HWH International Inc. 10-Q

Item 1. Financial Statements. HWH International Inc. and Subsidiaries Condensed Consolidated Balance Sheets (Unaudited) March 31, 2026 December 31, 2025 ASSETS Current Assets Cash $ 1,459,799 $ 2,085,918 Account receivable, net 3,096 3,324 Inventory 1,085 1,057 Other receivables, net 641,382 614,577 Deposit - current 21,112 21,205 Convertible notes receivable - related party 222,939 160,941 Marketable securities 99,615 84,466 Prepaid expenses 52 549 Total Current Assets $ 2,449,080 $ 2,972,037 Non-Current Assets Property and equipment, net $ 16,933 $ 19,153 Deposit – non-current 98,963 104,209 Investment in associate - related party 62,729 60,708 Investment at cost 16,188 1,531 Convertible notes receivable - related party 1,491,275 1,317,478 Other non-current asset 14,553 87 Operating lease right-of-use assets, net 60,576 92,655 Total Non-Current Assets $ 1,761,217 $ 1,595,821 TOTAL ASSETS $ 4,210,297 $ 4,567,858 LIABILITIES AND STOCKHOLDERS’ DEFICIT Current Liabilities Accounts payable and accrued expenses $ 298,486 $ 305,028 Due to related parties, net 901,568 613,140 Operating lease liabilities - current 63,149 84,122 Brokerage margin loans 9,176 17,461 Notes payable - current 259,191 259,290 Total Current Liabilities $ 1,531,570 $ 1,279,041 Non-Current Liabilities Operating lease liabilities - non-current $ - $ 11,785 Accrued Interest for promissory note – non-current 126,757 118,557 Notes payable - non-current 473,750 473,750 Total Non-Current Liabilities $ 600,507 $ 604,092 Commitments and Contingencies (Note 12) - Stockholders’ Equity Preferred stock, $ 0.0001 par value; 50,000,000 shares authorized; none issued and outstanding as of March 31, 2026 and December 31, 2025 - - Common stock, $ 0.0001 par value; 450,000,000 shares authorized; 7,476,400 and 7,476,400 issued and outstanding as of March 31, 2026 and December 31, 2025, respectively * 747 747 Additional paid in capital 12,470,373 12,470,373 Accumulated other comprehensive loss ( 884,348 ) ( 904,609 ) Accumulated deficit ( 9,573,827 ) ( 8,947,630 ) Total HWH International Inc. Stockholders’ Equity $ 2,012,945 $ 2,618,881 Non-controlling interests 65,275 65,844 Total Stockholders’ Equity 2,078,220 2,684,725 TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY $ 4,210,297 $ 4,567,858 * The common stock share amounts were adjusted retrospectively to reflect the 1-for-5 reverse stock split on February 24, 2025 The accompanying notes are an integral part of these condensed consolidated financial statements. 1 HWH International Inc. and Subsidiaries Condensed Consolidated Statements of Operations and Other Comprehensive Loss (Unaudited) Three Months Ended March 31 2026 2025 Food & Beverage Revenue $ 64,200 $ 295,197 Cost of revenue $ ( 16,912 ) $ ( 147,603 ) Gross profit $ 47,288 $ 147,594 Operating expenses: General and administrative expenses $ ( 672,202 ) $ ( 664,242 ) Impairment loss on goodwill - ( 77,480 ) Total Operating expenses $ ( 672,202 ) $ ( 741,722 ) Other income (expense) Other income $ 64,567 $ 29,587 Interest expense ( 9,132 ) ( 50,126 ) Foreign exchange transaction (loss) gain ( 21,540 ) 66,070 Gain on disposal of marketable securities 10,237 - Unrealized gain on marketable securities 932 - Gain on equity method investment - related party 2,315 - Unrealized (loss) Gain on convertible notes receivable and warrants – related party ( 49,238 ) 17,442 Total Other (expense) income $ ( 1,859 ) $ 62,973 Loss before provision for income taxes ( 626,773 ) ( 531,155 ) Income taxes - ( 42,948 ) Net loss $ ( 626,773 ) $ ( 574,103 ) Less: Net loss attributable to non-controlling Interests ( 576 ) ( 8,972 ) Net loss attributable to common stockholders $ ( 626,197 ) $ ( 565,131 ) Net Loss ( 626,773 ) ( 574,103 ) Other comprehensive income, net of tax: Foreign currency translation adjustment $ 20,268 $ ( 102,965 ) Total comprehensive loss, net of tax: $ ( 606,505 ) $ ( 677,068 ) Less Comprehensive loss attributable to non-controlling interests ( 569 ) ( 8,988 ) Total Comprehensive loss attributable to common stockholders $ ( 605,936 ) $ ( 668,080 ) Three Months Ended March 31 2026 2025 Common stock Common stock Loss per common share Basic $ ( 0.08 ) $ ( 0.09 ) Diluted $ ( 0.08 ) $ ( 0.09 ) Weighted average number of common shares outstanding* Basic * 7,476,400 6,416,274 Diluted * 7,476,400 6,416,274 * The numbers of weighted average outstanding common stock - basic and diluted were adjusted retrospectively to reflect the 1-for-5 reverse stock split on February 24, 2025 The accompanying notes are an integral part of these condensed consolidated financial statements. 