Company: XTKG
Filing Date: 2025-04-25
Form Type: 20-F
Source: 0001213900-25-035626
Chunk: 239

Company: X3 Holdings Co., Ltd.
Filing Date: 2025-04-25
Form: 20-F
Item: Item 19
Chunk 239
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 not necessarily agree with changes in
the corresponding balances on the balance sheets.

Commitments and Contingencies

In the normal course of business,
the Group is subject to contingencies, including legal proceedings and claims arising out of the business that relate to a wide range
of matters, such as government investigations and tax matters. The Group recognizes a liability for such contingency if it determines
it is probable that a loss has occurred and a reasonable estimate of the loss can be made. The Group may consider many factors in making
these assessments including historical and the specific facts and circumstances of each matter.

Segment reporting

The Group’s chief
operating decision maker (“ CODM”) has been identified as its CEO, who reviews the consolidated results when making decisions
about allocating resources and assessing performance of the Group as a whole and hence, the Group has only one reportable segment. The
Group does not distinguish between markets or segments for the purpose of internal reporting. The Group’s long-lived assets are
substantially all located in the PRC and all of the Group’s revenues are derived from the PRC. Therefore, no geographical segments
are presented.

F-20

X3 HOLDINGS CO., LTD.

Note 2 - Summary of significant accounting
policies(continued)

Concentrations of Risks

  (a)      Concentration of credit risk  

Assets that potentially subject
the Group to significant concentration of credit risk primarily consist of cash, restricted cash, accounts receivable and other current
assets. The maximum exposure of such assets to credit risk is their carrying amounts as at the balance sheet dates. As of December 31,
2024 and 2023, the aggregate amount of cash, cash equivalents and restricted cash of $4,209,535and $4,056,150, respectively, were held
at major financial institutions in PRC mainland, which the management believes are of high credit quality. On May 1, 2015, China’s
new Deposit Insurance Regulation came into effect, pursuant to which banking financial institutions, such as commercial banks, established
in China are required to purchase deposit insurance for deposits in RMB and in foreign currency placed with them. Such Deposit Insurance
Regulation would not be effective in providing complete protection for the Group’s accounts, as its aggregate deposits are much
higher than the compensation limit. However, the Group believes that the risk of failure of any of these Chinese banks is remote. Bank
failure is uncommon in China and the Group believes that those Chinese banks