Company: XTKG
Filing Date: 2025-04-25
Form Type: 20-F
Source: 0001213900-25-035626
Chunk: 227

Company: X3 Holdings Co., Ltd.
Filing Date: 2025-04-25
Form: 20-F
Item: Item 19
Chunk 227
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 to the application. The capitalized development cost is amortized on a straight-line
basis over the estimated useful life, which is generally five years. Management evaluates the useful lives of these assets on an annual
basis and tests for impairment whenever events or changes in circumstances occur that could impact the recoverability of these assets.

                                           Useful Life  
  Capitalized development costs            5 years      
  Purchased software                       5 years      
  Software from business combinations      10 years     

F-12

X3 HOLDINGS CO., LTD.

Note 2 - Summary of significant accounting
policies(continued)

Impairment for long-lived assets other than
goodwill

Long-lived assets, including
property, equipment, furniture and fixtures and intangible assets with finite lives are reviewed for impairment whenever events or changes
in circumstances indicate that the carrying value of an asset may not be recoverable. When these events occur, the Group measures impairment
by comparing the carrying values of the long-lived assets to the estimated undiscounted future cash flows expected to result from the
use of the assets and their eventual disposition. If the sum of the expected undiscounted cash flows is less than the carrying amounts
of the assets, the Group would recognize an impairment loss based on the excess of the carrying value over the assessed discounted cash
flow amount. For the year ended December 31, 2024, due to slow development of Smartconn and Boxinrui, the Group evaluated the recoverability
of long-lived assets by comparing the carrying amount of the assets to the future undiscounted cash flows expected to result from the
use of the assets and their eventual disposition and determined that the fair value of intangible assets of Smartconn and Boxinrui was
less than carrying value. Therefore, the Group impaired the intangible assets acquired from the acquisition of Smartconn and Boxinrui
of $12,705,933and $14,083,736for the year ended December 31, 2024. For the year ended December 31, 2023, due to slow development of
Smartconn, the Group evaluated the recoverability of long-lived assets by comparing the carrying amount of the assets to the future undiscounted
cash flows expected to result from the use of the assets and their eventual disposition and determined that the fair value of intangible
assets of Smartconn was less than carrying value. Therefore, the Group impaired the intangible assets acquired from the acquisition of
Smartconn of $2,272