{"url_path":"/sec/xch/10-k/2026/item-8","section_key":"item-8","section_title":"Item 8 FINANCIAL INFORMATION","topic":"sec","document":{"doc_type":"20-F","doc_date":"2026-04-27","source_url":"https://www.sec.gov/Archives/edgar/data/1979887/0001193125-26-182198-index.html","accession_number":"0001193125-26-182198","cik":"0001979887","ticker":"XCH","issuer_name":"XCHG Ltd","edgar_url":"https://www.sec.gov/Archives/edgar/data/1979887/0001193125-26-182198-index.html","primary_entity_key":"0001979887","primary_entity_name":"XCHG Ltd"},"word_count":763,"has_tables":true,"body_markdown":"## ITEM 8. FINANCIAL INFORMATION\n\n8.A. Consolidated Statements and Other Financial Information\n\nWe have appended consolidated financial statements filed as part of this annual report.\n\nLegal Proceedings\n\nWe may be involved in disputes and legal or administrative proceedings in the ordinary course of our business from time to time. As of the date of this report, save for the matter set forth below, we are not engaged in any material pending legal or administrative proceedings. However, litigation or any other legal or administrative proceeding, regardless of the outcome, is likely to result in substantial cost and diversion of our resources, including our management’s time and attention.\n\nAs detailed in Notes 8 and 9 to the consolidated financial statements appended to this annual report, on October 28, 2025, X-Charge Technology received a formal notice of arbitration from the China International Economic and Trade Arbitration Commission. The notice states that a claim was filed by Shell Ventures seeking repayment of the outstanding principal and interest totaling RMB16.71 million (equivalent to US$2.33 million), plus default interest accruing at an annual rate of 12% from March 10, 2025, as well as recovery of its legal fees and arbitration costs. The claim also demands joint and several liability from us, our German subsidiary, and our founders, Mr. Ding Rui and Mr. Hou Yifei. In connection with this matter, as of December 31, 2025, the Group had recognized a provision of RMB17.6 million (approximately US$2.5 million) for outstanding principal, accrued interest, and default interest accrued up to the balance sheet date, and had restricted cash of RMB16.9 million (approximately US$2.4 million) due to asset preservation measures on certain bank accounts. As of the date hereof, the arbitration is pending, and no hearing has been scheduled. The Group concluded that the ultimate outcome of this arbitration would not have a material adverse effect on the Group's results of operations, consolidated financial condition, or cash flows.\n\nDividend Policy\n\nWe have not previously declared or paid any cash dividend or dividend in kind. We do not have any present plan to pay any cash dividends on our Class A ordinary shares in the foreseeable future. We currently intend to retain most, if not all, of our available funds and any future earnings to operate and expand our business.\n\nOur board of directors has discretion as to whether to distribute dividends, subject to certain requirements of Cayman Islands law. In addition, our shareholders may by ordinary resolution declare a dividend, but no dividend may exceed the amount recommended by our directors. Under Cayman Islands law, a Cayman Islands company may pay a dividend out of either profit or share premium account,\n\n75\n\n \n\nprovided that in no circumstances may a dividend be paid if this would result in the company being unable to pay its debts as they fall due in the ordinary course of business. Even if our board of directors decides to pay dividends, the form, frequency and amount will depend upon our future operations and earnings, capital requirements and surplus, general financial condition, contractual restrictions and other factors that the board of directors may deem relevant. If we pay any dividends on our Class A ordinary shares, we will pay those dividends which are payable in respect of the Class A ordinary shares underlying the ADSs to the depositary, as the registered holder of such Class A ordinary shares, and the depositary then will pay such amounts to the ADS holders who will receive payment to the same extent as holders of our Class A ordinary shares underlying the ADSs held by such ADS holders, subject to the terms of the deposit agreement, including net of the fees and expenses payable thereunder.\n\nWe are a company incorporated in the Cayman Islands. For our cash requirements, including any payment of dividends to our shareholders, we rely upon payments from our operating entities. We rely on a combination of dividend payments from our subsidiaries in markets we operate. Regulations in local jurisdictions where we utilize dividend payments may restrict the ability of our subsidiaries to pay dividends to us.\n\nSee “Item 4. Information on the Company—4.B. Business Overview—Regulation—PRC—Regulations Relating to Foreign Exchange and Dividend Distribution—Regulations on Dividend Distributions,” and “Item 3. Key Information—3.D. Risk Factors—Risks Related to the ADSs—Because we do not expect to pay dividends in the foreseeable future, you must rely on a price appreciation of the ADSs for a return on your investment.”\n\n8.B. Significant Changes\n\nExcept as otherwise disclosed in this annual report, we have not experienced any significant changes since the date of the annual financial statements included herein."}