KIDZ AI Inc. 10-Q

Item 1 – Financial Statements CLASSOVER HOLDINGS, INC. AND SUBSIDIARIES UNAUDITED INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS (EXPRESSED IN US DOLLARS) September 30, December 31, 2025 2024 (Unaudited) ASSETS Current assets: Cash $ 3,428,824 $ 50,682 Prepayments and other current assets 4,056 15,557 Due from related parties 23,039 8,251 Total current assets 3,455,919 74,490 Noncurrent assets: Property and equipment, net 170,474 218,617 Intangible assets, net 5,631,091 - Operating lease right-of-use assets, net 1,324,294 1,552,242 Investment accounts 12,060,203 - Deposit 5,000 - Total noncurrent assets 19,191,062 1,770,859 TOTAL ASSETS $ 22,646,981 $ 1,845,349 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 93,896 $ 7,200 Interest payable 244,712 19,072 Deferred revenues 1,952,516 2,719,091 Due to related parties 18,117 249,545 Operating lease liabilities - current 191,581 314,685 Accrued liabilities and other payables 19,455 63,415 Total current liabilities 2,520,277 3,373,008 Noncurrent liabilities: Convertible notes payable 11,510,138 1,750,000 Operating lease liabilities - noncurrent 1,131,125 1,241,495 Deferred tax liabilities 701,957 - Warrant liabilities 1,383,449 - Total noncurrent liabilities 14,726,669 2,991,495 TOTAL LIABILITIES 17,246,946 6,364,503 Commitments and contingencies - - Stockholders' equity: Preferred Stock, $ 0.0001 par value, 10,000,000 shares authorized, -Series A, 584,869 and 1,000,000 shares issued and outstanding as of September 30, 2025 and December 31, 2024*, respectively 58 .00 100 -Series B, 5,000 and no shares issued and outstanding as of September 30, 2025 and December 31, 2024*, respectively 1 .00 - Class A Common Stock, $ 0.0001 par value, 50,000,000 shares authorized, 6,535,014 shares issued and outstanding as of September 30, 2025 and December 31, 2024*, respectively 654 654 Class B Common Stock $ 0.0001 par value, 450,000,000 shares authorized, 18,087,473 and 10,730,691 shares issued and outstanding as of September 30, 2025 and December 31, 2024*, respectively 1,809 1,113 Additional paid-in capital 11,639,624 78,703 Accumulated deficit ( 6,242,111 ) ( 4,599,724 ) Total stockholders' (deficit) 5,400,035 ( 4,519,154 ) TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY $ 22,646,981 $ 1,845,349 * Giving retroactive effect to reverse recapitalization effected on April 4, 2025 See accompanying notes to the consolidated financial statements. 3 Table of Contents CLASSOVER HOLDINGS, INC. AND SUBSIDIARIES UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (EXPRESSED IN US DOLLARS) For the Three Months Ended September 30, For the Nine Months Ended September 30, 2025 2024 2025 2024 (Unaudited) (Unaudited) (Unaudited) (Unaudited) Revenues: Service revenues $ 1,287,638 $ 878,934 $ 2,829,302 $ 2,504,830 Consulting revenues (related party) - 100,000 - 300,000 Total revenues 1,287,638 978,934 2,829,302 2,804,830 Cost of revenues: Cost of revenues 388,614 435,881 1,202,194 1,257,169 Total cost of revenues 388,614 435,881 1,202,194 1,257,169 Gross profit 899,024 543,053 1,627,108 1,547,661 Operating expenses: Selling and marketing 149,249 165,315 380,761 421,909 General and administrative 1,348,697 546,389 3,811,411 1,605,515 Research and development 5,971 5,053 34,769 29,971 Total operating expenses 1,503,917 716,757 4,226,941 2,057,395 (Loss) from operations ( 604,893 ) ( 173,704 ) ( 2,599,833 ) ( 509,734 ) Other income (expense) Change in fair value of warrants 910,799 - ( 629,625 ) - Change in fair value of crypto assets 3,159,986 - 3,342,651 - Change in fair value of convertible debt ( 249,508 ) - ( 510,138 ) - Financing cost - - ( 473,500 ) - Staking rewards 157,405 - 163,953 - Interest and other expense ( 189,203 ) ( 2,916 ) ( 233,938 ) ( 6,794 ) Total other income (expense) 3,789,479 ( 2,916 ) 1,659,403 ( 6,794 ) (Loss) before provision for income taxes 3,184,586 ( 176,620 ) ( 940,430 ) ( 516,528 ) Provision for income taxes 663,597 - 701,957 - Net income (loss) $ 2,520,989 $ ( 176,620 ) $ ( 1,642,387 ) $ ( 516,528 ) Weighted average shares outstanding-Preferred Stock-Series A* 584,869 1,000,000 859,588 1,000,000 Basic and diluted net income per share-Preferred Stock-Series A* $ 58,496 $ ( 9,462 ) $ ( 62,319 ) $ ( 27,671 ) Weighted average shares outstanding-Preferred Stock-Series B* 1,673 - 3,232 - Basic and diluted net income per share-Preferred Stock-Series B* $ 167 $ - $ ( 234 ) $ - Weighted average shares outstanding-Class A Common Stock* 6,535,014 6,535,014 6,535,014 6,535,014 Basic and diluted net income per share-Class A Common Stock* $ 653,600 $ ( 61,832 ) $ ( 473,782 ) $ ( 180,829 ) Weighted average shares outstanding-Class B Common Stock* 18,084,528 11,131,864 15,256,083 11,131,864 Basic and diluted net income per share-Class B Common Stock* $ 1,808,726 $ ( 105,326 ) $ ( 1,106,051 ) $ ( 308,028 ) * Giving retroactive effect to reverse recapitalization effected on April 4, 2025 See accompanying notes to the consolidated financial statements. 4 Table of Contents CLASSOVER HOLDINGS, INC. AND SUBSIDIARIES UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (EXPRESSED IN US DOLLARS) Preferred Stock-Series A* Preferred Stock-Series A amount Preferred Stock-Series B* Preferred Stock-Series B amount Class A Common Stock* Class A Common Stock amount Class B Common Stock* Class B Common Stock amount Additional Paid-in Capital Accumulated deficit Total Balance at December 31, 2023 1,000,000 $ 100 - $ - 6,535,014 $ 654 10,730,691 $ 1,073 $ 53,623 $ ( 3,756,676 ) $ ( 3,701,226 ) Stock compensation issued for consulting services - - - - - - 401,173 40 25,080 - 25,120 Net loss - - - - - - - - - ( 167,089 ) ( 167,089 ) Balance at March 31, 2024 (unaudited) 1,000,000 $ 100 - $ - 6,535,014 $ 654 11,131,864 $ 1,113 $ 78,703 $ ( 3,923,765 ) $ ( 3,843,195 ) Net loss - - - - - - - - - ( 172,819 ) ( 172,819 ) Balance at June 30, 2024 (unaudited) 1,000,000 $ 100 - $ - 6,535,014 $ 654 11,131,864 $ 1,113 $ 78,703 $ ( 4,096,584 ) $ ( 4,016,014 ) Net loss - - - - - - - - - ( 176,620 ) ( 176,620 ) Balance at September 30, 2024 (unaudited) 1,000,000 $ 100 - $ - 6,535,014 $ 654 11,131,864 $ 1,113 $ 78,703 $ ( 4,273,204 ) $ ( 4,192,634 ) Balance at December 31, 2024 1,000,000 $ 100 - $ - 6,535,014 $ 654 11,131,864 $ 1,113 $ 78,703 $ 4,599,724 $ 4,519,154 Net loss - - - - - - - - - ( 297,207 ) ( 297,207 ) Balance at March 31, 2025 (unaudited) 1,000,000 $ 100 - $ - 6,535,014 $ 654 11,131,864 $ 1,113 $ 78,703 $ ( 4,896,931 ) $ ( 4,816,361 ) Net loss - - - - - - - - - ( 3,866,169 ) ( 3,866,169 ) Reverse recapitalization - - - - - - - - ( 2,183,392 ) - ( 2,183,392 ) Conversion of convertible debt - - - - - - 4,433,122 443 1,768,629 - 1,769,072 Common stock issued to SPAC public shareholders - - - - - - 168,356 17 1,942,281 - 1,942,298 Capital contribution from private placement - - 5,000 1 - - - - 4,699,999 - 4,700,000 Employee stock compensation - - - - - - 820,000 82 118,362 - 118,444 Stock compensation to advisors - - - - - - 290,000 29 448,804 - 448,833 Conversion of preferred stock to common stock ( 415,131 ) ( 42 ) - - - - 415,131 42 - - - Issurance of common stock and warrants for intangible assets acquisition - - - - - - 800,000 80 4,525,398 - 4,525,478 Stock issued for waiving contractual restriction - - - - - - 25,000 3 66,497 - 66,500 Balance at June 30, 2025 (unaudited) 584,869 $ 58 5,000 $ 1 6,535,014 $ 654 18,083,473 $ 1,809 $ 11,465,281 $ ( 8,763,100 ) $ 2,704,703 Net income - - - - - - - - - 2,520,989 2,520,989 Employee stock compensation - - - - - - - - 142,133 - 142,133 Stock compensation to advisors - - - - - - 4,000 - 32,210 - 36,210 Balance at September 30, 2025 (unaudited) 584,869 $ 58 5,000 $ 1 6,535,014 $ 654 18,087,473 $ 1,809 $ 11,639,624 $ ( 6,242,111 ) $ 5,404,035 * Giving retroactive effect to reverse recapitalization effected on April 4, 2025 See accompanying notes to the consolidated financial statements. 