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Steel Partners and Camac Partners Send Letter to CreateAI Proposing to Acquire Company for Increased Consideration of $0.60 per Share in Cash

Published 13 hours ago via Business Wire

Proposal Reflects a 50% Premium to CreateAI’s Share Price as of February 5th

Steel Partners Holdings L.P. (“Steel”) and Camac Partners LLC (“Camac”), which together with their affiliates are shareholders of CreateAI Holdings Inc. (OTCMKTS: TSPH) (the “Company”), today released a letter they sent to the Company’s Board of Directors (the “Board”) proposing to acquire all outstanding shares of Class A and Class B common stock of CreateAI Holdings Inc. that they do not currently own for an increased consideration of $0.60 per share. This follows Steel and Camac’s December 2, 2024 proposal to acquire the Company for $0.46 per share.

The full text of the letter is below.

February 6, 2025

BY EMAIL

Board of Directors

CreateAI Holdings Inc.

9191 Towne Centre Drive, Suite 600,

San Diego, CA 92122

RE: Updated Proposal To Acquire All Outstanding Shares

To the Board of Directors:

We write on behalf of Steel Partners Holdings L.P. and Camac Fund LP, to make the following revised proposal, subject to the terms and conditions below, to acquire all outstanding shares of Class A and Class B common stock of CreateAI Holdings Inc. (the "Company") that we do not currently own for $0.60 per share.

We are submitting this updated proposal to acquire the Company with the goal of entering into a mutually agreeable transaction that is in the best interests of all parties. We therefore ask that the board of directors of the Company immediately form a special committee of independent directors to engage with us and our proposal. We are prepared to enter into a customary non-disclosure agreement with the Company, so that we can complete our due diligence and negotiate all definitive documentation within 30 days from the date of this letter.

Our revised proposal is an extremely attractive opportunity for stockholders to obtain full value as it represents a 50% premium to the Company's current stock price as of February 5, 2025. We believe it provides a certain and immediate upside to all stockholders and removes the risk to existing stockholders inherent in the Company's newly formulated Chinese animation strategy, which has included an alarming recently disclosed related party transaction.

This proposal is not contingent on financing. We have the necessary cash and liquid assets to close the transaction immediately.

Our proposal assumes that (i) the information set forth in the Company’s 3Q 2024 financial statements is correct, (ii) the Company’s current cash burn rate is less than $10 million per month, (iii) the Company’s cash and investments balance net existing liabilities is greater than $280 million, (iv) the Company’s current cash and other current assets have not been transferred to China and remain in the United States, (v) no dividends or distributions to stockholders will be made prior to the consummation of the proposed transaction, (vi) no further related party transactions will be completed prior to the consummation of the proposed transaction, and (vii) there has been no increase in the Company's outstanding common stock since October 28, 2024 (232,618,399 shares of common stock (inclusive of both Class A and Class B common stock)).

The proposal is subject only to (i) limited diligence to confirm our assumptions listed above as well as the location, quantum, and nature of the Company's current assets and liabilities and its tax assets; (ii) receipt of required Board and stockholder approvals and any required third-part and regulatory approvals; (iii) the Company's maintenance of its current operations and reasonable limitations on the ability of the Company to transfer its assets overseas; and (iv) the execution of a mutually agreeable definitive agreement containing standard terms and conditions for a transaction of this nature.

We hereby request a response from the Board to this proposal by February 11, 2025. We stand ready to meet with the Board and its representatives as soon as possible. It is our hope that we can execute a non-disclosure agreement, expeditiously conduct due diligence and agree on a transaction in short order.

This letter is an expression of the intent of the parties only and is subject to the due diligence review and other conditions set forth herein. Unless and until final, definitive agreements between the parties are executed and delivered, neither party shall have any legal obligation of any kind whatsoever, by virtue of this letter or any other written or oral expression.

We look forward to your prompt response and working with you to achieve an outcome that maximizes value for all stockholders.

Sincerely,

Warren Lichtenstein

Steel Partners Holdings L.P.

Eric Shahinian

Camac Fund LP

About Steel

Steel Partners Holdings L.P. is a diversified global holding company that owns and operates businesses and has significant interests in leading companies in various industries, including diversified industrial products, energy, defense, supply chain management and logistics, banking and youth sports.

About Camac

Camac Partners LLC is a private investment firm founded in 2011. Camac focuses on extremely mispriced assets in discrete pockets of opportunity. Camac prides itself on its unique sourcing, flexible mandate, and constant focus on non-competitive opportunities. Its investments are long term in nature and focused on compounding capital over several decades rather than months or years.

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