2 HWH International Inc. and Subsidiaries Condensed Consolidated Statements of Changes in Stockholders’ Equity (Deficit) (Unaudited) Three Months ended March 31, 2026 Common Stock Additional Accumulated Other Total HWH International Inc. Non- Total Shares Par Value $0.0001 Paid in Capital Comprehensive Loss Accumulated Deficit Stockholders’ Equity controlling interests Stockholders’ Equity Balances at December 31, 2025 7,476,400 $ 747 $ 12,470,373 $ ( 904,609 ) $ ( 8,947,630 ) $ 2,618,881 $ 65,844 $ 2,684,725 Net loss - - - - $ ( 626,197 ) $ ( 626,197 ) $ ( 576 ) $ ( 626,773 ) Foreign currency translation adjustment - - - $ 20,261 - $ 20,261 $ 7 $ 20,268 Balances at March 31, 2026 7,476,400 $ 747 $ 12,470,373 $ ( 884,348 ) $ ( 9,573,827 ) $ 2,012,945 $ 65,275 $ 2,078,220 Three months ended March 31, 2025 Common Stock Additional Accumulated Other Total HWH International Inc. Non- Total Shares Par Value $0.0001 Paid in Capital Comprehensive Loss Accumulated Deficit Stockholders’ Equity controlling interests Stockholders’ Equity Balances at December 31, 2024 5,593,920 $ 559 $ 9,339,413 $ ( 257,598 ) $ ( 6,317,010 ) $ 2,765,364 $ 111,835 $ 2,877,199 Issuance of Common Stock 632,500 $ 63 $ 1,409,795 - - $ 1,409,858 - $ 1,409,858 Warrants exercised to Common Stock 250,000 $ 25 $ 100 - - $ 125 - $ 125 Revaluation for SHRG note receivable and warrants - - $ 87,131 - - $ 87,131 - $ 87,131 Acquisition of LEH Insurance Group LLC - - - - - - $ ( 1,653 ) $ ( 1,653 ) Net loss - - - - $ ( 565,131 ) $ ( 565,131 ) $ ( 8,972 ) $ ( 574,103 ) Foreign currency translation adjustment - - - $ ( 102,949 ) - $ ( 102,949 ) $ ( 16 ) $ ( 102,965 ) Balances at March 31, 2025 6,476,420 $ 647 $ 10,836,439 $ ( 360,547 ) $ ( 6,882,141 ) $ 3,594,398 $ 101,194 $ 3,695,592 The accompanying notes are an integral part of these condensed consolidated financial statements. 3 HWH International Inc. and Subsidiaries Condensed Consolidated Statements of Cash Flows (Unaudited) Three Months Ended March 31, 2026 2025 Cash flows from operating activities: Net loss $ ( 626,773 ) $ ( 574,103 ) Adjustments to reconcile net loss to net cash used in operating activities: Foreign exchange transaction loss (gain) 21,540 ( 66,070 ) Depreciation expense 2,091 3,282 Non-cash lease expense 30,572 109,129 Share of result of an associate ( 2,315 ) - Impairment loss on goodwill - 77,480 Unrealized loss (gain) on convertible notes receivable and warrants – related party 49,238 ( 17,442 ) Fair value gain on marketable securities ( 932 ) - Gain on disposal of marketable securities ( 10,237 ) - Loss from related party balance written off 415,770 - Changes in operating assets and liabilities: Account receivables ( 629 ) ( 17,376 ) Receivable from related party ( 1,906 ) - Other receivables ( 44,430 ) ( 41,711 ) Prepaid expenses 494 5,603 Inventory ( 33 ) ( 1,007 ) Accounts payable and accrued expenses 5,529 61,113 Deferred revenue - 14,872 Operating lease liabilities ( 30,518 ) ( 109,103 ) Net cash used in operating activities $ ( 192,539 ) $ ( 555,333 ) Cash flows from investing activities: Purchases of property and equipment $ ( 766 ) $ - Convertible notes receivable - related party ( 285,000 ) ( 300,000 ) Investments at cost ( 14,907 ) - Purchase of marketable securities ( 3,194,961 ) - Proceeds from disposal of marketable securities 3,190,218 Net cash used in investing activities $ ( 305,416 ) $ ( 300,000 ) Cash flows from financing activities: Repayment of loans and borrowing $ - $ ( 247,300 ) Advances to related parties ( 140,687 ) ( 506,454 ) Repayment of brokerage margin loans ( 928,284 ) - Proceed from brokerage margin loans 920,539 Proceed from issuance of Common Stock and Warrants - 1,409,983 Net cash (used in) / provided by financing activities $ ( 148,432 ) $ 656,229 Net decrease in cash $ ( 646,387 ) $ ( 199,104 ) Effects of foreign exchange rate on cash 20,268 33,904 Cash at beginning of period 2,085,918 4,341,746 Cash at end of period $ 1,459,799 $ 4,176,546 Supplemental Cash Flow Information Cash Paid for Interest $ 932 $ 12 Cash Paid for Taxes $ - $ 42,948 Supplemental disclosure of non-cash investing and financing activities Valuation gain from notes receivable and warrants - SHRG $ - $ 87,131 The accompanying notes are an integral part of these condensed consolidated financial statements. 