What changed in this filing

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Item 1. Financial Statements

2026-08-13 compared with 2026-05-15 · 277 added, 162 removed, 625 unchanged (41% of the section changed)

Item 1 – Financial Statements

CLASSOVER HOLDINGS, INC.

AND SUBSIDIARIES

KIDZ AI INC AND SUBSIDIARIES

UNAUDITED INTERIM CONDENSED CONSOLIDATED BALANCE SHEETS

1 unchanged sentence

Current assets:

Cash and cash equivalents

Restricted cash

Prepayments and other current assets

26 unchanged sentences

Preferred Stock, $ 0.0001 par value, 10,000,000 shares authorized,

-Series A, 522,801 shares issued and outstanding as of March 31, 2026 and December 31, 2025*

-Series B, 1,875 and 2,775 shares issued and outstanding as of March 31, 2026 and December 31, 2025*, respectively

-Series C, 2,000 shares issued and outstanding as of March 31, 2026 and 2025*, respectively

Class A Common Stock, $ 0.0001 par value, 1,000,000 shares authorized, 130,701 shares issued and outstanding as of March 31, 2026 and 2025*

Class B Common Stock $ 0.0001 par value, 40,000,000 shares authorized, 1,174,718 and 496,434 shares issued and outstanding as of March 31, 2026 and 2025*, respectively

-Series A, 522,801 shares issued and outstanding as of June 30, 2026 and December 31, 2025*

-Series B, 0 and 2,775 shares issued and outstanding as of June 30, 2026 and December 31, 2025*, respectively

-Series C, 1,175 shares issued and outstanding as of June 30, 2026 and 2025*, respectively

Class A Common Stock, $ 0.0001 par value, 100,000 shares authorized, 13,070 shares issued and outstanding as of June 30, 2026 and December 31, 2025*

Class B Common Stock $ 0.0001 par value, 2,500,000,000 shares authorized, 2,416,846 and 49,653 shares issued as of June 30, 2026 and December 31, 2025*, respectively;

and 2,414,846 and 49,653 shares outstanding as of June 30, 2026 and December 31, 2025, respectively

Treasury stock, 2,000 shares at cost

Additional paid-in capital

4 unchanged sentences

TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY

* Giving retroactive effect to reverse recapitalization effected on April 4, 2025 and reverse stock split on March 9, 2026

* Giving retroactive effect to reverse recapitalization effected on April 4, 2025 and reverse stock split on March 9, 2026 and June 4, 2026

See accompanying notes to the consolidated financial statements.

CLASSOVER HOLDINGS, INC.

AND SUBSIDIARIES

1 unchanged sentence

(EXPRESSED IN US DOLLARS)

For the Three Months Ended March 31,

For the Three Months Ended June 30,

For the Six Months Ended June 30,

Service revenues

9 unchanged sentences

(Loss) from operations

( 1,148,306 )

( 1,699,033 )

( 2,043,121 )

( 1,994,940 )

Other income (expense)

Change in fair value of warrants

( 1,540,424 )

Change in fair value of crypto assets

1 unchanged sentence

Change in fair value of convertible debt

( 1,325,102 )

Financing cost

Staking rewards

2 unchanged sentences

( 1,347,768 )

( 2,128,776 )

( 4,640,487 )

( 2,130,076 )

(Loss) before provision for income taxes

( 2,496,074 )

( 3,827,809 )

( 6,683,608 )

( 4,125,016 )

Provision for income taxes

1 unchanged sentence

$ ( 3,866,169 )

Weighted average shares outstanding-Preferred Stock-Series A*

Basic and diluted net income per share-Preferred Stock-Series A*

$ ( 6,683,608 )

$ ( 4,163,376 )

Weighted average shares outstanding-Preferred Stock-Series B*

Basic and diluted net income per share-Preferred Stock-Series B*

Weighted average shares outstanding-Preferred Stock-Series C*

Basic and diluted net income per share-Preferred Stock-Series C*

Weighted average shares outstanding-Class A Common Stock*

Basic and diluted net income per share-Class A Common Stock*

$ ( 365,637 )

Weighted average shares outstanding-Class B Common Stock*

Basic and diluted net income per share-Class B Common Stock*

$ ( 2,347,341 )

* Giving retroactive effect to reverse recapitalization effected on April 4, 2025 and reverse stock split on March 9, 2026

* Giving retroactive effect to reverse recapitalization effected on April 4, 2025 and reverse stock split on March 9, 2026 and June 4, 2026

See accompanying notes to the consolidated financial statements.

CLASSOVER HOLDINGS, INC.

AND SUBSIDIARIES

UNAUDITED INTERIM CONDENSED CONSOLIDATED

STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

UNAUDITED INTERIM CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (DEFICIT)

(EXPRESSED IN US DOLLARS)

10 unchanged sentences

Additional Paid-in Capital

Treasury stock

Accumulated deficit

6 unchanged sentences

Conversion of preferred stock to common stock

Issuance of common stock for warrants excise

Issurance of common stock for warrants excise

Balance at March 31, 2026 (Unaudited)

$ ( 15,832,123 )

( 2,496,074 )

Conversion of preferred stock to common stock

Conversion of convertible debt

Capital contribution from private placement

Repurchase of treasury stock

Employee stock compensation

Stock compensation to advisors

Balance at June 30, 2026 (Unaudited)

$ ( 18,328,197 )

Balance at December 31, 2024

1 unchanged sentence

$ ( 4,519,154 )

Balance at March 31, 2025 (Unaudited)

Balance at Mrach 31, 2025 (Unaudited)

$ ( 4,896,931 )

$ ( 4,816,361 )

* Giving retroactive effect to reverse recapitalization effected on April 4, 2025 and reverse stock split on March 9, 2026

( 3,866,169 )

Reverse recapitalization

( 2,183,392 )

Conversion of convertible debt

Common stock issued to SPAC public shareholders

Capital contribution from private placement

Employee stock compensation

Stock compensation to advisors

Conversion of preferred stock to common stock

Issurance of common stock and warrants for intangible assets acquisition

Stock issued for waiving contractual restriction

Balance at June 30, 2025 (Unaudited)

$ ( 8,763,100 )

* Giving retroactive effect to reverse recapitalization effected on April 4, 2025 and reverse stock split on March 9, 2026 and June 4, 2026

See accompanying notes to the consolidated financial statements.

