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Stockholders’ Equity

6 Months Ended

Jun. 30, 2025

Stockholders’ Equity [Abstract]

Stockholders’ Equity

Note 5. Stockholders’ Equity

Authorized Capital Stock

The Company has authorized 40,000,000 shares of common stock, consisting of 2,000,000 shares of Class A Common Stock and 38,000,000 shares of Class B Common Stock.

Preferred Stock

The Company shall have the authority to issue the shares of Preferred stock, $0.0001 par value per share (“Preferred Stock”) in one or more series with such rights, preferences and designations as determined by the Board of Directors of the Company.

Series A Convertible Preferred Stock

On May 24, 2024, the Company filed a Certificate of Designation of Series A Convertible Preferred Stock (the “Certificate of Designation”) with the Secretary of State of the State of Nevada designating 660 shares of the Company’s Preferred Stock, $0.0001 par value per share, as “Series A Convertible Preferred Stock,” and setting forth the voting and other powers, preferences and relative, participating, optional or other rights of the Series A Preferred Stock. Each share of Series A Preferred Stock has an initial stated value (“Stated Value”) of $10,000 per share.

The Series A Preferred Stock, with respect to the payment of dividends, distributions and payments upon the liquidation, dissolution and winding up of the Company, ranks senior to all capital stock of the Company unless the holders of the majority of the outstanding shares of Series A Preferred Stock consent to the creation of other capital stock of the Company that is senior or equal in rank to the Series A Preferred Stock.

Holders of Series A Preferred Stock will be entitled to receive cumulative dividends, in shares of Class B Common Stock or cash on the Stated Value at an annual rate of 6% (which will increase to 12% if a Triggering Event (as defined in the Certificate of Designation) occurs. Dividends will be payable upon conversion of the Series A Preferred Stock or upon any redemption.

Holders of Series A Preferred Stock will be entitled to convert shares of Series A Preferred Stock into a number of shares of Class B Common Stock determined by dividing the Stated Value (plus any accrued but unpaid dividends and other amounts due, unless paid by the Company in cash) by the conversion price of the Series A Preferred Stock (the “Conversion Price”). The initial Conversion Price is $3.75, subject to adjustment including adjustments due to full-ratchet anti-dilution provisions. Holders may elect to convert shares of Series A Preferred Stock to Class B Common Stock at an alternate Conversion Price equal to 85% (or 70% if the Company’s Class B Common Stock is suspended from trading on or delisted from a principal trading market or upon occurrence of a Triggering Event) of the average lowest daily volume weighed average price of the Class B Common Stock during the Alternate Conversion Measuring Period (as defined in the Certificate of Designation).

On January 22, 2025, the Company filed an amendment (the “Fourth Amended Designation”) to the Certificate of Designation of Series A Convertible Preferred Stock of the Company filed with the Secretary of State of the State of Nevada on May 24, 2024, as amended by the Certificate of Amendment to Designation of Series A Convertible Preferred Stock of Asset Entities Inc. filed with the Secretary of State of the State of Nevada on June 14, 2024, as amended by the Certificate of Amendment to Designation of Series A Convertible Preferred Stock of Asset Entities Inc. filed with the Secretary of State of the State of Nevada on September 4, 2024, as amended by the Certificate of Amendment to Designation of Series A Convertible Preferred Stock of Asset Entities Inc. filed with the Secretary of State of the State of Nevada on September 4, 2024 (as amended, the “Certificate of Designation”). The Fourth Amended Designation amended the Certificate of Designation to provide that the term “Floor Price” will be defined as $0.18, subject to adjustments for any stock splits, stock dividends, stock combinations, recapitalizations or other similar transactions. The Fourth Amended Designation became effective immediately upon filing.

During the six months ended June 30, 2025, 100 shares of Series A Convertible Preferred Stock valued at $1,035,195 including dividend of $35,195 converted into 2,539,109 shares of Class B Stock.

The Company had 0 and 100 shares of Series A Convertible Preferred Stock issued and outstanding as of June 30, 2025 and December 31, 2024, respectively.