4 HWH International Inc. and Subsidiaries Notes to the Condensed Consolidated Financial Statements For the Three Months Ended March, 2026 and 2025 (Unaudited) NOTE 1 — DESCRIPTION OF ORGANIZATION, BUSINESS OPERATIONS HWH International Inc. (“HWH”) and its consolidated subsidiaries (collectively, the “Company”) operate a food and beverage (“F&B”) business in Singapore. The F&B business operates one café in Singapore. The Company is presently developing Hapi Marketplace, a business-to-consumer platform featuring diverse product categories, and Hapi Wealth Builder, an educational program focused on wealth-building strategies. Both initiatives are being rolled out in phases, with digital content development, partner collaborations, and regional infrastructure setup currently underway. HWH International Inc. was originally incorporated in Delaware on October 20, 2021 under the name Alset Capital Acquisition Corp. The Company was formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses (the “Business Combination”). The Company consummated the Business Combination on January 9, 2024 and changed its name from “Alset Capital Acquisition Corp.” to “HWH International Inc.” The Company is an early stage and emerging growth company and, as such, the Company is subject to all of the risks associated with early stage and emerging growth companies. On January 6, 2025, the Company announced the closing of its previously disclosed public offering of 632,500 shares of common stock, par value $ 0.0001 per share (the “Shares”) and 250,000 pre-funded warrants to purchase shares of common stock (“Pre-Funded Warrants”). The Shares and Pre-Funded Warrants were offered at a public offering price of $ 2.00 per share and $ 1.9995 per Pre-Funded Warrant, respectively. The Pre-Funded Warrants are exercisable immediately upon issuance and have an exercise price of $ 0.0001 per share. The gross proceeds to the Company from the offering were approximately $ 1.76 million, before deducting placement agent fees and other offering expenses. Each of the amounts of warrants and shares and the prices thereof in the foregoing paragraph are adjusted for a 1-for-5 reverse stock split of the Company’s stock split effective on February 24, 2025. D. Boral Capital LLC (“D. Boral Capital”) acted as the exclusive placement agent for the offering. Pursuant to the Placement Agency Agreement, the Company paid D. Boral Capital a cash fee equal to 7.5% of the gross proceeds from the offering, a non-accountable expense allowance equal to 1.0% of the gross proceeds , and reimbursement for legal and out-of-pocket expenses up to $ 75,000 . On November 14, 2025, the Company completed a merger pursuant to which the Delaware parent merged with and into its wholly owned Nevada subsidiary, with the Nevada entity surviving. As a result, HWH International Inc., a Nevada corporation, succeeded to all assets and liabilities of the former parent and became the publicly traded registrant. The transaction constituted a change in legal domicile only, with each outstanding share converting on a one-for-one basis, and had no impact on the Company’s consolidated financial position, results of operations, or cash flows. The Company is the successor issuer under Rule 12g-3 of the Securities Exchange Act of 1934. NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying unaudited condensed consolidated financial statements are presented in conformity with accounting principles generally accepted in the United States of America (“US GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). These interim financial statements have been prepared on the same basis as the Company’s annual financial statements and, in the opinion of management, reflect all adjustments, consisting only of normal recurring adjustments, which are necessary for a fair statement of the Company’s financial information. These interim results are not necessarily indicative of the results to be expected for the year ending December 31, 2026 or any other interim periods or for any other future years. These unaudited consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and the notes thereto included in the Company’s Form 10-K for the year ended December 31, 2025 filed on March 26, 2026. Basis of Consolidation The condensed consolidated financial statements include all accounts of the Company and its majority owned and controlled subsidiaries. The Company consolidates entities in which it owns more than 50% of the voting common stock and controls operations. All intercompany transactions and balances among consolidated subsidiaries have been eliminated. 