Company: ZDAN
Filing Date: 2025-01-10
Form Type: DRS/A
Source: 0001683168-25-000168
Chunk: 96

Company: Zerolimit Technology Holding Co. Ltd.
Filing Date: 2025-01-10
Form: DRS/A
Chunk 96
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 is insufficient to cover any loss WFOE incurred in the previous financial year, its current
financial year’s accumulated after-tax profits shall first be used to cover the loss before any statutory reserve fund is drawn
therefrom. Such statutory reserve funds and the accumulated after-tax profits that are used for covering the loss cannot be distributed
to us as dividends. At its discretion, WFOE may allocate a portion of its after-tax profits based on Chinese accounting standards to
a discretionary reserve fund. Any limitation on the ability of WFOE to distribute dividends or other payments to us could materially
and adversely limit our ability to grow, make investments or acquisitions that could be beneficial to our businesses, pay dividends or
otherwise fund and conduct our business.

| 51 |

Renminbi is not freely convertible
into other currencies. As result, any restriction on currency exchange may limit the ability of WFOE to use its potential future renminbi
revenues to pay dividends to us. The Chinese government imposes controls on the convertibility of renminbi into foreign currencies and,
in certain cases, the remittance of currency out of China. Shortages in availability of foreign currency may then restrict the ability
of WFOE to remit sufficient foreign currency to our offshore entities for our offshore entities to pay dividends or make other payments
or otherwise to satisfy our foreign-currency-denominated obligations. The renminbi is currently convertible under the “current
account,” which includes dividends and trade and service-related foreign exchange transactions, but not under the “capital
account,” which includes foreign direct investment and foreign currency debt, including loans we may secure for our onshore subsidiary.
Currently, WFOE may purchase foreign currency for settlement of “current account transactions,” including payment of dividends
to us, without the approval of the SAFE”) by complying with certain procedural requirements. However, the relevant Chinese governmental
authorities may limit or eliminate our ability to purchase foreign currencies in the future for current account transactions. The Chinese
government may continue to strengthen its capital controls, and additional restrictions and substantial vetting processes may be instituted
by SAFE for cross-border transactions falling under both the current account and the capital account. Any existing and future restrictions
on currency exchange may limit our ability to utilize revenues generated in renminbi to fund our business activities outside of China
or pay dividends in foreign currencies to holders of our securities. Foreign exchange transactions under the capital account remain subject
to limitations and require approvals from, or registration with, SAFE and other relevant Chinese