Company: ZDAN
Filing Date: 2025-01-10
Form Type: DRS/A
Source: 0001683168-25-000168
Chunk: 101

Company: Zerolimit Technology Holding Co. Ltd.
Filing Date: 2025-01-10
Form: DRS/A
Chunk 101
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 an integrated standard for conversion of foreign exchange under capital account
items (including but not limited to foreign currency capital and foreign debts) on a self-discretionary basis which applies to all enterprises
registered in China. SAFE Circular 16 reiterates the principle that Renminbi converted from foreign currency-denominated capital of a
company may not be directly or indirectly used for purposes beyond its business scope or prohibited by PRC laws or regulations, while
such converted Renminbi shall not be provided as loans to its non-affiliated entities. As this circular is relatively new, there remains
uncertainty as to its interpretation and application and any other future foreign exchange related rules. Violations of these Circulars
could result in monetary or other penalties. SAFE Circular 19 and SAFE Circular 16 may limit our ability to use Renminbi converted from
the net proceeds of this offering, to fund the establishment of new entities in China by the VIE, to invest in or acquire any other PRC
companies through WFOE, or to establish a new consolidated VIE in China, which may adversely affect our business, financial condition
and results of operations.

| 53 |

On October 23, 2019, the
SAFE promulgated the Notice of the State Administration of Foreign Exchange on Further Promoting the Convenience of Cross-border Trade
and Investment, or the SAFE Circular 28, which, among other things, allows all foreign-invested companies to use Renminbi converted from
foreign currency-denominated capital for equity investments in China, as long as the equity investment is genuine, does not violate applicable
laws, and complies with the negative list on foreign investment.

In light of the various
requirements imposed by PRC regulations on loans to and direct investment in PRC entities by offshore holding companies, we cannot assure
you that we will be able to complete the necessary government registrations or obtain the necessary government approvals on a timely
basis, if at all, with respect to future loans made by us to WFOE or with respect to future capital contributions made by us to WFOE.
If we fail to complete such registrations or obtain such approvals, our ability to use the proceeds we receive from our initial public
offering and to capitalize or otherwise fund our PRC operations may be negatively affected, which could materially and adversely affect
our liquidity and our ability to fund and expand our business.

PRC regulations relating to the establishment of offshore special purpose companies by PRC residents may subject our PRC resident