Strive, Inc 8-K, filed Sep 24, 2025
Strive, Inc. (ASST)
About this 8-K
Strive, Inc filed this 8-K on September 24, 2025, reporting on events of September 23, 2025.
Items reported
- Item 8.01: Other events
- Item 9.01: Financial statements and exhibits
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
Pursuant to Section 13 or 15(d) of The Securities Exchange Act of 1934
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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the Company under any of the following provisions:
| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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Indicate by check mark whether the Company is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 or Rule 12b-2 of the Securities Exchange Act of 1934.
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Item 8.01 Other Events
Strive, Inc. (“Strive” or the “Company”) is filing this Current Report on Form 8-K solely to provide certain information relating to the pending merger transaction involving Strive and Semler Scientific, Inc., a Delaware corporation (“Semler Scientific”). As previously disclosed in its Current Report on Form 8-K filed on September 22, 2025, Strive entered into an Agreement and Plan of Merger (the “Merger Agreement”) on September 22, 2025 with Semler Scientific. The Merger Agreement, which was unanimously approved on September 21, 2025 by both the board of directors of Strive and the board of directors of Semler Scientific, provides for an all-stock acquisition by Strive of Semler Scientific upon the terms and subject to the conditions set forth therein.
This Item 8.01 contains:
| 1. | Historical financial statements of Semler Scientific filed in accordance with Rule 3-05 of Regulation S-X, included as Exhibits 99.1 and 99.2, which are incorporated herein by reference; |
| 2. | Unaudited pro forma combined consolidated financial information of Strive and Semler Scientific in accordance with Article 11 of Regulation S-X giving effect to certain pro forma adjustments related to the pending merger transaction as if it were completed on January 1, 2024 as it relates to the unaudited pro forma combined consolidated statement of operations, and as if it were completed on June 30, 2025 as it relates to the unaudited pro forma combined consolidated balance sheet, included as Exhibit 99.3 hereto, which is incorporated herein by reference; and |
| 3. | Supplementary risk factors related to the pending merger transaction, included as Exhibit 99.4, which is incorporated herein by reference. |
The pro forma information and related notes have been prepared for illustrative purposes only, based upon applicable rules of the Securities and Exchange Commission. The pro forma information does not purport to be indicative of what the combined company’s consolidated financial position or results of operations actually would have been had the pending merger transaction been completed as of the dates indicated. In addition, the unaudited pro forma combined condensed financial information does not purport to project the future financial position or operating results of the combined company. The pro forma adjustments, which are subject to uncertainties, are based on the information available at the time of the preparation of these pro forma financial statements and on the basis of certain assumptions and estimates. The pro forma financial information should be read, if at all, with the related qualifications and other notes set forth in Exhibit 99.3.
This Report does not modify or update the consolidated financial statements of Strive included in the Company’s periodic reports. The historical financial statements of Semler Scientific included as Exhibits 99.1 and 99.2 hereto were prepared by Semler Scientific and previously disclosed by Semler Scientific in its periodic reports; it has not been independently validated or reviewed by Strive.
***
1
Cautionary Statement Regarding Forward-Looking Statements
Certain statements herein and the documents incorporated herein by reference may constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), and Rule 175 promulgated thereunder, and Section 21E of the Exchange Act and Rule 3b-6 promulgated thereunder, which statements involve inherent risks and uncertainties. Examples of forward-looking statements include, but are not limited to, statements regarding the outlook and expectations of Strive and Semler Scientific, respectively, with respect to the proposed transaction, the strategic benefits and financial benefits of the proposed transaction, including the expected impact of the proposed transaction on the combined company's future financial performance, the timing of the closing of the proposed transaction, and the ability to successfully integrate the combined businesses. Such statements are often characterized by the use of qualified words (and their derivatives) such as "may," "will," "anticipate," "could," "should," "would," "believe," "contemplate," "expect," "estimate," "continue," "plan," "project," "predict," "potential," "assume," "forecast," "target," "budget," "outlook," "trend," "guidance," "objective," "goal," "strategy," "opportunity," and "intend," as well as words of similar meaning or other statements concerning opinions or judgment of Strive, Semler Scientific or their respective management about future events. Forward-looking statements are based on assumptions as of the time they are made and are subject to risks, uncertainties and other factors that are difficult to predict with regard to timing, extent, likelihood and degree of occurrence, which could cause actual results to differ materially from anticipated results expressed or implied by such forward-looking statements. Such risks, uncertainties and assumptions, include, among others, the following:
| ● | the occurrence of any event, change or other circumstances that could give rise to the right of one or both of Strive and Semler Scientific to terminate the merger agreement between Strive and Semler Scientific; |
| ● | the possibility that the proposed transaction does not close when expected or at all because the conditions to closing are not received or satisfied on a timely basis or at all; |
| ● | the outcome of any legal proceedings that may be instituted against Strive or Semler Scientific or the combined company; |
| ● | the possibility that the anticipated benefits of the proposed transaction, including anticipated cost savings and strategic gains, are not realized when expected or at all, including as a result of changes in, or problems arising from, implementation of Bitcoin treasury strategies and risks associated with Bitcoin and other digital assets, general economic and market conditions, interest and exchange rates, monetary policy, and laws and regulations and their enforcement; |
| ● | the possibility that the integration of the two companies may be more difficult, time-consuming or costly than expected; |
| ● | the possibility that the proposed transaction may be more expensive or take longer to complete than anticipated, including as a result of unexpected factors or events; |
| ● | the diversion of management's attention from ongoing business operations and opportunities; |
| ● | dilution caused by Strive’s issuance of additional shares of its Class A common stock in connection with the proposed transaction; |
| ● | potential adverse reactions of Strive’s or Semler Scientific’s customers or changes to business or employee relationships, including those resulting from the announcement or completion of the proposed transaction; |
| ● | changes in Strive’s or Semler Scientific’s share price before closing; and |
| ● | other factors that may affect future results of Strive, Semler Scientific or the combined company. |
These factors are not necessarily all of the factors that could cause Strive’s, Semler Scientific’s or the combined company's actual results, performance or achievements to differ materially from those expressed in or implied by any of the forward-looking statements. Other factors, including unknown or unpredictable factors, also could harm Strive, Semler Scientific or the combined company's results.
2
Although each of Strive and Semler Scientific believes that its expectations with respect to forward-looking statements are based upon reasonable assumptions within the bounds of its existing knowledge of its business and operations, there can be no assurance that actual results of Strive or Semler Scientific will not differ materially from any projected future results expressed or implied by such forward-looking statements. Additional factors that could cause results to differ materially from those described above can be found in Strive’s current report on Form 8-K filed with the Securities and Exchange Commission (the SEC) on September 12, 2025 (including the documents incorporated by reference therein), Semler Scientific’s most recent annual report on Form 10-K for the fiscal year ended December 31, 2024 and quarterly reports on Form 10-Q, and other documents subsequently filed by Strive and Semler Scientific with the SEC. The actual results anticipated may not be realized or, even if substantially realized, they may not have the expected consequences to or effects on Strive, Semler Scientific or their respective businesses or operations. Investors are cautioned not to rely too heavily on any such forward-looking statements. Forward-looking statements speak only as of the date they are made and Strive and Semler Scientific undertake no obligation to update or clarify these forward-looking statements, whether as a result of new information, future events or otherwise, except to the extent required by applicable law.
Additional Information and Where to Find It
In connection with the proposed transaction, Strive intends to file with the SEC a Registration Statement on Form S-4 (the "Registration Statement") to register the Class A common stock to be issued by Strive in connection with the proposed transaction and that will include an information statement of Strive, proxy statement of Semler Scientific and a prospectus of Strive (the "Information Statement/Proxy Statement/Prospectus"), and each of Strive and Semler Scientific may file with the SEC other relevant documents concerning the proposed transaction. A definitive Information Statement/Proxy Statement/Prospectus will be sent to the stockholders of Semler Scientific to seek their approval of the proposed transaction. BEFORE MAKING ANY VOTING OR INVESTMENT DECISION, INVESTORS AND STOCKHOLDERS OF SEMLER SCIENTIFIC ARE URGED TO READ THE REGISTRATION STATEMENT AND INFORMATION STATEMENT/PROXY STATEMENT/PROSPECTUS REGARDING THE PROPOSED TRANSACTION WHEN THEY BECOME AVAILABLE AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THOSE DOCUMENTS, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT STRIVE, SEMLER SCIENTIFIC AND THE PROPOSED TRANSACTION AND RELATED MATTERS.
A copy of the Registration Statement, Information Statement/Proxy Statement/Prospectus, as well as other filings containing information about Strive and Semler Scientific, may be obtained, free of charge, at the SEC's website (http://www.sec.gov). You will also be able to obtain these documents, when they are filed, free of charge, from Strive by accessing Strive’s website at https://investors.strive.com/. Copies of the Registration Statement, the Information Statement/Proxy Statement/Prospectus and the filings with the SEC that will be incorporated by reference therein can also be obtained, without charge, by directing a request to Strive’s Investor Relations department at 200 Crescent Court, Suite 1400, Dallas, Texas 75201 or by calling (855) 427-7360 or by submitting an inquiry at https://investors.strive.com/ir-resources/contact-ir. Copies of the documents filed with the SEC by Semler Scientific will be available free of charge on Semler Scientific’s website at https://ir.semlerscientific.com/. The information on Strive’s or Semler Scientific’s respective websites is not, and shall not be deemed to be, a part of this communication or incorporated into other filings either company makes with the SEC.
Participants in the Solicitation
Strive, Semler Scientific and certain of their respective directors, executive officers and employees may be deemed to be participants in the solicitation of proxies from the stockholders of Semler Scientific in connection with the proposed transaction. Information about the interests of the directors and executive officers of Strive and Semler Scientific and other persons who may be deemed to be participants in the solicitation of stockholders of Semler Scientific in connection with the proposed transaction and a description of their direct and indirect interests, by security holdings or otherwise, will be included in the Information Statement/Proxy Statement/Prospectus related to the proposed transaction, which will be filed with the SEC. Information about the directors and executive officers of Semler Scientific, their ownership of Semler Scientific common stock, and Semler Scientific’s transactions with related persons is set forth in the section entitled "INFORMATION REGARDING OUR BOARD OF DIRECTORS AND CORPORATE GOVERNANCE," "EXECUTIVE OFFICERS," "SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT," “DIRECTOR COMPENSATION,” and "TRANSACTIONS WITH RELATED PERSONS" included in Semler Scientific’s definitive proxy statement in connection with its 2025 Annual Meeting of Stockholders, as filed with the SEC on July 17, 2025. Additional information regarding ownership of Semler Scientific’s securities by its directors and executive officers is included in such persons’ SEC filings on Forms 3 or 4, which are available at https://www.sec.gov/cgi-bin/own-disp?action=getissuer&CIK=0001554859. Information about the directors and executive officers of Strive is contained in Strive’s Current Report on Form 8-K filed with the SEC on September 15, 2025, Strive’s Current Report on Form 8-K filed with the SEC on September 12, 2025 and under “Meet the Leadership Team” accessed through the “About Us” link on Strive’s website at https://strive.com/team. Additional information regarding ownership of Strive’s securities by its directors and executive officers is included in such persons’ SEC filings on Forms 3 or 4 which are available at https://www.sec.gov/cgi-bin/own-disp?action=getissuer&CIK=1920406. These documents and the other SEC filings described in this paragraph may be obtained free of charge as described above under the heading “Additional Information and Where to Find It.”
