KIDZ AI Inc 8-K, filed Jul 7, 2025
KIDZ AI Inc. (KIDZ)
About this 8-K
KIDZ AI Inc filed this 8-K on July 7, 2025, reporting on events of June 30, 2025.
Items reported
- Item 1.01: Entered into a material agreement
- Item 2.01: Completed an acquisition or sale of assets
- Item 3.02: Unregistered sale of equity
- Item 7.01: Regulation FD disclosure
- 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
Date of Report (Date of earliest event reported):
(Exact Name of Registrant as Specified in Charter) |
|
| |||
(State or Other Jurisdiction |
| (Commission |
| (IRS Employer |
of Incorporation) |
| File Number) |
| Identification No.) |
| ||
(Address of Principal Executive Offices) |
| (Zip Code) |
(
(Registrant’s Telephone Number, Including Area Code)
N/A
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
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) |
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e 4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
| Trading Symbol(s) |
| Name of each exchange on which registered |
|
| The | ||
|
| The |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Item 1.01. Entry into a Material Definitive Agreement.
On June 30, 2025, Classover Holdings, Inc. (the “Company”) entered into and consummated the transactions contemplated by an Asset Purchase Agreement (the “APA”) with an unrelated third party and its wholly-owned subsidiary (collectively, the “Seller”). Pursuant to the APA, the Seller agreed to sell, and the Company agreed to purchase, a portfolio of intellectual property owned by the Seller (the “Purchased Assets”) which is intended to be utilized by the Company in its online enrichment class platform, which provides interactive live courses for K-12 students in the United States and around the globe.
In consideration for the Purchased Assets, the Company (a) paid $1,250,000 in cash to the Seller and (b) issued to the Seller (i) 800,000 shares (the “Shares”) of its Class B common stock, par value $0.0001 per share (the “Class B Common Stock”), and (ii) pre-funded warrants (the “Pre-Funded Warrants”) to purchase 739,278 shares of Class B Common Stock. This transaction is expected to result in an increase of approximately $7.25 million in the Company’s total assets.
In accordance with the APA, on June 30, 2025, the Seller entered into a lock-up agreement (the “Lock-Up Agreement”) with the Company, pursuant to which the Seller agreed not to transfer the Shares, the Pre-Funded Warrants, or the shares of Class B Common Stock issuable upon exercise the Pre-Funded Warrants for six months following the closing, or until December 30, 2025, subject to certain limited exceptions.
The APA contains certain representations, warranties and covenants of the parties that are customary for agreements of its type. In addition, the Seller agreed to indemnify the Company for breaches of the representations and warranties contained in the APA. The Seller also agreed that for the period ending on June 30, 2026, the Seller will not compete with the Company, solicit employees of the Company, or solicit licensors, licensees, suppliers, manufacturers, customers or clients of the Company.
The Pre-Funded Warrants expire on June 30, 2030 and have an exercise price of $0.01 per share. The Pre-Funded Warrants may be exercised on a cashless basis. The exercise price and the number of shares or other property issuable upon exercise of the Pre-Funded Warrants is subject to adjustment in certain circumstances, including for stock dividends and stock splits and combinations. In addition, a holder of the Pre-Funded Warrants will be entitled to participate in rights offerings or pro rata distributions by the Company. The Company may not enter into or be party to a Fundamental Transaction (as defined in the Pre-Funded Warrants) unless the successor entity assumes in writing all of the obligations of the Company under the Pre-Funded Warrants.
The Pre-Funded Warrants also contain a beneficial ownership limitation. The Pre-Funded Warrants will not be exercisable or exchangeable by the holder to the extent (but only to the extent) that the holder or any of its affiliates would beneficially own in excess of 4.9% of the number of shares of Class B Common Stock outstanding after giving effect to the issuance of the warrant shares, with such beneficial ownership calculated in accordance with Section 13(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”).
The offer and sale to the Buyers of the Shares and Pre-Funded Warrants, as well as the shares of Class B Common Stock issuable upon exercise of the Pre-Funded Warrants, has been, and will be, made in reliance upon Section 4(a)(2) under the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder (the “Securities Act”).
The foregoing descriptions of the APA, the Pre-Funded Warrants and the Lock-Up Agreement are not complete and are qualified in their entirety by reference to the full text of the APA, the form of Pre-Funded Warrant and the Lock-Up Agreement, copies of which are filed as Exhibits 10.1, 4.1 and 10.2 hereto, respectively, and are incorporated herein by reference. The APA, the form of Pre-Funded Warrant and the Lock-Up Agreement have been included to provide investors and security holders with information regarding their terms. The documents are not intended to provide any other factual information about the Company. The representations, warranties and covenants contained in the documents were made only for purposes of such agreements and as of specific dates, were solely for the benefit of the parties to such agreements, may in some cases be made solely for the allocation of risk between the parties and may be subject to limitations agreed upon by the contracting parties.
| 2 |
Item 2.01 Completion of Acquisition or Disposition of Assets.
Information regarding the acquisition of the Purchased Assets set forth under Item 1.01 of this Current Report on Form 8-K is incorporated herein by reference.
The Company has determined that the acquisition does not constitute the acquisition of a business under Rule 11-01(d) of Regulation S-X because the assets acquired do not include employees, operating systems, or substantive processes required to generate revenues independently. Accordingly, the Company concluded that financial statements and pro forma financial information are not required under Rule 3-05 and Article 11 of Regulation S-X
Item 3.02 Unregistered Sales of Equity Securities.
Information regarding unregistered sales of securities set forth under Item 1.01 of this Current Report on Form 8-K is incorporated herein by reference.
Item 7.01 Regulation FD Disclosure.
On July 7, 2025, the Company issued a press release announcing its entry into the APA and the closing of the transactions contemplated thereby. A copy of the press release is filed herewith as Exhibit 99.1.
The information furnished under Item 7.01, including the exhibit related thereto, shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, nor shall it be deemed incorporated by reference in any disclosure document of the Company, except as shall be expressly set forth by specific reference in such document.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits:
Exhibit |
| Description |
| ||
| ||
| ||
| ||
104 |
| Cover Page Interactive Data File - the cover page XBRL tags are embedded within the Inline XBRL document. |
| 3 |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| CLASSOVER HOLDINGS, INC. |
| |
| |||
Dated: July 7, 2025 | By: | /s/ Hui Luo |
|
Name: Hui Luo |
| ||
Title: Chief Executive Officer |
| ||
| 4 |
EXHIBIT 4.1
PRE-FUNDED WARRANT
NEITHER THE ISSUANCE AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE NOR THE SECURITIES INTO WHICH THESE SECURITIES ARE EXERCISABLE HAVE BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THE SECURITIES MAY NOT BE OFFERED FOR SALE, SOLD, TRANSFERRED OR ASSIGNED (I) IN THE ABSENCE OF (A) AN EFFECTIVE REGISTRATION STATEMENT FOR THE SECURITIES UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR (B) AN OPINION OF COUNSEL TO THE HOLDER (IF REQUESTED BY THE COMPANY), FROM REPUTABLE COUNSEL, THAT REGISTRATION IS NOT REQUIRED UNDER SAID ACT OR (II) UNLESS SOLD OR ELIGIBLE TO BE SOLD PURSUANT TO RULE 144 OR RULE 144A UNDER SAID ACT. NOTWITHSTANDING THE FOREGOING, THE SECURITIES MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN OR FINANCING ARRANGEMENT SECURED BY THE SECURITIES.
CLASSOVER HOLDINGS, INC.
PRE-FUNDED WARRANT TO PURCHASE CLASS B COMMON STOCK
Warrant No.: 20250627-01
Date of Issuance: June 30, 2025 (“Issuance Date”)
Classover Holdings, Inc., a Delaware corporation(the “Company”), hereby certifies that, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Silver Run Group, LLC, the registered holder hereof or its permitted assigns (the “Holder”), is entitled, subject to the terms set forth below, to purchase from the Company, at the Exercise Price (as defined below) then in effect, upon exercise of this Warrant to purchase, at any time or times on or after the Issuance Date, but not after 11:59 p.m., New York time, on the Expiration Date (as defined below), 739,278 fully paid and non-assessable shares (subject to adjustment as provided herein) of Common Stock (as defined below) (the “Warrant Shares”). Except as otherwise defined herein, capitalized terms in this Warrant shall have the meanings set forth in Section 16. This Warrant is issued to Holder pursuant to terms of the Asset Purchase Agreement, dated as of June 30, 2025, by and among the Holder, its wholly owned subsidiary Deer Creek IP, LLC and the Company (“APA”).
1. EXERCISE OF WARRANT.
(a) Mechanics of Exercise. Subject to the terms and conditions hereof (including, without limitation, the limitations set forth in Section 1(f)), this Warrant may be exercised by the Holder on any day on or after the Issuance Date in whole or in part, by delivery (whether via facsimile or otherwise) of a written notice, in the form attached hereto as Exhibit A (the “Exercise Notice”), of the Holder’s election to exercise this Warrant. Within one (1) Trading Day following an exercise of this Warrant as aforesaid, the Holder shall deliver payment to the Company of an amount equal to the Exercise Price in effect on the date of such exercise multiplied by the number of Warrant Shares as to which this Warrant was so exercised (in respect of such specific exercise, the “Aggregate Exercise Price”) in cash or via wire transfer of immediately available funds if the Holder did not notify the Company in such Exercise Notice that such exercise was made pursuant to a Cashless Exercise (as defined in Section 1(d)). The Holder shall not be required to deliver the original of this Warrant in order to effect an exercise hereunder. Execution and delivery of an Exercise Notice with respect to less than all of the Warrant Shares shall have the same effect as cancellation of the original of this Warrant certificate and issuance of a new Warrant certificate evidencing the right to purchase the remaining number of Warrant Shares. Execution and delivery of an Exercise Notice for all of the then-remaining Warrant Shares shall have the same effect as cancellation of the original of this Warrant certificate after delivery of the Warrant Shares in accordance with the terms hereof. On or before the first (1st) Trading Day following the date on which the Company has received an Exercise Notice, the Company shall transmit by facsimile an acknowledgment of confirmation of receipt of such Exercise Notice, in the form attached hereto as Exhibit B, to the Holder and the Company’s transfer agent (the “Transfer Agent”). On or before the second (2nd) Trading Day following the date on which the Company has received such Exercise Notice, the Company shall, upon the request of the Holder, credit such aggregate number shares of Common Stock to which the Holder is entitled pursuant to such exercise to the Holder’s or its designee’s balance account with Depository Trust Company (“DTC”) through its Deposit/ Withdrawal at Custodian system. Upon delivery of an Exercise Notice, the Holder shall be deemed for all corporate purposes to have become the holder of record of the Warrant Shares with respect to which this Warrant has been exercised, irrespective of the date such Warrant Shares are credited to the Holder’s DTC account. If this Warrant is submitted in connection with any exercise pursuant to this Section 1(a) and the number of Warrant Shares represented by this Warrant submitted for exercise is greater than the number of Warrant Shares being acquired upon an exercise, then, at the request of the Holder and upon surrender hereof by the Holder at the principal office of the Company, the Company shall as soon as practicable and in no event later than the date on which the Holder is credited with the shares of Common Stock issued upon exercise of the Warrant, and at its own expense, issue and deliver to the Holder (or its designee) a new Warrant (in accordance with Section 7(d)) representing the right to purchase the number of Warrant Shares purchasable immediately prior to such exercise under this Warrant, less the number of Warrant Shares with respect to which this Warrant is exercised. No fractional shares are to be issued upon the exercise of this Warrant, but rather the number of shares to be issued shall be rounded up to the nearest whole number. The Company shall pay any and all taxes and fees which may be payable with respect to the issuance and delivery of Warrant Shares upon exercise of this Warrant.
| 1 |
(b) Exercise Price. For purposes of this Warrant, “Exercise Price” means $0.01, subject to adjustment as provided herein.