5 Table of Contents CLASSOVER HOLDINGS, INC. AND SUBSIDIARIES UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (EXPRESSED IN US DOLLARS) For the Nine Months Ended September 30, 2025 2024 (Unaudited) (Unaudited) Cash flows from operating activities: Net (loss) $ ( 1,642,387 ) $ ( 516,528 ) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 192,530 38,602 Amortization of operating lease right-of-use assets 227,948 219,057 Employee stock compensation 260,577 - Stock compensation issued for advisory service 51,043 25,120 Deferred tax liabilities 701,957 - Change in fair value of warrants 629,625 - Change in fair value of crypto assets ( 3,342,651 ) - Change in fair value of convertible debt 510,138 Stock issued for waiving contractual restriction 66,500 - Staking rewards ( 163,953 ) - Changes in operating assets and liabilities: - Due from related parties ( 14,788 ) 9,297 Prepayments and other current assets 11,501 ( 1,498 ) Deposit ( 5,000 ) - Accounts payable ( 48,326 ) 23,696 Interest payable 244,712 4,851 Deferred revenues ( 766,575 ) 73,538 Operating lease liabilities ( 233,474 ) ( 219,164 ) Due to related parties ( 216,943 ) ( 252,519 ) Accrued liabilities and other payables 363,041 19,696 Net cash (used in) operating activities ( 3,174,525 ) ( 575,852 ) Cash flows from investing activities: Purchases of property and equipment - ( 185,705 ) Purchases of crypto assets ( 1,050,000 ) - Purchases of intangible assets ( 1,250,000 ) - Net cash (used in) investing activities ( 2,300,000 ) ( 185,705 ) Cash flows from financing activities: Proceeds from convertible notes payable 3,089,400 100,000 Capital contribution from private placement 4,700,000 - Proceeds from the reverse recapitalization 1,077,752 - Repayment of promissory notes to related party ( 332,485 ) - Proceeds from promissory notes related party 318,000 130,000 Net cash provided by financing activities 8,852,667 230,000 Net (decrease) increase in cash 3,378,142 ( 531,557 ) Cash, beginning of period 50,682 787,652 Cash, end of period $ 3,428,824 $ 256,095 Supplemental disclosure of cash flow information: Cash paid during the period for: Interest $ - $ - Income taxes $ - $ - Noncash activities: Issurance of common stock and warrants for intangible assets acquisition 4,525,398 - Purchase of crypto assets through covertible debt 7,503,600 - Common stock issued for liability payment 430,000 - Conversion of convertible debt and interest payable 1,769,072 - Conversion of preferred stock to common stock 42 - See accompanying notes to the consolidated financial statements. 6 Table of Contents CLASSOVER HOLDINGS, INC. AND SUBSIDIARIES NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS NINE MONTHS ENDED SEPTEMBER 30, 2025 AND 2024 (UNAUDITED) Note 1. Description of the Business and Basis of Presentation Classover Holdings, Inc. (the “Company”) is a company incorporated on May 2, 2024 under Delaware law as a wholly owned subsidiary of the Battery Future Acquisition Corp., a Cayman Islands exempted Company (the “BFAC”). On April 4, 2025, upon the closing of the business combination (the “Closing”), BFAC Merger Sub 1 Corp. (“Merger Sub 1”) merged with and into BFAC (the “Reorganization Merger”), with BFAC being the surviving corporation of the Reorganization Merger and becoming a wholly-owned subsidiary of the Company, and then, immediately following the consummation of the Reorganization Merger, BFAC Merger Sub 2 Corp. (“Merger Sub 2”) merged with and into Class Over Inc. (“Classover DE”), with Classover DE being the surviving corporation of the acquisition merger and becoming a wholly-owned subsidiary of the Company. The Merger is considered as a reverse recapitalization in accordance with Accounting Standards Codification (“ASC”) 805-40. Under this method of accounting, BFAC will be treated as the “acquired” company for financial reporting purposes. This determination is primarily based on Classover DE stockholders comprise majority of the voting power of the Company, directors appointed by Classover DE constituting majority of the Company’s board of directors, Classover DE’s operations prior to the merger comprising the only ongoing operations of the Company, and Classover DE’s senior management comprising all of the senior management of the Company. Accordingly, for accounting purposes, the financial statements of the Company will represent a continuation of the financial statements of Classover DE with the merger treated as the equivalent of Classover DE issuing stock for the net assets of BFAC, accompanied by a recapitalization. The net assets of BFAC will be stated at historical cost, with no goodwill or other intangible assets recorded. Operations prior to the merger will be presented as those of Classover DE in financial statements of the Company. The consolidation of the Company and its subsidiaries have been accounted for at historical cost and prepared on the basis as if the aforementioned transactions had become effective as of the beginning of the first period presented in the accompanying consolidated financial statements in accordance with ASC 805-50-45-5. All share and per share data has been retroactively restated to reflect the current capital structure of the Company. Classover DE was formed on March 16, 2022 as a holding company in Delaware, which was 100% controlled by the sole owner Hui Luo. Class Over Inc. (“Classover NJ”) was formed on September 16, 2020 in New Jersey, which was 100% controlled by the sole owner Hui Luo. Classover NJ is an online enrichment program that offers over 20 courses taught by certified instructors. It caters to children aged 4 to 17, providing personalized attention and a supportive learning environment. On April 19, 2022, Classover DE entered into a stock transfer agreement with Classover NJ. After the share exchange, Classover DE owned 100 % of Classover NJ. Basis of Presentation The accompanying unaudited interim condensed consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”), regarding financial reporting, and include all normal and recurring adjustments that management of the Company considers necessary for a fair presentation of its financial position and operating results. The results of operations for the three and nine months ended September 30, 2025 are not necessarily indicative of results to be expected for any other interim period or for the full year of 2025. Accordingly, these statements should be read in conjunction with the Company’s audited financial statements and notes thereto as of and for the years ended December 31, 2024 and 2023. 7 Table of Contents Note 2. Summary of Significant Accounting Policies Accounting Principles The consolidated financial statements and accompanying notes are prepared in accordance with generally accepted accounting principles in the United States of America (GAAP). Principles of Consolidation The consolidated financial statements include the financial statements of the Company and its subsidiary. All significant intercompany transactions and balances between the Company and its subsidiary are eliminated upon consolidation. Liquidity and Going Concern As of September 30, 2025, the Company had cash of $ 3,428,824 , current liabilities of $ 2,520,276 , a working capital of $ 935,642 and a stockholders’ equity of $ 5,400,035 . For the three months ended September 30, 2025 and 2024, the Company had income (loss) of $ 2,520,989 and $ 176,620 , respectively, and for the nine months ended September 30, 2025 and 2024, the Company had losses of $ 1,642,387 and $ 516,528 , respectively. The continuing losses raise substantial doubt about the ability of the Company to continue as a going concern. The Company completed business combination with Battery Future Acquisition Corp (the “BFAC”) on April 3, 2025 and received $ 1,075,936 from BFAC’s trust account. Additionally, the Company received an aggregate of $ 4,700,000 from PIPE investors following the business combination, and entered into an equity purchase facility agreement (the “FPFA”) with Solana Strategic Holdings LLC (the “Solana”) for up to an aggregate of $ 400 million in newly issued shares of the Company’s Class B common stock. Moreover, on May 30, 2025, the Company entered into a Securities Purchase Agreement with an investor and the Company may sell to the investor up to an aggregate of $ 500 million in newly issued senior secured convertible notes (the “Notes”). On June 6, 