Zhibao Technology Inc. Enters Non-Binding Term Sheet for PIPE Financing Valued at Around 3,500 Bitcoin

PIPE Financing Structure and Bitcoin-Based Consideration

The term sheet outlines a PIPE financing in which the Buyer or its designated entity plans to subscribe for securities in Zhibao Technology. A key feature is the proposed consideration of about 3,500 Bitcoin. This Bitcoin valuation is subject to final determination pending custodial arrangements, audit verification, and regulatory review.

Utilizing cryptocurrency as consideration in a public equity transaction marks a significant development for Zhibao and reflects wider capital market trends embracing alternative assets. However, the announcement emphasizes that there is no guarantee definitive agreements will be executed or that the transaction will close on the stated terms or at all.

Non-Binding Term Sheet and Conditions Precedent

The term sheet is explicitly non-binding, meaning neither party is legally obligated to proceed to definitive agreements or closing. The transaction depends on multiple conditions, including satisfactory legal, financial, and operational due diligence by the Buyer.

Additionally, the deal requires negotiation and execution of definitive agreements, receipt of corporate and regulatory approvals, and compliance with Nasdaq listing standards. Given the cross-border nature and cryptocurrency involvement, regulatory scrutiny is expected to be a significant factor in whether binding agreements are finalized.

Board Control Shift and Management Continuity

The term sheet anticipates a significant governance change, with the Buyer expected to appoint a majority of the board at PIPE financing closing. This signals a shift in oversight and strategic direction. Despite this, current management will continue to run daily operations of the legacy business until any separation, disposition, or restructuring occurs.

Zhibao's Digital Insurance Platform and 2B2C Model

Zhibao Technology is a leading InsurTech provider delivering digital insurance brokerage services in China. It pioneered the 2B2C (business-to-customer) digital embedded insurance model, integrating business-facing and consumer-facing insurance distribution via digital channels.

Since launching China's first digital insurance brokerage platform in 2020, powered by proprietary Platform as a Service (PaaS) technology, Zhibao has developed over 40 proprietary digital insurance solutions across industries such as travel, sports, logistics, utilities, and e-commerce. The company leverages data acquisition, artificial intelligence, and big data analytics to continuously enhance its insurance offerings.

Diverse Industry Insurance Solutions

Zhibao's digital insurance solutions span multiple sectors, capturing demand across travel, sports, logistics, utilities, and e-commerce. This diversification reduces concentration risk and broadens exposure to various economic activities.

The company’s competitive edge lies in iterative product development driven by customer data analysis and emerging market trends, supported by big data and AI technologies, reinforcing its strategic position in the InsurTech market.

Regulatory and Compliance Challenges

The transaction faces several regulatory and compliance hurdles, including Nasdaq listing requirements, which are particularly significant given the Bitcoin-denominated consideration. Regulatory authorities may impose conditions or additional scrutiny on the valuation and treatment of cryptocurrency in public equity financing.

The international scope—featuring a Shanghai-based company, a Buyer entity, and multi-jurisdictional regulatory oversight—adds complexity. Regulatory review and approval are critical due to the cross-border nature and digital asset involvement.

Bitcoin Custody and Valuation Considerations

The approximately 3,500 Bitcoin consideration is subject to final valuation based on custodial arrangements and audit verification. Custody solutions are essential for safeguarding, ownership confirmation, and management of digital assets on Zhibao’s balance sheet.

Audit verification implies independent accounting or valuation to confirm Bitcoin quantity and value before closing. Given Bitcoin's price volatility and accounting complexities, the final economic value may differ materially from the announcement date valuation.

Forward-Looking Statements and Risks

The announcement includes forward-looking statement disclaimers under the Private Securities Litigation Reform Act of 1995, highlighting uncertainties and risks detailed in Zhibao’s SEC filings (Forms 20-F and F-1). The company disclaims any obligation to update these statements except as required by law.

Investors should recognize the preliminary nature of the term sheet and the substantial contingencies before any binding commitments.

Investor Guidance and Next Steps

Investors should distinguish between this non-binding term sheet announcement and definitive agreement execution. The announcement represents an early disclosure of a proposed structure, not a commitment to proceed.

Material developments—including due diligence outcomes, definitive term negotiations, and regulatory decisions—are pending before closing. Zhibao has not provided timelines for these milestones. Future updates on closing conditions, transaction terms, or adverse due diligence findings will be material events for investors. Completion or termination of this transaction will significantly impact Zhibao’s corporate governance and shareholder composition.