(c) Company’s Failure to Timely Deliver Securities. To the extent permitted by law, the Company’s obligations to issue and deliver the Warrant Shares upon exercise of the Warrant in accordance with the terms hereof are absolute and unconditional, irrespective of any action or inaction by the Holder to enforce the same, any waiver or consent with respect to any provision hereof, the recovery of any judgment against any person or any action to enforce the same, or any setoff, counterclaim, recoupment, limitation or termination, or any breach or alleged breach by the Holder or any other person of any obligation to the Company or any violation or alleged violation of law by the Holder or any other person, and irrespective of any other circumstance that might otherwise limit such obligation of the Company to the Holder in connection with the issuance of the Warrant Shares. Nothing herein shall limit the Holder’s right to pursue any other remedies available to it hereunder, at law or in equity including, without limitation, a decree of specific performance and/or injunctive relief with respect to the Company’s failure to timely deliver the Warrant Shares issuable upon exercise of this Warrant as required pursuant to the terms hereof.
(d) Cashless Exercise. If at the time of exercise hereof there is no effective registration statement registering, or the prospectus contained therein is not available for the issuance of, the Warrant Shares to the Holder, then the Holder may exercise this Warrant, in whole or in part, by means of a “cashless exercise” in which the Holder shall be entitled to receive a number of Warrant Shares equal to the quotient obtained by dividing [(A-B) (X)] by (A), where:
(A) = as applicable: (i) the VWAP on the Trading Day immediately preceding the date of the applicable Notice of Exercise if such Notice of Exercise is (1) both executed and delivered pursuant to Section 2(a) hereof on a day that is not a Trading Day or (2) both executed and delivered pursuant to Section 2(a) hereof on a Trading Day prior to the opening of “regular trading hours” (as defined in Rule 600(b) of Regulation NMS promulgated under the federal securities laws) on such Trading Day, (ii) at the option of the Holder, either (y) the VWAP on the Trading Day immediately preceding the date of the applicable Notice of Exercise or (z) the Closing Bid Price of the Common Stock on the principal Trading Market as reported by Bloomberg as of the time of the Holder’s execution of the applicable Notice of Exercise if such Notice of Exercise is executed during “regular trading hours” on a Trading Day and is delivered within two (2) hours thereafter (including until two (2) hours after the close of “regular trading hours” on a Trading Day) as provided herein or (iii) the VWAP on the date of the applicable Notice of Exercise if the date of such Notice of Exercise is a Trading Day and such Notice of Exercise is both executed and delivered as provided herein after the close of “regular trading hours” on such Trading Day;
(B) = the Exercise Price, as adjusted hereunder; and
(X) = the number of Warrant Shares that would be issuable upon exercise of this Warrant in accordance with the terms of this Warrant if such exercise were by means of a cash exercise rather than a cashless exercise.
If Warrant Shares are issued in such a cashless exercise, the parties acknowledge and agree that in accordance with Section 3(a)(9) of the Securities Act, the Warrant Shares shall take on the registered characteristics of the Warrants being exercised.
Notwithstanding anything herein to the contrary, on the Termination Date, this Warrant shall be automatically exercised via cashless exercise pursuant to this Section 1(d).
| 2 |
(e) Disputes. In the case of a dispute as to the determination of the Exercise Price or the arithmetic calculation of the number of Warrant Shares to be issued pursuant to the terms hereof (including, without limitation, the Net Number), the Company shall promptly issue to the Holder the number of Warrant Shares that are not disputed, provided that following such issuance to Holder such dispute shall be resolved in accordance with Section 13 of this Warrant.
(f) Limitations on Exercises and Exchanges. Notwithstanding anything to the contrary contained in this Warrant, this Warrant shall not be exercisable or exchangeable by the Holder hereof to the extent (but only to the extent) that the Holder or any of its affiliates would beneficially own in excess of 4.9% of the number of shares of Common Stock outstanding after giving effect to the issuance of Warrant Shares issuable upon exercise of the Warrants calculated in accordance with Section 13(d) of the Exchange Act (the “Maximum Percentage”). To the extent the above limitation applies, the determination of whether this Warrant shall be exercisable or exchangeable (vis-à-vis other convertible, exercisable or exchangeable securities owned by the Holder or any of its affiliates) and of which such securities shall be exercisable or exchangeable (as among all such securities owned by the Holder) shall, subject to such Maximum Percentage limitation, be determined on the basis of the first submission to the Company for conversion, exercise or exchange (as the case may be). No prior inability to exercise or exchange this Warrant pursuant to this paragraph shall have any effect on the applicability of the provisions of this paragraph with respect to any subsequent determination of exercisability or exchangeability. For the purposes of this paragraph, beneficial ownership and all determinations and calculations (including, without limitation, with respect to calculations of percentage ownership) shall be determined in accordance with Section 13(d) of the Exchange Act (as defined in the Securities Purchase Agreement) and the rules and regulations promulgated thereunder. The provisions of this paragraph shall be implemented in a manner otherwise than in strict conformity with the terms of this paragraph to correct this paragraph (or any portion hereof) which may be defective or inconsistent with the intended Maximum Percentage beneficial ownership limitation herein contained or to make changes or supplements necessary or desirable to properly give effect to such Maximum Percentage limitation. The limitations contained in this paragraph shall apply to a successor Holder of this Warrant. For any reason at any time, upon the written or oral request of the Holder, the Company shall within two (2) Business Days confirm orally and in writing to the Holder the number of shares of Common Stock then outstanding, including by virtue of any prior conversion or exercise or exchange of convertible or exercisable or exchangeable securities into Common Stock, including, without limitation, pursuant to this Warrant or securities issued pursuant to the APA.
(g) Reservation of Shares; Insufficient Authorized Shares. The Company shall initially reserve out of its authorized and unissued Common Stock a number of shares equal to 200% of the maximum number of Warrant Shares issuable to satisfy the Company's obligations to issue Warrant Shares hereunder, and the Company shall at all times keep reserved for issuance under this Warrant a number of shares of Common Stock equal to 200% of the maximum number of Warrant Shares issuable to satisfy the Company’s obligation to issue such Warrant Shares hereunder.
| 3 |
(h) Activity Restrictions. For so long as Holder holds this Warrant or any Warrant Shares, Holder will not: (i) engage or participate in any actions, plans or proposals which relate to or would result in (a) acquiring additional securities of the Company, alone or together with any other Person, which would result in beneficially owning or controlling, or being deemed to beneficially own or control, more than 4.9% of the total outstanding Common Stock or other voting securities of the Company, (b) an extraordinary corporate transaction, such as a merger, reorganization or liquidation, involving Company, (c) a sale or transfer of a material amount of assets of the Company, (d) any change in the present board of directors or management of the Company, including any plans or proposals to change the number or term of directors or to fill any existing vacancies on the board, (e) any material change in the present capitalization or dividend policy of the Company, (f) any other material change in the Company’s business or corporate structure, including but not limited to, if the Company is a registered closed-end investment company, any plans or proposals to make any changes in its investment policy for which a vote is required by Section 13 of the Investment Company Act of 1940, (g) changes in the Company’s charter, bylaws or instruments corresponding thereto or other actions which may impede the acquisition of control of the Company by any Person, (h) causing a class of securities of the Company to be delisted from a national securities exchange or to cease to be authorized to be quoted in an inter-dealer quotation system of a registered national securities association, (i) a class of equity securities of the Company becoming eligible for termination of registration pursuant to Section 12(g)(4) of the Act, or (j) any action, intention, plan or arrangement similar to any of those enumerated above, or (ii) request the Company or its directors, officers, employees, agents or representatives to amend or waive any provision of this Section 1(i); provided, however, that notwithstanding anything to the contrary contain in clauses (i) and (ii) above, Holder may vote any shares of Common Stock owned or controlled by it, solicit any proxies, or seek to advise or influence any Person with respect to any voting securities of the Company. Holder may only exercise this Warrant for a cash exercise price if the trading price at the time of exercise is greater than the then applicable Exercise Price.
2. ADJUSTMENT OF EXERCISE PRICE AND NUMBER OF WARRANT SHARES. The Exercise Price and number of Warrant Shares issuable upon exercise of this Warrant are subject to adjustment from time to time as set forth in this Section 2.
(a) Stock Dividends and Splits. Without limiting any provision of Section 4, if the Company, at any time on or after the date of the Securities Purchase Agreement, (i) pays a stock dividend on one or more classes of its then outstanding Common Stock or otherwise makes a distribution on any class of capital stock that is payable in shares of Common Stock, (ii) subdivides (by any stock split, stock dividend, recapitalization or otherwise) one or more classes of its then outstanding Common Stock into a larger number of shares or (iii) combines (by combination, reverse stock split or otherwise) one or more classes of its then outstanding Common Stock into a smaller number of shares, then in each such case the Exercise Price shall be multiplied by a fraction of which the numerator shall be the number of shares of Common Stock outstanding immediately before such event and of which the denominator shall be the number of shares of Common Stock outstanding immediately after such event. Any adjustment made pursuant to clause (i) of this paragraph shall become effective immediately after the record date for the determination of shareholders entitled to receive such dividend or distribution, and any adjustment pursuant to clause (ii) or (iii) of this paragraph shall become effective immediately after the effective date of such subdivision or combination. If any event requiring an adjustment under this paragraph occurs during the period that an Exercise Price is calculated hereunder, then the calculation of such Exercise Price shall be adjusted appropriately to reflect such event.
| 4 |
(b) Number of Warrant Shares. Simultaneously with any adjustment to the Exercise Price pursuant to paragraph (a) or (b) of this Section 2, the number of Warrant Shares that may be purchased upon exercise of this Warrant shall be increased or decreased proportionately, so that after such adjustment the aggregate Exercise Price payable hereunder for the adjusted number of Warrant Shares shall be the same as the aggregate Exercise Price in effect immediately prior to such adjustment (without regard to any limitations on exercise contained herein). In addition, and notwithstanding anything to the contrary contained herein, upon a Cashless Exercise as set forth in Section 1(d) hereof, the number of Warrant Shares for which this Warrant is exercisable immediately following such Cashless Exercise shall be equal to (i) the number of Warrant Shares for which this Warrant was exercisable immediately prior to such Cashless Exercise less (ii) the number of Warrant Shares as to which such Cashless Exercise was exercised.
(c) Calculations. All calculations under this Section 2 shall be made by rounding to the nearest 1/10000th of cent and the nearest 1/100th of a share, as applicable. The number of shares of Common Stock outstanding at any given time shall not include shares owned or held by or for the account of the Company, and the disposition of any such shares shall be considered an issue or sale of Common Stock.