CLASSOVER HOLDINGS, INC.

AND SUBSIDIARIES

1 unchanged sentence

(EXPRESSED IN US DOLLARS)

For the Three Months Ended March 31,

For the Six Months Ended June 30,

Cash flows from operating activities:

5 unchanged sentences

Employee stock compensation

Stock compensation issued for advisory service

Deferred tax liabilities

Change in fair value of warrants

1 unchanged sentence

Change in fair value of convertible debt

Stock issued for waiving contractual restiction

Staking rewards

3 unchanged sentences

Accounts payable

Interest payable

Deferred revenues

3 unchanged sentences

Net cash (used in) operating activities

( 1,451,648 )

Cash flows from investing activities:

Purchases of property and equipment

Purchases of crypto assets

( 1,050,000 )

Sales of crypto assets

Purchases of intangible assets

( 1,250,000 )

Net cash (used in) investing activities

( 2,300,000 )

Cash flows from financing activities:

Proceeds from convertible notes payable

Capital contribution from private placement

Proceeds from the reverse recapitalization

Repurchase of treasury stock

Repayment of promissory notes to related party

Proceeds from promissory notes related party

Net cash provided by financing activities

Net (decrease) increase in cash

Cash, beginning of period

Cash, end of period

Net (decrease) increase in cash, cash equivalents and restricted cash

Cash, cash equivalents and restricted cash, beginning of period

Cash, cash equivalents and restricted cash, end of period

Supplemental disclosure of cash flow information:

1 unchanged sentence

Noncash activities:

Issuance of common stock for warrants excise

Issurance of common stock for warrants excise

Purchase of crypto assets through convertible debt

Common stock issued for liability payment

Conversion of convertible debt to common stock

1 unchanged sentence

See accompanying notes to the consolidated financial statements.

CLASSOVER HOLDINGS, INC.

KIDZ AI INC .

AND SUBSIDIARIES

NOTES TO INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

THREETHREE MONTHS ENDED MARCH 31, 2026 AND 2025

THREE AND SIX MONTHS ENDED JUNE 30 , 2026 AND 2025

Description of the Business and Basis of Presentation

Classover Holdings, Inc.

(the “Company”) is a company incorporated on May 2, 2024 under Delaware law as a wholly owned subsidiary of the Battery Future Acquisition Corp., a Cayman Islands exempted Company (the “BFAC”).

(formerly Classover Holdings, Inc.) (the “Company”) is a company incorporated on May 2, 2024 under Delaware law as a wholly owned subsidiary of the Battery Future Acquisition Corp., a Cayman Islands exempted Company (the “BFAC”).

On April 4, 2025, upon the closing of the business combination (the “Closing”), BFAC Merger Sub 1 Corp.

20 unchanged sentences

GAAP”) and applicable rules and regulations of the Securities and Exchange Commission (“SEC”), regarding financial reporting, and include all normal and recurring adjustments that management of the Company considers necessary for a fair presentation of its financial position and operating results.

The results of operations for the three months ended March 31, 2026 are not necessarily indicative of results to be expected for any other interim period or for the full year of 2026.

The results of operations for the three and six months ended June 30, 2026 are not necessarily indicative of results to be expected for any other interim period or for the full year of 2026.

Accordingly, these statements should be read in conjunction with the Company’s audited financial statements and notes thereto as of and for the years ended December 31, 2025 and 2024.

6 unchanged sentences

Liquidity and Going Concern

As of March 31, 2026, the Company had cash of $ 2,116,631 , current liabilities of $ 2,260,061 , a working capital deficit of $ 125,316 and a stockholders’ equity of $ 3,678,295 .

For the three months ended March 31, 2026 and 2025, the Company had loss of $ 4,187,534 and $ 297,207 , respectively.

As of June 30, 2026, the Company had cash and cash equivalents of $ 5,878,823 , current liabilities of $ 2,294,787 , a working capital surplus of $ 6,624,850 and a stockholders’ equity of $ 9,949,689 .

For the three months ended June 30, 2026 and 2025, the Company had losses of $ 2,496,074 and $ 3,866,169 , respectively, and for the six months ended June 30, 2026 and 2025, the Company had losses of $ 6,683,608 and $ 4,163,376 , respectively.

The continuing losses raise substantial doubt about the ability of the Company to continue as a going concern.

2 unchanged sentences

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.

On May 28, 2026 the Company issued an additional Senior Secured Convertible Note with an aggregate principal amount of $ 600,000 .

On May 12, 2026, the Company received approval from the SEC on S-3, which allows the Company to sell up to $ 200,000,000 securities.

The securities may be offered separately, together, or in series, and in amounts, at prices and on other terms to be determined at the time of each offering.

On May 14, 2026, the Company entered into an At-the-Market Sales Agreement (the “ATM Agreement”) with Chardan Capital Markets LLC, as sales agent, pursuant to which the Company may offer and sell, from time to time through or to the Agent, up to an aggregate of $ 9,115,000 (amended and increase to $ 12,455,000 on June 5, 2026) of shares of its Class B common stock.

