Company: XTKG
Filing Date: 2025-04-25
Form Type: 20-F
Source: 0001213900-25-035626
Chunk: 32

Company: X3 Holdings Co., Ltd.
Filing Date: 2025-04-25
Form: 20-F
Item: Item 3
Chunk 32
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 been predisposed
to this industry in the past. Some of these competitors may also have stronger brand names, greater access to capital, longer histories,
longer relationships with their suppliers or customers and more resources than we do. Furthermore, these competitors may be able to adapt
to changes in the industry more promptly and efficiently. Intense competition from existing and potential competitors could result in
material price reductions in the products we sell or a decrease in our market share. Aggressive pricing strategies by our competitors
and an abundant supply of cryptocurrency mining machines or AI products in the market may cause us to reduce the prices of our products
and also negatively affect the demand for our products or harm our profitability. If we fail to compete effectively and efficiently or
fail to adapt to changes in the competitive landscape, our business, financial condition and results of operations may be materially and
adversely affected.

Our Cryptocurrency mining machine business
depends on supplies from limited numbers of third-party foundry partners, and any failure to obtain sufficient foundry capacity from these
third-party foundry partners would significantly delay the shipment of our products.

As we rely on limited numbers
of third-party foundry partners, we cannot guarantee that they will be able to meet our manufacturing requirements. The ability of our
third-party foundry partners to provide us with foundry services is limited by their technology migration, available capacity, existing
obligations and global semiconductor supply. In particular, we have experienced a global shortage in semiconductors beginning 2021, which
may have adversely impacted the production activity and capacity of our third-party foundry partners. If these third-party foundry partners
fail to succeed in their technology migration or secure enough semiconductors, they will not be able to deliver to us qualified products
in a sufficient amount, which will significantly affect our technological advancement and shipment of cryptocurrency mining machines.
This could in turn result in lost sales and have a material adverse effect on our relationships with our customers and on our business
and financial condition.

In addition, we do not have
a guaranteed level of production capacity from our third-party foundry partners. We do not have long-term contracts with them, and we
source our supplies on a purchase order basis and prepay the purchase amount. As a result, we depend on our third-party foundry partners
to allocate to us a portion of their manufacturing capacity sufficient to meet our needs, to produce products of acceptable quality and
at acceptable final test yields and to deliver those products to us on