KIDZ AI Inc. 10-K

ITEM 9A. CONTROLS AND PROCEDURES. Evaluation of Disclosure Controls and Procedures Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure. As required by Rules 13a-15 and 15d-15 under the Exchange Act, our Chief Executive Officer and Chief Financial Officer carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as of December 31, 2025. Based upon their evaluation, our Chief Executive Officer and Chief Financial Officer concluded that during the period covered by this report, our disclosure controls and procedures (as defined in Rules 13a-15 (e) and 15d-15 (e) under the Exchange Act) were effective at a reasonable assurance level and, accordingly, provided reasonable assurance that the information required to be disclosed by us in reports filed under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Management’s Report on Internal Controls Over Financial Reporting This annual report does not include a report of management’s assessment regarding internal control over financial reporting or an attestation report of the company’s registered public accounting firm due to a transition period established by rules of the Securities and Exchange Commission for newly public companies. Changes in Internal Control over Financial Reporting There were no changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) of the Exchange Act) during the most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. ITEM 9B. OTHER INFORMATION During the quarter ended December 31, 2025, (A) no director or officer adopted or terminated any (i) “Rule 10b5-1 trading arrangement,” as defined in Item 408(a) of Regulation S-K intending to satisfy the affirmative defense conditions of Rule 10b5–1(c) or (ii) “non-Rule 10b5-1 trading arrangement,” as defined in Item 408(a) of Regulation S-K; and (B) there was no information that was required to be disclosed on a Current Report on Form 8-K during such quarter that was not so disclosed. ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS Not applicable. 60 Table of Contents PART III ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT The following persons are the members of our board of directors and our executive officers as of the date of this Annual Report: Name Age Executive Officers Hui (Stephanie) Luo 46 Chief Executive Officer, Chairwoman and Director Yanling (Flora) Peng 30 Chief Financial Officer Directors Yan Zhang 43 Director Tracy Xia 41 Director Mona Liang 38 Director Amanda Chang 46 Director Executive Officers Hui (Stephanie) Luo – Chief Executive Officer and Chairwoman Stephanie Luo has served as Chief Executive Officer and chairwoman of the board of directors of the Company since April 2025. Ms. Luo is the founder and has been Chief Executive Officer of Class Over since the Company's inception in June 2020. Prior to launching the company, Ms. Luo founded Dream Legal Group in January 2018, a business and immigration legal service company based in New York City. Previously in October 2016, she founded Dream Go Inc., an education consulting and advisory company. Ms. Luo was also a founder and Chief Executive Officer of Tutor Cube from 2008 to 2010, an afterschool learning center in Queens, New York City. Ms. Luo holds a Master's Degree in Mathematics from Marshall University. Her educational and entrepreneurial experience is pivotal in steering the Company toward delivering high-quality educational offerings and innovative online learning solutions. We believe Ms. Luo is well-qualified to serve on our board of directors due to her operational expertise and relationships. Yanling (Flora) Peng – Chief Financial Officer Yanling (Flora) Peng has served as Chief Financial Officer of the Company since April 2025. Ms. Peng has served as Class Over’s Chief Financial Officer since March 2024. Ms. Peng joined Class Over in June 2020, serving as a General Manager until she took over the Chief Financial Officer position. From January 2019 to May 2020, Ms. Peng served as Financial and Marketing Manager of Dream Go Inc. From March 2018 to December 2018, she served as a Digital Marketing and Financial Specialist for Forward Pathway LLC, an educational consulting company. Ms. Peng received a Bachelor of Science in International Economics and Trade from Central South University of Forestry & Technology in China and a M.S. in Business Analytics from Fordham University. Non-Employee Directors Yan Zhang Yan Zhang has served as a member of the board of directors since April 2025. She has been the President and a board member of Lion Group Holding Ltd (NASDAQ: LGHL) since May 2021. From September 2009 to June 2020, Ms. Zhang served as a manager, senior manager, and subsequently, principal of UHY Advisors NY, Inc., with her last role being a principal. From 2004 to 2007, Ms. Zhang served as a senior accountant of PricewaterhouseCoopers LLP in Beijing, China. Ms. Zhang received her bachelor’s degree and master’s degree both in Economics from Central University of Finance and Economics in Beijing, China, and obtained a second Master’s Degree in information assurance from The State University of New York at Albany. Ms. Zhang has been a member of The New York State Society of Certified Public Accountants since November 2010 and also a member of the New York Institute of Internal Auditors since September 2011. We believe Ms. Zhang is well-qualified to serve as a member of the Board due to her work experience and relationships. 61 Table of Contents Tracy Xia Tracy Xia has served as a member of the board of directors since April 2025. Since January 2018, she has served as the co-founder and Chief Operating Officer of Rejection Therapy, a pioneering learning and development platform that helps individuals and organizations overcome fear and unlock their full potential. Prior to this, she held various roles at major tech corporations. From August 2015 to December 2017, she was a Senior Program Manager at Google, where she successfully led the TOPPA career development community, growing its membership to over 5,000. From June 2011 to July 2015, Ms. Xia served as a Product Manager at Dell. She also co-founded the Bay Area Chinese Young Professional Fellowship in June 2014, which has provided career development training to hundreds of young professionals. Ms. Xia holds an Master’s Degree in Business Administration from the Fuqua School of Business at Duke University. We believe Ms. Xia is well-qualified to serve as a member of the board of directors due to her work experience and relationships. Mona Liang Mona Liang has served as a member of the board of directors since April 2025. Ms. Liang has served as a Project Manager and Business Analyst at TD Bank since November 2023, where she works in the Global AML (Anti-Money Laundering) department, focusing on management reporting, system enhancement proposals, and risk mitigation. From August 2021 to September 2023, she was a Project Manager at Prudential Financials. Ms. Liang co-founded TechWithU in April 2017, a staffing and consulting company in New York City, specializing in IT process optimization and business analytics solutions. From October 2015 to July 2019, she also served as a Project Manager and Business Analyst at Morgan Stanley Wealth Management. Ms. Liang holds a Master’s Degree in Economics from the State University of New York at Stony Brook. We believe Ms. Liang is well-qualified to serve as a member of the board of directors due to her work experience and relationships. Amanda Chang Amanda Chang has served as a member of the board of directors since April 2025. Since September 2023, Ms. Chang has served as a Marketing Director at Bodhi Meditation Center, a nonprofit organization based in New York. From January 2022 to August 2023, she has served as the E-commerce Marketing Regional Lead at 99 Ranch Market. From January 2016 to December 2021, she served as the Digital Marketing Lead at the Arts Culture Center New York. From June 2013 to November 2015, Ms. Chang worked as an art and fashion design consultant for clients in New York, Berlin, Los Angeles, and Beijing. From February2003 to December2011, she was a Project Manager at Far Rail Tours. Ms. Chang holds a Bachelor’s of Arts Degree in Art Design from Beijing Institute of Fashion Technology and an Associate’s of Arts Degree in Tourism & Marketing from Beijing Union University. We believe Ms. Chang is well-qualified to serve as a member of the board of directors due to her work experience and relationships. Controlled Company Exemption Hui Luo holds a majority of the voting power of the Company’s Common Stock and as a result, the Company is a “controlled company” within the meaning of applicable rules of Nasdaq. Under these rules, a company of which more than 50% of the voting power for the election of directors is held by an individual, group or another company is a “controlled company” and may elect not to comply with certain corporate governance requirements, including the requirements (a) that a majority of the board consists of independent directors; (b) for an annual performance evaluation of the nominating and corporate governance and compensation committees; (c) that the controlled company has a nominating and corporate governance committee that is composed entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities; and (d) that the controlled company has a compensation committee that is composed entirely of independent directors with a written charter addressing the committee’s purpose and responsibility. The Company currently satisfies all of Nasdaq’s corporate governance requirements and has not taken advantage of any of the exemptions available to it as a controlled company. If the Company determines in the future to avail itself of any of the corporate governance exemptions available to controlled companies, our shareholders may not have the same protections afforded to stockholders of companies that are subject to all of the Nasdaq corporate governance requirements. In the event that the Company ceases to be a “controlled company” and its Common Stock continues to be listed on Nasdaq, it will be required to comply with these provisions within the applicable transition periods. 