Company: ZDAN
Filing Date: 2025-01-10
Form Type: DRS/A
Source: 0001683168-25-000168
Chunk: 39

Company: Zerolimit Technology Holding Co. Ltd.
Filing Date: 2025-01-10
Form: DRS/A
Chunk 39
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 market price of our Ordinary Shares could decline, and you could lose part or all of your investment.

Risks Related to Our Corporate Structure

We do not hold direct equity interest in the VIE. We control and receive the economic benefits of the business operations of the VIE through the VIE Agreements among WFOE, the VIE and the VIE Shareholders. We have evaluated the guidance of FASB ASC 810 and determined that WFOE is the primary beneficiary of the VIE, for accounting purposes, based upon such contractual arrangements. Our Company has indirect beneficial ownership in 100% of the equity in WFOE. Accordingly, we consolidate the financial results of the VIE into our consolidated financial statements under U.S. GAAP. See “ Corporate History and Structure– VIE Agreements” for further details. In the opinion of Global Law Office, our PRC legal counsel, The VIE Agreements are not in violation of any prohibitive provisions of the current applicable PRC Laws, however, the relevant PRC regulatory authorities have broad discretion in determining whether the VIE structure violates PRC laws and regulations, therefore there are substantial uncertainties regarding the interpretation and application of the current and future PRC Laws, rules and regulations related to the validity and enforcement of VIE Agreements.

We rely on contractual arrangements by and between WFOE, the VIE and the VIE Shareholders for our business operations.

We are a Cayman Islands
exempted company and our China subsidiary, WFOE, is a foreign-invested enterprise. We have relied, and expect to continue relying, on
contractual arrangements by and between WFOE, the VIE and the VIE Shareholders to operate our business in China. We conduct our operations
in the PRC through the VIE pursuant to the VIE Agreements. The VIE Agreements 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, our Company is deemed to have a controlling financial
interest in, and be the primary beneficiary of, the VIE for accounting purposes only and is required to consolidate the financial results
of the VIE in our consolidated financial statements. For a description of the VIE Agreements, see “Corporate History and Structure — VIE Agreements.” The revenues contributed by the VIE constituted all of our net revenues for the fiscal years
ended September 30,