Company: XTKG
Filing Date: 2025-04-25
Form Type: 20-F
Source: 0001213900-25-035626
Chunk: 102

Company: X3 Holdings Co., Ltd.
Filing Date: 2025-04-25
Form: 20-F
Item: Item 4
Chunk 102
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 examination. Enterprises that fail to meet the annual examination standards will lose the favorable
enterprise income tax treatment. Enterprises exporting software or producing software products that are registered with the relevant government
authorities are also entitled to preferential treatment including governmental financial support, preferential import, export policies
and preferential tax rates.

Companies in China engaging
in information systems integration were used to be required to obtain qualification certificates from the Ministry of Industry and Information
Technology. “ Information systems integration” means plan, design, development, implementation, service and safeguard of computer
system and network system. Currently the Company does not engage in information system integration business, therefore the Company is
not required to have such qualification certificates. Companies planning to set up computer information systems may only retain systems
integration companies with appropriate qualification certificates. The qualification certificate is subject to review every two years
and is renewable every four years. In June 2015, the China Information Technology Industry Federation (CITIF) promulgated the Appraisal
Condition for Qualification Grade of Information Systems Integration (Provisional) to elaborate the conditions for appraising each of
the four qualification grades of systems integration companies. Companies applying for qualification are graded depending on the scale
of the work they undertake. The grades range from Grade 1 (highest) to Grade 4 (lowest) in the scale of the work the respective companies
can undertake.

In 2009, the Ministry of Commerce
and the Ministry of Industry and Information Technology jointly promulgated a rule aiming to protect a fair competition environment in
the PRC service outsourcing industry. This rule requires that each of the domestic enterprises which provides IT and technological BPO
services and each of its shareholders, directors, supervisors, managers and employees should not violate the service outsourcing contract
to disclose, use or allow others to use the confidential information of its customer. Such enterprises are also required to establish
an information protection system and take various measures to protect customers’ confidential information, including causing their
employees and third parties who have access to customers’ confidential information to sign confidentiality agreements and or non-competition
agreements.

Regulations on Information Security

Several Provisions on Regulating
the Market Order of Internet Information Services

The Ministry of
Industry and Information technology (“ MIIT”) issued the Several Provisions on Regulating the Market Order of Internet Information
Services (the “ Several Provisions”) in December 2011, which became effective in March 2012. Pursuant to the Several
Provisions, internet information