Company: XTKG
Filing Date: 2025-04-25
Form Type: 20-F
Source: 0001213900-25-035626
Chunk: 23

Company: X3 Holdings Co., Ltd.
Filing Date: 2025-04-25
Form: 20-F
Item: Item 3
Chunk 23
---
 the hiring of new employees who may misappropriate
intellectual property from their former employers. Parties making infringement claims may be able to obtain an injunction to prevent us
from delivering our services or using technology involving the allegedly infringing intellectual property. Intellectual property litigation
is expensive and time-consuming and could divert management’s attention from our business. A successful infringement claim against
us, whether with or without merit, could, among other things, require us to pay substantial damages, develop non-infringing technology,
or re-brand our name or enter into royalty or license agreements that may not be available on acceptable terms, if at all, and cease making,
licensing or using products that have infringed a third party’s intellectual property rights. Protracted litigation could also result
in existing or potential customers deferring or limiting their purchase or use of our products until resolution of such litigation, or
could require us to indemnify our customers against infringement claims in certain instances. Any intellectual property claims or litigation
in this area, whether we ultimately win or lose, could damage our reputation and have a material adverse effect on our business, results
of operations and financial condition.

We use third-party licensed software in
or with our services, and the inability to maintain these licenses or errors in the software services we provide could result in increased
costs or reduced service levels, which would adversely affect our business.

Our services incorporate certain
third-party software obtained under licenses from other companies. We anticipate that we will continue to rely on such third-party software
and development tools in the future. Such third-party companies may discontinue their products, go out of business or otherwise cease
to make support available for such third-party software. Although we believe that there are commercially reasonable alternatives to the
third-party software we currently license, this may not always be the case, or it may be difficult or costly to replace. In addition,
integration of the software used in our services with new third-party software may require significant work and substantial investment
of our time and resources. Also, to the extent that our services depend upon the successful operation of third-party software in conjunction
with our software, any undetected errors or defects in such third-party software could prevent the deployment or impair the functionality
of our services, delay new feature introductions, result in a failure of our services and injure our reputation. Our use of additional
or alternative third-party software would require us to enter into license agreements with third parties. In the event that we are not
able to maintain