Company: XTKG
Filing Date: 2025-04-25
Form Type: 20-F
Source: 0001213900-25-035626
Chunk: 35

Company: X3 Holdings Co., Ltd.
Filing Date: 2025-04-25
Form: 20-F
Item: Item 3
Chunk 35
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, which may negatively affect our abilities
to fulfill orders or make timely shipments to customers, as well as our customer relationships and profitability. Component shortages
may also increase our costs of revenue because we may be required to pay higher prices for components in short supply, not being able
to pass such costs to customers, and redesign or reconfigure products to accommodate substitute components.

Risks that may be encountered during the
transportation of cryptocurrency mining machines.

Physical damage during
shipping: cryptocurrency mining machines are delicate pieces of equipment that can be easily damaged during shipping. Factors such
as rough handling, temperature changes, and vibration can cause damage to the hardware.

Theft or loss during shipping:
cryptocurrency mining machines are valuable and can be a target for theft during shipping. In some cases, they can also be misplaced or
lost during the shipping process.

Improper packaging:
cryptocurrency mining machines require specialized packaging to ensure their safety during shipping. Failure to properly package the cryptocurrency
mining machines can increase the risk of damage during transport.

Inadequate storage conditions:
cryptocurrency mining machines require specific storage conditions, including temperature and humidity control, to maintain their performance
and lifespan. Failure to store cryptocurrency mining machines under optimal conditions can lead to hardware failure and increased downtime.

Fire or water damage:
Fire or water damage can be catastrophic to cryptocurrency mining machines and result in significant data loss. Proper fire suppression
systems and measures to prevent water damage should be in place to minimize these risks.

Risks like cryptocurrency mining machines
storage, overhaul, operation, and maintenance may occur:

Equipment failure:
Machines that are not properly stored, overhauled, operated, or maintained can lead to equipment failure, which can be dangerous for operators
and other individuals nearby.

Inadequate training:
Operators and maintenance personnel who are not properly trained may not know how to properly operate, maintain, or overhaul machines,
which can increase the risk of equipment failure or accidents.

Improper storage: Machines
that are not stored properly, such as in a location that is too hot, cold, humid, or dusty, can be damaged or degraded over time, leading
to equipment failure or decreased performance.

Poor maintenance: Failure
to properly maintain machines, such as by not performing regular inspections, cleaning, lubrication, or repairs, can lead to equipment
failure, decreased performance, or shortened machines lifespan.

Lack of safety protocols:
Inadequate safety protocols, such as not using appropriate personal protective equipment or not following proper lockout/tagout procedures,
can increase the