Company: XTKG
Filing Date: 2025-04-25
Form Type: 20-F
Source: 0001213900-25-035626
Chunk: 132

Company: X3 Holdings Co., Ltd.
Filing Date: 2025-04-25
Form: 20-F
Item: Item 5
Chunk 132
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 the U. S. dollar may affect our financial results reported in the U. S. dollar terms without
giving effect to any underlying change in our business or results of operation. The exchange rates in effect are shown below:

  At the end of the period - USD: RMB         $1=RMB7.2993      $1=RMB7.0999      $1=RMB6.8972  
  Average rate for the period - USD: RMB      $1=RMB7.1957      $1=RMB7.0809      $1=RMB6.7290  
 ────────────────────────────────────────────────────────────────────────────────────────────────
  U. S. Dollar Exchange Rate                  December 31,      December 31,      December 31,  

B. Liquidity and Capital Resources

Substantially all of our operations
are conducted in China and all of our revenue, expenses, and cash are denominated in RMB. RMB is subject to the exchange control regulation
in China, and, as a result, we may have difficulty distributing any dividends outside of China due to PRC exchange control regulations
that restrict our ability to convert RMB into U. S. dollars. As of December 31, 2024, cash of approximately $4.2 million were fully held
by the Company and its subsidiary in mainland PRC.

The Cayman holding company
is a holding company with no material operations of its own. We conduct our operations primarily through our subsidiary in China. As a
result, the Company’s ability to pay dividends depends upon dividends paid by our subsidiary. Our subsidiaries in China are permitted
to pay dividends to us only out of its retained earnings, if any, as determined in accordance with PRC accounting standards and regulations.
Under PRC law, our subsidiary is required to set aside at least 10% of its after-tax profits each year based on PRC accounting standards,
if any, to fund certain statutory reserve funds until such reserve funds reach 50% of its registered capital. The statutory reserve funds
are not distributable as cash dividends. Remittance of dividends by our subsidiary out of China is subject to examination by the banks
designated by SAFE. Our subsidiary has not paid dividends and will not be able to pay dividends until it generates accumulated profits
and meets the requirements for statutory reserve funds. In addition, we would need to accrue and pay withholding taxes if we were to distribute
funds from our