On May 21, 2026, the Company entered into a ChEF Purchase Agreement (the “ChEF Agreement”) with Chardan Capital Markets LLC.

Pursuant to the ChEF Agreement, subject to certain conditions precedent contained therein, the Company has the right, but not the obligation, to issue and sell to Chardan, and Chardan shall purchase from the Company, up to an aggregate of $ 100 million in newly issued shares of the Company’s Class B common stock.

Subject to certain conditions and limitations, the Company will control the timing and amount of any sales of Shares to Chardan pursuant to the ChEF Agreement.

Management of the Company has evaluated the mitigation plans and determined that the current working capital, cash position, and financing options 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.

19 unchanged sentences

Historically, the Company has not experienced material refunds.

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

13 unchanged sentences

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.

Cash , Cash Equivalents and R estricted cash

Cash consists primarily of cash on hand, bank deposits, and U.S.

dollar ("USD") balances held in the Company's investment accounts.

The Company also maintains U.S.

dollar-denominated stablecoins ("USDC") that are classified as restricted cash in the accompanying consolidated balance sheets pursuant to the terms of the Company's financing arrangements.

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.

March 31, 2026

June 30, 2026

December 31, 2025

Bank deposits

Restricted USDC in investment accounts

Total cash shown in the Statement of Cash Flows

2 unchanged sentences

Accounts considered uncollectible are written off against the allowance after exhaustive efforts at collection is made.

As of March 31,2026, there was no allowance for deposits.

As of June 30,2026, there was no allowance for deposits.

Property and Equipment

12 unchanged sentences

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.

Certain digital assets are pledged as collateral under the Company’s Senior Secured Convertible Notes as of December 31, 2025.

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.

20 unchanged sentences

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 March 31, 2026 and 2025 related to uncertain tax positions.

There were no amounts recorded at June 30, 2026 and 2025 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.

The carrying values of cash, accounts payable, deferred revenues, 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.

Research and development expenses are expensed as incurred and include compensation-related expenses to the outsourced subcontractors for maintenance of our online learning platform and ongoing investments in AI-related product development.

Segment Information and Geographic Data

5 unchanged sentences

Advertising Costs

Advertising costs amounted to $ 5,075 and $ 7,402 for the three months ended March 31, 2026 and 2025, respectively.

Advertising costs amounted to $ 18,841 and $ 11,187 for the three months ended June 30, 2026 and 2025, respectively, and $ 23,916 and $ 18,589 for the six months ended June 30, 2026 and 2025.

Advertising costs are expensed as incurred and included in selling expenses.

25 unchanged sentences

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 months ended March 31, 2026 and 2025, the convertible notes payable were excluded from the calculation of diluted EPS as their inclusion would have been anti-dilutive.

The Company computes earnings (loss) per share ("EPS") in accordance with ASC 260, Earnings per Share.

Basic earnings (loss) per share is computed using the two-class method, which allocates undistributed earnings or losses between common stockholders and participating securities based on their respective participation rights.

The Company's Preferred Stock is considered a participating security and is therefore included in the allocation of earnings (loss) under the two-class method.

Basic earnings (loss) per share attributable to common stockholders is computed by dividing net income (loss) attributable to common stockholders, after the allocation of earnings (loss) to participating securities, by the weighted-average number of shares of common stock outstanding during the period.

Diluted earnings (loss) per share reflects the potential dilution that could occur if securities or other contracts to issue common stock were exercised or converted into common stock.

Potential common shares include convertible preferred stock, convertible notes, warrants and stock options.

For the three and six months ended June 30, 2026 and 2025, all potential common shares were anti-dilutive due to the Company's net loss and, accordingly, diluted earnings (loss) per share equals basic earnings (loss) per share.

Recently Adopted Accounting Pronouncements

11 unchanged sentences

Property and Equipment, net

Property and equipment consists of the following as of March 31, 2026 and December 31, 2025:

March 31, 2026

Property and equipment consists of the following as of June 30, 2026 and December 31, 2025:

June 30, 2026

December 31, 2025

5 unchanged sentences

Total property and equipment, net

Depreciation expense was $ 14,748 and $ 16,221 for the three months ended March 31, 2026 and 2025, respectively.

Depreciation expense was $ 15,808 and $ 16,221 for the three months ended June 30, 2026 and 2025, respectively, and $ 30,556 and $ 32,442 for the six months ended June 30, 2026 and 2025, respectively.

Depreciation expense is included within general and administrative expenses in the Company’s statements of operations.

6 unchanged sentences

Changes in fair value are recognized in the Company’s consolidated statement of operations.

As of March 31, 2026, digital assets with a fair value of $ 4,729,446 were pledged as collateral under the Company’s Senior Secured Convertible Notes.

As of June 30, 2026 and December 31, 2025, digital assets with a fair value of $nil and $ 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.

On May 28, 2026, the Company entered into the First Amendment to the Securities Purchase Agreement.

(See First Convertible Notes Amendment )

The following table summarizes the Company’s digital asset holdings, as of:

March 31, 2026

June 30, 2026

December 31, 2025

3 unchanged sentences

Number of World Coin - Staking rewards

Number of Hyperliquid purchased

Crypto asset purchased carrying value

2 unchanged sentences

( 1,565,173 )

Total investment accounts

3 unchanged sentences

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;

Issuance of 1,600 shares of the Company’s Class B common stock (reflecting the March 2026 50-for-1 reverse stock split and the June 2026 10-for-1 reverse stock split;

800,000 shares on a pre-split basis, valued at $ 2.94 per share immediately prior to giving effect to the reverse stock splits, totaling $ 2,352,000 , based on the fair value of the shares on the acquisition date);

Issuance of warrants to purchase 1,479 shares of Class B common stock (reflecting the March 2026 50-for-1 reverse stock split and the June 2026 10-for-1 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.

