Company: XTKG
Filing Date: 2025-04-25
Form Type: 20-F
Source: 0001213900-25-035626
Chunk: 109

Company: X3 Holdings Co., Ltd.
Filing Date: 2025-04-25
Form: 20-F
Item: Item 4
Chunk 109
---
 Regulations on Mergers and Acquisitions
of Domestic Enterprises by Foreign Investors, or the New M& A Rule, which became effective on September 8, 2006 and was amended on
June 22, 2009. This New M& A Rule, among other things, includes provisions that purport to require that an offshore special purpose
vehicle formed for purposes of overseas listing of equity interests in PRC companies and controlled directly or indirectly by PRC companies
or individuals obtain the approval of CSRC prior to the listing and trading of such special purpose vehicle’s securities on an overseas
stock exchange.

On September 21, 2006, CSRC
published on its official website procedures regarding its approval of overseas listings by special purpose vehicles. The CSRC approval
procedures require the filing of a number of documents with the CSRC and it would take several months to complete the approval process.
The application of this new PRC regulation remains unclear with no consensus currently existing among leading PRC law firms regarding
the scope of the applicability of the CSRC approval requirement.

The corporate structure of
the Group Companies shall not be deemed as “a foreign investor’s merger and acquisition of a domestic enterprise” as
specified in the Article 2 of the New M& A Rule, so the Company is not required to obtain approval from the CSRC for listing and trading
of its shares. However, uncertainties still exist as to how the New M& A Rule will be interpreted and implemented and our opinion stated
above is subject to any new laws, rules and regulations or detailed implementations and interpretations in any form relating to the New
M& A Rule.

Regulations on Offshore Parent Holding Companies’
Direct Investment in and Loans to Their PRC subsidiary

An offshore company may invest
equity in a PRC company, which will become the PRC subsidiary of the offshore holding company after investment. Such equity investment
is subject to a series of laws and regulations generally applicable to any foreign-invested enterprise in China, which include the Wholly
Foreign Owned Enterprise Law, the Sino-foreign Equity Joint Venture Enterprise Law, the Sino-foreign Contractual Joint Venture Enterprise
Law, all as amended from time to time, and their respective implementing rules; the Administrative Provisions on Foreign Exchange in Domestic
Direct Investment by Foreign Investors; and the Notice of the State Administration on Foreign Exchange on Further Improving and Adjusting
Foreign Exchange Administration Policies for Direct Investment. Under the aforesaid laws and regulations