5 The following chart describes the Company’s ownership of various entities: Hapi Marketplace Ltd. (“HML”) was incorporated in Hong Kong on March 18, 2026, and remains dormant as of March 31, 2026. Functional and Reporting Currency The functional and reporting currency of the Company is the United States dollar (“$”). The financial records of the Company’s subsidiaries located in South Korea, Singapore, Hong Kong and Malaysia are maintained in their local currencies, the Korean Won (₩), Singapore Dollar (S$), Hong Kong Dollar (HK$) and Malaysian Ringgit (MYR), which are also the functional currencies of these entities. Use of Estimates The preparation of the financial statements in conformity with U.S. GAAP requires the Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the balance sheet. Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the balance sheet, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from those estimates. Cash and Cash Equivalents The Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents. The Company had cash of $ 1,459,799 and $ 2,085,918 as of March 31, 2026 and December 31, 2025, respectively. The Company had no cash equivalents as of March 31, 2026 and December 31, 2025. Fair Value of Financial Instruments The Company adopted Accounting Standards Codification (“ASC”) 820, “Fair Value Measurements and Disclosures”, for assets and liabilities measured at fair value on a recurring basis. ASC 820 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 describes three levels of inputs that may be used to measure fair value: Level 1: Observable inputs such as quoted market prices in active markets for identical assets or liabilities Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data Level 3: Unobservable inputs for which there is little or no market data, which require the use of the reporting entity’s own assumptions 6 Level 1 marketable securities are liquid and transparent financial instruments with readily observable market prices. Their value is based on unadjusted quoted prices in active markets for identical assets. Examples often include U.S. treasury securities, listed equities, exchange-traded funds and open-end mutual funds, foreign currencies, and gold bullion. An active market is defined by sufficient transaction frequency and volume to provide ongoing pricing information. For purpose of this disclosure, the fair value of a financial instrument is the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced sale or liquidation. The carrying values reported in balance sheets for current assets and liabilities approximate their estimated fair market values based on the short-term maturity of these instruments. The Company has a portfolio of trading level 1 marketable securities. The objective is to generate profits on short-term differences in market prices. The Company does not have significant influence over any trading securities in our portfolio and fair value of these trading securities are determined by quoted stock prices. Investment Securities at Cost Investments in equity securities without readily determinable fair values are measured at cost minus impairment adjusted by observable price changes in orderly transactions for the identical or similar investments of the same issuer. These investments are measured at fair value on a nonrecurring basis when there are events or changes in circumstances that may have a significant adverse effect. An impairment is recognized in the consolidated statements of comprehensive income equal to the amount by which the carrying value exceeds the fair value of the investment. Inventory Inventory is stated at the lower of cost or net realizable value. Cost is determined using the first-in, first-out method and includes all costs in bringing the inventories to their present location and condition. Net realizable value is an estimated selling price in the ordinary course of business less the estimated costs necessary to make the sale. As of March 31, 2026 