# EDGAR Filing Document

**Accession Number:** 0001966750
**File Stem:** 0001213900-26-003011
**Filing Date:** 2026-1
**Character Count:** 1060249
**Document Hash:** d5eee6f7286815beef019d1af0623e28
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001213900-26-003011.hdr.sgml**: 20260109

**ACCESSION NUMBER**: 0001213900-26-003011

**CONFORMED SUBMISSION TYPE**: 20-F

**PUBLIC DOCUMENT COUNT**: 121

**CONFORMED PERIOD OF REPORT**: 20250630

**FILED AS OF DATE**: 20260109

**DATE AS OF CHANGE**: 20260109

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** Zhibao Technology Inc.
- **CENTRAL INDEX KEY:** 0001966750
- **STANDARD INDUSTRIAL CLASSIFICATION:** INSURANCE AGENTS BROKERS & SERVICES [6411]
- **ORGANIZATION NAME:** 02 Finance
- **EIN:** 000000000
- **STATE OF INCORPORATION:** E9
- **FISCAL YEAR END:** 0630

**FILING VALUES:**
- **FORM TYPE:** 20-F
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-42000
- **FILM NUMBER:** 26523960

**BUSINESS ADDRESS:**
- **STREET 1:** BUILDING 10, 860 XINYANG ROAD
- **STREET 2:** LINGANG NEW AREA
- **CITY:** SHANGHAI
- **STATE:** F4
- **ZIP:** 000000
- **BUSINESS PHONE:** 862150896502

**MAIL ADDRESS:**
- **STREET 1:** BUILDING 10, 860 XINYANG ROAD
- **STREET 2:** LINGANG NEW AREA
- **CITY:** SHANGHAI
- **STATE:** F4
- **ZIP:** 000000

?xml version='1.0' encoding='ASCII'?

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**WASHINGTON, D.C. 20549**

**FORM 20-F**

**(Mark One)**

☐ **REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934**

**OR**

☒ **ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**

**For the fiscal year ended June 30, 2025**

**OR**

☐ **TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**

**OR**

☐ **SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**

Date of event requiring this shell company report

**For the transition period from&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; to&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;** 

Commission File Number: 001-42000

**ZHIBAO TECHNOLOGY INC.**

(Exact name of Registrant as specified in its charter)

**N/A**

(Translation of Registrant's name into English)

**Cayman Islands**

(Jurisdiction of incorporation or organization)

**Floor 3, Building 6, Wuxing Road, Lane 727**

**Pudong New Area, Shanghai, China, 201204**

**+86 (21) -5089-6502**

(Address of principal executive offices)

**Botao Ma**

**Chief Executive Officer**

**Floor 3, Building 6, Wuxing Road, Lane 727**

**Pudong New Area, Shanghai, China, 201204**

**Phone: +86 (21) -5089-6502**

**Email: ir@zhibao-tech.com**

(Name, Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)

Securities registered or to be registered pursuant to Section 12(b) of the Act:

---

| | | |
|:---|:---|:---|
| **Title of each class** | **Trading Symbol** | **Name of each exchange on which registered** |
| Class A ordinary shares, of par value US$0.0001 per share | ZBAO | Nasdaq Capital Market |

---

Securities registered or to be registered pursuant to Section 12(g) of the Act:

**None**

Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:

**None**

Indicate the number of outstanding shares of each of the issuer's classes of capital or common stock as of the close of the period covered by the annual report.

**16,105,132 Class A ordinary shares and 16,816,692 Class B ordinary shares were issued and outstanding as of June 30, 2025.**

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

☐ Yes ☒ No

If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934.

☐ Yes ☒ No

Note - Checking the box above will not relieve any registrant required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 from their obligations under those Sections.

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

☒ Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

☒ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or an emerging growth company. See definition of "large accelerated filer", "accelerated filer", and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer Accelerated file Non-accelerated filer Emerging growth company <br> ☐ ☐ ☒ ☒

If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards† provided pursuant to Section 13(a) of the Exchange Act. ☐

† The
term "new or revised financial accounting standard" refers to any update issued by the Financial Accounting Standards Board
to its Accounting Standards Codification after April 5, 2012.

Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant's executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:

U.S. GAAP ☒ International Financial Reporting Standards as issued by the International Accounting Standards Board ☐ Other ☐

If "Other" has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has elected to follow.

☐ Item 17 ☐ Item 18

If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

☐ Yes ☒ No

(APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PAST FIVE YEARS)

Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.

☐ Yes ☐ No

**Table of Contents**

---

| | | |
|:---|:---|:---|
| **[INTRODUCTION](#a_001)** | **[INTRODUCTION](#a_001)** | ii |
| [**FORWARD-LOOKING INFORMATION**](#a_002) | [**FORWARD-LOOKING INFORMATION**](#a_002) | vi |
| [**PART I**](#a_003) |  | 1 |
| &nbsp;&nbsp;&nbsp;**ITEM 1.** | [**IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS**](#a_004) | 1 |
| &nbsp;&nbsp;&nbsp;**ITEM 2.** | [**OFFER STATISTICS AND EXPECTED TIMETABLE**](#a_005) | 1 |
| &nbsp;&nbsp;&nbsp;**ITEM 3.** | [**KEY INFORMATION**](#a_006) | 1 |
| &nbsp;&nbsp;&nbsp;**ITEM 4.** | [**INFORMATION ON THE COMPANY**](#a_007) | 47 |
| &nbsp;&nbsp;&nbsp;**ITEM 4A.** | [**UNRESOLVED STAFF COMMENTS**](#a_008) | 89 |
| &nbsp;&nbsp;&nbsp;**ITEM 5.** | [**OPERATING AND FINANCIAL REVIEW AND PROSPECTS**](#a_009) | 89 |
| &nbsp;&nbsp;&nbsp;**ITEM 6.** | [**DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES**](#a_010) | 108 |
| &nbsp;&nbsp;&nbsp;**ITEM 7.** | [**MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS**](#a_011) | 116 |
| &nbsp;&nbsp;&nbsp;**ITEM 8.** | [**FINANCIAL INFORMATION**](#a_012) | 121 |
| &nbsp;&nbsp;&nbsp;**ITEM 9.** | [**THE OFFER AND LISTING**](#a_013) | 123 |
| &nbsp;&nbsp;&nbsp;**ITEM 10.** | [**ADDITIONAL INFORMATION**](#a_014) | 123 |
| &nbsp;&nbsp;&nbsp;**ITEM 11.** | [**QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK**](#a_015) | 140 |
| &nbsp;&nbsp;&nbsp;**ITEM 12.** | [**DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES**](#a_016) | 140 |
| [**PART II**](#a_017) |  | 141 |
| &nbsp;&nbsp;&nbsp;**ITEM 13.** | [**DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES**](#a_018) | 141 |
| &nbsp;&nbsp;&nbsp;**ITEM 14.** | [**MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS**](#a_019) | 141 |
| &nbsp;&nbsp;&nbsp;**ITEM 15.** | [**CONTROLS AND PROCEDURES**](#a_020) | 141 |
| &nbsp;&nbsp;&nbsp;**ITEM 16.** | [**RESERVED**](#a_021) | 142 |
| &nbsp;&nbsp;&nbsp;**ITEM 16.A.** | [**AUDIT COMMITTEE FINANCIAL EXPERT**](#a_022) | 142 |
| &nbsp;&nbsp;&nbsp;**ITEM 16.B.** | [**CODE OF ETHICS**](#a_023) | 142 |
| &nbsp;&nbsp;&nbsp;**ITEM 16.C.** | [**PRINCIPAL ACCOUNTANT FEES AND SERVICES**](#a_024) | 143 |
| &nbsp;&nbsp;&nbsp;**ITEM 16.D.** | [**EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES**](#a_025) | 143 |
| &nbsp;&nbsp;&nbsp;**ITEM 16.E.** | [**PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS**](#a_026) | 143 |
| &nbsp;&nbsp;&nbsp;**ITEM 16.F.** | [**CHANGE IN REGISTRANT'S CERTIFYING ACCOUNTANT**](#a_027) | 144 |
| &nbsp;&nbsp;&nbsp;**ITEM 16.G.** | [**CORPORATE GOVERNANCE**](#a_028) | 144 |
| &nbsp;&nbsp;&nbsp;**ITEM 16.H.** | [**MINE SAFETY DISCLOSURE**](#a_029) | 145 |
| &nbsp;&nbsp;&nbsp;**ITEM 16.I.** | [**DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS**](#a_030) | 145 |
| &nbsp;&nbsp;&nbsp;**ITEM 16J** | [**INSIDER TRADING POLICIES**](#a_031) | 145 |
| &nbsp;&nbsp;&nbsp;**ITEM 16K** | [**CYBERSECURITY**](#a_032) | 145 |
| [**PART III**](#a_033) |  | 146 |
| &nbsp;&nbsp;&nbsp;**ITEM 17.** | [**FINANCIAL STATEMENTS**](#a_034) | 146 |
| &nbsp;&nbsp;&nbsp;**ITEM 18.** | [**FINANCIAL STATEMENTS**](#a_035) | 146 |
| &nbsp;&nbsp;&nbsp;**ITEM 19.** | [**EXHIBITS**](#a_036) | 146 |

---

i

**INTRODUCTION**

Zhibao Technology Inc. ("**Zhibao**") is a Cayman Islands exempted company incorporated on January 11, 2023. Structured as a holding company with no material operations, Zhibao conducts its operations in China through its PRC Subsidiaries, primarily Zhibao Technology Co., Ltd. ("**Zhibao China**" or "**WFOE**") and Sunshine Insurance Brokers (Shanghai) Co., Ltd. ("**Sunshine Insurance Brokers**").

Zhibao China, previously known as Shanghai Julai Investment Management Co., Ltd. and Zhibao Technology (Shanghai) Co., Ltd., successively, started its business in the insurance brokerage industry since 2016 in China. With the growth of our business and in order to facilitate international capital investment in us, we started a reorganization as described below involving new offshore and onshore entities in December 2022 and completed it in March 2023.

Zhibao Technology Holdings Limited ("**Zhibao BVI**"), incorporated on January 12, 2023 under the laws of British Virgin Islands, is our wholly-owned subsidiary in BVI and a holding company with no business operations, which, in turn, wholly owns all of the equity interest of Zhibao Technology Limited ("**Zhibao HK**"), a limited company incorporated on January 19, 2023 under the laws of Hong Kong.

Zhibao HK, as a wholly-owned subsidiary of Zhibao BVI, is a holding company with no business operations, which, in turn, wholly owns all of the equity interest of Zhibao China or WFOE, a wholly foreign-owned enterprise formed on November 24, 2015 in Shanghai under the laws of China, currently with a registered capital of RMB 100,000,000. Zhibao China wholly owns Shanghai Anyi Network Technology Co., Ltd. ("**Shanghai Anyi**"), Sunshine Insurance Brokers and Shanghai Zhibao Health Management Co., Ltd. ("**Zhibao Health**"), primarily providing MGU services.

Shanghai Anyi was incorporated in Shanghai under the laws of China on September 18, 2015, currently with a registered capital of RMB10 million. Shanghai Anyi was originally 100% controlled by Shanghai Xinhui Investment Consulting Co., Ltd. ("**Shanghai Xinhui**"), a related party controlled by our Chief Executive Officer, Mr. Botao Ma. All of the equity interest of Shanghai Anyi was later transferred to Zhibao China on July 12, 2016, with a consideration of RMB 10 million. After such transfer, Shanghai Anyi became a wholly-owned subsidiary of Zhibao China, primarily providing R&D services to Sunshine Insurance Brokers and Zhibao China.

Sunshine Insurance Brokers was incorporated in Shanghai under the laws of China on November 17, 2011, currently with a registered capital of RMB 50 million. Sunshine Insurance Brokers was originally 100% controlled by an unrelated third party, all of the equity interest of which was thereafter transferred to Zhibao China on January 4, 2016, with a consideration of RMB 10 million. After such transfer, Sunshine Insurance Brokers became a wholly-owned subsidiary of Zhibao China, primarily providing insurance brokerage services.

Zhibao Health, previously known as Shanghai Zhongzhi Chengcheng Healthy Service Co., Ltd., was incorporated in Shanghai under the laws of China on November 16, 2022, currently with a registered capital of RMB 1 million. Zhibao Health is a wholly-owned subsidiary of Zhibao China, primarily engaged in the health management services.

Zhibao Labuan Reinsurance Company Limited ("**Zhibao Labuan Reinsurance**") was incorporated in Labuan, Malaysia, on July 29, 2024, and received a license approval on October 24, 2024. Zhibao Labuan Reinsurance is a wholly-owned subsidiary of Zhibao BVI, primarily engaging in brokerage and MGU services. As of the date of this annual report, it has not commenced operation yet.

Shanghai Zhizhongbao Enterprise Management Co., Ltd. ("**Shanghai Zhizhongbao**") was incorporated in Shanghai under the laws of China on March 6, 2025, as an investment holding company, currently with a registered capital of RMB 10 million. Shanghai Zhizhongbao is a wholly-owned subsidiary of Zhibao HK.

Shanghai Zhibao Yingshi Health Technology Co., Ltd. ("**Zhibao Yingshi**") was incorporated under the laws of China on September 24, 2025, as a professional healthcare services company with its principal business in Shanghai, China. Pursuant to a joint venture agreement, dated September 1, 2025, by and among Zhibao China, Shanghai Xingtao Network Technology Co., Ltd. ("**Xingtao**") and the shareholder of Xingtao, Zhibao China agreed to acquire 51% of the equity interest in Zhibao Yingshi. As a result, Zhibao Yingshi is a 51% owned subsidiary of Zhibao China.

Zhonglian Jinan Insurance Brokers Co., Ltd.("**Zhonglian**") was incorporated under the laws of China on June 8, 2005, currently with a registered capital of RMB 50 million. Zhonglian was previously 100% controlled by unrelated third parties. On September 30, 2025, pursuant to the Zhonglian Agreement (as defined below), Zhonglian's shareholders transferred 51% of the equity interest of Zhonglian to Zhibao China for a consideration of RMB 25.5 million, subject to the terms and conditions of the Zhonglian Agreement. Following such transfer, Zhonglian became a 51% owned subsidiary of Zhibao China.

On April 3, 2024, we closed the initial public offering of our Class A ordinary shares on the Nasdaq Capital Market (the "**IPO**") for aggregate gross proceeds of $6,000,000, before deducting underwriting discounts and offering expenses. On May 15, 2024, we issued an additional 23,765 Class A ordinary shares pursuant to the partial exercise of the underwriters' over-allotment option in connection with the IPO at $4.00 per share, resulting in additional gross proceeds of $95,060. The Class A ordinary shares are listed on the Nasdaq Capital Market under the symbol "ZBAO."

For the years ended June 30, 2023, 2024 and 2025, the Company incurred (i) capital investment of approximately RMB 1.8 million, RMB 0.3 million and nil in purchase of software, respectively. (ii) capital investment of nil, approximately RMB 0.3 million and nil in purchase of office equipment, respectively.

ii

**USE OF CERTAIN TERMS**

Unless otherwise indicated and except where the context otherwise requires, references in this annual report to:

---

| | |
|:---|:---|
| **"BVI"** | British Virgin Islands |
| **"Cayman**" | The Cayman Islands. |
| **"China" or the "PRC"** | The People's Republic of China, including Taiwan, Hong Kong and Macau, and the term "Chinese" has a correlative meaning for the purposes of this annual report only, unless the context otherwise indicates. The references to laws and regulations of "China" or the "PRC" are only to such laws and regulations of mainland China, excluding, for the purpose of this annual report only, Taiwan, Hong Kong and Macau. |
| **"Code"** | The Internal Revenue Code of 1986, as amended. |
| **"Class A ordinary shares"** | Class A ordinary shares, par value US$0.0001 per share, of Zhibao Technology Inc. |
| **"Class B ordinary shares"** | Class B ordinary shares, par value US$0.0001 per share, of Zhibao Technology Inc. |
| **"December 2024 Letter Agreement"** | Refers to the letter agreement, dated December 11, 2024, entered into by and between the Company and L1. |
| **"Exchange Act"** | Securities Exchange Act of 1934, as amended. |
| **"February 2025 Letter Agreement"** | Refers to the letter agreement, dated February 14, 2025, entered into by and between the Company and L1. |
| **"Hong Kong"** | The Hong Kong Special Administrative Region of the People's Republic of China. |
| **"Hudson"** | Hudson Global Ventures, LLC. |
| **"Hudson EPA"** | Refers to the equity purchase agreement, dated as of June 22, 2025, entered into by and between the Company and Hudson. |
| **"Hudson ELOC"** | Refers to the equity line of credit facility as described in the Hudson EPA. |
| **"Hudson RRA"** | Refers to the registration rights agreement, dated as of June 22, 2025, entered into by and between the Company and Hudson. |
| **"L1"** | L1 Capital Global Opportunities Master Fund. |
| **"L1 Registration Rights Agreement"** | Refers to the registration rights agreement, dated as of September 23, 2024, entered into by and between the Company and L1. |
| **"L1 Second Tranche Note"** | Promissory Convertible Note issued to L1 by the Company on February 14, 2025 |

---

iii

---

| | |
|:---|:---|
| **"L1 Warrants"** | L1 First Closing of First Tranche Warrant, L1 Second Closing of First Tranche Warrant, L1 Third Closing of First Tranche Warrant, Waiver Warrant, L1 First Closing of Second Tranche Warrant, and L1 Second Closing of Second Tranche Warrant. |
| **"L1 Securities"** | L1 First Tranche Note, L1 Second Tranche Note, and the L1 Warrants. |
| **"L1 Securities Purchase Agreement"** | Refers to the securities purchase agreement, dated as of September 23, 2024, entered into by and between the Company and L1, as amended by the February 2025 Letter Agreement, dated February 14, 2025, by and between the Company and L1. |
| **"L1 Waiver Warrant"** | Warrants to purchase up to 571,588 Class A ordinary shares (as adjusted) issued by the Company on December 16, 2024. |
| **"L1 Waiver Agreement"** | Refers to the waiver agreement, dated as of December 16, 2024, entered into by and between the Company and L1. |
| **"Macau"** | The Macao Special Administrative Region of the People's Republic of China. |
| **"mainland China"** | The People's Republic of Mainland China, excluding Taiwan, Hong Kong and Macau for the purpose of this annual report. |
| **"Nasdaq"** | Nasdaq Capital Market. |
| **"NDRC"** | National Development and Reform Commission of the People's Republic of China. |
| **"ODI Filings"** | The formalities and filings of overseas direct investment of PRC enterprises, including but not limited to fulfilling the filing, approval or registration procedures in the development and reform authorities, the competent commercial authorities, and foreign exchange administration authorities and competent banks authorized by such authorities. |
| **"ordinary shares"** | Ordinary shares, par value US$0.0001 per share, of Zhibao Technology Inc., consisting of Class A ordinary shares and Class B ordinary shares. |
| **"PCAOB"** | Public Company Accounting Oversight Board. |
| **"PRC Subsidiaries" or "Zhibao China Group"** | All references to "PRC Subsidiaries" or "Zhibao China Group" are to Zhibao China, Shanghai Anyi, Sunshine Insurance Brokers, Zhibao Health, Shanghai Zhizhongbao, Zhibao Yingshi and Zhonglian. |
| **"WFOE"** | Wholly Foreign Owned Enterprise |
| **"RMB", "Chinese Yuan" or "Renminbi"** | Legal currency of mainland China. |
| **"SEC"** | The United States Securities and Exchange Commission. |
| **"Securities Act"** | The Securities Act of 1933, as amended. |

---

iv

---

| | |
|:---|:---|
| **"Shanghai Anyi"** | Shanghai Anyi Network Technology Co., Ltd., a limited liability company organized under the laws of China and a wholly-owned subsidiary of WFOE. |
| **"Shanghai Zhizhongbao"** | Shanghai Zhizhongbao Enterprise Management Co., Ltd., a limited liability company organized under the laws of China and a wholly-owned subsidiary of Zhibao HK. |
| **"Sunshine Insurance Brokers"** | Sunshine Insurance Brokers (Shanghai) Co., Ltd., a limited liability company organized under the laws of China and a wholly-owned subsidiary of WFOE. |
| **"US", "U.S." or "USA"** | The United States of America. |
| **"US$," "U.S. dollars," "$," or "dollars"** | Legal currency of the United States. |
| **"VWAP"** | Volume weighted average price. |
| **"WFOE" or "Zhibao China"** | Zhibao Technology Co., Ltd., previously known as Shanghai Julai Investment Management Co., Ltd. and Zhibao Technology (Shanghai) Co., Ltd., successively, a limited liability company organized under the laws of China, which is wholly-owned by Zhibao HK. |
| **"Zhibao," "our company," "Company," "we," "us," "our," or "ourselves"** | All references to "Zhibao," "our company," "Company," "we," "us," "our," "ourselves" or similar terms used in this annual report are to Zhibao Technology Inc., an exempted company incorporated with limited liability under the laws of the Cayman Islands, unless the context otherwise indicates. |
| **"Zhibao BVI"** | Zhibao Technology Holdings Limited, a limited company incorporated under the laws of British Virgin Islands and a wholly owned subsidiary of Zhibao. |
| **"Zhibao HK"** | Zhibao Technology Limited, a limited company organized under the laws of Hong Kong and a wholly owned subsidiary of Zhibao BVI. |
| **"Zhibao Health"** | Shanghai Zhibao Health Management Co., Ltd., a limited liability company organized under the laws of China and a wholly-owned subsidiary of Zhibao China. |
| **"Zhibao Labuan Reinsurance"** | Zhibao Labuan Reinsurance Company Limited, a limited company organized under the laws of Malaysia and a wholly-owned subsidiary of Zhibao BVI. |
| **"Zhibao Yingshi"** | Shanghai Zhibao Yingshi Health Technology Co., Ltd., a limited liability company organized under the laws of China, a 51% owned subsidiary of Zhibao China. |
| **"Zhonglian Agreement"** | Refers to the share purchase agreement, dated as of July 2, 2025, entered into by and between Zhibao China and the shareholders of Zhonglian Jinan Insurance Brokers Co., Ltd., under which Zhibao China agreed to acquire an aggregate of 51% of the equity interest in Zhonglian Jinan Insurance Brokers Co., Ltd. |
| **"Zhonglian"** | Zhonglian Jinan Insurance Brokers Co., Ltd., a limited liability company organized under the laws of China and a 51% owned subsidiary of Zhibao China. |

---

v

**FORWARD-LOOKING INFORMATION**

Certain statements in this annual report may constitute "forward-looking statements" for purposes of the federal securities laws. Our forward-looking statements include, but are not limited to, statements regarding our or our management team's expectations, hopes, beliefs, intentions or strategies regarding the future. In addition, any statements that refer to projections, forecasts or other characterizations of future events or circumstances, including any underlying assumptions, are forward-looking statements. The words "anticipate," "believe," "continue," "could," "estimate," "expect," "intends," "may," "might," "plan," "possible," "potential," "predict," "project," "should," "would" and similar expressions may identify forward-looking statements, but the absence of these words does not mean that a statement is not forward-looking. Forward-looking statements in this annual report may include, for example, statements about:

● our dependence on the development, update, upgrade and innovations of insurance solutions and technologies on a timely basis;

● our dependence on growth in the demand for our services;

● our ability to attract and retain B channels and end customers;

● our ability to build stable and health relationships with insurance companies;

● our ability to compete effectively;

● our ability to successfully manage our business expansion in response to changing industry and market conditions;

● implementation of our expansion plans and our ability to obtain capital resources for our planned growth;

● our dependence on key personnel;

● our ability to expand into new businesses and industries, and to undertake mergers, acquisitions, investments or divestments;

● changes in technology and competing services;

● general economic and political conditions, including those related to the insurance brokerage industry;

● possible disruptions in commercial activities caused by events such as natural disasters, terrorist activities;

● fluctuations in foreign currency exchange rates; and

● other factors in the "Risk Factors" section in this annual report.

These forward-looking statements are subject to various and significant risks and uncertainties, including those which are beyond our control. Although we believe that our expectations expressed in these forward-looking statements are reasonable, our expectations may later be found to be incorrect. The forward-looking statements made in this annual report relate only to events or information as of the date on which the statements are made in this annual report. Except as required by law, we undertake no obligation to update or revise publicly any forward-looking statements, whether as a result of new information, future events or otherwise, after the date on which the statements are made or to reflect the occurrence of unanticipated events. You should thoroughly read this annual report and the documents that we refer to herein with the understanding that our actual future results may be materially different from and worse than what we expect. We qualify all of our forward-looking statements by these cautionary statements. We disclaim any obligation to update our forward-looking statements, except as required by law.

This annual report includes statistical and other industry and market data that we obtained from industry publications and research, surveys and studies conducted by third parties. Industry publications and third-party research, surveys and studies generally indicate that their information has been obtained from sources believed to be reliable, although they do not guarantee the accuracy or completeness of such information. Statistical data in these publications also include projections based on a number of assumptions. While we believe these industry publications and third-party research, surveys and studies are reliable, you are cautioned not to give undue weight to this information.

In addition, the new and rapidly changing nature of the insurance brokerage industry results in significant uncertainties for any projections or estimates relating to the growth prospects or future condition of our industry. Furthermore, if any one or more of the assumptions underlying the market data are later found to be incorrect, actual results may differ from the projections based on these assumptions. You should not place undue reliance on these forward-looking statements.

vi

**PART I**

**ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS**

Not applicable.

**ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE**

Not applicable.

**ITEM 3. KEY INFORMATION**

&nbsp;&nbsp;&nbsp;&nbsp;**A.** **[Reserved]** 

&nbsp;&nbsp;&nbsp;&nbsp;**B.** **Capitalization and Indebtedness** 

Not applicable.

&nbsp;&nbsp;&nbsp;&nbsp;**C.** **Reasons for the Offer and Use of Proceeds** 

Not applicable.

&nbsp;&nbsp;&nbsp;&nbsp;**D.** **Risk Factors.** 

**Summary of Risk Factors**

An investment in our securities involves significant risks. Below is a summary of material risks that we face, organized under relevant headings. These risks are discussed fully in Risk Factors, which you should read in its entirety starting from page 1, and elsewhere in this annual report.

***Risks Related to Doing Business in China***

● Our Class A ordinary shares may be delisted under the HFCA Act if the PRC adopts positions at any time in the future that would prevent the PCAOB from continuing to inspect or investigate completely accounting firms headquartered in mainland China or Hong Kong. The delisting of our Class A ordinary shares, or the threat of their being delisted, may materially and adversely affect the value of your investment. Furthermore, the U.S. Senate passed the Accelerating Holding Foreign Companies Accountable Act, which amends the HFCA Act and requires the SEC to prohibit an issuer's securities from trading on any U.S. stock exchanges if its auditor is not subject to PCAOB inspections for two consecutive years instead of three, thus reducing the time before our Class A ordinary shares may be prohibited from trading or delisted. As a result, trading in our securities may be prohibited under the HFCA Act, as amended by the Accelerating Holding Foreign Companies Accountable Act, and related regulations if the PCAOB determines that it cannot inspect or investigate completely our auditor for a period of two consecutive years, and that as a result an exchange may determine to delist our securities. The HFCA Act, the Accelerating Holding Foreign Companies Accountable Act, which amends the HFCA Act, together with recent joint statement by the SEC and PCAOB, the PCAOB's determinations, and the Nasdaq rule changes all call for additional and more stringent criteria to be applied to emerging market companies upon assessing the qualification of their auditors, especially the non-U.S. auditors who are not inspected by the PCAOB. These developments add uncertainties to our offering.

● Changes in the political and economic policies of the PRC government or in relations between China and the United States may materially and adversely affect our business, financial condition and results of operations and may result in our inability to sustain our growth and expansion strategies.

● Uncertainties in the interpretation and enforcement of PRC laws and regulations could limit the legal protections available to you and us.

● The PRC government exerts substantial influence over the manner in which we conduct our business activities. The PRC government may also intervene or influence our operations and offerings at any time, which could result in a material change in our operations and our Class A ordinary shares could decline in value or become worthless.

● Our business processes a certain quantity of personal information, and failure to protect private or sensitive information of end customers or improper handling of such information could have a material and adverse effect on our business. In light of recent events indicating greater oversight by the Cyberspace Administration of China, or CAC, over data security, we are subject to a variety of laws and other obligations regarding cybersecurity and data protection, and any failure to comply with applicable laws and obligations could have a material and adverse effect on our business, financial condition, results of operations, and the offering.

● PRC regulation on loans to, and direct investment in, our PRC Subsidiaries by offshore holding companies and governmental control in currency conversion may delay or prevent us from using the proceeds of any offerings to make loans to or make additional capital contributions to our PRC Subsidiaries, which could materially and adversely affect our liquidity and our ability to fund and expand our business.

● Within our direct holding structure, substantial uncertainties exist with respect to the requirement of National Financial Regulatory Administration and how it may impact the viability of our current corporate structure, corporate governance and business operations.

● Failure to make adequate contributions to various employee benefit plans and withhold individual income tax on employees' salaries as required by PRC regulations or comply with laws and regulations on other employment practices may subject us to penalties.

***Risks Related to Our Business and Industry***

In the following discussion of risks related to our business and industry, unless otherwise provided, "we," "us," "our," or "ourselves" refer to Zhibao's PRC Subsidiaries or Zhibao China Group.

Risks and uncertainties related to our business and industry include, but are not limited to, the following:

● We are dependent on key insurance companies on the supply of insurance products to our end customers, the loss of which could adversely affect our business, financial condition and results of operations.

● We are dependent on our B channels to reach end customers. Failure to acquire new B channels or retain existing B channels in a cost-effective manner, our business, financial condition and results of operations may be materially and adversely affected.

● Our PRC subsidiary, namely Zhibao China, significantly relies on a third party ()"**MGU Partner** "), its subsidiaries, affiliates, successors and assigns to conduct MGU services. Failure to comply with the relevant laws and regulations with regard to the MGU services will adversely and materially affect our business, financial conditions and results of operations.

● The innovative insurance technology and infrastructure we use to optimize our insurance solutions require continuous developments and upgrades. We cannot assure you that these technologies will fully support our business.

● The regulation on the requirement of a company to make a filing on internet information service in China is subject to interpretation, and our operation of digital insurance broker services could be harmed if we are deemed to have violated applicable laws and regulations.

● If we are unable to attract, incentivize and retain talented professionals, our business, financial condition and results of operations may be affected.

● We are subject to governmental regulations and other legal obligations related to privacy, information security, and data protection, and any security breaches, and our actual or perceived failure to comply with our legal obligations could harm our brand and business.

● Zhibao has identified two material weaknesses in its internal controls over financial reporting. If Zhibao does not adequately remediate the material weaknesses, or if it experiences additional material weaknesses in the future or otherwise fails to maintain effective internal controls, it may not be able to accurately or timely report its financial condition or results of operations, or comply with the accounting and reporting requirements applicable to public companies, which may adversely affect investor confidence in Zhibao and the market price of its shares.

● There is substantial doubt about our ability to continue as a going concern.

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***Risks Related to the Ownership of Class A Ordinary Shares***

Risks and uncertainties related to the ownership of Class A ordinary shares include, but are not limited to, the following:

● The trading market for our Class A ordinary shares is very new, and consistently robust and liquid trading market may not develop or be sustained over the long term.

● Nasdaq may apply additional and more stringent criteria for our continued listing because we commutated a small public offering and insiders currently hold a large portion of our listed securities.

● Our Chairman of the board of directors and Chief Executive Officer, Mr. Botao Ma, beneficially owns 16,816,692 Class B ordinary shares, currently representing approximately 94.0% of the voting power of our issued and outstanding share capital as of January 5, 2026, and has significant influence over all corporate matters for which shareholder approval is required.

● If we fail to meet continued listing standards of the Nasdaq Stock Market LLC, our Class A ordinary shares may be delisted. Delisting could adversely affect the liquidity of our Class A ordinary shares and the market price of our Class A ordinary shares could decrease, and our ability to obtain sufficient additional capital to fund our operations and to continue as a going concern would be substantially impaired.

● The trading price of our Class A ordinary shares may be volatile, which could result in substantial losses to investors.

● Certain initial public offerings of companies with public floats comparable to our public float have experienced extreme volatility that was seemingly unrelated to the underlying performance of the respective company. We may experience similar volatility, which may make it difficult for prospective investors to assess the value of our Class A ordinary shares.

● Because we do not expect to pay dividends in the foreseeable future, you must rely on price appreciation of our Class A ordinary shares for return on your investment.

● If we are classified as a passive foreign investment company, United States taxpayers who own our Class A ordinary shares may have adverse United States federal income tax consequences.

● We are an emerging growth company within the meaning of the Securities Act and may take advantage of certain reduced reporting requirements.

● We are a "controlled company" within the meaning of the listing rules of Nasdaq and, as a result, may rely on exemptions from certain corporate governance requirements that provide protection to shareholders of other companies.

● Nasdaq may delist our securities from trading on its exchange, which could limit investors' ability to make transactions in our securities and subject us to additional trading restrictions.

**Risks Related to Doing Business in China**

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***Our Class A ordinary shares may be delisted under the Holding Foreign Companies Accountable Act (HFCA) Act if the PRC adopts positions at any time in the future that would prevent the PCAOB from continuing to inspect or investigate completely accounting firms headquartered in mainland China or Hong Kong. The delisting of our Class A ordinary shares, or the threat of their being delisted, may materially and adversely affect the value of your investment. Furthermore, the U.S. Senate passed the Accelerating Holding Foreign Companies Accountable Act, which amends the HFCA Act and requires the SEC to prohibit an issuer's securities from trading on any U.S. stock exchanges if its auditor is not subject to PCAOB inspections for two consecutive years instead of three, thus reducing the time before our Class A ordinary shares may be prohibited from trading or delisted. The HFCA Act, the Accelerating Holding Foreign Companies Accountable Act, which amends the HFCA act, together with recent joint statement by the SEC and PCAOB, the PCAOB's determinations, and the Nasdaq rule changes all call for additional and more stringent criteria to be applied to emerging market companies upon assessing the qualification of their auditors, especially the non-U.S. auditors who are not inspected by the PCAOB. These developments add uncertainties to our offering.***

On April 21, 2020, SEC Chairman Jay Clayton and PCAOB Chairman William D. Duhnke III, along with other senior SEC staff, released a joint statement highlighting the disclosure, financial reporting and other risks associated with investing in companies based in or have substantial operations in emerging markets including China as well as the limited remedies available to investors who might take legal action against such companies. The joint statement emphasized the risks associated with lack of access for the PCAOB to inspect auditors and audit work papers in China and higher risks of fraud in emerging markets.

On May 18, 2020, Nasdaq filed three proposals with the SEC to (i) apply minimum offering size requirement for companies primarily operating in "Restrictive Market," (ii) adopt a new requirement relating to the qualification of management or board of director for Restrictive Market companies, and (iii) apply additional and more stringent criteria to an applicant or listed company based on the qualifications of the company's auditors. These proposals were approved by the SEC on October 4, 2021. These developments add uncertainties to our offering, including the possibility that Nasdaq can stop trading in our securities if the PCAOB cannot inspect or fully investigate our auditor.

Furthermore, various equity-based research organizations have recently published reports on China-based companies after examining their corporate governance practices, related party transactions, sales practices and financial statements, and these reports have led to special investigations and listing suspensions on U.S. national exchanges. Any similar scrutiny on us, regardless of its lack of merit, could cause the market price of our shares to fall, divert management resources and energy, cause us to incur expenses in defending ourselves against rumors, and increase the premiums we pay for director and officer insurance.

On May 20, 2020 and December 2, 2020, the United States Senate and the United States House of Representatives, respectively, passed S. 945, the HFCA Act, which was signed into law on December 18, 2020. The HFCA Act requires a foreign company to certify that it is not owned or manipulated by a foreign government if the PCAOB is unable to audit specified reports because the company uses a foreign auditor not subject to PCAOB inspection. If the PCAOB is unable to inspect the company's auditors for three consecutive years, the issuer's securities are prohibited from trading on a national exchange. Although we believe that the HFCA Act and the related regulations do not currently affect us, we cannot assure you that there will not be any further implementations and interpretations of the HFCA Act or the related regulations, which might pose regulatory risks to and impose restrictions on us because of our primary operations in China.

The lack of access to the PCAOB inspection in China prevents the PCAOB from fully evaluating audits and quality control procedures of the auditors based in China. As a result, the investors may be deprived of the benefits of such PCAOB inspections. The inability of the PCAOB to conduct inspections of auditors in China makes it more difficult to evaluate the effectiveness of these accounting firms' audit procedures or quality control procedures as compared to auditors outside of China that are subject to the PCAOB inspections, which could cause existing and potential investors in our shares to lose confidence in our audit procedures and reported financial information and the quality of our financial statements.

On December 2, 2021, the SEC issued final rules under the HFCA Act, which became effective on January 10, 2022, amending the disclosure requirements in annual reports. These amendments apply to registrants that the SEC identifies as having filed an annual report issued by a registered public accounting firm that is located in a foreign jurisdiction that the PCAOB is unable to inspect or investigate completely because of a position taken by an authority in that jurisdiction. The amendments require the submission of documentation to the SEC establishing that such a registrant is not owned or controlled by a governmental entity in that foreign jurisdiction and also require disclosure in a foreign issuer's annual report regarding the audit arrangements of, and governmental influence on, such registrants. The SEC is to identify a reporting company that has retained a registered public accounting firm to issue an audit report where that registered public accounting firm has a branch or office that:

● Is located in a foreign jurisdiction; and

● The PCAOB has determined that it is unable to inspect or investigate completely because of a position taken by an authority in the foreign jurisdiction.

Once identified, Section 104(i)(2)(B) of the Sarbanes-Oxley Act requires these issuers, which the SEC refers to as "SEC-Identified Issuers," to submit in connection with their annual report documentation to the SEC establishing that they are not owned or controlled by a governmental entity in that foreign jurisdiction and to name any director who is affiliated with the Chinese Communist Party or whether the company's articles include any charter of the Chinese Communist Party.

On December 16, 2021, the PCAOB determined that the PCAOB is unable to inspect or investigate completely PCAOB-registered public accounting firms headquartered in mainland China and in Hong Kong, because of positions taken by PRC authorities in those jurisdictions, and the PCAOB included in the report of its determination a list of the accounting firms that are headquartered in mainland China or Hong Kong. We dismissed Marcum Asia CPAs LLP ("**Marcum Asia**") and appointed HYYH CPA. LLC ("**HYYH**") as our independent registered public accounting firm, effective from November 24, 2025. Marcum Asia, our former auditor, is an independent public accounting firm registered with the PCAOB. Our former auditor is headquartered in the United States and is currently subject to the PCAOB inspections on a regular basis and was not identified in the determination report made by the PCAOB in 2021. Our current auditor, HYYH, an independent registered public accounting firm that headquartered in Maryland, is currently subject to the PCAOB inspections on a regular basis and was not identified in the determination report made by the PCAOB on December 16, 2021 as it is not on the list published by the PCAOB. HYYH audited our consolidated balance sheets as of June 30, 2024 and 2025, the related consolidated statements of operations and comprehensive (loss) income, changes in shareholders' equity and cash flows for each of the three years in the period ended June 30, 2025, and the related notes. However, our auditor's China affiliate is located in, and organized under the laws of the PRC. We cannot assure you that we will not be identified by the SEC under the HFCA Act as an issuer that has retained an auditor that has a branch or office located in a foreign jurisdiction that the PCAOB determines it is unable to inspect or investigate completely because of a position taken by an authority in that foreign jurisdiction. In the event the PRC authorities would further strengthen regulations over auditing work of Chinese companies listed on the U.S. stock exchanges, which would prohibit our current auditor to perform work in China, then we would need to change our auditor and the audit workpapers prepared by our new auditor may not be inspected by the PCAOB without the approval of the PRC authorities, In which case the PCAOB may not be able to fully evaluate the audit or the auditors' quality control procedures. In addition, there can be no assurance that, if we have a "non-inspection" year, we will be able to take any remedial measures. If any such event were to occur, trading in our securities could in the future be prohibited under the HFCA Act and, as a result, we cannot assure you that we will be able to maintain the listing of our Class A ordinary shares on Nasdaq or that you will be allowed to trade our Class A ordinary shares in the United States on the "over-the-counter" markets or otherwise. Notwithstanding the foregoing, in the event it is later determined that the PCAOB is unable to inspect or investigate completely our auditor, then such lack of inspection could cause our securities to be delisted from the stock exchange. Furthermore, due to the recent developments in connection with the implementation of the HFCAA, we cannot assure you whether the SEC, Nasdaq or other regulatory authorities would apply additional and more stringent criteria to us after considering the effectiveness of our auditor's audit procedures and quality control procedures, adequacy of personnel and training, or sufficiency of resources, geographic reach or experience as it relates to the audit of our financial statements. The requirement in the HFCA Act that the PCAOB be permitted to inspect the issuer's public accounting firm within three years, may result in our delisting in the future if the PCAOB is unable to inspect our accounting firm at such future time.

On August 26, 2022, the China Securities Regulatory Commission ("**CSRC**"), the Ministry of Finance ("**MOF**"), and the PCAOB signed the Protocol to allow the PCAOB to inspect and investigate completely registered public accounting firms headquartered in mainland China and Hong Kong, consistent with the HFCA Act, and the PCAOB will be required to reassess its determinations by the end of 2022. Pursuant to the fact sheet with respect to the Protocol disclosed by the SEC, the PCAOB shall have independent discretion to select any issuer audits for inspection or investigation and has the unfettered ability to transfer information to the SEC.

On December 15, 2022, the PCAOB announced that it was able to secure complete access to inspect and investigate PCAOB-registered public accounting firms headquartered in mainland China and Hong Kong completely.

On December 29, 2022, the Accelerating Holding Foreign Companies Accountable Act was enacted, which amended the HFCA Act by decreasing the number of non-inspection years from three years to two, thus reducing the time period before our Class A ordinary shares may be prohibited from trading or delisted. As a result, trading in our securities may be prohibited under the HFCA Act, as amended by the Accelerating Holding Foreign Companies Accountable Act, and related regulations if the PCAOB determines that it cannot inspect or investigate completely our auditor for a period of two consecutive years, and that as a result an exchange may determine to delist our securities.

Notwithstanding the foregoing, we cannot assure you that, because our books and records are primarily located in mainland China, we will in the future be able to become an issuer that is not a SEC-Identified Issuer, in which event our Class A ordinary shares may not be tradable in any United States stock exchange or market and it may be necessary for us to list on a foreign exchange in order that our Class A ordinary shares can be traded. It is possible that, in the event trading in our shares in the United States is no longer possible, you may lose the entire value of your Class A ordinary shares.

Further, new laws and regulations or changes in laws and regulations in both the United States and China could affect our ability to list our shares on Nasdaq, which could materially impair the market for and market price of our Class A ordinary shares.

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***Changes in the political and economic policies of the PRC government or in relations between China and the United States may materially and adversely affect our business, financial condition and results of operations and may result in our inability to sustain our growth and expansion strategies.***

We are a Cayman Islands holding company and are not a PRC operating company. As a holding company with no material operations of our own, we conduct substantially all of our operations in the PRC through our PRC Subsidiaries and substantially all of our revenues is sourced from the PRC. Accordingly, our financial condition and results of operations are affected to a significant extent by economic, political and legal developments in the PRC or changes in government relations between China and the United States or other governments. There is significant uncertainty about the future relationship between the United States and China with respect to trade policies, treaties, government regulations and tariffs.

The PRC economy differs from the economies of most developed countries in many respects, including the extent of government involvement, level of development, growth rate, control of foreign exchange and allocation of resources. Although the PRC government has implemented measures emphasizing the utilization of market forces for economic reform, the reduction of state ownership of productive assets, and the establishment of improved corporate governance in business enterprises, a substantial portion of productive assets in China is still owned by the government. In addition, the PRC government continues to play a significant role in regulating industry development by imposing industrial policies. The PRC government also exercises significant control over China's economic growth by allocating resources, controlling payment of foreign currency-denominated obligations, setting monetary policy, regulating financial services and institutions and providing preferential treatment to particular industries or companies.

While the PRC economy has experienced significant growth in the past four decades, growth has been uneven, both geographically and among various sectors of the economy. The PRC government has implemented various measures to encourage economic growth and guide the allocation of resources. Some of these measures may benefit the overall PRC economy, but may also have a negative effect on us. Our financial condition and results of operation could be materially and adversely affected by government control over capital investments or changes in tax regulations that are applicable to us.

In July 2021, the PRC government provided new guidance on China-based companies raising capital outside of China. In light of such developments, the SEC has imposed enhanced disclosure requirements on China-based companies seeking to register securities with the SEC. As substantially all of our operations are based in China, any future Chinese, U.S. or other rules and regulations that place restrictions on capital raising or other activities by China based companies could adversely affect our business and results of operations. If the business environment in China deteriorates from the perspective of domestic or international investment, or if relations between China and the United States or other governments deteriorate, the PRC government may intervene with our operations and our business in China and United States, as well as the market price of our Class A ordinary shares, may also be adversely affected.

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***Uncertainties in the interpretation and enforcement of PRC laws and regulations could limit the legal protections available to you and us.***

Our PRC Subsidiaries are subject to various PRC laws, rules and regulations generally applicable to companies in China. The PRC legal system is based on written statutes. Unlike common law systems, it is a system in which legal cases have limited value as precedents. In the late 1970s, the PRC government began to promulgate a comprehensive system of laws and regulations governing economic matters in general. The overall effect of legislation over the past four decades has significantly increased the protections afforded to various forms of foreign or private-sector investment in China.

As relevant laws and regulations are relatively new and the PRC legal system continues to rapidly evolve with little advance notice, the interpretations of many laws, regulations and rules are not always uniform and enforcement of these laws, regulations and rules involve uncertainties.

From time to time, we may have to resort to administrative and court proceedings to enforce our legal rights. However, since PRC administrative and court authorities have significant discretion in interpreting and implementing statutory and contractual terms, it may be more difficult to evaluate the outcome of administrative and court proceedings and the level of legal protection we enjoy than in more developed legal systems. Furthermore, the PRC legal system is based in part on government policies and internal rules (some of which are not published in a timely manner or at all) that may have retroactive effect. As a result, we may not be aware of our violation of these policies and rules until sometime after the violation. Such uncertainties, including uncertainty over the scope and effect of our contractual, property (including intellectual property) and procedural rights, and any failure to respond to changes in the regulatory environment in China could materially and adversely affect our business, impede our ability to continue our operations and reduce the value of your investment in Zhibao.

On December 28, 2021, the Cybersecurity Review Measures (2021 version) which were promulgated and became effective on February 15, 2022, provide that any "online platform operators" possessing personal information of more than one million users which seeks to list in a foreign stock exchange should be subject to cybersecurity review. The Cybersecurity Review Measures (2021 version), further list the factors to be considered when assessing the national security risks of the relevant activities, including, among others, (i) the risk of core data, important data or a large amount of personal information being stolen, leaked, destroyed, and illegally used or exited the country; and (ii) the risk of critical information infrastructure, core data, important data or a large amount of personal information being affected, controlled, or maliciously used by foreign governments after listing abroad. The CAC requires that under the new rules, online platform operators possessing personal information of more than one million users must apply for cybersecurity approval when seeking listings in other nations because of the risk that such data and personal information could be "affected, controlled, and maliciously exploited by foreign governments." The cybersecurity review will also look into the potential national security risks from overseas IPOs. As a network platform operator who possesses personal information of more than one million users for purposes of the Cybersecurity Review Measures (2021 version), we have applied for and completed a cybersecurity review with respect to the IPO pursuant to the Cybersecurity Review Measures (2021 version).

As of the date of this annual report, our PRC Subsidiaries had personal information of more than 24 million end customers through their digital insurance brokerage services and MGU services. Based upon the advice of our PRC counsel, Jinghe Law Firm, that each of our PRC Subsidiaries, is deemed a "personal information processor" under the Personal Information Protection Law ("**PIPL**") because they can all independently determine the handling purpose and method in the handling of personal information as defined in the PIPL.

In addition, neither Zhibao nor any of its subsidiaries is deemed an operator of any "critical information infrastructure" as defined under the PRC Cybersecurity Law and the Security Protection Measures on Critical Information Infrastructure promulgated by the State Council on July 30, 2021, which became effective on September 1, 2021, because neither of them is identified and notified by the PRC competent government authorities that any of them is a critical information infrastructure operator ("**CIIO**"). Notwithstanding the foregoing, Zhibao and its subsidiaries will be deemed an "online platform operator" possessing personal information of more than one million users under the Cybersecurity Review Measures if the platform operated by the Company for our digital insurance brokerage services and MGU services possesses personal information of more than one million users.

On February 17, 2023, the CSRC released the New Overseas Listing Rules, which came into effect on March 31, 2023. The New Overseas Listing Rules apply to overseas securities offerings and/or listings conducted by (i) companies incorporated in the PRC, or PRC domestic companies, directly and (ii) companies incorporated overseas with operations primarily in the PRC and valued on the basis of interests in PRC domestic companies, or indirect offerings. The New Overseas Listing Rules requires (1) the filings of the overseas offering and listing plan by the PRC domestic companies with the CSRC under certain conditions, and (2) the filing of their underwriters with the CSRC under certain conditions and the submission of an annual report to of such filed underwriters the CSRC within the required timeline. The required filing scope is not limited to the initial public offering, but also includes subsequent overseas securities offerings, single or multiple acquisition(s), share swap, transfer of shares or other means to seek an overseas direct or indirect listing, a secondary listing or dual listing.

Under the New Overseas Listing Rules, a filing-based regulatory system applies to "indirect overseas offerings and listings" of companies in mainland China, which refers to securities offerings and listings in an overseas market made under the name of an offshore entity but based on the underlying equity, assets, earnings or other similar rights of a company in mainland China that operates its main business in mainland China. As advised by our PRC legal counsel, Jinghe Law Firm, pursuant to the New Overseas Listing Rules, following an initial public offering, an issuer conducting an offering of its securities, (including ordinary shares, convertible notes, or preferred shares, is required to submit a filing to the CSRC within three business days after the closing of such offering.

On the same day, the CSRC also held a press conference for the release of the New Overseas Listing Rules and issued the Overseas Listing Notice. Under the Overseas Listing Notice, a company that has already completed overseas listing will be considered as an existing listed company and is not required to make any filing until it conducts a new offering in the future.

As of the date of this annual report, except for the licenses and permissions held by Zhibao's PRC Subsidiaries under "Regulatory Permissions" the Company believes it is not required to obtain permission or approval from any other PRC state or local government and has not received any denial to offer securities in the U.S. However, if any other filings, approval, review or other procedure is required, there is no assurance that we will be able to obtain such filings, approval or complete such review or other procedures timely or at all. For any approval or permission that we have received or may receive in future, it could nevertheless be revoked or cancelled, and the terms of its reissuance may impose restrictions on our operations and offerings relating to our securities. Besides, the New Overseas Listing Rules may subject us to additional compliance requirement in the future. Any failure of us to fully comply with new regulatory requirements may significantly limit or completely hinder our ability to continue to offer our Class A ordinary shares, cause significant disruption to our business operations, and severely damage our reputation, which would materially and adversely affect our financial condition and results of operations and cause our Class A ordinary shares to significantly decline in value or become worthless.

On February 24, 2023, the CSRC, together with other PRC government authorities, released the Provisions on Strengthening the Confidentiality and Archives Administration Related to the Overseas Securities Offering and Listing by Domestic Enterprises (the "**Confidentiality and Archives Administration Provisions**"), which come into effect on March 31, 2023. The Confidentiality and Archives Administration Provisions require, among others, that PRC domestic enterprises seeking to offer and list securities in overseas markets, either directly or indirectly, shall establish the confidentiality and archives system, and shall complete approval and filing procedures with competent authorities, if such PRC domestic enterprises or their overseas listing entities provide or publicly disclose documents or materials involving state secrets and work secrets of PRC government agencies to relevant securities companies, securities service institutions, overseas regulatory agencies and other entities and individuals. It further stipulates that providing or publicly disclosing documents and materials which may adversely affect national security or public interests, and accounting files or copies of important preservation value to the state and society shall be subject to corresponding procedures in accordance with relevant laws and regulations.

Given the PRC government's authority, oversight may also extend to Zhibao HK, our Hong Kong subsidiary, and the legal and operational risks associated with operating in mainland China could also apply to Zhibao HK. In Hong Kong, the basic policies of the PRC regarding Hong Kong are reflected in the Basic Law, which provides Hong Kong with a high degree of autonomy and executive, legislative and independent judicial powers, including that of final adjudication under the principle of "one country, two systems". We cannot assure you that there will not be any changes in the economic, political and legal environment in Hong Kong. We may be subject to uncertainty about any future actions of the PRC government and is possible that most of the legal and operational risks associated with operating in the PRC may also apply to the PRC operating entities' operations in Hong Kong if they conduct business in Hong Kong in the future. The PRC government may intervene or influence the PRC operating entities' future operations in Hong Kong at any time and exert more influence over the manner in which the PRC operating entities must conduct their business activities. Such government actions, if and when they occur, could result in a material change in their operations in Hong Kong. The protection of personal data is governed by the Personal Data (Privacy) Ordinance (Chapter 486 of The Laws of Hong Kong) (the "**PDPO**") in Hong Kong. All organizations that collect, hold, process or use personal data must comply with the PDPO, including the six Data Protection Principles ("**DPPs**") in Schedule 1 of the PDPO. In particular, Data Protection Principle 4 specifies the data security requirements which stipulate that, among other things, all practicable steps shall be taken to ensure that any personal data held by a data user is protected against unauthorized or accidental access, processing, erasure, loss or use. In addition, the Competition Ordinance and the relevant anti-monopoly law in Hong Kong are designed to promote competition and prohibit anti-competitive practices for entities conducting business operations in Hong Kong. The Merger Rule in the Competition Ordinance prohibits undertakings from directly or indirectly carrying out a merger that has, or is likely to have, the effect of substantially reduce the level of competition in Hong Kong. This rule is only applicable to telecommunication carrier licensees. There is no general merger control regime in Hong Kong. We believe, as of the date of this annual report, the relevant data security, anti-monopoly and merger laws and ordinance in Hong Kong, i.e. the PDPO and the Competition Ordinance are not applicable to our HK subsidiary and have no impact on our ability to conduct our business through our PRC operating entities, accept foreign investment or listing on an U.S. exchange as our Hong Kong subsidiary is currently a holding company with no material operations since its incorporation in Hong Kong. Furthermore, there are currently no regulatory actions related to data security or anti-monopoly concerns in Hong Kong that may impact our ability to conduct our business through our PRC operating entities, accept foreign investment or continue to list on a U.S./foreign exchange, and our Hong Kong subsidiary has not received any inquiry, notice, warning or sanctions regarding our continued listing on the Nasdaq from the Hong Kong government. Notwithstanding the foregoing, there is no assurance that regulators in Hong Kong will not take a contrary view or will not subsequently require us to obtain any approval or permission in Hong Kong and subject us to fines or penalties for non-compliance.

The PRC government authorities may further strengthen oversight and control over offerings that are conducted overseas and/or foreign investment in China-based issuers like us. Any such action may adversely affect our operations and significantly limit or hinder our ability to continue to offer securities to investors or reduce the value of such securities or cause such securities to become worthless.

There are risks arising from the legal systems in China, including the risks and uncertainties regarding the interpretation, application and enforcement of current and future PRC laws and regulations. The rules and regulations in China can change quickly with little advance notice and uncertainties in the interpretation and enforcement of PRC laws, rules and regulations could limit the legal protections available to you and us. The PRC government may intervene or influence our operations at any time, or may exert more control over offerings conducted overseas and/or foreign investment in China-based issuers, which could result in a material change in our operations, financial performance and/or the value of our Class A ordinary shares.

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***The PRC government exerts substantial influence over the manner in which we conduct our business activities. The PRC government may also intervene or influence our operations and our offerings at any time, which could result in a material change in our operations and our Class A ordinary shares could decline in value or become worthless.***

We are an exempted company incorporated under the laws of the Cayman Islands structured as a holding company and are not a PRC operating company. As a holding company with no material operations of our own, we conduct substantially all of our operations in China through our PRC Subsidiaries. We control and receive the economic benefits of our PRC Subsidiaries' business operation, if any, through equity ownership. We do not have, nor had we ever, used a VIE structure. Our corporate structure, i.e., a Cayman Islands holding company with operations conducted by our PRC Subsidiaries, involves unique risks to investors. The PRC regulatory authorities could change the rules and regulations regarding foreign ownership in the industry in which the company operates, which would likely result in a material change in our operations and/or a material change in the value of the securities we are registering for sale, including that it could cause the value of such securities to significantly decline or become worthless.

Except for the filing and reporting requirements under the New Overseas Listing Rules, we are currently not required to obtain approval from any PRC authorities to list on U.S. exchanges. However, if any of our holding company were required to obtain approval in the future and were denied permission from Chinese authorities to list on U.S. exchanges, we will not be able to continue listing on any U.S. exchange, continue to offer securities to investors, or materially affect the interest of the investors and cause significantly depreciation of our price of Class A ordinary shares.

The PRC government has exercised and continues to exercise substantial control over virtually every sector of the Chinese economy through regulation and state ownership. Our ability to operate in China may be harmed by changes in its laws and regulations, including those relating to foreign investment, taxation, environmental regulations, land use rights, property and other matters. The central or local governments of these jurisdictions may impose new, stricter regulations or interpretations of existing regulations that would require additional expenditures and efforts on our part to ensure our compliance with such regulations or interpretations. Accordingly, government actions in the future, including any decision not to continue to support recent economic reforms and to return to a more centrally planned economy or regional or local variations in the implementation of economic policies, could have a significant effect on economic conditions in China or particular regions thereof, and could require us to divest ourselves of any interest we then hold in our operations in China.

For example, the Chinese cybersecurity regulator announced on July 2, 2021, that it had begun an investigation of Didi Global Inc. (NYSE: DIDI) and two days later ordered that the company's app be removed from smartphone app stores. Similarly, our business segments may be subject to various government and regulatory interference in the regions in which we operate. We could be subject to regulation by various political and regulatory entities, including various local and municipal agencies and government sub-divisions. We may incur increased costs necessary to comply with existing and newly adopted laws and regulations or penalties for any failure to comply.

Furthermore, it is uncertain when and whether we will be required to obtain permission from the PRC government to list on U.S. exchanges in the future, and even when such permission is obtained, whether it will be denied or rescinded. On October 19, 2023, the CSRC published such Filing Completion Notice confirming that we completed the filing procedures with the CSRC under the New Overseas Listing Rules. Upon completion of the CSRC filing procedures, which was evidenced by the Filing Completion Notice, we have fulfilled the CSRC's requirements regarding our overseas offering and listing under the New Overseas Listing Rules.

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***Our business processes a certain quantity of personal information, and failure to protect private or sensitive information of customers or improper handling of such information could have a material and adverse effect on our business. In light of recent events indicating greater oversight by the Cyberspace Administration of China, or CAC, over data security, we are subject to a variety of laws and other obligations regarding cybersecurity and data protection, and any failure to comply with applicable laws and obligations could have a material and adverse effect on our business, financial condition, results of operations, and the offering.***

Our business involves collecting and retaining certain internal and end customer personal data. For example, our PRC Subsidiaries collect end customer's personal information in the ordinary course of business, including consumer profile data and purchase data. We and our PRC Subsidiaries also maintain information about various aspects of our operations as well as regarding our employees. The integrity and protection of our customers, employees and company data is critical to our business. Our customers and employees expect that we and our PRC Subsidiaries will adequately protect their personal information. We and our PRC Subsidiaries are required by applicable laws to keep strictly confidential the personal information that we and our and our PRC Subsidiaries collect, and to take adequate security measures to safeguard such information.

The PRC regulators have been increasingly focused on regulating data security and data protection, especially as to private or sensitive information. We expect that these areas will receive greater attention from regulators, as well as attract public scrutiny and attention going forward. This greater attention, scrutiny, and enforcement, including more frequent inspections, could increase our compliance costs and subject us to heightened risks and challenges associated with data security and protection. If we are unable to manage these risks, our reputation and results of operations could be materially and adversely affected. Besides, we face risks inherent in handling and protecting such data, including protecting the data hosted in our system, detecting and prohibiting unauthorized data share and transfer, preventing attacks on our system by outside parties or fraudulent behavior or improper use by our employees, and maintaining and updating our database. Any system failure, security breach or third parties attacks or attempts to illegally obtain the data that results in any actual or perceived release of user data could damage our reputation and brand, deter current and potential customers from using our services, damage our business, and expose us to potential legal liability.

On August 20, 2021,the SCNPC promulgated the Personal Information Protection Law ("**PIPL**"), which took effect on November 1, 2021. As the first systematic and comprehensive law specifically for the protection of personal information in the PRC, the PIPL provides, among others, that (i) an individual's separate consent shall be obtained before operation of such individual's sensitive personal information, e.g., biometric characteristics and individual location tracking, (ii) personal information operators operating sensitive personal information shall notify individuals of the necessity of such operations and the influence on the individuals' rights, (iii) if personal information operators reject individuals' requests to exercise their rights, individuals may file a lawsuit with a People's Court. The PIPL elaborates the protection by law of personal information for natural persons and no entity or individual may infringe upon the rights and interests of the natural persons.

On November 7, 2016, the SCNPC issued the Cybersecurity Law, which became effective on June 1, 2017. Pursuant to the Cybersecurity Law, network operators must not, without users' consent, collect their personal information, and may only collect users' personal information necessary to provide their services. Providers are also obliged to provide security maintenance for their products and services and shall comply with provisions regarding the protection of personal information as stipulated under the relevant laws and regulations. The Cybersecurity Law also provides that personal information and important data collected and generated by a CIIO in the course of its operations in China must be stored in China.

The PRC regulatory requirements regarding cybersecurity are evolving and we are subject to local laws and regulations relating to the collection, use, storage, transfer, disclosure and security of personally identifiable information with respect to our end customers and employees including any requests from regulatory and government authorities relating to the data we collected. For instance, various regulatory bodies in China, including the CAC, the Ministry of Public Security and the SAMR, have enforced data privacy and protection laws and regulations with varying and evolving standards and interpretations. On June 10, 2021, the Standing Committee of the National People's Congress promulgated the Data Security Law which took effect in September 2021. The Data Security Law requires that data shall not be collected by theft or other illegal means, and it also provides that a data classification and hierarchical protection system. The data classification and hierarchical protection system protects data according to its importance in economic and social development, and the damages it may cause to national security, public interests, or the legitimate rights and interests of individuals and organizations if the data is falsified, damaged, disclosed, illegally obtained or illegally used, which protection system is expected to be built by the state for data security in the near future.

On September 24, 2024, the CAC released the Network Internet Data Protection Regulations, which became effective on January 1, 2025. The Network Internet Data Protection Regulations provide that data processors refer to individuals or organizations that autonomously determine the purpose and the manner of processing data. Where a data processor processes personal data of more than ten million users, , it shall also abide by the provisions of articles 30 and 32 of these regulations on network data processors that process important data ("**Critical Data Processors**"). Critical Data Processors shall specify the person in charge of network data security and the network data security management organization and fulfill a variety of responsibilities. In addition, before providing, entrusting or jointly processing important data, Critical Data Processors shall conduct risk assessments, except for performing their statutory duties or obligations.

Further, the Cybersecurity Review Measures (2021 version), which were promulgated on December 28, 2021 and effective on February 15, 2022, provides that if a CIIO purchases internet products and services that affect or may affect national security as well as any online platform operators processing the personal information of more than one million users which seek to list on a foreign stock exchange shall file a cybersecurity review with the Cybersecurity Review Office ("**CRO**") in China. The Cybersecurity Review Measures also figure out the following key points:

● companies who are engaged in data processing are also subject to the regulatory scope;

● the CSRC is included as one of the regulatory authorities for purposes of jointly establishing the state cybersecurity review working mechanism; and

● the risks of core data, material data or large amounts of personal information being stolen, leaked, destroyed, damaged, illegally used or transmitted to overseas parties and the risks of critical information infrastructure, core data, material data or large amounts of personal information being influenced, controlled or used maliciously shall be collectively taken into consideration during the cybersecurity review process.

The Cybersecurity Review Measures (2021 version) iterates that any "online platform operators" possessing personal information of more than one million users which seeks to list in a foreign stock exchange should be subject to cybersecurity review. The Cybersecurity Review Measures (2021 version), further elaborates the factors to be considered when assessing the national security risks of the relevant activities, including, among others, (i) the risk of core data, important data or a large amount of personal information being stolen, leaked, destroyed, and illegally used or exited the country; and (ii) the risk of critical information infrastructure, core data, important data or a large amount of personal information being affected, controlled, or maliciously used by foreign governments after listing abroad. The CAC requires that under the new rules, online platform operators possessing personal information of more than one million users must now apply for cybersecurity approval when seeking listings in other nations because of the risk that such data and personal information could be "affected, controlled, and maliciously exploited by foreign governments." The cybersecurity review will also look into the potential national security risks from overseas IPOs.

On July 7, 2022, the CAC published the Outbound Data Transfer Security Assessment Measures (the "**Outbound Data Transfer Security Assessment Measures**"), which became effective on September 1, 2022 and specifies the circumstances in which data processors providing data outbound shall apply for outbound data transfer security assessment coordinated by the CAC: (i) any data processor transfers important data to overseas; (ii) any critical information infrastructure operator or data processor who processes personal information of over 1 million people provides personal information to overseas; (iii) any data processor who provides personal information to overseas and has already provided personal information of more than 100,000 people or sensitive personal information of more than 10,000 people to overseas since January 1<sup>st</sup> of the previous year and; and (iv) other circumstances under which the data cross-border transfer security assessment is required as prescribed by the CAC. However, it does not clarify the scope of the meaning of other circumstances under which the CAC would require the outbound data transfer security assessment, which leaves more uncertainties in its application and enforcement. If we are deemed to be a data handler providing important data outbound, we could be subject to the outbound data security assessment with national Cyberspace Administration as mentioned above. As a network platform operator who possess personal information of more than one million users for purposes of the Cybersecurity Review Measures (2021 version), we applied for and completed a cybersecurity review with respect to the IPO pursuant to the Cybersecurity Review Measures (2021 version).

On June 10, 2021, the SCNPC promulgated the PRC Data Security Law, which took effect in September 2021. The PRC Data Security Law imposes data security and privacy obligations on entities and individuals carrying out data activities, and introduces a data classification and hierarchical protection system based on the importance of data in economic and social development, and the degree of harm it will cause to national security, public interests, or legitimate rights and interests of individuals or organizations when such data is tampered with, destroyed, leaked, illegally acquired or used. The PRC Data Security Law also provides for a national security review procedure for data activities that may affect national security and imposes export restrictions on certain data an information.

As a network platform operator who possesses personal information of more than one million users for purposes of the Cybersecurity Review Measures (2021 version), we applied for and completed a cybersecurity review with respect to the IPO pursuant to the Cybersecurity Review Measures (2021 version). However, there remains uncertainty as to how the Cybersecurity Review Measures will be interpreted or implemented and how the PRC regulatory agencies, including the CAC or the NFRA, may adopt new laws, regulations, rules, or detailed implementation and interpretation related to the Cybersecurity Review Measures. We cannot assure you that we and/or our PRC Subsidiaries will comply with such regulations in all respects and we and/or our PRC Subsidiaries may be ordered to rectify or terminate any actions that are deemed illegal by regulatory authorities. Any failure or delay in the completion of the cybersecurity review procedures or any other non-compliance with the related laws and regulations may result in fines or other penalties, including suspension of business, website closure, and revocation of prerequisite licenses, as well as reputational damage or legal proceedings or actions against us, which could materially and adversely affect our business and impede our ability to continue our operations.

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***The enforcement of the PRC Labor Contract Law and other labor-related regulations in the PRC may increase our labor costs, impose limitations on our labor practices and adversely affect our business and our results of operations.***

The PRC Labor Law and the Labor Contract Law of the People's Republic of China (the "**Labor Contract Law**") require that employers must execute written employment contracts with full-time employees. All employers must compensate their employees with wages equal to at least the local minimum wage standards. Violations of the PRC Labor Law and the Labor Contract Law may result in the imposition of fines, compensations and other administrative sanctions, and serious violations may constitute criminal offenses.

The protection of employees who, under the PRC Labor Contract Law, have the right, among others, to enter into written labor contracts, to enter into labor contracts with no fixed terms under certain circumstances, to receive overtime wages and to terminate or alter terms in labor contracts. Besides, we are required to pay various statutory employee benefits, including pension, housing fund, medical insurance, work-related injury insurance, unemployment insurance and maternity insurance to designated government agencies for the benefit of our employees under the PRC laws and regulations. The relevant government agencies may examine whether an employer has made adequate payments to the statutory employee benefits, and those employers who fail to make adequate payments may be subject to late payment fees, fines and/or other penalties.

In addition, the Labor Contract Law, which became effective in January 2008 with its amendments being effective in July 2013 and its implementing rules being effective in September 2008, introduces specific provisions related to fixed-term employment contracts, part-time employment, probation, consultation with labor unions and employee assemblies, employment without a written contract, dismissal of employees, severance, and collective bargaining, which together represent enhanced enforcement of labor laws and regulations. For example, according to the PRC Labor Contract Law, an employer is obliged to sign an unfixed-term labor contract with any employee who has worked for the employer for 10 consecutive years. Further, if an employee requests or agrees to renew a fixed-term labor contract that has already been entered into twice consecutively, the resulting contract must have an unfixed term, with certain exceptions. The employer must pay economic compensation to an employee where a labor contract is terminated or expires in accordance with the PRC Labor Contract Law, except for certain situations which are specifically regulated. In addition, the government has issued various labor-related regulations to further protect the rights of employees. According to such laws and regulations, employees are entitled to annual leave ranging from five to 15 days and are able to be compensated for any untaken annual leave days in the amount of three times their daily salary, subject to certain exceptions.

In the event that we decide to terminate some of our employees or otherwise to change our employment or labor practices, the Labor Contract Law and its implement rules, and other labor-related regulation may also limit our ability to effect those changes in a manner that we believe to be cost-effective, which could adversely affect our business and results of operations. We expect that our labor costs, including wages and employee benefits, will continue to increase. Unless we are able to control our labor costs or pass on these increased labor costs to the insurance companies by increasing the fees of our brokerage services, our financial condition and results of operations may be adversely affected.

Our PRC Subsidiaries are currently not subject to any labor disputes or related query, investigation or interference by a PRC governing body. However, due to the uncertainties as to the interpretation and implementation of these PRC laws and regulations, our PRC Subsidiaries' employment practices may not be at all times deemed in compliance with the laws and regulations. If we are subject to severe penalties or incur significant liabilities in connection with labor disputes or investigations, our business and financial conditions may be adversely affected.

***PRC regulations relating to foreign exchange registration of overseas investment by PRC residents may subject our PRC resident beneficial owners of our PRC Subsidiaries to liability or penalties, limit our ability to inject capital into the subsidiary, limit PRC Subsidiaries' ability to increase its registered capital or distribute profits to us, or may otherwise adversely affect us.***

On July 4, 2014, the State Administration of Foreign Exchange of the People's Republic of China, or SAFE, promulgated the Circular on Relevant Issues Relating to Domestic Resident's Investment and Financing and Roundtrip Investment through Special Purpose Vehicles, or SAFE Circular 37, which replaced the former Notice on Relevant Issues Concerning Foreign Exchange Administration for PRC Residents to Engage in Financing and Inbound Investment via Overseas Special Purpose Vehicles (generally known as SAFE Circular 75) promulgated by SAFE on October 21, 2005. On February 13, 2015, SAFE further promulgated the Circular on Further Simplifying and Improving the Administration of the Foreign Exchange Concerning Direct Investment ("**SAFE Circular 13**"), which took effect on June 1, 2015. This SAFE Circular 13 has amended SAFE Circular 37 by requiring PRC residents or entities to register with qualified banks rather than SAFE or its local branch in connection with their direct establishment or indirect control of an offshore entity established for the purpose of overseas investment or financing with such mainland China residents' legally owned assets or equity interests in domestic enterprises or offshore assets or interests. Qualified local banks will directly examine and accept foreign exchange registration for overseas direct investment, including the initial foreign exchange registration and amendment registration, under Circular 37 from June 1, 2015.

These circulars further require amendment to the registration in the event of any significant changes with respect to the special purpose vehicle, such as an increase or decrease of capital contributed by PRC residents, share transfer or exchange, merger, division or other material events. In the event that a PRC resident holding interests in a special purpose vehicle fails to complete the required SAFE registration, the PRC subsidiaries of that special purpose vehicle may be prohibited from making profit distributions to the offshore parent and from carrying out subsequent cross-border foreign exchange activities, and the special purpose vehicle may be restricted in its ability to contribute additional capital into its PRC subsidiaries. Furthermore, it is unclear how this regulation, and any future regulation concerning offshore or cross-border transactions, will be interpreted, amended and implemented by the relevant PRC government authorities, and we cannot predict how these regulations will affect our business operations or future strategy. Failure to comply with the various SAFE registration requirements described above could result in liability under PRC law for evasion of foreign exchange controls. This may have a material adverse effect on our business, financial condition and results of operations.

According to SAFE Circular 37 and SAFE Circular 13, our shareholders or beneficial owners who are PRC residents are subject to Circular 37 or other foreign exchange administrative regulations in respect of their investment in our company. To the best of our knowledge, as of the date of this annual report, all of our PRC resident shareholders who directly or indirectly hold shares in our Cayman Islands holding company and who are known to us have completed the application for foreign exchange registrations for their foreign investment in our company in accordance with SAFE Circular 37 and SAFE Circular 13. We have taken steps to notify significant beneficial owners of ordinary shares whom we know are PRC residents of their filing obligations. However, we may not at all times be fully aware or informed of the identities of all our shareholders or beneficial owners that are required to make such registrations, and we may not always be able to compel them to comply with all relevant foreign exchange regulations. As a result, we cannot assure you that all of our shareholders or beneficial owners who are PRC residents will at all times comply with, or in the future make or obtain any applicable registrations or approvals required by all relevant foreign exchange regulations. The failure or inability of such individuals to comply with the registration procedures set forth in these regulations may subject us to fines or legal sanctions, restrictions on our cross-border investment activities or our PRC Subsidiaries' ability to distribute dividends to, or obtain foreign-exchange-dominated loans from, our company, or prevent us from making distributions or paying dividends. As a result, our business operations and our ability to make distributions to you could be materially and adversely affected.

Furthermore, as these foreign exchange regulations are still relatively new and their interpretation and implementation have been constantly evolving, it is unclear how these regulations, and any future regulation concerning offshore or cross-border transactions, will be interpreted, amended and implemented by the relevant government authorities. We cannot predict how these regulations will affect our business operations or future strategy. In addition, if we decide to acquire a PRC domestic company, we cannot assure you that we or the owners of such company, as the case may be, will be able to obtain the necessary approvals or complete the necessary filings and registrations required by the foreign exchange regulations. This may restrict our ability to implement our acquisition strategy and could adversely affect our business and prospects.

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***PRC regulation on loans to, and direct investment in, our PRC Subsidiaries by offshore holding companies and governmental control in currency conversion may delay or prevent us from using the proceeds of any offerings to make loans to or make additional capital contributions to our PRC Subsidiaries, which could materially and adversely affect our liquidity and our ability to fund and expand our business.***

Zhibao is an exempted company incorporated under the laws of the Cayman Islands with limited liability structured as a holding company conducting its operations substantially in China through its PRC Subsidiaries. As permitted under PRC laws and regulations, in utilizing the proceeds of any offerings, we may make loans to our PRC Subsidiaries subject to the approval from governmental authorities and limitation of amount, or we may make additional capital contributions to our PRC Subsidiaries. For the fiscal year ended June 30, 2024, Zhibao made capital contribution of RMB 3,559,651 to WFOE. For the fiscal year ended June 30, 2025, Zhibao has made RMB 27,000,000 loans or capital contributions to WFOE. Furthermore, loans by us to our PRC Subsidiaries to finance its activities cannot exceed the statutory limits and are subject to the requirement of making necessary filings in the Foreign Investment Comprehensive Management Information System and registration with other governmental authorities in China.

The SAFE promulgated the Notice of the State Administration of Foreign Exchange on Reforming the Administration of Foreign Exchange Settlement of Capital of Foreign-invested Enterprises ("**SAFE Circular 19**"), effective on June 1, 2015, in replacement of the Circular on the Relevant Operating Issues Concerning the Improvement of the Administration of the Payment and Settlement of Foreign Currency Capital of Foreign-Invested Enterprises, the Notice from the State Administration of Foreign Exchange on Relevant Issues Concerning Strengthening the Administration of Foreign Exchange Businesses, and the Circular on Further Clarification and Regulation of the Issues Concerning the Administration of Certain Capital Account Foreign Exchange Businesses. According to SAFE Circular 19, the flow and use of the RMB capital converted from foreign currency-denominated registered capital of a foreign-invested company is regulated such that RMB capital may not be used for the issuance of RMB entrusted loans, the repayment of inter-enterprise loans or the repayment of bank loans that have been transferred to a third party. Although SAFE Circular 19 allows RMB capital converted from foreign currency-denominated registered capital of a foreign-invested enterprise to be used for equity investments within the PRC, it also reiterates the principle that RMB converted from the foreign currency-denominated capital of a foreign-invested company may not be directly or indirectly used for purposes beyond its business scope. Thus, it is unclear whether the SAFE will permit such capital to be used for equity investments in the PRC in actual practice. The SAFE promulgated the Notice of the State Administration of Foreign Exchange on Reforming and Standardizing the Foreign Exchange Settlement Management Policy of Capital Account ("**SAFE Circular 16**"), effective on June 9, 2016, which reiterates some of the rules set forth in SAFE Circular 19, but changes the prohibition against using RMB capital converted from foreign currency-denominated registered capital of a foreign-invested company to issue RMB entrusted loans to a prohibition against using such capital to grant loans to non-associated enterprises. Violations of SAFE Circular 19 and SAFE Circular 16 could result in administrative penalties. SAFE Circular 19 and SAFE Circular 16 may significantly limit our ability to transfer any foreign currency we hold, to our PRC Subsidiaries, which may adversely affect our liquidity and our ability to fund and expand our business in the PRC.

In light of the various requirements imposed by PRC regulations on loans to, and direct investment in, the PRC subsidiaries by offshore holding companies, and the fact that the PRC government may at its discretion restrict access to foreign currencies for current account transactions in the future, we cannot assure you that we will be able to complete the necessary government registrations or obtain the necessary government approvals on a timely basis, if at all, with respect to future loans by us to our PRC Subsidiaries or with respect to future capital contributions by us to our PRC Subsidiaries. If we fail to complete such registrations or obtain such approvals, our ability to use the proceeds from any offerings and to capitalize or otherwise fund our PRC operations may be negatively affected, which could materially and adversely affect our liquidity and our ability to fund and expand our business.

***Under the PRC Enterprise Income Tax Law, we may be classified as a PRC "resident enterprise" for PRC enterprise income tax purposes. Such classification would likely result in unfavorable tax consequences to us and our non-PRC enterprise shareholders and has a material adverse effect on our results of operations and the value of your investment.***

Under the PRC Enterprise Income Tax Law ("**EIT Law**"), that became effective in January 2008 and was amended in February 2017 and December 2018, as well as its implementing rules, an enterprise established outside the PRC with "de facto management bodies" within the PRC is considered a "resident enterprise" for PRC enterprise income tax purposes and is generally subject to a uniform 25% enterprise income tax rate on its worldwide income. Under the implementation rules to the EIT Law, a "de facto management body" is defined as a body that has material and overall management and control over the manufacturing and business operations, personnel and human resources, finances and properties of an enterprise. In addition, a circular, known as SAT Circular 82, issued in April 2009 by the State Administration of Taxation (the "**SAT**"), specifies that certain offshore incorporated enterprises controlled by PRC enterprises or PRC enterprise groups will be classified as PRC resident enterprises if the following are located or resident in the PRC: senior management personnel and departments that are responsible for daily production, operation and management; financial and personnel decision making bodies; key properties, accounting books, company seal, and minutes of board meetings and shareholders' meetings; and half or more of the senior management or directors having voting rights. Further to SAT Circular 82, the SAT issued a bulletin, known as SAT Bulletin 45, which took effect in September 2011, to provide more guidance on the implementation of SAT Circular 82 and clarify the reporting and filing obligations of such "Chinese-controlled offshore incorporated resident enterprises." SAT Bulletin 45 provides procedures and administrative details for the determination of resident status and administration on post-determination matters. Although both SAT Circular 82 and SAT Bulletin 45 only apply to offshore enterprises controlled by PRC enterprises or PRC enterprise groups, not those controlled by PRC individuals or foreign individuals, the determining criteria set forth in SAT Circular 82 and SAT Bulletin 45 may reflect the SAT's general position on how the "de facto management body" test should be applied in determining the tax resident status of offshore enterprises, regardless of whether they are controlled by PRC enterprises, PRC enterprise groups or by PRC or foreign individuals.

We do not believe that we, as an exempted company incorporated under the laws of the Cayman Islands with limited liability, meet all of the conditions above; thus we do not believe that we are a PRC resident enterprise, though all members of our management team as well as the management team of our offshore holding company are located in China. However, if the PRC tax authorities determine that we are a PRC resident enterprise for PRC enterprise income tax purposes, a number of unfavorable PRC tax consequences could follow. First, we will be subject to the uniform 25% enterprise income tax on our world-wide income, which could materially reduce our net income. In addition, we will also be subject to PRC enterprise income tax reporting obligations. However, the tax resident status of an enterprise is subject to determination by the PRC tax authorities and uncertainties remain with respect to the interpretation of the term "de facto management body."

Finally, since there remain uncertainties regarding the interpretation and implementation of the EIT Law and its implementation rules, it is uncertain whether, if we are regarded as a PRC resident enterprise, any dividends payable by us to our investors and gains on the sale of our shares would become subject to PRC withholding tax, at a rate of 10% in the case of non-PRC enterprises (subject to the provisions of any applicable tax treaty). It is unclear whether non-PRC enterprise shareholders of our company would be able to claim the benefits of any tax treaties between their country of tax residence and the PRC in the event that we are treated as a PRC resident enterprise. Any such tax may reduce the returns on your investment in the Class A ordinary shares.

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***There are significant uncertainties under the EIT Law relating to the withholding tax liabilities of our PRC Subsidiaries, and dividends payable by our PRC Subsidiaries to our offshore subsidiaries may not qualify for certain treaty benefits.***

Under the EIT Law and its implementation rules, we, as a non-resident enterprise, that is, an enterprise lawfully incorporated pursuant to the laws of a foreign country (region) that has an office or premises established in China with no actual management functions performed in China, or an enterprise that has income derived from or accruing in China although it does not have an office or premises in China, will be subject to a withholding tax rate of 10%.

Pursuant to a special arrangement between Hong Kong and China, such rate may be reduced to 5% if a Hong Kong resident enterprise owns more than 25% of the equity interest in the PRC company. Zhibao China is 100% owned by Zhibao HK. Accordingly, Zhibao HK may qualify for a 5% tax rate in respect of distributions from Zhibao China when it becomes operational and is not obligated to pay more than 50% of the income in twelve months to residents in third country or region. Under the Notice of the State Administration of Taxation on Issues regarding the Administration of the Dividend Provision in Tax Treaties promulgated on February 20, 2009, the taxpayer needs to satisfy certain conditions to utilize the benefits under a tax treaty. These conditions include: (1) the taxpayer must be the beneficial owner of the relevant dividends, and (2) the corporate shareholder to receive dividends from the PRC Subsidiaries must have continuously met the direct ownership thresholds during the 12 consecutive months preceding the receipt of the dividends. Further, under Announcement of the State Administration of Taxation on Issues Relating to "Beneficial Owner" in Tax Treaties, which took effect on April 1, 2018, a "Beneficial Owner" shall mean a person who has ownership and control over the income and the rights and property from which the income is derived. To determine the "beneficial owner" status of a resident of the treaty counterparty who needs to take advantage of the tax treaty benefits, a comprehensive analysis shall be carried out, taking into account actual conditions of the specific case.

Entitlement to a lower tax rate on dividends according to tax treaties or arrangements between the PRC central government and governments of other countries or regions is subject to Announcement of State Taxation Administration on Promulgation of the Administrative Measures on Non-resident Taxpayers Enjoying Treaty Benefits ("**Circular 35**"). Circular 35 provides that non-resident enterprises are not required to obtain pre-approval from the relevant tax authority in order to enjoy the reduced withholding tax. Instead, non-resident enterprises and their withholding agents may, by self-assessment and on confirmation that the prescribed criteria to enjoy the tax treaty benefits are met, directly apply the reduced withholding tax rate, and file necessary forms and supporting documents when performing tax filings, which will be subject to post-tax filing examinations by the relevant tax authorities. As a result, we cannot assure you that we will be entitled to any preferential withholding tax rate under tax treaties for dividends received from WFOE.

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***Enhanced scrutiny over acquisition transactions by the PRC tax authorities may have a negative impact on potential acquisitions we may pursue in the future.***

Pursuant to the Notice on Strengthening Administration of Enterprise Income Tax for Share Transfers by Non-PRC Resident Enterprises ("**SAT Circular 698**") issued by the SAT on December 10, 2009, where a foreign investor transfers the equity interests of a resident enterprise indirectly via disposition of the equity interests of an overseas holding company, or an "indirect transfer," and such overseas holding company is located in a tax jurisdiction that (i) has an effective tax rate less than 12.5% or (ii) does not tax foreign income of its residents, the foreign investor shall report the indirect transfer to the competent tax authority. The PRC tax authority will examine the true nature of the indirect transfer, and if the tax authority considers that the foreign investor has adopted an "abusive arrangement" in order to avoid PRC tax, it may disregard the existence of the overseas holding company and re-characterize the indirect transfer.

On February 3, 2015, the SAT issued the Announcement of the State Administration of Taxation on Several Issues Concerning the Enterprise Income Tax on Indirect Property Transfer by Non-Resident Enterprises ("**SAT Bulletin** 7"), to supersede existing provisions in relation to the "indirect transfer" as set forth in SAT Circular 698, while the other provisions of SAT Circular 698 remain in force. Pursuant to SAT Bulletin 7, where a non-resident enterprise indirectly transfers properties such as equity in PRC resident enterprises without any justifiable business purposes and aiming to avoid the payment of enterprise income tax, such indirect transfer must be reclassified as a direct transfer of equity in PRC resident enterprises. To assess whether an indirect transfer of PRC taxable properties has reasonable commercial purposes, all arrangements related to the indirect transfer must be considered comprehensively and factors set forth in SAT Bulletin 7 must be comprehensively analyzed in light of the actual circumstances. SAT Bulletin 7 also provides that, where a non-PRC resident enterprise transfers its equity interests in a resident enterprise to its related parties at a price lower than the fair market value, the competent tax authority has the power to make a reasonable adjustment to the taxable income of the transaction.

On October 17, 2017, the SAT issued the Announcement of the State Administration of Taxation on Matters Concerning Withholding of Income Tax of Non-resident Enterprises as Source ("**SAT Bulletin 37**"), which repealed the entire SAT Circular 698 and the provision in relation to the time limit for the withholding agent to declare to the competent tax authority for payment of such tax of SAT Bulletin 7. Pursuant to SAT Bulletin 37, the income from a property transfer, as stipulated in the second item under Article 19 of the EIT Law, shall include the income derived from transferring such equity investment assets as equity. The balance of deducting the equity's net value from the total income from equity transfer shall be taxable income from equity transfer. Where a withholding agent enters into a business contract, involving the income specified in the third paragraph of Article 3 in the EIT Law, with a non-resident enterprise, the tax-excluding income of the non-resident enterprise will be treated as the tax-including income, based on which the tax payment will be calculated and remitted, if it is agreed in the contract that the withholding agent shall assume the tax payable.

It is possible that we or our non-PRC resident investors may become at risk of being taxed under SAT Bulletin 7 and SAT Bulletin 37 and may be required to expend valuable resources to comply with SAT Bulletin 7 and SAT Bulletin 37 or to establish that we or our non-PRC resident investors should not be taxed under SAT Bulletin 7 and SAT Bulletin 37, which may have an adverse effect on our financial condition and results of operations or such non-PRC resident investors' investment in us.

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***Dividends payable to our foreign investors and gains on the sale of our Class A ordinary shares by our foreign investors may be subject to PRC tax.***

Under the EIT Law and its implementation regulations issued by the State Council, a 10% PRC withholding tax is applicable to dividends payable to investors that are non-resident enterprises, which do not have an establishment or place of business in the PRC or which have such establishment or place of business but the dividends are not effectively connected with such establishment or place of business, to the extent such dividends are derived from sources within the PRC. Any gain realized on the transfer of ordinary shares by such investors is also subject to PRC tax at a current rate of 10% which in the case of dividends will be withheld at source if such gain is regarded as income derived from sources within the PRC. If we are deemed a PRC resident enterprise, dividends paid on our ordinary shares, and any gain realized from the transfer of our ordinary shares, may be treated as income derived from sources within the PRC and may as a result be subject to PRC taxation. Furthermore, if we are deemed a PRC resident enterprise, dividends payable to individual investors who are non-PRC residents and any gain realized on the transfer of ordinary shares by such investors may be subject to PRC tax at a current rate of 20%. Any PRC tax liability may be reduced under applicable tax treaties. However, it is unclear whether holders of our Class A ordinary shares would be able to claim the benefit of income tax treaties or agreements entered into between China and other countries or areas if we are considered a PRC resident enterprise. If dividends payable to our non-PRC investors, or gains from the transfer of our Class A ordinary shares by such investors are subject to PRC tax, the value of your investment in our Class A ordinary shares may decline significantly.

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***We may rely on dividends and other distributions on equity paid by our PRC Subsidiaries to fund any cash and financing requirements we may have, and the PRC Subsidiaries' restrictions on paying dividends or making other payments to us could restrict our ability to satisfy our liquidity requirements and have a material and adverse effect on our ability to conduct our business.***

Zhibao is an exempted company incorporated under the laws of the Cayman Islands with limited liability structured as a holding company. We may need dividends and other distributions on equity from our PRC Subsidiaries to satisfy our liquidity requirements, including the funds necessary to pay dividends and other cash distributions to shareholders and service, any debt Zhibao may incur. Our PRC Subsidiaries generate and retain cash generated from operating activities and re-invest it in our business. Current PRC regulations permit our PRC Subsidiaries to pay dividends to us only out of its accumulated profits, if any, determined in accordance with PRC accounting standards and regulations. In addition, our PRC Subsidiaries are required to set aside at least 10% of its accumulated profits each year, if any, to fund certain reserve funds until the total amount set aside reaches 50% of its registered capital. Our PRC Subsidiaries may also allocate a portion of its after-tax profits based on PRC accounting standards to employee welfare and bonus funds at their discretion. These reserves are not distributable as cash dividends. Furthermore, if our PRC Subsidiaries incur debt on its own behalf in the future, the instruments governing the debt may restrict their ability to pay dividends or make other payments to us. Any limitation on the ability of our PRC Subsidiaries to distribute dividends or to make payments to us may restrict our ability to satisfy our liquidity requirements.

In addition, the EIT Law, and its implementation rules provide that a withholding tax rate of up to 10% will be applicable to dividends payable by Chinese companies to non-PRC-resident enterprises unless otherwise exempted or reduced according to treaties or arrangements between the PRC central government and governments of other countries or regions where the non-PRC-resident enterprises are incorporated.

In response to the persistent capital outflow in China and the RMB's depreciation against the U.S. dollar in the fourth quarter of 2016, the People's Bank of China ("**PBOC**") and SAFE promulgated a series of capital control measures in early 2017, including stricter vetting procedures for domestic companies to remit foreign currency for overseas investments, dividends payments and shareholder loan repayments. The PRC government may continue to strengthen its capital controls, and more restrictions and substantial vetting process may be put forward by SAFE for cross-border transactions falling under both the current account and the capital account. Any limitation on the ability of our PRC Subsidiaries to pay dividends or make other kinds of payments to us could materially and adversely limit our ability to grow, make investments or acquisitions that could be beneficial to our business, pay dividends, or otherwise fund and conduct our business.

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***Fluctuations in exchange rates could result in foreign currency exchange losses to us and may reduce the value of, and amount in U.S. Dollars of dividends payable on, our shares in foreign currency terms and could impact our gross profit and gross margin.***

The value of the RMB and the Hong Kong dollar against the U.S. dollar and other currencies may fluctuate and is affected by, among other things, changes in political and economic conditions and the foreign exchange policy adopted by the PRC government. In August 2015, the PBOC, changed the way it calculates the mid-point price of RMB against the U.S. dollar, requiring the market-makers who submit for reference rates to consider the previous day's closing spot rate, foreign-exchange demand and supply as well as changes in major currency rates. In 2018, the value of the RMB appreciated by approximately 5.5% against the U.S. dollar; and in 2019, the RMB appreciated by approximately 1.9% against the U.S. dollar. It is difficult to predict how market forces or PRC or U.S. government policy, including any interest rate increases by the Federal Reserve, may impact the exchange rate between the RMB and the U.S. dollar in the future. There remains significant international pressure on the PRC government to adopt a more flexible currency policy, including from the U.S. government, which has threatened to label China as a "currency manipulator," which could result in greater fluctuation of the RMB against the U.S. dollar. However, the PRC government may still at its discretion restrict access to foreign currencies for current account transactions in the future. Therefore, it is difficult to predict how market forces or government policies may impact the exchange rate between the RMB and the U.S. dollar or other currencies in the future. In addition, the PBOC regularly intervenes in the foreign exchange market to limit fluctuations in RMB exchange rates and achieve policy goals. If the exchange rate between RMB and U.S. dollar fluctuates in unanticipated manners, our results of operations and financial condition, and the value of, and dividends payable on, our shares in foreign currency terms may be adversely affected. We may not be able to pay dividends in foreign currencies to our shareholders. Appreciation of RMB to U.S. dollar will result in foreign currency translation gain, while depreciation of RMB to U.S. dollar will result in foreign currency translation loss.

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***Restrictions on currency exchange may limit our ability to utilize our revenues or make foreign currency payments effectively.***

All of our revenues are denominated in Renminbi. The Renminbi is currently convertible under the "current account," which includes dividends, trade and service-related foreign exchange transactions, but not under the "capital account," which includes foreign direct investment and loans, including loans we may secure from our onshore subsidiaries. Currently, our WFOE may purchase foreign currency for settlement of "current account transactions," including payment of dividends to us, without the approval of SAFE by complying with certain procedural requirements. However, the relevant PRC governmental authorities may limit or eliminate our ability to purchase foreign currencies in the future for current account transactions. Since we expect a significant portion of our future revenue will be denominated in Renminbi, any existing and future restrictions on currency exchange may limit our ability to utilize revenue generated in Renminbi to fund our business activities outside of the PRC or pay dividends in foreign currencies to our shareholders. Foreign exchange transactions under the capital account remain subject to limitations and require approvals from, or registration with, SAFE and other relevant PRC governmental authorities. This could affect our ability to obtain foreign currency through debt or equity financing for our subsidiaries.

Also, substantially all of the Company's operating activities that were conducted through the PRC Subsidiaries in China and related assets and liabilities are denominated in Renminbi, which is not freely convertible into foreign currencies. All foreign exchange transactions take place either through the Peoples' Bank of China ("**PBOC**") or other authorized financial institutions at exchange rates quoted by PBOC. Approval of foreign currency payments by the PBOC or other regulatory institutions requires submitting a payment application form together with suppliers' invoices and signed contracts. The value of Renminbi is subject to changes in central government policies and to international economic and political developments affecting supply and demand in the China Foreign Exchange Trading System market.

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***It may be difficult for overseas shareholders and/or regulators to conduct investigation or collect evidence within China.***

Shareholder claims or regulatory investigation that are common in the United States generally are difficult to pursue as a matter of law or practicality in China. For example, in China, there are significant legal and other obstacles to providing information needed for regulatory investigations or litigation initiated outside China. Although the authorities in China may establish a regulatory cooperation mechanism with the securities regulatory authorities of another country or region to implement cross-border supervision and administration, such cooperation with the securities regulatory authorities in the Unities States may not be efficient in the absence of mutual and practical cooperation mechanism. Furthermore, according to Article 177 of the PRC Securities Law, or Article 177, which became effective in March 2020, no overseas securities regulator is allowed to directly conduct investigation or evidence collection activities within the territory of the PRC without first receiving approval from the CSRC. While detailed interpretation of or implementation rules under Article 177 have yet to be promulgated, the inability for an overseas securities regulator to directly conduct investigation or evidence collection activities within China may further increase difficulties faced by you in protecting your interests.

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***On February 17, 2023, the CSRC released the New Overseas Listing Rules for China-based companies seeking to conduct overseas offering and listing in foreign markets, effective as of March 31, 2023. Under the New Overseas Listing Rules, the PRC government exerts more oversight and control over offerings that are conducted overseas and foreign investment in China-based issuers, which could significantly limit or completely hinder our ability to continue to offer our Class A ordinary shares to investors and could cause the value of our Class A ordinary shares to significantly decline or such shares to become worthless.***

The General Office of the Central Committee of the Communist Party of China and the General Office of the State Council jointly issued the Opinions, which was made available to the public on July 6, 2021. The Opinions emphasized the need to strengthen the administration over illegal securities activities, and the need to strengthen the supervision over overseas listings by Chinese companies. Effective measures, such as promoting the construction of relevant regulatory systems will be taken to deal with the risks and incidents of China-concept overseas listed companies, and cybersecurity and data privacy protection requirements and similar matters.

On February 17, 2023, the CSRC released the New Overseas Listing Rules, which came into effect on March 31, 2023. The New Overseas Listing Rules apply to overseas securities offerings and/or listings conducted by (i) companies incorporated in the PRC, or PRC domestic companies, directly and (ii) companies incorporated overseas with operations primarily in the PRC and valued on the basis of interests in PRC domestic companies, or indirect offerings. The New Overseas Listing Rules requires (1) the filings of the overseas offering and listing plan by the PRC domestic companies with the CSRC under certain conditions, and (2) the filing of their underwriters with the CSRC under certain conditions and the submission of an annual report to of such filed underwriters the CSRC within the required timeline. The required filing scope is not limited to the initial public offering, but also includes subsequent overseas securities offerings, single or multiple acquisition(s), share swap, transfer of shares or other means to seek an overseas direct or indirect listing, a secondary listing or dual listing.

Under the New Overseas Listing Rules, a filing-based regulatory system applies to "indirect overseas offerings and listings" of companies in mainland China, which refers to securities offerings and listings in an overseas market made under the name of an offshore entity but based on the underlying equity, assets, earnings or other similar rights of a company in mainland China that operates its main business in mainland China. As advised by our PRC legal counsel, Jinghe Law Firm, the New Overseas Listing Rules state that, any post-listing follow-on offering by an issuer in an overseas market, including issuance of shares, convertible notes, exchangeable notes and preferred shares, shall be subject to filing requirement within three business days after the closing of such offering.

On the same day, the CSRC also held a press conference for the release of the New Overseas Listing Rules and issued the Overseas Listing Notice. Under the Overseas Listing Notice, a company that has already completed overseas listing will be considered as an existing listed company and is not required to make any filing until it conducts a new offering in the future.

As of the date of this annual report, except for the licenses and permissions held by Zhibao's PRC Subsidiaries under "Regulatory Permissions" the Company believes it is not required to obtain permission or approval from any other PRC state or local government and has not received any denial to offer securities in the U.S. However, if any other filings, approval, review or other procedure are required, there is no assurance that we will be able to obtain such filings, approval or complete such review or other procedures timely or at all. For any approval or permission that we have received or may receive in future, it could nevertheless be revoked or cancelled, and the terms of its reissuance may impose restrictions on our operations and offerings relating to our securities. Besides, the New Overseas Listing Rules may subject us to additional compliance requirements in the future. Any failure of us to fully comply with new regulatory requirements may significantly limit or completely hinder our ability to continue to offer our Class A ordinary shares, cause significant disruption to our business operations, and severely damage our reputation, which would materially and adversely affect our financial condition and results of operations and cause our Class A ordinary shares to significantly decline in value or become worthless.

On February 24, 2023, the CSRC, together with other PRC government authorities, released the Provisions on Strengthening the Confidentiality and Archives Administration Related to the Overseas Securities Offering and Listing by Domestic Enterprises (the "**Confidentiality and Archives Administration Provisions**"), which came into effect on March 31, 2023. The Confidentiality and Archives Administration Provisions require, among others, that PRC domestic enterprises seeking to offer and list securities in overseas markets, either directly or indirectly, shall establish the confidentiality and archives system, and shall complete approval and filing procedures with competent authorities, if such PRC domestic enterprises or their overseas listing entities provide or publicly disclose documents or materials involving state secrets and work secrets of PRC government agencies to relevant securities companies, securities service institutions, overseas regulatory agencies and other entities and individuals. It further stipulates that providing or publicly disclosing documents and materials which may adversely affect national security or public interests, and accounting files or copies of important preservation value to the state and society shall be subject to corresponding procedures in accordance with relevant laws and regulations.

As of the date of this annual report, we believe, except for the New Overseas Listing Rules and Overseas Listing Notice and the Cybersecurity Review Measures (2021 version), no other relevant laws or regulations in the PRC explicitly require us to seek approval or permissions from any other PRC governmental authorities for our continued listing on the Nasdaq, nor has our company, any of our subsidiaries received any inquiry, notice, warning or sanctions regarding our continued listing on the Nasdaq from any other PRC governmental authorities. As a network platform operator who possesses personal information of more than one million users for purposes of the Cybersecurity Review Measures (2021 version), we completed a cybersecurity review with respect to the IPO pursuant to the Cybersecurity Review Measures (2021 version). We have been closely monitoring regulatory developments in China regarding any necessary approvals from the CAC or other PRC regulatory authorities required for our operations and future overseas listings. However, there remains significant uncertainty as to the enactment, interpretation and implementation of regulatory requirements related to overseas securities offerings and other capital markets activities. The PRC government may take actions to exert more oversight and control over offerings by China-based issuers conducted overseas and/or foreign investment in such companies, which could significantly limit or completely hinder our ability to continue to offer securities to investors outside China and cause the value of our securities to significantly decline or become worthless. If it is determined in the future that the approval or permissions of any regulatory authority is required for our operations through our PRC Subsidiaries and our offerings and we or our PRC Subsidiaries do not receive or maintain the approvals or permissions, or we or our PRC Subsidiaries inadvertently conclude that such approvals or permissions are not required, or applicable laws, regulations, or interpretations change such that we or our PRC Subsidiaries are required to obtain approvals or permissions in the future, we and our PRC Subsidiaries may be subject to investigations by competent regulators, fines or penalties, ordered to suspend our relevant operations and rectify any non-compliance, limit our ability to pay dividends outside of mainland China, delay or restrict the repatriation of the proceeds from any future financings into mainland China or take other actions prohibited from engaging in relevant business or conducting any offering, and these risks could result in a material adverse change in our operations, significantly limit or completely hinder our ability to continue to offer securities to investors, or cause such securities to significantly decline in value or become worthless.

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***The M&A Rules and certain other PRC regulations establish complex procedures for some acquisitions of Chinese companies by foreign investors, which could make it more difficult for us to pursue growth through acquisitions in China.***

The M&A Rules discussed in the preceding risk factor and related regulations and rules concerning mergers and acquisitions established additional procedures and requirements that could make merger and acquisition activities by foreign investors more time-consuming and complex. For example, the M&A Rules require that MOFCOM be notified in advance of any change-of-control transaction in which a foreign investor takes control of a PRC domestic enterprise, if (i) any important industry is concerned, (ii) such transaction involves factors that have or may have impact on the national economic security, or (iii) such transaction will lead to a change in control of a domestic enterprise which holds a famous trademark or PRC time-honored brand, (iv) or in circumstances where overseas companies established or controlled by PRC enterprises or residents acquire affiliated domestic companies. Mergers, acquisitions or contractual arrangements that allow one market player to take control of or to exert decisive impact on another market player must also be notified in advance to the MOFCOM when the threshold under the Provisions on Thresholds for Prior Notification of Concentrations of Undertakings issued by the State Council in August 2008 is triggered.

