Company: XTKG
Filing Date: 2025-04-25
Form Type: 20-F
Source: 0001213900-25-035626
Chunk: 38

Company: X3 Holdings Co., Ltd.
Filing Date: 2025-04-25
Form: 20-F
Item: Item 3
Chunk 38
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We do not maintain any business liability
disruption or litigation insurance coverage for our operations, and any business liability, disruption or litigation we experience might
result in our incurring substantial costs and the diversion of resources.

While business disruption
insurance is available to a limited extent in China, we have determined that the risks of disruption, cost of such insurance and the difficulties
associated with acquiring such insurance on commercially reasonable terms make it impractical for us to have such insurance. As a result,
we do not have any business liability, disruption or litigation insurance coverage for our operations of advertising and media business
in China. Any business disruption or litigation may result in incurring substantial costs and the diversion of our resources.

Any negative publicity with respect to us
in general or our partners may materially and adversely affect our reputation, business and results of operations.

Complaints, litigation, regulatory
actions or other negative publicity that arise from the advertising industry in general or our Company in particular, including on the
quality, effectiveness and reliability of privacy and security practices, and advertising content, even if inaccurate, could adversely
affect our reputation and client confidence in, and the use of our solutions. Harm to our reputation and client confidence can also arise
for many other reasons, including employee misconduct, misconduct of our data and content distribution channel partners, data center providers
or other counterparties, failure by these persons or entities to meet minimum quality standards or otherwise fulfill their contractual
obligations or to comply with applicable laws and regulations. Additionally, negative publicity with respect to our data or content distribution
channel partners could also affect our business and results of operation to the extent that we rely on these partners or if marketers
or marketing agencies associate our Company with such partners.

If we fail to promote or maintain our brand
in a cost-efficient manner, our business and results of operations may be harmed.

We believe that developing
and maintaining awareness of our brand in a cost-effective manner is critical to achieving widespread acceptance of our platforms, and
is an important element in attracting new clients and partners. Furthermore, we believe that the importance of brand recognition will
increase as competition in our market increases. Successful promotion of our brand will depend largely on our ability to deliver value
propositions to marketers and on the effectiveness of our marketing efforts. If we fail to successfully promote and maintain our brand,
or incur substantial expenses in an unsuccessful attempt to promote and maintain our brand, we may fail to attract enough new clients
or retain our existing clients, thus our business and results