Item 5. Other Information
ITEM
5. OTHER INFORMATION .
We have no information to disclose that was required
to be disclosed in a Current Report on Form 8-K during the three months ended March 31, 2024 but was not reported, other than as disclosed
below. There have been no material changes to the procedures by which security holders may recommend nominees to our board of directors
where those changes were implemented after the Company last provided disclosure of such procedures.
26
On February 22, 2024, we entered into a separate
Cancellation and Exchange Agreement, dated as of February 22, 2024, with each of Asset Entities
Holdings, LLC, a Texas limited liability company (“AEH”), the holder of 8,385,276 shares of Class A Common Stock; GKDB AE
Holdings, LLC, a Texas limited liability company (“GKDB”), the holder of 603,953 units of membership interests in AEH representing
approximately 13.2% ownership of AEH; and each of certain holders of an aggregate of 308,073 units of membership interests in GKDB (the
“2024 Former GKDB Holders”), representing approximately 51.0% ownership in GKDB (collectively, the “Former GKDB Holder
Cancellation Agreements”). In accordance with the Former GKDB Holder Cancellation Agreements, we and AEH agreed to convert 561,585
shares of AEH’s Class A Common Stock into 561,585 shares of Class B Common Stock and transfer such shares to GKDB, in exchange
for GKDB’s agreement to cancel and surrender 308,073 of GKDB’s 603,953 units of membership interests in AEH, representing
the 2024 Former GKDB Holders’ approximately 51.0% share of GKDB’s total ownership interest in AEH. GKDB in turn agreed to
the cancellation of 308,073 of its AEH units and transfer of the 561,585 shares of Class B Common Stock to the 2024 Former GKDB Holders
in proportion to their former ownership interests in GKDB, in exchange for the 2024 Former GKDB Holders’ agreement to cancel and
surrender all of their units of membership interests in GKDB. The 561,585 shares of Class B Common Stock transferred to the 2024 Former
GKDB Holders were derived from the 2024 Former GKDB Holders’ approximately 6.7% nominal indirect interest in AEH’s 8,385,276
shares of Class A Common Stock, which in turn was derived from the 2024 Former GKDB Holders’ approximately 51.0% ownership of GKDB
and, in turn, their nominal indirect interest in approximately 51.0% of GKDB’s AEH units, which constituted approximately 13.2%
of AEH. The 2024 Former GKDB Holders’ nominal indirect interest in 561,585 of AEH’s 8,385,276 shares of Class A Common Stock
was therefore automatically converted into ownership of 561,585 shares of Class B Common Stock upon the conversion and transfer of this
number of Class A Common Stock that were held by AEH to the 2024 Former GKDB Holders. Additionally, on February 22, 2024, we entered
into a Cancellation and Exchange Agreement, dated as of February 22, 2024, with AEH and a holder of 160,000 units of membership interests
in AEH (the “2024 Former AEH Holder”), representing approximately 3.4% ownership in AEH (the “Former AEH Holder Cancellation
and Exchange Agreement”). In accordance with this agreement, we and AEH agreed to convert 291,662 shares of AEH’s Class A
Common Stock into 291,662 shares of Class B Common Stock and transfer such shares to the 2024 Former AEH Holder in exchange for the 2024
Former AEH Holder’s agreement to cancel and surrender the 2024 Former AEH Holder’s 160,000 units of membership interests
in AEH. The 2024 Former AEH Holder’s nominal direct interest in AEH’s 8,385,276 shares of Class A Common Stock was therefore
automatically converted into ownership of 291,662 shares of Class B Common Stock upon the conversion and transfer of this number of Class
A Common Stock that were held by AEH to the 2024 Former AEH Holder. These share transfers were recorded with the transfer agent as of
February 26, 2024. As a result of these transactions, AEH held 7,532,029 shares of Class A Common Stock, the 2024 Former GKDB Holders
held a total of 561,585 shares of Class B Common Stock, and the 2024 Former AEH Holder held 291,662 shares of Class B Common Stock.
On the date
of this transaction, the managers, officers, or other beneficial owners of the securities of the Company that were held by AEH consisted
of Arman Sarkhani, the Company’s Chief Operating Officer; Arshia Sarkhani, the Company’s Chief Executive Officer, President
and director; Jackson Fairbanks, the Company’s Director of Socials and former Chief Marketing Officer; Kyle Fairbanks, the Company’s
Chief Marketing Officer, Executive Vice-Chairman and director; Matthew Krueger, the Company’s Chief Financial Officer, Treasurer
and Secretary; and Michael Gaubert, the Company’s Executive Chairman, General Counsel, and director. Each of them was deemed to
beneficially own the shares of Class A Common Stock owned by Asset Entities Holdings, LLC and have shared voting and dispositive powers
over its shares.