In addition, the security review rules issued by the MOFCOM that became effective in September 2011 specify that mergers and acquisitions by foreign investors that raise "national defense and security" concerns and mergers and acquisitions through which foreign investors may acquire de facto control over domestic enterprises that raise "national security" concerns are subject to strict review by the MOFCOM, and the rules prohibit any activities attempting to bypass a security review, including by structuring the transaction through a proxy or contractual control arrangement. Furthermore, according to the security review, foreign investments that would result in acquiring the actual control of assets in certain key sectors, such as critical agricultural products, energy and resources, equipment manufacturing, infrastructure, transport, cultural products and services, information technology, Internet products and services, financial services and technology sectors, are required to obtain approval from designated governmental authorities in advance.

In the future, we may grow our business by acquiring complementary businesses. Complying with the requirements of the above-mentioned regulations and other relevant rules to complete such transactions, if required, could be time-consuming, and any required approval processes, including obtaining approval from the MOFCOM or its local counterparts may delay or inhibit our ability to complete such transactions. It is unclear whether our business would be deemed to be in an industry that raises "national defense and security" or "national security" concerns. However, the MOFCOM or other government agencies may publish explanations in the future determining that our business is in an industry subject to the security review, in which case our future acquisitions in the PRC, including those by way of entering into contractual control arrangements with target entities, may be closely scrutinized or prohibited. Our ability to expand our business or maintain or expand our market share through future acquisitions would as such be materially and adversely affected. Furthermore, according to the M&A Rules, if a PRC entity or individual plans to merge or acquire its related PRC entity through an overseas company legitimately incorporated or controlled by such entity or individual, such a merger and acquisition will be subject to examination and approval by the MOFCOM. There is a possibility that the PRC regulators may promulgate new rules or explanations requiring that we obtain the approval of the MOFCOM or other PRC governmental authorities for our completed or ongoing mergers and acquisitions. There is no assurance that, if we plan to make an acquisition, we can obtain such approval from the MOFCOM or any other relevant PRC governmental authorities for our mergers and acquisitions, and if we fail to obtain those approvals, we may be required to suspend our acquisition and be subject to penalties. Any uncertainties regarding such approval requirements could have a material adverse effect on our business, results of operations and corporate structure.

***To the extent cash or assets in our business are in mainland China or Hong Kong or a mainland China or Hong Kong entity, the funds or assets may not be available to fund operations or for other use outside of mainland China or Hong Kong due to interventions in or the imposition of restrictions and limitations on the ability of our company and our subsidiaries by the PRC government to transfer cash or assets, which may materially and adversely affect our business, financial condition and results of operations and may result in our inability to sustain our growth and expansion strategies.***

Zhibao is an offshore holding company with no material operations of its own, and conducts substantially all of its operations through its PRC Subsidiaries. As of the date of this annual report, substantially all of our cash and assets are located in the PRC. As a holding company, Zhibao may rely on dividends and other distributions on equity paid by its PRC Subsidiaries for its cash and financing requirements. If any of our PRC Subsidiaries incurs debt on its own behalf in the future, the instruments governing such debt may restrict its ability to pay dividends to us. We are currently in the process of adopting our formal cash management policies which will dictate the purpose, amount and procedure of cash transfers among Zhibao and our subsidiaries. Historically, one PRC operating entity provides financial support for other entities' operations by inter-company loans and they have not experienced difficulties or limitations on their ability to transfer cash between themselves. Prior to our reorganization for purpose of the IPO, cash transfers among our PRC operating entities and their subsidiaries were generally approved by the management of the company providing the funds. After our reorganization, cash transfers among Zhibao and our subsidiaries of less than RMB1 million (US$0.14 million) must be reported to, reviewed and approved by the chief financial officer of the company initiating such cash transfers; cash transfers equal to or in excess of RMB1 million (US$0.14 million) must be approved by the Chief Executive Officer and the Chief Financial Officer of Zhibao. We believe that there is no restriction imposed by the Hong Kong government on the transfer of capital within, into and out of Hong Kong (including funds from Hong Kong to mainland China), except transfer of funds involving money laundering and criminal activities. However, to the extent cash or assets in our business are in mainland China or Hong Kong or a mainland China or Hong Kong entity, the funds or assets may not be available to fund operations or for other use outside of mainland China or Hong Kong due to interventions in or the imposition of restrictions and limitations on the ability of our company and our subsidiaries by the PRC government to transfer cash or assets. As of the date of this annual report, no transfers, dividends or other distributions have been made from our subsidiaries to Zhibao or our investors, and no transfers, loans, or capital contributions have been made from Zhibao to any of our subsidiaries or our investors.

The PRC government imposes controls on the convertibility of the Renminbi into foreign currencies and, in certain cases, the remittance of currency out of mainland China. If the foreign exchange control system prevents us from obtaining sufficient foreign currencies to satisfy our foreign currency demands, we may not be able to transfer cash out of mainland China, and pay dividends in foreign currencies to our shareholders. Therefore, to the extent cash or assets in our business are in mainland China or Hong Kong or a mainland China or Hong Kong entity, the funds or assets may not be available to fund operations or for other use outside of mainland China or Hong Kong due to interventions in or the imposition of restrictions and limitations on the ability of our company and our subsidiaries by the PRC government to transfer cash or assets, which may materially and adversely affect our business, financial condition and results of operations and may result in our inability to sustain our growth and expansion strategies.

Notwithstanding the foregoing, there can be no assurance that the PRC government will not intervene or impose restrictions in future on our ability to transfer or distribute cash within our PRC Subsidiaries or to foreign investors, which could result in an inability or prohibition on making transfers or distributions outside of mainland China and may adversely affect our business, financial condition and results of operations.

***You may experience difficulties in effecting service of legal process, enforcing foreign judgments or bringing actions in China against us or our management named in the annual report based on foreign laws.***

Zhibao is an exempted company incorporated under the laws of the Cayman Islands. We conduct substantially all of our operations in China through our PRC Subsidiaries, and substantially all of our assets are located in China. In addition, our executive officers and certain directors are PRC nationals and reside within China for a significant portion of the time. The PRC does not have treaties providing for the reciprocal recognition and enforcement of judgments of courts with the United States, the United Kingdom, Japan and many other jurisdictions. As a result, it may not be possible for investors to serve process upon us or those persons in China, or to enforce against us or them in China, any judgments obtained from non-PRC jurisdictions. As a result, it may be difficult for you to effect service of process upon us or those persons inside China. It may also be difficult for you to enforce judgments obtained in U.S. courts based on the civil liability provisions of the U.S. federal securities laws against us and our officers and directors who do not reside in the United States or have substantial assets located in the United States. In addition, there is uncertainty as to whether the courts of the PRC would recognize or enforce judgments of U.S. courts against us or such persons predicated upon the civil liability provisions of the securities laws of the United States or any state.

Furthermore, there is uncertainty as to whether the courts of Hong Kong would (i) recognize or enforce judgments of United States courts obtained against us or our directors or officers predicated upon the civil liability provisions of the securities laws of the United States or any state in the United States or (ii) entertain original actions brought in Hong Kong against us or our directors or officers predicated upon the securities laws of the United States or any state in the United States. We believe that foreign judgments of United States courts will not be directly enforced in Hong Kong as there are currently no treaties or other arrangements providing for reciprocal enforcement of foreign judgments between Hong Kong and the United States. However, the common law permits an action to be brought upon a foreign judgment. As a result, a foreign judgment itself may form the basis of a cause of action since the judgment may be regarded as creating a debt between the parties to it. In a common law action for enforcement of a foreign judgment in Hong Kong, the enforcement is subject to various conditions, including but not limited to, that the foreign judgment is a final judgment conclusive upon the merits of the claim, the judgment is for a liquidated amount in civil matter and not in respect of taxes, fines, penalties, or similar charges, the proceedings in which the judgment was obtained were not contrary to natural justice, and the enforcement of the judgment is not contrary to public policy of Hong Kong. Such a judgment must be for a fixed sum and must also come from a "competent" court as determined by the private international law rules applied by the Hong Kong courts. The defenses that are available to a defendant in a common law action brought on the basis of a foreign judgment include lack of jurisdiction, breach of natural justice, fraud, and contrary to public policy. However, a separate legal action for debt must be commenced in Hong Kong in order to recover such debt from the judgment debtor. As a result, subject to the conditions with regard to enforcement of judgments of United States courts being met, including but not limited to the above, a foreign judgment of the United States of civil liabilities predicated solely upon the federal securities laws of the United States or the securities laws of any State or territory within the United States could be enforceable in Hong Kong.

Shareholder claims that are common in the United States, including securities law class actions and fraud claims, generally are difficult to pursue as a matter of law or practicality in China. For example, in China, there are significant legal and other obstacles to obtaining information needed for shareholder investigations or litigation outside China or otherwise with respect to foreign entities. Although the local authorities in China may establish a regulatory cooperation mechanism with the securities regulatory authorities of another country or region to implement cross-border supervision and administration, such regulatory cooperation with the securities regulatory authorities in the United States has not been efficient in the absence of mutual and practical cooperation mechanism. According to Article 177 of the PRC Securities Law which became effective in March 2020, no overseas securities regulator is allowed to directly conduct investigation or evidence collection activities within the PRC. Accordingly, without the consent of the competent PRC securities regulators or other relevant authorities, no entity or individual may provide any documents and materials relating to securities business activities to foreign entities or government agencies.

***The tension in international trade and rising political tension, particularly between U.S. and China, may adversely impact our business, financial condition, and results of operations.***

Although cross-border business may not be an area of our focus, as we plan to expand our business internationally in the future, any unfavorable government policies on international trade, such as capital controls or tariffs, may affect the demand for our products and services, impact our competitive position, or prevent us from being able to conduct business in certain countries. If any new tariffs, legislation, or regulations are implemented, or if existing trade agreements are renegotiated, such changes could adversely affect our business, financial condition, and results of operations. Recently, there have been heightened tensions in international economic relations, such as the one between the United States and China. The U.S. government has recently imposed, and has recently proposed to impose additional, new, or higher tariffs on certain products imported from China to penalize China for what it characterizes as unfair trade practices. China has responded by imposing, and proposing to impose additional, new, or higher tariffs on certain products imported from the United States. Following mutual retaliatory actions for months, on January 15, 2020, the United States and China entered into the Economic and Trade Agreement Between the United States of America and the People's Republic of China as a phase one trade deal, effective on February 14, 2020.

Although the direct impact of the current international trade tension, and any escalation of such tension, on the insurance industry in China is uncertain, the negative impact on general, economic, political and social conditions may adversely impact our business, financial condition and results of operations.

In addition, political tensions between the United States and China have escalated due to, among other things, trade disputes, sanctions imposed by the U.S. Department of Treasury on certain officials of the Hong Kong Special Administrative Region and the central government of the PRC and the executive orders issued by U.S. President Donald J. Trump in August 2020 that prohibit certain transactions with certain Chinese companies and their applications. Rising political tensions could reduce levels of trades, investments, technological exchanges and other economic activities between the two major economies, which would have a material adverse effect on global economic conditions and the stability of global financial markets. Any of these factors could have a material adverse effect on our business, prospects, financial condition and results of operations.

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***Within our direct holding structure, substantial uncertainties exist with respect to the requirement of National Financial Regulatory Administration and how it may impact the viability of our current corporate structure, corporate governance and business operations.***

The China Banking and Insurance Regulatory Commission ("**CBRIC**"), which was replaced by the National Financial Regulatory Administration on May 18, 2023, published the Notice on Clarifying Relevant Measures for the Opening-up of the Insurance Intermediary Market on December 3, 2021, which provides that overseas insurance brokerage companies with actual business experience and in compliance with the relevant provisions of the CBIRC are allowed to invest in and establish insurance brokerage companies in China to engage in insurance brokerage business. However, insurance brokage business is not a foreign restricted or forbidden business provided by the Special Entry Management Measures (Negative List) for the Access of Foreign Investment (2021 version). So, according to our PRC legal counsel's consultation with the CBRIC, only when a shareholder whose beneficiary owner is not a PRC citizen holding exceeds 25% total shares of the Company, such shareholder shall be an overseas insurance brokerage company with actual business experience and in compliance with the relevant provisions of the CBIRC.

However, because these laws, regulations and standards are subject to varying interpretations, there remain substantial uncertainties as to whether and what standards will be imposed on a PRC insurance brokerage company with respect to its foreign investors. For example, it is unclear as to whether the approval requirement with the NFRA will apply to our PRC Subsidiaries engaged in insurance brokerage once such business is regarded as foreign restricted or otherwise our corporate structure might be considered as not incompliance with the relevant requirement of the NFRA regarding foreign investment restriction. If so, we and/or our PRC Subsidiaries may be required to obtain an approval to carry out our business in China or we and/or our PRC Subsidiaries may be required to relinquish relevant licenses pertaining to restricted businesses. Should the insurance brokerage become subject to foreign investment restrictions, the viability of our current corporate structure, corporate governance and business operations may be materially impacted in many aspects.

***We are subject to risks relating to the leased properties of our PRC Subsidiaries.***

Our PRC Subsidiaries lease real properties for our offices in China, and as of the date of this annual report, our PRC Subsidiaries have a total of 15 lease agreements for these leased properties that have not been registered with the PRC governmental authorities as required by PRC law. Although the failure to do so does not in itself invalidate the leases, our PRC Subsidiaries may be ordered by the PRC government authorities to rectify such noncompliance and, if such noncompliance is not rectified within a given period of time, our PRC Subsidiaries may be subject to fines imposed by PRC government authorities ranging from RMB1,000 (approximately $155) and RMB10,000 (approximately $1,553) for each lease agreement that has not been registered with the relevant PRC governmental authorities.

The ownership certificates or other similar proof of the leased properties have not been provided to our PRC Subsidiaries by the relevant lessors. Therefore, we cannot assure you that such lessors are entitled to lease the relevant real properties to our PRC Subsidiaries. If the lessors are not entitled to lease the real properties to our PRC Subsidiaries and the owners of such real properties decline to ratify the lease agreements between our PRC Subsidiaries and the respective lessors, our PRC Subsidiaries may not be able to enforce their rights to lease such properties under the respective lease agreements against the owners. As of the date of this annual report, we and our PRC Subsidiaries are not aware of any claim or challenge brought by any third parties concerning the use of the leased properties without obtaining proper ownership proof. If the lease agreements are claimed as null and void by third parties who are the real owners of such leased real properties, our PRC Subsidiaries could be required to vacate the properties, in the event of which our PRC Subsidiaries could only initiate the claim against the lessors under relevant lease agreements for indemnities for their breach of the relevant leasing agreements. We cannot assure you that suitable alternative locations are readily available on commercially reasonable terms, or at all, and if our PRC Subsidiaries are unable to relocate our offices in a timely manner, our operations may be interrupted.

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***Failure to make adequate contributions to various employee benefit plans and withhold individual income tax on employees' salaries as required by PRC regulations or comply with laws and regulations on other employment practices may subject us to penalties.***

Companies operating in China are required to participate in various government sponsored employee benefit plans, including certain social insurance, housing funds and other welfare-oriented payment obligations, and contribute to the plans in amounts equal to certain percentages of salaries, including bonuses and allowances, of the PRC subsidiaries' employees up to a maximum amount specified by the local government from time to time at locations where the PRC subsidiaries operate their businesses. The requirement of employee benefit plans has not been implemented consistently by the local governments in China given the different levels of economic development in different locations. Companies operating in China are also required to withhold individual income tax on employees' salaries based on the actual salary of each employee upon payment.

As of the date of this annual report, although the PRC subsidiaries did not fully comply with the relevant requirements and have not made adequate contributions to various employee benefit plans in the history, they did not receive any notification from the competent PRC government for penalties in connection with such noncompliance. Over the past years, the PRC subsidiaries have not been making social payments for certain of their sales teams, while the applicable PRC laws and regulations on employee benefits stipulate that employers shall be responsible for making payments based on the actual wage paid to employees. With respect to the underpaid employee benefits, the PRC subsidiaries may be required to make up the contributions for these plans as well as to pay late fees and fines. With respect to the under-withheld individual income tax, the PRC subsidiaries may be required to make up sufficient withholding and pay late fees and fines. For example, an employer that has not made social insurance contributions at a rate and based on an amount prescribed by the law, or at all, may be ordered to rectify the non-compliance and pay the required contributions within a stipulated deadline and be subject to a late fee of up to 0.05% per day, as the case may be. If the employer still fails to rectify the failure to make social insurance contributions within the stipulated deadline, it may be subject to a fine ranging from one to three times of the amount overdue. If there is a failure to pay the full amount of housing provident fund as required, the housing provident fund management center may require payment of the outstanding amount within a prescribed period. If the payment is not made within such time limit, an application may be made to the PRC courts for compulsory enforcement. If the PRC subsidiaries are subject to late fees or fines in relation to the underpaid employee benefits and under-withheld individual income tax, our financial condition and results of operations may be adversely affected. The PRC subsidiaries may also be subject to regulatory investigations and other penalties if their other employment practices are deemed to be in violation of relevant PRC laws and regulations.

**Risks Related to Our Business and Industry**

In the following discussion of risks related to our business and industry, unless otherwise provided, "we," "us," "our," or "ourselves" refer to Zhibao's PRC Subsidiaries or Zhibao China Group.

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***We primarily operate in the digital insurance brokerage service industry in China, which is emerging, rapidly evolving, and competitive. As a result, predicting our prospects is challenging and our historical operating and financial results may not necessarily predict our future performance.***

We operate in China's digital insurance brokerage service industry, which is emerging, rapidly evolving, and fiercely competitive. Due to the relatively new nature, business models continue to evolve, and the regulatory framework governing the industry is also developing and may remain uncertain in the near future. As our business grows and in response to evolving end customers/B channels' needs and market competition, we will continue to introduce new insurance solutions and services, optimize existing ones, and adjust our business model as needed. However, significant changes to our business model may not yield the anticipated results and could have an adverse impact on our financial condition and results of operations.

As a result, it is challenging to predict our future prospects accurately. If we fail to educate our B channels and end customers on the value of our insurance solutions and services, fail to meet the needs of our target market, or if the market for our offerings does not develop as expected, our business and results of operations may suffer.

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***We are dependent on key insurance companies on the supply of insurance products to our end customers, the loss of which could adversely affect our business, financial condition and results of operations.***

We are dependent on key insurance company on the supply of insurance products to our end customers. For the fiscal year ended June 30, 2024, one key insurance brokerage company ("**Key Insurer C**") accounted for approximately 13% of our revenues. For the fiscal year ended June 30, 2025, three insurance companies accounted for approximately 55% of our revenues. One of our PRC Subsidiaries, Sunshine Insurance Brokers, has over three years of partnership with Key Insurer B since January 2020, and we believe that Sunshine Insurance Brokers has established a stable and healthy partnership with such company and expect to partner with such company on a long term. Sunshine Insurance Brokers also established a partnership with Key Insurer C since January 2024 and anticipates a long-term collaboration with such company. See "*Item 4. Information on the Company — B. Business Overview — Insurance Companies*" and "*Item 10. Additional Information — C. Material Contract*s" of this annual report.

Our ability to maintain close relationships with these major insurance companies is essential to the growth and profitability of our business. However, a major insurance company in one year may not provide the same level of revenues for us in any subsequent year. The services we provide to insurance companies, and the revenues so generated from those services, may decline or vary over time. In addition, our reliance on any individual insurance company for a significant portion of our revenues may give that insurance company a certain degree of pricing leverage against us when negotiating contracts and terms of service. A number of factors other than our performance could cause the loss of or reduction in business or revenues from an insurance company, and these factors are not predictable. These factors may include organization restructuring, pricing pressure, changes to its strategy, or switching to another services provider. The loss of cooperation with any of major insurance companies could adversely affect our financial condition and results of operations.

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***We are dependent on our B channels to reach end customers. Failure to acquire new B channels or retain existing B channels in a cost-effective manner, our business, financial condition and results of operations may be materially and adversely affected.***

Our B channels are indispensable to our business operations by allowing our Platform as a Service ("**PaaS**") to be embedded in their customer engagement matrix, including their websites, App, Wechat Mini Programs, Douyin (the Chinese equivalent of TikTok) and other social media accounts, which provide us with a stable and reliable end customer base. As of the date of the annual report, we have established business cooperation with more than 2,400 business channels, through which we have acquired more than 24 million end customers.

Our ability to cost-effectively attract and secure new B channels and retain and maintain existing B channels, is crucial to driving our business growth and expansion, thus indirectly achieving profitability. Although our B channels do not directly generate any revenues for us, they are essential to our business as they provide us unique opportunities to reach and serve the end customers. There can be no assurance that new B channels will stay with us. In addition, if the existing B channels no longer find our PaaS or services appealing, or if our competitors offer more attractive services or better customer services, our existing B channels may lose interest in us or even cease to transact with us. Any adverse changes to our relationships with B channels could have a material adverse effect on our image, brand and reputation, as well as on our business, financial condition and results of operations. If we are unable to retain our existing B channels or to acquire new B channels in a cost-effective manner, our business and results of operations will be adversely affected.

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***Our PRC subsidiary, namely Zhibao China, significantly relies on a third party ("MGU Partner"), its subsidiaries, affiliates, successors and assigns to conduct MGU services. Failure to comply with the relevant laws and regulations with regard to the MGU services will adversely and materially affect our business, financial conditions and results of operations.***

According to the Regulatory Provision on Insurance Agents, which was published on November 12, 2020 and effective on January 1, 2021, a specialized insurance agency or a corporate sideline insurance agency engaging in insurance agency business in the PRC shall satisfy the criteria stipulated by the insurance regulatory authority under the State Council and obtain the relevant insurance agency business permit. The subsidiary of our MGU Partner is qualified to carry out insurance agency business with an insurance agency business permit and we rely on our MGU Partner, its subsidiaries, affiliates, successors and assigns to carry out our MGU business. However, we cannot assure you that such business model is stable and the entering-into and performance of the contracts with such MGU Partner, its subsidiaries, affiliates, successors and assigns for MGU services are compliant with relevant PRC laws and regulations. Furthermore, we also cannot assure you that such MGU Partner, its subsidiaries, affiliates, successors and assigns engaged in the MGU services will be able to maintain and renew all licenses, permits and approvals necessary for their operations or comply with all applicable laws and regulations.

As of the date of this annual report, Zhibao China, as well as the MGU Partner, its subsidiaries, affiliates, successors and assigns has not been subject to any notice, fines or other penalties from competent government authorities or claims or allegations of its clients related to the above-mentioned business. If our MGU business is considered as non-compliance by any government authorities, we will terminate such business timely under which circumstance, we might be subject to administrative penalties and contractual liabilities owed to its clients and our business, financial condition and results of operations could be materially and adversely affected.

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***If we fail to accelerate expansion of 2B2C business to drive growth in our 2C business, our business and results of operations could be adversely affected.***

Our future growth depends on our ability to sustain the expansion of our 2B2C business and convert the end customers secured through our 2B2C business into our direct customers, or 2C business. With our strong position as a first mover in the 2B2C embedded insurance brokerage market, we aim to further broaden our B channel base through enhanced collaborations with insurance companies, other insurance brokerage companies, and technology firms with resources to B channels. We also plan to convert end customers secured through our 2B2C model into direct customers and fuel growth in our 2C business. To achieve these goals, we will employ two strategies. First, we will offer personalized insurance consultations to end customers through multiple channels, including, among others, WeChat Mini Program, phone, or face-to-face meetings. Our aim is to steer their attention towards comprehensive family security plans, leading to long-term insurance commitments with us. Second, we will provide targeted consulting services to guide end customers towards suitable insurance options and facilitate short-term policy conversions. However, our offerings may not always meet the needs of those potential or existing end customers. If they cannot find desirable insurance options at competitive prices and terms, or if their experience with us is unsatisfactory, they may lose trust and terminate their commitments. In such a scenario, they may switch to other platforms, which could significantly impact our business, financial condition, and results of operations.

***The innovative insurance technology and infrastructure we use to optimize our insurance solutions requires continuous developments and upgrades. We cannot assure you that these technologies will fully support our business.***

We regard insurance technology and infrastructure as critical to our ability to optimize our insurance solutions provided to our B channels and end customers. We have invested substantial resources in developing the sophisticated and innovative technology systems that we use for optimizing our insurance solutions on our PaaS. We will continually strive to improve and expand, upgrade and update our insurance solutions through our research and development and technology innovations in order to deliver innovative and comprehensive new, updated or upgraded insurance solutions to meet the evolving needs of our B channels and end customers. Our aim is to subdivide solutions across various scenarios, and ultimately infiltrate every aspect of the end customers' daily life, delivering unparalleled service to our B channels and end customers. To achieve such, we are dedicated to expanding our investment in our insurance technology infrastructure, our research and development of new technologies and existing technology upgrade or updates through any future financings. However, there is no assurance that we will be able to keep up with technological improvements or that the technology developed by others will not render our solutions less competitive or attractive.

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***If we are unable to attract, incentivize and retain talented professionals, our business, financial condition and results of operations may be affected.***

We believe our success greatly depends on our ability to attract, incentivize and retain talented professionals. To maintain and improve our competitive advantage in the market, we intend to implement several initiatives to retain and attract more mid- to high-level personnel. These include formulating a market-oriented compensation structure for our employees and implementing a standardized multi-level performance review mechanism. However, the competition for talented professionals with expertise in insurance, sales and marketing, and technology is fierce in China. Moreover, we invest significant time and resources in training our employees, which increases their value to competitors who may attempt to recruit them. Failure to retain our employees could result in significant expenses in hiring and training new employees. Moreover, our ability to serve customers and business channels could suffer, leading to an adverse impact on our business, financial condition, and results of operations.

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***The regulation on the requirement of a company to make a filing on internet information service in China is subject to interpretation, and our operation of digital insurance broker services could be harmed if we are deemed to have violated applicable laws and regulations.***

The interpretation and application of existing Chinese laws and regulations, the stated positions of the main governing authority, the Ministry of Industry and Information Technology ("**MIIT**"), and the possibility of adopting new laws or regulations have created significant uncertainties regarding the legality of the businesses and activities of the PRC companies with internet operations. In particular, according to the Internet Information Services Administrative Measures promulgated by the State Council on September 25, 2000, the activities of Internet content providers are regulated by various PRC governmental authorities depending on the specific activities conducted by the Internet content provider.

Our processing of policyholder information and completing insurance transactions through our platform in real time might fall into the category of "B21 Online Data Processing and Transaction Processing Business" in the "Telecommunications Business Classification Catalog (2015 Edition)" promulgated by the Ministry of Industry and Information Technology on June 6, 2019, for which a value-added telecommunications business license must be obtained in accordance with the "Regulations of the People's Republic of China on Telecommunications" promulgated by the State Council on February 6, 2016 and the "Internet Information Service Management Measures" promulgated by the State Council on January 8, 2011.

Given the "Measures for the Regulation of Internet Insurance Business" promulgated by the CBIRC on December 7, 2020 only requires Internet insurance institutions to complete the Internet information service filing procedures with the Internet industry management department for self-operated network platforms, whether our failure to obtain a value-added telecommunications business operation license constitutes a violation is subject to interpretation. If we are deemed to be required to obtain value-added telecommunications business operation license and, therefore, found to be in violation of the law, we might be subject to confiscation of illegal gains, penalties, suspension of certain types of services, or orders to shut down relevant websites. Such consequences could negatively impact our net revenues and results of operations.

***Our operating history may not be indicative of our future growth or financial results, and we may not be able to sustain our historical growth rates.***

Our operating history may not be indicative of our future growth or financial results. There is no assurance that we will be able to grow our revenues in future periods. Our growth rates may decline for any number of possible reasons, and some of them are beyond our control, including decreasing customer demand, increasing competition, declining growth of the insurance industry in general, or changes in government policies or general economic conditions. We will continue to expand our sales network, and upgrade, update, renovate our insurance resolutions to bring greater convenience to our B channels and end customers and to increase our B channels/end customer base and volume of sales on our PaaS.

However, the execution of our expansion plan is subject to uncertainty and the sales may not grow at the rate we expect for the reasons stated above. If our growth rates decline, investors' perceptions of our business and prospects may be adversely affected and the market price of our Class A ordinary shares could decline.

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***We may encounter difficulties expanding into new businesses or industries, which may affect adversely our results of operations and financial condition.***

We may encounter difficulties and face risks in connection with our expansion into new businesses or industries. We cannot assure you that our expansion into new businesses will be successful, as we may have limited experience in such industries. We cannot assure you that we will be able to generate sufficient profits to justify the costs of expanding into new businesses or industries. Any new business in which we invest or which we intend to develop may require our additional capital investment, R&D efforts, as well as our management's attention. If such new business does not progress as planned, our results of operations and financial condition may be affected adversely.

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***We may be subject to legal or other proceedings in the ordinary course of our business. If the outcome of these proceedings is adverse to us, they could have a material adverse effect on our business, financial condition and results of operations.***

During the ordinary course of our business operations, we may be involved in legal disputes or regulatory and other proceedings relating to, including but not limited to, contractual disputes, product liability claims and employees' claims. Especially, for contractual disputes, we cannot assure you that the venue and governing law agreed in relevant contracts are always favorable to us. Any such legal disputes or proceedings may subject us to substantial liabilities and may have a material and adverse effect on our reputation, business, financial condition and results of operations. Among those proceedings, some of them may be relating to our products or services or complaints from third parties.

If we become involved in material or protracted legal proceedings or other legal disputes in the future, we may incur substantial legal expenses and our management may need to devote significant time and attention to handle such proceedings and disputes, thereby diverting their attention from our business operations. In addition, the outcome of such proceedings or disputes may be uncertain and could result in settlement or outcomes which may adversely affect our business, financial condition and results of operations.

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***We are subject to governmental regulations and other legal obligations related to privacy, information security, and data protection, and any security breaches, and our actual or perceived failure to comply with our legal obligations could harm our brand and business.***

We generate, collect, store and process a large amount of personal, transactional, statistical and behavioral data, including certain personal and other sensitive data from our end customers, including names, identity card numbers, telephone numbers, correspondence addresses, and payment or transaction related information. We face risks inherent in handling large volumes of data and in securing and protecting such data. In particular, we face a number of data-related challenges related to our business operations, including: (i) protecting the data in and hosted on our system and servers, including against attacks on our system and cloud servers by external parties or fraudulent behavior by our employees; (ii) addressing concerns related to privacy and sharing, safety, security and other factors; and (iii) complying with applicable laws, rules and regulations relating to the collection, use, disclosure or security of personal information, including any requests from regulatory and government authorities relating to such data.

Although we have taken steps to protect such data, technology renovations or updates, increased level of expertise of hackers, new discoveries in the field of cryptography or others could still result in breach of the security measures that we use. On December 28, 2012, SCNPC promulgated the Decision to Strengthen the Protection of Internet Information, or the Information Protection Decision, to strengthen the protection of personal information on the internet. The Information Protection Decision provides that internet content providers must expressly inform their users of the purpose, manner to collect and use the users' personal information and the scope of the information to be collected and used by the provider. As of the date of this annual report, we have not experienced any material breach of our cybersecurity system or measures. As techniques used to sabotage or obtain unauthorized access to systems change frequently and generally are not recognized until they are launched against a target, we may be unable to anticipate these techniques or to implement adequate preventative measures. Any accidental or willful security breaches or other unauthorized access to our system and cloud servers could cause confidential information to be accessed, stolen and used for illegal or unauthorized purposes. Security breaches or unauthorized access to confidential information could also expose us to liability related to the loss of the information, time-consuming and expensive litigation and negative publicity. If security measures are breached because of third-party action, employee error, malfeasance or otherwise, or if design flaws in our technology infrastructure are exposed and exploited, our relationships with end customers, B channels, and other business partners could be severely damaged, we could incur significant liability, and our business and operations could be adversely affected.

In addition, PRC government authorities have enacted a series of laws and regulations in regard of the protection of personal information, under which telecommunication business operators, internet service providers and other value chain operators are required to comply with the principles of legality, justification and necessity, to clearly indicate the purposes, methods and scope of any information collection and usage, to obtain the consent of customers, and to keep collected personal information confidential, as well as to establish customer information protection system with appropriate remedial measures. On November 7, 2016, the SCNPC promulgated the PRC Cybersecurity Law, which took effect on June 1, 2017. Pursuant to the Cybersecurity Law, any individual or organization using the network must comply with the constitution and the applicable laws, follow the public order and respect social moralities; and must not endanger cybersecurity, or engage in activities by making use of the network that endanger the national security, honor and interests, or infringe on the fame, privacy, intellectual property and other legitimate rights and interests of others. The PRC Cybersecurity Law sets forth various security protection obligations for network operators, which are defined as "owners and administrators of networks and network service providers", including, among others, complying with a series of requirements of graded cybersecurity protection systems; verifying users' real identity; localizing the personal information and important data gathered and produced by key information infrastructure operators during operations within the PRC; and providing assistance and support to government authorities where necessary for protecting national security and investigating crimes. Significant capital, managerial and human resources are required to comply with legal requirements, enhance information security and to address any issues caused by security failures. On August 20, 2021, the SCNPC promulgated the Personal Information Protection Law (the "**PIPL**") which took effect on November 1, 2021. As the first systematic and comprehensive law specifically for the protection of personal information in the PRC, the PIPL provides, among others, that (i) an individual's separate consent shall be obtained before operation of such individual's sensitive personal information, e.g., biometric characteristics and individual location tracking, (ii) personal information operators operating sensitive personal information shall notify individuals of the necessity of such operations and the influence on the individuals' rights, (iii) if personal information operators reject individuals' requests to exercise their rights, individuals may file a lawsuit with a People's Court. The PIPL elaborates the protection by law of personal information for natural persons and no entity or individual may infringe upon the rights and interests of the natural persons. However, there is uncertainty as to the interpretation and application of such laws which may be interpreted and applied in a manner inconsistent with our current policies and practices or require changes to the features of our system. We cannot assure you that our existing information protection system and technical measures will be considered sufficient under applicable laws and regulations. If we are unable to address any information protection concerns, protect our systems or to comply with the then applicable laws and regulations, we may incur additional costs and liability and our reputation, business and operations might be adversely affected. In addition, complying with various laws and regulations may cause us to incur substantial costs or require us to change our business practices, including our data practices, in a manner adverse to our business.

We are currently taking compliance measures to ensure that we obtain consent from our end customers to use their information within the scope of authorization, and we have taken technical measures to ensure the security of such information and prevent the information from being divulged, damaged or lost. However, since the Cybersecurity Law, PIPL, as well as relevant regulations, rules and measures are relatively new, there are uncertainties as to the interpretation and application of these laws and regulations, and it is possible that our data protection practices and personal information protection practices are or will be inconsistent with regulatory requirements. Any violation of the provisions and requirements under the Cybersecurity Law, PIPL and other relevant regulations, rules and measures may subject us to warnings, fines, confiscation of illegal gains, revocation of licenses, suspension of business, shutting down of websites or even criminal liabilities. Complying with such requirements could cause us to incur substantial expenses or to alter or change our practice in a manner that could harm our business. Any systems failure or security breach or lapse that results in the unauthorized release of our customer data could harm our reputation and brand and, consequently, our business, in addition to exposing us to potential legal liability. Furthermore, end customers may have concerns about our practices with regard to the collection, use, disclosure, or security of personal information or other privacy related matters, and any negative publicity on our information safety or privacy protection mechanism and policy, even if unfounded, could damage our reputation and brand and adversely affect our business and results of operations.

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***We may be subject to liability if private information that we receive is not secure or if we violate privacy laws and regulations.***

We are or may become subject to a variety of laws and regulations in China, the United States and other jurisdictions where we operate our business regarding privacy, data security, cybersecurity and data protection. These laws and regulations are continuously evolving and developing. The scope and interpretation of the laws that are or may be applicable to us are often uncertain and may be conflicting, particularly with respect to foreign laws. In particular, there are numerous laws and regulations regarding privacy and the collection, sharing, use, processing, disclosure, and protection of personal information and other customer data in different jurisdictions. Such laws and regulations often vary in scope, may be subject to differing interpretations, and may be inconsistent among different jurisdictions.

The European Union Parliament approved a new data protection regulation, known as the General Data Protection Regulation ("**GDPR**"), which came into effect in May 2018. The GDPR includes operational requirements for companies that receive or process personal data of residents of the European Economic Area. The GDPR imposes significant penalties for non-compliance. Although we do not conduct any business in the European Economic Area, in the event that residents of the European Economic Area access our website and input protected information, we may become subject to provisions of the GDPR.

In February 2022, the Russian Federation commenced a military invasion of Ukraine, and as a result, the United States, the European Union, the United Kingdom and other jurisdictions have imposed sanctions on certain Russian and Ukrainian persons and entities, including certain Russian banks, energy companies and defense companies, and have imposed restrictions on exports of various items to Russian and certain regions of Ukraine (including the self-proclaimed Donetsk People's Republic and Luhansk People's Republic and Crimea). Moreover, on February 22, 2022, the Office of Foreign Assets Control of the United States issued sanctions aimed at limiting Russia's ability to raise funds through sovereign debt. These geopolitical issues have resulted in increasing global tensions and create uncertainty for global commerce. Any or all of these factors could negatively affect demand for our products and our business, financial condition and result of operations even though we do not conduct any business in Russia or Ukraine.

We are also subject to laws restricting disclosure of information relating to our employees. We strive to comply with all applicable laws, policies, legal obligations, and industry codes of conduct relating to privacy, data security, cybersecurity and data protection. However, given that the scope, interpretation, and application of these laws and regulations are often uncertain and may be conflicting, it is possible that these obligations may be interpreted and applied in a manner that is inconsistent from one jurisdiction to another and may conflict with other rules or our practices. Any failure or perceived failure by us or our third-party service-providers to comply with our privacy or security policies or privacy-related legal obligations, or any compromise of security that results in the unauthorized release or transfer of personally identifiable information or other customer data, may result in governmental enforcement actions, litigation, or negative publicity, and could have an adverse effect on our business and operating results. Although we maintain cybersecurity insurance, we cannot assure you that this insurance will cover or satisfy any claim made against us or adequately cover any defense costs we may incur.

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***Our ability to protect the confidential information of our customers may be adversely affected by cyberattacks, computer viruses, physical or electronic break-ins or similar disruptions.***

We collect, store, and process certain personal and other sensitive data from our customers, which makes us an attractive target and potentially vulnerable to cyberattacks, computer viruses, physical or electronic break-ins or similar disruptions. While we have taken steps to mitigate the cyberattack risks and protect the confidential information that we have access to, including but not limited to installation and periodical updates of antivirus software and backup of information on our computer systems, our security measures could be breached. Because techniques used to sabotage or obtain unauthorized access to systems change frequently and generally are not recognized until they are launched against a target, we may be unable to anticipate these techniques or to implement adequate preventative measures. Any cybersecurity incident, accidental or willful security breaches or other unauthorized access to our systems could cause confidential information to be stolen and used for criminal purposes. Cybersecurity incidents, security breaches or unauthorized access to confidential information could also expose us to liability related to the loss of the information, time-consuming and expensive litigation and negative publicity. If security measures are breached because of third-party action, employee error, malfeasance or otherwise, or if design flaws in our technology infrastructure are exposed and exploited, our relationships with our customers could be severely damaged, we could incur significant liability, and our business and operations could be adversely affected.

Meanwhile, if we fail to protect confidential information, we may be involved in various claims and litigations raised for privacy or other damages. Such claims and litigations will take a lot of time and resources to defend and we cannot assure you these claims or litigations will result in a favorable outcome. In February 2022, the Russian Federation commenced a military invasion of Ukraine, and Russian actions with respect to Ukraine have resulted in certain broad sanctions being imposed by the United States, the European Union, the United Kingdom and other international authorities. We cannot predict the impact of Russian actions in Ukraine or the reaction to such actions by the United States, the European Union, the United Kingdom or other international authorities. In connection with the aforesaid military invasion, cybersecurity experts anticipate a meaningful increase in cyberattack and cybercrime activity in connection with the Russian invasion of Ukraine around the globe. However, as of the date of this annual report, there is no new or heightened risk of potential cyberattacks on the Company by state actors or others since Russia's invasion of Ukraine.

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***The successful operation of our business depends upon the performance and reliability of the internet infrastructure in China.***

Our business depends on the performance and reliability of the internet infrastructure in China. Almost all access to the internet is maintained through state-owned telecommunication operators under the administrative control and regulatory supervision of the MIIT. In addition, the national networks in China are connected to the internet through state-owned international gateways, which are the only channels through which a domestic Chinese user can connect to the internet outside of China. We may not have access to alternative networks in the event of disruptions, failures or other problems with China's internet infrastructure. In addition, the internet infrastructure in China may not support the demands associated with continued growth in Internet usage.

The failure of telecommunications network operators to provide us with the requisite bandwidth could also interfere with the speed and availability of our APP and our website. We have no control over the costs of the services provided by the national telecommunications operators. If the prices that we pay for telecommunications and internet services rise significantly, our gross margins could be adversely affected. In addition, if internet access fees or other charges to internet users increase, our user traffic may decrease, which in turn may significantly decrease our revenues.

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***There is no assurance that Zhibao will be able to make the instalments pursuant to the Zhonglian Agreement.***

On July 2, 2025, Zhibao China, entered into a share purchase agreement (the "**Zhonglian Agreement**") with Xuegeng Zhao and Qin'er Ye, the shareholders of Zhonglian (the "**Zhonglian Sellers**") and Zhonglian, pursuant to which, subject to the terms and conditions set forth in the Zhonglian Agreement, Zhibao China agreed to acquire an aggregate of 51% of the equity interest in Zhonglian, including 23% of the equity interest from Xuegeng Zhao and 28% of the equity interest from Qin'er Ye, for a total purchase price of RMB25.5 million (approximately $3.5 million), subject to adjustment as provided in the Zhonglian Agreement (the "**Zhonglian Acquisition**").

The Zhonglian Acquisition was closed on September 30, 2025. Pursuant to the Zhonglian Agreement, the Company is required to make four installments to the Sellers. The Company made the first instalment as of the date of this annual report. If the Company fails to make the payment of the subsequent instalments pursuant to the Zhonglian Agreement or otherwise fails to perform its obligations pursuant to the Zhonglian Agreement, Zhibao China's equity interest in Zhonglian may be adjusted to to a percentage equal to the product of (a) 51% and (b) a fraction, the numerator of which is the aggregate amount paid by Zhibao, excluding any late fees pursuant to the Zhonglian Agreement, and the denominator of which is RMB 25.5 million, the ongoing businesses of the Company may be adversely impacted, and, without realizing any of the anticipated benefits of completing the Zhonglian Acquisition, the Company would be subject to a number of risks, including the following:

● the Company may experience negative reactions from the financial markets, including negative impacts on the Company's share price (including to the extent that the current market price reflects a market assumption that the Zhonglian Acquisition will be completed);

● the Company may experience negative reactions from its customers, vendors and employees; and

● the Company will have incurred substantial expenses and will be required to pay certain costs relating to the Zhonglian Acquisition.

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***The market price of our Class A ordinary shares may decline as a result of the Zhonglian Acquisition.***

The market price of our Class A ordinary shares may decline as a result of the Zhonglian Acquisition for a number of reasons, including, but not limited to, if:

● investors react negatively to the prospects of our business and the prospects of the Zhonglian Acquisition;

● the effect of the Zhonglian Acquisition on our business and prospects is not consistent with the expectations of financial or industry analysts; or

● We do not achieve the perceived benefits of the Zhonglian Acquisition as rapidly or to the extent anticipated by financial or industry analysts.

***Part of our services could be disrupted by network interruptions.***

Part of our services depends on the efficient and uninterrupted operation of our computer and communications systems. Substantially all of our computer hardware and our cloud computing services is currently located in China. Although we have prepared for contingencies through redundancy measures and disaster recovery plans, such preparation may not be sufficient and we do not carry business interruption insurance. Despite any precautions we may take, the occurrence of a natural disaster, such as an earthquake, flood or fire, or other unanticipated problems at our facilities in China, including power outages, telecommunications delays or failures, break-ins to our systems or computer viruses, could result in delays or interruptions to our APP and website, loss of our and customers' data and business interruption for us and our customers. Any of these events could damage our reputation, significantly disrupt our operations and subject us to liability, which could materially and adversely affect our business, financial condition and results of operations.

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***Infringement of our intellectual property right by any third party or loss of our intellectual property rights may materially and adversely affect our business, financial condition and results of operations.***

We rely on a combination of trademark, copyright and trade secret protection laws in China and other jurisdictions, as well as confidentiality procedures and contractual provisions, to protect our intellectual property rights. We also have confidentiality arrangements with our employees and any third parties who may access our proprietary information, and we rigorously control access to our proprietary technology and information.

Intellectual property protection may not be sufficient in China or other countries. Confidentiality agreements may be breached by counterparties, we may not be able to enforce these agreements and there may not be adequate remedies available to us for any such breach. Accordingly, we may not be able to effectively protect our intellectual property rights or to enforce our contractual rights in China or elsewhere. Policing any unauthorized use of our intellectual property is difficult, time-consuming, and costly, and the steps we have taken may be inadequate to prevent the misappropriation of our intellectual property. In the event that we resort to litigation to enforce our intellectual property rights, such litigation could result in substantial costs and a diversion of our managerial and financial resources. We can provide no assurance that we will prevail in such litigation. Furthermore, we may be subject to the risks of losing our intellectual property rights or the intellectual property rights licensed from other third-parties due to several reasons. Certain intellectual property rights, such as trademarks, are subject to a limited period of time. Upon the expiry of such period of time, others may freely use such intellectual properties without any license or charges, which may impose competitive harm to us and in turn adversely affect our business and prospects. The intellectual property rights that we currently have may also be revoked, invalidated or deprived by regulatory authorities as a result of intellectual property claims or challenges successfully raised by third parties. We may also rely on certain intellectual property rights licensed from other third parties. There can be no guarantee that we will be able to maintain such licenses at all times or renew such licenses upon expiry. Moreover, our trade secrets may be leaked or otherwise become available to, or be independently discovered by, our competitors. Any failure in maintaining, protecting or enforcing our intellectual property rights could have a material adverse effect on our business, financial condition and results of operations.

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***We may be subject to intellectual property infringement claims from third parties, which may be expensive to defend with no assurance of success and may disrupt our business and operations.***

We cannot be certain that our operations or any aspects of our business do not or will not infringe upon or otherwise violate trademark, copyrights or other intellectual property rights held by third parties. We may, and from time to time in the future be, subject to legal proceedings and claims relating to the intellectual property rights of others. There could also be existing trademarks or other intellectual property of which we are not aware that we may infringe. While we do not know of any intellectual property rights on which our products or our business infringe, we cannot assure you that holders of trademark or other intellectual property rights purportedly relating to some aspect of our technology or business, would not seek to enforce such intellectual property rights against us or that they will not be successful in any such enforcement action. If an action is commenced in China, the application and interpretation of China's intellectual property laws and the procedures and standards for granting and protecting intellectual property rights in China are still evolving and are uncertain, and we cannot assure you that PRC courts or regulatory authorities would agree with our analysis or be consistent with a decision in the United States. If we are found to have violated the intellectual property rights of others, we may be subject to liability for our infringement activities or may be prohibited from using such intellectual property, and we may incur licensing fees or damages or be forced to develop alternatives of our own. In addition, we may incur significant expenses, and may be forced to divert management's time and other resources from our business and operations to defend against these third-party infringement claims, regardless of their merits.

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***If we are unable to manage our growth or execute our strategies effectively, our business and prospects may be materially and adversely affected.***

To accommodate our growth, we anticipate that we will need to implement a variety of new and upgraded operational and financial systems, procedures and controls, including the improvement of our accounting and other internal management systems. We will also need to continue to expand, train, manage and motivate our workforce and manage our relationships with our B channels and end customers. All of these endeavors involve risks and will require substantial management effort and significant additional expenditures. We may not be able to manage our growth or execute our strategies effectively, and any failure to do so may have a material adverse effect on our business and prospects.

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***The wide variety of payment methods that we accept subjects us to third-party payment processing-related risks.***

We accept payments from customers in China through a variety of methods, including bank transfers, online payments (Alipay, WeChat Pay and other major payments), debit cards and credit cards issued by banks in China. We may be subject to fraud and other illegal activities in connection with the payment methods we accept. In addition, we are subject to rules, regulations and requirements, regulatory or otherwise, governing electronic funds transfers, which could change or be reinterpreted to make it difficult or impossible for us to comply. If we fail to comply with these rules or requirements, we may be subject to fines and higher transaction fees and lose our ability to accept online payments (Alipay, WeChat Pay and other major payments), debit card or credit card payments from our customers, process electronic funds transfers or facilitate other types of online payments, and our business, financial condition and results of operations could be materially and adversely affected. Further, to the extent that payment is made to us in China, we will have to comply with PRC banking regulations as to making payments in China.

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***Our success depends on our ability to retain our core management team and other key personnel.***

Our performance depends on the continued service and performance of our directors and senior management as they are expected to play an important role in guiding the implementation of our business strategies and future plans. The loss of the services of one or more of our core management team members could impede implementation of our business plan and result in reduced profitability. For example, our founder and Chief Executive Officer, Mr. Botao Ma has accumulated more than 30 years of management experience in insurance industry. Our Chief Financial Officer, Mr. Yuanwen Xia, has more than 15 years of experience in PwC and investment sector. Our Chief Operating Officer, Mr. Xiao Luo has more than 15 years of experience in insurance brokerage business. Our Chief Technical Officer, Mr. Yugang Wang, has more than 20 years of digital technology and management experience in the insurance industry. If any of our core management team members were to terminate his or her employment with us, there can be no assurance that we would be able to find suitable replacements in a timely manner, at acceptable cost or at all. The loss of services of core management team members or the inability to identify, hire, train and retain other qualified and managerial personnel in the future may materially and adversely affect our business, financial condition, results of operations and prospects.

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***Competition for our employees is intense, and we may not be able to attract and retain the highly skilled employees needed to support our business.***

As we continue to experience growth, we believe our success depends on the efforts and talents of our employees, including management team, sales team and R&D personnel. Our future success depends on our continued ability to attract, develop, motivate and retain highly qualified and skilled employees. Competition for highly skilled personnel is extremely intense. We may not be able to hire and retain these personnel at compensation levels consistent with our existing compensation and salary structure.

In addition, we invest significant time and expense in training our employees, which increases their value to competitors who may seek to recruit them. If we fail to retain our employees, we could incur significant expenses in hiring and training their replacements, and the quality of our services and our ability to serve customers could diminish, resulting in a material adverse effect on our business.

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***Our business, financial condition and results of operations may be adversely affected by an economic downturn.***

Because our sales may depend on customers' levels of disposable income, perceived job prospects and willingness to spend, our business and prospects may be affected by global economic conditions. The global financial markets experienced significant disruptions in 2008 and the United States, Europe and other economies went into recession. The recovery from the lows of 2008 and 2009 was uneven and is continuously facing new challenges, including the escalation of the European sovereign debt crisis since 2011 and the slowdown of the Chinese economy since 2012. The economic conditions in the markets in which our products are sold are sensitive to both global economic conditions, and the particular changes in each country's economic and political policies and its expected or perceived overall economic growth rate. A decline in the economic prospects in the mechanics and other industries could alter current or prospective customers' spending priorities. Therefore, a slowdown in China's economy or the global economy may lead to a reduction in demand for our products, which could materially and adversely affect our financial condition and results of operations.

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***Zhibao has identified two material weaknesses in its internal controls over financial reporting. If Zhibao does not adequately remediate the material weaknesses, or if it experiences additional material weaknesses in the future or otherwise fails to maintain effective internal controls, it may not be able to accurately or timely report its financial condition or results of operations, or comply with the accounting and reporting requirements applicable to public companies, which may adversely affect investor confidence in Zhibao and the market price of its shares.***

Prior to the IPO, Zhibao was a private company and was never required to evaluate its internal control within a specified period, and, as a result, it may experience difficulty in meeting these reporting requirements in a timely manner. Its management has not completed assessment of the effectiveness of its internal control over U.S. GAAP financial reporting, and its independent registered public accounting firm has not conducted an audit of the effectiveness of its internal control over financial reporting. However, in the course of preparing and auditing its consolidated financial statements for the fiscal year ended June 30, 2025, it respectively identified two material weaknesses in its internal control over financial reporting as of June 30, 2025. In accordance with reporting requirements set forth by the SEC, a "material weakness" is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company's annual or interim consolidated financial statements may not be prevented or detected on a timely basis.

The material weaknesses identified included (i) lack of sufficient financial reporting and accounting personnel with appropriate knowledge of U.S. GAAP and SEC reporting requirements to properly address U.S. GAAP technical accounting issues and prepare and review financial statements and related disclosures in accordance with U.S. GAAP and reporting requirements set forth by the SEC; and (ii) lack of formal risk assessment process and internal control framework over financial reporting, including lack of a formal group-wide risk assessment process to identify, assess, address or mitigate the risks in internal control, and lack of sufficient IT general controls designed and implemented surrounding the key financial related systems. Neither Zhibao nor its independent registered public accounting firm undertook a comprehensive assessment of its internal control under the Sarbanes-Oxley Act for purposes of identifying and reporting any material weakness in its internal control over financial reporting. Zhibao is required to do so only after it becomes a public company and it is exempt from the auditor attestation requirements as long as it is an emerging growth company. Had it performed a formal assessment of its internal control over financial reporting or had its independent registered public accounting firm performed an audit of the effectiveness of its internal control over financial reporting, additional material weaknesses may have been identified.

Following the identification of the material weaknesses and control deficiencies, Zhibao has taken some remedial measures including (i) hiring more qualified accounting personnel with relevant U.S. GAAP and SEC reporting experience and qualifications to strengthen its financial reporting function, (ii) setting up a financial and system control framework, (iii) implementing formal access and change controls to our systems, and making changes to our information technology systems, and (iv) improving governance, including providing internal training in relation to policies and procedures. Zhibao will continue to take additional measures to remediate the material weaknesses, including (i) implementing regular and continuous U.S. GAAP accounting and financial reporting training programs for its accounting and financial reporting personnel; (ii) appointing a third independent director; (iii) implementing formal access and change controls to our systems, and make changes to our information technology systems; and (iv) establishing more robust processes supporting internal control over financial reporting. However, the implementation of these measures may not fully address the material weaknesses in its internal control over financial reporting. Zhibao's failure to correct the material weaknesses or its failure to discover and address any other material weaknesses or control deficiencies could result in inaccuracies in its financial statements and could also impair its ability to comply with applicable financial reporting requirements and related regulatory filings on a timely basis. As a result, Zhibao's business, financial condition, results of operations and prospects, as well as the trading price of its Class A ordinary shares, may be materially and adversely affected. Moreover, ineffective internal control over financial reporting significantly hinders its ability to prevent fraud.

After the completion of the IPO in April 2024, Zhibao became a public company in the United States subject to the Sarbanes-Oxley Act of 2002 and an emerging growth company exempted from certain internal control reporting requirement. Section 404 of the Sarbanes-Oxley Act of 2002 requires that it includes a report of management on its internal control over financial reporting in its annual report in its second annual report on Form 20-F. In addition, once Zhibao ceases to be an "emerging growth company" as such term is defined in the JOBS Act, its independent registered public accounting firm must attest to and report on the effectiveness of its internal control over financial reporting. Zhibao's management may conclude that its internal control over financial reporting is not effective. Moreover, even if Zhibao's management concludes that its internal control over financial reporting is effective, its independent registered public accounting firm, after conducting the independent audit testing, may issue a report that is qualified if the accounting firm is not satisfied with Zhibao's internal controls or the level at which Zhibao's controls are documented, designed, operated or reviewed, or if it interprets the relevant requirements differently from Zhibao. In addition, after Zhibao becomes a public company, its reporting obligations may place a significant strain on its management, operational and financial resources and systems for the foreseeable future. It may be unable to timely complete its evaluation testing and any required remediation.

During the course of documenting and testing Zhibao's internal control procedures, in order to satisfy the requirements of Section 404, it may identify other weaknesses and deficiencies in its internal control over financial reporting. In addition, if it fails to maintain the adequacy of its internal control over financial reporting, as these standards are modified, supplemented or amended from time to time, it may not be able to conclude on an ongoing basis that it has effective internal control over financial reporting in accordance with Section 404. If it fails to achieve and maintain an effective internal control environment, it could suffer material misstatements in its financial statements and fail to meet its reporting obligations, which would likely cause investors to lose confidence in its reported financial information. This could in turn limit its access to capital markets, harm its results of operations, and lead to a decline in the trading price of its shares.

Additionally, ineffective internal control over financial reporting could expose Zhibao and its PRC Subsidiaries to increased risk of fraud or misuse of corporate assets and subject Zhibao to potential delisting from the stock exchange on which it lists, regulatory investigations and civil or criminal sanctions. It may also be required to restate its consolidated financial statements from prior periods.

***There is substantial doubt about our ability to continue as a going concern.***

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As of June 30, 2025, the Company reported working capital of RMB 0.4 million (US$51,600). However, the Company had accumulated deficits of RMB 193.9 million (US$27.1 million) as of June 30, 2025. For the years ended June 30, 2023 and 2025, the Company reported net loss of RMB 43.1 million and RMB 62.0 million ($8.7 million). For the years ended June 30, 2023, 2024 and 2025, the Company had operating cash outflows of RMB 1.1 million, RMB 3.8 million and RMB 20.7 million (US$2.9 million), respectively. These conditions raised substantial doubt about the Company's ability to continue as going concern.

The Company's liquidity is based on its ability to generate cash from operating activities and obtain financing from investors to fund its general operations and capital expansion needs. The Company's ability to continue as a going concern is dependent on management's ability to successfully execute its business plan, which includes increasing revenue while controlling operating cost and expenses to generate positive operating cash flows and obtain financing from outside sources.

The Company has funded its operations and capital needs primarily through the net proceeds received from fund raising from equity and debt offerings and bank loans.

The unstable financial conditions and operation results, as well as no guaranteed funding to meet our cash requirements for the next 12 months, raise substantial doubt about the Company's ability to continue as a going concern for a period of one year from June 30, 2025.

To meet the cash requirements for the next 12 months from June 30, 2025, the Company is undertaking the following plans:

● The Company is seeking for an extension of terms of bank loans, and corresponding interests to be paid until the funding shortage issue is resolved.

● The Company is focusing on the improvement of operation efficiency, implementation of strict cost control and budget and enhancement internal controls to create synergy of the Company's resources.

● The Company is seeking for cash proceeds from equity sales under the Hudson ELOC.

● The Company is going to seek more private and public equity offerings in the year of 2026.

However, there can be no assurance that the Company will be successful in achieving its strategic plans, that the Company's future capital raises will be sufficient to support its ongoing operations, or that any additional financing will be available in a timely manner or with acceptable terms, if at all.

If we are unable to obtain additional financing when it is needed, we will need to restructure our operations and possibly divest all or a portion of our business. We may seek additional capital through a combination of equity offerings and debt financings. Debt financing, if obtained, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, and could increase our expenses, require that our assets secure such debt, or provide for high interest rates, discounted conversion prices, or other unfavorable terms. Equity financing, if obtained, could result in dilution to our then-existing shareholders. If we are unsuccessful in securing additional funding, we may be required to cease operations which could result in our shareholders losing all or almost all of their investment.

***We may need additional capital but may not be able to obtain it on favorable terms or at all.***

We may require additional cash resources due to future growth and development of our business, including any investments or acquisitions we may decide to pursue. If our cash resources are insufficient to satisfy our cash requirements, we may seek to issue additional equity or debt securities or obtain new or expanded credit facilities. Our ability to obtain external financing in the future is subject to a variety of uncertainties, including our future financial condition, results of operations, cash flows, share price performance, liquidity of international capital and lending markets and PRC governmental regulations over foreign investment in the PRC. In addition, incurring indebtedness would subject us to increased debt service obligations and could result in operating and financing covenants that would restrict our operations. There can be no assurance that financing will be available in a timely manner or in amounts or on terms acceptable to us, or at all. Any failure to raise needed funds on terms favorable to us, or at all, could severely restrict our liquidity as well as have a material adverse effect on our business, financial condition and results of operations. Moreover, any issuance of equity or equity-linked securities could result in significant dilution to our existing shareholders.

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***Our business operations are located in China, which renders us especially sensitive to local conditions and changes, such as those with respect to laws and regulations, economic and political environments, force majeure events, natural disasters or mass civil movements.***

Currently, our business operations are based in China. Our business operations are therefore exposed to any deterioration in the economic, social and/or political conditions, significant changes in laws and regulations governing the insurance brokerage services industry, as well as any incidence of social movements, strike, riot, civil disturbances, mass civil movements, disobedience, recurrence of past outbreaks or epidemics, occurrence of any future epidemic outbreaks, natural disasters or other catastrophic events in China. Since our business operations are primarily located in China, the aforesaid adverse circumstances may materially and adversely disrupt operations of our insurance brokerage services, and in turn, our revenues and profitability, and consequently, our results of operations and financial condition.

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***Zhibao is a Cayman Islands exempted company, and will rely on dividends paid by its PRC Subsidiaries for its cash needs and financing. Any limitation on the ability of its PRC Subsidiaries to make dividend payments to Zhibao, or any tax implications of making dividend payments to Zhibao, could limit our ability to pay Zhibao's expenses or pay dividends to holders of Zhibao's ordinary shares.***

Zhibao is a holding company and conducts substantially all of its business through its PRC Subsidiaries. Zhibao may rely on dividends to be paid by its WFOE to fund its cash and financing requirements, including the funds necessary to pay dividends and other cash distributions to its shareholders, to service any debt it may incur and to pay it operating expenses. Zhibao's PRC Subsidiaries generate and retain cash generated from operating activities and re-invest it in their business. If WFOE incurs debt on its own behalf in the future, the instruments governing the debt may restrict its ability to pay dividends or make other distributions to Zhibao.

Under PRC laws and regulations, WFOE may pay dividends only out of its accumulated profits as determined in accordance with PRC accounting standards and regulations. In addition, WFOE is required to set aside at least 10% of its accumulated after-tax profits each year, if any, to fund a certain statutory reserve fund, until the aggregate amount of such fund reaches 50% of its registered capital.

WFOE generates primarily all of its revenue in Renminbi, which is not freely convertible into other currencies. As a result, any restriction on currency exchange may limit the ability of WFOE to use its Renminbi revenues to pay dividends to Zhibao. The PRC government may continue to strengthen its capital controls, and more restrictions and substantial vetting process may be put forward by the SAFE for cross-border transactions falling under both the current account and the capital account. Any limitation on the ability of WFOE to pay dividends or make other kinds of payments to Zhibao could materially and adversely limit its ability to grow, make investments or acquisitions that could be beneficial to its business, pay dividends, or otherwise fund and conduct its business.

**Risks Related to the Ownership of Class A Ordinary Shares**

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***An active, liquid trading market for our Class A ordinary shares may not develop or be sustained over the long term, which may limit your ability to sell such securities.***

We consummated our IPO in April 2024, and so the trading market for our Class A ordinary shares is still new and unestablished. An active trading market for the Class A ordinary shares may never develop or be sustained. A public trading market having the desirable characteristics of depth, liquidity and orderliness depends upon the existence of willing buyers and sellers at any given time, such existence being dependent upon the individual decisions of buyers and sellers over which neither we nor any market maker has control. The failure of an active and liquid trading market to develop and continue would likely have a material adverse effect on the value of the Class A ordinary shares.

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***Nasdaq may apply additional and more stringent criteria for our continued listing because we commutated a small public offering and insiders currently hold a large portion of our listed securities.***

Nasdaq Listing Rule 5101 provides Nasdaq with broad discretionary authority over the initial and continued listing of securities in Nasdaq and Nasdaq may use such discretion to apply additional or more stringent criteria for the continued listing of particular securities, or suspend or delist particular securities based on any event, condition, or circumstance that exists or occurs that makes continued listing of the securities on Nasdaq inadvisable or unwarranted in the opinion of Nasdaq, even though the securities meet all enumerated criteria for continued listing on Nasdaq. In addition, Nasdaq has used its discretion to deny continued listing or to apply additional and more stringent criteria in the instances, including but not limited to: (i) where the company engaged an auditor that has not been subject to an inspection by PCAOB, an auditor that PCAOB cannot inspect, or an auditor that has not demonstrated sufficient resources, geographic reach, or experience to adequately perform the company's audit; (ii) where the company planned a small public offering, which would result in insiders holding a large portion of the company's listed securities. Nasdaq was concerned that the offering size was insufficient to establish the company's initial valuation, and there would not be sufficient liquidity to support a public market for the company; and (iii) where the company did not demonstrate sufficient nexus to the U.S. capital market, including having no U.S. shareholders, operations, or members of the board of directors or management. The IPO was relatively small and the insiders of our Company hold a large portion of the company's listed securities following the consummation of the IPO. Nasdaq might apply the additional and more stringent criteria for our continued listing, which might cause suspension or even de-listing our securities listed on Nasdaq.

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***Our Chairman of the board of directors and Chief Executive Officer, Mr. Botao Ma, beneficially owns 16,816,692 Class B ordinary shares, currently representing approximately 94.0% of the voting power of our issued and outstanding share capital as of January 5, 2026, and has significant influence over all corporate matters for which shareholder approval is required.***

We have a dual-class share structure such that our share capital consists of Class A ordinary shares and Class B ordinary shares. Holders of our Class A ordinary shares and our Class B ordinary shares shall at all times vote together as one class on all resolutions submitted to a vote by our shareholders. Each Class A ordinary share shall entitle the holder thereof to one vote on all matters subject to vote at our general meetings (either on a poll or on a show of hands), and each Class B ordinary share shall entitle the holder thereof to twenty votes on all matters subject to vote at our general meetings (either on a poll or on a show of hands). Each Class B ordinary share is convertible into one Class A ordinary share at any time by the holder thereof upon written notice to the Company, while Class A ordinary shares are not convertible into Class B ordinary shares under any circumstances. Upon any sale, transfer, assignment or disposition of any Class B ordinary share by the holder of such Class B ordinary share to any person to or entity other than holders of Class B ordinary shares or their affiliate, such Class B ordinary share shall be automatically and immediately converted into the equivalent number of Class A ordinary shares.

Mr. Botao Ma, our Chairman of the board of directors and our Chief Executive Officer beneficially holding 16,816,692 Class B ordinary shares, is able to exercise approximately 94.0% of the total voting power of our issued and outstanding ordinary shares as of January 5, 2026. Mr. Ma could have significant influence on determining the outcome of any corporate transaction or other matter submitted to the shareholders for approval, including mergers, consolidations, the appointment of directors and other significant corporate actions. In cases where his interests are aligned, he has the power to prevent or cause a change in control. Without the consent of Mr. Ma, we may be prevented from entering into transactions that could be beneficial to us or our minority shareholders. In addition, Mr. Ma could violate his fiduciary duties by diverting business opportunities from us to himself or others. The interests of Mr. Ma may differ from the interests of our other shareholders. The concentrated voting power owned by Mr. Ma may cause a material decline in the value of our Class A ordinary shares. For more information regarding our beneficial owners and their affiliated entities, see "*Majority Shareholders and Related Party Transactions*."

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***If we fail to meet continued listing standards of the Nasdaq Stock Market LLC, our Class A ordinary shares may be delisted. Delisting could adversely affect the liquidity of our Class A ordinary shares and the market price of our Class A ordinary shares could decrease, and our ability to obtain sufficient additional capital to fund our operations and to continue as a going concern would be substantially impaired.***

Our Class A ordinary shares are currently listed on the Nasdaq Capital Market. The Nasdaq Stock Market LLC, or Nasdaq, has minimum requirements that a company must meet in order to remain listed on the Nasdaq Capital Market. These requirements include maintaining a minimum closing bid price of $1.00 per share, or the Bid Price Requirement. While the closing price of our Class A ordinary shares has largely remained above the minimum closing bid price of $1.00 per share from July 1, 2024 through December 31, 2025, our Class A ordinary shares traded as low as $0.83 per share and in the future, the closing bid price of our Class A ordinary shares may fall below $1.00 per share. If the closing bid price of our Class A ordinary shares were to remain below $1.00 per share for 30 consecutive trading days, or we do not meet other Nasdaq listing requirements, we would fail to be in compliance with Nasdaq's listing standards. In addition, L1 may sell a significant number of our Class A ordinary shares, which would cause dilution to our shareholders and could further depress our share price. There can be no assurance that we will continue to meet the Bid Price Requirement, or any other Nasdaq continued listing requirement, in the future. If we fail to meet these requirements, including the Bid Price Requirement and requirements to maintain minimum levels of shareholder's equity or market values of our Class A ordinary shares, Nasdaq may notify us that we have failed to meet the minimum listing requirements and initiate the delisting process. If our Class A ordinary shares is delisted, the liquidity of our Class A ordinary shares would be adversely affected and the market price of our Class A ordinary shares could decrease, and our ability to obtain sufficient additional capital to fund our operations and to continue as a going concern would be substantially impaired.

***The trading price of our Class A ordinary shares may be volatile, which could result in substantial losses to investors.***

The trading price of our Class A ordinary shares may be volatile and could fluctuate widely due to factors beyond our control. This may happen because of the broad market and industry factors, like the performance and fluctuation of the market prices of other companies with business operations located primarily in China that have listed their securities in the United States. A number of Chinese companies have listed or are in the process of listing their securities on U.S. stock markets. The securities of some of these companies have experienced significant volatility, including price declines in connection with their initial public offerings. The trading performance of these Chinese companies' securities after their offerings may affect the attitudes of investors toward Chinese companies listed in the United States in general and consequently may impact the trading performance of our Class A ordinary shares, regardless of our actual operating performance.

In addition to market and industry factors, the price and trading volume for our Class A ordinary shares may be highly volatile for factors specific to our own operations, including the following:

● regulatory developments affecting us or our industry;

● actual or anticipated fluctuations in our quarterly results of operations and changes or revisions of our expected results;

● changes in financial estimates by securities research analysts;

● conditions in the market for intermediary services;

● announcements by us or our competitors of new product and/or service offerings, acquisitions, strategic relationships, joint ventures, capital raisings or capital commitments;

● additions to or departures of our senior management;

● fluctuations of exchange rates between the Renminbi and the U.S. dollar;

● negative publicity regarding Chinese listed companies;

● Political or legal actions taken or restrictions imposed by the government in China; and

● sales or perceived potential sales of additional Class A ordinary shares.

Any of these factors may result in large and sudden changes in the volume and price at which our Class A ordinary shares will trade.

In the past, shareholders of public companies have often brought securities class action suits against those companies following periods of instability in the market price of their securities. If we were involved in a class action suit, it could divert a significant amount of our management's attention and other resources from our business and operations and require us to incur significant expenses to defend the suit, which could harm our results of operations. Any such class action suit, whether or not successful, could harm our reputation and restrict our ability to raise capital in the future. In addition, if a claim is successfully made against us, we may be required to pay significant damages, which could have a material adverse effect on our financial condition and results of operations.

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***Certain initial public offerings of companies with public floats comparable to our public float have experienced extreme volatility that was seemingly unrelated to the underlying performance of the respective company. We may experience similar volatility, which may make it difficult for prospective investors to assess the value of our Class A ordinary shares.***

In addition to the risks addressed above in "*The trading price of our Class A ordinary shares may be volatile, which could result in substantial losses to investors*", our Class A ordinary shares may be subject to extreme volatility that is seemingly unrelated to the underlying performance of our business. Recently, companies with comparable public floats and initial public offering sizes have experienced instances of extreme share price run-ups followed by rapid price declines, and such share price volatility was seemingly unrelated to the respective company's underlying performance. Although the specific cause of such volatility is unclear, our public float may amplify the impact the actions taken by a few shareholders have on the price of our Class A ordinary shares, which may cause our share price to deviate, potentially significantly, from a price that better reflects the underlying performance of our business. Should our Class A ordinary shares experience run-ups and declines that are seemingly unrelated to our actual or expected operating performance and financial condition or prospects, prospective investors may have difficulty assessing the rapidly changing value of our Class A ordinary shares. In addition, investors of our Class A ordinary shares may experience losses, which may be material, if the price of our Class A ordinary shares declines at any time or if such investors purchase shares of our Class A ordinary shares prior to any price decline.

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***If securities or industry analysts do not publish research or reports about our business, or if they adversely change their recommendations regarding our Class A ordinary shares, the market price for our Class A ordinary shares and trading volume could decline.***

The trading market for our Class A ordinary shares is influenced by research or reports that industry or securities analysts publish about our business. If one or more analysts who cover us downgrade our Class A ordinary shares, the market price for our Class A ordinary shares would likely decline. If one or more of these analysts cease to cover us or fail to regularly publish reports on us, we could lose visibility in the financial markets, which in turn could cause the market price or trading volume for our Class A ordinary shares to decline.

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***We have a number of Class A ordinary shares issuable upon exercise of outstanding warrants and convertible notes issued to L1; the issuance of such shares could have a significant dilutive impact on our shareholders.***

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As of January 5, 2026, we had outstanding warrants to purchase 2,099,901 Class A ordinary shares and convertible notes convertible into up to 729,433 Class A ordinary shares, subject to adjustment. The authorized share capital under our amended and restated memorandum and articles of association is 500,000,000 ordinary shares with a par value of US$0.0001 each, consisting of (i) 450,000,000 Class A ordinary shares and (ii) 50,000,000 Class B ordinary shares. This would permit us to issue up to approximately an additional 410,000,000 unissued Class A ordinary shares, after giving effect to the number of Class A ordinary shares currently issued and outstanding and the number of shares reserved for issuance under warrants and convertible notes.

Additionally, the L1 Warrants and L1 Second Tranche Note each provides for an adjustment to the exercise and conversion prices and number of shares underlying the such securities upon our issuance of our Class A ordinary shares or equivalents at a price per share that is less than the exercise and conversion prices of such securities.

In the case of the L1 Warrants, subject to certain exceptions, if and whenever, at any time during the 18-month period following the dates of issuances of each of the L1 Warrants, the Company effects a Dilutive Issuance, then immediately after such Dilutive Issuance the exercise price of each of the L1 Warrants then in effect shall be reduced to an amount equal to the issuance price of the newly issued securities. In addition, that upon any adjustment to the exercise price, the number of warrant shares that may be purchased upon exercise of the L1 Warrants shall be increased, so that after such adjustment the aggregate exercise price payable under the warrant shall be the same as the aggregate exercise price in effect immediately prior to such adjustment (without regard to any limitations on exercise contained therein).

Accordingly, sales of substantial amounts of our Class A ordinary shares, including Class B ordinary shares, which will automatically convert into Class A ordinary shares upon the exercise of the convertible promissory notes convertible into our Class A ordinary shares under certain conditions or warrants to purchase our Class A ordinary shares, in the public market at any time, or the perception that these sales could occur, could adversely affect the market price of our Class A ordinary shares and could materially impair our ability to raise capital through equity offerings in the future. In addition, the Class A ordinary shares sold freely tradable without restriction or further registration under the Securities Act, and shares held by our existing shareholders may also be sold in the public market subsequent to the IPO subject to the restrictions in Rule 144 under the Securities Act. As of January 5, 2026, there were 16,452,020 Class A ordinary shares and 16,816,692 Class B ordinary shares issued and outstanding. We cannot predict what effect, if any, market sales of securities held by our significant shareholders or any other shareholder or the availability of these securities for future sale will have on the market price of our Class A ordinary shares, and the issuance of such shares could have a significant dilutive impact on our shareholders.

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***Because we do not expect to pay dividends in the foreseeable future, you must rely on price appreciation of our Class A ordinary shares for return on your investment.***

We do not expect to pay any cash dividends in the foreseeable future. Therefore, you should not rely on an investment in our Class A ordinary shares as a source for any future dividend income.

Our board of directors has complete discretion as to whether to declare dividends. Even if our board of directors decides to declare and pay dividends, the timing, amount and form of future dividends, if any, will depend on, among other things, our future results of operations and cash flow, our capital requirements and surplus, the amount of distributions, if any, received by us from our subsidiaries, our financial condition, contractual restrictions and other factors deemed relevant by our board of directors. Accordingly, the return on your investment in our Class A ordinary shares will likely depend entirely upon any future price appreciation of our Class A ordinary shares. There is no guarantee that our Class A ordinary shares will appreciate in value or even maintain the price at which you purchased our Class A ordinary shares. You may not realize a return on your investment in our Class A ordinary shares and you may even lose your entire investment.

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***An investment in our company may involve tax implications, and you are encouraged to consult your own advisors as neither we nor any related party is offering any tax assurances or guidance regarding our Class A ordinary shares or your investment.***

An investment in our company generally involves complex federal, state and local income tax considerations. Neither the Internal Revenue Service nor any State or local taxing authority has reviewed the transactions described herein and may take different positions than the ones contemplated by management. You are strongly urged to consult your own tax and other advisors prior to investing, as neither we nor any of our officers, directors or related parties is offering you tax or similar advice, nor are any such persons making any representations and warrants regarding such matters.

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***If we are classified as a passive foreign investment company, United States taxpayers who own our Class A ordinary shares may have adverse United States federal income tax consequences.***

A non-U.S. corporation such as us will be classified as a passive foreign investment company, which is known as PFIC, for any taxable year if, for such year, either

● At least 75% of our gross income for the year is passive income; or

● The average percentage of our assets (determined at the end of each quarter) during the taxable year which produces passive income or which are held for the production of passive income is at least 50%.

Passive income generally includes dividends, interest, rents, royalties (other than rents or royalties derived from the active conduct of a trade or business) and gains from the disposition of passive assets.

If we are determined to be a PFIC for any taxable year (or portion thereof) that is included in the holding period of a U.S. taxpayer who holds our Class A ordinary shares, the U.S. taxpayer may be subject to increased U.S. federal income tax liability and may be subject to additional reporting requirements.

Depending on the amount of cash we hold and the amount of cash we raise in our future offerings of our securities, together with any other assets held for the production of passive income, it is possible that, for our current taxable year or for any subsequent year, more than 50% of our assets may be assets which produce passive income. We will make this determination following the end of any particular tax year. Although the law in this regard is unclear, we treat our consolidated affiliated entities as being owned by us for United States federal income tax purposes, not only because we exercise effective control over the operation of such entities but also because we are entitled to substantially all of their economic benefits, and, as a result, we consolidate their operating results in our consolidated financial statements. For purposes of the PFIC analysis, in general, a non-U.S. corporation is deemed to own its pro rata share of the gross income and assets of any entity in which it is considered to own, directly or indirectly, at least 25% of the equity by value.

Our status as a PFIC is a fact-intensive determination made on an annual basis. Accordingly, our U.S. counsel expresses no opinion with respect to our PFIC status and also expresses no opinion with regard to our expectations regarding our PFIC status.

For a more detailed discussion of the application of the PFIC rules to us and the consequences to U.S. taxpayers who own our ordinary shares if we were determined to be a PFIC, see "*Taxation — Material United States Federal Income Tax Considerations — Passive Foreign Investment Company*."

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***Our amended and restated memorandum and articles of association contains anti-takeover provisions that could have a material adverse effect on the rights of holders of our Class A ordinary shares.***

Certain provisions of our amended and restated memorandum and articles of association may discourage, delay or prevent a change in control of our company or management that shareholders may consider favorable, including provisions that authorize our board of directors to issue shares at such times and on such terms and conditions as the board of directors may decide without any further vote or action by our shareholders.

Our amended and restated memorandum and articles of association contain provisions to limit the ability of others to acquire control of our company or cause us to engage in change-of-control transactions. These provisions could have the effect of depriving our shareholders of an opportunity to sell their shares at a premium over prevailing market prices by discouraging third parties from seeking to obtain control of our company in a tender offer or similar transaction. Our dual-class voting structure gives disproportionate voting power to the holders of our Class B ordinary shares. In addition, our board of directors will have the authority, without further action by our shareholders, to issue shares (whether declared to be ordinary, preference or otherwise) in one or more series and to fix their designations, powers, preferences, privileges, and relative participating, optional or special rights and the qualifications, limitations or restrictions, including dividend rights, conversion rights, voting rights, terms of redemption and liquidation preferences, any or all of which may be greater than the rights associated with our Class A ordinary shares. Preferred shares could be issued quickly with terms calculated to delay or prevent a change in control of our company or make removal of management more difficult. If our board of directors decides to issue preferred shares, the price of our Class A ordinary shares may fall and the voting and other rights of the holders of our Class A ordinary shares may be materially and adversely affected.

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***We are a "controlled company" within the meaning of the Nasdaq Stock Market Rules and, as a result, may rely on exemptions from certain corporate governance requirements that provide protection to shareholders of other companies.***

We are a "controlled company" as defined under the Nasdaq Stock Market Rules because our Chairman of the board of directors and our Chief Executive Officer, Mr. Botao Ma, beneficially owns more than 50% of our total voting power. For so long as we remain a controlled company under that definition, we are permitted to elect to rely on, and may rely on, certain exemptions from corporate governance rules, including an exemption from the rule that a majority of our board of directors must be independent directors. As a result, you may not have the same protection afforded to shareholders of companies that are subject to these corporate governance requirements.

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***You may face difficulties in protecting your interests, and your ability to protect your rights through U.S. courts may be limited, because we are incorporated under Cayman Islands law.***

We are an exempted company incorporated under the laws of the Cayman Islands with limited liability. As a result, it may be difficult for investors to effect service of process within the United States upon our directors or officers, or enforce judgments obtained in the United States courts against our directors or officers.

Our corporate affairs are governed by our amended and restated memorandum and articles of association, as amended from time to time, the Companies Act (Revised) of the Cayman Islands and the common law of the Cayman Islands. The rights of shareholders to take action against the directors, actions by minority shareholders and the fiduciary duties of our directors to us under Cayman Islands law are to a large extent governed by the common law of the Cayman Islands. The common law of the Cayman Islands is derived in part from comparatively limited judicial precedent in the Cayman Islands as well as from the common law of England, the decisions of whose courts are of persuasive authority, but are not binding, on a court in the Cayman Islands. The rights of our shareholders and the fiduciary duties of our directors under Cayman Islands law are not as clearly established as they would be under statutes or judicial precedent in some jurisdictions in the United States. In particular, the Cayman Islands has a less developed body of securities laws than the United States. Some U.S. states, such as Delaware, have more fully developed and judicially interpreted bodies of corporate law than the Cayman Islands. In addition, Cayman Islands companies may not have the standing to initiate a shareholder derivative action in a federal court of the United States.

Shareholders of Cayman Islands exempted companies like us have no general rights under Cayman Islands law to inspect corporate records or to obtain copies of the register of members of these companies. Our directors have discretion under our amended and restated memorandum and articles of association to determine whether or not, and under what conditions, our corporate records may be inspected by our shareholders, but are not obliged to make them available to our shareholders. This may make it more difficult for you to obtain the information needed to establish any facts necessary for a shareholder motion or to solicit proxies from other shareholders in connection with a proxy contest.

Certain corporate governance practices in the Cayman Islands, which is our home country, differ significantly from requirements for companies incorporated in other jurisdictions such as the U.S. Currently, we do not plan to rely on home country practice with respect to any corporate governance matter. However, if we choose to follow our home country practice in the future, our shareholders may be afforded less protection than they otherwise would under rules and regulations applicable to U.S. domestic issuers.

As a result of all of the above, public shareholders may have more difficulty in protecting their interests in the face of actions taken by our management, members of the board of directors or controlling shareholders than they would as public shareholders of a company incorporated in the United States. For a discussion of significant differences between the provisions of the Companies Act of the Cayman Islands and the laws applicable to companies incorporated in the United States and their shareholders, see "*Description of Our Securities — Comparison of Cayman Islands Corporate Law and U.S. Corporate Law*."

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***You may be unable to present proposals before annual general meetings or extraordinary general meetings not called by shareholders.***

The laws of the Cayman Islands provide shareholders with only limited rights to requisition a general meeting, and does not provide shareholders with any right to put any proposal before a general meeting. These rights, however, may be provided in a company's articles of association. Our amended and restated articles of association allow our shareholders together holding shares representing in aggregate at least ten (10%) percent of our voting share capital in issue, to requisition a general meeting of our shareholders, in which case our directors are obliged to call such meeting. Advance notice of at least fourteen (14) clear days is required for the convening of our general shareholders' meeting. A quorum required for a meeting of shareholders consists of at least one or more shareholders present or by proxy, or if a corporation, by its duly authorized representative, representing not less than one-third of the issued and outstanding ordinary shares which are entitled to vote at such general meeting of the Company. For these purposes, "clear days" means that period of notice excluding (a) the day when the notice is given or deemed to be given and (b) the day for which it is given or on which it is to take effect.

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***Certain judgments obtained against us by our shareholders may not be enforceable.***

We are a Cayman Islands exempted company and substantially all of our assets are located outside of the United States. Substantially all of our current operations are conducted in the PRC. In addition, most of our current directors and officers are nationals and residents of countries other than the United States. Substantially all of the assets of these persons are located outside the United States. As a result, it may be difficult or impossible for you to bring an action against us or against these individuals in the United States in the event that you believe that your rights have been infringed under the U.S. federal securities laws or otherwise. Even if you are successful in bringing an action of this kind, the laws of the Cayman Islands and of the PRC may render you unable to seek recognition and/or enforce a judgment against our assets or the assets of our directors and officers. For more information regarding the relevant laws of the Cayman Islands and the PRC.

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***We are an emerging growth company within the meaning of the Securities Act and may take advantage of certain reduced reporting requirements.***

We are an "emerging growth company," as defined in the JOBS Act, and we may take advantage of certain exemptions from requirements applicable to other public companies that are not emerging growth companies including, most significantly, not being required to comply with the auditor attestation requirements of Section 404 for so long as we are an emerging growth company.

The JOBS Act also provides that an emerging growth company does not need to comply with any new or revised financial accounting standards until such date that a private company is otherwise required to comply with such new or revised accounting standards. In other words, an "emerging growth company" can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to take advantage of the extended transition period. As a result of this election, our future financial statements may not be comparable to other public companies that comply with the public company effective dates for these new or revised accounting standards.

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***We are a foreign private issuer within the meaning of the rules under the Exchange Act, and as such we are exempt from certain provisions applicable to United States domestic public companies.***

Because we are a foreign private issuer under the U.S. Securities Exchange Act of 1934, as amended (the "**Exchange Act**"), we are exempt from certain provisions of the securities rules and regulations in the United States that are applicable to U.S. domestic issuers, including:

● the rules under the Exchange Act requiring the filing of quarterly reports on Form 10-Q or current reports on Form 8-K with the SEC;

● the sections of the Exchange Act regulating the solicitation of proxies, consents, or authorizations in respect of a security registered under the Exchange Act;

● the sections of the Exchange Act requiring insiders to file public reports of their share ownership and trading activities and liability for insiders who profit from trades made in a short period of time; and

● the selective disclosure rules by issuers of material non-public information under Regulation FD.

We will be required to file an annual report on Form 20-F within four months of the end of each fiscal year. In addition, we intend to publish our results on a quarterly basis through press releases, distributed pursuant to the rules and regulations of the Nasdaq Capital Market. Press releases relating to financial results and material events will also be furnished to the SEC on Form 6-K. However, the information we are required to file with or furnish to the SEC will be less extensive and less timely compared to that required to be filed with the SEC by U.S. domestic issuers. As a result, you may not be afforded the same protections or information, which would be made available to you, were you investing in a U.S. domestic issuer.

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***We may incur significantly increased costs and devote substantial management time as a result of the listing of our Class A ordinary shares.***

We may incur additional legal, accounting and other expenses as a public reporting company, particularly after we cease to qualify as an emerging growth company. For example, we may be required to comply with the additional requirements of the rules and regulations of the SEC and the Nasdaq rules, including applicable corporate governance practices. We expect that compliance with these requirements m increase our legal and financial compliance costs and will make some activities more time-consuming and costly. In addition, we expect that our management and other personnel will need to divert attention from operational and other business matters to devote substantial time to these public company requirements. We cannot predict or estimate the number of additional costs we may incur as a result of becoming a public company or the timing of such costs.

In addition, changing laws, regulations and standards relating to corporate governance and public disclosure are creating uncertainty for public companies, increasing legal and financial compliance costs and making some activities more time-consuming. These laws, regulations and standards are subject to varying interpretations, in many cases due to their lack of specificity, and, as a result, their application in practice may evolve over time as new guidelines are provided by regulatory and governing bodies. This could result in continuing uncertainty regarding compliance matters and higher costs necessitated by ongoing revisions to disclosure and governance practices. We intend to invest resources to comply with evolving laws, regulations and standards, and this investment may result in increased general and administrative expenses and a diversion of management's time and attention from revenue-generating activities to compliance activities. If our efforts to comply with new laws, regulations and standards differ from the activities intended by regulatory or governing bodies due to ambiguities related to their application and practice, regulatory authorities may also initiate legal proceedings against us and our business may be adversely affected.

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***Nasdaq may delist our securities from trading on its exchange, which could limit investors' ability to make transactions in our securities and subject us to additional trading restrictions.***

Our Class A ordinary shares are listed on the Nasdaq under the symbol "ZBAO." We cannot assure you that our securities continue to be listed on Nasdaq in the future. In order to continue listing our securities on Nasdaq, we must maintain certain financial, distribution and share price levels. Generally, we must maintain a minimum amount in shareholders' equity (generally $2,500,000) and a minimum number of holders of our securities (generally 300 public holders). We cannot assure you that we will continue to meet those continued listing requirements.

If Nasdaq delists our securities from trading on its exchange and we are not able to list our securities on another national securities exchange, we expect our securities could be quoted on an over-the-counter market. If this were to occur, we could face significant material adverse consequences, including:

● a limited availability of market quotations for our securities;

● reduced liquidity for our securities;

● a determination that our Class A ordinary shares come within the definition of "penny stock" which will require brokers trading in our Class A ordinary shares to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for our securities;

● a limited amount of news and analyst coverage; and

● a decreased ability to issue additional securities or obtain additional financing in the future.

The National Securities Markets Improvement Act of 1996, which is a federal statute, prevents or preempts the states from regulating the sale of certain securities, which are referred to as "covered securities." Because our Class A ordinary shares are listed on Nasdaq, our Class A ordinary shares are covered securities. Although the states are pre-empted from regulating the sale of our securities, the federal statute does allow the states to investigate companies if there is a suspicion of fraud, and, if there is a finding of fraudulent activity, then the states can regulate or bar the sale of covered securities in a particular case.

***It is not possible to predict the actual number of Class A ordinary shares, if any, we will sell under the Hudson EPA or the actual gross proceeds resulting from those sales.***

On June 22, 2025, we entered into the Hudson Equity Purchase Agreement (the "**Hudson EPA**") with Hudson in connection with setting up certain equity line of credit facility (the "**Hudson ELOC**"). Pursuant to the Hudson EPA, Hudson has committed to purchase up to $15,000,000 (the "**Aggregate Limit**") of the Company's Class A ordinary shares over a two-year period commencing on June 22, 2025, subject to earlier terminations (the "**Commitment Period**").

Subject to the satisfaction of certain customary conditions including, without limitation, the effectiveness of this registration statement, our right to sell shares to Hudson commenced on the effective date of the resale registration statement (the "**ELOC Resale F-1**") through June 22, 2027. During such term, subject to the terms and conditions of the Hudson EPA, we shall notify Hudson when we exercise the right, in our sole discretion, to sell shares.

We generally have the right to control the timing and amount of any sales of our Class A ordinary shares to Hudson under the Hudson EPA. Sales of our Class A ordinary shares, if any, to Hudson under the Hudson EPA will depend upon market conditions and other factors to be determined by us. We may ultimately decide to sell to Hudson all, some or none of the Class A ordinary shares that may be available for us to sell to Hudson pursuant to the Hudson EPA.

Because the purchase price per Class A ordinary share to be paid by Hudson for the Class A ordinary shares that we may elect to sell to Hudson under the Hudson EPA, if any, will fluctuate based on the market prices of our Class A ordinary share at the time we elect to sell Class A ordinary shares to Hudson pursuant to the Hudson EPA, it is not possible for us to predict, as of the date of this annual report and prior to any such sales, the number of Class A ordinary shares that we will sell to Hudson under the Hudson EPA, the purchase price per share that Hudson will pay for Class A ordinary shares purchased from us under the Hudson EPA, or the aggregate gross proceeds that we will receive from those purchases by Hudson under the Hudson EPA.

The number of Class A ordinary shares ultimately offered for sale by Hudson is dependent upon the number of Class A ordinary shares, if any, we ultimately elect to sell to Hudson under the Hudson EPA. However, even if we elect to sell Class A ordinary shares to Hudson pursuant to the Hudson EPA, Hudson may resell all, some or none of such shares at any time or from time to time in its sole discretion and at different prices, subject to certain limitations in the Hudson EPA.

Because the market price of our Class A ordinary shares may fluctuate from time to time, as a result, the actual purchase price to be paid by Hudson for our Class A ordinary shares that we elect to sell to Hudson under the Hudson EPA, if any, also may fluctuate because they will be based on such fluctuating market price of our Class A ordinary shares, it is possible that we would need to issue and sell more than the number of Class A ordinary shares being registered for resale by Hudson under the ELOC Resale F-1in order to receive aggregate gross proceeds of $15.0 million under the Hudson EPA.

Accordingly, if it becomes necessary for us to issue and sell to Hudson under the Hudson EPA more than the 14,845,883 Class A ordinary shares being registered for resale under the ELOC Resale F-1 in order to receive aggregate gross proceeds equal to $15.0 million under the Hudson EPA, we must file with the SEC one or more additional registration statements to register under the Securities Act the resale by Hudson of any such additional Class A ordinary shares we wish to sell from time to time under the Hudson EPA, which must be declared effective by the SEC, in each case before we may elect to sell any additional Class A ordinary shares to Hudson under the Hudson EPA. Any issuance and sale by us under the Hudson EPA of a substantial amount of Class A ordinary shares in addition to the 14,845,883 Class A ordinary shares being registered for resale by Hudson under the ELOC Resale F-1 could cause additional substantial dilution to our shareholders.

***The sale and issuance of Class A ordinary shares to Hudson will cause dilution to our existing securityholders, and the resale of the Class A ordinary shares by Hudson, or the perception that such resales may occur, could cause the price of our shares to fall.***

The purchase price per Class A ordinary shares to be paid by Hudson for the Class A ordinary shares that we may elect to sell to Hudson under the Hudson EPA, if any, will fluctuate based on the market prices of our Class A ordinary shares at the time we elect to sell Class A ordinary shares to Hudson pursuant to the Hudson EPA. Depending on market liquidity at the time, resales of such Class A ordinary shares by Hudson may cause the trading price of our Class A ordinary shares to fall.

If and when we elect to sell Class A ordinary shares to Hudson, sales of newly issued Class A ordinary shares by us to Hudson could result in substantial dilution to the interests of existing holders of our Class A ordinary shares. If all of the 14,985,883 Class A ordinary shares offered for resale by Hudson under this annual report (without regard to the $15.0 million aggregate purchase price limit pursuant to the Hudson EPA) were issued and outstanding as of September 4, 2025, such Class A ordinary shares would represent approximately 92.3% of the total number of our total shares issued and outstanding as of September 4, 2025. Additionally, the sale of a substantial number of Class A ordinary shares to Hudson, or the anticipation of such sales, could make it more difficult for us to sell equity or equity-related securities in the future at a time and at a price that we might otherwise wish to effect sales.

**ITEM 4. INFORMATION ON THE COMPANY**

**A.** **History and Development of the Company** 

Zhibao Technology Inc. is a Cayman Islands exempted company incorporated on January 11, 2023. Structured as a holding company with no material operations, Zhibao conducts its operations in China through its PRC Subsidiaries, primarily Zhibao China and Sunshine Insurance Brokers.

Zhibao China, previously known as Shanghai Julai Investment Management Co., Ltd. and Zhibao Technology (Shanghai) Co., Ltd., successively, started its business in the insurance brokerage industry since 2016 in China. With the growth of our business and in order to facilitate international capital investment in us, we started a reorganization as described below involving new offshore and onshore entities in December 2022 and completed it in March 2023.

Zhibao BVI, incorporated on January 12, 2023 under the laws of British Virgin Islands, is our wholly-owned subsidiary in BVI and a holding company with no business operations, which, in turn, wholly owns all of the equity interest of Zhibao HK, a limited company incorporated on January 19, 2023 under the laws of Hong Kong.

Zhibao HK, as a wholly-owned subsidiary of Zhibao BVI, is a holding company with no business operations, which, in turn, wholly owns all of the equity interest of Zhibao China or WFOE, a wholly foreign-owned enterprise formed on November 24, 2015 in Shanghai under the laws of China, currently with a registered capital of RMB 100,000,000. Zhibao China wholly owns Shanghai Anyi, Sunshine Insurance Brokers and Zhibao Health, primarily providing MGU services.

Shanghai Anyi was incorporated in Shanghai under the laws of China on September 18, 2015, currently with a registered capital of RMB10 million. Shanghai Anyi was originally 100% controlled by Shanghai Xinhui, a related party controlled by our Chief Executive Officer, Mr. Botao Ma. All of the equity interest of Shanghai Anyi was later transferred to Zhibao China on July 12, 2016, with a consideration of RMB 10 million. After such transfer, Shanghai Anyi became a wholly-owned subsidiary of Zhibao China, primarily providing R&D services to Sunshine Insurance Brokers and Zhibao China.

Sunshine Insurance Brokers was incorporated in Shanghai under the laws of China on November 17, 2011, currently with a registered capital of RMB 50 million. Sunshine Insurance Brokers was originally 100% controlled by an unrelated third party, all of the equity interest of which was thereafter transferred to Zhibao China on January 4, 2016, with a consideration of RMB 10 million. After such transfer, Sunshine Insurance Brokers became a wholly-owned subsidiary of Zhibao China, primarily providing insurance brokerage services.

Zhibao Health, previously known as Shanghai Zhongzhi Chengcheng Healthy Service Co., Ltd., was incorporated in Shanghai under the laws of China on November 16, 2022, currently with a registered capital of RMB 1 million. Zhibao Health is a wholly-owned subsidiary of Zhibao China, primarily engaged in the health management services.

Zhibao Labuan Reinsurance was incorporated in Labuan, Malaysia, on July 29, 2024, and received a license approval on October 24, 2024. Zhibao Labuan Reinsurance is a wholly-owned subsidiary of Zhibao BVI, primarily engaged in brokerage and MGU services. As of the date of this annual report, it has not commenced operation yet.

Shanghai Zhizhongbao was incorporated in Shanghai under the laws of China on March 6, 2025, as an investment holding company, currently with a registered capital of RMB 10 million. Shanghai Zhizhongbao is a wholly-owned subsidiary of Zhibao HK.

Zhibao Yingshi was incorporated under the laws of China on September 24, 2025, as a professional healthcare services company with its principal business in Shanghai, China. Pursuant to a joint venture agreement, dated September 1, 2025, by and among Zhibao China, Xingtao and the shareholder of Xingtao, Zhibao China agreed to acquire 51% of the equity interest in Zhibao Yingshi. As a result, Zhibao Yingshi is a 51% owned subsidiary of Zhibao China.

Zhonglian was incorporated under the laws of China on June 8, 2005, currently with a registered capital of RMB 50 million. Zhonglian was previously 100% controlled by unrelated third parties. On September 30, 2025, pursuant to the Zhonglian Agreement, Zhonglian's shareholders transferred 51% of the equity interest of Zhonglian to Zhibao China for a consideration of RMB 25.5 million, subject to the terms and conditions of the Zhonglian Agreement. Following such transfer, Zhonglian became a 51% owned subsidiary of Zhibao China.

On December 12, 2023, our shareholders approved, among other things, to adjust our authorized share capital and to adopt a dual-class share structure, through a reclassification of our ordinary shares, consisting of Class A ordinary shares and Class B ordinary shares. The previous authorized share capital of the Company was $50,000 divided into 500,000,000 ordinary shares of par value $0.0001 each. Each Class A ordinary share is entitled to one vote per share on all matters subject to vote at general meetings of our company. Each Class B ordinary share is entitled to twenty (20) votes per share on all matters subject to vote at general meetings of our company. The issued and outstanding ordinary shares then held beneficially by Mr. Botao Ma, our Chairman and Chief Executive Officer were reclassified as Class B ordinary shares. All other ordinary shares then issued and outstanding were reclassified as Class A ordinary shares. On the same date, we amended and restated our then effective memorandum of association and articles of association in their entirety and adopted our amended and restated memorandum and articles of association which reflect, among other things, the changes to our capital structure. As a result of the share reclassification, our authorized share capital consisting of 500,000,000 ordinary shares, par value $0.0001 per share, was thus reclassified into (i) 494,394,436 Class A ordinary shares with a par value of $0.0001 per share; and (ii) 5,605,564 Class B ordinary shares with a par value of $0.0001 per share. Mr. Botao Ma held approximately 94.0% of our outstanding voting power as of January 5, 2026.

On February 4, 2024, our shareholders and our director approved, among other things, to adjust our authorized share capital whereby we reclassified 44,394,436 Class A ordinary shares as 44,394,436 Class B ordinary shares and amended our authorized share capital to reflect (i) 450,000,000 Class A ordinary shares with a par value of US$0.0001 each and 50,000,000 Class B ordinary shares with a par value of US$0.0001 each, and (ii) the issuance of an aggregate of 20,000,000 ordinary shares, at par value of $0.0001, to all existing shareholders on a pro rata basis. On the same date, we amended and restated our then effective amended and restated memorandum of association and articles of association in their entirety and adopted our amended and restated memorandum and articles of association which reflect, among other things, the changes to our capital structure. As a result of such changes, our authorized share capital consisting of 500,000,000 ordinary shares, par value $0.0001 per share, was thus reclassified into (i) 450,000,000 Class A ordinary shares with a par value of $0.0001 per share; and (ii) 50,000,000 Class B ordinary shares with a par value of $0.0001 per share.

On April 3, 2024, we closed the IPO for aggregate gross proceeds of $6,000,000, before deducting underwriting discounts and offering expenses. On May 15, 2024, we issued an additional 23,765 Class A ordinary shares pursuant to the partial exercise of the underwriters' over-allotment option in connection with the IPO at $4.00 per share, resulting in additional gross proceeds of $95,060. The Class A ordinary shares are listed on the Nasdaq Capital Market under the symbol "ZBAO."

***L1 Private Placement***

On September 23, 2024, the Company entered into a Securities Purchase Agreement with L1 Capital Global Opportunities Master Fund ("**L1**"), which was subsequently amended by the letter agreement, dated February 14, 2025, by and between the Company and L1 (as amended, the "**L1 Securities Purchase Agreement**"). The L1 Securities Purchase Agreement provides for, among other things, loans in an aggregate principal amount of up to $8.0 million under three tranches, including the first tranche (the "**First Tranche**"), the second tranche (the "**Second Tranche**") and the third tranche (the "**Third Tranche**"), subject to the terms and conditions therein. The L1 Securities Purchase Agreement contains certain anti-dilution provisions, pursuant to which, if and whenever, at any time during the 18-month period following the dates of issuances of each of (i) L1 First Tranche Notes (as defined below), (ii) L1 Second Tranche Notes (as defined below), and (iii) the L1 Warrants (as defined below) (collectively, the "**L1 Securities**"), the Company issues, sells or grants any Class A ordinary shares and/or equivalents of Class A ordinary shares for a consideration per share less than a price equal to the conversion price and/or exercise price of the L1 Securities in effect immediately prior to such issuances, sale or grant or deemed issuance, sale or grant (the foregoing a "**Dilutive Issuance**"), then immediately after such Dilutive Issuance the conversion price and/or exercise price of each of the L1 Securities then in effect shall be reduced to an amount equal to the issuance price of the newly issued securities. In addition, that upon any adjustment to the conversion price and/or exercise price, the number of conversion shares and/or warrant shares that may be purchased upon conversion and/or exercise of the L1 Securities shall be increased, so that after such adjustment the aggregate exercise price payable under the L1 Notes (as defined below) warrant shall be the same as the aggregate conversion and/or exercise price in effect immediately prior to such adjustment (without regard to any limitations on exercise contained therein).

