Company: XTKG
Filing Date: 2025-04-25
Form Type: 20-F
Source: 0001213900-25-035626
Chunk: 202

Company: X3 Holdings Co., Ltd.
Filing Date: 2025-04-25
Form: 20-F
Item: Item 15
Chunk 202
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 and (iv) a lack of sufficient documented financial closing policies
and procedures, specifically those related to period-end expenses cut-off and accruals.

Remediation of Material Weaknesses

To remediate our identified
material weaknesses, we intend to adopt several measures to improve our internal control over financial reporting, including (i) hiring
more qualified accounting personnel, including a financial controller, with relevant U. S. GAAP and SEC reporting experience and qualifications
to strengthen the financial reporting function and setting up a financial and system control framework; (ii) implementing regular and
continuous U. S. GAAP accounting and financial reporting training programs for our accounting and financial reporting personnel; (iii)
setting up an internal audit function as well as engaging an external consulting firm to assist us with assessment of Sarbanes-Oxley compliance
requirements and improvement of overall internal controls; (iv) preparing comprehensive accounting policies, manuals and closing procedures
to improve the quality and accuracy of our period-end financial closing process; (v) setting up and maintaining a control process for
the accounting implication assessment of all significant payment transactions, particularly those that are non-routine; (vi) setting up
and maintaining a control process for maintaining all supporting documentation regarding non-routine transactions; (vii) updating the
approval requirements for non-routine transactions to ensure that they match our transaction approval policies in place on our other accounts;
and (viii) partnering with third party service providers and a custodian bank to assist with borrower bank account management.

We believe that the actions
we are taking, as listed above, will help remedy the material weaknesses referred to above, and help strengthen our general internal controls
and procedures over financial reporting. However, the process of designing and implementing an effective financial reporting system represents
a continuous effort that requires us to anticipate and react to changes in our business and the economic and regulatory environments and
to expend significant resources to maintain a financial reporting system that is adequate to satisfy our reporting obligations. While
we have developed a remediation plan to address these material weaknesses, this remediation plan or any additional plan we plan to implement
may be insufficient to address our material weaknesses and additional material weaknesses may be discovered in the future. We plan to
continue to address and remediate additional control deficiencies we may identify during our evaluation process for the year ended December
31, 2025. If we fail to implement and maintain an effective system of internal controls or fail to remediate the material weaknesses in
our internal control over financial