2025, the Company consummated the initial closing of $ 11 million of Notes. Management of the Company has evaluated the mitigation plans and determined that the current working capital, cash position, the FPFA, and Notes available for future issuance are sufficient to support its continuous operations and to meet its payment obligations when liabilities fall due within the next twelve months from the date of issuance of these combined and consolidated financial statements. Accordingly, the Company’s combined and consolidated financial statements are prepared on going concern basis, which assumes that the Company will continue in operation for the foreseeable future and, accordingly, will be able to realize its assets and discharge its liabilities in the normal course of operations as they come due. Use of Estimates The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Significant estimates and assumptions reflected in the consolidated financial statements include, but are not limited to, useful lives of property and equipment, valuation of deferred tax assets and liabilities, operating lease right-of-use assets and liabilities and deferred revenue. Actual results may differ materially from such estimates. Management believes that the estimates, and judgments upon which they rely, are reasonable based upon information available to them at the time that these estimates and judgments are made. To the extent that there are material differences between these estimates and actual results, the Company’s consolidated financial statements will be affected. Revenue Recognition The Company has nine predominant sources of revenue: time-based subscriptions, credit-based subscriptions to our online courses, and marketing consulting services. Subscription Revenue Customers are required to pay in advance to enroll for courses. For time-based subscriptions, we are obligated to provide students with unlimited access to our course for a specified term. For credit-based subscriptions, we offer our students the flexibility to take courses at any time up to the limit of their prepaid balance. Each contract of the online education service is accounted for as a single performance obligation which is satisfied ratably over the service period. We charge fixed fees for the services contracts. The proceeds collected are initially recorded as deferred revenue. For credit-based subscriptions, revenues are recognized proportionately as the courses are delivered. For time-based subscriptions, revenues are recognized on a straight-line basis over the subscription period from the date in which the students activate the courses to the date of expiration. Refunds are provided to the students who decide to withdraw from the subscribed courses within the course offer period and a proportional refund is based on the percentage of untaken courses to the total courses purchased. Historically, the Company has not experienced material refunds. 8 Table of Contents Consulting Revenue The Company also generates revenue from consulting services. The Company’s consulting program is designed to teach startup founders within the education sector how to market their product, refine their course content, infrastructure, and business models, achieve market fit and operating efficiency, and scale the startup into a high growth education business. The Company’s performance obligation is to provide consulting services to startup founders for a specific term. Customers are required to prepay the full consulting service charge, which is fixed and determinable, at contract inception to secure program spot, and revenue is recognized over time on a straight-line basis through the service term. Principal Agent Considerations The Company makes its application available to be downloaded through third-party digital distribution service providers. Users who intend to enroll our courses are directed to third-party payment platforms before completing the subscription with us. The Company evaluates the purchases via third-party payment processors to determine whether its revenues should be reported gross or net of fees retained by the payment processor. The Company is the principal in the transaction with the end user as a result of controlling, hosting, and integrating the delivery of the virtual items to the end user. The Company records revenue on a gross basis as a principal and records fees paid to third-party payment platforms as cost of revenues. Deferred Revenue Deferred revenue mostly consists of payments we receive in advance of revenue recognition. Revenue is recognized over the life of the subscription, or as the delivery of the pre-purchased class sessions occurs. The Company classifies deferred revenue as a short-term liability on the balance sheets as the longest subscription plan is for twelve months and the remaining sessions are expected to be delivered within twelve months or less. Cost of Revenue Cost of revenue predominantly consists of streaming services, third-party payment processing fees, and wages for teachers and certain employees engaged in producing the revenue. Referral Incentives Referral incentives are course credits that we offer to our customers for referring new customers. The incentives are expensed as incurred when the credits are consummated and the corresponding expenses, which are independent educators’ compensation allocated to service the referral credits, are included in selling expenses. Cash and Cash Equivalents Cash consists primarily of cash on hand and bank deposits. The Company maintains cash deposits with financial institutions that may exceed federally insured limits at times. The following table shows the breakout between cash on hand and bank deposits. September 30, 2025 December 31, 2024 Cash on hand $ 3,146 $ 3,144 Bank deposits 3,425,678 47,538 Total cash shown in the Statement of Cash Flows $ 3,428,824 $ 50,682 9 Table of Contents Deposits Deposits consist of credit card security deposits, which paid to the bank upon the account open. Management regularly reviews the age of these deposits and changes in payment trends and records an allowance when management believes collection of amounts due are at risk. Accounts considered uncollectible are written off against the allowance after exhaustive efforts at collection is made. As of September 30,2025, there was no allowance for deposits. Property and Equipment Property and equipment primarily includes computers and furniture stated at cost, less accumulated depreciation. Depreciation is computed on the straight-line method over 5 years. Leasehold improvements are amortized over the lesser of the life of the lease or the estimated useful life of the leasehold improvements. Costs related to maintenance and repairs that do not extend the assets’ useful life are expensed as incurred. Investment accounts Investment accounts consist of cash and crypto assets held for investment purposes. Cash is carried at cost, which approximates fair value due to its short-term nature. The Company has elected to use the weighted average cost (WAC) method to determine the cost basis for its initial recognition of crypto asset holdings. Under this method, the cost of crypto assets sold or exchanged is calculated using the weighted average cost per unit at the time of the transaction. This method is applied consistently across all crypto asset holdings. The Company measures the fair value of its crypto assets subsequently, with gains and losses from changes in the fair value of such crypto assets recognized in net income each reporting period. The Company establishes a deferred tax liability if the market value of crypto assets at the reporting date is greater than the average cost basis of the Company’s crypto holdings at such reporting date, and any subsequent increases or decreases in the market value of crypto assets increases or decreases the deferred tax liability. In determining the gain (loss) to be recognized upon sale, the Company calculates the difference between the sales price and carrying value of the crypto assets with WAC method. Intangible assets Intangible assets acquired by the Company are stated at cost