Company: XHG
Filing Date: 2025-01-22
Form Type: 20-F
Source: 0001213900-25-005499
Chunk: 39

Company: XChange TEC.INC
Filing Date: 2025-01-22
Form: 20-F
Item: Item 3
Chunk 39
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 perform their respective obligations under their contractual arrangements with Current WFOE, we and the PRC subsidiaries may incur
substantial costs and expend additional resources to enforce such arrangements. We and the PRC subsidiaries may also have to rely on
legal remedies under PRC law, including seeking specific performance or injunctive relief, and claiming damages. Such remedies may not
be effective.

Current WFOE’s contractual arrangements
with the Current VIEs and its shareholders are governed by PRC laws and provide for the resolution of disputes through arbitrations in
the PRC. Accordingly, these contractual arrangements would be interpreted in accordance with PRC laws, and any disputes arising from
these contractual arrangements would be resolved in accordance with PRC legal procedures.

Uncertainties in the PRC legal system could limit
the abilities of us and the PRC subsidiaries to enforce these contractual arrangements. In the event that we and the PRC subsidiaries
cannot enforce the contractual arrangements with respect to the Current VIEs, or suffer significant delays or other obstacles in enforcing
these contractual arrangements, the ability of us and PRC subsidiaries to conduct our business, and our financial condition and results
of operations may be materially adversely affected. See “ - Risks Related to Doing Business in China - Uncertainties in
the interpretation and enforcement of PRC laws, rules and regulations could materially adversely affect our business.”

The Current VIEs’ shareholders may have potential conflicts
of interest with us, the PRC subsidiaries, which may materially adversely affect our business and financial condition.

The interests of the Current VIEs’ shareholders
may differ from the interests of us, the PRC subsidiaries and the Current VIEs. When conflicts of interest arise, any or all of these
individuals may not act in the best interests of us, the PRC subsidiaries, and any conflicts of interest may not resolve in the favor
of us, the PRC subsidiaries. In addition, these individuals may breach or cause the Current VIEs and the PRC subsidiaries to breach or
refuse to renew existing contractual arrangements with Current WFOE.

None of us, the PRC subsidiaries has arrangements
to address potential conflicts of interest between these shareholders and any of themselves. We, the PRC subsidiaries rely on these shareholders
to abide by the laws of the Cayman Islands and China. These laws provide that directors owe a fiduciary duty to the us to act in good
faith and in our best interests and not to use their respective positions for personal