Company: ZDAN
Filing Date: 2025-01-10
Form Type: DRS/A
Source: 0001683168-25-000168
Chunk: 32

Company: Zerolimit Technology Holding Co. Ltd.
Filing Date: 2025-01-10
Form: DRS/A
Chunk 32
---
 would result in the company being unable to pay its debts due in the ordinary course of business. If we
determine to pay dividends on any of our Ordinary Shares in the future, as a holding company, we will rely on dividends and other distributions
on equity from the VIE to WFOE in accordance with the VIE agreements for cash requirements, including the funds necessary to pay dividends
and other cash contributions to our shareholders.

According to the Foreign
Investment Law of the PRC and its implementing rules, which jointly established the legal framework for the administration of foreign-invested
companies, a foreign investor may, in accordance with other applicable laws, freely transfer into or out of China its contributions,
profits, capital earnings, income from asset disposal, intellectual property rights, royalties acquired, compensation or indemnity legally
obtained, and income from liquidation, made or derived within the territory of China in RMB or any foreign currency, and any entity or
individual shall not illegally restrict such transfer in terms of the currency, amount and frequency. According to the Company Law of
the PRC and other Chinese laws and regulations, WFOE may pay dividends only out of its respective accumulated profits as determined in
accordance with Chinese accounting standards and regulations. In addition, WFOE is required to set aside at least 10% of its accumulated
after-tax profits, if any, each year to fund a certain statutory reserve fund, until the aggregate amount of such fund reaches 50% of
its registered capital. Where the statutory reserve fund is insufficient to cover any loss WFOE incurred in the previous financial year,
its current financial year’s accumulated after-tax profits shall first be used to cover the loss before any statutory reserve fund
is drawn therefrom. Such statutory reserve funds and the accumulated after-tax profits that are used for covering the loss cannot be
distributed to us as dividends. At its discretion, WFOE may allocate a portion of its after-tax profits based on Chinese accounting standards
to a discretionary reserve fund. Any limitation on the ability of WFOE to distribute dividends or other payments to us could materially
and adversely limit our ability to grow, make investments or acquisitions that could be beneficial to our businesses, pay dividends or
otherwise fund and conduct our business.

| 17 |

Renminbi is not freely convertible
into other currencies. As result, any restriction on currency exchange may limit the ability of WFOE to use its potential future renminbi
revenues to pay