less accumulated amortization (where the estimated useful life is finite) and impairment losses. Amortization of intangible assets with finite useful lives is charged to profit or loss on a straight-line basis over the assets’ estimated useful life, which is the period over which an asset is expected to be available for use. The estimates and associated assumptions of useful life determined by the Company are based on technical or commercial obsolescence, legal or contractual limits on the use of the asset, and other relevant factors. Both the period and method of amortization are reviewed annually. Intangible assets are not amortized while their useful lives are assessed to be indefinite. Any conclusion that the useful life of an intangible asset is indefinite is reviewed annually to determine whether events and circumstances continue to support the indefinite useful life assessment for that asset. If they do not, the change in the useful life assessment from indefinite to finite is accounted for prospectively from the date of change and in accordance with the policy for amortization of intangible assets with finite lives as set out above. Income Taxes The Company provides for income taxes in accordance with the asset and liability method. Under this method, deferred tax assets and liabilities are recognized for future tax consequences attributable to differences between the carrying amounts of existing assets and liabilities for financial reporting and for income tax reporting. The deferred tax asset or liability represents the future tax return consequences of those differences, which will either be taxable or deductible when the assets and liabilities are recovered or settled. A valuation allowance is established for any deferred tax asset for which it is determined that it is more likely than not that some or all of the deferred tax assets will not be realized. 10 Table of Contents The Company utilizes a two-step approach to recognizing and measuring uncertain tax positions accounted for in accordance with the asset and liability method. The first step is to evaluate the tax position for recognition by determining whether evidence indicates that it is more likely than not that a position will be sustained if examined by a taxing authority. The second step is to measure the tax benefit as the largest amount that is 50% likely of being realized upon settlement with a taxing authority. There were no amounts recorded at September 30, 2025 and December 31, 2024 related to uncertain tax positions. Fair Value of Financial Instruments The Company accounts for certain assets and liabilities at fair value in accordance with the accounting guidance applicable to fair value measurements and disclosures. The carrying values of cash, accounts payable, deferred revenues, interest payable, due to related parties, and accrued liabilities and other payables are deemed to be reasonable estimates of their fair values because of their short-term nature. Research and Development Costs Research and development expenses are expensed as incurred and include compensation-related expenses to the outsourced subcontractors for maintenance of our online learning platform. Segment Information and Geographic Data FASB ASC 280, Segment Reporting, establishes standards for reporting information about operating segments on a basis consistent with the Company’s internal organizational structure as well as information about geographical areas, business segments and major customers in consolidated financial statements for details on the Company’s business segments. The Company uses the management approach to determine reportable operating segments. The management approach considers the internal organization and reporting used by the Company’s chief operating decision maker (“CODM”) for making decisions, allocating resources and assessing performance. The Company’s CODM has been identified as the CEO, who reviews consolidated results when making decisions about allocating resources and assessing performance of the Company. Based on management’s assessment, the Company determined that it has only one operating segment and therefore one reportable segment as defined by ASC 280. Advertising Costs Advertising costs amounted to $ 11,250 and $ 6,303 for the three months ended September 30, 2025 and 2024, respectively, and $ 29,839 and $ 49,726 for the nine months ended September 30, 2025 and 2024. Advertising costs are expensed as incurred and included in selling expenses. Contingencies The Company records accruals for contingencies and legal proceedings expected to be incurred in connection with a loss contingency when it is probable that a liability has been incurred and the amount can be reasonably estimated. If a loss contingency is not probable, but is reasonably possible, or is probable but cannot be estimated, the nature of the contingent liability, together with an estimate of the range of possible loss, would be disclosed. 11 Table of Contents Operating Leases Effective January 1, 2022, the Company adopted ASU 2016-02, “Leases” (Topic 842), and elected the practical expedients that does not require the Company to reassess: (1) whether any expired or existing contracts are, or contain, leases, (2) lease classification for any expired or existing leases and (3) initial direct costs for any expired or existing leases. For lease terms of twelve months or fewer, a lessee is permitted to make an accounting policy election not to recognize lease assets and liabilities. The Company also adopted the practical expedient that allows lessees to treat the lease and non-lease components of a lease as a single lease component. On November 1, 2022, the Company recognized approximately $ 2.2 million of right of use (“ROU”) assets and operating lease liabilities based on the present value of the future minimum rental payments of the sublease with related party Dream Go for its office space expiring on October 31,2029, using an incremental borrowing rate of 4 %. The Company determines if a contract contains a lease at inception. US GAAP requires that the Company’s leases be evaluated and classified as operating or finance leases for financial reporting purposes. The classification evaluation begins at the commencement date and the lease term used in the evaluation includes the non-cancellable period for which the Company has the right to use the underlying asset, together with renewal option periods when the exercise of the renewal option is reasonably certain and failure to exercise such option would result in an economic penalty. The Company’s real estate sublease has been classified as an operating lease. Since the implicit rate for the Company’s sublease was not readily determinable, the Company used its incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments. The incremental borrowing rate is the rate of interest that the Company would have to pay to borrow, on a collateralized basis, an amount equal to the lease payments, in a similar economic environment and over a similar term. The Company generally considers the economic life of its operating lease ROU assets to be comparable to the useful life of similar owned assets. The Company has elected the short-term lease exception; therefore operating lease ROU assets and liabilities do not include leases with a lease term of twelve months or less. Our sublease does not provide a residual guarantee. The operating lease ROU asset also excludes lease incentives. Lease expense is recognized on a straight-line basis over the lease term. The Company reviews the impairment of its ROU assets consistent with the approach applied for its other long-lived assets. The Company reviews the recoverability of its long-lived assets when events or changes in circumstances occur that indicate that the carrying value of the asset may not be recoverable. The assessment of possible impairment is based on its ability to recover the carrying value of the asset from the expected undiscounted future pre-tax cash flows of the related operations. The Company has elected to include the carrying amount of operating lease liabilities in any tested asset group