In short
- Zhibao Technology signed a non-binding term sheet with Joyertech and Information OPC for a PIPE financing agreement involving approximately 3,500 Bitcoin, worth approximately $220 million at current prices.
- The buyer would appoint a majority of Zhibao’s board of directors at closing, effectively assuming control of the company while current management continues day-to-day operations.
- Zhibao received a Nasdaq deficiency letter on July 15 for trading below $1 per share, and its shares doubled shortly after Bitcoin Treasury’s announcement.
Zhibao Technology Inc., a Nasdaq-listed Shanghai company that sells digital insurance products in China, announced Wednesday that it has signed a non-binding term sheet to receive about 3,500 Bitcoin as payment in a proposed stock sale. The deal would be worth around $220 million at current BTC prices.
According to the company press release“the buyer (or its designee) intends to subscribe for securities in a proposed PIPE financing of the company, with the consideration expected to be approximately 3,500 Bitcoin, subject to final valuation, custody arrangements, audit verification, regulatory review, Nasdaq compliance and execution of definitive agreements.”
A PIPE, or private investment in public equity, involves a private buyer purchasing shares directly from a publicly traded company rather than on the open market. In this case, the buyer, a company called Joyertech and Information OPC, would pay for those shares not in cash but in Bitcoin.
Who is actually in charge here?
The deal has a catch that goes far beyond a simple Bitcoin purchase. According to the term sheet, “the company intends to maintain its existing operations, while the buyer is expected to appoint a majority of the members of the board of directors upon closing of the PIPE financing.” That means Joyertech would effectively take control of the company.
Zhibao, which trades on Nasdaq as ZBAO, describes itself as “a leading, fast-growing InsurTech company and pioneer of the 2B2C digital embedded insurance model in China.” The company launched what it calls the country’s first digital insurance brokerage platform in 2020, powered by its proprietary platform-as-a-service: a cloud-based system that other companies plug into to offer insurance products to their customers.
Just a week before this announcement, on July 15, Zhibao announced that it was a shortage letter from Nasdaq for trading under $1 per share. The stock hovered around $0.22.
Hours after the announcement, the stock price shot up from $0.15 to $0.40, which is more than 2x in less than four hours. Momentum waned as the hour passed and shares fell around $0.24 – a sharp correction, but still a gain of about 60%.
A well-known script
The structure becomes common. Instead of raising money and then buying Bitcoin on the open market – as companies like Strategy (formerly MicroStrategy) did starting in 2020 – Zhibao would take the Bitcoin itself as payment. That puts a treasury on the balance sheet from day one.
Based on the deal, the current team will only continue to exist temporarily. The press release states that “the current management team is expected to continue to oversee the day-to-day operations of the old company” until a later “separation, divestiture or other restructuring” occurs. In plain English, the founders manage the insurance side until the new owners decide what to do with it.
The Bitcoin Treasury trend has swept Wall Street over the past two years, with companies large and small reshaping themselves around BTC holdings. More than 150 publicly traded companies now hold Bitcoin on their balance sheets. However, this did not always turn out favorably.
While many of these publicly traded companies became digital asset darlings (DATs), initially seeing significant gains on paper and skyrocketing stock prices after initial announcements, the hype surrounding crypto treasuries faded as the bear market began. Just days ago, one such company – UK-based Satsuma Technology – announced it would sell its remaining Bitcoin, refund investors and conduct shutter operations.
Meanwhile, for Zhibao, none of this is final. Zhibao’s own filing emphasizes that the term sheet is non-binding and that the proposed transaction “remains subject to, among other things, the completion of satisfactory legal, financial and operational due diligence, the negotiation and execution of definitive agreements, applicable corporate and regulatory approvals, compliance with the Nasdaq listing requirements and the satisfaction of other customary closing conditions.”
Zhibao has 180 calendar days – until January 6, 2027 – to return to compliance with Nasdaq’s minimum bid price requirement of $1 per share.
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