62 Table of Contents Role of Board in Risk Oversight One of the key functions of the board of directors is informed oversight of our risk management process. The board of directors does not currently have a standing risk management committee, but administers this oversight function directly through the board of directors as a whole, as well as through various standing committees of the board of directors that address risks inherent in their respective areas of oversight. In particular, the board of directors is responsible for monitoring and assessing strategic risk exposure and the board of directors’ Audit Committee has the responsibility to consider and discuss the Company’s major financial risk exposures and the steps management takes to monitor and control such exposures, including guidelines and policies to govern the process by which risk assessment and management is undertaken. The Audit Committee also monitors compliance with legal and regulatory requirements. The Company’s Compensation Committee also assesses and monitors whether the Company’s compensation plans, policies and programs comply with applicable legal and regulatory requirements. Director Independence The Company adheres to the listing rules of Nasdaq in affirmatively determining whether a director is independent. Nasdaq listing standards generally define an “independent director” as a person, other than an executive officer of a company or any other individual having a relationship which, in the opinion of the issuer’s board of directors, would interfere with the exercise of independent judgment in carrying out the responsibilities of a director. The board of directors has determined that each of the directors, other than Ms. Luo, qualifies as an independent director, as defined under the listing rules of Nasdaq, and that the board of directors consists of a majority of “independent directors,” as defined under the rules of the SEC and Nasdaq listing rules relating to director independence requirements. Although the board of directors presently consists of a majority independent directors, there can be no assurance that the Company will not avail itself of the exemption for controlled companies in the future, which would remove this requirement. Committees of the Board of Directors We have a standing Audit Committee, Compensation Committee and Nominating and Governance Committee. Each committee operates under a charter that has been approved by the board of directors. The committees have the composition and responsibilities described below. Audit Committee Yan Zhang, Mona Liang, and Amanda Chang are currently the members of the Audit Committee, with Yan Zhang serving as chair. The Audit Committee meets Nasdaq audit committee composition requirements. Each member of the Audit Committee is financially literate. The board of directors of the Company has determined that of Yan Zhang qualifies as an “audit committee financial expert” as defined by the SEC. The functions of the Audit Committee include, among other things: · evaluating the performance, independence and qualifications of our independent auditors and determining whether to retain the existing independent auditors or engage new independent auditors · reviewing our financial reporting processes and disclosure controls; · reviewing and approving the engagement of our independent auditors to perform audit services and any permissible non-audit services; · reviewing the adequacy and effectiveness of our internal control policies and procedures, including the responsibilities, budget, staffing and effectiveness of our internal audit function; · reviewing with the independent auditors the annual audit plan, including the scope of audit activities and all critical accounting policies and practices; · obtaining and reviewing at least annually a report by our independent auditors describing the independent auditors’ internal quality control procedures and any material issues raised by the most recent internal quality-control review; · monitoring the rotation of partners of our independent auditors on the engagement team as required by law; 63 Table of Contents · prior to engagement of any independent auditor, and at least annually thereafter, reviewing relationships that may reasonably be thought to bear on their independence, and assessing and otherwise taking the appropriate action to oversee the independence of the independent auditor; · reviewing annual and quarterly financial statements and reports, including the disclosures contained in “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” in periodic reports to be filed with the SEC and discussing the statements and reports with independent auditors and management; · reviewing with the independent auditors and management significant issues that arise regarding accounting principles and financial statement presentation and matters concerning the scope, adequacy and effectiveness of our financial controls and critical accounting policies; · reviewing with management and the auditors any earnings announcements and other public announcements regarding material developments; · establishing procedures for the receipt, retention and treatment of complaints received by Company regarding financial controls, accounting, auditing or other matters; · preparing the report that the SEC requires in our annual proxy statement; · reviewing and providing oversight of any related party transactions in accordance with our related party transaction policy and reviewing and monitoring compliance with legal and regulatory responsibilities, including our code of ethics; · reviewing our major financial risk exposures, including the guidelines and policies to govern the process by which risk assessment and risk management is implemented; and · reviewing and evaluating on an annual basis the performance of the Audit Committee and the Audit Committee charter. The composition and function of the Audit Committee complies with all applicable requirements of the Sarbanes-Oxley Act, all applicable SEC rules and regulations and all applicable Nasdaq listing rules. We will comply with future requirements of the SEC, Nasdaq or other applicable authority to the extent they become applicable to our company. The Audit Committee has established a procedure whereby complaints or concerns regarding accounting, internal controls or auditing matters may be submitted anonymously to the Audit Committee by email. Compensation Committee Mona Liang, Tracy Xia, and Amanda Chang are currently the members of the Compensation Committee, with Mona Liang acting as chair. The Board has determined that each of the members of the Compensation Committee satisfies the independence requirements of Nasdaq and is a non-employee director, as defined in Rule 16b-3 promulgated under the Exchange Act. The functions of the Compensation Committee include, among other things: · reviewing and approving the corporate objectives that pertain to the determination of executive compensation; · reviewing and approving the compensation and other terms of employment of our executive officers; · reviewing and approving performance goals and objectives relevant to the compensation of our executive officers and assessing their performance against these goals and objectives; · making recommendations to the Board regarding the adoption or amendment of equity and cash incentive plans and approving amendments to such plans to the extent authorized by the Board; · reviewing and making recommendations to the board of directors of Company regarding the type and amount of compensation to be paid or awarded to non-employee board members; · reviewing and assessing the independence of compensation consultants, legal counsel and other advisors as required by Section 10C of the Exchange Act; 64 Table of Contents · administering our equity incentive plans, to the extent such authority is delegated by the Board; · reviewing and approving the terms of any employment agreements, severance arrangements, change in control protections, indemnification agreements and any other material arrangements for executive officers; · reviewing with management disclosures under the caption “Compensation Discussion and Analysis” in our periodic reports or proxy statements to be filed with the SEC, to the extent such caption is included in any such report or proxy statement; · preparing an annual report on executive compensation that the SEC requires in our annual proxy statement; and · reviewing and evaluating on an annual basis the performance of the Compensation Committee and recommending such changes as deemed necessary with the Board Company. The Compensation Committee may also, in its sole discretion, retain or obtain the advice of a compensation consultant, legal counsel or other advisor and is directly responsible for the appointment, compensation and oversight of the work of any such advisor. However, before engaging or receiving advice from a compensation consultant, external legal counsel or any other advisor, the Compensation Committee will consider the independence of each such advisor, including the factors required by Nasdaq and the SEC. The composition and function of the Compensation Committee complies with all applicable requirements of the Sarbanes-Oxley Act and all applicable SEC and Nasdaq rules and regulations. The Company will comply with future requirements of the SEC, Nasdaq or other applicable authority to the extent they become applicable to the Company. The Company maintains the Compensation Committee in accordance with the rules of Nasdaq notwithstanding the general availability of an exemption from those rules for controlled companies. There can be no assurance that the Company will not avail itself of the exemption for controlled companies in the future. Nominating and Governance Committee Tracy Xia, Mona Liang, and Amanda Chang are currently the members of the Nominating and Corporate Governance Committee, with Tracy Xia acting as chair. The board of directors has determined that each of the members of the Compensation Committee satisfies the independence requirements of Nasdaq. The Nominating and Governance Committee assists the Board by identifying and recommending individuals qualified to become members of the board of directors. The Nominating and Corporate Governance Committee is responsible for evaluating the composition, size and governance of the board of directors and its committees and making recommendations regarding future planning and the appointment of directors to the committees, establishing a policy for considering stockholder nominees to the board of directors , reviewing the corporate governance principles and making recommendations to the board of directors regarding possible changes; and reviewing and monitoring compliance with our Code of Business Conduct and Ethics. The Company maintains the Nominating and Corporate Governance Committee in accordance with the rules of Nasdaq notwithstanding the general availability of an exemption from those rules for controlled companies. There can be no assurance that the Company will not avail itself of the exemption for controlled companies in the future. Code of Business Conduct and Ethics The board of directors has adopted a Code of Business Conduct and Ethics that applies to all of its directors, officers and employees, including its principal executive officer, principal financial officer and principal accounting officer. In the event the Company makes any amendments to, or grants any waiver from, a provision of the code that applies to its principal executive officer, principal financial officer or principal accounting officer that requires disclosure under applicable SEC or Nasdaq rules, the Company will disclose such amendment or waiver and reasons therefore in a Current Report on Form 8-K as required by SEC rules. Indemnification Agreements On the Closing Date, the Company entered into indemnification agreements with each executive officer and director of the Company. The indemnification agreements provide that, subject to limited exceptions specified therein, the Company will indemnify its directors and officers for certain expenses, including attorneys’ fees, judgments, fines and settlement amounts incurred by a director or officer in any action or proceeding arising out of their services as one of the Company’s directors or officers or any other company or enterprise to which the person provides (or provided) services at the Company’s request. 