Company: XTKG
Filing Date: 2025-04-25
Form Type: 20-F
Source: 0001213900-25-035626
Chunk: 137

Company: X3 Holdings Co., Ltd.
Filing Date: 2025-04-25
Form: 20-F
Item: Item 5
Chunk 137
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Other than as disclosed elsewhere
in this annual report, we are not aware of any trends, uncertainties, demands, commitments or events for the year ended December 31, 2024
that are reasonably likely to have a material and adverse effect on our net revenues, income, profitability, liquidity or capital resources,
or that would cause the disclosed financial information to be not necessarily indicative of future results of operations or financial
condition.

E. Critical Accounting Estimates

We prepare our consolidated
financial statements in conformity with U. S. GAAP, which requires us to make judgments, estimates and assumptions that affect our reported
amount of assets, liabilities, revenue, costs and expenses, and any related disclosures. Although there were no material changes made
to the accounting estimates and assumptions in the past two years, we continually evaluate these estimates and assumptions based on the
most recently available information, our own historical experience and various other assumptions that we believe to be reasonable under
the circumstances. Since the use of estimates is an integral component of the financial reporting process, actual results could differ
from our expectations as a result of changes in our estimates.

We believe that the following
accounting policies involve a higher degree of judgment and complexity in their application and require us to make significant accounting
estimates. Accordingly, these are the policies we believe are the most critical to understanding and evaluating our consolidated financial
condition and results of operations.

Use of estimates

The preparation of consolidated
financial statements in conformity with U. S. GAAP requires management to make estimates and assumptions that affect the reported amounts
of assets and liabilities and disclosures of contingent assets and liabilities as of the date of the consolidated financial statements
and the reported amounts of revenues and expenses during the periods presented. Significant accounting estimates reflected in our consolidated
financial statements include but not limited to the useful lives of property and equipment and intangible assets, impairment of long-lived
assets, impairment of goodwill, valuation of accounts receivables, revenue recognition and realization of deferred tax assets and uncertain
tax positions. Actual results could differ from these estimates.

Fair value measurement

ASC 825-10 requires certain
disclosures regarding the fair value of financial instruments. Fair value is defined as the price that would be received to sell an asset
or paid to transfer a liability in an orderly transaction between market participants at the measurement date. A three-level fair value
hierarchy prioritizes the inputs used to measure fair value. The hierarchy requires entities to maximize the use of observable inputs
and minimize the use of unobservable