Asset Entities Inc. filed SEC Form 8-K: Entry into a Material Definitive Agreement, Regulation FD Disclosure, Financial Statements and Exhibits
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934
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Item 1.01 Entry into a Material Definitive Agreement.
Merger Agreement
On May 6, 2025, Asset Entities Inc., a Nevada corporation (the “Company”), entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Alpha Merger Sub, LLC, an Ohio limited liability company and wholly-owned subsidiary of the Company (“Merger Sub”), Strive Enterprises, Inc., an Ohio corporation (“Strive”), and Strive Asset Management, LLC, an Ohio limited liability company and a wholly owned subsidiary of Strive (“Asset Management”), pursuant to which, and subject to the satisfaction or waiver of the conditions set forth in the Merger Agreement, Merger Sub will merge with and into Asset Management (the “Merger”), with Asset Management continuing as a wholly owned subsidiary of the Company and the surviving company of the Merger.
The board of directors of the Company unanimously adopted and approved the Merger Agreement and the transactions contemplated thereby, and, subject to the terms and conditions of the Merger Agreement, resolved to recommend that the Company’s stockholders approve the Merger Agreement and the transactions contemplated thereby.
Subject to the terms and conditions of the Merger Agreement, at the effective time of the Merger, each then-outstanding unit or membership interest of Asset Management will be converted into the right to receive a number of shares of the Company Consideration Stock equal to the Exchange Ratio (the “Merger Consideration”). The “Company Consideration Stock” shall be the current Class A Common Stock, $0.0001 par value per share, of the Company (the “Class A Common Stock”) redesignated as class B common stock, $0.0001 par value per share, of the Company (the “New Class B Common Stock”), pursuant to amended and restated articles of incorporation of the Company to be adopted and approved in accordance with the Merger Agreement (the “A&R Articles of Incorporation”). The “Exchange Ratio” shall be calculated so that Strive shall receive, in respect of such units or membership interests of Asset Management, a number (rounded up to the nearest whole number) of shares of Company Consideration Stock equal to the aggregate number of shares of Company Consideration Stock that would need to be issued to Strive to result in Strive holding 94.2% of the then outstanding common stock of the Company after giving effect to the Merger on a fully-diluted basis (subject to certain adjustments).
The closing of the Merger (the “Closing”) is subject to the satisfaction or, to the extent permitted by law, the waiver of certain conditions including, among other things, (i) the required approvals by the Company’s and Strive’s stockholders, (ii) the Company’s current holders of shares of Class A Common Stock having converted all shares of Class A Common Stock into current Class B Common Stock, $0.0001 par value per share, of the Company (the “Class B Common Stock”), (iii) the effectiveness of the A&R Articles of Incorporation, (iv) the Form S-4 (as defined below) having become effective in accordance with the provisions of the Securities Act of 1933, as amended (the “Securities Act”), and not being subject to any stop order or proceeding seeking a stop order or having been withdrawn, (v) no law or order preventing the Merger and the other transactions contemplated by the Merger Agreement (or, with respect to Strive’s obligations to consummate the Closing, imposing a Burdensome Condition (as defined in the Merger Agreement)), (vi) the approval for listing on The Nasdaq Stock Market LLC (“Nasdaq”) of the class A common stock, $0.0001 par value per share, of the Company (the “New Class A Common Stock”), which is the current Class B Common Stock, $0.0001 par value per share, of the Company (the “Class B Common Stock”) redesignated pursuant to the A&R Articles of Incorporation, (vii) the Pre-Closing Reorganization (as defined in the Merger Agreement) having been consummated, (viii) Strive having received a tax opinion that the transfer (or deemed transfer) of assets from Strive to the Company in exchange for Company stock (and the deemed assumption of liabilities) pursuant to the Merger will qualify as a transaction described in Section 351(a) of the Internal Revenue Code, (ix) no share of Company capital stock being entitled to dissenters’ rights, and (x) other customary closing conditions.
The Merger Agreement contains representations, warranties and covenants made by the Company and Strive, including covenants relating to obtaining the requisite approvals of the stockholders of the Company and Strive, indemnification of directors and officers, and the Company’s and Strive’s conduct of their respective businesses between the date of signing the Merger Agreement and the date of the Closing.
In connection with the Merger, the Company will prepare and file with the U.S. Securities and Exchange Commission (the “SEC”) a registration statement on Form S-4 registering the New Class A Common Stock to be issued to the Company’s stockholders in the Merger (the “Form S-4”), and a proxy statement with respect to the meeting of the Company’s stockholders.
