Classover Issues $500 Million in Notes to Boost Solana Reserve

Classover, a K-12 education company, has announced a significant move into the cryptocurrency space by creating a Solana reserve. The company plans to issue up to $500 million in senior convertible notes, with 80% of the proceeds allocated to purchasing Solana (SOL) tokens. This strategic shift follows a growing trend among companies that are expanding into crypto-related strategies alongside their core businesses.

According to a June 2 announcement, Classover has already purchased 6,472 SOL tokens worth approximately $1.1 million to initiate its reserve. The issuance of $500 million in convertible notes is facilitated through a partnership with Solana Growth Ventures. This move is part of Classover's broader strategy to integrate Solana into its financial operations, aiming to create additional revenue streams and attract investor interest.

Classover is an online education company offering learning courses for K-12 students worldwide. The issuance of up to $500 million in convertible notes could be complementary to Classover’s $400 million equity purchase agreement. Combined, these two financing methods would bring the company’s Solana purchasing power to $900 million. This significant investment underscores Classover's commitment to leveraging cryptocurrency to enhance its financial stability and growth prospects.

Classover's pivot to a Solana reserve company marks a trend among some publicly traded companies turning to SOL to create more revenue streams and spark investor interest. In May, a publicly traded Canadian company sought regulatory permission to raise up to $1 billion for its SOL staking operations. Another company listed on the Nasdaq saw its shares soar after announcing a $100 million raise, with 90% of the funds pledged to SOL purchases. These examples illustrate the growing interest in Solana as a strategic asset for companies looking to diversify their financial portfolios.

Classover Holdings Inc., an educational technology company, has secured a significant funding deal with Solana Growth Ventures LLC. The company has signed an agreement to issue up to $500 million in senior secured convertible notes. This move is part of Classover's strategy to bolster its Solana (SOL)-based treasury reserve, with up to 80% of the proceeds from the notes allocated towards purchasing SOL tokens. The convertible notes can be converted into Classover’s Class B common stock at a price that is twice the closing price of the stock before the deal is completed. This agreement includes an initial payment of $11 million, which will be made once the standard closing conditions are met.

The funding is crucial for Classover, which has been facing short-term liquidity issues. The company's current ratio of 0.02 indicates significant pressure on its working capital. This deal follows an earlier $400 million equity agreement, bringing the total potential investment in SOL to $900 million. Classover's CEO, Ms. Luo, described this funding as a “significant milestone,” emphasizing the company's commitment to integrating Solana into its core financial strategy.

Classover, launched in 2020, provides live online classes for students from kindergarten through 12th grade worldwide. However, the company's revenues have declined by 102% in the past year, highlighting the importance of this funding round for its financial stability. The company has also announced that its Chief Financial Officer, Yanling Peng, will receive an annual salary of $156,000 starting May 1, 2025, reflecting changes in leadership and company strategy.

Prior to this deal, Classover had already purchased 6,472 SOL tokens for approximately $1.05 million and is now exploring the acquisition of discounted locked tokens to further enhance its reserves. This strategic move underscores Classover's confidence in improving its financial health and expanding its crypto-backed treasury. Chardan is acting as the sole financial advisor and placement agent for this deal.