Company: XHG
Filing Date: 2025-01-22
Form Type: 20-F
Source: 0001213900-25-005499
Chunk: 158

Company: XChange TEC.INC
Filing Date: 2025-01-22
Form: 20-F
Item: Item 10
Chunk 158
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for the Class A ordinary shares or ADSs) and gain that the U. S. Holder recognizes on the sale of our ordinary shares or ADSs. Under these
rules (a) the excess distribution or gain will be allocated ratably over the U. S. Holder’s holding period, (b) the amount allocated
to the current taxable year and any taxable year prior to the first taxable year in which we are a PFIC will be taxed as ordinary income,
and (c) the amount allocated to each of the other taxable years will be subject to tax at the highest rate of tax in effect for the applicable
class of taxpayer for that year, and an interest charge for the deemed deferral benefit will be imposed with respect to the resulting
tax attributable to each such other taxable year. Classification as a PFIC may also have other adverse tax consequences, including, in
the case of individuals, the denial of a step up in the basis of his or her Class A ordinary shares or ADSs at death.

If we are a PFIC for any taxable year during which
a U. S. Holder holds our ADSs or Class A ordinary shares and any of our non-U. S. subsidiaries is also a PFIC, such U. S. Holder will be
treated as owning a proportionate amount (by value) of the shares of the lower-tier PFIC for purposes of the application of the PFIC rules.
U. S. Holders should consult their own tax advisors about the possible application of the PFIC rules to any of our subsidiaries.

A U. S. Holder may be subject to alternative treatment
by electing to mark its ADSs to market, provided the ADSs are treated as “marketable stock.” The ADSs generally will be treated
as marketable stock if the ADSs are “regularly traded” on a “qualified exchange or other market” (which includes
the NASDAQ Capital Market). It should also be noted that the Class A ordinary shares are not listed on the NASDAQ Capital Market. Consequently,
a U. S. Holder that holds Class A ordinary shares that are not represented by ADSs may not be eligible to make a mark-to-market election.
If the U. S. Holder makes a mark-to-market election, (i) the U. S. Holder will be required in any year in which we are a PFIC to include
as ordinary income the excess of the fair market value of its ADSs at the end of the U. S