65 Table of Contents Insider Trading Policy We have an insider trading policy governing the purchase, sale, and other dispositions of our securities that applies to our directors, officers, employees, and consultants. The policy generally prohibits the purchase, sale or trade of our securities with the knowledge of material nonpublic information. We believe our insider trading policy is reasonably designed to promote compliance with insider trading laws, rules and regulations, and listing standards applicable to our company. ITEM 11. EXECUTIVE COMPENSATION This section discusses the material components of the executive compensation program for the Company’s named executive officers (“NEOs”) who are identified in the 2025 Summary Compensation Table below. This discussion contains forward-looking statements that are based on the Company’s current plans, considerations, expectations, and determinations regarding future compensation programs and related target milestones for the Company’s future results of operations. 2025 Summary Compensation Table The following table presents information regarding the total compensation awarded to, earned by and paid to the Company’s NEOs for services during 2025 and 2024. Name and Principal Position Year Salary ($) Stock Awards ($) Option Awards ($) Non-Equity Plan Compensation (1) ($) Total ($) Hui (Stephanie) Luo 2025 197,565 __ __ __ 197,565 Chief Executive Officer 2024 84,000 __ __ __ 84,000 Yanling (Flora) Peng 2025 169,783 __ __ __ 169,783 Chief Financial Officer 2024 103,141 __ __ __ 103,141 Narrative Disclosure to the Summary Compensation Table Base Salaries Our NEOs each receive a base salary to compensate them for services rendered to our Company. The base salary payable to each NEO is intended to provide a fixed component of compensation reflecting the executive’s skill set, experience, role and responsibilities. Ms. Luo’s annual base salary during fiscal years 2025 and 2024 was $197,565 and $84,000 and Ms. Peng’s annual base salary during fiscal years 2025 and 2024 was $138,380 and $103,141. On April 29, 2025, our Board of Directors and Compensation Committee approved and adopted an increase to the monthly base salary payable to Ms. Peng to $13,000 per month (or $156,000 on an annualized basis), effective May 1, 2025. Perquisites We generally do not provide perquisites or personal benefits to our employees, including our NEOs. Offer Letters and Employment Agreements with the Company’s NEOs Ms. Luo has entered into an employment agreement with the Company. The terms of this agreement include an annual base salary of $240,000, payable monthly. Ms. Luo is also eligible for an annual bonus in cash, Company stock, or both, based on performance targets set by the Board. She will also participate in the Company’s equity incentive plans. Upon termination, Ms. Luo will receive any accrued but unpaid base salary, an additional amount equal to 50% of the then-current base salary, and any awarded but unpaid annual bonus for the preceding year. All NEOs are eligible to participate in the employee benefit plans available to our employees, subject to the terms of such plans. 66 Table of Contents Equity Incentive Plans The Company has two equity incentive plans: the 2024 Plan which was adopted on November 22, 2024 and the 2025 Plan which was adopted on December 22, 2025. As of the date of this Annual Report, the Company has issued an aggregate of 46,740 shares of Common Stock under the 2024 Plan and an aggregate of 15,000 shares of Common Stock under the 2025 Plan. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED SHAREHOLDER MATTERS The following table sets forth information regarding the beneficial ownership of our Ordinary Shares as of the date of this Annual Report by: · each person known by us to be the beneficial owner of more than 5% of our outstanding Ordinary Shares; · each of our officers and directors; and · all of our officers and directors as a group. Name and Address of Beneficial Owners(1) Number of Class A Common Stock (#) Percentage (%) Number of Class B Common Stock (#) Percentage (%) % of Total Voting Power(2) Executive Officers and Directors: Hui Luo 130,731 100 % 10,457 (3) * 73.6 % Yanling Peng - - 3,067 (4) * * Yan Zhang - - - - - Tracy Xia - - - - - Mona Liang - - - - - Amanda Chang - - - - - All Directors and Executive Officers as a group (6 Individuals) 130,731 100 % 13,524 (3)(4) 1.2 % 73.6 % Greater than 5% Holders: Highbridge Capital Management, LLC(5) - - 44,076 9.9 % * ____________________ * Less than 1%. (1) Unless otherwise noted, the business address of each of the following entities or individuals is 450 7 th Avenue, Suite 905, New York, New York 10123. (2) Percentage of total voting power represents voting power with respect to all shares of our Class A common stock and Class B Common Stock, as a single class. The holders of our Class A Common Stock are entitled to 25 votes per share, and holders of our Class B Common Stock are entitled to one vote per share. (3) Represents 10,457 shares of Class B Common Stock issuable upon conversion of 522,801 shares of Series A Preferred Stock which are convertible at any time at the option of the holder. Does not include (i) an aggregate of 10,000 shares of Common Stock issued to Ms. Luo under the 2024 Plan and (ii) an aggregate of 10,000 shares of Common Stock issued to Ms. Luo under the 2025 Plan, in each case subject to vesting conditions that will not be satisfied in the next 60 days. (4) Does not include (i) an aggregate of 16,134 shares of Common Stock issued to Ms. Peng under the 2024 Plan and (ii) an aggregate of 5,000 shares of Common Stock issued to Ms. Peng under the 2025 Plan, in each case subject to vesting conditions that will not be satisfied in the next 60 days. (5) Represents shares held by Highbridge Capital Management, LLC and certain funds and accounts which it acts as investment adviser for. The business address of Highbridge is 277 Park Avenue, 23 rd Floor, New York, New York 10172. Information obtained from a Schedule 13G/A filed on February 17, 2026. Equity Compensation Plans As of December 31, 2025, the Company has issued an aggregate of 18,740 shares of Common Stock under the 2024 Plan and an aggregate of 0 shares of Common Stock under the 2025 Plan. 67 Table of Contents ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE As of December 31, 2025 and 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 December 31, 2025 December 31, 2024 Dream Legal Group, Inc. 45,493 8,251 Total due from related parties $ 63,316 $ 8,251 Due to related parties December 31, 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. 63,316 117,379 Total due to related parties - current $ 45,493 $ 249,545 The following table represents related party transactions for the year ended December 31, 2025 and 2024: Year Ended December 31, Name Business Purpose of Transaction 2025 2024 Dream Legal Group, Inc Sublease income $ 104,105 $ 71,344 Dreamgo Inc. Rent expense 361,011 361,011 Genius Kid Class LLC Consulting revenue — 300,000 Yi Liu Interest expense — — Luo Hui Interest expense — — Totals $ 465,116 $ 532,356 Sublease income has been reflected as a reduction of general and administrative expenses in the accompanying consolidated statements of operations. 68 Table of Contents As of December 31, 2025 and 2024, the Company has the following right of use (ROU) assets and operating lease liabilities recognized from related party under ASC 842 (Note 4): December 31, 2025 December 31, 2024 Dreamgo Inc. ROU assets $ 1,246,766 $ 1,552,242 Dreamgo Inc. Short term obligation under operating leases $ (195,353 ) $ (314,685 ) Dreamgo Inc. Long term obligation under operating leases $ (1,046,141 ) $ (1,241,495 ) On November 1, 2022, the Company entered into a sublease agreement with Dream Go Inc. pursuant to which Dream Go Inc. subleased to the Company the offices currently serving as the Company’s headquarters at 450 7th Avenue, New York, New York 10123. Dream Go Inc. is an entity controlled by Hui Luo, the Company’s chief executive officer. The lease expires October 31, 2029. Related Person Transactions Policy The Company’s board of directors has adopted a written related person transaction policy setting forth the policies and procedures for the review and approval or ratification of related person transactions. This policy covers, with certain exceptions set forth in Item 404 of Regulation S-K under the Securities Act, any transaction or arrangement, or any series of transactions or arrangements in which the Company (or its direct and indirect subsidiaries and controlled entities) is to be a participant, whether or not the Company is a party, and a related party has a direct or indirect material interest in such transaction (unless clearly incidental in nature or it is determined in accordance with the related person transaction policy that such interest is immaterial in nature such that further review is not warranted), including without limitation sales, purchases or other transfers of real or personal property, use of property and equipment by lease or otherwise, services received or provided, the borrowing and lending of funds, guarantees of loans or other undertakings and the employment by the Company of an immediate family member of a related person or a change in the terms or conditions of employment of such an individual that is material to such individual. In reviewing and approving any such transactions, the Company’s audit committee is tasked, in light of the relevant facts and circumstances whether the transaction is in, or not inconsistent with, the best interests of the Company, including, but not limited to, the position or relationship of the related person with the Company, materiality of the transaction, business purpose for and rationale of the transaction, whether the transaction is on terms comparable to those available on an arms-length basis or is on terms that the Company offers generally to persons who are not related persons, whether the transaction is in the ordinary course of business, the effect of the transaction on the Company’s business and operations, potential for a conflict of interest, and overall fairness. All such approved transactions must be reviewed and approved or ratified by the audit committee, taking into account the foregoing considerations, during the next meeting of the audit committee, or sooner if determined to be necessary by the Company’s general counsel Director Independence Currently, Yan Zhang, Tracy Xia, Mona Liang and Amanda Chang would each be considered an “independent director” under the Nasdaq listing rules, which is defined generally as a person other than an officer or employee of the company or its subsidiaries or any other individual having a relationship, which, in the opinion of the company’s board of directors would interfere with the director’s exercise of independent judgment in carrying out the responsibilities of a director. Our independent directors will have regularly scheduled meetings at which only independent directors are present. ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES. Michael T. Studer CPA P.C. served as our independent registered public accounting firm for the fiscal year ended December 31, 2024 and from January 1, 2025 until the closing of the business combination with BFAC on April 4, 2025. Bush & Associates CPAs LLC has served as our independent registered public accounting firm since such date. The following is a summary of fees paid or to be paid to Michael T. Studer CPA P.C. and Bush & Associates CPAs LLC for services rendered during the fiscal years ended December 31, 2025 and 2024. Audit Fees During the fiscal years ended December 31, 2025 and 2024, audit fees paid to Michael T. Studer CPA P.C. were $0 and $75,000, respectively, and audit fees paid to Bush & Associates CPAs LLC were $165,000 and $0, respectively. Audit-Related Fees During the fiscal years ended December 31, 2025 and 2024, audit-related services, consisting of fees billed for assurance and related services that are reasonably related to performance of the audit or review of our financial statements and are not reported under “Audit Fees,” were $0 and $0, respectively, paid to Michael T. Studer CPA P.C. and $15,000 and $0, respectively, paid to Bush & Associates CPAs LLC. Tax Fees During the fiscal years ended December 31, 2025 and 2024, no fees were paid to either Michael T. Studer or Bush & Associates CPAs LLC for tax services. Pre-Approval Policy Our audit committee was formed in connection with the consummation of our business combination with BFAC. As a result, the audit committee did not pre-approve all of the foregoing services, although any services rendered prior to the formation of our audit committee were approved by our board of directors. Since the formation of our audit committee, and on a going-forward basis, the audit committee has and will pre-approve all auditing services and permitted non-audit services to be performed for us by our auditors, including the fees and terms thereof (subject to the de minimis exceptions for non-audit services described in the Exchange Act which are approved by the audit committee prior to the completion of the audit). 69 Table of Contents PART IV ITEM 15. EXHIBITS, FINANCIAL STATEMENTS, AND SCHEDULES (a) The following documents are filed as part of this report: (1) Financial Statements: Report of Independent Registered Public Accounting Firm (PCAOB ID #6797) Consolidated Balance Sheets Consolidated Statements of Operations Consolidated Statements of Changes in Shareholders’ Equity (Deficit) Consolidated Statements of Cash Flows Notes to Consolidated Financial Statements (2) Financial Statement Schedules: None. (b) The following Exhibits are filed as part of this report: Exhibit No. 2.1 Agreement and Plan of Merger, dated as of May 12, 2024, by and among Battery Future Acquisition Corp., BFAC Merger Sub 1 Corp, BFAC Merger Sub 2 Corp, Class Over Inc., and Classover Holdings, Inc. (incorporated by reference to Exhibit 2.1 to Company’s Registration Statement filed on Form S-4, File No. 333-283454 filed on November 26, 2024, as amended). 3.1 Articles of Incorporation of Classover Holdings, Inc. (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed on December 30, 2025). 3.2 Bylaws of Classover Holdings, Inc. (incorporated by reference to Exhibit 3.3 to Company’s Current Report on Form 8-K filed on December 30, 2025). 4.1 Warrant Agreement between Battery Future Acquisition Corp. and Continental Stock Transfer & Trust Company (incorporated by reference to Exhibit 4.1 to Company’s Registration Statement filed on Form S-4, File No. 333-283454 filed on November 26, 2024, as amended). 4.2 Warrant Assignment, Assumption and Amendment Agreement, dated as of April 4, 2025 (incorporated by reference to Exhibit 4.2 to Company’s Current Report on Form 8-K filed on April 10, 2025, as amended). 4.3 Specimen Common Stock Certificate of Company4.34 (incorporated by reference to Exhibit 4.3 to Company’s Registration Statement filed on Form S-4, File No. 333-283454 filed on November 26, 2024, as amended). 4.4 Specimen Warrant Certificate of Company (incorporated by reference to Exhibit 4.4 to Company’s Registration Statement filed on Form S-4, File No. 333-283454 filed on November 26, 2024, as amended). 70 Table of Contents 4.5 Form of First Preferred Warrant dated as of April 4, 2025 (incorporated by reference to Exhibit 4.5 to the Company’s Current Report on Form 8-K filed on April 10, 2025, as amended). 4.6 Form of Second Preferred Warrant dated as of April 4, 2025 (incorporated by reference to Exhibit 4.6 to the Company’s Current Report on Form 8-K filed on April 10, 2025, as amended). 4.7 Form of Pre-Funded Warrant (incorporated by reference to Exhibit 4.1 to Company’s Current Report on Form 8-K filed on July 7, 2025) 10.1 Classover Holdings, Inc. 2024 Equity Incentive Plan (incorporated by reference to Exhibit 10.4 to Company’s Registration Statement filed on Form S-4, File No. 333-283454 filed on November 26, 2024, as amended). 10.2 Employment Agreement, dated as of April 4, 2025, by and between the Company and Hui Luo. (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed on April 10, 2025, as amended). 10.3 Form of Indemnification Agreement. (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed on April 10, 2025, as amended). 10.4 Form of Registration Rights Agreement by and between Company and the PIPE Investor. (incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K filed on April 10, 2025, as amended). 10.5 Sublease Agreement between Class Over Inc. and Dream Go Inc. (incorporated by reference to Exhibit 10.8 to Company’s Registration Statement filed on Form S-4, File No. 333-283454 filed on November 26, 2024, as amended). 10.6 Marketing Consulting Agreement between Class Over Inc. and Genius Kid Class LLC (incorporated by reference to Exhibit 10.9 to Company’s Registration Statement filed on Form S-4, File No. 333-283454 filed on November 26, 2024, as amended). 10.7 Convertible Promissory Note issued to Yi Liu (incorporated by reference to Exhibit 10.10 to Company’s Registration Statement filed on Form S-4, File No. 333-283454 filed on November 26, 2024, as amended). 10.8 Sublease Agreement between Class Over Inc. and Dream Legal Group (incorporated by reference to Exhibit 10.11 to Company’s Registration Statement filed on Form S-4, File No. 333-283454 filed on November 26, 2024, as amended). 10.9 Securities Purchase Agreement for Series B Preferred Stock (incorporated by reference to Exhibit 10.12 to Company’s Registration Statement filed on Form S-4, File No. 333-283454 filed on November 26, 2024, as amended). 10.10 Promissory note issued to Hui Luo (incorporated by reference to Exhibit 10.15 to Company’s Registration Statement filed on Form S-4, File No. 333-283454 filed on November 26, 2024, as amended). 10.11 Talk-Cloud Classroom Service Agreement (incorporated by reference to Exhibit 10.5 to Company’s Registration Statement filed on Form S-4, File No. 333-283454 filed on November 26, 2024, as amended). 10.12 Note Purchase Agreement (incorporated by reference to Exhibit 10.1 to Company’s Current Report on Form 8-K filed on June 2, 2025). 71 Table of Contents 10.13 Equity Purchase Facility Agreement (incorporated by reference to Exhibit 10.1 to Company’s Current Report on Form 8-K filed on May 1, 2025). 10.14 Form of Asset Purchase Agreement (incorporated by reference to Exhibit 10.1 to Company’s Current Report on Form 8-K filed on May 1, 2025) 19.1* Insider Trading Policy 21.1 List of subsidiaries of the Registrant. (incorporated by reference to Exhibit 21.1 to the Company’s Current Report on Form 8-K filed on April 10, 2025, as amended). 23.1 Consent of Bush & Associates CPA LLC. 31.1* Certification of Principal Executive Officer Pursuant to Securities Exchange Act Rules 13a-14(a) and 15(d)-14(a), as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 31.2* Certification of Principal Financial Officer Pursuant to Securities Exchange Act Rules 13a-14(a) and 15(d)-14(a), as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. 32.1** Certification of Principal Executive Officer and Principal Accounting and Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 32.2** Certification of Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 97* Clawback Policy 101.INS * Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document 101.SCH* Inline XBRL Taxonomy Extension Schema Document 101.CAL* Inline XBRL Taxonomy Extension Calculation Linkbase Document 101.DEF* Inline XBRL Taxonomy Extension Definition Linkbase Document 101.LAB* Inline XBRL Taxonomy Extension Labels Linkbase Document 101.PRE* Inline XBRL Taxonomy Extension Presentation Linkbase Document 101* Cover Page Interactive Data File (embedded within the Inline XBRL document). *Filed herewith **Furnished herewith ITEM 16. FORM 10-K SUMMARY None. 72 Table of Contents SIGNATURES Pursuant to the requirements of the Section 13 or 15 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized on the 1 st day of April, 2026. CLASSOVER HOLDINGS, INC. By: /s/ Hui Luo Hui Luo Chief Executive Officer In accordance with the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. Name Position Date /s/ Hui Luo Chief Executive Officer and Chairwoman (Principal Executive Officer) April 1, 2026 Hui Luo /s/ Yanling Peng Chief Financial Officer (Principal Financial and Accounting Officer) April 1, 2026 Yanling Peng /s/ Yan Zhang Director April 1, 2026 Yan Zhang /s/ Tracy Xia Director April 1, 2026 Tracy Xia /s/ Mona Liang Director April 1, 2026 Mona Liang /s/ Amanda Chang Director April 1, 2026 Amanda Chang 73 Table of Contents Report of Independent Registered Public Accounting Firm Board of Directors and Shareholders Classover Holdings, Inc. 8 The Green, #18195 Dover, Delaware 19901 Opinion on the Financial Statements We have audited the accompanying balance sheets of Classover Holdings, Inc. (the “Company”) as of December 31, 2025, and 2024, and the related statements of operations, stockholders’ equity, and cash flows for each of the three years in the period ended December 31, 2025, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of Classover Holdings, Inc. as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America. Going Concern The accompanying financial statements have been prepared assuming that the entity will continue as a going concern. As discussed in Note 2 to the financial statements, the entity has suffered recurring losses from operations and has a net capital deficiency that raise substantial doubt about its ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 2. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. Basis for Opinion These financial statements are the responsibility of the entity’s management. Our responsibility is to express an opinion on these financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control over financial reporting. Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matters The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate. F-1 Table of Contents 1. Valuation of acquired intellectual property The Company acquired intellectual property with a recorded fair value of approximately $5.4 million during the year ended December 31, 2025. The valuation of this asset involved significant management judgment in selecting valuation methodologies and key assumptions, including projected cash flows and discount rates, and the Company engaged a valuation specialist to assist in determining the fair value. We also involved our valuation specialists, who developed alternative assumptions that resulted in a significantly lower valuation and led to management revising its estimate to approximately $4.1 million. Because the valuation of the intellectual property required the use of complex models, significant subjective assumptions, and the involvement of specialists, auditing this area required especially challenging, subjective, and complex auditor judgment. Accordingly, the valuation of acquired intellectual property was a critical audit matter. How the Matter Was Addressed in the Audit Our audit procedures related to the valuation of the acquired intellectual property included, among others, the following: - We obtained and evaluated the purchase agreement and related supporting documentation to understand the terms of the acquisition and the rights obtained. - With the assistance of our valuation specialists, we assessed the valuation methodologies used by management’s specialist and tested the reasonableness of key assumptions, including projected cash flows, discount rates, and other significant inputs. - We developed independent estimates using alternative assumptions and compared the results to management’s recorded fair value and to the revised amount recognized by the Company. - We evaluated the Company’s process for reviewing and approving the valuation and assessed the adequacy of related financial statement disclosures regarding the acquisition and valuation of the intellectual property. 2. Valuation of convertible notes measured at fair value On May 30, 2025, the Company entered into a Securities Purchase Agreement to issue up to $500 million of senior secured convertible notes, with an initial closing of $11 million completed on June 6, 2025. The Company elected the fair value option for this convertible debt and engaged a valuation specialist to estimate fair value, which required significant judgment in applying complex valuation models and in selecting key assumptions such as volatility, discount rates, credit spreads, and other market inputs. We involved our own valuation specialists to review management’s model and assumptions and to develop independent fair value estimates. Because the valuation of the convertible notes involved complex financial instruments, highly subjective assumptions, and the use of specialists, auditing this area required especially challenging, subjective, and complex auditor judgment. Accordingly, the valuation of convertible notes measured at fair value was a critical audit matter. How the Matter Was Addressed in the Audit Our audit procedures related to the valuation of the convertible notes measured at fair value included, among others, the following: - We obtained and read the Securities Purchase Agreement and related amendments to understand the key terms, including conversion features, maturities, interest terms, and repayment provisions. - We evaluated management’s election of the fair value option and its accounting policies for the convertible notes. - With the assistance of our valuation specialists, we assessed the valuation methodologies applied by management’s specialist and tested the reasonableness of key assumptions, including volatility, discount rates, credit spreads, and other significant inputs. - We developed independent fair value estimates for the convertible notes using alternative market-based assumptions and compared those results to the fair value recorded by the Company. - We tested the accuracy and completeness of underlying data used in the valuation models and evaluated the related financial statement presentation and disclosures, including the description of the fair value measurements and related risks. F-2 Table of Contents 3. Accounting for reverse recapitalization On April 4, 2025, Classover Holdings, Inc. (formerly Class Over Inc.) completed a transaction with Battery Future Acquisition Corp. (“BFAC”), a special purpose acquisition company, which was accounted for as a reverse recapitalization under U.S. GAAP. Accounting for this transaction required significant judgment in determining the accounting acquirer, distinguishing a reverse recapitalization from a business combination, identifying the appropriate equity structure, and recasting prior‑period earnings per share and share counts. The transaction also involved complex equity instruments and multiple legal agreements that required careful interpretation. Because of the complexity of the transaction, the significant judgments involved, and the extent of effort required to evaluate management’s conclusions, auditing the accounting for the reverse recapitalization required especially challenging, subjective, and complex auditor judgment. Accordingly, accounting for the reverse recapitalization was a critical audit matter. How the Matter Was Addressed in the Audit Our audit procedures related to the accounting for the reverse recapitalization included, among others, the following: - We obtained and read the merger agreement and related legal documents to understand the terms of the transaction, including the structure, consideration transferred, and equity instruments issued. - We evaluated management’s analysis supporting the determination of the accounting acquirer and the conclusion that the transaction should be accounted for as a reverse recapitalization rather than a business combination. - We tested the completeness and accuracy of the transaction entries, including the recognition and classification of equity and other related balances, and assessed whether the presentation was consistent with the applicable accounting guidance. - We tested the Company’s calculations of shares outstanding, earnings per share, and the retrospective adjustments to prior‑period share and per‑share data. - We assessed the adequacy of related disclosures in the financial statements describing the transaction, the significant judgments applied, and the impacts of the reverse recapitalization on the Company’s financial position and results of operations. /s/ Bush & Associates CPA LLC We have served as the Company's auditor since 2025. Las Vegas, Nevada April 1, 2026 PCAOB ID Number 6797 F-3 Table of Contents CLASSOVER HOLDINGS, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (EXPRESSED IN US DOLLARS) December 31, December 31, 2025 2024 ASSETS Current assets: Cash $ 2,751,594 $ 50,682 Prepayments and other current assets 10,129 15,557 Due from related parties 45,493 8,251 Total current assets 2,807,216 74,490 Noncurrent assets: Property and equipment, net 154,713 218,617 Intangible assets, net 4,026,000 - Operating lease right-of-use assets, net 1,246,766 1,552,242 Investment accounts-restricted 7,084,194 - Investment accounts-unrestricted 220,566 - Deposit 5,000 - Total noncurrent assets 12,737,239 1,770,859 TOTAL ASSETS $ 15,544,455 $ 1,845,349 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 145,987 $ 7,200 Interest payable - 19,072 Deferred revenues 1,871,722 2,719,091 Due to related parties 63,316 249,545 Operating lease liabilities - current 195,353 314,685 Accrued liabilities and other payables 36,178 63,415 Total current liabilities 2,312,556 3,373,008 Noncurrent liabilities: Convertible notes payable 8,201,746 1,750,000 Operating lease liabilities - noncurrent 1,046,141 1,241,495 Deferred tax liabilities - - Warrant liabilities 207,000 - Total noncurrent liabilities 9,454,887 2,991,495 TOTAL LIABILITIES 11,767,443 6,364,503 Commitments and contingencies - - Stockholders' equity (deficit): Preferred Stock, $ 0.0001 par value, 10,000,000 shares authorized, -Series A, 522,801 and 1,000,000 shares issued and outstanding as of December 31, 2025 and 2024*, respectively 52 .00 100 -Series B, 2,775 and no shares issued and outstanding as of December 31, 2025 and 2024*, respectively 1 .00 - -Series C, 2,000 and no shares issued and outstanding as of December 31, 2025 and 2024*, respectively - - Class A Common Stock, $ 0.0001 par value, 1,000,000 shares authorized, 130,701 shares issued and outstanding as of December 31, 2025 and 2024*, respectively 13 13 Class B Common Stock $ 0.0001 par value, 40,000,000 shares authorized, 496,434 and 222,659 shares issued and outstanding as of December 31, 2025 and 2024*, respectively 50 22 Additional paid-in capital 15,421,485 80,435 Accumulated deficit ( 11,644,589 ) ( 4,599,724 ) Total stockholders' (deficit) 3,777,012 ( 4,519,154 ) TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY (DEFICIT) $ 15,544,455 $ 1,845,349 * Giving retroactive effect to reverse recapitalization effected on April 4, 2025 and reverse stock split on March 9, 2026 See accompanying notes to the consolidated financial statements. F-4 Table of Contents CLASSOVER HOLDINGS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (EXPRESSED IN US DOLLARS) For the Year Ended, 2025 2024 Revenues: Service revenues $ 3,366,421 $ 3,375,604 Consulting revenues (related party) - 300,000 Total revenues 3,366,421 3,675,604 Cost of revenues: Cost of revenues 1,448,665 1,616,428 Total cost of revenues 1,448,665 1,616,428 Gross profit 1,917,756 2,059,176 Operating expenses: Selling and marketing 508,703 657,003 General and administrative 4,946,263 2,196,747 Research and development 54,462 39,254 Total operating expenses 5,509,428 2,893,004 (Loss) from operations ( 3,591,672 ) ( 833,828 ) Other income (expense) Change in fair value of warrants 546,824 - Change in fair value of crypto assets ( 1,565,172 ) - Change in fair value of convertible debt ( 807,703 ) - Impairment loss on intangible assets ( 1,460,704 ) Financing cost ( 473,500 ) - Staking rewards 291,333 - Loss on debt extinguishment - Interest and other expense 15,729 ( 9,220 ) Total other income (expense) ( 3,453,193 ) ( 9,220 ) (Loss) before provision for income taxes ( 7,044,865 ) ( 843,048 ) Provision for income taxes - - Net (loss) $ ( 7,044,865 ) $ ( 843,048 ) Weighted average shares outstanding-Preferred Stock-Series A* 776,001 999,472 Basic and diluted net income per share-Preferred Stock-Series A* $ ( 4,389,700 ) $ ( 622,904 ) Weighted average shares outstanding-Preferred Stock-Series B* 3,220 - Basic and diluted net income per share-Preferred Stock-Series B* $ ( 18,215 ) $ - Weighted average shares outstanding-Preferred Stock-Series C* 11 - Basic and diluted net income per share-Preferred Stock-Series C* $ ( 62 ) $ - Weighted