Company: ZDAN
Filing Date: 2025-02-18
Form Type: DRS/A
Source: 0001683168-25-001085
Chunk: 39

Company: Zerolimit Technology Holding Co. Ltd.
Filing Date: 2025-02-18
Form: DRS/A
Chunk 39
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 ownership in 100% of the equity in WFOE. Accordingly, we consolidate the financial results of the VIE into our consolidated financial statements under U.S. GAAP. See “ Corporate History and Structure– VIE Agreements” for further details. In the opinion of Global Law Office, our PRC legal counsel, The VIE Agreements are not in violation of any prohibitive provisions of the current applicable PRC Laws, however, the relevant PRC regulatory authorities have broad discretion in determining whether the VIE structure violates PRC laws and regulations, therefore there are substantial uncertainties regarding the interpretation and application of the current and future PRC Laws, rules and regulations related to the validity and enforcement of VIE Agreements.

We rely on contractual arrangements by and between WFOE, the VIE and the VIE Shareholders for our business operations.

We are a Cayman Islands
exempted company and our China subsidiary, WFOE, is a foreign-invested enterprise. We have relied, and expect to continue relying, on
contractual arrangements by and between WFOE, the VIE and the VIE Shareholders to operate our business in China. We conduct our operations
in the PRC through the VIE pursuant to the VIE Agreements. The VIE Agreements 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, our Company is deemed to have a controlling financial
interest in, and be the primary beneficiary of, the VIE for accounting purposes only and is required to consolidate the financial results
of the VIE in our consolidated financial statements. For a description of the VIE Agreements, see “Corporate History and Structure — VIE Agreements.” The revenues contributed by the VIE constituted all of our net revenues for the fiscal years
ended September 30, 2024 and 2023.

If the VIE or the VIE Shareholders
fail to perform their respective obligations under the contractual arrangements, we may have to incur substantial costs and expend additional
resources to enforce such arrangements. For example, if the VIE Shareholders refuse to transfer their equity interest in the VIE to us
or our designee if we exercise the purchase option pursuant to the VIE Agreements, or if they otherwise act in bad faith toward us, then
we may have to take legal actions to compel them to perform their contractual obligations. In addition,