F-1/A: Zhibao Technology Amends F-1 for Share Resale, Details China Risks

Zhibao Technology Inc. filed an amended F-1 registration statement for the resale of up to 14.98 million Class A ordinary shares by Hudson Global Ventures, LLC, while highlighting significant operational and regulatory risks in China.

Summary

• This Amendment No. 2 to Form F-1 is for the resale of up to 14,985,883 Class A ordinary shares by Hudson Global Ventures, LLC, with the company not receiving any proceeds from this specific resale.
• The company may receive up to $15.0 million in aggregate gross proceeds from Hudson under an Equity Purchase Agreement (Hudson EPA) in connection with future sales of Class A ordinary shares to Hudson.
• Zhibao Technology Inc. operates as a Cayman Islands holding company, conducting substantially all its business through PRC Subsidiaries in China, primarily offering digital insurance brokerage and managing general underwriting (MGU) services.
• The company utilizes a 2B2C (to-business-to-customer) embedded insurance model, having developed over 40 proprietary digital insurance solutions and partnered with over 100 insurance companies.
• As of the prospectus date, the company has cooperated with more than 2,400 B channels and acquired over 24 million end customers.
• Revenue increased by RMB 41.6 million (US$5.7 million), or 29%, from RMB 142.1 million in fiscal year 2023 to RMB 183.7 million in fiscal year 2024.
• Revenue further increased by RMB 93.3 million (US$13.3 million), or 51%, to RMB 276.9 million (US$38.7 million) for fiscal year 2025.
• The company reported a net loss of RMB 43.1 million for fiscal year 2023, achieved net income of RMB 13.3 million for fiscal year 2024, and incurred a net loss of RMB 62.0 million (US$8.7 million) for fiscal year 2025.
• As of June 30, 2025, the company had working capital of RMB 0.4 million (US$51,600) and accumulated deficits of RMB 193.9 million (US$27.1 million).
• Operating cash outflows were RMB 1.1 million in fiscal year 2023, RMB 3.8 million in fiscal year 2024, and RMB 20.7 million (US$2.9 million) in fiscal year 2025.
• Management has identified substantial doubt about the company's ability to continue as a going concern.
• Two material weaknesses in internal controls over financial reporting were identified as of June 30, 2025, related to insufficient U.S. GAAP and SEC reporting personnel and lack of a formal risk assessment process.
• Mr. Botao Ma, CEO and Chairman, beneficially holds 16,816,692 Class B ordinary shares, representing approximately 94.0% of the total voting power as of January 5, 2026.
• Recent corporate activities include the Second Closing of Second Tranche of L1 Private Placement ($270,000 net proceeds received), the acquisition of 51% equity interest in Zhonglian Jinan Insurance Brokers Co., Ltd. for RMB 25.5 million (approx. $3.5 million), and a joint venture for Zhibao Yingshi (51% owned subsidiary).
• The company changed its independent registered public accounting firm from Marcum Asia CPAs LLP to HYYH CPA. LLC, effective November 24, 2025.

Sentiment

Score: 3

Explanation: The sentiment is negative due to the company's return to net loss, significant increase in operating cash outflows, substantial accumulated deficits, and an explicit 'going concern' warning. These financial challenges are compounded by identified material weaknesses in internal controls and a high degree of regulatory and geopolitical risk associated with operating in China, including potential delisting from Nasdaq. While there are strategic growth plans and potential capital raises, the immediate financial health and operational uncertainties outweigh the positives.

Positives

• Revenue demonstrated strong growth, increasing by 29% in fiscal year 2024 and 51% in fiscal year 2025.
• The company is a pioneer and market leader in China's 2B2C embedded insurance business, enabling low customer acquisition costs and higher efficiency compared to peers.
• An extensive network has been built, with over 2,400 B channels and more than 24 million end customers secured.
• Over 40 proprietary and innovative digital insurance solutions have been developed, built and operated on a proprietary Platform as a Service (PaaS).
• The management team is experienced and devoted, with deep expertise in the insurance industry and digital technology.
• Strategic growth plans are in place, including accelerating B channel expansion, growing the sales force, strengthening the 2C business, upgrading digital solutions and PaaS, expanding MGU services, and pursuing global expansion.
• A wholly-owned reinsurance subsidiary, Zhibao Labuan Reinsurance, was incorporated in July 2024 and received final license approval in April 2025, intended to support brokerage and MGU services.
• The company completed a cybersecurity review for its initial public offering (IPO) and is not required to do so for this offering.
• The current auditor, HYYH CPA. LLC, is headquartered in the United States and is subject to PCAOB inspections, not having been identified in the 2021 PCAOB determination report.