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The Merger Agreement contains certain termination rights, including, among others, (i) the mutual written consent of the parties, (ii) the right of either the Company or Strive to terminate the Merger Agreement if the Merger shall not have been consummated by November 6, 2025 (the “End Date”), (iii) the right of either the Company or Strive to terminate the Merger Agreement if any applicable law is adopted or a court of competent jurisdiction or other governmental authority issues an order, decree or ruling prohibiting, rendering illegal or permanently enjoining the Merger and the other transactions contemplated by the Merger Agreement and, in the case of an order, decree or ruling, such order, decree or ruling shall have become final and nonappealable, (iv) the right of either the Company or Strive to terminate the Merger Agreement if approval of the Company’s stockholders is not obtained at the Company stockholder meeting, (v) the right of either the Company or Strive to terminate the Merger Agreement if, at the time of the approval of the Company’s stockholders, approval of Strive’s stockholders has not been obtained, (vi) the right of Strive to terminate the Merger Agreement, at any time prior to Strive obtaining stockholder approval, if Strive’s board authorizes it to, and Strive does, enter into a definitive written agreement providing for a Parent Superior Proposal (as defined in the Merger Agreement) (a “Parent Superior Proposal Termination”), (vii) the right of Strive to terminate the Merger Agreement, at any time prior to the Company obtaining stockholder approval, upon the occurrence of a Company Adverse Recommendation Change (as defined in the Merger Agreement), (viii) the right of the Company to terminate the Merger Agreement, at any time prior to the Company obtaining stockholder approval, if the Company’s board authorizes it to, and the Company does, enter into a definitive written agreement providing for a Company Superior Proposal (as defined in the Merger Agreement) (a “Company Superior Proposal Termination”), (ix) the right of the Company to terminate the Merger Agreement, at any time prior to Strive obtaining stockholder approval, upon the occurrence of a Parent Adverse Recommendation Change (as defined in the Merger Agreement), and (x) the right of either the Company or Strive to terminate the Merger Agreement due to a breach by the other party of any of its representations, warranties or covenants which would result in the closing conditions not being satisfied, subject to certain conditions. The Merger Agreement further provides that, upon termination of the Merger Agreement under certain circumstances, (i) the Company may be obligated to pay Strive a termination fee of $10 million, including (a) upon termination by the Company pursuant to a Company Superior Proposal Termination, (b) upon termination by Strive pursuant to a Company Adverse Recommendation Change, and (c) prior to Company stockholder approval being obtained, the Merger Agreement is terminated for certain reasons by either Strive or the Company if a Company Acquisition Proposal (as defined in the Merger Agreement) shall have been publicly announced or otherwise been communicated to the Company’s board after the date of the Merger Agreement and prior to the Company stockholder meeting or the date of termination, as applicable, and within 12 months after such termination the Company enters into a definitive agreement with respect to, or consummates, a Company Acquisition Proposal, and (ii) Strive may be obligated to pay the Company a termination fee of $10 million, including (a) upon termination by Strive if pursuant to a Parent Superior Proposal Termination, (b) upon termination by the Company pursuant to a Parent Adverse Recommendation Change, and (c) prior to Strive stockholder approval being obtained, the Merger Agreement is terminated for certain reasons by either Strive or the Company if a Parent Alternative Proposal (as defined in the Merger Agreement) shall have been publicly announced or otherwise been communicated to Strive’s board after the date of the Merger Agreement and prior to the Company stockholder meeting or the date of termination, as applicable, and within 12 months after such termination Strive enters into a definitive agreement with respect to, or consummates, a Parent Alternative Proposal.
The foregoing description of the Merger Agreement and the Merger does not purport to be complete and is qualified in its entirety by the terms and conditions of the Merger Agreement, a copy of which is filed as Exhibit 2.1 hereto and is incorporated herein by reference.
The Merger Agreement contains representations, warranties and covenants that the respective parties made to each other as of the date of such agreement or other specific dates. The assertions embodied in those representations, warranties and covenants were made for purposes of the contract among the respective parties and are subject to important qualifications and limitations agreed to by the parties in connection with negotiating such agreement. The Merger Agreement has been filed to provide investors with information regarding its terms. It is not intended to provide any other factual information about the Company, Strive or any other party to the Merger Agreement. In particular, the representations, warranties, covenants and agreements contained in the Merger Agreement, which were made only for purposes of such agreement and as of specific dates, were solely for the benefit of the parties to the Merger Agreement, may be subject to limitations agreed upon by the contracting parties (including being qualified by confidential disclosures made for the purposes of allocating contractual risk between the parties to the Merger Agreement instead of establishing these matters as facts) and may be subject to standards of materiality applicable to the contracting parties that differ from those applicable to investors and reports and documents filed with the SEC. Investors should not rely on the representations, warranties, covenants and agreements, or any descriptions thereof, as characterizations of the actual state of facts or condition of any party to the Merger Agreement. In addition, the representations, warranties, covenants and agreements and other terms of the Merger Agreement may be subject to subsequent waiver or modification. Moreover, information concerning the subject matter of the representations and warranties and other terms may change after the date of the Merger Agreement, which subsequent information may or may not be fully reflected in the Company’s public disclosures.
