Company: XTKG
Filing Date: 2025-04-25
Form Type: 20-F
Source: 0001213900-25-035626
Chunk: 58

Company: X3 Holdings Co., Ltd.
Filing Date: 2025-04-25
Form: 20-F
Item: Item 3
Chunk 58
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 fashion or at all, or may involve substantial costs and unforeseen risks. Any failure of us to fully comply with applicable
laws and regulations may significantly limit or completely hinder our ability and the ability of any holder of our securities to offer
or continue to offer such securities, cause significant disruption to our business operations, and severely damage our reputation, which
would materially and adversely affect our financial condition and results of operations and cause our securities to significantly decline
in value or become worthless.

Recent regulatory initiatives implemented
by the PRC competent government authorities on cyberspace data security may have introduced uncertainty in our business operations and
compliance status, which could result in materially adverse impact on our business, results of operations and our listing on Nasdaq.

We are subject to complex
and evolving statutory and regulatory requirements relating to cybersecurity, information security, privacy and data protection. Regulatory
authorities in mainland China have enhanced data protection and cybersecurity regulatory requirements. These laws continue to develop,
and the PRC government may adopt other rules and restrictions in the future. Non-compliance could result in penalties or other significant
legal liabilities.

The PRC Cybersecurity Law,
which took effect in June 2017, created China’s first national-level data protection framework for “network operators.”
It is relatively new and subject to interpretations by the regulator. It requires, among other things, that network operators take security
measures to protect the network from unauthorized interference, damage and unauthorized access and prevent data from being divulged, stolen
or tampered with. Network operators are also required to collect and use personal information in compliance with the principles of legitimacy,
properness and necessity, and strictly within the scope of authorization by the subject of personal information unless otherwise prescribed
by laws or regulations. Significant capital, managerial and human resources are required to comply with legal requirements, enhance information
security and address any issues caused by security failures.

The Measures for Cybersecurity
Review promulgated in April 2020 provides that critical information infrastructure operators must pass a cybersecurity review when purchasing
network products and services which do or may affect national security. Pursuant to the Revised Cybersecurity Review Measures that took
effect on February 15, 2022, operators of critical information infrastructure that intend to purchase network products and services that
affect or may affect national security must apply for a cybersecurity review. However, as advised by our PRC counsel, as such new laws,
regulations and rules were only recently promulgated, their interpretation and implementation shall be determined in accordance with the