Company: XHG
Filing Date: 2025-01-22
Form Type: 20-F
Source: 0001213900-25-005499
Chunk: 73

Company: XChange TEC.INC
Filing Date: 2025-01-22
Form: 20-F
Item: Item 3
Chunk 73
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 “ Item 10. Additional Information - E. Taxation - United States Federal Income Tax Considerations - Passive Foreign
Investment Company Considerations” for more details. U. S. Holders should consult their own tax advisors regarding the U. S. federal
income tax consequences of holding stock or ADSs in a PFIC.

We will incur increased costs if we cease to qualify as an “emerging
growth company.”

As a public company, we have incurred and expect
to continue to incur significant legal, accounting and other expenses that we did not incur as a private company. The Sarbanes-Oxley
Act of 2002, as well as rules subsequently implemented by the SEC and the NASDAQ Capital Market, impose various requirements on the corporate
governance practices of public companies. A company qualifies as an emerging growth company if it has total annual gross revenues of
less than $1.235 billion during its most recently completed fiscal year. A company continues to be an emerging growth company for the
first five fiscal years after it completes an IPO, unless (i) its total annual gross revenues are $1.235 billion or more; (ii) it has
issued more than $1 billion in non-convertible debt in the past three years; or (iii) it becomes a “large accelerated filer”.
We qualify as an “emerging growth company” pursuant to the JOBS Act. An emerging growth company may take advantage of specified
reduced reporting and other requirements that are otherwise applicable generally to public companies. These provisions include exemption
from the auditor attestation requirement under Section 404 of the Sarbanes-Oxley Act of 2002 in the assessment of the emerging growth
company’s internal control over financial reporting and permission to delay adopting new or revised accounting standards until
such time as those standards apply to private companies.

We expect these rules and regulations to increase
our legal and financial compliance costs and to make some corporate activities more time-consuming and costly. After we are no longer
an “emerging growth company,” we expect to incur significant expenses and devote substantial management effort toward ensuring
compliance with the requirements of Section 404 of the Sarbanes-Oxley Act of 2002 and the other rules and regulations of the SEC. For
example, as a result of becoming a public company, we will need to increase the number of independent directors and adopt policies regarding
internal controls and disclosure controls and procedures. We also expect that operating as a public company