3
No Offer or Solicitation
This communication is not intended to and shall not constitute an offer to sell or the solicitation of an offer to sell or the solicitation of an offer to buy any securities or the solicitation of any vote of approval, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offer of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act, or pursuant to an exemption from, or in a transaction not subject to, such registration requirements.
Item 9.01 Financial Statements and Exhibits.
(a) Financial Statements of Businesses Acquired
As mentioned under Item 8.01 above, Strive is filing: (i) as Exhibit 99.1 to this Current Report on Form 8-K, the audited consolidated financial statements of Semler Scientific as of December 31, 2024 and 2023, and for each of the two fiscal years in the period ended December 31, 2024, together with the notes related thereto and the Report of Independent Registered Public Accounting Firm thereon, (ii) as Exhibit 99.2, the interim unaudited condensed consolidated financial statements of Semler Scientific as of June 30, 2025 and for the three and six months ended June 30, 2025 and June 30, 2024, together with the notes related thereto; and (iii) as Exhibit 23.1, the consent of BDO USA, P.C., independent registered public accounting firm of Semler Scientific.
(b) Pro Forma Financial Information
As mentioned under Item 8.01 above, Strive is filing as Exhibit 99.3 to this Current Report on Form 8-K, the unaudited pro forma combined consolidated financial statements of Strive and Semler Scientific giving effect to certain pro forma adjustments related to the pending merger transaction between Strive and Semler Scientific as if it were completed on January 1, 2024 as it relates to the unaudited pro forma combined consolidated statement of operations, and as if it were completed on June 30, 2025 as it relates to the unaudited pro forma combined consolidated balance sheet.
(c) Exhibits
4
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Date: September 23, 2025 | Strive, Inc. | |
| /s/ Matthew Cole | ||
| Name: | Matthew Cole | |
| Title: | Chief Executive Officer | |
5
Exhibit 23.1
Consent of Independent Registered Public Accounting Firm
We hereby consent to the incorporation by reference in the Registration Statements on Form S-3ASR (No. 333-290252) and Form S-8 (No. 333-290254) of Strive, Inc. of our report dated February 28, 2025, relating to the financial statements of Semler Scientific, Inc. (the “Company”) which appears in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024.
/s/ BDO USA, P.C.
BDO USA, P.C.
New York, New York
September 23, 2025
Exhibit 99.3
UNAUDITED PRO FORMA COMBINED CONSOLIDATED FINANCIAL INFORMATION
The following unaudited pro forma combined consolidated financial information was prepared using the acquisition method of accounting under GAAP, and gives effect to the transaction between Strive, Inc. and Semler Scientific, Inc. (the “Semler Merger”) to be accounted for as a business combination, with Strive, Inc. being deemed the acquiring company for accounting purposes.
Strive was determined to be the accounting acquirer based upon the terms of the Semler Merger Agreement, as defined below, and other factors including, assuming the Semler Merger is consummated: (i) Strive’s existing stockholders are expected to have the greatest voting interest in the combined entity following consummation of the Semler Merger; (ii) the largest individual stockholder of the combined entity is expected to be an existing stockholder of Strive; (iii) directors of Strive are expected to hold a majority of board seats of the combined company; and (iv) Strive’s senior management is expected to control the strategic direction of Strive following consummation of the Semler Merger.
The following unaudited pro forma combined consolidated financial statements are based on the pro forma combined consolidated financial statements of Strive and the historical financial statements of Semler Scientific, Inc., as adjusted to give effect to Strive’s acquisition of Semler Scientific, Inc. and certain related transactions. The pro forma combined consolidated financial statements of Strive, Inc. utilize the historical financial statements of Strive Enterprises, Inc. and Asset Entities Inc., giving effect to the reverse acquisition Strive Enterprises, Inc. completed of Asset Entities, Inc. on September 12, 2025, with Strive being considered the accounting acquirer in the transaction. The unaudited pro forma combined consolidated statement of operations for the six months ended June 30, 2025 and the year ended December 31, 2024 give effect to these transactions as if they had occurred on January 1, 2024. The unaudited pro forma combined consolidated balance sheet as of June 30, 2025 gives effect to these transactions as if they had occurred on June 30, 2025.
Because Strive will be treated as the accounting acquirer, Strive’s assets and liabilities will be recorded at their pre-combination carrying amounts, and the historical operations that are reflected in the unaudited pro forma financial information will be those of Strive. Semler Scientific’s assets and liabilities will be measured and recognized at their fair values as of the transaction date, and combined with the assets, liabilities and results of operations of Strive after the consummation of the transaction.
The unaudited pro forma combined consolidated financial information is based on the assumptions and adjustments that are described in the accompanying notes. The application of the acquisition method of accounting is dependent upon a purchase price allocation analysis, which includes valuation analysis and other studies that have yet to be completed, pursuant to Financial Accounting Standards Board Accounting Standards Codification Topic 805, Business Combinations. Accordingly, the pro forma adjustments are preliminary, subject to further revision as additional information becomes available and additional analyses are performed, and have been made solely for the purpose of providing unaudited pro forma combined consolidated financial information. Differences between these preliminary estimates and the final acquisition accounting, expected to be completed after the closing of the transaction, will occur and these differences could have a material impact on the accompanying unaudited pro forma combined consolidated financial information and the combined company’s future results of operations and financial position. In addition, differences between the preliminary and final amounts will likely occur as a result of changes in the fair value of Strive’s common stock and changes in Semler Scientific’s assets and liabilities.
The unaudited pro forma combined consolidated financial information does not give effect to the potential impact of current financial conditions, regulatory matters, operating efficiencies or other savings or expenses that may be associated with the integration of the two companies. The unaudited pro forma combined consolidated financial information is preliminary and has been prepared for illustrative purposes only and is not necessarily indicative of the financial position or results of operations in future periods or the results that actually would have been realized had Strive and Semler Scientific been a combined company during the specified periods. The actual results reported in periods following the transaction may differ significantly from those reflected in these pro forma financial information presented herein for a number of reasons, including, but not limited to, differences between the assumptions used to prepare this pro forma financial information and actual results realized.
The assumptions and estimates underlying the unaudited adjustments to the pro forma combined consolidated financial statements are described in the accompanying notes, which should be read together with the pro forma combined consolidated financial statements.
Defined terms included below shall have the same meaning as terms defined and included elsewhere in this Current Report on Form 8-K, unless otherwise noted.
Introduction and Description of Transaction
Strive, Inc., a Nevada corporation (“Strive”), whose Class A common stock trades on The Nasdaq Stock Market LLC under the symbol “ASST”, is an asset management Bitcoin Treasury Company. Strive’s wholly owned subsidiary, Strive Enterprises, Inc., an Ohio corporation, completed the reverse acquisition of Asset Entities, Inc. (“Asset Entities”) on September 12, 2025, and continued as the surviving entity (the “Asset Entities Merger”). As part of this transaction, Strive shareholders held 94.2% of the Pro Forma Share Total of the Combined Company (as defined in the merger agreement for the Asset Entities Merger). The below pro forma combined consolidated financial statements give effect to this and related transactions, and are based on preliminary assumptions and estimates.
Strive earns substantially all of its income from generating market returns from its investments in bitcoin and bitcoin-related products as well as revenue from investment advisory and sub-advisory contracts related to its investment management services.
The historical financial information of Asset Entities was derived from the unaudited financial statements of Asset Entities as of and for the six months ended June 30, 2025, as well as the audited financial statements of Asset Entities as of and for the year ended December 31, 2024. The historical financial information of Strive Enterprises, Inc. was derived from the unaudited consolidated financial statements of Strive Enterprises, Inc. as of and for the six months ended June 30, 2025, as well as the audited consolidated financial statements of Strive Enterprises, Inc. as of and for the year ended December 31, 2024, included elsewhere in this filing. This information should be read together with Asset Entities’ and Strive’s audited and unaudited financial statements and the related notes.
Strive, Inc. and Semler Scientific, Inc., whose common stock trades on The Nasdaq Stock Market LLC under the symbol “SMLR”, entered into an Agreement and Plan of Merger dated September 22, 2025 (the “Semler Merger Agreement”). Pursuant to the Semler Merger Agreement, and subject to the satisfaction or waiver of customary closing conditions, a to be formed subsidiary of Strive (“Merger Sub”), will merge with and into Semler, with Semler surviving as a wholly owned subsidiary of Strive.
Pursuant to the Semler Merger Agreement, at the effective time of the Semler Merger (the “Effective Time”), each share of common stock of Semler issued and outstanding immediately before the Effective Time (other than treasury shares held by Semler) will be converted into the right to receive 21.05 shares of Strive Class A common stock.
Management has reviewed the applicable guidance under Standards Codification (“ASC”) Topic 805, “Business Combinations” (“Topic 805”) to determine the appropriate accounting acquirer and financial reporting implications. Based on this analysis, management has concluded that the Semler Merger will be accounted for as a business acquisition, where:
| ● | Strive will be the accounting acquirer in this business combination. |
| ● | Strive’s historical financial statements will become the historical financial statements of the combined entity. |
| ● | Semler’s identifiable assets and liabilities will be recognized at fair value as of the acquisition date. |
Strive is deemed as the accounting acquirer for the following reasons:
| ● | Strive shareholders will retain the majority of the voting and economic value of the common shares of the combined company subsequent to the transaction. |
| ● | The remaining voting interests held by former Semler shareholders do not constitute a coordinated minority. |
| ● | Strive’s designated leadership will control the combined entity’s operations post business combination. |
| ● | Strive, Inc.’s existing directors will control the majority of the post business combination board. |
The following unaudited pro forma combined consolidated financial statements are based on the pro forma combined consolidated financial statements of Strive, Inc. and the historical financial statements of Semler Scientific, Inc., as adjusted to give effect to Strive’s acquisition of Semler Scientific, Inc. and certain related transactions. The pro forma combined consolidated financial statements of Strive, Inc. utilize the historical financial statements of Strive Enterprises, Inc. and Asset Entities Inc., giving effect to the reverse acquisition Strive Enterprises, Inc. completed of Asset Entities, Inc. on September 12, 2025, with Strive being considered the accounting acquirer in the transaction. The unaudited pro forma combined consolidated statement of operations for the six months ended June 30, 2025 and the year ended December 31, 2024 give effect to these transactions as if they had occurred on January 1, 2024. The unaudited pro forma combined consolidated balance sheet as of June 30, 2025 gives effect to these transactions as if they had occurred on June 30, 2025.
