Company: ZDAN
Filing Date: 2025-02-18
Form Type: DRS/A
Source: 0001683168-25-001085
Chunk: 54

Company: Zerolimit Technology Holding Co. Ltd.
Filing Date: 2025-02-18
Form: DRS/A
Chunk 54
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 price of our Ordinary Shares could decline accordingly.

The VIE depends on its proprietary technology, and our future results may be impacted if the VIE cannot maintain technological superiority in its industry.

The VIE’s success
in the past has largely been attributable to its sophisticated proprietary technology. The VIE has benefited from the fact that the type
of proprietary technology employed by the VIE has not been widely available to its competitors. This is largely because Mr. Guangqing
Hu, our founder, Chairman of our Board of Directors and CTO has been developing the distributed network configuration tool software since
2017 using the VIE’s proprietary technology and has taken steps to safeguard such technology. If technology equivalent to the proprietary
technology the VIE employs becomes more widely available to its current or future competitors for any reason, including, but not limited
to, loss of intellectual property protection, challenges to our intellectual property rights, unenforceability of such rights, or even
industry innovation or industry divergence from our technological philosophy and roadmap, our operating results may be adversely affected.

Additionally, to keep pace
with changing technologies and client demands, the VIE must correctly interpret and address market trends and enhance the features and
functionality of its technology in response to these trends, which management expects will lead to significant research and development
costs. The VIE may be unable to accurately determine the needs of clients, developers and end-users or the trends in the decentralized
distributed technology industry or to design and implement the appropriate features and functionality of the VIE’s technology in
a timely and cost-effective manner, which could result in decreased demand for the VIE’s network, products, and service offerings
and a corresponding decrease in our revenue. Also, any adoption or development of similar or more advanced technologies by the VIE’s
competitors may require that the VIE devotes substantial resources to the development of more advanced technology to remain competitive.
The markets in which the VIE competes are characterized by rapidly changing technology, evolving industry standards, practices and techniques.
Also, the VIE may not be able to keep up with these rapid changes in the future, develop new technology, realize a return on its research
and development expenditures or remain competitive in the future.

In addition, although the
VIE’s network is decentralized and less susceptible to the following as a result of its decentralized nature, the VIE must still
protect its systems against physical damage from fire, earthquakes, power loss, telecommunications failures, computer viruses, hacker
attacks, physical