8 unchanged sentences

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.

All equity securities issued in the transaction are subject to a six-month lock-up pursuant to a Lock-Up Agreement entered into on the same date.

The acquired IP is recorded as an intangible asset and is being amortized over its estimated useful life of 10 years.

Amortization expense related to the acquired IP for the three months ended March 31, 2026 was $ 105,947 .

Amortization expense related to the acquired IP for the three and six months ended June 30, 2026 was $ 105,947 and $ 211,895 .

During the year ended December 31, 2025, the Company identified indicators of impairment related to the IP.

2 unchanged sentences

Accordingly, the Company recorded an impairment loss of $ 1,460,704 for the year ended December 31, 2025, representing the excess of the carrying amount over the estimated fair value of the IP.

No additional impairment loss was recorded for the three months ended March 31, 2026.

No additional impairment loss was recorded for the three and six months ended June 30, 2026.

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.

2 unchanged sentences

The fair value measurement is classified as Level 3 within the fair value hierarchy due to the use of significant unobservable inputs

As of March 31, 2026, the fair value of the patented technology was determined to be $ 3,920,053 .

As of December 31, 2025, the fair value of the patented technology was determined to be $ 4,026,000 .

Following the impairment, the Company revised the remaining useful life and amortization of the intangible asset.

3 unchanged sentences

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 March 31, 2026, the Company’s operating sublease had a remaining lease term of approximately 3.6 years.

For the quarter ended March 31, 2026 and 2025, rent expense for the operating sublease was $ 90,253 .

The Company’s sublease obligations as of March 31, 2026 are presented below:

As of June 30, 2026, the Company’s operating sublease had a remaining lease term of approximately 3.3 years.

For the three and six months ended June 30, 2026 and 2025, rent expense for the operating sublease was $ 90,253 and 180,506 , respectively.

The Company’s sublease obligations as of June 30, 2026 are presented below:

Year ending December 31,

9 unchanged sentences

Billed and uncollected operating lease receivables will be included in due from related parties which are stated at their estimated net realizable value.

For the three months ended March 31, 2026 and 2025, the Company’s income from these subleases totaled $ 4,666 and $ 24,854 respectively (which has been reflected as a reduction of general and administrative expenses in the accompanying consolidated Statements of Operations).

For the three months ended June 30, 2026 and 2025, the Company’s income from these subleases totaled $ 12,117 and $ 24,325 respectively, and for the six months ended June 30, 2026 and 2025, the Company’s income from these subleases totaled $ 16,783 and $ 49,920 , respectively (which has been reflected as a reduction of general and administrative expenses in the accompanying consolidated Statements of Operations).

Accrued Liabilities and Other Payables

Accrued liabilities and other payables consisted of the following:

March 31, 2026

June 30, 2026

December 31, 2025

1 unchanged sentence

Payroll tax payable

The Company had nil income tax provision for the three months ended March 31, 2026 and 2025.

For the three months ended

The Company had nil and $ 38,360 income tax provision for the six months ended June 30, 2026 and 2025.

For the six months ended June 30,

Deferred income tax expense

Current income tax expense

The Company has the following deferred tax assets (liabilities) as of March 31, 2026 and December 31 2025:

As of March 31 , 2026

The Company has the following deferred tax assets (liabilities) as of June 30, 2026 and December 31 2025:

As of June 30, 2026

As of December 31, 2025

13 unchanged sentences

The Company has provided a valuation allowance for the net deferred tax asset as it is not more likely than not that the asset will be realized.

The provision for income taxes differs from the amounts computed by applying the federal statutory rate as follows for the periods ended March 31, 2026 and 2025:

March 31, 2026

March 31, 2025

The provision for income taxes differs from the amounts computed by applying the federal statutory rate as follows for the periods ended June 30, 2026 and 2025:

June 30, 2026

June 30, 2025

Federal statutory rate

Deferred tax adjustment related to convertible debt convesion

Deferred tax adjustment related to Crypto asset exchange

Nondeductible expense

1 unchanged sentence

Effective income tax rate

The effective tax rate for the three months ended March 31, 2026 and 2025 is less than the statutory rate primarily as a result of the valuation allowance for net deferred tax assets.

No uncertain tax benefits have been recorded for the three months ended March 31, 2026 and 2025.

The effective tax rate for the six months ended June 30, 2026 and 2025 is less than the statutory rate primarily as a result of the valuation allowance for net deferred tax assets.

No uncertain tax benefits have been recorded for the three and six months ended June 30, 2026 and 2025.

On March 27, 2020, the “Coronavirus Aid, Relief and Economic Security (CARES) Act” (the “Act”) was signed into law.

1 unchanged sentence

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 March 31, 2026, Classover NJ and Classover Holdings, Inc.

As of June 30, 2026, Classover NJ and Classover Holdings, Inc.

has approximately $ 9,340,060 and $ 1,040,203 in federal net operating loss carryforwards, respectively.