and includes the associated operating lease payments in the undiscounted future pre-tax cash flows. Earnings (loss) per Share The Company computes earnings (loss) per share (“EPS”) in accordance with FASB ASC 260, “Earnings per Share”. ASC 260 requires companies to present basic and diluted EPS. Basic EPS is measured as net income (loss) divided by the weighted average ordinary shares outstanding for the period. Diluted EPS presents the diluted effect on a per share basis of the potential ordinary shares (e.g., convertible securities, options and warrants) as if they had been converted at the beginning of the periods presented, or issuance date, if later. Potential ordinary shares that have an anti-dilutive effect (i.e., those that increase income per share or decrease loss per share) are excluded from the calculation of diluted EPS. For the three and nine months ended September 30, 2025 and 2024, the convertible notes payable were excluded from the calculation of diluted EPS as their inclusion would have been anti-dilutive. Recently Adopted Accounting Pronouncements In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (ASU 2016-13) , which modifies the measurement of expected credit losses of certain financial instruments. This new guidance was effective for private companies for fiscal years beginning after December 15, 2021, but early adoption was permitted. The adoption of this guidance did not have an impact on our consolidated financial statements and related disclosures. In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No. 2023-08, Intangibles—Goodwill and Other—Crypto Assets (Subtopic 350-60): Accounting for and Disclosure of Crypto Assets (“ASU 2023-08”). ASU 2023-08 requires in-scope crypto assets (including the Company's bitcoin holdings) to be measured at fair value in the statement of financial position, with gains and losses from changes in the fair value of such crypto assets recognized in net income each reporting period. ASU 2023-08 also requires certain interim and annual disclosures for crypto assets within the scope of the standard. The Company adopted this guidance effective January 1, 2025. 12 Table of Contents Note 3. Property and Equipment, net Property and equipment consists of the following as of September 30, 2025 and December 31, 2024: September 30, 2025 December 31, 2024 Computers and electronic equipment $ 55,532 $ 55,532 Furniture and fixtures 91,018 91,018 Leasehold improvements 177,865 177,865 Total property and equipment 324,415 324,415 Less: accumulated depreciation ( 154,464 ) ( 105,798 ) Total property and equipment, net $ 170,474 $ 218,617 Depreciation expense was $ 16,224 and $ 15,222 for the three months ended September 30, 2025 and 2024, respectively, and $ 48,666 and $ 38,602 for the nine months ended September 30, 2025 and 2024, respectively. Depreciation expense is included within general and administrative expenses in the Company’s statements of operations. Note 4 . Investment accounts Investment accounts consist of cash and crypto assets held for investment purposes. Cash is carried at cost, which approximates fair value due to its short-term nature. The Company accounts for its crypto assets, which are currently comprised solely of Solana, as indefinite-lived intangible assets in accordance with ASC 350, Intangibles—Goodwill and Other and ASU 2023-08. The Company’s crypto assets are initially recorded at cost and subsequently are measured at fair value as of each reporting period. The Company determines the fair value of its crypto assets in accordance with ASC 820, Fair Value Measurement, based on quoted (unadjusted) prices on the Coinbase exchange, the active exchange that the Company has determined is its principal market for bitcoin (Level 1 inputs). Changes in fair value are recognized in the Company’s consolidated statement of operations. The following table summarizes the Company’s digital asset holdings, as of: September 30, 2025 December 31, 2024 Number of Solana 56,909 - Crypto asset carrying value $ 8,553,600 $ - Unrealized gain (loss) on crypto assets 3,342,651 - Staking rewards 163,953 - Total investment accounts $ 12,060,203 $ - Note 5 . Intangible Assets On June 30, 2025, the Company acquired certain intellectual property rights and trademarks (“IP”) with fair value $ 8,500,000 from Silver Run Group, LLC and its wholly owned subsidiary, Deer Creek IP, LLC, which are expected to enhance the Company’s development and future commercialization strategy. The total consideration for the acquisition was approximately $ 5,775,000 , consisting of the following components: · Cash consideration of $ 1,250,000 ; · Issuance of 800,000 shares of the Company’s Class B common stock valued at $ 2.94 , totaling $ 2,352,000 , based on the fair value of the shares on the acquisition date; 13 Table of Contents · Issuance of warrants to purchase 739,278 shares of Class B common stock, with an exercise price of $ 0.01 per share and an expiration date of June 30, 2030. The pre-funded warrants are exercisable on a cash or cashless basis and are subject to a 9.9 % beneficial ownership blocker. The fair value of the warrants on the acquisition date was estimated at $2.94 using the Black-Scholes option pricing model with the following assumptions: ○ Expected term: 5 years ○ Expected volatility: 4.43 ○ Risk-free interest rate: 4.24 60% ○ Dividend yield: 0 % The Company accounts for asset acquisitions in accordance with ASC 805-50, Business Combinations – Related Issues. An asset acquisition occurs when a transaction does not meet the definition of a business under ASC 805-10. In such cases, the total cost of the acquisition, including consideration transferred, transaction costs, and other directly attributable costs. No bargain purchase gain is recognized in an asset acquisition. All equity securities issued in the transaction are subject to a nine-month lock-up pursuant to a Lock-Up Agreement entered into on the same date. The acquired IP is recorded as an intangible asset and is being amortized over its estimated useful life of 10 years. Amortization expense related to the acquired IP for the three and nine months ended September 30, 2025 was $ 144,387 . Future amortization of the Company’s intangible assets is presented below: Year ended December 31, 2025 $ 144,387 2026 577,548 2027 577,548 2028 577,548 Remaining 3,754,061 Total $ 5,631,091 Note 6 . Leases On November 1, 2022, the Company entered into an operating sublease with a related party Dream Go for its office space located at 450 7 th Avenue, Suite 905, New York, NY 10123 expiring on October 31, 2029. On November 1, 2022, the Company recognized approximately $ 2.2 million of right of use (“ROU”) assets and operating lease liabilities based on the present value of the future minimum rental payments of the sublease, using an incremental borrowing rate of 4 %. As of September 30, 2025, the Company’s operating sublease had a remaining lease term of approximately 4.1 years. For the three and nine months ended September 30, 2025 and 2024, rent expense for the operating sublease was $ 90,253 and $ 270,758 , respectively. The Company’s sublease obligations as of September 30, 2025 are presented below: Year ending December 31, 2025 $ 93,937 2026 242,211 2027 388,790 2028 407,405 Remaining 310,114 Total future lease payments 1,442,458 Less: Interest ( 119,752 ) Present value of lease liabilities $ 1,322,706 14 Table of Contents Future amortization of the Company’s ROU assets is presented below: Year ended December 31, 2025 $ 77,528 2026 314,154 2027 326,161 2028 340,709 Remaining 265,743 Total $ 1,324,294 Subleases On November 1, 2022, the Company entered into sublease agreements with related parties (1) Dream Legal Group, Inc., (2) Tigerless Health, Inc., and (3) First Cover, Inc. to sub rent portions of its office space located at 450 7th Avenue, Suite 905, New York, NY 10123. These subleases are month-to-month leases starting on November 1, 2022 and ending upon a notice of 30 days from either party. On July 1, 2024, the Company terminated the subleases with Tigerless Health, Inc, and First Cover, Inc. Sublease income is recognized on the