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UNAUDITED PRO FORMA COMBINED CONSOLIDATED STATEMENTS
OF FINANCIAL POSITION
As of June 30, 2025
| Strive Enterprises, Inc. and Subsidiaries (Historical) | Asset Entities Inc. (Historical) | Reclassification Adjustments | Notes | Transaction Accounting Adjustments | Notes | Strive,
Inc. and Subsidiaries (Pro Forma Combined) | Semler
Scientific, Inc. (Historical) | Reclassification
Adjustments | Notes | Transaction
Accounting Adjustments | Notes | Pro
Forma Combined | ||||||||||||||||||||||||||||||||||||||||
| ASSETS | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Current assets: | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Cash and cash equivalents | $ | 12,615,491 | $ | 2,518,441 | $ | — | $ | 45,195,524 | (3m) | $ | 60,329,456 | $ | 13,482,000 | $ | — | $ | — | $ | 73,811,456 | |||||||||||||||||||||||||||||||||
| Restricted cash | — | — | — | — | — | 134,000 | — | — | 134,000 | |||||||||||||||||||||||||||||||||||||||||||
| Short-term deposits | — | — | — | — | — | 270,000 | — | — | 270,000 | |||||||||||||||||||||||||||||||||||||||||||
| Short-term investments | — | — | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||
| Accounts receivable | 404,392 | — | — | (404,392 | ) | (3i) | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
| Trade accounts receivable | — | — | — | — | — | 2,831,000 | (2,831,000 | ) | (4a) | — | — | |||||||||||||||||||||||||||||||||||||||||
| Inventory | — | — | — | — | — | 558,000 | (558,000 | ) | (4a) | — | — | |||||||||||||||||||||||||||||||||||||||||
| Prepaid expenses | 715,458 | 225,742 | — | (10,623 | ) | (3i) | 930,577 | 4,623,000 | — | — | 5,553,577 | |||||||||||||||||||||||||||||||||||||||||
| Other assets | 950,000 | — | — | (450,000 | ) | (3g) | 500,000 | — | 3,389,000 | (4a) | — | 3,889,000 | ||||||||||||||||||||||||||||||||||||||||
| Total current assets | 14,685,341 | 2,744,183 | — | 44,330,509 | 61,760,033 | 21,898,000 | — | — | 83,658,033 | |||||||||||||||||||||||||||||||||||||||||||
| Intangible digital assets | — | — | — | 675,000,000 | (3g) | 675,000,000 | 496,865,000 | — | — | 1,171,865,000 | ||||||||||||||||||||||||||||||||||||||||||
| Property and equipment, net | 859,998 | 8,758 | — | 242 | (3b) | 868,998 | 368,000 | — | — | 1,236,998 | ||||||||||||||||||||||||||||||||||||||||||
| Intangible assets, net | 295,615 | 509,500 | — | 88,500 | (3c) | 893,615 | — | — | — | 893,615 | ||||||||||||||||||||||||||||||||||||||||||
| Assets for lease, net | — | — | — | — | — | 1,431,000 | (1,431,000 | ) | (4a) | — | — | |||||||||||||||||||||||||||||||||||||||||
| Right-of-use
lease asset | 4,242,983 | — | — | — | 4,242,983 | — | — | — | 4,242,983 | |||||||||||||||||||||||||||||||||||||||||||
| Loans receivable | 2,256,416 | — | — | (1,002,194 | ) | (3i) | 1,254,222 | — | — | — | 1,254,222 | |||||||||||||||||||||||||||||||||||||||||
| Long-term investments | — | — | — | — | — | 512,000 | — | — | 512,000 | |||||||||||||||||||||||||||||||||||||||||||
| Long-term notes receivable | — | — | — | — | — | 1,500,000 | — | — | 1,500,00 | |||||||||||||||||||||||||||||||||||||||||||
| Other non-current assets | — | — | — | — | — | 23,000 | 1,431,000 | (4a) | — | 1,454,000 | ||||||||||||||||||||||||||||||||||||||||||
| Deposits | 92,489 | — | — | (5,988 | ) | (3i) | 86,501 | — | — | — | 86,501 | |||||||||||||||||||||||||||||||||||||||||
| Goodwill | — | — | — | 138,635,813 | (3h) | 138,635,813 | — | — | 1,058,127,300 | (4e) | 1,196,763,113 | |||||||||||||||||||||||||||||||||||||||||
| Total assets | $ | 22,432,842 | $ | 3,262,441 | $ | — | $ | 857,046,882 | $ | 882,742,165 | $ | 522,597,000 | $ | — | $ | 1,058,127,300 | $ | 2,463,466,465 | ||||||||||||||||||||||||||||||||||
| LIABILITIES AND STOCKHOLDER’S EQUITY | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Current liabilities: | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Compensation and benefits payable | $ | 1,013,276 | $ | — | $ | — | $ | — | $ | 1,013,276 | $ | — | $ | — | $ | — | $ | 1,013,276 | ||||||||||||||||||||||||||||||||||
| Accounts payable and other liabilities | 7,007,588 | 578,000 | 447 | (3a) | 4,919,070 | (3l) | 12,505,105 | 156,000 | 6,866,000 | (4a) | 10,435,000 | (4d) | 29,962,105 | |||||||||||||||||||||||||||||||||||||||
| Accrued expenses | — | — | — | — | — | 6,013,000 | (6,013,000 | ) | (4a) | — | — | |||||||||||||||||||||||||||||||||||||||||
| Accrued contingent liability | — | — | — | — | — | 29,750,000 | — | — | 29,750,000 | |||||||||||||||||||||||||||||||||||||||||||
| Other short-term liabilities | — | — | — | — | — | 215,000 | (215,000 | ) | (4a) | — | — | |||||||||||||||||||||||||||||||||||||||||
| Contract liabilities | — | 447 | (447 | ) | (3a) | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
| Deferred revenue | — | — | — | — | — | 638,000 | (638,000 | ) | (4a) | — | — | |||||||||||||||||||||||||||||||||||||||||
| Total current liabilities | 8,020,864 | 578,447 | — | 4,919,070 | 13,518,381 | 36,772,000 | — | 10,435,000 | 60,725,381 | |||||||||||||||||||||||||||||||||||||||||||
| Long-term notes payable, net | — | — | — | — | — | 96,255,000 | — | — | 96,255,000 | |||||||||||||||||||||||||||||||||||||||||||
| Deferred tax liabilities | — | — | — | — | — | 6,161,000 | — | — | 6,161,000 | |||||||||||||||||||||||||||||||||||||||||||
| Non-current operating lease liabilities | 3,693,195 | — | — | — | 3,693,195 | — | — | — | 3,693,195 | |||||||||||||||||||||||||||||||||||||||||||
| Total liabilities | $ | 11,714,059 | $ | 578,447 | $ | — | $ | 4,919,070 | $ | 17,211,576 | $ | 139,188,000 | $ | — | $ | 10,435,000 | $ | 166,834,576 | ||||||||||||||||||||||||||||||||||
| Preferred stock | $ | 72,488,497 | $ | — | $ | — | $ | (72,488,497 | ) | (3d) | $ | — | $ | — | $ | — | $ | — | $ | — | ||||||||||||||||||||||||||||||||
| Common stock | — | — | — | — | — | 14,000 | — | (14,000 | ) | (4c) | — | |||||||||||||||||||||||||||||||||||||||||
| Class A
common stock | 20 | 100 | — | 572,351 | (3d) | 572,471 | — | — | 335,241 | (4c) | 907,712 | |||||||||||||||||||||||||||||||||||||||||
| Class B
common stock | 4 | 1,562 | — | 1,994 | (3d) | 3,560 | — | — | — | 3,560 | ||||||||||||||||||||||||||||||||||||||||||
| Additional paid-in capital | — | 19,012,713 | — | 925,581,187 | (3d) | 944,593,900 | 280,463,000 | — | 1,160,738,059 | (4c) | 2,385,794,959 | |||||||||||||||||||||||||||||||||||||||||
| Retained earnings (accumulated deficit) | (61,769,738 | ) | (16,330,381 | ) | — | (1,539,223 | ) | (3d) | (79,639,342 | ) | 102,932,000 | — | (113,367,000 | ) | (4c) | (90,074,342 | ) | |||||||||||||||||||||||||||||||||||
| Total stockholders’ equity | $ | 10,718,783 | $ | 2,683,994 | $ | — | $ | 852,127,812 | $ | 865,530,589 | $ | 383,409,000 | $ | — | $ | 1,047,692,300 | $ | 2,296,631,889 | ||||||||||||||||||||||||||||||||||
| Total liabilities and stockholder’s equity | $ | 22,432,842 | $ | 3,262,441 | $ | — | $ | 857,046,882 | $ | 882,742,165 | $ | 522,597,000 | $ | — | $ | 1,058,127,300 | $ | 2,463,466,465 | ||||||||||||||||||||||||||||||||||
3
UNAUDITED PRO FORMA COMBINED CONSOLIDATED STATEMENTS
OF OPERATIONS
For the Six Months Ended June 30, 2025
Strive Enterprises, Inc. and Subsidiaries (Historical) | Asset Entities Inc. (Historical) | Reclassification Adjustments | Notes | Transaction Accounting Adjustments | Notes | Strive, Inc. and Subsidiaries (Pro Forma Combined) | Semler Scientific, Inc. (Historical) | Reclassification Adjustments | Note | Transaction Accounting Adjustments | Note | Pro Forma Combined | |||||||||||||||||||||||||||||||||||||||
| Investment advisory fees | $ | 2,903,506 | $ | — | $ | — | $ | (760,514 | ) | (3i) | $ | 2,142,992 | $ | — | $ | — | $ | — | $ | 2,142,992 | |||||||||||||||||||||||||||||||
| Revenues | — | 344,008 | — | — | 344,008 | 17,052,000 | — | — | 17,396,008 | ||||||||||||||||||||||||||||||||||||||||||
| Other income | 29,865 | — | — | — | 29,865 | — | — | — | 29,865 | ||||||||||||||||||||||||||||||||||||||||||
| Total revenue | 2,933,371 | 344,008 | — | (760,514 | ) | 2,516,865 | 17,052,000 | — | — | 19,568,865 | |||||||||||||||||||||||||||||||||||||||||
| OPERATING EXPENSES | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Fund management and administration | 2,998,872 | — | — | (169,465 | ) | (3i) | 2,829,407 | — | — | — | 2,829,407 | ||||||||||||||||||||||||||||||||||||||||
| Cost of revenues | — | — | — | — | — | 1,677,000 | — | — | 1,677,000 | ||||||||||||||||||||||||||||||||||||||||||
| Engineering and product development | — | — | — | — | — | 2,552,000 | — | — | 2,552,000 | ||||||||||||||||||||||||||||||||||||||||||
| Employee compensation and benefits | 4,069,844 | — | 2,532,794 | (3a) | 1,544,967 | (3j) | 8,147,605 | — | — | — | 8,147,605 | ||||||||||||||||||||||||||||||||||||||||
| Contract labor | — | 278,216 | (278,216 | ) | (3a) | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||
| Management compensation | — | 2,532,794 | (2,532,794 | ) | (3a) | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||
| General and administrative expense | 3,358,817 | 1,882,404 | 278,216 | (3a) | (328,670 | ) | (3i) | 5,190,767 | 10,034,000 | — | — | 15,224,767 | |||||||||||||||||||||||||||||||||||||||
| Marketing and advertising | 163,745 | — | — | (3,809 | ) | (3i) | 159,936 | — | 6,195,000 | (4a) | — | 6,354,936 | |||||||||||||||||||||||||||||||||||||||
| Sales and marketing | — | — | — | — | — | 6,195,000 | (6,195,000 | ) | (4a) | — | — | ||||||||||||||||||||||||||||||||||||||||
| Depreciation and amortization | 105,876 | — | — | 58,877 | (3k) | 164,753 | — | — | — | 164,753 | |||||||||||||||||||||||||||||||||||||||||
| Litigation contingency | — | — | — | — | — | 29,750,000 | — | — | 29,750,000 | ||||||||||||||||||||||||||||||||||||||||||
| Operating expenses | 10,697,154 | 4,693,414 | — | 1,101,900 | 16,492,468 | 50,208,000 | — | — | 66,700,468 | ||||||||||||||||||||||||||||||||||||||||||
