Company: XHG
Filing Date: 2025-01-22
Form Type: 20-F
Source: 0001213900-25-005499
Chunk: 9

Company: XChange TEC.INC
Filing Date: 2025-01-22
Form: 20-F
Item: Item 3
Chunk 9
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 on the ability of Alpha Mind WFOE to settle amounts owed under
the Contractual Arrangements as both Alpha Mind WFOE and the VIE are incorporated in China and the amount to be settled will be in RMB
without foreign exchange control. For more details, see “ Item 3 Key Information - D. Risk Factors - Risks Related to Doing
Business in China - PRC governmental control of currency conversion may limit our ability to utilize our net revenues effectively
and affect the value of your investment.”

We, XChange TEC. INC, are
a Cayman Islands holding company, and we may rely principally on dividends and other distributions on equity paid by our subsidiaries
for cash and financing requirements we may have, including the funds necessary to pay dividends and other cash distributions to our shareholders
and service any debt we may incur. If any of our subsidiaries incur debt on their own behalf in the future, the instruments governing
the debt may restrict their ability to pay dividends or make other distributions to us. As we conduct our operations in China primarily
through our subsidiaries, the VIE and its subsidiaries, our ability to pay dividends to the shareholders and to service any debt we may
incur may depend upon dividends paid by our subsidiaries and license and service fees paid by the VIE. Current PRC regulations permit
Alpha Mind WFOE to pay dividends to the Company only out of its accumulated profits, if any, determined in accordance with Chinese accounting
standards and regulations. Remittance of dividends by a wholly foreign-owned enterprise out of China is also subject to examination by
the banks designated by SAFE. In addition, our subsidiaries, the VIE and its subsidiaries in China are required to set aside at least
10% of their after-tax profits each year, if any, to fund a statutory reserve until such reserve reaches 50% of its registered capital.
For more details, see “ Item 3 Key Information - D. Risk Factors - Risks Related to Doing Business in China - We may
rely on dividends and other distributions on equity paid by our PRC subsidiaries to fund any cash and financing requirements we may have,
and any limitation on the ability of our PRC subsidiaries to make payments to us could have a material and adverse effect on our ability
to conduct our business.” Each such entity in China is also required to further set aside a portion of its after-tax profits to
fund the employee welfare fund, although the amount to be set aside, if any, is determined at the discretion