Company: ZDAN
Filing Date: 2025-02-18
Form Type: DRS/A
Source: 0001683168-25-001085
Chunk: 290

Company: Zerolimit Technology Holding Co. Ltd.
Filing Date: 2025-02-18
Form: DRS/A
Chunk 290
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 of their equity interests in the VIE
without the prior written consent of WFOE, and the VIE shall not dispose of or transfer any of its assets or income or distribute any
dividends to the VIE Shareholders in any manner. The Exclusive Option Agreement remains effective unless otherwise terminated by WFOE
or terminated pursuant to other agreements entered into among all parties to the Exclusive Option Agreement.

As a holding company with no material operations
of our own, the majority of our operations are conducted through the VIE in China pursuant to the VIE Agreements. The VIE Agreements
were entered into by and among WFOE, the VIE, and the VIE’s shareholders and include the Powers of Attorney, Equity Interest Pledge
Agreement, Exclusive Consulting and Services Agreement, Exclusive Option Agreement, and a Spousal Consent Letter. Due to PRC legal restrictions
on foreign ownership in certain internet-related businesses we may explore and operate in the future, we do not have any direct equity
ownership of the VIE. We control and receive the economic benefits of the VIE’s business operations through the VIE Agreements,
and we consolidate the VIE for accounting purposes only because we met the conditions under U.S. GAAP to consolidate the VIE. Pursuant
to the VIE Agreements, the VIE shall pay service fees in an amount equivalent to all of its net income to WFOE, while WFOE has the power
to direct the activities of the VIE that can significantly impact the VIE’s economic performance, has the obligation to absorb
the expected losses of the VIE, and has the right to receive substantially all of the economic benefits of the VIE. Such contractual
arrangements are designed so that the operations of the VIE are solely for the benefit of WFOE and ultimately, the Company. As such,
under U.S. GAAP, the Company is deemed to have a controlling financial interest in, and be the primary beneficiary of, the VIE for accounting
purposes and must consolidate the VIE.

The Company’s total assets and liabilities
presented in the accompanying consolidated financial statements represent substantially all of the total assets and liabilities of the
VIE because the other entities in the consolidation are non-operating holding entities with nominal assets and liabilities. The following
financial statement amounts and balances of the VIE were included in the accompanying audited consolidated financial statements for the
years ended September 30, 2024 and