Company: XTKG
Filing Date: 2025-04-25
Form Type: 20-F
Source: 0001213900-25-035626
Chunk: 129

Company: X3 Holdings Co., Ltd.
Filing Date: 2025-04-25
Form: 20-F
Item: Item 5
Chunk 129
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 impaired the
intangible assets acquired from the acquisition of Smartconn of approximately $2.3 million for the year ended December 31, 2023.

For the year ended December
31, 2023, the Company performed the impairment test and determined that the fair value of goodwill acquired from the acquisition of Boxinrui
and Smartconn was less than carrying value. The Company impaired the goodwill acquired from the acquisition of Boxinrui and Smartconn
of approximately $8.6 million and approximately $21.1 million for the year ended December 31, 2023.

Other Income (Expense)

Change in fair value of convertible notes

The Company elected the fair
value option to account for its convertible loans. For the year ended December 31, 2023 and 2022, we recognized an unrealized loss of
$21,166 and approximately $2.4 million, respectively.

Gain from fair value change in equity investments

Gain from fair value change
in equity investments derived from two step acquisitions. On January 5, 2023, the Company completed acquisition of 50.99% equity interest
in Smartconn, consisting of an acquisition of 31% equity interest of Smartconn acquired from the previous shareholder and an investment
of 19.99% equity interest in Smartconn which the Group has already held prior to January 5, 2023. The company recognized a loss of approximately
$0.3 million in fair value change for the previous 19.99% equity 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.

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