Company: XHG
Filing Date: 2025-01-22
Form Type: 20-F
Source: 0001213900-25-005499
Chunk: 109

Company: XChange TEC.INC
Filing Date: 2025-01-22
Form: 20-F
Item: Item 4
Chunk 109
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 2000 and September 3, 2016,
respectively, and (iii) the Implementation Rules of the Foreign-invested Enterprise Law approved by the State Council on October 28, 1990,
and as amended on April 12, 2001, and February 19, 2014, respectively.

Under these laws and regulations, foreign-invested
enterprises in China may pay dividends only out of their accumulated profits, if any, determined in accordance with PRC accounting standards
and regulations. In addition, foreign-invested enterprises in China are required to allocate at least 10% of their respective accumulated
profits each year, if any, to fund certain reserve funds unless these reserves have reached 50% of the registered capital of the enterprises.
These reserves are not distributable as cash dividends. A foreign-invested enterprise has the discretion to allocate a portion of its
after tax profits to staff welfare and bonus funds. A Chinese company (including the foreign-invested enterprise) is not permitted to
distribute any profits until any losses from prior fiscal years have been offset. Profits retained from prior fiscal years may be distributed
together with distributable profits from the current fiscal year.

Regulations Relating to Merger and Acquisition and Overseas
Listing

On August 8, 2006, six PRC regulatory agencies,
namely the MOFCOM, the State Assets Supervision and Administration Commission, the State Administration of Taxation, the State Administration
of Industry and Commerce, or the SAIC, the China Securities Regulatory Commission, or the CSRC, and the SAFE, jointly adopted the Regulations
on Mergers and Acquisitions of Domestic Enterprises by Foreign Investors, or the New M& A Rule, which became effective on September
8, 2006. This New M& A Rule, as amended on June 22, 2009, purports, among other things, to require offshore special purpose vehicles,
or SPVs, formed for overseas listing purposes through acquisitions of PRC domestic companies and controlled by PRC companies or individuals,
to obtain the approval of the CSRC prior to publicly listing their securities on an overseas stock exchange. On September 21, 2006, the
CSRC published a notice on its official website specifying documents and materials required to be submitted to it by SPVs seeking CSRC
approval of their overseas listings.

The New M& A Rule also established additional
procedures and requirements that could make merger and acquisition activities