Negatives

• The company reported a net loss of RMB 62.0 million (US$8.7 million) for fiscal year 2025, a significant decline from the net income of RMB 13.3 million in fiscal year 2024.
• Operating cash outflows increased substantially to RMB 20.7 million (US$2.9 million) for fiscal year 2025.
• Accumulated deficits reached RMB 193.9 million (US$27.1 million) as of June 30, 2025.
• Management has identified substantial doubt about the company's ability to continue as a going concern.
• Two material weaknesses in internal controls over financial reporting were identified as of June 30, 2025, indicating deficiencies in U.S. GAAP knowledge and formal risk assessment.
• The company will not receive any proceeds from the current resale of Class A ordinary shares by the Selling Shareholder.
• Potential for significant dilution to existing shareholders from the issuance of up to 14,985,883 Class A ordinary shares under the Hudson EPA, representing approximately 92.3% of total Class A shares outstanding as of September 4, 2025, if fully issued.
• The CEO and Chairman, Mr. Botao Ma, holds approximately 94.0% of the total voting power, leading to highly concentrated control and potential misalignment of interests with other shareholders.
• Significant regulatory and geopolitical risks are associated with operating in China, including uncertainties in the interpretation and enforcement of PRC laws (e.g., data security, cybersecurity, overseas listing rules).
• There is a risk of delisting from Nasdaq under the Holding Foreign Companies Accountable Act (HFCA Act) if the PCAOB is unable to inspect the company's auditor for two consecutive years, despite the current auditor's U.S. base.
• The company is dependent on key insurance companies for product supply and on B channels for customer reach, with risks of business reduction if these relationships deteriorate.
• Uncertainties exist regarding the compliance of the MGU business model with PRC laws and regulations.
• The company faces risks in making all installments for the Zhonglian Acquisition and in realizing its anticipated benefits.
• No cash dividends are expected in the foreseeable future, requiring investors to rely solely on share price appreciation for returns.

