Company: XHG
Filing Date: 2025-10-29
Form Type: F-3/A
Source: 0001213900-25-103499
Chunk: 25

Company: XChange TEC.INC
Filing Date: 2025-10-29
Form: F-3/A
Chunk 25
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 we will be able to comply with these laws and regulations in all respects. The regulatory
authorities may deem our activities or services non-compliant and therefore require us to suspend or terminate our business. We may also
be subject to fines, legal or administrative sanctions and other adverse consequences, and may not be able to become in compliance with
relevant laws and regulations in a timely manner, or at all. These may materially and adversely affect our business, financial condition,
results of operations and reputation.

Our Holding Company Structure and Contractual Arrangement with the VIEs and Their Shareholders

XChange TEC.INC is not a Chinese operating
company but a Cayman Islands holding company. Our operations are primarily conducted through our PRC subsidiaries, other consolidated
entities, and contractual arrangements with VIEs. We use a VIE structure to provide investors exposure to China-based operating companies
where direct foreign investment is, or could become, restricted or prohibited by PRC law. Investors in our ADSs thus are purchasing equity
interest in a Cayman Islands holding company and not in our Chinese operating entity. As a holding company, XChange TEC.INC may rely
on dividends from its subsidiaries for cash requirements, including any payment of dividends to our shareholders. The ability of our
subsidiaries to pay dividends to XChange TEC.INC may be restricted by laws and regulations applicable to them or the debt they incur
on their own behalf or the instruments governing their debt.

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XChange TEC.INC conducts insurance agency businesses
in the PRC through Alpha Mind and its indirectly wholly-owned subsidiary, the WFOE and the VIEs. In April 2022, Alpha Mind, through the
WFOE, entered into contractual arrangements with VIEs, respectively. Via such contractual arrangements (the “VIE Structure”),
we are regarded as the primary beneficiary of the VIEs and consolidate the financial results of the VIEs under U.S. GAAP. The contractual
arrangements consist of powers of attorney, exclusive business cooperation agreements, exclusive option agreements, equity pledge agreements
and spousal consent letters. Terms contained in each set of contractual arrangements with each of the VIEs and its respective shareholders
are substantially similar. In particular, (i) pledge agreements, entered into between the WFOE and each of the VIEs and its shareholders,
where each shareholder of the VIEs pledged his or her equity interest to the