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Voting and Support Agreement
In connection with the Merger Agreement, on May 6, 2025, Strive and certain stockholders of the Company entered into a Voting and Support Agreement (the “Support Agreement”), pursuant to which, among other things, each such stockholder has agreed, on the terms and subject to the conditions set forth therein, (i) to vote all of their respective voting shares in the Company, collectively constituting approximately 42.7% of the total voting power of the outstanding shares of the Company’s common stock as of the date of the Merger Agreement, in favor of the approval of the Merger Agreement and other transactions contemplated by the Merger Agreement), (ii) to convert their Class A Common Stock into Class B Common Stock (which will be redesignated as New Class A Common Stock), in exchange for a payment of $2.5 million from the Company and (iii) certain other matters in connection with the Merger as contemplated thereby.
The foregoing description of the Support Agreement does not purport to be complete and is qualified in its entirety by the terms and conditions of the Support Agreement, a copy of which is filed as Exhibit 10.1 hereto and is incorporated herein by reference.
Item 7.01 Regulation FD Disclosure.
On May 7, 2025, the Company issued a press release to announce the Merger Agreement. A copy of the press release is attached hereto as Exhibit 99.1.
The information furnished pursuant to this Item 7.01 (including Exhibit 99.1) shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference into any filing under the Exchange Act or the Securities Act, except as expressly set forth by specific reference in such a filing.
Cautionary Statement Regarding Forward-Looking Statements
Certain statements herein and the documents incorporated herein by reference may constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act, and Rule 175 promulgated thereunder, and Section 21E of the Exchange Act, and Rule 3b-6 promulgated thereunder, which statements involve inherent risks and uncertainties. Examples of forward-looking statements include, but are not limited to, statements regarding the outlook and expectations of Strive and the Company, respectively, with respect to the proposed transaction, the strategic benefits and financial benefits of the proposed transaction, including the expected impact of the proposed transaction on the combined company’s future financial performance (including anticipated accretion to earnings per share, the tangible book value earn-back period and other operating and return metrics), the timing of the closing of the proposed transaction, and the ability to successfully integrate the combined businesses. Such statements are often characterized by the use of qualified words (and their derivatives) such as “may,” “will,” “anticipate,” “could,” “should,” “would,” “believe,” “contemplate,” “expect,” “estimate,” “continue,” “plan,” “project,” “predict,” “potential,” “assume,” “forecast,” “target,” “budget,” “outlook,” “trend,” “guidance,” “objective,” “goal,” “strategy,” “opportunity,” and “intend,” as well as words of similar meaning or other statements concerning opinions or judgment of Strive, the Company or their respective management about future events. Forward-looking statements are based on assumptions as of the time they are made and are subject to risks, uncertainties and other factors that are difficult to predict with regard to timing, extent, likelihood and degree of occurrence, which could cause actual results to differ materially from anticipated results expressed or implied by such forward-looking statements. Such risks, uncertainties and assumptions, include, among others, the following:
| ● | the occurrence of any event, change or other circumstances that could give rise to the right of one or both of the parties to terminate the merger agreement between Strive, the Company and the other parties thereto; |
| ● | the possibility that the proposed transaction does not close when expected or at all because the conditions to closing are not received or satisfied on a timely basis or at all; |
| ● | the outcome of any legal proceedings that may be instituted against Strive or the Company or the combined company; |
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| ● | the possibility that the anticipated benefits of the proposed transaction, including anticipated cost savings and strategic gains, are not realized when expected or at all, including as a result of changes in, or problems arising from, general economic and market conditions, interest and exchange rates, monetary policy, laws and regulations and their enforcement, and the degree of competition in the geographic and business areas in which Strive or the Company operate; |
| ● | the possibility that the integration of the two companies may be more difficult, time-consuming or costly than expected; |
| ● | the possibility that the proposed transaction may be more expensive or take longer to complete than anticipated, including as a result of unexpected factors or events; |
| ● | the diversion of management’s attention from ongoing business operations and opportunities; |
| ● | potential adverse reactions of Strive’s or the Company’s customers or changes to business or employee relationships, including those resulting from the announcement or completion of the proposed transaction; |
| ● | changes in the Company’s share price before closing; and |
| ● | other factors that may affect future results of Strive, the Company or the combined company. |
These factors are not necessarily all of the factors that could cause Strive’s, the Company’s or the combined company’s actual results, performance or achievements to differ materially from those expressed in or implied by any of the forward-looking statements. Other factors, including unknown or unpredictable factors, also could harm Strive’s, the Company’s or the combined company’s results.