2 unchanged sentences

Related parties

As of March 31, 2026 and 2025, The Company has related party transactions with the following affiliates and affiliated entities:

As of June 30, 2026 and 2025, The Company has related party transactions with the following affiliates and affiliated entities:

Related Party Name

3 unchanged sentences

An entity controlled by Hui Luo

Ideal Force LLC

An entity controlled by Yi Liu

An entity controlled by Hui Luo

Due from related parties

March 31, 2026

June 30, 2026

December 31, 2025

2 unchanged sentences

Due to related parties

March 31, 2026

June 30, 2026

December 31, 2025

1 unchanged sentence

Total due to related parties - current

The following table represents related party transactions for the quarter ended March 31, 2026 and 2025:

The following table represents related party transactions for the quarter and six months ended June 30, 2026 and 2025:

Three Months Ended

Six Months Ended

Business Purpose of Transaction

4 unchanged sentences

Sublease income has been reflected as a reduction of general and administrative expenses in the accompanying consolidated statements of operations.

As of March 31, 2026 and December 31, 2025, the Company has the following ROU assets and operating lease liabilities recognized from related party under ASC 842 (Note 4):

March 31, 2026

As of June 30, 2026 and December 31, 2025, the Company has the following ROU assets and operating lease liabilities recognized from related party under ASC 842 (Note 4):

June 30 , 2026

December 31, 2025

Short term obligation under operating leases

$ ( 280,678 )

$ ( 195,353 )

Long term obligation under operating leases

$ ( 960,320 )

$ ( 1,046,141 )

Convertible notes

7 unchanged sentences

The Notes are due on the two-year anniversary of the date of issuance unless earlier converted or repaid.

First Convertible Notes Amendment

On May 28, 2026, the Company entered into the First Amendment to the Securities Purchase Agreement, which modified certain provisions of the Purchase Agreement and the form of the senior secured convertible notes.

The amendment, among other things:

1) revised the use of proceeds for future Additional Closings to require proceeds to be deposited into the Control Account until the Company satisfies the Available Cash Test, after which remaining proceeds may be used for working capital or capital expenditures related to AI operations;

2) revised the Available Cash Test and certain definitions, including Permitted Indebtedness and Permitted Liens;

3) replaced the form of the Additional Notes with an amended form of Senior Secured Convertible Note;

and 4) permitted the Company to continue its at-the-market equity program and ChEF Purchase Agreement subject to specified limitations.

In connection with the amendment, the Company completed an Additional Closing on May 28, 2026 and issued an additional Senior Secured Convertible Note with an aggregate principal amount of $600,000.

The additional note bears interest at 7% per annum, matures two years from issuance, and is governed by substantially the same terms as amended under the Purchase Agreement.

Description of 2025 Convertible Note upon issuance:

7 unchanged sentences

20% for operations

7.0 % per annum;

payable at the Company's option in cash, shares or PIK

Conversion Price

Initially $ 5.13 6

$ 0.47 74 per share

120% upon Issuer's Call;

100% at Maturity

Use of Proceeds

Held in Control Account until Available Cash Test is met;

thereafter for working capital and AI-related capital expenditures (no Solana purchase requirement)

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).

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 5,355 shares of Class B Common Stock (reflecting the March 2026 50-for-1 reverse stock split and the June 2026 10-for-1 reverse stock spilt 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.

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During the three months ended March 31, 2026, the Company converted an aggregate principal amount of $ 2,742,500 of convertible notes into equity securities in accordance with the terms of the note agreements.

Upon conversion, $ 2,742,500 of the notes were converted into 529,749 shares of Class B Common Stock (reflecting the March 2026 reverse stock split;

Upon conversion, $ 2,742,500 of the notes were converted into 52,995 shares of Class B Common Stock (reflecting the March 2026 50-for-1 reverse stock split and the June 2026 10-for-1 reverse stock spilt;

26,487,424 shares on a pre-split basis).

The fair value of the Class B Common Stock issued upon conversion was $ 3,899,856 .

During the three months ended June 30, 2026, the Company converted an aggregate principal amount of $ 5,032,500 of convertible notes into equity securities in accordance with the terms of the note agreements.

Upon conversion, $5,032,500 of the notes were converted into 534,688 shares of Class B Common Stock (reflecting the June 2026 10-for-1 reverse stock split;

5,346,878 shares on a pre-split basis).

The fair value of the Class B Common Stock issued upon conversion was $ 5,559,579 .

The Company had elected the fair value option for the convertible notes in accordance with ASC 825-10, Financial Instruments.

1 unchanged sentence

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 Class B Common Stock issued upon conversion was $ 3,899,856 .

Immediately prior to conversion, the carrying value of the convertible notes approximated their fair value.

1 unchanged sentence

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.

The Company elected the fair value option (“FVO”) under ASC 825 for its senior secured convertible notes.

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.

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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 March 31, 2026 and December 31, 2025, the aggregate contractual principal amount of the convertible notes was $ 5,162,521 and $ 5,032,500 .

As of June 30, 2026 and December 31, 2025, the aggregate contractual principal amount of the convertible notes was $ 600,000 and $ 7,775,000 .

Level 3 Quantitative Inputs

The significant inputs used in the valuation as of December 31, 2025 were as follows:

The significant inputs used in the valuation as of June 30, 2026 and December 31, 2025 were as follows:

June 30, 2026

December 31, 2025

March 31, 2026

Risk-free rate

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PIK interest rate

Conversion price (effective)

Conversion price (floor)

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Based on the sensitivity analysis performed as of December 31, 2025, 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.

Based on the sensitivity analysis performed as of March 31, 2026, increasing volatility from 94 % to 120 % would decrease the fair value by approximately $ 128,332 , while decreasing volatility from 94 % to 80 % would increase the fair value by approximately $ 149,096 .

Based on the sensitivity analysis performed as of June 30, 2026, increasing the expected volatility from the base assumption of 161 % to 200 % would not have a material impact on the estimated fair value of the convertible note.

Decreasing expected volatility to 132% likewise would not materially affect the estimated fair value.

