Company: ZDAN
Filing Date: 2025-01-10
Form Type: DRS/A
Source: 0001683168-25-000168
Chunk: 33

Company: Zerolimit Technology Holding Co. Ltd.
Filing Date: 2025-01-10
Form: DRS/A
Chunk 33
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 dividends to us. The Chinese government imposes controls on the convertibility of renminbi into foreign currencies and,
in certain cases, the remittance of currency out of China. Shortages in availability of foreign currency may then restrict the ability
of WFOE to remit sufficient foreign currency to our offshore entities for our offshore entities to pay dividends or make other payments
or otherwise to satisfy our foreign-currency-denominated obligations. The renminbi is currently convertible under the “current
account,” which includes dividends and trade and service-related foreign exchange transactions, but not under the “capital
account,” which includes foreign direct investment and foreign currency debt, including loans we may secure for our onshore subsidiary.
Currently, WFOE may purchase foreign currency for settlement of “current account transactions,”, without the approval of
the State Administration of Foreign Exchange of China (“SAFE”) by complying with certain procedural requirements. However,
the relevant Chinese governmental authorities may limit or eliminate our ability to purchase foreign currencies in the future for current
account transactions. The Chinese government may continue to strengthen its capital controls, and additional restrictions and substantial
vetting processes may be instituted by SAFE for cross-border transactions falling under both the current account and the capital account.
Any existing and future restrictions on currency exchange may limit our ability to utilize revenues generated in renminbi to fund our
business activities outside of China or pay dividends in foreign currencies to holders of our securities. Foreign exchange transactions
under the capital account remain subject to limitations and require approvals from, or registration with, SAFE and other relevant Chinese
governmental authorities. This could affect our ability to obtain foreign currency through debt or equity financing for our subsidiaries.
See “Risk Factors — Risks Related to Doing Business in the PRC — We may rely on dividends and other distributions on equity paid by WFOE to fund any cash and financing requirements we may have, and any limitation on the ability of WFOE to make payments to us and any tax we are required to pay could have a material adverse effect on our ability to conduct our business.” For a detailed discussion of the Chinese legal restrictions on the payment of dividends and our ability to transfer
cash within our organization. In addition, if we are considered a PRC tax resident enterprise for tax purposes, any dividends we pay
to our overseas shareholders may be regarded as China-sourced income and, as a result, may be subject to PRC withholding tax at a rate
of up to 10.0%.

In order for us to pay dividends
to