Company: ZDAN
Filing Date: 2025-02-18
Form Type: DRS/A
Source: 0001683168-25-001085
Chunk: 295

Company: Zerolimit Technology Holding Co. Ltd.
Filing Date: 2025-02-18
Form: DRS/A
Chunk 295
---
 realizable value.
Inventories that the Company determines to be obsolete or in excess of forecasted usage are reduced to its estimated realizable value
based on assumptions about future demand and market conditions. If actual demand is lower than the forecasted demand, additional inventory
markdown may be required.

Prepayments, deposits and other current assets

Prepayments, deposits and other current assets
mainly represents advances to suppliers and other receivables.

Advances to suppliers refers to advances for
purchase of materials or other service agreements, which are applied against trade accounts payable when the materials or services are
received. These advances are interest free, unsecured, short-term in nature and are reviewed periodically to determine whether their
carrying value has become impaired.

The Company reviews a supplier’s credit
history and background information before advancing a payment. If the financial condition of its suppliers were to deteriorate, resulting
in an impairment of their ability to deliver goods or provide services, the Company would recognize expense in the period they are considered
unlikely to be collected.

Deposits and other current assets mainly represents
security deposits on rental and other miscellaneous receivables from staffs and subsidies receivables from governments.

Property and Equipment, net

Property and equipment are recorded at cost less accumulated depreciation.
Depreciation commences upon placing the asset in usage and is recognized on a straight-line basis over the estimated useful lives of
the assets with 5% of residual value, as follows:

|                                    |     | Useful lives |         |
| Research and development equipment |     |              | 5       
 years   |
| Office and electronic equipment    |     |              | 5       
 years   |
| Leasehold improvement              |     |              | 5 years |

| F-12 |

Expenditures for maintenance and repairs, which
do not materially extend the useful lives of the assets, are charged to expense as incurred. Expenditures for major renewals and betterments
which substantially extend the useful life of assets are capitalized. The cost and related accumulated depreciation of assets retired
or sold are removed from the respective accounts, and any gain or loss is recognized in the consolidated statements of income and other
comprehensive income in other income or expenses.

Intangible Assets

Intangible assets consist of licensed software,
patent right and software in development which are recorded at cost less accumulated amortization. Intangible assets are amortized using
the straight-line method with the following estimated useful lives:

|                   |     | Useful 
 lives