In connection with the L1 Securities Purchase Agreement, on September 23, 2024, the Company entered into a registration rights agreement with L1 (the "**L1 Registration Rights Agreement**") pursuant to which the registrable securities held by L1, subject to certain conditions, are entitled to registration under the Securities Act.

*L1 Private Placement - First Tranche Financing* 

On September 23, 2024, the Company received $675,000 (net of original issue discount of 10%) in a first closing of the first tranche, excluding expenses and commissions (the "**L1 First Closing of First Tranche**"). In consideration for L1's funding of the L1 First Closing of First Tranche, on September 23, 2024, the Company issued and sold to L1, in private placement, (i) a convertible promissory note in the aggregate principal amount of up to $2,500,000 (the "**L1 First Tranche Note**"), (ii) warrants to purchase up to 296,472 Class A ordinary shares at an as-adjusted exercise price of $1.18172 per share, subject to certain adjustments (as adjusted from 74,451 Class A ordinary shares when initially issued on September 23, 2024, such warrants, the "**L1 First Closing of First Tranche Warrant**"), and (iii) a pre-funded warrant to purchase up to 191,522 Class A ordinary shares (based on $750,000 divided by the 10-day volume weighted average price ("**VWAP**") for the 10 trading day period immediately prior to the L1 First Closing of First Tranche) at a nominal exercise price of $0.0001 per share, subject to certain adjustments (such warrants, the "**L1 Pre-funded Warrants**"). L1 Pre-funded warrants may only be exercised upon occurrence of an Event of Default (as defined in the L1 First Tranche Note). In connection with the consummation of the L1 First Closing of First Tranche, the Company paid $47,250 (representing 7% of gross proceeds) to D. Boral Capital LLC ("**D. Boral**"), the sole placement agent in the transaction, and $6,750 expenses pursuant to an engagement letter.

On September 30, 2024, the Company filed a Registration Statement on Form F-1 (File No. 333-282423) with the Securities and Exchange Commission (the "**SEC**") pursuant to the terms of the Securities Purchase Agreement. The registration statement was declared effective by the SEC on November 22, 2024.

On October 1, 2024, pursuant to the terms of the L1 Securities Purchase Agreement, the Company received additional $675,000 (net of original issue discount of 10%) in a second closing of the first tranche, excluding expenses and commissions (the "**L1 Second Closing of First Tranche**"). In the L1 Second Closing of First Tranche, the Company issued to L1 a warrant to purchase up to 301,094 Class A ordinary shares at an as-adjusted exercise price of $1.18172 per share (as adjusted from 79,599 Class A ordinary shares when initially issued on October 1, 2024, such warrants, the "**L1 Second Closing of First Tranche Warrant**"), subject to certain adjustments. In connection with the consummation of the L1 Second Closing of First Tranche, the Company paid $47,250 (representing 7% of gross proceeds) to D. Boral, the sole placement agent in the transaction, and $6,750 expenses pursuant to an engagement letter.

On December 11, 2024, the Company and L1 entered into a letter agreement (the "**December 2024 Letter Agreement**") and mutually agreed to waive the requirement under the L1 Securities Purchase Agreement that the execution of a duly executed deposit account control agreement (the "**DACA**") and DACA account have been executed and established, respectively, before closing of the remaining portion of the first tranche in the amount of $900,000 as provided under Section 2.1(a)(iii) of the L1 Securities Purchase Agreement.

On December 11, 2024, pursuant to the terms of the L1 Securities Purchase Agreement and the December 2024 Letter Agreement, the Company and L1 consummated the third closing of the first tranche (the "**L1 Third Closing of First Tranche**"), and the Company received additional $900,000 (net of original issue discount of 10%) in the L1 Third Closing of First Tranche, excluding expenses and commissions, and issued to L1 a warrant to purchase up to 440,094 Class A ordinary shares at an as-adjusted exercise price of $1.18172 per share (as adjusted from 160,020 Class A ordinary shares when initially issued on December 11, 2024, such warrants, the "**L1 Third Closing of First Tranche Warrant**"), subject to certain adjustments. In connection with the consummation of the L1 Third Closing of First Tranche, the Company paid $63,000 (representing 7% of gross proceeds) to D. Boral, the sole placement agent in the transaction, and $9,000 expenses pursuant to an engagement letter.

As of June 30, 2025, the L1 First Tranche Note was fully paid off.

*L1 Waiver Agreement*

On December 16, 2024, the Company entered into certain waiver agreement with L1 (the "**L1 Waiver Agreement**") in connection with certain transaction related to equity line of credit (the "**ELOC Transaction**"). Pursuant to the L1 Waiver Agreement, in connection with an ELOC Transaction, L1 agreed to waive its rights arising under the L1 Securities Purchase Agreement and the L1 Notes, and the Company agreed to issue a warrant to purchase up to 571,588 Class A ordinary shares to L1 at an as-adjusted exercise price of $1.18172 per share (as adjusted from 240,000 Class A ordinary shares when initially issued to L1 on December 16, 2024, such warrants, the "**L1 Waiver Warrant**"), subject to certain adjustments.

*L1 Private Placement - Second Tranche Financing*

On February 14, 2025, the Company and L1 entered into a letter agreement (the "**February 2025 Letter Agreement**"), pursuant to which the Company and L1 amended the L1 Securities Purchase Agreement to provide for, among other things, (i) up to three closings in the second tranche subject to the terms and conditions therein, and (ii) a convertible promissory note for the Second Tranche (the "**L1 Second Tranche Note**", together with the L1 First Tranche Note, the "**L1 Notes**") and, if applicable, a convertible promissory note for the Third Tranche (the "**L1 Third Tranche Note**") shall have the following new or amended terms: (a) the number of deferrals or accelerations in the third paragraph of Section 1.3 of the L1 Securities Purchase Agreement shall by increased from five to six, (b) the holder of the L1 Second Tranche Note and, if applicable, the L1 Third Tranche Note may accelerate any Monthly Payment (as defined in the L1 Second Tranche Note) on or following any day on which the trading value (determined by multiplying the VWAP by the trading volume on such day) of the Class A ordinary shares is at least $5 million, and any such accelerations will not count against the six total accelerations referred to in (i) above, and (c) the floor price will be subject to reduction (but not increase) on the six-month anniversary of the applicable closing date, and on every succeeding six-month anniversary thereafter, to equal 20% of the average VWAP during the five trading days immediately preceding each such date.

On February 14, 2025, pursuant to the terms of the L1 Securities Purchase Agreement, the Company and L1 consummated the first closing of second tranche (the "**L1 First Closing of Second Tranche**"), and the Company received $630,000 (net of original issue discount of 10%), excluding expenses and commissions. In consideration for L1's funding of the L1 First Closing of Second Tranche, on February 14, 2025, the Company issued and sold to L1, in a private placement, (i) the L1 Second Tranche Note, and (ii) a warrant to purchase up to 291,193 Class A ordinary shares at an as-adjusted exercise price of $1.18172 per share (as adjusted from 202,459 Class A ordinary shares when initially issued on February 14, 2025, such warrants, the "**L1 First Closing of Second Tranche Warrant**"), subject to certain adjustments. In connection with the consummation of the L1 First Closing of Second Tranche, the Company paid $44,100 (representing 7% of gross proceeds) to D. Boral, the sole placement agent in the transaction, and $6,300 expenses pursuant to an engagement letter.

The L1 Second Tranche Note is initially convertible into Class A ordinary shares at conversion price of $1.69964 per share, subject to certain adjustments, provided that the conversion price shall not be reduced below a floor price of $0.282. The L1 Second Tranche Note does not bear any interest and matures on February 13, 2026.

The L1 Second Tranche Note further provides for , among other things, commencing on the earlier of (i) the 60-day anniversary after the date hereof and (ii) the date on which the first resale registration statement for the L1 Second Tranche shall have been declared effective by the SEC, the Company is required to pay to L1 the outstanding principal balance under the L1 Second Tranche Note in monthly installments, on such date and each one (1) month anniversary thereof, in an amount equal to 105% of the total principal amount multiplied by the quotient determined by dividing one by the number of months remaining until the maturity date of the L1 Second Tranche Note, until the outstanding principal amount has been paid in full or, if earlier, upon acceleration, conversion or redemption of the L1 Second Tranche Note in accordance with its terms. All monthly payments are payable the Company, in cash, provided that under certain circumstances, as provided in the L1 Second Tranche Note, the Company may elect to pay in Class A ordinary shares.

If the Company directly or indirectly receives proceeds from and closes any kind of financing including through the issuance of any equity or debt securities, L1 may request a prepayment of the principal amount of the L1 Second Tranche Note and any accrued and unpaid interest thereon (if any) in an amount up to 25% of the gross proceeds received by the Company.

Upon the occurrence of any Event of Default, interest shall accrue on the L1 Notes at a rate equal to 10% per annum or, if less, the highest amount permitted by law. In addition, upon the occurrence of Event of Default, which has not been cured within any applicable cure period, interest is also payable at the "Mandatory Default Amount" (i.e. 120% of the sum of (i) the outstanding principal balance of the L1 Notes on the date on which the first Event of Default has occurred and (ii) any accrued and unpaid interest thereon. Furthermore, if an Event of Default is not cured, L1 also shall have the right to convert the Mandatory Default Amount (as defined in the L1 Second Tranche Note), upon the terms provided in the L1 Notes.

Each of the L1 Second Tranche Note and the warrants issued by the Company to L1 in the First Closing of Second Tranche provides that L1 will not have the right to convert any portion of the L1 Second Tranche Note or exercise any portion of the L1 First Closing of Second Tranche Warrant, as applicable, if, together with its affiliates, and any other party whose holdings would be aggregated with those of the holder for purposes of Section 13(d) or Section 16 of the Securities of 1934, as amended, would beneficially own in excess of 4.99% of the number of Class A ordinary shares outstanding immediately after giving effect to such conversion or exercise, as applicable (the "**Beneficial Ownership Limitation**"); provided, however, that the Beneficial Ownership Limitation shall be increased to 9.99% on the 61st day upon receipt of a written notice by L1 delivered to the Company, and provided further, in no event shall the Beneficial Ownership Limitation exceed 9.99%.

On July 21, 2025, the Company's registration statement on Form F-1 (File No. 333-286140) was declared effective by the SEC. Accordingly, on July 22, 2025, pursuant to the terms of the L1 Securities Purchase Agreement, the Company received additional $270,000 (net of original issue discount of 10%) in a second closing of the second tranche, excluding expenses and commissions (the "**L1 Second Closing of Second Tranche**"). In connection with the consummation of the L1 Second Closing of Second Tranche, the Company paid $18,900 (representing 7% of gross proceeds) to D. Boral, the sole placement agent in the transaction, and $2,700 expenses pursuant to an engagement letter. In the Second Closing of Second Tranche, the Company issued to the Investor a warrant to purchase up to 123,002 Class A ordinary shares at an initial exercise price of $1.18172 per share, subject to certain adjustments (the "**L1 Second Closing of Second Tranche Warrant**").

*Event of Default*

On June 12, 2025, an event of default under the terms of the L1 Second Tranche Note has occurred, as the resale registration statement to register the securities issued to L1 that were not registered had not been declared effective by the SEC with the timeframe provided under the L1 Registration Rights Agreement.

 ****

The event of default was cured on July 21, 2025, when the L1 Second Tranche Resale Registration Statement was declared effective by the SEC. As of the date of this annual report, no L1 Pre-Funded Warrants were issued and outstanding.

 ****

***GEM Share Subscription Facility and Termination***

On December 16, 2024, the Company entered into certain share purchase agreement (the "**GEM Share Purchase Agreement**") and certain registration rights agreement (the "**GEM Registration Rights Agreement**", together with the GEM Share Purchase Agreement, the "**GEM Agreements**") with GEM Global Yield LLC SCS ("**GEM**") and GEM Yield Bahamas Limited ("**GYBL**"), in connection with setting up certain share subscription facility. Pursuant to the GEM Share Purchase Agreement, GEM agreed to purchase up to $50,000,000 of the Class A ordinary shares during a three-year period. On December 16, 2024, the Company issued to GYBL a warrant to purchase 467,800 ordinary shares at an exercise price of $3.95 per share (the "**GYBL Warrant**", collectively with the GEM Agreements, the "**GEM Transaction Documents**").

On March 11, 2025, the Company terminated the GEM Transaction Documents, including the GYBL Warrant. No Class A ordinary shares were issued under the GEM Transaction Documents.

***Hudson ELOC***

 ****

*Hudson Equity Purchase Agreement*

On June 22, 2025, the Company entered into the Hudson EPA with Hudson in connection with setting up the Hudson ELOC. Pursuant to the Hudson EPA, Hudson has agreed to purchase up to $15,000,000 of the Company's Class A ordinary shares over a two-year period commencing on June 22, 2025, subject to earlier terminations. Under the Hudson EPA, the Company may, by delivering a written notice to Hudson (each such notice, a "**Put Notice**") setting forth the shares (such shares, the "**Put Shares**", and the date on which such Put Notice is delivered, the "**Put Date**"), directing Hudson to purchase the Class A ordinary shares in an amount (i) not lower than $25,000 (calculated using the "**Initial Purchase Price**", which is equal to 90% of closing price of the Class A ordinary shares on Nasdaq on the trading day immediately preceding the respective Put Date)) and (ii) up to the lesser of (a) $2,000,000.00, or (b) 200% of the average daily trading value (calculated as the average trading volume of the Class A ordinary shares on Nasdaq during the three (3) trading days immediately preceding the respective Put Date multiplied by the lowest closing price of the Class A ordinary shares during the three (3) trading days immediately preceding the respective Put Date. Hudson is not obligated to purchase any Class A ordinary shares which would result in Hudson beneficially owning, directly or indirectly, at the time of the proposed issuance, more than 4.99% of the Class A ordinary shares issued and outstanding. Hudson will pay a purchase price per share equal to the lesser of (i) the Initial Purchase Price or (ii) the "Market Price," which is equal to 90% of the average closing price of the Class A ordinary shares on Nasdaq during period commencing on the Put Date and continuing through the date that is three (3) trading days immediately following the date when Hudson receives the Put Shares in its brokerage account (such date, the "**Clearing Date**") associated with the applicable Put Notice (the "**Valuation Period**").

Additionally, the Company is obligated to issue to Hudson an aggregate amount of Class A ordinary shares equal to (i) 140,000 Class A ordinary shares (the "**Initial Commitment Shares**"), plus (ii) any "**Make-Whole Commitment Shares**" (together with the Initial Commitment Shares, the "**Commitment Shares**") calculated by dividing 140,000 by the closing price of Class A ordinary shares on the date that is the earlier of (i) December 21, 2025 (being the six (6) calendar months after the date of Hudson EPA) or (ii) the first date that the ELOC Resale F-1 is declared effective by the SEC (the "**Measurement Date**"), if the closing price of Class A ordinary shares on the Measurement Date is less than the closing price of the Class A ordinary shares on the date of the Hudson EPA. A total of 140,000 Commitment Shares have been issued to Hudson as of the date of this annual report.

The Hudson EPA contains customary representations, warranties, agreements and conditions to completing future sale transactions, indemnification rights and obligations of the parties.

*Hudson Registration Rights Agreement*

On June 22, 2025, the Company also entered into a registration rights agreement with Hudson (the "**Hudson RRA**"). Pursuant to the Hudson RRA, the Company is required to, as soon as practicable but no later than One Hundred and Eighty (180) calendar days following June 22, 2025, file with the SEC a resale registration statement registering the resale of the Class A ordinary shares that Hudson is entitled to receive pursuant to the Hudson EPA, including any Class A ordinary shares issued or issuable upon any share split, dividend or other distribution, recapitalization or similar event with respect to the foregoing, and to use its commercially reasonable efforts to have such registration statement declared effective within two hundred ten (210) calendar days from June 22, 2025 and as soon as practicable after the filing thereof. Accordingly, on September 9, 2025, the Company filed the ELOC Resale F-1 pursuant to the Hudson RRA.

Hudson represented to the Company, among other things, that it was an "accredited investor" (as such term is defined in Regulation D under the U.S. Securities Act), and the Company would rely upon an exemption from registration contained in Section 4(a)(2) of the Securities Act and Rule 506 of Regulation D promulgated thereunder when issuing Class A ordinary shares under the Hudson EPA.

***Consulting Agreement***

In addition, on April 22, 2025, the Company entered into that certain financing consulting agreement (the "**Consulting Agreement**") with a consultant, pursuant to which the Company shall issue 153,846 Class A ordinary shares to the consultant when the Company entered into any financing project brought to the Company by the consultant, including the Hudson ELOC. In addition, the consultant is entitled to 10% of the cash the Company receives in each and all closings of such financings, including the Hudson ELOC.

***Zhonglian Acquisition***

On July 2, 2025, Zhibao China, entered into the Zhonglian Agreement with the Zhonglian Sellers and Zhonglian, pursuant to which, subject to the terms and conditions set forth in the Zhonglian Agreement, Zhibao China agreed to acquire an aggregate of 51% of the equity interest in Zhonglian, including 23% of the equity interest from Xuegeng Zhao and 28% of the equity interest from Qin'er Ye, for a total purchase price of RMB25.5 million (approximately $3.5 million), subject to adjustment as provided in the Zhonglian Agreement.

The purchase price is based on an evaluation of RMB 50 million for the 100% of the equity interest in Zhonglian mutually agreed by Zhibao China and Sellers and shall be paid in four installments. The first three installments, each in the amount of RMB7.65 million (approximately $1.05 million), shall be payable on July 31, 2025, July 31, 2025 and January 31, 2026, respectively. As of the date of this annual report, the first installment under this agreement has been made. The fourth installment, in the amount of RMB 2.55 million (approximately $0.35 million), is subject to adjustment in the event that the revenue generated by Zhonglian is less than RMB 140 million (approximately $19.18 million) within one year following the full payment of the first instalment of the purchase price (the "**Delivery Date**"). The adjustment shall be calculated based on the following formula: RMB 25.5 million times the product of RMB 140 million minus 100% of the Zhonglian's revenue within one year following the Delivery Date, *divided* by RMB 140 million, and shall be capped at a maximum adjustment amount of RMB 1 million (approximately $0.14 million). The fourth installment is payable within 30 days following the first anniversary of the Delivery Date. Failure to pay the purchase price on time as stipulated in the Zhonglian Agreement will subject Zhibao China to liquidated damages at a rate of 0.05% of the unpaid amount for each overdue day. If payment is not made within 90 days of the due date, the Sellers may elect to demand continued performance, accelerated lump-sum payment, or retain amounts paid and convert such amounts, net of liquidated damages, into equity in Zhonglian based on a RMB 50 million valuation, plus additional compensation if the liquidated damages that are insufficient to cover losses.

Under the Zhonglian Agreement, Zhibao China also has a right of first refusal to acquire an additional 34% equity interests in Zhonglian by the end of 2027 (the "**Subsequent Acquisition**"), provided that the Sellers and Zhonglian have fulfilled their respective obligations under the Zhonglian Agreement, and Zhibao China has not deliberately obstructed, whether through affirmative acts or passive omissions, the normal operation and management of Zhonglian. Notwithstanding the foregoing, if Zhibao China fails to complete the Subsequent Acquisition despite Zhonglian having fulfilled its obligations under the Zhonglian Agreement , Zhibao China shall be deemed to be in breach of the Zhonglian Agreement and shall be required to pay liquidated damages to the Sellers.

The Zhonglian Agreement may be terminated by mutual agreement of the parties. In addition, the Sellers may unilaterally terminate the Zhonglian Agreement if Zhibao China fails to pay the first installment within the timeline specified in the Zhonglian Agreement.

The Acquisition and related transactions shall be registered with the relevant PRC governmental authorities within a specified period following the Delivery Date, as set forth in the Zhonglian Agreement. On September 30, 2025, Zhonglian became a 51% owned PRC subsidiary of Zhibao China.

***Joint Venture – Zhibao Yingshi***

Zhibao Yingshi was incorporated under the laws of China on September 24, 2025, as a healthcare services company with its principal business in Shanghai, China. Pursuant to a joint venture agreement, dated September 1, 2025, among Zhibao China, Xingtao, and the shareholder of Xingtao, Zhibao China agreed to acquire 51% of the equity interest in Zhibao Yingshi. As a result, Zhibao Yingshi is a 51% owned subsidiary of Zhibao China.

Our principal executive offices are located at Floor 3, Building 6, Wuxing Road, Lane 727, Pudong New Area, Shanghai, China, 201204, and our telephone number is +86 21-5089-6502. Our website is www.zhibao-tech.com. Our registered office in the Cayman Islands is located at the offices of Vistra (Cayman) Limited, Grand Pavilion, Hibiscus Way, Seven Mile Beach, P.O. Box 31119, Grand Cayman, Cayman Islands, or such other place in the Cayman Islands as the directors may, from time to time decide. Our agent for service of process in the United States is Puglisi & Associates, 850 Library Avenue, Suite 204, Newark, DE 19711. We also maintain a website at https://www.zhibao-tech.com/. Information contained on, or that can be accessed through, our website is not a part of, and shall not be incorporated by reference into, this report. SEC maintains an Internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC and state the address of that site (http:// www.sec.gov).

&nbsp;&nbsp;&nbsp;&nbsp;**B.** **Business Overview** 

In the following discussion of our business, unless otherwise provided, "we," "us," "our," or "ourselves" refer to Zhibao's PRC Subsidiaries or Zhibao China Group.

**Overview**

Zhibao Technology Inc. is an exempted company incorporated under the laws of the Cayman Islands on January 11, 2023. It operates as a holding company with substantially all of its business through its PRC Subsidiaries, or Zhibao China Group, in particular Zhibao China and Sunshine Insurance Brokers.

2B2C digital embedded insurance refers to our one-stop customized insurance brokerage model conducted through Zhibao China Group, under which we provide proprietary and customized insurance solutions to be digitally embedded in the existing customer engagement matrix of business entities (our "**business channels**" or "**B channels**") to reach and serve such B channels' existing pool of end customers ("**end customers**" or "**C**"). Each B channel encompasses a specific scenario where its end customers also have potential, untapped insurance needs. For example, a Chinese travel agency (our B channel) has an average of 100,000 Chinese tourists traveling to the U.S. for tourism every year. We believe this presents an untapped scenario-specific opportunity for international travel accident insurance needs for a pool of 100,000 Chinese tourists as end customers. These end customers might otherwise have to search for and purchase insurance separately or might not purchase insurance at all. After Zhibao China Group reaching an agreement with such travel agency to become one of our B channels, they build and embed a travel insurance solution across this travel agency's matrix of digital channels, including its website, App, Douyin (the Chinese equivalent of TikTok), WeChat Mini Program, and other social media accounts. Consequently, we, through Zhibao China Group, may pinpoint the 100,000-strong customer base and provide insurance brokerage services which are specifically and accurately tailored to the insurance needs of these end customers.

Our service portfolio through Zhibao China Group includes (1) insurance brokerage services, and (2) managing general underwriting ("**MGU**") services, a specialized insurance brokerage service whereby the insurance companies authorize us to assist them in underwriting, claims and risk control services. It broadly covers insurance product design and customization, selection of insurance companies, technology system interconnection and delivery, customer AARRR (Acquisition, Activation, Retention, Referral, Revenue)operation, customer service, compliance management, data analysis, all of which are integrated in each of our insurance solutions. Each insurance solution generally applies to one specific scenario in a particular sector, with customized product design and services relevant for that scenario and sector. As of the date of this annual report, we, through Zhibao China Group, have developed more than 40 proprietary and innovative digital insurance solutions addressing different scenarios in a wide range of industries, including but not limited to travel, sports, logistics, utilities (i.e., gas and electricity), and e-commerce. Zhibao China Group acquire and analyze customer data, utilize big data and artificial intelligence ("**AI**") technology to continually iterate and enhance our digital insurance solutions. This iterative process, in addition to continually improving our digital insurance solutions, will keep us abreast of the new trends and customer preferences in the market.

Zhibao China Group secure and serve our end customers through our B channels. Our B channels cover a wide range of industries and organizations, including but not limited to internet platforms, large and medium-sized enterprises, and government agencies. While B channels have end customers with potential insurance needs relevant and specific to their primary operations, they usually do not have the experience and expertise to effectively provide insurance related services. In order to address this pain-point, we, through Zhibao China Group, provide them with our customized digital insurance solutions specifically tailored to their business. Our 2B2C model thrives because our relationship with B channels is mutually beneficial and sustainable for all participants. Our B channels view us as a valuable partner as we empower them to provide insurance as a value-added service to their end customers, a potential competitive advantage for them. By embedding our digital insurance solutions into our B channels' online matrix to reach their customer base, we maintain a captive, stable and sustainable source of end customers at low cost. The end customers, as a result, can conveniently and efficiently access quality brokerage services and suitable insurance products tailored to their actual needs. As of the date of this annual report, we, through Zhibao China Group, have cooperated with more than 2,400 B channels, and secured more than 24 million end customers. We will expand the number of B channels as a key growth strategy of our business.

Under our business model, Zhibao China Group represent end customers as their authorized insurance broker to negotiate with insurance companies and select the most suitable insurance products for our end customers. As of the date of this annual report, we have partnered with over 100 insurance companies (including their subsidiaries and branches) through Zhibao China Group.

While embedded insurance brokerage is still at an early stage of development in China, we believe it is the future of insurance brokerage industry.

Our revenue increased by RMB 41.6 million (US$5.7 million), or 29% from approximately RMB 142.1 million for the fiscal year ended June 30, 2023 to RMB 183.7 million for the fiscal year ended June 30, 2024, and further increased by RMB 93.3 million (US$13.3 million), or 51% to RMB 276.9 million (US$38.7 million) for the fiscal year ended June 30, 2025.

For the fiscal year ended June 30, 2023, we incurred net loss of approximately RMB 43.1 million, respectively. For the fiscal year ended June 30, 2024, we achieved profitability with our net income of approximately RMB 13.3 million. For the fiscal year ended June 30, 2025, we incurred net loss of approximately RMB 62.0 million ($8.7 million). Our business is generally stable throughout the year. However, the volume of business from July to December tends to be higher than that from January to June.

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***Our Revenue Model***

Our revenue consists of (i) brokerage Zhibao China Group receive for their general digital insurance brokerage service fees ("**Insurance Brokerage Fees**"), and, (ii) MGU service fees ("**MGU Service Fees**") Zhibao China Group receive for our MGU services.

Insurance Brokerage Fees refer to the commissions or fees Zhibao China Group receive from insurance companies for the digital insurance brokerage services they offer to our end customers (who pay insurance premium to insurance companies according to the terms of their policies), primarily at the range of 10% – 35% for property & casualty insurance products, 10% – 35% for health insurance products and 50% – 80% for life insurance products, of gross written premium per insurance policy depending on the type of the insurance, the specific insurance products, and their negotiated terms with each insurance company. Insurance Brokerage Fees accounted for approximately 94% and 99%, respectively, of our total revenues for the fiscal years ended June 30, 2024 and 2025.

 

*MGU Service Fees* refer to service *fees Zhibao China Group receive from insurance companies for the MGU services they provide to such insurance companies, usually at an average of approximately 15% of gross written premium per insurance policy depending on the type of insurance, and their negotiated terms with each insurance company. MGU Service Fees accounted for approximately 6% and 1%, respectively, of our total revenues for the fiscal years ended June 30, 2024 and 2025.* 

***Competitive Strengths***

We believe that the following strengths contribute to Zhibao China Group's growth and differentiate us from our competitors:

●  ***Innovative Business Model — 2B2C Embedded Insurance*** 

We are a pioneer and market leader through Zhibao China Group in 2B2C embedded insurance business in China. Our 2B2C model is key to enable us to acquire end customers at minimal cost and therefore to achieve higher efficiency compared with our industry peers, who might gain customers by investing a large amount of capital through direct-to-consumer advertisement and other marketing channels. Each of our B channels has already developed a stable relationship with their end customers. By embedding our customized digital insurance solutions into B channels' online matrix, we can reach end customers more precisely and efficiently. As the first-mover and a market leader in 2B2C embedded insurance brokerage service in China, we have entrenched relationships with B channels and other industry participants through Zhibao China Group. As of the date of this annual report, we have cumulatively cooperated with over 2,400 B channels and will continue to expand the number of B channels as a key growth strategy.

●  ***Market Leading Digital Insurance Solutions*** 

As of June 30, 2025, we, through Zhibao China Group, have developed over 40 proprietary and innovative digital insurance solutions which are built and operated based on their PaaS. Each of our proprietary digital insurance solutions primarily consists of insurance product(s), a solution-specific technology system, customer AARRR operations plan, and customer service plan. They are specifically tailored to the various scenarios of our B channels and their end customers' insurance needs. Our digital insurance solutions can largely reduce point-of-sale friction and deliver the digital insurance brokerage services which are relevant and tailored to the separate needs of our B channels and end customers. Through our digital insurance solutions on Zhibao China Group's PaaS, Zhibao China Group acquire and analyze customer data, and utilize big data and AI technology to continually iterate and enhance our digital solutions. This iterative process, in addition to continually improving our digital solutions, will keep us abreast of the new trends and customer preferences in the market.

●  ***Advanced Technology Platform*** 

Zhibao China Group launched the first digital insurance brokerage platform in China in 2020. This platform includes (i) 2B2C insurance PaaS, (ii) digital insurance solutions, and (iii) delivery system. Through their platform, they can provide Software as a Service ("**SaaS**") to our various B channels and insurance brokerage services to our end customers effectively and efficiently.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) Zhibao China Group's PaaS is a cloud-based development platform which offers a collection of 2B2C insurance tools for building the systems required for various insurance solutions efficiently. Their PaaS was developed out of their professional knowledge and experience gained from real-world deployment of systems in the past eight years. The tools of their PaaS are analogous to providing "pre-washed" and "pre-cut" raw materials, allowing them to quickly and reliably output "cooked dishes". Without such a PaaS, building the necessary solution-specific systems would be a complicated and slow process with no guarantee of a positive user experience. Their PaaS is not only for our internal solution-specific systems but can be extended to our independent sales partners. It allows such partners to share our tools and workflows, and incubate new solutions without having to start from scratch each time. Furthermore, the unified design foundation of their PaaS allows them to develop brand new solutions as well as to piggyback additional solutions on top of those already deployed with reusable system components, data consistency and customer convenience.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) Our various insurance solutions are built and run based on the PaaS. These solutions are delivered to B channels by embedding within the B channels' platforms, including but not limited to WeChat Official Accounts, websites, and insurance modules within Apps. Our end customers may purchase insurance products and have access to insurance services through our embedded insurance solutions on our B channels' website, App, H5 page, or QR codes.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) The delivery system, developed according to the best practices of digital insurance brokerage services, breaks down our various solutions into workflows, work nodes, automatic resource assignments, and deliverable standards. On the delivery system, business opportunities are segregated into different industries which are automatically mapped to our various solutions. It also allows Zhibao China Group to collect and consider the specific needs from each B channel. The delivery system then runs the pre-set workflow, standardizing the processes and providing higher-quality and higher-efficiency deliverables. According to the specific needs of our B channels, the delivery system is capable of making changes to the standard workflow to meet these customizations. Our delivery system helps us greatly improve our delivery efficiency, quality and channel satisfaction.

●  ***Experienced Management Team with Extensive Expertise in Insurance Industry and Digital Technology*** 

We have an experienced and devoted management team that has helmed the acceleration of our growth and steered our strategic direction. Our management team is passionate about innovation in providing digital insurance solutions to end customers. Our founder and Chief Executive Officer, Mr. Botao Ma has accumulated more than 30 years of management experience in the insurance industry. Our Chief Financial Officer, Mr. Yuanwen Xia, has more than 15 years of experience in PwC and investment sector. Our Chief Marketing Officer, Mr. Xiao Luo has more than 15 years of experience in insurance brokerage business. Our Chief Operating Officer, Mr. Xiaowei Le has more than 20 years of experience in sales management, general management, and leadership roles across multiple insurance companies. Our Chief Actuary, Mr. Guangtong Ren has more than 25 years of experience in corporate finance, strategic planning, and risk management of insurance, investment management and start-ups. Our Chief Technical Officer, Mr. Yugang Wang, has more than 20 years of digital technology and management experience in the insurance industry. Our management team has extensive experience in China's insurance market; in particular, our team's 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. Their influences across the market have already, and will continue to, attract more B channels and deepen relationships with existing B channels and insurance companies, all of which will sustain and accelerate the rapid-paced growth of the Company.

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***Growth Strategies***

We intend to grow our business by pursuing the following key strategies through Zhibao China Group:

●  ***Accelerate the Expansion of B Channels*** 

We plan to scale up our business by rapidly expanding the number of B channels. We intend to penetrate new markets, increase market share in existing markets and access a broader range of B channels in China. With the continuing development of our 2B2C business, we, through Zhibao China Group, have developed insurance companies as a special type of B channel, providing digital brokerage services and supports for their existing individual policyholders. We plan to cooperate with more insurance companies as a key focus for expansion.

●  ***Expand Our Sales Force*** 

●  ***Drive Additional Conversions for Existing End Customers — Our 2C Business*** 

Through our B channels, we are accumulating an ever-larger pool of potential end customers. Although the initial customer interaction is related to the specific scenario and sector of the B channel, end customer may have additional needs that have not yet been addressed. For example, a medical insurance end customer might have additional demand for travel, household, or life insurance. 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.

●  ***Upgrade and Enrich Our Digital Insurance Solutions*** 

Currently we have over 40 proprietary digital insurance solutions on Zhibao China Group's platform, which covers various scenarios in a variety of industries. We will keep refining and upgrading our insurance solutions to keep abreast of new trends and customer preferences. In addition to optimizing our existing insurance solutions, we are developing new insurance solutions to meet emerging demands. We intend to develop solutions across every sector of the economy, thus ultimately covering every aspect of the end customers' daily life to deliver all-around insurance coverage.

●  ***Upgrade and Enhance Our PaaS*** 

Zhibao China Group are the first to establish a PaaS in the digital insurance brokerage market in China. 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. In particular, we plan to enrich the technology infrastructure tools and functionalities of the business components of the PaaS, and introduce new AI and business intelligence (BI) functionalities, continually strengthening our data security and governance.

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***●***  ***Expand the Scale of the MGU business.*** 

Zhibao China Group pioneered the MGU business model in China. Under this model, in addition to providing general digital insurance brokerage services to our end customers, Zhibao China Group also assist insurance companies in product design, underwriting, reinsurance, claims and risk control services. 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,, and expand the insurance products from the current high-end medical insurance and long-term disability lines to mid-end medical and personal accident lines in the future.

●  ***Support our brokerage and MGU services through our subsidiary reinsurance company in Labuan, Malaysia*** 

In July 2024, we incorporated Zhibao Labuan Reinsurance, our wholly-owned subsidiary reinsurance company in Labuan, Malaysia. In October 2024, we received a license approval, and in April 2025, we received the final approval. Through this subsidiary, we intend to support our brokerage and MGU services.

●  ***Seek new strategic partnerships and cooperation*** 

There is a fragmented constellation of smaller-scale firms engaged in online insurance agency or brokerage business in China. They are commonly lacking in industry recognition, technological capacity, team expertise, capital, and market resources, therefore they face significant headwinds in scaling up their business and attaining profitability. However, some of them have built strong ties with B channels in niche industries, providing us with potential targets for strategic partnerships and cooperation. We plan to approach these potential opportunities for cooperation and/or potential M&A targets in the future, especially those who can bring new B channel resources.

●  ***Expand the business globally*** 

Zhibao China Group pioneered the 2B2C digital embedded insurance model in China. Utilizing this foundation, 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. By joining their local connections and foundations with our digital insurance brokerage platform, PaaS and digital insurance solutions, we aim to expand our business to different countries and regions. As of the date of this annual report, we have signed a Memorandum of Understanding (MOU) with a brokerage partner in Singapore, and we are taking steps to assess opportunities of offering our products in the U.S. and European markets.

**Our Services**

Our service portfolio includes (i) insurance brokerage services, and (ii) MGU services.

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***Insurance Brokerage Services — Our Primary Business Line***

Insurance Brokerage Services is our primary business line, accounting for over 75% of our overall revenue. We provide embedded digital insurance brokerage services to end customers through B channels supported by our digital insurance brokerage platform — our proprietary PaaS providing insurance solutions embedded in the customer engagement matrix of our B channels, including but not limited to their websites, App, WeChat Mini Programs, Douyin (the Chinese equivalent of TikTok) and other social media accounts. An insurance solution refers to an insurance brokerage service specially designed for a B channel and its end customers, which integrates online operations, systems, insurance products and customer services.

For the fiscal years ended June 30, 2024 and 2025, the revenue generated from the digital insurance brokerage services was approximately RMB 174.1 million and RMB 273.8 (US$38.2 million), respectively, accounting for approximately 94% and 99%, respectively, of our total revenues.

 

 

*Overview of Platform*

With a deep understanding of the needs and challenges facing our B channels and end customers, driven by digital technology, we introduced 2B2C business model as our primary marketing channel by building relationships with B channels to reach end customers and utilizing our digital insurance brokerage platform to support this business model. Our platform, launched in 2020, adopts this new business model and is embedded in, and primarily accessible through, the digital platforms of our B channels, i.e. their websites, Apps, WeChat Mini Programs, coupled with a small amount of transactions through our direct operation channel, primarily our own WeChat Mini Program. A wide range of digital insurance brokerage services run on our platform, including customer AARRR operation, channel management, and customer service, specific to each solution and each embedded scenario.

Our platform is the first digital insurance brokerage platform in China, which provides a wide range of insurance solutions to our end customers. As of June 30, 2025, we have more than 40 innovative insurance solutions on our platform covering the corresponding insurance scenarios in different industries, including but not limited to travel, outdoor activities, sports, travel, logistics, utilities (e.g., municipal gas), and e-commerce. Each insurance solution generally targets one scenario within the primary industry of our B channels and based on the actual needs of their end customers, powered and supported by a series of proprietary systems we build and run on our platform. Each end customer accesses our insurance solutions via a system embedded in our B channel's digital channels, or via our own WeChat Mini Program. Once they log into our system and prior to clicking the "Purchase" button, our end user must agree to our Brokerage Agreement, authorizing us to represent him (or her) in securing such insurance transaction. Afterwards, the insurance premium is collected either by the insurance company directly or via us (for later settlement with the insurer) and the policy is electronically and automatically issued by the insurance company.

Each of our insurance solutions includes the following elements:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) Insurance Product Design and Customization: we customize and design bespoke insurance products, including insurance coverage, premium price, and service offerings that cater to the specific business nature of our B channels and the needs of their end customers.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) Insurer Selection: We represent our B channels and end customers when selecting an insurance company. If necessary, we will set up a bidding process to obtain the best terms and conditions from insurance companies on behalf of our end customers. After an insurance is placed with an insurer, we will continually monitor its service performance, and request service improvement when necessary.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) Technology System Interconnection: we set up customized one-stop digital insurance brokerage service systems for our B channels and end customers, including the establishment of a B channel specific and dedicated service website or other online portal for end customers, and the integration of this portal into our platform.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) Customer AARRR Operation and Promotion: we carry out various marketing and promotional activities for end customers on a variety of digital channels including but not limited to website, App, social media, WeChat Official Account and Mini Programs, Douyin (the Chinese version of TikTok) and other social media accounts.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) Customer Service: We have a dedicated and experienced customer service team, combined with AI, to provide end customers with one-on-one insurance policy consultation, claim support and other services via online, phone, and in-person meeting.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi) Regulatory Compliance Management: We ensure that insurance product, sales process, online and offline marketing and service are all in compliance with the relevant PRC regulation and rules. All sales should be pre-approved and all the records are kept on our business management system. This includes retracing of the process and recordings of the sales transaction as required by the relevant regulator, as well as relevant data privacy and security regulations in China.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vii) Data Analysis: We collect data during the course of our insurance brokerage services, including but not limited to sales, claims, operation, and market feedback data. We utilize big data technology and our proprietary algorithms to keep improving every aspect of our insurance solutions and share the data analysis with our B channels and the insurance companies (if necessary).

 

 

*Working Mechanism of Platform and Its Technology Infrastructure*

The working mechanism of our platform is illustrated in below chart:

![](image_001.jpg)

We launched the first digital insurance brokerage platform in 2020 in China. This platform includes (i) the 2B2C insurance PaaS, (ii) our digital insurance solutions, and (iii) delivery system. Through our platform, we can provide SaaS to our various B channels and insurance brokerage services to our end customers.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) Our PaaS is a cloud-based development and running platform which offers a collection of 2B2C insurance tools for building the systems required for various insurance solutions efficiently. Our PaaS was developed out of our professional knowledge and experience gained from real-world deployment of systems over the course of the past 8 years. The work mechanism of our PaaS is illustrated in the below chart.

![](image_002.jpg)

*Business SaaS Systems Grouping* contains the specific SaaS systems provided to each relevant participants in the insurance brokerage business. For example, the B Channel Center provides SaaS functionality to our B channels, including multi-level distribution, reconciliation of accounts, business analytics etc. At the simplest level, after setting up the relevant sales team/distribution network and insurance products within our B Channel Center, we can quickly launch insurance sales to end customers.

 

 

*Biz Components & Tools Grouping* provides a complete and fundamental toolset for our 2B2C brokerage business. For example, our integrated payment center collects Alipay, WeChat Pay and other major payment methods into an integrated tool. All solutions that utilize this tool enables end customers to use the most convenient payment methods to complete their payment. Our unified messaging tool provides access to short messaging service ("**SMS**"), WeChat messaging, email and other communication channels with various templates. Solutions that utilize this component can choose various communication channels relevant to their specific scenario to reach and engage end customers. As a further example, our AI Q&A Tool allows our various solutions to provide online automated responses to varying communication strategies. Our Biz Components & Tools offers abundant fundamental tools to our different solutions, greatly improving our ability to quickly respond to business needs and deploy necessary systems.

 

*Data Center* provides a strong data analytics capability and data intelligence tools. For example, it can intelligently assess and matches end customer needs via customer-insight and digital customer AARRR operation tools, provided that we receive customer permission to do so. This can improve customer experience, operational efficiency, and customer value add across the client's entire lifecycle with us. It can also provide various analytics and reporting tools for our various solutions, providing our B channels with improved management and data analysis capabilities.

 

*Technical Center* is the operational platform that our various solution operating systems utilizing our PaaS run on. This technical system utilizes cloud infrastructure provided by leading cloud systems providers, and has received ISO 27001 and local equivalent data security certification. Utilizing our technology platform provides usability, strong operational reliability, expandability and security. It helps reduce technological complexity for our systems, greatly improving efficiency for our online systems and therefore our business.

Our PaaS was developed out of our professional knowledge and experience gained from real-world deployment of systems in the past eight years. The tools of our PaaS is analogous to providing "pre-washed" and "pre-cut" raw materials, allowing us to quickly and reliably output "cooked dishes". Without such a PaaS, building the necessary solution-specific systems would be a complicated and slow process with no guarantee of a positive user experience. Our PaaS is not only for our internal solution-specific systems, but can be extended to our independent sales partners. It allows such partners to share our highly-efficient tools and workflows, and incubate new solutions without having to start from scratch each time. Furthermore, the unified design foundation of our PaaS allows us to develop brand new solutions as well as to piggyback additional solutions on top of those already deployed with reusable system components, data consistency and customer convenience.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) Our various insurance solutions are built and run based on the PaaS. These solutions are delivered to B channels by embedding within the B channels' platforms, including but not limited to WeChat Official Accounts, Websites, and insurance modules within Apps. Our end customers can purchase insurance products and have access to insurance services via our B channel's website, App, H5 page, QR codes.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) Our delivery system, according to the best practices of digital insurance brokerage service, breaks down our various solutions into workflows, work nodes, automatic resource assignments, and deliverable standards. On the delivery system, business opportunities are segregated into different industries which are automatically mapped to our various solutions. It also allows us to collect and consider the specific needs from each B channel. The delivery system then runs the pre-set workflow, standardizing our processes and providing higher-quality and higher-efficiency deliverables. According to the specific needs of our B channels, the delivery system can make changes to the standard workflow to meet these customizations. Our delivery system helps us greatly improve our delivery efficiency, quality and channel satisfaction.

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***MGU Services***

We are the pioneer of the MGU model in China with a focus on high-end medical insurance. We provide one-stop digital MGU services to domestic insurance companies and overseas reinsurance companies, covering product design, underwriting, risk control, claims settlement, reinsurance, sales and supplier management and other related matters. Our MGU services provide the easiest and most efficient way for overseas insurances or reinsurance companies to enter the China market as they do not need to invest in and scale up their own local capabilities. Conversely, our MGU services allow local Chinese insurers to easily enter a niche or specialized market segment with minimal up-front investment. The demand for high-end medical insurance is growing and the market size in terms of gross written premium ("**GWP**") is expanding rapidly. We currently have MGU agreements with seven insurance companies, including five domestic insurers and two international reinsurers.

For the fiscal years ended June 30, 2024 and 2025, the revenues generated from the MGU services were approximately RMB 10.2 million and RMB 3.5 million (US$0.5 million), respectively, accounting for approximately 6%, and 1% respectively, of our total revenues .

**Our B Channels**

Our B channels are indispensable to our model by allowing our platform to be embedded in their customer engagement channels, which provide us with a stable and reliable end customer base. This allows us to minimize our customer acquisition costs compared with traditional brokerage service providers, who may invest in a large amount of capital in direct-to-consumer marketing and advertising.

Our B channels include internet platforms, government agencies, and large and medium-size enterprises, covering most provinces and major cities of China, including but not limited to Shanghai, Beijing, Guangzhou, and Shenzhen. We expect to expand our B channel base by enhancing our cooperation with insurance companies, other insurance brokerage companies and technology companies who have connections to potential target B channels. Although our B channels do not directly generate any revenues for us, they are essential to our business as they provide us unique opportunities to reach and serve the end customers. As of the date of this annual report, we have a total of more than 2,400 B channels.

Our B channels generally charge certain intermediary fees for allowing our platform to be embedded in their customer engagement channels ("**Intermediary Fees**") ranging from 30% to 50% of the Insurance Brokerage Fee collected by us.

We generally have a multi-year agreement with each of our B channels. The key terms of the agreements include our service to end customers, revenue sharing, each parties' responsibility in the service process.

We have established healthy and stable relationships with our B channels, which form a solid, constant, and reliable source of end customers for our operation. We will continue to deepen our relationship with existing B channels, and identify and secure new B channels to drive our continual growth.

**Our End Customers**

A sound customer base is instrumental to our success. Our end customers generally include individuals, families, and small- and medium enterprises ("**SMEs**"), the vast majority of which are sourced from our B channels. Our end customers can access our insurance services via our embedded online brokerage system in the B channels' customer engagement channels or via our own WeChat Mini Program.

Our end customers may be converted into our direct customers and receive our ongoing insurance brokerage services by logging into our WeChat Mini Program, thus driving growth in our direct-to-customer, or 2C business. We started our 2C business in the middle of 2022 and have launched a number of 2C solutions to provide the consulting service and different types of insurance products to end customers with different needs.

As of June 30, 2025, we have a total of more than 24 million end customer. While we do not collect any revenue directly from our end customers (i.e., membership fees), we do receive revenue in the form of Insurance Brokerage and MGU Fees from the insurance companies as a result of these end customers purchasing (an) insurance policy(s).

**Insurance Companies**

Insurance companies are essential to our business model as they provide insurance services to our end customers. As of the date of this annual report, we have partnered with over 100 insurance companies (including their subsidiaries and branches) in China, which provide our end customers with a wide variety of insurance products.

Insurance companies we work with include property and casualty (P&C) insurance companies, life and pension insurance companies, health insurance companies and other insurance institutions. Our agreements with insurance companies are governed by either framework agreements or confirmed through emails, containing customary contract terms in our industry. Each insurance company is required to be qualified to do insurance business under the competent jurisdictions to provide insurance products and service to our end customers.

Insurance companies are connected with us through our PaaS and offline activities.

Our revenues are generated from Insurance Brokerage and MGU Services Fees, most of which are sourced from insurance companies, generally payable to us after the end customer has purchased and paid for their policy. For the fiscal years ended June 30, 2024, one key insurance company ("**Key Insurer C**") contributed approximately RMB 24.1 million to our revenues, accounting for approximately 13% of our total revenues. For the fiscal years ended June 30, 2025, two key insurance companies contributed an aggregation of approximately RMB 101 million to our revenues, accounting for approximately 36% of our total revenues. Zhibao China and Sunshine Insurance Brokers have over two years of partnership with Key Insurer A and had a eight month of partnership with Key Insurer C, and we expect that Zhibao China and Sunshine Insurance Brokers will continue to have a stable and healthy partnership with those companies. We will continue to work with our existing insurance company partners, and identify and secure new insurance company partners, to expand our supply base.

**Marketing and Sales**

We market and sell our services through (i) Independent Sales Partners, (ii) B channels, and (iii) our own sales team.

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***Independent Sales Partners*** are those partners who source B channels on our behalf and receive certain fees from us, usually in the range of 15% to 50% of Insurance Brokerage Fees. We generally have a long-term agreement of one year or longer with each of independent sales partners, with customary contract terms. As of June 30, 2025, we have a total of approximately 40 independent sales partners, and approximately 20% of B channels were secured through them.

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***B Channels*** refer to our business channels who allow our digital brokerage solutions to be embedded in their various platforms to reach their end customer base. As of the date of this annual report, we have established business cooperation with more than 2,400 business channels, through which we have acquired more than 24 million end customers.

We will continue to work with existing independent sales partners and business channels, and identify and secure new independent sales partners and business channels, to expand our marketing base and strength our brand recognition in China.

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***Our Own Sales Team*** refers to our own sales employees who develop B channels. As of June 30, 2025, we have a direct sales team of 65 people, all of whom are our full-time employees. The compensation package for our sales team includes fixed base salaries and commissions ranging from 0 – 10% of our revenue. Our own sales team are located in both our head office and branches. We provide our sales team with regular training and delivery systems to assist them in quickly becoming proficient and productive sales personnel.

**Customer Services**

We provide basic customer services and value-added customer services to our end customers. Basic customer services include insurance policy renewal, day-to-day consultation, claims assistance and other related services, to our end customers. Value-added customer services refer to health service, family insurance planning and other related services.

All end customers may contact us through our WeChat Official Account, our WeChat Mini Program and our customer service hotline at 400-820-9619 for assistance. We may also provide offline face-to-face customer services based on the needs of the end customers.

As of June 30, 2025, we have an operations team of 44 people carrying out customer AARRR operation activities.

**Research and Development ("R&D")**

Our R&D primarily focuses on the research and development of our digital insurance brokerage platform, including technology innovations, development, system function and feature upgrades. Our R&D efforts also involve research and development on our insurance solutions' innovations, replacement, upgrades, upgrades and improvement.

As of June 30, 2025, we had a team of 18 employees engaged in the R&D activities, all of which had obtained at least a Bachelor degree, with average R&D work experience of approximately 9 years. For the fiscal years ended June 30, 2023 and 2024 and 2025, our R&D expenses were approximately RMB 9.7 million, RMB 15.1 million and RMB 10.9 million (US$1.5 million), respectively. R&D expenses mainly consist of salaries, and mandatory social insurance and housing funds contributions for our R&D personnel and outsourcing costs. We invest in R&D to continually develop and enhance the functionality of our platform and related systems, therefore keeping us abreast of new trends and customer preferences.

We adhere to a market-oriented R&D approach, and from May 2017 to December 2020, we and Fudan University jointly established China's first Insurtech Lab, primarily focusing on the insurance product innovations and risk management supported by artificial intelligence and big data technology.

In the future, we expect R&D expenses to increase as we continue to accelerate the development of new services and functions, in addition to enhancing and upgrading existing services and functions.

**Intellectual Property**

Our business is dependent on a combination of trademarks, copyrights, domain names, trade secrets and other proprietary rights in order to protect our intellectual property rights.

As of June 30, 2025, the PRC Subsidiaries have 20 registered trademarks, 37 registered copyrights, including 32 registered computer software copyrights and 5 artwork copyrights, and 9 domain names in China.

We enter into agreements with our employees and consultants who may have access to our proprietary information upon the commencement of an employment or service engagement. These agreements generally provide that all inventions, ideas, discoveries, improvements and copyrightable material made or conceived by the individual arising out of the employment or consulting relationship and all confidential information developed or made known to such individuals during the term of the relationship are our exclusive property.

**Competition**

We have the following direct and non-direct competitors:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) Our direct competitors are those insurance brokerage firms which also engage in 2B2C insurance brokerage services. They are the later comers and are much smaller scale compared to us. They usually focus on one business area. For example, a small 2B2C insurance brokerage firm specializes on insurance services for short-term homestay rentals (similar to Airbnb). There are quite a number of such niche 2B2C insurance brokerage firms in China. However, some of them lack access to capital, technology, brand recognition and industry resources, and face significant headwinds to scale up their operations. We view these small and specialized players as M&A targets for us in the near future.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) In-house brokerage firms of internet companies are our non-direct competitors. These firms are usually fully owned subsidiaries of large internet companies. As such they are not independent brokers, their coverage is usually limited to the industry and end customer base of their parent company. Compared to them, we can directly and independently provide brokerage services to a wide variety of industries and end customers. We view these in-house brokerage firms as potential partners of our PaaS and digital insurance solutions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) Other independent digital insurance brokerage firms are our non-direct competitors. They have different business models from ours. They source and acquire end customers through capital-intensive direct marketing, advertising and acquisition. We believe that our 2B2C model is a superior one and can generate higher economic efficiency and capital return.

Our competitors, especially those focusing on traditional 2B business, may have stronger financial foundations, more established brand recognition, and/or longer standing relationships with their clients. However, we believe we can effectively compete in the industry based on our following principal competitive edges:

● Innovative 2B2C embedded insurance brokerage service business model with a stable source of end customers and minimal customer acquisition costs;

● Focus on Individual and SME business, a major driver of future growth in the Chinese insurance market;

● Innovative, diversified, and highly customized digital insurance solutions;

● Powerful technology platform;

● Brand equity and stable relationships with B channels and end customers;

● Diversified business portfolio and effective sales and marketing management system;

● Technology innovations and strong R&D capabilities.

**Regulatory Permissions**

As of the date of this annual report, Zhibao and its subsidiaries have received from PRC authorities all requisite licenses, permissions or approvals required to engage in the businesses currently conducted in China, and no permission or approval has been denied. Such licenses and permissions include but are not limited to business license and insurance broker license. The following table provides details on the licenses and permissions held by Zhibao's PRC Subsidiaries:

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| | | | |
|:---|:---|:---|:---|
| **Company** | **License/Permission** | **Issuing Authority** | **Validity** |
| **Zhibao China** | Business License | Shanghai Administration for Market Regulation | No Fixed Term |
| **Shanghai Anyi** | Business License | Pilot Free Zone Administration for Market Regulation | No Fixed Term |
| **Sunshine Insurance Brokers** | Business License | Shanghai Pudong New Area Administration for Market Regulation | November 16, 2041 |
|  | Record-filing Certificate of Classification Protection of Information System Security – S3A3 | Shanghai Municipal Public Security Bureau | Long Term |
|  | Insurance brokerage license | National Financial Regulatory Administration Shanghai Bureau | September 1, 2026 |
| **Zhibao Health** | Business License | Pilot Free Zone Administration for Market Regulation | November 15, 2052 |
| **Zhizhongbao** | Business License | Pilot Free Zone Administration for Market Regulation | No Fixed Term |
| **Yingshi** | Business License | Pilot Free Zone Administration for Market Regulation | No Fixed Term |
| **Zhonglian** | Business License | Ningbo Beilun Area Administration for Market Regulation | June 7, 2104 |
|  | Insurance brokerage license | National Financial Regulatory Administration Ningbo Bureau | September 30, 2027 |

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**REGULATIONS IN PRC**

We operate our business in the PRC under a legal regime consisting of the National People's Congress, which is the country's highest legislative body, the State Council, which is the highest authority of the executive branch of the PRC central government, and several ministries and agencies under its authority, including the State Administration of Foreign Exchange (SAFE), the Ministry of Commerce (MOFCOM), the National Development and Reform Commission (NDRC), the State Administration for Magret Regulation (SAMR), formerly known as SAIC, the Ministry of Civil Affairs,(MCA), and their respective authorized local counterparts.

This section sets forth a summary of the most significant rules and regulations that affect our business activities in China.

**Regulations Related to Insurance Industry**

The insurance industry in the PRC is highly regulated. Between 1998 and March 2018, the China Insurance Regulatory Commission ("**CIRC**"), was the regulatory authority responsible for the supervision of the Chinese insurance industry. In March 2018, the China Banking and Insurance Regulatory Commission (CBIRC) was established as the result of the merger between the CIRC and the China Banking Regulatory Commission ("**CBRC**"), replacing CIRC as the regulatory authority for the supervision of the Chinese insurance industry. On May 18, 2023, National Financial Regulatory Administration was established as due to institutional reform, replacing the CBIRC as the regulatory authority responsible for overseeing the Chinese insurance industry. Insurance activities within the PRC are primarily governed by the Insurance Law and the related rules and regulations.

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***Initial Development of Regulatory Framework***

The Chinese Insurance Law was enacted in 1995. The original insurance law, which we refer to as the 1995 Insurance Law, provided the initial framework for regulating the domestic insurance industry. Among the steps taken under the 1995 Insurance Law were the following:

● Licensing of insurance companies and insurance intermediaries, such as agencies and brokers. The 1995 Insurance Law established requirements for minimum registered capital levels, form of organization, qualification of senior management and adequacy of the information systems for insurance companies and insurance agencies and brokers.

● Separation of property and casualty insurance businesses and life insurance businesses. The 1995 Insurance Law classified insurance between property, casualty, liability and credit insurance businesses, on the one hand, and life, accidental and health insurance businesses on the other, and prohibited insurance companies from engaging in both types of businesses.

● Regulation of market conduct by participants. The 1995 Insurance Law prohibited fraudulent and other unlawful conduct by insurance companies, agencies and brokers.

● Substantive regulation of insurance products. The 1995 Insurance Law gave insurance regulators the authority to approve the basic policy terms and premium rates for major insurance products.

● Financial condition and performance of insurance companies. The 1995 Insurance Law established reserve and solvency standards for insurance companies, imposed restrictions on investment powers and established mandatory reinsurance requirements, and put in place a reporting regime to facilitate monitoring by insurance regulators.

● Supervisory and enforcement powers of the principal regulatory authority. The principal regulatory authority, then the PBOC, was given broad powers under the 1995 Insurance Law to regulate the insurance industry.

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***Establishment of The CIRC and 2002 Amendments to The Insurance Law***

China's insurance regulatory regime was further strengthened with the establishment of the CIRC in 1998. The CIRC was given the mandate to implement reform in the insurance industry, minimize insolvency risk for Chinese insurers and promote the development of the insurance market. The 1995 Insurance Law was amended in 2002 and the amended insurance law, which we refer to as the 2002 Insurance Law, became effective on January 1, 2003. The major amendments to the 1995 Insurance Law include:

● Authorizing the CIRC to be the insurance supervisory and regulatory body nationwide. The 2002 Insurance Law expressly grants the CIRC the authority to supervise and administer the insurance industry nationwide.

● Expanding the permitted scope of business of property and casualty insurers. Under the 2002 Insurance Law, property and casualty insurance companies may engage in the short-term health insurance and accidental insurance businesses upon the CIRC's approval.

● Providing additional guidelines for the relationship between insurance companies and insurance agents. The 2002 Insurance Law requires an insurance company to enter into an agent agreement with each insurance agent that will act as an agent for that insurance company. The agent agreement sets forth the rights and obligations of the parties to the agreement as well as other matters pursuant to law. An insurance company is responsible for the acts of its agents when the acts are within the scope authorized by the insurance company.

● Relaxing restrictions on the use of funds by insurance companies. Under the 2002 Insurance Law, an insurance company may use its funds to make equity investments in insurance-related enterprises, such as asset management companies.

● Allowing greater freedom for insurance companies to develop insurance products. The 2002 Insurance Law allowed insurance companies to set their own policy terms and premium rates, subject to the approval of, or a filing with, the CIRC.

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***2009 Amendments to The Insurance Law***

The 2002 Insurance Law was amended again in 2009 and the amended insurance law, which we refer to as the 2009 Insurance Law, became effective on October 1, 2009. The major amendments to the 2009 Insurance Law include:

● Strengthening protection of the insured's interests. The 2009 Insurance Law added a variety of clauses such as incontestable clause, abstained and estoppels clause, common disaster clause and amending immunity clause, claims-settlement prescription clause, reasons for claims rejection and contract modification clause.

● Strengthening supervision on the qualification of the shareholders of the insurance companies and setting forth specific qualification requirements for the major shareholders, directors, supervisors and senior managers of insurance companies.

● Expanding the business scope of insurers and further relaxing restriction on the use of fund by insurers.

● Strengthening supervision on solvency of insurers with stricter measures.

● Tightening regulations governing the administration of insurance intermediary companies, especially those relating to behaviors of insurance agents.

According to the 2009 Insurance Law, the minimum registered capital required to establish an insurance agency or insurance broker as a company must comply with the PRC Company Law. The registered capital or the capital contribution of insurance agencies or insurance brokers must be paid-up capital in cash. The 2009 Insurance Law also sets forth some specific qualification requirements for insurance agency and brokerage practitioners. The senior managers of insurance agencies or insurance brokers must meet specific qualification requirements, and their appointments are subject to approval of the CIRC. Personnel of an insurance agency or insurance broker engaging in the sales of insurance products must meet the qualification requirements set by the CIRC and obtain a qualification certificate issued by the CIRC. Under the 2009 Insurance Law, the parties to an insurance transaction may engage insurance adjusting firms or other independent appraisal firms that are established in accordance with applicable laws, or persons who possess the requisite professional expertise, to conduct assessment and adjustment of the insured subject matters. Additionally, the 2009 Insurance Law specifies additional legal obligations for insurance agencies and brokers.

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***2015 Amendments to The Insurance Law***

However, the 2015 Insurance Law, effective on April 24, 2015, revised certain provisions in the previous versions of the Insurance Law, such as:

● Eliminating the requirement for an insurance agent or broker to obtain a qualification certificate issued by the CIRC before providing any insurance agency or brokerage services.

● Relaxing certain requirements for the establishment or other significant corporate events of an insurance agency or brokerage firm, including obtaining a business permit, the divesture or merger of insurance agencies or brokerage firms, the change of their organizational form, or the establishment or winding-up of a branch by an insurance agency or brokerage firm.

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***The CIRC, the CBIRC, and the NFRA***

The CBIRC, the result of the merger of China Banking Regulatory Commission ("**CBRC**") and CIRC in March, 2018, has the extensive authority to supervise insurance companies and insurance intermediaries operating in the PRC.

In May 2023, the NFRA was established due to institutional reform and replaced the CBIRC as the regulatory authority responsible for overseeing the Chinese financial industry, except for the securities sector, and received some of the functions from the PBOC and the CSRC. As a ministry-level institution, the NFRA has more extensive regulatory and enforcement authority compared to the CBIRC, including the power to supervise financial holding companies and other financial groups, and to promote the legislation and law enforcement against illegal financial activities that may arise across various financial sectors.

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***Regulations on Insurance Agents***

The principal regulation governing insurance agents is the Provisions on the Supervision and Administration of Insurance Agents promulgated by the CBIRC on November 12, 2020 and effective on January 1, 2021.

When the agent conducts insurance business they should meet the conditions prescribed by the State Council's Insurance Regulatory Department within the territory of the People's Republic of China and obtain an insurance agent business permit.

To engage in insurance agency business within the territory of the PRC, an insurance agent shall satisfy the requirements prescribed by the CIRC and obtain an insurance brokerage business permit issued by the NFRA, after obtaining a business license. An insurance agency shall take any of the following organization forms: (i) a limited liability company; or (ii) a joint stock limited company, except as otherwise stipulated by the State Council's insurance regulatory department.

The minimum registered capital of an insurance agent company whose business area is not limited to a province where it is formed, is RMB50 million while the minimum registered capital of an insurance agent whose business area is limited to the place of its formation is RMB20 million. The registered capital of an insurance agent company must be paid-in currency capital.

The name of an insurance agent shall include the words "insurance agent." An insurance agent may conduct all or part of the following insurance agency businesses:

● selling of insurance products as an agent;

● collecting insurance premiums as an agent;

● acting as an agent for the investigation and settlement of losses in the related insurance businesses; and

● other relevant business activities as prescribed by the State Council's insurance regulatory department.

An insurance agent shall submit a written report to the CIRC and make public disclosure within five days from the date of occurrence of any of the following matters: (i) change of name, domicile or business premises; (ii) change of shareholders, registered capital or form of organization; (iii) change of names of shareholders or capital contributions; (iv) amendment to the articles of association; (v) equity investment, establishment of offshore insurance related entities or non-operational organizations; (vi) division, merger and dissolution or termination of insurance agent business activities of its branches; (vii) change of the primary person in charge of its branches other than provincial branches; (viii) being a subject of administrative or criminal penalties, or under investigation for suspected involvement in any violation of law or a crime; and (x) other reportable events prescribed by the CIRC.

The insurance agent company shall purchase professional liability insurance or make a deposit within 20 days from the date of obtaining the insurance agent business permit. The compensation limit of the professional liability insurance purchased by the insurance agent on an accident shall not be less than one (1) million RMB, the cumulative compensation limit of the one-year policy shall not be less than RMB10 million and shall not be less than that of the main business income of insurance agency of the previous year. The insurance agent shall deposit 5% of the registered capital as the cash deposit, and if an insurance agent company increases its registered capital, it shall increase the amount of the security deposit proportionally.

An insurance agency company may use the margin in one of the following circumstances: (i) The registered capital is reduced; (ii) The insurance agent business permit has been cancelled; (iii) Purchase qualified professional liability insurance; or (iv) Other circumstances specified by the insurance regulatory department of the State Council. We have obtained all of the necessary approval and licenses from the relevant PRC regulatory entities to operate our insurance agent business. In 2012, we increased our registered capital to RMB 50 million, meeting the regulatory requirements a national insurance agency.

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***Regulation of Internet Insurance***

The principal regulation governing the operation of internet insurance business is the Measures for the Regulation of the Internet Insurance Business, or Regulation Measures, promulgated by the CBIRC on December 7, 2020 and effective on February 1, 2021. Under the Regulation Measures, the term of "internet insurance business" refers to the insurance business activities in which Insurance institutions conclude insurance contracts and provide insurance services by relying on the Internet.

Insurance institutions include insurance companies and insurance intermediary companies. Insurance intermediaries include insurance agents (excluding individual insurance agents), insurance brokers and insurance assessors; insurance agents (excluding individual insurance agents) include specialized insurance agencies, banking sideline insurance agencies and Internet enterprises that have obtained insurance agency business permits in accordance with the law; specialized insurance intermediaries include specialized insurance agencies, insurance brokers and insurance assessors. Specialized insurance agencies, insurance brokerage firms and insurance claims adjusting firms that can operate in the areas not limited to the provinces where they are registered. An insurance institution shall sell Internet insurance products or provide insurance brokerage and insurance assessment services through its self-run network platform or the self-run network platforms of other insurance institutions, and the insurance application pages must belong to the self-run network platform of the insurance institution, with the exception that government departments require insurance applicants to complete the entry of insurance application information on the online platform specified by the government for public interests.

To operate self-operated internet platforms, through which insurance institutions conduct internet insurance business, shall meet certain requirements such as obtaining ICP licenses or making i filing and maintaining sound internet operation system and information security system. We have made the required ICP filing with the relevant government agency. The Regulation Measures also specifies requirements on disclosure of information regarding insurance products sold on the internet and provides guidelines for the operations of the insurance institutions that engage in internet insurance business.

On April 2, 2019, the CBIRC promulgated the Circular of the General Office of the CBIRC on Issuing the 2019 Plan for the Rectification of Chaos in the Insurance Intermediary Market, or the Rectification Plan, aiming to further curb the chaos of violations of laws and regulations in the insurance intermediary market. The Rectification Plan mainly includes three key tasks: (i) to ascertain insurance companies' responsibility for management and control of various intermediary channels; (ii) to strengthen internal control and management to prevent prohibited business; and (iii) to offer insurance business of the third-party online platforms in cooperation with insurance institutions. Pursuant to the Rectification Plan, all insurance institutions (including insurance companies and insurance intermediaries) shall conduct internet insurance business, regulate the business cooperation with third-party online platforms, prohibit third-party platforms from illegally engaging in insurance intermediary business in accordance with the Interim Regulatory Measures for Internet Insurance Business and relevant regulations, and focus their rectification on the following: (i) whether the activities of any cooperative third-party online platform of the insurance institution and its employees are limited to providing sales support services such as insurance product display and description and web links, and whether it illegally engages in insurance sales, underwriting, settlement of claims, and surrender or other insurance business links; (ii) whether there is a cooperation between the insurance institution and any third-party online platform engaging in internet finance involving wealth management, peer-to-peer lending and finance lease, etc.; (iii) whether the insurance institution performs the primary responsibility for supervising and managing its cooperative third-party platforms as required; (iv) whether all cooperative third-party online platforms of the insurance institution conform to relevant provisions of the Interim Regulatory Measures for Internet Insurance Business; (v) whether the insurance institution owns the interfaces where customers purchase insurance policies on its cooperative third-party online platforms and bears the compliance responsibility, and whether any of its third-party platforms engages in the collection of insurance premiums on its behalf and transfer of payments; (vi) whether each cooperative third-party online platform of the insurance institution discloses the information of all its cooperative insurance institutions at an eye-catching position, and that of such third-party online platform disclosed on the information disclosure platform of the Insurance Association of China at an eye-catching position, and indicates that the insurance business is provided by insurance institutions; and (vii) whether any cooperative third-party online platform of the insurance institution restricts such insurance institutions from accessing relevant information of customers in a truthful, complete and timely manner.

On June 22, 2020, the CBIRC promulgated the Circular on Standardizing the Retrospective Administration of Online Insurance Sales Practices, which took effect on October 1, 2020, setting out requirements on various aspects of online sales by insurance institutions (including insurance companies and insurance intermediaries), including sales practices, record-keeping for backtracking sales, and disclosure requirements. The Circular on Regulating the Retrospective Management of Internet Insurance Sales Practices provides that, (i) online sales pages should be displayed only on insurance institutions' self-operated online platforms and should be separated from non-sales pages; (ii) important insurance clauses should be presented on a separate page and be confirmed by policyholders or insureds; and (iii) insurance institutions should keep records for five years after the expiry of the policy for policies with a term of one year or less and for ten years for policies with a term longer than one year for purposes of backtracking sales.

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***Regulations on Further Standardize Internet Insurance Business***

On December 7, 2020, the CBIRC published the Measures for the Regulation of Internet Insurance Business, which became effective on February 1, 2021. The purpose of the above is to further standardize the Internet insurance business, including:

● clearly stipulate the main governing body of Internet insurance business;

● specify the scope of Internet business services of insurance intermediaries;

● require the information disclosure of insurance intermediaries to follow the online and offline principle consistently and refine the information disclosure standards and requirements;

● require insurance intermediaries to keep complete records of Internet insurance business transaction information to ensure that the complete and accurate information storage;

● require insurance intermediaries to establish and improve the customer identification system, strengthen the monitoring and reporting of large transactions and suspicious transactions, and strictly abide by the relevant provisions of anti-money laundering policy;

● establish an Internet insurance business service evaluation system, which covers all business processes including sales, underwriting, preservation, claims settlement, consultation, return visits and complaints of insurance companies and insurance intermediaries.

**Regulations Related to Company Law and Foreign Investment**

The establishment, operation and management of companies in China are mainly governed by the PRC Company Law, as most recently amended in 2023, to be effective on July 1, 2024, which applies to both PRC domestic companies and foreign-invested companies. Pursuant to the Company Law, companies are classified into categories, namely limited liability companies and limited companies by shares. The Company Law shall also apply to foreign-invested limited liability companies and companies limited by shares. According to the Company Law, the provisions otherwise prescribed by the laws on foreign investment shall prevail.

On March 15, 2019, the National People's Congress approved the Foreign Investment Law, and on December 26, 2019, the State Council promulgated the Implementing Rules of the PRC Foreign Investment Law (the "**Implementing Rules**"), to further clarify and elaborate the relevant provisions of the Foreign Investment Law. The Foreign Investment Law and the Implementing Rules both took effect on January 1, 2020 and replaced three major previous laws on foreign investments in China, namely, the Sino-foreign Equity Joint Venture Law, the Sino-foreign Cooperative Joint Venture Law and the Wholly Foreign-owned Enterprise Law, together with their respective implementing rules. Pursuant to the Foreign Investment Law, "foreign investments" refer to investment activities conducted by foreign investors (including foreign natural persons, foreign enterprises or other foreign organizations) directly or indirectly in the PRC, which include any of the following circumstances: (i) foreign investors setting up foreign-invested enterprises in the PRC solely or jointly with other investors, (ii) foreign investors obtaining shares, equity interests, property portions or other similar rights and interests of enterprises within the PRC, (iii) foreign investors investing in new projects in the PRC solely or jointly with other investors, and (iv) investment in other methods as specified in laws, administrative regulations, or as stipulated by the State Council. The Implementing Rules introduce a see-through principle and further provide that foreign-invested enterprises that invest in the PRC shall also be governed by the Foreign Investment Law and the Implementing Rules.

The Foreign Investment Law and the Implementing Rules provide that a system of pre-entry national treatment and the Negative List shall be applied for the administration of foreign investment, where "pre-entry national treatment" means that the treatment given to foreign investors and their investments at market access stage is no less favorable than that given to domestic investors and their investments, and "negative list" means the special administrative measures for foreign investment's access to specific fields or industries, which will be proposed by the competent investment department of the State Council in conjunction with the competent commerce department of the State Council and other relevant departments, and be reported to the State Council for promulgation, or be promulgated by the competent investment department or competent commerce department of the State Council after being reported to the State Council for approval. Foreign investment beyond the Negative List will be granted national treatment. Foreign investors shall not invest in the prohibited fields as specified in the negative list, and foreign investors who invest in the restricted fields shall comply with the special requirements on the shareholding, senior management personnel, etc. In the meantime, relevant competent government departments will formulate a catalogue of industries for which foreign investments are encouraged according to the needs for national economic and social development, to list the specific industries, fields and regions in which foreign investors are encouraged and guided to invest. The NDRC and the MOFCOM promulgated the Special Administrative Measures (Negative List) for Foreign Investment Access (2021 version) (the "**2021 National Negative List**") and the Special Administrative Measures (Negative List) for Foreign Investment Access in Pilot Free Trade Zones (2021 version) (the "**2021 FTZ Negative List**") (collectively the "**2021 Negative Lists**") on December 27, 2021, which took effect on January 1, 2022. Industries listed in the 2021 Negative Lists are divided into two categories: restricted and prohibited. Industries not listed in the 2021 Negative Lists are generally deemed as constituting a third "permitted" category. Establishment of wholly foreign-owned enterprises is generally allowed in permitted industries. Some restricted industries are limited to equity or contractual joint ventures, while in some cases Chinese partners are required to hold the majority interests in such joint ventures. In addition, restricted category projects are subject to higher-level government approvals. Foreign investors are not allowed to invest in industries in the prohibited category. Industries not listed in the Negative List are generally open to foreign investment unless specifically restricted by other PRC regulations. Any domestic enterprise engaging in businesses prohibited by the Negative Lists that lists, issues securities and trades shares overseas must obtain pre-approval consent from relevant competent regulator; overseas investors must not engage in the operation and management of the enterprise, and the percentage of foreign shareholding is subject to the relevant provisions in the administrative measures for domestic securities investments by foreign investors.

Compared to the last Special Administrative Measures for Market Access of Foreign Investment (Negative List) promulgated by the NDRC and the MOFCOM in June 2020, the 2021 Negative Lists cuts down the number of items restricted or prohibited to foreign investors from 33 to 31, widening access to more industries and fields. However, the 2021 Negative Lists prescribe that any domestic enterprise engaging in businesses prohibited by the Negative Lists that lists, issues securities and trades shares overseas must obtain pre-approval consent from relevant competent regulator; overseas investors must not engage in the operation and management of the enterprise, and the percentage of foreign shareholding is subject to the relevant provisions in the administrative measures for domestic securities investments by foreign investors. The Foreign Investment Law provides that foreign invested entities operating in foreign restricted or prohibited industries will require market entry clearance and other approvals from relevant PRC governmental authorities. The NDRC and the MOFCOM promulgated the Special Administrative Measures (Negative List) for Foreign Investment Access (2024 version) (the "**2024 Negative List**") on September 6, 2024, effective on November 1, 2024. Compared to the 2021 Negative Lists, the 2024 Negative List cuts down the number of items restricted or prohibited to foreign investors from 31 to 29, the related restrictions in the area of production and manufacturing have been removed.

According to the Implementing Rules, the registration of foreign-invested enterprises shall be handled by the SAMR or its authorized local counterparts. Where a foreign investor invests in an industry or field subject to licensing in accordance with laws, the relevant competent government department responsible for granting such license shall review the license application of the foreign investor in accordance with the same conditions and procedures applicable to PRC domestic investors unless it is stipulated otherwise by the laws and administrative regulations, and the competent government department shall not impose discriminatory requirements on the foreign investor in terms of licensing conditions, application materials, reviewing steps and deadlines, etc. However, the relevant competent government departments shall not grant the license or permit enterprise registration if the foreign investor intends to invest in the industries or fields as specified in the 2024 Negative List without satisfying the relevant requirements. In the event that a foreign investor invests in a prohibited field or industry as specified in the negative list, the relevant competent government department shall order the foreign investor to stop the investment activities, dispose of the shares or assets or take other necessary measures within a specified time limit, and restore to the status prior to the occurrence of the aforesaid investment, and the illegal gains, if any, shall be confiscated. If the investment activities of a foreign investor violate the special administration measures for access restrictions on foreign investments as stipulated in the negative list, the relevant competent government department shall order the investor to make corrections within the specified time limit and take necessary measures to meet the relevant requirements. If the foreign investor fails to make corrections within the specified time limit, the aforesaid provisions regarding the circumstance that a foreign investor invests in the prohibited field or industry shall apply.

Pursuant to the Foreign Investment Law and the Implementing Rules, and the Information Reporting Measures for Foreign Investment jointly promulgated by the MOFCOM and the SAMR, which took effect on January 1, 2020, a foreign investment information reporting system shall be established and foreign investors or foreign-invested enterprises shall report investment information to competent commerce departments of the government through the enterprise registration system and the enterprise credit information publicity system, and the administration for market regulation shall forward the above investment information to the competent commerce departments in a timely manner. In addition, the MOFCOM shall set up a foreign investment information reporting system to receive and handle the investment information and inter-departmentally shared information forwarded by the administration for market regulation in a timely manner. The foreign investors or foreign-invested enterprises shall report the investment information by submitting reports including initial reports, change reports, deregistration reports and annual reports.

Furthermore, the Foreign Investment Law provides that foreign-invested enterprises established according to the previous laws regulating foreign investment prior to the implementation of the Foreign Investment Law may maintain their structure and corporate governance within five years after the implementation of the Foreign Investment Law. The Implementing Rules further clarify that such foreign-invested enterprises established prior to the implementation of the Foreign Investment Law may either adjust their organizational forms or organizational structures pursuant to the Company Law or the Partnership Law, or maintain their current structure and corporate governance within five years upon the implementation of the Foreign Investment Law. Since January 1, 2025, if a foreign-invested enterprise fails to adjust its organizational form or organizational structure in accordance with the laws and go through the applicable registrations for changes, the relevant administration for market regulation shall not handle other registrations for such foreign-invested enterprise and shall publicize the relevant circumstances. However, after the organizational forms or organizational structures of a foreign-invested enterprise have been adjusted, the original parties to the Sino-foreign equity or cooperative joint ventures may continue to process such matters as the equity interest transfer, the distribution of income or surplus assets as agreed by the parties in the relevant contracts.

In addition, the Foreign Investment Law and the Implementing Rules also specify other protective rules and principles for foreign investors and their investments in the PRC, including, among others, that local governments shall abide by their commitments to the foreign investors; except for special circumstances, in which case statutory procedures shall be followed and fair and reasonable compensation shall be made in a timely manner, expropriation or requisition of the investment of foreign investors is prohibited; mandatory technology transfer is prohibited, etc.

Our PRC Subsidiaries, including Zhibao China, our wholly foreign owned subsidiary, and its subsidiaries Shanghai Anyi, Sunshine Insurance Brokers, Zhibao Health, and our subsidiaries outside China, Zhibao BVI and Zhibao HK, as foreign investors, are required to comply with the information reporting requirements under the Foreign Investment Law, the Implementing Rules and the Information Reporting Measures for Foreign Investment and are in full compliance. As of the date of this annual report, the businesses operated by our PRC Subsidiaries are not on the 2024 Negative List and we and our PRC Subsidiaries do not expect to engage in the businesses on the 2024 Negative List in the near future, and therefore, we and our PRC Subsidiaries are not subject to foreign investment restrictions required by law in China.

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***Measures for the Safety Examination of Foreign Investment***

The Measures for the Safety Examination of Foreign Investment, which were promulgated by the NDRC and the MOFCOM on December 19, 2020, and came into force as of January 18, 2021. The term "Foreign Investment" as mentioned in these measures refers to investment activities carried out directly or indirectly by foreign investors within the territory of the People's Republic of China, including the following situations:(1) the foreign investor alone or jointly with other investors, invests in a new project or establishes an enterprise in China; (2)The foreign investor acquires the equity or assets of the domestic enterprise through mergers and acquisitions; (3) the foreign investor invests in China by other means.

For Foreign Investment in the following areas, the foreign investor or the relevant domestic parties (hereinafter referred to as the parties) shall, on their own initiative, make a declaration to the office of the working mechanism, which was formed under the NDRC, prior to the implementation of the investment: (I) to invest in areas related to national defense and security, such as military industry and military industrial facilities, as well as in the surrounding areas of military facilities and military industrial facilities; (II) investment in important agricultural products, important energy and resources, manufacture of major equipment, important infrastructure, important transportation services, important cultural products and services, important information technology and internet products and services, important financial services, key technologies and other important areas of national security, and obtain the actual control of the invested enterprise.

The term "Acquisition of effective control of the invested enterprise" as mentioned in paragraph 2 of the preceding paragraph includes the following situations: Foreign investors hold more than 50% of the equity in the enterprise; Foreign investors hold less than 50% of the equity of the enterprise, but the voting rights they enjoy can have a significant impact on the resolutions of the board of directors, the shareholders' meeting or the shareholders' general meeting; other circumstances that result in the foreign investor being able to exert a significant influence on the business decision-making, personnel, finance, technology, etc. of the enterprise.

 ****

***Regulations on Foreign Restriction on Insurance Brokerage***

According to the Announcement of the CIRC on Permitting the Establishment of Wholly Foreign-invested Insurance Brokerage Companies by Foreign Insurance Brokerage Companies, which was promulgated by CIRC on December 11, 2006, and became effective on the same day, in five years following China's accession into the WTO, the establishment of a wholly foreign owned enterprise to engage in insurance brokerage services shall be permitted. There shall be no other restrictions except those on the establishment conditions and business scopes. On April 27, 2018, the CBIRC promulgated the Notice on Relaxing Restrictions on the Business Scope of Foreign-Funded Insurance Brokerage Companies, which became effective on April 27, 2018. Pursuant to this notice, the foreign-funded insurance brokerage institutions that obtain insurance brokerage business permits upon approval by the insurance regulatory authority of the State Council may engage in the following insurance brokerage businesses within the PRC: (i) drafting insurance application proposals, selecting insurers, and undergoing the insurance application formalities for insurance applicants; (ii) assisting the insured parties or beneficiaries in claiming compensation; (iii) reinsurance brokerage business; (iv) providing disaster or loss prevention or risk evaluation and management advisory services; and (v) other businesses approved by the CBIRC.

The insurance brokerage business is not listed under the 2020 Negative List. However, according to the administrative guidelines published by the CBIRC on its official website in 2019, a foreign investor holding more than 25% of the shares in an insurance brokerage company must satisfy the following requirements before investing in the insurance brokerage industry: (i) it has engaged in insurance brokerage business for more than thirty years within the territories of World Trade Organization members; and (ii) its total assets shall be no less than US$200 million as of the end of the year prior to its application. On May 1, 2019, the CBIRC released a press indicating that it plans to further open up the insurance brokerage industry to foreign investors by abolishing some of the requirements aforesaid. The State Council also promulgated an Opinions on Further Proper Utilization of Foreign Investment on October 30, 2019 to abolish such aforesaid requirements regarding the track record and total assets; however, no particular laws or regulations have been issued so far.

Sunshine Insurance Brokerage, one of our PRC Subsidiaries, has obtained the license for conducting insurance brokerage business, which is current as of the date of this annual report.

**Regulation Related to Value-Added Telecommunications Services and Foreign Investment Restrictions**

On September 25, 2000, the Telecommunications Regulations of the People's Republic of China (the "**Telecom Regulations**"), the primary governing law on telecommunication services, were issued by the State Council. The Telecom Regulations were most recently amended and became effective on February 6, 2016. The Telecom Regulations set out the general framework for the provision of telecommunication services by PRC companies. Under the Telecom Regulations, telecommunications service providers are required to procure operating licenses prior to commencing operations. Any violation of the Telecom Regulations by conducting telecommunication services without first obtaining the operating licenses may be subject to suspension of business, shutting down of websites, confiscation of illegal income and fines.

The Telecom Regulations draw a distinction between "basic telecommunications services" and "value-added telecommunications services." The Catalog of Telecommunications Business was issued as an attachment to the Telecom Regulations to categorize telecommunications services as basic or value-added. Information services via public communication networks, such as fixed networks, mobile networks and the internet, are classified as value-added telecommunications services.

On March 1, 2009, the MIIT issued the Administrative Measures for Telecommunications Business Operating Permit (the "**Telecom Permit Measures**"), which took effect on April 10, 2009. The Telecom Permit Measures were amended and became effective on September 1, 2017. The Telecom Permit Measures confirm that there are two types of telecom operating licenses for operators in China, namely, the Value Added Telecommunication Service (VATS) License. The operating scope of a license describes the permitted activities of the enterprise to which it is granted. An approved telecommunication services operator must conduct its business in accordance with the specifications listed in its VATS License.

On July 13, 2006, the MIIT issued the Circular on Strengthening the Administration of Foreign Investment in and Operation of Value-added Telecommunications Business (the "**MIIT Circular**"), which requires foreign investors to set up foreign-invested enterprises and obtain a VATS License to conduct any value-added telecommunications business in China. Pursuant to the Provisions on Administration of Foreign Invested Telecommunications Enterprises promulgated by the State Council on December 11, 2001 and amended on September 10, 2008, February 6, 2016 and March 29, 2022, respectively, and Notice of Removing the Restrictions on Foreign Equity Ratios in Online Data Processing and Transaction Processing (Operating E-commerce) Business promulgated by MIIT on June 19, 2015, the ultimate foreign equity ownership in a value-added telecommunications services provider may not exceed 50%, except for online data processing and transaction processing businesses (i.e., the e-commerce business) as a type of value-added telecommunications services, which has been allowed to be 100% owned by foreign investors. The 2024 Negative List also imposes the 50% restrictions on foreign ownership in value-added telecommunications business, except for operating e-commerce business, domestic multi-party communication, storage-forwarding, and call centers.

In light of the above restrictions and requirements, we operate our digital insurance brokerage business through one of the PRC Subsidiaries, Sunshine Insurance Brokerage. On June 2, 2021, Sunshine Insurance Brokerage made a filing on internet information service to comply with the related laws and regulations, and as of the date of this annual report, we are current on this filing.

On June 28, 2016, the CAC promulgated the Administrative Provisions on Mobile Internet Applications Information Services (the "**Former APP Provisions**"), which became effective on August 1, 2016 and amended on June 14, 2022. On August 1, 2022, the CAC promulgated the Administrative Provisions on Mobile Internet Applications Information Services (the "**APP Provisions**") and replaced the Former APP Provisions, which was terminated on August 1, 2022. Under the APP Provisions, mobile application providers are prohibited from engaging in any activity that may endanger national security, disturb the social order, or infringe the legal rights of third parties, and may not produce, copy, issue or disseminate through internet mobile applications any content prohibited by laws and regulations. The APP Provisions also require application providers to obtain relevant qualifications required by laws and regulations for providing services through such applications.

Furthermore, on December 16, 2016, the MIIT promulgated the Interim Measures on the Administration of Pre-Installation and Distribution of Applications for Mobile Smart Terminals, which took effect on July 1, 2017. It requires, among others, that internet information service providers should ensure that a mobile application, as well as its ancillary resource files, configuration files and user data can be uninstalled by a user on a convenient basis, unless it is a basic function software, which refers to a software that supports the normal functioning of hardware and operating system of a mobile smart device. The Measures for the Regulation of Internet Insurance Business, promulgated by the CBIRC on December 7, 2020 and implemented on February 1, 2021, requires Internet insurance institutions to complete the Internet information service filing procedures with the Internet industry management department for self-operated network platforms. According to which, whether our failure to obtain a value-added telecommunications business operation license constitutes a violation is subject to interpretation. If we are deemed to be required to obtain value-added telecommunications business operation license and, therefore, found to be in violation of the law, we might face consequences including confiscation of illegal gains, being subject to penalties, suspension of certain types of services, or orders to shut down relevant websites. Such consequences could negatively impact our net revenues and results of operations.

**Regulations Related to Cybersecurity**

 

*Regulations on Information Security*

The Standing Committee of the National People's Congress (SCNPC) promulgated the Cybersecurity Law on November 7, 2016, which became effective on June 1, 2017, to protect cyberspace security and order. Pursuant to the Cybersecurity Law, any individual or organization using the network must comply with the constitution and the applicable laws, follow the public order and respect social moralities, and must not endanger cyber security, or engage in activities by making use of the network that endanger the national security, honor and interests; incite subversion of state power; overthrow the socialist system; incite secession, undermining national unity, terrorism and extremism promotion, ethnic hatred and discrimination; spread violence and disseminate pornographic information, fabricating and spreading false information that disturbs economic and social order; or infringe on the fame, privacy, intellectual property and other legitimate rights and interests of others. The Cybersecurity Law sets forth various security protection obligations for network operators, which are defined as "owners and administrators of networks and network service providers," including, among others, complying with a series of requirements of tiered cyber protection systems; verifying users' real identity; localizing the personal information and important data gathered and produced by key information infrastructure operators during operations within the PRC; and providing assistance and support to government authorities where necessary for protecting national security and investigating crimes.

To comply with these laws and regulations, we have adopted security policies and measures to protect our cyber system and customer information.

 

*Regulations on Internet Privacy*

Pursuant to the APP Provisions, an APP provider shall, when handling personal information, follow the principles of legality, legitimacy, necessity and integrity, have clear and reasonable purposes, disclose processing rules, comply with relevant provisions on the scope of necessary personal information, regulate personal information processing activities, and take necessary measures to protect the security of personal information, and shall not force users to agree on the processing of personal information for any reason or refuse users' use of its basic functions and services due to users' disagreement on providing non-essential personal information. In addition, the Cybersecurity Law also requires network operators to strictly keep confidential users' personal information that they have collected and to establish and improve user information protective mechanism. On May 8, 2017, the Supreme People's Court and the Supreme People's Procuratorate released the Interpretations of the Supreme People's Court and the Supreme People's Procuratorate on Several Issues Concerning the Application of Law in the Handling of Criminal Cases Involving Infringement of Citizens' Personal Information, which became effective on June 1, 2017 and clarifies several concepts regarding the crime of "infringement of citizens' personal information" stipulated by Article 253A of the Criminal Law of the People's Republic of China, including "citizen's personal information," "provision" and "unlawful acquisition of citizens' personal information." Also, it specifies the standards for determining "serious circumstances" and "particularly serious circumstances" of this crime.

To comply with these laws and regulations, we have required our end customers to consent to our collecting and using their personal information, and established information security systems to protect customers' privacy.

 

 

*Regulations on Electronic Signature*

The SCNPC enacted the Electronic Signature Law on August 28, 2004, which was amended on April 24, 2015 and April 23, 2019, respectively. The parties to a contract or other document, document or other document in a civil activity may agree to use or not use an electronic signature or data message. An instrument in which the parties agree to use an electronic signature or data message may not be denied legal effect merely because it is in the form of an electronic signature or data message. The preceding paragraph does not apply to the following instruments:(1) involving personal relations such as marriage, adoption or inheritance; (2) involving the discontinuation of public utility services such as water supply, heat supply and gas supply; (3) other circumstances under which the provisions of laws and administrative regulations do not apply to electronic documents. An electronic signature shall be deemed to be a reliable electronic signature if it simultaneously meets the following conditions: (i) when the data used for the creation of an electronic signature is used in an electronic signature, it shall be exclusive to the electronic signer; (ii) at the time of signature, the data relating to the creation of the electronic signature will be controlled only by the electronic signer; (iii) any alteration to the electronic signature after signature can be discovered; (iv) any alteration to the content and form of the data message after it has been signed can be discovered. A party may also choose to use an electronic signature that meets the conditions for reliability agreed upon by the party. A reliable electronic signature shall have the same legal effect as a handwritten signature or seal.

As of the date of this annual report, the electronic signatures used by our PRC Subsidiaries comply with the Electronic Signature Law.

 

*Regulations on Cybersecurity Review*

On December 28, 2021, the CAC and certain other PRC regulatory authorities jointly issued the Cybersecurity Review Measures (2021 version) which became effective on February 15, 2022. According to the Cybersecurity Review Measures (2021 version), personal information and important data collected and generated by a critical information infrastructure operator in the course of its operations in China must be stored in China, and if a critical information infrastructure operator purchases internet products and services that affect or may affect national security as well as any online platform operators processing the personal information of more than one million users which seek to list on a foreign stock exchange shall file a cybersecurity review with the CRO.

Where an operator procures network products and services, it shall anticipate the possible national security risks that may be brought about by the use of such products and services. If it affects or is likely to affect national security, it shall report the cybersecurity review to the cybersecurity review office. The operators shall, through the procurement documents and agreements, request the suppliers of products and services to cooperate with the cybersecurity review for the procurement activities that have been declared for the cybersecurity review, These include a commitment not to use the facilities for the provision of products and services to illegally access user data, illegally control and manipulate user equipment, and not to disrupt the supply of products or necessary technical support services without just cause.

The cybersecurity review shall focus on the assessment of possible national security risks arising from the procurement of network products and services, taking into account the following factors:(I) the risk of illegal control, interference or destruction of critical information infrastructure and theft, leakage and destruction of critical data resulting from the use of products and services; (II) disruption of the supply of products and services to the business continuity of critical information infrastructure; (III) the security, openness, transparency and diversity of sources of products and services, the reliability of supply channels and the risk of supply disruptions due to political, diplomatic and trade factors; (IV) compliance by suppliers of products and services with the PRC laws, administrative regulations and departmental rules and regulations; (V) other factors that may jeopardize the security of critical information infrastructure and national security.

The operator of key information infrastructure in these measures refers to the operator identified by the department for the protection of key information infrastructure. "Network products and services" as mentioned in these measures mainly refer to core network equipment, high-performance computers and servers, large-capacity storage equipment, large-scale database and application software, cybersecurity equipment and cloud computing services, and other network products and services that have a significant impact on critical information infrastructure security.

As a network platform operator who possesses personal information of more than one million users for purposes of the Cybersecurity Review Measures (2021 version), we have applied for and completed a cybersecurity review with respect to the IPO pursuant to the Cybersecurity Review Measures (2021 version). However, there remains uncertainty as to how the Cybersecurity Review Measures will be interpreted or implemented and how the PRC regulatory agencies, including the Cyberspace Administration of China (CAC) or the National Financial Regulatory Administration (NFRA), may adopt new laws, regulations, rules, or detailed implementation and interpretation related to the Cybersecurity Review Measures. We cannot assure you that we and/or our PRC Subsidiaries will comply with such regulations in all respects and we and/or our PRC Subsidiaries may be ordered to rectify or terminate any actions that are deemed illegal by regulatory authorities. We or our PRC Subsidiaries may not be able to pass such review in relation to our offerings in a timely manner or at all. Any failure or delay in the completion of the cybersecurity review procedures or any other non-compliance with the related laws and regulations may result in fines or other penalties, including suspension of business, website closure, and revocation of prerequisite licenses, as well as reputational damage or legal proceedings or actions against us, which could materially and adversely affect our business and impede our ability to continue our operations.

 

*Regulations on Data Security*

The SCNPC issued the PRC Data Security Law on June 10, 2021, which took effect on September 1, 2021, to regulate data processing activities, safeguard data security, promote data development and utilization, protect the lawful rights and interests of individuals and organizations, and maintain national sovereignty, security, and development interests. Under the Data Security Law, "data" means any record of information in electronic or any other form. "Data processing" includes but is not limited to the collection, storage, use, processing, transmission, provision, and public disclosure of data. "Data security" means that necessary measures are taken to ensure the state of effective protection and lawful utilization of data and have the capability to safeguard the continuing state of security. When conducting data processing activities, one shall comply with laws and regulations, respect social norms and ethics, observe business and professional ethics, act in good faith, perform data security protection obligations, and undertake social responsibilities, and shall neither compromise national security and public interest nor harm the lawful rights and interests of any organization or individual.

**Regulations Related to Personal Information Protection**

The SCNPC promulgated the PIPL on August 20, 2021, which took effect on November 1, 2021. As the first systematic and comprehensive law specifically for the protection of personal information in the PRC, the PIPL provides, among others, that (i) an individual's separate consent shall be obtained before operation of such individual's sensitive personal information, e.g., biometric characteristics and individual location tracking, (ii) personal information operators operating sensitive personal information shall notify individuals of the necessity of such operations and the influence on the individuals' rights, (iii) if personal information operators reject individuals' requests to exercise their rights, individuals may file a lawsuit with a People's Court. The PIPL elaborates the protection by law of personal information for natural persons and no entity or individual may infringe upon the rights and interests of the natural persons.

It clearly stipulates the rules for cross-border provision of personal information. Pursuant to the rules, personal information processors shall meet one of the conditions in order to provide personal information overseas for their business operations: (i) passing the security evaluation organized by the CAC; (ii) acquiring personal information protection certification from the professional organizations regulated by the CAC; (iii) adopting the standard contract forms stipulated by the CAC when entering into contracts with overseas information receivers, setting forth the rights and obligations of the parties; and (iv) other conditions regulated by laws, regulations and the CAC. Prior to the cross-border provision of personal information of the natural persons, personal information processors shall obtain the approval of the corresponding natural persons and advise them of the overseas receiver's name, contact information, processing purpose and methods, classification of personal information, information reception procedures and other related information.

It further regulates that all personal information collected and produced in China by critical information infrastructure operators, and personal information processors holding the threshold users regulated by the CAC, shall be stored and saved in the territory of China. Provided that overseas provision of such personal information is required, unless laws and regulations regulate otherwise, it must pass the security evaluation organized by the CAC. Without the approval of the PRC competent authority, personal information processors are prohibited from providing personal information stored in the territory of China to foreign judicial or law enforcement agencies.

**Regulations on Foreign Debt**

On January 1, 2023, the NDRC issued the Measures for Administration of Examination and Registration of Medium and Long-term Foreign Debt of Enterprises ("**Order No.56**"), which came into effect on February 10, 2023. Under Order No.56, medium and long-term foreign debts of enterprises ("**Foreign Debts**") means debt instruments with a maturity period of more than one (1) year (one (1) year not included) that are borrowed from overseas by enterprises within the territory of the PRC and by overseas enterprises or branches controlled by them, denominated in local or foreign currency, and of which principal is repaid with payment of interest as agreed. Such enterprises borrowing medium and long-term foreign debts shall apply for foreign debt examination and registration in accordance with the provisions of Order No.56 and obtain a "Certificate of Examination and Registration for Enterprise Borrowing Foreign Debt" before borrowing foreign debts. Furthermore, Order No.56 applies to the indirect borrowing of Foreign Debts by domestic enterprises overseas and it means that an enterprise of which the main business activities are conducted within the PRC, in the name of an enterprise registered overseas, issues bonds, notes or borrows commercial loans overseas, among others, based on the equity, assets, earnings, or other similar rights and interests of the domestic enterprise. Debt instruments mentioned in Order No.56 include, but are not limited to, senior debts, perpetual debts, capital debts, medium-term notes, convertible bonds, exchangeable bonds, financial leasing, and commercial loans.

As the term of the Note issued by the Company to the Investor bears a maturity period of no more than one (1) year, the Company is not required to apply and obtain such certificate concerning borrowing Foreign Debt.

**Regulations on Dividend Distributions**

The principal laws, rule and regulations governing dividends distribution by companies in the PRC are the PRC Company Law, which applies to both PRC domestic companies and foreign-invested companies, and the Foreign Investment Law and its implementing rules, which apply to foreign-invested companies. Under these laws, regulations and rules, both domestic companies and foreign-invested companies in the PRC are required to set aside as general reserves at least 10% of their after-tax profit, until the cumulative amount of their reserves reaches 50% of their registered capital. PRC companies are not permitted to distribute any profits until any losses from prior fiscal years have been offset. Profits retained from prior fiscal years may be distributed together with distributable profits from the current fiscal year. Furthermore, under the EIT Law, which became effective in January 2008 and amended in December 2018, the maximum tax rate for the withholding tax imposed on dividend payments from PRC foreign invested companies to their overseas investors that are not regarded as "resident" for tax purposes is 20%. The rate was reduced to 10% under the Implementing Regulations for the EIT Law issued by the State Council on April 23, 2019. However, a lower withholding tax rate might be applied if there is a tax treaty between China and the jurisdiction of the foreign holding companies, such as tax rate of 5% in the case of Hong Kong companies that holds at least 25% of the equity interests in the foreign-invested enterprise, and certain requirements specified by PRC tax authorities are satisfied.

**Regulations Related to Leasing**

Pursuant to the Law on Administration of Urban Real Estate which took effect in January 1995 with the latest amendment in August 2019, lessors and lessees are required to enter into a written lease contract, containing such provisions as the term of the lease, the use of the premises, liability for rent and repair, and other rights and obligations of both parties. Both lessor and lessee are also required to register the lease with the real estate administration department. If the lessor and lessee fail to complete the registration procedures, both lessor and lessee may be subject to fines ranging from RMB1,000 (approximately $155) to RMB10,000 (approximately $1,553). In addition, although the unregistered lease agreements are considered binding agreements, in practice, some of the remedies generally available to the registered lease agreements may not be fully applicable to the unregistered lease agreements, such as specific performance of lease agreement against new purchasers of the property.

According to the PRC Civil Code, the lessee may sublease the leased premises to a third party, subject to the consent of the lessor. Where the lessee subleases the premises, the lease contract between the lessee and the lessor remains valid. The lessor is entitled to terminate the lease agreement if the lessee subleases the premises without the prior consent of the lessor.

Pursuant to the Administrative Measures for Commodity Housing Tenancy issued by the Ministry of Housing and Urban-Rural Development on December 1, 2010 and came into effect on February 1, 2011, both lessor and lessee shall go through the housing tenancy registration formalities with the competent construction (real estate) departments of the municipalities directly under the central government, cities and counties where the housing is located within 30 days after the housing tenancy contract is signed.

As of the date of this annual report, our PRC Subsidiaries have a total of 17 lease agreements that have not been registered with the PRC governmental authorities as required by PRC law. Although the failure to do so does not in itself invalidate the leases, our PRC Subsidiaries may be ordered by the PRC government authorities to rectify such noncompliance and, if such noncompliance is not rectified within a given period of time, our PRC Subsidiaries may be subject to fines imposed by PRC government authorities ranging from RMB1,000 (approximately $155) to RMB10,000 (approximately $1,553) for each lease agreement that has not been registered with the relevant PRC governmental authorities.

**Regulations Related to Intellectual Property**

China has adopted comprehensive legislation governing intellectual property rights, including copyrights, trademarks, patents and domain names. China is a signatory to the primary international conventions on intellectual property rights and has been a member of the Agreement on Trade Related Aspects of Intellectual Property Rights since its accession to the World Trade Organization in December 2001.

