Company: XTKG
Filing Date: 2025-04-25
Form Type: 20-F
Source: 0001213900-25-035626
Chunk: 121

Company: X3 Holdings Co., Ltd.
Filing Date: 2025-04-25
Form: 20-F
Item: Item 5
Chunk 121
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 interests. On March 28, 2023, the Company completed acquisition of 100%
equity interest in Boxirui, consisting of an acquisition of 65% equity interest of Boxinrui acquired from the previous shareholder and
an investment of 35% equity interest in Boxinrui which the Group has already held prior to March 28, 2023. The company recognized a gain
of approximately $2.7 million in fair value change for the previous 35% equity interests. No such gain recognized for the year ended December
31, 2024.

Fair value loss on financial instruments

Fair value loss on financial
instrument is derived from acquisition of Smartconn on January 5, 2023, and acquisition of Boxinrui on March 28, 2023 which involved payments
of future financial instrument upon the shares price is lower than the payment date price. Put options liabilities are recorded for the
estimated fair value of the financial instrument on the merger date. The fair value of the financial instrument is re-measured at each
reporting period, and the change in fair value is recognized as either income or expense. The Company recorded an unrealized loss of approximately
$71.0 million for the year ended December 31, 2023. No such loss incurred for the year ended December 31, 2024.

Other expense, net

Other expense was primarily
related to interest expenses, interest income, government subsidy income and other items. Our other expense increased by approximately
$1.0 million from approximately $0.2 million for the year ended December 31, 2023 to approximately $1.1 million for the year ended December
31, 2024, due to more interest expense and loss on disposal of assets.

Income Tax Benefit

Income tax benefit was approximately $0.1 million for both the years
ended December 31, 2024 and 2023. Under the Income Tax Laws of the PRC, companies are generally subject to income tax at a rate of 25%.
Under the Income Tax Laws of the PRC, companies are generally subject to income tax at a rate of 25%. However, our major operating subsidiary
- Powerbridge Zhuhai was recognized as the “high-tech enterprise” status, which reduced its statutory income tax rate to 15%.
The rest of our subsidiaries in PRC are subject to an income tax rate of 25%.

Net Loss

As a result of the foregoing,