(d) Other Events. In the event that the Company shall take any action to which the provisions hereof are not strictly applicable, or, if applicable, would not operate to protect the Holder from dilution or if any event occurs of the type contemplated by the provisions of this Section 2 but not expressly provided for by such provisions (including, without limitation, the granting of stock appreciation rights, phantom stock rights or other rights with equity features), then the Company’s board of directors shall in good faith determine and implement an appropriate adjustment in the Exercise Price and the number of Warrant Shares (if applicable) so as to protect the rights of the Holder, provided that no such adjustment pursuant to this Section 2(d) will increase the Exercise Price or decrease the number of Warrant Shares as otherwise determined pursuant to this Section 2, provided further that if the Holder does not accept such adjustments as appropriately protecting its interests hereunder against such dilution, then the Company’s board of directors and the Holder shall agree, in good faith, upon an independent investment bank of nationally recognized standing to make such appropriate adjustments, whose determination shall be final and binding and whose fees and expenses shall be borne by the Company.
3. RIGHTS UPON DISTRIBUTION OF ASSETS. In addition to any adjustments pursuant to Section 2 above, if the Company shall declare or make any dividend or other distribution of its assets (or rights to acquire its assets) to holders of Common Stock, by way of return of capital or otherwise (including, without limitation, any distribution of cash, stock or other securities, indebtedness, property or options by way of a dividend, spin off, reclassification, corporate rearrangement, scheme of arrangement or other similar transaction, other than a distribution of shares of Common Stock covered by Section 2(a)) (a “Distribution”), at any time after the issuance of this Warrant, then, in each such case, provision shall be made so that upon exercise of this Warrant, the Holder shall be entitled to participate in such Distribution to the same extent that the Holder would have participated therein if the Holder had held the number of shares of Common Stock acquirable upon complete exercise of this Warrant (without regard to any limitations on exercise hereof, including without limitation, the Maximum Percentage) immediately before the date on which a record is taken for such Distribution, or, if no such record is taken, the date as of which the record holders of Common Stock are to be determined for the participation in such Distribution (provided, however, to the extent that the Holder’s right to participate in any such Distributions would result in the Holder exceeding the Maximum Percentage, then the Holder shall not be entitled to participate in such Distribution to such extent (or the beneficial ownership of any such Common Stock as a result of such Distribution to such extent) and such Distribution to such extent shall be held in abeyance for the benefit of the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding the Maximum Percentage).
| 5 |
4. PURCHASE RIGHTS; FUNDAMENTAL TRANSACTIONS.
(a) Purchase Rights. In addition to any adjustments pursuant to Section 2 above, if at any time the Company grants, issues or sells any Options, Convertible Securities or rights to purchase stock, warrants, securities or other property pro rata to the record holders of Common Stock (the “Purchase Rights”), then the Holder will be entitled to acquire, upon the terms applicable to such Purchase Rights, the aggregate Purchase Rights which the Holder could have acquired if the Holder had held the number of shares of Common Stock acquirable upon complete exercise of this Warrant (without regard to any limitations on exercise hereof, including without limitation, the Maximum Percentage) immediately before the date on which a record is taken for the grant, issuance or sale of such Purchase Rights, or, if no such record is taken, the date as of which the record holders of Common Stock are to be determined for the grant, issue or sale of such Purchase Rights (provided, however, to the extent that the Holder’s right to participate in any such Purchase Right would result in the Holder exceeding the Maximum Percentage, then the Holder shall not be entitled to participate in such Purchase Right to such extent (or beneficial ownership of such Common Stock as a result of such Purchase Right to such extent) and such Purchase Right to such extent shall be held in abeyance for the Holder until such time, if ever, as its right thereto would not result in the Holder exceeding the Maximum Percentage).
(b) Fundamental Transactions. The Company shall not enter into or be party to a Fundamental Transaction unless the Successor Entity assumes in writing all of the obligations of the Company under this Warrant and the other Transaction Documents related to this Warrant in accordance with the provisions of this Section 4(b) pursuant to written agreements in form and substance reasonably satisfactory to the Holder, including agreements confirming the obligations of the Successor Entity as set forth in this paragraph (b) and (c) and elsewhere in this Warrant and an obligation to deliver to the Holder in exchange for this Warrant a security of the Successor Entity evidenced by a written instrument substantially similar in form and substance to this Warrant, including, without limitation, which is exercisable for a corresponding number of shares of capital stock equivalent to the shares of Common Stock acquirable and receivable upon exercise of this Warrant (without regard to any limitations on the exercise of this Warrant) prior to such Fundamental Transaction, and with an exercise price which applies the exercise price hereunder to such shares of capital stock (but taking into account the relative value of the Common Stock pursuant to such Fundamental Transaction and the value of such shares of capital stock, such adjustments to the number of shares of capital stock and such exercise price being for the purpose of protecting the economic value of this Warrant immediately prior to the consummation of such Fundamental Transaction). Notwithstanding the foregoing, at the election of the Holder upon exercise of this Warrant following a Fundamental Transaction, the Successor Entity shall deliver to the Holder, in lieu of shares of Common Stock (or other securities, cash, assets or other property (except such items still issuable under Sections 3 and 4(a) above, which shall continue to be receivable thereafter)) issuable upon the exercise of this Warrant prior to the applicable Fundamental Transaction, such shares of common stock (or its equivalent) of the Successor Entity (including its Parent Entity), or other securities, cash, assets or other property, which the Holder would have been entitled to receive upon the happening of the applicable Fundamental Transaction had this Warrant been exercised immediately prior to the applicable Fundamental Transaction; provided, however, that such amount of reserved shares of Common Stock shall be limited by the Maximum Percentage of shares of Common Stock as set forth in Section 1(f).
| 6 |
(c) Application. The provisions of this Section 4 shall apply similarly and equally to successive Fundamental Transactions and shall be applied as if this Warrant (and any such subsequent warrants issued hereunder) were fully exercisable and without regard to any limitations on the exercise of this Warrant (provided that the Holder shall continue to be entitled to the benefit of the Maximum Percentage, applied however with respect to shares of capital stock registered under the Exchange Act and thereafter receivable upon exercise of this Warrant (or any such other warrant)).
5. NONCIRCUMVENTION. The Company hereby covenants and agrees that the Company will not, by amendment of its certificate of incorporation, bylaws or through any reorganization, transfer of assets, consolidation, merger, scheme of arrangement, dissolution, issue or sale of securities, or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, and will at all times in good faith carry out all the provisions of this Warrant and take all action as may be required to protect the rights of the Holder. Without limiting the generality of the foregoing, the Company (i) shall not increase the par value of any shares of Common Stock receivable upon the exercise of this Warrant above the Exercise Price then in effect, (ii) shall take all such actions as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and non-assessable shares of Common Stock upon the exercise of this Warrant, and (iii) shall, so long as this Warrant is outstanding, take all action necessary to reserve and keep available out of its authorized and unissued shares of Common Stock, solely for the purpose of effecting the exercise of this Warrant, the maximum number of shares of Common Stock as shall from time to time be necessary to effect the exercise of this Warrant; provided, however, that such amount of reserved shares of Common Stock shall be limited by the Maximum Percentage of shares of Common Stock as set forth in Section 1(f).
6. WARRANT HOLDER NOT DEEMED A SHAREHOLDER. Except as otherwise specifically provided herein, the Holder, solely in its capacity as a holder of this Warrant, shall not be entitled to vote or receive dividends or be deemed the holder of share capital of the Company for any purpose, nor shall anything contained in this Warrant be construed to confer upon the Holder, solely in its capacity as the Holder of this Warrant, any of the rights of a shareholder of the Company or any right to vote, give or withhold consent to any corporate action (whether any reorganization, issue of stock, reclassification of stock, consolidation, merger, conveyance or otherwise), receive notice of meetings, receive dividends or subscription rights, or otherwise, prior to the issuance to the Holder of the Warrant Shares which it is then entitled to receive upon the due exercise of this Warrant. In addition, nothing contained in this Warrant shall be construed as imposing any liabilities on the Holder to purchase any securities (upon exercise of this Warrant or otherwise) or as a shareholder of the Company, whether such liabilities are asserted by the Company or by creditors of the Company. Notwithstanding this Section 6, the Company shall provide the Holder with copies of the same notices and other information given to the shareholders of the Company generally, contemporaneously with the giving thereof to the shareholders.
| 7 |
7. REISSUANCE OF WARRANTS.
(a) Transfer of Warrant. If this Warrant is to be transferred, the Holder shall surrender this Warrant to the Company, whereupon the Company will forthwith issue and deliver upon the order of the Holder a new Warrant (in accordance with Section 7(d)), registered as the Holder may request, representing the right to purchase the number of Warrant Shares being transferred by the Holder and, if less than the total number of Warrant Shares then underlying this Warrant is being transferred, a new Warrant (in accordance with Section 7(d)) to the Holder representing the right to purchase the number of Warrant Shares not being transferred. If, at the time of the surrender of this Warrant in connection with any transfer of this Warrant, the transfer of this Warrant shall not be either (i) registered pursuant to an effective registration statement under the Securities Act and under applicable state securities or blue sky laws or (ii) eligible for resale without volume or manner-of-sale restrictions or current public information requirements pursuant to Rule 144, the Company may require, as a condition of allowing such transfer, that the Holder or transferee of this Warrant, as the case may be, provide to the Company an opinion of counsel selected by the Holder and reasonably acceptable to the Company, the form and substance of which opinion shall be reasonably satisfactory to the Company, to the effect that such transfer does not require registration of such transferred securities under the Securities Act.
(b) Lost, Stolen or Mutilated Warrant. Upon receipt by the Company of evidence reasonably satisfactory to the Company of the loss, theft, destruction or mutilation of this Warrant (as to which a written certification and the indemnification contemplated below shall suffice as such evidence), and, in the case of loss, theft or destruction, of any indemnification undertaking by the Holder to the Company in customary and reasonable form and, in the case of mutilation, upon surrender and cancellation of this Warrant, the Company shall execute and deliver to the Holder a new Warrant (in accordance with Section 7(d)) representing the right to purchase the Warrant Shares then underlying this Warrant.
(c) Exchangeable for Multiple Warrants. This Warrant is exchangeable, upon the surrender hereof by the Holder at the principal office of the Company, for a new Warrant or Warrants (in accordance with Section 7(d)) representing in the aggregate the right to purchase the number of Warrant Shares then underlying this Warrant, and each such new Warrant will represent the right to purchase such portion of such Warrant Shares as is designated by the Holder at the time of such surrender; provided, however, no warrants for fractional shares of Common Stock shall be given.