 

*Copyright*

On September 7, 1990, the SCNPC promulgated the Copyright Law of the People's Republic of China (the "**Copyright Law**"), effective on June 1, 1991 and amended on October 27, 2001, February 26, 2010 and November 11, 2020, respectively. The Copyright Law revised in 2010 extends copyright protection to internet activities, products disseminated over the Internet and software products. In addition, there is a voluntary registration system administered by the Copyright Protection Center of China.

Under the Regulations on the Protection of the Right to Network Dissemination of Information that took effect on July 1, 2006 and was amended on January 30, 2013, it is further provided that an Internet information service provider may be held liable under various situations, including that if it knows or should reasonably have known a copyright infringement through the Internet and the service provider fails to take measures to remove or block or disconnect links to the relevant content, or, although not aware of the infringement, the Internet information service provider fails to take such measures upon receipt of the copyright holder's notice of such infringement.

In order to further implement the Regulations on Computer Software Protection, promulgated by the State Council on June 4, 1991 and amended on December 20, 2001, January 8, 2011 and January 30, 2013, respectively, the National Copyright Administration issued the Measures for the Registration of Computer Software Copyright on February 20, 2002, which specify detailed procedures and requirements with respect to the registration of software copyrights.

 

*Trademark*

According to the Trademark Law of the People's Republic of China promulgated by the SCNPC on August 23, 1982, and amended on February 22, 1993, October 27, 2001, August 30, 2013 and April 23, 2019, respectively, the Trademark Office of the China National Intellectual Property Administration (the "**CNIPA**") is responsible for the registration and administration of trademarks in China. The CNIPA under the SAMR has established a Trademark Review and Adjudication Board for resolving trademark disputes. Registered trademarks are valid for ten years from the date the registration is approved. A registrant may apply to renew a registration within twelve months before the expiration date of the registration. If the registrant fails to apply in a timely manner, a grace period of six additional months may be granted. If the registrant fails to apply before the grace period expires, the registered trademark shall be deregistered. Renewed registrations are valid for ten years. On April 29, 2014, the State Council issued the revised the Implementing Regulations of the Trademark Law of the People's Republic of China, which specified the requirements of applying for trademark registration and renewal.

 

*Patent*

According to the Patent Law of the People's Republic of China (the "**Patent Law**") promulgated by the SCNPC on March 12, 1984 and amended on September 4, 1992, August 25, 2000, December 27, 2008 and October 17, 2020, respectively, and the Implementation Rules of the Patent Law of the People's Republic of China (the "**Implementation Rules of the Patent Law**") promulgated by the State Council on June 15, 2001 and revised on December 28, 2002 and January 9, 2010 and December 11, 2023, the patent administrative department under the State Council is responsible for the administration of patent-related work nationwide and the patent administration departments of provincial or autonomous regions or municipal governments are responsible for administering patents within their respective administrative areas. The Patent Law and Implementation Rules of the Patent Law provide for three types of patents, namely "inventions", "utility models" and "designs". Invention patents are valid for twenty years, while utility model patents are valid for ten years and design patents are valid for fifteen years, from the date of application. The Chinese patent system adopts a "first come, first file" principle, which means that where more than one person files a patent application for the same invention, a patent will be granted to the person who files the application first. An invention or a utility model must possess novelty, inventiveness and practical applicability to be patentable. Third Parties must obtain consent or a proper license from the patent owner to use the patent. Otherwise, the unauthorized use constitutes an infringement on the patent rights.

 

*Domain Names*

Domain names are protected under the Administrative Measures on the Internet Domain Names, which was promulgated by the MIIT in August 2017 and effective on November 1, 2017, and the Implementing Rules on Registration of National Top-level Domain Names, which was promulgated by China Internet Network Information Center in and came into effect in June 2019. The MIIT is the main regulatory body responsible for the administration of PRC internet domain names. Domain name registrations are handled through domain name service agencies established under the relevant regulations, and the applicants become domain name holders upon successful registration. The Domain Name Measures regulate the registration of domain names, such as the China's national top-level domain name ".CN". The China Internet Network Information Center (CNNIC) issued the Measures of the China Internet Network Information Center for the Resolution of Country Code Top-Level Domain Name Disputes on September 9, 2014, which took effect on November 21, 2014, and was replaced by the Measures for the Resolution of National Top-level Domain Names Disputes issued by the CNNIC on June 18, 2019. Pursuant to the Measures for the Resolution of National Top-level Domain Names Disputes, domain name disputes shall be accepted and resolved by the dispute resolution service providers as accredited by the CNNIC.

**Regulations Related to Foreign Exchange**

The principal regulations governing foreign currency exchange in China are the Administrative Regulations on Foreign Exchange of the People's Republic of China, or the Foreign Exchange Administrative Regulation, which was promulgated by the State Council on January 29, 1996, which became effective on April 1, 1996 and was subsequently amended on January 14, 1997 and August 5, 2008 and the Administrative Regulations on Foreign Exchange Settlement, Sales and Payment which was promulgated by the PBOC, on June 20, 1996 and became effective on July 1, 1996. Under these regulations, payments of current account items, such as profit distributions and trade and service-related foreign exchange transactions, can be made in foreign currencies without prior approval from State Foreign Exchange Administration of the People's Republic of China, or the SAFE, by complying with certain procedural requirements. By contrast, approval from or registration with appropriate government authorities is required where RMB is to be converted into foreign currency and remitted out of China to pay capital account items such as the repayment of foreign currency-denominated loans, direct investment overseas and investments in securities or derivative products outside of the PRC. FIEs are permitted to convert their after-tax dividends into foreign exchange and to remit such foreign exchange out of their foreign exchange bank accounts in the PRC.

On March 30, 2015, SAFE promulgated the Notice of the State Administration of Foreign Exchange on Reforming the Administration of Foreign Exchange Settlement of Capital of Foreign-invested Enterprises, SAFE Circular 19, which took effect on June 1, 2015 and was amended on December 30, 2019. According to SAFE Circular 19, the foreign currency capital contribution to an FIE in its capital account may be converted into RMB on a discretional basis.

On June 9, 2016, the SAFE promulgated the Notice of the State Administration of Foreign Exchange on Policies for Reforming and Regulating the Control over Foreign Exchange Settlement under the Capital Account, SAFE Circular 16, which was amended on December 4, 2023. The SAFE Circular 16 unifies the discretional foreign exchange settlement for all the domestic institutions. The Discretional Foreign Exchange Settlement refers to the foreign exchange capital in the capital account which has been confirmed by the relevant policies subject to the discretional foreign exchange settlement (including foreign exchange capital, foreign loans and funds remitted from the proceeds from the overseas listing) can be settled at the banks based on the actual operational needs of the domestic institutions. The proportion of Discretional Foreign Exchange Settlement of the foreign exchange capital is temporarily determined as 100%. Violations of SAFE Circular 19 or SAFE Circular 16 could result in administrative penalties in accordance with the Foreign Exchange Administrative Regulation and relevant provisions.

Furthermore, SAFE Circular 16 stipulates that the use of foreign exchange incomes of capital accounts by FIEs shall follow the principles of authenticity and self-use within the business scope of the enterprises. The foreign exchange incomes of capital accounts and capital in RMB obtained by the FIE from foreign exchange settlement shall not be used for the following purposes: (i) directly or indirectly used for the payment beyond the business scope of the enterprises or the payment prohibited by relevant laws and regulations; (ii) directly or indirectly used for investment in securities or financial schemes other than bank guaranteed products unless otherwise provided by relevant laws and regulations; (iii) used for granting loans to non-affiliated enterprises, unless otherwise permitted by its business scope; and (iv) used for the construction or purchase of real estate that is not for self-use (except for the real estate enterprises).

**Regulations Related to Offshore Special Purpose Companies Held by PRC Residents**

SAFE promulgated the Circular on Printing and Distributing the Provisions on Foreign Exchange Administration over Domestic Direct Investment by Foreign Investors and the Supporting Documents on May 10, 2013, which became effective on May 13, 2013, amended on October 10, 2018 and December 30, 2019, and which specifies that the administration by SAFE or its local branches over direct investment by foreign investors in the PRC shall be conducted by way of registration and banks shall process foreign exchange business relating to the direct investment in the PRC based on the registration information provided by SAFE and its branches.

SAFE promulgated Notice on Issues Relating to Foreign Exchange Administration over the Overseas Investment and Financing and Round-trip Investment by Domestic Residents via Special Purpose Vehicles, or the SAFE Circular 37, on July 4, 2014 that requires PRC residents or entities to register with SAFE or its local branch in connection with their establishment or control of an offshore entity established for the purpose of overseas investment or financing. In addition, such PRC residents or entities must update their SAFE registrations when the offshore special purpose vehicle undergoes material events relating to any change of basic information (including change of such PRC citizens or residents, name and term of operation), capital increase or capital reduction, transfers or exchanges of shares, or mergers or divisions. SAFE Circular 37 was issued to replace the Notice on Relevant Issues Concerning Foreign Exchange Administration for PRC Residents Engaging in Financing and Roundtrip Investments via Overseas Special Purposes Vehicles.

SAFE further enacted the SAFE Circular 13, which allows PRC residents or entities to register with qualified banks in connection with their establishment or control of an offshore entity established for the purpose of overseas investment or financing. However, remedial registration applications made by PRC residents that previously failed to comply with the SAFE Circular 37 continue to fall under the jurisdiction of the relevant local branch of SAFE.

In the event that a PRC shareholder holding interests in a special purpose vehicle fails to fulfil the required SAFE registration, the PRC Subsidiaries of that special purpose vehicle may be prohibited from distributing profits to the offshore parent and from carrying out subsequent cross-border foreign exchange activities, and the special purpose vehicle may be restricted in its ability to contribute additional capital into its PRC Subsidiaries.

On January 26, 2017, SAFE issued the Notice on Improving the Check of Authenticity and Compliance to Further Promote Foreign Exchange Control ("**SAFE Circular 3**"), which stipulates several capital control measures with respect to the outbound remittance of profit from domestic entities to offshore entities, including (i) under the principle of genuine transaction, banks shall check board resolutions regarding profit distribution, the original version of tax filing records and audited financial statements; and (ii) domestic entities shall hold income to account for previous years' losses before remitting the profits. Moreover, pursuant to SAFE Circular 3, domestic entities shall make detailed explanations of the sources of capital and utilization arrangements, and provide board resolutions, contracts and other proof when completing the registration procedures in connection with an outbound investment.

**Regulations Related to Customer Rights Protection**

The PRC Customer Rights and Interests Protection Law, or Customer Protection Law, as amended on October 25, 2013 and effective on March 15, 2014, sets out the obligations of business operators and the rights and interests of the customers. Pursuant to this law, business operators must guarantee that the commodities they sell satisfy the requirements for personal or property safety, provide customers with authentic information about the commodities, and guarantee the quality, function, usage and term of validity of the commodities. Failure to comply with the Customer Protection Law may subject business operators to civil liabilities such as refunding purchase prices, exchange of commodities, repairing, ceasing damages, compensation, and restoring reputation, and even subject the business operators or the responsible individuals to criminal penalties if business operators commit crimes by infringing the legitimate rights and interests of customers.

**Regulations Related to Taxation**

 

*Income Tax*

According to the EIT Law, which was promulgated on March 16, 2007, became effective as from January 1, 2008 and amended on February 24, 2017 and December 29, 2018, an enterprise established outside the PRC with de facto management bodies within the PRC is considered as a resident enterprise for PRC enterprise income tax purposes and is generally subject to a uniform 25% enterprise income tax rate on its worldwide income. The Implementing Rules of the Enterprise Income Law of the People's Republic of China, or the Implementing Rules of the EIT Law, defines a de facto management body as a managing body that in practice exercises "substantial and overall management and control over the production and operations, personnel, accounting, and properties" of the enterprise. Non-PRC resident enterprises without any branches in the PRC pay an enterprise income tax in connection with their income originating from the PRC at the tax rate of 10%.

On February 3, 2015, the PRC State Administration of Taxation (SAT),, issued the Announcement on Several Issues Concerning the Enterprise Income Tax on Indirect Transfer of Assets by Non-Resident Enterprises, or the SAT Circular 7. The SAT Circular 7 repeals certain provisions in the Notice of the State Administration of Taxation on Strengthening the Administration of Enterprise Income Tax on Income from Equity Transfer by Non-Resident Enterprises, or the SAT Circular 698, issued by SAT on December 10, 2009 and the Announcement on Several Issues Relating to the Administration of Income Tax on Non-resident Enterprises issued by SAT on March 28, 2011 and clarifies certain provisions in the SAT Circular 698. The SAT Circular 7 provides comprehensive guidelines relating to, and heightening the Chinese tax authorities' scrutiny on, indirect transfers by a non-resident enterprise of assets (including assets of organizations and premises in the PRC, immovable property in the PRC, equity investments in PRC resident enterprises), or the PRC Taxable Assets. For instance, when a non-resident enterprise transfers equity interests in an overseas holding company that directly or indirectly holds certain PRC Taxable Assets and if the transfer is believed by the Chinese tax authorities to have no reasonable commercial purpose other than to evade enterprise income tax, the SAT Circular 7 allows the Chinese tax authorities to reclassify the indirect transfer of PRC Taxable Assets into a direct transfer and therefore impose a 10% rate of PRC enterprise income tax on the non-resident enterprise. The SAT Circular 7 lists several factors to be taken into consideration by tax authorities in determining if an indirect transfer has a reasonable commercial purpose. However, regardless of these factors, the overall arrangements in relation to an indirect transfer satisfying all the following criteria will be deemed to lack a reasonable commercial purpose: (i) 75% or more of the equity value of the intermediary enterprise being transferred is derived directly or indirectly from PRC Taxable Assets; (ii) at any time during the one year period before the indirect transfer, 90% or more of the asset value of the intermediary enterprise (excluding cash) is comprised directly or indirectly of investments in the PRC, or during the one year period before the indirect transfer, 90% or more of its income is derived directly or indirectly from the PRC; (iii) the functions performed and risks assumed by the intermediary enterprise and any of its subsidiaries and branches that directly or indirectly hold the PRC Taxable Assets are limited and are insufficient to prove their economic substance; and (iv) the foreign tax payable on the gain derived from the indirect transfer of the PRC Taxable Assets is lower than the potential PRC tax on the direct transfer of those assets. On the other hand, indirect transfers falling into the scope of the safe harbors under the SAT Circular 7 will not be subject to PRC tax under the SAT Circular 7. The safe harbors include qualified group restructurings, public market trades and exemptions under tax treaties or arrangements.

On October 17, 2017, SAT issued the Announcement on Issues Relating to Withholding at Source of Income Tax of Non-resident Enterprises (the "**SAT Circular 37**"), which took effect on December 1, 2017. According to the SAT Circular 37, the balance after deducting the equity net value from the equity transfer income shall be the taxable income amount for equity transfer income. Equity transfer income shall mean the consideration collected by the equity transferor from the equity transfer, including various income in monetary form and non-monetary form. Equity net value shall mean the tax computation basis for obtaining the said equity. The tax computation basis for equity shall be: (i) the capital contribution costs actually paid by the equity transferor to a Chinese resident enterprise at the time of investment and equity participation, or (ii) the equity transfer costs actually paid at the time of acquisition of such equity to the original transferor of the said equity. Where there is reduction or appreciation of value during the equity holding period, and the gains or losses may be confirmed pursuant to the rules of the finance and tax authorities of the State Council, the equity net value shall be adjusted accordingly. When an enterprise computes equity transfer income, it shall not deduct the amount in the shareholders' retained earnings such as undistributed profits etc. of the investee enterprise, which may be distributed in accordance with the said equity. In the event of partial transfer of equity under multiple investments or acquisitions, the enterprise shall determine the costs corresponding to the transferred equity in accordance with the transfer ratio, out of all costs of the equity.

Under the SAT Circular 7 and the Law of the People's Republic of China on the Administration of Tax Collection promulgated by the SCNPC on September 4, 1992 and newly amended on April 24, 2015, in the case of an indirect transfer, entities or individuals obligated to pay the transfer price to the transferor shall act as withholding agents. If they fail to make withholding or withhold the full amount of tax payable, the transferor of equity shall declare and pay tax to the relevant tax authorities within seven days from the occurrence of tax payment obligation. Where the withholding agent does not make the withholding, and the transferor of the equity does not pay the tax payable amount, the tax authority may impose late payment interest on the transferor. In addition, the tax authority may also hold the withholding agents liable and impose a penalty of ranging from 50% to 300% of the unpaid tax on them. The penalty imposed on the withholding agents may be reduced or waived if the withholding agents have submitted the relevant materials in connection with the indirect transfer to the PRC tax authorities in accordance with the SAT Circular 7.

 

 

*Withholding Tax on Dividend Distribution*

The EIT Law prescribes a standard withholding tax rate of 20% on dividends and other China-sourced income of non-PRC resident enterprises which have no establishment or place of business in the PRC, or if established, the relevant dividends or other China-sourced income are in fact not associated with such establishment or place of business in the PRC. However, the Implementing Rules of the EIT Law which reduced the rate from 20% to 10%, became effective from January 1, 2008. However, a lower withholding tax rate might be applied if there is a tax treaty between China and the jurisdiction of the foreign holding companies, for example, pursuant to the Arrangement Between the Mainland of China and the Hong Kong Special Administrative Region for the Avoidance of Double Taxation on Income (the "**Double Tax Avoidance Arrangement**"), and other applicable PRC laws, if a Hong Kong resident enterprise is determined by the competent PRC tax authority to have satisfied the relevant conditions and requirements under the Double Tax Avoidance Arrangement and other applicable laws, the 10% withholding tax on the dividends that the Hong Kong resident enterprise receives from a PRC resident enterprise may be reduced to 5% upon receiving approval from the tax authority in charge.

Based on the Notice on Relevant Issues Relating to the Enforcement of Dividend Provisions in Tax Treaties issued on February 20, 2009 by the SAT, if the relevant PRC tax authorities determine, at their discretion, that a company benefits from such reduced income tax rate due to a structure or an arrangement that is primarily tax-driven, such PRC tax authorities may adjust the preferential tax treatment; and based on the Announcement of the State Administration of Taxation on Issues Concerning "Beneficial Owners" in Tax Treaties, which was promulgated on February 3, 2018 and came into effect on April 1, 2018. If the company's activities do not constitute substantive business activities, it will be analyzed according to the actual situation of the specific case, which may not be conducive to the determination of its "beneficiary owner" capacity, and thus may not enjoy the concessions under the Double Tax Avoidance Arrangement.

 

*Value-Added Tax*

Pursuant to the Interim Regulations on Value-Added Tax of the People's Republic of China, which was promulgated by the State Council on December 13, 1993 and amended on November 10, 2008, February 6, 2016 and November 19, 2017, and the Implementation Rules for the Interim Regulations on Value-Added Tax (VAT) of the People's Republic of China, which was promulgated by the Ministry of Finance (MOF) on December 25, 1993 and amended on December 15, 2008 and October 28, 2011, entities or individuals engaging in sale of goods, provision of processing services, repairs and replacement services or import of goods within the territory of the PRC shall pay VAT. Unless provided otherwise, the rate of VAT is 17% on sales and 6% on the services. On April 4, 2018, MOF and SAT jointly promulgated the Circular of the Ministry of Finance and the State Administration of Taxation on Adjustment of Value-Added Tax Rates (the "**Circular 32**") according to which (i) for VAT taxable sales acts or import of goods originally subject to VAT rates of 17% and 11% respectively, such tax rates shall be adjusted to 16% and 10%, respectively; (ii) for purchase of agricultural products originally subject to tax rate of 11%, such tax rate shall be adjusted to 10%; (iii) for purchase of agricultural products for the purpose of production and sales or consigned processing of goods subject to tax rate of 16%, such tax shall be calculated at the tax rate of 12%; (iv) for exported goods originally subject to tax rate of 17% and export tax refund rate of 17%, the export tax refund rate shall be adjusted to 16%; and (v) for exported goods and cross-border taxable acts originally subject to tax rate of 11% and export tax refund rate of 11%, the export tax refund rate shall be adjusted to 10%. Circular 32 became effective on May 1, 2018 and shall supersede existing provisions which are inconsistent with Circular 32.

Since November 16, 2011, the MOF and the SAT have implemented the Pilot Plan for Imposition of Value-Added Tax to Replace Business Tax (the "**VAT Pilot Plan**"), which imposes VAT in lieu of business tax for certain "modern service industries" in certain regions and eventually expanded to nation-wide application in 2016. According to the Implementation Rules for the Pilot Plan for Imposition of Value-Added Tax to Replace Business Tax released by the MOF and the SAT on the VAT Pilot Program, the "modern service industries" include research, development and technology services, information technology services, cultural innovation services, logistics support, lease of corporeal properties, attestation and consulting services. The Notice on Comprehensively Promoting the Pilot Plan of the Conversion of Business Tax to Value-Added Tax, which was promulgated on March 23, 2016, became effective on May 1, 2016 and amended on July 11, 2017 and March 20, 2019, sets out that VAT in lieu of business tax be collected in all regions and industries.

On March 20, 2019, the MOF, the SAT and the General Administration of Customs (GAC) jointly promulgated the Announcement on Relevant Policies for Deepening Value-Added Tax Reform, which became effective on April 1, 2019 and provides that (i) with respect to VAT taxable sales acts or import of goods originally subject to VAT rates of 16% and 10% respectively, such tax rates shall be adjusted to 13% and 9%, respectively; (ii) with respect to purchase of agricultural products originally subject to tax rate of 10%, such tax rate shall be adjusted to 9%; (iii) with respect to purchase of agricultural products for the purpose of production or consigned processing of goods subject to tax rate of 13%, such tax shall be calculated at the tax rate of 10%; (iv) with respect to export of goods and services originally subject to tax rate of 16% and export tax refund rate of 16%, the export tax refund rate shall be adjusted to 13%; and (v) with respect to export of goods and cross-border taxable acts originally subject to tax rate of 10% and export tax refund rate of 10%, the export tax refund rate shall be adjusted to 9%.

**Regulations Related to Employment**

The PRC Labor Law and the Labor Contract Law with its implementation rules provide requirements concerning employment contracts between an employer and its employees. If an employer fails to enter into a written employment contract with an employee within one year from the date on which the employment relationship is established, the employer must rectify the situation by entering into a written employment contract with the employee and pay the employee twice the employee's salary for the period from the day following the lapse of one month from the date of establishment of the employment relationship to the day prior to the execution of the written employment contract. The Labor Contract Law and its implementation rules also require compensation to be paid upon certain terminations.

In addition, if an employer intends to enforce a non-compete provision in an employment contract or non-competition agreement with an employee, it has to compensate the employee on a monthly basis during the term of the restriction period after the termination or expiry of the labor contract. Employers in most cases are also required to provide severance payment to their employees after their employment relationships are terminated. Violations of the PRC Labor Law and the Labor Contract Law may result in the imposition of fines and other administrative sanctions, and serious violations may result in criminal liabilities.

Enterprises in China are required by PRC laws and regulations to participate in certain employee benefit plans, including social insurance funds, namely a pension plan, a medical insurance plan, an unemployment insurance plan, a work-related injury insurance plan and a maternity insurance plan, and a housing provident fund, and contribute to the plans or funds in amounts equal to certain percentages of salaries, including bonuses and allowances, of the employees as specified by the local government from time to time at locations where they operate their businesses or where they are located. According to the Social Insurance Law, which was promulgated by the SCNPC in October 2010 and came into effect in July 2011, and further amended in December 2018, an employer that fails to make social insurance contributions may be ordered to rectify the non-compliance and pay the required contributions within a stipulated deadline and be subject to a late fee. If the employer still fails to rectify the failure to make social insurance contributions within the stipulated deadline, it may be subject to a fine ranging from one to three times the amount overdue. According to the Regulations on Management of Housing Fund, which was promulgated by the State Council in April 1999 and amended in March 2002 and March 2019, respectively, an enterprise that fails to make housing fund contributions may be ordered to rectify the noncompliance and pay the required contributions within a stipulated deadline; if the enterprise fails to rectify the non-compliance with the stipulated deadline, an application may be made to a local court for compulsory enforcement.

On December 28, 2012, the Labor Contract Law was amended to impose more stringent requirements on labor dispatch which became effective on July 1, 2013. Pursuant to the amended Labor Contract Law, the outsourced contract workers shall be entitled to equal pay for equal work as a fulltime employee of an employer, and they shall only be engaged to perform temporary, ancillary or substitute works, and an employer shall strictly control the number of outsourced contract workers so that they do not exceed certain percentage of total number of employees. "Temporary work" means a position with a term of less than six months; "auxiliary work" means a non-core business position that provides services for the core business of the employer; and "substitute worker" means a position that can be temporarily replaced with a outsourced contract worker for the period that a regular employee is away from work for vacation, study or for other reasons. According to the Labor Dispatch Interim Provisions, promulgated by the Ministry of Human Resources and Social Security on January 24, 2014, which became effective on March 1, 2014, outsourced workers are entitled to equal pay with full-time employees for equal work. Employers are allowed to use outsourced workers for temporary, auxiliary or substitutive positions, and the number of outsourced workers may not exceed 10% of the total number of employees. Any labor dispatching entity or employer in violation of the Labor Dispatch Interim Provisions shall be ordered by the labor administrative authorities to rectify the noncompliance within a prescribed time limit; and if such entity or employer fails to do so within the prescribed time limit, it may be subject to a fine from RMB5,000 to RMB10,000 for each noncompliance outsourced worker, and the labor dispatching entity is subject to revocation of its license for engaging in the labor dispatch business. Where the employer causes any damage to the outsourced worker, the labor dispatch entity and the employer shall assume joint and several liabilities.

Pursuant to the PRC Civil Code, employers shall bear tortious liability for any injury or damage caused to other people by their employees in the course of their work. Parties that use outsourced labor shall bear tortious liability for any injury or damage caused to other people by outsourced personnel during the course of their work during the labor dispatch period; the labor dispatching party shall bear corresponding supplementary liability where it is at fault.

**Regulations Related to Overseas Listing and M&A**

On August 8, 2006, six PRC regulatory agencies, including the CSRC, promulgated the Provisions on Foreign-funded Mergers and Acquisitions of Domestic Enterprises, or M&A Rules, which became effective on September 8, 2006 and were amended on June 22, 2009. The M&A Rules, among other things, require offshore special purpose vehicles formed for overseas listing purposes through acquisitions of PRC domestic companies and controlled by PRC domestic enterprises or individuals to obtain the approval of the CSRC prior to the listing and trading of such special purpose vehicle's securities on an overseas stock exchange. In September 2006, the CSRC published on its official website procedures regarding its approval of overseas listings by special purpose vehicles. The CSRC approval procedures require the filing of a number of documents with the CSRC. Although (i) the CSRC currently has not issued any definitive rule or interpretation concerning whether offerings like ours under this annual report are subject to the M&A Rules; and (ii) no provision in the M&A Rules clearly classifies contractual arrangements as a type of transaction subject to the M&A Rules; the interpretation and application of the regulations remain unclear, and our offerings may ultimately require approval from the CSRC. If CSRC approval is required, it is uncertain whether it would be possible for us to obtain the approval and any failure to obtain or delay in obtaining CSRC approval for our offerings would subject us to sanctions imposed by the CSRC and other PRC regulatory agencies.

The M&A Rules, and other regulations and rules concerning mergers and acquisitions established additional procedures and requirements that could make merger and acquisition activities by foreign investors more time consuming and complex. For example, the M&A Rules require that MOFCOM be notified in advance of any change-of-control transaction in which a foreign investor takes control of a PRC domestic enterprise, if (i) any important industry is concerned, (ii) such transaction involves factors that impact or may impact national economic security, or (iii) such transaction will lead to a change in control of a domestic enterprise which holds a famous trademark or PRC time-honored brand.

In addition, according to the Notice of the General Office of State Council on Establishment of Security Review System Pertaining to Mergers and Acquisitions of Domestic Enterprises by Foreign Investors issued on February 3, 2011 and which became effective 30 days thereafter, the Rules on Implementation of Security Review System for the Merger and Acquisition of Domestic Enterprises by Foreign Investors issued by the MOFCOM on August 25, 2011 and which became effective on September 1, 2011, mergers and acquisitions by foreign investors that raise "national defense and security" concerns and mergers and acquisitions through which foreign investors may acquire de facto control over domestic enterprises that raise "national security" concerns are subject to strict review by the MOFCOM, and the regulations prohibit any activities attempting to bypass such security review, including by structuring the transaction through a proxy or contractual control arrangement.

On July 6, 2021, the State Council and General Office of the CPC Central Committee issued the Opinions. The Opinions emphasized the need to strengthen the administration over illegal securities activities and the supervision on overseas listings by China-based companies and proposed to take effective measures, such as promoting the construction of relevant regulatory systems to deal with the risks and incidents faced by China-based overseas-listed companies.

On February 17, 2023, the CSRC released the New Overseas Listing Rules, which came into effect on March 31, 2023. The New Overseas Listing Rules apply to overseas securities offerings and/or listings conducted by (i) companies incorporated in the PRC, or PRC domestic companies, directly and (ii) companies incorporated overseas with operations primarily in the PRC and valued on the basis of interests in PRC domestic companies, or indirect offerings. The New Overseas Listing Rules requires (1) the filings of the overseas offering and listing plan by the PRC domestic companies with the CSRC under certain conditions, and (2) the filing of their underwriters with the CSRC under certain conditions and the submission of an annual report to of such filed underwriters the CSRC within the required timeline. The required filing scope is not limited to the initial public offering, but also includes subsequent overseas securities offerings, single or multiple acquisition(s), share swap, transfer of shares or other means to seek an overseas direct or indirect listing, a secondary listing or dual listing.

Under the New Overseas Listing Rules, a filing-based regulatory system applies to "indirect overseas offerings and listings" of companies in mainland China, which refers to securities offerings and listings in an overseas market made under the name of an offshore entity but based on the underlying equity, assets, earnings or other similar rights of a company in mainland China that operates its main business in mainland China. As advised by our PRC legal counsel, Jinghe Law Firm, the New Overseas Listing Rules state that, any post-listing follow-on offering by an issuer in an overseas market, including issuance of shares, convertible notes, exchangeable notes and preferred shares, shall be subject to filing requirement within three business days after the completion of the offering.

On the same day, the CSRC also held a press conference for the release of the New Overseas Listing Rules and issued the Overseas Listing Notice. Under the Overseas Listing Notice, a company that has already completed overseas listing will be considered as an existing listed company and is not required to make any filing until it conducts a new offering in the future.

Based on our understanding of the rules, we are required to submit the filing report to the CSRC within three business days upon the first closing of the transactions contemplated under the L1 Securities Purchase Agreements and report share issuance status to the CSRC upon completion of all subsequent closings. On September 26, 2024, we made the initial CSRC Filing with the CSRC and will report share issuance status to the CSRC upon completion of all subsequent closings in compliance with New Overseas Listing Rules. It is uncertain whether such filing can be completed or how long it will take to complete such filing. Any delay in completing such filing procedures might affect the other filing procedures with respect to other applicable circumstances, under the New Overseas Listing Rules in the future, such as the secondary listing, primary listing, spin-off listing and making overseas offering and listing anew after being delisted from an overseas exchange, which might affect our future public market financings and capital market transactions.

As of September 30, 2024, the Company believes it is not required to obtain permission or approval from any other PRC state or local government. See "*Item 4. Information on the Company – B. Business Overview*. However, if any other filings, approval, review or other procedure is required, there is no assurance that we will be able to obtain such filings, approval or complete such review or other procedures timely or at all. For any approval or permission that we have received or may receive in future, it could nevertheless be revoked or cancelled, and the terms of its reissuance may impose restrictions on our operations and offerings relating to our securities. Besides, the New Overseas Listing Rules may subject us to additional compliance requirement in the future. Any failure of us to fully comply with new regulatory requirements may significantly limit or completely hinder our ability to continue to offer our Class A ordinary shares, cause significant disruption to our business operations, and severely damage our reputation, which would materially and adversely affect our financial condition and results of operations and cause our Class A ordinary shares to significantly decline in value or become worthless.

&nbsp;&nbsp;&nbsp;&nbsp;**C.** **Organizational Structure** 

Zhibao is a Cayman Islands exempted company incorporated on January 11, 2023. Structured as a holding company with no material operations, Zhibao conducts its operations in China through its PRC Subsidiaries, primarily Zhibao China and Sunshine Insurance Brokers.

We have started our business in the insurance brokerage industry through Zhibao China since 2016. With the growth of our business and in order to facilitate international capital investment in us, we started a reorganization as described below involving new offshore and onshore entities in December 2022 and completed it in March 2023.

For information of our subsidiaries, please see "*Item 4, Information on the Company – A. History and Development of the Company*" beginning on page 47 of this annual report.

The chart below shows our corporate structure as of the date of this annual report:

![](image_003.jpg)

&nbsp;&nbsp;&nbsp;&nbsp;**D.** **Property, Plants and Equipment** 

**Properties**

Our headquarters and administrative offices are currently located in Shanghai, China.

The following table sets forth certain information relating to the primary leased offices of Zhibao's PRC Subsidiaries in China as of the date of this annual report.

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| | | | | |
|:---|:---|:---|:---|:---|
| **Property User** | **Location** | **Size <br> (Square <br> Meters)** | **Term** | **Primary <br> Use** |
| Sunshine Insurance Brokers | Rooms 301-307, Floor 3, Building 6, Lane 727, Wuxing Road, Pudong New <br> District, <br> Shanghai | 1143.32 | November 1, 2024 to October 31, 2027 | Office |

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In addition to the above-mentioned primary leases, one of Zhibao's PRC Subsidiaries, Sunshine Insurance Brokers also leases offices for its branches located in Beijing, Guangzhou, Harbin, Nanjing, Hangzhou, Jinan, Linyi, Shenzhen and Kunming for office uses. As of the date of this annual report, we have a total of 15 lease agreements for our leased properties in China for our business operations.

We believe the above offices and facilities are adequate and suitable for our current needs and that, should it be needed, suitable additional or alternative space will be available to accommodate any such expansion of our operations.

**ITEM 4A. UNRESOLVED STAFF COMMENTS**

Not Applicable

**ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS** 

*You should read the following discussion and analysis of our financial condition and results of operations in conjunction with our combined financial statements and consolidated financial statements and the related notes included in this annual report. This discussion contains forward-looking statements that involve risks and uncertainties. Our actual results and the timing of selected events could differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth under "Risk Factors" and elsewhere in this annual report. All amounts included herein with respect to the fiscal years ended June 30, 2023, 2024 and 2025 are derived from our audited consolidated financial statements included elsewhere in this Report. Our financial statements have been prepared in accordance with U.S. Generally Accepted Accounting Principles, or U.S. GAAP.*

**Overview**

Zhibao Technology Inc. is an exempted company incorporated under the laws of the Cayman Islands on January 11, 2023. It operates as a holding company with substantially all of its business through its PRC Subsidiaries, or Zhibao China Group, in particular Zhibao China and Sunshine Insurance Brokers.

2B2C digital embedded insurance refers to our one-stop customized insurance brokerage model conducted through Zhibao China Group, under which we provide proprietary and customized insurance solutions to be digitally embedded in the existing customer engagement matrix of our B channels to reach and serve such B channels' existing pool of end customers. Each B channel encompasses a specific scenario where its end customers also have potential, untapped insurance needs. For example, a Chinese travel agency (our B channel) has an average of 100,000 Chinese tourists traveling to the U.S. for tourism every year. We believe this presents an untapped scenario-specific opportunity for international travel accident insurance needs for a pool of 100,000 Chinese tourists as end customers. These end customers might otherwise have to search for and purchase insurance separately or might not purchase insurance at all. After Zhibao China Group reaching an agreement with such travel agency to become one of our B channels, they build and embed a travel insurance solution across this travel agency's matrix of digital channels, including its website, App, Douyin (the Chinese equivalent of TikTok), WeChat Mini Program, and other social media accounts. Consequently, we, through Zhibao China Group, may pinpoint the 100,000-strong customer base and provide insurance brokerage services which are specifically and accurately tailored to the insurance needs of these end customers.

Our service portfolio through Zhibao China Group includes (1) insurance brokerage services, and (2) MGU services, a specialized insurance brokerage service whereby the insurance companies authorize us to assist them in underwriting, claims and risk control services. It broadly covers insurance product design and customization, selection of insurance companies, technology system interconnection and delivery, customer AARRR operation, customer service, compliance management, and data analysis, all of which are integrated in each of our insurance solutions. Each insurance solution generally applies to one specific scenario in a particular sector, with customized product design and services relevant for that scenario and sector. As of the date of this annual report, we, through Zhibao China Group, have developed more than 40 proprietary and innovative digital insurance solutions addressing different scenarios in a wide range of industries, including but not limited to travel, sports, logistics, utilities (i.e., gas and electricity), and e-commerce. Zhibao China Group acquire and analyze customer data, utilize big data and AI technology to continually iterate and enhance our digital insurance solutions. This iterative process, in addition to continually improving our digital insurance solutions, will keep us abreast of the new trends and customer preferences in the market.

Zhibao China Group secure and serve our end customers through our B channels. Our B channels cover a wide range of industries and organizations, including but not limited to internet platforms, large and medium-sized enterprises, and government agencies. While B channels have end customers with potential insurance needs relevant and specific to their primary operations, they usually do not have the experience and expertise to effectively provide insurance related services. In order to address this pain-point, we, through Zhibao China Group, provide them with our customized digital insurance solutions specifically tailored to their business. Our 2B2C model thrives because our relationship with B channels is mutually beneficial and sustainable for all participants. Our B channels view us as a valuable partner as we empower them to provide insurance as a value-added service to their end customers, a potential competitive advantage for them. By embedding our digital insurance solutions into our B channels' online matrix to reach their customer base, we maintain a captive, stable and sustainable source of end customers at low cost. The end customers, as a result, can conveniently and efficiently access quality brokerage services and suitable insurance products tailored to their actual needs. As of the date of this annual report, we, through Zhibao China Group, have cooperated with more than 2,400 B channels, and secured more than 24 million end customers through them. We will expand the number of B channels as a key growth strategy of our business.

Under our business model, Zhibao China Group represent end customers as their authorized insurance broker to negotiate with insurance companies and select the most suitable insurance products for our end customers. As of the date of this annual report, we have partnered with over 100 insurance companies (including their subsidiaries and branches) through Zhibao China Group.

While embedded insurance brokerage is still at an early stage of development in China, we believe it is the future of insurance brokerage industry.

Our revenue increased by RMB 41.6 million (US$5.7 million), or 29% from approximately RMB 142.1 million for the fiscal year ended June 30, 2023 to RMB 183.7 million for the fiscal year ended June 30, 2024, and further increased by RMB 93.3 million (US$13.3 million), or 51% to RMB 276.9 million (US$38.7 million) for the fiscal year ended June 30, 2025.

For the fiscal year ended June 30, 2023, we incurred net loss of approximately RMB 43.1 million, respectively. For the fiscal year ended June 30, 2024, we achieved profitability with our net income of approximately RMB 13.3 million. For the fiscal year ended June 30, 2025, we incurred net loss of approximately RMB 62.0 million ($8.7 million). Our business is generally stable throughout the year. However, the volume of business from July to December tends to be higher than that from January to June.

**Financing through issuance of convertible notes**

On September 23, 2024, the Company entered into a L1 Securities Purchase Agreement with L1. The L1 Securities Purchase Agreement provides for loans in an aggregate principal amount of up to $8.0 million under up to three tranches. As of June 30, 2025, the Company received net proceeds of approximately RMB 17.5 million (US$2.4 million), and the Company also settled the principal and interest of convertible notes of approximately RMB 19.4 million (US$2.7 million) through issuance of Class A ordinary shares, and approximately RMB 5.3 million (US$0.7 million) in cash, on an aggregate base in connection with the financings with L1. On July 22, 2025, the Company received additional $270,000 from L1 (net of original issue discount of 10%) in the Second Closing of the Second Tranche. As of June 30, 2025, the carrying amounts of the Company's convertible notes are RMB 3,510,163 ($490,000), net of unamortized debt discount of RMB 1,800,820 ($251,385).

See "*Item 4. Information about the Company – History and Development of the Company – L1 Private Placement.*"

**Acquisition of a subsidiary**

On July 2, 2025, Zhibao China, entered into the Zhonglian Agreement with the Zhonglian Sellers and Zhonglian, pursuant to which, subject to the terms and conditions set forth in the Zhonglian Agreement, Zhibao China agreed to acquire an aggregate of 51% of the equity interest in Zhonglian, including 23% of the equity interest from Xuegeng Zhao and 28% of the equity interest from Qin'er Ye, for a total purchase price of RMB25.5 million (approximately $3.5 million), subject to adjustment as provided in the Zhonglian Agreement.

See "*Item 4. Information about the Company – History and Development of the Company – Zhonglian Acquisition.*"

**Entry into Hudson Equity Purchase Agreement**

On June 22, 2025, the Company entered into the Hudson EPA with Hudson in connection with setting up the Hudson ELOC. Pursuant to the Hudson EPA, Hudson has agreed to purchase up to $15,000,000 of the Company's Class A ordinary shares over a two-year period commencing on June 22, 2025, subject to earlier terminations.

See "*Item 4. Information about the Company – History and Development of the Company – Hudson ELOC.*"

**Key Factors that Affect Operating Results**

Our business, financial condition and results of operations have been, and are expected to continue to be, affected by a number of factors, which primarily include the following:

 ****

***Our ability to accelerate the expansion of 2B2C business and drive additional conversion for end customers***

Our future growth depends on our ability to sustain the expansion of our 2B2C business and drive additional conversion for end customers. With our strong position as a first mover in the 2B2C embedded insurance market, we aim to further broaden our B channels base through expansion of our sales teams and independent sales partners with resources to B channels. We also plan to strengthen our 2C business by targeting our existing customer base to meet the additional needs of each end customer. To achieve the goal, we will offer personalized insurance consultations to end customers through multiple channels, such as WeChat Mini Program, phone, or face-to-face meetings. Our aim is to steer their attention towards comprehensive family security plans, leading to long-term insurance commitments with us. Besides, we will also provide targeted consulting services to guide end customers towards suitable insurance options and facilitate short-term policy conversions.

 ****

***Our ability to utilize innovative insurance technology and infrastructure***

We regard insurance technology and infrastructure as critical to our ability to optimize our insurance solutions provided to our business channels and end customers. We have invested substantial resources in developing the sophisticated and innovative technology systems that we use for optimizing our insurance solutions. We will continually upgrade and enhance our insurance technologies to upgrade and enrich our digital insurance solutions to keep us abreast of the new trends and customer preferences in the market. Our aim is to develop solutions across every sector of the economy, and ultimately cover every aspect of the end customers' daily life.

 ****

 ****

***Our ability to attract, incentivize and retain talented professionals***

We believe our success greatly depends on our ability to attract, incentivize and retain talented professionals. To maintain and improve our competitive advantage in the market, we intend to implement several initiatives to retain and attract more mid- to high-level personnel. These include formulating a market-oriented compensation structure for our employees and implementing a standardized multi-level performance review mechanism. We also plan to invest more time and resources in training to increase the value of our employees. We need more talented professionals for the expansion of our business.

**Key Components of Results of Operations**

 ****

***Revenues***

Our revenues consist of (i) Insurance Brokerage Fees Zhibao China Group receive from their digital insurance brokerage services, and (ii) MGU Service Fees Zhibao China Group receive from insurance companies for MGU services. For the fiscal years ended June 30, 2023, 2024 and 2025, our revenues were approximately RMB 142.1 million, RMB 183.7 million and RMB 276.9 million (US$38.7 million), respectively. The following table sets forth a breakdown of our revenue by service type for the fiscal years indicated.

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **For the Fiscal Years Ended June 30,** | **For the Fiscal Years Ended June 30,** | **For the Fiscal Years Ended June 30,** | **For the Fiscal Years Ended June 30,** | **For the Fiscal Years Ended June 30,** | **For the Fiscal Years Ended June 30,** | **For the Fiscal Years Ended June 30,** |
|  | **2023** | **2023** | **2024** | **2024** | **2025** | **2025** | **2025** |
|  | **RMB** | **%** | **RMB** | **%** | **RMB** | **US$** | **%** |
| Insurance Brokerage Fees | 119765046 | 84 | 174056644 | 94 | 273799682 | 38220961 | 99 |
| MGU Service Fees | 22814079 | 16 | 10198113 | 6 | 3463519 | 483489 | 1 |
| Less: business taxes and surcharges | (476291) |  | (585431) |  | (327171) | (45671) |  |
|  | **142102834** | **100** | **183669326** | **100** | **276936030** | **38658779** | **100** |

---

For the fiscal years ended June 30, 2023, 2024 and 2025, all insurance applications submitted by end customers were fully approved by insurance companies without any denial. The following table sets forth a breakdown of the number of insurance policies submitted by end customers and related revenues, disaggregating by product types.

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **For the Fiscal Years Ended June 30,** | **For the Fiscal Years Ended June 30,** | **For the Fiscal Years Ended June 30,** | **For the Fiscal Years Ended June 30,** | **For the Fiscal Years Ended June 30,** | **For the Fiscal Years Ended June 30,** | **For the Fiscal Years Ended June 30,** |
|  | **2023** | **2023** | **2024** | **2024** | **2025** | **2025** | **2025** |
|  | **RMB** | **Number of<br> insurance<br> policies** | **RMB** | **Number of<br> insurance<br> policies** | **RMB** | **US$** | **Number of<br> insurance<br> policies** |
| ***Insurance Brokerage Fees*** |  |  |  |  |  |  |  |
| Property & casualty insurance products | 47456050 | 141567 | 88894882 | 658553 | 162093101 | 22627324 | 1340541 |
| Life insurance products | 3469862 | 945 | 146357 | 39 | 187843 | 26222 | 50 |
| Health insurance product | 58115503 | 350962 | 81809456 | 658005 | 108062068 | 15084883 | 1227027 |
| Others | 10723631 |  | 3205949 |  | 3456670 | 482532 |  |
| **Total** | **119765046** | **493483** | **174056644** | **1316597** | **273799682** | **38220961** | **2567618** |
| ***MGU Service Fees*** |  |  |  |  |  |  |  |
| Health insurance product | 22814079 | 1072 | 10198113 | **834** | **3463519** | 483489 | **481** |
| **Total** | **22814079** | **1072** | **10198113** | **834** | **3463519** | **483489** | **481** |

---

Insurance Brokerage

Insurance Brokerage services is our PRC Subsidiaries' primary business line. We provide embedded digital insurance brokerage services through our PRC Subsidiaries to end customers through B channels supported by the digital insurance brokerage platform — a proprietary platform of our PRC Subsidiaries providing insurance solutions embedded in the customer engagement matrix of our B channels, including their websites, App, Wechat Mini Programs, Douyin (the Chinese equivalent of TikTok) and other social media accounts. An insurance solution refers to an insurance brokerage service specially designed for a B channel and its end customers, which integrates online operations, systems, insurance products and customer services.

The commission fees are calculated on a predetermined percentage of insurance premium of each insurance policy. Commission fees are recognized when our PRC Subsidiaries complete the insurance brokerage services, at which point our PRC Subsidiaries successfully place an insurance policy for the end customers.

For the fiscal years ended June 30, 2023, 2024 and 2025, the revenues generated from the general digital insurance brokerage services were approximately RMB 119.8 million, RMB 174.1 and RMB 273.8 million (US$38.2 million), respectively, accounting for approximately 84%, 94% and 99%, respectively, of our total revenues. The increase in the insurance brokerage fees as a percentage of total revenues for such periods was mainly due to the increase in volume of transactions on our platform, primarily contributed by larger customer base and more selection of production.

MGU Service Fees

Our PRC Subsidiaries receive MGU Service Fees from insurance companies. MGU Service Fees are calculated on a predetermined percentage of insurance premium of each insurance policy. MGU Service Fees are generally comprised of i) underwriting services, the revenue of which are recognized at a point when the PRC Subsidiaries complete the underwriting services, and ii) claims and risk control services, the revenue of which are recognized ratably over the terms of insurance policies.

For the fiscal years ended June 30, 2023, 2024 and 2025, the revenues generated from the MGU services were approximately RMB 22.8, RMB 10.2 million and RMB 3.5 million (US$0.5 million), respectively, accounting for approximately 16%, 6% and 1%, respectively, of our total revenues. The decrease in the MGU Service Fees as a percentage of total revenues for such periods was mainly due to abrupt closure of business by a reinsurance partner in the high-end medical sector. The PRC Subsidiaries' MGU services focus on health insurance products for high-value individuals, which was a relatively small market and therefore the growth in MGU service was slower than that of insurance brokerage services.

***Cost of revenues***

Our cost of revenue primarily consists of intermediary fees paid to our B channels for allowing our insurance solutions to be embedded in the platforms of our B channels and other services to facilitate the insurance brokerage and MGU services and promotion cost incurred to increase our exposure to potential insured customers. &nbsp;&nbsp;&nbsp;&nbsp;These costs are charged to the consolidated statements of operations and comprehensive (loss) income as incurred.

---

| | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **For the Fiscal Years Ended June 30,** | **For the Fiscal Years Ended June 30,** | **For the Fiscal Years Ended June 30,** | **For the Fiscal Years Ended June 30,** | **For the Fiscal Years Ended June 30,** | **For the Fiscal Years Ended June 30,** | **For the Fiscal Years Ended June 30,** |
|  | **2023** | **2023** | **2024** | **2024** | **2025** | **2025** | **2025** |
|  | **RMB** | **%** | **RMB** | **%** | **RMB** | **US$** | **%** |
| Insurance Brokerage Fees | 71399238 | 84 | 102132184 | 94 | 159732950 | 22297859 | 98 |
| MGU Service Fees | 12085965 | 16 | 6776363 | 6 | 3633875 | 507270 | 2 |
|  | **83485203** | **100** | **108908547** | **100** | **163366825** | **22805129** | **100** |

---

***Selling expenses***

Selling expenses primarily consist of (i) staff costs, consisting of salaries, social insurance, and housing funds for our personnel in our sales departments; (ii) service fees; (iii) entertainment expenses and (iv) other miscellaneous expenses.

 ****

***General and administrative expenses***

General and administrative expenses primarily consist of (i) staff costs, consisting of salaries, social insurance, housing funds and share-based compensation for our personnel in our finance and human resource departments; (ii) professional service fees, such as legal fees for our daily operations; (iii) rental and property management expenses for our offices in headquarter and branches, (iv) provision against doubtful accounts and (iv) other miscellaneous expenses.

***Research and development expenses***

Research and development expenses primarily consist of (i) staff costs, consisting of salaries, social insurance, and housing funds for our personnel in our research and development departments; (ii) our sourcing labor cost which were incurred to improve our digital insurance brokerage platform primarily embedded in the platforms of our B channels; (iii) service fees and (iv) other miscellaneous expenses.

 ****

***Taxation***

 

*Cayman Islands*

The Cayman Islands currently levies no taxes on individuals or corporations based upon profits, income, gains or appreciation and there is no taxation in the nature of inheritance tax, gift tax or estate duty. There are no other taxes likely to be material to us levied by the Government of the Cayman Islands, except for stamp duties which may be applicable on instruments executed in, or after execution brought within the jurisdiction of the Cayman Islands. No stamp duty is payable in the Cayman Islands on the issue of shares by, or any transfers of shares of, Cayman Islands companies (except those which hold interests in land in the Cayman Islands). An instrument of transfer in respect of shares is stampable if executed or brought into the Cayman Islands There are no exchange control regulations or currency restrictions in the Cayman Islands.

Payments of dividends and capital in respect of our ordinary shares will not be subject to taxation in the Cayman Islands and no withholding will be required under Cayman Islands laws on the payment of a dividend or capital to any holder of ordinary shares, nor will gains derived from the disposal of our ordinary shares be subject to Cayman Islands income or corporation tax.

 

*British Virgin Islands ("**BVI**")*

Zhibao BVI is incorporated in the British Virgin Islands and is not subject to tax on income or capital gains under current British Virgin Islands law. In addition, upon payments of dividends by these entities to their shareholders, no British Virgin Islands withholding tax will be imposed.

 

*Hong Kong*

According to Tax (Amendment) (No. 3) Ordinance 2018 published by Hong Kong government, from April 1, 2018, under the two-tiered profits tax rates regime, the profits tax rate for the first HKD2 million of assessable profits will be lowered to 8.25% (half of the rate specified in Schedule 8 to the Inland Revenue Ordinance (IRO)) for corporations, and the profits tax rate for remaining profits will be subjected to 16.5%. Zhibao HK was not subject to Hong Kong profit tax for FY2025 as it did not have assessable profit in FY2025. There are no withholding taxes in Hong Kong on remittance of dividends.

*Malaysia*

Zhibao Labuan is incorporated in Malaysia and is subject to Malaysia Corporate Income Tax imposed on income accruing in or derived from Malaysia. Zhibao Labuan is subject to the standard corporate tax rate of 24% if in a taxable position. However, resident companies that qualify as small and medium-sized enterprises may benefit from a reduced tax rate of 15% on the first RM 150,000 of chargeable income and 17% on the next RM 450,000.

 

*China*

Zhibao China, Sunshine Insurance Brokers, Shanghai Anyi, Zhibao Health and Zhizhongbao were incorporated in the PRC and are subject to PRC Enterprise Income Tax ("**EIT**") on the taxable income in accordance with the relevant PRC income tax laws. Under the EIT Law in the PRC, the unified EIT rate for domestic enterprises and foreign invested enterprises is 25%, except for available preferential tax treatments.

**A. Operating Results**

***For Fiscal Years ended June 30, 2024 and 2025***

 **

The following table sets forth a summary of our results of operations for the years/periods indicated, both in dollar amounts and as percentages of total revenue. This information should be read together with our consolidated financial statements and related notes included elsewhere in this annual report. The operating results in any period are not necessarily indicative of the results that may be expected for any future period.

 ****

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **For the Fiscal Year Ended June 30,** | **For the Fiscal Year Ended June 30,** | **For the Fiscal Year Ended June 30,** | **For the Fiscal Year Ended June 30,** | **For the Fiscal Year Ended June 30,** |
|  | **2024** | **2024** | **2025** | **2025** | **2025** |
|  | **RMB** | **%** | **RMB** | **US$** | **%** |
| **Revenues** | 183669326 | 100 | 276936030 | 38658779 | 100 |
| **Cost of revenues** | (108908547) | (59) | (163366825) | (22805129) | (59) |
|  | **74760779** | 41 | **113569205** | **15853650** | 41 |
| **Operating expenses** |  |  |  |  |  |
| Selling and marketing expenses | (31606719) | (17) | (112234880) | (15667385) | (41) |
| General and administrative expenses | (17954289) | (10) | (44016390) | (6144451) | (16) |
| Research and development expenses | (15092620) | (8) | (10855939) | (1515431) | (4) |
| **Total operating expenses** | **(64653628)** | **(35)** | **(167107209)** | **(23327267)** | **(61)** |
| **Income (loss) from operations** | **10107151** | **6** | **(53538004)** | **(7473617)** | **(20)** |
| Interest expense, net | (848575) | (0) | (3304880) | (461343) | (1) |
| Other income, net | 507609 | 0 | (1532989) | (213997) | (1) |
| Gain on extinguishment of liability | 8996341 | 5 |  |  |  |
| Loss on extinguishment of convertible notes |  |  | (7174958) | (1001586) | (3) |
| Changes in fair value of derivative liabilities |  |  | (1031558) | (144000) | 0 |
| Changes in fair value of warrant liabilities | - | - | 1952081 | 272500 | 1 |
| **Income (Loss) Before Income Taxes** | **18762526** | **11** | **(64630308)** | **(9022043)** | **(24)** |
| Income tax (expenses) benefits | (5510773) | (3) | 2610709 | 364441 | 1 |
| **Net Income (Loss)** | **13251753** | **8** | **(62019599)** | **(8657602)** | **(23)** |

---

*Revenues*

Our revenues increased by approximately RMB 93.3 million (US$13.0 million), or 51% to approximately RMB 276.9 million (US$38.7 million) for the fiscal year ended June 30, 2025 from approximately RMB 183.7 million for the fiscal year ended June 30, 2024. The increase was primarily driven by an increase of approximately RMB 99.7 million from the digital insurance brokerage, partially offset against a decrease of approximately RMB 6.7 million from our MGU service fees, as more fully discussed below.

● *Insurance Brokerage Fees.* Our revenues from digital insurance brokerage services increased by approximately RMB 99.7 million, or 57%, to approximately RMB 273.8 million (US$38.2 million) for the fiscal year ended June 30, 2025 from approximately RMB 174.1 million for the fiscal year ended June 30, 2024. The increase was mainly attributable to combined effects of (i) an increase of gross written premiums ()"**GWP**") from approximately RMB 1.19 billion for the fiscal year ended June 30, 2024 to approximately RMB 1.57 billion (US$0.22 billion) for the fiscal year ended June 30, 2025, where the increase in GWP was primarily due to an increase of the number of insurance policies for property & casualty insurance products; and (ii) an increase in commission rate from weighted average rate of approximately 15.7% for the fiscal year ended June 30, 2024 to approximately 17.8% for the fiscal year ended June 30, 2025.

 

● *MGU Service Fees.* MGU Service Fees decreased by approximately RMB 6.7 million, or 66% to approximately RMB 3.5 million (US$0.5 million) for the fiscal year ended June 30, 2025 from approximately RMB 10.2 million for the fiscal year ended June 30, 2024. The decrease was mainly attributable to decrease in GWP for the MGU services which was due to abrupt closure of business by a reinsurance partner in the high-end medical sector. The GWP for the MGU services was approximately RMB 82 million and RMB 36 million (US$5.0 million) for the fiscal year ended June 30, 2024 and 2025, respectively.

 

 

*Cost of revenues*

Our cost of revenue increased by approximately 50% from RMB 108.9 million for the fiscal year ended June 30, 2024 to approximately RMB 163.4 million (US$22.8 million) for the fiscal year ended June 30, 2025. The increase of cost of revenues was in line with the increase of revenues.

 

*Gross margin*

As a result of foregoing, our gross margin was 40.7% and 41.0%, respectively, for the fiscal year ended June 30, 2024 and 2025, respectively.

 

*Selling expenses*

Our selling expenses increased by approximately RMB 80.6 million, or 255% from approximately RMB 31.6 million for the fiscal year ended June 30, 2024 to approximately RMB 112.2 million (US$15.7 million) for the fiscal year ended June 30, 2025. The increase was mainly due to an increase of approximately RMB 82.0 million in marketing service fees to gain an increase of GWP which was expected to decrease in next years, partially offset by a decrease of approximately RMB 0.8 million in salary and welfare expenses due to resignation of certain salespersons and a decrease of approximately $0.9 million in entertainment expenses.

*General and administrative expenses*

Our general and administrative expenses increased by approximately RMB 26.1 million, or 145% from approximately RMB 18.0 million for the fiscal year ended June 30, 2024 to approximately RMB 44.0 million (US$6.1 million) for the fiscal year ended June 30, 2025. The increase was mainly due to an increase of approximately RMB 12.3 million in provision of credit losses against accounts receivable due to increased aging of accounts receivable, an increase of approximately RMB 9.1 million in provision of allowance against prepayments to a related party, and an increase of approximately RMB 5.3 million in professional service expenses for filing of legal proceedings and services to the listed company.

*Research and development expenses*

Our research and development expenses decreased by approximately RMB 4.2 million, or 28% from approximately RMB 15.1 million for the fiscal year ended June 30, 2024 to approximately RMB 10.9 million (US$1.5 million) for the fiscal year ended June 30, 2025. The decrease was mainly due to a decrease of approximately RMB 3.9 million in service expenses and a decrease of approximately RMB 0.3 million in outsourcing expenses for the development of our online platform, which was completed in the year of 2024.

 ****

*Loss on extinguishment of convertible notes*

For the year ended June 30, 2025, the Company settled the principal and interest of convertible notes of approximately RMB 19.4 million (US$2.7 million) through issuance of Class A ordinary shares. The difference between the fair value of Class A ordinary shares on settlement dates and the principal and interest of convertible notes was recognized as loss on extinguishment of convertible notes.

 

 

*Changes in fair value of derivative liabilities*

In connection with L1 Securities Purchase Agreement, we recognized conversion features as derivative liabilities which was measured at fair value. For the year ended June 30, 2025, we remeasured fair value of derivative liabilities and charged remeasurement loss of approximately RMB 1.0 million (US$0.1 million) in the account of changes in fair value of derivative liabilities.

 

*Changes in fair value of warrant liabilities*

 

In connection with L1 Securities Purchase Agreement, we recognized warrants as liabilities measured at fair value. For the year ended June 30, 2025, we remeasured fair value of warrant liabilities and charged remeasurement gain of approximately RMB 2.0 million (US$0.3 million) in the account of changes in fair value of warrant liabilities.

*Income tax expenses*

For the fiscal year ended June 30, 2024, we recorded income tax expense of RMB 5.5 million which was primarily caused by deferred income tax expenses of approximately $5.5 million as a result of decrease of approximately $2.6 million in deferred tax liabilities and a decrease of approximately $1.6 million in deferred tax assets.

For the fiscal year ended June 30, 2025, we recorded income tax benefits of RMB 2.6 million which was primarily caused by deferred income tax expenses of approximately $2.6 million as a result of decreased deferred tax liabilities of approximately $2.6 million.

 

*Net income (loss)*

As a result of the foregoing, we had a net income of approximately RMB 13.3 million and a net loss of approximately RMB 62.0 million for the fiscal year ended June 30, 2024 and 2025, respectively.

 ****

***For Fiscal Years ended June 30, 2023 and 2024***

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **For the Fiscal Year Ended June 30,** | **For the Fiscal Year Ended June 30,** | **For the Fiscal Year Ended June 30,** | **For the Fiscal Year Ended June 30,** | **For the Fiscal Year Ended June 30,** |
|  | **2023** | **2023** | **2024** | **2024** | **2024** |
|  | **RMB** | **%** | **RMB** | **US$** | **%** |
| **Revenues** | 142102834 | 100 | 183669326 | 25273740 | 100 |
| **Cost of revenues** | (83485203) | (59) | (108908547) | (14986315) | (59) |
|  | **58617631** | **41** | **74760779** | **10287425** | 41 |
| **Operating expenses** |  |  |  |  |  |
| Selling and marketing expenses | (22495891) | (16) | (31606719) | (4349229) | (17) |
| General and administrative expenses | (70991876) | (50) | (17954289) | (2470592) | (10) |
| Research and development expenses | (9682605) | (7) | (15092620) | (2076814) | (8) |
| **Total operating expenses** | **(103170372)** | **(73)** | **(64653628)** | **(8896635)** | **(35)** |
| **(Loss) income from operations** | **(44552741)** | **(32)** | **10107151** | **1390790** | **6** |
| Interest expense, net | (912397) | (1) | (848575) | (116768) | (0) |
| Other income, net | 2907818 | 2 | 507609 | 69849 | 0 |
| Gain on extinguishment of liability |  |  | 8996341 | 1237938 | 5 |
| **(Loss) Income Before Income Taxes** | **(42557320)** | **(31)** | **18762526** | **2581809** | **11** |
| Income tax benefits | (541460) | (0) | (5510773) | (758308) | (3) |
| **Net (Loss) Income** | **(43098780)** | **(31)** | **13251753** | **1823501** | **8** |

---

*Revenues*

Our revenues increased by approximately RMB 41.6 million (US$5.7 million), or 29% to approximately RMB 183.7 million (US$25.3 million) for the fiscal year ended June 30, 2024 from approximately RMB 142.1 million for the fiscal year ended June 30, 2023. The increase was primarily driven by an increase of approximately RMB 54.3 million from the digital insurance brokerage services, partially offset against a decrease of approximately RMB 12.6 million from our MGU service fees, as more fully discussed below.

● *Insurance Brokerage Fees.* Our revenues from digital insurance brokerage increased by approximately RMB 54.3 million, or 45%, to approximately RMB 174.1 million (US$24.0 million) for the fiscal year ended June 30, 2024 from approximately RMB 119.8 million for the fiscal year ended June 30, 2023. The increase was mainly attributable to combined effects of (i) an increase of gross written premiums ("GWP") from approximately RMB 1.01 billion for the fiscal year ended June 30, 2023 to approximately RMB 1.19 billion (US$0.2 billion) for the fiscal year ended June 30, 2024, where the increase in GWP was primarily due to an increase of the number of insurance policies for property & casualty insurance products; and (ii) an increase in commission rate from weighted average rate of approximately 13.9% for the fiscal year ended June 30, 2023 to approximately 15.7 % for the fiscal year ended June 30, 2024.

● *MGU Service Fees.* MGU Service Fees decreased by approximately RMB 12.6 million, or 55% to approximately RMB 10.2 million (US$1.4 million) for the fiscal year ended June 30, 2024 from approximately RMB 22.8 million for the fiscal year ended June 30, 2023. The decrease was mainly attributable to decrease in GWP for the MGU services which was due to abrupt closure of business by a reinsurance partner in the high-end medical sector. The GWP for the MGU services was approximately RMB 152 million and RMB 82 million (US$11.3 million) for the fiscal year ended June 30, 2023 and 2024, respectively.

*Cost of revenues*

Our cost of revenue increased by approximately 30% from RMB 83.5 million for the fiscal year ended June 30, 2023 to approximately RMB 108.9 million (US$15.0 million) for the fiscal year ended June 30, 2024. The increase of cost of revenues was in line with the increase of revenues.

*Gross margin*

As a result of foregoing, our gross margin kept stable at 41.3% and 40.7%, respectively, for the fiscal year ended June 30, 2023 and 2024, respectively.

*Selling expenses*

Our selling expenses increased by approximately RMB 9.1 million, or 40% from approximately RMB 22.5 million for the fiscal year ended June 30, 2023 to approximately RMB 31.6 million (US$4.3 million) for the fiscal year ended June 30, 2024. The increase was mainly due to (i) an increase of approximately RMB5.8 million in salary and welfare expenses for our sales team as a result of employment of more sales persons in anticipation to increase the GWP for both of our digital brokerage services and MGU services, and (ii) an increase in other expenses of approximately RMB 2.3 million incurred by our sales teams, including an increase of approximately RMB 1.4 million in entertainment expenses and approximately $1.1 million in travel expenses which was used for expanding our customer base.

*General and administrative expenses*

Our general and administrative expenses decreased by approximately RMB 53.0 million, or 75% from approximately RMB 71.0 million for the fiscal year ended June 30, 2023 to approximately RMB 18.0 million (US$2.5 million) for the fiscal year ended June 30, 2024. The decrease was mainly due to a decrease in share-based compensation expenses of approximately RMB 55.3 million as we issued ordinary shares to a related party which is wholly controlled by Mr. Ma, our Chairman of the Board and Chief Executive Officer, and a decrease of approximately 1.3 million in payroll and welfare expenses, partially offset by an partially offset by an increase of approximately RMB 2.3 million in in provision for credit losses since our adoption of Accounting Standard s Update ASU 2016-13 on July 1, 2023, and an increase of approximately RMB 1.3 million in service fees because we update our financial system.

*Research and development expenses*

Our research and development expenses increased by approximately RMB 5.4 million, or 56% from approximately RMB 9.7 million for the fiscal year ended June 30, 2023 to approximately RMB 15.1 million (US$2.1 million) for the fiscal year ended June 30, 2024. The increase was mainly due to an increase of outsourcing expenses for the development of our platform.

*Gain on extinguishment of liability*

Before June 30, 2020, Zhibao China issued redeemable preferred shares to one investor for its cash consideration of RMB 15 million. In return, 6,521,739 Series Pre-A redeemable preferred shares of Zhibao China was issued and outstanding, which accounted for approximately 12.20% equity interest in Zhibao China.

On April 12, 2024, the Company entered into the agreement with such investor. Pursuant to the agreement, the Company settled this liability at the cash consideration of RMB 6,003,659, which was paid by Shanghai Xinhu Investment Consulting Co., Ltd, a related party wholly controlled by Mr. Botao Ma. The difference between RMB 6,003,659 and the carrying amount of the liability was recognized as the gain on extinguishment of liability. 

 

*Income tax benefits (expenses)*

For the fiscal year ended June 30, 2023, we recorded income tax expenses of approximately RMB 0.5 million, since we earned net income from Sunshine Insurance Brokers.

For the fiscal year ended June 30, 2024, we recorded income tax expense of RMB 5.5 million, which was primarily attributable to an increase in deferred income tax expense of approximately RMB 4.7 million, mainly consisting of an increase in deferred tax liabilities of approximately RMB 6.4 million arising from timing differences related to revenue recognized prior to issuance of PRC VAT invoices, partially offset by an increase in deferred tax assets of approximately RMB 1.7 million arising from the allowance for expected credit losses.

 

*Net (loss) income*

As a result of the foregoing, we had a net loss of approximately RMB 43.1 million for the fiscal year ended June 30, 2023, and a net income of approximately RMB 13.3 million for the fiscal year ended June 30, 2024.

 ****

**Discussion of Certain Balance Sheet Items**

The following table sets forth selected information from our consolidated balance sheets as of June 30, 2024 and 2025. This information should be read together with our consolidated financial statements and related notes included elsewhere in this annual report.

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| | | | |
|:---|:---|:---|:---|
|  | **As of June 30,** | **As of June 30,** | **As of June 30,** |
|  | **2024** | **2025** | **2025** |
|  | **RMB** | **RMB** | **USD<br> (Note 2)** |
| **ASSETS** |  |  |  |
| **Current Assets** |  |  |  |
| Cash and cash equivalents | 2401495 | 10284108 | 1435606 |
| Restricted cash | 38743831 | 4245599 | 592663 |
| Accounts receivable, net | 130354429 | 114070587 | 15923640 |
| Due from related parties | 16566524 | 9076416 | 1267019 |
| Prepaid expenses and other current assets, net | 9485464 | 6824085 | 952606 |
| &nbsp;&nbsp;&nbsp;**Total Current Assets** | **197551743** | **144500795** | **20171534** |
| Deposit of long-term investments |  | 12475000 | 1741443 |
| Long-term investments in equity investee |  | 2500000 | 348987 |
| Property and equipment, net | 233375 | 142887 | 19946 |
| Intangible assets, net | 2581046 | 1539437 | 214897 |
| Operating lease right of use assets | 3313215 | 3976798 | 555140 |
| Restricted cash, noncurrent | 5000000 | 5000000 | 697973 |
| Deferred tax assets | 57257 |  |  |
| Other non-current assets | 51004 | 624653 | 87198 |
| &nbsp;&nbsp;&nbsp;**Total Non-Current Assets** | **11235897** | **26258775** | **3665584** |
| &nbsp;&nbsp;&nbsp;**Total Assets** | **208787640** | **170759570** | **23837118** |
| **LIABILITIES** |  |  |  |
| **Current Liabilities** |  |  |  |
| Short-term borrowings | 26814237 | 21800000 | 3043163 |
| Accounts payable | 51252954 | 58610826 | 8181756 |
| Insurance premium payable | 38376850 | 42789314 | 5973158 |
| Income tax payable | 42747 | 58600 | 8180 |
| Due to related parties | 6166067 | 3128044 | 436658 |
| Operating lease liabilities, current | 2425135 | 2078397 | 290133 |
| Accrued expenses and other liabilities | 15990970 | 12049786 | 1682084 |
| Convertible notes |  | 1709343 | 238615 |
| Derivative liabilities |  | 14327 | 2000 |
| Warrant liabilities |  | 1892623 | 264200 |
| &nbsp;&nbsp;&nbsp;**Total Current Liabilities** | **141068960** | **144131260** | **20119947** |
| Operating lease liabilities, noncurrent | 1044068 | 1934528 | 270050 |
| Deferred tax liabilities | 2683818 |  |  |
| &nbsp;&nbsp;&nbsp;**Total Non-current Liabilities** | **3727886** | **1934528** | **270050** |
| &nbsp;&nbsp;&nbsp;**Total Liabilities** | **144796846** | **146065788** | **20389997** |

---

***Cash and cash equivalents and restricted cash, current and noncurrent***

Cash and cash equivalents consist of funds deposited with banks, which are highly liquid and are unrestricted as to withdrawal or use. Restricted cash mainly represents the unremitted insurance premiums collected from certain insureds, which are held in custody until disbursed to insurance companies.

The total balance of cash and cash equivalents and restricted cash, current and noncurrent, were approximately RMB 46.1 million and RMB 19.5 million (US$2.7 million) as of June 30, 2024 and 2025, respectively. For the fiscal year ended June 30, 2025, the change in balance of cash and cash equivalents and restricted cash, current and noncurrent, was a result of approximately RMB 20.7 million used in operating activities and approximately RMB 15.0 million used in investing activities, partially offset by approximately RMB 9.9 million provided by our financing activities.

***Accounts receivable, net***

As of June 30, 2024 and 2025, turnover days of accounts receivable were approximately 223 days and 188 days, respectively. We improved collection of insurance brokerage service fees in the year ended June 30, 2025.

Our turnover days for accounts receivable as of June 30, 2024 and 2025 was calculated as the average of the beginning and ending balance of the gross carrying amount of accounts receivable for the year, divided by our revenues for the year, multiplied by 365 days.

We are generally granted credit term of up to 60 days for our insurance companies after they have confirmed the brokerage with us.

For the fiscal years ended June 30, 2024 and 2025, the Company accrued provisions of approximately RMB 4.0 million and RMB 12.3 million, respectively, for doubtful accounts of accounts receivable. The increase in allowance for expected credit losses was primarily attributable to changes in the credit risk profile of certain accounts receivable, including extended collection periods and uncertainties in customers' ability to settle outstanding balances in a timely manner. For the fiscal years ended June 30, 2024 and 2025, the Company wrote off doubtful allowance of approximately RMB 0.4 million and RMB nil, respectively, against accounts receivable whose collection of which was remote.

 ****

***Due from related parties***

As of June 30, 2024 and 2025, the balance due from related parties represented balance due from Shanghai GBG Enterprise Management Consulting Co., Ltd. ("**Shanghai GBG**"), for which Mr. Ma, our Chairman and Chief Executive Officer, is the legal representative. As of June 30, 2025, the balance of due from related parties represented deposits of approximately RMB 14.2 million made to Shanghai GBG for sustainable hospital services, which is expected to be launched in the year of 2026, and advance of RMB 4.0 million made to Shanghai GBG to support Shanghai GBG's operations. For the year ended June 30, 2025, the Company evaluated the collectability of the amounts due from Shanghai GBG based on a comprehensive assessment of credit risk, expected future services to be provided, and Shanghai GBG's operational and financial condition. Based on such assessment, the Company determined that a portion of the advances may not be recoverable and recorded an allowance for credit losses of RMB 9.0 million against the amounts due from Shanghai GBG. See Note 17 — Related Party Transactions and Balances to our consolidated financial statements.

 ****

***Operating lease right of use assets and operating lease liabilities***

As of June 30, 2024 and 2025, we had operating lease right of use assets of approximately RMB 3.3 million and RMB 4.0 million (US$0.6 million), respectively. The change in operating lease right of use assets was primarily due to acquisition of right-of-use assets of approximately RMB 4.6 million through entering into new lease agreements with third party lessors, partially offset by amortization of operating lease right of use assets of approximately RMB 2.1 million and derecognition of operating lease right of use assets of approximately RMB 1.5 million due to early termination.

As of June 30, 2024 and 2025, we had operating lease liabilities, including current and noncurrent, of approximately RMB 3.5 million and RMB 4.0 million (US$0.6 million), respectively. The change in operating lease liabilities was primarily due to payment of rental expenses and accretion of lease liabilities using incremental rate, and reversal of lease liabilities due to early termination.

 ****

 ****

***Accounts payable***

The accounts payables mainly represented intermediary fees due to B channels, for allowing our digital insurance solutions to be embedded in their platforms. The intermediary fees are calculated as a percentage of Insurance Brokerage Fees earned. The balance of accounts payable increased from approximately RMB 51.3 million as of June 30, 2024 to approximately RMB 58.6 million (US$8.2 million) as of June 30, 2025. The increases were a result of increasing insurance brokerage fees earned from embedded platforms of our B channels.

 ****

***Accrued expenses and other liabilities***

As of June 30, 2024 and 2025, our accrued expenses and other liabilities were approximately RMB 16.0 million and RMB 12.0 million (US$1.7 million), respectively.

As compared with the balance as of June 30, 2024, the balance of accrued expenses and other liabilities decreased by approximately RMB 3.9 million as of June 30, 2025, which were mainly due to a decrease of approximately RMB 3.3 million in VAT and other tax payable, a decrease of approximately RMB 0.3 million in accrued payroll and welfare and a decrease of approximately RMB 0.2 million in amount due to insurance carriers.

**B. Liquidity and Capital Resources**

To date, we have financed our operating and investing activities primarily through cash generated from operating activities, initial public offering and equity financing from institutional investors. As of June 30, 2025, we reported working capital of approximately RMB 0.4 million (US$51,600) and accumulated deficits of approximately RMB 193.9 million (US$27.1 million), respectively. For the fiscal year ended June 30, 2025, we had operating cash outflows of approximately RMB 20.7 million (US$2.9 million). As of June 30, 2024, we reported working capital of approximately RMB 56.5 million and accumulated deficits of approximately RMB 131.8 million, respectively. For the fiscal year ended June 30, 2024, we had cash outflows of approximately RMB 3.8 million. Please see "*Item 3.D. Key Information - Risk Factors - There is substantial doubt about our ability to continue as a going concern.*"

 

*Cash flows*

The following table sets forth a summary of our cash flows for the fiscal years presented:

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **For the Years Ended June 30,** | **For the Years Ended June 30,** | **For the Years Ended June 30,** | **For the Years Ended June 30,** |
|  | **2023** | **2024** | **2025** | **2025** |
|  | **RMB** | **RMB** | **RMB** | **USD<br> (Note 2)** |
| Net cash used in operating activities | (1123895) | (3809353) | (20676488) | (2886325) |
| Net cash provided by (used in) investing activities | 13974214 | (592338) | (14975000) | (2090430) |
| Net cash (used in) provided by financing activities | (4555972) | 30907356 | 9874380 | 1380330 |
| Effect of exchange rate changes on cash and cash equivalents | 5116 | (233991) | (838511) | (118972) |
| Net increase (decrease) in cash, cash equivalents and restricted cash | 8299463 | 26271674 | (26615619) | (3715397) |
| Cash, cash equivalents and restricted cash at beginning of the year | 11574189 | 19873652 | 46145326 | 6441639 |
| **Cash, cash equivalents and restricted cash at end of the year** | **19873652** | **46145326** | **19529707** | **2726242** |

---

 

*Operating activities*

Net cash used in operating activities for the fiscal year ended June 30, 2023 was approximately RMB 1.1 million, primarily attributable to net loss of approximately RMB 43.1 million, adjusted for non-cash share-based compensation expenses of RMB 55.3 million and provision against doubtful receivables of approximately RMB 1.9 million, and changes in operating assets and liabilities, primarily consisting of (i) an increase of approximately RMB 29.8 million in accounts receivable and an increase of approximately RMB 2.7 million in due from a related party as a result of increase in revenues, (ii) an increase of approximately RMB 3.2 million in prepaid expenses and other current assets which was primarily attributable to an increase of RMB 1.9 million in advance to staff for various operating expenses and an increase of RMB 1.8 million in government grant receivable, (iii) an increase of approximately RMB 10.0 million in accounts payable as a result of increase in revenues, which is the base we calculate the service change for our business channels, and (iv) an increase of approximately RMB 8.7 million in accrued expenses and other liabilities which was caused by increasing operating expenses.

Net cash used in operating activities for the fiscal year ended June 30, 2024 was approximately RMB 3.8 million, primarily attributable to net income of approximately RMB 13.3 million, adjusted for provision of credit losses of approximately RMB 4.1 million, amortization of right-of-use assets of approximately RMB 2.2 million, deferred tax expenses of RMB 5.5 million, gain on extinguishment of liability of approximately RMB 9.0 million and changes in operating assets and liabilities, primarily consisting of (i) an increase of approximately RMB 65.5 million in accounts receivable which corresponded to an increase in turnover days of accounts receivable (ii) an increase of approximately RMB 8.0 million in prepayment due from a related party, (iii) an increase of approximately RMB 19.8 million in accounts payable as a result of delayed payments of service fees to our business channels, and (iv) an increase of approximately RMB 34.8 million due to insurance carriers which would be settled by restricted cash.

Net cash used in operating activities for the fiscal year ended June 30, 2025 was approximately RMB 20.7 million (US$2.9 million), primarily attributable to net loss of approximately RMB 62.0 million (US$8.7 million), adjusted for provision of doubtful receivables of approximately RMB 21.4 million (US$3.0 million), loss on extinguishment of convertible notes of approximately RMB 7.2 million (US$1.0 million), accretion of discounts and interest expenses of convertible notes of approximately RMB 2.8 million (US$0.4 million), and changes in operating assets and liabilities, primarily consisting of (i) an increase of approximately RMB 7.4 million (US$1.0 million) in accounts payable as a result of increased service fees due to our business channels which was in line with increased revenues, (ii) an increase of approximately RMB 4.4 million (US$0.6 million) due to insurance carriers which would be settled by restricted cash, and (iii) a decrease of approximately RMB 3.9 million (US$0.6 million) in accrued expenses and other liabilities due to a decrease of approximately RMB 3.3 million in VAT and other tax payable.

 

*Investing activities*

For the fiscal year ended June 30, 2023, we reported cash provided by investing activities of approximately RMB 14.0 million, which was primarily provided by collection of loans of approximately RMB 15.8 million from related parties, partially offset by purchase of intangible assets of approximately RMB 1.8 million.

For the fiscal year ended June 30, 2024, we reported cash used in investing activities of approximately RMB 0.6 million, which was used in purchase of intangible assets of approximately RMB 0.3 million and purchase of property and equipment of approximately RMB 0.3 million.

For the fiscal year ended June 30, 2025, we reported cash used in investing activities of approximately RMB 15.0 million (US$2.1 million), which was used in prepayment of equity investments of approximately RMB 12.5 million (US$1.7 million) and investment in 2.6316% equity interest in a limited partnership of approximately RMB 2.5 million (US$0.3 million).

 

*Financing activities*

For the fiscal year ended June 30, 2023, we used cash of approximately RMB 4.6 million in financing activities, which was primarily used in repayment of bank borrowings of approximately RMB 30.9 million, repayment of related party borrowings of approximately RMB 0.4 million, and payment of offering costs of approximately RMB 4.2 million, partially offset by proceeds of approximately RMB 30.2 million from short-term bank borrowings and capital contribution of RMB 0.6 million from our shareholders.

For the fiscal year ended June 30, 2024, we provided cash of approximately RMB 30.9 million in financing activities, which was primarily provided by proceeds of approximately RMB 43.4 million from the IPO, proceeds of approximately RMB 0.7 million from the over-allotment, proceeds of approximately 25.0 million from short-term bank borrowings and borrowings of approximately RMB 28.5 million from a related party, partially offset by repayment of bank borrowings of approximately RMB 25.5 million, repayment of related party borrowings of approximately RMB 28.8 million, and payment of offering costs of approximately RMB 12.4 million.

For the fiscal year ended June 30, 2025, we provided cash of approximately RMB 9.9 million (US$1.4 million) in financing activities, which was primarily provided by net proceeds of approximately RMB 17.5 million (US$2.4 million) from issuance of convertible notes, capital contribution of approximately $5.8 million from a shareholder, proceeds of approximately 40.0 million (US$5.6 million) from short-term bank borrowings and borrowings of approximately RMB 9.5 million (US$1.3 million) from a related party, partially offset by repayment of convertible notes of approximately RMB 5.3 million (US$0.7 million), repayment of bank borrowings of approximately RMB 45.0 million (US$6.3 million), and repayment of related party borrowings of approximately RMB 8.7 million (US$1.2 million).

**C. Research and Development**

Research and development expenses consist primarily of staff cost, service fees for developing software and outsourced labor cost for the research and development of our platform, including technology innovations, development and updates, and system function and feature updates and upgrades. Our R&D efforts also involve research and development on our insurance solutions' development, replacement, updates, upgrades, and innovations. See "*Business — Research and Development*" for more information regarding our plan to develop this platform.

During the fiscal years ended June 30, 2023, 2024 and 2025, we incurred research and development expenses of approximately RMB 9.7 million, RMB 15.1 million and RMB 10.9 million (US$1.5 million), respectively.

We will continue to work on the development of our platform. We may need to devote more resources and funds to improve/add functions as our business develops. We plan to fund the further development of our platform through equity and/or debt financing, if cash generated from our operations is insufficient.

**D. Trend Information**

Other than as disclosed in this annual report, we are not aware of any trends, uncertainties, demands, commitments or events for the current fiscal year that are reasonably likely to have a material effect on our net revenues, income, profitability, liquidity or capital reserves, or that caused the disclosed financial information to be not necessarily indicative of future operating results or financial conditions.

**E. Quantitative and Qualitative Disclosures About Market Risk**

 

*Foreign Exchange Risk*

Foreign currency risk is the risk of loss resulting from changes in foreign currency exchange rates. Fluctuations in exchange rates between the RMB and other currencies in which we conduct business may affect our financial position and results of operations.

Our subsidiaries are operating in mainland China and Hong Kong with substantially all of their transactions settled in RMB. As a result of, we are mainly exposed to foreign exchange risk arising from our cash and cash equivalents denominated in RMB.

However, we consider that our business in mainland China is not exposed to any significant foreign exchange risk as there are no significant financial assets or liabilities of these subsidiaries denominated in the currencies other than the functional currency.

 

*Interest Rate Risk*

Our exposure to interest rate risk primarily relates to the interest income generated by excess cash, which is mostly held in interest-bearing bank deposits and financial products purchased from financial institutions. Interest-earning instruments carry a degree of interest rate risk. We have not been exposed to material risks due to changes in interest rates, and we have not used any derivative financial instruments to manage our interest risk exposure.

**Holding Company Structure**

All of our revenues have been, and we expect they are likely to continue to be, in the form of Renminbi. Under existing PRC foreign exchange regulations, payments of current account items, including profit distributions, interest payments and trade and service-related foreign exchange transactions, can be made in foreign currencies without prior SAFE approval as long as certain routine procedural requirements are fulfilled. Therefore, our PRC Subsidiaries are allowed to pay dividends in foreign currencies to us without prior SAFE approval by following certain routine procedural requirements and clearance of taxes. However, current PRC regulations permit our PRC subsidiaries to pay dividends to us only out of its accumulated profits, if any, determined in accordance with Chinese accounting standards and regulations. Our PRC Subsidiaries are required to set aside at least 10% of their after-tax profits after making up previous years' accumulated losses each year, if any, to fund certain reserve funds until the total amount set aside reaches 50% of its registered capital. These reserves are not distributable as cash dividends. Historically, our PRC Subsidiaries have not paid dividends to us, and they will not be able to pay dividends until they generate accumulated profits. Furthermore, capital account transactions, which include foreign direct investment in and loans to our PRC Subsidiaries, must be approved by and/or registered with SAFE, its local branches and certain local banks, as the case may be.

As a Cayman Islands exempted company and offshore holding company, we are permitted under PRC laws and regulations to provide funding to our PRC Subsidiaries only through loans or capital contributions, subject to the approval, filings or registration of government authorities and limits on the amount of capital contributions and loans. This may delay us from using the proceeds from any offerings to make loans or capital contributions to our PRC Subsidiaries. We expect to invest substantially all of the proceeds from any offerings in our PRC operations within the business scopes of our PRC Subsidiaries. See "*Risk Factors — Risks Related to Doing Business in China — PRC regulation on loans to, and direct investment in, our PRC Subsidiaries by offshore holding companies and governmental control in currency conversion may delay or prevent us from using the proceeds of any offerings to make loans to or make additional capital contributions to our PRC Subsidiaries, which could materially and adversely affect our liquidity and our ability to fund and expand our business*".

**Critical Accounting Estimates**

We prepare our consolidated financial statements in accordance with U.S. GAAP, which requires our management to make estimates that affect the reported amounts of assets, liabilities and disclosures of contingent assets and liabilities at the balance sheet dates, as well as the reported amounts of revenues and expenses during the reporting periods. To the extent that there are material differences between these estimates and actual results, our financial condition or results of operations would be affected. We base our estimates on our own historical experience and other assumptions that we believe are reasonable after taking account of our circumstances and expectations for the future based on available information. We evaluate these estimates on an ongoing basis.

Our expectations regarding the future are based on available information and assumptions that we believe to be reasonable, which together form our basis for making judgments about matters that are not readily apparent from other sources. Since the use of estimates is an integral component of the financial reporting process, our actual results could differ from those estimates. Some of our accounting policies require a higher degree of judgment than others in their application.

We consider an accounting estimate to be critical if: (i) the accounting estimate requires us to make assumptions about matters that were highly uncertain at the time the accounting estimate was made, and (ii) changes in the estimate that are reasonably likely to occur from period to period or use of different estimates that we reasonably could have used in the current period, would have a material impact on our financial condition or results of operations. When reading our consolidated financial statements, you should consider our selection of critical accounting policies, the judgment and other uncertainties affecting the application of such policies and the sensitivity of reported results to changes in conditions and assumptions.

When reading our consolidated financial statements, you should consider our selection of critical accounting policies, the judgment and other uncertainties affecting the application of such policies and the sensitivity of reported results to changes in conditions and assumptions. Our critical accounting policies and practices include the following: (i) revenue recognition; (ii) accounts receivable, net; and (iii) income taxes. See Note 2 — Summary of Significant Accounting Policies to our consolidated financial statements for the disclosure of these accounting policies. We believe the following accounting estimates involve the most significant judgments used in the preparation of our financial statements.

While management believes its judgments, estimates and assumptions are reasonable, they are based on information presently available and actual results may differ significantly from those estimates under different assumptions and conditions. We believe that the following critical accounting estimates involve the most significant judgments used in the preparation of our financial statements.

(a) Allowance
for credit losses

Accounts receivable, net are stated at the original amount less an allowance for credit losses.

On July 1, 2023, we adopted Accounting Standards Update ("**ASU**") No. 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments ("**ASU 2016-13**"), using the modified retrospective transition method. ASU 2016-13 replaces the existing incurred loss impairment model with an expected loss methodology, which will result in more timely recognition of credit losses. Upon adoption, we changed the impairment model to utilize a forward-looking current expected credit losses (CECL) model in place of the incurred loss methodology for financial instruments measured at amortized cost and receivables resulting from the application of ASC 606, including contract assets. The adoption of the guidance resulted in an increase of RMB 8,821,129 in the allowance for credit losses for accounts receivable on July 1, 2023.

For the fiscal years ended June 30, 2023, 2024 and 2025, we accrued provisions for credit losses of approximately RMB 1.9 million, RMB 4.0 million and RMB 12.3 million (US$1.7 million), respectively. During the fiscal years ended June 30, 2023, 2024 and 2025, we wrote off the allowance of approximately RMB 0.3 million, RMB 0.4 million and RMB nil million, respectively, against accounts receivable because the chance of collection is deemed to be remote.

(b) Valuation
of deferred tax assets

Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period including the enactment date. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized. Current income taxes are provided for in accordance with the laws of the relevant taxing authorities.

Based upon the level of historical taxable income and projections for future taxable income over the periods in which the deferred tax assets are recoverable, management estimated that it is more likely than not that the results of future operations will not generate sufficient taxable income to realize the deferred tax assets as June 30, 2024 and 2025. Thus, management recorded valuation allowance amounted to RMB 10.4 million and RMB 21.2 million (US$3.0 million) as of June 30, 2024 and 2025, respectively. The projections of future income qualified tax-planning strategies may be changed due to the macroeconomic conditions and the business development. The deferred tax assets could be utilized in the future years if the Company make profits in the future, the valuation allowance shall be reversed.

The provisions of ASC 740-10-25, "Accounting for Uncertainty in Income Taxes," prescribe a more-likely-than-not threshold for consolidated financial statement recognition and measurement of a tax position taken (or expected to be taken) in a tax return. This interpretation also provides guidance on the recognition of income tax assets and liabilities, classification of current and deferred income tax assets and liabilities, accounting for interest and penalties associated with tax positions, and related disclosures. The PRC operating entities in PRC are subject to examination by the relevant tax authorities. According to the PRC Tax Administration and Collection Law, the statute of limitations is three years if the underpayment of taxes is due to computational errors made by the taxpayer or the withholding agent. The statute of limitations is extended to five years under special circumstances, where the underpayment of taxes is more than RMB 100,000 ($14,000). In the case of transfer pricing issues, the statute of limitation is ten years. There is no statute of limitation in the case of tax evasion. Penalties and interest incurred related to underpayment of income tax are classified as income tax expense in the period incurred.

As of June 30, 2024 and 2025, there were RMB1.0 million and RMB1.0 million of unrecognized tax benefits, respectively, that would affect the annual effective tax rate if recognized. The unrecognized tax benefit was presented as a reduction of the Deferred tax assets — Net operating loss carrying forwards in the consolidated financial statements as of June 30, 2024 and 2025. The Company recognizes interest and penalty charges related to uncertain tax positions as necessary in the provision for income taxes. For the fiscal years ended June 30, 2024 and 2025, no interest expense or penalty was accrued in relation to the unrecognized tax benefit. The Company has a liability for accrued interest of nil as of June 30, 2024 and 2025, respectively.

(c) Valuation
of convertible notes and derivative liabilities

On September 23, 2024, the Company entered into the L1 Securities Purchase Agreement with L1, which provides for loans in an aggregate principal amount of up to $8.0 million under three tranches. See "*Item 4. Information about the Company – L1 Private Placement*."

For the year ended June 30, 2025, the Company consummated four closings of convertible notes and received net proceeds of approximately RMB 17.5 million (US$2.4 million). The holder of the Notes shall have the right, at such holder's sole discretion, to convert all or any portion of the convertible notes into Class A ordinary shares at anytime after September 23, 2024 at fixed conversion prices.

The Company has classified the convertible notes as liabilities under ASC 470 because it is a debt in its legal form. The Company determined that the conversion feature within the Notes meet the definition of embedded derivatives and the Company estimated a fair value of the derivative liability using the Binominal Tree Model at the date of issuance. The key factors used in Binominal Tree Model included risk-free interest rate, estimated volatility rate, dividend yield and bond yield.

For details of quantitative information regarding Level 3 fair value measurements inputs for the Company's derivate liabilities at their measurement dates, please see *Note 10 – Convertible Note* to the consolidated financial statements.

**Recently Issued Accounting Pronouncements**

A list of recently issued accounting pronouncements that are relevant to us is included in note 2 to our consolidated financial statements included elsewhere in this annual report.

**Non-GAAP Financial Measures**

In addition to consolidated U.S. GAAP financial measures, we consistently evaluate our use of and calculation of the non-GAAP financial measures, "Adjusted EBITDA".

Adjusted EBITDA is a financial measure defined as our EBITDA, adjusted to eliminate the effects of certain non-cash and/or non-recurring items, that do not reflect our ongoing strategic business operations. EBITDA is computed as net income (loss) before interest, taxes, depreciation, and amortization. Adjusted EBITDA is EBITDA further adjusted for certain income and expenses, which management believes results in a performance measurement that represents a key indicator of the Company's core business operations of digital insurance brokerage services. The adjustments currently include share-based compensation expenses, gain from early termination of leases and provision of doubtful accounts,

We believe Adjusted EBITDA can be important financial measures because they allow management, investors, and our board of directors to evaluate and compare our operating results, including our return on capital and operating efficiencies, from period-to-period by making such adjustments.

Adjusted EBITDA are provided in addition to and should not be considered to be a substitute for, or superior to net income (loss), the comparable measures under U.S. GAAP. Further, Adjusted EBITDA should not be considered as an alternative to revenue growth, net income (loss), diluted earnings (loss) per share or any other performance measure derived in accordance with U.S. GAAP, or as an alternative to cash flow from operating activities as a measure of our liquidity. Adjusted EBITDA have limitations as analytical tools, and you should not consider such measures either in isolation or as substitutes for analyzing our results as reported under U.S. GAAP.

Reconciliations of Adjusted EBITDA to the most comparable U.S. GAAP financial metric for historical periods are presented in the table below:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **For the fiscal year Ended June 30,** | **For the fiscal year Ended June 30,** | **For the fiscal year Ended June 30,** | **For the fiscal year Ended June 30,** |
|  | **2023** | **2024** | **2025** | **2025** |
|  | **RMB** | **RMB** | **RMB** | **USD** |
| **Reconciliation of non-GAAP (loss) income from operations:** |  |  |  |  |
| **Net (Loss) Income** | (43098780) | 13251753 | (62019599) | (8657602) |
| Depreciation and amortization expenses | 928385 | 1109606 | 1132097 | 158035 |
| Income tax (benefits) expenses | 541460 | 5510773 | (2610709) | (364441) |
| Interest expenses | 1241082 | 986785 | 3304880 | 461343 |
| **EBITDA** | **(40387853)** | **20858917** | **(60193331)** | **(8402664)** |
| **Adjustments:** |  |  |  |  |
| Share-based compensation expenses | 55266010 |  | 97765 | 13647 |
| (Gain) loss from early termination of right-of-use assets | (58092) | 46943 | (34321) | (4791) |
| Loss from disposal of property and equipment | 13223 |  |  |  |
| Gain on extinguishment of liability |  | (8996341) |  |  |
| Loss on extinguishment of convertible notes |  |  | 7174958 | 1001586 |
| Changes in fair value of derivative liabilities |  |  | 1031558 | 144000 |
| Changes in fair value of warrant liabilities |  |  | (1952081) | (272500) |
| **Adjusted EBITDA** | **16687974** | **16027851** | **(53875452)** | **(7520722)** |

---

**ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES**

&nbsp;&nbsp;&nbsp;&nbsp;**A.** **Directors and Senior Management** 

**Directors and Executive Officers**

The following table sets forth information regarding our executive officers and directors as of the date of this annual report. Unless otherwise stated, the business address for our directors and executive officers is that of our principal executive offices at Floor 3, Building 6, Wuxing Road, Lane 727, Pudong New Area, Shanghai, China, 201204.

---

| | | |
|:---|:---|:---|
| **Name** | **Age** | **Position with our Company** |
| Botao Ma | 59 | Chief Executive Officer, Director and Chairman of the Board of Directors |
| Yuanwen Xia | 42 | Chief Financial Officer and Director |
| Xiaowei Le | 50 | Chief Operating Officer |
| Xiao Luo | 40 | Chief Marketing Officer |
| Yugang Wang | 48 | Chief Technical Officer |
| Guangtong Ren | 56 | Chief Actuary |
| Stephen Bernardez | 61 | Independent Director |
| Armando Luis Baez | 79 | Independent Director |
| Jeffrey Rong Cai | 61 | Independent Director |

---

 **

***Botao Ma — Chief Executive Officer and Chairman of the Board of Directors***

 

**Botao Ma** has served as Chairman of the board of directors and Chief Executive Officer of the Company since June 2023, and the chief executive officer and chairman of Zhibao China since April 2018. Mr. Ma has over 20 years of experience in the insurance industry and operations management. From June 2001 to November 2016, Mr. Ma served as chairman of the board of directors and general manager at Wills Insurance Brokers Co. Ltd ("**Wills China**"), a company engaged in insurance brokerage services in Shanghai. From January 2000 to May 2001, Mr. Ma served as a director and associate general manager at Shanghai Dong Da Insurance Brokers Ltd., an insurance broker company based in Shanghai. From June 1998 to December 1999, Mr. Ma served as general manager of Everlasting Insurance Consulting Ltd., a company engaged in insurance consulting. Between July 1990 and June 1998, Mr. Ma worked at Ping An Property & Casualty Insurance Co of China Ltd ("**Ping An**"), a Chinese holding conglomerate whose subsidiaries provide insurance, banking, asset management, financial, healthcare services and other related services, where Mr. Ma first served as head of business development and then associate general manager of Ping An. Mr. Ma received a bachelor's degree in International Shipping from Shanghai Maritime University in July 1987 and a master's degree in Maritime Law from Shanghai Maritime University in July 1990. We believe Mr. Ma's decades' experience in business management and insurance industry qualifies him to serve on our board of directors.

 **

***Yuanwen Xia — Chief Financial Officer and Director***

 

**Yuanwen Xia** has served as Chief Financial Officer of the Company since June 2023 and a director of the Company since March 2024, and chief financial officer of Sunshine Insurance Brokers since January 2020. Mr. Xia has also served as our director since March 2024. Mr. Xia has over 16 years of experience in finance and investment. From July 2016 to December 2019, Mr. Xia served as investment manager at Chenhui Venture Partners, an early-stage venture capital firm based in Shanghai, China. Between June 2013 and June 2016, Mr. Xia worked as business control & planning manager at Louis Vuitton (China) Commerce Sales Co., Ltd, a subsidiary of French luxury fashion company located in Shanghai, China. From June 2011 to July 2013, Mr. Xia worked as a senior internal auditor at Coca-Cola Beverages (Shanghai) Company Limited, an American multinational beverage corporation. Between August 2006 and June 2011, Mr. Xia worked as a senior associate in PricewaterhouseCoopers Consultants (Shenzhen) Limited, an international professional services firm focusing on audit and consulting. Mr. Xia is a member of The Chinese Institute of Certified Public Accountants (CICPA), and a Certified Public Accountant in China, but currently in inactive status. He is also a Chartered Financial Analyst (CFA). Mr. Xia received a bachelor's degree in Japanese from Shanghai Jiao Tong University in July 2006 and a master's degree in Financial Management from Shanghai University of Finance and Economics in December 2012. We believe Mr. Xia's extensive experience in management and corporate accounting and finance qualifies him to serve on our board of directors.

 **

***Xiaowei Le — Chief Operating Officer***

 

***Xiaowei Le*** has served as Chief Operating Officer of the Company since December 2025. Mr. Le has over 20 years of experience in sales management, general management, and leadership roles across multiple insurance companies. Mr. Le has been serving as Executive Director of Sunshine Insurance Broker since October 2023. From July 2019 to August 2022, Mr. Le served as deputy general manager of Bohai Property Insurance Co., LTD, a national property insurance company headquartered in Tianjin. From February 2007 to July 2019, Mr. Le served as assistant general manager, deputy general manager and general manager of headquarter departments and subsidiaries of Yongcheng Property Insurance Co., Ltd. ("**Yongcheng**"), a national property insurer specializing in electric power and energy insurance, manager of the head office department of Yongcheng, and director, deputy general manager and general manager of a subsidiary of Yongcheng. From July 1998 to October 2005, Mr. Le served as an agent, clerk, and department director of China Ping An Property Insurance Co., Ltd., the second-largest national insurer in China. Mr. Le received his bachelor's degree in Economics from Sun Yat-Sen University in 1998.

 **

***Xiao Luo — Chief Marketing Officer***

 

**Xiao Luo** has served as Chief Marketing Officer of the Company since December 2025, Chief Operating Officer of the Company from June 2023 to December 2025, deputy manager between April 2018 and January 2020 and general manager of Sunshine Insurance Brokers since April 2020. Mr. Luo has over 10 years of experience in the insurance industry and operations management. Between October 2015 and March 2018, Mr. Luo served as general manager of Shanghai Anyi. From July 2007 to September 2015, he worked as deputy managing director of risk management department at Wills China. Mr. Luo received a bachelor's degree in Transportation and Math from Shanghai Jiao Tong University in July 2007 and a master's degree in Business Administration in June 2015 from Shanghai Advanced Institute of Finance.

***Yugang Wang — Chief Technical Officer***

 ****

**Yugang Wang** has served as Chief Technical Officer of the Company since June 2023, and chief technology officer of Sunshine Insurance Brokers since January 2021. Prior to that, Mr. Wang worked at Shanghai Anyi, first as chief technology officer, then as managing director and general manager of Shanghai Anyi between January 2019 and February 2021. Mr. Wang has over 20 years of experience in the information technology industry and over 10 years of experience in the insurance industry. From December 2016 to January 2019, Mr. Wang served as IT head at Fosun United Health Insurance, a professional financial services institution that provides health insurance services. From October 2009 to December 2016, Mr. Wang worked as IT director at Allianz China Life Insurance Company, a joint venture life insurance company formed by Allianz SE, the German financial services conglomerate, and CITIC Trust. Between October 2001 and September 2009, Mr. Wang served as software development department head at eBaoTech Co. Ltd., a technology solution provider for global insurance industry in China. Between July 2000 and October 2001, Mr. Wang worked as a software engineer at several information technology companies. Mr. Wang received a bachelor's degree in Chemical Engineering from Zhejiang University in 2000 and a minor degree in Computer Science and Application from Zhejiang University in 2000.

