Business Context and Reporting Period
This Form 6-K filing by Zhibao Technology Inc. covers the period ending July 22, 2025. The report details the consummation of the second closing of the second tranche of a previously disclosed financing arrangement with an institutional investor, following the SEC's declaration of effectiveness for the Company's resale registration statement on Form F-1.
Key Financial Metrics and Transaction Details
- Proceeds Received: The Company received $270,000 (net of a 10% original issue discount) in the Second Closing of the Second Tranche on July 22, 2025.
- Securities Issued: A warrant to purchase up to 123,002 Class A ordinary shares at an initial exercise price of $1.18172 per share.
- Debt Instrument: The proceeds relate to the Second Tranche Note, which bears no interest and matures on February 14, 2026. The note is convertible at a price of $1.69964 per share, subject to a floor price of $0.282.
- Guarantees: The Company and its subsidiaries entered into a Guarantee Agreement to unconditionally guarantee the obligations under the Second Tranche Note.
- Use of Proceeds: Working capital and general corporate purposes.
Material Changes and Prior Period Context
The filing reports the resolution of a previously disclosed Event of Default. The default occurred because the resale registration statement for the Second Tranche was not declared effective within the timeframe required by the Registration Rights Agreement. This default was cured on July 21, 2025, when the SEC declared the registration statement (File No. 333-286140) effective, enabling the July 22, 2025 closing.
This transaction follows the First Closing of the Second Tranche on February 14, 2025, where the Company received $630,000 net proceeds and issued a warrant for 202,459 shares.
Outlook, Risks, and Contingencies
- Future Closings: The financing agreement allows for a third closing of the Second Tranche for up to $1,500,000 in face value, contingent on the Company's share price reaching or exceeding $2.50 per share within a specific timeframe (subject to extension).
- Repayment Terms: Monthly installments on the Second Tranche Note are required commencing 60 days after the closing or upon the effectiveness of the resale registration statement. Payments are calculated as 105% of the principal divided by the remaining months to maturity.
- Acceleration and Prepayment: The Investor may request prepayment of up to 25% of gross proceeds from future financings. Upon a Change of Control, the Investor may require prepayment of 120% of the outstanding principal and accrued interest.
- Default Consequences: In the event of a default, interest accrues at 10% per annum (or the maximum permitted by law), and the Investor may convert a "Mandatory Default Amount" (120% of principal plus interest) into shares.
- Beneficial Ownership Limitation: Conversion or exercise is limited to prevent the Investor from beneficially owning more than 4.99% of outstanding shares (increasable to 9.99% with notice).
Investor Verification Checklist
- Verify the current trading price of Class A ordinary shares to assess the likelihood of triggering the third closing of the Second Tranche (threshold: $2.50).
- Review the Company's cash flow projections to ensure ability to meet the mandatory monthly installment payments on the Second Tranche Note.
- Confirm the status of the resale registration statement (File No. 333-286140) and any potential future regulatory hurdles.
- Assess the dilution impact of the outstanding warrants issued in the First and Second Closings of the Second Tranche.
- Examine the full text of the Guarantee Agreement (Exhibit 10.1) to understand the extent of subsidiary liability.