Company: XHG
Filing Date: 2025-01-22
Form Type: 20-F
Source: 0001213900-25-005499
Chunk: 16

Company: XChange TEC.INC
Filing Date: 2025-01-22
Form: 20-F
Item: Item 3
Chunk 16
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 and were unable to perform our payment obligations
under the terms of the Notes before the maturity date, the holders of the Notes may exercise their collateral rights. We will lose control
of and no longer be able to consolidate Alpha Mind and our business, financial condition, results of operations and prospects will be
adversely affected.

This significant indebtedness in connection with
the Notes or financing of the Notes could have important consequences for our business and operations including, but not limited to:

  limiting or impairing our ability to obtain financing,                                                                            

  restricting or impeding our ability to access capital                      

  requiring us to dedicate a substantial portion of our                                                                                  

  placing us at a competitive disadvantage compared to                                

  increasing our vulnerability to downturns in general   

The report of our independent registered public accounting firm
on our consolidated financial statements includes an explanatory paragraph questioning our ability to continue as a going concern. We
recorded net losses in the past and may not be able to continue as a going concern or achieve or maintain profitability in the future.

We generated a net income of RMB820.0 million
in FY 2022, a net loss of RMB71.3 million (US$9.8 million) in FY 2023 and a net loss of RMB226.8 million (US$32.3 million). As of September
30, 2024, we had an accumulated deficit of RMB3,856.8 million (US$549.6 million). Our net cash used in operating activities from continuing
operations were RMB 7.1 million, RMB 22.2million and RMB 9.0 million for FY 2022, FY 2023 and FY2024, respectively. As
of September 30, 2023 and 2024, our current liabilities exceeded current assets by RMB 643.4 million and RMB 1,271.2 million, respectively.
We disposed of our long-term rental apartment rental business in October 2023 and we had no revenues from Continuing Operations for the
years ended September 30, 2022 and 2023, respectively.

On December 28, 2023, we completed the acquisition
of 100% equity interest in Alpha Mind for a consideration of US$180,000,000. The purchase price is payable in the form of the Notes. The
Notes, with an outstanding principal amount of USD$152.14 million as of September 30,