Company: XHG
Filing Date: 2025-01-22
Form Type: 20-F
Source: 0001213900-25-005499
Chunk: 60

Company: XChange TEC.INC
Filing Date: 2025-01-22
Form: 20-F
Item: Item 3
Chunk 60
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s. You may not realize a return on
your investment in the ADSs and you may even lose your entire investment in the ADSs.

Substantial future sales or perceived potential sales of ADSs
in the public market could cause the price of the ADSs to decline.

Sales of the ADSs in the public market, or the
perception that these sales could occur, could cause the market price of the ADSs to decline. As of the date of this annual report, we
had 24,631,068,1046,400 ordinary shares outstanding, consisting of 239,917,892,046,400 Class A ordinary shares represented by 19,993,157
ADSs and 6,392,789,000,000 Class B ordinary shares. All our ADSs are freely transferable without restriction or additional registration
under the Securities Act. The remaining ordinary shares outstanding are subject to volume and other restrictions as applicable under Rules
144 and 701 under the Securities Act. To the extent shares are sold into the market, the market price of the ADSs could decline.

We have granted share-based awards to certain
management, employees and non-employees. In addition, we adopted share incentive plans in 2019 (the “2019 Plan”), 2022 (the
“2022 Plan”) and 2024 (the “2024 Plan”), under which we may have the discretion to grant a range of share-based
awards to eligible participants. We intend to register all Class A ordinary shares that we have issued or that we may issue in connection
with any employee share-based awards. Once we register these ordinary shares, ADSs representing them can be freely sold in the public
market upon issuance, subject to volume limitations applicable to affiliates. If ADSs representing a large number of our ordinary shares
or securities convertible into our ordinary shares are sold in the public market after they become eligible for sale, the sales could
reduce the trading price of the ADSs and impede our ability to raise future capital. In addition, any ordinary shares that we issue under
our share incentive plan would dilute the percentage ownership held by investors who purchase the ADSs.

The voting rights of holders of ADSs are limited by the terms
of the deposit agreement, and you may not be able to exercise your right to direct the voting of the underlying ordinary shares which
are represented by your ADSs.

As a holder of our ADSs, you will not have any
direct right to attend general