A further decrease in expected volatility to 115%, 100%, and 90% would increase the estimated fair value by approximately $197, $6,950, and $7,544, respectively , 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:

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Fair value at March 31, 2026

Changes in fair value recognized in earnings

Conversion into common stock

( 5,559,579 )

Initial recognition at principal amount

Fair value at June 30, 2026

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.

In connection with the Reorganization Merger, the Company has assumed 17,250,000 warrants outstanding from BFAC public shareholders.

As of June 30, 2026, the Company has 17,249,987 warrants outstanding.

Each whole warrant entitles the holder to purchase 0.002 (reflecting the March 2026 50 for 1 reverse stock split and the June 2026 10 for 1 reverse stock split) 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.

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In addition, if (a) the Company issues additional ordinary shares or equity-linked securities for capital raising purposes in connection with the closing of its initial business combination at a newly issued price of less than $9.20 per share (with such issue price or effective issue price to be determined in good faith by our board of directors and, in the case of any such issuance to our initial shareholders or their affiliates, without taking into account any founders’ shares held by the Company’s initial shareholders or such affiliates, as applicable, prior to such issuance), (b) the aggregate gross proceeds from such issuances represent more than 60 % of the total equity proceeds, and interest thereon, available for the funding of the initial business combination on the date of the consummation of the Company’s initial business combination (net of redemptions), and (c) the volume weighted average trading price of the Company’s ordinary shares during the 20 trading day period starting on the trading day prior to the day on which the Company consummates its initial business combination is below $ 9.20 per share, the exercise price of the warrants will be adjusted (to the nearest cent) to be equal to 115 % of the higher of the market value and the newly issued price, and the $18.00 per share redemption trigger price described above will be adjusted (to the nearest cent) to be equal to 180% of the higher of the market value and the newly issued price.

The Company accounts for the 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.

The Company accounts for the outstanding warrants issued in connection with the Public Offering of BFAC in accordance with the guidance contained in ASC 815-40.

Such guidance provides that because the warrants do not meet the criteria for equity treatment thereunder, each warrant must be recorded as a liability.

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Change in fair value

Fair value as of March 31, 2026

Recurring f air v alue m easurements

Fair value as of June 30, 2026

Recurring fair value measurements

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.

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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 March 31, 2026, 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:

March 31, 2026

The following tables present fair value information as of June 30, 2026, 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:

June 30, 2026

Investment- Crypto asset

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Three Months Ended

March 31, 2026

March 31, 2025

Six Months Ended

June 30, 2026

June 30, 2025

June 30, 2026

June 30, 2025

Time-based subscriptions

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The Company establishes an accrued liability for legal proceedings only when those matters present loss contingencies that are both probable and reasonably estimable.

At March 31, 2026, the Company was not involved in any material legal proceedings regarding claims or legal actions against the Company.

As of March 31, 2026, 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 1,000,000 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.

At June 30, 2026, the Company was not involved in any material legal proceedings regarding claims or legal actions against the Company.

As of June 4, 2026, the total number of shares which the Company shall have the authority to issue is 5,100,000 shares (reflecting the March 2026 50-for-1 reverse stock split and the June 2026 10-for-1 reverse stock spilt;

510,000,000 shares on a pre-split basis), which include 100,000 shares of Class A common stock (reflecting the March 2026 50-for-1 reverse stock split and the June 2026 10-for-1 reverse stock spilt;

50,000,000 shares on a pre-split basis, par value $ 0.0001 per share), 4,000,000 shares of Class B common stock (reflecting the March 2026 50-for-1 reverse stock split and the June 2026 10-for-1 reverse stock spilt;

200,000,000 shares on a pre-split basis, 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.

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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.

On June 10, 2026, the Company’s stockholders approved an amendment to increase the authorized number of Class B common shares to 2,500,000,000 .

Reverse Recapitalization and De-SPAC Merger

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As part of the transaction:

Former Classover DE shareholders received 12,500,000 shares of Company’s equity, including:

130,701 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;

Former Classover DE shareholders received 25,000 shares (reflecting the March 2026 50-for-1 reverse stock split and the June 2026 10-for-1 reverse stock spilt;

12,500,000 shares on a pre-split basis) of Company’s equity, including:

13,071 Class A common shares to Hui Luo (reflecting the March 2026 50-for-1 reverse stock split and the June 2026 10-for-1 reverse stock spilt6, 535,014 shares on a pre-split basis)

3,064 Class B common shares to other Classover shareholders (reflecting the March 2026 50-for-1 reverse stock split and the June 2026 10-for-1 reverse stock spilt;

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;

8,867 Class B common shares to convertible note holders upon conversion (reflecting the March 2026 50-for-1 reverse stock split and the June 2026 10-for-1 reverse stock spilt;

4,433,122 shares on a pre-split basis)

BFAC Sponsor received 192,021 Class B common shares (reflecting the March 2026 reverse stock split;

BFAC Sponsor received 19,203 Class B common shares (reflecting the March 2026 50-for-1 reverse stock split and the June 2026 10-for-1 reverse stock spilt;

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;

Remaining BFAC IPO investors were issued 337 Class B common shares (reflecting the March 2026 50-for-1 reverse stock split and the June 2026 10-for-1 reverse stock spilt;

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 )

17,250,000 warrants (the warrants can be exchanged 1-for-0.002 Class B common shares after reflecting the March 2026 50-for-1 reverse stock split and the June 2026 10-for-1 reverse stock spilt )

These equity issuances were part of the reverse recapitalization and accounted for in accordance with ASC 805-40.