(d) Issuance of New Warrants. Whenever the Company is required to issue a new Warrant pursuant to the terms of this Warrant, such new Warrant (i) shall be of like tenor with this Warrant, (ii) shall represent, as indicated on the face of such new Warrant, the right to purchase the Warrant Shares then underlying this Warrant (or in the case of a new Warrant being issued pursuant to Section 7(a) or Section 7(c), the Warrant Shares designated by the Holder which, when added to the number of shares of Common Stock underlying the other new Warrants issued in connection with such issuance, does not exceed the number of Warrant Shares then underlying this Warrant), (iii) shall have an issuance date, as indicated on the face of such new Warrant which is the same as the Issuance Date, and (iv) shall have the same rights and conditions as this Warrant.
| 8 |
8. NOTICES. Whenever notice is required to be given under this Warrant, unless otherwise provided herein, such notice shall be given in accordance with the notice provisions of the APA. The Company shall provide the Holder with prompt written notice of all actions taken pursuant to this Warrant, including in reasonable detail a description of such action and the reason therefor. Without limiting the generality of the foregoing, the Company will give written notice to the Holder (i) as soon as practicable upon each adjustment of the Exercise Price and the number of Warrant Shares, setting forth in reasonable detail, and certifying, the calculation of such adjustment(s) and (ii) at least fifteen (15) days prior to the date on which the Company closes its books or takes a record (A) with respect to any dividend or distribution with respect to the Common Stock, (B) with respect to any grants, issuances or sales of any Options, Convertible Securities or rights to purchase stock, warrants, securities, indebtedness, or other property pro rata to holders of Common Stock or (C) for determining rights to vote with respect to any Fundamental Transaction, dissolution or liquidation, provided in each case that such information (to the extent it constitutes, or contains, material, non-public information regarding the Company shall be made known to the public prior to or in conjunction with such notice being provided to the Holder and (iii) at least ten (10) Trading Days prior to the consummation of any Fundamental Transaction. To the extent that any notice provided hereunder (whether under this Section 8 or otherwise) constitutes, or contains, material, non-public information regarding the Company, the Company shall simultaneously file such notice with the Commission (as defined in the Securities Purchase Agreement) pursuant to a Current Report on Form 8-K. It is expressly understood and agreed that the time of execution specified by the Holder in each Exercise Notice shall be definitive and may not be disputed or challenged by the Company.
9. AMENDMENT AND WAIVER. Except as otherwise provided herein, the provisions of this Warrant (other than Section 1(f)) may be amended and the Company may take any action herein prohibited, or omit to perform any act herein required to be performed by it, only if the Company has obtained the written consent of the Holder. The Holder shall be entitled, at its option, to the benefit of any amendment of any other similar warrant issued under the Securities Purchase Agreement. No waiver shall be effective unless it is in writing and signed by an authorized representative of the waiving party.
10. SEVERABILITY. If any provision of this Warrant is prohibited by law or otherwise determined to be invalid or unenforceable by a court of competent jurisdiction, the provision that would otherwise be prohibited, invalid or unenforceable shall be deemed amended to apply to the broadest extent that it would be valid and enforceable, and the invalidity or unenforceability of such provision shall not affect the validity of the remaining provisions of this Warrant so long as this Warrant as so modified continues to express, without material change, the original intentions of the parties as to the subject matter hereof and the prohibited nature, invalidity or unenforceability of the provision(s) in question does not substantially impair the respective expectations or reciprocal obligations of the parties or the practical realization of the benefits that would otherwise be conferred upon the parties. The parties will endeavor in good faith negotiations to replace the prohibited, invalid or unenforceable provision(s) with a valid provision(s), the effect of which comes as close as possible to that of the prohibited, invalid or unenforceable provision(s).
| 9 |
11. GOVERNING LAW. This Warrant shall be governed by and construed and enforced in accor-dance with, and all questions concerning the construction, validity, interpretation and performance of this Warrant shall be governed by, the internal laws of the State of New York, without giving effect to any choice of law or conflict of law provision or rule (whether of the State of New York or any other jurisdictions) that would cause the application of the laws of any jurisdictions other than the State of New York. The Company hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in The City of New York, Borough of Manhattan, for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein, and hereby irrevocably waives, and agrees not to assert in any suit, action or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is brought in an inconvenient forum or that the venue of such suit, action or proceeding is improper. Nothing contained herein shall be deemed to limit in any way any right to serve process in any manner permitted by law. Nothing contained herein shall be deemed or operate to preclude the Holder from bringing suit or taking other legal action against the Company in any other jurisdiction to collect on the Company’s obligations to the Holder or to enforce a judgment or other court ruling in favor of the Holder. THE COMPANY HEREBY IRREVOCABLY WAIVES ANY RIGHT IT MAY HAVE TO, AND AGREES NOT TO REQUEST, A JURY TRIAL FOR THE ADJUDICATION OF ANY DISPUTE HEREUNDER OR IN CONNECTION WITH OR ARISING OUT OF THIS WARRANT OR ANY TRANSACTION CONTEMPLATED HEREBY.
12. CONSTRUCTION; HEADINGS. This Warrant shall be deemed to be jointly drafted by the Company and the Holder and shall not be construed against any Person as the drafter hereof. The headings of this Warrant are for convenience of reference and shall not form part of, or affect the interpretation of, this Warrant. Terms used in this Warrant but defined in the APA or related transaction documents shall have the meanings ascribed to such terms on the Closing Date (as defined in the APA) unless otherwise consented to in writing by the Holder.
13. DISPUTE RESOLUTION. In the case of a dispute as to the determination of the Exercise Price, the Closing Sale Price, the Closing Bid Price, or fair market value or the arithmetic calculation of the Warrant Shares (as the case may be), the Company or the Holder (as the case may be) shall submit the disputed determinations or arithmetic calculations (as the case may be) via facsimile (i) within two (2) Business Days after receipt of the applicable notice giving rise to such dispute to the Company or the Holder (as the case may be) or (ii) if no notice gave rise to such dispute, at any time after the Holder or the Company (as the case may be) learned of the circumstances giving rise to such dispute. If the Holder and the Company are unable to agree upon such determination or calculation (as the case may be) of the Exercise Price, the Closing Sale Price, the Closing Bid Price or fair market value or the number of Warrant Shares (as the case may be) within three (3) Business Days of such disputed determination or arithmetic calculation being submitted to the Company or the Holder (as the case may be), then the Company shall, within two (2) Business Days submit via facsimile (a) the disputed arithmetic calculation of the Warrant Shares, the disputed determination of the Exercise Price, the Closing Sale Price, the Closing Bid Price, or fair market value (as the case may be) to an independent, reputable investment bank selected by the Holder, with the consent of the Company (which may not be unreasonably withheld, conditioned or delayed), or (b) if acceptable to the Holder, the disputed arithmetic calculation of the Warrant Shares to the Company’s independent, outside accountant. The Company shall cause at its expense the investment bank or the accountant (as the case may be) to perform the determinations or calculations (as the case may be) and notify the Company and the Holder of the results no later than ten (10) Business Days from the time it receives such disputed determinations or calculations (as the case may be). Such investment bank’s or accountant’s determination or calculation (as the case may be) shall be binding upon all parties absent demonstrable error.
| 10 |
14. REMEDIES, CHARACTERIZATION, OTHER OBLIGATIONS, BREACHES AND INJUNCTIVE RELIEF. The remedies provided in this Warrant shall be cumulative and in addition to all other remedies available under this Warrant and the other Transaction Documents, at law or in equity (including a decree of specific performance and/or other injunctive relief), and nothing herein shall limit the right of the Holder to pursue actual damages for any failure by the Company to comply with the terms of this Warrant. The Company covenants to the Holder that there shall be no characterization concerning this instrument other than as expressly provided herein. Amounts set forth or provided for herein with respect to payments, exercises and the like (and the computation thereof) shall be the amounts to be received by the Holder and shall not, except as expressly provided herein, be subject to any other obligation of the Company (or the performance thereof). The Company acknowledges that a breach by it of its obligations hereunder will cause irreparable harm to the Holder and that the remedy at law for any such breach may be inadequate. The Company therefore agrees that, in the event of any such breach or threatened breach, the holder of this Warrant shall be entitled, in addition to all other available remedies, to an injunction restraining any breach, without the necessity of showing economic loss and without any bond or other security being required. The Company shall provide all information and documentation to the Holder that is requested by the Holder to enable the Holder to confirm the Company’s compliance with the terms and conditions of this Warrant (including, without limitation, compliance with Section 2 hereof). The issuance of shares as contemplated hereby upon the exercise of this Warrant shall be made without charge to the Holder or such shares for any issuance tax or other costs in respect thereof, provided that the Company shall not be required to pay any tax which may be payable in respect of any transfer involved in the issuance and delivery of any certificate in a name other than the Holder or its agent on its behalf.
15. TRANSFER. This Warrant may be offered for sale, sold, transferred or assigned without the consent of the Company.
16. CERTAIN DEFINITIONS. For purposes of this Warrant, the following terms shall have the following meanings:
(a) “Bloomberg” means Bloomberg, L.P.
(b) “Business Day” means any day other than Saturday, Sunday or other day on which commercial banks in New York, New York are authorized or required by law to remain closed.
(c) “Closing Bid Price” and “Closing Sale Price” means, for any security as of any date, the last closing bid price and the last closing trade price, respectively, for such security on the Principal Market, as reported by Bloomberg, or, if the Principal Market begins to operate on an extended hours basis and does not designate the closing bid price or the closing trade price (as the case may be) then the last bid price or last trade price, respectively, of such security prior to 4:00 p.m., New York time, as reported by Bloomberg, or, if the Principal Market is not the principal securities exchange or trading market for such security, the last closing bid price or last trade price, respectively, of such security on the principal securities exchange or trading market where such security is listed or traded as reported by Bloomberg, or if the foregoing do not apply, the average of the bid prices, or the ask prices, respectively, of all of the market makers for such security as reported in the “pink sheets” by OTC Markets Group Inc. (formerly Pink Sheets LLC). If the Closing Bid Price or the Closing Sale Price cannot be calculated for a security on a particular date on any of the foregoing bases, the Closing Bid Price or the Closing Sale Price (as the case may be) of such security on such date shall be the fair market value as mutually determined by the Company and the Holder. If the Company and the Holder are unable to agree upon the fair market value of such security, then such dispute shall be resolved in accordance with the procedures in Section 13. All such determinations shall be appropriately adjusted for any stock dividend, stock split, stock combination or other similar transaction during such period.
| 11 |
(d) “Common Stock” means (i) the Company’s Class B common stock, par value $0.00001 per share, and (ii) any capital stock into which such Common Stock of the Company shall have been changed or any share capital resulting from a reclassification of such Common Stock.
(e) “Convertible Securities” means any stock or other security (other than Options) that is at any time and under any circumstances, directly or indirectly, convertible into, exercisable or exchangeable for, or which otherwise entitles the holder thereof to acquire, any shares of Common Stock.
(f) “Eligible Market” means the New York Stock Exchange, the NYSE Amex, the Nasdaq Global Select Market, the Nasdaq Global Market or the Principal Market.
(g) “Expiration Date” means the date that is five (5) years from the Issuance Date or, if such date falls on a day other than a Business Day or on which trading does not take place on the Principal Market (a “Holiday”), the next date that is not a Holiday.
