Asset Entities Inc. Reports Material Agreements & Equity Sales

TL;DR

Asset Entities Inc. filed an 8-K detailing new agreements and equity sales. Watch for details.

AI Summary

Asset Entities Inc. filed an 8-K on May 28, 2024, reporting several material events as of May 24, 2024. These include entering into a material definitive agreement, unregistered sales of equity securities, material modifications to security holder rights, and amendments to its articles of incorporation or bylaws. The company is incorporated in Nevada and its principal executive offices are located in Dallas, Texas.

Why It Matters

This filing indicates significant corporate actions by Asset Entities Inc., including potential new agreements and the issuance of equity, which could impact its financial structure and shareholder value.

Risk Assessment

Risk Level: medium — The filing mentions unregistered sales of equity securities and material modifications to security holder rights, which can introduce uncertainty and potential dilution.

Key Players & Entities

• Asset Entities Inc. (company) — Registrant
• May 24, 2024 (date) — Earliest event reported
• May 28, 2024 (date) — Filing date
• Nevada (jurisdiction) — State of incorporation
• Dallas, TX (location) — Principal executive offices

FAQ

Key Financial Figures

• $0.0001 — hich registered Class B Common Stock, $0.0001 par value per share ASST The NASDAQ
• $3,000,000 — Stock"), for maximum gross proceeds of $3,000,000. The shares of the Series A Preferred S
• $1,500,000 — A Preferred Stock for gross proceeds of $1,500,000. The second closing (the "Second Closin
• $10,000 — nitial stated value ("Stated Value") of $10,000 per share. The Series A Preferred Stoc
• $0 — rice"). The initial Conversion Price is $0.75, subject to adjustment including adj
• $0.0855 — or less than a separate floor price of $0.0855 per share regardless of whether the Exc
• $0.75 — of the Class B Common Stock falls below $0.75 per share, the holder's total sales of
• $25,000 — e holder can sell either the greater of $25,000 per Trading Day or 15% of the daily tra
• $120,000 — erefore paid Boustead a total amount of $120,000, and will be required to pay Boustead a
• $2.5 million — any's stockholders' equity is above the $2.5 million requirement under applicable rules of T

Filing Documents

• ea0206908-8k_asset.htm (8-K) — 58KB
• ea020690801ex3-1_asset.htm (EX-3.1) — 291KB
• ea020690801ex4-1_asset.htm (EX-4.1) — 93KB
• ea020690801ex10-1_asset.htm (EX-10.1) — 385KB
• ea020690801ex10-2_asset.htm (EX-10.2) — 100KB
• ex3-1_001.jpg (GRAPHIC) — 36KB
• 0001213900-24-046775.txt ( ) — 1356KB
• asst-20240524.xsd (EX-101.SCH) — 3KB
• asst-20240524_lab.xml (EX-101.LAB) — 33KB
• asst-20240524_pre.xml (EX-101.PRE) — 22KB
• ea0206908-8k_asset_htm.xml (XML) — 4KB

01 Entry into a Material Definitive Agreement

Item 1.01 Entry into a Material Definitive Agreement. Securities Purchase Agreement On May 24, 2024, Asset Entities Inc., a Nevada corporation (the "Company") entered into a securities purchase agreement (the "Purchase Agreement") with an investor (the "Investor") for the issuance and sale of up to 330 shares of the Company's newly designated Series A Convertible Preferred Stock, $0.0001 par value per share ("Series A Preferred Stock"), for maximum gross proceeds of $3,000,000. The shares of the Series A Preferred Stock are convertible into shares of Class B Common Stock, $0.0001 par value per share, of the Company ("Class B Common Stock") . Pursuant to the Purchase Agreement, the Company is required to issue and sell 165 shares of Series A Preferred Stock at each of two closings subject to the satisfaction of the terms and conditions for each closing. The first closing (the "First Closing") occurred on May 24, 2024 for the issuance and sale of 165 shares of Series A Preferred Stock for gross proceeds of $1,500,000. The second closing (the "Second Closing"), for the issuance and sale of 165 shares of Series A Preferred Stock for gross proceeds of $1,500,000, will occur on the first business day on which the conditions specified in the Purchase Agreement for the Second Closing are satisfied or waived, including the filing and effectiveness of the Registration Statement (as defined below) and the effectiveness of the Stockholder Consent (as defined below). In connection with the Purchase Agreement, the Company agreed to provide certain registration rights to the Investor, pursuant to a registration rights agreement, dated as of May 24, 2024 (the "Registration Rights Agreement"). The Registration Rights Agreement provides for the registration for resale of any and all shares of Class B Common Stock issuable to the Investor with respect to the Series A Preferred Stock under the Purchase Agreement (the "Registrable Conversion Shares"). Within the later of 15 calenda

