Company: ZDAN
Filing Date: 2025-02-18
Form Type: DRS/A
Source: 0001683168-25-001085
Chunk: 63

Company: Zerolimit Technology Holding Co. Ltd.
Filing Date: 2025-02-18
Form: DRS/A
Chunk 63
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 in the supply of the VIE’s hardware components could
limit the ability of the VIE to fulfill orders or service or replace products, or cause other constraints on the VIE’s operations
that could damage its customer relationships.

If the VIE is unable to build and maintain a sufficient sales and distribution network to meet increasing demand of its products, the VIE’s ability to execute on its business plan as outlined in this prospectus will be impaired.

The VIE’s distributors refer to those individuals or entities who purchase our products and distribute them in the region designated in our purchase agreements with them or through offline and online channels to resell our products to end users. As of September 30, 2024, we had 35 distributors in China. These intermediaries cover 9 provinces and 11 municipalities in China, including Guangdong, Chongqing, Zhejiang, Hainan, Hubei, Liaoning, Shandong, Sichuan, and Hebei.

Although the VIE’s
current sales and distribution channels are sufficient to satisfy the current business needs, it might become insufficient to meet demand
if the VIE continues to grow its business. If the VIE’s planned efforts to expand its direct sales force and distribution channels
are not effective, its ability to execute on its business plan and to realize continued growth will be impaired.

The VIE may face competition from, and the VIE may be unable to compete successfully against, new entrants and established companies with greater resources.

The VIE’s industry
is competitive and rapidly evolving and includes many companies both domestically and internationally. The VIE faces increasing competitive
pressures to grow its business in order to maintain its competitive position, and the VIE may encounter competition from, and lose customers
to, other companies with design, technological and manufacturing capabilities similar to them. In addition to the risk posed by the quantitative
effect of the entry of new competitors, some of the VIE’s potential competitors may also have greater name recognition, greater
operating revenues, larger customer bases, longer customer relationships, and greater financial, technical, personnel and marketing resources
than the VIE. If the VIE is unsuccessful in competing with its competitors for its existing and prospective customers’ business,
the VIE’s financial condition and results of operation may be adversely affected.

Increased competition may
further reduce the VIE’s market share and profitability and require the VIE to increase its sales and marketing efforts and capital
commitment in the future, which could