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Shares issued in connection with the Company’s Merger on April, 4, 2025:

Common Share- reflecting the March 2026 reverse stock split

Common Share- reflecting the March 2026 and June 2026 reverse stock split

Common Share- on a pre-split basis

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$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;

On May 30, 2025, the Company issued 50 Class B common shares (reflecting the March 2026 50-for-1 reverse stock split and the June 2026 10-for-1 reverse stock spilt;

25,000 shares on a pre-split basis) to the investor as consideration for waving specific financing restrictions under the PIPE agreement.

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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;

Accordingly, the 2024 Incentive Plan is eligible to issue up to 6,537 Class B Common Shares (reflecting the March 2026 50-for-1 reverse stock split and the June 2026 10-for-1 reverse stock;

3,268,668 shares on a pre-split basis ).

On April 17, 2025, 16,400 shares (reflecting the March 2026 reverse stock split;

On April 17, 2025, 1,640 shares (reflecting the March 2026 50-for-1 reverse stock split and the June 2026 10-for-1 reverse stock;

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;

On April 28, 2025, 200 shares (reflecting the March 2026 50-for-1 reverse stock split and the June 2026 10-for-1 reverse stock spilt;

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;

On September 6, 2025, 8 shares (reflecting the March 2026 50-for-1 reverse stock split and the June 2026 10-for-1 reverse stock spilt;

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;

On October 28, 2025, 20 shares (reflecting the March 2026 50-for-1 reverse stock split and the June 2026 10-for-1 reverse stock spilt;

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;

On October 31, 2025, 6 shares (reflecting the March 2026 50-for-1 reverse stock split and the June 2026 10-for-1 reverse stock spilt;

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.

On January 21, 2026, 28,000 shares (reflecting the March 2026 reverse stock split;

On January 21, 2026, 2,800 shares (reflecting the March 2026 50-for-1 reverse stock split and the June 2026 10-for-1 reverse stock spilt;

1,400,000 shares on a pre-split basis) were issued to three employees of the Company which will be vested over four years.

2025 Incentive Plan

On January 9, 2026, the Company registered 100,000 shares (reflecting the March 2026 reverse stock split;

On January 9, 2026, the Company registered 10,000 shares (reflecting the March 2026 50-for-1 reverse stock split and the June 2026 10-for-1 reverse stock spilt;

5,000,000 shares on a pre-split basis), issuable pursuant to the Company’s 2025 Long-Term Incentive Equity Plan (the “2025 Incentive Plan”) .

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2025 Incentive Plan (“Plan”) is to enable the Company to offer to its employees, officers, directors and consultants whose past, present and/or potential future contributions to the Company and its Subsidiaries have been, are or will be important to the success of the Company, an opportunity to acquire a proprietary interest in the Company, or be paid incentive compensation, including incentive compensation measured by reference to the value of Common Stock, thereby strengthening their commitment to the Company and aligning their interests with those of the Company's stockholders

On January 21, 2026, 15,000 shares (reflecting the March 2026 reverse stock split;

On January 21, 2026, 1,500 shares (reflecting the March 2026 50-for-1 reverse stock split and the June 2026 10-for-1 reverse stock spilt;

750,000 shares on a pre-split basis) were granted as equity-based compensation to two employees of the Company, which will be vested over four years .

1 unchanged sentence

Compensation cost is recognized ratably over the vesting period.

For the three months ended March 31, 2026, stock compensation cost under 2024 and 2025 inventive plan was $ 188,960 .

There was no stock compensation for the three months ended March 31, 2025.

For the three and six months ended June 30, 2026, stock compensation cost under 2024 and 2025 inventive plan was $ 178,503 and $ 367,464 , respectively.

For the three and six months ended June 30, 2025, stock compensation cost under 2024 and 2025 inventive plan was $ 137,278 .

At-the-Market Equity Offering

In May 2026, the Company entered into an At-the-Market Equity Offering Sales Agreement (the "ATM Sales Agreement") with Chardan Capital Markets LLC, pursuant to which the Company may offer and sell shares of its Class B common stock from time to time through the sales agent in accordance with the terms of the Sales Agreement and the applicable registration statement.

Under the ATM Sales Agreement, the Company pays the sales agent a commission based on the gross sales price of shares sold, together with reimbursement of certain offering expenses.

During the three months ended June 30, 2026, the Company sold an aggregate of 778,910 shares (reflecting the June 2026 reverse stock split;

7,789,100 shares on a pre-split basis) of its Class B common stock under the ATM Sales Agreement for aggregate gross proceeds of $3,126,813.

The Company incurred total offering costs of $93,987, consisting primarily of sales commissions and other offering expenses, and received aggregate net proceeds of 3,032,905.

Other equity transactions

On April 17, 2025, 3,800 shares (reflecting the March 2026 reverse stock split;

On April 17, 2025, 380 shares (reflecting the March 2026 50-for-1 reverse stock split and the June 2026 10-for-1 reverse stock spilt;

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;

On June 30, 2025, 41,513 Series A Preferred Shares were converted into 832 Class B common shares (reflecting the March 2026 50-for-1 reverse stock split and the June 2026 10-for-1 reverse stock ;

415,131 shares on a pre-split basis on a 1:1 basis).

1 unchanged sentence

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;

On June 30, 2025, the Company acquired intellectual property using $ 1,250,000 cash, 1,600 Class B common shares (reflecting the March 2026 50-for-1 reverse stock split and the June 2026 10-for-1 reverse stock;

800,000 shares on a pre-split basis) and 1,479 warrants (reflecting the March 2026 reverse stock split and the June 2026 10-for-1 reverse stock;

739,278 warrants on a pre-split basis).

1 unchanged sentence

Shares and warrants were valued at fair value on grant date.

