Company: ZDAN
Filing Date: 2025-07-28
Form Type: F-1/A
Source: 0001683168-25-005450
Chunk: 156

Company: Zerolimit Technology Holding Co. Ltd.
Filing Date: 2025-07-28
Form: F-1/A
Chunk 156
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 reflects the consideration to which
the entity expects to be entitled in exchange for those goods or services. Revenue is the transaction price the Company expects to be
entitled to in exchange for the promised services in a contract in the ordinary course of the Company’s activities and is recorded
net of value-added tax (“VAT”). To achieve that core principle, the Company applies the following steps:

Step 1: Identify the contract(s) with a customer;

Step 2: Identify the performance obligations in the contract;

Step 3: Determine the transaction price;;

Step 4: Allocate the transaction price to the performance
obligations in the contract; and

Step 5: Recognize revenue when (or as)
the entity satisfies a performance obligation.

The Company generates revenues
from software licensing and providing related services through its distribution network. The distributors are considered as customers.

The Company typically enter
into purchase agreements with its distributors, which specify the cooperation scope, payment terms, rights and obligations of both parties,
restrictive covenants, delivery terms, refunds or replacements, breach and termination, and dispute resolutions. The distributors make
payment to the Company in accordance with the agreed-upon terms. After the payment has been received from the distributors, software
products are delivered in accordance with the contractual obligations in the purchase agreements to the distributors through an activation
code. After delivery of the software product, the Company works together with distributors to provide after-sales support and maintenance
services. Revenue recognition policies for each type of revenue stream are as follow:

Software Perpetual License

The Company derives its software
perpetual license revenue by selling software perpetual license and providing related services based on customers’ order. There
are two performance obligations. Software license and related pre-installation debugging service is considered one performance obligation.
Usually, the physical possession of the software is transferred to the customers immediately upon the delivery of software and the activation
code. The activation codes are matched to debugged software only, so the debugging is not separable from the fulfillment of software license.
Post-contract consulting (“PCS”), technical support and upgrade services are collectively considered as another performance
obligation as these services are provided to customers on within 1 year of the transfer of software licenses. The transaction price is
predetermined according to the contract price. Generally, the credit term is within three months. There is no other obligation in our
contracts, such as return, refund or warranties. Software perpetual license and pre-installation debugging service revenue is recognized
when