| INCOME (LOSS) FROM OPERATIONS | (7,763,783 | ) | (4,349,406 | ) | — | (1,862,414 | ) | (13,975,603 | ) | (33,156,000 | ) | — | — | (47,131,603 | ) | ||||||||||||||||||||||||||||||||||||
| OTHER INCOME/ (EXPENSES) | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Interest and dividend income (expense), net | 576,568 | 62,883 | (2,306 | ) | (3a) | (40,850 | ) | (3i) | 596,295 | — | (1,948,000 | ) | (4a) | — | (1,351,705 | ) | |||||||||||||||||||||||||||||||||||
| Interest (expense) income, net | — | (2,306 | ) | 2,306 | (3a) | — | — | (1,948,000 | ) | 1,948,000 | (4a) | — | — | ||||||||||||||||||||||||||||||||||||||
| Change in fair value of intangible digital assets | — | — | — | — | — | 41,932,000 | — | — | 41,932,000 | ||||||||||||||||||||||||||||||||||||||||||
| Transaction costs | (5,436,522 | ) | — | — | (800,836 | ) | (3e) | (6,237,358 | ) | — | — | — | (6,237,358 | ) | |||||||||||||||||||||||||||||||||||||
| Impairment of investments | — | — | — | — | — | (1,135,000 | ) | — | — | (1,135,000 | ) | ||||||||||||||||||||||||||||||||||||||||
| Other income/(expenses), net | (4,859,954 | ) | 60,577 | — | (841,686 | ) | (5,641,063 | ) | 38,849,000 | — | — | (33,207,937 | ) | ||||||||||||||||||||||||||||||||||||||
| INCOME (LOSS) BEFORE INCOME TAXES | (12,623,737 | ) | (4,288,829 | ) | — | (2,704,100 | ) | (19,616,666 | ) | 5,693,000 | — | — | (13,923,666 | ) | |||||||||||||||||||||||||||||||||||||
| Income tax provision (benefit) | — | — | — | — | — | 3,463,000 | — | — | 3,463,000 | ||||||||||||||||||||||||||||||||||||||||||
| NET INCOME (LOSS) | $ | (12,623,737 | ) | $ | (4,288,829 | ) | $ | — | $ | (2,704,100 | ) | $ | (19,616,666 | ) | $ | 2,230,000 | $ | — | $ | — | $ | (17,386,666 | ) | ||||||||||||||||||||||||||||
| Dividends on Asset Entities Inc. Series A Preferred Stock | (12,623,737 | ) | 35,195 | — | — | 35,195 | — | — | — | 35,195 | |||||||||||||||||||||||||||||||||||||||||
| NET INCOME (LOSS) ATTRIBUTABLE TO COMMON SHAREHOLDERS | $ | (12,623,737 | ) | $ | (4,324,024 | ) | $ | — | $ | (2,704,100 | ) | $ | (19,651,861 | ) | $ | 2,230,000 | $ | — | $ | — | $ | (17,421,861 | ) | ||||||||||||||||||||||||||||
| Weighted average number of Semler Scientific, Inc. and Strive, Inc. Class A and Class B common shares outstanding: | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Basic | 2,288,538 | 14,380,325 | (3n) | 845,111,752 | 10,661,851 | (4f) | 1,180,352,752 | ||||||||||||||||||||||||||||||||||||||||||||
| Diluted | 2,288,538 | 14,380,325 | (3n) | 845,111,752 | 12,260,223 | (4f) | 1,180,352,752 | ||||||||||||||||||||||||||||||||||||||||||||
Net(income) loss per share attributable to Semler Scientific, Inc. and Strive, Inc. Class A and Class B shareholders: | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Basic | $ | (5.52 | ) | $ | (0.30 | ) | (3n) | $ | (0.02 | ) | $ | 0.21 | (4f) | $ | (0.01 | ) | |||||||||||||||||||||||||||||||||||
| Diluted | $ | (5.52 | ) | $ | (0.30 | ) | (3n) | $ | (0.02 | ) | $ | 0.25 | (4f) | $ | (0.01 | ) | |||||||||||||||||||||||||||||||||||
4
UNAUDITED PRO FORMA COMBINED CONSOLIDATED STATEMENTS
OF OPERATIONS
For the Year Ended December 31, 2024
Strive Enterprises, Inc. and Subsidiaries (Historical) | Asset Entities Inc. (Historical) | Reclassification Adjustments | Notes | Transaction Accounting Adjustments | Notes | Strive,
Inc. and Subsidiaries (Pro Forma Combined) | Semler
Scientific, Inc. (Historical) | Reclassification
Adjustments | Note | Transaction
Accounting Adjustments | Note | Pro
Forma Combined | ||||||||||||||||||||||||||||||||||||||||
| Investment advisory fees | $ | 3,591,727 | $ | — | $ | — | $ | — | $ | 3,591,727 | $ | — | $ | — | $ | — | $ | 3,591,727 | ||||||||||||||||||||||||||||||||||
| Revenues | — | 633,489 | — | — | 633,489 | 56,294,000 | — | — | 56,927,489 | |||||||||||||||||||||||||||||||||||||||||||
| Other income | 58,379 | — | — | — | 58,379 | 13,000 | — | — | 71,379 | |||||||||||||||||||||||||||||||||||||||||||
| Total revenue | 3,650,106 | 633,489 | — | — | 4,283,595 | 56,307,000 | — | — | 60,590,595 | |||||||||||||||||||||||||||||||||||||||||||
| OPERATING EXPENSES | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Fund management and administration | 4,866,902 | — | — | — | 4,866,902 | — | — | — | 4,866,902 | |||||||||||||||||||||||||||||||||||||||||||
| Cost of revenues | — | — | — | — | — | 4,759,000 | — | — | 4,759,000 | |||||||||||||||||||||||||||||||||||||||||||
| Engineering and product development | — | — | — | — | — | 4,792,000 | — | — | 4,792,000 | |||||||||||||||||||||||||||||||||||||||||||
| Employee compensation and benefits | 9,135,102 | — | 3,503,059 | (3a) | 5,445,003 | (3j) | 18,083,164 | — | — | — | 18,083,164 | |||||||||||||||||||||||||||||||||||||||||
| Contract labor | — | 512,911 | (512,911 | ) | (3a) | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
| Management compensation | — | 3,503,059 | (3,503,059 | ) | (3a) | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||
| General
and administrative expense | 11,248,243 | 3,021,547 | 512,911 | (3a) | (1,702,394 | ) | (3i) | 13,080,307 | 12,732,000 | — | — | 25,812,307 | ||||||||||||||||||||||||||||||||||||||||
| Marketing and advertising | 861,618 | — | — | — | 831,618 | — | 13,078,000 | (4a) | — | 13,939,618 | ||||||||||||||||||||||||||||||||||||||||||
| Sales and marketing | — | — | — | — | — | 13,078,000 | (13,078,000 | ) | (4a) | — | — | |||||||||||||||||||||||||||||||||||||||||
| Depreciation and amortization | 192,211 | — | — | 117,755 | (3k) | 309,966 | — | — | — | 309,966 | ||||||||||||||||||||||||||||||||||||||||||
| Operating expenses | 26,304,076 | 7,037,517 | — | 3,860,364 | 37,201,957 | 35,361,000 | — | — | 72,562,957 | |||||||||||||||||||||||||||||||||||||||||||
| INCOME (LOSS) FROM OPERATIONS | (22,653,970 | ) | (6,404,028 | ) | — | (3,860,364 | ) | (32,918,362 | ) | 20,946,000 | — | — | (11,972,362) | |||||||||||||||||||||||||||||||||||||||
| OTHER INCOME/ (EXPENSES) | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Interest and dividend income (expense), net | 794,839 | 10,096 | — | (3,033 | ) | (3i) | 801,902 | — | 1,877,000 | (4a) | — | 2,678,902 | ||||||||||||||||||||||||||||||||||||||||
| Interest (expense) income, net | — | — | — | — | — | 1,877,000 | (1,877,000 | ) | (4a) | — | — | |||||||||||||||||||||||||||||||||||||||||
| Change in fair value of notes held for investment | — | — | — | — | — | 128,000 | — | — | 128,000 | |||||||||||||||||||||||||||||||||||||||||||
| Change in fair value of intangible digital assets | — | — | — | — | — | 24,933,000 | — | — | 24,933,000 | |||||||||||||||||||||||||||||||||||||||||||
| Transaction costs | — | — | — | (11,478,739 | ) | (3e) | (11,478,739 | ) | — | — | (10,435,000 | ) | (4d) | (21,913,739) | ||||||||||||||||||||||||||||||||||||||
| Gain on lease remeasurement | 279,265 | — | — | — | 279,265 | — | — | — | 279,265 | |||||||||||||||||||||||||||||||||||||||||||
| Other income/(expenses), net | 1,074,104 | 10,096 | — | (11,481,772 | ) | (10,397,572 | ) | 26,938,000 | — | (10,435,000 | ) | 6,105,428 | ||||||||||||||||||||||||||||||||||||||||
| INCOME (LOSS) BEFORE INCOME TAXES | (21,579,866 | ) | (6,393,932 | ) | — | (15,342,136 | ) | (43,315,934 | ) | 47,884,000 | — | (10,435,000 | ) | (5,866,934) | ||||||||||||||||||||||||||||||||||||||
| Income tax provision (benefit) | — | — | — | — | — | 6,985,000 | — | — | 6,985,000 | |||||||||||||||||||||||||||||||||||||||||||
| NET INCOME (LOSS) | $ | (21,579,866 | ) | $ | (6,393,932 | ) | $ | — | $ | (15,342,136 | ) | $ | (43,315,934 | ) | $ | 40,899,000 | $ | — | $ | (10,435,000 | ) | $ | (12,851,934) | |||||||||||||||||||||||||||||
| Dividends on Asset Entities Inc. Series A Preferred Stock | — | 54,110 | — | — | 54,110 | — | — | — | 54,110 | |||||||||||||||||||||||||||||||||||||||||||
| NET INCOME (LOSS) ATTRIBUTABLE TO COMMON SHAREHOLDERS | $ | (21,579,866 | ) | $ | (6,448,042 | ) | $ | — | $ | (15,342,136 | ) | $ | (43,370,044 | ) | $ | 40,899,000 | $ | — | $ | (10,435,000 | ) | $ | (12,906,044) | |||||||||||||||||||||||||||||
| Weighted average number of Semler Scientific, Inc. and Strive, Inc. Class A and Class B common shares outstanding: | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Basic | 2,213,424 | 3,788,525 | (3n) | 845,111,752 | 7,228,961 | (4f) | 1,180,352,752 | |||||||||||||||||||||||||||||||||||||||||||||
| Diluted | 2,213,424 | 3,788,525 | (3n) | 845,111,752 | 7,980,118 | (4f) | 1,180,352,752 | |||||||||||||||||||||||||||||||||||||||||||||
| Net (income) loss per share attributable to Semler Scientific, Inc. and Strive, Inc. Class A and Class B shareholders: | ||||||||||||||||||||||||||||||||||||||||||||||||||||
| Basic | $ | (9.75 | ) | $ | (1.70 | ) | (3n) | $ | (0.05 | ) | $ | 5.66 | (4f) | $ | (0.01) | |||||||||||||||||||||||||||||||||||||
| Diluted | $ | (9.75 | ) | $ | (1.70 | ) | (3n) | $ | (0.05 | ) | $ | 5.13 | (4f) | $ | (0.01) | |||||||||||||||||||||||||||||||||||||
5
Note 1 — Basis of Presentation
The unaudited pro forma combined consolidated financial information has been prepared in accordance with Rule 8-05 and Article 11 of SEC Regulation S-X. The unaudited pro forma combined consolidated financial statements as of and for the six months ended June 30, 2025 and for the year ended December 31, 2024 gives effect to both the merger of Strive Enterprises, Inc. and a subsidiary of Asset Entities Inc., closed on September 12, 2025 and the proposed acquisition by Strive, Inc. of Semler Scientific, Inc. The unaudited pro forma combined consolidated statements of operations gives effect to these transactions and other events as if it had been consummated on January 1, 2024 and combines the pro forma combined consolidated financial statements of Strive, Inc., which is based on the historical statements of operations of Strive Enterprises, Inc. and Asset Entities Inc. and the associated transaction adjustments, and the historical statements of income of Semler Scientific, Inc., all as of such date.
