Company: ZDAN
Filing Date: 2025-01-10
Form Type: DRS/A
Source: 0001683168-25-000168
Chunk: 42

Company: Zerolimit Technology Holding Co. Ltd.
Filing Date: 2025-01-10
Form: DRS/A
Chunk 42
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 relevant regulators that have competent authority, to be illegal, either in whole or in
part, we may lose the consolidated VIE, which conducts our business operations, holds significant intellectual property assets and accounts
for all of our revenues to date, and have to modify such structure to comply with regulatory requirements. However, there can be no assurance
that we can achieve this without material disruption to our business. Further, if our corporate structure and contractual arrangements
are found to be in violation of any existing or future PRC laws or regulations, the relevant regulatory authorities would have broad
discretion in dealing with such violations, including:

| · | revoking our business and operating licenses for the VIE and WFOE; |

| · | levying fines on the VIE and WFOE; |

| · | confiscating income that they deem to be obtained through illegal operations; |

| · | discontinuing or restricting business operations in China; |

| · | imposing conditions or requirements with which we may not be able to 
 comply;                                                              |

| · | requiring us to change our corporate structure and contractual arrangements; |

| · | restricting or prohibiting our use of the proceeds from the overseas                
 offering to finance our consolidated VIE’s business and operations in China; and or |

| · | taking other regulatory or enforcement actions that could be harmful 
 to our business.                                                     |

Furthermore, new PRC laws,
rules and regulations may be introduced to impose additional requirements that may be applicable to our corporate structure and
contractual arrangements. The occurrence of any of these events could materially and adversely affect our business, financial condition
and results of operations and the market price of our Ordinary Shares. In addition, if the imposition of any of these penalties or a
requirement to restructure our corporate structure causes us to lose the rights to direct the activities of the VIE or our right to receive
their economic benefits for accounting purposes, we would no longer be able to consolidate the financial results of the VIE into our
consolidated financial statements for accounting purposes, which may cause the value of our securities to significantly decline or even
become worthless.

| 24 |

The VIE Shareholders may have actual or potential conflicts of interest with us, which may materially and adversely affect our business and financial condition.

Pursuant to the VIE Agreements,
the VIE shall pay service fees in an amount equivalent to all of its net income to WFOE, and WFOE has the power to direct the activities
of