Company: ZDAN
Filing Date: 2025-01-10
Form Type: DRS/A
Source: 0001683168-25-000168
Chunk: 59

Company: Zerolimit Technology Holding Co. Ltd.
Filing Date: 2025-01-10
Form: DRS/A
Chunk 59
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 of our total revenues, respectively. The total sales to these customers accounted for approximately 34% and 47% of our total revenues, respectively, for the same periods. As of September 30, 2024 and 2023, there were one and two suppliers from whom purchases individually represent greater than 10% of our total purchases, respectively. The total purchase from these suppliers accounted for approximately 100% and 79% of our total purchase, respectively, for the same periods. Considering such concentration, the loss of these customers and suppliers could have a material adverse effect on our business.

Although the VIE enters into distributor agreements with its customers, and thereby the parties agree to a specific quantity of products and services, the consequences of breach of any such agreement is only the termination of the applicable distributor agreement. If customers reduce the quantities of products and services or cease purchasing products and services from the VIE, such reductions or terminations would cause a significant decline in our consolidated revenues.

The distributor agreement
with each customer describes the terms and conditions concerning the software, delivery of the software and payment. The VIE relies upon
short-form order sheets to memorialize agreements with its customers for the purchase of products and services, pursuant to which customers
make their orders on an as-needed basis. The customers can reduce the quantities of products from the VIE, or cease purchasing products
from the VIE. Such reductions or terminations could have a material adverse impact on the VIE’s revenues, profits and financial
condition. The loss of any of the VIE’s major customers, or a significant reduction in sales to any such customers, would adversely
affect the VIE’s profitability and also cause a significant decline in our consolidated revenues.

The success of a network created using our proprietary technology depends on maintaining a minimum user base, which translates to a minimum number of nodes; for instance, if the number of users and nodes decreases below 160, application failures on the distributed network are more likely, however the minimum number of nodes to run a network with only one application is three nodes.

There are a number of factors
that could negatively impact user retention and growth, including, among other things:

| · | the VIE may fail to introduce new software products or those the VIE                                                             
 introduces may be poorly received;                                                                                               |
| · | decentralized applications created by developers may fail to operate                                                             
 effectively on networks created by the VIE’s proprietary technology;                                                             |
| · | there is a requirement for a minimum