Company: XTKG
Filing Date: 2025-04-25
Form Type: 20-F
Source: 0001213900-25-035626
Chunk: 120

Company: X3 Holdings Co., Ltd.
Filing Date: 2025-04-25
Form: 20-F
Item: Item 5
Chunk 120
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 approximately $4.1 million for the year ended December 31, 2024, representing 35.0% and 28.6% of our total revenues
for the years ended December 31, 2024 and 2023, respectively. We expect to continue to invest in R& D. We expect that our ability to
effectively utilize our R& D capabilities significantly affect our results of operations in the future.

Stock-based compensation decreased
by approximately $0.2 million from approximately $6.1 million for the year ended December 31, 2023 to approximately $5.8 million for the
year ended December 31, 2024.

Impairment charges increased
by approximately $32.5 million from approximately $32.0 million for the year ended December 31, 2023 to approximately $64.5 million for
the year ended December 31, 2024. We evaluated the recoverability of non-current assets by engaging an independent valuation firm to perform
the valuation and determined that certain assets’ fair value is less than the carrying amount.

Other Expense

Loss on debt extinguishment

Loss on debt extinguishment
derived from extinguishment of debt in accordance with ASC 470, the difference between the fair value of convertible notes immediately
after the modification and the carrying value of convertible notes immediately before the modification was recognized as a loss of debt
extinguishment in the amount of approximately $0.5 million and nil for the years ended December 31, 2024 and 2023, respectively.

Change in fair value of convertible notes

The Company elected the fair
value option to account for its convertible notes. For the year ended December 31, 2024 and 2023, we recognized an unrealized gain of
approximately $1.0 million and an unrealized loss of approximately $0.02 million, respectively.

Gain from fair value change in equity investments

Gain from fair value change
in equity investments derived from two step acquisitions. On January 5, 2023, the Company completed acquisition of 50.99% equity interest
in Smartconn, consisting of an acquisition of 31% equity interest of Smartconn acquired from the previous shareholder and an investment
of 19.99% equity interest in Smartconn which the Group has already held prior to January 5, 2023. The company recognized a loss of approximately
$0.3 million in fair value change for the previous 19.99% equity