Risks

• Class A ordinary shares may be delisted under the HFCA Act if the PRC prevents the PCAOB from inspecting accounting firms in mainland China or Hong Kong for two consecutive years.
• Changes in PRC government political and economic policies or U.S.-China relations may materially and adversely affect business, financial condition, and results of operations.
• Uncertainties in the interpretation and enforcement of PRC laws and regulations could limit legal protections available to the company and investors.
• The PRC government exerts substantial influence over business activities and may intervene or influence operations and offerings at any time, potentially causing Class A ordinary shares to decline in value or become worthless.
• Processing personal information of over one million users subjects the company to cybersecurity review and data protection laws (Cybersecurity Law, PIPL, Data Security Law), with failure to comply potentially leading to material adverse effects.
• PRC regulations on loans and direct investment in PRC Subsidiaries by offshore holding companies, and governmental control in currency conversion, may delay or prevent the use of offering proceeds to fund PRC operations.
• The company may be classified as a PRC resident enterprise for tax purposes, resulting in a 25% enterprise income tax on worldwide income and potential withholding tax on dividends for non-PRC shareholders.
• Dividends payable to foreign investors and gains on the sale of Class A ordinary shares by foreign investors may be subject to PRC tax.
• Reliance on dividends and other distributions from PRC Subsidiaries for cash and financing requirements, which are subject to PRC restrictions on dividend payments and foreign exchange controls.
• Fluctuations in exchange rates between RMB and U.S. dollar could result in foreign currency exchange losses and reduce the value of dividends.
• Difficulties may arise in effecting service of legal process, enforcing foreign judgments, or bringing actions in China against the company or its management based on foreign laws.
• The New Overseas Listing Rules (effective March 31, 2023) require a filing for this offering with the CSRC within three business days of SEC effectiveness; non-compliance could lead to investigations, fines, or suspension of operations.
• The M&A Rules and other PRC regulations establish complex procedures for acquisitions of Chinese companies by foreign investors, potentially hindering future growth through acquisitions.
• Funds or assets in mainland China or Hong Kong may not be available to fund operations or for other use outside these regions due to PRC government interventions or restrictions.
• Risks relating to the leased properties of PRC Subsidiaries, including unregistered leases and lack of ownership certificates from lessors, could lead to fines or operational interruptions.
• Failure to make adequate contributions to various employee benefit plans and withhold individual income tax as required by PRC regulations may subject the company to penalties.
• The digital insurance brokerage service industry in China is emerging, rapidly evolving, and competitive, making future growth and financial results challenging to predict.
• Dependence on key insurance companies for the supply of insurance products; loss of cooperation could adversely affect business.
• Dependence on B channels to reach end customers; failure to acquire new or retain existing B channels cost-effectively could materially and adversely affect business.
• Significant reliance on a third-party MGU Partner for MGU services, with risks of non-compliance with relevant laws and regulations.
• Failure to accelerate expansion of 2B2C business to drive growth in 2C business could adversely affect results.
• The innovative insurance technology and infrastructure require continuous developments and upgrades, with no assurance they will fully support the business or remain competitive.
• Uncertainty regarding the requirement for a value-added telecommunications business operation license for digital insurance broker services in China.
• Inability to attract, incentivize, and retain talented professionals could adversely affect business.
• Potential for legal or other proceedings in the ordinary course of business, leading to substantial liabilities or diversion of management attention.
• Cyberattacks, computer viruses, physical or electronic break-ins, or similar disruptions could compromise confidential information and harm reputation and business.
• Infringement of intellectual property rights by third parties or loss of the company's intellectual property rights may materially and adversely affect business.
• Inability to manage growth or execute strategies effectively could materially and adversely affect business and prospects.
• The wide variety of payment methods accepted subjects the company to third-party payment processing-related risks.
• Substantial doubt about the company's ability to continue as a going concern due to accumulated deficits and operating cash outflows.
• Need for additional capital, which may not be obtainable on favorable terms or at all, leading to severe liquidity restrictions or cessation of operations.
• An active, liquid trading market for Class A ordinary shares may not develop or be sustained over the long term.
• Nasdaq may apply additional and more stringent criteria for continued listing due to a small public offering and insiders holding a large portion of listed securities.
• The CEO and Chairman, Mr. Botao Ma, has significant influence over all corporate matters due to 94.0% voting power, potentially misaligning with other shareholders' interests.
• Failure to meet Nasdaq continued listing standards could result in delisting, adversely affecting liquidity and share price.
• The trading price of Class A ordinary shares may be volatile, potentially unrelated to underlying performance, making valuation difficult for investors.
• Significant dilution risk from Class A ordinary shares issuable upon exercise of outstanding warrants (2,099,901 shares) and convertible notes (729,433 shares) to L1.
• Investors who buy Class A ordinary shares from Hudson at different times will likely pay different prices and experience different levels of dilution.
• If the company is classified as a passive foreign investment company (PFIC), U.S. taxpayers owning Class A ordinary shares may face adverse U.S. federal income tax consequences.
• Anti-takeover provisions in the amended articles of association could discourage, delay, or prevent a change in control.
• Difficulties in protecting interests and limited ability to protect rights through U.S. courts due to incorporation under Cayman Islands law.
• Certain judgments obtained against the company by shareholders may not be enforceable in the Cayman Islands or China.
• Tension in international trade and rising political tension, particularly between the U.S. and China, may adversely impact business.

