Company: XHG
Filing Date: 2025-01-22
Form Type: 20-F
Source: 0001213900-25-005499
Chunk: 8

Company: XChange TEC.INC
Filing Date: 2025-01-22
Form: 20-F
Item: Item 3
Chunk 8
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Transfers between the VIE and Alpha Mind WFOE

The VIE and its consolidated
subsidiaries are the main operating entities, which receive their revenues in RMB. Alpha Mind WFOE may receive payments from the VIE,
pursuant to the Contractual Arrangements. There may also be transfers via intercompany loans between Alpha Mind WFOE and the VIE.

Transfer between XHG, Alpha Mind HK and Alpha
Mind WFOE

XHG and Alpha Mind HK are
holding companies and may rely on dividends from Alpha Mind WFOE to fund cash and financing requirements. Cash transfers may also be in
the form of capital injection from the holding companies to Alpha Mind WFOE or via intercompany loans between the holding companies and
Alpha Mind WFOE. Under existing PRC foreign exchange regulations, payments of current account items, such as profit distributions and
trade and service-related foreign exchange transactions, can be made in foreign currencies without prior approval from the State Administration
of Foreign Exchange, or SAFE, by complying with certain procedural requirements. Therefore, our PRC subsidiary, Alpha Mind WFOE, is able
to pay dividends in foreign currencies to us without prior approval from SAFE, subject to the condition that the remittance of such dividends
outside of the PRC complies with certain routine procedures under PRC foreign exchange regulations, such as the overseas investment registrations
by shareholders who are PRC residents. Approval from or registration with appropriate government authorities is, however, required where
the RMB is to be converted into foreign currency and remitted out of China to pay capital expenses such as the repayment of loans denominated
in foreign currencies. The PRC government may also at its discretion restrict access in the future to foreign currencies for current account
transactions.

For our Hong Kong subsidiary,
Alpha Mind HK, and the holding company, XChange TEC. INC, or the Non-PRC Entities, there is no restriction on foreign exchange for such
entities and they are able to transfer cash among these entities, across borders and to U. S. investors. Also, there are no restrictions
or limitations on the abilities of the Non-PRC Entities to distribute earnings from the businesses, including the subsidiaries and/or
the consolidated VIE, to XChange TEC. INC or from XChange TEC. INC to U. S. investors, as well as the ability to settle amounts owed under
the Contractual Arrangements. There are also no restrictions or limitations