Based on Strive’s preliminary review of Strive’s, Asset Entities’, and Semler’s summary of significant accounting policies, the nature and amount of any adjustments to the historical financial statements of Asset Entities’ and Semler to conform its accounting policies to those of Strive are not expected to be material. Upon completion of the transactions, further review of accounting policies may result in additional revisions to historical accounting policies and classifications to conform to those of Strive.
The unaudited pro forma combined consolidated financial information is based on the assumptions and adjustments that are described in the accompanying notes. Accordingly, the pro forma adjustments are preliminary, subject to further revisions as additional information becomes available and additional analyses are performed, and have been made solely for the purpose of providing unaudited pro forma combined consolidated financial information. Differences between these preliminary accounting conclusions and estimates and the final accounting conclusions and amounts may occur as a result of, among other reasons, (i) changes in initial assumptions in determination of the accounting acquirer and related accounting, (ii) changes in Semler’s assets and liabilities, which are expected to be completed after the closing, and these differences could have a material impact on the accompanying unaudited pro forma combined consolidated financial information and the combined entity’s future results of operations and financial position.
The unaudited pro forma combined consolidated financial information has been presented for illustrative purpose only and is not necessarily indicative of the financial position and results of operations that would have been achieved had the Semler Merger and Asset Entities Merger occurred on the dates indicated. Further, the unaudited pro forma combined consolidated financial information may not be useful in predicting the future financial condition and results of operations of the post-combination company. The actual financial position and results of operations may differ significantly from the pro forma amounts reflected herein due to a variety of factors. The unaudited pro forma adjustments represent Strive management’s estimates based on information available as of the date of the unaudited pro forma combined consolidated financial information and is subject to change as additional information becomes available and analyses are performed.
The historical consolidated financial statements of Strive, Asset Entities, and Semler were prepared in accordance with accounting policies generally accepted in the United States of America and shown in U.S. dollars.
For the purposes of these pro forma financial statements, the preliminary purchase price consideration is as follows:
| Number of estimated Class A common stock of Strive to be issued to Semler stockholders | 335,241,000 | |||
| Multiplied by Strive’s Class A common stock price per share | $ | 4.30 | ||
| Estimated purchase price consideration | $ | 1,441,536,300 |
Note 2 — Preliminary purchase price allocation
For accounting purposes, Strive is considered to be the acquiring company and the Semler Merger is expected to be accounted for as a business combination. The Semler Merger is accounted for using the acquisition method of accounting in accordance with ASC Topic 805. Strive is the accounting acquirer as Strive will have assumed control over Semler as of the closing date. Topic 805 requires, among other things, that the assets acquired, and liabilities assumed be recognized at their acquisition date fair values, with any excess of the purchase price over the estimated fair values of the identifiable net assets acquired recorded as goodwill.
6
The allocation of the preliminary purchase price for Semler is based upon management’s estimates of and assumptions related to the fair value of the consideration transferred, assets acquired, and liabilities assumed as of the filing of the Current Report on Form 8-K using currently available information. The unaudited pro forma combined consolidated financial information has been prepared based on these preliminary estimates, such that the final purchase price allocation and the resulting effect on the Company’s financial position and earnings results may differ significantly from the pro forma amounts included herein.
Note 3 — Transaction Accounting Adjustments related to merger of Strive Enterprises, Inc. and Asset Entities Inc.
| a. | During the preparation of the unaudited pro forma combined consolidated financial information, management performed a preliminary analysis of Asset Entities’ financial information to identify differences in financial statement presentation compared to the presentation of Strive Enterprises, Inc.. Certain reclassifications have been made to the historical consolidated presentation of Asset Entities to conform to the financial statement presentation of the Company. |
The table below summarizes the reclassification adjustments made to present the unaudited historical financial statements of Asset Entities as of and for the six months ended June 30, 2025 and for the year ended December 31, 2024 in conformity with the unaudited historical consolidated financial statements of Strive as of and for the six months ended June 30, 2025 and for the year ended December 31, 2024.
| Historical Asset Entities Inc. Balance Sheet Line Item | Strive Line Item | Historical Asset Entities | Reclassifications | Historical Asset Entities Reclassified | ||||||||||
| Accounts payable and credit card liability | Accounts payable and other liabilities | 578,000 | 447 | 578,447 | ||||||||||
| Contract liabilities | Accounts payable and other liabilities | 447 | (447 | ) | — | |||||||||
| Historical Asset Entities Inc. Statement of Operations Line Item | Strive Line Item | Historical Asset Entities | Reclassifications | Historical Asset Entities Reclassified | ||||||||||
| For the six months ended June 30, 2025: | ||||||||||||||
| Contract labor | General and administrative expense | 278,216 | (278,216 | ) | — | |||||||||
| General and administrative | General and administrative expense | 1,882,404 | 278,216 | 2,160,620 | ||||||||||
| Management compensation | Employee compensation and benefits | 2,532,794 | (2,532,794 | ) | — | |||||||||
| Employee compensation and benefits | Employee compensation and benefits | — | 2,532,794 | 2,532,794 | ||||||||||
| Interest expense | Interest and dividend income | (2,306 | ) | 2,306 | — | |||||||||
| Interest and dividend income | Interest and dividend income | — | (2,306 | ) | (2,306 | ) | ||||||||
7
| Historical Asset Entities Inc. Statement of Operations Line Item | Strive Line Item | Historical Asset Entities | Reclassifications | Historical Asset Entities Reclassified | ||||||||||
| For the year ended December 31, 2024: | ||||||||||||||
| Contract labor | General and administrative expense | 512,911 | (512,911 | ) | — | |||||||||
| General and administrative | General and administrative expense | 3,021,547 | 512,911 | 3,534,458 | ||||||||||
| Management compensation | Employee compensation and benefits | 3,503,059 | (3,503,059 | ) | — | |||||||||
| Employee compensation and benefits | Employee compensation and benefits | — | 3,503,059 | 3,503,059 | ||||||||||
| b. | Reflects the adjustment to property, plant and equipment, net (“PP&E”) of $242 to reflect the estimated fair value of the acquired PP&E of $9,000. |
The following table summarizes the estimated fair values for the identified PP&E assets and the remaining estimated useful life, where applicable:
| Fair Value | Remaining Estimated Useful Life (in years) | |||||||
| Buildings and building improvements | $ | 9,000 | 5 | |||||
| Total fair value | 9,000 | |||||||
| Less: Asset Entities’ historical PP&E, net of accumulated depreciation | (8,758 | ) | ||||||
| Pro forma adjustment to property, plant and equipment, net | $ | 242 | ||||||
The pro forma impact to depreciation expense on the unaudited pro forma combined consolidated statements of operations is a $456 and $912 decrease to depreciation expense for the six months ended June 30, 2025 and the year ended December 31, 2024, respectively.
| c. | Reflects the adjustment to intangible assets, net resulting in a $88,500 increase to reflect the estimated fair value of the acquired intangible assets of $598,000. |
The following table summarizes the estimated fair values for each intangible asset and the estimated useful life:
| Fair Value | Estimated Useful Life (in years) | |||||||
| Trade names and Discord domain names | $ | 20,000 | 10 | |||||
| Purchased technology | 8,000 | 3 | ||||||
| Customer relationships | 570,000 | 5 | ||||||
| Total fair value | 598,000 | |||||||
| Less: Asset Entities’ historical intangible assets, net of accumulated amortization | (509,500 | ) | ||||||
| Pro forma adjustment to intangible assets, net | $ | 88,500 | ||||||
The pro forma impact to amortization expense on the unaudited pro forma combined consolidated statements of operations is a $59,333 and $118,667 increase to amortization expense for the six months ended June 30, 2025 and the year ended December 31, 2024, respectively.