straight-line basis over the lease term. Billed and uncollected operating lease receivables will be included in due from related parties which are stated at their estimated net realizable value. For the three months ended September 30, 2025 and 2024, the Company’s income from these subleases totaled $ 26,684 and $ 23,471 respectively, and for the nine months ended September 30, 2025 and 2024 the Company’s income from these subleases totaled $ 76,604 and $ 48,471 , respectively (which has been reflected as a reduction of general and administrative expenses in the accompanying consolidated Statements of Operations). Note 7 . Accrued Liabilities and Other Payables Accrued liabilities and other payables consisted of the following: September 30, 2025 December 31, 2024 Credit card payable $ 12,605 $ 58,269 Payroll tax payable 6,850 5,146 Total $ 19,455 $ 63,415 Note 8 . Income Taxes The Company had $ 701,957 income tax provision for the nine months ended September 30, 2025 and 2024. For the nine months ended September 30, 2025 For the nine months ended September 30, 202 4 Deferred income tax expense $ 701,957 $ - Current income tax expense - - Total $ 701,957 $ - 15 Table of Contents The Company has the following deferred tax assets (liabilities) as of September 30, 2025 and December 31 2024: As of September 30, 2025 As of December 31, 2024 Net operating loss carryforwards $ 1,640,916 $ 965,019 Change in fair value of warrants 132,221 Change in fair value of convertible debt 107,129 Other expense temporary difference 2,813 2,813 Total deferred tax assets 1,883,080 967,833 Change in fair value of crypto assets ( 701,957 ) - Deferred tax liability- Depreciation ( 2,263 ) ( 2,263 ) Allowance ( 1,880,817 ) ) ( 965,570 ) Net deferred tax liability $ 701,957 $ - The Company evaluated the recoverable amounts of deferred tax assets, and provided a valuation allowance to the extent that future taxable profits will not be available against which the net operating loss and temporary differences can be utilized. A valuation allowance is provided against deferred tax assets when the Company determines that it is more likely than not that the deferred tax assets will not be utilized in the future. In making such determination, the Company considered factors including future taxable income exclusive of reversing temporary differences and tax loss carry forwards. The Company has provided a valuation allowance for the net deferred tax asset as it is not more likely than not that the asset will be realized. The provision for income taxes differs from the amounts computed by applying the federal statutory rate as follows for the periods ended September 30, 2025 and 2024: September 30, 2025 September 30, 2024 Federal statutory rate 21.0 % 21.0 % Valuation allowance ( 95.6 )% ( 21.0 ) Effective income tax rate ( 74.6 )% 0.0 % The effective tax rate for the nine months ended September 30, 2025 and 2024 is less than the statutory rate primarily as a result of the valuation allowance for net deferred tax assets. No uncertain tax benefits have been recorded for the three and nine months ended September 30, 2025 and 2024 On March 27, 2020, the “Coronavirus Aid, Relief and Economic Security (CARES) Act” (the “Act”) was signed into law. The Act includes provisions relating to refundable payroll tax credits, deferment of the employer portion of certain payroll taxes, net operating loss carryback periods, alternative minimum tax credit refunds, modifications to the net interest deduction limitations and technical corrections to tax depreciation methods for qualified improvement property. The Company analyzed the provisions of the Act and determined there was no significant impact to its income taxes for the periods presented. As of September 30, 2025, Classover NJ and Classover Holdings, Inc. has approximately $ 6,868,745 and $ 945,143 in federal net operating loss carryforwards, respectively. These loss carryforwards have an indefinite life. The Company’s tax years 2022 and forward generally remain subject to examination by federal and state tax authorities. 16 Table of Contents Note 9. Related parties As of September 30, 2025 and December 31, 2024, The Company has related party transactions with the following affiliates and affiliated entities: Related Party Name Relationship Hui Luo Majority owner of the Company Liu Yi Spouse of Hui Luo Genius Kid Class LLC An entity controlled by Yi Liu Dream Legal Group, Inc An entity controlled by Hui Luo Ideal Force LLC An entity controlled by Yi Liu Dreamgo Inc. An entity controlled by Hui Luo Due from related parties September 30, 2025 December 31, 2024 Dream Legal Group, Inc. 23,039 8,251 Total due from related parties $ 23,039 $ 8,251 Due to related parties September 30, 2025 December 31, 2024 Luo Hui-accrued interest on promissory note — 2,166 Luo Hui – promissory note, due on August 15, 2025; at a rate of 4% per annum — 130,000 Due to Dream Go Inc. 18,117 117,379 Total due to related parties - current $ 18,117 $ 249,545 The following table represents related party transactions for the nine months ended September 30, 2025 and 2024: Three Months Ended Nine Months Ended Name Business Purpose of Transaction September 30, 2025 September 30, 2024 September 30, 2025 September 30, 2024 Dream Legal Group, Inc Sublease income $ 26,684 $ 23,471 $ 76,604 $ 48,471 Dreamgo Inc. Rent expense 92,095 90,253 276,284 270,758 Genius Kid Class LLC Consulting revenue — 100,000 — 300,000 Yi Liu Interest expense — — 822 — Luo Hui Interest expense — — 1,300 — Totals $ 118,779 $ 213,724 $ 355,010 $ 619,230 Sublease income has been reflected as a reduction of general and administrative expenses in the accompanying consolidated statements of operations. 17 Table of Contents As of September 30, 2025 and December 31, 2024, the Company has the following ROU assets and operating lease liabilities recognized from related party under ASC 842 (Note 4): September 30, 2025 December 31, 2024 Dreamgo Inc. ROU assets $ 1,324,294 $ 1,552,242 Dreamgo Inc. Short term obligation under operating leases $ ( 191,581 ) $ ( 314,685 ) Dreamgo Inc. Long term obligation under operating leases $ ( 1,131,125 ) $ ( 1,241,495 ) Note 10 . Convertible notes Conversion of convertible notes in connection with the Business Combination Convertible notes payable is comprised of the following as of December 31, 2024: Borrower No. Amount Interest Rate Conversion Cap Closing Date Maturity Date December 31, 2024 1 $ 250,000 0.44 % $ 3,000,000 2/7/2022 2/7/2027 $ 250,000 2 62,500 0.44 % 3,000,000 2/7/2022 2/7/2027 62,500 3 62,500 0.44 % 3,000,000 2/7/2022 2/7/2027 62,500 4 35,000 0.44 % 3,000,000 2/7/2022 2/7/2027 35,000 5 90,000 0.44 % 3,000,000 2/7/2022 2/7/2027 90,000 6 50,000 0.44 % 3,000,000 2/7/2022 2/7/2027 50,000 7 50,000 0.44 % 3,000,000 2/7/2022 2/7/2027 50,000 8 10,000 0.44 % 3,000,000 2/7/2022 2/7/2027 10,000 9 50,000 0.44 % 3,000,000 2/7/2022 2/7/2027 50,000 10 30,000 0.44 % 3,000,000 2/7/2022 2/7/2027 30,000 11 100,000 0.44 % 3,000,000 2/7/2022 2/7/2027 100,000 12 50,000 0.44 % 3,000,000 2/7/2022 2/7/2027 50,000 13 20,000 0.44 % 3,000,000 2/7/2022 2/7/2027 20,000 14 20,000 0.44 % 3,000,000 2/7/2022 2/7/2027 20,000 15 20,000 0.44 % 3,000,000 3/3/2022 3/3/2027 20,000 16 18,176 0.44 % 3,000,000 2/7/2022 2/7/2027 18,176 17 53,015 0.44 % 3,000,000 2/7/2022 2/7/2027 53,015 18 53,015 0.44 % 3,000,000 2/7/2022 2/7/2027 53,015 19 27,265 0.44 % 3,000,000 2/7/2022 2/7/2027 27,265 20 98,529 0.44 % 3,000,000 2/7/2022 2/7/2027 98,529 21 50,000 0.44 % 3,000,000 4/7/2022 4/7/2027 50,000 22 200,000 0.44 % 5,000,000 12/6/2023 12/6/2028 200,000 23 50,000 0.44 % 5,000,000 3/15/2024 3/15/2029 50,000 24 50,000 0.44 % 5,000,000 3/15/2024 3/15/2029 50,000 25 87,500 0.44 % 3,000,000 2/7/2022 2/7/2027 87,500 26 62,500 0.44 % 3,000,000 2/7/2022 2/7/2027 62,500 27 100,000 0.44 % 3,000,000 2/7/2022 2/7/2027 100,000 Totals $ 1,750,000 $ 1,750,000 Upon the closing of the business combination, the above notes $ 1,750,000 and accrued interest payable $ 19,072 were converted to 4,433,122 Class B Common Shares. 