Company: ZDAN
Filing Date: 2025-01-10
Form Type: DRS/A
Source: 0001683168-25-000168
Chunk: 67

Company: Zerolimit Technology Holding Co. Ltd.
Filing Date: 2025-01-10
Form: DRS/A
Chunk 67
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 the constantly evolving industry trends and must enhance and improve its technology accordingly.
The VIE must identify and adopt new technologies to meet customer needs, and must also identify and adopt technologies that meet evolving
industry standards and trends. Such adoption may be accomplished through in-house research and development or acquisition of the technologies.
There can be no assurance that the VIE will be able to identify, develop or acquire such technologies or even utilize such technologies
effectively. If the VIE is unable to adapt to customer demands and evolving industry standards and trends in a cost-effective and timely
manner, whether for technical, legal, financial or other reasons, its business may be materially and adversely affected.

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Changes to the VIE’s payment terms with both distributors and suppliers may materially adversely affect our operating cash flows.

The VIE may experience significant
pressure from its suppliers to reduce the number of days of their accounts payable or change the way they pay. At the same time, the
VIE may experience pressure from its distributors to extend the number of days before paying their accounts receivable. As the company's
business expands and distributors’ needs become increasingly diverse, in order to enhance market competitiveness and strengthen
long-term strategic partnerships with clients, we have appropriately relaxed our payment collection policies for distributors with good
credit standing. We now offer distributors a credit term of approximately 30 days. Agreements with distributors include terms for acceptable
methods of payment, the dates payments are due, and other payment terms. Additionally, we have strengthened comprehensive monitoring
and control over accounts receivable throughout the entire process, from pre-sale to in-process and post-sale stages, while maintaining
close communication with distributors. This helps to ensure the smooth and timely receipt of payments. Any failure to manage the VIE’s
accounts payable and accounts receivable may have a material adverse effect on our business, financial condition and results of operations.

Economic recessions could have a significant, adverse impact on our business.

The VIE’s revenues
are generated from sales of products and services in China and the VIE anticipates that revenues from such sales will continue to constitute
its sole source of revenues in the near future. The VIE’s sales and earnings can also be affected by changes in the general economy
of China.

The distributed technology
industry historically has experienced cyclical fluctuations in financial results due to economic recession, downturns in business cycles
of customers, interest rate fluctuations, and other economic factors beyond the VIE’s control. Deterioration in the