Company: XTKG
Filing Date: 2025-04-25
Form Type: 20-F
Source: 0001213900-25-035626
Chunk: 243

Company: X3 Holdings Co., Ltd.
Filing Date: 2025-04-25
Form: 20-F
Item: Item 19
Chunk 243
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mentioned
pronouncements, there are no new recent issued accounting standards that will have a material impact on the consolidated financial position,
statements of operations and cash flows.

F-22

X3 HOLDINGS CO., LTD.

Note 3 - Acquisition

The Group accounted the following
acquisitions as business combinations in accordance with ASC 805. Acquisition-related costs incurred for the acquisitions are not material.

Smartconn Acquisition

On January 5, 2023, the Group
completed an equity acquisition with a shareholder of Smartconn. Prior to the acquisition, the Group held19.99% in Smartconn. The
Group further purchased31% equity of Smartconn at90% of the appraisal price. The consideration of the acquisition was paid in the form
of23,937(post-reverse stock split adjusted to3,989) newly issued Class A ordinary shares of the Group with fair value of $12,640,062.
Also, there was $173,243due from Smartconn was effective settled because of the acquisition and became part of consideration. Together
with the newly acquired shares, the Group holds in total50.99% in Smartconn. The consolidated operating results of Smartconn for
the years ended December 31, 2022 were not significant to the Group.

The objective of the acquisition
is to support the Group’s software application and technology service. The acquisition was closed on January 5, 2023.

The following table summarizes
the fair value of the identifiable assets acquired and liabilities assumed at the acquisition date, which represents the net purchase
price allocation at the date of the acquisition based on a valuation report performed by an independent valuation firm engaged by the
Group. The valuation report considered generally accepted valuation methodologies such as the income, market and cost approaches. The
fair value of the non-controlling interest was calculated after determination of an overall enterprise value for Smartconn under the market
approach. Upon the acquisition, the Group recognized a loss of approximately $
0.3
million in fair value change for the previous
19.99
%
equity interests in
Smartconn.

                                                     Amount                    
  Total consideration for step acquisition           $             12,813,305  
  Assets acquired and liabilities assumed:                                     
  Cash acquired                                                        49,496  
  Property and equipment, net                                             305  
  Intangible assets, net                                           19,226,106  
  Current liabilities                                                ( 83,496  
  Total net assets acquired                                        19,192,411