18 Table of Contents 2025 Convertible Notes On May 30, 2025, the Company entered into a Securities Purchase Agreement for up to an aggregate of $ 500 million in newly issued senior secured convertible notes (the “2025 Convertible Notes”). The Purchase Agreement provides for an initial closing of $ 11 million of convertible notes, subject to customary closing conditions. The Company has agreed, subject to certain exceptions contained in the Purchase Agreement, to use 80% of the net proceeds from the notes to purchase certain cryptocurrency as set forth in the Purchase Agreement. The Notes will be convertible into Class B common stock of the Company at the option of the holder at an initial conversion price equal to 200% of the closing price of the Common Stock on the trading day immediately prior to the closing date, subject to adjustment as provided for in the Notes. Interest is payable under the notes at a rate of 7 % per annum and is payable, quarterly, at the option of the Company in cash, through the issuance of additional notes or, under certain situations, through the issuance of shares of Common Stock. The Notes will rank senior to all outstanding and future indebtedness of the Company and its subsidiaries (subject to certain exceptions contained in the notes) and will be secured by a first priority perfected security interest in all of the existing and future assets of the Company and its direct and indirect subsidiaries, including all of the capital stock of each of the subsidiaries and the cryptocurrency purchased with the proceeds of the Notes. The Notes are due on the two-year anniversary of the date of issuance unless earlier converted or repaid. Description of 2025 Convertible Note: Issue Date June 6, 2025 Face Value $ 11,000,000 Maturity June 6, 2027 Coupon 7.0 % per annum, quarterly, PIK-eligible Conversion Price Initially $ 7.36 subject to adjustments Floor Price $ 0.74 per share Redemption 120% upon Issuer’s Call, 0% on Maturity Use of Proceeds 80% for SOL investment; 20% for operations The Company elected the fair value option for 2025 convertible notes. The fair value of the convertible notes are remeasured at each balance sheet date and any changes are recorded in the consolidated statements of operations. For the three and nine months ended September 30, 2025, the Company recorded a change in the fair value of 2025 convertible notes in the amount of a loss of $ 249,508 and $ 510,138 . For the three and nine months ended September 30, 2025, interest expense related to the 2025 Convertible Note is $ 194,082 and $ 244,712 . Note 11 . Warrant Liabilities In connection with the Reorganization Merger, the Company has assumed 17,250,000 warrants outstanding from BFAC public shareholders. Each whole warrant entitles the holder to purchase one ordinary share at a price of $ 11.50 per share, subject to adjustment as described below, commencing 30 days after the completion of its initial business combination, and expiring five years from after the completion of an initial business combination. No fractional warrant will be issued and only whole warrants will trade. The Company may redeem the warrants at a price of $ 0.01 per warrant upon 30 days’ notice, only in the event that the last sale price of the ordinary shares is at least $18.00 (as adjusted for share sub-divisions, share dividends, reorganizations and recapitalizations) per share for any 20 trading days within a 30-trading day period ending on the third day prior to the date on which notice of redemption is given, provided there is an effective registration statement and current prospectus in effect with respect to the ordinary shares underlying such warrants during the 30 day redemption period. If the Company redeems the warrants as described above, management will have the option to require all holders that wish to exercise warrants to do so on a “cashless basis.” If a registration statement is not effective within 90 days following the consummation of a business combination, warrant holders may, until such time as there is an effective registration statement and during any period when the Company shall have failed to maintain an effective registration statement, exercise warrants on a cashless basis pursuant to an available exemption from registration under the Securities Act. If an exemption from registration is not available, holders will not be able to exercise their warrants on a cashless basis and in no event (whether in the case of a registration statement being effective or otherwise) will the Company be required to net cash settle the warrant exercise. If an initial business combination is not consummated, the warrants will expire and will be worthless. 19 Table of Contents In addition, if (a) the Company issues additional ordinary shares or equity-linked securities for capital raising purposes in connection with the closing of its initial business combination at a newly issued price of less than $ 9.20 per share (with such issue price or effective issue price to be determined in good faith by our board of directors and, in the case of any such issuance to our initial shareholders or their affiliates, without taking into account any founders’ shares held by the Company’s initial shareholders or such affiliates, as applicable, prior to such issuance), (b) the aggregate gross proceeds from such issuances represent more than 60 % of the total equity proceeds, and interest thereon, available for the funding of the initial business combination on the date of the consummation of the Company’s initial business combination (net of redemptions), and (c) the volume weighted average trading price of the Company’s ordinary shares during the 20 trading day period starting on the trading day prior to the day on which the Company consummates its initial business combination is below $9.20 per share, the exercise price of the warrants will be adjusted (to the nearest cent) to be equal to 115 % of the higher of the market value and the newly issued price, and the $ 18.00 per share redemption trigger price described above will be adjusted (to the nearest cent) to be equal to 180% of the higher of the market value and the newly issued price. The Company accounts for the 17,250,000 warrants issued in connection with the Public Offering of BFAC in accordance with the guidance contained in ASC 815-40. Such guidance provides that because the warrants do not meet the criteria for equity treatment thereunder, each warrant must be recorded as a liability. Accordingly, the Company classifies each warrant as a liability at its fair value. This liability is subject to remeasurement at each condensed balance sheet date. With each such remeasurement, the warrant liability will be adjusted to fair value, with the change in fair value recognized in the Company’s unaudited condensed statements of operations. The following table presents the changes in the fair value of warrant liabilities: Fair value as of April 4, 2025 (Reorganization Merger Date) $ 753,824 Change in fair value 629,625 Fair value as of September 30 , 202 5 $ 1,383,449 Note 12 . Recurring f air v alue m easurements Fair value is defined as the price that would be received for sale of an asset or paid for transfer of a liability in an orderly transaction between market participants at the measurement date. U.S. GAAP (as defined in Note 2) establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). These tiers consist of: · Level 1, defined as observable inputs such as quoted prices (unadjusted) for identical instruments in active markets; · Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and · Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. 