Derek Dunlop,
who was one of the 2024 Former GKDB Holders, is the Company’s Chief Experience Officer. In accordance with the Cancellation and
Exchange Agreement among the Company, AEH, GKDB, and Mr. Dunlop, the Company and AEH agreed to convert 122,565 shares of AEH’s Class
A Common Stock into 122,565 shares of Class B Common Stock and transfer such shares to GKDB, in exchange for GKDB’s agreement to
cancel and surrender 67,237 of GKDB’s 603,953 units of membership interests in AEH, representing Mr. Dunlop’s approximately
11.1% share of GKDB’s total ownership interest in AEH. GKDB in turn agreed to the cancellation of 67,237 of its AEH units and transfer
of the 122,565 shares of Class B Common Stock to Mr. Dunlop in proportion to Mr. Dunlop’s former ownership interest in GKDB, in
exchange for Mr. Dunlop’s agreement to cancel and surrender all of Mr. Dunlop’s units of membership interests in GKDB. The
122,565 shares of Class B Common Stock transferred to Mr. Dunlop were derived from Mr. Dunlop’s approximately 1.5% nominal indirect
interest in AEH’s 8,385,276 shares of Class A Common Stock, which in turn was derived from Mr. Dunlop’s approximately 21.8%
of GKDB and, in turn, Mr. Dunlop’s nominal indirect interest in approximately 11.1% of GKDB’s AEH units, which constituted
approximately 13.2% of AEH. Mr. Dunlop’s nominal indirect interest in 122,565 of AEH’s 8,385,276 shares of Class A Common
Stock was therefore automatically converted into ownership of 122,565 shares of Class B Common Stock upon the conversion and transfer
of this number of shares of Class A Common Stock.
Copies of each of the
Former GKDB Holder Cancellation Agreements and the Former
AEH Holder Cancellation and Exchange Agreement are each attached to this Quarterly Report on Form 10-Q as Exhibit 10.2, Exhibit
10.3, Exhibit 10.4, Exhibit 10.5, Exhibit 10.6, and Exhibit 10.7, respectively, and the description above is qualified in its entirety
by reference to the full text of such exhibits.
27
ITEM
6. EXHIBITS.
Exhibit No.
Description
3.1
Articles of Incorporation of Asset Entities Inc. (incorporated by reference to Exhibit 3.1 to Registration Statement on Form S-1 filed on September 2, 2022)
3.2
Bylaws of Asset Entities Inc. (incorporated by reference to Exhibit 3.2 to Registration Statement on Form S-1 filed on September 2, 2022)
4.1
Form of Pre-Funded Common Stock Purchase Warrant (incorporated by reference to Exhibit 4.1 to Current Report on Form 8-K filed on August 7, 2023)
4.2
Form of Common Stock Purchase Warrant issuable to Boustead Securities, LLC (incorporated by reference to Exhibit 4.2 to Current Report on Form 8-K filed on August 7, 2023)
10.1
Third Amendment to Amended and Restated Closing Agreement, dated as of March 29, 2024, between Asset Entities Inc. and Triton Funds LP (incorporated by reference to Exhibit 10.32 to Annual Report on Form 10-K filed on April 2, 2024)
10.2*
Cancellation and Exchange Agreement, dated as of February 22, 2024, among Asset Entities Inc., Asset Entities Holdings, LLC, GKDB AE Holdings, LLC, and Derek Dunlop
10.3*
Cancellation and Exchange Agreement, dated as of February 22, 2024, among Asset Entities Inc., Asset Entities Holdings, LLC, GKDB AE Holdings, LLC, and Brian Fox
10.4*
Cancellation and Exchange Agreement, dated as of February 22, 2024, among Asset Entities Inc., Asset Entities Holdings, LLC, GKDB AE Holdings, LLC, and Haeley Benavides
10.5*
Cancellation and Exchange Agreement, dated as of February 22, 2024, among Asset Entities Inc., Asset Entities Holdings, LLC, GKDB AE Holdings, LLC, and John Costacos
10.6*
Cancellation and Exchange Agreement, dated as of February 22, 2024, among Asset Entities Inc., Asset Entities Holdings, LLC, GKDB AE Holdings, LLC, and Aaron Edwards
10.7*
Cancellation and Exchange Agreement, dated as of February 22, 2024, among Asset Entities Inc., Asset Entities Holdings, LLC, and Atticus Peppas
31.1*
Certifications of Principal Executive Officer filed pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2*
Certifications of Principal Financial and Accounting Officer filed pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1**
Certifications of Principal Executive Officer furnished pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2**
Certifications of Principal Financial and Accounting Officer furnished pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS*
Inline XBRL Instance 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 Label Linkbase Document
101.PRE*
Inline XBRL Taxonomy Extension Presentation Linkbase Document
104*
Cover Page Interactive Data File (formatted as Inline XBRL and contained
in Exhibit 101)
* Filed herewith
** Furnished herewith
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SIGNATURES
Pursuant to the requirements
of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto
duly authorized.
Date: May 15, 2024
ASSET ENTITIES INC.
/s/ Arshia Sarkhani
Name: Arshia Sarkhani
Title: Chief Executive Officer and President
(Principal Executive Officer)
/s/ Matthew Krueger
Name: Matthew Krueger
Title: Chief Financial Officer
(Principal Accounting and Financial Officer)
29