Company: ZDAN
Filing Date: 2025-02-18
Form Type: DRS/A
Source: 0001683168-25-001085
Chunk: 163

Company: Zerolimit Technology Holding Co. Ltd.
Filing Date: 2025-02-18
Form: DRS/A
Chunk 163
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 1, 2018 and superseded existing provisions which were inconsistent with Circular 32.

Pursuant to the Announcement
on Relevant Policies for Deepening Value-Added Tax Reform, which was promulgated by MOF, SAT and the General Administration of Customs
on March 20, 2019, where (i) for VAT taxable sales or imports of goods originally subject to VAT rates of 16%, such tax rates shall be
adjusted to 13%; (ii) for exported goods originally subject to a tax rate of 16% and an export tax refund rate of 16%, the export
tax refund rate shall be adjusted to 13%.

We are also subject to VAT
at a rate of approximately 13% on the software Zhenglian Shenzhen sell to its customers, less any deductible VAT we have already paid
or borne. We are also subject to surcharges on VAT payments in accordance with PRC law.

Quantitative and Qualitative Disclosures about Market Risk

Foreign Exchange Risk

Substantially all of our
revenues and all of our expenses are denominated in RMB. In our consolidated financial statements, our financial information that uses
RMB as the functional currency has been translated into U.S. dollars. Any significant revaluation of the Renminbi may materially and
adversely affect our results of operations and financial position reported in Renminbi when translated into U.S. dollars, and the value
of, and any dividends payable, in U.S. dollars.

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RMB is not freely convertible
into foreign currencies. All foreign exchange transactions take place either through the Peoples’ Bank of China (“PBOC”)
or other authorized financial institutions at exchange rates quoted by PBOC. Approval of foreign currency payments by the PBOC or other
regulatory institutions requires submitting a payment application form together with suppliers’ invoices and signed contracts.
The value of RMB is subject to changes in central government policies and to international economic and political developments affecting
supply and demand in the China Foreign Exchange Trading System market.

Interest Rate Risk

Our exposure to interest
rate risk primarily relates to the short-term and long-term borrowings we have entered with a bank. We have not been exposed to material
risks due to changes in interest rates. An increase, however, may raise the cost of any debt we have now or in the future.

Inflation Risk

Our costs and expenses may
also be affected by China’s inflation level. Since our inception, inflation