Future Outlook

The company plans to accelerate the expansion of its B channels, penetrate new markets, and increase market share, with a key focus on cooperating with more insurance companies. It intends to expand its sales force and strengthen its 2C business by targeting existing customer bases for additional insurance needs. Significant investment is planned for R&D to upgrade and enhance the proprietary PaaS, introducing new AI and BI functionalities and strengthening data security. The MGU business is targeted for growth, aiming to increase partners from 10 to 15 and online business proportion to 50% by June 2026, while expanding product lines. The company also intends to support brokerage and MGU services through its new reinsurance subsidiary in Labuan, Malaysia, and seek new strategic partnerships and M&A targets. Global expansion is a goal, with an MOU signed in Singapore and assessment of opportunities in the U.S. and European markets. The company intends to retain all future earnings for business expansion and does not anticipate paying cash dividends in the foreseeable future. Management is actively working to remediate identified material weaknesses in internal controls, seeking bank loan extensions, and planning for additional private and public equity offerings in 2026 to address liquidity concerns.

Management Comments

• "We believe embedded insurance brokerage is still at an early stage of development in China, we believe it is the future of insurance brokerage industry."
• "Our management team is passionate about innovation in providing digital insurance solutions to end customers."
• "Our teams expertise in the insurance brokerage industry will help steer the Company to continuously maintain and extend our leading position in the digitalization of the insurance brokerage industry in China."
• "We intend to strengthen our to-customer, or 2C business through Zhibao China Group by targeting our existing customer base to meet the additional needs of each end customer. Our 2C business is an increasingly important part of our business growth in the coming years."
• "We intend to invest in the research and development (R&D) of new technologies to upgrade and enhance the PaaS to maintain our leadership position in China."
• "We intend to increase the number of MGU partners (insurance companies) from 10 to 15 and the proportion of MGU online business to 50% of total MGU business by June 2026."
• "We plan to expand our business footprint outside of China. We intend to cooperate with partners in other countries who have similar business models and/or connections with B channels in local market."
• "We do not expect to pay any cash dividends in the foreseeable future. Rather, we currently intend to retain all of our available funds and any future earnings to operate and grow our business."

Industry Context

The company operates in China's digital insurance brokerage service industry, which is characterized as emerging, rapidly evolving, and fiercely competitive. It positions itself as a pioneer and market leader in the 2B2C embedded insurance model, which is considered to be at an early stage of development but represents the future of the industry in China. The regulatory environment in China is highly dynamic, with significant government oversight and control, particularly concerning cybersecurity, data security, anti-monopoly enforcement, and overseas listings. Recent regulations like the New Overseas Listing Rules and the HFCA Act in the U.S. introduce substantial compliance burdens and risks for China-based companies. The industry also faces intense competition for skilled professionals in insurance, sales, marketing, and technology, and is sensitive to broader economic conditions in China and globally.

Comparison to Industry Standards

• The company claims to be a pioneer and market leader in the 2B2C embedded insurance business in China.
• Its 2B2C model is stated to enable lower customer acquisition costs and higher efficiency compared to industry peers who rely on direct-to-consumer advertisement.
• The company launched the first digital insurance brokerage platform in China in 2020.
• It is also stated to be the first to establish a PaaS (Platform as a Service) in the digital insurance brokerage market in China.
• The company pioneered the MGU (managing general underwriting) business model in China.

Management Changes

Corporate Governance

Related Party Transactions

• Shanghai Anyi, a wholly-owned subsidiary of Zhibao China, was originally 100% controlled by Shanghai Xinhui Investment Consulting Co., Ltd., a related party controlled by CEO Mr. Botao Ma, before its equity was transferred to Zhibao China on July 12, 2016.
• Mr. Botao Ma, the CEO and Chairman, is the director of Mavy Holdings Limited and the first beneficiary of The Maximum Trust, which controls Maximum Global Holdings Limited, both of which beneficially hold Class B ordinary shares.
• Mr. Botao Ma is the majority shareholder of Shanghai Xinhui Investment Consulting Co., Ltd., which indirectly holds Class B ordinary shares.
• Mr. Xiao Luo, the Chief Marketing Officer, is the sole shareholder of Tianze Zihan Holdings Limited, which holds Class A ordinary shares.
• Mr. Yugang Wang, the Chief Technical Officer, is the sole shareholder of ElecJoys Holdings Limited, which holds Class A ordinary shares.