***Guangtong Ren — Chief Actuary***

 ****

***Guangtong Ren*** has served as Chief Actuary of the Company since December 2025 Mr. Ren has over 25 years of extensive experience in corporate finance, strategic planning, and risk management of insurance, investment management and start-ups. Mr. Ren has served as Executive Director and Chief Actuary of Zhibao China since November 2023, and Principal Insurance Officer of Zhibao Labuan Re Co., Ltd., a subsidiary of the Company, since April 2025. From August 2020 to November 2023, Mr. Ren served as special advisor to Chief Executive Officer at GLP Capital Partners Limited, a global leader in providing industrial services and investment focused on next-generation infrastructure in the supply chain, big data, and new energy sectors. From August 2018 to July 2020, Mr. Ren served as an advisor to the Chairman at Lupu Investment Holding Group Ltd., a Group specializes in wealth management and private equity investment. From October 2006 and June 2018, Mr. Ren served as Chief Financial Officer, Regional Finance Actuary and Greater China Chief Risk Officer of AIG Insurance Company China Limited, an international insurance organization serving commercial, institutional and individual customers. From August 2004 to January 2006, Mr. Ren served as Consultant of the Boston Consulting Group, a global management consulting firm. From July 1994 to July 2004, Mr. Ren served as Deputy General Manager of Ping An Insurance (Group) Company of China, Ltd., a Chinese financial services holding company whose subsidiaries provide insurance, banking, asset management, financial services. Mr. Ren received his Master of Business Administration degree in Finance from London Business School in 2004, a master's degree in Finance/Actuarial Science from Nankai University in 1994, and a bachelor's degree in Mathematical Statistics from Nankai University in 1991.

 ****

 **

***Stephen Bernardez — Independent Director***

 

**Stephen Bernardez** has served as our independent director since April 1, 2025. Mr. Bernardez has extensive experience in venture capital investment, growth strategy, and partnership development across large enterprises and startups. Since January 2025, Mr. Bernardez has served as Partner at Pegasus Tech Ventures, a global venture capital firm focused on helping Asian corporations access Silicon Valley startup innovation. From March 2019 to March 2024, Mr. Bernardez served as Partner at Avanta Ventures, the corporate venture capital arm of CSAA Insurance Group, where he led the venture capital investment team, the Avanta Studios accelerator program and Avanta Ventures' portfolio partnership development team. At Avanta Ventures, he built a portfolio of over a dozen early-stage startups relevant to an insurance company and facilitated commercial partnerships with those portfolio companies. While at Avanta Ventures, Mr. Bernardez served as a director on the boards of director of multiple Insurtech startup companies. From June 2006 to March 2019, Mr. Bernardez was a venture capitalist at ONSET Ventures, a Silicon Valley-based venture capital firm, where he was involved in certain early-stage software investments. Before ONSET Ventures, Mr. Bernardez was a Director of Business Development at Microsoft Corporation from September 2001 to June 2006, where he built and managed Microsoft's relationships with leading Silicon Valley-based venture capitalists and sourced VC-funded startup partnerships impacting the breadth of Microsoft's businesses. Mr. Bernardez was Director of Business Development at Mercado Software, an e-commerce software startup, from July 1999 to July 2001. From August 1995 to June 1999, Mr. Bernardez was a strategy consultant at Accenture, serving the Electronics and High Tech vertical. Mr. Bernardez was named to Global Corporate Venturing's Powerlist for 2021 and 2022, honoring the top 100 corporate venture capitalists. Mr. Bernardez received his Master of Business Administration degree from Stanford Graduate School of Business in June 1995 and his Bachelor of Science degree in Biological Sciences from Stanford University in June 1986. We believe Mr. Bernardez's extensive experience in venture capital investment, finance, and partnership development qualifies him to serve on our board of directors.

 **

***Armando Baez — Independent Director***

 

**Armando Baez**, has served as our independent director since June 2024. Mr. Baez has extensive experience in managing and operating international insurance brokerage companies and companies specialized in insurance related services. Currently, Mr. Baez has served as president of Baez Insurance Services, Inc., an insurance brokerage company in California since 2018. From 2009 to 2016, Mr. Baez served as general manager of Global Benefits Group China, a regional branch of Global Benefits Group, an international insurance services provider, and from 2005 to 2017, Mr. Baez served as vice president of GBG, Inc., a subsidiary of Global Benefits Group based in California, and from 2007 to 2009, he served as president at International Claims Services, Inc., an affiliated entity of Global Benefits Group based in California. During his time with Global Benefits Group, Mr. Baez was primarily responsible for managing the China subsidiary of Global Benefits Group, growing sales and business development into Latin America, developing and managing business partners in China, and developing international product, sales, marketing and administration strategies. Mr. Baez studied at University of Bridgeport and University of San Francisco and obtained from the Fellow Life Management Institute (FLMI) a FLMI Designation, a ten-course professional development program. We believe Mr. Baez's extensive experience in management and insurance industry qualifies him to serve on our board of directors.

***Jeffrey Cai — Independent Director***

**Jeffrey Cai** has served as our independent director since April 2025. Jeffrey Cai is a seasoned enterprise and technology architect with over 20 years of experience driving innovation, enterprise architecture, and digital transformation. From May 2021 to August 2024, Jeffrey served as Chief Architect Officer at Pediatric Associates and Alpine Physician Groups, both of which entities are among the healthcare portfolio of Summit Partners, a venture capital that has healthcare & life science lines of business as part of the portfolio. At Pediatric Associates, Jeffrey collaborated with senior IT and business leaders to develop next-generation systems that enhanced customer service, operational agility, and financial performance, and at Alpine Physician Groups, Jeffrey led efforts to define technology roadmaps, assess ROI, optimize IT budgets, and conduct due diligence for strategic M&A initiatives. From November 2015 to November 2020, Jeffrey served as Director of Enterprise Information Architecture at Blue Shield of California, where he led enterprise-wide digital transformation efforts for medical insurance products and processes. From January 2014 to November 2025, Jeffrey was a Principal Business Solution Architect at Optum, a key business unit of UnitedHealth Group, where he played a leadership role in designing architectural solutions for pharmacy management. Earlier in his career, Jeffrey held manager in Oracle Applications at Steven Myers & Associates, Inc., a defense and aerospace consulting firm, from October 2012 to January 2014, and served as senior solution architect at MSC Software, a simulation software technology from January 2001 to October 2012. Jeffrey holds a Master's degree in Management Information Systems from California State University, Fullerton, and a Bachelor of Science in Physics from Fudan University, Shanghai, China. He has completed extensive professional development in TOGAF, ITIL, project management, and Agile methodologies.

**Family Relationships**

There are no family relationships, or other arrangements or understandings between or among any of the directors, executive officers or other person pursuant to which such person was selected to serve as a director or officer.

**Director Independence**

The Nasdaq listing standards require that a majority of our board of directors be independent. An "independent director" is defined generally as a person who has no material relationship with the listed company (either directly or as a partner, shareholder or officer of an organization that has a relationship with the company). We have "independent directors" as defined in the Nasdaq listing standards and applicable SEC rules.

Our board has determined that Stephen Bernardez, Jeffrey Cai and Armando Baez are independent directors under applicable SEC and Nasdaq rules. Our independent directors will have regularly scheduled meetings at which only independent directors are present.

&nbsp;&nbsp;&nbsp;&nbsp;**B.** **Compensation of Directors and Executive Officers** 

For the fiscal year ended June 30, 2025, our executive officers received an aggregate of approximately RMB3.26 (US$0.46 million) in compensation from the PRC Subsidiaries. Our PRC Subsidiaries are required by law to make contributions equal to certain percentages of each employee's salary for his or her pension insurance, medical insurance, unemployment insurance and other statutory benefits and a housing provident fund. As of the date of this annual report, the total amounts set aside or accrued by our PRC Subsidiaries to provide pension, retirement or similar benefits to our executive officers were approximately RMB0.31 million (US$0.04 million), which were in compliance with all relevant laws and regulations regarding such benefits.

For the fiscal year ended June 30, 2025, no other members of our board of directors received compensation in their capacity as directors except for Mr. Lucki, our former director, who received an aggregate of $45,000 for service rendered since our IPO. None of the directors are entitled to receive any compensation or benefits upon termination of their directorship with the Company except for those compensation that they have already earned for services so rendered. We will also reimburse all directors for any out-of-pocket expenses incurred by them in connection with their services provided in such capacity.

&nbsp;&nbsp;&nbsp;&nbsp;**C.** **Board Practices** 

**Board of Directors and Committees**

Our board of directors consists of five directors, including three independent directors. We have established an Audit Committee, a Nominating and Corporate Governance Committee and a Compensation Committee under the board of directors. We have adopted a charter for each of the three committees. Each of the committees of our board of directors shall have the composition and responsibilities described below. We have also adopted an Executive Compensation Clawback Policy, for which our Compensation Committee's decisions will be final, conclusive, and binding on all of our executive officers.

 

 

*Audit Committee*

Messrs, Bernardez, Cai and Baez serve as members of our Audit Committee with Mr. Baez serving as the chairman of the Audit Committee. Our board of directors have determined that Mr. Baez possesses accounting or related financial management experience that qualifies him as an "audit committee financial expert" as defined by the rules and regulations of the SEC. Our Audit Committee oversees our accounting and financial reporting processes and the audits of our financial statements. Our Audit Committee performs several functions, including:

● evaluating the independence and performance of, and assesses the qualifications of, our independent auditor, and engages such independent auditor;

● approving the plan and fees for the annual audit, quarterly reviews, tax and other audit-related services, and approves in advance any non-audit service to be provided by the independent auditor;

● monitoring the independence of the independent auditor and the rotation of partners of the independent auditor on our engagement team as required by law;

● reviewing the financial statements to be included in our Annual Report on Form 20-F and Current Reports on Form 6-K and reviews with management and the independent auditors the results of the annual audit and reviews of our quarterly financial statements;

● overseeing all aspects of our systems of internal accounting control and corporate governance functions on behalf of the board;

● reviewing and approving in advance any proposed related-party transactions and report to the full Board on any approved transactions; and

● providing oversight assistance in connection with legal, ethical and risk management compliance programs established by management and our board of directors, including Sarbanes-Oxley Act implementation, and makes recommendations to our board of directors regarding corporate governance issues and policy decisions.

 

*Compensation Committee*

Messrs. Bernardez, Cai and Baez serve as members of our Compensation Committee with Mr. Bernardez, Cai and serving as the chairman of the Compensation Committee.. Our Compensation Committee is responsible for overseeing and making recommendations to our board of our directors regarding the salaries and other compensation of our executive officers and general employees and providing assistance and recommendations with respect to our compensation policies and practices.

We have adopted an Executive Compensation Clawback Policy. The recovery of incentive-based compensation from an executive officer as provided for in this policy shall apply only in the event that the Company is required to prepare an accounting restatement due to the material noncompliance of Company with any financial reporting requirement under the United States securities laws, in6cluding any required accounting restatement to correct an error in previously issued financial statements that is material to the previously issued financial statements, or that would result in a material misstatement if the error was corrected in the current period or left uncorrected in the current period. Our Compensation Committee's decisions with respect to this policy shall be final, conclusive, and binding on all of our executive officers.

 

*Nominating and Corporate Governance Committee*

Messrs. Bernardez, Cai and Baez serve as members of our Nominating and Corporate Governance Committee, with Mr. Cai serving as the chairman of the Nominating and Corporate Governance Committee. Our Nominating and Corporate Governance Committee is responsible for identifying and proposing new potential director nominees to the board of directors for consideration and reviewing our corporate governance policies.

**Board Oversight of Cybersecurity Risks**

The management of the operation and the business affairs of a Cayman Islands company lies within the power of its board of directors. Directors of companies incorporated under the Companies Act (Revised) of the Cayman Islands (the "**Companies Act**") are subject to both statutory obligations under the Companies Act as well as fiduciary duties under the common law to the extent applicable to Cayman Islands companies. In addition to the statutory duties which include duties such as reporting obligations, the maintenance of internal company registers, accounting requirements, etc., directors of Cayman Islands companies owe fiduciary duties including the duty to act in good faith and in the best interests of the company as well as a duty to act with care, skill and diligence under English common law principles. Maintaining sufficient protection against the increasing risks associated with cybercrime is one of the key challenges to the commercial world and, the overseeing of cybersecurity risks falls within the duties of the Company's board of directors, including its independent directors. The directors oversee cybersecurity risks as of the date of this annual report.

Our board of directors plays an active role in monitoring cybersecurity risks and is committed to the prevention, timely detection, and mitigation of the effects of any such incidents on our operations. In addition to regular reports from each of the board's committees, the board receives regular reports from our management on material cybersecurity risks and the degree of our exposure to those risks. While the board oversees our cybersecurity risk management, management is responsible for day-to-day risk management processes. Management also works with third party service providers, i.e. software companies who provide software and antivirus supports to the Company to ensure appropriate controls are in place and to regularly monitor network activities. We believe this division of responsibilities is the most effective approach for addressing our cybersecurity risks and that our board leadership structure supports this approach.

**Code of Ethics**

We have adopted a code of ethics that applies to all of our executive officers, directors and employees in accordance with the rules of the Nasdaq and the SEC. The code of ethics codifies the business and ethical principles that govern all aspects of our business, a copy of which has been filed as an exhibit to our registration statement on Form F-1 for our IPO. You are able to review the code by accessing our public filings at the SEC's website at www.sec.gov.

**Duties of Directors**

Under Cayman Islands law, the directors and officers both owe statutory duties under the Companies Act, common law duties and fiduciary duties to our company. Under common law, our directors and officers have a duty to exercise the care, diligence and skills that a reasonably prudent person would exercise in comparable circumstances. The fiduciary duties which our directors and officers owe to our company are summarized as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) duty to act bona fide in
 what the director or officer believes to be in the best interests of the company as a whole;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) duty to exercise powers
 for the purposes for which those powers were conferred and not for a collateral purpose;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) directors should not properly
 fetter the discretion to act in the best interest of the Company; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) duty not to put themselves
 in a position in which there is a conflict between their duty to the company and their personal interests.

In addition to the above, directors also owe a duty of care which is not fiduciary in nature. This duty has been defined as a requirement to act as a reasonably diligent person having both the general knowledge, skill and experience that may reasonably be expected of a person carrying out the same functions as are carried out by that director in relation to the company and the general knowledge skill and experience which that director has.

As set out above, directors have a duty not to put themselves in a position of conflict and this includes a duty not to engage in self-dealing, or to otherwise benefit as a result of their position. However, in some instances what would otherwise be a breach of this duty can be forgiven and/or authorized in advance by the shareholders provided that there is full disclosure by the directors. This can be done by way of permission granted in the memorandum and articles of association or alternatively by shareholder approval at general meetings.

Accordingly, as a result of multiple business affiliations, our officers and directors may have similar legal obligations relating to presenting business opportunities meeting the above-listed criteria to multiple entities. In addition, conflicts of interest may arise when our board evaluates a particular business opportunity with respect to the above-listed criteria. We cannot assure you that any of the afore-mentioned conflicts will be resolved in our favor. Furthermore, each of our officers and directors has pre-existing fiduciary obligations to other businesses of which they are officers or directors.

Our company has the right to seek damages if a duty owed by our directors is breached. A shareholder may in certain limited exceptional circumstances have the right to seek damages in our name if a duty owed by our directors is breached. You should refer to *"Description of Our Securities — Comparison of Cayman Islands Corporate Law and U.S. Corporate Law"* for additional information on our standard of corporate governance under Cayman Islands law.

**Terms of Directors and Officers** 

Our officers are appointed by and serve at the discretion of our board of directors and the shareholders voting by ordinary resolution. Our directors are not subject to a set term of office and hold office until the next general meeting called for the appointment of directors and until their successor is duly appointed or such time as they die, resign or are removed from office by a shareholders' ordinary resolution. The office of a director will be vacated automatically if, among other things, the directors resigns in writing, becomes bankrupt or makes any arrangement or composition with his/her creditors generally or is found to be or becomes of unsound mind.

**Employment Agreements**

Our executive officers do not have a written employment agreement with the Company; however, each of our executive officers has a labor contract with our PRC Subsidiaries.

On April 1, 2018, Mr. Botao Ma and Zhibao China entered into a labor contract. Pursuant to the labor contract, Mr. Ma serves as chairman of the board of directors of Zhibao China for an indefinite term, commencing on April 1, 2018, subject to certain conditions for termination and certain exceptions provided under the PRC Labor Contract Law. Mr. Ma is entitled to a fixed base salary in the amount of RMB30,000 ($4,300) per month plus bonus. Mr. Ma is also entitled to participate in any benefit plans stipulated by both parties or required by the PRC laws. This labor contract also contains customary restrictive covenants relating to non-competition for a period of two years from the date of termination of employment and non-solicitation within one year after the termination of the employment, confidentiality covenants restricting disclosures of the trade secrets and other confidential information until those information becomes public, as well as certain liabilities due to his breach of contract.

On April 1, 2022, Mr. Xiao Luo and Sunshine Insurance Brokers entered into a labor contract. Pursuant to the labor contract, Mr. Luo serves as general manager of the Company for an indefinite term, commencing on April 1, 2022, subject to certain conditions for termination and certain exceptions provided under the PRC Labor Contract Law. Mr. Luo is entitled to a fixed base salary in the amount of RMB45,000 ($6,400) per month plus subsidies and bonus. Mr. Luo is also entitled to participate in any benefit plans stipulated by both parties or required by the PRC laws. This labor contract also contains customary restrictive covenants relating to non-competition for a period of two years from the date of termination of employment and non-solicitation within one year after the termination of the employment, confidentiality covenants restricting disclosures of the trade secrets and other confidential information until those information becomes public, as well as certain liabilities due to his breach of contract.

On January 7, 2020, Mr. Yuanwen Xia and Sunshine Insurance Brokers entered into a labor contract. Pursuant to the labor contract, Mr. Xia serves as chief financial officer of Sunshine Insurance Brokers for a term of three years commencing from January 2, 2020 to January 1, 2023, which was renewed for additional three years commencing on January 2, 2023 through January 1, 2026, subject to certain conditions for termination and certain exceptions provided under the PRC Labor Contract Law. Mr. Xia is entitled to a fixed base salary in the amount of RMB40,000 ($5,700) per year plus subsidies and bonus. Mr. Xia is also entitled to participate in any benefit plans stipulated by both parties or required by the PRC laws. The labor contract also contains customary restrictive covenants relating to non-competition for a period of two years from the date of termination of employment and non-solicitation within one year after the termination of the employment, confidentiality covenants restricting disclosures of the trade secrets and other confidential information until those information becomes public, as well as certain liabilities due to his breach of contract.

On January 18, 2022, Mr. Yugang Wang and Sunshine Insurance Brokers entered into a labor contract. Pursuant to the labor contract, Mr. Wang serves as chief technology officer of Sunshine Insurance Brokers for an indefinite term, commencing on January 21, 2022, subject to certain conditions for termination and certain exceptions provided under the PRC Labor Contract Law. Mr. Wang is entitled to a fixed base salary in the amount of RMB55,000 ($7,900) per month plus subsidies and bonus. Mr. Wang is also entitled to participate in any benefit plans stipulated by both parties or required by the PRC laws. This labor contract also contains customary restrictive covenants relating to non-competition for a period of two years from the date of termination of employment and non-solicitation within one year after the termination of the employment, confidentiality covenants restricting disclosures of the trade secrets and other confidential information until those information becomes public, as well as certain liabilities due to his breach of contract.

&nbsp;&nbsp;&nbsp;&nbsp;**D.** **Employees** 

As of June 30, 2023, 2024 and 2025, we had 148, 164 and 137 full-time employees, respectively. We currently do not have dispatched workers or part-time employees. The following table provides a breakdown of our employees by function as of June 30, 2025.

---

| | | |
|:---|:---|:---|
| **Functions** | **Number** | **Percentage** |
| Sales and marketing<sup>(1)</sup> | 65 | 47.5% |
| Technology and R&D<sup>(2)</sup> | 18 | 13.1% |
| Customer AARRR Operation | 44 | 32.1% |
| Back Office (including human resources, accounting, compliance, administration and management) | 10 | 7.3% |
| **Total** | 137 | 100.0% |

---

&nbsp;&nbsp;&nbsp;&nbsp;(1) There
 was a decrease of headcounts for a total of 17 employees, or approximately 21% of the total sales
 and marketing personnel in the sales and marketing department for the fiscal year ended June 30,
 2025 compared to the same period in 2024. The decrease was primarily due to operation efficiency
 optimization.

&nbsp;&nbsp;&nbsp;&nbsp;(2) There
 was a decrease of headcounts for a total of eight employees, or approximately 30.8%, in the R&D
 department, for the fiscal year ended June 30, 2025 compared to the same period in 2024, primarily
 due to the optimization of our R&D expenses.

Our success depends on our ability to attract, motivate, train and retain qualified personnel. We believe we offer our employees competitive compensation packages and an environment that encourages self-development and, as a result, have generally been able to attract and retain qualified personnel and maintain a stable core management team.

As required by regulations in China, we participate in various mandatory employee social security plans that are organized by local governments, including social insurance, pension, unemployment insurance, childbirth insurance, work-related injury insurance, medical insurance and housing insurance. We are required under Chinese law to make contributions to employee benefit plans at specified percentages of the salaries, bonuses and certain allowances of our employees, up to a maximum amount specified by the local government.

Our employees are not represented by a labor organization or covered by a collective bargaining agreement. We believe that we maintain a good working relationship with our employees and to date, we have not experienced any significant labor disputes.

&nbsp;&nbsp;&nbsp;&nbsp;**E.** **Share Ownership** 

Please refer to "Item 7. Majority Shareholders and Related Party Transactions -- A. Major Shareholders."

&nbsp;&nbsp;&nbsp;&nbsp;**F.** **Disclosure of a Registrant's Action to Recover Erroneously Awarded Compensation** 

Not applicable.

**ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS**

&nbsp;&nbsp;&nbsp;&nbsp;**A.** **Major Shareholders** 

The following table sets forth information regarding the beneficial ownership of our Class A ordinary shares and Class B ordinary shares as of the date of this annual report, with regard to (i) each person, or group of affiliated persons, known to us to be the beneficial owner of more than five percent of our Class A ordinary shares and Class B ordinary shares; (ii) each of our directors; (iii) each of our named executive officers; and (iv) all of our current directors and executive officers as a group.

We have determined beneficial ownership in accordance with the rules of the SEC. These rules generally attribute beneficial ownership of securities to persons who possess sole or shared voting power or investment power with respect to those securities. The person is also deemed to be a beneficial owner of any security of which that person has a right to acquire beneficial ownership within 60 days. Unless otherwise indicated, the person identified in this table has sole voting and investment power with respect to all shares shown as beneficially owned by him, subject to applicable community property laws.

As of the date of this annual report, we had 28 shareholders of record in the United States. None of our shareholders has informed us that it is affiliated with a registered broker-dealer or is in the business of underwriting securities. We are not aware of any arrangement that may, at a subsequent date, result in a change of control of our company.

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| **Name and Address of Beneficial Owner (1)** | **Class A<br> Ordinary<br> Shares** | **Percentage<br> Ownership<br> of Class A<br> Ordinary<br> Shares (2)** | **Class B<br> Ordinary<br> Shares** | **Percentage<br> Ownership<br> of Class B<br> Ordinary<br> Shares (2)** | **Percentage<br> of Total<br> Voting<br> Power (2)** |
| **5% or Greater Shareholders (Other Than Executive Officers and Directors):** | | | | | |
| Mavy Holdings Limited (3) |  |  | 13155570 | 78.2% | 74.6% |
| Maximum Global Holdings Limited (4) |  |  | 13155570 | 78.2% | 74.6% |
| Shenbao Limited Partnership (5) |  |  | 4222959 | 25.1% | 23.9% |
| Shanghai Xinhui Investment Consulting Co., Ltd. (6) |  |  | 3661122 | 21.8% | 20.8% |
| Beijing Koala Kunlu Internet Industry Investment Fund (Limited Partnership) (7) | 3661140 | 22.3% |  |  | 1.0% |
| Ningbo Pangu Chuangfu Hefu Equity Investment Partnership (Limited Partnership) (8) | 1813954 | 11.0% |  |  | \* |
| Beijing 1898 Youchuang Investment Center (Limited Partnership) (9) | 1109430 | 6.7% |  |  | \* |
| Mangosteen International Consulting PTE. Ltd (10) | 900000 | 5.5% |  |  | \* |
| **Executive Officers and Directors** |  |  |  |  |  |
| Botao Ma (3)(4)(5)(6) |  |  | 16816692 | 100.00% | 95.3% |
| Yuanwen Xia |  |  |  |  |  |
| Xiaowei Le |  |  |  |  |  |
| Xiao Luo (11) | 156108 | 1.0% |  |  |  |
| Yugang Wang (12) | 44601 | \* |  |  |  |
| Guangtong Ren |  |  |  |  |  |
| Stephen Bernardez |  |  |  |  |  |
| Armando Baez |  |  |  |  |  |
| Jeffrey Cai |  |  |  |  |  |
| All directors and executive officers as a group (nine individuals) | 200709 | 1.3% | 16816692 | 100.00% | 95.4% |

---

\* Less than 1%.

<sup>(1)</sup> Except as otherwise indicated below, the business address of each of the shareholders listed above is Floor 3, Building 6, Lane 727, Wuxing Road, Pudong New Area, Shanghai, China, 201204.

&nbsp;&nbsp;&nbsp;&nbsp;(2) Based on 33,268,712 ordinary shares issued and outstanding as of January 5, 2026, consisting of (i) 16,452,020 Class A ordinary shares and (ii) 16,816,692 Class B ordinary shares.

&nbsp;&nbsp;&nbsp;&nbsp;(3) Consists of (i) 8,932,611
 Class B ordinary shares directly held by Mavy Holdings Limited, a British Virgin Islands business company ()"**Mavy** ")
 and (ii) 4,222,959 Class B ordinary shares indirectly held by Mavy, as the majority shareholder of Shenbao Limited Partnership, a
 British Virgin Islands partnership ()"**Shenbao** "). Mr. Botao Ma is the director of Mavy. As such, he may be deemed
 to have the voting and dispositive power of the Class B ordinary shares beneficially held by Mavy. Mr. Ma disclaims any beneficial
 ownership of the reported Class B ordinary shares other than to the extent of any pecuniary interest he may have therein, directly
 or indirectly.

&nbsp;&nbsp;&nbsp;&nbsp;(4) Consists of (i) 8,932,611
 Class B ordinary shares beneficially held by Maximum Global Holdings Limited, a British Virgin Islands business company ()"**Maximum** ")
 through its 99.80% equity interest of Mavy and (ii) 4,222,959 Class B ordinary indirectly held by Mavy, as the majority shareholder
 of Shenbao. Dedao Trust Limited, a company incorporated in Hong Kong, is sole member and sole director of Maximum. Dedao Trust Limited
 is the trustee of The Maximum Trust, a trust established under the laws of Hong Kong. Mavy is the settlor of The Maximum Trust, and
 Mr. Ma is the first beneficiary is The Maximum Trust. As such, Mr. Ma may be deemed to have or share voting and dispositive power
 of the Class B ordinary shares beneficially held by Maximum. Mr. Ma disclaims any beneficial ownership of the reported ordinary shares
 other than to the extent of any pecuniary interest he may have therein, directly or indirectly.

&nbsp;&nbsp;&nbsp;&nbsp;(5) Represents 4,222,959 Class
 B ordinary shares held by Shenbao. Mavy beneficially holds approximately 99.04% equity interest of Shenbao. As such, Mr. Ma may be
 deemed to have or share voting and dispositive power of the Class B ordinary shares held directly by Shenbao.

&nbsp;&nbsp;&nbsp;&nbsp;(6) Represents approximately
 3,661,122 Class B ordinary shares indirectly held by Shanghai Xinhui Investment Consulting Co., Ltd. ()"**Xinhui** ").
 Mr. Botao Ma is the majority shareholder of Xinhui. As such, he may be deemed to have or share voting and dispositive power of the
 Class B ordinary shares held beneficially by Xinhui. Mr. Ma disclaims any beneficial ownership of the reported Class B ordinary shares
 other than to the extent of any pecuniary interest he may have therein, directly or indirectly.

&nbsp;&nbsp;&nbsp;&nbsp;(7) Represents 3,661,140 Class A
 ordinary shares held by Beijing Koala Kunlu Internet Industry Investment Fund (Limited Partnership) ()"**Beijing Koala** "),
 a limited partnership organized under the laws of the PRC. Beijing Koala currently has 17 partners, who are unrelated to the Company,
 its subsidiaries and the officers and directors of the Company, and each of whom exercises the voting and dispositive power of our
 Class A ordinary shares held by Beijing Koala based on their capital subscription proportion. The address of Beijing Koala is 1-616,
 6th Floor, Building 1, No. 42 Gaoliangqiao Xiejie Street, Haidian District, Beijing, China.

&nbsp;&nbsp;&nbsp;&nbsp;(8) Represents 1,813,954 Class A
 ordinary shares held by Ningbo Pangu Chuangfu Hefu Equity Investment Partnership (Limited Partnership) ()"**Ningbo Pangu** "),
 a limited partnership organized under the laws of the PRC. Ningbo Pangu currently has nine partners, who are unrelated to the
 Company, its subsidiaries and the officers and directors of the Company, and each of whom exercises the voting and dispositive power
 of our Class A ordinary shares held by Ningbo Pangu based on their capital subscription proportion. The address of Ningbo Pangu is
 No.1 Jianwai Street, Building A, Guomao Building, Room 3623, Chaoyang District, Beijing China.

&nbsp;&nbsp;&nbsp;&nbsp;(9) Represents 1,109,430 Class A
 ordinary shares held by Beijing 1898 Youchuang Investment Center (Limited Partnership) ()"**Youchuang** "), a limited
 partnership organized under the laws of the PRC. Hong Li is the managing partner of Youchuang. As such, she may be deemed to
 have or share voting and dispositive power of the Class A ordinary shares held beneficially by Youchuang. The address of Youchuang
 is Room 1805, Building 1, No. 105 Yaojiayuan Road, Chaoyang District, Beijing, China.

&nbsp;&nbsp;&nbsp;&nbsp;(10) Represents 900,000 Class A
 ordinary shares held by Mangosteen International Consulting PTE. Ltd ()"**Mangosteen** "). Selina Shwatz is the director
 of Mangosteen. As such, Selina may be deemed to have or share voting and dispositive power of the Class A ordinary shares held beneficially
 by Mangosteen. The address of Mangosteen is #06-13, A'Posh Bizhub 1 Yishun Industrial Street 1 Singapore.

(11) Represents 156,108 Class
 A ordinary shares held by Tianze Zihan Holdings Limited ()"**Tianze** "), a British Virgin Islands corporation. Mr.
 Xiao Luo, our Chief Operating Officer, is the sole shareholder of Tianze holding 100% shares, and thus exercise 100% voting and dispositive
 power of our Class A ordinary shares held by Tianze.

(12) Represents 44,601 Class A ordinary shares
 held by ElecJoys Holdings Limited ()"**ElecJoys** "), a British Virgin Islands corporation. Mr. Yugang Wang, our
 Chief Technical Officer, is the sole shareholder of ElecJoys holding 100% shares, and thus exercise 100% voting and dispositive
 power of our Class A ordinary shares held by ElecJoys.

&nbsp;&nbsp;&nbsp;&nbsp;**B.** **Related Party Transactions** 

**RELATED PARTY TRANSACTIONS**

In addition to the executive officer and director compensation arrangements discussed in "Compensation of Directors and Executive Officers," we describe below the related party transactions of our Company and our PRC Subsidiaries that occurred during the past three fiscal years up to June 30, 2025.

 ****

***Transactions with a Related Party***

 

*Shanghai GBG Enterprise Management Consulting Co., Ltd.*

We purchase certain services on insurance purchase and claim assistance from Shanghai GBG, a limited liability company organized under the laws of PRC and an affiliate of Mr. Botao Ma, our Chief Executive Officer. For the fiscal years ended June 30, 2023, 2024 and 2025, the purchase amount was approximately RMB11.3 million and RMB 2.0 million and RMB 0.4 million (US$49,300), respectively, representing approximately 8%, 1% and 0%, respectively, of our total sales amount.

***Borrowings from Related Parties.***

For the fiscal year ended June 30, 2023, we borrowed RMB 0.2 million from Mr. Yuanwen Xia, unsecured, interest-free, and due on demand. For the fiscal year ended June 30, 2023, we repaid Mr. Yuanwen Xia in full.

For the fiscal year ended June 30, 2024, we borrowed RMB 28.1 million and RMB 0.4 million from Shanghai Xinhui and Mr. Botao Ma, respectively. Both borrowings were unsecured, interest-free and due on demand. For the fiscal year ended June 30, 2024, we repaid borrowings of RMB 28.4 million and RMB 0.4 million to Shanghai Xinhui and Mr. Botao Ma, respectively.

For the fiscal year ended June 30, 2025, we borrowed RMB 9.5 million from Shanghai Xinhui. The borrowing was unsecured, interest-free and due on demand. For the fiscal year ended June 30, 2025, we repaid borrowings of RMB 8.8 million to Shanghai Xinhui

***Loans Made to Related Parties.***

For the fiscal year ended June 30, 2023, we made loans of approximately RMB 15,500 to Ningbo Shen'an Enterprise Management Center LLP ("**Ningbo Shen'an**"), a limited liability company organized under the laws of PRC and controlled by Mr. Botao Ma, and we also collected approximately RMB 0.7 million from Shanghai Shenbao Enterprise Management Center LLP ("**Shanghai Shenbao**"), a limited liability company organized under the laws of PRC and controlled by Mr. Botao Ma, and RMB30,000 from Ningbo Shen'an.

As of June 30, 2023, we fully collected outstanding loans from our related parties.

For the fiscal year ended June 30, 2024 and 2025, we did not make loans to or collect repayment of loans from related parties.

***Payments on Behalf of a Related Party.***

 ****

For the fiscal year ended June 30, 2023, 2024 and 2025, we did not make payments. For the year ended June 30, 2023, Botao Ma made repayments of RMB 15.0 million (US$2.1 million) to us, and settled payable of RMB0.4 million (US$51,600) with receivables. In addition, Shanghai Xinhui settled payable of RMB 0.5 million (US$63,409) with receivables due from Botao Ma. As of June 30, 2023, all outstanding balance due from Botao Ma was fully settled.

For the years ended June 30, 2024 and 2025, we did not incur such transactions.

 

***Amount due from Related Parties.*** As of June 30, 2024 and 2025, the total amount due from related parties represented advances made to Shanghai GBG of approximately RMB 16.6 million and RMB 18.2 million, respectively, in exchange for MGU services to be provided by Shanghai GBG.

***Amount due to Related Parties.*** As of June 30, 2024 and June 30, 2025, the total amount due to related parties were comprised of the following:

---

| | | |
|:---|:---|:---|
|  | **June 30,<br> 2024** | **June 30, <br> 2025** |
|  | **RMB** | **RMB** |
| **Due to related parties** | | |
| &nbsp;&nbsp;&nbsp;Shanghai Xinhui<sup>(a)</sup> | 6003659 | 2828820 |
| &nbsp;&nbsp;&nbsp;Botao Ma<sup>(b)</sup> | 162408 |  |
|  | **6166067** | **2828820** |

---

&nbsp;&nbsp;&nbsp;&nbsp;(a) As of June 30, 2024, the balance due to Shanghai Xinhui represented the amount paid by the related party on behalf of the Company to settle the subscription fees liabilities due to a shareholder.

As of June 30, 2025, the balance due to Shanghai Xinhui consisted of (i) borrowing of RMB 838,016, which was borrowed to support the Company's working capital. The borrowing was interest free and payable on demand, and (ii) the outstanding liabilities of RMB 1,990,804 due to Xinhui for its payment on behalf of the Company to settle the subscription fees liabilities due to an investor.

&nbsp;&nbsp;&nbsp;&nbsp;(b) As of June 30, 2024, the balance due to Mr. Botao Ma represented the operating expenses paid by Mr. Botao Ma on behalf of the Company, which was fully settled in the year ended June 30, 2025. The expenses were interest free and payable on demand.

***Related Transaction with Key Management Personnel***

See "*Management — Employment Agreement*s."

**Related Party Policy**

Our Code, requires us to avoid, wherever possible, all related party transactions that could result in actual or potential conflicts of interests, except under guidelines approved by the board of directors (or the audit committee). A conflict of interest situation can arise when a person takes actions or has interests that may make it difficult to perform his or her work objectively and effectively. Conflicts of interest may also arise if a person, or a member of his or her family, receives improper personal benefits as a result of his or her position.

Our audit committee, pursuant to its written charter, is responsible for reviewing any conflicts of interest and related-party transactions to assess an impact on the Company's internal controls on financial reporting and disclosure.

These procedures are intended to determine whether any such related party transaction impairs the independence of a director or presents a conflict of interest on the part of a director, employee or officer.

&nbsp;&nbsp;&nbsp;&nbsp;**C.** **Interests of Experts and Counsel** 

Not Applicable.

**ITEM 8. FINANCIAL INFORMATION**

&nbsp;&nbsp;&nbsp;&nbsp;**A.** **Consolidated Statements and Other Financial Information** 

Please refer to Item 18 "Financial Statements" for our audited consolidated financial statements filed as part of this annual report.

**Legal Proceedings**

The Company currently has the following legal proceedings:

***Zhibao China vs. Taiping General Insurance Company Limited ("Taiping Insurance")***

 ****

On June 3, 2024, Zhibao China, the plaintiff, filed a lawsuit at Shenzhen Futian District People's Court against Taiping Insurance, in connection with the breach of contract pursuant to Third Party Management Service Cooperation Agreements. In this lawsuit, Zhibao China requested Taiping Insurance to repay management service fees of RMB 11,053,754.69, together with a penalty of approximately RMB 99,740 and case acceptance fees, litigation preservation fees pursuant to such Third Party Management Service Cooperation Agreements. On November 10, 2025, the Shenzhen Futian District People's Court rendered its judgement of first instance (at the trial court level) ordering Taiping Insurance to pay Zhibao China, management service fees of RMB 11,053,754.69 and overdue-interest within ten days of the judgment's effective date. The interest is to be calculated (i) on RMB 7,683,325.10 from February 2, 2024 and (ii) on RMB 3,370,429.59 from August 14, 2024, in each case at the one-year Loan Prime Rate published by the National Inter-bank Funding Center, until the date of actual payment.

***Shanghai Chenxi Technology Group Co., Ltd. ("Shanghai Chenxi") vs. Sunshine Insurance Brokers (Shanghai) Co., Ltd. ("Sunshine Insurance Brokers") & Zhibao China***

 ****

On June 28, 2024, Shanghai Chenxi filed a lawsuit against Sunshine Insurance Brokers and Zhibao China at Shanghai Pudong New Area People's Court, in connection with the breach of contract pursuant to Internet Insurance Marketing Promotion Cooperation Agreement. In this lawsuit, Shanghai Chenxi requested Sunshine Insurance Brokers and Zhibao China to be jointly liable in repaying promotion service fees of RMB 14,216,437.05, together with a penalty of approximately RMB 10,883.44, litigation costs and litigation preservation fees pursuant to such Internet Insurance Marketing Promotion Cooperation Agreement.

On December 5, 2024 and February 26, 2025, Shanghai Pudong New Area People's Court separately issued two civil mediation documents, confirming that Shanghai Chenxi reached mediation agreements with Sunshine Insurance Brokers and Zhibao China. In the mediation agreements, Sunshine Insurance Brokers agreed to pay Shanghai Chenxi a total promotion service fees of RMB 13,257,049, along with case acceptance fees and litigation preservation fees of RMB 26,577.29. Sunshine Insurance Brokers has made the first due payment of RMB 2,370,483.68 on December 11, 2024, the second due payment of RMB 1,335,000 (together with enforcement fees of RMB 15,750, totaling RMB 1,350,750) on June 24, 2025, an aggregated amount of RMB 685,194.75 on July 30, 2025, and RMB 739,243.90 on September 26, 2025.

***Guangdong Zhongkang Yongdao Insurance Brokerage Co., Ltd. ("Guangdong Zhongkang") vs. Sunshine Insurance Brokers & Zhibao China***

 ****

On June 28, 2024, Guangdong Zhongkang filed a lawsuit against Sunshine Insurance Brokers and Zhibao China at Shanghai Pudong New Area People's Court, in connection with the breach of contract pursuant to Joint Brokerage Cooperation Agreement. In this lawsuit, Guangdong Zhongkang requested Sunshine Insurance Brokers & Zhibao China to bear joint liability in repaying joint brokerage commission fees of RMB1,418,192.63, together with a penalty of approximately RMB 9,689.88 and litigation costs, litigation preservation fees pursuant to such Joint Brokerage Cooperation Agreement.

On September 5, 2024, Sunshine Insurance Brokers filed a counterclaim lawsuit at Shanghai Pudong New Area People's Court against Guangdong Zhongkang (Zhibao China as the third party) in connection with the aforementioned dispute. In this lawsuit, Sunshine Insurance Brokers requested Guangdong Zhongkang to return payments of RMB 4,476,900.00, together with a penalty of approximately RMB 65,126.06 and court acceptance fees.

On May 29, 2025, Sunshine Insurance Brokers and Zhibao China agreed to mediate in court with Guangdong Zhongkang and a mediation record was formed. According to the mediation record, Guangdong Zhongkang shall pay Sunshine Insurance Brokers a settlement amount of RMB 38,280.60, case acceptance fees of RMB 758 (reduced to RMB 379), and property preservation fees of RMB 5,000, totaling RMB 5,379, to be shared equally by Guangdong Zhongkang and Sunshine Insurance Brokers. On the same day, the Shanghai Pudong New Area People's Court issued a ruling to lift the freeze on Sunshine Insurance Brokers' bank deposits of RMB 1,427,881. As of the date of this annual report, all obligations under the mediation record have been fulfilled.

***Beijing Tiantan Puhua International Hospital ("Tiantan Puhua") vs. Taiping Property Insurance Co., Ltd. Shanghai Branch ("Taiping Shanghai"), Shanghai Jibeiji Enterprise Management Consulting Co., Ltd. ("Jibeiji") & Zhibao China (Peter William Anthony Hogg as the third party)***

 ****

On June 3, 2024, Tiantan Puhua filed a lawsuit at Shanghai Pudong New Area People's Court against Taiping Shanghai, Jibeiji & Zhibao China (Peter William Anthony Hogg as the third party), in connection with exercise of subrogation rights regarding the third party's outstanding medical expenses to Tiantan Puhua. In this lawsuit, Tiantan Puhua requested Taiping Shanghai to repay medical expenses of RMB 1,389,590.94, together with relevant interests and all litigation costs. Tiantan Puhua requested Jibeiji & Zhibao China to bear joint liability in repaying the aforementioned medical expenses and relevant interests. As of the date of this annual report, the case is still pending.

***Changzhou Anzhuo Logistics Co., Ltd ("Anzhuo Logistics") vs. Yang Xiurong, Sunshine Insurance Brokers & Shanghai Asia Pacific Insurance Brokerage Co., Ltd ("Asia Pacific Insurance Brokerage")***

 ****

On June 5, 2025, Anzhuo Logistics instituted proceedings at the Xiaoshan County People's Court, Suzhou, Anhui, naming Yang Xiurong, Sunshine Insurance Brokers and Asia-Pacific Insurance Brokerage as defendants. The plaintiff alleges that the defendants arranged insurance through unlicensed individuals, misled both insurer and insured, and induced non-disclosure, and claims damages of RMB 500,000 plus interest accruing from the date of filing.

Sunshine Insurance Brokers has challenged the jurisdiction of the court. On July 3, 2025, the Xiaoshan County People's Court issued a ruling granting the objection and ordering the case to be transferred to the Pudong New Area People's Court, Shanghai. On October 9, 2025, Sunshine Insurance Brokers received a hearing notice from the Pudong New Area People's Court, scheduling the case for December 3, 2025. As of the date of this annual report, the case remains pending.

***Zhonglian vs. Hangzhou Fuxiaoyun Technology Co., Ltd. ("Fuxiaoyun")***

 ****

On July 20, 2025, Zhonglian, as the plaintiff, filed a lawsuit at Ningbo Yinzhou District People's Court against Fuxiaoyun, alleging breach of contract under a recommendation and consulting service agreement. In this action, Zhonglian seeks compensation from Fuxiaoyun for losses amounting to RMB 695,633.11, plus interest calculated at the annual LPR on the principal sum of RMB 695,633.11 from the date of filing until the date Fuxiaoyun fully settles the payment. Additionally, Zhonglian claims attorney's fees of RMB 30,000 and all associated litigation costs. As of the date of this legal annual report, the case remains pending.

Except as disclosed above, the Company knows of no material, active, pending or threatened proceeding against itself or its subsidiaries, including the PRC Subsidiaries, nor is the Company, or its subsidiaries, including the PRC Subsidiaries, involved as a plaintiff or defendant in any material proceeding or pending litigation.

The Company and its subsidiaries, including the PRC Subsidiaries, may from time to time be subject to various legal or administrative claims and proceedings arising in the ordinary course of business. Litigation or any other legal or administrative proceeding, regardless of the outcome, is likely to result in substantial cost and diversion of the Company's resources, including the Company's management's time and attention.

**Dividend Policy**

Subject to the provisions of the Companies Act and any rights attaching to any class or classes of shares under and in accordance with our amended and restated memorandum and articles of association, as amended from time to time, our board of directors has discretion regarding whether to declare or pay dividends or other distributions out of our funds which are lawfully available for that purpose. In addition, our shareholders may by ordinary resolution declare a dividend in accordance with the respective rights attached to the shares, provided that no dividend may exceed the amount recommended by our directors. Subject to the requirements of the Companies Act regarding the application of a company's share premium account and with the sanction of an ordinary resolution, dividends may also be declared and paid out of any share premium account. The directors when paying dividends to shareholders may make such payment either in cash or in specie. Unless provided by the rights attached to a share, no dividend shall bear interest. All dividends are subject to certain restrictions under Cayman Islands law, namely that a Cayman Islands company may pay a dividend on its shares out of either profit or share premium account, provided that in no circumstances may a dividend be paid if following such payment the company would be unable to pay its debts as they fall due in the ordinary course of business. Even if our board of directors decides to pay dividends, the form, frequency and amount will depend upon our future operations and earnings, capital requirements and surplus, general financial condition, contractual restrictions and other factors that the board of directors may deem relevant.

We have never declared or paid cash dividends on our shares. We currently do not have any plans to pay cash dividends. Rather, we currently intend to retain all of our available funds and any future earnings to operate and grow our business.

Cash dividends on our ordinary shares, if any, will be paid in U.S. dollars.

**B. Significant Changes**

Except as disclosed elsewhere in this annual report, we have not experienced any significant changes since the date of our audited consolidated financial statements included in this annual report.

**ITEM 9. THE OFFER AND LISTING**

**A. Offer and Listing Details**

See below "-C. Markets."

**B. Plan of Distribution**

Not Applicable.

**C. Markets**

Our Class A ordinary shares are listed on the Nasdaq under the symbol "ZBAO." As of January 5, 2026, 33,268,712 ordinary shares were issued and outstanding, of which 16,452,020 were Class A ordinary shares and 16,816,692 were Class B ordinary shares.

**D. Selling Shareholders**

Not Applicable.

**E. Dilution**

Not Applicable.

**F. Expenses of the Issue**

Not Applicable.

**ITEM 10. ADDITIONAL INFORMATION**

**A. Share Capital**

Not Applicable.

**B. Memorandum and Articles of Association**

We are a Cayman Islands exempted company and our affairs are governed by our amended and restated memorandum and articles of association, as amended from time to time, the Companies Act (Revised) of the Cayman Islands (which we refer to as the Companies Act below) and the common law of the Cayman Islands. For information on our securities, including Class A ordinary shares, Class B ordinary shares, warrants and convertible notes, please see Exhibit 2.2 Description of Securities" of this annual report.

**Comparison of Cayman Islands Corporate Law and U.S. Corporate Law**

Cayman Islands companies are governed by the Companies Act. The Companies Act is modeled on English Law but does not follow recent English Law statutory enactments, and accordingly there are significant differences between the Companies Act and the current Companies Act of England and Wales. In addition, the Companies Act differs from laws applicable to United States corporations and their shareholders. Set forth below is a summary of the material differences between the provisions of the Companies Act applicable to us and the comparable laws applicable to companies incorporated in the United States and their shareholders.

 

 

*Mergers and Similar Arrangements*

In certain circumstances the Cayman Islands Companies Act allows for mergers or consolidations between two Cayman Islands companies, or between a Cayman Islands company and a company incorporated in another jurisdiction (provided that is facilitated by the laws of that other jurisdiction). For these purposes, (a) "merger" means the merging of two or more constituent companies and the vesting of their undertaking, property, and liabilities in one of such companies as the surviving company, and (b) a "consolidation" means the combination of two or more constituent companies into a consolidated combined company and the vesting of the undertaking, property and liabilities of such companies into the consolidated company.

Where the merger or consolidation is between two Cayman Islands companies, the directors of each company must approve a written plan of merger or consolidation containing certain prescribed information. That plan or merger or consolidation must then be authorized by either (a) a special resolution of the shareholders of each company; or (b) such other authorization, if any, as may be specified in such constituent company's articles of association. The written plan of merger or consolidation must be filed with the Registrar of Companies of the Cayman Islands together with, among other documents, a declaration as to the solvency of the consolidated or surviving company, a declaration of the assets and liabilities of each constituent company, and (unless the surviving or consolidated company is to be a non-Cayman Islands company) an undertaking that a copy of the certificate of merger or consolidation will be given to the members and creditors of each constituent company and that notification of the merger or consolidation will be published in the Cayman Islands Gazette. Court approval is not required for a merger or consolidation which is effected in compliance with these statutory procedures.

A shareholder has the right to vote on a merger or consolidation regardless of whether the shares that he holds otherwise give him voting rights. No shareholder resolution is required for a merger between a parent company (i.e., a company that owns at least 90% of the issued shares entitled to vote of each class in a subsidiary company) and its subsidiary company, provided that a copy of the plan of merger is given to every member of each subsidiary company to be merged unless the member agrees otherwise.

The consent of each holder of a fixed or floating security interest of a constituent company must be obtained, unless the court waives such requirement. If the Registrar is satisfied that the requirements of the Companies Act (which includes certain other formalities) have been complied with, the Registrar will register the plan of merger or consolidation.

Where the merger or consolidation involves a foreign company, the procedure is similar, save that with respect to the foreign company, the director of the Cayman Islands company is required to make a declaration to the effect that, having made due enquiry, he is of the opinion that the requirements set out below have been met: (i) that the merger or consolidation is permitted or not prohibited by the constitutional documents of the foreign company and by the laws of the jurisdiction in which the foreign company is incorporated, and that those laws and any requirements of those constitutional documents have been or will be complied with; (ii) that no petition or other similar proceeding has been filed and remains outstanding or order made or resolution adopted to wind up or liquidate the foreign company in any jurisdictions; (iii) that no receiver, trustee, administrator or other similar person has been appointed in any jurisdiction and is acting in respect of the foreign company, its affairs or its property or any part thereof; (iv) that no scheme, order, compromise or other similar arrangement has been entered into or made in any jurisdiction whereby the rights of creditors of the foreign company are and continue to be suspended or restricted.

Where the surviving company is the Cayman Islands company, the director of the Cayman Islands company is further required to make a declaration to the effect that, having made due enquiry, he is of the opinion that the requirements set out below have been met: (i) that the foreign company is able to pay its debts as they fall due and that the merger or consolidated is bona fide and not intended to defraud unsecured creditors of the foreign company; (ii) that in respect of the transfer of any security interest granted by the foreign company to the surviving or consolidated company (a) consent or approval to the transfer has been obtained, released or waived; (b) the transfer is permitted by and has been approved in accordance with the constitutional documents of the foreign company; and (c) the laws of the jurisdiction of the foreign company with respect to the transfer have been or will be complied with; (iii) that the foreign company will, upon the merger or consolidation becoming effective, cease to be incorporated, registered or exist under the laws of the relevant foreign jurisdiction; and (iv) that there is no other reason why it would be against the public interest to permit the merger or consolidation.

Where the above procedures are adopted, the Companies Act provides for a right of dissenting shareholders to be paid a payment of the fair value of his shares (which, if not agreed between the parties, will be determined by the Cayman Islands court) upon their dissenting to the merger or consolidation if they follow a prescribed procedure. In essence, that procedure is as follows (a) the shareholder must give his written objection to the merger or consolidation to the constituent company before the vote on the merger or consolidation, including a statement that the shareholder proposes to demand payment for his shares if the merger or consolidation is authorized by the vote; (b) within 20 days following the date on which the merger or consolidation is approved by the shareholders, the constituent company must give written notice to each shareholder who made a written objection; (c) a shareholder must within 20 days following receipt of such notice from the constituent company, give the constituent company a written notice of his intention to dissent including, among other details, a demand for payment of the fair value of his shares; (d) within seven days following the date of the expiration of the period set out in paragraph (b) above or seven days following the date on which the plan of merger or consolidation is filed, whichever is later, the constituent company, the surviving company or the consolidated company must make a written offer to each dissenting shareholder to purchase his shares at a price that the company determines is the fair value and if the company and the shareholder agree on the price within 30 days following the date on which the offer was made, the company must pay the shareholder such amount; (e) if the company and the shareholder fail to agree on a price within such 30 day period, within 20 days following the date on which such 30 day period expires, the company (and any dissenting shareholder) must file a petition with the Cayman Islands Grand Court to determine the fair value and such petition must be accompanied by a list of the names and addresses of the dissenting shareholders with whom agreements as to the fair value of their shares have not been reached by the company. At the hearing of that petition, the court has the power to determine the fair value of the shares together with a fair rate of interest, if any, to be paid by the company upon the amount determined to be the fair value. Any dissenting shareholder whose name appears on the list filed by the company may participate fully in all proceedings until the determination of fair value is reached. These rights of a dissenting shareholder are not be available in certain circumstances, for example, to dissenters holding shares of any class in respect of which an open market exists on a recognized stock exchange or recognized interdealer quotation system at the relevant date or where the consideration for such shares to be contributed are shares of any company listed on a national securities exchange or shares of the surviving or consolidated company.

Moreover, Cayman Islands law also has separate statutory provisions that facilitate the reconstruction or amalgamation of companies in certain circumstances, schemes of arrangement will generally be more suited for complex mergers or other transactions involving widely held companies, commonly referred to in the Cayman Islands as a "scheme of arrangement" which may be tantamount to a merger. In the event that a merger was sought pursuant to a scheme of arrangement (the procedure of which are more rigorous and take longer to complete than the procedures typically required to consummate a merger in the United States), the arrangement in question must be approved by a majority in number of each class of shareholders and creditors with whom the arrangement is to be made and who must in addition represent three-fourths in value of each such class of shareholders or creditors, as the case may be, that are present and voting either in person or by proxy at a meeting, or meeting summoned for that purpose. The convening of the meetings and subsequently the terms of the arrangement must be sanctioned by the Grand Court of the Cayman Islands. While a dissenting shareholder would have the right to express to the court the view that the transaction should not be approved, the court can be expected to approve the arrangement if it satisfies itself that:

● we are not proposing to act illegally or beyond the scope of our corporate authority and the statutory provisions as to majority vote have been complied with;

● the shareholders have been fairly represented at the meeting in question and the statutory majority are acting bona fide without coercion of the minority to promote interests adverse to those of the class;

● the arrangement is such that a business person would reasonably approve by an intelligent and honest man of that class acting in respect of his interest; and

● the arrangement is not one that would more properly be sanctioned under some other provision of the Companies Act or that would amount to a "fraud on the minority."

If a scheme of arrangement or takeover offer (as described below) is approved, any dissenting shareholder would have no rights comparable to appraisal rights, which would otherwise ordinarily be available to dissenting shareholders of United States corporations, providing rights to receive payment in cash for the judicially determined value of the shares.

 

*Squeeze-out Provisions*

The Companies Act contains a statutory power of compulsory acquisition which may facilitate the "squeeze out" of dissentient minority shareholders upon a tender offer. When a tender offer is made and accepted by holders of 90% of the shares to whom the offer is made within four months, the offeror may, within a two-month period, require the holders of the remaining shares to transfer such shares to the offeror on the terms of the offer. An objection can be made to the Grand Court of the Cayman Islands but this is unlikely to succeed unless there is evidence of fraud, bad faith, collusion or inequitable treatment of the shareholders.

Further, transactions similar to a merger, reconstruction and/or an amalgamation may in some circumstances be achieved through other means to these statutory provisions, such as a share capital exchange, asset acquisition or control, through contractual arrangements, of an operating business.

 

*Shareholders' Suits*

Ogier (Cayman) LLP, our Cayman Islands legal counsel, is not aware of any reported class action having been brought in a Cayman Islands court. Derivative actions have been brought in the Cayman Islands courts, and the Cayman Islands courts have confirmed the availability for such actions. In most cases, we will be the proper plaintiff in any claim based on a breach of duty owed to us, and a claim against (for example) our officers or directors usually may not be brought by a shareholder. However, based on English authorities, which would in all likelihood be of persuasive authority and be applied by a court in the Cayman Islands, exceptions to the foregoing principle apply in circumstances in which:

● a company is acting, or proposing to act, illegally or beyond the scope of its authority and is therefore incapable of ratification by the shareholders;

● an irregularity in the passing of a resolution which requires a qualified majority;

● an act purporting to abridge or abolish the individual rights of a member; and

● those who control the company are perpetrating a "fraud on the minority."

A shareholder may have a direct right of action against us where the individual rights of that shareholder have been infringed or are about to be infringed.

 

*Indemnification of Directors and Executive Officers and Limitation of Liability*

Cayman Islands law does not limit the extent to which a company's memorandum and articles of association may provide for indemnification of officers and directors, except to the extent any such provision may be held by the Cayman Islands courts to be contrary to public policy, such as to provide indemnification against fraud or the consequences of committing a crime, or against the indemnified person's own fraud or willful default. Our amended and restated articles of association provide to the extent permitted by law, we shall indemnify each existing or former secretary, director (including alternate director), and any of our other officers (including an investment adviser or an administrator or liquidator) and their personal representatives against:

&nbsp;&nbsp;&nbsp;&nbsp;(a) all
actions, proceedings, costs, charges, expenses, losses, damages, or liabilities incurred or sustained by the existing or former director
(including alternate director), secretary, or officer in or about the conduct of our business or affairs or in the execution or discharge
of the existing or former director (including alternate director), secretary's or officer's duties, powers, authorities,
or discretions; and

&nbsp;&nbsp;&nbsp;&nbsp;(b) without
limitation to paragraph (a) above, all costs, expenses, losses, or liabilities incurred by the existing or former director (including
alternate director), secretary, or officer in defending (whether successfully or otherwise) any civil, criminal, administrative, or investigative
proceedings (whether threatened, pending or completed) concerning us or our affairs in any court or tribunal, whether in the Cayman Islands
or elsewhere.

No such existing or former director (including alternate director), secretary, or officer, however, shall be indemnified in respect of any matter arising out of his own actual fraud, willful default or willful neglect.

To the extent permitted by law, we may make a payment, or agree to make a payment, whether by way of advance, loan, or otherwise, for any legal costs incurred by an existing or former director (including alternate director), secretary, or any of our officers in respect of any matter identified in above on condition that the director (including alternate director), secretary, or officer must repay the amount paid by us to the extent that it is ultimately found not liable to indemnify the director (including alternate director), the secretary, or that officer for those legal costs.

Our amended and restated memorandum and articles of association, as amended from time to time, permit indemnification of officers and directors for losses, damages, costs and expenses incurred in their capacities as such unless such losses or damages arise from dishonesty or fraud of such directors or officers.

This standard of conduct is generally the same as permitted under the Delaware General Corporation Law for a Delaware corporation. In addition, our offer letters to our independent directors and our employment agreements with our executive officers provide such persons with additional indemnification beyond that provided in our amended and restated memorandum and articles of association, as amended from time to time.

Insofar as indemnification for liabilities arising under the Securities Act may be permitted to our directors, officers or persons controlling us under the foregoing provisions, we have been informed that in the opinion of the SEC, such indemnification is against public policy as expressed in the Securities Act and is therefore unenforceable.

 

*Directors' Fiduciary Duties*

Under Delaware General Corporation Law, a director of a Delaware corporation has a fiduciary duty to the corporation and its shareholders. This duty has two components: the duty of care and the duty of loyalty. The duty of care requires that a director act in good faith, with the care that an ordinarily prudent person would exercise under similar circumstances. Under this duty, a director must inform himself of, and disclose to shareholders, all material information reasonably available regarding a significant transaction. The duty of loyalty requires that a director acts in a manner he reasonably believes to be in the best interests of the corporation. He must not use his corporate position for personal gain or advantage. This duty prohibits self-dealing by a director and mandates that the best interest of the corporation and its shareholders take precedence over any interest possessed by a director, officer or controlling shareholder and not shared by the shareholders generally. In general, actions of a director are presumed to have been made on an informed basis, in good faith and in the honest belief that the action taken was in the best interests of the corporation. However, this presumption may be rebutted by evidence of a breach of one of the fiduciary duties. Should such evidence be presented concerning a transaction by a director, the director must prove the procedural fairness of the transaction, and that the transaction was of fair value to the corporation.

Under Cayman Islands law, all of our directors owe three types of duties to us: (i) statutory duties, (ii) fiduciary duties, and (iii) common law duties. The Companies Act (Revised) of the Cayman Islands imposes a number of statutory duties on a director. A Cayman Islands director's fiduciary duties are not codified, however, the courts of the Cayman Islands have held that a director owes the following fiduciary duties: (a) a duty to act in what the director bona fide considers to be in the best interests of the company, (b) a duty to exercise their powers for the purposes they were conferred, (c) a duty to avoid fettering his or her discretion in the future and (d) a duty to avoid conflicts of interest and of duty. The common law duties owed by a director are those to act with skill, care and diligence that may reasonably be expected of a person carrying out the same functions as are carried out by that director in relation to the company and, also, to act with the skill, care and diligence in keeping with a standard of care commensurate with any particular skill they have which enables them to meet a higher standard than a director without those skills. In fulfilling their duty of care to us, our directors must ensure compliance with our amended and restated articles of association. We have the right to seek damages if a duty owed by any of our directors is breached.

The functions and powers of our board of directors include, among others:

● appointing officers and determining the term of office of the officers;

● exercising the borrowing powers of the Company and mortgaging the property of the Company; and

● maintaining or registering a register of mortgages, charges, or other encumbrances of the Company.

 

*Shareholder Action by Written Consent*

Under the Delaware General Corporation Law, a corporation may eliminate the right of shareholders to act by written consent in its certificate of incorporation. Our amended and restated articles of association provide that shareholders may not approve corporate matters by way of a unanimous written resolution signed by or on behalf of each shareholder who would have been entitled to vote on such matter at a general meeting without a meeting being held.

 

*Shareholder Proposals*

Under the Delaware General Corporation Law, a shareholder has the right to put any proposal before the annual general meeting, provided it complies with the notice provisions in the governing documents. An extraordinary general meeting may be called by the board of directors or any other person authorized to do so in the governing documents, but shareholders may be precluded from calling special meetings.

Cayman Islands law provides shareholders with only limited rights to requisition a general meeting, and does not provide shareholders with any right to put any proposal before a general meeting. However, these rights may be provided in a company's articles of association. Our amended and restated articles of association provide that general meetings shall be convened on the written requisition of one or more of the shareholders entitled to attend and vote at our general meetings who (together) hold not less than 10 percent of the rights to vote at such general meeting in accordance with the notice provisions in the amended and restated articles of association, specifying the purpose of the meeting and signed by each of the shareholders making the requisition. If the directors do not convene such meeting for a date not later than 21 days' after the date of receipt of the written requisition, those shareholders who requested the meeting may convene the general meeting themselves within 30 days after the end of such period of 21 days in which case reasonable expenses incurred by them as a result of the directors failing to convene a meeting shall be reimbursed by us. Our amended and restated articles of association provide no other right to put any proposals before annual general meetings or extraordinary general meetings. As a Cayman Islands exempted company, we are not obligated by law to call shareholders' annual general meetings.

 

*Cumulative Voting*

Under the Delaware General Corporation Law, cumulative voting for elections of directors is not permitted unless the corporation's certificate of incorporation specifically provides for it. Cumulative voting potentially facilitates the representation of minority shareholders on a board of directors since it permits the minority shareholder to cast all the votes to which the shareholder is entitled on a single director, which increases the shareholder's voting power with respect to electing such director. There are no prohibitions in relation to cumulative voting under the Companies Act but our amended and restated articles of association do not provide for cumulative voting. As a result, our shareholders are not afforded any fewer protections or rights on this issue than shareholders of a Delaware corporation.

 

*Removal of Directors*

Under the Delaware General Corporation Law, a director of a corporation with a classified board may be removed only for cause with the approval of a majority of the outstanding shares entitled to vote, unless the certificate of incorporation provides otherwise. Subject to the provisions of our amended and restated articles of association (which include the removal of a director by ordinary resolution), the office of a director may be terminated forthwith if (a) he is prohibited by the laws of the Cayman Islands from acting as a director, (b) he is made bankrupt or makes an arrangement or composition with his creditors generally, (c) he resigns his office by notice to us, (d) he only held office as a director for a fixed term and such term expires, (e) in the opinion of a registered medical practitioner by whom he is being treated he becomes physically or mentally incapable of acting as a director, (f) he is given notice by the majority of the other directors (not being less than two in number) to vacate office (without prejudice to any claim for damages for breach of any agreement relating to the provision of the services of such director), (g) he is made subject to any law relating to mental health or incompetence, whether by court order or otherwise, or (h) without the consent of the other directors, he is absent from meetings of directors for continuous period of six months.

 

 

*Transactions with Interested Shareholders*

The Delaware General Corporation Law contains a business combination statute applicable to Delaware corporations whereby, unless the corporation has specifically elected not to be governed by such statute in its certificate of incorporation, it is prohibited from engaging in certain business combinations with an "interested shareholder" for three years following the date that such person becomes an interested shareholder. An interested shareholder generally is a person or a group who or which owns or owned 15% or more of the target's outstanding voting share within the past three years. This has the effect of limiting the ability of a potential acquirer to make a two-tiered bid for the target in which all shareholders would not be treated equally. The statute does not apply if, among other things, prior to the date on which such shareholder becomes an interested shareholder, the board of directors approves either the business combination or the transaction which resulted in the person becoming an interested shareholder. This encourages any potential acquirer of a Delaware corporation to negotiate the terms of any acquisition transaction with the target's board of directors.

Cayman Islands law has no comparable statute. As a result, we cannot avail ourselves of the types of protections afforded by the Delaware business combination statute. However, although Cayman Islands law does not regulate transactions between a company and its significant shareholders, it does provide that such transactions must be entered into bona fide in the best interests of the company and for a proper corporate purpose and not with the effect of constituting a fraud on the minority shareholders.

 

*Dissolution; Winding up*

Under the Delaware General Corporation Law, unless the board of directors approves the proposal to dissolve, dissolution must be approved by shareholders holding 100% of the total voting power of the corporation. Only if the dissolution is initiated by the board of directors may it be approved by a simple majority of the corporation's outstanding shares. Delaware law allows a Delaware corporation to include in its certificate of incorporation a supermajority voting requirement in connection with dissolutions initiated by the board.

Under Cayman Islands law and our amended and restated articles of association, the company may be wound up by a special resolution of our shareholders, or if the winding up is initiated by our board of directors, by either a special resolution of our members or, if our Company is unable to pay its debts as they fall due, by an ordinary resolution of our members. In addition, a company may be wound up by an order of the courts of the Cayman Islands. The court has authority to order winding up in a number of specified circumstances including where it is, in the opinion of the court, just and equitable to do so.

 

*Variation of Rights of Shares*

Under the Delaware General Corporation Law, a corporation may vary the rights of a class of shares with the approval of a majority of the outstanding shares of such class, unless the certificate of incorporation provides otherwise. Under Cayman Islands law and our amended and restated articles of association, if our share capital is divided into more than one class of shares, we may vary the rights attached to any class with the written consent of the holders of not less than three-fourths of the issued shares of that class or with the sanction of a special resolution passed at a general meeting of the holders of the shares of that class.

 

*Amendment of Governing Documents*

Under the Delaware General Corporation Law, a corporation's governing documents may be amended with the approval of a majority of the outstanding shares entitled to vote, unless the certificate of incorporation provides otherwise. As permitted by Cayman Islands law, our amended and restated memorandum and articles of association may only be amended with a special resolution of our shareholders.

**Anti-Money Laundering — Cayman Islands**

In order to comply with legislation or regulations aimed at the prevention of money laundering and terrorist financing, we are required to adopt and maintain anti-money laundering procedures and will require subscribers to provide information and evidence to verify their identity, address and source of funds. Where permitted, and subject to certain conditions, we may also delegate the maintenance of our anti-money laundering procedures (including the acquisition of due diligence information) to a suitable person.

We reserve the right to request such information and evidence as is necessary to verify the identity, address and source of funds of a subscriber. In the event of delay or failure on the part of the subscriber in producing any information required for verification purposes, we may refuse to accept the application, in which case any funds received will be returned without interest to the account from which they were originally debited. We will not be liable for any loss suffered by a subscriber arising as a result of a refusal of, or delay in processing, an application from a subscriber if such information and documentation requested has not been provided by the subscriber in a timely manner.

We also reserve the right to refuse to make any redemption payment to a shareholder if our directors or officers suspect or are advised that the payment of redemption proceeds to such shareholder might result in a breach of applicable anti-money laundering or other laws or regulations by any person in any relevant jurisdiction, or if such refusal is considered necessary or appropriate to ensure our compliance with any such laws or regulations in any applicable jurisdiction.

If any person resident in the Cayman Islands knows or suspects or has reasonable grounds for knowing or suspecting that another person is engaged in criminal conduct or is involved with terrorism or terrorist property and the information for that knowledge or suspicion came to their attention in the course of their business in the regulated sector, or other trade, profession, business or employment, the person will be required to report such knowledge or suspicion to (i) a nominated officer (appointed in accordance with the Proceeds of Crime Act (Revised) of the Cayman Islands) or the Financial Reporting Authority of the Cayman Islands, pursuant to the Proceeds of Crime Act (Revised), if the disclosure relates to criminal conduct or money laundering or (ii) to the Financial Reporting Authority or a police constable or a nominated officer (pursuant to the Terrorism Act (Revised) of the Cayman Islands), if the disclosure relates to involvement with terrorism or terrorist financing and terrorist property. Such a report shall not be treated as a breach of confidence or of any restriction upon the disclosure of information imposed by any enactment or otherwise.

By subscribing for shares, the subscriber consents to the disclosure of any information about them to regulators and others upon request in connection with money laundering and similar matters both in the Cayman Islands and in other jurisdictions.

**Economic Substance Legislation of The Cayman Islands**

The Cayman Islands, together with several other non-European Union jurisdictions, have introduced legislation aimed at addressing concerns raised by the Council of the European Union and the OECD as to offshore structures engaged in certain activities which attract profits without real economic activity. The International Tax Co-operation (Economic Substance) Act (Revised) (the "**Substance Act**") came into force in the Cayman Islands in January 2019, introducing certain economic substance requirements for in-scope Cayman Islands entities which are engaged in certain geographically mobile business activities ("**relevant activities**"). As we are a Cayman Islands exempted company, its compliance obligations include filing annual notifications , in which need to state whether we are carrying out any relevant activities and, if so, whether or not we have satisfied economic substance tests to the extent required under the Substance Act. It is anticipated that our company will not be engaging in any "relevant activities" and will therefore not be required to meet the economic substance requirements tests or will otherwise be subject to more limited substance requirements. However, it is anticipated that the Substance Act will evolve and be subject to further clarification and amendments. Failure to satisfy applicable requirements may subject us to penalties under the Substance Act.

**Data Protection — Cayman Islands**

We have certain duties under the Data Protection Act (As Revised) of the Cayman Islands (the "**DPA**") based on internationally accepted principles of data privacy.

**Data Protection in the Cayman Islands — Privacy Notice**

This privacy notice explains the manner in which we collect, process, and maintain personal data about investors of the Company pursuant to the Data Protection Act (Revised) of the Cayman Islands, as amended from time to time and any regulations, codes of practice, or orders promulgated pursuant thereto.

We are committed to processing personal data in accordance with the DPA. In our use of personal data, we will be characterized under the DPA as a "data controller," whilst certain of our service providers, affiliates, and delegates may act as "data processors" under the DPA. These service providers may process personal data for their own lawful purposes in connection with services provided to us. For the purposes of this privacy notice, "you" or "your" shall mean the subscriber and shall also include any individual connected to the subscriber.

By virtue of your investment in the Company, we and certain of our service providers may collect, record, store, transfer, and otherwise process personal data by which individuals may be directly or indirectly identified. We may combine personal data that you provide to use with personal data that we collect from, or about you. This may include personal data collected in an online or offline context including from credit reference agencies and other available public databases or data sources, such as news outlines, websites and other media sources and international sanctions lists.

Your personal data will be processed fairly and for lawful purposes, including (a) where the processing is necessary for us to perform a contract to which you are a party or for taking pre-contractual steps at your request, (b) where the processing is necessary for compliance with any legal, tax, or regulatory obligation to which we are subject, or (c) where the processing is for the purposes of legitimate interests pursued by us or by a service provider to whom the data are disclosed, or (d) where you otherwise consent to the processing of personal data for any specific purpose. As a data controller, we will only use your personal data for the purposes for which we collected it. If we need to use your personal data for an unrelated purpose, we will contact you.

We anticipate that we will share your personal data with our service providers for the purposes set out in this privacy notice. We may also share relevant personal data where it is lawful to do so and necessary to comply with our contractual obligations or your instructions or where it is necessary or desirable to do so in connection with any regulatory reporting obligations. In exceptional circumstances, we will share your personal data with regulatory, prosecuting, and other governmental agencies or departments, and parties to litigation (whether pending or threatened), in any country or territory including to any other person where we have a public or legal duty to do so (e.g. to assist with detecting and preventing fraud, tax evasion, and financial crime or compliance with a court order).

Your personal data shall not be held by the Company for longer than necessary with regard to the purposes of the data processing.

We will not sell your personal data. Any transfer of personal data outside of the Cayman Islands shall be in accordance with the requirements of the DPA. Where necessary, we will ensure that separate and appropriate legal agreements are put in place with the recipient of that data.

We will only transfer personal data in accordance with the requirements of the DPA, and will apply appropriate technical and organizational information security measures designed to protect against unauthorized or unlawful processing of the personal data and against the accidental loss, destruction, or damage to the personal data.

If you are a natural person, this will affect you directly. If you are a corporate investor (including, for these purposes, legal arrangements such as trusts or exempted limited partnerships) that provides us with personal data on individuals connected to you for any reason in relation to your investment into the Company, this will be relevant for those individuals and you should transmit this document to those individuals for their awareness and consideration.

You have certain rights under the DPA, including (a) the right to be informed as to how we collect and use your personal data (and this privacy notice fulfils our obligation in this respect), (b) the right to obtain a copy of your personal data, (c) the right to require us to stop direct marketing, (d) the right to have inaccurate or incomplete personal data corrected, (e) the right to withdraw your consent and require us to stop processing or restrict the processing, or not begin the processing of your personal data, (f) the right to be notified of a data breach (unless the breach is unlikely to be prejudicial), (g) the right to obtain information as to any countries or territories outside the Cayman Islands to which we, whether directly or indirectly, transfer, intend to transfer, or wish to transfer your personal data, general measures we take to ensure the security of personal data, and any information available to us as to the source of your personal data, (h) the right to complain to the Office of the Ombudsman of the Cayman Islands, and (i) the right to require us to delete your personal data in some limited circumstances.

If you do not wish to provide us with requested personal data or subsequently withdraw your consent, you may not be able to invest in the Company or remain invested in the Company as it will affect the Company' ability to manage your investment.

If you consider that your personal data has not been handled correctly, or you are not satisfied with our responses to any requests you have made regarding the use of your personal data, you have the right to complain to the Cayman Islands' Ombudsman. The Ombudsman can be contacted by email at info@ombudsman.ky or by accessing their website at ombudsman.ky.

**Our Transfer Agent**

The transfer agent for our Class A ordinary shares is Continental Stock Transfer & Trust Company.

**Listing**

Our Class A ordinary shares are listed on the Nasdaq Capital Market under the symbol "ZBAO".

**C. Material Contracts**

Set forth below is a summary of all material agreements to which we are a party.

 ****

***Cooperation Agreement with Key Insurer A***

On December 27, 2019, Zhibao China entered into a cooperation agreement with Key Insurer A for a term of two years commencing from January 1, 2020, ending on December 31, 2021, which was automatically renewed for an additional 12 months. On February 10, 2023, Zhibao China signed a new cooperation agreement with Key Insurer A, effective from January 1, 2023 to December 31, 2024, under similar terms and conditions.

Pursuant to those agreements, Zhibao China agreed to provide Key Insurer A with MGU services for its insurance products, including but not limited to insurance product design, assistance in sales and trainings, quotation management, assistance in enrollment and claims, risk management, customer services, and value-added services such as clinic appointments and scheduling. Key Insurer A provides our end customers with a variety of insurance products, among others, the Group Global Medical Insurance, Personal Global Medical Insurance, Group Disability Insurance, Global Cancer Medical Insurance, and Life Insurance.

In return for our MGU services, Key Insurer A pays us certain MGU Service Fees. In terms of the sales of its insurance products through its own sales team, Key Insurer A agreed to pay Zhibao China 14% of the premium of each insurance policy for managing Group Global Medical Insurance, Personal Global Medical Insurance, and Global Cancer Medical Insurance, and 18.21% of the premium of each insurance policy for managing Group Disability Insurance and Life Insurance. In terms of the sales of insurance products through the assistance of Zhibao China or with the assistance of "a third party" introduced by Zhibao China, Key Insurer A agreed to pay Zhibao China the difference between the maximum sales expense rate as stipulated in those agreements and the actual sales expense rate paid by Key Insurer A to the third party, at an average rate of approximately 15% in the practice.

Those agreements may be terminated immediately if (i) either party files for, or is in the proceeding of, bankruptcy, (ii) either party has sold, or intends to sell, 50% or more of its business without providing a written notice to the other party, and (iii) either party breaches the obligations as stipulated in those agreements and fails to cure the breach within 60 days after the receipt of the other party's written request to cure.

As of the date of this annual report, this agreement has expired and was not renewed..

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***Cooperation Agreement with Key Insurer B***

The cooperation agreement between Sunshine Insurance Brokers and Key Insurer B has been renewed annually since 2022. In December 2023, Sunshine Insurance Brokers entered into a cooperation agreement with Key Insurer B, which serves as primary insurer, and several co-insurers, for a term of one year commencing from January 1, 2024 and ending on December 31, 2024. In November 2024, Sunshine Insurance Brokers entered into a cooperation agreement with Key Insurer B, which serves as primary insurer, and several co-insurers, for a term of one year commencing from January 1, 2025 and ending on December 31, 2025.

Pursuant to the agreement, Sunshine Insurance Brokers agreed to provide the insurers with digital insurance brokerage services for its insurance products, including but not limited to assisting in insurance product design and formation of co-insurance groups, WeChat official account registration and development and implementation of certain product promotion plans, as well as providing customer consultation services. The insurers provide our end customers with a variety of medical insurance products.

In return for our insurance brokerage services, the insurers pay us certain brokerage fees. The insurers agreed to pay Sunshine Insurance Brokers 10.6% of the premium of each insurance policy generated through our brokerage services for a variety of medical insurance products.

This agreement may not be terminated unilaterally by any of the insurers during the term of the agreement unless we breach our obligations under the agreement. Pursuant to this agreement, if any of the insurers unilaterally ceases their performance under this agreement, it should be considered as a breach of contract and their undertakings shall be shared proportionately among the remaining insurers.

As of the date of this annual report, Sunshine Insurance Brokers is current with its obligations under this agreement.

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***Cooperation Agreement with Key Insurer C***

January 1, 2024, Sunshine Insurance Brokers entered into a service procurement agreement with Key Insurer C for the effective period commencing on November 1, 2023 and ending on June 30, 2024. As of the date of this annual report, the agreement has expired and was not renewed.

Pursuant to the agreement, Sunshine Insurance Brokers agreed to provide brokerage services including comprehensive brand services, retail insurance customer acquisition and related insurance brand promotion, advertising, online and offline promotions. In return for our insurance brokerage services, the insurer agreed to pay Sunshine Insurance Brokers 20% of the premium of each insurance policy generated through our brokerage services for a variety of insurance products.

**D. Exchange Controls**

There are no laws, decrees, regulations or other legislation in the Cayman Islands that may affect the payment of dividends or other distributions to shareholders who do not reside in the Cayman Islands. There is no limitation imposed by laws of the Cayman Islands or in our amended and restated articles of association on the rights of non-residents to hold ordinary shares.

**E. Taxation**

The following discussion of material Cayman Islands, PRC, and United States federal income tax consequences of an investment in our Class A ordinary shares is based upon laws and relevant interpretations thereof in effect as of the date of this annual report, all of which are subject to change. This discussion does not deal with all possible tax consequences relating to an investment in our Class A ordinary shares, such as the tax consequences under state, local, and other tax laws.

WE URGE POTENTIAL PURCHASERS OF OUR CLASS A ORDINARY SHARES TO CONSULT THEIR OWN TAX ADVISORS CONCERNING THE U.S. FEDERAL, STATE, LOCAL, AND NON-U.S. TAX CONSEQUENCES OF PURCHASING, OWNING AND DISPOSING OF OUR CLASS A ORDINARY SHARES.

**Cayman Islands Taxation**

The Cayman Islands currently levies no taxes on individuals or corporations based upon profits, income, gains or appreciation and there is no taxation in the nature of inheritance tax, gift tax or estate duty. There are no other taxes likely to be material to us levied by the Government of the Cayman Islands, except for stamp duties which may be applicable on instruments executed in, or after execution brought within the jurisdiction of the Cayman Islands. No stamp duty is payable in the Cayman Islands on the issue of shares by, or any transfers of shares of, Cayman Islands companies (except those which hold interests in land in the Cayman Islands). An instrument of transfer in respect of shares is stampable if executed or brought into the Cayman Islands There are no exchange control regulations or currency restrictions in the Cayman Islands.

Payments of dividends and capital in respect of our ordinary shares will not be subject to taxation in the Cayman Islands and no withholding will be required under Cayman Islands laws on the payment of a dividend or capital to any holder of ordinary shares, nor will gains derived from the disposal of our ordinary shares be subject to Cayman Islands income or corporation tax.

We have been incorporated under the laws of the Cayman Islands as an exempted company with limited liability and, as such, we have obtained an undertaking from the Financial Secretary of the Cayman Islands on March 23, 2023 in the following form:

The Tax Concessions Act (Revised)

Undertaking as to Tax Concessions

In accordance with the Tax Concessions Act (Revised), the following undertaking is hereby given to the Company:

&nbsp;&nbsp;&nbsp;&nbsp;(a) that no
 Act which is hereafter enacted in the Islands imposing any tax to be levied on profits, income, gains or appreciations shall apply
 to the Company or its operations; and

&nbsp;&nbsp;&nbsp;&nbsp;(b) in
addition, that no tax to be levied on profits, income, gains or appreciations or which is in the nature of estate duty or inheritance
tax shall be payable:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) on
or in respect of the shares, debentures or other obligations of the Company; or

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) by
way of the withholding in whole or in part, of any relevant payment as defined in the Tax Concessions Act (Revised).

These concessions shall be for a period of twenty years from March 23, 2023.

**People's Republic of China Taxation**

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***Income Tax and Withholding Tax***

Under the EIT Law, an enterprise established outside the PRC with a "de facto management body" within the PRC is considered a PRC resident enterprise for PRC enterprise income tax purposes and is generally subject to a uniform 25% enterprise income tax rate on its worldwide income as well as tax reporting obligations. Under the Implementation Rules, a "de facto management body" is defined as a body that has material and overall management and control over the manufacturing and business operations, personnel and human resources, finances and properties of an enterprise.

In addition, State Administration of Taxation (SAT) Circular 82 issued in April 2009 specifies that certain offshore-incorporated enterprises controlled by PRC enterprises or PRC enterprise groups will be classified as PRC resident enterprises if all of the following conditions are met: (a) senior management personnel and core management departments in charge of the daily operations of the enterprises have their presence mainly in the PRC; (b) their financial and human resources decisions are subject to determination or approval by persons or bodies in the PRC; (c) major assets, accounting books and company seals of the enterprises, and minutes and files of their board's and shareholders' meetings are located or kept in the PRC; and (d) half or more of the enterprises' directors or senior management personnel with voting rights habitually reside in the PRC. Further to SAT Circular 82, the SAT issued Announcement of the State Administration of Taxation on Printing and Distributing the Administrative Measures for Income Tax on Chinese-controlled Resident Enterprises Incorporated Overseas (Trial Implementation) (the "**SAT Bulletin 45**") on July 27, 2011, which took effect on September 1, 2011, to provide more guidance on the implementation of SAT Circular 82. SAT Bulletin 45 provides for procedures and administration details of determination on PRC resident enterprise status and administration on post-determination matters.

We believe that the Cayman Islands holding company, Zhibao Technology Inc., is not a PRC resident enterprise for PRC tax purposes. Zhibao Technology Inc. is a company incorporated outside China. As a holding company, its key assets are its ownership interests in its subsidiaries, and its key assets are located, and its records (including the resolutions of its board of directors and the resolutions of its shareholders) are maintained, outside China. As such, we do not believe that our company meets all of the conditions above or is a PRC resident enterprise for PRC tax purposes. For the same reasons, we believe our other entities outside China are not PRC resident enterprises either. However, the tax resident status of an enterprise is subject to determination by the PRC tax authorities and uncertainties remain with respect to the interpretation of the term "de facto management body." There can be no assurance that the PRC government will ultimately take a view that is consistent with our position and there is a risk that the PRC tax authorities may deem our company as a PRC resident enterprise since a substantial majority of the members of our management team are located in China, in which case we would be subject to the EIT at the rate of 25% on worldwide income. If the PRC tax authorities determine that the Cayman Islands holding company is a "resident enterprise" for EIT purposes, a number of unfavorable PRC tax consequences could follow.

One example is a 10% withholding tax would be imposed on dividends we pay to our non-PRC enterprise shareholders and with respect to gains derived by our non-PRC enterprise shareholders from transferring our ordinary shares.

It is unclear whether, if we are considered a PRC resident enterprise, holders of our Class A ordinary shares would be able to claim the benefit of income tax treaties or agreements entered into between China and other countries or areas.

The SAT and the Ministry of Finance issued the Notice of Ministry of Finance and State Administration of Taxation on Several Issues relating to Treatment of Corporate Income Tax Pertaining to Restructured Business Operations of Enterprises (the "**SAT Circular 59**") in April 2009, which became effective on January 1, 2008. On October 17, 2017, the SAT issued the SAT Circular 37, which became effective on December 1, 2017 and was amended on June 15, 2018. By promulgating and implementing the SAT Circular 59 and the SAT Circular 37, the PRC tax authorities have enhanced their scrutiny over the direct or indirect transfer of equity interests in a PRC resident enterprise by a non-PRC resident enterprise.

Pursuant to the Arrangement between the Mainland China and the Hong Kong Special Administrative Region for the Avoidance of Double Taxation and Tax Evasion on Income (the "**Tax Arrangement**"), where a Hong Kong resident enterprise which is considered a non-PRC tax resident enterprise directly holds at least 25% of a PRC enterprise, the withholding tax rate in respect of the payment of dividends by such PRC enterprise to such Hong Kong resident enterprise is reduced to 5% from a standard rate of 10%, subject to approval of the PRC local tax authority.

Pursuant to the Circular of the State Administration of Taxation on the Issues concerning the Application of the Dividend Clauses of Tax Agreements ("**Circular 81**"), a resident enterprise of the counter-party to such Tax Arrangement should meet all of the following conditions, among others, in order to enjoy the reduced withholding tax under the Tax Arrangement: (i) it must take the form of a company; (ii) it must directly own the required percentage of equity interests and voting rights in such PRC resident enterprise; and (iii) it should directly own such percentage of capital in the PRC resident enterprise anytime in the 12 consecutive months prior to receiving the dividends. Furthermore, the Administrative Measures for Non-Resident Enterprises to Enjoy Treatments under Treaties (the "**Administrative Measures**"), which became effective in January 2020, requires that the non-resident taxpayer shall determine whether it may enjoy the treatments under relevant tax treaties and file the tax return or withholding declaration subject to further monitoring and oversight by the tax authorities. Accordingly, Zhibao may be able to enjoy the 5% withholding tax rate for the dividends it receives from WFOE, if it satisfies the conditions prescribed under Circular 81 and other relevant tax rules and regulations. However, according to Circular 81, if the relevant tax authorities consider the transactions or arrangements we have are for the primary purpose of enjoying a favorable tax treatment, the relevant tax authorities may adjust the favorable withholding tax in the future.

 ****

***Value-added Tax***

Under the Circular on Comprehensively Promoting the Pilot Program of the Collection of Value-added Tax to Replace Business ("Circular 36"), which was promulgated by the Ministry of Finance and the SAT on March 23, 2016 and became effective on May 1, 2016, entities and individuals engaging in the sale of services, intangible assets or fixed assets within the territory of the PRC are required to pay value added tax, or VAT, instead of business tax.

According to Circular 36, the PRC subsidiaries are subject to VAT, at a rate of 6% to 17% on proceeds received from customers.

According to the Circular of the Ministry of Finance and the SAT on Adjusting Value-added Tax Rates, where a taxpayer engages in a taxable sales activity for the value-added tax purpose or imports goods, the previous applicable 17% and 11% tax rates are lowered to 16% and 10%, respectively.

According to the Circular on Policies to Deepen Value-added Tax Reform, where a taxpayer engages in a taxable sales activity for the value-added tax purpose or imports goods, the previous applicable 16% and 10% tax rates are lowered to 13% and 9% respectively.

**Material United States Federal Income Tax Considerations**

The following is a discussion of certain material United States federal income tax considerations relating to the acquisition, ownership, and disposition of our ordinary shares by a U.S. Holder, as defined below, that acquires our Class A ordinary shares in our offerings and holds our Class A ordinary shares as "capital assets" (generally, property held for investment) under the United States Internal Revenue Code of 1986, as amended (the "Code"). This discussion is based on existing United States federal income tax law, which is subject to differing interpretations or change, possibly with retroactive effect. No ruling has been sought from the Internal Revenue Service (the "IRS") with respect to any United States federal income tax consequences described below, and there can be no assurance that the IRS or a court will not take a contrary position. This discussion does not address all aspects of United States federal income taxation that may be important to particular investors in light of their individual circumstances, including investors subject to special tax rules (such as, for example, certain financial institutions, insurance companies, regulated investment companies, real estate investment trusts, broker-dealers, traders in securities that elect mark-to-market treatment, partnerships (or other entities treated as partnerships for United States federal income tax purposes) and their partners, tax-exempt organizations (including private foundations)), investors who are not U.S. Holders, investors that own (directly, indirectly, or constructively) 5% or more of our voting Class A ordinary shares, investors that hold their Class A ordinary shares as part of a straddle, hedge, conversion, constructive sale or other integrated transaction), investors that are subject to the applicable financial statement accounting rules under Section 451 of the Code, or investors that have a functional currency other than the U.S. dollar, all of whom may be subject to tax rules that differ significantly from those summarized below. In addition, this discussion does not address any tax laws other than the United States federal income tax laws, including any state, local, alternative minimum tax or non-United States tax considerations, or the Medicare tax on unearned income. Each potential investor is urged to consult its tax advisor regarding the United States federal, state, local and non-United States income and other tax considerations of an investment in our ordinary shares.

 ****

***General***

For purposes of this discussion, a "U.S. Holder" is a beneficial owner of our ordinary shares that is, for United States federal income tax purposes, (i) an individual who is a citizen or resident of the United States, (ii) a corporation (or other entity treated as a corporation for United States federal income tax purposes) created in, or organized under the laws of, the United States or any state thereof or the District of Columbia, (iii) an estate the income of which is includible in gross income for United States federal income tax purposes regardless of its source, or (iv) a trust (A) the administration of which is subject to the primary supervision of a United States court and which has one or more United States persons who have the authority to control all substantial decisions of the trust or (B) that has otherwise elected to be treated as a United States person under the Code.

If a partnership (or other entity treated as a partnership for United States federal income tax purposes) is a beneficial owner of our ordinary shares, the tax treatment of a partner in the partnership will depend upon the status of the partner and the activities of the partnership. Partnerships and partners of a partnership holding our ordinary shares are urged to consult their tax advisors regarding an investment in our ordinary shares.

The discussion set forth below is addressed only to U.S. Holders that purchase ordinary shares in our offerings. Prospective purchasers are urged to consult their own tax advisors about the application of U.S. federal income tax law to their particular circumstances as well as the state, local, foreign and other tax consequences to them of the purchase, ownership and disposition of our ordinary shares.

 ****

***Taxation of Dividends and Other Distributions on our Ordinary Shares***

Subject to the passive foreign investment company rules discussed below, distributions of cash or other property made by us to you with respect to the ordinary shares (including the amount of any taxes withheld therefrom) will generally be includable in your gross income as dividend income on the date of receipt by you, but only to the extent that the distribution is paid out of our current or accumulated earnings and profits (as determined under U.S. federal income tax principles). With respect to corporate U.S. Holders, the dividends will not be eligible for the dividends-received deduction allowed to corporations in respect of dividends received from other U.S. corporations.

With respect to non-corporate U.S. Holders, including individual U.S. Holders, dividends will be taxed at the lower capital gains rate applicable to qualified dividend income, provided that (1) the ordinary shares are readily tradable on an established securities market in the United States, or we are eligible for the benefits of an approved qualifying income tax treaty with the United States that includes an exchange of information program, (2) we are not a passive foreign investment company (as discussed below) for either our taxable year in which the dividend is paid or the preceding taxable year, and (3) certain holding period requirements are met. You are urged to consult your tax advisors regarding the availability of the lower rate for dividends paid with respect to our ordinary shares, including the effects of any change in law after the date of this annual report.

To the extent that the amount of the distribution exceeds our current and accumulated earnings and profits (as determined under U.S. federal income tax principles), it will be treated first as a tax-free return of your tax basis in your ordinary shares, and to the extent the amount of the distribution exceeds your tax basis, the excess will be taxed as capital gain. We do not intend to calculate our earnings and profits under U.S. federal income tax principles. Therefore, a U.S. Holder should expect that a distribution will be treated as a dividend even if that distribution would otherwise be treated as a non-taxable return of capital or as capital gain under the rules described above.

 ****

***Taxation of Dispositions of Ordinary Shares***

Subject to the passive foreign investment company rules discussed below, you will recognize taxable gain or loss on any sale, exchange or other taxable disposition of a share equal to the difference between the amount realized (in U.S. dollars) for the share and your tax basis (in U.S. dollars) in the ordinary shares. The gain or loss will be capital gain or loss. If you are a non-corporate U.S. Holder, including an individual U.S. Holder, who has held the ordinary shares for more than one year, you may be eligible for reduced tax rates on any such capital gains. The deductibility of capital losses is subject to limitations.

 ****

***Passive Foreign Investment Company***

A non-U.S. corporation is considered a PFIC for any taxable year if either:

● at least 75% of its gross income for such taxable year is passive income; or

● at least 50% of the value of its assets (based on an average of the quarterly values of the assets during a taxable year) is attributable to assets that produce or are held for the production of passive income (the "asset test").

Passive income generally includes dividends, interest, rents and royalties (other than rents or royalties derived from the active conduct of a trade or business) and gains from the disposition of passive assets. We will be treated as owning our proportionate share of the assets and earning our proportionate share of the income of any other corporation in which we own, directly or indirectly, at least 25% (by value) of the shares. In determining the value and composition of our assets for purposes of the PFIC asset test, (1) the cash we hold will generally be considered to be held for the production of passive income and (2) the value of our assets must be determined based on the market value of our ordinary shares from time to time, which could cause the value of our non-passive assets to be less than 50% of the value of all of our assets on any particular quarterly testing date for purposes of the asset test.

We must make a separate determination each year as to whether we are a PFIC. Depending on the amount of cash we hold, together with any other assets held for the production of passive income, it is possible that, for our current taxable year or for any subsequent taxable year, more than 50% of our assets may be assets held for the production of passive income. We will make this determination following the end of any particular tax year. Although the law in this regard is unclear, we treat our consolidated affiliated entities as being owned by us for United States federal income tax purposes, not only because we exercise effective control over the operation of such entities but also because we are entitled to substantially all of their economic benefits, and, as a result, we consolidate their operating results in our consolidated financial statements. In particular, because the value of our assets for purposes of the asset test will generally be determined based on the market price of our ordinary shares and because cash is generally considered to be an asset held for the production of passive income, our PFIC status will depend in large part on the market price of our ordinary shares and the amount of cash we hold. Accordingly, fluctuations in the market price of the ordinary shares may cause us to become a PFIC. In addition, the application of the PFIC rules is subject to uncertainty in several respects and the composition of our income and assets will be affected by how, and how quickly, we spend the cash we hold. We are under no obligation to take steps to reduce the risk of our being classified as a PFIC, and as stated above, the determination of the value of our assets will depend upon material facts (including the market price of our ordinary shares from time to time and the amount of cash we hold) that may not be within our control. If we are a PFIC for any year during which you hold ordinary shares, we will continue to be treated as a PFIC for all succeeding years during which you hold ordinary shares. However, if we cease to be a PFIC and you did not previously make a timely "mark-to-market" election as described below, you may avoid some of the adverse effects of the PFIC regime by making a "purging election" (as described below) with respect to the ordinary shares.

If we are a PFIC for your taxable year(s) during which you hold ordinary shares, you will be subject to special tax rules with respect to any "excess distribution" that you receive and any gain you realize from a sale or other disposition (including a pledge) of the ordinary shares, unless you make a "mark-to-market" election as discussed below. Distributions you receive in a taxable year that are greater than 125% of the average annual distributions you received during the shorter of the three preceding taxable years or your holding period for the ordinary shares will be treated as an excess distribution. Under these special tax rules:

● the excess distribution or gain will be allocated ratably over your holding period for the ordinary shares;

● the amount allocated to your current taxable year, and any amount allocated to any of your taxable year(s) prior to the first taxable year in which we were a PFIC, will be treated as ordinary income, and

● the amount allocated to each of your other taxable year(s) will be subject to the highest tax rate in effect for that year and the interest charge generally applicable to underpayments of tax will be imposed on the resulting tax attributable to each such year.

The tax liability for amounts allocated to years prior to the year of disposition or "excess distribution" cannot be offset by any net operating losses for such years, and gains (but not losses) realized on the sale of the ordinary shares cannot be treated as capital, even if you hold the ordinary shares as capital assets.

A U.S. Holder of "marketable stock" (as defined below) in a PFIC may make a mark-to-market election for such stock to elect out of the tax treatment discussed above. If you make a mark-to-market election for the first taxable year during which you hold (or are deemed to hold) ordinary shares and for which we are determined to be a PFIC, you will include in your income each year an amount equal to the excess, if any, of the fair market value of the ordinary shares as of the close of such taxable year over your adjusted basis in such ordinary shares, which excess will be treated as ordinary income and not capital gain. You are allowed an ordinary loss for the excess, if any, of the adjusted basis of the ordinary shares over their fair market value as of the close of the taxable year. However, such ordinary loss is allowable only to the extent of any net mark-to-market gains on the ordinary shares included in your income for prior taxable years. Amounts included in your income under a mark-to-market election, as well as gain on the actual sale or other disposition of the ordinary shares, are treated as ordinary income. Ordinary loss treatment also applies to any loss realized on the actual sale or disposition of the ordinary shares, to the extent that the amount of such loss does not exceed the net mark-to-market gains previously included for such ordinary shares. Your basis in the ordinary shares will be adjusted to reflect any such income or loss amounts. If you make a valid mark-to-market election, the tax rules that apply to distributions by corporations which are not PFICs would apply to distributions by us, except that the lower applicable capital gains rate for qualified dividend income discussed above under "— Taxation of Dividends and Other Distributions on our ordinary shares" generally would not apply.

The mark-to-market election is available only for "marketable stock", which is stock that is traded in other than de minimis quantities on at least 15 days during each calendar quarter ("regularly traded") on a qualified exchange or other market (as defined in applicable U.S. Treasury regulations), including Nasdaq. If the ordinary shares are regularly traded on Nasdaq and if you are a holder of ordinary shares, the mark-to-market election would be available to you were we to be or become a PFIC.

Alternatively, a U.S. Holder of stock in a PFIC may make a "qualified electing fund" election with respect to such PFIC to elect out of the tax treatment discussed above. A U.S. Holder who makes a valid qualified electing fund election with respect to a PFIC will generally include in gross income for a taxable year such holder's pro rata share of the corporation's earnings and profits for the taxable year. However, the qualified electing fund election is available only if such PFIC provides such U.S. Holder with certain information regarding its earnings and profits as required under applicable U.S. Treasury regulations. We do not currently intend to prepare or provide the information that would enable you to make a qualified electing fund election. If you hold ordinary shares in any taxable year in which we are a PFIC, you will be required to file IRS Form 8621 in each such year and provide certain annual information regarding such ordinary shares, including regarding distributions received on the ordinary shares and any gain realized on the disposition of the ordinary shares.

If you do not make a timely "mark-to-market" election (as described above), and if we were a PFIC at any time during the period you hold our ordinary shares, then such ordinary shares will continue to be treated as stock of a PFIC with respect to you even if we cease to be a PFIC in a future year, unless you make a "purging election" for the year we cease to be a PFIC. A "purging election" creates a deemed sale of such ordinary shares at their fair market value on the last day of the last year in which we are treated as a PFIC. The gain recognized by the purging election will be subject to the special tax and interest charge rules treating the gain as an excess distribution, as described above. As a result of the purging election, you will have a new basis (equal to the fair market value of the ordinary shares on the last day of the last year in which we are treated as a PFIC) and holding period (which new holding period will begin the day after such last day) in your ordinary shares for tax purposes.

You are urged to consult your tax advisors regarding the application of the PFIC rules to your investment in our ordinary shares and the elections discussed above.

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***Information Reporting and Backup Withholding***

Dividend payments with respect to our ordinary shares and proceeds from the sale, exchange or redemption of our ordinary shares may be subject to information reporting to the IRS and possible U.S. backup withholding. Backup withholding will not apply, however, to a U.S. Holder who furnishes a correct taxpayer identification number and makes any other required certification on IRS Form W-9 or who is otherwise exempt from backup withholding. U.S. Holders who are required to establish their exempt status generally must provide such certification on IRS Form W-9. U.S. Holders are urged to consult their tax advisors regarding the application of the U.S. information reporting and backup withholding rules.

Backup withholding is not an additional tax. Amounts withheld as backup withholding may be credited against your U.S. federal income tax liability, and you may obtain a refund of any excess amounts withheld under the backup withholding rules by filing the appropriate claim for refund with the IRS and furnishing any required information. We do not intend to withhold taxes for individual shareholders. However, transactions effected through certain brokers or other intermediaries may be subject to withholding taxes (including backup withholding), and such brokers or intermediaries may be required by law to withhold such taxes.

Under the Hiring Incentives to Restore Employment Act of 2010, certain U.S. Holders are required to report information relating to our ordinary shares, subject to certain exceptions (including an exception for ordinary shares held in accounts maintained by certain financial institutions), by attaching a complete IRS Form 8938, Statement of Specified Foreign Financial Assets, with their tax return for each year in which they hold ordinary shares.