(h) “Fundamental Transaction” means that (i) the Company shall, directly or indirectly, in one or more related transactions, (1) consolidate or merge with or into (whether or not the Company is the surviving entity) any other Person unless the shareholders of the Company immediately prior to such consolidation or merger continue to hold more than 50% of the outstanding shares of Voting Stock after such consolidation or merger, or (2) sell, lease, license, assign, transfer, convey or otherwise dispose of all or substantially all of its properties or assets to any other Person, in connection with which the Company is dissolved, or (3) allow any other Person to make a purchase, tender or exchange offer that is accepted by the holders of more than 50% of the outstanding shares of Voting Stock of the Company (not including any shares of Voting Stock of the Company held by the Person or Persons making or party to, or associated or affiliated with the Persons making or party to, such purchase, tender or exchange offer), or (4) consummate a stock or share purchase agreement or other business combination (including, without limitation, a reorganization, recapitalization, spin-off or scheme of arrangement) with any other Person whereby such other Person acquires more than 50% of the outstanding shares of Voting Stock of the Company (not including any shares of Voting Stock of the Company held by the other Person or other Persons making or party to, or associated or affiliated with the other Persons making or party to, such stock or share purchase agreement or other business combination), or (ii) any “person” or “group” (as these terms are used for purposes of Sections 13(d) and 14(d) of the Exchange Act and the rules and regulations promulgated thereunder) is or shall become the “beneficial owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of 50% of the aggregate ordinary voting power represented by issued and outstanding Voting Stock of the Company.
| 12 |
(i) “Market Price” means, as of any time of determination, the Closing Bid Price as of the last completed Trading Day immediately prior thereto.
(j) “Options” means any rights, warrants or options to subscribe for or purchase shares of Common Stock or Convertible Securities.
(k) “Parent Entity” of a Person means an entity that, directly or indirectly, controls the applicable Person and whose common stock or equivalent equity security is quoted or listed on an Eligible Market, or, if there is more than one such Person or Parent Entity, the Person or Parent Entity with the largest public market capitalization as of the date of consummation of the Fundamental Transaction.
(l) “Person” means an individual, a limited liability company, a partnership, a joint venture, a corporation, a trust, an unincorporated organization, any other entity or a government or any department or agency thereof.
(m) “Principal Market” means the Nasdaq Capital Market.
(n) “Successor Entity” means the Person (or, if so elected by the Holder, the Parent Entity) formed by, resulting from or surviving any Fundamental Transaction or the Person (or, if so elected by the Holder, the Parent Entity) with which such Fundamental Transaction shall have been entered into.
(o) “Trading Day” means, as applicable, (x) with respect to all price determinations relating to the Common Stock, any day on which the Common Stock is traded on the Principal Market, or, if the Principal Market is not the principal trading market for the Common Stock, then on the principal securities exchange or securities market on which the Common Stock is then traded, provided that “Trading Day” shall not include any day on which the Common Stock is scheduled to trade on such exchange or market for less than 4.5 hours or any day that the Comon Stock is suspended from trading during the final hour of trading on such exchange or market (or if such exchange or market does not designate in advance the closing time of trading on such exchange or market, then during the hour ending at 4:00:00 p.m., New York time) unless such day is otherwise designated as a Trading Day in writing by the Holder or (y) with respect to all determinations other than price determinations relating to the Common Stock, any day on which The New York Stock Exchange (or any successor thereto) is open for trading of securities.
(p) “Voting Stock” of a Person means capital stock of such Person of the class or classes pursuant to which the holders thereof have the general voting power to elect, or the general power to appoint, at least a majority of the board of directors, managers or trustees of such Person (irrespective of whether or not at the time capital stock of any other class or classes shall have or might have voting power by reason of the happening of any contingency).
(q) “VWAP” means, for any security as of any date, the dollar volume-weighted average price for such security on the Principal Market (or, if the Principal Market is not the principal trading market for such security, then on the principal securities exchange or securities market on which such security is then traded) during the period beginning at 9:30:01 a.m., New York time, and ending at 4:00:00 p.m., New York time, as reported by Bloomberg through its “Volume at Price” function or, if the foregoing does not apply, the dollar volume-weighted average price of such security in the over-the-counter market on the electronic bulletin board for such security during the period beginning at 9:30:01 a.m., New York time, and ending at 4:00:00 p.m., New York time, as reported by Bloomberg, or, if no dollar volume-weighted average price is reported for such security by Bloomberg for such hours, the average of the three highest closing bid prices and the three lowest closing ask prices of all of the market makers for such security as reported in the “pink sheets” by OTC Markets Group Inc. (formerly Pink Sheets LLC). If VWAP cannot be calculated for such security on such date on any of the foregoing bases, the VWAP of such security on such date shall be the fair market value as mutually determined by the Company and the Holder. If the Company and the Holder are unable to agree upon the fair market value of such security, then such dispute shall be resolved in accordance with the procedures in Section 13. All such determinations shall be appropriately adjusted for any stock dividend, stock split, stock combination or other similar transaction during such period.
[signature page follows]
| 13 |
IN WITNESS WHEREOF, the Company has caused this Warrant to Purchase Class B Common Stock to be duly executed as of the Issuance Date set out above.
| CLASSOVER HOLDINGS, INC. | |||
| By: | |||
|
| Name: | Hui Luo | |
| Title: | CEO | ||
EXHIBIT A
EXERCISE NOTICE
TO BE EXECUTED BY THE REGISTERED HOLDER TO EXERCISE THIS
WARRANT TO PURCHASE COMMON STOCK
CLASSOVER HOLDINGS, INC.
The undersigned holder hereby exercises the right to purchase _________________ of the shares of Class B common stock (“Warrant Shares”) of Classover Holdings, Inc. , a Delaware corporation (the “Company”), evidenced by Warrant to Purchase Class B Common Stock No. _______ (the “Warrant”). Capitalized terms used herein and not otherwise defined shall have the respective meanings set forth in the Warrant.
1. Form of Exercise Price. The Holder intends that payment of the Exercise Price shall be made as:
____________ a “Cash Exercise” with respect to _________________ Warrant Shares; and/or
____________ a “Cashless Exercise” with respect to _______________ Warrant Shares.
In the event that the Holder has elected a Cashless Exercise with respect to some or all of the Warrant Shares, the Holder represents and warrants that ____________ Warrant Shares are to be delivered pursuant to such Cashless Exercise, as provided and in accordance with the terms of the Warrant, including Section 1(d) thereof.
2. Payment of Exercise Price. In the event that the Holder has elected a Cash Exercise with respect to some or all of the Warrant Shares, the Holder shall pay the Aggregate Exercise Price in the sum of $___________________ to the Company in accordance with the terms of the Warrant.
3. Delivery of Warrant Shares and Net Number of Warrant Shares. The Company shall deliver to Holder, or its designee or agent as specified below, __________ Warrant Shares in respect of the exercise contemplated hereby. Delivery shall be made to Holder, or for its benefit, to the following address:
_______________________
_______________________
_______________________
_______________________
Date: _______________ __, ______
Name of Registered Holder
| By: |
|
|
| Name: |
| |
| Title: |
|
|
| Account Number:___________________________________________________________ |
|
|
| (if electronic book entry transfer) |
|
|
|
|
|
|
| Transaction Code Number:____________________________________________________ |
|
|
| (if electronic book entry transfer) |
|
EXHIBIT B
ACKNOWLEDGMENT
The Company hereby acknowledges this Exercise Notice and hereby directs ______________ to issue the above indicated number of Warranty Shares in accordance with the Transfer Agent Instructions dated _________, 20__, from the Company and acknowledged and agreed to by _______________.
| CLASSOVER HOLDINGS, INC. | |||
| By: | |||
|
|
| Name: | |
| Title: | |||
EXHIBIT 10.1
ASSET PURCHASE AGREEMENT
This ASSET PURCHASE AGREEMENT (this “Agreement”), dated as of June 30, 2025, is entered into by and among SILVER RUN GROUP, LLC, a Delaware limited liability company (“SRG”), and its wholly owned subsidiary DEER CREEK IP, LLC, a Delaware limited liability company (“Company”), and CLASSOVER HOLDINGS, INC., a Delaware corporation (“Buyer”).
RECITALS
WHEREAS the Buyer desires to purchase from the Company, and SRG and the Company each desires that the Company sell to the Buyer, the Purchased Assets (as defined) on the terms and conditions set forth herein.
NOW THEREFORE in consideration of the mutual covenants, agreements, representations, and warranties herein contained, the parties hereto agree as follows:
1. PURCHASE AND SALE
1.1 Purchase and Sale of Purchased Assets. Subject to the terms and conditions of this Agreement, at the Closing, the Company shall sell, assign and deliver to the Buyer, and the Buyer shall purchase and accept from the Company, free and clear of all liens, mortgages, pledges, options, claims, security interests, conditional sales contracts, title defects, encumbrances, charges and other restrictions of every kind (collectively, the “Liens”), other than Permitted Liens (as defined herein), all of the assets of the Company (collectively, the “Purchased Assets”), including, but not limited to, the following:
(a) all accounts receivable of the Company, if any (the “Accounts Receivable”), all of which SRG hereby represents are listed on Schedule 1.1(a);
(b) all of the Company’s rights, title, and interest in and to the agreements, arrangements, and commitments to which the Company is a party or by which it or any of the Purchased Assets are bound (the “Contracts”), all of which SRG hereby represents are listed on Schedule 1.1(b);
(c) all of the Company’s rights, title and interest in and to the licenses, registrations, permits, approvals and other authorizations (the “Licenses and Registrations”) issued to it by any governmental authority including a court, all of which SRG hereby represents are listed on Schedule 1.1(c);
(d) all proceeds, rights, claims, credits, causes of action or rights of set-off against third parties relating to the Purchased Assets, including, without limitation, unliquidated rights under manufacturers’ and vendors’ warranties, insurance claims, and claims for refunds or credits of any taxes that relate to any taxable period (or portion thereof) that ends on or before the Closing Date;
| 1 |
(e) all rights and claims pursuant to any policy of property and casualty insurance underwritten by any person arising from any casualty loss or damage to the Purchased Assets occurring from the date hereof through the Closing Date;
(f) copies of all books and records pertaining to the Purchased Assets, including, without limitation, books, records and files relating to customers, suppliers, licensors, contractors, and manufacturers of or to the Company, operating data, business and marketing plans, electronic data files, budgets, regulatory filings, warranties, guaranties, bills of sale, customer, vendor, contractor and supplier lists, copies of financial and accounting records, executed Contracts, credit records, correspondence and other similar documents and records used and/or useful in connection with the Purchased Assets (collectively, the “Books and Records”);
(g) all patents, trademarks, tradenames, including copyrights, copyright registrations and applications, system designs, UPC codes, trade dress, (whether or not registered or by whatever name or designation relating to the Purchased Assets (all of which SRG hereby represents are listed on Schedule 1.1(g) (hereafter, the “Intellectual Property”), including any IP owned, applied for or used by, or registered in the name of, the Company (or in any other name on behalf of the Company or which is otherwise part of the Purchased Assets) (the “Acquired Intellectual Property”), and any customer lists, supplier relationships, contractor relationships, all proprietary data, processes, formulations, technical or manufacturing know-how or information (and materials embodying such information), owned by or used by, the Company in connection with the operations of its business or use of the Purchased Assets, and all goodwill relating to the Purchased Assets, (collectively with the Acquired Intellectual Property, the “Intangible Assets”);
(h) all computer equipment, office furniture, stationary, any and all other physical assets of the Company; and
(i) all accounts, deposits, cash, rights, and other assets of the Company.