20 Table of Contents The following tables present fair value information as of September 30, 2025, the Company’s financial assets and liabilities that were accounted for at fair value on a recurring basis and indicate the fair value hierarchy of the valuation techniques the Company utilized to determine such fair value: September 30 , 2025 Level 1 Level 2 Level 3 Assets: Investment- Crypto asset $ 12,060,203 $ - $ - Liabilities Warrant liabilities $ 1,383,449 $ - $ - Convertible notes payable $ - $ - $ 11,510,138 Note 13 . Segment information and revenue analysis The Company follows ASC 280, Segment Reporting, which requires that companies disclose segment data based on how management makes decisions about allocating resources to each segment and evaluating their performances. The Company has one reporting segment. The Company’s chief operating decision maker has been identified as the chief executive officer, who reviews consolidated results when making decisions about allocating resources and assessing performance of the Company and hence the Company has only one reportable segment. The Company does not distinguish between markets or segments for the purpose of internal reporting. Disaggregated information of revenues by stream are as follows: Three Months Ended Nine Months Ended September 30, 2025 September 30, 2024 September 30, 2025 September 30, 2024 Revenues: Time-based subscriptions $ 227,417 $ 324,583 $ 698,259 $ 888,915 Credit-based subscriptions 1,060,221 554,351 2,131,043 1,615,915 Marketing revenues (related party) — 100,000 — 300,000 Total revenues $ 1,287,638 $ 978,934 $ 2,829,302 $ 2,804,830 Note 14 . Commitments and Contingencies Legal Proceedings The Company may be involved in various claims and legal actions arising in the ordinary course of business. The Company establishes an accrued liability for legal proceedings only when those matters present loss contingencies that are both probable and reasonably estimable. At September 30, 2025, the Company was not involved in any material legal proceedings regarding claims or legal actions against the Company. Note 15 . Equity As of September 30, 2025, the total number of shares which the Company shall have the authority to issue is five hundred and ten million ( 510,000,000 ) shares, which include 50,000,000 shares of Class A common stock, par value $ 0.0001 per share, 450,000,000 shares of Class B common stock, par value $ 0.0001 per share, and 10,000,000 shares of preferred stock. The Preferred Stock authorized by this Certificate of Incorporation may be issued in series. Each Series A Preferred Shares are convertible to Class B Common Shares on a 1 to 1 basis, and each Series B Preferred Shares are convertible to Class B Common Shares on a 1 to 100 basis. Holders of shares of Common Stock will exclusively possess all voting power with respect to the Company and are entitled vote on all matters submitted to the Company’s stockholders for their vote or approval. Each share of Class A Common Stock has the voting power of twenty-five votes and each share of Class B Common Stock has the voting power of one vote. 21 Table of Contents Reverse Recapitalization and De-SPAC Merger On April 4, 2025, The Company consummated a business combination with Classover DE and BFAC (the SPAC), resulting in a reverse recapitalization. As part of the transaction: · Former Classover DE shareholders received 12,500,000 shares of Company’s equity, including: ○ 6,535,014 Class A common shares to Hui Luo ○ 1,531,864 Class B common shares to other Classover shareholders ○ 1,000,000 Series A Preferred Shares to Classover equity holders ○ 4,433,122 Class B common shares to convertible note holders upon conversion · BFAC Sponsor received 9,600,000 Class B common shares · Remaining BFAC IPO investors were issued 168,356 Class B common shares, representing residual trust shares post-redemptions (3,683,125 original shares less 3,514,769 redeemed) · 17,250,000 warrants were exchanged 1-for-1 with original BFAC warrant holders These equity issuances were part of the reverse recapitalization and accounted for in accordance with ASC 805-40. No goodwill or intangible assets were recorded. The conversion of convertible notes was accounted for in accordance with ASC 470-20, with no gain or loss recognized upon conversion. Shares issued in connection with the Company’s Merger on April, 4, 2025: Common Share Holders of BFAC public shareholders – Class B 168,356 BFAC sponsors – Class B 9,600,000 Founder of Classover DE – Class A 6,535,014 Rest of Classover DE shareholders prior to merger – Class B 1,531,864 Convertible note holders of Classover Inc. prior to merger – Class B 4,433,122 Classover DE equity holders-Series A Preferred Shares 1,000,000 Total Class A common shares 6,535,014 Total Class B common shares 15,733,342 Total Series A Preferred Shares 1,000,000 PIPE Investment On April 4 and April 14, 2025, a PIPE investor invested $ 5,000,000 via a PIPE agreement with 5,000 Series B Preferred Shares to the PIPE investor. Preferred shares were classified as equity under ASC 480. $5,000,000 was delivered, less $300,000 in transaction costs, with net proceeds of $4,700,000 . On May 30, 2025, the Company issued 25,000 Class B common shares to the investor as consideration for waving specific financing restrictions under the PIPE agreement. Shares issued as contract modifications are recorded at fair value and $ 66,500 expense was recorded when the waiver becomes effective, per ASC 470 and ASC 505. 2024 Incentive Plan In connection with the Reorganization Merger, the Company adopted the Equity Incentive Plan (the “2024 Incentive Plan”). The 2024 Incentive Plan will provide for grants of stock options, stock appreciation rights, restricted stock, restricted stock units, and other stock or equity-related cash-based awards. Directors, officers and other employees of the Company and its subsidiaries, as well as others performing consulting or advisory services for the Company, will be eligible for grants under the 2024 Incentive Plan. 22 Table of Contents The 2024 Incentive Plan provides for the future issuance of shares of the Company’s Class B Common Shares, representing 8% of the number of shares of the Company’s Common Stock outstanding following the Business Combination (after giving effect to the Redemption). Accordingly, the 2024 Incentive Plan is eligible to issue up to 3,268,668 Class B Common Shares. · On April 17, 2025, 820,000 shares were granted as equity-based compensation to two employees of the Company, which will be vested over three years. · On April 28, 2025, 100,000 shares were issued to a third-party advisor for advisory services which will be vested over one year. · On September 6, 2025, 4,000 shares were issued to a third-party advisor for advisory services which was fully vested. Shares were measured at fair value on grant date under ASC 718. Compensation cost is recognized ratably over the vesting period. During the three and nine months ended September 30, 2025, stock compensation cost were $ 174,343 and $ 311,620 . Other equity transactions On April 17, 2025, 190,000 shares were issued to a professional service provider as part of an outstanding bill payment amount to $ 430,000 . On June 30, 2025, 415,131 Series A Preferred Shares were converted into an equivalent number of Class B common shares on a 1:1 basis . The conversion was accounted for as an equity-for-equity exchange under ASC 505. No gain or loss recognized. On June 30, 2025, the Company acquired intellectual property using $ 1,250,000 cash, 800,000 Class B common shares and 739,278 warrants. The transaction was accounted for under ASC 805-50 as an asset acquisition. Shares and warrants were valued at fair value on grant date. (See Note 5) Note 16 . Concentration of risk Credit risk The Company’s concentration of credit risk relates to financial institutions holding the Company’s cash. The Company maintains cash deposits with financial institutions that may exceed federally insured limits at times. The insurance coverage for cash deposits at each bank is $ 250,000 . As of September 30, 2025, a cash balance of $ 2,659,724 deposited with three financial institutions was uninsured. Management believes that the financial institutions that hold the Company’s deposits are financially credit worthy and, accordingly, minimal credit risk exists with respect to those balances. Customer concentration risk For the three and nine months ended September 30, 2025 and 2024, no customer accounted for more than 10 % of the Company’s total revenues. Vendor concentration risk For the three and nine months ended September 30, 2025 and 2024, no vendor accounted for over 10 % of the Company’s total purchases. 23 Table of Contents