**EACH PROSPECTIVE INVESTOR IS URGED TO CONSULT ITS OWN TAX ADVISOR REGARDING THE TAX CONSEQUENCES OF AN INVESTMENT IN OUR CLASS A ORDINARY SHARES IN LIGHT OF SUCH INVESTOR'S PARTICULAR CIRCUMSTANCES.**

**F.** **Dividends and Paying Agents** 

Not Applicable.

**G.** **Statement by Experts** 

Not Applicable.

**H.** **Documents on Display** 

We are subject to periodic reporting and other informational requirements of the Exchange Act as applicable to foreign private issuers. Accordingly, we are required to file reports, including annual reports on Form 20-F, and other information with the SEC. As a foreign private issuer, we are exempt from the rules of the Exchange Act prescribing the furnishing and content of proxy statements to shareholders, and our executive officers, directors and principal shareholders are not subject to the insider short-swing profit disclosure and recovery provisions of Section 16 of the Exchange Act.

All information that we have filed with the SEC can be accessed through the SEC's website at www.sec.gov. This information can also be inspected and copied at the public reference facilities maintained by the SEC at 100 F Street, N.E., Washington, D.C. 20549. You can request copies of these documents, upon payment of a duplicating fee, by writing to the SEC. Please call the SEC at 1-800-SEC-0330 for further information on the operation of the public reference rooms.

In accordance with Nasdaq Stock Market Rule 5250(d), we will post this annual report on Form 20-F on our website at ir.scienjoy.com. In addition, we will provide hard copies of our annual report free of charge to shareholders upon request.

**I.** **Subsidiary Information** 

Not Applicable.

**J.** **Annual Report to Security Holders** 

Not Applicable.

**ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK**

**Interest Rate Risk**

Our exposure to interest rate risk primarily relates to the interest income generated by excess cash, which is mostly held in interest-bearing bank deposits and financial products purchased from financial institutions. Interest-earning instruments carry a degree of interest rate risk. We have not been exposed to material risks due to changes in interest rates, and we have not used any derivative financial instruments to manage our interest risk exposure.

**Credit risk**

Assets that potentially subject the Company to significant concentration of credit risk primarily consist of cash and cash equivalents. The maximum exposure of such assets to credit risk is their carrying amount as at the balance sheet dates. As of June 30, 2024 and 2025, RMB 2,401,495 and RMB6,119,295 (US$854,221) were deposited in financial institutions in the PRC, and each bank accounts is insured by the government authority with the maximum limit of RMB 500,000. To limit exposure to credit risk relating to deposits, the Company primarily place cash and cash equivalent deposits with large financial institutions in China which management believes are of high credit quality and the Company also continually monitors their credit worthiness.

The risk with respect to accounts receivable and amounts due from related parties is mitigated by credit evaluations the Company performs on its customers and its ongoing monitoring processes of outstanding balances.

The Company's operations are carried out in China. Accordingly, the Company's business, financial condition and results of operations may be influenced by the political, economic and legal environments in the PRC as well as by the general state of the PRC's economy. In addition, the Company's business may be influenced by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion and remittance abroad, rates and methods of taxation among other factors.

**Foreign Currency Exchange Rate Risk**

Substantially all of the Company's operating activities that were conducted through the subsidiaries in China and related assets and liabilities are denominated in RMB, which is not freely convertible into foreign currencies. All foreign exchange transactions take place either through the Peoples' Bank of China ("PBOC") or other authorized financial institutions at exchange rates quoted by PBOC. Approval of foreign currency payments by the PBOC or other regulatory institutions requires submitting a payment application form together with suppliers' invoices and signed contracts. The value of RMB is subject to changes in central government policies and to international economic and political developments affecting supply and demand in the China Foreign Exchange Trading System market.

**ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES**

**A.** **Debt Securities** 

For information with regards to the convertible promissory notes we issued to an institutional investor, please see "*Exhibit 2.2 Description of Securities*" of this annual report.

**B.** **Warrants and Rights** 

For information with regards to the warrants we issued, please see "*Exhibit 2.2 Description of Securities*" of this annual report.

**C.** **Other Securities** 

Not Applicable.

**D.** **American Depositary Shares** 

Not Applicable.

**PART II**

**ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES**

None.

**ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS**

Not Applicable.

**ITEM 15. CONTROLS AND PROCEDURES**

**Disclosure Controls and Procedures**

Under the supervision and with the participation of our management, including our chief executive officer and chief financial officer, we carried out an evaluation of the effectiveness of our disclosure controls and procedures, as defined in Rules 13a-15(e) under the Exchange Act. Based upon this evaluation, our management, with the participation of our chief executive officer and chief financial officer, has concluded that, as of June 30, 2025, our disclosure controls and procedures were effective.

Disclosure controls and procedures means controls and other procedures that are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in SEC's rule and forms and that such information required to be disclosed by us in the reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosures.

**Management's Annual Report on Internal Control over Financial Reporting**

Our management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the U.S. Exchange Act. As required by Rule 13a-15(c) of the U.S. Exchange Act.

Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of our financial reporting and the preparation of financial statements for external purposes in accordance with U.S. GAAP and includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of our company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of consolidated financial statements in accordance with GAAP, and that receipts and expenditures of our company are being made only in accordance with authorizations of our management and directors; and (3) provide reasonable assurance regarding prevention or timely detection of the unauthorized acquisition, use or disposition of our company's assets that could have a material effect on the consolidated financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness of our internal control over financial reporting to future periods are subject to the risks that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

As required by Rule 13a-15(c) of the Exchange Act, our management conducted an evaluation of our company's internal control over financial reporting as of June 30, 2025 based on the framework in Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this evaluation, our management concluded that our internal control over financial reporting was effective as of June 30, 2024.

As a company with less than US$1.235 billion in revenue for our last fiscal year, we qualify as an "emerging growth company" pursuant to the JOBS Act. An emerging growth company may take advantage of specified reduced reporting and other requirements that are otherwise applicable generally to public companies. These provisions include exemption from the auditor attestation requirement under Section 404 of the Sarbanes-Oxley Act of 2002 in the assessment of the emerging growth company's internal control over financial reporting.

**Changes in Internal Control over Financial Reporting**

Other than those disclosed above, there were no changes in our internal controls over financial reporting during our fiscal year ended June 30, 2025 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

**ITEM 16. [Reserved]**

**ITEM 16. A. AUDIT COMMITTEE FINANCIAL EXPERT**

Our board of directors has determined that Armando Baez, our independent director (under the standards set forth in Nasdaq Stock Market Rule 5605(a)(2) and Rule 10A-3 under the Exchange Act) and members of our audit committee, is an audit committee financial expert.

**ITEM 16. B. CODE OF ETHICS**

On April 3, 2024, our Board adopted a Code of Conduct and Ethics (the "**Code of Ethics**"), which applies to all officers, directors, and employees of us and our subsidiaries.

The Code of Ethics was adopted to reflect current best practices and enhance the personnel's understanding of our standards of ethical business practices, promote awareness of ethical issues that may be encountered in carrying out an employee's or director's responsibilities, and improve its clarity as to how to address ethical issues that may arise.

**ITEM 16. C. PRINCIPAL ACCOUNTANT FEES AND SERVICES**

The following table sets forth the aggregate fees by categories specified below in connection with certain professional services rendered by HYYH and Marcum Asia for the fiscal years ending June 30 2024 and 2025, respectively.

---

| | | |
|:---|:---|:---|
|  | **For the Years Ended <br> June 30,** | **For the Years Ended <br> June 30,** |
|  | **2024** | **2025** |
|  | **USD** | **USD** |
| Audit Fees (1) | 388234 | 468200 |
| Audit-related Fees (2) | - | - |
| Total | 388234 | 468200 |

---

(1) "Audit
Fees" represent the aggregate fees billed for professional services rendered by our principal accountants for the audit of our
consolidated financial statements and assistance with and review of documents filed with the SEC.

(2) "Audit-Related
Fees" represent the aggregate fees billed for professional services rendered by our principal accountants for the assurance and
related services, which are not included under "Audit Fees" above

**Pre-approval Policies**

The Company's audit committee approves all auditing services and permitted non-audit services performed for the Company by its independent auditor in advance of an engagement. All auditing services and permitted non-audit services (including the fees and terms thereof) to be performed for the Company by its independent auditor must be approved by the audit committee in advance, subject to the de minimis exceptions for non-audit services described in Section 10A(i)(1)(B) of the Exchange Act which are approved by the committee prior to the completion of the audit.

**ITEM 16. D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES**

Not Applicable

**ITEM 16. E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS**

None.

**ITEM 16. F. CHANGE IN REGISTRANT'S CERTIFYING ACCOUNTANT** 

***Dismissal of Former Independent Registered Public Accounting Firm***

On November 22, 2025, the Audit Committee of the Board of Directors of the Company approved the dismissal of Marcum Asia as independent registered public accounting firm of the Company, effective on November 24, 2025.

The audit reports of Marcum Asia on the Company's consolidated financial statements as of and for the years ended June 30, 2024 and 2023 contained no adverse opinion or disclaimer of opinion and were not qualified or modified as to uncertainty, audit scope or accounting principles.

During the Company's two most recent fiscal years, and for the subsequent interim period through November 24, 2025, the Company had no "disagreements" (as described in Item 16F(a)(1)(iv) of Form 20-F) with Marcum Asia on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which disagreements, if not resolved to the satisfaction of Marcum Asia, would have caused it to make reference in connection with its opinion to the subject matter of the disagreements.

During the Company's two most recent fiscal years, and for the subsequent interim period through November 24, 2025, there were no reportable events (as defined by Item 16F(a)(1)(v) of Form 20-F), except for the material weaknesses in the Company's internal control over financial reporting previously disclosed in the Company's (i) registration statements on (a) [Form F-1](http://www.sec.gov/Archives/edgar/data/1966750/000121390025086177/ea0256141-f1_zhibao.htm), as amended (File No. 333-290132), initially filed with the SEC on September 9, 2025, (b) [Form F-1](http://www.sec.gov/Archives/edgar/data/1966750/000101376225002806/ea0233797-f1_zhibaotech.htm), as amended (File No. 333-286140), initially filed with the SEC on March 26, 2025 and declared effective on July 21, 2025, (c) [Form F-1](http://www.sec.gov/Archives/edgar/data/1966750/000121390024083467/ea0216027-01.htm), as amended (File No. 333-282423), initially filed with the SEC on September 30, 2024 and declared effective on November 22, 2024, (d) [Form F-1](http://www.sec.gov/Archives/edgar/data/1966750/000121390023075431/ff12023_zhibaotech.htm), as amended (File No. 333-274431), initially filed with the SEC on September 8, 2023 and declared effective on March 29, 2024, in connection with the Company's initial public offering, and (e) [Form F-3](http://www.sec.gov/Archives/edgar/data/1966750/000121390025088779/ea0257071-f3_zhibao.htm) (File No. 333-290341), initially filed with the SEC on September 18, 2025 and declared effective on September 29, 2025, and (ii) annual report on [Form 20-F](http://www.sec.gov/Archives/edgar/data/1966750/000121390024092990/ea0218749-20f_zhibao.htm) filed with the SEC on October 31, 2024 (the "**2024 20-F**"), as amended by [Amendment No. 1](http://www.sec.gov/Archives/edgar/data/1966750/000121390025035729/ea0239287-20fa1_zhibao.htm) to the 2024 20-F filed with the SEC on April 28, 2025, regarding (i) insufficient number of personnel with an appropriate level of U.S. GAAP knowledge and experience and ongoing training in the application of U.S. GAAP commensurate with its financial reporting requirements, and (ii) the Company's inadequate proper IT control related logical access security.

In accordance with Item 16F(a)(3) of Form 20-F, the Company furnished Marcum Asia with a copy of the report, providing Marcum Asia with the opportunity to furnish the Company with a letter addressed to the SEC stating whether it agrees with the statements made by the Company herein in response to Item 16F(a) of Form 20-F, and if not, stating the respects in which it does not agree. Attached as Exhibit 16.1 is a copy of Marcum Asia's letter addressed to the SEC relating to the statements made by the Company in the report.

***Appointment of New Independent Registered Public Accounting Firm*** 

On November 22, 2025, the Audit Committee approved the appointment of HYYH as independent registered public accounting firm of the Company, effective on November 24, 2025.

As previously disclosed on the Form 6-K filed with the SEC on July 2, 2025, the Company entered into a Share Purchase Agreement with certain shareholders of Zhonglian, pursuant to which the Company agreed to acquire 51% equity ownership interest of Zhonglian from the shareholders. On May 23, 2025, Zhonglian engaged HYYH to audit the financial statements of Zhonglian.

Except as disclosed above, during the Company's two most recent fiscal years, the Company did not consult HYYH with respect to (a) the application of accounting principles to a specified transaction, either completed or proposed; or the type of audit opinion that might be rendered on the Company's consolidated financial statements, and neither a written report was provided to the Company or oral advice was provided that HYYH concluded was an important factor considered by the Company in reaching a decision as to the accounting, auditing or financial reporting issue; or (b) any matter that was the subject of either a disagreement as defined in Item 16F(a)(1)(iv) of Form 20-F or a reportable event as described in Item 16F(a)(1)(v) of Form 20-F.

**ITEM 16. G. CORPORATE GOVERNANCE**

**Foreign Private Issuer**

As a Cayman Islands exempted company listed on the Nasdaq Capital Market, we are subject to the Nasdaq Stock Market Rules corporate governance listing standards. However, Nasdaq Stock Market Rules permit a foreign private issuer like us to follow the corporate governance practices of its home country. Certain corporate governance practices in Cayman Islands, which is our home country, may differ significantly from the Nasdaq Stock Market Rules. While we voluntarily follow most Nasdaq corporate governance rules, we may choose to take advantage of the following exemptions afforded to foreign private issuers:

● exemption from the requirement to obtain shareholder approval for certain issuances of securities, including shareholder approval of share option plans; and

● exemption from the requirement that our board of directors shall have regularly scheduled meetings at which only independent directors are present as set forth in Nasdaq Rule 5605(b)(2).

If we choose to follow our home country practice in the future, our shareholders may be afforded less protection than they otherwise would under rules and regulations applicable to U.S. domestic issuers.

Although we may rely on home country corporate governance practices in lieu of certain of the rules in the Nasdaq Rule 5600 Series and Rule 5250(d), we must comply with Nasdaq's Notification of Noncompliance requirement (Rule 5625), the Voting Rights requirement (Rule 5640), the Diverse Board representation requirement (Rule 5605(f)), the Board Diversity disclosure rule (Rule 5606), have an audit committee that satisfies Rule 5605(c)(3), consisting of committee members that meet the independence requirements of Rule 5605(c)(2)(A)(ii), and Rule 5000 series. Although we currently intend to comply with the Nasdaq corporate governance rules applicable other than as noted above, we may in the future decide to use the foreign private issuer exemption with respect to some or all the other Nasdaq corporate governance rules. As a result, our shareholders may be afforded less protection than they otherwise would under the Nasdaq corporate governance listing standards applicable to U.S. domestic issuers. We may utilize these exemptions for as long as we continue to qualify as a foreign private issuer.

**Controlled Company**

Under the Nasdaq Rules, a controlled company is a company of which more than 50% of the voting power for the election of directors is held by an individual, a group or another company. We may be deemed a controlled company because Mr. Botao Ma, our Chairman and Chief Executive Officer, currently owns more than 50% of our voting power. For so long as we remain a controlled company, we are exempt from the obligation to comply with certain Nasdaq corporate governance requirements, including:

● our board of directors is not required to be comprised of a majority of independent directors;

● our board of directors is not subject to the compensation committee requirement; and

● we are not subject to the requirements that director nominees be selected either by the independent directors or a nomination committee comprised solely of independent directors.

The controlled company exemptions do not apply to the audit committee requirement or the requirement for executive sessions of independent directors. We are required to disclose in our annual report that we are a controlled company and the basis for that determination. Although we do not plan to take advantage of the exemptions provided to controlled companies, we may in the future take advantage of such exemptions.

**ITEM 16. H. MINE SAFETY DISCLOSURE**

Not Applicable.

**ITEM 16. I. DISCLOSURE REGARDING FOREIGN JURISDICTION THAT PREVENT INSPECTIONS**

Not Applicable.

**ITEM 16J. INSIDER TRADING POLICIES.**

On April 3, 2024, our Board adopted an Insider Trading Policy (the "**Insider Trading Policy**").

The Insider Trading Policy provides guidelines to employees, officers and directors of us and our subsidiaries with respect to transactions in our securities and the procedures set forth therein is intended to help prevent insider trading and to assist the employees, officers and directors of us and our subsidiaries in complying with their obligations under the federal securities laws, please see "*Exhibit 11.1 Insider Trading Policy*" of this annual report.

**ITEM 16K. Cybersecurity.**

The management of the operation and the business affairs of a Cayman Islands company lies within the power of its board of directors. Directors of companies incorporated under the Companies Act (Revised) of the Cayman Islands (the "**Companies Act**") are subject to both statutory obligations under the Companies Act as well as fiduciary duties under the common law to the extent applicable to Cayman Islands companies. In addition to the statutory duties which include duties such as reporting obligations, the maintenance of internal company registers, accounting requirements, etc., directors of Cayman Islands companies owe fiduciary duties including the duty to act in good faith and in the best interests of the company as well as a duty to act with care, skill and diligence under English common law principles. Maintaining sufficient protection against the increasing risks associated with cybercrime is one of the key challenges to the commercial world and, the overseeing of cybersecurity risks falls within the duties of the Company's board of directors, including its independent directors. The directors oversee cybersecurity risks as of the date of this annual report.

Our board of directors plays an active role in monitoring cybersecurity risks and is committed to the prevention, timely detection, and mitigation of the effects of any such incidents on our operations. In addition to regular reports from each of the board's committees, the board receives regular reports from our management on material cybersecurity risks and the degree of our exposure to those risks. While the board oversees our cybersecurity risk management, management is responsible for day-to-day risk management processes. Management also works with third party service providers, i.e. software companies who provide software and antivirus supports to the Company to ensure appropriate controls are in place and to regularly monitor network activities. We believe this division of responsibilities is the most effective approach for addressing our cybersecurity risks and that our board leadership structure supports this approach.

**PART III**

**ITEM 17. FINANCIAL STATEMENTS**

We have elected to provide financial statements pursuant to Item 18.

**ITEM 18. FINANCIAL STATEMENTS**

Our consolidated financial statements are included at the end of this annual report.

**ITEM 19. EXHIBITS**

---

| | |
|:---|:---|
| **Exhibit <br> Number** | **Description of Document** |
| 1.1 | [Amended and Restated Memorandum and Articles of Association (incorporated by reference to Exhibit 3.4 of the Company's Form F-1/A3 (file No. 333-274431), filed with the Commission on March 22, 2024)](http://www.sec.gov/Archives/edgar/data/1966750/000121390024014606/ff12024a3ex3-4_zhibaotech.htm) |
| 2.1 | [Company's Specimen Certificate for Class A Ordinary Shares (incorporated by reference to Exhibit 4.1 of the Company's Form F-1/A3 (file No. 333-274431), filed with the Commission on March 22, 2024)](http://www.sec.gov/Archives/edgar/data/1966750/000121390023097805/ff12023a1ex4-1_zhibao.htm) |
| 2.2\* | [Description of Securities](ea026470301ex2-2_zhibao.htm) |
| 2.3 | [Form of Convertible Promissory Note (incorporated by reference to Exhibit 4.1 of the Company's Form 6-K, filed with the Commission on September 23, 2024)](http://www.sec.gov/Archives/edgar/data/1966750/000121390024081041/ea021522901ex4-1_zhibao.htm) |
| 2.4 | [Form of Class A Ordinary Shares Purchase Warrant (incorporated by reference to Exhibit 4.2 of the Company's Form 6-K, filed with the Commission on September 23, 2024)](http://www.sec.gov/Archives/edgar/data/1966750/000121390024081041/ea021522901ex4-2_zhibao.htm) |
| 2.5 | [Form of Pre-funded Class A Ordinary Shares Purchase Warrant (incorporated by reference to Exhibit 4.3 of the Company's Form 6-K, filed with the Commission on September 23, 2024)](http://www.sec.gov/Archives/edgar/data/1966750/000121390024081041/ea021522901ex4-3_zhibao.htm) |
| 2.6 | [Letter Agreement dated December 11, 2024 by and between the Company and L1 (incorporated by reference to Exhibit 10.1 of the Company's Form 6-K, filed with the Commission on December 11, 2024)](http://www.sec.gov/Archives/edgar/data/1966750/000121390024107900/ea022433901ex10-1_zhibao.htm) |
| 2.7 | [Waiver Agreement dated December 10, 2024 by and between the Company and L1 (incorporated by reference to Exhibit 10.3 of the Company's Form 6-K, filed with the Commission on December 20, 2024)](http://www.sec.gov/Archives/edgar/data/1966750/000121390024111275/ea022531201ex10-3_zhibao.htm) |
| 2.8 | [Letter Agreement dated February 14, 2025 by and between the Company and L1 (incorporated by reference to Exhibit 10.1 of the Company's Form 6-K, filed with the Commission on February 14, 2025)](http://www.sec.gov/Archives/edgar/data/1966750/000121390025014394/ea0231165ex10-1_zhibao.htm) |
| 2.9 | [Equity Purchase Agreement, dated as of June 22, 2025, by and between the Company and Hudson Global Ventures, LLC. (incorporated by reference to Exhibit 10.1 of the Company's Form 6-K, filed with the Commission on June 26, 2025)](http://www.sec.gov/Archives/edgar/data/1966750/000121390025058398/ea024698201ex10-1_zhibao.htm) |
| 2.10 | [Registration Rights Agreement, dated as of June 22, 2025, by and between the Company and Hudson Global Ventures, LLC. (incorporated by reference to Exhibit 10.2 of the Company's Form 6-K, filed with the Commission on June 26, 2025)](http://www.sec.gov/Archives/edgar/data/1966750/000121390025058398/ea024698201ex10-2_zhibao.htm) |
| 2.13 | [Share Purchase Agreement, dated as of July 2, 2025, by and among Zhibao China and Sellers (incorporated by reference to Exhibit 10.1 of the Company's Form 6-K, filed with the Commission on July 3, 2025)](http://www.sec.gov/Archives/edgar/data/1966750/000121390025061165/ea024770201ex10-1_zhibao.htm) |
| 2.14 | [Form of Guarantee Agreement (incorporated by reference to Exhibit 10.1 of the Company's Form 6-K, filed with the Commission on July 22, 2025)](http://www.sec.gov/Archives/edgar/data/1966750/000121390025066724/ea024987801ex10-1_zhibao.htm) |
| 4.1 | [English Translation of Employment Agreement dated April 1, 2018, by and between Zhibao Technology Co., Ltd. and Botao Ma (incorporated by reference to Exhibit 10.1 of the Company's Form F-1/A3 (file No. 333-274431), filed with the Commission on March 22, 2024)](http://www.sec.gov/Archives/edgar/data/1966750/000121390023097805/ff12023a1ex10-1_zhibao.htm) |
| 4.2 | [English Translation of Form of Labor Contract between Sunshine Insurance Brokers (Shanghai) Co., Ltd. and certain executive officers of the Registrant (incorporated by reference to Exhibit 10.2 of the Company's Form F-1/A3 (file No. 333-274431), filed with the Commission on March 22, 2024)](http://www.sec.gov/Archives/edgar/data/1966750/000121390023075431/ff12023ex10-2_zhibao.htm) |
| 4.3 | [English Translation of the Office Lease and Supplemental Agreement dated June 6, 2019 and July 1, 2022, respectively, by and between Jishu Enterprise Marketing and Strategy Limited (Shanghai) and Zhibao Technology Co., Ltd. (incorporated by reference to Exhibit 10.3 of the Company's Form F-1/A3 (file No. 333-274431), filed with the Commission on March 22, 2024)](http://www.sec.gov/Archives/edgar/data/1966750/000121390023075431/ff12023ex10-3_zhibao.htm) |
| 4.4 | [English Translation of the Office Lease dated July 1, 2022, by and between Shanghai Lingang Fengxian Enterprise Services Limited and Sunshine Insurance Brokers (Shanghai) Co., Ltd (incorporated by reference to Exhibit 10.4 of the Company's Form F-1/A3 (file No. 333-274431), filed with the Commission on March 22, 2024)](http://www.sec.gov/Archives/edgar/data/1966750/000121390023097805/ff12023a1ex10-4_zhibao.htm) |
| 4.5 | [English Translation of the Office Lease dated August 16, 2022, by and between Jishu Enterprise Marketing and Strategy Limited (Shanghai) and Shanghai Anyi Network Technology Co., Ltd. (incorporated by reference to Exhibit 10.5 of the Company's Form F-1/A3 (file No. 333-274431), filed with the Commission on March 22, 2024)](http://www.sec.gov/Archives/edgar/data/1966750/000121390023075431/ff12023ex10-5_zhibao.htm) |
| 4.6 | [English Translation of Cooperation Agreement dated February 10, 2023, by and between Zhibao Technology Co., Ltd. and Key Insurer A (incorporated by reference to Exhibit 10.6 of the Company's Form F-1/A3 (file No. 333-274431), filed with the Commission on March 22, 2024)](http://www.sec.gov/Archives/edgar/data/1966750/000121390023097805/ff12023a1ex10-6_zhibao.htm) |
| 4.7 | [English Translation of Form of Shareholder Agreement, by and between Zhibao Technology Co., Ltd. and certain investors (incorporated by reference to Exhibit 10.7 of the Company's Form F-1/A3 (file No. 333-274431), filed with the Commission on March 22, 2024)](http://www.sec.gov/Archives/edgar/data/1966750/000121390023097805/ff12023a1ex10-7_zhibao.htm) |
| 4.8 | [English Translation of Form of Share Surrender Agreement, by and between Zhibao Technology Co., Ltd. and its shareholders, and Declaration by Zhibao Technology Limited dated September 8, 2023 (incorporated by reference to Exhibit 10.8 of the Company's Form F-1/A3 (file No. 333-274431), filed with the Commission on March 22, 2024)](http://www.sec.gov/Archives/edgar/data/1966750/000121390023097805/ff12023a1ex10-8_zhibao.htm) |

---

---

| | |
|:---|:---|
| 4.9 | [English Translation of Share Subscription Agreement dated April 10, 2023, by and between the Registrant and certain purchasers, and Form of Application for Shares by certain purchasers (incorporated by reference to Exhibit 10.9 of the Company's Form F-1/A3 (file No. 333-274431), filed with the Commission on March 22, 2024)](http://www.sec.gov/Archives/edgar/data/1966750/000121390023097805/ff12023a1ex10-9_zhibao.htm) |
| 4.10 | [Form of Director Offer Letter (incorporated by reference to Exhibit 10.10 of the Company's Form F-1/A3 (file No. 333-274431), filed with the Commission on March 22, 2024)](http://www.sec.gov/Archives/edgar/data/1966750/000121390024014606/ff12024a3ex10-10_zhibaotech.htm) |
| 4.11 | [Form of Securities Purchase Agreement (incorporated by reference to Exhibit 10.1 of the Company's Form 6-K, filed with the Commission on September 23, 2024)](http://www.sec.gov/Archives/edgar/data/1966750/000121390024081041/ea021522901ex10-1_zhibao.htm) |
| 4.12 | [Form of Security Agreement (incorporated by reference to Exhibit 10.2 of the Company's Form 6-K, filed with the Commission on September 23, 2024)](http://www.sec.gov/Archives/edgar/data/1966750/000121390024081041/ea021522901ex10-2_zhibao.htm) |
| 4.13 | [Form of Guarantee Agreement (incorporated by reference to Exhibit 10.3 of the Company's Form 6-K, filed with the Commission on September 23, 2024)](http://www.sec.gov/Archives/edgar/data/1966750/000121390024081041/ea021522901ex10-3_zhibao.htm) |
| 4.14 | [Form of Registration Rights Agreement (incorporated by reference to Exhibit 10.4 of the Company's Form 6-K, filed with the Commission on September 23, 2024)](http://www.sec.gov/Archives/edgar/data/1966750/000121390024081041/ea021522901ex10-4_zhibao.htm) |
| 4.15 | [English Translation of Cooperation Agreement dated December 2023, by and between Sunshine Insurance Brokers (Shanghai) Co., Ltd. and Key Insurer B (incorporated by reference to Exhibit 10.15 of the Company's Form F-1, filed with the Commission on September 30, 2024)](http://www.sec.gov/Archives/edgar/data/1966750/000121390024083467/ea021602701ex10-15_zhibao.htm) |
| 4.16 | [English Translation of Insurance Comprehensive Brand Service Procurement Agreement dated January 1, 2024, by and between Sunshine Insurance Brokers (Shanghai) Co., Ltd. and Key Insurer C (incorporated by reference to Exhibit 4.16 of the Company's Form 20-F, filed with the Commission on October 31, 2024)](http://www.sec.gov/Archives/edgar/data/1966750/000121390024092990/ea021874901ex4-16_zhibao.htm) |
| 4.17\*+^ | English Translation of Cooperation Agreement dated November 25, 2024, by and between Sunshine Insurance Brokers and Key Insurer B |
| 4.18 | [English Translation of Employment Agreement, dated April 1, 2022, by and between Sunshine Insurance Broker (Shanghai) Co., Ltd. and Xiao Luo (incorporated by reference to Exhibit 10.1 of the Company's Form 6-K, filed with the Commission on December 4, 2025)](http://www.sec.gov/Archives/edgar/data/1966750/000121390025118396/ea026849701ex10-1_zhibao.htm) |
| 4.19 | [English Translation of Employment Agreement, dated October 11, 2023, by and between Sunshine Insurance Broker (Shanghai) Co., Ltd. and Xiaowei Le (incorporated by reference to Exhibit 10.2 of the Company's Form 6-K, filed with the Commission on December 4, 2025)](http://www.sec.gov/Archives/edgar/data/1966750/000121390025118396/ea026849701ex10-2_zhibao.htm) |
| 4.20 | [English Translation of Employment Agreement, dated November 27, 2023, by and between Zhibao Technology Co., Ltd. and Guangtong Ren (incorporated by reference to Exhibit 10.3 of the Company's Form 6-K, filed with the Commission on December 4, 2025)](http://www.sec.gov/Archives/edgar/data/1966750/000121390025118396/ea026849701ex10-3_zhibao.htm) |
| 8.1\* | [List of Subsidiaries](ea026470301ex8-1_zhibao.htm) |
| 11.1 | [Insider Trading Policy (incorporated by reference to Exhibit 11.1 of the Company's Form 20-F, filed with the Commission on October 31, 2024)](http://www.sec.gov/Archives/edgar/data/1966750/000121390024092990/ea021874901ex11-1_zhibao.htm) |
| 11.2 | [Code of Business Conduct and Ethics (incorporated by reference to Exhibit 99.1 of the Company's Form F-1/A3 (file No. 333-274431), filed with the Commission on March 22, 2024)](http://www.sec.gov/Archives/edgar/data/1966750/000121390023075431/ff12023ex99-1_zhibao.htm) |
| 12.1\* | [Certification of Principal Executive Officer pursuant to Rule 13a-14(a) of the Exchange Act](ea026470301ex12-1_zhibao.htm) |
| 12.2\* | [Certification of Principal Financial Officer pursuant to Rule 13a-14(a) of the Exchange Act](ea026470301ex12-2_zhibao.htm) |
| 13.1\*\* | [Certification of Principal Executive Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002](ea026470301ex13-1_zhibao.htm) |
| 13.2\*\* | [Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002](ea026470301ex13-2_zhibao.htm) |
| 15.1\* | [Consent of HYYH CPA. LLC](ea026470301ex15-1_zhibao.htm) |
| 15.2\* | [Consent of Jinghe Law Firm](ea026470301ex15-2_zhibao.htm) |
| 16.1 | [Letter from Marcum Asia CPAs LLP to Securities and Exchange Commission (incorporated by reference to Exhibit 16.1 of the Company's Form 6-K, filed with the Commission on November 26, 2025)](https://www.sec.gov/Archives/edgar/data/1966750/000121390025115523/ea026748201ex16-1_zhibao.htm) |
| 97.1 | [Executive Compensation Clawback Policy (incorporated by reference to Exhibit 97.1 of the Company's Form 20-F, filed with the Commission on October 31, 2024)](http://www.sec.gov/Archives/edgar/data/1966750/000121390024092990/ea021874901ex97-1_zhibao.htm) |
| 101. INS\* | Inline XBRL Instance Document. |
| 101. SCH\* | Inline XBRL Taxonomy Extension Schema Document. |
| 101. CAL\* | Inline XBRL Taxonomy Extension Calculation Linkbase Document. |
| 101. DEF\* | Inline XBRL Taxonomy Extension Definition Linkbase Document. |
| 101. LAB\* | Inline XBRL Taxonomy Extension Label Linkbase Document. |
| 101. PRE\* | Inline XBRL Taxonomy Extension Presentation Linkbase Document. |
| 104\* | Cover Page Interactive Data File (embedded within the Inline XBRL document) |

---

\* Filed herewith

+ Certain portions of this exhibit are omitted pursuant to Item 601(b)(10)(iv) of Regulations S-K because they are not material and are the type that the registrant treats as private or confidential. The Registrant hereby agrees to furnish a copy of any omitted portion to the SEC upon request.

^ Certain portions of this exhibit have been omitted pursuant to Item 601(a)(6) of Regulations S-K. The Company hereby agrees to furnish a copy of any omitted portion to the SEC upon request.

\*\* Furnished herewith.

**SIGNATURES**

The registrant hereby certifies that it meets all of the requirements for filing its annual report on Form 20-F and that it has duly caused and authorized the undersigned to sign this annual report on its behalf.

---

| | |
|:---|:---|
| **Zhibao Technology Inc.** | **Zhibao Technology Inc.** |
| By: | /s/ Botao Ma |
| Name: | Botao Ma |
| Title: | Chief Executive Officer |

---

Date: January 9, 2026

**ZHIBAO TECHNOLOGY INC.**

**INDEX TO CONSOLIDATED FINANCIAL INFORMATION**

---

| | |
|:---|:---|
|  | **Page** |
| [Report of Independent Registered Public Accounting Firm (PCAOB ID: 7302)](#f_006) | F-2 |
| [Consolidated Balance Sheets as of June 30, 2024 and 2025](#F_001) | F-3 |
| [Consolidated Statements of Operations and Comprehensive Income (Loss) for the Years Ended June 30, 2023, 2024 and 2025](#F_002) | F-4 |
| [Consolidated Statements of Changes in Shareholders' (Deficit) Equity for the Years Ended June 30, 2023, 2024 and 2025](#F_003) | F-5 |
| [Consolidated Statements of Cash Flows for the Years Ended June 30, 2023, 2024 and 2025](#F_004) | F-6 |
| [Notes to the Consolidated Financial Statements](#F_005) | F-8 |

---

**REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM**

To the Shareholders and the Board of Directors of Zhibao Technology Inc.

**Opinion on the Financial Statements**

We have audited the accompanying consolidated balance sheets of Zhibao Technology Inc. (the "Company") as of June 30, 2024 and 2025, the related consolidated statements of operations and comprehensive (loss) income, changes in shareholders' equity and cash flows for each of the three years in the period ended June 30, 2025, and the related notes (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company at June 30, 2024, and 2025, and the results of its operations and its cash flows for each of the three years in the period ended June 30, 2025, in conformity with accounting principles generally accepted in the United States of America.

**The Company's Ability to Continue as a Going Concern**

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the financial statements, the Company has incurred recurring losses from operations, has negative cash flow from operations, and was in an accumulated deficit position. Given the Company's financial position, there is substantial doubt about the Company's ability to continue as a going concern. Management's evaluation of the events and conditions and management's plans regarding these matters are also described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

**Basis for Opinion**

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

/s/ HYYH CPA. LLC

HYYH CPA. LLC

We have served as the Company's auditor since 2025.

Baltimore, Maryland

January 9, 2026

**ZHIBAO TECHNOLOGY INC. CONSOLIDATED BALANCE SHEETS**

(Amounts in Renminbi ("RMB") and U.S. dollars ("US$"), except for share and per share data)

---

| | | | |
|:---|:---|:---|:---|
|  | **As of June 30,** | **As of June 30,** | **As of June 30,** |
|  | **2024** | **2025** | **2025** |
|  | **RMB** | **RMB** | **USD<br> (Note 2)** |
| **ASSETS** |  |  |  |
| **Current Assets** |  |  |  |
| Cash and cash equivalents | 2401495 | 10284108 | 1435606 |
| Restricted cash | 38743831 | 4245599 | 592663 |
| Accounts receivable, net | 130354429 | 114070587 | 15923640 |
| Due from related parties | 16566524 | 9076416 | 1267019 |
| Prepaid expenses and other current assets, net | 9485464 | 6824085 | 952606 |
| &nbsp;&nbsp;&nbsp;**Total Current Assets** | **197551743** | **144500795** | **20171534** |
| Deposit of long-term investments |  | 12475000 | 1741443 |
| Long-term investments in equity investee |  | 2500000 | 348987 |
| Property and equipment, net | 233375 | 142887 | 19946 |
| Intangible assets, net | 2581046 | 1539437 | 214897 |
| Operating lease right of use assets | 3313215 | 3976798 | 555140 |
| Restricted cash, noncurrent | 5000000 | 5000000 | 697973 |
| Deferred tax assets | 57257 |  |  |
| Other non-current assets | 51004 | 624653 | 87198 |
| &nbsp;&nbsp;&nbsp;**Total Non-Current Assets** | **11235897** | **26258775** | **3665584** |
| &nbsp;&nbsp;&nbsp;**Total Assets** | **208787640** | **170759570** | **23837118** |
| **LIABILITIES, AND SHAREHOLDERS' EQUITY** |  |  |  |
| **Current Liabilities** |  |  |  |
| Short-term borrowings | 26814237 | 21800000 | 3043163 |
| Accounts payable | 51252954 | 58610826 | 8181756 |
| Insurance premium payable | 38376850 | 42789314 | 5973158 |
| Income tax payable | 42747 | 58600 | 8180 |
| Due to related parties | 6166067 | 3128044 | 436658 |
| Operating lease liabilities, current | 2425135 | 2078397 | 290133 |
| Accrued expenses and other liabilities | 15990970 | 12049786 | 1682084 |
| Convertible notes | - | 1709343 | 238615 |
| Derivative liabilities | - | 14327 | 2000 |
| Warrant liabilities | - | 1892623 | 264200 |
| &nbsp;&nbsp;&nbsp;**Total Current Liabilities** | **141068960** | **144131260** | **20119947** |
| Operating lease liabilities, noncurrent | 1044068 | 1934528 | 270050 |
| Deferred tax liabilities | 2683818 |  |  |
| &nbsp;&nbsp;&nbsp;**Total Non-current Liabilities** | **3727886** | **1934528** | **270050** |
| &nbsp;&nbsp;&nbsp;**Total Liabilities** | **144796846** | **146065788** | **20389997** |
| **Commitments and contingencies** |  |  |  |
| **Shareholders' Equity** |  |  |  |
| Class A ordinary shares (par value $0.0001 per share, 450,000,000 shares authorized, 14,707,073 and 16,105,132 shares issued and outstanding as of June 30, 2024 and 2025, respectively) | 9922 | 10923 | 1611 |
| Class B ordinary shares (par value $0.0001 per share, 50,000,000 shares authorized, 16,816,692 and 16,816,692 shares issued and outstanding as of June 30, 2024 and 2025, respectively) | 12204 | 12204 | 1682 |
| Additional paid-in capital | 196038784 | 219416239 | 30629325 |
| Accumulated deficit | (131841244) | (193860843) | (27061992) |
| Accumulated other comprehensive loss | (228872) | (884741) | (123505) |
| &nbsp;&nbsp;&nbsp;**Total Shareholders' Equity** | **63990794** | **24693782** | **3447121** |
| &nbsp;&nbsp;&nbsp;**Total Liabilities and Shareholders' Equity** | **208787640** | **170759570** | **23837118** |

---

The accompanying notes are an integral part of the consolidated financial statements.

**ZHIBAO TECHNOLOGY INC. CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE (LOSS) INCOME**

(Amounts in Renminbi ("RMB") and U.S. dollars ("US$"), except for share and per share data)

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **For the Year Ended June 30,** | **For the Year Ended June 30,** | **For the Year Ended June 30,** | **For the Year Ended June 30,** |
|  | **2023** | **2024** | **2025** | **2025** |
|  | **RMB** | **RMB** | **RMB** | **USD<br> (Note 2)** |
| Revenues | 142102834 | 183669326 | 276936030 | 38658779 |
| Cost of revenues | (83485203) | (108908547) | (163366825) | (22805129) |
| &nbsp;&nbsp;&nbsp;**Gross profit** | **58617631** | **74760779** | **113569205** | **15853650** |
| **Operating expenses** |  |  |  |  |
| Selling and marketing expenses | (22495891) | (31606719) | (112234880) | (15667385) |
| General and administrative expenses | (70991876) | (17954289) | (44016390) | (6144451) |
| Research and development expenses | (9682605) | (15092620) | (10855939) | (1515431) |
| &nbsp;&nbsp;&nbsp;**Total operating expenses** | **(103170372)** | **(64653628)** | **(167107209)** | **(23327267)** |
| &nbsp;&nbsp;&nbsp;**(Loss) income from operations** | **(44552741)** | **10107151** | **(53538004)** | **(7473617)** |
| Interest expense, net | (912397) | (848575) | (3304880) | (461343) |
| Other income (expenses), net | 2907818 | 507609 | (1532989) | (213997) |
| Gain on extinguishment of liability (Note 10) |  | 8996341 | - | - |
| Loss on extinguishment of convertible notes |  |  | (7174958) | (1001586) |
| Changes in fair value of derivative liabilities |  |  | (1031558) | (144000) |
| Changes in fair value of warrant liabilities |  |  | 1952081 | 272500 |
| &nbsp;&nbsp;&nbsp;**(Loss) Income Before Income Taxes** | **(42557320)** | **18762526** | **(64630308)** | **(9022043)** |
| Income tax (expenses) benefits | (541460) | (5510773) | 2610709 | 364441 |
| **Net (Loss) Income** | **(43098780)** | **13251753** | **(62019599)** | **(8657602)** |
| **Other comprehensive income (loss)** |  |  |  |  |
| Foreign currency translation adjustments | 5118 | (233990) | (655869) | (91556) |
| &nbsp;&nbsp;&nbsp;**Comprehensive (loss) income** | **(43093662)** | **13017763** | **(62675468)** | **(8749158)** |
| **Weighted average number of ordinary share outstanding** |  |  |  |  |
| Basic | **26710005** | **30367806** | **31986420** | **31986420** |
| Diluted | **26710005** | **30367806** | **31986420** | **31986420** |
| **(Loss) earnings per share** |  |  |  |  |
| Basic | **(1.61)** | **0.44** | **(1.94)** | **(0.27)** |
| Diluted | **(1.61)** | **0.44** | **(1.94)** | **(0.27)** |

---

The accompanying notes are an integral part of the consolidated financial statements.

**ZHIBAO TECHNOLOGY INC. CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY FOR THE YEARS ENDED JUNE 30, 2023, 2024 and 2025** (Amounts in Renminbi ("RMB") and U.S. dollars ("US$"), except for share and per share data)

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Class A<br> Ordinary Shares** | **Class A<br> Ordinary Shares** | **Class B <br> Ordinary Shares** | **Class B <br> Ordinary Shares** | | | | |
|  | **Shares** | **Amount** | **Shares** | **Amount** | **Additional<br> Paid-in**<br>**Capital** | **Accumulated**<br>**Deficits** | **Accumulated<br> Other<br> Comprehensive**<br>**Income (Loss)** |<br>**Total** |
|  | | **RMB** | | **RMB** | **RMB** | **RMB** | **RMB** | **RMB** |
| **As of June 30, 2022** | **13183308** | **8820** | **13155570** | **8817** | **113111157** | **(94446003)** | **—**  | **18682791** |
| Contribution from shareholders |  |  |  |  | 600000 |  |  | **600000** |
| Share based compensation |  |  | 3661122 | 3387 | 55262623 |  |  | **55266010** |
| Net loss |  |  |  |  |  | (43098780) |  | **(43098780)** |
| Foreign exchange adjustments |  |  |  |  |  |  | 5118 | **5118** |
| **As of June 30, 2023** | **13183308** | **8820** | **16816692** | **12204** | **168973780** | **(137544783)** | **5118** | **31455139** |
| Adjustments due to the adoption of ASC 326 |  |  |  |  |  | (7548214) |  | **(7548214)** |
| **As of July 1, 2023** | **13183308** | **8820** | **16816692** | **12204** | **168973780** | **(145092997)** | **5118** | **23906925** |
| Issuance of Class A Ordinary Shares pursuant to initial public offering ("IPO") | 1500000 | 1085 |  |  | 43383715 |  |  | **43384800** |
| Issuance of Class A Ordinary Shares pursuant to over allotment | 23765 | 17 |  |  | 687505 |  |  | **687522** |
| Offering cost incurred for IPO and over allotment |  |  |  |  | (17633556) |  |  | **(17633566)** |
| Issuance of warrants |  |  |  |  | 627340 |  |  | **627340** |
| Net income |  |  |  |  |  | 13251753 |  | **13251753** |
| Foreign exchange adjustments |  |  |  |  |  |  | (233990) | **(233990)** |
| **As of June 30, 2024** | **14707073** | **9922** | **16816692** | **12204** | **196038784** | **(131841244)** | **(228872)** | **63990794** |
| Issuance of Class A Ordinary Shares pursuant to settlement of convertible notes | 1384809 | 992 |  |  | 17479730 |  |  | **17480722** |
| Share-based compensation expenses | 13250 | 9 |  |  | 97756 |  |  | 97765 |
| Capital contribution from a shareholder |  |  |  |  | 5799969 |  |  | **5799969** |
| Net loss |  |  |  |  |  | (62019599) |  | **(62019599)** |
| Foreign exchange adjustments |  |  |  |  |  |  | (655869) | **(655869)** |
| **As of June 30, 2025** | **16105132** | **10923** | **16816692** | **12204** | **219416239** | **(193860843)** | **(884741)** | **24693782** |

---

The accompanying notes are an integral part of the consolidated financial statements.

**ZHIBAO TECHNOLOGY INC. CONSOLIDATED STATEMENTS OF CASH FLOWS**

(Amounts in Renminbi ("RMB") and U.S. dollars ("US$"))

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **For the Years Ended June 30,** | **For the Years Ended June 30,** | **For the Years Ended June 30,** | **For the Years Ended June 30,** |
|  | **2023** | **2024** | **2025** | **2025** |
|  | **RMB** | **RMB** | **RMB** | **USD<br> (Note 2)** |
| **Cash Flows From Operating Activities:** |  |  |  |  |
| Net (loss) income | (43098780) | 13251753 | (62019599) | (8657602) |
| Adjustments to reconcile net (loss) income to net cash used in operating activities: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Depreciation and amortization expenses | 928385 | 1109606 | 1132097 | 158035 |
| &nbsp;&nbsp;&nbsp;Amortization of operating lease right-of-use assets | 2407047 | 2153804 | 2090222 | 291784 |
| &nbsp;&nbsp;&nbsp;(Gain) loss from early termination of right-of-use assets | (58092) | 46943 | (34321) | (4791) |
| &nbsp;&nbsp;&nbsp;Loss from disposal of property and equipment | 13223 |  |  |  |
| &nbsp;&nbsp;&nbsp;Share-based compensation expenses | 55266010 |  | 97765 | 13647 |
| &nbsp;&nbsp;&nbsp;Provision for doubtful receivables | 1854686 | 4118332 | 21421734 | 2990359 |
| &nbsp;&nbsp;&nbsp;Gain from extinguishment of liability (Note 10) |  | (8996341) |  |  |
| &nbsp;&nbsp;&nbsp;Accretion of interest expenses on convertible notes |  |  | 2761739 | 385524 |
| &nbsp;&nbsp;&nbsp;Loss from extinguishment of convertible notes |  |  | 7174958 | 1001586 |
| &nbsp;&nbsp;&nbsp;Changes in fair value of derivative liabilities |  |  | 1031558 | 144000 |
| &nbsp;&nbsp;&nbsp;Changes in fair value of warrant liabilities |  |  | (1952081) | (272500) |
| &nbsp;&nbsp;&nbsp;Deferred income tax expenses (benefits) | 513577 | 5496536 | (2626562) | (366654) |
| Changes in operating assets and liabilities: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Accounts receivable | (29805495) | (65456574) | 3938524 | 549797 |
| &nbsp;&nbsp;&nbsp;Due from related parties | (2724260) | (8040512) | (1586308) | (221440) |
| &nbsp;&nbsp;&nbsp;Prepaid expenses and other current assets | (3311573) | (1240202) | 2661378 | 371514 |
| &nbsp;&nbsp;&nbsp;Other non-current assets | 159865 | 15000 | (573649) | (80078) |
| &nbsp;&nbsp;&nbsp;Accounts payable | 10047563 | 19816427 | 7357872 | 1027119 |
| &nbsp;&nbsp;&nbsp;Insurance premium payable | 108124 | 34823473 | 4412464 | 615956 |
| &nbsp;&nbsp;&nbsp;Due to related parties |  | 162408 | 136816 | 19099 |
| &nbsp;&nbsp;&nbsp;Income tax payable | 28343 | 14404 | 15853 | 2213 |
| &nbsp;&nbsp;&nbsp;Operating lease liabilities | (2144171) | (1999242) | (2175762) | (303725) |
| &nbsp;&nbsp;&nbsp;Accrued expenses and other liabilities | 8691653 | 914832 | (3941186) | (550168) |
| &nbsp;&nbsp;&nbsp;&nbsp;**Net cash used in operating activities** | **(1123895)** | **(3809353)** | **(20676488)** | **(2886325)** |
| **Cash Flows From Investing Activities** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Purchase of property and equipment |  | (276102) |  |  |
| &nbsp;&nbsp;&nbsp;Prepayments or purchase for intangible assets | (1791906) | (316236) |  |  |
| &nbsp;&nbsp;&nbsp;Loans made to related parties | (15500) |  |  |  |
| &nbsp;&nbsp;&nbsp;Collection of loan to related parties | 15771100 |  |  |  |
| &nbsp;&nbsp;&nbsp;Proceeds from disposal of property and equipment | 10520 |  |  |  |
| &nbsp;&nbsp;&nbsp;Prepayment for equity investments |  |  | (12475000) | (1741443) |
| &nbsp;&nbsp;&nbsp;Investment in an equity investee |  |  | (2500000) | (348987) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Net cash provided by (used in) investing activities** | **13974214** | **(592338)** | **(14975000)** | **(2090430)** |
| **Cash Flows From Financing Activities** |  |  |  |  |
| Proceeds from IPO |  | 43384800 |  |  |
| Proceeds from over-allotment |  | 687523 |  |  |
| Net proceeds from issuance of convertible notes |  |  | 17483280 | 2442491 |
| Repayment of convertible notes |  |  | (5264783) | (734935) |
| Capital contribution from a shareholder | 600000 |  | 5799969 | 809644 |
| Proceeds from short-term bank borrowings | 30200000 | 25000000 | 40000000 | 5583785 |
| Repayment of short-term borrowings | (30932203) | (25453560) | (45014237) | (6283745) |
| Borrowings from related parties | 237000 | 28500000 | 9500000 | 1326149 |
| Repayment of borrowings to related parties | (437000) | (28790200) | (8661984) | (1209166) |
| Settlement of subscription fees advanced from a investor |  |  | (3967865) | (553893) |
| Payment of offering cost | (4223769) | (12421207) |  |  |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;**Net cash (used in) provided by financing activities** | **(4555972)** | **30907356** | **9874380** | **1380330** |
| Effect of exchange rate changes on cash and cash equivalents | 5116 | (233991) | (838511) | (118972) |
| Net increase (decrease) in cash, cash equivalents and restricted cash | 8299463 | 26271674 | (26615619) | (3715397) |
| Cash, cash equivalents and restricted cash at beginning of the year | 11574189 | 19873652 | 46145326 | 6441639 |
| **Cash, cash equivalents and restricted cash at end of the year** | **19873652** | **46145326** | **19529707** | **2726242** |

---

**ZHIBAO TECHNOLOGY INC. CONSOLIDATED STATEMENTS OF CASH FLOWS — (Continued)** (Amounts in Renminbi ("RMB") and U.S. dollars ("US$"))

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **For the Years Ended June 30,** | **For the Years Ended June 30,** | **For the Years Ended June 30,** | **For the Years Ended June 30,** |
|  | **2023** | **2024** | **2025** | **2025** |
|  | **RMB** | **RMB** | **RMB** | **USD<br> (Note 2)** |
| **Supplemental Cash Flow Information** |  |  |  |  |
| Cash paid for interest expense | 1241082 | 4255412 | 1223712 | 170824 |
| Cash paid for income tax | **—**  | **—**  | **—**  | **—**  |
| **Non-cash Investing and Financing activities** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Operating lease right-of-use assets obtained in exchange for operating lease liabilities | 6609590 | 1355484 | 4617878 | 644631 |
| &nbsp;&nbsp;&nbsp;Disposal of operating lease right-of-use assets | 1922624 | 216170 | 1464840 | 204484 |
| &nbsp;&nbsp;&nbsp;Issuance of warrants to underwriter in connection with IPO and overallotment | **—**  | 627340 | **—**  | **—**  |
| Issuance of shares to settlement convertible notes |  |  | 14148573 | 1975065 |
| **Reconciliation of cash, cash equivalents and restricted cash to the consolidated balance sheets** |  |  |  |  |

---

---

| | | | |
|:---|:---|:---|:---|
|  | **As of June 30,** | **As of June 30,** | **As of June 30,** |
|  | **2024** | **2025** | **2025** |
|  | **RMB** | **RMB** | **USD<br> (Note 2)** |
| Cash and cash equivalents | 2401495 | 10284108 | 1435606 |
| Restricted cash | 38743831 | 4245599 | 592663 |
| Restricted cash, noncurrent | 5000000 | 5000000 | 697973 |
|  | **46145326** | **19529707** | **2726242** |

---

The accompanying notes are an integral part of the consolidated financial statements.

**ZHIBAO TECHNOLOGY INC. NOTES TO CONSOLIDATED** **FINANCIAL STATEMENTS**

**1 — NATURE OF THE ORGANIZATION AND BUSINESS**

Zhibao Technology Inc. (the "Company" or "Zhibao") was incorporated on January 11, 2023, under the laws of the Cayman Islands as an exempted company with limited liability. The Company commenced operations in November 2015, through its a wholly owned subsidiary Zhibao Technology Co., Ltd., ("Zhibao China"), which is a limited liability company established under the laws of the PRC. Zhibao China and its subsidiaries (collectively known as "Zhibao China Group") are primarily engaged providing in digital insurance brokerage services to end customers.

The accompanying consolidated financial statements reflect the activities of Zhibao and each of the following entities:

---

| | | | | |
|:---|:---|:---|:---|:---|
| **Name of Entity** | **Date of <br> Incorporation** | **Place of <br> Incorporation** | **% of <br> Ownership** | **Principal Activities** |
| **Parent company:** |  |  |  |  |
| Zhibao | January 11, 2023 | Cayman Islands | Parent | Investment holding |
| **Wholly owned subsidiaries of Zhibao** |  |  |  |  |
| Zhibao Technology Holdings Limited ("Zhibao BVI") | January 12, 2023 | British Virgin Islands | 100 | Investment holding |
| Zhibao Technology Limited ("Zhibao HK") | January 19, 2023 | Hong Kong | 100 | Investment holding |
| Zhibao Labuan Reinsurance ("Zhibao Labuan") | July 29, 2024 | Malaysia | 100 | Brokerage services and Managing general underwriter ("MGU") services |
| Zhibao China | November 24, 2015 | PRC | 100 | MGU services |
| Shanghai Anyi Network Technology Co., Ltd. ("Shanghai Anyi") | September 18, 2015 | PRC | 100 | R&D services |
| Sunshine Insurance Brokers (Shanghai) Co., Ltd. ("Sunshine Insurance Brokers") | November 17, 2011 | PRC | 100 | Digital insurance brokerage services and offline insurance brokerage consulting services |
| Shanghai Zhibao Health Management Co., Ltd. ("Zhibao Health") | November 16, 2022 | PRC | 100 | Healthcare services |
| Shanghai Zhizhongbao Enterprise Management Co., Ltd. ("Zhizhongbao") | March 6, 2025 | PRC | 100 | Healthcare services |
| Shanghai Zhibao Yingshi Health Technology Co., Ltd. | September 24, 2025 | PRC | 51 | Healthcare services |

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*Initial public offering ("IPO")*

On April 3, 2024, the Company closed its IPO of 1,500,000 Class A ordinary shares at a public offering price of $4.00 per Class A ordinary share for aggregate gross proceeds of $6,000,000, before deducting underwriting discounts and offering expenses. The Class A ordinary shares began trading on the Nasdaq Capital Market on April 2, 2024 under the symbol "ZBAO".

On May 14, 2024, the Company issued an additional 23,765 Class A ordinary shares of the Company pursuant to the partial exercise of the underwriters' over-allotment option in connection with the Company's initial public offering at $4.00 per share, resulting in additional gross proceeds of $95,060.

**ZHIBAO TECHNOLOGY INC. NOTES TO CONSOLIDATED** **FINANCIAL STATEMENTS**

**1 — NATURE OF THE ORGANIZATION AND BUSINESS** (cont.)

*Reorganization*

On February 16, 2023, Zhibao, through its wholly owned subsidiary Zhibao HK, entered into an equity transfer agreement with the shareholders of Zhibao China. Pursuant to the equity transfer agreement, each of the shareholders of Zhibao China transferred to Zhibao their respective equity interests in Zhibao China ("Equity Transfer"). Upon completion of the Equity Transfer, Zhibao China became a direct wholly-owned subsidiary of Zhibao.

On March 10, 2023, Zhibao completed the reorganization of entities under common control of its then existing shareholders, who collectively owned 100% of the equity interests of Zhibao China prior to the reorganization. Zhibao, Zhibao BVI, Zhibao HK were established as holding companies of Zhibao China and its subsidiaries, and all of these entities are under common control which results in the consolidation of Zhibao China and its subsidiaries, which have been accounted for as a reorganization of entities under common control at carrying value.

In March 2023, four preferred shareholders of Zhibao China surrendered their equity interest in Zhibao China. In April 2023, three of the four preferred shareholders determined to contribute the cash consideration to be received from Zhibao China in return for their equity surrender to Zhibao directly. In May 2023, Zhibao issued an aggregate of 3,507,734 ordinary shares to the three investors.

 

*Reclassification of Class A and Class B ordinary Shares*

On December 12, 2023, the shareholders of the Company passed a special resolution to reclassify 5,605,564 ordinary shares held by three shareholders into Class B ordinary shares, with remaining ordinary shares as Class A ordinary shares. All of the Class B shareholders are controlled by Mr. Botao Ma, the founder and Chief Executive Officer of the Company.

Each of the Class A ordinary shares and Class B ordinary shares has the right to an equal share in any dividend paid by the Company and the right to an equal share in the distribution of the surplus assets of the Company. However Each Class A ordinary share has the right to one vote on any resolution, and each Class B ordinary share has the right to twenty (20) votes on any resolutions.

The Company believed that it was appropriate to reflect the above transactions on a retroactive basis pursuant to ASC 260, *Earnings Per Share*. The Company has retroactively adjusted all share and per share data for all periods presented.

*Variable interest in Shanghai GBG Enterprise Management Consulting Co., Ltd. ("Shanghai GBG")*

For the years ended June 30, 2023, 2024 and 2025, the Company was charged of service cost by Shanghai GBG, which is a major service provider engaged by the Company to provide MGU services for the insurance carriers. As of June 30, 2024 and 2025, the Company had outstanding balances of approximately RMB 16.6 million and RMB 18.2 million due from Shanghai GBG, respectively. The Company may be exposed to credit risks and operating risks in the event that GBG defaulted in provision of MGU services or charged high service fees to the Company, which led to conclusion that the Company has variable interest in Shanghai GBG. However, the Company did not consolidate Shanghai GBG as it is not primary beneficiary of Shanghai GBG as the Company does not have power to direct the activities that most significantly affect Shanghai GBG's economic performance

**ZHIBAO TECHNOLOGY INC. NOTES TO CONSOLIDATED** **FINANCIAL STATEMENTS**

**2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES**

**Basis of Presentation**

The accompanying consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America ("U.S. GAAP") and pursuant to the rules and regulations of the Securities and Exchange Commission ("SEC").

**Principles of Consolidation**

The consolidated financial statements include the accounts of the Company and its wholly and majority owned subsidiaries. All transactions and balances among the Company and its subsidiaries have been eliminated upon consolidation. All intercompany transactions and balances have been eliminated upon consolidation.

**Liquidity Condition and Going Concern**

As of June 30, 2025, the Company reported working capital of RMB 0.4 million (US$51,600). However, the Company had accumulated deficits of RMB 193.9 million (US$27.1 million) as of June 30, 2025. For the years ended June 30, 2023 and 2025, the Company reported net loss of RMB 43.1 million and RMB 62.0 million (US$8.7 million). For the years ended June 30, 2023, 2024 and 2025, the Company had operating cash outflows of RMB 1.1 million, RMB 3.8 million and RMB 20.7 million (US$2.9 million), respectively. These conditions raised substantial doubt about the Company's ability to continue as going concern.

Furthermore, the Company has entered into multiple financing arrangements involving convertible notes and warrants that contain variable conversion and settlement features. Certain of these arrangements include variable conversion price mechanisms, anti-dilution protections, and repayment obligations that may exceed the stated principal amounts. As of June 30, 2025, certain of these financing arrangements remained outstanding and subject to future settlement. In addition, subsequent to June 30, 2025, the Company completed additional drawdowns under its existing financing arrangements.

These features and subsequent financing activities could adversely affect the Company's liquidity and cash flows, particularly in circumstances where the Company is required to make cash payments in connection with settlements, redemptions, or default-related remedies. The potential issuance of a significant number of shares upon conversion or exercise may also limit the Company's ability to raise additional capital on favorable terms, which could further constrain liquidity.

Accordingly, the Company's ability to continue as a going concern is dependent, in part, on its ability to manage these financing arrangements, including outstanding and unsettled obligations, generate sufficient operating cash flows, and obtain additional financing as needed. Management's plans include improving operating performance and maintaining access to external sources of financing to support the Company's ongoing operations.

As of June 30, 2025, the Company had cash of RMB 10.3 million (US$1.4 million), accounts receivable of RMB 114.1 million (US$15.9 million). The Company expects to collect outstanding accounts receivable in the next twelve months. On the other hand, the Company had current liabilities of RMB 144.1 million (US$20.1 million). As of the date of issuance of the consolidated financial statements, the Company has renewed its revolving credit facility agreement with one bank pursuant to which the Company could draw down RMB 30 million for a period through October 2026. The Company could enter loan contracts under the credit facility and the Company expected it could further renew the revolving credit facility agreement upon its maturity in November 2026. Besides, Mr. Ma, the founder and Chief Executive Officer of the Company, pledged his own property with carrying value of approximately RMB 120 million for the revolving credit facility (see Note 8). Mr. Ma provided a financial support letter to the Company, pursuant to which the property is available for sale for future operating fund shortage after repayment of borrowings.

There can be no assurance that the Company future cashflows from operating activities or financing activities including borrowings and equity financing will be sufficient to support its ongoing operations, or that any additional financing will be available in a timely manner or on acceptable terms, if at all. If the Company is unable to raise sufficient financing or events or circumstances occur such that the Company does not meet its strategic plans, the Company will be required to reduce certain discretionary spending, alter or scale back its digital insurance brokerage services, or be unable to fund capital expenditures, which would have a material adverse effect on the Company's financial position, results of operations, cash flows, and ability to achieve its intended business objectives. Given the Company's existing cash balances and projected cash generated by, and used in, operating activities, the Company believes that it will have sufficient liquidity to fund its operating activities, and react as necessary to market changes, which may include working capital needs for at least twelve months from June 30, 2025, the Company has concluded that there is substantial doubt about its ability to continue as a going concern for a period of one year from the date that these consolidated financial statements are issued.

**ZHIBAO TECHNOLOGY INC. NOTES TO CONSOLIDATED** **FINANCIAL STATEMENTS**

**2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES** (cont.)

**Liquidity Condition and Going Concern (cont.)**

The accompanying consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty. Accordingly, the consolidated financial statements have been prepared on a basis that assumes the Company will continue as a going concern and which contemplates the realization of assets and satisfaction of liabilities and commitments in the ordinary course of business.

**Use of Estimates**

The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosures of contingent assets and liabilities on the date of the consolidated financial statements, and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. On an ongoing basis, management reviews these estimates and assumptions using the currently available information. Changes in facts and circumstances may cause the Company to revise its estimates. The Company bases its estimates on past experience and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Estimates are used when accounting for items and matters including, but not limited to, determinations of the useful lives and valuation of long-lived assets, estimates of allowances for doubtful accounts, valuation of deferred tax assets, valuation of fair value of convertible notes, valuation of fair value of derivative liabilities and warrant liabilities and other provisions and contingencies.

**Fair Value of Financial Instruments**

The Company's financial instruments are accounted for at fair value on a recurring basis. Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The three levels of the fair value hierarchy are described below:

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| | |
|:---|:---|
| Level 1 — | inputs to the valuation methodology are quoted prices (unadjusted) for identical assets or liabilities in active markets. |
| Level 2 — | inputs to the valuation methodology include quoted prices for similar assets and liabilities in active markets, and inputs that are observable for the assets or liability, either directly or indirectly, for substantially the full term of the financial instruments. |
| Level 3 — | inputs to the valuation methodology are unobservable and significant to the fair value. |

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Financial instruments of the Company primarily comprised current assets and current liabilities including cash and cash equivalents, restricted cash, accounts receivable, short-term borrowings, accounts payable, insurance premium payables, other payables, and due to related parties. The Company's financial instruments approximate their fair values because of the short-term nature of these instruments. Warrants and derivative liabilities were measured at fair value using unobservable inputs and categorized in Level 3 of the fair value hierarchy (Note 11 and 12). Convertible notes were measured at amortized cost using unobservable inputs and categorized in Level 3 of the fair value hierarchy (Note 11).

**ZHIBAO TECHNOLOGY INC. NOTES TO CONSOLIDATED** **FINANCIAL STATEMENTS**

**2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES** (cont.)

**Convenience Translation**

Translations of balances in the Group's consolidated balance sheets, consolidated statements of comprehensive income (loss) and consolidated statements of cash flows from RMB into US$ as of and for year ended June 30, 2025 are solely for the convenience of the readers and were calculated at the rate of US$1.00=RMB 7.1636, representing the noon buying rate set forth in the H.10 statistical release of the U.S. Federal Reserve Board on June 30, 2025. No representation is made that the RMB amounts could have been, or could be, converted, realized or settled into US$ at that rate on June 30, 2025 or at any other rate.

**Cash and Cash Equivalents**

Cash and cash equivalents consist of cash on hand, bank deposits, as well as highly liquid investments with original maturities less than three months, which are unrestricted as to withdrawal or use.

**Restricted Cash**

In its capacity as an insurance broker, Sunshine Insurance Brokers collects "premiums" (unremitted insurance premiums) from certain insureds and remits the "premiums" to the appropriate insurance companies. Unremitted insurance premiums are held in custody until disbursed by Sunshine Insurance Brokers. The Company reports such amounts as current restricted cash in the consolidated balance sheets.

Restricted cash, noncurrent represented guarantee deposits are required by China Banking and Insurance Regulatory Commission ("CBIRC") in order to protect insurance premium appropriation by insurance broker.

**Accounts Receivable, Net**

Accounts receivable are recorded at the gross amount less an allowance for any uncollectible accounts and do not bear interest. Accounts receivable represented brokerage fees receivable from insurer carriers.

On July 1, 2023, the Company adopted Accounting Standards Update ("ASU") No. 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments ("ASU 2016-13"), using the modified retrospective transition method. ASU 2016-13 replaces the existing incurred loss impairment model with an expected loss methodology, which will result in more timely recognition of credit losses. Upon adoption, the Company changed the impairment model to utilize a forward-looking current expected credit losses (CECL) model in place of the incurred loss methodology for financial instruments measured at amortized cost and receivables resulting from the application of ASC 606, including contract assets. The adoption of the guidance resulted in an increase of RMB 8,821,129 in the allowance for credit losses for accounts receivable on July 1, 2023.

The Company uses the roll-rate method to measure the expected credit losses of accounts receivable. The Company assesses collectability by reviewing accounts receivable on aging schedules. In determining the amount of the allowance for credit losses, the Company considers historical collectability based on past due status, the age of the balances, current economic conditions, reasonable and supportable forecasts of future economic conditions, and other factors that may affect the Company's ability to collect from customers. Delinquent account balances are written-off against the allowance for expected credit loss after management has determined that the likelihood of collection is not probable. The estimated credit losses charged to the allowance is classified as "general and administrative expenses" in the consolidated statements of operations and comprehensive income (loss). For the years ended June 30, 2024 and 2025, the Company provided expected credit losses of RMB 4,031,265 and RMB 12,345,318 against accounts receivable, respectively.

**ZHIBAO TECHNOLOGY INC. NOTES TO CONSOLIDATED** **FINANCIAL STATEMENTS**

**2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES** (cont.)

**Long-term Investment**

As of June 30, 2025, long-term investments represent the Company's investment in 2.6316% equity interest in one limited partnership over which the Company neither has control nor significant influence through investments in ordinary shares.

Equity investments not accounted for using the equity method are carried at fair value with unrealized gains and losses recorded in the consolidated statements of operations, according to ASC 321, Investments - Equity Securities. The Company elected to record the equity investments in privately held companies using the measurement alternative at cost, less impairment, with subsequent adjustments for observable price changes resulting from orderly transactions for identical or similar investments of the same issuer.

Equity investments in privately held companies accounted for using the measurement alternative are subject to periodic impairment reviews. The Company's impairment analysis considers both qualitative and quantitative factors that may have a significant effect on the fair value of these equity securities, including consideration of the impact of the COVID-19 pandemic. In computing realized gains and losses on equity securities, the Company calculates cost based on amounts paid using the average cost method. Dividend income is recognized when the right to receive the payment is established. As of June 30, 2025, the Company did not provide impairment against long-term investment.

**Property and Equipment, Net**

Property and equipment primarily consist of office equipment and leasehold improvements, which are stated at cost less accumulated depreciation less any provision required for impairment in value. Depreciation is computed using the straight-line method with residual value rate of 5% based on the estimated useful lives of three years.

Costs of repairs and maintenance are expensed as incurred and asset improvements are capitalized. The cost and related accumulated depreciation of assets disposed of or retired are removed from the accounts, and any resulting gain or loss is reflected in the consolidated statement of income.

**Intangible Assets, Net**

The Company capitalizes certain software development costs related to the management general underwriter services during the application development stage. The costs related to preliminary project activities and post-implementation activities are expensed as incurred. Capitalized software development costs are depreciated on a straight-line basis over the estimated useful life of 5 years.

**Impairment of Long-lived Assets**

The Company reviews long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an asset to the future undiscounted cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. No impairment of long-lived assets was recognized for the fiscal years ended June 30, 2023, 2024 and 2025.

**Operating Leases**

Zhibao China Group leases its offices, which are classified as operating leases in accordance with Topic 842. Operating leases are required to record in the balance sheet as right-of-use assets and lease liabilities, initially measured at the present value of the lease payments. The Company has elected the package of practical expedients, which allows the Company not to reassess (1) whether any expired or existing contracts as of the adoption date are or contain a lease, (2) lease classification for any expired or existing leases as of the adoption date, and (3) initial direct costs for any expired or existing leases as of the adoption date. The Company elected the short-term lease exemption as the lease terms are 12 months or less.

At the commencement date, the Company recognizes the lease liability at the present value of the lease payments not yet paid, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Company's incremental borrowing rate for the same term as the underlying lease.

The right-of-use asset is recognized initially at cost, which primarily comprises the initial amount of the lease liability, plus any initial direct costs incurred, consisting mainly of brokerage commissions, less any lease incentives received. All right-of-use assets are reviewed for impairment. There was no impairment for right-of-use lease assets as of June 30, 2024 and 2025.

**ZHIBAO TECHNOLOGY INC. NOTES TO CONSOLIDATED** **FINANCIAL STATEMENTS**

**2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES** (cont.)

**Insurance Premium Payables**

Insurance premium payables are insurance premiums collected on behalf of insurer carriers but not yet remitted as of the balance sheet dates.

**Revenue Recognition**

In accordance with ASC 606, revenue is recognized when the control of the promised goods or services is transferred to the customers, and the performance obligations under the contract have been satisfied, in an amount that reflects the consideration expected to be entitled to in exchange for those goods or services (excluding sales taxes collected on behalf of government authorities).

The Company determines revenue recognition through the following steps: (1) identify the contract(s) with a customer, (2) identify the performance obligations in the contract, (3) determine the transaction price, (4) allocate the transaction price to the performance obligations in the contract, and (5) recognize revenue when (or as) the entity satisfies a performance obligation.

The Company primarily generated revenues from contracts with customers:

 

*<u>Insurance brokerage services</u>*

The Company offers digital insurance brokerage services to end customers/the insured for placing insurance policies, and the Company earns insurance brokerage fees from insurance carriers upon completing insurance brokerage services. The commission fees are calculated on a predetermined percentage of insurance premium of each insurance policy. The insurance brokerage services are considered as a single performance obligation, as the insurer carriers cannot benefit until the Company sells an insurance policy. Commission fees are recognized when the Company completes the insurance brokerage services, at which point the Company successfully places an insurance policy for the end customers/the insured.

The Company recognizes insurance brokerage fees net of return allowances. End customers/the insured are generally entitled to return insurance policies at any time under no conditions. Significant judgement is required to estimate return allowances. The Company reasonably estimates the possibility of return based on the historical experience, changes in judgments on these assumptions and estimates could materially impact the amount of net revenues recognized. During the fiscal years ended June 30, 2023, 2024 and 2025, the Company did not record return allowance because the Company historically incurred minimal returns from end customers/the insured and the Company did not expect a significant reversal in the amount of cumulative revenue.

**ZHIBAO TECHNOLOGY INC. NOTES TO CONSOLIDATED** **FINANCIAL STATEMENTS**

**2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES** (cont.)

*<u>Management general underwriter ("MGU") services</u>*

On behalf of the insurance carriers, the Company offers MGU services to end customers/the insured who pay insurance premiums to insurance carriers. The insurance carriers authorize the Company to assist them in certain underwriting, claims and risk control services. The Company earns MGU service fees from insurance carriers. MGU service fees are calculated on a predetermined percentage of insurance premium of each insurance policy.

The Company identifies two performance obligations in the MGU services which are comprised of i) underwriting services, the revenue of which are recognized at a point when the Company completes the underwriting services, and ii) claims and risk control services, the revenue of which are recognized ratably over the terms of insurance policies, generally one year. The Company used cost plus expected margin method to estimate and allocate the transaction prices between both performance obligations.

 

*Contract balances*

The Company classifies its right to consideration in exchange for services transferred to a customer as either a receivable or a contract asset. A receivable is a right to consideration that is unconditional as compared to a contract asset which is a right to consideration that is conditional upon factors other than the passage of time. The Company recognizes accounts receivable in its consolidated balance sheets when it performs a service in advance of receiving consideration and it has the unconditional right to receive consideration. A contract asset is recorded when the Company has transferred services to the customer before payment is received or is due, and the Company's right to consideration is conditional on future performance or other factors in the contract. As of June 30, 2024 and 2025, the Company did not record contract assets.

The Company capitalizes incremental costs incurred to fulfill contracts that (i) relate directly to the contract, (ii) are expected to generate resources that will be used to satisfy the performance obligation under the contract, and (iii) are expected to be recovered through revenue generated under the contract. Provisions for estimated losses, if any, on uncompleted contracts are recorded in the period in which such losses become probable based on the current contract estimates. As of June 30, 2024 and 2025, the Company had no deferred contract costs.

Contract liabilities are recognized if the Company receives consideration prior to satisfying the performance obligations, which include customer advances and deferred revenue under service arrangements. As of June 30, 2024 and 2025, the Company had no contract liabilities.

 

*Practical expedients*

Payment terms and conditions vary by contract type; however, the Company's terms generally include a requirement of payment within a period between 30 to 60 days after reconciliation of insurance premiums with insurer companies if not paid in advance. The Company has elected the practical expedient to not assess whether a significant financing component exists if the period between when we transfer a promised good or service to a customer and when the customer pays for that good or service is one year or less.

Additionally, the Company has applied the following practical expedients: 1) not to disclose the transaction price allocated to unsatisfied or partially unsatisfied performance obligations that are part of a contract that has an original expected duration of one year or less, and 2) to not capitalize incremental costs of obtaining a contract if the amortization would be less than 12 months.

**ZHIBAO TECHNOLOGY INC. NOTES TO CONSOLIDATED** **FINANCIAL STATEMENTS**

**2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES** (cont.)

*Disaggregation of revenue*

For the fiscal years ended June 30, 2023, 2024 and 2025, substantially all of the Company's revenue was generated in the PRC. The Company disaggregate revenue into two revenue streams as the following table:

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| | | | |
|:---|:---|:---|:---|
|  | **For the Years Ended June 30,** | **For the Years Ended June 30,** | **For the Years Ended June 30,** |
|  | **2023** | **2024** | **2025** |
|  | **RMB** | **RMB** | **RMB** |
| Insurance brokerage service fees | 119765046 | 174056644 | 273799682 |
| MGU service fees | 22814079 | 10198113 | 3463519 |
| Less: business taxes and surcharges | (476291) | (585431) | (327171) |
| **Total revenues** | 142102834 | 183669326 | 276936030 |

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The Company disaggregates revenue by transferal of services as the following table:

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| | | | |
|:---|:---|:---|:---|
|  | **For the Years Ended June 30,** | **For the Years Ended June 30,** | **For the Years Ended June 30,** |
|  | **2023** | **2024** | **2025** |
|  | **RMB** | **RMB** | **RMB** |
| Services transferred over time | 2208203 | 2226771 | 603819 |
| Services transferred at a point in time | 140370922 | 182027986 | 276659382 |
| Less: business taxes and surcharges | (476291) | (585431) | (327171) |
| **Total revenues** | 142102834 | 183669326 | 276936030 |

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**Cost of Revenues**

Cost of revenue consists primarily of insurance policy acquisition costs, which are service fees paid to various channels for successful sales of insurance policies, promotion costs and labor cost. These costs are charged to the consolidated statements of operations and comprehensive (loss) income as incurred.

**Selling and Marketing Expenses**

Selling and marketing expenses consist primarily of payroll and related expenses for employees involved in selling and marketing activities, rental, brokerage service related promotion and consulting service fee and other expenses.

**General and Administrative Expenses**

General and administrative expenses primarily consist of employee related expenses for administrative functions, costs associated with these functions including facilities and equipment depreciation expenses, share base compensation expenses, rental and other general corporate related expenses.

**Research and Development Expenses**

Research and development expenses primarily consist of employee related expenses for research and development functions, and outsourced research service expenses.

**Value Added Taxes**

The Company's PRC subsidiaries are subject to value-added taxes ("VAT") at a rate of 6% on their services a, less any deductible VAT the Company's PRC subsidiaries have already paid or borne. They are also subject to surcharges on VAT payments in accordance with PRC law.

**ZHIBAO TECHNOLOGY INC. NOTES TO CONSOLIDATED** **FINANCIAL STATEMENTS**

**2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES** (cont.)

**Income Taxes**

The Company accounts for income taxes in accordance with the U.S. GAAP for income taxes. Under the asset and liability method as required by this accounting standard, the recognition of deferred income tax liabilities and assets for the expected future tax consequences of temporary differences between the income tax basis and financial reporting basis of assets and liabilities. Provision for income taxes consists of taxes currently due plus deferred taxes.

The charge for taxation is based on the results for the year as adjusted for items which are non-assessable or disallowed. It is calculated using tax rates that have been enacted or substantively enacted by the balance sheet date.

Deferred tax is accounted for using the balance sheet liability method in respect of temporary differences arising from differences between the carrying amount of assets and liabilities in the consolidated financial statements and the corresponding tax basis. Deferred tax assets are recognized to the extent that it is more likely than not these items will be utilized against taxable income in the future. Deferred tax is calculated using tax rates that are expected to apply to the period when the asset is realized, or the liability is settled. Deferred tax is charged or credited in the income statement, except when it is related to items credited or charged directly to equity. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. Current income taxes are provided in accordance with the laws of the relevant taxing authorities.

An uncertain tax position is recognized as a benefit only if it is "more likely than not" that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely to be realized on examination. Penalties and interest incurred related to underpayment of income tax are classified as income tax expense in the period incurred. According to PRC Tax Administration and Collection Law, the statute of limitations is three years if the underpayment of taxes is due to computational errors made by the taxpayer or withholding agent. The statute of limitations will be extended to five years under special circumstances, which are not clearly defined (but an underpayment of tax liability exceeding RMB0.1 million is specifically listed as a special circumstance). In the case of a related party transaction, the statute of limitations is ten years. There is no statute of limitations in the case of tax evasion.

**Warrant Liabilities**

The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant's specific terms and applicable authoritative guidance in Financial Accounting Standards Board ("FASB") ASC 480, Distinguishing Liabilities from Equity ("ASC 480") and ASC 815, Derivatives and Hedging ("ASC 815"). The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company's own ordinary shares and whether the warrant holders could potentially require "net cash settlement" in a circumstance outside of the Company's control, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding.

For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of equity at the time of issuance.

**Share-based Compensation**

The Company grants share options, restricted shares and ordinary shares to its management, employees and third-party service providers.

For share-based awards granted to management and employees, the Company measures the cost of share options and restricted shares based on the grant-date fair value of the awards and recognizes compensation cost over the vesting period, which is generally the requisite service period as specified in the applicable award agreements. When no future services are required to be performed in exchange for an award of equity instruments, the cost of the award is expensed on the grant date. The Company elects to recognize forfeitures when they occur.

**ZHIBAO TECHNOLOGY INC. NOTES TO CONSOLIDATED** **FINANCIAL STATEMENTS**

**2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES** (cont.)

For share-based awards granted to third-party service providers, the Company measures the cost of equity instruments issued in exchange for services at the fair value of the equity instruments on the date the services are completed or the equity instruments are issued, whichever is earlier, and recognizes the expense when the related services are rendered.

The Company utilizes the binomial option pricing model to determine the fair value of share options and utilizes the discounted cash flow method or quoted market prices, when available, to determine the fair value of restricted shares or ordinary shares at the relevant measurement date.

**Government Grants**

Government grants include cash subsidies as well as other subsidies receivable from various government agencies by the subsidiaries of the Company. Government grants are recognized as other income when all conditions attached to the grants are fulfilled and collection is reasonably assured, and recorded in the consolidated statements of operations and comprehensive (loss) income. For the year ended June 30, 2025, the government did not approve the application of government grants of RMB 1,800,000. As of June 30, 2024, the Company had recorded government grants receivable of RMB 1,800,000, as management believed, based on the information available as of that date, that all substantive conditions attached to the grants had been satisfied and that approval and collection of the grants were reasonably assured. However, during the year ended June 30, 2025, the applications for such government grants were not approved by the relevant government authority, and the Company reversed the related government grants receivable and adjusted other income accordingly.

**(Loss) Earnings per Share**

In accordance with ASC 260, Earnings Per Share, basic net (loss) earnings per share is computed by dividing net (loss) income attributable to ordinary shareholders by the weighted average number of ordinary shares outstanding during the year using the two-class method. Under the two-class method, net (loss) income is allocated between ordinary shares and other participating securities based on dividends declared (or accumulated) and participating rights in undistributed earnings as if all the earnings for the reporting period had been distributed.

Diluted net (loss) earnings per share is calculated by dividing net (loss) income attributable to ordinary shareholders by the weighted average number of ordinary and dilutive ordinary equivalent shares outstanding during the period. Ordinary share equivalents are excluded from the computation in (loss) income periods should their effects be anti-dilutive.

**Commitments and Contingencies**

Certain conditions may exist as of the date the consolidated financial statements are issued, which may result in a loss to the Company but which will only be resolved when one or more future events occur or fail to occur. The Company's management and its legal counsel assess such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company or unasserted claims that may result in such proceedings, the Company's legal counsel evaluates the perceived merits of any legal proceedings or unasserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein.

If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company's consolidated financial statements. If the assessment indicates that a potentially material loss contingency is not probable, but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, together with an estimate of the range of possible loss if determinable and material, would be disclosed. Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the nature of the guarantee would be disclosed.

**ZHIBAO TECHNOLOGY INC. NOTES TO CONSOLIDATED** **FINANCIAL STATEMENTS**

**2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES** (cont.)

**Segment Reporting**

ASC 280, Segment Reporting, establishes standards for companies to report in their financial statements information about operating segments, products, services, geographic areas, and major customers. Operating segments are defined as components of an enterprise engaging in businesses activities for which separate financial information is available that is regularly evaluated by the Company's chief operating decision makers in deciding how to allocate resources and assess performance. The Company's chief operating decision maker ("CODM") has been identified as the Chief Executive Officer, who reviews consolidated results including revenue, gross profit and operating profit at a consolidated level only. The Company does not distinguish between markets for the purpose of making decisions about resources allocation and performance assessment. Therefore, the Company has only one operating segment and one reportable segment.

Operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker ("CODM"), or decision making group, in deciding how to allocate resources and in assessing performance. The Company's CODM is the Chief Executive Officer.

The Company's CODM relies upon the consolidated results of operations as a whole when making decisions about allocating resources and assessing the performance of the Company. As a result of the assessment made by CODM, the Company has only one principal reportable segment as defined by ASC 280. The Company has concluded that consolidated net (loss) income is the measure of segment profitability. The CODM assesses performance for the Company, monitors budget versus actual results, and determines how to allocate resources based on consolidated net (loss) income as reported in the consolidated statements of operations.

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **For the Year Ended June 30,** | **For the Year Ended June 30,** | **For the Year Ended June 30,** | **For the Year Ended June 30,** |
|  | **2023** | **2024** | **2025** | **2025** |
|  | **RMB** | **RMB** | **RMB** | **USD<br> (Note 2)** |
| Revenues | 142102834 | 183669326 | 276936030 | 38658779 |
| Cost of revenues | (83485203) | (108908547) | (163366825) | (22805129) |
| Other operating expenses | (103170372) | (64653628) | (167107209) | (23327267) |
| Other income (expenses), net | 1995421 | 8655375 | (11092304) | (1548426) |
| Income tax (expenses) benefits | (541460) | (5510773) | 2610709 | 364441 |
| **Net (loss) income** | **(43098780)** | **13251753** | **(62019599)** | **(8657602)** |

---

The Company does not distinguish between markets or segments for the purpose of internal reporting. The Company's long-lived assets are all located in the PRC and substantially all of the Company's revenues are derived from the PRC. Therefore, no geographical segments are presented.

**ZHIBAO TECHNOLOGY INC. NOTES TO CONSOLIDATED** **FINANCIAL STATEMENTS**

**2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES** (cont.)

**Concentration and Credit Risk**

1) Credit risk

Assets that potentially subject the Company to significant concentration of credit risk primarily consist of cash and cash equivalents. The maximum exposure of such assets to credit risk is their carrying amount as at the balance sheet dates. As of June 30, 2024 and 2025, RMB 2,401,495 and RMB 6,119,295 (US$854,221) were deposited in financial institutions in the PRC, and each bank accounts is insured by the government authority with the maximum limit of RMB 500,000. To limit exposure to credit risk relating to deposits, the Company primarily place cash and cash equivalent deposits with large financial institutions in China which management believes are of high credit quality and the Company also continually monitors their credit worthiness.

The risk with respect to accounts receivable and amounts due from related parties is mitigated by credit evaluations the Company performs on its customers and its ongoing monitoring processes of outstanding balances. The Company's operations are carried out in China. Accordingly, the Company's business, financial condition and results of operations may be influenced by the political, economic and legal environments in the PRC as well as by the general state of the PRC's economy. In addition, the Company's business may be influenced by changes in governmental policies with respect to laws and regulations, anti-inflationary measures, currency conversion and remittance abroad, rates and methods of taxation among other factors.

2) Foreign currency risk

Substantially all of the Company's operating activities that were conducted through the subsidiaries in China and related assets and liabilities are denominated in RMB, which is not freely convertible into foreign currencies. All foreign exchange transactions take place either through the Peoples' Bank of China ("PBOC") or other authorized financial institutions at exchange rates quoted by PBOC. Approval of foreign currency payments by the PBOC or other regulatory institutions requires submitting a payment application form together with suppliers' invoices and signed contracts. The value of RMB is subject to changes in central government policies and to international economic and political developments affecting supply and demand in the China Foreign Exchange Trading System market.

3) Concentration risks

Accounts receivable are typically unsecured and derived from goods sold and services rendered to customers that are located primarily in China, thereby exposed to credit risk. The risk is mitigated by the Company's assessment of customers' creditworthiness and its ongoing monitoring of outstanding balances. The Company has a concentration of its receivables and revenues with specific customers. As of June 30, 2024, three customers accounted for 18%, 15% and 10% of accounts receivable, respectively. As of June 30, 2025, one customer accounted for 11% of accounts receivable.

For the fiscal year ended June 30, 2023, one customer accounted for 12% of revenues. For the fiscal year ended June 30, 2024, two customer accounted for 14% and 13% of revenues, respectively. For the fiscal year ended June 30, 2025, two customers accounted for 22% and 14% of revenues.

As of June 30, 2024, one vendor accounted for 26% of accounts payable. As of June 30, 2025, one vendor accounted for 13% of accounts payable.

**ZHIBAO TECHNOLOGY INC. NOTES TO CONSOLIDATED** **FINANCIAL STATEMENTS**

**2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES** (cont.)

**Concentration and Credit Risk (cont.)**

3) Concentration risks (cont.)

For the fiscal year ended June 30, 2023, three vendors accounted for 25%, 13% and 11% of cost of revenues, respectively. For the fiscal year ended June 30, 2024, one vendor accounted for 11% of cost of revenues. For the fiscal year ended June 30, 2025, one vendor accounted for 22% of cost of revenues.

4) Other risks

The Company's business, financial condition and results of operations may also be negatively impacted by risks related to natural disasters, extreme weather conditions, health epidemics and other catastrophic incidents, such as the COVID-19 outbreak and spread, which could significantly disrupt the Company's operations.

***Recently adopted accounting standards***

 ****

In November 2023, the FASB issued ASU 2023-07, *Segment Reporting (Topic ASC 280) Improvements to Reportable Segment Disclosures* ("ASU 2023-07"). The ASU improves reportable segment disclosure requirements, primarily through enhanced disclosure about significant segment expenses. The enhancements under this update require disclosure of significant segment expenses that are regularly provided to the CODM and included within each reported measure of segment profit or loss, require disclosure of other segment items by reportable segment and a description of the composition of other segment items, require annual disclosures under ASC 280 to be provided in interim periods, clarify use of more than one measure of segment profit or loss by the CODM, require that the title of the CODM be disclosed with an explanation of how the CODM uses the reported measures of segment profit or loss to make decisions, and require that entities with a single reportable segment provide all disclosures required by this update and required under ASC 280. The Company adopted ASU 2023-07 for the annual period ended June 30, 2025. The adoption of this standard did not have a material impact to our results of operations, cash flows or financial condition.

In August 2020, the FASB issued ASU 2020-06, Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity's Own Equity (Subtopic 815 – 40), ("ASU 2020-06"). ASU 2020-06 simplifies the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts on an entity's own equity. We adopted ASU 2020-06 on July 1, 2024. The adoption of ASU 2020-06 did not have a material impact on our consolidated financial statements and disclosures.

**ZHIBAO TECHNOLOGY INC. NOTES TO CONSOLIDATED** **FINANCIAL STATEMENTS**

**2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES** (cont.)

**Recently Issued Accounting Standards**

The Company is an "emerging growth company" ("EGC") as defined in the Jumpstart Our Business Startups Act of 2012 (the "JOBS Act"). Under the JOBS Act, EGC can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act until such time as those standards apply to private companies. As a result, the Company's operating results and financial statements may not be comparable to the operating results and financial statements of other companies who have adopted the new or revised accounting standards.

On September 29, 2025, the FASB issued ASU 2025-07, "Derivatives and Hedging ("Topic 815") and Revenue from Contracts with Customers ("Topic 606")", which (1) refines the scope of the guidance on derivatives in ASC 815 ("Issue 1") and (2) clarifies the guidance on share-based payments from a customer in ASC 606 ("Issue 2"). The ASU is intended to address concerns about the application of derivative accounting to contracts that have features based on the operations or activities of one of the parties to the contract and to reduce diversity in the accounting for share-based payments in revenue contracts. ASU 2025-07 is effective for annual reporting periods beginning after December 15, 2026, including interim reporting periods within those annual reporting periods. Early adoption of the standard is permitted in an interim or annual reporting period for which financial statements have not been issued or made available for issuance. If an entity elects to early adopt the standard in an interim period, the entity must apply the standard as of the beginning of the fiscal year that includes the interim period. Further, an entity that elects to early adopt the ASU is required to early adopt the guidance for both Issue 1 and Issue 2 in the standard.

On July 30, 2025, the FASB issued ASU 2025-05 , "Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets", which amends ASC 326-20 to provide a practical expedient for all entities which elect a practical expedient that assumes that current conditions as of the balance sheet date do not change for the remaining life of the asset in developing reasonable and supportable forecasts as part of estimating expected credit losses, and an accounting policy election for all entities, other than a public business entity, that elect the practical expedient related to the estimation of expected credit losses for current accounts receivable and current contract assets that arise from transactions accounted for under ASC 606. Under ASU 2025-05, an entity is required to disclose whether it has elected to use the practical expedient and, if so, whether it has also applied the accounting policy election. An entity that makes the accounting policy election is required to disclose the date through which subsequent cash collections are evaluated. ASU 2025-05 is effective for annual reporting periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods, with early adoption permitted. Entities should apply the new guidance prospectively. The Company is currently evaluating these new disclosure requirements and does not expect the adoption to have a material impact.

In November 2024, the FASB issued ASU 2024-03, "Income Statement — Reporting Comprehensive Income (Subtopic 220-40): Disaggregation of Income Statement Expenses." This pronouncement introduces new disclosure requirements aimed at enhancing transparency in financial reporting by requiring disaggregation of specific income statement expense captions. Under the new guidance, entities are required to disclose a breakdown of certain expense categories, such as: employee compensation; depreciation; amortization, and other material components. The disaggregated information can be presented either on the face of the income statement or in the notes to the financial statements, often using a tabular format. The ASU is effective for fiscal years beginning after December 15, 2026, and interim periods within those fiscal years. In January 2025, the FASB issued ASU 2025-01, "Income Statement – Comprehensive Income – Expense Disaggregation Disclosure (Subtopic 220-40): Clarifying the Effective Date." This pronouncement revises the effective date of ASU 2024-03 and clarifies that all public business entities are required to adopt the guidance in annual reporting periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027. Entities within the ASU's scope are permitted to early adopt the accounting standard update. The Company is currently evaluating these new disclosure requirements and does not expect the adoption to have a material impact.

**ZHIBAO TECHNOLOGY INC. NOTES TO CONSOLIDATED** **FINANCIAL STATEMENTS**

**2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES** (cont.)

**Recently Issued Accounting Standards** (cont.)

In December 2023, the FASB issued ASU 2023-09, which is an update to Topic 740, Income Taxes. The amendments in this update related to the rate reconciliation and income taxes paid disclosures improve the transparency of income tax disclosures by requiring (1) adding disclosures of pretax income (or loss) and income tax expense (or benefit) to be consistent with U.S. Securities and Exchange Commission (the "SEC") Regulation S-X 210.4-08(h), Rules of General Application — General Notes to Financial Statements: Income Tax Expense, and (2) removing disclosures that no longer are considered cost beneficial or relevant. For public business entities, the amendments in this Update are effective for annual periods beginning after December 15, 2024. For entities other than public business entities, the amendments are effective for annual periods beginning after December 15, 2025. Early adoption is permitted for annual financial statements that have not yet been issued or made available for issuance. The amendments in this update should be applied on a prospective basis. Retrospective application is permitted. The Company is in the process of evaluating the impact of ASU 2023-09 on the consolidated financial statements.

In October 2023, the FASB issued ASU 2023-06, Disclosure Improvements — Codification Amendments in Response to SEC's Disclosure Update and Simplification Initiative which amend the disclosure or presentation requirements of codification subtopic 230-10 Statement of Cash Flows — Overall, 250-10 Accounting Changes and Error Corrections — Overall, 260-10 Earnings Per Share — Overall, 270-10 Interim Reporting — Overall, 440-10 Commitments — Overall, 470-10 Debt — Overall, 505-10 Equity — Overall, 815-10 Derivatives and Hedging — Overall, 860-30 Transfers and Servicing — Secured Borrowing and Collateral, 932-235 Extractive Activities — Oil and Gas — Notes to Financial Statements, 946-20 Financial Services — Investment Companies — Investment Company Activities, and 974-10 Real Estate — Real Estate Investment Trusts — Overall. The amendments represent changes to clarify or improve disclosure and presentation requirements of the above subtopics. Many of the amendments allow users to more easily compare entities subject to the SEC's existing disclosures with those entities that were not previously subject to the SEC's requirements. Also, the amendments align the requirements in the codification with the SEC's regulations. For entities subject to existing SEC disclosure requirements or those that must provide financial statements to the SEC for securities purposes without contractual transfer restrictions, the effective date aligns with the date when the SEC removes the related disclosure from Regulation S-X or Regulation S-K. Early adoption is not allowed. For all other entities, the amendments will be effective two years later from the date of the SEC's removal. The Company is in the process of evaluating the impact of ASU 2023-06 on the consolidated financial statements.

In March 2024, the FASB issued ASU 2024-01, "Compensation - Stock Compensation (Topic 718) - Scope Application of Profits Interest and Similar Awards" ("ASU 2024-01"), which intends to improve clarity and operability without changing the existing guidance. ASU 2024-01 provides an illustrative example intended to demonstrate how entities that account for profits interest and similar awards would determine whether a profits interest award should be accounted for in accordance with Topic 718. Entities can apply the guidance either retrospectively to all prior periods presented in the financial statements or prospectively to profits interest and similar awards granted or modified on or after the date of adoption. ASU 2024-01 is effective for annual periods beginning after December 15, 2024, and interim periods within those annual periods. Early adoption is permitted for both interim and annual financial statements that have not yet been issued or made available for issuance. The Company is in the process of evaluating the impact of ASU 2023-06 on the consolidated financial statements.

Other accounting standards that have been issued by FASB that do not require adoption until a future date are not expected to have a material impact on the consolidated financial statements upon adoption. The Company does not believe other recently issued but not yet effective accounting standards, if currently adopted, would have a material effect on the consolidated balance sheets, consolidated statements of operations and comprehensive income (loss), and consolidated statements of cash flows.

**ZHIBAO TECHNOLOGY INC. NOTES TO CONSOLIDATED** **FINANCIAL STATEMENTS**

**3 — ACCOUNTS RECEIVABLE**

As of June 30, 2024 and 2025, accounts receivable consisted of the following:

---

| | | |
|:---|:---|:---|
|  | **June 30,<br> 2024** | **June 30,<br> 2025** |
|  | **RMB** | **RMB** |
| Accounts receivable | 144670083 | 140731559 |
| Less: Allowance for credit losses | (14315654) | (26660972) |
|  | **130354429** | **114070587** |

---

For the fiscal years ended June 30, 2023, 2024 and 2025, the movement of allowance against expected credit losses was as the following:

---

| | | | |
|:---|:---|:---|:---|
|  | **June 30, <br> 2023** | **June 30, <br> 2024** | **June 30, <br> 2025** |
|  | **RMB** | **RMB** | **RMB** |
| Opening balance | 303038 | 1852816 | 14315654 |
| Adjustment of opening balance due to adoption of ASU 2016-13 |  | 8821129 |  |
| Provision of expected credit losses | 1852816 | 4031265 | 12345318 |
| Writing off accounts receivable | (303038) | (389556) |  |
| **Ending balance** | **1852816** | **14315654** | **26660972** |

---

**4 — PREPAID EXPENSES AND OTHER CURRENT ASSETS, NET**

As of June 30, 2024 and 2025, prepaid expenses and other current assets, net consisted of the following:

---

| | | |
|:---|:---|:---|
|  | **June 30,<br> 2024** | **June 30,<br> 2025** |
|  | **RMB** | **RMB** |
| Advance to staff | 2087034 | 2604854 |
| Deposits<sup>(a)</sup> | 1600863 | 1928641 |
| Prepaid expenses | 610404 | 940146 |
| Value-added tax recoverable | 1210092 | 808479 |
| Employee loan | 1900000 | 300000 |
| Government grants receivable | 1800000 |  |
| Others | 629026 | 593920 |
|  | 9837419 | 7176040 |
| Less: Allowance for credit losses | (351955) | (351955) |
| **Total prepayments and other current assets, net** | **9485464** | **6824085** |

---

&nbsp;&nbsp;&nbsp;&nbsp;(a) The balance of deposits primarily consisted of office rental deposits and deposits made with distribution channels.

**ZHIBAO TECHNOLOGY INC. NOTES TO CONSOLIDATED** **FINANCIAL STATEMENTS**

**4 — PREPAID EXPENSES AND OTHER CURRENT ASSETS, NET** (cont.)

The movement of the expected credit loss against prepaid expenses and other receivables for the years ended June 30, 2023, 2024 and 2025 is as follows:

---

| | | | |
|:---|:---|:---|:---|
|  | **June 30, <br> 2023** | **June 30, <br> 2024** | **June 30, <br> 2025** |
|  | **RMB** | **RMB** | **RMB** |
| Opening balance | 263018 | 264888 | 351955 |
| Provision of expected credit losses | 1870 | 87067 |  |
| **Ending balance** | **264888** | **351955** | **351955** |

---

**5 — INTANGIBLE ASSETS, NET**

As of June 30, 2024 and 2025, intangible assets, net consisted of the following:

---

| | | |
|:---|:---|:---|
|  | **June 30,<br> 2024** | **June 30,<br> 2025** |
|  | **RMB** | **RMB** |
| Software | 6167067 | 6167067 |
| Less: accumulated amortization | (3586021) | (4627630) |
|  | **2581046** | **1539437** |

---

For the fiscal years ended June 30, 2023, 2024 and 2025, amortization expenses were RMB 920,418, RMB 1,064,363 and RMB 1,041,609 (US$145,403), respectively.

The following is a schedule, by years, of amortization of intangible assets as of June 30, 2025:

---

| | | |
|:---|:---|:---|
|  | **June 30,<br> 2025** | **June 30,<br> 2025** |
|  | **RMB** | **RMB** |
| For the year ending June 30, 2026 |  | 540134 |
| For the year ending June 30, 2027 |  | 540134 |
| For the year ending June 30, 2028 |  | 312995 |
| For the year ending June 30, 2029 | | 146,174 |
|  | | **1,539,437** |

---

**ZHIBAO TECHNOLOGY INC. NOTES TO CONSOLIDATED** **FINANCIAL STATEMENTS**

**6 — LEASES**

As of June 30, 2024 and 2025, Zhibao China Group leases office spaces in different cities in the PRC under non-cancelable operating leases, with terms ranging between 12 months and 60 months. The Company considers those renewal or termination options that are reasonably certain to be exercised in the determination of the lease term and initial measurement of right of use assets and lease liabilities. Lease expense for lease payment is recognized on a straight-line basis over the lease term.

The Company determines whether a contract is or contains a lease at inception of the contract and whether that lease meets the classification criteria of a finance or operating lease. When available, the Company uses the rate implicit in the lease to discount lease payments to present value; however, most of the leases do not provide a readily determinable implicit rate. Therefore, the Company discount lease payments based on an estimate of the incremental borrowing rate.