Class A Common Stock

Each share of Class A Common Stock entitles the holder to ten (10) votes, in person or proxy, on any matter on which an action of the stockholders of the Company is sought and is convertible by the holder into one (1) share of Class B Common Stock.

The Company had 1,000,000 shares of Class A Common Stock issued and outstanding as of June 30, 2025 and December 31, 2024.

Class B Common Stock

Each share of Class B Common Stock entitles the holder to one (1) vote, in person or proxy, on any matter on which an action of the stockholders of the Company is sought.

The Company had 15,624,395 and 9,060,965 shares of Class B Common Stock issued and outstanding as of June 30, 2025 and December 31, 2024, respectively.

Fiscal year 2025

During the six months ended June 30, 2025, the Company issued 6,563,430 shares of Class B common stock as follows:

●

2,833,543 shares issued for cash pursuant to a sales agreement;

●

3,677,536 shares issued, including 1,138,427 shares that relate to conversion of Series A Convertible Preferred Stock in 2024; and

●

52,351 shares issued for cashless exercise of warrants.

Sales Agreement of Class B Common Stock

On September 27, 2024, the Company entered into a Sales Agreement between the Company and A.G.P./Alliance Global Partners (the “Sales Agent”). Pursuant to the prospectus supplement and accompanying base prospectus relating to the offering of the Shares (as defined below), and under terms of the Sales Agreement and the prospectus supplement and the accompanying base prospectus, filed on September 27, 2024, the Company may, from time to time, in transactions that are deemed to be “at the market offerings” as defined in Rule 415 under the Securities Act of 1933, as amended (the “Securities Act”), issue and sell through or to the Sales Agent, up to a maximum aggregate amount of $1,791,704 of shares of the Company’s Class B Common Stock, $0.0001 par value per share (the “Shares”). In November 2024 and January 2025, the Company filed additional prospectus supplements to the base prospectus to increase the maximum gross proceeds to $5,489,399, as of June 30, 2025.

The Company will pay the Sales Agent a cash commission of 3.0% of the gross sales price of the Shares sold by the Sales Agent pursuant to the Sales Agreement. Pursuant to the terms of the Sales Agreement, the Company also agreed to reimburse the Sales Agent for reasonable fees and expenses, not to exceed $60,000 (including but not limited to the reasonable and documented fees and disbursements of its legal counsel), and additional amounts for annual maintenance of the Sales Agreement (including but not limited to the reasonable and documented fees and disbursements of its legal counsel) on a quarterly basis, not to exceed $5,000 per quarter.

2022 Equity Incentive Plan

The maximum number of shares of Class B Common Stock that may be issued pursuant to awards granted under the 2022 Plan is 550,000 shares. Awards that may be granted include: (a) Incentive Stock Options, or ISO (b) Non-statutory Stock Options, (c) Stock Appreciation Rights, (d) Restricted Stock, the Restricted Stock Units, or RSUs, (f) Stock granted as a bonus or in lieu of another award, and (g) Performance Awards. These awards offer us and our shareholders the possibility of future value, depending on the long-term price appreciation of our Class B Common Stock and the award holder’s continuing service with us.

The RSA shares issued to directors vest quarterly for one year from the date of grantee’s appointment as a director. The RSA shares issued to officers vest annually over three years from the grant date. RSA shares are measured at fair market value on the date of grant and stock-based compensation expense is recognized as the shares vest with a corresponding offset credited to additional paid-in-capital. For the six months ended June 30, 2025 and 2024, the Company recorded stock-based compensation expense of $1,067,382 and $739,309, respectively. For the six months ended June 30, 2025, the Company accelerated the vesting of remaining all RSAs and RSAs were fully vested.

Warrant

A summary of activity during the six months ended June 30, 2025, follows:

						Weighted				Weighted
		Number of shares				Average Exercise Price				Average Life (years)
Outstanding, December 31, 2024			105,490			$	11.71				3.92
Granted			-				-				-
Expired			-				-				-
Exercised			(73,990	)			(3.39	)			-
Outstanding, June 30, 2025			31,500			$	31.25				2.47

All of the outstanding warrants are exercisable as of June 30, 2025. The intrinsic value of the warrants as of June 30, 2025, is $0.