Company: XTKG
Filing Date: 2025-04-25
Form Type: 20-F
Source: 0001213900-25-035626
Chunk: 33

Company: X3 Holdings Co., Ltd.
Filing Date: 2025-04-25
Form: 20-F
Item: Item 3
Chunk 33
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 a timely basis and at acceptable prices. If our third-party foundry
partners raise their prices or are unable to meet our required capacity for any reason, such as shortages or delays in the shipment of
semiconductor equipment, or if our business relationships with them deteriorate, we may not be able to obtain the required capacity and
would have to seek alternative foundries, which may not be available on commercially reasonable terms, or at all. Moreover, it is possible
that other customers of our third-party foundry partners that are larger and/or better financed than we are, or that have long-term contracts
with them, may receive preferential treatment in terms of capacity allocation or pricing. In addition, if we do not accurately forecast
our capacity needs, our third-party foundry partners may not have available capacity to meet our immediate needs or we may be required
to pay higher costs to fulfill those needs, either of which could materially and adversely affect our business, operating results or financial
condition.

Other risks associated with
our dependence on a few third-party foundry partners include limited control over delivery schedules and quality assurance, lack of capacity
in periods of excess demand, unauthorized use of our intellectual property and limited ability to manage inventory and parts.

Moreover, if any of our third-party
foundry partners suffers any damage to its facilities, suspends manufacturing operations, loses benefits under material agreements, experiences
power outages or computer virus attacks, lacks sufficient capacity to manufacture our products, encounters financial difficulties, is
unable to secure necessary raw materials from its suppliers or suffers any other disruption or reduction in efficiency, we may encounter
supply delays or disruptions.

Failure to maintain inventory levels of
our cryptocurrency mining machines in line with the approximate level of demand for our products could cause us to lose sales, expose
us to increased inventory risks and subject us to increases in holding costs, risk of inventory obsolescence, increases in markdown allowances
and write-offs, any of which could have a material adverse effect on our business, financial condition and results of operations.

To operate our business successfully
and meet our customers’ demands and expectations, we must maintain a certain level of finished goods inventory to ensure immediate
delivery when required. Furthermore, we are required to maintain an appropriate level of inventory of parts and components for our production.
However, forecasts are inherently uncertain. If our forecasted demand is lower than actual demand, we may not be able to maintain an adequate
inventory level of our finished goods or produce our products in a timely manner, and