Company: XTKG
Filing Date: 2025-04-25
Form Type: 20-F
Source: 0001213900-25-035626
Chunk: 72

Company: X3 Holdings Co., Ltd.
Filing Date: 2025-04-25
Form: 20-F
Item: Item 3
Chunk 72
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 certain thresholds are
triggered. In addition, the security review rules issued by the MOC that became effective in September 2011 specify that mergers
and acquisitions by foreign investors that raise “national defense and security” concerns and mergers and acquisitions through
which foreign investors may acquire de facto control over domestic enterprises that raise “national security” concerns are
subject to strict review by the MOC, and the rules prohibit any activities attempting to bypass a security review, including by structuring
the transaction through a proxy or contractual control arrangement. In the future, we may grow our business by acquiring complementary
businesses. Complying with the requirements of the above-mentioned regulations and other relevant rules to complete such transactions
could be time-consuming, and any required approval processes, including obtaining approval from the MOC or its local counterparts may
delay or inhibit our ability to complete such transactions, which could affect our ability to expand our business or maintain our market
share.

Any failure to comply with PRC regulations
regarding the registration requirements for employee stock incentive plans may subject the PRC plan participants or us to fines and other
legal or administrative sanctions.

In February 2012, SAFE promulgated the Notices on Issues Concerning
the Foreign Exchange Administration for Domestic Individuals Participating in Stock Incentive Plans of Overseas Publicly-Listed Companies,
replacing earlier rules promulgated in March 2007. Pursuant to these rules, PRC citizens and non-PRC citizens who reside in China
for a continuous period of not less than one year who participate in any stock incentive plan of an overseas publicly listed company,
subject to a few exceptions, are required to register with SAFE through a domestic qualified agent, which could be the PRC subsidiaries
of such overseas listed company, and complete certain other procedures. In addition, an overseas entrusted institution must be retained
to handle matters in connection with the exercise or sale of stock options and the purchase or sale of shares and interests. We and our
executive officers and other employees who are PRC citizens or who have resided in the PRC for a continuous period of not less than one
year and who are granted options or other awards under the equity incentive plan are subject to these regulations as our company has become
an overseas listed company. Failure to complete the SAFE registrations may subject them to fines and legal sanctions and may also limit
our ability to contribute additional capital into our PRC subsidiary and limit our PRC subsidiary's ability to distribute dividends to