Zhibao Technology signs a $154.7 million PIPE agreement, with investors paying 2,380 bitcoins and gaining control of the board

According to CryptoSlate, Nasdaq-listed company Zhibao Technology (a Chinese insurtech company) signed a PIPE (Private Investment in Public Equity) agreement worth approximately $154.7 million on July 31, with investors paying in 2,380 bitcoins (calculated at a fixed price of $65,000 per bitcoin).

The agreement lists 10 investor entities, each allocated 44.2 million units, totaling $154.7 million, paid in 238 bitcoins. Investors will purchase 442 million units at $0.35 per unit, with each unit consisting of 1 share of Class A common stock and a 2-year warrant (to buy 1 additional share at an exercise price of $0.35), with a potential total issuance of up to 884 million shares.

After the transaction is completed, investors will designate 4 out of 5 directors and choose a new CEO and CFO. The existing 4 directors and the current CEO and CFO will resign. This issuance will significantly dilute the shareholding ratio prior to the PIPE transaction. The 49,001,662 shares will account for approximately 9.98% of the share base after the transaction is completed, while Class B shareholders will lose their 20-to-1 voting advantage.

If all new warrants are subsequently exercised, the share base will increase to at least 933,001,662 shares, while the shareholding ratio prior to the PIPE transaction will drop to about 5.25%. The agreement is intended to be settled within 12 business days after July 31, or on another date agreed upon in writing by both parties, but the required capital increase and approval issues remain unresolved.