Company: ZDAN
Filing Date: 2025-06-30
Form Type: F-1
Source: 0001683168-25-004840
Chunk: 58

Company: Zerolimit Technology Holding Co. Ltd.
Filing Date: 2025-06-30
Form: F-1
Chunk 58
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 of their distributor agreement. The VIE relies upon
short-form order sheets to memorialize purchase agreements when distributors make their orders on an as-needed basis. The distributors
can reduce the quantities of products from the VIE, or cease purchasing products from the VIE. Such reductions or terminations could
have a material adverse impact on the VIE’s revenues, profits and financial condition. The loss of any of the VIE’s major
customers, or a significant reduction in sales to any such customers, would adversely affect its profitability, which would cause a significant
decline in our consolidated revenues.

We expect that the VIE will
continue to depend on a relatively small number of distributors for a significant portion of its net revenue. The distributors constitute
customers of the VIE. The VIE’s ability to maintain close and satisfactory relationships with its distributors is important to
the ongoing success and profitability of its business. The VIE’s ability to attract potential distributors is also critical to
the success of its business. If any of the VIE’s significant distributors reduce, delay or cancel orders for any reason, or the
financial condition of any of the VIE’s key distributors deteriorates, the VIE’s business could be seriously harmed. Similarly,
a failure to manufacture sufficient quantities of products to meet the demands of these distributors may cause the VIE to lose distributors,
which may affect adversely the profitability of the VIE’s business as a result which would cause a significant decline in our consolidated
revenues. Furthermore, if the VIE experiences difficulties in the collection of their accounts receivables from their major distributors,
our results of operation may be materially and adversely affected.

The top 3 customers for
the fiscal year ended September 30, 2024 are the following (1) Guangdong Lightning Cat New Energy Technology Co., Ltd (“Guangdong
Lightning”), (2) Chongqing Shenghong Technology Co., Ltd (“Chongqing Shenghong”), and (3) Shenzhen Huawang Supply Chain
Co., Ltd (“Shenzhen Huawang”), accounting for 11%, 11% and 10% of the total revenue for the fiscal year, respectively.
Among these customers, none of them are related parties of our Company, its subsidiaries or the VIE.

Guangdong Lightning, Chongqing Shenghong and Shenzhen Huawang are distributors which have signed master sales contracts with the VIE. Important terms of the agreements are as follows:

1. Upon