Company: XTKG
Filing Date: 2025-04-25
Form Type: 20-F
Source: 0001213900-25-035626
Chunk: 8

Company: X3 Holdings Co., Ltd.
Filing Date: 2025-04-25
Form: 20-F
Item: Item 3
Chunk 8
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ivable balance, net of allowance, amounted to approximately $17.3 million, $21.5 million and $14.8 million, respectively.
As of December 31, 2024, two customers accounted for 15.6% and 10.3% of the Company’s accounts receivable, respectively. As of December
31, 2023, one customer accounted for 15.9% of the Company’s accounts receivable. As of December 31, 2022, no customer accounted
for more than 10% of our accounts receivable. The significant outstanding accounts receivable balance was mainly related to certain projects
for our government customers such as government agencies, authorities and state-owned enterprises. Due to multiple levels of the government
approval process for payments, it could take extra time for us to collect the full proceeds from our governmental customers. In addition,
since we generally do not require collateral or other security from our customers, we establish an allowance for credit losses based upon
estimates, historical experiences and other factors surrounding the credit risk of specific customers. However, actual losses on customer
receivables balance could differ from those that we anticipate and as a result we might need to adjust our allowance. There is no guarantee
that we will accurately assess the creditworthiness of our customers. Macroeconomic conditions, including related turmoil in the global
financial system, could also result in financial difficulties for our customers, including limited access to the credit markets, insolvency
or bankruptcy, and as a result could cause customers to delay payments to us, request modifications to their payment arrangements that
could increase our receivables balance, or default on their payment obligations to us. As a result, an extended delay or default in payment
relating to a significant account will have a material and adverse effect on the aging schedule and turnover days of our accounts receivable.
If we are unable to collect our receivables from our customers in accordance with the contracts with our customers, our results of operations
and cash flows could be adversely affected.

We face a number of risks in our strategy
to target larger organizations for sales of our services, and if we do not manage these efforts effectively, our business and results
of operations could be adversely affected.

A portion of our sales and
marketing efforts are focusing on larger corporate and governmental organizations. As a result, we face a number of risks with respect
to this strategy. For example, we expect to incur higher costs and longer sales cycles for larger organizations,