and December 31, 2025, inventory consisted of finished goods procured from suppliers. The Company continuously evaluates the need for reserve for obsolescence and possible price concessions required to write-down inventory to its net realizable value. Leases The Company follows FASB ASC Topic 842 in accounting for its operating lease right-of-use assets and operating lease liabilities. At inception of a contract, the Company assesses whether a contract is, or contains, a lease. A contract is or contains a lease if it conveys the right to control the use of an identified asset for a period of time in exchange of a consideration. To assess whether a contract is or contains a lease, the Company assesses whether the contract involves the use of an identified asset, whether it has the right to obtain substantially all of the economic benefits from the use of the asset and whether it has the right to control the use of the asset. The right-of-use assets and related lease liabilities are recognized at the lease commencement date. The Company recognizes operating lease expenses on a straight-line basis over the lease term. For leases that contain related non-lease components, such as maintenance, the Company will account for these payments as a single lease component. Right-of-use of Assets The right-of-use of asset is measured at cost, which comprises the amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and less any lease incentive received. 7 Lease Liabilities Lease liability is measured at the present value of the outstanding lease payments at the commencement date, discounted using the Company’s incremental borrowing rate. Lease payments included in the measurement of the lease liability comprise mainly of fixed lease payments. Short-term Leases and Leases of Low Value Assets The Company has elected to not recognize right-of-use assets and lease liabilities for short-term leases that have a lease term of 12 months or less at inception and leases of low value assets. Lease payments associated with these leases are expensed as incurred. Property and Equipment Property and equipment are recorded at cost, less depreciation. Repairs and maintenance are expensed as incurred. Expenditures incurred as a consequence of acquiring or using the asset, or that increase the value or productive capacity of assets are capitalized. When property and equipment is retired, sold, or otherwise disposed of, the asset’s carrying amount and related accumulated depreciation are removed from the accounts and any gain or loss is included in statement of operations. Depreciation is computed by the reducing balance method (after considering their respective estimated residual values) over the estimated useful lives of the respective assets as follows: SCHEDULE OF ESTIMATED USEFUL LIVES OF PROPERTY PLANT AND EQUIPMENT Office Equipment 3 – 5 years Furniture and Fittings 3 – 5 years Kitchen Equipment 3 – 5 years Operating Equipment 3 – 5 years Leasehold Improvements Shorter of lease life or asset life The Company reviews the carrying value of property and equipment for impairment whenever events and circumstances indicate that the carrying value of an asset may not be recoverable from the estimated future cash flows expected to result from its use and eventual disposition. In cases where undiscounted expected future cash flows are less than the carrying value, an impairment loss is recognized, equaling an amount by which the carrying value exceeds the fair value of assets. The factors considered by management in performing this assessment include current operating results, trends, and prospects, as well as the effects of obsolescence, demand, competition, and other economic factors. Deposits Deposits represent rental security deposits paid for the Company’s office and café locations, which are refundable upon expiration of the respective lease terms. Deposits are classified as current or non-current based on the expected timing of refund. Deposits related to leases expiring within the next twelve months are classified as current, while deposits related to leases expiring after twelve months are classified as non-current. As of March 31, 2026, current deposits totaled $ 21,112 and non-current deposits totaled $ 98,963 . Revenue Recognition ASC 606 – Revenue from Contracts with Customers (“ASC 606”), establishes principles for reporting information