Zhibao, a Listed Company, to Receive Bitcoin Worth 37 Billion Yen in Exchange for New Share Issuance

Key Points of This Article

• Buyer expected to gain control with receipt of 3,500 BTC
• There are views that the aim is to get listed on NASDAQ

Signing of a Non-Binding Basic Agreement

Zhibao Technology, a NASDAQ-listed company based in Shanghai, announced on the 22nd that it has signed a non-binding basic agreement to receive approximately 3,500 bitcoins (BTC) as compensation for PIPE financing.

The company JOYERTECH AND INFORMATION OPC will purchase newly issued shares from Zhibao. The buyer is expected to pay approximately 3,500 BTC as part of the compensation to acquire the new shares, which is worth about 37 billion yen at the time of writing.

If realized, Bitcoin will be recorded as a financial asset on the balance sheet.

According to Zhibao, the basic agreement is non-binding, and there is no guarantee that a final contract will be concluded. Additionally, the terms of the transaction are provisional, and there is no assurance that the transaction will even be executed.

Upon completion of the transaction, the buyer is expected to designate a majority of the members of Zhibao's board of directors, effectively gaining control of Zhibao. Meanwhile, Zhibao intends to maintain its existing business operations.

Furthermore, until the existing business of the company is separated, disposed of, or otherwise restructured, the current management team is expected to continue overseeing daily operations.

Views That the Aim is to Get Listed on NASDAQ

Zhibao launched China's first digital insurance brokerage platform developed in-house in 2020. It is a cloud-based system that other companies can use to offer insurance products to customers.

The TFTC has indicated that this transaction may have been conducted for the buyer to gain the status of a NASDAQ-listed company. Zhibao received a notice of non-compliance with NASDAQ listing standards on the 15th, as its stock price fell below $1 per share.

While Zhibao's market capitalization is only about $12 million to $15 million, the proposed Bitcoin compensation is worth approximately $220 million, highlighting a significant disparity in scale.

What the business model will look like after the transaction is expected to gradually become clear if a formal contract is made in the future.

Regarding companies holding Bitcoin as a financial asset, UK-based Satsuma Technology announced on the 20th that it is proceeding with delisting from the London Stock Exchange and will sell its held Bitcoin.