Company: XTKG
Filing Date: 2025-04-25
Form Type: 20-F
Source: 0001213900-25-035626
Chunk: 140

Company: X3 Holdings Co., Ltd.
Filing Date: 2025-04-25
Form: 20-F
Item: Item 5
Chunk 140
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 ended December 31, 2024. For the year ended December 31, 2023,
due to slow development of Smartconn, the Company evaluated the recoverability of long-lived assets by comparing the carrying amount of
the assets to the future undiscounted cash flows expected to result from the use of the assets and their eventual disposition and determined
that the fair value of intangible assets of Smartconn was less than carrying value. Therefore, the Company impaired the intangible assets
acquired from the acquisition of Smartconn of approximately $2.3 million for the year ended December 31, 2023. For the years ended December
31, 2022, there was no impairment was recognized for the long-lived assets.

Goodwill

Goodwill is the cost of acquired
companies in excess of the fair value of identifiable net assets at acquisition date. Goodwill is not subject to amortization, but rather
is evaluated for impairment at least annually. The Company evaluates its goodwill for impairment during the fourth quarter of its fiscal
year or more frequently if indicators of potential impairment exist, in accordance with ASC 350, Intangibles - Goodwill and Other. Goodwill
impairment is determined by comparing the estimated fair value of a reporting unit (generally defined as the businesses for which financial
information is available and reviewed regularly by management) with its respective carrying value. If the estimated fair value exceeds
the carrying value, goodwill at the reporting unit level is not deemed to be impaired. However, if the estimated fair value is below carrying
value, further analysis is required to determine the amount of the impairment. For the year ended December 31, 2024, the Company performed
the impairment test and determined that the fair value of goodwill acquired from the acquisition of Boxinrui and Hongchuagnxin was less
than carrying value. The Company impaired the goodwill acquired from the acquisition of Boxinrui and Hongchuangxin of approximately $15.0
million and approximately $2.9 million for the year ended December 31, 2024. 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 $8.6 million and $21.1 million
for the year ended December 31, 202