Company: ZDAN
Filing Date: 2025-07-28
Form Type: F-1/A
Source: 0001683168-25-005450
Chunk: 137

Company: Zerolimit Technology Holding Co. Ltd.
Filing Date: 2025-07-28
Form: F-1/A
Chunk 137
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IE Agreements

We are a holding company
incorporated in the Cayman Islands and not a Chinese operating company. As a holding company with no material operations of our own,
the majority of our operations are conducted through the VIE in the PRC pursuant to the VIE Agreements. The VIE Agreements were entered
into by and among WFOE, the VIE, and the VIE’s shareholders and include the following agreements: Powers of Attorney, Equity Interest
Pledge Agreement, Exclusive Consulting and Services Agreement, Exclusive Option Agreement, and a Spousal Consent Letter. Due to the PRC
legal restrictions on foreign ownership in certain internet-related businesses we may explore and operate in the future. We control and
receive the economic benefits of the VIE’s business operations through the VIE Agreements, and we consolidate the VIE for accounting
purposes only because we met the conditions under U.S. GAAP to consolidate the VIE. Pursuant to the VIE Agreements, the VIE shall pay
service fees in an amount equivalent to all of its net income to WFOE, while WFOE has the power to direct the activities of the VIE that
can significantly impact the VIE’s economic performance, has the obligation to absorb the expected losses of the VIE, and has the
right to receive substantially all of the economic benefits of the VIE. Such contractual arrangements are designed so that the operations
of the VIE are solely for the benefit of WFOE and ultimately, the Company. As such, under U.S. GAAP, the Company is deemed to have a
controlling financial interest in, and be the primary beneficiary of, the VIE for accounting purposes and must consolidate the VIE.

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However, the VIE Agreements
may not be as effective in providing operational control. For example, the VIE and the VIE Shareholders could breach their contractual
arrangements with us by, among other things, failing to conduct the VIE’s operations in an acceptable manner or taking other actions
that are detrimental to our interests. If we had direct ownership of the VIE, we would be able to exercise our rights as a shareholder
to effect changes in the board of directors of the VIE, which in turn could implement changes, subject to any applicable fiduciary obligations,
at the management and operational level. However, under the current contractual arrangements, we rely on the VIE and the VIE Shareholders