about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity’s contracts to provide goods or services to customers. In accordance with ASC 606, revenue is recognized when a customer obtains control of promised goods or services. The amount of revenue recognized reflects the consideration to which the Company expects to be entitled to receive in exchange for these goods or services. The provisions of ASC 606 include a five-step process by which the determination of revenue recognition, depicting the transfer of goods or services to customers in amounts reflecting the payment to which the Company expects to be entitled in exchange for those goods or services. ASC 606 requires the Company to apply the following steps: (1) identify the contract with the customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations in the contract; and (5) recognize revenue when, or as, performance obligations are satisfied. The Company generates its revenue primarily from product sales and F&B business. 8 Food and Beverage : The Company’s performance obligation is to transfer ownership of its F&B products to its customers. The Company generally recognizes revenue when F&B products are delivered to its customers. Revenue is recorded net of applicable taxes, allowances, refunds or returns. The Company receives the net sales price in cash or through credit card payments at the point of sale or from web-based ordering system. Accounts Receivable Accounts receivable is recorded at invoiced amounts net of an allowance for credit losses and does not bear interest. The allowance for credit losses is the Company’s best estimate of the amount of probable credit losses in the Company’s existing account receivable. The measurement and recognition of credit losses involves the use of judgment. Management’s assessment of expected credit losses includes consideration of current and expected economic conditions, market and industry factors affecting the Company’s customers (including their financial condition), the aging of account balances, historical credit loss experience, customer concentrations, customer creditworthiness, and the existence of sources of payment. The Company also establishes an allowance for credit losses for specific receivables when it is probable that the receivable will not be collected and the loss can be reasonably estimated. Account receivable considered uncollectible is charged against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. Value-added Tax The Company is subject to value-added tax (“VAT”) on purchases of inventory, rent payments, professional fees, and certain other taxable expenditures. As of March 31, 2026 and December 31, 2025, included in other receivables was VAT paid of $ 2,099 and $ 3,027 , respectively, due primarily to the purchase of inventory and payment of rents and accounting fees. Cost of Revenue Cost of revenue consists of the cost of procuring finished goods from suppliers and related shipping and handling fees from third-party money platforms, and contractor fees for part-time staff. Below is a breakdown of the Company’s cost of revenue for the three months ended March 31, 2026 and 2025. For the three months ended: SCHEDULE OF COST OF REVENUE Total March 31, 2026 Finished goods $ 10,899 Handling fee 3,892 Contractor fee 31 Depreciation 2,090 Total of Cost of revenue $ 16,912 March 31, 2025 Finished goods $ 109,006 Related shipping 12,931 Handling fee 11,566 Contractor fee 8,254 Franchise commission 3,350 Depreciation 2,496 Total of Cost of revenue $ 147,603 Shipping and Handling Fees The Company utilizes the practical expedient under ASC 606-10-25-18B to account for its shipping and handling as fulfillment activities, and not a promised service (a revenue element). Shipping and handling fees are included in costs of revenue within the statements of operations. 