Company: ZDAN
Filing Date: 2025-02-18
Form Type: DRS/A
Source: 0001683168-25-001085
Chunk: 71

Company: Zerolimit Technology Holding Co. Ltd.
Filing Date: 2025-02-18
Form: DRS/A
Chunk 71
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 in China. Confidentiality
agreements may be breached by counterparties, and there may not be adequate remedies available to the VIE for any such breach. Accordingly,
the VIE may not be able to effectively protect its intellectual property rights or to enforce its contractual rights in China. In addition,
policing any unauthorized use of the VIE’s intellectual property is difficult, time-consuming and costly and the steps the VIE
has taken may be inadequate to prevent the misappropriation of its intellectual property.

| 39 |

In the event that the VIE
resorts to litigation to enforce its intellectual property rights, such litigation could result in substantial costs and a diversion
of their managerial and financial resources. We can provide no assurance that the VIE will prevail in such litigation. In addition, the
VIE’s trade secrets may be leaked or otherwise become available to, or be independently discovered by, its competitors. Any failure
in protecting or enforcing the VIE’s intellectual property rights could have a material adverse effect on our business, financial
condition and results of operations.

Changes in U.S. and international trade policies, particularly with regard to China, may adversely impact the VIE’s business and operating results.

The U.S. government has
recently made statements and taken certain actions that may lead to potential changes to U.S. and international trade policies, including
recently imposed tariffs affecting certain products manufactured in China. It is unknown whether and to what extent new tariffs (or other
new laws or regulations) will be adopted, or the effect that any such actions would have on the VIE or its industry and customers. If
the VIE plans to sell its products internationally in the future, any unfavorable government policies on international trade, such as
capital controls or tariffs, may affect the demand for the VIE’s products, impact the competitive position of the VIE’s products
or prevent the VIE from being able to sell products in certain countries. If any new tariffs, legislation and/or regulations are implemented,
or if existing trade agreements are renegotiated or, in particular, if the U.S. government takes retaliatory trade actions due to the
recent U.S.-China trade tension, such changes could have an adverse effect on the VIE’s business, financial condition, and results
of operations.

The VIE has no business liability or disruption insurance, which could expose the VIE to significant costs and business disruption.

The insurance industry in
China is still at an early stage of development, and insurance