Company: XTKG
Filing Date: 2025-04-25
Form Type: 20-F
Source: 0001213900-25-035626
Chunk: 128

Company: X3 Holdings Co., Ltd.
Filing Date: 2025-04-25
Form: 20-F
Item: Item 5
Chunk 128
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3.

General and administrative
expenses primarily consisted of salary and compensation expenses relating to our accounting, human resources and executive office personnel,
and included rental expenses, depreciation and amortization expenses, office overhead, professional service fees and travel and transportation
costs. General and administrative expenses increased by approximately $4.4 million or 56.9% from approximately $7.7 million for the year
ended December 31, 2022 to approximately $12.1 million for the year ended December 31, 2023, due to higher depreciation and amortization
and professional consulting fee. As a percentage of revenues, general and administrative expenses were 72.1% and 73.8% of our total revenue
for the years ended December 31, 2023 and 2022, respectively.

Provision for credit losses
decreased by approximately $4.2 million from approximately $4.7 million for the year ended December 31, 2022 to approximately $0.5 million
for the year ended December 31, 2023

R& D expenses primarily
consisted of compensation and benefit expenses relating to our R& D personnel as well as office overhead and other expenses relating
to our R& D activities. Our R& D expenses increased by approximately $1.4 million from approximately $3.5 million for the year ended
December 31, 2022 to approximately $4.8 million for the year ended December 31, 2023, representing 28.6% and 33.0% of our total revenues
for the years ended December 31, 2023 and 2022, 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 increased
by approximately $0.1 million from approximately $6.0 million for the year ended December 31, 2022 to approximately $6.1 million for the
year ended December 31, 2023.

For the year ended December
31, 2023, due to slow development of Smartconn, the Company evaluated the recoverability of long-lived assets by comparing the carrying
amount of the assets to the future undiscounted cash flows expected to result from the use of the assets and their eventual disposition
and determined that the fair value of intangible assets of Smartconn was less than carrying value. Therefore, the Company