Company: ZDAN
Filing Date: 2025-02-18
Form Type: DRS/A
Source: 0001683168-25-001085
Chunk: 40

Company: Zerolimit Technology Holding Co. Ltd.
Filing Date: 2025-02-18
Form: DRS/A
Chunk 40
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 if any third parties claim
any interest in such shareholders’ equity interests in the VIE, our ability to exercise shareholders’ rights or foreclose
the share pledge according to the contractual arrangements may be impaired. If these events or other disputes between the VIE Shareholders
and third parties were to impair our contractual relationship with the VIE, our ability to consolidate the financial results of the VIE
for accounting purposes would be affected, which would in turn result in a material adverse effect on our business, operations and financial
condition.

All of the VIE Agreements
are governed by and interpreted in accordance with PRC law, and disputes arising from the VIE Agreements between us and the VIE will
be resolved through arbitration in China. These disputes do not include claims arising under United States federal securities law and
thus the arbitration provisions do not prevent our shareholders from pursuing claims under United States federal securities law. 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. As a result, uncertainties in the legal system could limit
our ability to enforce the VIE Agreements. There remain significant uncertainties regarding the ultimate outcome of such arbitration
should legal action become necessary. In addition, under PRC law, as long as the award does not violate the Arbitration Law, the award
is final, which means parties cannot appeal the arbitration results in courts, and if the losing parties fail to carry out the arbitration
awards within a prescribed time limit, the prevailing parties may only enforce the arbitration awards in PRC courts through arbitration
award enforcement proceedings, which would require additional expenses and delay. In the event we are unable to enforce the VIE Agreements,
or if we suffer significant delays or other obstacles in the process of enforcing the VIE Agreements, our ability to conduct business
may be negatively affected.

| 23 |

Numerous uncertainties exist regarding the status of the rights of the Cayman Islands holding companies, including with respect to our Company’s contractual arrangements with the VIE, its founders and owners, and accordingly, we face significant challenges in enforcing these contractual agreements due to legal uncertainties and jurisdictional limits.

We have been advised by
our Cayman Islands legal counsel, Ogier, that there is uncertainty as to whether the courts of the Cayman Islands would (i