Zhibao Technology (Nasdaq: ZBAO), a Shanghai-based digital insurance company, has signed a non-binding term sheet that could place approximately 3,500 Bitcoin—valued at roughly $220 million—onto its balance sheet through a proposed private investment in public equity (PIPE) financing settled in BTC rather than cash.

Under the agreement with Joyertech and Information OPC, the buyer or its designated entity would subscribe to newly issued securities. The final Bitcoin amount remains subject to valuation, custodial arrangements, audit verification, regulatory review, Nasdaq compliance, and the execution of definitive agreements.

The structure goes beyond simply adding Bitcoin to Zhibao's balance sheet. Per the term sheet, Joyertech is expected to nominate a majority of Zhibao's board members upon closing, granting the investor effective control of the company—a governance shift more characteristic of a change-of-control or reverse merger transaction than a conventional PIPE, which typically does not hand board majority to a single investor. Zhibao would continue operating its existing insurance business during an initial transition period.

For Zhibao, whose shares were trading in the low-twenties of a dollar before the announcement, the proposed Bitcoin treasury would represent a balance sheet addition potentially dwarfing the company's current market valuation. The deal's scale is unusual for a Nasdaq-listed company of this size, and the effective transfer of control signals that the transaction is as much about reshaping corporate identity as about treasury allocation.

Zhibao's Shanghai headquarters adds a cross-border regulatory dimension. China prohibited domestic cryptocurrency trading and initial coin offerings in 2017 and extended the ban to crypto mining in 2021. While Zhibao is listed on Nasdaq and the proposed Bitcoin treasury would sit at the corporate level, the regulatory environment in its home jurisdiction could factor into how custodial arrangements and corporate governance are structured.

How the Bitcoin-Denominated PIPE Works

A PIPE allows private investors to purchase newly issued shares directly from a publicly listed company rather than through public markets. In this instance, the consideration would be Bitcoin instead of cash, enabling Zhibao to establish a substantial Bitcoin treasury at closing if the deal receives final approval.

The approach diverges from the model used by many public companies that first raise capital and then purchase Bitcoin in the open market. Here, Bitcoin would be transferred directly to the company as payment for newly issued equity, with the treasury created as an integral part of the financing.

Zhibao describes itself as a digital insurance technology provider focused on China's embedded insurance market. The company launched what it calls the country's first digital insurance brokerage platform in 2020, built on its own cloud-based platform-as-a-service infrastructure.

Ownership Restructuring and Legacy Business

While the insurance operations would continue post-financing, company disclosures indicate that the current management team is expected to oversee day-to-day operations only until a future separation, disposal, or restructuring of the legacy business is completed.

Investor reaction was swift. Zhibao shares rose from approximately $0.15 to nearly $0.40 within four hours of the announcement before retreating and stabilizing around $0.24. Even after the pullback, the stock remained roughly 60% above its pre-announcement level.

The surge follows a recent compliance challenge. On July 15, Zhibao disclosed that it had received a Nasdaq deficiency notice after its share price fell below the exchange's minimum $1 bid requirement. At that time, the stock was trading near $0.22. The company now has until January 6, 2027, to regain compliance with Nasdaq's listing standards.

Diversifying Bitcoin Treasury Strategies

Zhibao's proposal comes amid a broader trend of public companies experimenting with different approaches to building Bitcoin reserves, with no single treasury model emerging as dominant.

Some companies tie future accumulation to operating cash flow. Earlier in July, ORANGE JUICE announced it had raised $40 million to acquire profitable American businesses, with surplus cash from those operations expected to finance future Bitcoin purchases alongside additional acquisitions.

Others continue to rely on capital markets. Japan's Bitcoin Japan secured plans to raise approximately 9.66 billion yen, allocating about 662 million yen for its first funded Bitcoin treasury purchase after a prior fundraising effort fell short of providing sufficient capital for digital asset acquisitions.

Capital B has pursued yet another path by expanding its financing capacity before making additional purchases. In June, shareholders approved a framework authorizing up to €5 billion in capital increases and €100 billion in credit instruments to support future Bitcoin acquisitions as part of the French company's long-term treasury strategy.

Not every company is increasing its Bitcoin exposure. Earlier in July, Empery disclosed that it had sold 1,400 Bitcoin for approximately $87.1 million since May, using the proceeds to repay debt, finance acquisitions, cover legal expenses, and strengthen liquidity while maintaining a smaller Bitcoin reserve.

More than 150 publicly traded companies now hold Bitcoin on their balance sheets, though recent developments demonstrate that treasury strategies increasingly reflect each company's specific financing needs, operating model, and balance sheet priorities.

Conditions and Uncertainty

For Zhibao, the proposed transaction remains far from finalized. Company filings state that the agreement is non-binding and still depends on satisfactory legal, financial, and operational due diligence; the execution of definitive agreements; corporate and regulatory approvals; continued Nasdaq compliance; and other customary closing conditions before any Bitcoin would change hands.