8
| d. | The total pro forma adjustment to total Strive Enterprises, Inc. and Subsidiaries stockholders’ equity is summarized below: |
| Elimination of historical equity balance of Asset Entities | $ | (2,683,994 | ) | |
| Estimated purchase price consideration | 141,408,549 | |||
| Non-recurring acquisition-related expenses (refer to note (3e) below) | (5,453,589 | ) | ||
| Adjustment to equity from issuance of proceeds from PIPE (refer to note (3g) below) | 723,087,746 | |||
| Adjustment reflects the elimination of assets and liabilities attributable to SWM and related separation expenses (refer to note (3i) below) | (4,230,900 | ) | ||
| Pro forma adjustment to total Strive Enterprises, Inc. and Subsidiaries stockholder’s equity | $ | 852,127,812 |
| e. | The total pro forma adjustment to Transaction costs relates to the accrual for non-recurring costs incurred related to the Asset Entities Merger, but not reflected in the historical financial statements for either the six months ended June 30, 2025 or the year ended December 31, 2024, which are summarized below. An additional $800,836 was is included as transaction costs during the six months ended June 30, 2025 related to additional amounts forgiven related to a loan receivable from an SWM employee. |
| Non-recurring acquisition-related expenses | 5,453,589 | |||
| Separation expenses related to SWM disposition (refer to note (3i) below) | 6,025,150 | |||
| Pro forma adjustment to Transaction costs for the year ended December 31, 2024 | $ | 11,478,739 |
| f. | In connection with the Asset Entities Merger qualifying as the occurrence of a liquidity event, the performance condition for certain grant-date Restricted Stock Units (“RSUs”) of Strive Enterprises, Inc. is deemed satisfied as of the closing date. Accordingly, the portion of such RSUs in which the related time-based vesting has occurred will vest as of the closing date of the Asset Entities Merger. The pro forma combined consolidated statements of financial condition and statements of operations reflect a transaction accounting adjustment of $2,614,203 and $6,078,447 for the six months ended June 30, 2025 and the year ended December 31, 2024, respectively, to accrue and expense the unrecognized share-based compensation cost related to these RSUs. Refer to note (3j) for more information. |
| g. | Reflects net proceeds of $723,587,746 from issuing and selling 346,043,350 Class A Common Stock at $1.35 per share and 209,771,462 pre-funded warrants at $1.3499 each in a private placement pursuant to the Subscription Agreements. Approximately $675,000,000 of these proceeds were deployed into bitcoin purchases. |
| h. | Represents the preliminary estimate of goodwill based on the preliminary purchase price allocation. |
| i. | During 2025, in line with the proposed Asset Entities Merger, management began internal discussions on various strategies for separating from SWM. The Company determined that the planned exit from SWM did not represent a strategic shift with a major effect on its consolidated results of operations. As a result, SWM was not classified as discontinued operations as of or for the six months ended June 30, 2025 or the year ended December 31, 2024. To effectuate the transaction, the Company accelerated existing employee restricted stock units, made transition payments for the SWM business, and originated a short term note to an SWM employee, which is included within Transaction costs (refer to note (3e) above). |
9
The following activities related to the statement of financial condition and statement of operations are directly attributable to SWM:
| Consolidated Statement of Financial Condition as of June 30, 2025 | ||||
| Accounts receivable | $ | (404,392 | ) | |
| Prepaid expenses | (10,623 | ) | ||
| Existing loan receivable | (2,256,416 | ) | ||
| New loan receivable | 1,254,222 | |||
| Deposits | (5,988 | ) | ||
| Accounts payable and other liabilities | (84,519 | ) | ||
| Additional paid-in capital | (5,695,521 | ) | ||
| Accumulated deficit | 3,102,621 | |||
| Consolidated Statement of Operations for the six months ended June 30, 2025 | ||||
| Investment advisory fees | $ | (760,514 | ) | |
| Fund management and administration | (169,465 | ) | ||
| Employee compensation and benefits | (1,069,236 | ) | ||
| General and administrative expense | (328,670 | ) | ||
| Marketing and advertising | (3,809 | ) | ||
| Interest and dividend income | (40,850 | ) | ||
| Consolidated Statement of Operations for the year ended December 31, 2024 | ||||
| Employee compensation and benefits | $ | (633,444 | ) | |
| General and administrative expense | (1,702,394 | ) | ||
| Interest and dividend income | (3,033 | ) | ||
| j. | The total pro forma adjustment to Employee compensation and benefits expense for the six months ended June 30, 2025 and the year ended December 31, 2024 is summarized below: |
| For the six months June 30, 2025: | ||||
| Stock compensation expense recognized as a result of the Asset Entities Merger (refer to note (3f)) | 2,614,203 | |||
| Adjustment reflects the elimination of employee compensation and benefits expenses directly attributable to SWM (refer to note (i) above) | (1,069,236 | ) | ||
| Pro forma adjustment to Employee compensation and benefits expense for the six months ended June 30, 2025 | $ | 1,544,967 | ||
| For the year ended December 31, 2024: | ||||
| Stock compensation expense recognized as a result of the Asset Entities Merger (refer to note (3f)) | 6,078,447 | |||
| Adjustment reflects the elimination of employee compensation and benefits expenses directly attributable to SWM (refer to note (i) above) | (633,444 | ) | ||
| Pro forma adjustment to Employee compensation and benefits expense for the year ended December 31, 2024 | $ | 5,445,003 | ||
| k. | The total pro forma adjustment to Depreciation and amortization for the six months ended June 30, 2025 and December 31, 2024 is summarized below: |
| For the six months June 30, 2025: | ||||
| Depreciation expense recognized related to the fair value of PP&E (refer to note (3b)) | $ | (456 | ) | |
| Amortization expense recognized related to the fair value of intangible assets (refer to note (3c)) | 59,333 | |||
| Pro forma adjustment to Depreciation and amortization for the six months ended June 30, 2025 | $ | 58,877 | ||
| For the year ended December 31, 2024: | ||||
| Depreciation expense recognized related to the fair value of PP&E (refer to note (3b)) | $ | (912 | ) | |
| Amortization expense recognized related to the fair value of intangible assets (refer to note (3c)) | 118,667 | |||
| Pro forma adjustment to Depreciation and amortization for the year ended December 31, 2024 | $ | 117,755 | ||
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| l. | The total pro forma adjustment to Accounts payable and other liabilities is summarized below: |
| Non-recurring acquisition-related expenses (refer to note (e) above) | 5,453,589 | |||
| PIPE financing-related fees | (450,000 | ) | ||
| Accounts payable and other liabilities directly attributable to SWM (refer to note (j) above) | (84,519 | ) | ||
| Pro forma adjustment to Accounts payable and other liabilities | $ | 4,919,070 |
| m. | The total pro forma adjustment to Cash and cash equivalents is summarized below: |
| Proceeds from PIPE financing (refer to note (3g) above) | 48,087,746 | |||
| Separation expenses related to SWM disposition (refer to note (3i) below) | (2,892,222 | ) | ||
| Pro forma adjustment to Accounts payable and other liabilities | $ | 45,195,524 |
| n. | For purposes of the unaudited pro forma combined consolidated financial information, the pro forma earnings (loss) per common share figures have been calculated using the pro forma weighted average number of Class A common stock and Class B common stock which would have been outstanding for the six months ended June 30, 2025 and the year ended December 31, 2024 assuming the completion of the Asset Entities Merger on January 1, 2024. |
Note 4 — Transaction Accounting Adjustments related to merger of Strive, Inc. and Semler Scientific, Inc.
| a. | During the preparation of the unaudited pro forma combined consolidated financial information, management performed a preliminary analysis of Semler’s financial information to identify differences in financial statement presentation compared to the presentation of Strive. Certain reclassifications have been made to the historical consolidated presentation of Semler to conform to the financial statement presentation of the Company. |
The table below summarizes the reclassification adjustments made to present the unaudited historical financial statements of Semler as of and for the six months ended June 30, 2025 and for the year ended December 31, 2024 in conformity with the unaudited historical consolidated financial statements of Strive as of and for the six months ended June 30, 2025 and for the year ended December 31, 2024.
| Historical Semler Scientific, Inc. Balance Sheet Line Item | Strive, Inc. Line Item | Historical Semler Scientific, Inc. | Reclassifications | Historical Semler Scientific, Inc. Reclassified | ||||||||||
| Trade accounts receivable | Other assets | 2,831,000 | (2,831,000 | ) | — | |||||||||
| Inventory | Other assets | 558,000 | (558,000 | ) | — | |||||||||
| Other assets | Other assets | — | 3,389,000 | 3,389,000 | ||||||||||
| Assets for lease, net | Other non-current assets | 1,431,000 | (1,431,000 | ) | — | |||||||||
| Other non-current assets | Other non-current assets | 23,000 | 1,431,000 | 1,454,000 | ||||||||||
| Accrued expenses | Accounts payable and other liabilities | 6,013,000 | (6,013,000 | ) | — | |||||||||
| Other short-term liabilities | Accounts payable and other liabilities | 215,000 | (215,000 | ) | — | |||||||||
| Deferred revenue | Accounts payable and other liabilities | 638,000 | (638,000 | ) | — | |||||||||
| Accounts payable and other liabilities | Accounts payable and other liabilities | 156,000 | 6,866,000 | 7,022,000 | ||||||||||
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| Historical Semler Scientific, Inc. Statement of Operations Line Item | Strive, Inc. Line Item | Historical Semler Scientific, Inc. | Reclassifications | Historical Semler Scientific, Inc. Reclassified | ||||||||||
| For the six months ended June 30, 2025: | ||||||||||||||
| Sales and marketing | Marketing and advertising | 6,195,000 | (6,195,000 | ) | — | |||||||||
| Marketing and advertising | Marketing and advertising | — | 6,195,000 | 6,195,000 | ||||||||||
| Interest (expense) income, net | Interest and dividend income (expense), net | (1,948,000 | ) | 1,948,000 | — | |||||||||
| Interest and dividend income (expense), net | Interest and dividend income (expense), net | — | (1,948,000 | ) | (1,948,000 | ) | ||||||||
| Historical Semler Scientific, Inc. Statement of Operations Line Item | Strive, Inc. Line Item | Historical Semler Scientific, Inc. | Reclassifications | Historical Semler Scientific, Inc. Reclassified | ||||||||||
| For the year ended December 31, 2024: | ||||||||||||||
| Sales and marketing | Marketing and advertising | 13,078,000 | (13,078,000 | ) | — | |||||||||
| Marketing and advertising | Marketing and advertising | — | 13,078,000 | 13,078,000 | ||||||||||
| Interest (expense) income, net | Interest and dividend income (expense), net | 1,877,000 | (1,877,000 | ) | — | |||||||||
| Interest and dividend income (expense), net | Interest and dividend income (expense), net | — | 1,877,000 | 1,877,000 | ||||||||||
| c. | The total pro forma adjustment to total Strive, Inc. and Subsidiaries stockholders’ equity is summarized below: |
| Elimination of historical equity balance of Semler Scientific, Inc. | $ | (383,409,000 | ) | |
| Estimated purchase price consideration | 1,441,536,300 | |||
| Non-recurring acquisition-related expenses (refer to note (d) below) | (10,435,000 | ) | ||
| Pro forma adjustment to total Strive, Inc. and Subsidiaries stockholders’ equity | $ | 1,047,692,300 |
| d. | Reflects the adjustment of $10,435,000 for an accrual for non-recurring expenses related to the Semler Merger incurred or expected to be incurred that are not reflected in the historical financial statements for either the six months ended June 30, 2025 or the year ended December 31, 2024. The adjustment has been recorded as a liability within Accounts payable and other liabilities with a corresponding reduction to equity on the unaudited pro forma combined consolidated statements of financial condition. The amount has also been reflected as a non-recurring expense classified within General and administrative expense in the unaudited pro forma combined consolidated statements of operations for the year ended December 31, 2024. |
| e. | Represents the preliminary estimate of goodwill based on the preliminary purchase price allocation. |
| f. | For purposes of the unaudited pro forma combined consolidated financial information, the pro forma earnings (loss) per common share figures have been calculated using the pro forma weighted average number of Class A common stock and Class B common stock which would have been outstanding for the six months ended June 30, 2025 and the year ended December 31, 2024 assuming the completion of the Semler Merger on January 1, 2024. |
12
Exhibit 99.4
Supplementary Risk Factors
Unless these supplemental risk factors indicate otherwise, or the context otherwise requires, references to the term “Strive” means Strive, Inc. and “Semler Scientific” means Semler Scientific, Inc. Capitalized terms used but not defined herein have the meanings ascribed to them in the Current Report on Form 8-K to which these supplementary risk factors are attached as Exhibit 99.4 (the “Financial Statement Form 8-K”).
Risks Related to the Merger
The ability of Strive and Semler Scientific to complete the Merger is subject to various closing conditions, including the receipt of approval of Semler Scientific stockholders and the receipt of antitrust clearance from governmental authorities, which may impose conditions that could adversely affect Strive or Semler Scientific or cause the Merger to be abandoned. Failure to complete the Merger, or significant delays in completing the Merger, could negatively affect the trading price of Strive and Semler Scientific common stock or other securities and the future business and financial results of Strive and Semler Scientific.
