Company: XTKG
Filing Date: 2025-04-25
Form Type: 20-F
Source: 0001213900-25-035626
Chunk: 67

Company: X3 Holdings Co., Ltd.
Filing Date: 2025-04-25
Form: 20-F
Item: Item 3
Chunk 67
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 loans to our PRC subsidiary
and controlled PRC affiliate, or we may make additional capital contributions to our PRC subsidiary. Any loans to our PRC subsidiary or
controlled PRC affiliate are subject to PRC regulations and approvals. For example, loans by us to our PRC subsidiary in China, each of
which is a foreign-invested enterprise, to finance their activities cannot exceed the statutory limits and must be registered with SAFE
or its local counterpart.

We may also decide to finance
our PRC subsidiary through capital contributions. These capital contributions must be approved by the Ministry of Commerce in China or
its local counterpart. We cannot assure you that we will be able to obtain these government registrations or approvals on a timely basis,
if at all, with respect to future loans by us to our PRC subsidiary or controlled PRC affiliate or capital contributions by us to our
subsidiaries or any of their respective subsidiaries. If we fail to receive such registrations or approvals, our ability to use the proceeds
of the IPO and to capitalize our PRC operations may be negatively affected, which could adversely and materially affect our liquidity
and our ability to fund and expand our business.

In 2015, SAFE promulgated
Circular 19, a notice regulating the conversion by a foreign-invested enterprise of foreign currency into Renminbi by restricting how
the converted Renminbi may be used. Circular 19 requires that Renminbi converted from the foreign currency-denominated capital of a foreign-invested
enterprise may only be used for purposes within the business scope approved by the applicable governmental authority and may not be used
for equity investments within the PRC unless specifically provided for otherwise in its business scope. In addition, SAFE strengthened
its oversight of the flow and use of Renminbi funds converted from the foreign currency-denominated capital of a foreign-invested enterprise.
The use of such Renminbi may not be changed without approval from SAFE and may not be used to repay Renminbi loans if the proceeds of
such loans have not yet been used for purposes within the foreign-invested enterprise’s approved business scope.

We cannot assure you that
we will be able to complete the necessary government registrations or obtain the necessary government approvals on a timely basis, if
at all, with respect to future loans by us to our PRC subsidiary or controlled PRC affiliate or with respect to future capital contributions
by us to our PRC subsidiary. If we fail to complete such registrations or obtain such approvals,