average shares outstanding-Class A Common Stock* 130,701 130,701 Basic and diluted net income per share-Class A Common Stock* $ ( 739,353 ) $ ( 81,457 ) Weighted average shares outstanding-Class B Common Stock* 335,442 222,527 Basic and diluted net income per share-Class B Common Stock* $ ( 1,897,535 ) $ ( 138,686 ) * Giving retroactive effect to reverse recapitalization effected on April 4, 2025 and reverse stock split on March 9, 2026 See accompanying notes to the consolidated financial statements. F-5 Table of Contents CLASSOVER HOLDINGS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (DEFICIT) (EXPRESSED IN US DOLLARS) Preferred Stock-Series A* Preferred Stock-Series A amount Preferred Stock-Series B* Preferred Stock-Series B amount Preferred Stock-Series C* Preferred Stock-Series C 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 967,907 $ 97 - $ - - $ - 130,701 $ 13 214,636 $ 21 $ 55,319 $ ( 3,756,676 ) $ ( 3,701,226 ) Stock compensation issued for consulting services 32,093 3 - - - - - - 8,023 1 25,116 - 25,120 Net loss - - - - - - - - - - - ( 843,048 ) ( 843,048 ) Balance at December 31, 2024 1,000,000 $ 100 - $ - - $ - 130,701 $ 13 222,659 $ 22 $ 80,435 $ ( 4,599,724 ) $ ( 4,519,154 ) Net loss - - - - - - - - - ( 7,044,865 ) ( 7,044,865 ) Reverse recapitalization - - - - - - - - - - ( 2,183,392 ) - ( 2,183,392 ) Conversion of convertible debt - - - - 2,000 - - - 142,189 14 5,375,015 - 5,375,029 Common stock issued to SPAC public shareholders - - - - - - - - 3,368 - 1,942,298 - 1,942,298 Capital contribution from private placement - - 5,000 1 - - - - 4,699,999 - 4,700,000 Employee stock compensation - - - - - - - - 16,400 2 402,708 - 402,710 Stock compensation to advisors - - - - - - - - 6,140 1 512,407 - 512,408 Conversion of preferred stock to common stock ( 477,199 ) ( 48 ) ( 2,225 ) - - - - - 89,178 9 39 - - Issurance of common stock and warrants for intangible assets acquisition - - - - - - 16,000 2 4,525,476 - 4,525,478 Stock issued for waiving contractual restriction - - - - - - 500 - 66,500 - 66,500 Balance at December 31, 2025 522,801 $ 52 2,775 $ 1 2,000 $ - 130,701 $ 13 496,434 $ 50 $ 15,421,485 $ ( 11,644,589 ) $ 3,777,012 * Giving retroactive effect to reverse recapitalization effected on April 4, 2025 and reverse stock split on March 9, 2026 See accompanying notes to the consolidated financial statements. F-6 Table of Contents CLASSOVER HOLDINGS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (EXPRESSED IN US DOLLARS) For the Year Ended, 2025 2024 Cash flows from operating activities: Net (loss) $ ( 7,044,865 ) $ ( 843,048 ) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 352,678 54,823 Amortization of operating lease right-of-use assets 305,476 293,526 Employee stock compensation 402,710 25,120 Stock compensation issued for advisory service 82,408 Impairment loss on intangible assets 1,460,704 Deferred tax liabilities - - Change in fair value of warrants ( 546,824 ) - Change in fair value of crypto assets 1,565,172 - Change in fair value of convertible debt 807,703 Stock issued for waiving contractual restriction 66,500 - Staking rewards ( 291,333 ) - Changes in operating assets and liabilities: - Due from related parties ( 37,242 ) 1,046 Prepayments and other current assets 5,428 1,843 Deposit ( 5,000 ) - Accounts payable 3,766 7,140 Interest payable - 9,103 Deferred revenues ( 847,369 ) 157,845 Operating lease liabilities ( 314,686 ) ( 295,475 ) Due to related parties ( 171,744 ) ( 237,086 ) Accrued liabilities and other payables 379,764 43,898 Net cash (used in) operating activities ( 3,826,755 ) ( 781,265 ) Cash flows from investing activities: Purchases of property and equipment - ( 185,705 ) Purchases of crypto assets ( 1,075,000 ) - Purchases of intangible assets ( 1,250,000 ) - Net cash (used in) investing activities ( 2,325,000 ) ( 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 2,700,912 ( 736,970 ) Cash, beginning of period 50,682 787,652 Cash, end of period $ 2,751,594 $ 50,682 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 4,525,478 - 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 convertible debt to common stock and Series C preferred Stock 3,605,957 Conversion of preferred stock to common stock 9 - See accompanying notes to the consolidated financial statements. F-7 Table of Contents CLASSOVER HOLDINGS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS YEAR ENDED DECEMBER 3 1 , 2025 AND 2024 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 (“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 June 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 consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) from the Company’s accounting records and reflect the financial position and results of operations for the fiscal years ended December 31, 2025 and 2024. 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). F-8 Table of Contents 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 December 31, 2025, the Company had cash of $ 2,751,594 , current liabilities of $ 2,312,556 , a working capital of $ 494,660 and a stockholders’ equity of $ 3,777,012 . For the year ended December 31, 2025 and 2024, the Company had loss of $ 7,044,865 and $ 843,048 , 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, 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, 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 three 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. F-9 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. December 31, 2025 December 31, 2024 Cash on hand $ 3,144 $ 3,144 Bank deposits 2,748,450 47,538 Total cash shown in the Statement of Cash Flows $ 2,751,594 $ 50,682 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 December 31,2025, there was no allowance for deposits. F-10 Table of Contents 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. Certain digital assets are pledged as collateral under the Company’s Senior Secured Convertible Notes. Pursuant to the terms of the Securities Purchase Agreement and related Security Documents, approximately 80% of the net proceeds from the issuance of the Notes are required to be used to acquire specified digital assets and deposited into a controlled collateral account for the benefit of the noteholder. These pledged digital assets are subject to a first priority security interest and are held in a block control account while the Notes remain outstanding. Digital assets that are subject to contractual restrictions or are pledged as collateral and not available for general corporate purposes are classified as restricted digital assets. Restricted digital assets are presented separately on the Company’s consolidated balance sheets or disclosed parenthetically within digital assets. The Company earns staking rewards from certain digital assets held by the Company. Staking rewards are recognized as income when earned and measured at fair value at the time of receipt. Such rewards are not subject to contractual restrictions and are classified as unrestricted digital assets. 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. F-11 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 December 31, 2025 and 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 $ 33,362 and $ 63,176 for the year ended December 31, 2025 and 2024, respectively. 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. F-12 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 year ended December 31, 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. F-13 Table of Contents 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. Note 3. Property and Equipment, net Property and equipment consists of the following as of December 31, 2025 and 2024: December 31, 2025 December 31, 2024 Computers and electronic equipment $ 55,532 $ 55,532 Furniture and fixtures 92,052 91,018 Leasehold improvements 177,865 177,865 Total property and equipment 325,449 324,415 Less: accumulated depreciation ( 170,736 ) ( 105,798 ) Total property and equipment, net $ 154,713 $ 218,617 Depreciation expense was $ 63,904 and $ 54,823 for the year ended December 31, 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 primarily consisting of Solana and Worldcoin, 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. As of December 31, 2025, digital assets with a fair value of $ 7,084,194 were pledged as collateral under the Company’s Senior Secured Convertible Notes. Pursuant to the terms of the Securities Purchase Agreement, approximately 80 % of the net proceeds from the issuance of the Notes were required to be used to acquire specified digital assets and deposited into a controlled collateral account for the benefit of the noteholder. Such digital assets are subject to a first priority security interest and are not available for general corporate purposes while the notes remain outstanding. The following table summarizes the Company’s digital asset holdings, as of: December 31, 2025 December 31, 2024 Number of Solana-purchased (restricted) 56,908 .26 - Number of Solana- Staking rewards 1,672 .82 - Number of Worldcoin-purchased 25,000 - Number of Worldcoin- Staking rewards - - Crypto asset purchased carrying value $ 8,578,600 $ - Staking rewards 291,333 Unrealized gain (loss) on crypto assets ( 1,565,173 ) - Total investment accounts $ 7,304,760 $ - F-14 Table of Contents 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 16,000 shares of the Company’s Class B common stock (reflecting the March 2026 reverse stock split; 800,000 shares on a pre-split basis, valued at $ 2.94 , totaling $ 2,352,000 , based on the fair value of the shares on the acquisition date); · Issuance of warrants to purchase 14,786 shares of Class B common stock (reflecting the March 2026 reverse stock split; 739,278 shares on a pre-split basis, 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 year ended December 31, 2025 was $ 288,773 . During the year ended December 31, 2025, the Company identified indicators of impairment related to the IP. The Company performed a recoverability test by comparing the carrying amount of the IP to the estimated undiscounted future cash flows. As a result of this analysis, the Company determined that the carrying amount was not recoverable. Accordingly, the Company recorded an impairment loss of $ 1,460,704 , representing the excess of the carrying amount over the estimated fair value of the IP. The fair value of the Company’s patented technology was determined in accordance with ASC 820 using an income approach, specifically the relief-from-royalty method. Under this method, the fair value was estimated based on the present value of projected future royalty savings attributable to the ownership of the patented technology. The valuation incorporated significant assumptions, including forecasted revenues provided by management, royalty rates ranging from approximately 5.0 % to 12.0 % based on comparable licensing transactions, and a discount rate of approximately 23.0 %, which reflects the Company’s weighted average cost of capital and the risks associated with achieving the projected cash flows. The fair value measurement is classified