Zhibao plans $220M PIPE paid in 3,500 Bitcoin

Shanghai-based Zhibao Technology Inc. signed a non-binding term sheet with Joyertech and Information OPC for a proposed private investment in public equity that would be paid with about 3,500 Bitcoin, roughly $220 million at current prices.

The company’s filing states “the Buyer (or its designated entity) intends to subscribe for securities in a proposed PIPE financing of the Company, with consideration expected to include approximately 3,500 Bitcoin,” subject to final valuation, custodial arrangements, audit verification, regulatory review, Nasdaq compliance and execution of definitive agreements. In the proposed transaction the investor would pay with cryptocurrency rather than cash.

Under the term sheet the buyer would designate a majority of Zhibao’s board at closing, giving the purchaser effective control while the existing management team continues to run day-to-day operations of the legacy insurance business until a later separation, disposition or restructuring.

Zhibao’s filing says the transaction remains subject to satisfactory legal, financial and operational due diligence, negotiation and execution of definitive agreements, applicable corporate and regulatory approvals, compliance with Nasdaq listing requirements and other customary closing conditions.

The company received a Nasdaq deficiency letter on July 15 for failing to maintain a minimum $1 bid price; the stock was trading near $0.22 at the time. After the Bitcoin-backed PIPE announcement shares rose from about $0.15 to $0.40 within hours before retreating and settling around $0.24, a roughly 60% intraday increase. Zhibao has 180 calendar days, until Jan. 6, 2027, to regain compliance with Nasdaq’s minimum bid price.

Zhibao, which trades as ZBAO, says it operates a cloud platform-as-a-service for embedded digital insurance products and launched a digital insurance brokerage platform in 2020. The company is based in Shanghai.

Receiving Bitcoin directly would place the cryptocurrency on Zhibao’s balance sheet immediately rather than requiring the company to purchase Bitcoin later on the open market. More than 150 publicly traded companies report holding Bitcoin; some companies have later sold holdings, returned funds to investors or wound down operations.

The company did not provide a timetable for closing the proposed PIPE or for any board appointments beyond the term sheet’s terms. Completion will depend on the outcome of audits, custodial and regulatory checks and the execution of definitive agreements by both parties.