Zhibao Technology, a Nasdaq-listed company, has signed a $154.7 million private investment in public equity (PIPE) agreement that will be paid entirely in Bitcoin — 2,380 BTC at a fixed price of $65,000 per coin. The deal, announced July 30, would give the investors roughly 442 million new Class A shares at $0.35 each, plus warrants for another 442 million shares at the same price. But the transaction faces a long list of conditions, and as of Aug. 1 no closing had been disclosed.
How the deal works
The PIPE involves 10 investor entities, each allocated 44.2 million units. Each unit consists of one Class A ordinary share and one warrant to buy another Class A share at $0.35 within two years. The total potential share issuance is 884 million — 442 million at closing plus up to 442 million if all warrants are exercised. The Bitcoin price was fixed using July 30 market rates, so each investor must deliver 238 BTC to a company-designated custodian wallet before closing, unless otherwise agreed in writing.
Governance overhaul
Upon closing, the investors would get to appoint four of the five board seats and choose the new CEO and CFO. Four incumbent directors and the current CEO and CFO would resign. Botao Ma, a current director, would stay on. That means the investors would effectively control the company's management and board.
Share dilution and Nasdaq compliance
Zhibao currently has about 32.2 million Class A shares and 16.8 million Class B shares (each Class B gets 20 votes). After converting all Class B shares into Class A and issuing the PIPE shares, the total Class A count would hit 491 million — well above the 450 million authorized. The company says it will need shareholder approval to increase the authorized share capital. If all warrants are exercised, the total could reach 933 million shares, diluting the pre-PIPE block (49 million shares) to just 5.25%.
Zhibao also has a Nasdaq compliance problem. Its stock closed below $1 for more than 30 consecutive trading days from May 27 through July 9. The exchange notified the company on July 10, giving it until Jan. 6, 2027 to regain compliance. The PIPE's closing conditions include Nasdaq compliance and no exchange objection.
Unanswered questions
The filings don't name the natural-person controllers behind the 10 investor entities, nor the custodian or wallet address. There's no independent confirmation that the Bitcoin actually exists or is available. The agreement contemplates closing within 12 business days of July 31, but as of Aug. 1 no closing had been announced. Whether the investors can deliver the Bitcoin and whether Zhibao can get the necessary approvals remain open questions.