as Level 3 within the fair value hierarchy due to the use of significant unobservable inputs. As of December 31, 2025, the fair value of the patented technology was determined to be $ 4,026,000 . F-15 Table of Contents Following the impairment, the Company revised the remaining useful life and amortization of the intangible asset. Future amortization is expected to be as follows: Year ended December 31, 2026 $ 423,789 2027 423,789 2028 423,789 Remaining 2,754,632 Total $ 4,026,000 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 December 31, 2025, the Company’s operating sublease had a remaining lease term of approximately 3.8 years. For the year ended December 31, 2025 and 2024, rent expense for the operating sublease was $ 361,011 and $ 361,011 , respectively. The Company’s sublease obligations as of December 31, 2025 are presented below: Year ending December 31, 2026 $ 242,211 2027 388,790 2028 407,405 Remaining 310,115 Total future lease payments 1,348,521 Less: Interest ( 107,026 ) Present value of lease liabilities $ 1,241,495 Future amortization of the Company’s ROU assets is presented below: Year ending December 31, 2026 $ 314,154 2027 326,160 2028 340,709 Remaining 265,743 Total $ 1,246,766 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. F-16 Table of Contents 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 year ended December 31, 2025 and 2024, the Company’s income from these subleases totaled 104,105 and $ 108,965 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: December 31, 2025 December 31, 2024 Credit card payable $ 31,268 $ 58,269 Payroll tax payable 4,910 5,146 Total $ 36,178 $ 63,415 Note 8 . Income Taxes The Company had nil income tax provision for the year ended December 31, 2025 and 2024. For the year ended December 31, 2025 2024 Deferred income tax expense $ - $ - Current income tax expense - - Total $ - $ - The Company has the following deferred tax assets (liabilities) as of December 31 2025 and 2024: As of December 31 , 2025 As of December 31, 2024 Net operating loss carryforwards $ 1,768,511 $ 965,019 Change in fair value of crypto assets 328,686 - Change in fair value of convertible debt 169,618 - Impairment loss on intangible assets 306,748 - Other expense temporary difference 2,813 2,813 Total deferred tax assets 2,576,376 967,833 Deferred tax liability- Depreciation ( 2,263 ) ( 2,263 ) Allowance ( 2,574,113 ) ( 965,570 ) Net deferred tax liability $ - $ - 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. F-17 Table of Contents The provision for income taxes differs from the amounts computed by applying the federal statutory rate as follows for the periods ended December 31, 2025 and 2024: December 31, 2025 December 31, 2024 Federal statutory rate 21.0 % 21.0 % Nondeductible expense 1.6 % Valuation allowance ( 22.6 )% ( 21.0 ) Effective income tax rate 0.0 % 0.0 % The effective tax rate for the year ended December 31, 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 year ended December 31, 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 December 31, 2025, Classover NJ and Classover Holdings, Inc. has approximately $ 7,678,957 and $ 742,524 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. Note 8 . Related parties As of December 31, 2025 and 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 December 31, 2025 December 31, 2024 Dream Legal Group, Inc. 45,493 8,251 Total due from related parties $ 63,316 $ 8,251 F-18 Table of Contents Due to related parties December 31, 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. 63,316 117,379 Total due to related parties - current $ 45,493 $ 249,545 The following table represents related party transactions for the year ended December 31, 2025 and 2024: Year Ended December 31, Name Business Purpose of Transaction 2025 2024 Dream Legal Group, Inc Sublease income $ 104,105 $ 71,344 Dreamgo Inc. Rent expense 361,011 361,011 Genius Kid Class LLC Consulting revenue — 300,000 Yi Liu Interest expense — — Luo Hui Interest expense — — Totals $ 465,116 $ 532,356 Sublease income has been reflected as a reduction of general and administrative expenses in the accompanying consolidated statements of operations. As of December 31, 2025 and 2024, the Company has the following ROU assets and operating lease liabilities recognized from related party under ASC 842 (Note 4): December 31, 2025 December 31, 2024 Dreamgo Inc. ROU assets $ 1,246,766 $ 1,552,242 Dreamgo Inc. Short term obligation under operating leases $ ( 195,353 ) $ ( 314,685 ) Dreamgo Inc. Long term obligation under operating leases $ ( 1,046,141 ) $ ( 1,241,495 ) F-19 Table of Contents Note 9 . 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 88,663 Class B Common Shares (reflecting the March 2026 reverse stock split; 4,433,122 shares on a pre-split basis). 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. F-20 Table of Contents Description of 2025 Convertible Note upon issuance: 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 During the fourth quarter ended December 31, 2025, the Company converted an aggregate principal amount of $ 3,225,000 of convertible notes into equity securities in accordance with the terms of the note agreements. Upon conversion, $ 2,000,000 of the notes were converted into 2,000 shares of Series C Preferred Stock, and $ 1,225,000 of the notes were converted into 53,526 shares of Class B Common Stock (reflecting the March 2026 reverse stock split; 2,675,975 shares on a pre-split basis). The Company had elected the fair value option for the convertible notes in accordance with ASC 825-10, Financial Instruments. Accordingly, the convertible notes were measured at fair value at each reporting date, with changes in fair value recognized in earnings. At the conversion date, the equity instruments issued were measured based on the quoted market price of the Company’s common stock on the conversion date. The fair value of the Series C Preferred Stock and Class B Common Stock issued upon conversion was $ 2,109,774 and $ 1,496,183 , respectively. Immediately prior to conversion, the carrying value of the convertible notes approximated their fair value. As a result, the derecognition of the convertible notes and issuance of equity securities did not result in a material gain or loss upon conversion. The carrying value of the notes was reclassified to equity upon issuance of the shares. The Company elected the fair value option (“FVO”) under ASC 825 for its senior secured convertible notes issued on June 6, 2025. Accordingly, the convertible notes are measured at fair value at each reporting date, with changes in fair value recognized in earnings within other income (expense), net. The fair value of the convertible notes was estimated using a lattice (binomial tree) model, which captures the hybrid nature of the instrument, including the embedded conversion feature, issuer redemption option, payment-in-kind (“PIK”) interest accretion, floor-price reset provisions, and contractual call premiums. The valuation incorporates market participant assumptions consistent with ASC 820 and is classified within Level 3 of the fair value hierarchy due to the use of significant unobservable inputs. As of December 31, 2025, the aggregate contractual principal amount of the convertible notes was $ 7,775,000 . Level 3 Quantitative Inputs The significant inputs used in the valuation as of December 31, 2025 were as follows: Input Amount Face value $ 7,775,000 Fair value $ 8,201,746 Volatility 100.0 % Risk-free rate 3.48 % Remaining contractual term 1.43 years PIK interest rate 7.00 % Stock price $ 0.178 Conversion price (floor) $ 0.74 Redemption premium 120 % F-21 Table of Contents The Company applied a contractual floor conversion price of $ 0.74 per share, as the market-price reset formula would otherwise have resulted in a lower conversion price based on 95 % of the lowest six-day VWAP. The Company did not separately isolate the portion of the fair value change attributable to instrument-specific credit risk. The fair value measurement primarily reflects changes in the Company’s stock price, expected volatility, time to maturity, collateral coverage triggers, conversion reset provisions, and other market-based factors. No separate credit spread or own-credit adjustment was applied in the valuation model. The fair value of the convertible notes is sensitive to changes in expected volatility, which represents a significant unobservable input. A hypothetical 10 % increase in expected volatility would have decreased the fair value by approximately $ 220,805 , while a 10 % decrease would have decreased the fair value adjustment to approximately $ 44,519 , with all other assumptions held constant. The following table summarizes the changes in the fair value of the Company’s convertible notes classified within Level 3 of the fair value hierarchy: Fair value at December 31, 2024 - Initial recognition at principal amount 11,000,000 Changes in fair value recognized in earnings 807,703 Conversion into common and preferred stock ( 3,605,957 ) Fair value at December 31, 2025 8,201,746 Note 10. Warrant Liabilities In connection with the Reorganization Merger, the Company has assumed 345,000 warrants outstanding (reflecting the March 2026 reverse stock split; 17,250,000 warrants on a pre-split basis) 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. 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. F-22 Table of Contents The Company accounts for the 345,000 warrants (reflecting the March 2026 reverse stock split; 17,250,000 warrants on a pre-split basis) 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 ( 546,825 ) Fair value as of December 31, 2025 $ 207,000 Note 1 1 . 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. The following tables present fair value information as of December 31, 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: December 31, 2025 Level 1 Level 2 Level 3 Assets: Investment- Crypto asset $ 7,304,760 $ - $ - Liabilities Warrant liabilities $ 207,000 $ - $ - Convertible notes payable $ - $ - $ 8,201,746 F-23 Table of Contents Note 1 2 . 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: Year Ended December 31, 2025 2024 Revenues: Time-based subscriptions $ 854,851 $ 1,161,383 Credit-based subscriptions 2,511,570 2,214,221 Marketing revenues (related party) — 300,000 Total revenues $ 3,366,421 $ 3,675,604 Note 1 3 . 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 December 31, 2025, the Company was not involved in any material legal proceedings regarding claims or legal actions against the Company. Note 1 4 . Equity As of December 31, 2025, the total number of shares which the Company shall have the authority to issue is 51,000,000 shares (reflecting the March 2026 reverse stock split; 510,000,000 shares on a pre-split basis), which include 1,00,000 shares of Class A common stock (reflecting the March 2026 reverse stock split; 50,000,000 shares on a pre-split basis, par value $ 0.0001 per share), 40,000,000 shares of Class B common stock (reflecting the March 2026 reverse stock split; 200,000,000 shares on a pre-split basis, par value $ 0.0001 per share, 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 50 to 1 basis. , Each Series B and Series C Preferred Shares are convertible to Class B Common Shares. The conversion price of Series B Preferred Shares are the greater of 92% of the lowest Volume Weighted Average Price (“VMAP”) of the stock price five days before conversion, or adjusted floor price. The conversion price of Series C Preferred Shares are the lower of 95% of the lowest VMAP of the stock price six days before conversion, or initial conversion price. 