Company: ZDAN
Filing Date: 2025-06-30
Form Type: F-1
Source: 0001683168-25-004840
Chunk: 113

Company: Zerolimit Technology Holding Co. Ltd.
Filing Date: 2025-06-30
Form: F-1
Chunk 113
---
 trading volume could decline.

The trading market for our
Ordinary Shares will be influenced by research or reports that industry or securities analysts publish about our business. If industry
or securities analysts decide to cover us and in the future downgrade our Ordinary Shares, the market price for our Ordinary Shares would
likely decline. If one or more of these analysts cease to cover us or fail to regularly publish reports on us, we could lose visibility
in the financial markets, which in turn could cause the market price or trading volume for our Ordinary Shares to decline.

If our stock becomes publicly traded, techniques employed by short sellers may drive down the market price of our Ordinary Shares.

Short selling is the practice
of selling securities that the seller does not own but rather has borrowed from a third party with the intention of buying identical
securities back at a later date to return to the lender. The short seller hopes to profit from a decline in the value of the securities
between the sale of the borrowed securities and the purchase of the replacement shares, as the short seller expects to pay less in that
purchase than it received in the sale. As it is in the short seller’s interest for the price of the security to decline, many short
sellers publish, or arrange for the publication of, negative opinions regarding the relevant issuer and its business prospects in order
to create negative market momentum and generate profits for themselves after selling a security. These short attacks have, in the past,
led to selling of shares in the market, driving down the price of stock.

| 60 |

Public companies with substantial
operations in the PRC (either through a VIE structure or otherwise) have been the subject of short selling. Much of the scrutiny and
negative publicity has centered on allegations of a lack of effective internal control over financial reporting resulting in financial
and accounting irregularities and mistakes, inadequate corporate governance policies or a lack of adherence thereto and, in many cases,
allegations of fraud. As a result, many of these companies are now conducting internal and external investigations into the allegations
and, in the interim, are subject to shareholder lawsuits and/or SEC enforcement actions.

It is not clear what effect
such negative publicity could have on us. If we were to become the subject of any unfavorable allegations, whether such allegations are
proven to be true or untrue, we could have to expend a significant amount of resources to investigate such allegations and/or defend
ourselves. While we would strongly defend against any such short seller attacks, we may be constrained