For operating leases that include rent holidays and rent escalation clauses, the Company recognizes lease expense on a straight-line basis over the lease term from the date it takes possession of the leased property. The Company records the straight-line lease expense and any contingent rent, if applicable, in general and administrative expenses on the consolidated statements of operations and comprehensive (loss) income. The corporate office lease also requires the Company to pay real estate taxes, common area maintenance costs and other occupancy costs which are included in the general and administrative expenses on the consolidated statements of operations and comprehensive (loss) income. The lease agreements do not contain any material residual value guarantees or material restrictive covenants.

For short-term leases, the Company records operating lease expense in its consolidated statements of operations and comprehensive (loss) income on a straight-line basis over the lease term and record variable lease payments as incurred.

The table below presents the operating lease related assets and liabilities recorded on the consolidated balance sheets.

---

| | | |
|:---|:---|:---|
|  | **June 30,<br> 2024** | **June 30,<br> 2025** |
|  | **RMB** | **RMB** |
| Right of use assets | 3313215 | 3976798 |
| Operating lease liabilities, current | 2425135 | 2078397 |
| Operating lease liabilities, noncurrent | 1044068 | 1934528 |
| **Total operating lease liabilities** | **3469203** | **4012925** |

---

Other information about the Company's leases is as follows:

---

| | | | |
|:---|:---|:---|:---|
|  | **June 30, <br> 2023** | **June 30, <br> 2024** | **June 30, <br> 2025** |
|  | **RMB** | **RMB** | **RMB** |
| Operating cash flows used in operating leases | 2144171 | 1999242 | 2175762 |
| Weighted average remaining lease term (years) | 2.25 | 1.67 | 1.99 |
| Weighted average discount rate | 4.75% | 4.55% | 3.86% |

---

Operating lease expenses were RMB 2,618,366, RMB 2,335,152 and RMB 2,353,117 (US$328,482), respectively, for the fiscal years ended June 30, 2023, 2024 and 2025, among which RMB nil, RMB 235,815 and RMB 255,335 (US$35,643) were incurred for short-term lease arrangements for the fiscal years ended June 30, 2023, 2024 and 2025, respectively.

**ZHIBAO TECHNOLOGY INC. NOTES TO CONSOLIDATED** **FINANCIAL STATEMENTS**

**6 — LEASES** (cont.)

The following is a schedule, by years, of maturities of lease liabilities as of June 30, 2025:

---

| | |
|:---|:---|
|  | **June 30,<br> 2025** |
|  | **RMB** |
| For the year ending June 30, 2026 | 2149526 |
| For the year ending June 30, 2027 | 1463930 |
| For the year ending June 30, 2028 | 523235 |
| Total lease payments | 4136691 |
| Less: imputed interest | (123766) |
| Present value of lease liabilities | **4012925** |

---

**7 — DEPOSIT OF LONG-TERM INVESTMENTS**

Deposit of long-term investments represented cash consideration advanced to the shareholders of certain equity investees. As of June 30, 2024 and 2025, deposit of long-term investments consisted of the following:

---

| | | |
|:---|:---|:---|
|  | **June 30,<br> 2024** | **June 30,<br> 2025** |
|  | **RMB** | **RMB** |
| Deposit of investment in Zhonglian Jinan Insurance Brokers Co., Ltd. ("Zhonglian") – deposit related to an acquisition in progress (a) |  | 6700000 |
| Deposit for non-controlling interests in other investees (b) |  | 5775000 |
|  |  | **12475000** |

---

(a) On July 2, 2025, Zhibao China entered into a Share Purchase
Agreement (the "SPA") with Zhonglian and its shareholders of Zhonglian. Pursuant to the terms and conditions set forth in
the SPA, Zhibao China agreed to acquire an aggregate of 51% of the equity interest in Zhonglian for a total purchase price of RMB25.5
million (the "Acquisition"). As of June 30, 2025, the Company made deposits of RMB 6,700,000 to the shareholders of Zhonglian.
Upon the closing of the Acquisition, the Company would consolidate the financial statements of Zhonglian in its consolidated financial
statements.

(b) For the year ended June 30, 2025, Zhibao China also made
deposits aggregating RMB 5,775,000 to three investees over which the Company had no control nor significant influence. Upon closing of
the investment, the Company would elect to record the equity investments in privately held companies using the measurement alternative
at cost, less impairment, with subsequent adjustments for observable price changes resulting from orderly transactions for identical
or similar investments of the same issuer.

**ZHIBAO TECHNOLOGY INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS**

**8 — SHORT-TERM BANK BORROWINGS**

As of June 30, 2024 and 2025, short-term bank borrowings consisted of the following:

---

| | | |
|:---|:---|:---|
|  | **June 30,<br> 2024** | **June 30,<br> 2025** |
|  | **RMB** | **RMB** |
| China Merchant Bank ("CMB")<sup>(a)</sup> | 20000000 | 20000000 |
| Bank of Shanghai ("BOS")<sup>(b)</sup> | 5000000 |  |
| China Construction Bank ("CCB")<sup>(c)</sup> | 1814237 | 1800000 |
|  | **26814237** | **21800000** |

---

&nbsp;&nbsp;&nbsp;&nbsp;(a) In October 2020, Zhibao China Group entered into an extended three-year bank credit facility with CMB under which Zhibao China Group can draw-down up to RMB 30,000,000 by October 14, 2023. In October 2023, Zhibao China Group entered into an extended three-year bank credit facility with CMB under which Zhibao China Group can draw-down up to RMB 30,000,000 by October 2026. The credit facility was collateralized by properties owned by Mr. Botao Ma, the founder and Chief Executive Officer of the Company. In addition, the credit facility was also mutually guaranteed by Mr. Botao Ma and Ms Xiaohong Huang, the wife of Mr. Botao Ma. The borrowings bore interest rate ranging between 2.75% and 3.45% per annum. The term for each borrowing is one year.

For the years ended June 30, 2023, 2024 and 2025, Zhibao China Group drew down RMB 28,300,000, RMB 20,000,000 and RMB 40,000,000 (US$5,583,785) from CMB, and repaid RMB 23,300,000, RMB 25,000,000 and RMB 40,000,000 (US$5,583,785), respectively.

&nbsp;&nbsp;&nbsp;&nbsp;(b) In September 2023, Zhibao China Group borrowed RMB 5,000,000 from BOS with maturity date due in September 2024. The loan was mutually guaranteed by Mr. Botao Ma and China Financing Guarantee Association for . The borrowings bore interest rate of 3.65% per annum. In September 2024, the Company repaid the borrowing.

&nbsp;&nbsp;&nbsp;&nbsp;(c) Zhibao China Group borrowed loans of RMB 1,900,000 from CCB in November 2022. The borrowing bore interest rate of 3.85% per annum. For the year ended June 30, 2024 and 2025, the Company repaid borrowings of RMB 85,763 and RMB 14,237, respectively. Interest expenses were RMB1,241,082, RMB986,785 and RMB 978,468 for short-term borrowings for the fiscal years ended June 30, 2023, 2024 and 2025. The weighted average interest rates of bank borrowings were 3.52% and 2.89% per annum as of June 30, 2024 and 2025, respectively.

**ZHIBAO TECHNOLOGY INC. NOTES TO CONSOLIDATED** **FINANCIAL STATEMENTS**

**9 — ACCRUED EXPENSES AND OTHER LIABILITIES**

As of June 30, 2024 and 2025, accrued expenses and other liabilities consisted of the following:

---

| | | |
|:---|:---|:---|
|  | **June 30,<br> 2024** | **June 30,<br> 2025** |
|  | **RMB** | **RMB** |
| VAT and other taxes payable | 5462014 | 2446880 |
| Accrued payroll and welfare | 3148555 | 2864484 |
| Due to insurance carriers | 1357228 | 1413757 |
| Deposits payable | 995778 | 1125778 |
| Other payables to suppliers (1) | 5027395 | 4198887 |
|  | **15990970** | **12049786** |

---

&nbsp;&nbsp;&nbsp;&nbsp;(1) Other payable mainly includes payable to suppliers for promotion service, daily operation and other service.

**10 — SUBSCRIPTION FEES ADVANCED FROM ONE INVESTOR**

Before June 30, 2020, Zhibao China issued redeemable preferred shares to one investor for its cash consideration of RMB 15 million. As of June 30, 2020, 6,521,739 Series Pre-A redeemable preferred shares of Zhibao China was issued and outstanding, which accounted for approximately 12.20% equity interest in Zhibao China.

During the IPO reorganization, such investor withdrew its equity interest in Zhibao China, planned to contribute the same amount of said withdrawn capital to Zhibao directly, and Zhibao planned to approve the issuance of shares to such investor for the consideration of RMB 15 million. The Company believed that it was appropriate to reflect the above transactions on a retroactive basis pursuant to ASC 260, Earnings Per Share.

On April 12, 2024, the Company entered into the agreement with such investor. Pursuant to the agreement, the Company settled this liability at the consideration of RMB 6,003,659, which was paid by Shanghai Xinhui Investment Consulting Co., Ltd, a related party (see Note 17). The difference between RMB 6,003,659 and the carrying amount of the liability was recognized as the gain on extinguishment of liability.

**11 — CONVERTIBLE NOTES**

On September 23, 2024, the Company entered into a securities purchase agreement (the "Securities Purchase Agreement") with an institutional investor (the "Investor"), which provides for loans in an aggregate principal amount of up to $8.0 million under three tranches (the "Financing").

On September 23, 2024, the Company consummated the first closing of the first tranche (the "First Closing of First Tranche") and issued to the Investor, (A) a convertible promissory note in the aggregate principal amount of up to $750,000, (B) a warrant to purchase up to 74,451 Class A ordinary shares at an initial exercise price of $4.71 per share, subject to certain adjustments (the "Purchase Warrants"), and (C) a pre-funded warrant to purchase up to 191,522 shares at a nominal exercise price of $0.0001 per share, subject to certain adjustments (the "Pre-Funded Warrant"). Pre-Funded Warrants may only be exercised upon occurrence of an Event of Default. In return, the Company received $675,000 (net of original issue discount of 10%) on September 24, 2024 in the First Closing of First Tranche, excluding expenses and commissions.

On October 1, 2024, the Company and the Investor consummated the second closing of the First Tranche. The Company received $675,000 (net of original issue discount of 10%) on October 7, 2024 in a second closing of the First Tranche, excluding expenses and commissions (the "Second Closing of First Tranche"). In the Second Closing of First Tranche, the Company issued to the Investor Purchase Warrants to purchase up to 79,599 shares at an initial exercise price of $4.47 per share, subject to certain adjustments.

On December 11, 2024, pursuant to the terms of the Securities Purchase Agreement and the Letter Agreement, the Company and the Investor consummated the third closing of the First Tranche (the "Third Closing of the First Tranche"). The Company received $900,000 (net of original issue discount of 10%) on December 12, 2024, in the Third Closing of the First Tranche, excluding expenses and commissions, and issued to the Investor Purchase Warrants to purchase up to 160,020 shares at an initial exercise price of $3.25 per share, subject to certain adjustments.

**ZHIBAO TECHNOLOGY INC. NOTES TO CONSOLIDATED** **FINANCIAL STATEMENTS**

**11 — CONVERTIBLE NOTES** (cont.)

On February 14, 2025, pursuant to the terms of the Securities Purchase Agreement and the Letter Agreement, the Company and the Investor consummated the first closing of the Second Tranche (the "First Closing of the Second Tranche"). The Company received $630,000 (net of original issue discount of 10%) on February 20, 2025, in the First Closing of the Second Tranche, excluding expenses and commissions, and issued to the Investor Purchase Warrants to purchase up to 202,459 shares at an initial exercise price of $1.70 per share, subject to certain adjustments.

In return, the Company received $2,880,000 (net of original issue discount of 10%) in the four closings and incurred expenses and commissions of $437,509.

The Notes will mature on the first anniversary from its issuance. No interest is charged to the Notes. The key terms of the Notes are as follows:

*Conversion*

The holder of the Notes shall have the right, at such holder's sole discretion, to convert all or any portion of the convertible notes into Class A ordinary shares at any time after September 23, 2024 at following fixed conversion prices.

---

| | |
|:---|:---|
|  | **Initial Conversion Price** |
|  | **US$** |
| First Closing of First Tranche | 4.71 |
| Second Closing of First Tranche | 4.66 |
| Third Closing of First Tranche | 3.06 |
| First Closing of Second Tranche | 1.70 |

---

Effective upon each of the second Closing and third Closing of First Tranche and Second Tranche, as applicable, the Fixed Conversion Price shall be decreased, but in no event increased, to an amount equal to the lowest of 120% of the average three-day VWAP calculated immediately prior to the applicable Closing date. As a result of the application of this VWAP-based adjustment mechanism upon the First Closing of the Second Tranche, the conversion price was adjusted to $1.70 as of June 30, 2025.

If the Company receives a conversion notice to convert the First Tranche convertible notes at a time at which the conversion price is less than $0.7616, the Company shall issue a number of shares equal to the conversion amount divided by $0.7616 and pay the economic difference between the conversion price and $0.7616 in cash. If the Company receives a conversion notice to convert the Second Tranche convertible notes at a time at which the conversion price is less than $0.2820, the Company shall issue a number of shares equal to the conversion amount divided by $0.2820 and pay the economic difference between the conversion price and $0.2820 in cash.

The conversion price is subject to adjustments in the events of i) share splits and combinations, ii) Class A ordinary share dividends and distributions, iii) reclassifications, exchanges, substitutions, and iv) issuance of common stocks, issuance of options, issuance of convertible stocks, change in option price or rate of conversion and issuance of units. In addition, the conversion price is also subject to down-round adjustments including adjustments for issuance of common stocks, issuance of options, issuance of convertible stocks, change in option price or rate of conversion and issuance of units.

*Acceleration*

Upon two trading days' notice to the Company (the date of such notice, the "Monthly Payment Adjustment Notice Date"), the Investor may elect at its sole option, to defer or accelerate up to five (5) Monthly Payments or any portion of a Monthly Payment, to any Trading Day succeeding such Monthly Payment Adjustment Notice Date provided such date precedes the next monthly Payment Date, provided, however, that any such accelerations shall be payable in shares rather than cash. In addition, the Investor and the Company may mutually agree to additional accelerations or deferrals in excess of the up to five (5) accelerations or deferrals provided for above.

*Repayment*

Commencing on the earlier of (i) the 60-day anniversary of September 23, 2024 and (ii) the date on which the Resale Registration Statement registering the conversion shares issuable under this Note shall have been declared effective by the SEC, the Company shall pay 105% of the total principal in monthly installments to the Holder of the Notes.

**ZHIBAO TECHNOLOGY INC. NOTES TO CONSOLIDATED** **FINANCIAL STATEMENTS**

**11 — CONVERTIBLE NOTES** (cont.)

The monthly payments shall be payable in cash; provided, however, that the Company may elect to pay all or part of a monthly payment in the form of conversion shares in the following formula: (A) the monthly payment for such month shall be 100% of the total principal amount multiplied by the quotient determined by dividing one by the remaining number of months divided by (B) a price per share equal to the lesser of (i) the fixed conversion price then in effect, and (ii) 93.5% of the average of the four (4) lowest daily VWAPs during the 15 Trading Day period immediately preceding the applicable payment date, provided that such price shall not be less than $0.7616 for the First Tranche Convertible Notes or $0.2820 for the Second Tranche Convertible Notes.

The Company is also obliged to transfer make whole shares in the event that the 93.5% of market price prevailing on 15 trading days succeeding the payment dates is less than the conversion price. The number of make whole shares equals to the difference between the number of conversion shares the Holder received in monthly payment and the number of conversion shares which the Holder would have received had the succeeding market price applied to such monthly payment.

As of June 30, 2025, the Company has fully settled the note issued in First Closing of First Tranche with principal amount of $750,000, the note issued in Second Closing of First Tranche with principal amount of $750,000 and note issued in Third Closing of First Tranche with principal amount of $1,000,000, and partially settled the note issued in the First closing of Second Tranche with principal amount of $210,000 by issuance of an aggregate of 1,384,809 Class A ordinary shares and payment of cash consideration of $734,935 to the Investor.

*Accounting for the Convertible Notes*

 

The Company has classified the convertible notes as liabilities under ASC 470 because it is a debt in its legal form. The Company determined that the conversion feature within the Notes meet the definition of embedded derivatives and the Group estimated a fair value of the derivative liability using the Binominal Tree Model at the date of issuance.

The convertible notes were issued in multiple closings. The Company initially recognized each convertible note at its residual value after allocating the net proceeds of each issuance to the related warrant liabilities (Note 12) and embedded derivative liabilities. Accordingly, the Company allocated net proceeds of $370,328, $420,000, $633,000 and $428,150 to the convertible notes issued in each respective closing.

Subsequently, the Company accretes interest on convertible notes based on effective interest rate. The interest expenses was charged to the account of interest expenses on the consolidated statements of operations and comprehensive loss. For the year ended June 30, 2025, the Company recognized interest expenses of $385,524 on convertible notes.

On settlement of the Notes, the Company adopted extinguishment accounting to derecognize the convertible notes. The Company charged the difference between the carrying amount of the convertible notes in addition to the fair value of related derivative liabilities and the fair value of Class A ordinary shares on payment dates into the account of "loss on settlement of convertible notes" on the consolidated statements of operations and comprehensive (loss) income. For the year ended June 30, 2025, the Company recognized loss on settlement of convertible notes of $1,001,586.

The conversion feature is accounted for as a derivative liability at fair value, with changes in fair value charged to consolidated statements of operations and comprehensive (loss) income. For the year ended June 30, 2025, the Company recognized an increase in fair value of derivative liability of $144,000 of conversion feature.

As of June 30, 2025, the carrying amounts of the Company's convertible notes are RMB 3,510,163 ($490,000), net of unamortized debt discount of RMB 1,800,820 ($251,385).

**ZHIBAO TECHNOLOGY INC. NOTES TO CONSOLIDATED** **FINANCIAL STATEMENTS**

**11 — CONVERTIBLE NOTES** (cont.)

The following table provides quantitative information regarding Level 3 fair value measurements inputs for the Company's derivate liabilities at their measurement dates:

---

| | | | | |
|:---|:---|:---|:---|:---|
| <br>**Issuance Date** | **First<br> Closing of<br> First<br> Tranche**<br>**On<br> September 24,<br> 2024** | **Second<br> Closing of<br> First<br> Tranche**<br>**On <br> October 7,<br> 2024** | **Third<br> Closing of<br> First<br> Tranche**<br>**On<br> December 12,<br> 2024** | **First <br> Closing of<br> Second<br> Tranche**<br>**On <br> February 20,<br> 2025** |
| Risk-free rate | 3.86%~4.02 | 4.28%~4.41 | 4.34%~4.35 | 4.29%~4.33 |
| Estimated volatility rate | 37.57%~42.09 | 38.86%~45.27 | 38.52%~43.00 | 31.36%~38.94 |
| Dividend yield | 0% | 0% | 0% | 0% |
| Bond yield | 8.32% | 8.62% | 8.66% | 8.69% |

---

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
| <br>**Extinguishment date or Balance sheet date** | **First <br> Closing of<br> First<br> Tranche**<br>**On <br> November 22,<br> 2024** | **First <br> Closing of<br> First <br> Tranche**<br>**On <br> December 6,<br> 2024** | **Second <br> Closing of <br> First <br> Tranche**<br>**On <br> December 6,<br> 2024** | **Second<br> Closing of <br> First<br> Tranche**<br>**On<br> December 23,<br> 2024** | **Second <br> Closing of<br> First <br> Tranche**<br>**On <br> January 23,<br> 2025** | **Second <br> Closing of<br> First <br> Tranche**<br>**On <br> February 24,<br> 2025** |
| Risk-free rate | 4.53% | 4.32%~4.42 | 4.41% | 4.39%~4.41 | 4.28% | 4.29% |
| Estimated volatility rate | 37.60% | 38.04%~43.99 | 39.17%~48.45 | 44.96%~49.86% | 34.85%~37.20 | 34.51%~35.04 |
| Dividend yield | 0% | 0% | 0% | 0% | 0% | 0% |
| Bond yield | 8.32% | 8.64% | 8.64% | 8.81% | 8.70% | 8.62% |

---

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| <br>**Extinguishment date or Balance sheet date** | **Third<br> Closing of <br> First<br> Tranche**<br>**On <br> February 24,<br> 2025** | **Third <br> Closing of<br> First <br> Tranche**<br>**On <br> April 1,<br> 2025** | **Third <br> Closing of <br> First<br> Tranche**<br>**On <br> April 23, <br> 2025** | **Third <br> Closing of<br> First <br> Tranche**<br>**On<br> May 23,<br> 2025** | **Third<br> Closing of<br> First<br> Tranche**<br>**On <br> June 23,<br> 2025** |
| Risk-free rate | 4.26%~4.29 | 4.15%~4.24 | 4.08%~4.10 | 4.10~4.29% | 4.25% |
| Estimated volatility rate | 30.21%~40.01 | 21.78%~36.67 | 35.13%~40.10 | 38.65%~42.77 | 38.52% |
| Dividend yield | 0% | 0% | 0% | 0% | 0% |
| Bond yield | 8.62% | 8.49% | 8.63% | 8.65% | 8.51% |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
| <br>**Extinguishment date or Balance sheet date** | **First<br> Closing of<br> Second<br> Tranche**<br>**On <br> April 15, <br> 2025** | **First <br> Closing of<br> Second <br> Tranche**<br>**On<br> June 3,<br> 2025** | **First <br> Closing of<br> Second <br> Tranche**<br>**On<br> June 16, <br> 2025** | **First <br> Closing of<br> Second <br> Tranche**<br>**On<br> June 30, <br> 2025** |
| Risk-free rate | 4.02%~4.11 | 4.17%~4.23 | 4.20%~4.26 | 4.04%~4.09 |
| Estimated volatility rate | 28.96%~40.19 | 28.62%~44.44 | 30.60%~40.75 | 28.25%~39.62 |
| Dividend yield | 0% | 0% | 0% | 0% |
| Bond yield | 8.63% | 8.62% | 8.59% | 8.38% |

---

**ZHIBAO TECHNOLOGY INC. NOTES TO CONSOLIDATED** **FINANCIAL STATEMENTS**

**12 — WARRANT LIABILITIES**

In connection with convertible notes (Note 11), the Company issued Purchase Warrants to the Holder to purchase up to 74,451 Class A ordinary shares, 79,599 Class A ordinary shares, 160,020 Class A ordinary shares and 202,459 Class A ordinary shares, respectively, in the First Closing of First Tranche, Second Closing of First Tranche, Third Closing of First Tranche and First Closing of Second Tranche. Each of the Purchase Warrants will mature on the fifth anniversary since its issuance.

The exercise price for each Purchase Warrants were as the following:

---

| | |
|:---|:---|
|  | **Exercise Price** |
|  | **US$** |
| First Closing of First Tranche | 4.71 |
| Second Closing of First Tranche | 4.47 |
| Third Closing of First Tranche | 3.25 |
| First Closing of Second Tranche | 1.70 |

---

The Purchase Warrants may only be exercised for a whole number of shares. No fractional shares will be issued upon exercise of the Purchase Warrants. The exercise prices of the Purchase Warrants are subject to adjustments in the events of i) share splits and combinations, ii) ordinary share dividends and distributions, iii) reclassifications, exchanges, substitutions, and iv) issuance of Class A ordinary shares, issuance of options, issuance of convertible stocks, change in option price or rate of conversion and issuance of units. If at any time after 90 days after the Initial Exercise Date there is no effective registration statement registering the Purchase Warrant Shares, or the prospectus contained therein is not available for the issuance of the Purchase Warrant Shares to the Holder, then this Purchase Warrant may also be exercised, in whole or in part, at such time by means of a "cashless exercise".

On December 16, 2024, the Company entered into a share subscription facility (the "Share Subscription Facility"), pursuant to which a third-party investor agreed, subject to certain conditions, to subscribe for the Company's Class A ordinary shares. In connection with the Share Subscription Facility, the Company entered into a waiver agreement (the "Waiver Agreement") with the Holder of the Company's convertible notes and purchase warrants. Pursuant to the Waiver Agreement, the Holder agreed to waive certain rights arising under the Securities Purchase Agreement and the related convertible notes, including rights related to price adjustments and other protective provisions, that could otherwise have been triggered by the Company's entry into equity financing arrangements.

On June 22, 2025, upon the Company's entry into an equity purchase agreement with Hudson Global Ventures, LLC, which constituted a triggering event under the Waiver Agreement, the Company issued 240,000 Waiver Warrants to L1 at an exercise price of $1.70 per share, subject to adjustment for subsequent financing transactions.

In addition, pursuant to the anti-dilution and price adjustment provisions of the Purchase Warrants, subsequent financing transactions at prices below the then-current exercise prices resulted in a downward adjustment of the exercise prices of all outstanding Purchase Warrants and Waiver Warrants to $1.70 per share.

The issuance of Purchase Warrants triggered the adjustments of exercise prices for Purchase Warrants issued in the three closings of First Tranche and one closing of Second Tranche. The Company adjusted the Purchase Warrants to the Holder to purchase up to 206,318 Class A ordinary shares, 209,343 Class A ordinary shares, 305,987 Class A ordinary shares and 202,459 Class A ordinary shares, respectively, in the First Closing of First Tranche, Second Closing of First Tranche, Third Closing of First Tranche and First Closing of Second Tranche. The Company adjusted the Waiver Warrants to the Holder to purchase up to 397,411 Class A ordinary shares. The exercise price was decreased to $1.70 for all Purchase Warrants and Waiver Warrants.

As the Purchase Warrants are not indexed to the Company's stock according to ASC 815, therefore, the Purchase Warrants are classified as liability. The Company accounted for warrant liability with fair value changes charged to the account of "changes in fair value of warrant liabilities" on the condensed consolidated statements of operations and comprehensive loss.

On issuance dates, the Company recognized the Purchase Warrants at fair value of $106,000, $120,000, $149,000 and $85,200, respectively. For the year ended June 30, 2025, the Company recognized gain on fair value change of warrant liabilities aggregating $277,200.

**ZHIBAO TECHNOLOGY INC. NOTES TO CONSOLIDATED** **FINANCIAL STATEMENTS**

**12 — WARRANT LIABILITIES** (cont.)

The Waiver Warrants were determined to be derivative liabilities under ASC 815-40, as they are not considered indexed to the Company's own stock due to their variable settlement provisions. The Waiver Warrants constituted newly issued derivative instruments and were initially recognized at fair value on the issuance date.

The issuance of the Waiver Warrants did not result in the replacement or cancellation of the existing convertible notes issued in the first three closings, nor did it modify the notes' principal amounts, stated interest rates, or contractual maturity dates. Instead, the Waiver Warrants were issued as consideration to the holder in exchange for the waiver of certain rights under the existing convertible notes. Accordingly, the Company concluded that the issuance of the Waiver Warrants represented a modification of the existing convertible notes rather than an extinguishment under ASC 470-50.

The fair value of the Waiver Warrants was recorded as an additional debt discount and is amortized over the remaining term of the related credit facility using the effective interest method. As the convertible notes issued in the first three closings were fully repaid on June 23, 2025, the remaining unamortized debt discount related to the Waiver Warrants was expensed immediately upon issuance.

For the year ended June 30, 2025, the Company recognized $76,500 of interest expense related to the debt discount arising from the issuance of the Waiver Warrants.

The fair value of Purchase Warrant and Waiver Warrants was estimated using Black-Scholes model. The following table provides quantitative information regarding Level 3 fair value measurements inputs for the Company's warrants at their measurement dates:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| <br>**Issuance Date** | **First<br> Closing of<br> First <br> Tranche**<br>**On<br> September 24,<br> 2024** | **Second<br> Closing of<br> First<br> Tranche**<br>**On<br> October 7,<br> 2024** | **Third<br> Closing of<br> First <br> Tranche**<br>**On<br> December 12,<br> 2024** | **First<br> Closing of<br> Second<br> Tranche**<br>**On<br> February 20,<br> 2025** | **Waiver<br> Warrants**<br>**On <br> June 22,<br> 2025** |
| Risk-free rate | 3.62% | 4.00% | 4.37% | 4.50% | 3.99% |
| Estimated volatility rate | 43.79% | 43.88% | 44.39% | 40.58% | 38.11% |
| Dividend yield | 0% | 0% | 0% | 0% | 0% |
| Spot price of underling ordinary share | 3.87 | 3.86 | 2.53 | 1.28 | 0.98 |
| Exercise price | 4.71 | 4.47 | 3.25 | 1.70 | 1.70 |
| Fair value of Purchase Warrant in USD | 106000 | 120000 | 149000 | 85200 | 76500 |

---

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
| <br>**Balance Sheet Date** | **First<br> Closing of<br> First<br> Tranche**<br>**On <br> June 30,<br> 2025** | **Second<br> Closing of<br> First<br> Tranche**<br>**On<br> June 30,<br> 2025** | **Third<br> Closing of<br> First<br> Tranche**<br>**On <br> June 30,<br> 2025** | **First<br> Closing of<br> Second<br> Tranche**<br>**On<br> June 30,<br> 2025** | **Waiver<br> Warrants**<br>**On <br> June 30,<br> 2025** |
| Risk-free rate | 3.87% | 3.87% | 3.89% | 3.83% | 3.82% |
| Estimated volatility rate | 37.58% | 37.52% | 38.23% | 37.81% | 38.18% |
| Dividend yield | 0% | 0% | 0% | 0% | 0% |
| Spot price of underling ordinary share | 1.01 | 1.01 | 1.01 | 1.01 | 1.01 |
| Exercise price | 1.70 | 1.70 | 1.70 | 1.70 | 1.70 |
| Fair value of Purchase Warrant in USD | 38800 | 39500 | 62400 | 42300 | 81200 |

---

**ZHIBAO TECHNOLOGY INC. NOTES TO CONSOLIDATED** **FINANCIAL STATEMENTS**

**13 — EQUITY**

<u>Ordinary shares</u>

The Company's authorized share capital is US$50,000 divided into 500,000,000 ordinary shares, par value US$0.0001 per share, consisting of (i) 450,000,000 Class A ordinary shares with a par value of US$0.0001 each; and (ii) 50,000,000 Class B ordinary shares with a par value of US$0.0001 each.

On January 11, 2023, the Company issued 6,373,327 ordinary shares, at par value of $0.0001, to all existing shareholders on a pro rata basis. No cash or other consideration was paid for the issuance of 6,373,327 ordinary shares.

As stated in Note 1, the Company issued an aggregate of 3,507,734 ordinary shares to the three shareholders in May 2023.

On May 24, 2023, the Company issued 1,220,374 ordinary shares to Shanghai Xinhui Investment Consulting Co., Ltd. in exchange for cash consideration of RMB 5,820,049. In March 2025, the Company received cash consideration of RMB 5,799,969.

On December 12, 2023, the shareholders of the Company passed a special resolution to reclassify 5,605,564 ordinary shares held by three shareholders into Class B ordinary shares, with remaining ordinary shares as Class A ordinary shares. All of the three shareholders are controlled by Mr. Botao Ma, the founder and Chief Executive Officer of the Company.

Each of the Class A ordinary shares and Class B ordinary shares has the right to an equal share in any dividend paid by the Company and the right to an equal share in the distribution of the surplus assets of the Company. However, each Class A ordinary share has the right to one vote on any resolution, and each Class B ordinary share has the right to vote 20 votes on any resolutions.

On February 4, 2024, the Company's shareholders and Board of Directors approved: (i) the reclassification of 44,394,436 Class A ordinary shares to be 44,394,436 Class B ordinary shares and (ii) the issuance of an aggregated 20,000,000 shares of Class A ordinary shares, at par value of $0.0001, and Class B ordinary shares, at par value of $0.0001, to all existing shareholders on a pro rata basis. No cash or other consideration was paid for the issuance of 20,000,000 Class A ordinary shares and Class B ordinary shares.

The Company believed that it was appropriate to reflect the above transactions on a retroactive basis pursuant to ASC 260, Earnings Per Share. The Company has retroactively restated all shares and per share data for all periods presented.

On April 3, 2024, the Company closed its IPO of 1,500,000 Class A ordinary shares at a public offering price of $4.00 per Class A ordinary share for aggregate gross proceeds of $6,000,000, before deducting underwriting discounts and offering expenses. The Company has granted the underwriters a 45-day option to purchase up to an additional 225,000 Class A ordinary shares to cover the over-allotment at the public offering price, less underwriting discounts and commissions. On May 14, 2024, the Company issued an additional 23,765 Class A ordinary shares of the Company pursuant to the partial exercise of the underwriters' over-allotment option in connection with the Company's initial public offering at $4.00 per share, resulting in additional gross proceeds of $95,060.

In connection with the IPO and over-allotment, the Company incurred offering cost of RMB17,006,216, which was charged against additional paid-in capital upon closing of the IPO and over-allotment.

During the year ended June 30, 2025, the Company issued an aggregated 1,384,809 Class A ordinary shares to holders of convertible notes (Note 11) to settle the principal of RMB 14,148,579 (US$1,975,065).

In March 10, 2025, the Company issued 13,250 Class A ordinary shares to a financial consultant as financial advisory services compensation. The Company record the service expenses of RMB 97,765, in the account of general and administrative expenses, by reference to the closing price prevailing on the share issuance date.

As a result of the issuances and reclassification stated above, the Company had 450,000,000 authorized Class A ordinary shares, par value of US$0.0001, of which 14,707,073 and 16,105,132 Class A ordinary shares were issued and outstanding as of June 30, 2024 and 2025, respectively. The Company had 50,000,000 authorized Class B ordinary shares, par value of US$0.0001, of which 16,816,692 and 16,816,692 Class B ordinary shares were issued and outstanding as of June 30, 2024 and 2025, respectively.

**ZHIBAO TECHNOLOGY INC. NOTES TO CONSOLIDATED** **FINANCIAL STATEMENTS**

**13 — EQUITY** (cont.)

<u>Warrants</u>

On April 3, 2024, the Company issued 75,000 warrants to EF Hutton LLC, the representative of the underwriters, as compensation for the services in connection with the IPO ("IPO warrants"). On May 14, 2024, the Company issued 1,188 warrants to EF Hutton LLC as compensation for the services in connection with the over-allotment ("Over-allotment Warrants").

EF Hutton LLC is entitled to exercise each warrant by purchase of one Class A Ordinary Share at an exercise price of $4.4 at any time from September 25, 2024 to March 29, 2029. The warrants can be exercised for a whole number of shares. No fractional shares will be issued upon exercise of the warrants. The warrants are subject to adjustments in the event of (i) share dividends, (ii) aggregation of shares, (iii) subsequent right offerings, (iv) replacement of securities upon reorganization, and (v) changes in the form of warrants. The warrants may be exercised on "cashless basis" unless there is no effective registration statement registering, or no current prospectus available for, the issuance or resale of the shares by EF Hutton LLC at any time after September 29, 2024.

In accordance with ASC 815, the Company determined that the warrants meet the conditions necessary to be classified as equity because the consideration is indexed to the Company's own equity, there are no exercise contingencies based on an observable market not based on its stock or operations, settlement is consistent with a fixed-for-fixed equity instrument, the agreement contains an explicit number of shares and there are no cash payment provisions.

The fair value of the IPO Warrants and Over-allotment Warrants were estimated at RMB 617,554 (US$85,406) and RMB 9,786 (US$1,353), respectively, using the Black-Scholes model. Inherent in these valuations are assumptions related to expected stock-price volatility, expected life, risk-free interest rate and dividend yield. The Company estimates the volatility of its ordinary shares based on historical and implied volatilities of selected peer companies as well as its own that match the expected remaining life of the warrants. The risk-free interest rate is based on the U.S. Treasury zero-coupon yield curve on the grant date for a maturity similar to the expected remaining life of the warrants. The expected life of the warrants is assumed to be equivalent to their remaining contractual term. The dividend rate is based on the historical rate, which the Company anticipates it to remain at zero.

The following table provides quantitative information regarding Level 3 fair value measurements inputs for the Company's warrants at their measurement dates:

---

| | |
|:---|:---|
|  | **US$** |
| Exercise price | 4.40 |
| Stock price | 3.30 |
| Expected life of the warrants (in years) | 4.98 |
| Risk free rate | 4.42% |
| Dividend yield | 0.0% |
| Volatility | 42.87% |

---

<u>Restricted net assets</u>

The Company's ability to pay dividends is primarily dependent on the Company receiving distributions of funds from its subsidiaries. Relevant PRC statutory laws and regulations permit payments of dividends by the Company's PRC subsidiaries only out of its retained earnings, if any, as determined in accordance with PRC accounting standards and regulations and after it has met the PRC requirements for appropriation to statutory reserves. The Company will not pay dividends until it has a retained earning on its consolidated balance sheets. Paid in capital of the PRC subsidiaries included in the Company's consolidated net assets are also non-distributable for dividend purposes. The results of operations reflected in the accompanying consolidated financial statements prepared in accordance with U.S. GAAP differ from those reflected in the statutory financial statements of the PRC subsidiaries. The Company's PRC subsidiaries are required to set aside at least 10% of their after-tax profits each year, if any, to fund certain statutory reserve funds until such reserve funds reach 50% of its registered capital. In addition, the Company's PRC subsidiaries may allocate a portion of its after-tax profits based on PRC accounting standards to enterprise expansion fund and staff bonus and welfare fund at its discretion. The statutory reserve funds and the discretionary funds are not distributable as cash dividends.

As of June 30, 2024 and 2025, the Company's PRC subsidiaries did not set aside statutory reserves. As of June 30, 2025, the Company had restricted net assets of approximately RMB 75 million.

**ZHIBAO TECHNOLOGY INC. NOTES TO CONSOLIDATED** **FINANCIAL STATEMENTS**

**14 — INCOME TAX**

**Cayman Islands**

Under the current and applicable laws of the Cayman Islands, the Company is not subject to tax on income or capital gain. Additionally, upon payments of dividends by the Company to its shareholders, no Cayman Islands withholding tax will be imposed.

**British Virgin Islands**

Zhibao BVI is incorporated in the British Virgin Islands and is not subject to tax on income or capital gains under current British Virgin Islands law. In addition, upon payments of dividends by these entities to their shareholders, no British Virgin Islands withholding tax will be imposed.

**Hong Kong**

According to Tax (Amendment) (No. 3) Ordinance 2018 published by Hong Kong government, from April 1, 2018, under the two-tiered profits tax rates regime, the profits tax rate for the first HKD2 million of assessable profits will be lowered to 8.25% (half of the rate specified in Schedule 8 to the Inland Revenue Ordinance (IRO)) for corporations, and the profits tax rate for remaining profits will be subjected to 16.5%. Zhibao HK was not subject to Hong Kong profit tax for FY2025 as it did not have assessable profit in FY2025. There are no withholding taxes in Hong Kong on remittance of dividends.

**Malaysia**

Zhibao Labuan is incorporated in Malaysia and is subject to Malaysia Corporate Income Tax imposed on income accruing in or derived from Malaysia. Zhibao Labuan is subject to the standard corporate tax rate of 24% if in a taxable position. However, resident companies that qualify as small and medium-sized enterprises may benefit from a reduced tax rate of 15% on the first RM 150,000 of chargeable income and 17% on the next RM 450,000.

**PRC**

Zhibao China, Sunshine Insurance Brokers, Shanghai Anyi, Zhibao Health and Zhizhongbao were incorporated in the PRC and are subject to PRC Enterprise Income Tax ("EIT") on the taxable income in accordance with the relevant PRC income tax laws. Under the EIT Law in the PRC, the unified EIT rate for domestic enterprises and foreign invested enterprises is 25%, except for available preferential tax treatments.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(Loss) Income before income tax expense is attributable to the following geographic locations:

---

| | | | |
|:---|:---|:---|:---|
|  | **For the Year Ended June 30,** | **For the Year Ended June 30,** | **For the Year Ended June 30,** |
|  | **2023** | **2024** | **2025** |
|  | **RMB** | **RMB** | **RMB** |
| PRC | (42687229) | 10537631 | (50677236) |
| Non-PRC | 129909 | 8224895 | (13953072) |
| **Total (loss) income before income tax expense** | **(42557320)** | **18762526** | **(64630308)** |

---

**ZHIBAO TECHNOLOGY INC. NOTES TO CONSOLIDATED** **FINANCIAL STATEMENTS**

**14 — INCOME TAX** (cont.)

**PRC (cont.)**

The income tax provision consists of the following components:

---

| | | | |
|:---|:---|:---|:---|
|  | **For the Year Ended June 30,** | **For the Year Ended June 30,** | **For the Year Ended June 30,** |
|  | **2023** | **2024** | **2025** |
|  | **RMB** | **RMB** | **RMB** |
| Current income tax (expenses | (27883) | (14237) | (15853) |
| Deferred income tax (expenses) benefits | (513577) | (5496536) | 2626562 |
| **Total income tax (expenses) benefits** | **(541460)** | **(5510773)** | **2610709** |

---

A reconciliation of the differences between the statutory tax rate and the effective tax rate for enterprise income tax is as follows:

---

| | | | |
|:---|:---|:---|:---|
|  | **For the Year Ended June 30,** | **For the Year Ended June 30,** | **For the Year Ended June 30,** |
|  | **2023** | **2024** | **2025** |
|  | **RMB** | **RMB** | **RMB** |
| (Loss) income before income tax | (42557320) | 18762526 | (64630308) |
| PRC statutory income tax rate | 25% | 25% | 25% |
| Computed income tax benefits (expenses) with PRC statutory income tax rate (25%) | 10639329 | (4690630) | 16157575 |
| Effect of different tax rates in other jurisdictions | 21760 | (207099) | (3465770) |
| Effect of staff welfare expense | (61534) |  |  |
| Effect of additional deduction of qualified R&D expenditures |  |  | 662285 |
| Effect of entertainment expense | (182962) | (475202) | (230952) |
| Effect of gain from extinguishment of liability |  | 2249085 |  |
| Effect of non-deductible expenses | (74) |  | (32556) |
| Effect of share-based compensation | (13816502) |  |  |
| Effect of changes in valuation allowance | 2858523 | (2386927) | (10852592) |
| Effect of expired NOL |  |  | (391455) |
| Effect of true-up on NOL |  |  | 764174 |
| **Total income tax (expenses) benefits** | **(541460)** | **(5510773)** | **2610709** |

---

The significant components of deferred taxes were as follows:

---

| | | |
|:---|:---|:---|
|  | **As of<br> June 30,<br> 2024** | **As of <br> June 30,<br> 2025** |
|  | **RMB** | **RMB** |
| **Deferred tax assets** | | |
| &nbsp;&nbsp;&nbsp;Net operating loss carrying forwards | 10523266 | 15316222 |
| &nbsp;&nbsp;&nbsp;Allowance against doubtful accounts | 3578914 | 6898153 |
| &nbsp;&nbsp;&nbsp;Operating lease liabilities | 4517779 | 5060696 |
| &nbsp;&nbsp;&nbsp;**Total deferred tax assets** | **18619959** | **27275071** |
| &nbsp;&nbsp;&nbsp;Less: Valuation allowance | (10366052) | (21218644) |
| **Total deferred tax assets, net of valuation allowance** | **8253907** | **6056427** |
| Net off against deferred tax liabilities | (8196650) | (6056427) |
| &nbsp;&nbsp;&nbsp;**Total Deferred tax assets, net** | **57257** | **—**  |

---

**ZHIBAO TECHNOLOGY INC. NOTES TO CONSOLIDATED** **FINANCIAL STATEMENTS**

**14 — INCOME TAX** (cont.)

**PRC (cont.)**

---

| | | |
|:---|:---|:---|
|  | **As of<br> June 30, 2024** | **As of <br> June 30, 2025** |
|  | **RMB** | **RMB** |
| **Deferred tax liabilities** | | |
| &nbsp;&nbsp;&nbsp;Operating lease right of use assets | 4498450 | 4991631 |
| &nbsp;&nbsp;&nbsp;Timing difference - revenue recognized prior to issuance of PRC VAT invoices | 6382018 | 1064796 |
| &nbsp;&nbsp;&nbsp;**Total deferred tax liabilities** | **10880468** | **6056427** |
| &nbsp;&nbsp;&nbsp;Net off against deferred tax assets | (8196650) | (6056427) |
| &nbsp;&nbsp;&nbsp;**Deferred tax liabilities, net** | **2683818** | **—**  |

---

According to PRC tax regulations, the PRC enterprise net operating loss can generally carry forward for no longer than five years, starting from the year subsequent to the year in which the loss was incurred. Carryback of losses is not permitted.

Total net operating losses carryforwards of the Company's subsidiaries in mainland China is RMB 40,527,246 and RMB 61,212,089 as of June 30, 2024 and 2025, respectively. As of June 30, 2025, net operating loss carryforwards from PRC will expire in calendar years 2026 through 2030, if not utilized.

The Company considers positive and negative evidence to determine whether some portion or all of the deferred tax assets will more likely than not be realized. This assessment considers, among other matters, the nature, frequency and severity of recent losses, forecasts of future profitability, the duration of statutory carry forward periods, the Company's experience with tax attributes expiring unused and tax planning alternatives. Valuation allowances have been established for deferred tax assets based on a more-likely-than-not threshold. Under the applicable accounting standards, management has considered the Company's history of losses and the uncertainty of future profitability, and concluded that it is more likely than not that the Company will not generate future taxable income to utilize the deferred tax assets prior to the expiration of the majority of net operating losses. Accordingly, as of June 30, 2024 and 2025, a valuation allowance of RMB 10,366,052 and RMB 21,218,644, respectively, was provided against deferred tax assets.

**ZHIBAO TECHNOLOGY INC. NOTES TO CONSOLIDATED** **FINANCIAL STATEMENTS**

**14 — INCOME TAX** (cont.)

**Unrecognized tax benefits**

As of June 30, 2024 and 2025, the Company had unrecognized tax benefits of RMB 1,026,964 and RMB 1,026,964, both of which were deducted against the deferred tax assets on tax losses carry forward. As a full valuation allowance has been recorded against the related deferred tax asset, the recognition of these unrecognized tax benefits would not affect the Company's effective tax rate. It is possible that the amount of unrecognized benefits will change in the next 12 months; however, an estimate of the range of the possible change cannot be made at this moment.

The Company recognizes interest and penalties, where applicable, as a component of income tax expense.

As of June 30, 2024, and 2025, the Company did not accrue interest related to unrecognized tax benefits. For the year ended June 30, 2024 and 2025, the Company did not reverse any interest related to unrecognized tax benefits. The Company did not record any penalties related to unrecognized tax benefits.

According to PRC Tax Administration and Collection Law, the statute of limitations is three years if the underpayment of taxes is due to computational errors made by the taxpayer or withholding agent. The statute of limitations will be extended to five years under special circumstances, which are not clearly defined (but an underpayment of tax liability exceeding RMB0.1 million is specifically listed as a special circumstance). In the case of a related party transaction, the statute of limitations is ten years. There is no statute of limitations in the case of tax evasion.

**15 — (LOSS) EARNINGS PER SHARE**

The following table sets forth the computation of basic and diluted (loss) earnings per share for the fiscal years ended June 30, 2023, 2024 and 2025:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **For the Year Ended June 30,** | **For the Year Ended June 30,** | **For the Year Ended June 30,** | **For the Year Ended June 30,** |
|  | **2023** | **2024** | **2025** | **2025** |
|  | **RMB** | **RMB** | **RMB** | **USD<br> (Note 2)** |
| **Net (Loss) Income** | **(43098780)** | **13251753** | **(62019599)** | **(8657602)** |
| **Weighted average number of ordinary share outstanding** |  |  |  |  |
| Basic | **26710005** | **30367806** | **31986420** | **31986420** |
| Diluted | **26710005** | **30367806** | **31986420** | **31986420** |
| **(Loss) earnings per share** |  |  |  |  |
| Basic | **(1.61)** | **0.44** | **(1.94)** | **(0.27)** |
| Diluted | **(1.61)** | **0.44** | **(1.94)** | **(0.27)** |

---

Pursuant to ASC 260, Earnings Per Share, the Company has retroactively restated all shares and per share data for all periods presented. For the year ended June 30, 2024 and 2025, the Company incurred net losses. Accordingly, all potentially dilutive securities were anti-dilutive and were excluded from the calculation of diluted (loss) earnings per share. The weighted-average number of potentially anti-dilutive shares excluded from calculation of dilutive earnings per share are as follows:

---

| | | | |
|:---|:---|:---|:---|
|  | **For the Year Ended June 30,** | **For the Year Ended June 30,** | **For the Year Ended June 30,** |
|  | **2023** | **2024** | **2025** |
| IPO warrants |  | 75000 | 75000 |
| Over-allotment warrants |  | 1188 | 1188 |
| Convertible notes (note 11) |  |  | 564823 |
| **Total** |  | **76188** | **641011** |

---

**ZHIBAO TECHNOLOGY INC. NOTES TO CONSOLIDATED** **FINANCIAL STATEMENTS**

**16 — COMMITMENTS AND CONTINGENCIES**

From time to time, the Company are parties to various legal actions arising in the ordinary course of business. The Company accrues costs associated with these matters when they become probable and the amount can be reasonably estimated. Legal costs incurred in connection with loss contingencies are expensed as incurred.

*Legal proceedings*

 

On June 28, 2024, Shanghai Chenxi Technology Group Co., Ltd. ("Shanghai Chenxi") filed a lawsuit against Sunshine Insurance Brokers and Zhibao China at Shanghai Pudong New Area People's Court, in connection with the breach of contract pursuant to Internet Insurance Marketing Promotion Cooperation Agreement. In this lawsuit, Shanghai Chenxi requested Sunshine Insurance Brokers and Zhibao China to be jointly liable in repaying promotion service fees of approximately RMB 14.2 million, together with a penalty of approximately RMB 10,883, litigation costs and litigation preservation fees pursuant to such Internet Insurance Marketing Promotion Cooperation Agreement. Shanghai Chenxi filed a lawsuit against Shanghai Anyi at Shanghai Pudong New Area People's Court, in connection with the breach of contract pursuant to Brand Promotion and Communication Service Agency Procurement Framework Agreement. In this lawsuit, Shanghai Chenxi requested Shanghai Anyi to repay promotion service fees of approximately RMB 0.9 million, together with a penalty of approximately RMB 12,764, attorney fees of RMB 40,000 and litigation costs, litigation preservation fees pursuant to such Brand Promotion and Communication Service Agency Procurement Framework Agreement. On December 5, 2024 and February 26, 2025, Shanghai Pudong New Area People's Court separately issued two civil mediation documents, confirming that Shanghai Chenxi reached mediation agreements with Sunshine Insurance Brokers and Zhibao China. In the mediation agreement, Sunshine Insurance Brokers agreed to pay Shanghai Chenxi a total promotion service fees of RMB 13,257,049, along with case acceptance fees and litigation preservation fees of RMB 26,577. Sunshine Insurance Brokers has made the majority of due payment of RMB 2,370,484 for the year ended June 30, 2025, with outstanding payable of approximately RMB1.2 million.

On June 3, 2024, Beijing Tiantan Puhua International Hospital ("Tiantan Puhua") filed a lawsuit at Shanghai Pudong New Area People's Court against Taiping Property Insurance Co., Ltd. Shanghai Branch ("Taiping Shanghai"), Shanghai Jibeiji Enterprise Management Consulting Co., Ltd. ("Jibeiji") & Zhibao China (Peter William Anthony Hogg as the third party), in connection with exercise of subrogation rights regarding the third party's outstanding medical expenses to Tiantan Puhua. In this lawsuit, Tiantan Puhua requested Taiping Shanghai to repay medical expenses of approximately RMB 1.4 million, together with relevant interests and all litigation costs. Tiantan Puhua requested Jibeiji & Zhibao China to bear joint liability in repaying the aforementioned medical expenses and relevant interests. As of the date of this annual report, the case is still pending.

On June 5, 2025, Changzhou Anzhuo Logistics Co., Ltd. ("Changzhou Anzhuo") filed a lawsuit at Anhui Xiaoxian People's Court against Shanghai Asia Pacific Insurance Brokerage ("Shanghai API") & Sunshine Insurance Brokers and Yang Xiurong. In this lawsuit, Changzhou Anzhuo requested Shanghai API, Sunshine Insurance Brokers and Yang Xiurong, collectively, to repay approximately RMB 0.5 million, together with relevant interests and all litigation costs. Changzhou Anzhuo requested Shanghai API, Sunshine Insurance Brokers and Yang Xiurong to bear joint liability in repaying the aforementioned medical expenses and relevant interests. As of the date of this annual report, the case is still pending.

Other than the above, the Company did not have other significant commitments, long-term obligations, significant contingencies or guarantees as of June 30, 2024 and 2025.

**ZHIBAO TECHNOLOGY INC. NOTES TO CONSOLIDATED** **FINANCIAL STATEMENTS**

**17 — RELATED PARTY TRANSACTIONS**

 

*1)* *Nature of relationships with related parties*

 

---

| | |
|:---|:---|
| **Name** | **Relationship with the Company** |
| Botao Ma | Chairman of the Board, Chief Executive Officer |
| Shanghai Xinhui Investment Consulting Co., Ltd. ("Shanghai Xinhui") | Controlled by Botao Ma |
| Shanghai GBG Enterprise Management Consulting Co., Ltd. ("Shanghai GBG") | Mr. Botao Ma is legal representative of Shanghai GBG |
| Shanghai Shenbao | Controlled by Botao Ma |
| Ningbo Shen'an Enterprise Management Center LLP ("Ningbo Shen'an) | Controlled by Botao Ma |
| Yuanwen Xia | Chief Financial Officer |

---

 

*2)* *Transactions with related parties*

During the fiscal years ended June 30, 2023, 2024 and 2025, the transactions with related parties were as follows:

 

*Purchases of services from related parties*

 

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **For the Year Ended June 30,** | **For the Year Ended June 30,** | **For the Year Ended June 30,** | **For the Year Ended June 30,** | **For the Year Ended June 30,** | **For the Year Ended June 30,** |
|  | **2023** | **2023** | **2024** | **2024** | **2025** | **2025** |
|  | **RMB** | **RMB** | **RMB** | **RMB** | **RMB** | **RMB** |
| Shanghai GBG | | 11,257,057 | | 1,987,274 | | 572,381 |

---

 

*Borrowings from (Repayment of Borrowings to) related parties*

 

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **For the Year ended June 30,** | **For the Year ended June 30,** | **For the Year ended June 30,** | **For the Year ended June 30,** | **For the Year ended June 30,** | **For the Year ended June 30,** |
|  | **2023** | **2023** | **2024** | **2024** | **2025** | **2025** |
|  | **Borrowings** | **Repayments** | **Borrowings** | **Repayments** | **Borrowings** | **Repayments** |
|  | **RMB** | **RMB** | **RMB** | **RMB** | **RMB** | **RMB** |
| Shanghai Xinhui |  |  | 28100000 | (28390200) | 9500000 | (8661984) |
| Botao Ma |  |  | 400000 | (400000) |  |  |
| Yuanwen Xia | 237000 | (437000) |  |  |  |  |
|  | 237000 | (437000) | 28500000 | (28790200) | 9500000 | (8661984) |

---

*(Loans made to) Repayment of loans from related parties*

---

| | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|
|  | **For the Year ended June 30,** | **For the Year ended June 30,** | **For the Year ended June 30,** | **For the Year ended June 30,** | **For the Year ended June 30,** | **For the Year ended June 30,** |
|  | **2023** | **2023** | **2024** | **2024** | **2025** | **2025** |
|  | **Borrowings** | **Repayments** | **Borrowings** | **Repayments** | **Borrowings** | **Repayments** |
|  | **RMB** | **RMB** | **RMB** | **RMB** | **RMB** | **RMB** |
| Shanghai Shenbao |  | 700000 |  |  |  |  |
| Ningbo Shen'an | (15500) | 30000 |  |  |  |  |
|  | (15500) | 730000 |  |  |  |  |

---

**ZHIBAO TECHNOLOGY INC. NOTES TO CONSOLIDATED** **FINANCIAL STATEMENTS**

**17 — RELATED PARTY TRANSACTIONS** (cont.)

*Collection of payments on behalf of a related party*

For the year ended June 30, 2023, Botao Ma made repayments of RMB 15.0 million to Zhibao China Group, and settled payable of RMB 0.8 million with receivables. In addition, Xinhui settled payable of RMB 0.5 million with receivables due from Botao Ma. As of June 30, 2023, 2024 and 2025, the Company had no outstanding balance due from Botao Ma was fully settled.

 

*Settlement of subscription fees advanced from a investor*

As noted in Note 9, during the year ended June 30, 2024, Shanghai Xinhui made cash payment of RMB 6,003,659 to an investor on behalf of the Company to settle the liability with the investor. For the year ended June 30, 2025, the Company repaid RMB 3,967,865 to Shanghai Xinhui.

 

*3)* *Balances with related parties*

As of June 30, 2024 and 2025, the balances with related parties were as follows:

---

| | | |
|:---|:---|:---|
|  | **June 30,<br> 2024** | **June 30, <br> 2025** |
|  | **RMB** | **RMB** |
| **Due from related parties** | | |
| Shanghai GBG<sup>(a)</sup> | 16566524 | 18152832 |
| Less: Allowance against advances to Shanghai GBG |  | (9076416) |
|  | **16566524** | **9076416** |

---

&nbsp;&nbsp;&nbsp;&nbsp;(a) As of June 30, 2024 and 2025, the balances due from Shanghai GBG represented advances to the related party, which the related party would settle the outstanding balances by providing MGU services to the Company. For the year ended June 30, 2025, the Company evaluated the collectability of the amounts due from Shanghai GBG based on a comprehensive assessment of credit risk, expected future services to be provided, and Shanghai GBG's operational and financial condition. Based on such assessment, the Company determined that a portion of the advances may not be recoverable and recorded an allowance for credit losses of RMB 9.0 million against the amounts due from Shanghai GBG.

---

| | | |
|:---|:---|:---|
|  | **June 30,<br> 2024** | **June 30, <br> 2025** |
|  | **RMB** | **RMB** |
| **Due to related parties** | | |
| &nbsp;&nbsp;&nbsp;Shanghai Xinhui<sup>(a)</sup> | 6003659 | 2828820 |
| &nbsp;&nbsp;&nbsp;Botao Ma<sup>(b)</sup> | 162408 | 299224 |
|  | **6166067** | **3128044** |

---

&nbsp;&nbsp;&nbsp;&nbsp;(a) As of June 30, 2024, amounts due to Shanghai Xinhui represented advances made by the related party on behalf of the Company to settle the subscription fees obligations owed to an investor (Note 10). As of June 30, 2025, the balance due to Shanghai Xinhui consisted of (i) borrowing of RMB 838,016, which was borrowed to support the Company's working capital. The borrowing was interest free and payable on demand, and (ii) RMB 1,990,804 representing advances made by Shanghai to Xinhui on behalf of the Company to settle the subscription fees obligations owed to an investor.

&nbsp;&nbsp;&nbsp;&nbsp;(b) As of June 30, 2024 and 2025, the balance due to Mr. Botao Ma represented the operating expenses paid by Mr. Botao Ma on behalf of the Company. The expenses were interest free and payable on demand.

**ZHIBAO TECHNOLOGY INC. NOTES TO CONSOLIDATED** **FINANCIAL STATEMENTS**

**18 — SUBSEQUENT EVENTS**

*Acquisition of a subsidiary*

On July 2, 2025, Zhibao China entered into a Share Purchase Agreement (the "SPA") with the shareholders of Zhonglian Jinan Insurance Brokers Co., Ltd. ("Zhonglian" or "Target"), and the Target, pursuant to which, subject to the terms and conditions set forth in the SPA, Zhibao China agreed to acquire an aggregate of 51% of the equity interest in Zhonglian (the "Acquired Assets") for a total purchase price of RMB25.5 million (approximately $3.5 million) ("Purchase Price"), subject to adjustment as provided in the SPA (the "Acquisition").

Under the SPA, Zhibao China also has a right of first refusal to acquire an additional 34% equity interests in Zhonglian by the end of 2027 (the "**Subsequent Acquisition**"), provided that the Sellers and Zhonglian have fulfilled their respective obligations under the SPA, and Zhibao China has not deliberately obstructed, whether through affirmative acts or passive omissions, the normal operation and management of Zhonglian. Notwithstanding the foregoing, if Zhibao China fails to complete the Subsequent Acquisition despite Zhonglian having fulfilled its obligations under the SPA, Zhibao China shall be deemed to be in breach of the SPA and shall be required to pay liquidated damages to the Sellers.

The acquisition was closed in September 2025. Due to the timing of acquisition, the initial accounting for the business combination is incomplete. As such the Company is not able to disclose certain information relating to the acquisition, including the preliminary fair value of assets acquired and liabilities assumed. The Company expects to complete the initial accounting for the acquisition before March 31, 2026.

*Issuance of convertible notes*

On July 22, 2025, pursuant to the terms of the Amended and Restated Securities Purchase Agreement (the "A&R Securities Purchase Agreement"), as amended and restated on February 14, 2025 in connection with the Company's convertible note financing, the Company received additional $270,000 (net of original issue discount of 10%) in a second closing of the second tranche, excluding expenses and commissions (the "Second Closing of Second Tranche"). In the Second Closing of Second Tranche, the Company issued to the Investor a warrant to purchase up to 123,002 Class A ordinary shares at an initial exercise price of $1.18172 per share, subject to certain adjustments (the "Second Closing of Second Tranche Warrant").

*Entry into Hudson Equity Purchase Agreement*

On June 22, 2025, the Company entered into the Hudson EPA with Hudson in connection with setting up certain equity line of credit facility (the "Hudson ELOC"). Pursuant to the Hudson EPA, Hudson has committed to purchase up to $15,000,000 (the "Aggregate Limit") of the Company's Class A ordinary shares over a two-year period commencing on June 22, 2025, subject to earlier terminations (the "Commitment Period"). On July 24, 2025, the Company issued to Hudson Global Ventures, LLC 140,000 Class A ordinary shares pursuant to the Hudson EPA.

Other than the above, the Company evaluated the subsequent event through the date of this report and concluded that there are no material reportable subsequent events need to be disclosed.

**ZHIBAO TECHNOLOGY INC. NOTES TO CONSOLIDATED** **FINANCIAL STATEMENTS**

**19 — CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY**

Regulation S-X requires the condensed financial information of registrant shall be filed when the restricted net assets of consolidated subsidiaries exceed 25 percent of consolidated net assets as of the end of the most recently completed fiscal year. For purposes of the above test, restricted net assets of consolidated subsidiaries shall mean that amount of the registrant's proportionate share of net assets of consolidated subsidiaries (after intercompany eliminations) of which as of the end of the most recent fiscal year may not be transferred to the parent company by subsidiaries in the form of loans, advances or cash dividends without the consent of a third party. The condensed parent company financial statements have been prepared in accordance with Rule 12-04, Schedule I of Regulation S-X as the restricted net assets of the Company's PRC subsidiary exceed 25% of the consolidated net assets of the Company.

Certain information and footnote disclosures normally included in financial statements prepared in conformity with U.S. GAAP have been condensed or omitted. The Company's investment in subsidiary is stated at cost plus equity in undistributed earnings of subsidiaries.

Investment in subsidiaries on the Condensed Balance Sheets, is comprised of the parent company's net investment in its subsidiaries under the equity method of accounting. As the parent company was not in existence until January 11, 2023, and the reorganization was not completed until March 10, 2023, financial statements of the parent company are not required until March 10, 2023.

**Condensed Balance Sheets**

---

| | | | |
|:---|:---|:---|:---|
|  | **June 30, <br> 2024** | **June 30, <br> 2025** | **June 30, <br> 2025** |
|  | **RMB** | **RMB** | **US$** |
| **ASSETS** | | | |
| **Current assets:** | | | |
| Cash and cash equivalents | 21921333 | 1446094 | 201867 |
| Prepaid expenses and other current assets, net | 293993 | 748596 | 104500 |
| Due from subsidiaries | 14593117 | 50399981 | 7035568 |
| **Total current assets** | **36808443** | **52594671** | **7341935** |
| **Non-current assets:** |  |  |  |
| Investment in subsidiaries | 27545711 |  |  |
| **Total non-current assets** | **27545711** |  |  |
| **Total assets** | **64354154** | **52594671** | **7341935** |
| **LIABILITIES AND SHAREHOLDERS' EQUITY** |  |  |  |
| Convertible notes |  | 1709343 | 238615 |
| Derivative liabilities |  | 14327 | 2000 |
| Warrant liabilities |  | 1892623 | 264200 |
| Accrued expenses and other liabilities | 363360 | 838156 | 117003 |
| **Total current liabilities** | **363360** | **4454449** | **621818** |
| **Non-current liabilities:** |  |  |  |
| Investment in deficits of subsidiaries |  | 23446440 | 3272997 |
| **Total non-current liabilities** | **—**  | **23446440** | **3272997** |
| **Total liabilities** | **363360** | **27900889** | **3894814** |
| **Shareholders' Equity** |  |  |  |
| Class A ordinary shares (par value $0.0001 per share, 450,000,000 shares authorized, 14,707,073 and 16,105,132 shares issued and outstanding as of June 30, 2024 and 2025, respectively) | 9922 | 10923 | 1611 |
| Class B ordinary shares (par value $0.0001 per share, 50,000,000 shares authorized, 16,816,692 and 16,816,692 shares issued and outstanding as of June 30, 2024 and 2025, respectively) | 12204 | 12204 | 1682 |
| Additional paid-in capital | 196038784 | 219416239 | 30629325 |
| Accumulated deficit | (131841244) | (193860843) | (27061992) |
| Accumulated other comprehensive loss | (228872) | (884741) | (123505) |
| **Total Shareholders' Equity** | **63990794** | **24693782** | **3447121** |
| **Total Liabilities and Shareholders' Equity** | **64354154** | **52594671** | **7341935** |

---

**ZHIBAO TECHNOLOGY INC. NOTES TO CONSOLIDATED** **FINANCIAL STATEMENTS**

**19 — CONDENSED FINANCIAL INFORMATION OF THE PARENT COMPANY** (cont.)

**Condensed Statements of Comprehensive Income (Loss)**

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **For the Year Ended June 30,** | **For the Year Ended June 30,** | **For the Year Ended June 30,** | **For the Year Ended June 30,** |
|  | **2023** | **2024** | **2025** | **2025** |
|  | **RMB** | **RMB** | **RMB** | **USD<br> (Note 2)** |
| **Operating costs and expenses:** |  |  |  |  |
| General and administrative expenses |  | (775077) | (4967529) | (688567) |
| Interest income, net |  | (56424) | 194516 | 26962 |
| Loss on extinguishment of convertible notes |  |  | (7174958) | (1001586) |
| Changes in fair value of derivative liabilities |  |  | (1031558) | (144000) |
| Changes in fair value of warrant liabilities |  | 8996341 | 1952081 | 272500 |
| Share of (loss) profit of subsidiaries | (43098780) | 5086913 | (50992151) | (7122911) |
| **Net (Loss) Income** | **(43098780)** | **13251753** | **(62019599)** | **(8657602)** |
| **Other comprehensive income (loss)** |  |  |  |  |
| Foreign currency translation adjustments | 5118 | (233990) | (655869) | (91556) |
| **Comprehensive (loss) income** | **(43093662)** | **13017763** | **(62675468)** | **(8749158)** |

---

**Condensed Statements of Cash Flows**

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **For the Year Ended June 30,** | **For the Year Ended June 30,** | **For the Year Ended June 30,** | **For the Year Ended June 30,** |
|  | **2023** | **2024** | **2025** | **2025** |
|  | **RMB** | **RMB** | **RMB** | **USD<br> (Note 2)** |
| Net cash used in operating activities |  |  | (4732113) | (660577) |
| Net cash used in investing activities |  | (14593117) | (18323584) | (2557874) |
| Net cash provided by financing activities |  | 36011851 | 535186 | 74709 |
| Effect of exchange rate changes on cash and cash equivalents |  | 502599 | 2045272 | 285509 |
| Net change in cash and cash equivalents |  | 21921333 | (20475239) | (2858233) |
| Cash and cash equivalents at the beginning of the year |  |  | 21921333 | 3060100 |
| **Cash and cash equivalents at the end of the year** |  | **21921333** | **1446094** | **201867** |

---

## Exhibit 2.2

**Exhibit 2.2**

**DESCRIPTION OF SECURITIES**

Zhibao Technology Inc. ("we," "our," "us" or the "Company") is a Cayman Islands exempted company and its affairs are governed by the amended and restated memorandum and articles of association, as amended from time to time (the "Articles"), the Companies Act (Revised) of the Cayman Islands (which we refer to as the Companies Act below) and the common law of the Cayman Islands.

Pursuant to the Articles, we are authorized to issue Class A ordinary shares, of par value US$0.0001 each (the "Class A ordinary shares"), and Class B ordinary shares, of par value US$0.0001 each (the "Class B ordinary shares"). Each Class A ordinary share is entitled to one vote per share on all matters subject to vote at general meetings of the Company. Each Class B ordinary share is entitled to twenty (20) votes per share on all matters subject to vote at general meetings of the Company.

As of the date of this annual report, 33,268,712 ordinary shares were issued and outstanding, of which 16,452,020 were Class A ordinary shares and 16,816,692 were Class B ordinary shares. As of January 5, 2026, we had outstanding warrants to purchase 2,099,901 Class A ordinary shares and convertible notes convertible into up to 729,433 Class A ordinary shares, subject to adjustment.

We were incorporated as an exempted company with limited liability under the laws of the Cayman Islands on January 11, 2023. A Cayman Islands exempted company:

● is a company that conducts its business mainly outside the Cayman Islands;

● is prohibited from trading in the Cayman Islands with any person, firm or corporation except in furtherance of the business of the exempted company carried on outside the Cayman Islands (and for this purpose can effect and conclude contracts in the Cayman Islands and exercise in the Cayman Islands all of its powers necessary for the carrying on of its business outside the Cayman Islands);

● does not have to hold an annual general meeting;

● does not have to make its register of members open to inspection by shareholders of that company;

● may obtain an undertaking against the imposition of any future taxation;

● may register by way of continuation in another jurisdiction and be deregistered in the Cayman Islands;

● may register as a limited duration company; and

● may register as a segregated portfolio company.

The following are summaries of material provisions of our proposed post-offering memorandum and articles of association and the Companies Act insofar as they relate to the material terms of our ordinary shares.

***Ordinary Shares***

Under our Articles, the holders of Class A ordinary shares are entitled to one (1) vote for each Class A ordinary share held of record and the holders of Class B ordinary shares are entitled to twenty (20) votes for each Class B ordinary share held of record on all matters submitted to a vote of the shareholders.

 

 

*Dividends.* Subject to the provisions of the Companies Act and any rights and restrictions attaching to any class or series of shares under and in accordance with our articles of association, as amended from time to time:

&nbsp;&nbsp;&nbsp;&nbsp;(a) our board of directors may, from time to time, declare dividends or distributions out of our lawfully available funds. No dividends shall be declared by the board out of the Company except the following:

● profits; or

● "share premium account," which represents the excess of the price paid to the Company on the issue of its shares over the par or "nominal" value of those shares, which is similar to the U.S. concept of additional paid in capital.

&nbsp;&nbsp;&nbsp;&nbsp;(b) our shareholders may, by ordinary resolution, declare dividends but no such dividend shall exceed the amount recommended by the board of directors.

Subject to the requirements of the Cayman Companies Act regarding the application of a company's share premium account and with the sanction of an ordinary resolution, dividends may also be declared and paid out of any share premium account. The directors when paying dividends to shareholders may make such payment either in cash or in specie.

However, no dividend shall bear interest against the Company.

 

*Voting Rights.* Holders of our ordinary shares vote as a single class on all matters submitted to a vote of our shareholders, except as may otherwise be required by law. Holders of Class A ordinary shares have the right to one (1) vote per Class A ordinary share and holders of Class B ordinary shares have the right to twenty (20) votes per Class B ordinary share held on any resolution of members. At any general meeting a resolution put to the vote of the meeting shall be decided by a poll.

As a matter of Cayman Islands law, (i) an ordinary resolution requires the affirmative vote of a majority of the shareholders who attend and vote at a general meeting of the Company; and (ii) a special resolution requires the affirmative vote of a majority of at least two-thirds or such higher percentage as set forth in the memorandum and articles of association, of the shareholders being entitled to attend and vote at a general meeting of the Company, or by unanimous written consent of shareholders entitled to vote at a general meeting. The Companies Act defines "special resolutions" only. A company's memorandum and articles of association can therefore tailor the definition of "ordinary resolutions" as a whole, or with respect to specific provisions. Under our amended and restated articles of association an ordinary resolution must be passed at a general meeting by a simple majority of shareholders who (being entitled to do so) vote in person or by proxy at that meeting. The expression includes a unanimous written resolution.

For the protection of shareholders, certain matters must be approved by special resolution of the shareholders as a matter of Cayman Islands law, including alteration of the memorandum or articles of association, appointment of inspectors to examine company affairs, reduction of share capital (subject, in relevant circumstances, to court approval), change of name, authorization of a plan of merger (other than a merger between a parent and a subsidiary), authorization of a transfer by way of continuation to another jurisdiction or consolidation or voluntary winding up of the Company.

There are no limitations on non-residents or foreign shareholders to hold or exercise voting rights on the ordinary shares imposed by foreign law or by the charter or other constituent documents of the Company. However, no person will be entitled to vote at any general meeting or at any separate meeting of the holders of the ordinary shares unless the person is registered as of the record date for such meeting and unless all calls or other sums presently payable by the person in respect of our ordinary shares have been paid.

 

*Winding Up; Liquidation.* Under Cayman Islands law and our amended and restated articles of association, the Company may be wound up by a special resolution of our shareholders, or if the winding up is initiated by our board of directors, by either a special resolution of our members or, if the Company is unable to pay its debts as they fall due, by an ordinary resolution of our members. In addition, a company may be wound up by an order of the courts of the Cayman Islands. The court has authority to order winding up in a number of specified circumstances including where it is, in the opinion of the court, just and equitable to do so.

Upon the winding up of the Company, after the full amount that holders of any issued shares ranking senior to the ordinary shares as to distribution on liquidation or winding up are entitled to receive has been paid or set aside for payment, the holders of our ordinary shares are entitled to receive any remaining assets of the Company available for distribution as determined by the liquidator. The assets received by the holders of our ordinary shares in a liquidation may consist in whole or in part of a property, which is not required to be of the same kind for all shareholders.

 

*Calls on Ordinary Shares and Forfeiture of Ordinary Shares*. Subject to the terms of allotment, the directors may make calls on the shareholders in respect of any monies unpaid on their shares including any premium and each shareholder shall (subject to receiving at least 14 days' written notice specifying when and where payment is to be made), pay to us the amount called on his shares. Shareholders registered as the joint holders of a share shall be jointly and severally liable to pay all calls in respect of the share. If a call remains unpaid after it has become due and payable the person from whom it is due and payable shall pay interest on the amount unpaid from the day it became due and payable until it is paid at the rate fixed by the terms of allotment of the share or in the notice of the call or if no rate is fixed, at the rate of ten percent per annum. The directors may waive payment of the interest wholly or in part.

We have a first and paramount lien on all shares (whether fully paid up or not) registered in the name of a shareholder (whether solely or jointly with others). The lien is for all monies payable to us by the shareholder or the shareholder's estate:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) either alone or jointly with any other person, whether or not that other person is a shareholder; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) whether or not those monies are presently payable.

At any time the directors may declare any share to be wholly or partly exempt from the lien on shares provisions of the amended and restated articles of association.

We may sell, in such manner as the directors may determine, any share on which the sum in respect of which the lien exists is presently payable, if due notice that such sum is payable has been given (as prescribed by the amended and restated articles of association) and, within 14 days of the date on which the notice is deemed to be given under the amended and restated articles of association, such notice has not been complied with.

 

*Redemption of Ordinary Shares.* We may issue shares that are, or at our option or at the option of the holders are, subject to redemption on such terms and in such manner as it may, before the issue of the shares, determine. Under the Companies Act, shares of a Cayman Islands company may be redeemed or repurchased out of profits of the Company, out of the proceeds of a fresh issue of shares made for that purpose or out of capital, provided the memorandum and articles of association authorize this and it has the ability to pay its debts as they come due in the ordinary course of business.

 

*No Preemptive Rights.* Holders of ordinary shares will have no preemptive or preferential right to purchase any securities of the Company.

 

*Variation of Rights Attaching to Shares*. If at any time the share capital is divided into different classes of shares, the rights attaching to any class (unless otherwise provided by the terms of issue of the shares of that class) may, subject to the memorandum and articles of association, be varied or abrogated with the consent in writing of the holders of three-fourths of the issued shares of that class or with the sanction of a special resolution passed at a general meeting of the holders of the shares of that class.

 

*Rights Attaching to Class A Ordinary Shares.* Each Class A ordinary share confers on the holder: (a) the right to one (1) vote on any resolution of shareholders; (b) the right to an equal share in any dividend paid by the Company in accordance with the Companies Act; and (c) the right to an equal share in the distribution of the surplus assets of the Company.

 

*Rights Attaching to Class B Ordinary Shares*. Each Class B ordinary share confers on the holder: (a) the right to twenty (20) votes on any resolution of shareholders; (b) the right to an equal share in any dividend paid by the Company in accordance with the Companies Act; (c) the right to an equal share in the distribution of the surplus assets of the Company; and (d) the conversion rights.

Each Class B ordinary share is convertible into one Class A ordinary share at the option of the holder of such Class B ordinary share at any time, upon written notice to the Company, but Class A ordinary shares shall not be convertible into Class B ordinary shares under any circumstances. Notwithstanding anything contained in the Articles, upon any transfer of Class B ordinary shares by a holder to any person or entity other than holders of Class B ordinary shares or their affiliates, such Class B ordinary shares shall be automatically and immediately converted into the equivalent number of Class A ordinary shares. Where the Class B ordinary share concerned was fully paid and non-assessable, the Class A ordinary share into which it converted shall be fully paid and non-assessable. A written notice to the Company may specify that the intended conversion shall take effect subject to and with effect from a transfer of the Class B ordinary share concerned, in which case any conversion of such Class B ordinary share shall take effect concurrent with the transfer of the Class B ordinary share.

 

*Alteration of Share Capital.* Subject to the Companies Act, we may, by ordinary resolution:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) increase our share capital by new shares of the amount fixed by that ordinary resolution and with the attached rights, priorities and privileges set out in that ordinary resolution;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) consolidate and divide all or any of our share capital into shares of larger amount than our existing shares;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) convert all or any of our paid-up shares into stock, and reconvert that stock into paid up shares of any denomination;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) sub-divide our shares or any of them into shares of an amount smaller than that fixed, so, however, that in the sub-division, the proportion between the amount paid and the amount, if any, unpaid on each reduced share shall be the same as it was in case of the share from which the reduced share is derived; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) cancel shares which, at the date of the passing of that ordinary resolution, have not been taken or agreed to be taken by any person and diminish the amount of our share capital by the amount of the shares so cancelled or, in the case of shares without nominal par value, diminish the number of shares into which our capital is divided.

Subject to the Companies Act and to any rights for the time being conferred on the shareholders holding a particular class of shares, we may, by special resolution, reduce our share capital in any way.

 

*Conversion Rights.* Each Class B ordinary share of the Company is convertible into one (1) Class A ordinary share, at the option of the holder of such Class B ordinary share, at any time, upon written notice to the Company, but Class A ordinary shares shall not be convertible into Class B ordinary shares under any circumstances. Notwithstanding anything contained in the Articles, upon any transfer of Class B ordinary shares by a holder to any person or entity other than holders of Class B ordinary shares or their affiliates, such Class B ordinary shares shall be automatically and immediately converted into the equivalent number of Class A ordinary shares.

*Transfer of Class A Ordinary Shares*. Provided that a transfer of Class A ordinary shares complies with applicable rules of the Nasdaq Capital Market, a Class A shareholder may transfer ordinary shares to another person by completing an instrument of transfer in the usual or common form, with respect to Class A ordinary shares, or in a form prescribed by Nasdaq, or in any other form approved by the directors, executed:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) where the Class A ordinary shares are fully paid, by or on behalf of that shareholder; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) where the Class A ordinary shares are nil or partly paid, by or on behalf of that shareholder and the transferee.

The transferor shall be deemed to remain the holder of a Class A ordinary share until the name of the transferee is entered into the register of members of the Company.

Our board of directors may, in its absolute discretion, decline to register any transfer of any Class A ordinary share that has not been fully paid up or is subject to a company lien. Our board of directors may also decline to register any transfer of such Class A ordinary share unless:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) the instrument of transfer is lodged with the Company, accompanied by the certificate (if any) for the ordinary shares to which it relates and such other evidence as our board of directors may reasonably require to show the right of the transferor to make the transfer;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) the instrument of transfer is in respect of only one class of shares;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) the instrument of transfer is properly stamped, if required;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) the Class A ordinary share transferred is fully paid and free of any lien in favor of us;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) any fee related to the transfer has been paid to us; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) in the case of a transfer to joint holders, the transfer is not to more than four joint holders.

If our directors refuse to register a transfer, they are required, within three months after the date on which the instrument of transfer was lodged, to send to each of the transferor and the transferee notice of such refusal.

This, however, is unlikely to affect market transactions of the Class A ordinary shares purchased by investors in the public offering. Once the Class A ordinary shares have been listed, the legal title to such Class A ordinary shares and the registration details of those Class A ordinary shares in our register of members will remain with DTC. All market transactions with respect to those Class A ordinary shares will then be carried out without the need for any kind of registration by the directors, as the market transactions will all be conducted through the DTC systems.

The registration of transfers may be suspended at such times and for such periods as our board of directors may, from time to time determine, provided always that such registration of transfers shall not be suspended for more than 30 days in any year.

*Anti-Takeover Provisions*. Some provisions of our amended and restated memorandum and articles of association may discourage, delay or prevent a change of control of our company or management that shareholders may consider favorable, including provisions that authorize our board of directors to issue preference shares in one or more series and to designate the price, rights, preferences, privileges and restrictions of such preference shares without any further vote or action by our shareholders.

*Special Considerations for Exempted Companies*. We are an exempted company with limited liability under the Companies Act. The Companies Act distinguishes between ordinary resident companies and exempted companies. Any company that is registered in the Cayman Islands but conducts business mainly outside of the Cayman Islands may apply to be registered as an exempted company. The requirements for an exempted company are essentially the same as for an ordinary company except for the exemptions and privileges listed below:

● an exempted company does not have to file an annual return of its shareholders with the Registrar of Companies of the Cayman Islands (the Registrar);

● an exempted company's register of members is not open to inspection;

● an exempted company does not have to hold an annual general meeting;

● an exempted company may issue shares with no par value;

● an exempted company may obtain an undertaking against the imposition of any future taxation (such undertakings are usually given for 20 years in the first instance);

● an exempted company may register by way of continuation in another jurisdiction and be deregistered in the Cayman Islands;

● an exempted company may register as a limited duration company; and

● an exempted company may register as a segregated portfolio company.

"Limited liability" means that the liability of each shareholder is limited to the amount unpaid by the shareholder on the shares of the company (except in exceptional circumstances, such as involving fraud, the establishment of an agency relationship or an illegal or improper purpose or other circumstances in which a court may be prepared to pierce or lift the corporate veil).

*Register of Members*. Under the Companies Act, we must keep a register of members and there should be entered therein:

● the names and addresses of the members of the Company, a statement of the shares held by each member, which: distinguishes each share by its number (so long as the share has a number); confirms the amount paid, or agreed to be considered as paid, on the shares of each member; confirms the number and category of shares held by each member; and confirms whether each relevant category of shares held by a member carries voting rights under the Articles, and if so, whether such voting rights are conditional;

● the date on which the name of any person was entered on the register as a member; and

● the date on which any person ceased to be a member.

Under Cayman Islands law, the register of members of our Company is prima facie evidence of the matters set out therein (that is, the register of members will raise a presumption of fact on the matters referred to above unless rebutted) and a shareholder registered in the register of members is deemed as a matter of the Cayman Islands law to have legal title to the shares as set against its name in the register of members.

However, there are certain limited circumstances where an application may be made to a Cayman Islands court for a determination on whether the register of members reflects the correct legal position. Further, the Cayman Islands court has the power to order that the register of members maintained by the company should be rectified, where it considers that the register of members does not reflect the correct legal position. If an application for an order for rectification of the register of members were made in respect of our ordinary shares, then the validity of such shares may be subject to re-examination by a Cayman Islands courts.

 

***Preference Shares***

The board of directors is empowered to designate and issue from time to time one or more classes or series of preference shares and to fix and determine the relative rights, preferences, designations, qualifications, privileges, options, conversion rights, limitations and other special or relative rights of each such class or series so authorized. Such action could adversely affect the voting power and other rights of the holders of our ordinary shares or could have the effect of discouraging any attempt by a person or group to obtain control of us.

***L1 Ordinary Share Purchase Warrants***

 

*Duration and Exercise Price*

The outstanding ordinary share purchase warrants that the Company has issued to L1 Capital Global Opportunities Master Fund ("L1") are as follows:

● The L1 First Closing of First Tranche Warrant (as defined in this annual report) to purchase up to 296,742 Class A ordinary shares at an as-adjusted exercise price of $1.18172 per share, subject to certain adjustments (as adjusted from 74,451 Class A ordinary shares when initially issued on September 23, 2024);

● The L1 Second Closing of First Tranche Warrant (as defined in this annual report) to purchase up to 301,094 Class A ordinary shares at an as-adjusted exercise price of $1.18172 per share (as adjusted from 79,599 Class A ordinary shares when initially issued on October 1, 2024);

● The L1 Third Closing of First Tranche Warrant (as defined in this annual report) to purchase up to 440,094 Class A ordinary shares at an as-adjusted exercise price of $1.18172 per share (as adjusted from 184,788 Class A ordinary shares when initially issued on December 11, 2024);

● The L1 Waiver Warrant (as defined in this annual report) to purchase up to 571,588 Class A ordinary shares to L1 at an as-adjusted exercise price of $1.18172 per share (as adjusted from 240,000 Class A ordinary shares pursuant to the Section 3(d) of the warrant issue to L1 on December 16, 2024);

● The L1 First Closing of Second Tranche Warrant (as defined in this annual report) to purchase up to 291,193 Class A ordinary shares at an as-adjusted exercise price of $1.18172 per share (as adjusted from 202,459 Class A ordinary shares pursuant to the Section 3(d) of the warrant issue to L1 at the L1 First Closing of Second Tranche); and

● The L1 Second Closing of Second Tranche Warrant (as defined in this annual report) to purchase up to 123,002 Class A ordinary shares at an initial exercise price of $1.18172 per share, subject to certain adjustments (collectively, the "L1 Warrants").

The L1 Warrants were immediately exercisable upon issuance and are exercisable for five years after the date of issuance. The exercise price and number of Class A ordinary shares issuable upon exercise are subject to appropriate adjustment in the event of share dividends, share splits, or similar events affecting our Class A ordinary shares. Except for certain exceptions, the exercise price is also subject to adjustment in the event of subsequent equity sales by the Company at a price less than the current exercise price of the L1 Warrants.

 

*Exercisability*

The L1 Warrant are exercisable, at the option of the holder, in whole or in part, by delivering to us a duly executed exercise notice accompanied by payment in full for the number of Class A ordinary shares purchased upon such exercise (except in the case of a cashless exercise as discussed below). The holder (together with its affiliates) may not exercise any portion of the holder's L1 Warrants to the extent that the holder would own more than 4.99% (or, at the election of the holder, 9.99%) of our outstanding Class A ordinary shares immediately after exercise, except that upon at least 61 days' prior notice from the holder to us, the holder may increase the amount of ownership of outstanding Class A ordinary shares after exercising the L1 Warrants up to 9.99% of the number of ordinary shares outstanding immediately after giving effect to the exercise, as such percentage ownership is determined in accordance with the terms of the L1 Warrants.

 

*Cashless Exercise*

For the L1 Warrants, if at any time after 90 days after issuance there is not an effective registration statement covering the Class A ordinary shares underlying the L1 Warrants, in lieu of making the cash payment otherwise contemplated to be made to us upon such exercise in payment of the aggregate exercise price, the holder may elect instead to receive upon such exercise (either in whole or in part) the net number of Class A ordinary shares determined according to a formula set forth in the L1 Warrants.

 

 

*Fundamental Transactions*

In the event of any fundamental transaction, as described in the L1 Warrants and generally including any merger with or into another entity, sale of all or substantially all of our assets, tender offer or exchange offer, or reclassification of our Class A ordinary shares, then upon any subsequent exercise of the L1 Warrants, the holder will have the right to receive as alternative consideration, for each Class A ordinary share that would have been issuable upon such exercise immediately prior to the occurrence of such fundamental transaction, the number of Class A ordinary shares of the successor or acquiring corporation or of our Company, if it is the surviving corporation, and any additional consideration receivable upon or as a result of such transaction by a holder of the number of Class A ordinary shares for which the L1 Warrants are exercisable immediately prior to such event.

 

*Transferability*

In accordance with its terms and subject to applicable laws, the L1 Warrants may be transferred at the option of the holder upon surrender of the L1 Warrants to us together with the appropriate instruments of transfer and payment of funds sufficient to pay any transfer taxes (if applicable).

 

*Fractional Shares*

No fractional Class A ordinary shares will be issued upon the exercise of the L1 Warrants. Rather, the number of Class A ordinary shares to be issued will, at our election, either be rounded down to the nearest whole number or we will pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by the exercise price.

 

*Trading Market*

There is no established trading market for the L1 Warrants, and we do not expect a market to develop. We do not intend to apply for a listing for the L1 Warrants on any securities exchange or other nationally recognized trading system. Without an active trading market, the liquidity of the L1 Warrants will be limited.

 

*Rights as a Shareholder*

Except as otherwise provided in the L1 Warrants or by virtue of the holders' ownership of Class A ordinary shares, the holders of L1 Warrants do not have the rights or privileges of holders of our Class A ordinary shares, including any voting rights, until such L1 Warrants holders exercise their warrants.

*Anti-Dilution Provision*

If and whenever, at any time during the 18-month period following the dates of issuances of each of the L1 Warrants, the Company issues, sells or grants any Class A ordinary shares and/or equivalents of Class A ordinary shares for a consideration per share less than a price equal to the conversion price and/or exercise price of the L1 Warrants and L1 Notes (as defined in this annual report) in effect immediately prior to such issuances, sale or grant or deemed issuance, sale or grant (the foregoing a "Dilutive Issuance"), then immediately after such Dilutive Issuance the exercise price of each of the L1 Warrants then in effect shall be reduced to an amount equal to the issuance price of the newly issued securities. In addition, that upon any adjustment to the exercise price, the number of warrant shares that may be purchased upon exercise of the L1 Warrants shall be increased, so that after such adjustment the aggregate exercise price payable under the warrant shall be the same as the aggregate exercise price in effect immediately prior to such adjustment (without regard to any limitations on exercise contained therein).

 ****

***L1 Pre-Funded Warrant***

 

*Duration and Exercise Price*

The pre-funded warrant that the Company issued to L1 at the L1 First Closing of First Tranche (the "L1 Pre-Funded Warrant") will be exercisable at any time on or after the occurrence of an Event of Default (as defined in this annual report) and until the date on which no L1 Notes are outstanding or may be issuable under the L1 Securities Purchase Agreement (as defined in the annual report). Upon the occurrence of an Event of Default, the holder may subscribe for and purchase from the Company up to 191,522 shares (as subject to adjustment thereunder) at a nominal exercise price of $0.0001 per share.

 

 

*Exercisability*

The L1 Pre-Funded Warrant will be exercisable, at the option of the holder, in whole or in part, at any time on or after the occurrence of an Event of Default. The holder (together with its affiliates) may not exercise any portion of the holder's L1 Pre-Funded Warrant to the extent that the holder would own more than 4.99% (or, at the election of the holder, 9.99%) of our outstanding Class A ordinary shares immediately after exercise, except that upon at least 61 days' prior notice from the holder to us, the holder may increase the amount of ownership of outstanding Class A ordinary shares after exercising the holder's ordinary shares up to 9.99% of the number of Class A ordinary shares outstanding immediately after giving effect to the exercise, as such percentage ownership is determined in accordance with the terms of the warrant.

 

*Cashless Exercise*

In lieu of making the cash payment otherwise contemplated to be made to us upon such exercise in payment of the aggregate exercise price, the holder may elect instead to receive upon such exercise (either in whole or in part) the net number of Class A ordinary shares determined according to a formula set forth in the L1 Pre-Funded Warrant.

*Fundamental Transactions*

In the event of any fundamental transaction, as described in the L1 Pre-Funded Warrant and generally including any merger with or into another entity, sale of all or substantially all of our assets, tender offer or exchange offer, or reclassification of our Class A ordinary shares, then upon any subsequent exercise of a L1 Pre-Funded Warrant, the holder will have the right to receive as alternative consideration, for each Class A ordinary share that would have been issuable upon such exercise immediately prior to the occurrence of such fundamental transaction, the number of Class A ordinary shares of the successor or acquiring corporation or of our Company, if it is the surviving corporation, and any additional consideration receivable upon or as a result of such transaction by a holder of the number of Class A ordinary shares for which the L1 Pre-Funded Warrant is exercisable immediately prior to such event.

 

*Transferability*

In accordance with its terms and subject to applicable laws, the L1 Pre-Funded Warrant may be transferred at the option of the holder upon surrender of the L1 Pre-Funded Warrant to us together with the appropriate instruments of transfer and payment of funds sufficient to pay any transfer taxes (if applicable).

 

*Fractional Shares*

No fractional Class A ordinary shares will be issued upon the exercise of the L1 Pre-Funded Warrant. Rather, the number of Class A ordinary shares to be issued will, at our election, either be rounded up to the nearest whole number or we will pay a cash adjustment in respect of such final fraction in an amount equal to such fraction multiplied by the exercise price.

 

*Trading Market*

There is no established trading market for the L1 Pre-Funded Warrants, and we do not expect a market to develop. We do not intend to apply for a listing for the L1 Pre-Funded Warrants on any securities exchange or other nationally recognized trading system. Without an active trading market, the liquidity of the L1 Pre-Funded Warrant will be limited.

 

*Rights as a Shareholder*

Except as otherwise provided in the L1 Pre-Funded Warrants or by virtue of the holders' ownership of Class A ordinary shares, the holders of L1 Pre-Funded Warrants do not have the rights or privileges of holders of our Class A ordinary shares, including any voting rights, until such L1 Pre-Funded Warrant holders exercise their warrants.

***L1 Notes***

*Principal and Maturity*

The convertible notes that the Company has issued to L1 are as follows:

● The L1 First Tranche Note (as defined in this annual report) was issued in the principal amount of $2,500,000, with a 10% Original Issue Discount ("OID") of $250,000. The L1 First Tranche Note is initially convertible into Class A ordinary shares at conversion price of $4.71, subject to certain adjustments, provided that the conversion price shall not be reduced below a floor price of $0.7616. The L1 First Tranche Note does not bear any interest and matures on September 23, 2025. The L1 First Tranche Note has been fully paid off as of June 30, 2025.

● The L1 Second Tranche Note (as defined in this annual report) was issued in the principal amount of $2,500,000, with a 10% OID of $250,000. The L1 Second Tranche Note is initially convertible into Class A ordinary shares at conversion price of $1.69964, subject to certain adjustments, provided that the conversion price shall not be reduced below a floor price of $0.282. The L1 Second Tranche Note does not bear any interest and matures on February 13, 2026.

*Payment of the Outstanding Principal Amount*

With respect to the L1 Second Tranche Note, commencing on the earlier of (i) the day that is the 60-day anniversary after February 13, 2026 and (ii) the date on which the Registration Statement is declared effective by the SEC, the Company is required to pay to the holder the outstanding principal balance under the L1 Second Tranche Note in monthly installments, on such date and each one (1) month anniversary thereof, in an amount equal to 105% of the total principal amount multiplied by the quotient determined by dividing one by the number of months remaining until the maturity date of the L1 Second Tranche Note, until the outstanding principal amount has been paid in full or, if earlier, upon acceleration, conversion or redemption of the L1 Second Tranche Note in accordance with its terms. All monthly payments are payable the Company, in cash, provided that under certain circumstances, as provided in the L1 Second Tranche Note, the Company may elect to pay in Class A ordinary shares.

 

*Prepayment*

The Company may not repay any portion of the outstanding principal amount of the L1 Second Tranche Note.

 

*Beneficial Ownership Limitation*

The L1 Second Tranche Note may not be converted to the extent that the holder would own more than 4.99% (or, at the election of the holder, 9.99%) of our outstanding Class A ordinary shares immediately after conversion, except that upon at least 61 days' prior notice from the holder to us, the holder may increase the amount of ownership of outstanding Class A ordinary shares after converting the L1 Second Tranche Note up to 9.99% of the number of Class A ordinary shares outstanding immediately after giving effect to the conversion, as such percentage ownership is determined in accordance with the terms of the L1 Second Tranche Note.

 

*Events of Default*

Upon the occurrence of any Event of Default, interest shall accrue on the L1 Second Tranche Note at a rate equal to 10% per annum or, if less, the highest amount permitted by law. In addition, upon the occurrence of Event of Default, which has not been cured within any applicable cure period, interest is also payable at the "Mandatory Default Amount" (i.e. 120% of the sum of (i) the outstanding principal balance of the L1 Second Tranche Note on the date on which the first Event of Default has occurred and (ii) any accrued and unpaid interest thereon. Furthermore, if an Event of Default in not cured, L1 also shall have the right to convert the Mandatory Default Amount, upon the terms provided in the L1 Second Tranche Note.

 

*Security*

As collateral for the obligations under the Securities Purchase Agreement and the L1 Second Tranche Note, the Company has granted to the holder a senior security interest in all of the Company's current and future assets, if any, (inclusive of intellectual property) in the United States and an account in connection with a duly executed deposit account control agreement ("DACA") subject to certain exceptions, as set forth in the Security Agreement (as defined in the L1 Securities Purchase Agreement).

## Exhibit 4.17

**Exhibit 4.17**

**[\*\*\*\*\*] Insurance 2025 Project**

**Cooperation Agreement**

Party A (Lead Insurer): […]

Address: […]

Person in Charge: […]

Telephone: […]

Party B (Co-insurer): […]

Address: […]

Person in Charge: […]

Telephone: […]

Party C (Co-insurer): […]

Address: […]

Person in Charge: […]

Telephone: […]

Party D (Co-insurer): […]

Address: […]

Contact Person: […]

Telephone: […]

Party E (Co-insurer): […]

Address: […]

Person in Charge: […]

Telephone: […]

Party F (Co-insurer): […]

Address:

Person in Charge: […]

Telephone: […]

Party G (Co-insurer): […]

Address: […]

Contact Person: […]

Contact Number: […]

Party H (Co-insurer): […]

Address: […]

Contact Person: […]

Telephone: […]

Party I (Platform Technical Service Provider): […]

Address: […]

Contact Person: […]

Telephone: […]

Party J (Insurance Brokerage Service Provider): Sunshine Insurance Brokerage (Shanghai) Co., Ltd.

Address: Rooms 301-307, 3rd Floor, Building 6, Lane 727, Wuxing Road, Pudong New District, Shanghai

Contact Person: Luo Xiao

Telephone: 021-58901588

To comprehensively and thoroughly implement […] jointly issued by […], Provincial State Taxation Bureau, Provincial Local Financial Supervision Bureau, Provincial Department of Education, Provincial State-owned Assets Supervision and Administration Commission, Provincial Department of Civil Affairs, Provincial Rural Revitalisation Bureau, Provincial Federation of Trade Unions, and Provincial Disabled Persons' Federation, and to accelerate […] standardise project operations, and clarify the rights and obligations of all parties in the cooperation, the parties have amicably negotiated matters related to the […] Project and voluntarily reached the following agreement for mutual observance and execution.

The […] comprises a Lead Insurer and Co-insurers, responsible for the promotion, underwriting, claims settlement and related operations of the […] Project. Party A serves as the Lead Insurer for this Project, while Parties B, C, D, E, F, G and H act as Co-insurers.

Party I serves as the platform technical service provider for this project, delivering technical services including: medical insurance identity verification, individual account integration services, payment platform integration services, individual account reconciliation and settlement services, SMS verification services, pre-existing condition verification integration services, query database interface integration, policy application platform and backend system development services, claims fast-track system, Level 3 information security certification filing services, retrospective system deployment services, and insurance agent tool interface integration. Upon authorisation by the premium payer or insured party, Party I may act as the policyholder and be reported to regulators by the lead underwriting insurer. Party I shall not collect or remit premiums on behalf of others, nor shall it collect surrendered premiums or claims settlements.

Party J, as the insurance brokerage service provider, delivers insurance brokerage services to clients. Responsibilities include assisting with the establishment of the "[…]" co-insurance consortium, WeChat official account registration applications, formulating and executing operational promotion strategies, and providing client consultation services.

**Chapter I: Co-insurance Arrangements**

**Article 1: Principles of Co-insurance**

1. The pooling consortium companies shall, based on the principles of "unified service, shared risk, amicable consultation, and shared benefits", and grounded in the insurance contract and this agreement, jointly bear the responsibilities and obligations related to the "[…]" project.

2. The Pooling Entity Companies shall collectively be responsible for the "[…]" project. Parties B, C, D, E, F, G and H agree to appoint Party A as the Lead Insurer, responsible for spearheading negotiations with government supervisory bodies, technical service providers, insurance brokerage service providers and other relevant parties concerning information system development, operational promotion, insurance brokerage services and value-added product services. Party A shall also coordinate resources among the co-insurance consortium members to liaise with provincial and municipal government authorities, and undertake promotional activities, underwriting, claims settlement and related operations. No co-insurance company may unilaterally withdraw from the […] co-insurance consortium or terminate this agreement before the insurance liabilities stipulated in the contract have been fulfilled.

3. All pooling insurers shall adhere to commercial confidentiality principles and shall not disclose any information pertaining to the "[…]" project to third parties without the prior authorisation of […].

4. Pooling companies shall not, under any circumstances, act to the detriment of the collective interests of the pooling arrangement.

**Article 2: Co-insurance Consortium Operational Mechanism**

1. Unified Decision-Making Principle. A Project Management Leading Group shall be established within the consortium, chaired by the Lead Insurer. Where member companies fail to reach consensus on operational matters, decisions shall be determined by majority vote: resolutions shall pass if supported by more than half of the participating insurers, and shall be rejected otherwise.

2. Unified Management Principle. Matters requiring consultation with […] and relevant supervisory authorities in daily operations shall be handled by the Lead Insurer.

3. The Lead Insurer shall handle premium settlements and insurance benefit claims with the insured party. Other pool members shall actively cooperate and bear responsibility in proportion to their respective co-insurance shares.

4. Co-insurers shall not unilaterally terminate this agreement during its term. Should any insurer withdraw from the consortium during the co-insurance period for reasons other than force majeure, it shall bear liability for breach of contract as stipulated herein. Its share shall be assumed proportionally by the remaining co-insurers, who shall continue fulfilling their obligations.

**Article 3: Insurance Coverage**

1. The co-insurance consortium shall provide insurance services in accordance with the insurance coverage stipulated under the "[…]" product. For matters falling outside the scope of insurance coverage, supplementary agreements shall be established as stipulated in the "Notice on Regulating Urban Customised Commercial Medical Insurance Business of Insurance Companies" ([…]), subject to confirmation by […]

2. During the contract period, any changes to insurance coverage arising from policy adjustments shall be implemented in accordance with the new policies only after mutual agreement between all co-insurance companies and […].

**Article IV: Co-insurance Ratios and Shares**

1. Business Objective: Guided by […], the overall participation rate target for the third phase of the "[…]" project is "8% guaranteed, 10% targeted" – meaning a minimum participation rate of 8% (approximately 2.56 million people) and an aspiration for 10% (approximately 3.2 million people), based on a fundamental medical insurance participant base of approximately 32 million people.

2. Total premiums are categorised as online and offline premiums. Online premiums comprise individual policy premiums generated through non-consortium entities (government, platforms, media, etc.) promoting sales. Offline premiums encompass all premiums (including individual and group policies) generated by consortium members via their proprietary channels, which are classified as self-promoted offline business. Consortium shares are allocated between online and offline channels as follows:

(1) Offline promotion premiums accrue to individual co-insurance consortium members.