For clarity, following the Closing, SRG shall have no right to use any of the Purchased Assets, including any Intangible Assets. SRG agrees that, as soon as practicable following the Closing, and in any event within 30 days thereafter, SRG shall (a) cease all use of any trade names, trademarks, service marks, logos, domain names, or other identifiers included in the Intellectual Property, and (b) take all necessary steps to change the Company’s name, trade name, and any related fictitious or "doing business as" names to names that do not include and are not confusingly similar to any such identifiers.
| 2 |
“Permitted Liens” means (a) Liens for taxes, assessments or governmental charges not yet due and payable or which are being contested in good faith by appropriate proceedings; (b) mechanics’, carriers’, workers’, repairers’ and similar Liens arising or incurred in the ordinary course of business and that are not yet due and payable; (c) zoning, building codes and other land use laws regulating the use or occupancy of real property or the activities conducted thereon which are imposed by governmental authorities having jurisdiction over such real property; and (d) such other imperfections of title, easements, encumbrances and Liens that do not, individually or in the aggregate, materially impair the continued use or value of the Purchased Assets.
1.2 Assumed Liabilities. At the Closing and as a condition to the sale of the Purchased Assets, the Buyer shall assume and undertake to perform, pay, satisfy or discharge in accordance with their terms, the liabilities, obligations and commitments of the Company arising or accruing during the period commencing on and after the Closing under the Contracts and the Licenses and Registrations. The parties acknowledge and agree that no other liabilities or obligations, whether accrued, matured, absolute, contingent or otherwise, whether arising before or after the Closing Date, shall be assumed by Buyer.
1.3 Purchase Price. The aggregate consideration for the Purchased Assets shall be (a) One Million Two Hundred Fifty Thousand Dollars ($1,250,000) in cash (the “Cash Consideration”) and (b) Seven Million Two Hundred Fifty Thousand Dollars ($7,250,000) in (i) shares of Class B common stock, par value $0.0001 per share, of Buyer (“Class B Common Stock”) valued at Four and 71/100 Dollars ($4.71) per share (“Closing Price”), (ii) five-year pre-funded warrants to purchase such number of shares of Class B Common Stock (“Pre-Funded Warrants”) at an exercise price equal to 1/100 Dollars ($0.01) per share, or (iii) any combination of the two, as mutually agreed upon by the parties hereto (the “Equity Consideration”).
1.4 Lock-up Restrictions. The Equity Consideration (including any shares of Class B Common Stock issuable upon exercise of any Pre-Funded Warrants) shall be subject to a six (6) month lock-up period commencing on the Closing Date, during which the securities may not be sold, pledged, assigned, or otherwise transferred except as required by law, as further provided in the form of Lock-Up Agreement annex hereto as Exhibit A.
| 3 |
2. CLOSING
2.1 Closing. The closing of the transactions contemplated by this Agreement (the “Closing”) shall take place remotely via the exchange of documents and signatures on the date hereof or such other date as the parties may agree.
2.2 Deliverables. At the Closing:
(a) SRG and the Company shall deliver to the Buyer (i) an assignment of the Purchased Assets to Buyer, (ii) certificates representing the Purchased Assets (if same are certificated), (iii) all Required Consents (as defined), and (iv) an executed copy of the Lock-up Agreement;
(b) The Buyer shall deliver to the Company (i) the Cash Consideration and (ii) issue the Equity Consideration in accordance with Section 1.3; and
(c) The parties shall deliver such other documents as may be required to consummate the transactions contemplated hereby.
2.3 Consents.
(a) All consents, approvals, waivers, or authorizations, including any applicable consents or approvals under applicable bulk sales laws, required to be obtained in connection with the execution, delivery, and performance of this Agreement and the consummation of the transactions contemplated hereby (the "Required Consents") are set forth on Schedule 2.3. Except as specifically indicated on Schedule 2.3 as not having been obtained as of the Closing (the "Outstanding Required Consents"), all Required Consents have been obtained.
(b) At the Buyer’s sole discretion, the Closing may proceed notwithstanding the existence of one or more Outstanding Required Consents. In such event, SRG shall use commercially reasonable efforts and cooperate fully with Buyer following the Closing to obtain all such Outstanding Required Consents as promptly as practicable.
(c) Until such time as an Outstanding Required Consent is obtained, to the extent permitted by applicable Law, the Company hereby grants to the Buyer a perpetual, irrevocable, royalty-free, fully paid-up license to exercise all rights and enjoy all benefits under the applicable Contract for which such Outstanding Required Consent applies, to the same extent as if such Required Consent had been obtained.
| 4 |
3. REPRESENTATIONS AND WARRANTIES OF SRG AND COMPANY
SRG and the Company hereby jointly and severally represent and warrant to the Buyer as follows:
3.1 Organization and Good Standing. Each of the Company and SRG is a limited liability company duly organized, validly existing, and in good standing under the laws of the State of Delaware. Each of the Company and SRG has full limited liability company power and authority to own and operate its properties and to carry on its business as currently conducted. Each of the Company and SRG is in good standing in its respective state of formation.
3.2 Authorization; Binding Obligations; No Conflicts. The execution, delivery and performance of this Agreement and the other agreements prescribed hereby have been duly authorized by all necessary member and manager vote and approval and other requisite action on the part of each of the Company and SRG. This Agreement has been duly executed and delivered by the Company and SRG and the obligations prescribed hereby are the legal, valid and binding obligations of the Company and SRG enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors’ rights generally, and to general principles of equity (regardless of whether enforcement is sought in a proceeding in equity or at law). The execution and delivery of this Agreement, and the consummation of the transactions contemplated hereby by the Company and SRG does not and will not, violate or result in the breach of any term or provision of (a) the charter documents or operating agreements of the Company or SRG, (b) to the best knowledge of SRG, any law, treaty, ordinance, rule, regulation, judgment, order, decree or injunction of a governmental authority applicable to any of the Company or SRG or the Purchased Assets, or (c) to the best knowledge of SRG, any mortgage, indenture, lease, license, agreement, instrument, plan, document or understanding, oral or written, to which any of the Company or SRG are a party, or to which the assets, properties or business of such entity are subject, or give any party with rights thereunder the right to terminate, accelerate, modify or change the existing rights or obligations of the Company or SRG. Except for the Required Consents, no consent, action, permit, license, approval or authorization of, or material registration, declaration or filing with, any person is required or necessary to be obtained by the Company or SRG in connection with the execution, delivery and performance by them of this Agreement or the consummation of the transactions contemplated hereby.
3.3 Purchased Assets. The Purchased Assets constitute all of the assets of the Company that are owned by it or used in its business and operations. The Purchased Assets are owned by the Company free and clear of all Liens other than Permitted Liens. The Company has good and marketable title to the Purchased Assets, and there are no unpaid taxes or other matters that are or could become a Lien on the Purchased Assets. No person has any equity, economic, or pecuniary interest in any of the Purchased Assets or any right to acquire same. All Accounts Receivable, if any, arose in the ordinary course of business of the Company.
| 5 |
3.4 Tax Matters. Each of the Company and SRG has timely filed all federal, state, local, and foreign tax returns required to be filed by it and has paid all taxes due and owing. There are no audits or proceedings pending, or, to the knowledge of SRG, threatened with respect to any tax matters of the Company or SRG.
3.5 Litigation. There are no claims, actions, suits, proceedings, or governmental investigations pending or, to the knowledge of SRG, threatened (a) against the Company in any respect, (b) against SRG that directly or indirectly involves the Purchased Assets, or (c) that would affect the legality or validity of this Agreement or prevent the consummation of the transaction contemplated hereby by either the Company or SRG.
3.6 Compliance with Laws. Each of the Company and SRG is in compliance in all material respects with all applicable laws, regulations, and orders.
3.7 Permits. The Company holds all licenses, permits, franchises, approvals, authorizations, and consents necessary to conduct its business as presently conducted, all of which are valid and in full force and effect.
3.8 Contracts. Neither the Company nor SRG is a party to or bound by any contract or agreement that would prevent the execution, delivery, or performance of this Agreement. All Contracts of the Company are listed on Schedule 1.1(b) hereto and all Licenses and Permits are listed on Schedule 1.1(c) hereto, and are valid, binding, and in full force and effect, and the Company is not in material breach or default under any such contracts, licenses or permits.
3.9 Intellectual Property.
(a) Schedule 1.1(g) hereto sets forth a true and complete list of all registered Intellectual Property and all material unregistered Intellectual Property owned by the Company. All such Intellectual Property is owned 100% by the Company and is included as part of the Purchased Assets, and neither SRG nor any other person has any rights therein, including any licensed rights.
| 6 |
(b) SRG does not own or have license to any Intellectual Property that has historically been utilized by the Company in connection with its business and operations.
(c) The Company owns or has valid licenses to use all Intellectual Property necessary for the conduct of its business as currently conducted, free and clear of any liens or encumbrances. All Intellectual Property owned by or purported to be owned by, or which otherwise rightfully belongs to the Company under law, including any work for hire arrangement, has been duly assigned and transferred to the Company under valid assignment or work for hire agreements and no individual or entity has any claim to any right in such Intellectual Property.
(d) To the knowledge of SRG, no third party is violating, infringing or misappropriating any of the Company’s Intellectual Property and the Company’s Intellectual Property is not violating, infringing or misappropriating any other party’s Intellectual Property.
(e) Neither the Company nor SRG has received any written notice of any pending or threatened claim against the Company alleging that the Company is infringing, misappropriating, or otherwise violating any intellectual property rights of any third party and neither the Company nor SRG has made or asserted any written complaint or claim alleging any such infringement, misappropriation or other violation of its Intellectual Property.
(f) The Company has taken, and SRG has caused the Company to take, reasonable measures to protect the confidentiality of its trade secrets.
(g) All payments relating to the Intellectual Property, including renewal payments, have been made when due in the ordinary course of business.
(h) “Intellectual Property” means all intellectual property and proprietary rights of any kind, including but not limited to: (a) patents, patent applications, any other patent rights and inventions (whether or not patentable); (b) trademarks, service marks, trade names, trade dress, logos, and other source identifiers, together with all goodwill associated therewith; (c) copyrights and works of authorship (whether or not registered); (d) trade secrets, know-how, confidential information, formulas, processes, techniques, protocols, and methods; (e) internet domain names and social media handles; and (f) all registrations, applications, renewals, extensions, and rights to sue and recover for past, present, and future infringement relating to any of the foregoing.
| 7 |
3.10 Financial Statements; No Undisclosed Liabilities. SRG has delivered to the Buyer complete and accurate financial statements of the Company for the years ended December 31, 2023 and 2024 (collectively, the “Annual Financial Statements”) and the six-month period ended June 30, 2025 (“Stub Financial Statements”), which fairly present the financial position and results of operations of the Company in accordance with GAAP, consistently applied. Except as set forth in the Stub Financial Statements, the Company has no undisclosed liabilities.
3.11 Absence of Changes. Since January 1, 2023, there has been no material adverse change in the financial condition or operations of the Company or SRG.
3.12 Employees and Contractors. The Company has no employees and no obligations to any employees or contractors, except as set forth on Schedule 3.12. The Company is not a party to any collective bargaining agreement.