02 Unregistered Sales of Equity Securities

Item 3.02 Unregistered Sales of Equity Securities. The information set forth under Item 1.01 of this Current Report on Form 8-K is incorporated by reference into this Item 3.02. The securities that have been or that may be issued by the Company to the Investor under the Purchase Agreement and the Certificate of Designation are being offered and sold by the Company to the Investor in a transaction that is exempt from the registration requirements of the Securities Act, in reliance on Section 4(a)(2) of the Securities Act and Rule 506(b) of Regulation D thereunder. In the Purchase Agreement, the Investor represented to the Company, among other things, that it is an "accredited investor" (as such term is defined in Rule 501(a) of Regulation D under the Securities Act). Accordingly, the offer and sale by the Company of the securities that may be issued and sold to the Investor under the Purchase Agreement have not and will not be registered under the Securities Act or any applicable state securities or "Blue Sky" laws and, therefore, such securities may not be offered or sold in the United States absent registration or an exemption from registration under the Securities Act and any applicable state securities or "Blue Sky" laws. The securities that have been issued or may be issued by the Company to Boustead under the Boustead Engagement Letter and the Underwriting Agreement are being offered and sold by the Company to Boustead in a transaction that is exempt from the registration requirements of the Securities Act, in reliance on Section 4(a)(2) of the Securities Act and/or Rule 506(b) of Regulation D thereunder. Accordingly, the offer and sale by the Company of the securities to Boustead under the Boustead Engagement Letter have not and will not be registered under the Securities Act or any applicable state securities or "Blue Sky" laws and, therefore, such securities may not be offered or sold in the United States absent registration or an exemption from registra

03 Material Modification to Rights of Security Holders

Item 3.03 Material Modification to Rights of Security Holders. On May 24, 2024, the Company filed the Certificate of Designation with the Secretary of State of the State of Nevada to establish the preferences, voting powers, limitations as to dividends or other distributions, qualifications, terms and conditions of redemption and other terms and conditions of the Series A Preferred Stock. The Certificate of Designation became effective upon filing. To the extent the Company issues its Series A Preferred Stock, the ability of the Company to declare or pay dividends on shares of its Class B C ommon Stock, or any shares of other stock of the Company that rank junior to or on parity with the Series A Preferred Stock either as to the payment of dividends and/or as to the distribution of assets upon the liquidation , dissolution or winding up of the Company will be subject to certain restrictions in the event that the Company does not declare and pay (or set aside) dividends on the Series A Preferred Stock. The terms of the Series A Preferred Stock, including such restrictions, are more fully described in Item 1.01 above, and this description is qualified in its entirety by reference to the Certificate of Designation, a copy of which is filed as Exhibit 3.1 to this Current Report on Form 8-K.

03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year

Item 5.03 Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year. The information set forth under Item 1.01 of this Current Report on Form 8-K with respect to the Certificate of Designation is incorporated by reference into this Item 5.03.

01 Other Events

Item 8.01 Other Events. As a result of the above described transaction, the Company's stockholders' equity is above the $2.5 million requirement under applicable rules of The Nasdaq Stock Market LLC as of the date of this filing.

01 Financial Statements and Exhibits

Item 9.01 Financial Statements and Exhibits. (d) Exhibits Exhibit No. Description 3.1 Certificate of Designation of Series A Convertible Preferred Stock of Asset Entities Inc. filed with the Secretary of State of the State of Nevada on May 24, 2024 4.1 Common Stock Purchase Warrant issued to Boustead Securities, LLC, dated as of May 24, 2024 10.1 Form of Securities Purchase Agreement, dated as of May 24, 2024 10.2 Form of Registration Rights Agreement, dated as of May 24, 2024 104 Cover Page Interactive Data File (embedded within the Inline XBRL document) 5

SIGNATURES

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 hereunto duly authorized. Date: May 28, 2024 ASSET ENTITIES INC. /s/ Arshia Sarkhani Name: Arshia Sarkhani Title: Chief Executive Officer and President 6

View Full Filing

View this 8-K filing on SEC EDGAR