(2) Allocation rules for the share of online premiums generated through unified promotion by the project operation platform (Public Premium Pool). The Public Premium Pool comprises two components:

First, the fixed share (Pool A: 40%): The lead insurer responsible for policy issuance and claims settlement receives 40% of the public premium pool.

Second, the residual share (Pool B: 60%): distributed among all co-insurance group insurers (including the lead underwriter) based on the proportion of their respective offline premiums to the total offline premiums of the entire co-insurance group.

3. Co-insurance ratio for pool members = (allocated online premiums + offline premiums) / total premiums

4. To enhance sales promotion efforts, any co-insurance company within the consortium whose offline sales volume falls below 50,000 policies (50,000 insured persons) in the 2025 fiscal year shall be ineligible to participate in the subsequent "[…]" project ([…] 2026).

5. Subsequent references to "online" and "offline" in this agreement shall be interpreted in accordance with the definitions provided in this chapter.

**Article 5: Underwriting Services**

1. The "[…]" product adopts a combined online and offline promotion model for policy acquisition, led by the Lead Insurer with all pool members jointly undertaking publicity and implementation. Pool members shall strictly adhere to the cooperative agreement during promotional activities:

(1) The "[…]" WeChat official account and sales tool QR codes shall serve as the entry points for policy applications;

(2) The platform technical service provider shall serve as the sole technical interface provider, utilising dedicated QR codes for policy performance statistics;

(3) All pool member companies must underwrite policies through the platform; private underwriting is strictly prohibited;

(4) Co-insurers shall refrain from engaging in unfair competition, including inciting policyholders to cancel their policies and re-enrol through their own channels;

(5) All consortium members shall implement, comply with, and enforce all national insurance laws and regulations. Sales practices must be standardised, and improper means to compete for business are prohibited. Members shall jointly uphold insurance credibility, maintain stable and sound market order, and support one another through unity and cooperation. During promotional and business development activities, any conduct disrespectful to, or disparaging or defamatory of, other participating entities is strictly prohibited. Avoidance of incidents detrimental to the […] brand image is imperative, and the provision of benefits to policyholders, premium payers, or insured parties beyond those stipulated in insurance contracts is resolutely prohibited. Effective management of sales channels shall be maintained, encompassing but not limited to cooperative insurance intermediaries and duly qualified sales platforms. No business dealings related to this agreement shall be conducted with insurance intermediaries that lack approval and certification from national insurance regulatory authorities, or those ordered to rectify, revoke, or cease operations by such authorities. Should any member insurer of the consortium be found in violation of these terms, its sales qualification shall be terminated effective from the date of verification.

(6) The pooling companies jointly undertake that sales expenses for this project shall not exceed 5% of the policy premium. Any increase in sales expenses is strictly prohibited. Furthermore, the market sales premium for the "[…]" product shall be uniformly set at RMB 149 per person per annum. Sales expenses for individual business shall not be used to provide additional benefits to policyholders or insured persons. Should any co-insurance company be found in breach of this undertaking, the platform operator shall publish the violation on the "[…]" official account following confirmation by the co-insurance company.

2. Party A shall organise the co-insurance consortium companies to file the underwriting responsibilities of "[…]" with the relevant regulatory authorities. The product details are set out in: Appendix 1: […] ("[…]" 2025 Edition).

---

| | | |
|:---|:---|:---|
| **"[…] 2025" Product Filing Information** | **"[…] 2025" Product Filing Information** | **"[…] 2025" Product Filing Information** |
| Product Name | Insurance Category (Clause) | **Filing Document Number** |
| […] | […] | […] |

---

3. Premium Collection

Premiums paid by individual customers via WeChat Pay: All premiums shall be deposited into Party J's dedicated "[…]" premium income account. Within 10 working days after the policy period reconciliation is completed, Party J shall transfer the full amount of online premiums to Party A's premium account based on the reconciled amount. Party A shall then allocate the respective co-insurance shares determined after premium reconciliation and settlement to each co-insurance entity insurance company.

Premiums paid via individual accounts: In principle, premiums shall be paid to Party A's premium account. Where medical insurance centres in other coordinated regions (excluding […]) stipulate otherwise, Party J shall settle directly with them and transfer the full premium amount to Party A's dedicated premium account. Party A shall then allocate the co-insurance shares determined after reconciliation to each co-insurance consortium insurer.

Group customer premiums: All premiums shall be deposited into Party A's premium account. Following reconciliation at the end of the insurance period, Party A shall allocate the determined co-insurance shares to each insurance company within the co-insurance consortium after reconciling and settling the premiums.

Bank account for premium collection by Party A's operational implementation entity:

Account Name: […]

Bank: […]

Account Number: […]

4. Premium Settlement

(1) Upon receipt of the full premium amount, Party A shall notify all co-insurers to issue invoices. Within 15 working days of Party A receiving the premium invoices issued by other co-insurers, the corresponding premium amounts shall be transferred to the designated accounts of such co-insurers.

(2) Should the client request policy surrender during the coverage period, upon submission of complete and reasonable application materials, Party A shall review the client's documentation and calculate the refundable premium. Following client confirmation, Party A shall email the surrender application materials to […], and shall advance the surrender premium to other co-insurers for transfer to Party J within 10 working days. Party J shall pay the surrender premium within 10 working days of receiving Party A's surrender request, based on the customer information provided by Party A. Premiums for "[…]" purchased via the employee medical insurance personal account shall be settled and paid to Party J centrally by the medical insurance centres of each coordinated area in […] Province (excluding […]).

Party A shall provide monthly "Premium Refund Details" to other co-insurance entities. Within 10 working days of receiving Party A's monthly "Premium Refund Details", other co-insurance entities shall transfer their respective shares of premium refunds to Party A's designated account.

(3) Party A's invoicing details and bank accounts for premium collection by co-insurance entities:

Company Name: […]

Tax ID: […]

Address: […]

Telephone: […]

Bank: […]

Account Number: […]

Bank Account for Premium Collection by Party B's Operational Implementation Entity

Account Name: […]

Bank Account Number: […]

Account Opening Bank: […]

Bank account for premium collection by Party C's operational entity

Account Name: […]

Account Opening Bank: […]

Account Number: […]

Bank Account for Premium Collection by Party D's Operational Implementation Entity

Account Name: […]

Bank: […]

Account Number: […]

Party E's Actual Business Implementation Entity's Bank Account for Premium Collection

Account Name: […]

Bank: […]

Account Number: […]

Bank account for premium collection by Party F's operational implementation entity

Account Name: […]

Bank: […]

Account Number: […]

Bank account for premium collection by Party G's operational entity

Account Name: […]

Bank: […]

Account Number: […]

Bank account for premium collection by the actual business implementation entity of Party H

Account Name: […]

Bank: […]

Account Number: […]

5. Technical platform service provider (Party I) shall push underwriting data to the co-insurance pool according to the following rules:

Online applications: Provide the customer's name and ID number, but allocate policyholders to each participating insurer based on the proportion of their respective offline premium amounts to the total offline premium amount of the entire co-insurance pool. The policyholder's telephone number shall be assigned to the allocated insurer, and insurers shall not share this information;

Offline applications: Provide full details (including telephone numbers) for all customers applying offline through one's own company, while for customers applying offline through other companies, only provide name and ID number;

Allocation and processing of online policyholder data shall be conducted by the technical platform service provider following the conclusion of the sales period, based on the final confirmed co-insurance ratios. The customer allocation principles are as follows:

(1) Allocation by one-year age brackets according to respective share ratios;

(2) Members of the same household shall be allocated to the same company;

(3) Clients with pre-existing conditions or current illnesses undergoing treatment shall be allocated according to respective share ratios;

(4) The client allocation procedures of the technical platform service provider shall be reviewed by the information technology personnel of each co-insurance entity.

6. Policy Issuance and Underwriting

For both online and offline applications, Party A and its branches shall uniformly issue policies and full-premium VAT ordinary invoices. For corporate applications, Party A shall uniformly issue policies and full-premium invoices to legal entity clients. Individual applicants shall only receive participation certificates; no invoices shall be provided to individuals. The […] Co-insurance Consortium shall commission Party I to generate electronic insurance certificates. These certificates shall display only the […] insurance coverage, special provisions, coverage details, policy information, and important notices, with the names of all co-insurers listed below. After Party A confirms the required content on behalf of the consortium, Party I shall generate the specific electronic certificates.

The technical platform service provider (Party I) shall furnish Party A with the full names and national identity card numbers of all customers (including those who applied online and offline) for the purpose of underwriting and policy issuance by Party A.

**Article 6 Claims Settlement Services**

1. Party A shall actively coordinate with all co-insurers in processing insurance claims in accordance with relevant laws and regulations.

2. Party A shall implement "fast claims settlement" for insurance payouts in accordance with the requirements of […].

3. For medical expenses incurred by […] policyholders during hospitalisation at designated medical institutions or for certain high-value medications (at designated outpatient clinics and dual-channel pharmacies), […] shall facilitate rapid claims settlement following basic medical insurance reimbursement.

4. Medical expense reimbursements for insured persons shall be uniformly disbursed by Party A based on data provided by medical insurance authorities.

5. Following Party A's advance payment of claims, the "[…]" Commercial Health Insurance Claims Expenditure Schedule (\*\*Month\*\*, \*\*Year\*\*) shall be prepared on the day each claims data batch is pushed, detailing the claims situation. Each co-insurance entity shall, within 10 working days of receiving the aforementioned Schedule for the current month's claims from Party A, transfer the corresponding share of claims payments to Party A's designated account. Party A shall provide only this single document as evidence for the reimbursement. (the expenditure table requires a stamped hard copy) shall, within 10 working days, transfer the corresponding share of claims payments to Party A's designated account. Party A shall provide only the aforementioned single document as the basis for apportioning claims payments. Co-insurers shall not delay or refuse apportionment payments on any grounds, including alleged incomplete documentation. Each co-insurer shall designate a dedicated individual to handle settlement matters. No co-insurer may withhold payment for any reason. Any co-insurer failing to remit reinsurance payments within 10 working days shall pay Party A a late payment penalty equivalent to 10% of the outstanding reinsurance amount. Such co-insurer shall also be barred from participating in the subsequent "[…]" programme. Should claims arising from Party A's system errors or operational mistakes prevent a co-insurance entity from timely reimbursement, Party A shall waive the late payment penalty for the affected portion based on actual circumstances.

6. The recovery of reinsurance claims shall be primarily undertaken jointly by Party A and Party I, with all co-insurers providing necessary cooperation. All recovered funds shall be allocated to Party A, while the company subject to recovery shall bear the corresponding expenses.

Party A Claims Disbursement Account

Account Name: […]

Bank Account Number: […]

Bank: […]

7. To ensure the efficient and sound operation of the project and safeguard the collective interests of the co-insurance consortium, member companies shall deposit a performance bond managed by Party A. The performance bond management rules are as follows:

(1) Each co-insurance company shall contribute a performance bond equivalent to […] of the premium within its final share.

(2) Within 15 working days of confirming the final co-insurance ratio following the sales period, each co-insurer shall remit the agreed performance bond amount to Party A's claims settlement account;

(3) Should a co-insurance entity fail to remit its share of claims payments within 10 working days, late payment penalties shall be deducted from the guarantee deposit in accordance with Clause 6.5 of the Claims Handling Services. A formal notice shall simultaneously be issued to the defaulting co-insurer, detailing the deduction and the remaining guarantee deposit balance.

(4) During the term of this Agreement, should any deduction be made from the guarantee deposit, the co-insurer shall replenish the performance bond to its pre-deduction level within 10 working days of receiving notification of the late payment penalty deduction;

(5) Pursuant to Article 26 of the Insurance Law, which stipulates that "for insurance other than life insurance, such as health insurance, medical insurance, critical illness insurance, etc., the insured or beneficiary must submit a claim to the insurer within [two years] of becoming aware or having reason to be aware of the occurrence of the insured event," the claims acceptance period for the […] 2025 project shall be extended until 24:00 on 31 December 2026. Within 30 working days of the expiry date, Party A shall refund the remaining performance bond interest-free via the original payment method to the co-insurance consortium's designated payment account.

The refund calculation formula is as follows: Performance Bond Refund Amount = Initial Deposit Amount - Deductions During Period + Additional Payments During Period.

Party A Claims Disbursement Account

Account Name: […]

Bank Account Number: […]

Bank Name: […]

8. The compensation amounts paid by each co-insurance company shall be consistent with the amount confirmed by Party A and shall not be refused under any circumstances.

9. For special claims cases (e.g., ambiguous liability), Party A may convene a joint deliberation among co-insurers to resolve the matter through mutual consultation, with written documentation forming part of the claims file.

10. Co-insurance companies shall not delay or refuse payment of "[…]" insurance claims under any circumstances. Failure to do so shall constitute a breach of contract, for which each party shall bear corresponding liability. Party A reserves the right to initiate legal proceedings, with all associated costs—including but not limited to litigation fees and legal counsel fees—borne by the defaulting party.

**Article 7: Other Expenses and Cost Allocation**

1. Scope of Other Expenses

(1) Insurance Brokerage Fees: Expenses related to assisting with insurance product scheme design, facilitating consortium formation, and formulating and executing relevant promotional and operational plans.

(2) Technical Service Fees: Expenses incurred for implementing medical insurance identity verification, individual account deductions, expedited claims settlement, and project platform development.

(3) Professional service fees that may arise in accordance with relevant requirements, including but not limited to project consultancy fees, project audit implementation fees, and project certification assessment fees. The above fees shall be shared by the co-insurance consortium companies in proportion to their respective co-insurance premium allocations.

(4) Other reasonable expenses agreed upon by the co-insurance consortium.

2. Technical service fees shall be shared equally among the pooling companies, whereby each participating insurer shall pay: Technical Service Fee = Total Technical Service Fee / Number of Pooling Insurers.

3. All other expenses shall be shared by the pooling companies in proportion to their respective co-insurance premium shares.

4. Invoicing details for pooling members are as follows:

Invoicing details for Party A's operational entity:

Company Name: […]

Tax ID: […]

Address: […]

Telephone: […]

Bank: […]

Account Number: […]

Invoicing details for Party B's operational entity:

Company Name: […]

Tax ID: […]

Address: […]

Telephone: […]

Bank: […]

Account Number: […]

Party C's Actual Operational Implementation Institution Invoice Information:

Company Name: […]

Tax ID: […]

Address: […]

Telephone: […]

Bank: […]

Account Number: […]

Invoice Information for Party D's Actual Operational Implementation Institution:

Company Name: […]

Tax ID: […]

Address: […]

Telephone: […]

Bank: […]

Account Number: […]

Invoicing details for Party E's operational implementation entity:

Company Name: […]

Tax ID: […]

Address: […]

Telephone: […]

Bank: […]

Account Number: […]

Invoice details for the actual operational entity:

Company Name: […]

Tax Registration Number: […]

Address: […]

Telephone: […]

Bank: […]

Account Number: […]

Invoice Information for G's Actual Operational Entity:

Company Name: […]

Tax ID: […]

Address: […]

Telephone: […]

Bank: […]

Account Number: […]

Invoice Information for H's Actual Business Implementation Institution:

Company Name: […]

Tax ID: […]

Address: […]

Telephone: […]

Bank: […]

Account Number: […]

**Article 8 Rights and Obligations of the Pool**

1. Rights and Obligations of the Lead Insurer

(1) As Lead Insurer, Party A shall handle all business matters between the Pooling Entity and […], Party I, Party J, the Insured, and the Beneficiaries in accordance with the Contract.

(2) Party A shall fulfil the underwriter's responsibilities stipulated in the Contract on behalf of the Pooling Entity, designate accounts for premium receipts and claims payments, and be responsible for unified premium collection, unified policy issuance, unified claims settlement, unified business processing standards, and unified management of the Pooling Entity. Party A shall coordinate with each Pooling Entity insurer to communicate with or obtain required materials from […], and provide such materials to each Pooling Entity insurer.

(3) Party A shall fulfil the service requirements stipulated in the Contract by […] for underwriters on behalf of all co-insurers, ensuring the legality, authenticity, and accuracy of all project-related expenses incurred during service delivery.

(4) Party A shall transfer premiums to co-insurers and disburse claims payments to policyholders within stipulated timeframes. Party A shall guide and standardise commercial health insurance service procedures and operational standards.

(5) Party A shall take the lead in undertaking the promotion and mobilisation of the "[…]" scheme, premium collection, claims settlement, and related tasks.

(6) Party A shall take the lead in refining the insurance product content according to project requirements, specifying the scope of disease screening, and submitting it to […] for archiving.

2. Rights and Obligations of Co-insurers

(1) Co-insurers (other co-insurance entities) shall actively cooperate with Party A in underwriting and claims settlement services for "[…]" in accordance with the insurance product scheme, claims procedures and timelines, administrative fees, dispute resolution, and relevant provisions stipulated in this cooperation agreement.

(2) Co-insurers (other co-insurance entities) shall pay corresponding claims to Party A within the timeframe stipulated in this Agreement.

(3) Co-insurers (other co-insurance consortium members) shall bear the administrative expenses of "[…]" in proportion to their respective co-insurance shares.

(4) Upon request by Party A, the Co-insurer (other co-insurance consortium companies) shall actively assist Party A in completing promotional services, file management, complaint management, telephone follow-ups, satisfaction surveys, and other tasks related to the "[…]" project to ensure its sound operation.

(5) Co-insurers (other co-insurance entities) shall implement project services in accordance with standardised service procedures and operational standards.

**Chapter II Technical Service Arrangements**

**Article 9: Scope of Cooperation**

As insurance institutions, the co-insurers shall be responsible for the overall operation of the "[…]" scheme, drawing upon their extensive insurance business experience. Furthermore, based on Party I's technical service experience as a technology company in similar projects across multiple regions, and with the unanimous consent of the co-insurers, Party I is hereby commissioned to undertake the technical and related service aspects of the "[…]" project. The services and work content are summarised below, with detailed specifications outlined in Appendix 2: Functional List:

1. Technical Services for the Policy Application System

(1) Mobile Insurance Platform. Individual online enrolment (including online policy purchase, post-enrolment identity verification import/export, premium order management, etc.), group policy online corporate booking, policy disclosure, and policy information enquiry.

(2) Personal Centre Functionality. Account information management (including account unbinding, personal information registration and modification, feedback submission, privacy agreement), order management (including order cancellation, detail viewing), certificate enquiry and download.

(3) PC-based Policy Application Platform. Includes policy management, ad hoc offline application management, group policy processing (encompassing online application scheduling, roster upload verification, bulk order import), relevant interface integration (enrolment channels, verification data interfaces, payment gateways), reconciliation support, and agent information management.

(4) Data Management Functions. PC real-time data dashboards, mobile real-time data dashboards, payment platform and reconciliation services, bulk order queries and exports (payments, refunds, etc.), agent list and performance queries.

(5) Integration with personal medical insurance account systems. Provides services for interfacing with personal medical insurance account systems, verifying medical insurance information, enabling payment channels, facilitating personal medical insurance account refunds, data collection, data analysis, and order export.

2. Claims Technical Services

(1) PC-based Claims Service Platform. Includes user permission management (user management, role management), policy management, foundational management (manage designated hospitals, underwriting institutions, three directories, designated pharmacies, benefit obligations, coverage plans, insurance products, etc.), claims management (claim filing, initial review, re-review and calculation implementation, handling of exceptional claims, comprehensive case queries, claims report statistics), expedited claims queries, payment management, log management, etc.

(2) Mobile Claims Service Platform. This includes user information management, mobile claims reporting, document submission (including supplementary submissions), and claims progress and outcome enquiries.

(3) Interface Integration Development. This includes integration with the policy application system and information synchronisation.

3. The information platform provided by the third party, including the policy application system, shall meet Level 3 requirements of the Cybersecurity Level Protection Scheme and obtain relevant certification. The traceable system provided by the third party for policy application, claims settlement and other service processes shall comply with the relevant requirements of the China Banking and Insurance Regulatory Commission's Notice on Standardising Traceable Management of Internet Insurance Sales Practices. It shall record and retain the operational traces of policyholders and insured persons on sales pages, which shall include the timestamps of the policyholder entering and exiting the sales page, as well as the content and timing of selections made by the policyholder and insured party on the sales page. The sales page shall include web pages prompting entry into the application process, displaying insurance terms and conditions, fulfilling duty of disclosure and clear explanation obligations, verifying the policyholder's identity, and enabling the policyholder to complete application details, independently confirm reading of relevant information, submit the application, and pay premiums. These pages shall be mandatory reading items. The retention period for traceable records shall commence from the date of termination of the insurance contract and shall not be less than ten years.

**Article 10 Acceptance Criteria**

The technical services provided by Party I pursuant to the "Cooperation Content" stipulated in Article 9 shall include the following functionalities and modules:

1. Technical Services for the Policy Application System

(1) Mobile Application Platform. Individual online insurance participation (including online application, post-verification import/export of participant identity, fee order management, etc.), group policy online corporate booking, insurance disclosure, and policy information enquiry.

(2) Personal Centre Functionality. Account information management (including account unbinding, personal information registration and modification, feedback submission, privacy agreement), order management (including order cancellation, viewing details), certificate enquiry and download, etc.

(3) PC-based Policy Application Platform. Includes policy management, ad hoc offline application management, group policy processing (encompassing online application scheduling, roster upload verification, bulk order import), relevant interface integration (enrolment channels, verification data interfaces, payment gateways), reconciliation support, and agent information management.

(4) Data Management Functions. PC real-time data dashboards, mobile real-time data dashboards, payment platform and reconciliation services, bulk order queries and exports (payments, refunds, etc.), agent list and performance queries.

(5) Medical Insurance Personal Account System Integration. Provides integration services with medical insurance personal account systems, verifying medical insurance information, enabling payment channels, facilitating medical insurance personal account refunds, data collection, analysis, and order export.

2. Claims System Technical Services

(1) PC-based claims service platform. Includes user permission management (user administration, role management), policy management, foundational management (enabling administration of designated hospitals, underwriting institutions, three directories, designated pharmacies, benefit obligations, coverage plans, insurance products, etc.), claims management (claim filing applications, initial review, re-examination and calculation implementation, handling of exceptional claims, comprehensive case queries, claims reporting statistics), expedited claims case queries, payment management, log management, etc.

(2) Mobile Claims Service Platform. This includes user information management, mobile claims reporting, document submission (including supplementary submissions), and claims progress and outcome enquiries.

(3) Interface Integration Development. This encompasses information exchange and synchronisation with underwriting systems, provincial medical insurance platforms, and insurance institution platforms.

**Article 11 Service Fees and Payment Method**

1. The Pooling Consortium shall pay Party I the agreed technical service fees totalling RMB […] (in words: […]). Of this sum, the technical service fee for the policy application system (including SMS notification costs) shall be […] (in words: […]), and the technical service fee for the claims system (including SMS notification costs) shall be […] (in words: […]).

2. The technical service fee shall be shared equally among the co-insurance consortium members, whereby each participating insurer shall pay: Technical Service Fee = Total Technical Service Fee ÷ Number of Consortium Insurers.

3. Should any co-insurer request Party I to undertake additional functional development or modification beyond the system functionalities stipulated in this Agreement (Appendix 2: Functional Specification) during the project period, Party I shall charge each co-insurer a service fee at a rate of RMB 1,800 per person-day (One Thousand Eight Hundred Yuan). The actual workload and total amount shall be determined in writing following assessment and negotiation between Party I and the co-insurance companies. Costs for additional functional development or modification shall be shared equally among the co-insurance companies.

4. Payment Method: Each Co-Insurer shall pay Party I the respective amount within 15 working days after the payment period published on the platform concludes and upon receipt of the invoice issued by Party I. The apportioned amount shall be calculated according to the apportionment rules stipulated in Clause 11(2), with the final invoice amount issued by Party I as the basis. The invoicing information for Co-Insurer Companies shall be as agreed in Clause 7 of Chapter I.

5. Party I's designated bank account details are as follows:

Account Name: […]

Bank: […]

Account Number: […]

**Article 12 Rights and Obligations of the Parties**

1. Rights and Obligations of the Co-Insurance Consortium

(1) The Pooling Entity agrees to appoint Party A as Lead Insurer to spearhead negotiations with the Technical Service Provider regarding information system construction matters. Party A shall represent the Pooling Entity in setting requirements for the scope and quality of services provided by Party I, and shall conduct acceptance inspections.

(2) To provide necessary facilitation in accordance with the law, supply relevant project documentation and materials (e.g., providing corresponding technical interface connections, supplying hardware/software equipment and environments, obtaining written authorisation for relevant personal information from clients to ensure smooth implementation of this Agreement), ensuring all information is truthful, accurate, lawful and complete.

(3) Jointly deliberate with Party I on project-related matters and closely coordinate with Party I in executing project-related work. Designate a dedicated liaison officer to liaise with Party I.

(4) Strictly comply with national laws and regulations concerning the Personal Information Protection Law and Data Security Law, except as stipulated in Article 17 of this Agreement.

(5) Pay fees to Party I as agreed.

2. Rights and Obligations of Party I

(1) To provide services to the consortium in accordance with the provisions of Article 9 of this Agreement.

(2) Ensure that the standards and systems of the services provided are consistent and integrated with the overall scheme of the Pooling Entity. Upon completion of the service system development, be responsible for the routine maintenance of the system throughout the term of this Agreement.

(3) Except as stipulated in Article 17 of this Agreement, where the collection, retention, or use of personal information pertaining to clients of the Pooling Entity is required for the purposes of this Agreement, Party I shall strictly comply with applicable laws, regulations, and supervisory requirements. Party I shall request the Pooling Entity to provide the relevant written authorisation from such clients in accordance with the applicable provisions (this provision does not exempt the Pooling Entity from its own obligations under the law).

(4) During the provision of technical services by Party I, the Pooling Entity shall provide necessary cooperation. Should the actual requirements of the Pooling Entity exceed the functional scope stipulated in the preceding paragraph, additional service fees and extended timelines shall apply, subject to separate negotiation and confirmation, and shall not be deemed a breach by Party I.

(5) Party I shall be entitled to require the Pooling Entity to pay fees.

**Chapter III: Insurance Brokerage Service Agreement**

Given Party J's extensive experience as a leading domestic internet insurance brokerage firm in providing insurance brokerage services for similar projects across multiple regions, the Pooling Entity and Party J hereby agree that under this Agreement, Party J shall provide insurance brokerage services for the "[…]" business in the interests of the policyholder. The specific services and work scope are as follows:

**Article 13: Scope of Cooperation**

1. The Pooling Entity and Party J agree that, for the "[…]" business under this Agreement, Party J shall provide brokerage services to facilitate the conclusion of insurance contracts between policyholders and the Pooling Entity for the "[…]" business, acting in the best interests of the policyholders. Based on the actual operational requirements of the "[…]" project, Party J shall provide the Pooling Entity with client advisory services, training services, and other related services.

2. The Pooling Companies agree to authorise Party A to issue insurance policies in accordance with the insurance plan mutually confirmed in advance between Party A and Party J, and to pay brokerage fees and service charges to Party J at the rates agreed between the parties. The business attribution for the cooperative insurance products shall belong to Party A and its relevant co-pooling entities.

3. Party A, representing the co-insurance consortium, authorises Party J to collect premiums on its behalf. Party J shall establish a dedicated premium collection account in accordance with the requirements of the China Banking and Insurance Regulatory Commission. Party J shall pay Party A the full premium amount for all insured policies under this Agreement, comprising "Premiums paid via WeChat Pay by individual customers" and "Premiums paid via individual accounts by individual customers". Following the conclusion of the insurance period, the business departments of both parties shall commence reconciliation and notify their respective finance departments of the reconciliation results. The finance departments shall complete verification within 10 working days, after which Party J's finance department shall remit the full amount of "Individual Customer WeChat Payment" premiums to Party A within 10 working days. Where relevant requirements exist within medical insurance pooling regions necessitating Party J's collection of "Individual Customer Personal Account Payment" premiums, Party J shall remit the full amount of such premiums to Party A within 10 working days of receipt.

4. The geographical scope for cooperative sales under this Agreement shall be [[…] Province (excluding […])]. Any subsequent expansion of the sales scope shall be separately agreed. Party A and its branches shall undertake services including policy issuance, customer service, and fee settlement.

5. During the sales and claims periods for "[…]", customer service shall primarily be provided via the hotline: […]. The Lead Insurer shall assign claims teams and customer service personnel to assist in handling matters. During the sales and claims periods, should customer complaints be received, the […] helpline shall prioritise handling regulatory complaints. Should this adversely affect the Lead Insurer's rating, Party A may request Party J to reduce the commission rate, with specific adjustment methods to be separately agreed upon by Party A.

**Article 14: Premium Collection and Settlement**

1. Party A, representing the co-insurance consortium, authorises Party J to collect a portion of premiums on its behalf. Party J shall establish a dedicated premium collection account in compliance with the China Banking and Insurance Regulatory Commission's requirements and shall remit to Party A the full amount of premiums collected under this project for all underwritten policies, as stipulated herein.

2. Following the conclusion of the centralised enrolment period for "[…]", Party J shall conduct fund reconciliation and settlement with Party A. Upon confirmation of accuracy, Party J shall notify Party A. Party A shall then distribute funds to the co-insurance consortium companies according to the final co-insurance ratios and share allocations.

Bank account for premium collection by Party A's operational implementation entity

Account Name: […]

Bank: […]

Account Number: […]

Specialised bank account for premium collection by Party J:

Name: […]

Bank: […]

Account Number: […]

3. Party J shall not default on premiums owed to the co-insurance pool for any reason. Should payment remain outstanding for over 10 working days, Party J shall pay a late payment penalty of 10% of the outstanding premium to each co-insurer. Such penalties shall be collected by Party A and distributed to other co-insurers according to their respective co-insurance ratios.

**Article 15 Commission Settlement**

1. As the insurance brokerage company assisting in the design of the "[…]" insurance product scheme, facilitating the establishment of the co-insurance consortium, handling premium collection and disbursement, and managing the WeChat official account registration and operations, Party J shall be responsible for the operational promotion and customer consultation of this project. It shall also provide employee training and promotional guidance related to this project to the co-insurance consortium companies and shall be entitled to collect brokerage commissions from the co-insurance consortium companies in accordance with the terms of this Agreement.

2. The insurance products and fee settlement ratios for this project are as follows. Co-insurers shall pay brokerage fees to Party J in accordance with the standards stipulated in this agreement.

Product Name <u>Insurance Type (Policy Terms)</u> <u>Filing Document Number</u> <u>Fee Settlement Ratio</u> <br> <u> […]</u> <u>[…]</u> <u>[…]</u> <u>[…]</u>

3. For insurance brokerage services provided by Party J, brokerage fees shall be settled based on 10.6% of the full premium amount actually received by the co-insurers and underwritten in their core systems for each policy under all business (including individual and group policies) within this project.

4. The Pooling Company shall provide Party J with a brokerage fee settlement statement within 30 days of receiving the full premium. Upon mutual verification and confirmation, Party J shall issue a special VAT invoice (at a 6% VAT rate) to the Pooling Company. Within 15 working days of receiving the VAT special invoice issued by Party J, the co-insurance consortium shall remit the corresponding brokerage fee to Party J's designated account. Any taxes or duties related to the brokerage fee shall be borne solely by Party J.

5. Party J's dedicated bank account for brokerage fee collection:

Name: Sunshine Insurance Brokerage (Shanghai) Co., Ltd.

Bank: China Merchants Bank, Shenyang Branch, Nanshuncheng Sub-branch

Account Number: 755913555810555

6. Party A, as the Lead Insurer, shall be responsible for providing policy surrender services to clients and shall furnish Party J with a monthly Policy Surrender Statement. Within ten days of receiving the Policy Surrender Statement, Party J shall refund the relevant client brokerage fees in full to Party A's designated account.

Party A's Designated Bank Account:

Account Name: […]

Tax ID: […]

Address: […]

Telephone: […]

Account Opening Bank: […]

Account Number: […]

7. Party J shall ensure that a special VAT invoice is issued to the Pooling Entity upon receipt of written notification from the latter. The invoicing details for the Pooling Entity shall be as stipulated in "Chapter I, Article VII".

8. Party J must strictly comply with relevant tax laws and regulations when issuing lawful special VAT invoices.

9. Should any VAT special invoices issued by Party J be lost, destroyed, or stolen prior to delivery to the Pooling Entity due to Party J's fault, thereby preventing successful delivery, Party J shall be responsible for providing the Pooling Entity with documentation as required by tax regulations to ensure the Pooling Entity can successfully claim tax credits.

10. To ensure timely and successful tax credit claims for invoices received, should any VAT special invoices issued by Party J become lost after delivery and acceptance by the Pooling Entity, Party J shall assist the Pooling Entity in providing the requisite documentation as stipulated by relevant tax laws and regulations. All expenses or costs incurred thereby shall be borne by the Pooling Entity.

**Article 16 Rights and Obligations of the Parties**

1. The Pooling Company shall enjoy the following rights:

(1) The right to require Party J to maintain the confidentiality of the Pooling Entity's commercial secrets;

(2) The right to require Party J to observe the principle of utmost good faith and fulfil its duty of disclosure when conducting brokerage business;

(3) The right to require Party J to provide relevant materials or data pertaining to this project that do not involve Party J's commercial secrets;

(4) The right to require Party J to perform services under this agreement: customer service, operational promotion and other related matters;

(5) The right to review Party J's marketing and promotional materials;

2. The Pooling Companies shall fulfil the following obligations:

(1) To furnish Party J with necessary business documentation, policy terms, and other requisite materials. Should the Pooling Entity require amendments to relevant operational rules (including underwriting criteria, product discontinuation, etc.), prior consultation with Party J shall be undertaken, with finalised changes notified to Party J ten days in advance;

(2) The Pooling Entity shall pay brokerage fees to Party J punctually in accordance with the terms of this Agreement.

3. Party J shall enjoy the following rights:

(1) The right to obtain relevant terms, documents, business materials, promotional materials, and review authorisations provided by the Pooling Companies;

(2) The right to require the Pooling Companies to pay brokerage fees as stipulated in this Agreement;

4. Party J shall undertake the following obligations:

(1) To pay premiums to the Pooling Entity in a timely manner and to refund brokerage fees in accordance with client surrender requests;

(2) When conducting brokerage business, Party J shall fulfil its duty of full disclosure;

(3) Party J shall maintain confidentiality and shall not disclose to any third party any information or materials concerning the Pooling Entity obtained in the course of its brokerage activities;

(4) Party J shall strictly conduct insurance brokerage business in accordance with the insurance terms, rates, documents, and operational practices provided by the Pooling Entity. It shall properly safeguard documents and materials provided by the Pooling Entity, shall not lose or transfer them to others, and shall not alter the documents or materials of the Pooling Entity;

(5) When collecting brokerage fees, Party J shall provide the Pooling Companies with brokerage fee invoices issued under the supervision of the national tax authorities;

(6) Urge and guide clients in disaster prevention, loss prevention and safety measures to safeguard the interests of the Pooling Group;

(7) Cooperate with the Pooling Entity in collecting information/materials and handling claims related to brokerage operations.

**Chapter IV Other Provisions**

**Article 17: Confidentiality Clauses**

1. All parties and their personnel shall undertake confidentiality obligations regarding the following information accessed, utilised, or generated during the operation of the "[…]" project:

(1) Social insurance registration details of the insured persons and their employing organisations.

(2) Social insurance contribution information of the insured persons and their employers.

(3) The insured person's contribution period and personal account information.

(4) Medical treatment information of the insured person.

(5) Information regarding the insured person's entitlement to benefits under social medical insurance and commercial health insurance.

(6) Other information reflecting the insured person's personal entitlements.

The aforementioned information shall not be disclosed to any third party without the written consent of […] and the Pooling Entity.

2. Should any party breach confidentiality obligations and thereby cause losses to the insured person, the joint insurance entity, the platform technical service provider, the insurance brokerage service provider, or their employing organisation, they shall bear liability for compensation in accordance with the law.

3. Specific details and requirements for project information sharing shall be separately stipulated in supplementary agreements to be executed by all parties.

4. This Agreement shall not terminate upon the termination of this Agreement.

**Article 18 Intellectual Property Rights**

1. Intellectual property rights utilised by Party I in performing this Agreement, along with copyrights, patent rights and other intellectual property rights pertaining to achievements obtained prior to the execution of this Agreement, shall remain the property of Party I.

2. Intellectual property rights pertaining to proprietary technical achievements arising from services provided under this Agreement shall belong to Party I.

3. Party I undertakes that the technology provided for the services under this Agreement shall not infringe upon the lawful rights and interests of any third party. Should any third party pursue claims as a result, Party I shall bear all liability.

**Article 19: Liability for Breach**

1. Any Party breaching the terms of this Agreement shall bear liability for breach of contract towards the other Party; where such breach causes direct economic loss to the other Party, compensation shall be paid for such direct economic loss.

2. Should any party's material breach of this Agreement constitute a suspected criminal offence, the other contracting party may report or refer the matter to judicial authorities.

3. Unless otherwise stipulated herein, should either party cause losses to the other through breach of this Agreement or its supplementary agreements, the non-breaching party may unilaterally terminate this Agreement and pursue the breaching party's liability for breach.

**Article 20: Anti-False Advertising Clause**

1. All parties shall strictly comply with the provisions of relevant laws of the People's Republic of China, including the Copyright Law, Trademark Law, Patent Law, Anti-Unfair Competition Law, Contract Law, and Advertising Law. Each party shall have the right to use or promote the matters agreed upon in this Contract in a truthful and reasonable manner within the agreed scope and manner, provided that such use or promotion shall not involve any confidential information agreed upon in the Contract. To avoid risks such as trademark infringement and unfair promotion, prior written consent from the brand owner must be obtained before using the other party's trademarks, brands, or corporate names for promotional purposes. Otherwise, such use or promotion shall not be permitted.

2. The Parties hereby undertake as follows:

(1) To respond positively to reasonable requests from other parties for the use or promotion of cooperative matters.

(2) Any commercial promotion using another party's trademarks, brands, or corporate names without written consent; fabrication of cooperative matters; exaggeration of the scope, content, effects, scale, or extent of cooperation; or other breaches of this Agreement may constitute unfair competition through false advertising. The non-breaching party or aggrieved party shall have the right to pursue corresponding legal liability.

**Article 21 Anti-Commercial Bribery Clause**

1. All parties acknowledge and agree to strictly comply with the laws and regulations of the People's Republic of China concerning anti-commercial bribery. Both parties understand that any form of bribery or corruption constitutes a violation of the law and will be subject to severe legal penalties.

2. No Party shall solicit, accept, provide, or offer any benefit beyond those expressly stipulated in this Agreement to the other Party, its agents, or other relevant personnel. Such benefits include, but are not limited to, overt or covert discounts, cash, shopping vouchers, tangible goods, securities, travel arrangements, or other non-monetary advantages.

3. All parties strictly prohibit any commercial bribery by their representatives. Any representative engaging in conduct listed in Clause 2 of this Article shall be subject to disciplinary action under their respective company policies and national laws.

4. Should any representative of the Parties engage in any conduct listed in Clause 2 of this Article with any third party outside the scope of this Contract for the purposes of this Contract, such conduct shall constitute a violation of national laws and shall be subject to penalties under national laws.

5. Where a Party or its representative breaches the provisions of Articles 2, 3 or 4 above, causing loss to the other Party, it shall bear liability for damages.

6. The term "other relevant personnel" as used herein refers to individuals, other than the respective parties' authorised representatives, who have a direct or indirect interest in the Contract, including but not limited to relatives and friends of the Contract representatives.

**Article 22 Anti-Money Laundering Provisions**

1. The consortium agrees to authorise Party A to represent the consortium in fulfilling relevant anti-money laundering obligations under the "[…]" project. All parties shall comply with and implement the requirements of the Anti-Money Laundering Law of the People's Republic of China, the Administrative Measures for Customer Identification and Customer Identity Data and Transaction Record Keeping by Financial Institutions, the Administrative Measures for Reporting Large Transactions and Suspicious Transactions by Financial Institutions, the Notice on Strengthening Customer Identification Work Related to Anti-Money Laundering, the Guidelines for Obligated Institutions on Establishing Anti-Money Laundering Transaction Monitoring Standards, and the Administrative Measures for Anti-Money Laundering Work in the Insurance Industry.

2. Should Party A detect any irregularities during transactions, or circumstances constituting a large transaction, it shall promptly notify all other parties involved. All parties shall fulfil their reporting obligations for large and suspicious transactions in accordance with the Administrative Measures for Reporting Large and Suspicious Transactions by Financial Institutions.

3. In establishing and maintaining business relationships with Party A, Party J shall cooperate with Party A's due diligence procedures. Party J shall provide authentic and valid identification documents or proof of identity, accurately and completely complete relevant identity information, and truthfully furnish details and materials concerning beneficial owners. Upon Party A's request, Party J shall truthfully provide materials related to the purpose and nature of the business relationship or transaction, as well as the source and use of funds. Should the Client fail to cooperate with Party A in implementing reasonable due diligence measures in accordance with anti-money laundering regulations, Party A reserves the right to restrict or refuse the transaction and, where appropriate, submit a suspicious transaction report. Where the Client receives or pays fees to Party A in cash rather than through financial institutions, and the amount involved is substantial and exceeds the prescribed threshold, the Client shall immediately notify Party A of the cash transaction and cooperate with Party A in completing relevant procedures, including reporting to the China Anti-Money Laundering Monitoring Centre.

**Article 23 Consumer Rights Protection**

All parties to this Agreement shall ensure that all business activities under this Agreement strictly comply with consumer rights protection requirements stipulated in national laws, regulations, and supervisory provisions, thereby safeguarding the lawful rights and interests of insurance consumers. The laws, regulations, and supervisory provisions referred to herein include, but are not limited to, the Insurance Law of the People's Republic of China, the Consumer Rights Protection Law of the People's Republic of China, and the Measures for the Protection of Consumer Rights and Interests of Banking and Insurance Institutions (CBIRC Order No. 9 of 2022). Specific requirements are as follows:

1. All parties shall prioritise consumer rights protection and establish compliant mechanisms for the admission and withdrawal of cooperative institutions. Party J shall not have engaged in any consumer rights infringement or been subject to regulatory notifications within the preceding two years. Party J shall establish robust consumer rights protection mechanisms and actively cooperate with the Pooling Group in handling consumer complaints. Should Party J be found by regulatory authorities to have infringed upon consumer rights during the course of business cooperation, or should it fail to cooperate with the consortium in handling consumer complaints, the consortium shall have the right to terminate its cooperation with Party J, including but not limited to contract termination, and shall include Party J in its negative list for cooperative institutions.

2. All parties to this agreement shall strictly fulfil their responsibilities in compliance and risk management, information security control, service pricing management, service continuity, information disclosure, dispute resolution mechanisms, liability for breach of contract, and emergency response, in accordance with relevant laws and regulations.

3. All parties shall regulate insurance sales practices in accordance with the Administrative Measures for Insurance Sales Activities, ensuring no conduct detrimental to consumer interests occurs during insurance sales. This includes, but is not limited to: Party J shall not promote or sell products/services to consumers under the joint underwriting consortium's name at business outlets or proprietary online platforms; shall not conduct insurance marketing activities unlawfully or beyond authorised scope; and shall not market insurance products or services through fraudulent or misleading means. Party J shall actively cooperate with the Pooling Entity's supervision and inspection of business activities, promptly rectifying any identified issues as required by the Pooling Entity. The Pooling Entity reserves the right to take measures to halt and urge rectification of any violations of laws, regulations, or the cooperation agreement by Party J during insurance sales, and to pursue Party J's liability in accordance with the law.

4. All parties to this agreement shall establish robust consumer complaint handling mechanisms, clearly publicise complaint channels and procedures, improve complaint data statistics, and appropriately address and resolve insurance consumer disputes arising during cooperation. Where a customer lodges a complaint with Party J, Party J shall promptly report it to the Pooling Entity following preliminary investigation and verification, and cooperate with the Pooling Entity's subsequent handling measures. Where customers lodge complaints directly with the pooling entity, the latter shall have the right to request assistance from Party J regarding facts pertaining to Party J or information held by Party J, to which Party J shall respond positively. Where customers lodge complaints with regulatory authorities, all parties to the agreement shall immediately establish a dedicated complaint handling team to collaborate on resolving the complaint. Throughout the complaint resolution process, both parties shall actively coordinate with government bodies, regulatory authorities, news media and other relevant institutions to prevent risk escalation.

5. All parties shall proactively trace and address issues revealed by consumer complaints, identify service deficiencies and potential risks, reduce consumer grievances at source, enhance service standards, and strengthen protection of insurance consumers' rights.

6. For insurance products or services receiving numerous customer complaints or exhibiting design flaws, Party J shall promptly notify the pooling entity and handle relevant matters appropriately in accordance with the pooling entity's requirements, including ceasing sales or service provision.

7. Regardless of whether this Agreement or any supplementary agreements concerning insurance product cooperation are terminated, rescinded, or revoked, all parties shall actively cooperate with investigations related to consumer rights protection, providing relevant materials as required. Such investigations shall include, but are not limited to, complaints, petitions, and public opinion incidents. Should relevant regulatory authorities conduct inquiries or inspections concerning consumer rights protection, all parties shall actively assist one another in providing pertinent information and documentation.

**Article 24: Customer Information Protection Clause**

Where the cooperation involves the collection, use, or other processing of customer information, it shall be ensured that such processing complies with the requirements of the Civil Code the Personal Information Protection Law, the Data Security Law, the Cybersecurity Law, the Consumer Rights

Protection Law, the Decision of the Standing Committee of the National People's Congress on Strengthening the Protection of Network Information, and the national standard Information Security Technology Personal Information Security Specification. Such processing shall adhere to the principles of legality, legitimacy, necessity, and good faith. The purpose, method, and scope of information collection, use, and processing shall be explicitly communicated to the customer, and authorisation and consent shall be obtained. Specific requirements are as follows:

1. The collection, use, and processing of customer personal information must be based on legal obligations or be necessary for the performance of this Agreement, and customer information shall be collected only within the scope necessary for the performance of this Agreement. Without the customer's authorisation and consent, customer personal information shall not be publicly disclosed, nor transferred or sold to third parties. Where one party provides the personal information it processes to another party, it shall inform the individual of the name or title, contact details, processing purpose, processing methods, and types of personal information of the receiving party, and obtain the individual's separate consent. The recipient shall process personal information strictly within the scope of the aforementioned processing purpose, processing methods, and categories of personal information. Should the recipient alter the original processing purpose or methods, it shall consult to obtain renewed consent from the customer.

2. The retention period for customer personal information shall be the minimum time necessary to achieve the business processing objectives of this Agreement. Upon completion of the collection and usage objectives, customer personal information obtained during the cooperation shall be promptly deleted or anonymised. Should this Contract become ineffective, void, terminated, or revoked, Party A shall have the right to require Party J to return or delete the customer information.

3. Where processing involves sensitive customer information, it shall be conducted for specific purposes with sufficient necessity, obtain separate consent from the customer, and comply with relevant laws, regulations, and management requirements concerning personal information protection.

4. Party J shall maintain strict confidentiality of customer personal information, implementing technical measures and other necessary safeguards to ensure its security. Should a breach, alteration, or loss of customer personal information occur or be imminent, Party J shall immediately implement remedial actions while concurrently notifying Party A to mitigate harm to both customers and Party A.

5. Party J shall guarantee the lawful sourcing of customer information and provide Party A with accurate and authentic customer data. Where customers request access, copying, correction, supplementation, or deletion of their information, both Party J and Party A shall promptly cooperate with the customer to process such requests under lawful and reasonable circumstances. The party first receiving the customer's request shall promptly notify the other party.

6. Party A shall have the right to supervise Party J's handling of matters concerning Party A's business and the personal information of Party A's clients. Party A shall have the right to require Party J to cooperate in completing matters related to client information processing in accordance with relevant laws and regulations. Should Party J fail to process client information in compliance with personal information protection laws, regulations, and contractual agreements, thereby causing impact or loss to Party A and its clients, Party J shall bear all liability for compensation. Concurrently, Party A shall have the right to terminate this Contract.

**Article 25 Dispute Resolution**

1. All matters shall be handled strictly in accordance with this Agreement.

2. Any disputes arising during the execution of this Agreement shall be resolved through consultation among the parties. Should consultation fail to reach an agreement, the parties may apply to […] for mediation. Where mediation proves unsuccessful, the dispute may be resolved through litigation at the People's Court with jurisdiction over Party A's place of business.

**Article 26 Supplementary Provisions: Changes to Underwriting Services**

Pursuant to the provisions of Article 5 "Insurance Coverage Services" herein, following the conclusion of the sales period, the Lead Insurer shall issue policies and full-premium VAT ordinary invoices to all policyholders, whether online or offline, in accordance with the finally confirmed co-insurance ratio. However, to accommodate certain group policy clients' requests for advance invoicing, the Lead Insurer shall issue policies during the sales period (20 November 2024 to 31 March 2025) prior to determining co-insurance ratios. In accordance with the Lead Insurer's internal management regulations, the following three supplementary rules shall apply, with all other provisions remaining unchanged.

**(i) Co-insurance ratio for group policies during the agreed sales period (**20 November 2024 – 31 March 2025**)**

At the request of each co-insurer, the Lead Insurer shall issue policies for group policy clients requiring advance invoice printing after 20 November 2024. As the final co-insurance ratio remains undetermined, the following ratios shall apply by reference to the final 2024 […] co-insurance ratios:

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| | | |
|:---|:---|:---|
| Serial No. | Institution Name | Agreed Proportion |
| 1 | […] | […] |
| 2 | […] | […] |
| 3 | […] | […] |
| 4 | […] | […] |
| 5 | […] | […] |
| 6 | […] | […] |
| 7 | […] | […] |
| 8 | […] | […] |

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Following the conclusion of the sales period, adjustments shall be made in accordance with the rules stipulated in Clause IV "Co-insurance Ratios and Shares" of this Agreement, after determining the final co-insurance ratios for each co-insurer.

**(b) Group Policy Issuance Process During the Agreed Sales Period (**20 November 2024 – 31 March 2025**)**

Party I shall collect requirements from each co-insurer and relay them to the Lead Insurer and Party J. Subsequently, Party Kui shall transfer the corresponding policy premiums and customer details (name, ID number) to the Lead Insurer. Each co-insurer must post the relevant application materials for their respective policies to the Lead Insurer. The Lead Insurer shall verify the application materials, premium amounts, and customer information before proceeding with policy issuance for the respective group policy. Invoices shall be issued within 3-5 working days following policy completion. Printed invoices shall be mailed back to each co-insurer.

Principal Insurer Postal Address:

Address: […]

Attn: […]

Telephone: […]

**(3) Agreed Premium Collection Rules**

During the sales period, the Lead Insurer shall collect group policy customer information and associated premiums as required by each co-insurer, without distributing payments to co-insurers according to the "agreed proportion". Operations shall continue in accordance with the provisions of Clause 5 "Underwriting Services" in the Master Agreement.

**Article 27: Miscellaneous**

1. This Agreement shall take effect upon affixing the official seals or contract seals of all parties and shall remain valid until 31 December 2025.

2. Provisions concerning outstanding matters such as claims settlement shall remain in full force and effect.

3. Any matters not covered herein may be addressed through supplementary agreements.

4. This Agreement is executed in eleven (11) original copies, with each party holding one copy.

(This page serves as the signature page)

Party A (Principal Insured): […]

Signature of Responsible Person/Authorised Representative:

Date:

Party B (Co-insurer): […]

Signature of Responsible Person/Authorised Representative:

Date:

Party C (Co-insurer): […]

Signature of Responsible Person/Authorised Representative:

Date:

Party D (Co-insurer): […]

Signature of Responsible Person/Authorised Representative:

Date:

Party E (Co-insurer): […]

Signature of Responsible Person/Authorised Representative:

Date:

Party F (Co-insurer): […]

Signature of Responsible Person/Authorised Representative:

Date:

Party G (Co-insurer): […]

Signature of Responsible Person/Authorised Representative:

Date:

Party H (Co-insurer): […]

Signature of Responsible Person/Authorised Representative:

Date:

Party I (Platform Technical Service Provider): […].

Signature of Legal Representative/Authorised Representative:

Date:

Party J (Insurance Brokerage Service Provider): Sunshine Insurance Brokerage (Shanghai) Co., Ltd.

Signature of Legal Representative/Authorised Representative:

Date:

**Appendix 1: […] Province Inclusive Commercial Health Insurance Protection Scheme ("[…]" 2025 Edition)**

**Product Prospectus**

**1、 Product Summary**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1. Eligible Population: Urban employees and urban and rural residents enrolled in basic medical insurance within […] Province (excluding […]).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2. Age Eligibility: No restrictions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3. Health Status: No restrictions.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4. Policy Period: One year, from 00:00 on 1 January 2025 to 24:00 on 31 December 2025.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;5. Waiting Period: None.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6. Number of Policies: Each insured person may purchase only one policy. Multiple purchases are invalid, and no liability shall be assumed for excess coverage.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7. Minor coverage: When purchasing for a minor, supplementary information regarding the legal guardian must be provided.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;8. Premium Payment Method: Single premium payment.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;9. Premium: […]

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;10. Claims: This product shall not bear insurance liability for medical treatment received by the insured person that has not been settled through basic medical insurance.

**2、 Coverage Plan**

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| | | | |
|:---|:---|:---|:---|
| &nbsp;&nbsp;**Product Name** | &nbsp;&nbsp;**[…] 2025** | &nbsp;&nbsp;**[…] 2025** | &nbsp;&nbsp;**[…] 2025** |
| &nbsp;&nbsp;**Coverage Items** | &nbsp;&nbsp;Coverage 1: Personal out-of-pocket expenses for compliant hospitalisation medical costs within the basic medical insurance catalogue | &nbsp;&nbsp;Coverage 2: Reasonable personal out-of-pocket hospitalisation medical expenses not covered by the basic medical insurance catalogue | &nbsp;&nbsp;Coverage 3: Expenses for individuals aged 18 years or above diagnosed with phenylketonuria Coverage Liability |
| &nbsp;&nbsp;**Coverage Scope** | &nbsp;&nbsp;Refers to the personal out-of-pocket portion of medical expenses incurred by basic medical insurance participants during hospitalisation at designated basic medical insurance institutions, after reimbursement from […] Province's basic medical insurance, urban and rural residents' critical illness insurance (or employee high-cost medical expense subsidy, civil servant medical subsidy), and medical assistance compensation. This includes compliant medical expenses covered by the participant that fall below the deductible threshold or exceed the maximum reimbursement limit. | &nbsp;&nbsp;Refers to reasonable medical expenses incurred by basic medical insurance participants during hospitalisation at designated basic medical insurance institutions that are not covered by the basic medical insurance catalogue. | &nbsp;&nbsp;Medical expenses for special dietary requirements incurred by individuals aged eighteen years or above diagnosed with phenylketonuria, provided such expenses comply with relevant regulations. |

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| | | | | |
|:---|:---|:---|:---|:---|
| &nbsp;&nbsp; **Coverage Limit** | &nbsp;&nbsp; **Coverage Limit** | &nbsp;&nbsp; RMB 1 million | &nbsp;&nbsp; 2 million yuan | &nbsp;&nbsp; ¥10,000 |
| &nbsp;&nbsp;**Excess** | &nbsp;&nbsp;**Excess** | &nbsp;&nbsp; Shared 45,000 yuan (inclusive)<br> (First-time policyholders and claim-free renewals: ¥38,000) | &nbsp;&nbsp; Shared 45,000 yuan (inclusive)<br> (First-time policyholders and claim-free renewals: ¥38,000) | &nbsp;&nbsp; ¥0 |
| &nbsp;&nbsp; **Reimbursement Ratio** | &nbsp;&nbsp;**Non-pre-existing conditions** | &nbsp;&nbsp; Excess up to ¥60,000 (inclusive), 50%<br> Over ¥60,000: 30% | &nbsp;&nbsp; Excess up to ¥60,000 (inclusive), 50%<br> Over ¥60,000: 30% | &nbsp;&nbsp;100% |
| &nbsp;&nbsp; **Reimbursement Ratio** | &nbsp;&nbsp;**Pre-existing conditions** | &nbsp;&nbsp;20% | &nbsp;&nbsp;20% | &nbsp;&nbsp; — |
| &nbsp;&nbsp;**Out-of-province medical treatment** | &nbsp;&nbsp;**Out-of-province medical treatment** | &nbsp;&nbsp; Corresponding reimbursement rate reduced by 10% | &nbsp;&nbsp; Corresponding reimbursement rate reduced by 10% | &nbsp;&nbsp; — |
| &nbsp;&nbsp;**Hospital Coverage** | &nbsp;&nbsp;**Hospital Coverage** | &nbsp;&nbsp; Designated medical institutions under the basic medical insurance scheme | &nbsp;&nbsp; Designated medical institutions under the basic medical insurance scheme | &nbsp;&nbsp; Designated medical institutions under the basic medical insurance scheme |
| &nbsp;&nbsp;**Premium** | &nbsp;&nbsp;**Premium** | &nbsp;&nbsp; ¥149 per person per year | &nbsp;&nbsp; ¥149 per person per year | &nbsp;&nbsp; ¥149 per person per year |
| &nbsp;&nbsp;**Pre-existing Conditions** | &nbsp;&nbsp;**Pre-existing Conditions** | &nbsp;&nbsp; Specific Pre-existing Conditions | &nbsp;&nbsp; Specific Pre-existing Conditions | &nbsp;&nbsp; Specific Pre-existing Conditions |
| &nbsp;&nbsp;**Waiting Period** | &nbsp;&nbsp;**Waiting Period** | &nbsp;&nbsp; No waiting period | &nbsp;&nbsp; No waiting period | &nbsp;&nbsp; No waiting period |
| &nbsp;&nbsp; **Enrolment Period** | &nbsp;&nbsp; **Enrolment Period** | &nbsp;&nbsp; From 00:00 on 20 November 2024 to 24:00 on 31 March 2025 | &nbsp;&nbsp; From 00:00 on 20 November 2024 to 24:00 on 31 March 2025 | &nbsp;&nbsp; From 00:00 on 20 November 2024 to 24:00 on 31 March 2025 |
| &nbsp;&nbsp; **Coverage Period** | &nbsp;&nbsp; **Coverage Period** | &nbsp;&nbsp; 00:00 on 1 January 2025 to 24:00 on 31 December 2025 | &nbsp;&nbsp; 00:00 on 1 January 2025 to 24:00 on 31 December 2025 | &nbsp;&nbsp; 00:00 on 1 January 2025 to 24:00 on 31 December 2025 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <br> 1. Regarding Coverage I and Coverage II: Explanation of the staged reimbursement ratio for non-pre-existing conditions:<br>After deducting the amount reimbursed by basic medical insurance, the remaining personal expenses incurred:<br>&nbsp;&nbsp;&nbsp;&nbsp;● 0–Excess: 0% reimbursement;<br>&nbsp;&nbsp;&nbsp;&nbsp;● Excess to RMB 60,000 (inclusive): 50% reimbursement;<br>&nbsp;&nbsp;&nbsp;&nbsp;● Above ¥60,000: 30% reimbursement.<br>2、 First-time enrolment: Refers to participants who have not previously enrolled in either "[…] 2023" or "[…] 2024".<br>3、 Renewal without claims: Refers to individuals who have previously enrolled in either "[…] 2023" or "[…] 2024" and have not incurred any claims (i.e., claims amount = 0). | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <br> 1. Regarding Coverage I and Coverage II: Explanation of the staged reimbursement ratio for non-pre-existing conditions:<br>After deducting the amount reimbursed by basic medical insurance, the remaining personal expenses incurred:<br>&nbsp;&nbsp;&nbsp;&nbsp;● 0–Excess: 0% reimbursement;<br>&nbsp;&nbsp;&nbsp;&nbsp;● Excess to RMB 60,000 (inclusive): 50% reimbursement;<br>&nbsp;&nbsp;&nbsp;&nbsp;● Above ¥60,000: 30% reimbursement.<br>2、 First-time enrolment: Refers to participants who have not previously enrolled in either "[…] 2023" or "[…] 2024".<br>3、 Renewal without claims: Refers to individuals who have previously enrolled in either "[…] 2023" or "[…] 2024" and have not incurred any claims (i.e., claims amount = 0). | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <br> 1. Regarding Coverage I and Coverage II: Explanation of the staged reimbursement ratio for non-pre-existing conditions:<br>After deducting the amount reimbursed by basic medical insurance, the remaining personal expenses incurred:<br>&nbsp;&nbsp;&nbsp;&nbsp;● 0–Excess: 0% reimbursement;<br>&nbsp;&nbsp;&nbsp;&nbsp;● Excess to RMB 60,000 (inclusive): 50% reimbursement;<br>&nbsp;&nbsp;&nbsp;&nbsp;● Above ¥60,000: 30% reimbursement.<br>2、 First-time enrolment: Refers to participants who have not previously enrolled in either "[…] 2023" or "[…] 2024".<br>3、 Renewal without claims: Refers to individuals who have previously enrolled in either "[…] 2023" or "[…] 2024" and have not incurred any claims (i.e., claims amount = 0). | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <br> 1. Regarding Coverage I and Coverage II: Explanation of the staged reimbursement ratio for non-pre-existing conditions:<br>After deducting the amount reimbursed by basic medical insurance, the remaining personal expenses incurred:<br>&nbsp;&nbsp;&nbsp;&nbsp;● 0–Excess: 0% reimbursement;<br>&nbsp;&nbsp;&nbsp;&nbsp;● Excess to RMB 60,000 (inclusive): 50% reimbursement;<br>&nbsp;&nbsp;&nbsp;&nbsp;● Above ¥60,000: 30% reimbursement.<br>2、 First-time enrolment: Refers to participants who have not previously enrolled in either "[…] 2023" or "[…] 2024".<br>3、 Renewal without claims: Refers to individuals who have previously enrolled in either "[…] 2023" or "[…] 2024" and have not incurred any claims (i.e., claims amount = 0). | &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; <br> 1. Regarding Coverage I and Coverage II: Explanation of the staged reimbursement ratio for non-pre-existing conditions:<br>After deducting the amount reimbursed by basic medical insurance, the remaining personal expenses incurred:<br>&nbsp;&nbsp;&nbsp;&nbsp;● 0–Excess: 0% reimbursement;<br>&nbsp;&nbsp;&nbsp;&nbsp;● Excess to RMB 60,000 (inclusive): 50% reimbursement;<br>&nbsp;&nbsp;&nbsp;&nbsp;● Above ¥60,000: 30% reimbursement.<br>2、 First-time enrolment: Refers to participants who have not previously enrolled in either "[…] 2023" or "[…] 2024".<br>3、 Renewal without claims: Refers to individuals who have previously enrolled in either "[…] 2023" or "[…] 2024" and have not incurred any claims (i.e., claims amount = 0). |

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**3、 Relevant Role Descriptions**

1. Policyholder: For individual contributions, the policyholder must possess full capacity for civil conduct and may insure themselves, their parents, spouse, or children. For contributions made by enterprises, institutions, or other organisations, the policyholder must meet regulatory requirements and may be the relevant enterprise, institution, or organisation.

2. Insured Person: Participants in the basic medical insurance scheme for urban employees or urban and rural residents within […] Province (excluding […]).

3. The beneficiary is the insured person themselves. In the event of the insured person's death, the beneficiary shall be their legal heir.

4. In all coordinated regions of […] Province (excluding […]), individuals who contribute to the employee medical insurance scheme may utilise their personal medical insurance accounts to pay for the "[…]" insurance premiums for themselves, their spouse, children, and parents (up to a cumulative total of seven individuals) within the same coordinated region.

Note: The relationship between the policyholder and the insured is restricted to the policyholder themselves, their spouse, parents (excluding the spouse's parents), and children. Should any false information be provided, the policyholder shall bear all legal liabilities.

5. Where the insured person is a minor, the policyholder must be their legal guardian. The policyholder shall ensure the accuracy and validity of the minor's information and undertake obligations including premium payments, policy maintenance, and claims processing on behalf of the minor.

**4、Insurance coverage period**

From 00:00 on 20 November 2024 to 24:00 on 31 March 2025.

**5、Insurance Period**

1. Policy Term: 1 year

Coverage Period: Commencing at 00:00 on 1 January 2025 and concluding at 24:00 on 31 December 2025.

2. Clarification on Determining the Time of Incident

For all coverage under this product, the time of hospitalisation shall be deemed the time of claim occurrence. Should the time of claim fall within the insurance period, the insurer shall bear the liability for payment. Where the admission date occurs within the insurance coverage period but the discharge date extends beyond the end of said coverage period, this insurance product shall continue to cover hospitalisation medical expenses for this admission (where discharge has not been processed during the period) up to 90 days following the end of the insurance coverage period.

**6、 Coverage Details**

1. Personal Out-of-Pocket Hospitalisation Medical Expenses Within the Scope of Medical Insurance Policies

During the policy period, the personal out-of-pocket portion of medical expenses incurred by the insured during hospitalisation at designated basic medical insurance institutions, after reimbursement by […] Province's basic medical insurance, urban and rural residents' critical illness insurance (or employee high-cost medical expense subsidy, civil servant medical subsidy), and medical assistance compensation. This includes compliant medical expenses below the deductible threshold and above the maximum reimbursement limit. The annual cumulative maximum reimbursement limit per insured person is RMB 1 million.

2. Reasonable personal out-of-pocket hospitalisation medical expenses outside the scope of medical insurance policies

During the insurance period, the maximum annual cumulative reimbursement limit per insured person for reasonable medical expenses incurred during hospitalisation at designated basic medical insurance institutions that fall outside the basic medical insurance catalogue shall be RMB 2 million.

3. Reimbursement ratios for in-policy and out-of-policy liabilities

For the aforementioned in-patient medical expenses covered by medical insurance and reasonable out-of-pocket in-patient medical expenses outside medical insurance coverage: For remaining medical expenses exceeding RMB 60,000, non-specified pre-existing conditions are reimbursed at 30%. During the policy period, cumulative reimbursement for in-policy hospitalisation expenses is capped at RMB 1 million, while cumulative reimbursement for out-of-policy hospitalisation expenses is capped at RMB 2 million. Specified pre-existing conditions are reimbursed at 20% after deducting the annual cumulative deductible. Medical expenses incurred outside the insured's home province are reimbursed at a rate reduced by 10% of the corresponding coverage percentage.

4. Coverage for individuals aged eighteen or above diagnosed with phenylketonuria

Special dietary expenses incurred by diagnosed phenylketonuria patients aged eighteen or above shall be reimbursed upon submission of valid retail pharmacy receipts for specialised foods. Such expenses shall be reimbursed at 100% without excess, provided the insured submits original valid receipts. The maximum annual cumulative compensation limit per insured person is RMB 10,000.

This insurance contract operates on a compensation principle. The aggregate reimbursement amount for medical expenses under the three coverage provisions obtained by the insured through any channel shall be capped at the actual medical expenses incurred.

**7、 Insurance Coverage Details**

(i) Coverage for Reasonable Personal Out-of-Pocket Hospitalisation Expenses Outside the Basic Medical Insurance Catalogue Refers to the self-funded portion outside the scope of the basic medical insurance catalogue, including expenses for medications included in the basic medical insurance catalogue but exceeding the specified payment limits.

(2) Expenses for high-value medicines settled separately from medical insurance (including high-value medicines at designated medical insurance outpatient facilities and dual-channel pharmacies) shall be settled according to the medical insurance policies of each coordinated area in […] Province and included under the coverage of "Coverage I: Reasonable Personal Out-of-Pocket Hospitalisation Medical Expenses Within the Basic Medical Insurance Catalogue".

(iii) Rules for Determining "Specific Pre-existing Conditions"

1. Should an insured person have been diagnosed with a "specified pre-existing condition" prior to the policy's effective date (including primary and secondary diagnoses), whether undergoing treatment or having recovered, such condition shall be deemed a "specified pre-existing condition" for that insured person. Should the insured person receive treatment for their "specified pre-existing condition" on or after the policy commencement date, claims arising from such treatment shall be assessed and paid in accordance with the "specified pre-existing condition" claims settlement rules.

2. Where an insured person has not been diagnosed with a "specified pre-existing condition" prior to the policy commencement date, any new occurrence of such a condition requiring treatment (whether single or multiple instances) during the policy term shall be assessed and paid in accordance with the non-specified pre-existing condition claims settlement rules.

3. Should the insured person undergo multiple hospitalisations during the coverage period that cumulatively meet the claim threshold, the determination of whether a hospitalisation constitutes a "specific pre-existing condition" shall be based on the primary diagnosis at the time of discharge from the hospitalisation that first reached the cumulative threshold.

4. If the insured person had a specified pre-existing condition prior to 24:00 on 31 December 2024 and subsequently enrolled in […] 2025, they shall be classified as belonging to the specified pre-existing condition group during the coverage period of […] 2025.

5. List of Specified Pre-existing Conditions

(1) Malignant tumours (including leukaemia, lymphoma, and minimally invasive cancer; excluding carcinoma in situ and precancerous lesions).

(2) Cardiovascular, Cerebrovascular, and Metabolic Disorders: Coronary heart disease, valvular heart disease, congenital heart disease, malignant arrhythmia, aneurysm (including aortic dissection), cardiomyopathy, and complications arising from any of the aforementioned conditions; cardiac insufficiency or chronic heart failure; cerebral infarction, cerebral haemorrhage, stroke, cerebral vascular accident, and complications arising from any of the aforementioned conditions; Stage III hypertension, diabetes mellitus with complications.

(3) Chronic pulmonary, renal, and hepatic conditions: chronic respiratory failure, chronic obstructive pulmonary disease (excluding chronic emphysema);

Chronic renal insufficiency (including renal failure stage, uraemic stage), nephrotic syndrome and complications arising from the above conditions; cirrhosis of the liver, hepatic failure and complications arising therefrom.

(4) Paralysis (denoting permanent, complete loss of voluntary motor function in two or more limbs due to disease or accidental injury, where two of the three major joints per limb remain rigid or limb muscle strength is Grade 2 or below; or amputation or loss of two or more limbs).

(5) Autoimmune diseases – including systemic lupus erythematosus, systemic sclerosis, acquired immunodeficiency syndrome (AIDS), AIDS-related complex (ARC), and other HIV-related sexually transmitted diseases or symptoms.

(6) Aplastic anaemia.

(7) Ulcerative colitis.

(8) Congenital and hereditary diseases.

(IV) Reasonable and Necessary Medical Expenses

1. Conformity with customary practice: Refers to costs consistent with prevailing treatment protocols, standard therapeutic approaches, and average medical expense levels in the locality where medical services are received. Compliance with customary practice shall be assessed by us based on objective, prudent, and reasonable principles. Should the insured party disagree with the assessment outcome, review and determination may be conducted by an authoritative medical institution or expert mutually agreed upon by both parties.

2. Medically Necessary:

Refers to medical expenses meeting all the following conditions:

(1) Essential items for treating accidental injury or illness;

(2) Items that do not exceed the principles of safe and adequate treatment;

(3) Prescription medications issued by a doctor;

(4) Non-experimental and non-research items;

(5) Items consistent with generally accepted standards of medical practice in the locality where treatment is received. Medical necessity shall be assessed by us based on objective, prudent and reasonable principles. Should the insured party disagree with the assessment outcome, review and appraisal may be conducted by an authoritative medical institution or expert mutually agreed upon by both parties.

(V) Definition of "Cross-Provincial Out-of-Area Medical Treatment" under […] 2025: Refers to hospitalisation treatment received by the insured at medical institutions located outside […] Province.

**Appendix 2: Functional Specifications**

**1. Policy Application System Function List:**

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| | | |
|:---|:---|:---|
| &nbsp;&nbsp;**Primary Menu** | &nbsp;&nbsp;**Secondary Menu** | &nbsp;&nbsp;**Function Description** |
| &nbsp;&nbsp;Mobile App - Policy Application Service | &nbsp;&nbsp;User Login | &nbsp;&nbsp;Redirected to mobile H5 page via external public account, app, or QR code scan; initial login requires registration and binding; |
| &nbsp;&nbsp;Mobile App - Policy Application Service | &nbsp;&nbsp;User Login | &nbsp;&nbsp;Verify whether the logged-in user is a whitelisted user (sales agent) |
| &nbsp;&nbsp;Mobile App - Policy Application Service | &nbsp;&nbsp;Insurance Eligibility Verification | &nbsp;&nbsp;1. Verify the policyholder's medical insurance status, supporting new residents' enrolment;<br> 2. If selecting personal account payment, verify whether the policyholder is a valid medical insurance participant; |
| &nbsp;&nbsp;Mobile App - Policy Application Service | &nbsp;&nbsp;Personal Centre | &nbsp;&nbsp;Upon successful registration, users may access their personal centre to view order details and other services. Only users who have passed identity verification may enter various modules. Content visibility within the personal centre may be customised based on the user's identity type; |
| &nbsp;&nbsp;Mobile App - Policy Application Service | &nbsp;&nbsp;Personal Information Binding and Modification | &nbsp;&nbsp;Following successful mobile registration, users may complete their basic personal details (name, ID number) to facilitate subsequent service operations. |
| &nbsp;&nbsp;Mobile App - Policy Application Service | &nbsp;&nbsp;Personal Information Binding and Modification | &nbsp;&nbsp;Users may modify personal details (name, ID type, ID number) when no active orders exist. |
| &nbsp;&nbsp;Mobile App - Policy Application Service | &nbsp;&nbsp;Online Insurance Application | &nbsp;&nbsp;Details of the […] product are provided. |
| &nbsp;&nbsp;Mobile App - Policy Application Service | &nbsp;&nbsp;Online Insurance Application | &nbsp;&nbsp;Follow the relevant pages of the application process to complete details for the policyholder and insured person, then proceed with premium payment. |
| &nbsp;&nbsp;Mobile App - Policy Application Service | &nbsp;&nbsp;Online Insurance Application | &nbsp;&nbsp;Verify the payer details entered. |
| &nbsp;&nbsp;Mobile App - Policy Application Service | &nbsp;&nbsp;Online Insurance Application | &nbsp;&nbsp;Add insured persons (multiple entries permitted) |
| &nbsp;&nbsp;Mobile App - Policy Application Service | &nbsp;&nbsp;Online Insurance Application | &nbsp;&nbsp;Verify the policyholder's eligibility to purchase and the insured's eligibility for coverage |
| &nbsp;&nbsp;Mobile App - Policy Application Service | &nbsp;&nbsp;Online Insurance Application | &nbsp;&nbsp;Use the medical insurance personal account to pay for the order (excluding combined payments) |
|  |  | &nbsp;&nbsp;Pay individual account fees via personal out-of-pocket methods (alternative payment options may apply depending on the service, excluding combined payments) |
|  | &nbsp;&nbsp;My Orders | &nbsp;&nbsp;This page displays pending payment orders. (Organised by sub-order) |
|  | &nbsp;&nbsp;My Orders | &nbsp;&nbsp;This page displays paid orders. (Displayed by sub-order) |
|  | &nbsp;&nbsp;My Orders | &nbsp;&nbsp;This page displays refunded orders. (Displayed by sub-order) |
|  | &nbsp;&nbsp;My Orders | &nbsp;&nbsp;This page displays cancelled orders. (Displayed by sub-order) |
|  | &nbsp;&nbsp;Insurance Coverage Status | &nbsp;&nbsp;Users may download personal insurance policy certificates via mobile devices; certificates become available for download only after the insurer has successfully issued the policy. |
|  | &nbsp;&nbsp;Corporate Insurance Booking | &nbsp;&nbsp;Corporate insurance applications initiated online will be followed up by customer service representatives. |
|  | &nbsp;&nbsp;Corporate Booking Enquiry | &nbsp;&nbsp;Online corporate booking requests can be queried. Customer service will follow up offline to handle subsequent insurance matters. |
|  | &nbsp;&nbsp;Customer Service | &nbsp;&nbsp;Providing 7x8-hour customer service daily for […] policyholders. Requires telephone communication with the customer. |
|  | &nbsp;&nbsp;SMS Verification | &nbsp;&nbsp;① Login verification; ② Policyholder mobile number verification; ③ Notifications for policy cancellation and successful purchase; |
|  | &nbsp;&nbsp;Policy Dashboard | &nbsp;&nbsp;Real-time viewing of policy details (matching PC dashboard metrics), with mobile access permissions configurable; |
|  | &nbsp;&nbsp;Historical Orders | &nbsp;&nbsp;Enables retrieval of historical order details |
|  | &nbsp;&nbsp;Policyholder Enquiry | &nbsp;&nbsp;Retrie`ve individual insurance records using name and ID card details (data list - full database searchable) |

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| | | |
|:---|:---|:---|
| &nbsp;&nbsp;PC Version | &nbsp;&nbsp;Group Policy Management | &nbsp;&nbsp;Clicking this allows external import of customer insurance information. Imported lists undergo medical insurance identity verification; successfully verified entries may be processed via "Cancel Pre-Insurance" or "Confirm Insurance" operations. |
| &nbsp;&nbsp;PC Version | &nbsp;&nbsp;Group Policy Management | &nbsp;&nbsp;First, select the pre-insurance batch number in the verification batch number field. Then, click "Cancel Pre-Insurance" to remove the pre-insurance record. |
| &nbsp;&nbsp;PC Version | &nbsp;&nbsp;Group Policy Management | &nbsp;&nbsp;After entering the payment method in the designated field, click "Confirm Enrolment" to finalise the enrolment. |
| &nbsp;&nbsp;PC Version | &nbsp;&nbsp;Corporate Insurance Booking Management | &nbsp;&nbsp;① Query online appointment requests initiated by enterprises; customer service will follow up offline to process subsequent insurance matters.<br> ② Export relevant records; |
| &nbsp;&nbsp;PC Version | &nbsp;&nbsp;Ad Hoc Offline Insurance Management | &nbsp;&nbsp;Batch import pre-insurance information in file format. |
| &nbsp;&nbsp;PC Version | &nbsp;&nbsp;Ad Hoc Offline Insurance Management | &nbsp;&nbsp;Batch export pre-insurance information in file format. Query orders with individual account payment methods. Extract policyholder name, ID type, ID number, and total order cost by insurance order dimension for export. |
| &nbsp;&nbsp;PC Version | &nbsp;&nbsp;Ad Hoc Offline Insurance Management | &nbsp;&nbsp;Add basic information for the policyholder, insured person, and product. |
| &nbsp;&nbsp;PC Version | &nbsp;&nbsp;Mobile User Management | &nbsp;&nbsp;Manage registered user information on the mobile platform (including the ability to suspend users – meaning adding them to a blacklist); Support bulk import of lists (e.g., agent lists). |
| &nbsp;&nbsp;PC Version | &nbsp;&nbsp;Mobile User Management | &nbsp;&nbsp;Edit user mobile numbers, personal three-factor authentication details, etc. |
| &nbsp;&nbsp;PC Version | &nbsp;&nbsp;Whitelist User Management | &nbsp;&nbsp;Maintain the mobile end user whitelist (representing sales personnel), supporting bulk import and editing; |
| &nbsp;&nbsp;PC Version | &nbsp;&nbsp;Insurance Application Verification Whitelist | &nbsp;&nbsp;Invalidates medical insurance status verification for individuals within the whitelist during policy application |
| &nbsp;&nbsp;PC Version | &nbsp;&nbsp;Report management | &nbsp;&nbsp;Export enrolment figures by medical insurance type across districts/counties within specified timeframes. |
| &nbsp;&nbsp;PC Version | &nbsp;&nbsp;Report management | &nbsp;&nbsp;Export the number of participants and amounts paid by different payment methods within a specified timeframe. |
| &nbsp;&nbsp;PC Version | &nbsp;&nbsp;Report management | &nbsp;&nbsp;Export enrolment volumes by channel source within a specified timeframe. (Subject to insurer permissions) |
| &nbsp;&nbsp;PC Version | &nbsp;&nbsp;Report management | &nbsp;&nbsp;Export daily enrolment figures across all channels within the specified timeframe. (Default exports data from the past seven days; subject to insurer permissions) |
| &nbsp;&nbsp;PC Version | &nbsp;&nbsp;Report management | &nbsp;&nbsp;Export detailed promotion records for each insurer within the specified timeframe (subject to insurer permissions). |

---

---

| | | |
|:---|:---|:---|
|  | &nbsp;&nbsp;Medical Insurance Subscriber Management | &nbsp;&nbsp;Maintain the list of medical insurance enrollees (import and add functionality available) |
|  | &nbsp;&nbsp;Task Export Management | &nbsp;&nbsp;View pending export tasks and download corresponding reports |
|  | &nbsp;&nbsp;Policy Information Management | &nbsp;&nbsp;Enables querying of all online insurance order details and tracking of order statuses. Allows exporting of sales promotion performance data for agents across insurance companies |
|  | &nbsp;&nbsp;Policy Information Management | &nbsp;&nbsp;Export insurance summary reports. |
|  | &nbsp;&nbsp;Policy Information Management | &nbsp;&nbsp;Export the insurance application information management list. |
|  | &nbsp;&nbsp;Policy Data Dashboard | &nbsp;&nbsp;View real-time dynamic data for all key metrics. |
|  | &nbsp;&nbsp;User Management | &nbsp;&nbsp;Complete user information entry, maintenance, and authorisation tasks. Assign appropriate roles to users and perform bulk import/export of user information. |
|  | &nbsp;&nbsp;Role Management | &nbsp;&nbsp;Create role groups through role management, assign personnel to groups to grant role functions, and link roles with permissions to control module menu operations. |
|  | &nbsp;&nbsp;Dictionary Management | &nbsp;&nbsp;Maintain business code information within the system through operations such as adding, editing, and deleting entries. |
|  | &nbsp;&nbsp;Image Configuration | &nbsp;&nbsp;Configure corresponding images and logo information within the system online. |
|  | &nbsp;&nbsp;Pre-existing Condition Verification | &nbsp;&nbsp;After the policy period concludes, assess whether the insured has pre-existing conditions and assign relevant labels (year, major pre-existing conditions) |
|  | &nbsp;&nbsp;Menu Management | &nbsp;&nbsp;Maintain menu management, enabling the addition and editing of menus |
| &nbsp;&nbsp;System interfaces | &nbsp;&nbsp;Payment Interface Services | &nbsp;&nbsp;Integrate with various payment platforms to facilitate fee payments and refunds |
| &nbsp;&nbsp;System interfaces | &nbsp;&nbsp;Business Platform Integration | &nbsp;&nbsp;Integrates with external business development platforms for real-time synchronisation of order and performance data |
| &nbsp;&nbsp;System interfaces | &nbsp;&nbsp;Medical Insurance Interface Services | &nbsp;&nbsp;Interfaces with medical insurance platforms to enable medical insurance identity verification, personal account payments, and refunds |
|  | &nbsp;&nbsp;Insurance Enrolment Channel Interface Services | &nbsp;&nbsp;Enable external channels to access the insurance platform for online policy applications while recording associated channel information |

---

**2. Claims System Functional Specification:**

---

| | | |
|:---|:---|:---|
| &nbsp;&nbsp;**Primary Module** | &nbsp;&nbsp;**Secondary Module** | &nbsp;&nbsp;**Function Description** |
| &nbsp;&nbsp;Mobile App | &nbsp;&nbsp;User Portal | &nbsp;&nbsp;Upon clicking "Apply for Claim" at the designated claims portal for Huimin Insurance, users are redirected to the claims service platform's H5 page. After logging in, users may proceed with claims applications and case enquiries as normal. |
| &nbsp;&nbsp;Mobile App | &nbsp;&nbsp;Insured Person Management | &nbsp;&nbsp;Policyholders may bind their insurance policies by entering three key details. Additionally, mobile numbers and bank account information may be provided for use during the claims process. |
| &nbsp;&nbsp;Mobile App | &nbsp;&nbsp;Offline Claims Application | &nbsp;&nbsp;Claims Application Process Step 1: Complete essential incident details required for claims processing, including claimant information, insured party details, and hospital of treatment. |
| &nbsp;&nbsp;Mobile App | &nbsp;&nbsp;Offline Claims Application | &nbsp;&nbsp;Step 2: Users must categorise and upload claim documentation as images. Categorised uploads facilitate subsequent review by claims assessors. |
| &nbsp;&nbsp;Mobile App | &nbsp;&nbsp;Offline Claims Application | &nbsp;&nbsp;Step 3: Upon completing document upload, the user must provide an electronic signature authorisation to ensure compliance of the claim application. |
| &nbsp;&nbsp;Mobile App | &nbsp;&nbsp;Offline Claims Application | &nbsp;&nbsp;Step 4: Upon submission, the system will access the policy query interface to instantly verify the user's policy details, confirming the validity of the claim application. |
| &nbsp;&nbsp;Mobile App | &nbsp;&nbsp;Online Fast Claims Application | &nbsp;&nbsp;Users may view the fast claims notification details automatically generated by the system based on medical insurance settlement data, along with the claim settlement outcome. |
| &nbsp;&nbsp;Mobile App | &nbsp;&nbsp;Online Fast Claims Application | &nbsp;&nbsp;When viewing fast claims data, users may click to initiate the subsequent fast claims process. This requires pre-maintained basic information such as the insured person's bank account and contact number, along with the provision of the user's electronic signature authorisation to ensure the compliance of this application. |
| &nbsp;&nbsp;Mobile App | &nbsp;&nbsp;Claims Enquiry | &nbsp;&nbsp;Users may review past claims application records and claim case details to track claims progress. |
| &nbsp;&nbsp;Mobile App | &nbsp;&nbsp;Claims Enquiry | &nbsp;&nbsp;For claims where the process cannot proceed due to insufficient documentation, users may upload supplementary materials via the claim record details page (the system will display required supplementary documentation notes). |

---

---

| | | |
|:---|:---|:---|
| &nbsp;&nbsp;PC Version - Claims Management | &nbsp;&nbsp;Policy Management | &nbsp;&nbsp;Query and import policyholder policy information. |
| &nbsp;&nbsp;PC Version - Claims Management | &nbsp;&nbsp;Policy Management | &nbsp;&nbsp;Claims statistics, claims ranking briefings, claims case statistics (by insurance liability), claims case statistics (by medical category), claims case statistics (by region), claims processing time statistics, high-value medication claims statistics |
| &nbsp;&nbsp;PC Version - Claims Management | &nbsp;&nbsp;Case Filing | &nbsp;&nbsp;View lists of all active and returned claims. Clicking a case detail allows input or editing of claim information. |
| &nbsp;&nbsp;PC Version - Claims Management | &nbsp;&nbsp;Case Filing | &nbsp;&nbsp;Upon case acceptance, verify the claimant's insured status and retrieve their policy details and coverage status. After platform retrieval, policy information is displayed and validated on-screen. |
| &nbsp;&nbsp;PC Version - Claims Management | &nbsp;&nbsp;Case Filing | &nbsp;&nbsp;Upon completing case information entry, select the appropriate case filing conclusion based on the completeness and reasonableness of the submitted materials, then submit the case (select 'Approved' for standard cases; select 'Rejected' if the claimant's identity is invalid or the claim does not meet insurance coverage requirements, specifying the reason for rejection). |
| &nbsp;&nbsp;PC Version - Claims Management | &nbsp;&nbsp;Initial Case Review | &nbsp;&nbsp;View the list of all cases undergoing initial review. Click on a case detail to commence the initial review process. |
| &nbsp;&nbsp;PC Version - Claims Management | &nbsp;&nbsp;Initial Case Review | &nbsp;&nbsp;The system automatically calculates the claim amount based on the matched liability. A single case may involve multiple liability calculations. |
| &nbsp;&nbsp;PC Version - Claims Management | &nbsp;&nbsp;Initial Case Review | &nbsp;&nbsp;The initial reviewer must examine the case details, review any case filing annotations, verify the submitted materials and the calculated claim amount, and determine whether the medical expense items comply with the claim reimbursement rules. They then select the appropriate initial review conclusion and submit the case (for standard cases, the case can be approved directly; if the claim does not meet the liability rules, it can be rejected with the reason for rejection noted). |
| &nbsp;&nbsp;PC Version - Claims Management | &nbsp;&nbsp;Initial Case Review | &nbsp;&nbsp;For anomalous cases involving missing documentation or erroneous incident details, reviewers may return the case to the filing stage for correction or refer it back to the claimant to supplement materials. |
| &nbsp;&nbsp;PC Version - Claims Management | &nbsp;&nbsp;Case Re-examination | &nbsp;&nbsp;Reviewers may view a list of all cases awaiting re-examination. Upon clicking a case detail, they may conduct the re-examination. |
| &nbsp;&nbsp;PC Version - Claims Management | &nbsp;&nbsp;Case Re-examination | &nbsp;&nbsp;After reviewing the case details, the reviewer may directly approve valid cases or return problematic cases to the case filing or initial review stage for reprocessing. |
| &nbsp;&nbsp;PC Version - Claims Management | &nbsp;&nbsp;Comprehensive Query | &nbsp;&nbsp;All claims on the platform may be queried based on criteria such as case status or claimant information, with case details accessible for review. |
| &nbsp;&nbsp;PC Version - Claims Management | &nbsp;&nbsp;Comprehensive Query | &nbsp;&nbsp;After retrieving the corresponding case list based on your criteria, you may download all case information in Excel format. |
| &nbsp;&nbsp;PC Version - Claims Management | &nbsp;&nbsp;Comprehensive Query | &nbsp;&nbsp;You may view complete case information, including basic claim details (applicant, claimant, hospital attended, various claim documentation images, settlement results, etc.), as well as case processing workflow information (outcomes and review annotations for case registration, initial review, and re-examination). |
| &nbsp;&nbsp;PC Version - Claims Management | &nbsp;&nbsp;Fast Claims Management | &nbsp;&nbsp;Quick claims can be queried based on case status, claimant information, and other criteria, with case details available for review. |
| &nbsp;&nbsp;PC Version - Claims Management | &nbsp;&nbsp;Fast Claims Management | &nbsp;&nbsp;Statistical analysis of expedited claims metrics is available by dimensions such as time and treatment type. |
| &nbsp;&nbsp;PC Version - Claims Management | &nbsp;&nbsp;Fast Claims Management | &nbsp;&nbsp;Statistics on key metrics for fast-track claims can be generated by settlement date, insured person, and other dimensions. |
| &nbsp;&nbsp;PC-based - Payment Management<br> (Insurance Company) | &nbsp;&nbsp;Claims Payment | &nbsp;&nbsp;All pending reimbursement claims for payment may be queried. Information includes the payer (insurance institution) and payee (policyholder's bank account) details, along with the associated claim reference number. |
| &nbsp;&nbsp;PC-based - Payment Management<br> (Insurance Company) | &nbsp;&nbsp;Claims Payment | &nbsp;&nbsp;Based on the query results, all claims payment information can be downloaded in Excel format and submitted to the insurer for processing. |
| &nbsp;&nbsp;PC-based - Payment Management<br> (Insurance Company) | &nbsp;&nbsp;Claims Payment | &nbsp;&nbsp;After the insurer has disbursed the claim payment, the payment outcome may be imported into the system. Upon successful import, the case status will be updated to 'Archived'. |

---

---

| | | |
|:---|:---|:---|
| &nbsp;&nbsp;Log Management | &nbsp;&nbsp;Operational Log Management | &nbsp;&nbsp;User operation logs within the system can be queried, displaying relevant log entries by business scenario, processing time, and operation content, facilitating subsequent log auditing. |
| &nbsp;&nbsp;Basic Management | &nbsp;&nbsp;Institution Management | &nbsp;&nbsp;Maintains foundational information for underwriting institutions, policyholder institutions, and service providers. Basic information can be added and edited, serving as essential data during insurance product maintenance. |
| &nbsp;&nbsp;Basic Management | &nbsp;&nbsp;Three-Directory Management | &nbsp;&nbsp;Maintains detailed information on the three directories for medical insurance across various cities and regions; |
| &nbsp;&nbsp;Basic Management | &nbsp;&nbsp;Designated Pharmacy Management | &nbsp;&nbsp;Enables querying of designated pharmacy information by region, name, and other criteria; allows adding or editing designated pharmacy details. |
| &nbsp;&nbsp;Basic Management | &nbsp;&nbsp;Special Medication Directory Management | &nbsp;&nbsp;Provides a specialised medication directory search function, serving as a foundational catalogue for insurance product selection. Enables viewing of medication details (including dosage instructions, indications, etc.). |
| &nbsp;&nbsp;Basic Management | &nbsp;&nbsp;Designated Hospital Management | &nbsp;&nbsp;Search for medical institution information by criteria such as grade and rating. Add or edit medical institution information. |
|  | &nbsp;&nbsp;Diagnosis Directory Management | &nbsp;&nbsp;Manages diagnostic codes and diagnostic name directories, enabling the addition or editing of diagnostic information. |
|  | &nbsp;&nbsp;Document Type Management | &nbsp;&nbsp;Maintain the types of documentation required for claims applications submitted via mobile devices. The mobile interface dynamically displays the required documentation types based on the case category. |
|  | &nbsp;&nbsp;Insurance Product Management | &nbsp;&nbsp;Maintains corresponding insurance products, enabling querying and editing of insurance product information. |
|  | &nbsp;&nbsp;Coverage Plan Management | &nbsp;&nbsp;Enables management of cover plans for insurance products, along with corresponding benefit payment obligations under each plan. |
|  | &nbsp;&nbsp;Benefit Obligation Maintenance | &nbsp;&nbsp;Maintain and manage benefit obligations according to dimensions of insurance institutions, products, and coverage plans. |
| &nbsp;&nbsp;PC-based User Permissions Management | &nbsp;&nbsp;Data Dictionary | &nbsp;&nbsp;Maintain business code information within the system through operations such as adding, editing, and deleting. |
| &nbsp;&nbsp;PC-based User Permissions Management | &nbsp;&nbsp;User Management | &nbsp;&nbsp;Complete user information entry, maintenance, and authorisation tasks. Assign appropriate roles to users and perform bulk import/export of user information. |
| &nbsp;&nbsp;PC-based User Permissions Management | &nbsp;&nbsp;Role Management | &nbsp;&nbsp;User operational permissions within the system are controlled through roles, which may be understood as user groups possessing specific operational authorisations. Role management enables the creation of role groups, assigning personnel to these groups to grant role functionality. The association between roles and permissions facilitates operations on module menus. |
| &nbsp;&nbsp;System Integration<br> (Medical Insurance) | &nbsp;&nbsp;Quick Claims Application | &nbsp;&nbsp;Following standard medical insurance settlements at hospitals for […] policyholders, the insurance platform periodically pushes transaction settlement data to the claims processing platform. Upon receiving this data, the claims platform triggers automated case initiation, review, and calculation workflows. Processed claims can be queried via both the backend management interface and mobile application. |
| &nbsp;&nbsp;System Integration<br> (Medical Insurance) | &nbsp;&nbsp;Express Claim Revocation | &nbsp;&nbsp;Upon cancellation of a medical insurance settlement at a hospital, the medical insurance platform identifies the cancellation record and periodically pushes this negative transaction settlement information to the claims platform. Upon receiving the data, the claims platform triggers the cancellation processing of the claims case. |

---

## Exhibit 8.1

**Exhibit 8.1**

**List of Subsidiaries of Zhibao Technology Inc.**

---

| | |
|:---|:---|
| **Name of Subsidiaries** | **Jurisdiction** |
| Zhibao Technology Holdings Limited | British Virgin Islands |
| Zhibao Technology Limited | Hong Kong |
| Zhibao Technology Co., Ltd. | The People's Republic of China |
| Shanghai Zhizhongbao Enterprise Management Co., Ltd. | The People's Republic of China |
| Shanghai Anyi Network Technology Co., Ltd. | The People's Republic of China |
| Sunshine Insurance Brokers (Shanghai) Co., Ltd. | The People's Republic of China |
| Shanghai Zhibao Health Management Co., Ltd. | The People's Republic of China |
| Shanghai Zhibao Yingshi Health Technology Co., Ltd. | The People's Republic of China |
| Zhibao Labuan Reinsurance Company Limited | Malaysia |
| Zhonglian Jinan Insurance Brokers Co., Ltd. | The People's Republic of China |

---

## Exhibit 12.1

**Exhibit 12.1**

**Certification by the Chief Executive Officer**

**Pursuant to Section 302 Of the Sarbanes-Oxley Act 2002**

I, Botao Ma, Chief Executive Officer of Zhibao Technology Inc., certify that:

&nbsp;&nbsp;&nbsp;&nbsp;1. I have reviewed this annual report on Form 20-F of Zhibao Technology Inc.;

&nbsp;&nbsp;&nbsp;&nbsp;2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to
state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not
misleading with respect to the period covered by this report;

&nbsp;&nbsp;&nbsp;&nbsp;3. Based on my knowledge, the financial statements, and other financial information included in this report,
fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the
periods presented in this report;

&nbsp;&nbsp;&nbsp;&nbsp;4. The company's other certifying officer(s) and I are responsible for establishing and maintaining
disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting
(as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to
be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries,
is made known to us by others within those entities, particularly during the period in which this report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Designed such internal control over financial reporting, or caused such internal control over financial
reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Evaluated the effectiveness of the company's disclosure controls and procedures and presented in
this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by
this report based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) Disclosed in this report any change in the company's internal control over financial reporting that
occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the
company's internal control over financial reporting; and

&nbsp;&nbsp;&nbsp;&nbsp;5. The company's other certifying officer(s) and I have disclosed, based on our most recent evaluation
of internal control over financial reporting, to the company's auditors and the audit committee of the company's board of
directors (or persons performing the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) All significant deficiencies and material weaknesses in the design or operation of internal control over
financial reporting which are reasonably likely to adversely affect the company's ability to record, process, summarize and report
financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Any fraud, whether or not material, that involves management or other employees who have a significant
role in the company's internal control over financial reporting.

---

| | |
|:---|:---|
| Date: January 9, 2026 | Date: January 9, 2026 |
| By: | /s/ Botao Ma |
| Name: | Botao Ma |
| Title: | Chief Executive Officer |

---

## Exhibit 12.2

**Exhibit 12.2**

**Certification by the Chief Financial Officer**

**Pursuant to Section 302 Of the Sarbanes-Oxley Act 2002**

I, Yuanwen Xia, Chief Financial Officer of Zhibao Technology Inc., certify that:

&nbsp;&nbsp;&nbsp;&nbsp;1. I have reviewed this annual report on Form 20-F of Zhibao Technology Inc.;

&nbsp;&nbsp;&nbsp;&nbsp;2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to
state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not
misleading with respect to the period covered by this report;

&nbsp;&nbsp;&nbsp;&nbsp;3. Based on my knowledge, the financial statements, and other financial information included in this report,
fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the
periods presented in this report;

&nbsp;&nbsp;&nbsp;&nbsp;4. The company's other certifying officer(s) and I are responsible for establishing and maintaining
disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting
(as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to
be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries,
is made known to us by others within those entities, particularly during the period in which this report is being prepared;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Designed such internal control over financial reporting, or caused such internal control over financial
reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Evaluated the effectiveness of the company's disclosure controls and procedures and presented in
this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by
this report based on such evaluation; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) Disclosed in this report any change in the company's internal control over financial reporting that
occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the
company's internal control over financial reporting; and

&nbsp;&nbsp;&nbsp;&nbsp;5. The company's other certifying officer(s) and I have disclosed, based on our most recent evaluation
of internal control over financial reporting, to the company's auditors and the audit committee of the company's board of
directors (or persons performing the equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) All significant deficiencies and material weaknesses in the design or operation of internal control over
financial reporting which are reasonably likely to adversely affect the company's ability to record, process, summarize and report
financial information; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) Any fraud, whether or not material, that involves management or other employees who have a significant
role in the company's internal control over financial reporting.

---

| | |
|:---|:---|
| Date: January 9, 2026 | Date: January 9, 2026 |
| By: | /s/ Yuanwen Xia |
| Name: | Yuanwen Xia |
| Title: | Chief Financial Officer |

---

## Exhibit 13.1

**Exhibit 13.1**

**Certification by the Chief Executive Officer** 

**Pursuant to Section 906 Of the Sarbanes-Oxley Act 2002**

In connection with the Annual Report of Zhibao Technology Inc. (the "Company) on Form 20-F for the year ended June 30, 2025 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Botao Ma, Chief Executive Officer of the Company, hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) The Report fully complies with the requirements of Section
13(a) or 15(d) of the Securities Exchange Act of 1934; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) The information contained in the Report fairly presents, in
all material respects, the financial condition and results of operations of the Company.

---

| | |
|:---|:---|
| Date: January 9, 2026 | Date: January 9, 2026 |
| By: | /s/ Botao Ma |
| Name: | Botao Ma |
| Title: | Chief Executive Officer |

---

## Exhibit 13.2

**Exhibit 13.2**

**Certification by the Chief Financial Officer** 

**Pursuant to Section 906 Of the Sarbanes-Oxley Act 2002**

In connection with the Annual Report of Zhibao Technology Inc. (the "Company) on Form 20-F for the year ended June 30, 2025 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Yuanwen Xia, Chief Financial Officer of the Company, hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) The Report fully complies with the requirements of Section
13(a) or 15(d) of the Securities Exchange Act of 1934; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) The information contained in the Report fairly presents, in
all material respects, the financial condition and results of operations of the Company.

---

| | |
|:---|:---|
| Date: January 9, 2026 | Date: January 9, 2026 |
| By: | /s/ Yuanwen Xia |
| Name: | Yuanwen Xia |
| Title: | Chief Financial Officer |

---

## Exhibit 15.1

**Exhibit 15.1**

**<u>Consent of Independent Registered Public Accounting Firm</u>**

We consent to the incorporation by reference in the following Registration Statements:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(1) Registration Statement (Form F-1 No. 333-290132) and related Prospectus of Zhibao Technology Inc. for the registration of up to 14,985,883 Class A Ordinary Shares.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(2) Registration Statement (Form F-1 No. 333-286140) and related Prospectus of Zhibao Technology Inc. for the registration of up to 8,865,249 Class A Ordinary Shares issuable upon conversion of a senior secured convertible promissory note and up to 686,677 Class A Ordinary Shares issuable upon exercise of warrants.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(3) Registration Statement (Form F-1 No. 333-282423) and related Prospectus of Zhibao Technology Inc. for the registration of up to 3,282,563 Class A Ordinary Shares issuable upon conversion of a senior secured convertible promissory note, up to 154,050 Class A Ordinary Shares issuable upon exercise of warrants and up to 984,769 Class A Ordinary Shares issuable upon exercise of a pre-funded warrant of our report dated January 9, 2026, with respect to the consolidated balance sheets of Zhibao Technology Inc. as of June 30, 2024 and 2025 and the related consolidated statements of operations and comprehensive (loss) income, changes in shareholders' equity and cash flows of Zhibao Technology Inc. for each of the three years in the period ended June 30, 2025 included in this Annual Report (Form 20-F) of Zhibao Technology Inc. for the year ended June 30, 2025.

HYYH CPA. LLC

*Baltimore, Maryland*

January 9, 2026

## Exhibit 15.2

**Exhibit 15.2**

![](ex15-2_001.jpg)

**Consent Letter**

Date: January 9<sup>th</sup>, 2026

**To:** 

Zhibao Technology Inc.

Floor 3, Building 6, Wuxing Road, Lane 727

Pudong New Area, Shanghai 201204

People's Republic of China

Dear Sir/Madam:

We hereby consent to the reference to our firm and the summary of our opinion under the headings "Item 3. Key Information—D. Risk Factors—Risks Related to Doing Business in China" ,"Item 4. Information on the Company—C. Organizational Structure," "Item 4. Information on the Company—B. Business Overview—Regulations in PRC" and "Item 10. Additional Information—E. Taxation—People's Republic of China Taxation" in Zhibao Technology Inc.'s Annual Report on Form 20-F for the year ended June 30, 2025 (the "Annual Report"), which will be filed with the Securities and Exchange Commission (the "SEC") in the month of November 2025. We also consent to the filing of this consent letter with the SEC as an exhibit to the Annual Report.

In giving such consent, we do not thereby admit that we come within the category of persons whose consent is required under Section 7 of the Securities Act of 1933, or under the Securities Exchange Act of 1934, in each case, as amended, or the regulations promulgated thereunder.

Sincerely yours,

---

| |
|:---|
| **/s/ Jinghe Law Firm** |
| **Jinghe Law Firm** |

---