The Merger is subject to customary conditions, including, among others, (i) the approval and adoption of the Merger Agreement by the holders of a majority of the outstanding shares of Semler Scientific’s common stock, $0.001 par value per share (the “Semler Scientific Common Stock”), (ii) the approval and adoption of the issuance of shares of Strive’s Class A common stock, par value $0.001 per share (the “Strive Class A Common Stock”), in connection with the Merger, as contemplated by the Merger Agreement, by holders of a majority of the outstanding voting power of the outstanding shares of Strive Class A Common Stock and Strive’s Class B common stock, $0.001 par value per share (the “Strive Class B Common Stock”), which approval and adoption was obtained on September 22, 2025, (iii) the absence of any applicable law, regulation, injunction, judgment, order or decree preventing or making illegal the consummation of the Merger or any of the other transactions contemplated by the Merger Agreement (or in the case of Strive’s obligation to close, imposing a Burdensome Condition (as defined in the Merger Agreement)), (iv) the absence of pending litigation or similar legal action by any governmental authority (in any jurisdiction in which Strive, Semler Scientific or any of their respective subsidiaries conducts material operations) seeking to prohibit or restrain the Merger (or in the case of Strive’s obligation to close, seeking to impose a Burdensome Condition); (v) the early termination or expiration of any applicable waiting period or periods under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, or the HSR Act (or in the case of Strive’s obligations to close, without the imposition of a Burdensome Condition); (vi) compliance by Strive and Semler Scientific in all material respects with their respective obligations under the Merger Agreement and (vii) subject in most cases to exceptions that do not rise to the level of a “Parent Material Adverse Effect” or a “Company Material Adverse Effect” (each as defined in the Merger Agreement), as applicable, the accuracy of representations and warranties made by Strive and Semler Scientific, respectively. The obligation of Strive and Semler Scientific to consummate the Merger is also subject to there not having occurred an event that has had or would reasonably be expected to have, individually or in the aggregate, a “Parent Material Adverse Effect” or “Company Material Adverse Effect”, respectively. If the foregoing conditions are not satisfied or waived, one or both of Strive or Semler Scientific would not be required to complete the Merger.
Strive and Semler Scientific have not yet obtained stockholder approval from Semler Scientific’s stockholders or the regulatory consents and approvals, required to complete the Merger. Governmental or regulatory agencies could seek to block or challenge the Merger or could impose restrictions as conditions to approving the Merger. Strive and Semler Scientific will be unable to complete the Merger until the waiting period under the HSR Act has expired or been terminated. Regulatory authorities may impose certain requirements or obligations as conditions for their approval. If the required governmental approvals are not received, or they are not received on terms that satisfy the conditions set forth in the Merger Agreement, then Strive will not be obligated to complete the Merger.
Strive and Semler Scientific believe that the Merger will receive the necessary antitrust clearance. However, there can be no assurance that a challenge to the Merger on antitrust grounds will not be made or, if such a challenge is made, of the result of such challenge.
Additionally, even after the statutory waiting period under the antitrust laws and even after completion of the Merger, governmental authorities could seek to block or challenge the Merger as they deem necessary or desirable in the public interest. In addition, in some jurisdictions, a private party could initiate an action under the antitrust laws challenging or seeking to enjoin the Merger, before or after they are completed. Strive or Semler Scientific may not prevail and may incur significant costs in defending or settling any action under the antitrust laws.
The special meetings at which the Semler Scientific stockholders will vote on the transactions contemplated by the Merger Agreement may take place before antitrust clearance under the HSR Act has been obtained and, in cases where it has not been obtained, before the terms of any conditions to obtain such antitrust clearance that may be imposed are known. As a result, if stockholder approval of the transactions contemplated by the Merger Agreement is obtained at such meetings, Strive or Semler Scientific may make decisions after the meetings to waive a condition or approve certain actions required to obtain the necessary approvals without seeking further stockholder approval. Such actions could have an adverse effect on the combined company.
If Strive and Semler Scientific are unable to complete the Merger, or there is a significant delay in completing the Merger, Strive and Semler Scientific would be subject to a number of risks, including the following:
| ● | Strive and Semler Scientific would not realize the anticipated benefits of the Merger; |
| ● | the attention of management of Strive may have been diverted to the Merger rather than to its own operations and the pursuit of other opportunities that could have been beneficial to Strive; |
| ● | the potential loss of key personnel during the pendency of the Merger as employees may experience uncertainty about their future roles with the combined company; |
| ● | Strive will have been subject to certain restrictions on the conduct of its business, which may prevent Strive from making certain acquisitions or dispositions or pursuing certain business opportunities while the Merger is pending; |
| ● | the trading price of Strive Class A Common Stock, Semler Scientific Common Stock or other securities may decline to the extent that the current market prices reflect a market assumption that the Merger will be completed; and |
| ● | the parties may be liable for damages to one another, or Semler Scientific has to pay a termination fee to Strive, under the Merger Agreement. |
Strive can provide no assurance that the various closing conditions will be satisfied and that the required governmental approvals and other approvals will be obtained, or that any required conditions will not materially adversely affect the combined company following the Merger. In addition, Strive can provide no assurance that these conditions will not result in the abandonment or delay of the Merger. The occurrence of any of these events individually or in combination could have a material adverse effect on Strive’s results of operations and the trading price of Strive Class A Common Stock or other securities.
The Merger Agreement contains provisions that limit Strive’s ability and Semler Scientific’s ability to pursue alternatives to the Merger and could discourage a potential competing transaction counterparty from making a favorable alternative transaction proposal to Strive or Semler Scientific.
The Merger Agreement contains provisions that make it more difficult for each of Strive and Semler Scientific to be acquired by, or enter into certain combination transactions with, a third party, including constraints preventing the acquisition or merger of Strive and Semler Scientific by or with a third party, and certain restrictions on capital expenditures and restrictions on loan transactions and incurrences of indebtedness on Semler Scientific.
The Merger Agreement contains certain provisions that restrict Semler Scientific’s ability to, among other things, solicit, initiate or take any action to knowingly facilitate or knowingly encourage the submission of certain alternative transaction proposals, or enter into or participate in any discussions or negotiations with, furnish any information relating to Semler Scientific or any of its subsidiaries or afford access to the business, properties, assets, books or records of Semler Scientific or any of its subsidiaries to, otherwise knowingly cooperate in any way with, or knowingly assist, participate in, facilitate or knowingly encourage any effort by, any third party that Semler Scientific knows, or should reasonably be expected to know, is seeking to make, or has made, such an alternative transaction proposal. In addition, even in circumstances in which Semler Scientific is permitted under the Merger Agreement to entertain an alternative transaction proposal, Strive would have an opportunity to offer to revise the terms of the Merger Agreement before Semler Scientific may decide to withhold, qualify or modify its recommendation with respect to the Merger in a manner adverse to the other party. If Semler Scientific’s board of directors withholds, qualifies or modifies in a manner adverse to Strive its recommendation with respect to the Merger or in certain other circumstances, Semler Scientific may be required to pay a termination fee of $49 million to Strive in cash or bitcoin at Strive’s election, as contemplated by the Merger Agreement.
Additionally, while Semler Scientific is permitted under the Merger Agreement to entertain an alternative transaction proposal and make a Company Adverse Recommendation Change (as defined in the Merger Agreement), Semler Scientific will still nonetheless be subject to all of its obligations under the Merger Agreement, including, the obligation to hold the Semler Scientific stockholder meeting to vote to approve and adopt the Merger Agreement.
2
These provisions could discourage a potential third-party acquirer or merger partner that might have an interest in acquiring or combining with all or a significant portion of Semler Scientific or pursuing an alternative transaction from considering or proposing such a transaction.
Until the closing of the Merger or the termination of the Merger Agreement in accordance with its terms, Strive and Semler Scientific are prohibited from entering into certain transactions and taking certain actions that might otherwise be beneficial to Strive or Semler Scientific, as applicable, and their respective stockholders.
After the date of the Merger Agreement and prior to the Effective Time (as defined in the Merger Agreement), the Merger Agreement restricts Strive and Semler Scientific from taking specified actions without the written consent of the other party (such consent not to be unreasonably withheld, conditioned or delayed) and requires that the businesses of Semler Scientific be conducted in all material respects in the ordinary course of business consistent with past practice. These restrictions may prevent Strive or Semler Scientific from making appropriate changes to their respective businesses or organizational structures or from consummating attractive business opportunities that may arise prior to the closing of the Merger (the “Closing”) and could have the effect of delaying or preventing other strategic transactions. Adverse effects arising from the pendency of the Merger could be exacerbated by any delays in the Closing or termination of the Merger Agreement.
The Merger may distract Strive’s and Semler Scientific’s respective management teams from their other responsibilities and the Merger Agreement may limit each of Strive’s and Semler Scientific’s ability to pursue new opportunities.
The Merger could cause each of Strive’s and Semler Scientific’s management teams to focus their time and energies on matters related to the Transactions (as defined in the Merger Agreement) that otherwise would be directed to the companies’ businesses and operations. Any such distraction on the part of Strive’s and Semler Scientific’s management teams could affect each of Strive’s and Semler Scientific’s ability to service existing business and develop new business and adversely affect each of Strive’s and Semler Scientific’s businesses and earnings before the Closing.
The Merger, including uncertainty regarding the Merger, may cause third parties to delay or defer decisions concerning Strive and Semler Scientific and could adversely affect each of Strive’s and Semler Scientific’s ability to effectively manage their respective businesses.
The Merger will happen only if the stated conditions are met, including the approval of the Merger Agreement by the Semler Scientific stockholders, among other conditions. Many of the conditions are outside the control of Strive and Semler Scientific, and both parties also have certain rights to terminate the Merger Agreement. Accordingly, there may be uncertainty regarding the Closing. This uncertainty may cause others that deal with Strive or Semler Scientific, including new or existing customers, to delay or defer entering into contracts with Strive or Semler Scientific or make other decisions concerning Strive or Semler Scientific or seek to change or cancel existing business relationships with Strive or Semler Scientific. Any delay or deferral of those decisions or changes in existing agreements could have a material adverse effect on each of Strive’s and Semler Scientific’s businesses, regardless of whether the Merger is ultimately completed, and on the combined company’s business if the Merger is completed.
Business uncertainties while the Merger is pending may negatively impact Strive’s ability and Semler Scientific’s to attract and retain personnel.
Uncertainty about the effect of the Merger on Strive’s and Semler Scientific’s employees may impair Strive’s and Semler Scientific’s abilities to attract, retain and motivate key personnel until the Merger is completed. Retention or hiring of certain employees may be challenging while the Merger is pending, as certain employees may experience uncertainty about their future roles with the combined company. If key employees of Strive or Semler Scientific depart because of issues relating to the uncertainty and difficulty of integration or a desire not to remain with the combined entity, each of Strive’s or Semler Scientific’s businesses, as applicable, could be harmed and the ability to conduct business operations may be impeded.
3
The market prices of Strive Class A Common Stock, Semler Scientific Common Stock and other securities may be subject to fluctuation while the Merger is pending and after the Merger is completed.
The market price of Strive Class A Common Stock, Semler Scientific Common Stock and other securities may fluctuate significantly while the Merger is pending or after it is completed, and any adverse developments related to the Merger or otherwise could result in holders of Strive Class A Common Stock, Semler Scientific Common Stock or other securities losing some or all of the value of their investment. In addition, if the stock market experiences significant price and volume fluctuations, such fluctuations could be exacerbated by the pendency of the Merger, which could adversely affect the market for, or liquidity of, Strive Class A Common Stock, Semler Scientific Common Stock or other securities, regardless of Strive’s, Semler Scientific’s or the combined company’s actual operating performance.
