Preface

Summary: Zhibao Technology Inc., a Nasdaq-listed Shanghai-based InsurTech, has signed a non-binding term sheet for a proposed private investment in public equity (PIPE) that would involve roughly 3,500 Bitcoin, valued at about $220 million at current BTC prices. This article explains the terms of that agreement, the implications for corporate control and the company’s operations, the market reaction, and the broader trend of public companies taking Bitcoin onto their balance sheets. The purpose is to clarify risks, conditions and likely outcomes while providing context on why this structure is gaining popularity among listed firms.

Lazy bag

Key takeaways: Zhibao signed a non-binding term sheet for a PIPE in which the buyer would pay primarily in Bitcoin. The buyer would designate a majority of the board at closing, effectively assuming control while existing management continues day-to-day operations for now. The plan follows a growing pattern of companies accepting BTC directly to establish an immediate Bitcoin treasury.

Main Body

Zhibao Technology Inc., which trades under the ticker ZBAO on Nasdaq and operates digital insurance services in China, announced that it has entered into a non-binding term sheet with a buyer identified as Joyertech and Information OPC for a proposed PIPE financing. Under the arrangement described in the company press release, the buyer—or an entity it designates—would subscribe for shares in the company with consideration expected to include approximately 3,500 Bitcoin, subject to valuation, custodial arrangements, audit verification, regulatory review, Nasdaq compliance and definitive documentation.

A PIPE (private investment in public equity) is a mechanism by which a private investor purchases securities directly from a publicly traded company rather than buying shares on the open market. What makes this proposed transaction notable is the use of Bitcoin as the primary form of payment rather than cash. If completed as described, Zhibao would receive Bitcoin directly, creating an immediate Bitcoin holding on its balance sheet instead of raising fiat and then purchasing BTC later.

The term sheet contains a governance change that goes beyond the financing itself: the buyer is expected to designate a majority of the company’s board of directors at the closing of the PIPE. In practical terms, that means Joyertech would obtain effective control of Zhibao’s board. The company’s announcement indicates the current management team is expected to continue overseeing day-to-day operations of the legacy insurance business for the near term, pending a later separation, disposition, or restructuring the new owners may pursue.

This structure—accepting Bitcoin directly in a financing and accommodating board reconstitution—has appeared with increasing frequency since 2020. Companies that adopt this approach secure an instant Bitcoin treasury rather than raising cash and buying Bitcoin themselves. Proponents argue it accelerates exposure to BTC, aligns corporate treasury strategy with investor appetite for crypto assets, and can generate market interest. Critics caution that the move can concentrate risk (crypto price volatility, custody and regulatory exposure) and that governance transfers of this nature may unsettle existing stakeholders.

Market reaction to Zhibao’s announcement was immediate but volatile. The company had disclosed just a week earlier, on July 15, that it had received a Nasdaq deficiency letter for trading below the $1 minimum bid-price threshold. At the time of that filing, Zhibao’s shares were trading near $0.22. Following the Bitcoin-treasury announcement, the stock jumped intraday from roughly $0.15 to $0.40—more than doubling within hours—before retreating and settling around $0.24, a roughly 60% net gain from the prior level. Such rapid moves are common when small-cap names announce high-profile strategic shifts, particularly involving crypto.

It is important to emphasize the term sheet is non-binding. Zhibao’s filing underscores that the proposed transaction remains subject to a range of customary conditions: satisfactory legal, financial and operational due diligence; negotiation and execution of definitive agreements; applicable corporate and regulatory approvals; compliance with Nasdaq listing requirements; custodial and audit confirmations for the Bitcoin; and other closing conditions. Until these hurdles are cleared and definitive contracts are signed, the arrangement could be revised or abandoned.

The broader trend of publicly traded companies holding Bitcoin on their balance sheets expanded substantially in recent years. Dozens of firms, both large and small, have either bought Bitcoin directly or restructured to hold BTC. Some early converts saw significant paper gains and positive investor sentiment at the outset; others have faced challenges as crypto markets turned lower, regulatory uncertainty increased, or operational issues emerged. For example, a recently public UK firm that accumulated BTC ultimately liquidated its holdings, refunded shareholders and ceased operations—illustrating the potential pitfalls.

For Zhibao specifically, key near-term considerations include: finalizing definitive agreements that clarify valuation, custody and audit procedures for the Bitcoin; securing any required regulatory and Nasdaq approvals; and managing the transition of board control to the buyer’s designees while keeping the legacy business stable. Zhibao has 180 calendar days—until January 6, 2027—to regain compliance with Nasdaq’s minimum bid price requirement of $1 per share, a separate but relevant timeline for the company’s listing status.

Investors should weigh both the potential upside of an immediate Bitcoin treasury and the governance implications of a majority-board designation by a buyer. The non-binding nature of the term sheet leaves multiple outcomes possible: the transaction could proceed as announced, be modified, or fail to close. If completed, the deal would position Zhibao among a growing cohort of publicly traded companies that hold Bitcoin, but it would also mark a significant change in control and strategic trajectory for a company whose core business centers on digital insurance products in China.

In summary, Zhibao’s proposed PIPE would provide it with substantial Bitcoin exposure upfront while ceding board control to the buyer’s nominees. The company’s management is expected to continue running daily operations for now, but the structural shift signals material strategic and governance changes if the transaction reaches a definitive, approved closing. Observers should monitor regulatory filings, custody and audit confirmations for the Bitcoin consideration, and any updates about definitive agreements and Nasdaq compliance steps.

Key Insights Table