Zhibao Technology, a Nasdaq-listed Chinese insurtech company, signed a private investment in public equity agreement on July 31 valued at about $154.7 million, according to CryptoSlate. The investors will pay with 2,380 BTC, using a fixed valuation of $65,000 per bitcoin.
Ten investor entities are listed in the agreement
The agreement names 10 investor entities. Each one is allocated 44.2 million units with a total value of $15.47 million and will pay with 238 BTC. On an aggregate basis, the investors are buying 442 million units at $0.35 per unit.
Each unit includes one Class A ordinary share and a two-year warrant that allows the holder to buy one additional share at an exercise price of $0.35. Based on that structure, the potential total issuance could reach 884 million shares.
Board and executive control would shift after closing
Once the transaction closes, the investors will designate four of the company’s five directors and will select a new CEO and CFO. The current four directors, as well as the sitting CEO and CFO, are set to resign.
Pre-PIPE shareholders face substantial dilution
The filing says the issuance would significantly dilute the ownership percentage of shareholders that held stock before the PIPE. The existing 49,001,662 shares would account for about 9.98% of the referenced post-closing share base. Class B shareholders would also lose their 20-to-1 voting advantage.
If all newly issued warrants are later exercised, the referenced share base would increase to at least 933,001,662 shares. Under that scenario, the pre-PIPE ownership percentage would fall to about 5.25%.
Closing timeline still depends on unresolved approvals
The agreement is scheduled to close within 12 business days after July 31, or on another date agreed to in writing by both sides. The required capital increase and approval matters, however, remain unresolved.