Because the Merger Agreement contemplates that Strive will issue shares of Strive Class A Common Stock to Semler Scientific’s stockholders based upon a fixed exchange ratio, developments with respect to Semler Scientific and its shares of common stock may affect Strive Class A Common Stock irrespective of their relevance to standalone Strive and even though Strive may have no control over, or knowledge of, such developments. As a result, the market price of Strive Class A Common Stock during the pendency of the Merger may not accurately reflect the value of Strive absent the Merger.
Strive is subject to contractual restrictions in the Merger Agreement that may hinder its operations while the Merger is pending. The corollary restrictions applicable to Semler Scientific may not prevent Semler Scientific from taking actions that are adverse to Strive or its stockholders.
The Merger Agreement includes certain customary restrictions with respect to the operation of Strive’s and Semler Scientific’s respective businesses between the date of the Merger Agreement and the consummation of the Merger. These restrictions may prevent Strive from pursuing otherwise attractive business opportunities and making other changes to its business prior to completion of the Merger or termination of the Merger Agreement.
Despite these mutual restrictions, Strive and Semler Scientific will continue to operate their businesses independently of one another during the pendency of the Merger. The restrictions in the Merger Agreement, which are subject to numerous exceptions, may not be adequate to prevent Semler Scientific from taking actions that are adverse to Strive or its stockholders.
Strive and Semler Scientific will incur significant transaction costs in connection with the Merger.
Strive and Semler Scientific have incurred and are each expected to continue to incur non-recurring costs associated with the Merger. These costs have been, and will continue to be, substantial and, in many cases, will be borne by each of Strive and Semler Scientific whether or not the Merger is completed. A substantial majority of non-recurring expenses will consist of transaction costs and include, among others, fees paid to financial, legal, accounting and other advisors and employee retention, severance and benefit costs. Strive and Semler Scientific may also incur costs related to formulating and implementing integration plans. Although Strive and Semler Scientific expect that the realization of intended benefits related to the Merger should allow the combined company to offset these transaction costs over time, this net benefit may not be achieved in the near term or at all.
The unaudited pro forma combined consolidated financial information included in the Financial Statement Form 8-K does not purport to be, and likely is not, representative of the combined results of Strive and Semler Scientific if the Merger is consummated.
The unaudited pro forma combined consolidated financial information in the Financial Statement Form 8-K is presented for informational purposes only. It does not purport to be indicative of the financial position or results of operations that would have actually occurred had the Merger been completed at or as of the dates indicated, nor is it indicative of the combined company’s future operating results or financial position. The unaudited pro forma combined consolidated financial information in the Financial Statement Form 8-K does not reflect future events that may occur after the Closing, including the potential realization of operating efficiencies or costs related to the Merger, and does not consider the effect of potential market conditions on revenues or expenses. The unaudited pro forma combined consolidated financial information in the Financial Statement Form 8-K is based in part on certain assumptions regarding the Merger that Strive believes are reasonable under the circumstances. Strive cannot assure you that its assumptions will prove to be accurate over time.
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The Merger may not be accretive to Strive’s or Semler Scientific’s earnings and may cause dilution to Strive’s or Semler Scientific’s earnings per share, which may negatively affect the current or future market price of Strive Class A Common Stock or other securities.
Strive currently anticipates that the Merger will be accretive to Strive’s forecasted earnings per share on a standalone basis, and Semler Scientific currently anticipates that the Merger will be accretive to Semler Scientific’s forecasted earnings per share on a standalone basis, in each case beginning in the first full calendar year after closing. These expectations are based on preliminary estimates any of which may prove to be incorrect or may change materially. Strive and Semler Scientific may encounter additional transaction and integration-related costs other than those they currently anticipate, may fail to realize all of the benefits anticipated in the Merger or may be subject to other factors that affect preliminary estimates or the ability of either company to realize operational efficiencies. Any of these factors could cause a decrease in each of Strive’s and Semler Scientific’s earnings per share, or negatively affect the current or future market price of Strive Class A Common Stock or other securities.
Stockholder litigation could prevent or delay the Closing or otherwise negatively impact each of Strive’s and Semler Scientific’s businesses and operations.
Securities class action lawsuits and derivative lawsuits are often brought against companies that have entered into acquisition, merger or other business combination agreements. Even if such a lawsuit is without merit, defending against these claims can result in substantial costs and divert management time and other resources to the lawsuit. An adverse judgment could result in monetary damages, which could have a negative impact on each of Strive’s and Semler Scientific’s liquidity and financial condition.
Any lawsuits brought against Strive, Semler Scientific or their respective directors could also seek, among other things, injunctive relief or other equitable relief, including a request to enjoin the companies from consummating the Merger. The Merger is subject to customary closing conditions, including the absence of any applicable law, regulation, injunction, judgment, order or decree preventing or making illegal the consummation of the Merger or any of the other transactions contemplated by the Merger Agreement (or in the case of Strive’s obligation to close, imposing a Burdensome Condition) and the absence of pending litigation or similar legal action by any governmental authority (in any jurisdiction in which Strive, Semler Scientific or any of their respective subsidiaries conducts material operations) seeking to prohibit or restrain the Merger (or in the case of Strive’s obligation to close, seeking to impose a Burdensome Condition). Consequently, if a plaintiff is successful in obtaining an order, judgment, decision, or decree prohibiting the Closing, such order, judgment, decision or decree may delay or prevent the Merger from being completed within the expected time frame or at all, which may adversely affect Strive’s and Semler Scientific’s businesses, reputation with customers, vendors, suppliers, or employees, and financial positions and results of operations.
Future sales and issuance of Strive Class A Common Stock and Semler Scientific Common Stock could result in dilution of the percentage ownership of their respective stockholders and cause the stock prices of the Strive Class A Common Stock and Semler Scientific Common Stock to fall.
Strive and Semler Scientific may sell a substantial number of Strive Class A Common Stock and Semler Scientific Common Stock, respectively, in the public market at any time. Subject to restrictions under the Merger Agreement, Strive and Semler may continue to issue or grant equity securities, including by raising substantial amounts of additional capital under their respective at-the-market offering programs. To the extent Strive and Semler Scientific raise additional capital by issuing Strive Class A Common Stock and Semler Scientific Common Stock, respectively, or by issuing other equity or equity-linked offerings and/or preferred stock issuances, their respective stockholders may experience substantial dilution, and the trading price of their respective shares of common stock may be negatively impacted.
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Sales of Strive Class A Common Stock or Semler Scientific Common Stock, by Strive, Semler Scientific or otherwise, or the perception in the market that the holders of a large number of shares of Strive Class A Common Stock or Semler Scientific Common Stock intend to sell shares, could reduce the market price of such shares of common stock. Strive and Semler Scientific cannot predict the size of future sales or issuances of their respective shares of common stock or the effect, if any, that any such future sales or issuances will have on the market price of their respective shares of common stock.
Risks Relating to the Combined Company Following Completion of the Merger
Failure to successfully combine the businesses of Strive and Semler Scientific in the expected time frame or at all may adversely affect the future results of the combined company, and, consequently, the value of the Strive Class A Common Stock.
The success of the Merger will depend, in part, on the ability of the combined company to realize in a timely fashion the anticipated benefits and efficiencies from combining the businesses of Strive and Semler Scientific. The process of integration may reveal that benefits and efficiencies are less than anticipated and may result in additional expenses, all of which could reduce the anticipated benefits of the Merger.
Achieving the anticipated benefits of the Merger is subject to a number of uncertainties, including:
| ● | the ability of the two companies to combine certain of their operations or take advantage of expected growth opportunities; |
| ● | general market and economic conditions; |
| ● | general competitive factors in the marketplace; and |
| ● | higher than expected costs required to achieve the anticipated benefits of the Merger. |
Failure to achieve the anticipated benefits and efficiencies from the Merger, or the occurrence of additional expenses, could have a material adverse impact on the results of operations of the combined company and its ability to pay dividends after closing. In turn, the market value of Strive Class A Common Stock could be adversely impacted.
The market price of Strive Class A Common Stock after the completion of the Merger may be affected by factors different from those that historically have affected or currently affect Strive Class A Common Stock.
Upon completion of the Merger, Semler Scientific stockholders who receive Merger Consideration (as defined in the Merger Agreement) will become holders of Strive Class A Common Stock, which will continue to trade on the NASDAQ. Strive’s business differs from that of Semler Scientific and certain adjustments may be made to the combined company as a result of the Merger. The financial position of the combined company after completion of the Merger may differ from Strive’s financial position before the completion of the Merger, and the results of operations and/or cash flows of the combined company after the completion of the Merger may be affected by factors different from those currently affecting the financial position or results of operations and/or cash flows of Strive and Semler Scientific, respectively. Accordingly, the market price of Strive Class A Common Stock after the completion of the Merger may be affected by factors different from those currently affecting the market prices of Strive Class A Common Stock and Semler Scientific Common Stock, respectively, in the absence of the Merger. In addition, general fluctuations in stock markets could adversely affect the market for, or liquidity of, Strive Class A Common Stock, regardless of the combined company’s actual operating performance.
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Each of Strive and Semler Scientific may have liabilities that are not known to the other party.
Each of Strive and Semler Scientific may have liabilities that the other party failed, or was unable, to discover in the course of performing its respective due diligence investigations. Strive and Semler Scientific may learn additional information about the other party that materially adversely affects it, such as unknown or contingent liabilities and liabilities related to compliance with applicable laws. As a result of these factors, the combined company may incur additional costs and expenses and may be forced to later write-down or write-off assets, restructure operations or incur impairment or other charges that could result in the combined company reporting losses. Even if Strive’s and Semler Scientific’s respective due diligence has identified certain risks, unexpected risks may arise and previously known risks may materialize in a manner not consistent with such party’s expectations. If any of these risks materialize, this could adversely affect the combined company’s financial condition and results of operations and could contribute to negative market perceptions about, or price movements of, Strive Class A Common Stock following the Merger.
There is no guarantee that the combined company will declare and pay dividends following the Merger.
Strive does not currently anticipate that the combined company will pay any cash dividends on its common stock in the foreseeable future. As a result, capital appreciation, if any, of the common stock of the combined company may be the sole source of gain on shares of such common stock for the foreseeable future, if any.
Future disclosures relating to the Merger may not align with investor expectations.
In connection with the Merger, Strive expects to file a registration statement on Form S-4, including a information statement of Strive, proxy statement of Semler Scientific and a prospectus of Strive. Information that will be contained in such registration statement and other future disclosures relating to the Merger, which are expected to include (among other things) detailed background about the process leading the Merger, prospective financial information reviewed by the Strive board of directors in connection with the Merger, and updated historical financial information of Semler Scientific and pro forma financial information of the combined company, may not align with investor expectations. Such disclosures, the anticipation of such disclosures, or reactions to such disclosures could have an adverse effect on the business of Strive and trading price or liquidity of Strive Class A Common Stock or other securities. Persons making investment decisions about Strive securities prior to such disclosures will be required to do so without the benefit of such information and with the risk that such information may not align with their expectations or that it may have an unexpected impact on Strive or the trading price or liquidity of its Class A Common Stock or other securities.
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