Although each of Strive and the Company believes that its expectations with respect to forward-looking statements are based upon reasonable assumptions within the bounds of its existing knowledge of its business and operations, there can be no assurance that actual results of Strive or the Company will not differ materially from any projected future results expressed or implied by such forward-looking statements. Additional factors that could cause results to differ materially from those described above can be found in the Company’s most recent annual report on Form 10-K for the fiscal year ended December 31, 2024, quarterly reports on Form 10-Q, and other documents subsequently filed by the Company with the SEC. The actual results anticipated may not be realized or, even if substantially realized, they may not have the expected consequences to or effects on Strive, the Company or their respective businesses or operations. Investors are cautioned not to rely too heavily on any such forward-looking statements. Forward-looking statements speak only as of the date they are made and Strive and the Company undertake no obligation to update or clarify these forward-looking statements, whether as a result of new information, future events or otherwise, except to the extent required by applicable law.
Additional Information and Where to Find It
In connection with the proposed transaction, the Company intends to file with the SEC a Registration Statement on Form S-4 (the “Registration Statement”) to register the common stock to be issued by the Company in connection with the proposed transaction and that will include a proxy statement of the Company and a prospectus of the Company (the “Proxy Statement/Prospectus”), and each of Strive and the Company may file with the SEC other relevant documents concerning the proposed transaction. A definitive Proxy Statement/Prospectus will be sent to the stockholders of the Company to seek their approval of the proposed transaction. BEFORE MAKING ANY VOTING OR INVESTMENT DECISION, INVESTORS AND STOCKHOLDERS OF THE COMPANY ARE URGED TO READ THE REGISTRATION STATEMENT AND PROXY STATEMENT/PROSPECTUS REGARDING THE PROPOSED TRANSACTION WHEN THEY BECOME AVAILABLE AND ANY OTHER RELEVANT DOCUMENTS FILED WITH THE SEC, AS WELL AS ANY AMENDMENTS OR SUPPLEMENTS TO THOSE DOCUMENTS, BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT STRIVE, THE COMPANY AND THE PROPOSED TRANSACTION AND RELATED MATTERS.
A copy of the Registration Statement, Proxy Statement/Prospectus, as well as other filings containing information about Strive and the Company, may be obtained, free of charge, at the SEC’s website (http://www.sec.gov). You will also be able to obtain these documents, when they are filed, free of charge, from the Company by accessing the Company’s website at https://www.assetentities.com/. Copies of the Registration Statement, the Proxy Statement/Prospectus and the filings with the SEC that will be incorporated by reference therein can also be obtained, without charge, by directing a request to the Company by directing a request to the Company’s Investor Relations department at 100 Crescent Court, 7th floor, Dallas, TX 75201 or by calling (214) 459-3117 or emailing [email protected]. The information on Strive’s or the Company’s respective websites is not, and shall not be deemed to be, a part of this communication or incorporated into other filings either company makes with the SEC.
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Participants in the Solicitation
Strive, the Company and certain of their respective directors, executive officers and employees may be deemed to be participants in the solicitation of proxies from the stockholders of the Company in connection with the proposed transaction. Information about the interests of the directors and executive officers of Strive and the Company and other persons who may be deemed to be participants in the solicitation of stockholders of the Company in connection with the proposed transaction and a description of their direct and indirect interests, by security holdings or otherwise, will be included in the Proxy Statement/Prospectus related to the proposed transaction, which will be filed with the SEC. Information about the directors and executive officers of the Company, their ownership of the Company common stock, and the Company’s transactions with related persons is set forth in the section entitled “Board of Directors and Corporate Governance,” “Executive Officers of the Company,” “Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters,” “Executive Compensation,” and “Certain Relationships and Related Transactions” included in the Company’s definitive proxy statement in connection with its 2024 Annual Meeting of Stockholders, as filed with the SEC on August 22, 2024.
No Offer or Solicitation
This communication is not intended to and shall not constitute an offer to sell or the solicitation of an offer to sell or the solicitation of an offer to buy any securities or the solicitation of any vote of approval, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offer of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act, or pursuant to an exemption from, or in a transaction not subject to, such registration requirements.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits
| Exhibit No. | Description | |
| 2.1 | Agreement and Plan of Merger among Asset Entities Inc., Alpha Merger Sub, LLC, Strive Enterprises, Inc., and Strive Asset Management, LLC, dated as of May 6, 2025* | |
| 10.1 | Voting and Support Agreement by and among Strive Enterprises, Inc. and certain stockholders of Asset Entities Inc., dated as of May 6, 2025* | |
| 99.1 | Press Release dated May 7, 2025 | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
| * | Annexes, schedules and exhibits have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The Company hereby undertakes to furnish supplemental copies of any of the omitted annexes, schedules and exhibits upon request by the SEC. |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Date: May 7, 2025 | ASSET ENTITIES INC. | |
| /s/ Arshia Sarkhani | ||
| Name: | Arshia Sarkhani | |
| Title: | Chief Executive Officer and President | |
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