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. 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: ○ 130,710 Class A common shares to Hui Luo (reflecting the March 2026 reverse stock split; 6,535,014 shares on a pre-split basis) ○ 30,638 Class B common shares to other Classover shareholders (reflecting the March 2026 reverse stock split; 1,531,864 shares on a pre-split basis) ○ 1,000,000 Series A Preferred Shares to Classover equity holders ○ 88,663 Class B common shares to convertible note holders upon conversion (reflecting the March 2026 reverse stock split; 4,433,122 shares on a pre-split basis) F-24 Table of Contents · BFAC Sponsor received 192,021 Class B common shares (reflecting the March 2026 reverse stock split; 9,600,000 shares on a pre-split basis) · Remaining BFAC IPO investors were issued 3,368 Class B common shares (reflecting the March 2026 reverse stock split; 168,356 shares on a pre-split basis), representing residual trust shares post-redemptions (3,683,125 original shares less 3,514,769 redeemed) · 345,000 warrants (reflecting the March 2026 reverse stock split; 17,250,000 warrants on a pre-split basis 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- reflecting the March 2026 reverse stock split Common Share- on a pre-split basis Holders of BFAC public shareholders – Class B 3,368 168,356 BFAC sponsors – Class B 192,021 9,600,000 Founder of Classover DE – Class A 130,701 6,535,014 Rest of Classover DE shareholders prior to merger – Class B 1,531,864 1,531,864 Convertible note holders of Classover Inc. prior to merger – Class B 88,663 4,433,122 Classover DE equity holders-Series A Preferred Shares 1,000,000 1,000,000 Total Class A common shares 130,701 6,535,014 Total Class B common shares 314,690 15,733,342 Total Series A Preferred Shares 1,000,000 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 500 Class B common shares (reflecting the March 2026 reverse stock split; 25,000 shares on a pre-split basis) 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 provides 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, are eligible for grants under the 2024 Incentive Plan. F-25 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 65,373 Class B Common Shares (reflecting the March 2026 reverse stock split; 3,268,668 shares on a pre-split basis). · On April 17, 2025, 16,400 shares (reflecting the March 2026 reverse stock split; 820,000 shares on a pre-split basis) were granted as equity-based compensation to two employees of the Company, which will be vested over three years. · On April 28, 2025, 2,000 shares (reflecting the March 2026 reverse stock split; 100,000 shares on a pre-split basis) were issued to a third-party advisor for advisory services which will be vested over one year. · On September 6, 2025, 80 shares (reflecting the March 2026 reverse stock split; 4,000 shares on a pre-split basis) were issued to a third-party advisor for advisory services which was fully vested. · On October 28, 2025, 200 shares (reflecting the March 2026 reverse stock split; 10,000 shares on a pre-split basis) were issued to a third-party advisor to collaborate on joint branding, public relations initiatives, and exploration of blockchain-based educational products which will be vested over one year. · On October 31, 2025, 60 shares (reflecting the March 2026 reverse stock split; 3,000 shares on a pre-split basis) were issued to a third-party advisor for advisory services to provide strategic and technical guidance related to the Company’s AI education initiatives which will be vested over 90 days. Shares were measured at fair value on grant date under ASC 718. Compensation cost is recognized ratably over the vesting period. During the year ended December 31, 2025 and 2024, stock compensation cost were $ 485,119 and $ 25,120 . Other equity transactions On April 17, 2025, 3,800 shares (reflecting the March 2026 reverse stock split; 190,000 shares on a pre-split basis) 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 8,304 Class B common shares (reflecting the March 2026 reverse stock split; 415,131 shares on a pre-split basis 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, 16,000 Class B common shares (reflecting the March 2026 reverse stock split; 800,000 shares on a pre-split basis) and 14,786 warrants (reflecting the March 2026 reverse stock split; 739,278 warrants on a pre-split basis). 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) On October 9, 2025, 62,068 series A preferred shares were canceled, in exchange, the company issued 11,938 class B common shares (reflecting the March 2026 reverse stock split; 596,808 shares on a pre-split basis) to the investors On December 22, 2025, the company's shareholders approved a few proposals through a special meeting: a). redomestiacate the company from Delaware Corporation to Nevada Corporation, b) adopt the new incentive plan - 2025 Long-Term Incentive Equity Plan, a total of 100,000 shares of Class B stock (reflecting the March 2026 reverse stock split; 5,000,000 shares on a pre-split basis) is reserved for employee, the size of pool is subject to increase at the time the market cap of the company hits certain milestones. c) approve to execute a reverse stock split of all outstanding shares, including Class A and Class B, at a ratio from 1-for-2, to 1-for-50 , to be determined by board of directors. F-26 Table of Contents During the fourth quarter ended December 31, 2025, the Company converted an aggregate principal amount of $ 3,225,000 of convertible notes into equity securities in accordance with the terms of the note agreements. Upon conversion, $ 2,000,000 of the notes were converted into 2,000 shares of Series C Preferred Stock, and $ 1,225,000 of the notes were converted into 53,526 shares of Class B Common Stock (reflecting the March 2026 reverse stock split; 2,675,975 shares on a pre-split basis). The Company had elected the fair value option for the convertible notes in accordance with ASC 825-10, Financial Instruments. Accordingly, the convertible notes were measured at fair value at each reporting date, with changes in fair value recognized in earnings. At the conversion date, the equity instruments issued were measured based on the quoted market price of the Company’s common stock on the conversion date. The fair value of the Series C Preferred Stock and Class B Common Stock issued upon conversion was $ 2,109,774 and $ 1,496,183 , respectively. Immediately prior to conversion, the carrying value of the convertible notes approximated their fair value. As a result, the derecognition of the convertible notes and issuance of equity securities did not result in a material gain or loss upon conversion. The carrying value of the notes was reclassified to equity upon issuance of the shares. ranking senior to common but subordinate to Series B Preferred, Each Series C convertible preferred share entitled to 7 % annual dividends payable every quarter in Class B common shares, and can be converted to class B common at $ 0.2029 . During the fourth quarter ended December 31, 2025, the Company received several conversion notices from a holder of its Series B Convertible Preferred Stock to convert 2,225 shares of Series B Convertible Preferred Stock into 68,936 shares (reflecting the March 2026 reverse stock split; 3,446,349 shares on a pre-split basis)of the Company’s Class B common stock in accordance with the terms of the Certificate of Designations governing the Series B Convertible Preferred Stock. Upon conversion, the Company recorded the par value of the Class B common stock issued as common stock, with the remaining amount recorded as additional paid-in capital. Note 1 5 . 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 December 31, 2025, a cash balance of $ 1,982,747 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 year ended December 31, 2025 and 2024, no customer accounted for more than 10 % of the Company’s total revenues. Vendor concentration risk For the year ended December 31, 2025 and 2024, no vendor accounted for over 10 % of the Company’s total purchases. Note 1 6 . Subsequent Event In January 2026, company issued 43,000 shares of Class B common stock (reflecting the March 2026 reverse stock split; 2,150,000 shares on a pre-split basis) to executives and employees under the Management Inventive Shares Plan. On February 11, 2026, 900 shares of Series B Preferred Stock were converted into 93,104 shares of Class B Common Stock per the existing agreement (reflecting the March 2026 reverse stock split; 4,655,200 shares on a pre-split basis) On February 10, 2026, the Company's board authorized to repurchase up to $ 2,000,000 Class B common shares. The repurchase program does not obligate the Company to acquire any particular amount of shares of Class B common stock. On March 6, 2026, the Company terminated an Equity Purchase Facility Agreement (the “EPFA”) with Solana Strategic Holdings LLC (the “Investor”) pursuant to which, subject to certain conditions precedent contained therein, the Company had the right to issue and sell to the Investor up to an aggregate of $ 400 million in newly issued shares of the Company’s Class B common stock, par value $ 0.0001 per share. In March 2026, 14,786 pre-funded warrants (reflecting the March 2026 reverse stock split; 739,278 warrants shares on a pre-split basis) were exercised, resulting in the issuance of 12,431 shares of Common Stock (reflecting the March 2026 reverse stock split; 621,550 shares on a pre-split basis). From January 2026 to March 2026, $ 2,742,500 convertible debt has been converted into 529,749 shares of Class B common stock per the existing agreement (reflecting the March 2026 reverse stock split; 26,487,450 shares on a pre-split basis). On March 9, 2026, the Company effected a reverse stock split of its outstanding Class A common stock and Class B common stock (the “Reverse Split”) at a ratio of 1-for-50, as well as an associated reduction in the number of shares of Class A common stock and Class B common stock the Company is authorized to issue from 50,000,000 shares of Class A common stock to 1,000,000 shares of Class A common stock and 2,000,000,000 shares of Class B common stock to 40,000,000 shares of Class B common stock. The number of issued and outstanding shares of common stock was reduced proportionately. The par value per share remained unchanged. All share and per share amounts presented in the accompanying consolidated financial statements have been retroactively adjusted to reflect the reverse stock split for all periods presented. F-27