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Zhibao Technology Inc. Unveils Key Insights from Form 6-K Financing Report

$ZBAO
Form 6-K
Filed on: 2025-02-14
Source
Zhibao Technology Inc. Unveils Key Insights from Form 6-K Financing Report

Key Information and Insights from Zhibao Technology Inc.'s Form 6-K Report

1. Overview:

  • Company Name: Zhibao Technology Inc.
  • Type of Filing: Form 6-K, which is used by foreign private issuers to report significant events.
  • Filing Date: February 14, 2025.
  • Commission File Number: 001-42000.
  • Location: Pudong New Area, Shanghai, China.

2. Financing Activities:

  • First Tranche Financing:
    • Total amount: Up to $8.0 million in loans structured in three tranches.
    • First Closing of First Tranche: Completed on September 23, 2024.
    • Amount received: $675,000 (after a 10% original issue discount).
    • Instruments issued: Convertible promissory note for $2.5 million, warrants for 74,451 and 191,522 Class A ordinary shares.
    • Second Closing: Completed on October 1, 2024.
    • Amount received: $675,000 (after discount).
    • Instruments issued: Warrant for 79,599 Class A ordinary shares.
    • Third Closing: Completed on December 11, 2024.
    • Amount received: $900,000 (after discount).
    • Instruments issued: Warrant for 160,020 (later adjusted to 184,788) Class A ordinary shares.
  • Second Tranche Financing:
    • February 2025 Letter Agreement: Amended the Original Securities Purchase Agreement for up to three closings in the second tranche.
    • Initial Closing: Amount of $700,000.
    • Second Closing: For an additional $300,000, contingent on regulatory approval.
    • Third Closing: For an additional $1.5 million, contingent on share price performance.
    • First Closing of Second Tranche: Completed on February 14, 2025.
    • Amount received: $630,000 (after discount).
    • Instruments issued: Convertible promissory note for $2.5 million and warrants for 202,459 Class A ordinary shares.

3. Terms of Securities:

  • Convertible Promissory Notes:
    • The notes have an initial conversion price of $1.69964 per share, with a floor price of $0.282.
    • Maturity date is February 14, 2026.
    • The notes do not bear interest.
  • Warrants:
    • Various exercise prices for the warrants, with specific adjustments based on conditions.
  • Prepayment Rights: The Investor can request prepayment up to 25% of gross proceeds from any financing received by the Company.

4. Use of Proceeds:

  • The proceeds from these financings will be used for working capital and general corporate purposes.

5. Regulatory Compliance:

  • The securities issued are unregistered and are subject to the Securities Act and applicable state laws. The company clarifies that neither the report nor any attached exhibit constitutes an offer to sell or solicit an offer to buy any securities.

6. Exhibits Attached:

  • The report includes multiple exhibits detailing the forms of the convertible promissory note, warrants, and the February 2025 Letter Agreement.

Insights:

  • Zhibao Technology Inc. is actively engaging in multiple financing rounds to raise substantial capital, indicating a strategy to bolster liquidity and support growth initiatives.
  • The structured nature of the financing (tranches) allows the company to mitigate immediate dilution while aligning investor interests with performance metrics (e.g., stock price thresholds).
  • The absence of interest on the convertible notes suggests a focus on maintaining cash flow, albeit at the cost of potential future dilution upon conversion.
  • The report highlights the Company’s proactive approach in securing funding through a well-defined agreement with an institutional investor, reflecting confidence in its operational and financial strategy.

This report is critical for stakeholders assessing the financial health and strategic direction of Zhibao Technology Inc.