3.13 Environmental Compliance. The Company is and has been in compliance in all material respects with all applicable Environmental Laws. There are no claims or investigations pending or threatened relating to environmental matters.
3.14 Insurance. The Company maintains insurance policies in such amounts and against such risks as are customary for similarly situated businesses.
3.15 Bank Accounts. Schedule 3.15 sets forth a true and complete list of all bank accounts and authorized signatories of the Company.
3.16 No Other Agreements. The Company is not party to any agreement or obligation that would conflict with or be violated by the execution and performance of this Agreement.
3.17 Investment Representations.
(a) The Company is acquiring the Equity Consideration for its own account and not with a view to or for sale in connection with any distribution thereof in violation of the Securities Act of 1933, as amended (the “Securities Act”), or any applicable state securities laws.
(b) The Company is an “accredited investor” as such term is defined in Rule 501(a) of Regulation D under the Securities Act.
(c) The Company acknowledges that the Equity Consideration has not been registered under the Securities Act or under any state securities laws, and that such securities may not be offered, sold, assigned, pledged, or otherwise transferred except in accordance with the Securities Act and applicable state securities laws, pursuant to registration or exemption therefrom.
| 8 |
(d) The Company has sufficient knowledge and experience in business, financial, and investment matters to evaluate the merits and risks of receiving the Equity Consideration and can bear the economic risk of such investment.
(e) The Company acknowledges that the certificates (or book-entry notations) representing the Equity Consideration shall bear a restrictive legend indicating that such securities have not been registered under the Securities Act and setting forth or referring to the restrictions on transfer contained herein.
4. REPRESENTATIONS AND WARRANTIES OF BUYER
The Buyer represents and warrants to SRG and the Company that:
4.1 Organization. It is a corporation duly organized, validly existing, and in good standing under the laws of the State of Delaware.
4.2 Authorization; Binding Obligations; No Conflicts. The execution, delivery and performance of this Agreement and the other agreements prescribed hereby have been duly authorized by all necessary corporate approval and other requisite action on the part of the Buer. This Agreement has been duly executed and delivered by the Buyer and the obligations prescribed hereby are the legal, valid and binding obligations of the Buyer enforceable in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting creditors’ rights generally, and to general principles of equity (regardless of whether enforcement is sought in a proceeding in equity or at law). The execution and delivery of this Agreement, and the consummation of the transactions contemplated hereby by the Buyer does not and will not, violate or result in the breach of any term or provision of (a) the charter documents or bylaws of the Buyer, (b) to the best knowledge of the Buyer, any law, treaty, ordinance, rule, regulation, judgment, order, decree or injunction of a governmental authority applicable to the Buyer, or (c) to the best knowledge of the Buyer, any mortgage, indenture, lease, license, agreement, instrument, plan, document or understanding, oral or written, to which the Buyer is a party, or to which the assets, properties or business of such entity are subject, or give any party with rights thereunder the right to terminate, accelerate, modify or change the existing rights or obligations of the Buyer. Company or SRG. Except for the Required Consents, no consent, action, permit, license, approval or authorization of, or material registration, declaration or filing with, any person is required or necessary to be obtained by the Buyer in connection with the execution, delivery and performance by them of this Agreement or the consummation of the transactions contemplated hereby.
| 9 |
5. INDEMNIFICATION
5.1 Indemnification Obligations. From and after the Closing, SRG and the Company shall jointly and severally indemnify, defend, and hold harmless Buyer and its affiliates, and each of their respective officers, directors, members, managers, stockholders, employees, agents, successors and assigns (collectively, the “Buyer Indemnified Parties”), from and against any and all losses, damages, liabilities, deficiencies, claims, interest, awards, judgments, penalties, costs, and expenses (including reasonable attorneys’ fees and expenses and costs of investigation and enforcement) (collectively, “Losses”) incurred or suffered by any Buyer Indemnified Party resulting from or arising out of:
(a) any breach of, or inaccuracy in, any representation or warranty made by SRG or the Company in this Agreement or in any certificate or other instrument delivered by SRG or the Company pursuant to this Agreement; or
(b) any liability or obligation of the Company of any kind or nature, whether accrued, absolute, contingent or otherwise, that is not an Assumed Liability.
5.2 Third Party Claims. In the event of any claim by a third party that may give rise to indemnification hereunder (a “Third-Party Claim”), Buyer shall have the right, but not the obligation, to assume and control the defense and settlement of such Third Party Claim with counsel of its choice (and reasonably acceptable to SRG), at SRG’s sole cost and expense. SRG shall promptly reimburse Buyer on demand for all Losses (including reasonable attorneys’ fees and expenses) incurred by Buyer or any other Buyer Indemnified Party in connection with the investigation, defense, settlement or resolution of any such Third-Party Claim, whether or not Buyer elects to control the defense. SRG shall cooperate in good faith with Buyer in the defense of any such Third-Party Claim and shall not settle any such claim without the prior written consent of Buyer.
5.3 Notice of Claims. In the event that any Buyer Indemnified Party believes it has a claim for indemnification under this Section, whether or not arising from a Third Party Claim (a “Direct Claim”), Buyer shall promptly deliver to SRG a written notice (a “Claim Notice”) describing the nature and basis of the claim, the amount of Losses (to the extent then known or estimated), and the factual and legal basis for such claim in reasonable detail. Failure to provide prompt notice shall not relieve SRG of its indemnification obligations, except to the extent that SRG is materially prejudiced by such failure. In the case of any Third-Party Claim, Buyer shall provide SRG with written notice of such claim as soon as reasonably practicable after becoming aware thereof. Such notice shall describe in reasonable detail the nature of the Third-Party Claim and the basis upon which indemnification may be sought.
| 10 |
5.4 Survival. The representations and warranties of SRG contained in this Agreement shall survive the Closing and shall remain in full force and effect for purposes of this Section until and including the date that is twenty-four (24) months after the Closing Date.
6. MISCELLANEOUS
6.1 Governing Law. This Agreement shall be governed by the laws of the State of New York without regard to conflict of laws principles. Any legal action brought with respect to this Agreement or the transactions prescribed hereby shall be brought in the Supreme Court of the State of New York located in Manhattan, or the federal courts for the Southern District of New York.
6.2 Further Assurances. Each party agrees to execute such documents and take such further actions as may reasonably be necessary to carry out the provisions of this Agreement.
6.3 Entire Agreement. This Agreement constitutes the entire agreement between the parties with respect to the subject matter and supersedes all prior discussions and understandings.
6.4 Expenses. SRG (on behalf of itself and the Company), on the one hand, and the Buyer, on the other hand, shall bear its own expenses in connection with the negotiation and production of this Agreement and the consummation of the transactions prescribed hereby.
6.5 Disclosure. Notwithstanding anything to the contrary, including the provisions of the nondisclosure and confidentiality agreement between the parties, dated as of June 19, 2025, the Buyer shall be permitted to make public disclosure of the consummation of the transaction contemplated hereby as necessary to comply with its obligations under the federal securities laws of the United States.
| 11 |
6.6 Covenant Not to Compete, Solicit or Interfere. In consideration of the Purchase Price, SGC and the Company, for each of them, and on behalf of each of their respective directors, officers, employees and affiliates (collectively, the “Seller Group”), hereby covenant and agree to the terms and conditions of the restrictive covenants and agreements set forth below:
(a) During the period commencing on the date hereof and ending on the first anniversary of the Closing Date (hereafter, the “Restricted Period”), no member of the Seller Group will, directly, indirectly or through an affiliate:
(i) as an individual proprietor, owner, partner, stockholder, officer, employee, director, consultant, agent, joint venture partner, investor, lender, or in any other capacity whatsoever (other than as the holder of not more than five percent of the total outstanding stock of any company the securities of which are traded on a regular basis on recognized securities exchanges or any national over-the-counter market), alone or in association with others, or in any capacity, own, manage, operate, control, consult with, provide financing to, be employed by, or invest in, any business that is engaged in the business of the design, creation, marketing or licensing of technology based education production or intellectual property related thereto (the “Business”);
(ii) recruit or otherwise solicit or induce any person who is or becomes an employee or consultant of the Buyer or any of its affiliates to terminate his or her employment with, or otherwise cease his or her relationship with, the Buyer or any of its respective affiliates; provided that nothing shall restrict any party from hiring any person seeking employment as a result of a good faith public general employment solicitation; or
(iii) solicit or attempt to solicit any licensors, licensees, suppliers, manufacturers, customers or clients of the Buyers or any of their respective affiliates with respect to business similar or the same as the Business;
(b) SGC and the Company, on behalf of themselves and the other members of the Seller Group, acknowledge and agree that the obligations set forth in this Section are necessary and desirable to ensure that the Buyer obtains the benefit of its bargain under this Agreement and that the covenants contained therein are a material and integral part of this Agreement and necessary and reasonable to protect the legitimate business interest of the Buyer. SGC and the Company, on behalf of themselves and the other members of the Seller Group, further acknowledge and agree that, due to its knowledge of the Business, any subsequent competition would irreparably harm the Buyer and that the only effective way of protecting the Buyers is to enter into the non-competition and non-solicitation provisions on the terms and conditions contained herein. In view of the substantial harm, which would result from a breach or threatened breach by the Seller Group of the covenants contained in this Section, the parties agree that such covenants shall be enforced to the maximum extent permitted by law. In the event of a breach or threatened breach of the covenants of this Section, the parties acknowledge and agree that the Buyer would suffer irreparable harm and that monetary damages would be inadequate. Accordingly, in addition to all other remedies to which the Buyer may be entitled, at law or in equity, the Buyer shall be entitled to seek specific performance and/or injunctive relief without the necessity of posting a bond in the event of any such breach or threatened breach by any member of the Seller Group.
| 12 |
(c) The Restricted Period set forth in this Section shall be tolled for any period(s) of time as to which any member of the Seller Group is adjudicated to have been violating the covenants herein in the event a preliminary injunction is not issued against such member and the Buyer is the prevailing party. If any covenant or portion thereof is found by any court of competent jurisdiction to be illegal, void or unenforceable because it extends for too long a period of time or over too broad a range of activities or in too large a geographic area or for any other reason, then such restriction shall be interpreted to extend only over the maximum period of time, range of activities or geographic area as to which it may be enforceable or otherwise so as to render the covenant enforceable.
6.7 Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same agreement.
| 13 |
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written.
| By: | |||
|
| Name: | ||
| Title: | |||
| By: | |||
|
| Name: | ||
| Title: | |||
| By: | |||
|
| Name: | ||
| Title: | |||
| 14 |
EXHIBIT 10.2
CLASSOVER HOLDINGS INC.
LOCK-UP AGREEMENT
This Lock-up Agreement (this “Agreement”) is dated as of June 30, 2025 by and among Classover Holdings Inc., a Delaware corporation (the “Company”), on the one hand, and Silver Run Group, LLC (“SRG”) for itself and on behalf of its managers, members and affiliates (each a “Holder” and collectively the “Holders”), on the other hand. The Company and the Holders are collectively referred to herein as the “Parties.” Capitalized terms used and not otherwise defined herein shall have the meanings ascribed to such terms in the APA (as defined below).
