains valid as long as the shareholder holds shares in the Current VIEs; (iii) exclusive business cooperation agreement, entered into
between the Current WFOE and each of the Current VIEs, granting the Current WFOE the exclusive right to provide services to the Current
VIEs in exchange for a service fee equal to 100% of the consolidated net income, and also including the exclusive right for the Current
WFOE to purchase the Current VIEs’ business or assets at the lowest permissible price under PRC law, with the agreement remaining
in effect unless otherwise specified by the parties; (iv) exclusive option agreements, entered into between the Current WFOE and the
each of the Current VIEs and its shareholders, granting the exclusive right to purchase the equity interests of the Current VIEs’
shareholders, while the Current WFOE is entitled to dividends and distributions, and the exclusive option agreements remain in effect
until the transfer of all equity interests to the Current WFOE or its designated party; and (v) spousal consent letters, signed by each
spouse of the relevant individual shareholders of the Current VIEs, stating that the disposition of the equity interest held by their
spouse will be governed by the above-mentioned agreements, and their spouse undertake not to make any assertions to such equity interest.
As a result of these contractual arrangements, we, through Alpha Mind and its subsidiaries (i) are able to consolidate the financial
results of the Current VIEs, and (ii) receive substantially all of the economic benefits from the Current VIEs. The VIE structure is
not equivalent of an investment in the equity interest of the Current VIEs. See “ Item 4. Information on the Company - C.
Organizational Structure - Contractual Arrangements” for details.

However, neither XChange TEC. INC nor the Current
WFOE owns any equity interests in the Current VIEs. Our contractual arrangements with the Current VIEs and their nominee shareholders
are not equivalent of an investment in the equity interest of the Current VIEs. Instead, as described above, we are regarded as the primary
beneficiary of the Current VIEs and consolidate the financial results of the Current VIEs under U. S. GAAP in light