Stakeholder Impact

• Shareholders face significant dilution risk from potential future equity sales under the Hudson EPA and existing warrants/convertible notes, as well as the risk of delisting from Nasdaq, which would adversely affect liquidity and share price.
• Shareholders' ability to influence corporate matters is limited due to the CEO's concentrated voting power (94.0%).
• Investors are not expected to receive cash dividends in the foreseeable future, relying solely on share price appreciation.
• U.S. Holders may face adverse U.S. federal income tax consequences if the company is classified as a Passive Foreign Investment Company (PFIC).
• Employees may be impacted by increased labor costs and potential penalties if the company fails to comply with PRC regulations on employee benefit plans and income tax withholding.
• Customers (B channels and end customers) could be affected if the company fails to maintain appealing services, protect personal data, or if relationships with B channels deteriorate.
• Creditors face increased risk due to the company's accumulated deficits, operating cash outflows, and explicit 'going concern' doubt, leading to potential difficulties in loan repayment.
• The company's ability to fund operations and expand is at risk, potentially impacting its long-term viability and ability to serve all stakeholders.

Next Steps

• Submit a filing for this offering to the CSRC within three business days after the SEC's declaration of effectiveness of the registration statement.
• Accelerate the expansion of B channels, including cooperating with more insurance companies.
• Expand the sales force and develop more independent sales partners.
• Strengthen the 2C business by targeting the existing customer base for additional insurance needs.
• Refine, upgrade, and develop new digital insurance solutions across various sectors.
• Invest in R&D to upgrade and enhance the PaaS, introducing new AI and BI functionalities and strengthening data security.
• Increase the number of MGU partners from 10 to 15 and the proportion of MGU online business to 50% of total MGU business by June 2026.
• Expand MGU insurance products from high-end medical and long-term disability to mid-end medical and personal accident lines.
• Support brokerage and MGU services through the subsidiary reinsurance company in Labuan, Malaysia.
• Seek new strategic partnerships and cooperation, including potential M&A targets.
• Expand business footprint outside of China, starting with Singapore and assessing U.S. and European markets.
• Implement regular and continuous U.S. GAAP accounting and financial reporting training programs for accounting and financial reporting personnel.
• Appoint a third independent director.
• Implement formal access and change controls to systems and make changes to information technology systems.
• Establish more robust processes supporting internal control over financial reporting.
• Seek an extension of terms of bank loans.
• Focus on the improvement of operation efficiency, implementation of strict cost control and budget, and enhancement of internal controls.
• Seek cash proceeds from equity sales under the Hudson ELOC.
• Seek more private and public equity offerings in 2026.
• Make the second and fourth installments for the Zhonglian Acquisition.

Key Dates

Recommendation

The company's financial health is severely challenged, evidenced by a return to net loss in FY2025, substantial operating cash outflows, and significant accumulated deficits, leading to an explicit 'going concern' warning. These fundamental issues are compounded by identified material weaknesses in internal controls, indicating operational deficiencies. Furthermore, the company faces a high degree of regulatory and geopolitical risk associated with operating in China, including the potential for delisting from Nasdaq under the HFCA Act, which would severely impact liquidity. While strategic growth plans are outlined and potential capital raises are in progress, these also introduce substantial dilution risk for existing shareholders. The concentrated voting power of the CEO further limits minority shareholder influence. Given these severe and multifaceted risks, a seasoned investor would likely recommend selling the stock to mitigate significant downside potential and preserve capital.

Keywords

InsurTech, Digital Insurance Brokerage, MGU Services, China, Cayman Islands Holding Company, SEC Filing, F-1/A, Hudson Global Ventures, Share Resale, Dilution, PRC Regulations, Cybersecurity, Data Protection, CSRC, PCAOB, HFCA Act, Going Concern, Corporate Governance, Botao Ma, Nasdaq, ZBAO, Equity Purchase Agreement, Zhonglian Acquisition, Joint Venture, PaaS, AI, Big Data