Company: XHG
Filing Date: 2025-01-22
Form Type: 20-F
Source: 0001213900-25-005499
Chunk: 124

Company: XChange TEC.INC
Filing Date: 2025-01-22
Form: 20-F
Item: Item 5
Chunk 124
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 The reserve fund requires annual appropriation
of 10% of after tax profit (as determined under accounting principles generally accepted in the PRC at each year-end) after offsetting
accumulated losses from prior years, until such reserve reaches 50% of the subsidiary’s registered capital. The reserve fund can
only be used to increase the registered capital and eliminate further losses of the respective companies under PRC regulations. These
reserves are not distributable as cash dividends, loans or advances. In addition, due to restrictions under PRC laws and regulations,
our PRC subsidiaries and other consolidated entities are restricted in their ability to transfer their net assets to us in the form of
dividend payments, loans or advances. Amounts restricted including paid-in capital and statutory reserve funds as determined pursuant
to PRC Laws were nil and nil as of September 30, 2023 and 2024, respectively.

Furthermore, under regulations of the SAFE, the
RMB is not convertible into foreign currencies for capital account items, such as loans, repatriation of investments and investments outside
of China, unless the prior approval of the SAFE is obtained and prior registration with the SAFE is made.

  Research and Development, Patents, and Licenses, etc.  
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See “ Item 4. Information on the Company - B.
Business Overview - Our SaaS Platform” and “ Item 4. Information on the Company - B. Business Overview - Intellectual
Property.”

  Trend Information  
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Other than as disclosed elsewhere in this annual
report, we are not aware of any trends, uncertainties, demands, commitments or events for FY 2024 that are reasonably likely to have a
material and adverse effect on our net revenues, income, profitability, liquidity or capital resources, or that would cause the disclosed
financial information to be not necessarily indicative of future results of operations or financial conditions.

  Critical Accounting Estimates  
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We prepare our consolidated financial statements
in accordance with U. S. GAAP. The preparation of financial statements in conformity with U. S. GAAP requires management to make judgments,
estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and reported
amounts of revenues and expenses during the reporting period. We continually evaluate these judgments and estimates based on our own experience,
knowledge and assessment of current business and other conditions.

Our expectations regarding the future are based
on