Company: ZDAN
Filing Date: 2025-01-10
Form Type: DRS/A
Source: 0001683168-25-000168
Chunk: 107

Company: Zerolimit Technology Holding Co. Ltd.
Filing Date: 2025-01-10
Form: DRS/A
Chunk 107
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IE expects that its labor costs,
including wages and employee benefits, will continue to increase. Unless the VIE is able to pass on these increased labor costs to its
clients by increasing prices for its products and/or services, the VIE’s profitability and results of operations may be materially
and adversely affected.

In addition, the VIE has
been subject to stricter regulatory requirements with respect to labor contracts with its employees and the payment of various statutory
employee benefits, including pensions, housing fund deposits, medical insurance, work-related injury insurance, unemployment insurance,
and maternity insurance to designated government agencies for the benefit of their employees. Pursuant to the PRC Labor Contract Law,
or the “Labor Contract Law,” that became effective in January 2008 and its amendments that became effective in July 2013
and its implementing rules that became effective in September 2008, employers are subject to stricter requirements in terms of signing
labor contracts, minimum wages, paying remuneration, determining the term of employees’ probation, and unilaterally terminating
labor contracts. In the event that the VIE decides to terminate some of its employees or otherwise changes its employment or labor practices,
the Labor Contract Law and its implementation rules may limit the VIE’s ability to effect those changes in a desirable or
cost-effective manner, which could adversely affect the VIE’s business and results of operations.

| 56 |

Companies operating in China
are required by PRC labor-related laws and regulations to pay various statutory employee benefits, including pensions insurance, medical
insurance, work-related injury insurance, unemployment insurance, maternity insurance and housing provident fund, to designated government
agencies for the benefit of their employees and associates. The VIE has completed the social insurance registration and housing provident
fund deposit registration but failed to make contributions in full on the social insurance fund and housing provident fund for all their
employees, as required by the relevant PRC laws and regulations. Although the VIE has not received any order or notice from the local
authorities nor any claims or complaints from their existing and former employees regarding their non-compliance with PRC labor-related
laws and regulations for the years September 30, 2024 and 2023, we cannot rule out the possibility that the competent PRC labor authorities
may order the VIE to rectify the non-compliance and pay the required contributions within a stipulated deadline and the VIE may be subject
to a late fee of up to 0.05% per