Company: ZDAN
Filing Date: 2025-07-28
Form Type: F-1/A
Source: 0001683168-25-005450
Chunk: 295

Company: Zerolimit Technology Holding Co. Ltd.
Filing Date: 2025-07-28
Form: F-1/A
Chunk 295
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, 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 enters into purchase agreements
with its distributors that 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.

Additionally, 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 follows:

Software Perpetual License

The Company derives its software perpetual license
revenue by selling software perpetual license and providing related services based on customers’ orders. 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 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 control
of the software is transferred to the distributors (i.e., when our performance obligation is satisfied at a point in time), which typically
occurs immediately after delivery and installation is completed. Revenue derived from PCS service, technical support service and upgrade
service is recognized over the contract period as these services are provided over the contract period and