BACKGROUND
WHEREAS, in connection with this Agreement, the Company entered into an Asset Purchase Agreement (the “APA”) with the Holder and its wholly owned subsidiary Deer Creek IP, LLC;
WHEREAS, under the terms of the APA, the Company has issued to SRG, as part of the Purchase Price, (a) 800,000 shares of Common Stock and (b) pre-funded Warrants to purchase 739,278 shares of Common Stock (such shares, Warrants and the shares underlying the Warrants being collectively referred to herein as the “Subject Shares”);
WHEREAS, as a condition of, and as a material inducement for, the Company to enter into and consummate the transactions contemplated by the APA, SRG has agreed to execute and deliver this Agreement.
NOW, THEREFORE, for and in consideration of the mutual covenants and agreements set forth herein, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties, intending to be legally bound, agree as follows:
AGREEMENT
1. Lock-Up.
(a) Each Holder hereby agrees that it will not offer, sell, contract to sell, pledge or otherwise dispose of, directly or indirectly, any of the Subject Shares, enter into a transaction that would have the same effect, or enter into any swap, hedge or other arrangement that transfers, in whole or in part, any of the economic consequences of ownership of such Subject Shares, whether any of these transactions are to be settled by delivery of any such Subject Shares, in cash or otherwise, publicly disclose the intention to make any offer, sale, pledge or disposition, or to enter into any transaction, swap, hedge or other arrangement, or engage in any Short Sales (as defined below) with respect to any Subject Shares or any other security of the Company (these actions, collectively, “Transfer”) or interest therein beneficially owned or owned of record by such Holder (collectively, such Holder’s “Lock-Up Shares”) until the date that is six (6) months following the date of the Closing (the “Lock-Up Term”).
| 1 |
(b) Notwithstanding the foregoing restrictions on Transfer set forth herein, each Holder may:
(i) Transfer its Lock-Up Shares to any Permitted Transferee (as defined below);
(ii) Transfer any shares of Common Stock or other securities convertible into or exercisable or exchangeable for Common Stock acquired in open market transactions after the Closing; provided, however, that no such transaction is required to be, or is, publicly announced (whether on Form 4, Form 5 or otherwise, other than a required filing on Schedule 13F, 13D, 13D/A, 13G or 13G/A) during the Lock-Up Term; and
(iii) Exercise any options or warrants (including the Warrant) to purchase shares of Common Stock (which exercises may be effected on a cashless basis to the extent the instruments representing such options or warrants permit exercises on a cashless basis); provided, however, that such Holder shall otherwise comply with any restrictions on Transfer applicable to such underlying shares of Common Stock;
provided, however, that in the case of any Transfer or distribution pursuant to Subsections (b)(i), (x) in each case such transferees must enter into a written agreement agreeing to be bound by this Agreement, including the restrictions on Transfer set forth in Section (a), and (y) such Permitted Transferee (other than a Permitted Transferee as defined in clause (E) or (F) thereof) agrees to promptly Transfer such Lock-Up Shares back to such Holder if such Permitted Transferee ceases to be a Permitted Transferee for any reason prior to the date such Lock-Up Shares becomes freely transferable. Furthermore, Section 1(a) shall not apply to the entry, by such Holder, of any trading plan providing for the sale of shares of Common Stock by such Holder, which trading plan meets the requirements of Rule 10b5-1(c) under the Securities Exchange Act of 1934, as it may be amended from time to time (the “Exchange Act”); provided, however, that such plan does not provide for, or permit, the sale of any Common Stock during the Lock-Up Term and no public announcement or filing is voluntarily made or required regarding such plan during the Lock-Up Term.
(c) Each of the Holders acknowledges and agrees that any purported Transfer of Lock-Up Shares in violation of this Agreement shall be null and void ab initio, and the Company shall not be required to register any such purported Transfer.
(d) Each of the Holders agrees and consents to the entry of stop transfer instructions with the Company’s transfer agent and registrar against the Transfer of the Lock-Up Shares except in compliance with the foregoing restrictions and to the addition of a legend to such Holder’s Lock-Up Shares describing the foregoing restrictions.
| 2 |
“Permitted Transferee” means, with respect to any an individual, corporation, partnership, limited partnership, limited liability company, syndicate, person (including a “person” as defined in Section 13(d)(3) of the Exchange Act), trust, association or entity or government, political subdivision, agency or instrumentality of a government (each a “Person”), (A) the direct or indirect partners, members, equity holders or other Persons who, directly or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with, such specified Person of such Person (each such Person an “Affiliate”), (B) any of such Person’s related investment funds or vehicles controlled or managed by such Person or Affiliate of such Person, (C) any of such Person’s officers or directors, or Affiliates or family members of the Person’s officers or directors, (D) in the case of an individual, such Person’s immediate family or a trust, the beneficiary of which is a member of such Person’s immediate family, an Affiliate of such Person or a charitable organization, in each case, provided the transfer is a gift; (E) in the case of an individual, a Person who would receive the Shares by virtue of laws of descent and distribution upon death of such Person; or (F) in the case of an individual, a Person who would receive the Shares pursuant to a qualified domestic relations order. “Short Sales” include, without limitation, all “short sales” as defined in Rule 200 promulgated under Regulation SHO under the Exchange Act, forward sale contracts, options, puts, calls, swaps and similar arrangements (including on a total return basis), and sales and other transactions through non-US broker dealers or foreign regulated brokers.
2. Representations and Warranties. Each of the Parties, by their respective execution and delivery of this Agreement, hereby represents and warrants to the other Parties that (a) such Party has the full right, capacity and authority to enter into, deliver and perform its respective obligations under this Agreement, (b) this Agreement has been duly executed and delivered by such Party and is the binding and enforceable obligation of such Party, enforceable against such Party in accordance with the terms of this Agreement (assuming that this Agreement constitutes a legal, valid and binding obligation of the other Parties) and (c) the execution, delivery and performance of such Party’s obligations under this Agreement will not conflict with or breach the terms of any other agreement, contract, commitment or understanding to which such Party is a party or to which the assets or securities of such Party are bound.
3. Beneficial Ownership. Each Holder hereby represents and warrants that it does not beneficially own, directly or through its nominees (as determined in accordance with Section 13(d) of the Exchange Act, and the rules and regulations promulgated thereunder), any Common Stock (of any class), or any economic interest in or derivative of such equity, other than those securities specified on Schedule A attached hereto.
4. No Additional Fees/Payment. Other than the consideration specifically referenced herein, the Parties agree that no fee, payment or additional consideration in any form has been or will be paid to any Holder in connection with this Agreement.
5. Controlling Agreement. To the extent the terms of this Agreement (as amended, supplemented, restated or otherwise modified from time to time) directly conflict with a provision in the APA, the terms of this Agreement shall control.
6. Miscellaneous. The “Miscellaneous” provisions set forth in Section 6 of the APA are hereby incorporated and made part hereof, mutatis mutandis.
[Signature Page Follows]
| 3 |
IN WITNESS WHEREOF, the Parties have caused this Agreement to be effective as of the date first written above.
| CLASSOVER HOLDINGS, INC. |
| ||
|
| |||
| By: |
| ||
| Name: |
| ||
| Title: |
| ||
[Signature page to Lock-Up Agreement]
| 4 |
IN WITNESS WHEREOF, the Parties have caused this Agreement to be effective as of the date first written above.
|
|
|
|
|
|
| |
| Signature |
|
|
|
|
|
|
|
|
| |
| Signatory Name |
|
|
|
|
|
|
|
|
| |
| Signatory Title |
|
|
[Signature page to Lock-Up Agreement]
| 5 |
EXHIBIT 99.1
Classover Acquires IP Portfolio to Accelerate AI Innovation
NEW YORK, NY / ACCESS Newswire / July 7, 2025 / Classover Holdings, Inc. (NASDAQ:KIDZ) (NASDAQ:KIDZW) (“Classover” or the “Company”), a leading provider of live, interactive online learning, today announced the acquisition of a strategic portfolio of intellectual property (IP) assets designed to accelerate the development of its next-generation AI-powered tutoring platform.
The IP portfolio consists of core technologies in areas such as machine-learning technologies, device-to-device (D2D) communication, intelligent data coordination, and adaptive scheduling across distributed systems. These technologies are expected to strengthen the underlying infrastructure of the Company’s learning platform, supporting more responsive, efficient, and personalized educational experiences, and powering the development of next-generation online learning services.
The integration of these newly acquired IP provides a strong catalyst for Classover’s AI evolution. The IP package aligns with the Company’s broader AI roadmap, driving the advancement of AI-powered courses, adaptive learning tools, and intelligent system. By incorporating these technologies, Classover will look to enhance its ability to build a continuously evolving, AI-driven learning ecosystem.
In parallel, these technologies are intended to help boost operational efficiency through AI-driven innovation. Classover seeks to leverage AI to raise instructional quality, streamline content generation, and allocate teaching resources more effectively. These improvements are expected to enhance the competitiveness of Classover’s products and reduce operational friction and other costs, reinforcing the Company’s ability to scale efficiently and maximize value for stakeholders.
This acquisition reflects the Company’s long-term commitment to advancing Classover’s technological infrastructure and delivering superior learning outcomes through AI innovation.
About Classover
Founded in 2020 and headquartered in New York, Classover has rapidly emerged as a leader in educational technology, specializing in live online courses for K-12 students worldwide. Offering a diverse curriculum tailored to different learning levels and interests, Classover empowers students through personalized instruction, innovative course design, and cutting-edge AI technology. From creativity-driven programs to competitive test preparation, Classover is dedicated to redefining education through accessible, high-quality learning experiences.
Forward-Looking Statements
This press release contains “forward-looking statements” within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on Classover’s current beliefs, expectations and assumptions regarding the future of Classover’s business, future plans and strategies, projections, anticipated events and trends, the economy and other future conditions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that are difficult to predict and many of which are outside of Classover’s control including, but not limited to: Classover’s ability to successfully integrate its newly acquired intellectual property; Classover’s ability to execute its business model, including obtaining market acceptance of its products and services; Classover’s financial and business performance, including financial projections and business metrics and any underlying assumptions thereunder; Classover’s ability to maintain the listing of its securities on Nasdaq; changes in Classover’s strategy, future operations, financial position, estimated revenue and losses, projected costs, prospects and plans; Classover’s ability to attract and retain a large number of customers; Classover’s future capital requirements and sources and uses of cash; Classover’s ability to attract and retain key personnel; Classover’s expectations regarding its ability to obtain and maintain intellectual property protection and not infringe on the rights of others; changes in applicable laws or regulations; and the possibility that Classover may be adversely affected by other economic, business, and/or competitive factors. These risks and uncertainties also include those risks and uncertainties indicated in the Company’s filings with the Securities and Exchange Commission. Classover’s actual results and financial condition may differ materially from those indicated in the forward-looking statements. Therefore, you should not rely on any of these forward-looking statements.
Any forward-looking statement made by Classover in this press release is based only on information currently available to Classover and speaks only as of the date on which it is made. Classover undertakes no obligation to publicly update any forward-looking statement, whether written or oral, that may be made from time to time, whether as a result of new information, future developments or otherwise.
Contacts:
Classover Holdings Inc.
ir@classover.com
800-345-9588
Source: Classover Holdings, Inc.