Company: ZDAN
Filing Date: 2025-06-30
Form Type: F-1
Source: 0001683168-25-004840
Chunk: 60

Company: Zerolimit Technology Holding Co. Ltd.
Filing Date: 2025-06-30
Form: F-1
Chunk 60
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 guarantee obligations towards the end-users,
which are transferred to Party B concurrently with the delivery of Party A's products.

| 32 |

Zerolimit Digital is the
VIE’s domestic parent company which has signed software authorization agreements for the use of four software products developed
by the VIE. Please refer to the discussion starting on page 140 for “Material Transactions with Related Parties”
for more details.

We are subject to concentration risks of suppliers and customers.

As of September 30, 2024
and 2023, there were three and three customers from whom revenues individually represent greater than 10% of our total revenues, respectively.
The total sales to these customers accounted for approximately 34% and 47% of our total revenues, respectively, for the same periods.
As of September 30, 2024 and 2023, there were one and zero suppliers from whom purchases individually represent greater than 10% of our
total purchases, respectively. The total purchase from these suppliers accounted for approximately 100% and 0% of our total purchase,
respectively, for the same periods. Considering such concentration, the loss of these customers and suppliers could have a material adverse
effect on our business.

Although the VIE enters into distributor agreements with its customers, and thereby the parties agree to a specific quantity of products and services, the consequences of breach of any such agreement is only the termination of the applicable distributor agreement. If customers reduce the quantities of products and services or cease purchasing products and services from the VIE, such reductions or terminations would cause a significant decline in our consolidated revenues.

The distributor agreement
with each customer describes the terms and conditions concerning the software, delivery of the software and payment. The VIE relies upon
short-form order sheets to memorialize agreements with its customers for the purchase of products and services, pursuant to which customers
make their orders on an as-needed basis. The customers 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 the VIE’s profitability and also cause a significant decline in our consolidated revenues.

The success of a network created using our proprietary technology depends on maintaining a minimum user base, which translates to a minimum number of nodes; for instance, if