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;

On October 9, 2025, 62,068 series A preferred shares were canceled, in exchange, the company issued 1,194 class B common shares (reflecting the March 2026 50-for-1 reverse stock split and the June 2026 10-for-1 reverse stock;

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:

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;

redomestiacate the company from Delaware Corporation to Nevada Corporation, b) adopt the new incentive plan - 2025 Long-Term Incentive Equity Plan, a total of 10,000 shares of Class B stock (reflecting the March 2026 50-for-1 reverse stock split and the June 2026 10-for-1 reverse stock;

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.

1 unchanged sentence

2,675,975 shares on a pre-split basis).

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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;

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 6,897 shares (reflecting the March 2026 50-for-1 reverse stock split and the June 2026 10-for-1 reverse stock spilt;

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.

1 unchanged sentence

During the three months ended March 31, 2026, the Company converted an aggregate principal amount of $2,742,500 of convertible notes into equity securities in accordance with the terms of the note agreements.

Upon conversion, $2,742,500 of the notes were converted into 529,749 shares of Class B Common Stock (reflecting the March 2026 reverse stock split;

Upon conversion, $2,742,500 of the notes were converted into 52,995 shares of Class B Common Stock (reflecting the March 2026 50-for-1 reverse stock split and the June 2026 10-for-1 reverse stock spilt;

26,487,424 shares on a pre-split basis).

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The fair value of the Class B Common Stock issued upon conversion was $ 3,899,857 .

During the three months ended March 31, 2026, the Company received several conversion notices from a holder of its Series B Convertible Preferred Stock to convert 900 shares of Series B Convertible Preferred Stock into 93,104 shares (reflecting the March 2026 reverse stock split ;

During the three months ended March 31, 2026, the Company received several conversion notices from a holder of its Series B Convertible Preferred Stock to convert 900 shares of Series B Convertible Preferred Stock into 9,315 shares (reflecting the March 2026 50-for-1 reverse stock split and the June 2026 10-for-1 reverse stock spilt;

4,655,200 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.

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 April and May 2026, the Company converted an aggregate principal amount of $ 5,032,500 of convertible notes into equity securities in accordance with the terms of the note agreements.

Upon conversion, $ 5,032,500 of the notes were converted into 534,688 shares of Class B Common Stock (reflecting the June 2026 reverse stock split;

5,346,878 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 Class B Common Stock issued upon conversion was $ 5,559,579 .

In April 2026, the Company received several conversion notices from a holder of its Series B Convertible Preferred Stock to convert 1,875 shares of Series B Convertible Preferred Stock into 129,177 shares (reflecting the June 2026 reverse stock split;

1,291,763 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.

In June 2026, the Company received several conversion notices from a holder of its Series C Convertible Preferred Stock to convert 825 shares of Series C Convertible Preferred Stock into 856,564 shares of the Company’s Class B common stock in accordance with the terms of the Certificate of Designations governing the Series C 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.

Treasury Stock

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.

The Company accounts for treasury stock using the cost method.

Under the cost method, shares repurchased are recorded as treasury stock at the cost of acquisition and presented as a reduction of stockholders' equity in the accompanying consolidated balance sheets.

In June 2026, the Company repurchased 2,000 shares of its Class B common stock for an aggregate purchase price of $ 3,518 , including commissions and other directly attributable transaction costs.

Treasury shares are not considered outstanding for purposes of earnings per share and do not have voting or dividend rights while held by the Company.

No treasury shares were reissued or retired during the three months ended June 30, 2026.

Concentration of risk

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The insurance coverage for cash deposits at each bank is $ 250,000 .

As of March 31, 2026, a cash balance of $ 1,049,764 deposited with three financial institutions was uninsured.

As of June 30,, 2026, a cash balance of $ 4,836,511 deposited with three financial institutions was uninsured.

Management believes that the financial institutions that hold the Company’s deposits are financially credit worthy and, accordingly, minimal credit risk exists with respect to those balances.

Customer concentration risk

For the three months ended March 31, 2026 and 2025, no customer accounted for more than 10 % of the Company’s total revenues.

For the three and six months ended June 30, 2026 and 2025, no customer accounted for more than 10 % of the Company’s total revenues.

Vendor concentration risk

For the three months ended March 31, 2026 and 2025, no vendor accounted for over 10 % of the Company’s total purchases.

For the three and six months ended June 30, 2026 and 2025, no vendor accounted for over 10 % of the Company’s total purchases.

Subsequent Event

In April 2026, 1,875 shares of Series B Preferred Stock were converted into 1,291,763 shares of Class B Common Stock per the existing agreement。

In April and May 2026, an aggregate of $ 5,032,500 convertible debt was converted into 5,346,878 shares of Class B common stock per the existing agreement。

On June 30, 2026, the Company established Catalyst Compute LLC, a wholly owned subsidiary, to conduct its AI compute infrastructure business.

On July 17, 2026, Catalyst Compute LLC entered into a GPU Compute Services Agreement with Canopy Wave, Inc.

with an aggregate contract value of approximately $ 44.6 million.

In July 2026, the Company received several conversion notices from a holder of its Series C Convertible Preferred Stock to convert 1,175 shares of Series C Convertible Preferred Stock into 2,299,052 shares of the Company’s Class B common stock in accordance with the terms of the Certificate of Designations governing the Series C 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.

In July and August 2026, the Company sold an aggregate of 8,182,307 shares of its Class B common stock under the ATM Sales Agreement for aggregate gross proceeds of $ 7,066,522 .

On July 22, 2026, the related registration statement became effective, registering up to 151,112,186 shares for potential issuance and resale under the Chardan equity purchase facility.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements