Company: XTKG
Filing Date: 2025-04-25
Form Type: 20-F
Source: 0001213900-25-035626
Chunk: 195

Company: X3 Holdings Co., Ltd.
Filing Date: 2025-04-25
Form: 20-F
Item: Item 10
Chunk 195
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 (“ PBOC”).
Remittances in currencies other than RMB by the Company in China must be processed through the PBOC or other China foreign exchange regulatory
bodies which require certain supporting documentation in order to affect the remittance.

Our functional currency is
the RMB, and our financial statements are presented in U. S. dollars. The RMB depreciated by 8.2% in fiscal year 2022, further depreciated
by 2.9% in fiscal year 2023 and depreciated by 2.8% in fiscal year 2024. It is difficult to predict how market forces or PRC or U. S. government
policy may impact the exchange rate between the RMB and the U. S. dollar in the future. The change in the value of the RMB relative to
the U. S. dollar may affect our financial results reported in the U. S. dollar terms without giving effect to any underlying changes in
our business or results of operations. Currently, our assets, liabilities, revenues and costs are denominated in RMB.

To the extent that the Company
needs to convert U. S. dollars into RMB for capital expenditures and working capital and other business purposes, appreciation of RMB against
U. S. dollar would have an adverse effect on the RMB amount that the Company would receive from the conversion. Conversely, if the Company
decides to convert RMB into U. S. dollar for the purpose of making payments for dividends, strategic acquisitions or investments or other
business purposes, appreciation of U. S. dollar against RMB would have a negative effect on the U. S. dollar amount available to the Company.

Inflation

Since our inception, inflation
in China has not materially affected our results of operations. According to the National Bureau of Statistics of China, the year-over-year
percent changes in the consumer price index for December 2022, 2023 and 2024 increased 2.0%, 0.2% and 0.2%, respectively. Although we
have not been materially affected by inflation in the past, we may be affected if China experiences higher rates of inflation in the future.

Item 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES