Company: ZDAN
Filing Date: 2025-06-30
Form Type: F-1
Source: 0001683168-25-004840
Chunk: 326

Company: Zerolimit Technology Holding Co. Ltd.
Filing Date: 2025-06-30
Form: F-1
Chunk 326
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 the Company’s business and operating licenses and being required
to restructure the Company’s operations or terminate the Company’s operating activities. The imposition of any of these or
other penalties may result in a material and adverse effect on the Company’s ability to conduct its operations. In such case, the
Company may not be able to operate or control the VIE, which may result in deconsolidation of the VIE.

21. Commitments and contingencies

From time to time, the Company may become involved
in various lawsuits and legal proceedings, which arise in the ordinary course of business. Litigation is subject to inherent uncertainties,
and an adverse result in these or other matters may arise from time to time that may harm business. Management is not aware of any such
legal proceedings or claims that could have, individually or in the aggregate, a material adverse effect on the Company’s business,
financial condition, or operating results as of the date hereof.

Zhenglian Shenzhen has a contract dispute with one
of its previous suppliers, Shenzhen Youwei Communication Technology Co., Ltd. (“Youwei”). Zhenglian Shenzhen sued
Youwei on March 23, 2023 in connection with a cooperative purchasing agreement and a relevant supplementary agreement (the “Youwei Purchase Agreements”) between Youwei and Zhenglian Shenzhen in Shenzhen Qianhai Cooperation Zone People's
Court (“Qianhai Court”). Zhenglian Shenzhen claimed that Youwei failed to provide Zhenglian Shenzhen with the customized
mobile phones that meet Zhenglian Shenzhen’s requirements in accordance with the Youwei Purchase Agreements. Zhenglian Shenzhen
has claimed total compensation of approximately $1.1 million. Since then Youwei filed a counterclaim against Zhenglian Shenzhen and,
as of September 30, 2024, the case was still pending the Qianhai Court’s judgement. We do not believe this legal proceeding will
have any material adverse effect on our operation in China.

22. Subsequent events

The Company evaluated all events and transactions
that occurred after September 30, 2024 up through January 10, 2025, the date the Company confidentially filed these consolidated financial
statements for disclosure or recognition in the consolidated financial statements of the Company, as appropriate.

On Oct 11, 2024, the Company obtained $270,748 borrowings from Bank of Communications Co., Ltd. Shenzhen Branch with interest rate of 3%.

This short-term loan was guaranteed by the below
intangible