Zhibao's $220 million Bitcoin PIPE deal comes with new board control

Zhibao Technology said on July 22 it had signed a non-binding term sheet. The Nasdaq-listed Shanghai insurance-tech company agreed to accept about 3,500 Bitcoin, worth about $220 million, for new stock.

The buyer would pick most of the board and take control. Zhibao got a Nasdaq deficiency notice a week earlier for trading below $1. And the proposed Bitcoin position dwarfs its entire market value.

Zhibao takes Bitcoin instead of cash for new shares

The buyer is a company named Joyertech and Information OPC. A term sheet disclosed in a Form 6-K would have it subscribe to a private investment in public equity, or PIPE. This is a sale of shares directly from the company to a private investor, not on the open market.

The consideration is about 3,500 BTC, which in its own press release Zhibao said was worth around $220 million. The coins would be on the balance sheet at closing, not purchased on an exchange.

As of writing this, BTC was changing hands around $65,144. Since the Bitcoin is paid directly for equity, the arrangement does not add any new buying pressure to the open market.

Zhibao trades as ZBAO. It claims to be the first in China to adopt what it calls the “2B2C” embedded-insurance model. The firm launched the first digital insurance brokerage platform in the country in 2020. Zhibao says it has developed 40+ insurance products in sectors including travel, logistics and e-commerce.

Zhibao’s market cap is in the vicinity of $12 million to $15 million. The proposed Bitcoin holding is ~$220 million. That’s about 15 times the company’s equity value.

Zhibao received a Nasdaq deficiency notice on July 15 concerning the minimum bid price. Its stocks traded below $1 from May 27 to July 9. It has until January 6, 2027, to come back into compliance.

The company is a going concern based on previous filings with the SEC. The company’s Form F-1/A said there is “substantial doubt about our ability to continue as a going concern,” citing accumulated deficits and cash outflows.

The stock of Zhibao briefly more than doubled in value on the announcement, reaching $0.40. That may help on the price test, though the deal has not closed.

Board control, not the insurance business, is the real prize

The term sheet states Joyertech will name a majority of the board when the PIPE closes. Zhibao’s existing team continues to run the legacy insurance business “until the separation, disposition, or other restructuring” of that business, the filing said. The current operation will simply continue to exist until the new owners decide what to do with it.

A term sheet is specifically non-binding. Zhibao listed a series of gates that need to be cleared first. These include final valuation, custody arrangements, audit, regulatory review, Nasdaq sign-off and definitive agreements.

The company said there was no guarantee the deal would be consummated on these terms or at all. Any one of those conditions could sink it.

If it does, Joyertech can move to “separation or disposition” language. A quick wind down of the insurance arm would suggest that the wrapper not the business was the target. It would be part of a wider trend of listed companies relying on Bitcoin.

Cryptopolitan has reported on that pattern in the other direction in Empery Digital’s change away from a Bitcoin treasury towards AI data centers under shareholder pressure.

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