Company: ZDAN
Filing Date: 2025-02-18
Form Type: DRS/A
Source: 0001683168-25-001085
Chunk: 100

Company: Zerolimit Technology Holding Co. Ltd.
Filing Date: 2025-02-18
Form: DRS/A
Chunk 100
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 capital expenditure payments outside China in a currency other than
Renminbi.

The PRC government has imposed
restrictive foreign exchange policies. and stepped-up scrutiny of major outbound capital movement including overseas direct investment.
More restrictions and substantial vetting process are put in place by SAFE to regulate cross-border transactions falling under the capital
account. If any of our shareholders regulated by such policies fails to satisfy the applicable overseas direct investment filing or approval
requirement timely or at all, it may be subject to penalties from the relevant PRC authorities. The PRC government may at its discretion
further restrict access in the future to foreign currencies for current account transactions. If the foreign exchange control system
prevents us from obtaining sufficient foreign currencies to satisfy our foreign currency demands, we may not be able to pay dividends
in foreign currencies to our shareholders, including holders of the Ordinary Shares.

PRC regulation of loans to and direct investment in the VIE by offshore holding companies and governmental control of currency conversion may delay us from using the proceeds of this offering, to make loans or additional capital contributions to WFOE, which could materially and adversely affect our liquidity and our ability to fund and expand our business.

Any funds we transfer to
WFOE, either as a shareholder loan or as an increase in registered capital, are subject to approval by or registration with relevant
governmental authorities in China. According to the relevant PRC regulations on Foreign Investment Enterprises (“FIEs”) in
China, capital contributions to our China subsidiary are subject to the information report with the MOFCOM or their respective local
branches and registration with a local bank authorized by the SAFE. In addition, any foreign loan procured by WFOE cannot exceed statutory
limits and is required to be registered with SAFE or its respective local branches. Any medium or long-term loan to be provided by us
to the VIE must be registered with the National Development and Reform Commission, or NDRC, and the SAFE or its local branches. We may
not be able to complete such registrations on a timely basis, with respect to future capital contributions or foreign loans by us to
WFOE. If we fail to complete such registrations, our ability to use the proceeds of this offering, and to capitalize our PRC operations
may be negatively affected, which could adversely affect our liquidity and our ability to fund and expand our business.

On March 30, 2015,
the SAFE promulgated the Circular on Reforming the Management Approach Regarding the Foreign Exchange Capital Settlement of