Company: XTKG
Filing Date: 2025-04-25
Form Type: 20-F
Source: 0001213900-25-035626
Chunk: 71

Company: X3 Holdings Co., Ltd.
Filing Date: 2025-04-25
Form: 20-F
Item: Item 3
Chunk 71
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and we may be required to expend valuable resources to comply with Bulletin 37, or to establish that we should not be taxed under Circular
7 and Bulletin 37.

In addition to the uncertainty
in how the new resident enterprise classification could apply, it is also possible that the rules may change in the future, possibly with
retroactive effect. If we are required under the Enterprise Income Tax law to withhold PRC income tax on our dividends payable to our
foreign shareholders, or if you are required to pay PRC income tax on the transfer of our shares under the circumstances mentioned above,
the value of your investment in our shares may be materially and adversely affected. These rates may be reduced by an applicable tax treaty,
but it is unclear whether, if we are considered a PRC resident enterprise, holders of our shares would be able to claim the benefit of
income tax treaties or agreements entered into between China and other countries or areas. Any such tax may reduce the returns on your
investment in our shares.

The M& A Rules and certain other PRC
regulations establish complex procedures for some acquisitions of Chinese companies by foreign investors, which could make it more difficult
for us to pursue growth through acquisitions in China.

The Regulations on Mergers and Acquisitions of Domestic Companies by
Foreign Investors, or the M& A Rules, adopted by six PRC regulatory agencies in August 2006 and amended in 2009, requires an overseas
special purpose vehicle formed for listing purposes through acquisitions of PRC domestic companies and controlled by PRC companies or
individuals to obtain the approval of the China Securities Regulatory Commission, or the CSRC, prior to the listing and trading of such
special purpose vehicle’s securities on an overseas stock exchange. In September 2006, the CSRC published a notice on its official
website specifying documents and materials required to be submitted to it by a special purpose vehicle seeking CSRC approval of its overseas
listings. The application of the M& A Rules remains unclear. These M& A Rules and some other regulations and rules concerning mergers
and acquisitions established additional procedures and requirements that could make merger and acquisition activities by foreign investors
more time-consuming and complex, including requirements in some instances that the China’s Commerce Ministry (“ MOC”)
be notified in advance of any change-of-control transaction in which a foreign investor takes control of a PRC domestic enterprise. Moreover,
the Anti-Monopoly Law requires that the MOC shall be notified in advance of any concentration of undertaking if