9 Advertising Expenses Advertising costs are charged to operations as incurred. Advertising expenses for the three months ended March 31, 2026 and 2025 were $ 1,000 and $ 68,845 , respectively. Income Taxes The Company accounts for income taxes pursuant to the provision of ASC 740-10, “Accounting for Income Taxes” (“ASC 740-10”), which requires, among other things, assets and liabilities approach to calculating deferred income taxes. The assets and liabilities approach requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amounts and the tax bases of assets and liabilities. A valuation allowance is provided to offset any net deferred tax assets for which management believes it is more likely than not that the net deferred tax assets will not be realized. Tax positions that meet the more likely than not recognition threshold are measured at the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority. The Company follows the provision of ASC 740-10 related to Accounting for Uncertain Income Tax Positions. When tax returns are filed, there may be uncertainty about the merits of positions taken or the amount of the position that would be ultimately sustained. In accordance with the guidance of ASC 740-10, the benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. The Company has not recorded any unrecognized tax benefits. The Company’s policy is to recognize interest and penalties related to income taxes in income tax expense. The Company’s tax returns for 2022, 2023, 2024 and 2025 remain open to examination. Franchise Tax The Company was reincorporated in the State of Nevada on November 14, 2025, through a reincorporation merger. As a Nevada corporation, we are no longer subject to the Delaware franchise tax. Prior to the reincorporation the Company was subject to annual Delaware franchise taxes, which are a privilege fee and not an income tax. During the year ended December 31, 2025 the Company received a refund of prepaid Delaware franchise tax of $ 41,349 . Earnings (Loss) per Share The Company presents basic and diluted earnings (loss) per share for its common shares. Basic earnings (loss) per share is calculated by dividing net income (loss) attributable to common shareholders of the Company by the weighted-average number of common shares outstanding during the period, adjusted for treasury shares held by the Company. Diluted earnings (loss) per share is computed by dividing net income (loss) attributable to common stockholders by the weighted-average number of shares of common stock outstanding during the period, adjusted to give effect to all potentially dilutive securities, including stock options, warrants, and convertible debt securities. During the three months ended March 31, 2026 and 2025 there were 909,874 potentially dilutive warrants outstanding. For the periods ended March 31, 2026 and 2025, basic and diluted earnings per share (EPS) were the same, as the effect of potentially dilutive securities was anti-dilutive during periods of net loss and therefore did not reduce the loss per share. Non-controlling Interests Non-controlling interests represent the equity in a subsidiary not attributable, directly or indirectly, to owners of the Company, and are presented separately in the Consolidated Statements of Operations and Other Comprehensive Loss, and within equity in the Consolidated Balance Sheets, separately from equity attributable to owners of the Company. 10 Liquidity and Capital Resources In the three months ended March 31, 2026, we incurred a net loss, a loss from operations and negative cash flow from operating cafés during the period. These factors raise substantial doubt about our ability to continue as a going concern. Notwithstanding the above, the Company believes that the available cash in the Company’s bank accounts, anticipated cash from operations, and financing availability from related parties are sufficient to alleviate substantial doubt about the Company’s ability to continue as a going concern for at least the next 12 months. The Company’s capital requirements for the planned expansion are based on, among other items, location-specific property costs, team requirements, and marketing steps needed. Our expansion includes plans to take over leases of existing Hapi Cafes that we currently do not own, with a goal to add additional Hapi Cafes over the next two years. Executing these plans will require a minimum investment for each Hapi Café location. There is no guarantee, however, that we will be able to achieve these plans as described. The accompanying financial statements have been prepared assuming the Company will continue as a going concern and do not contain any adjustments that might be required should the Company be unable to continue as a going concern. On April 24, 2024, the Company entered into a Credit Facility Agreement (the “Credit Agreement”) with Alset Inc., a Texas corporation and the Company’s majority stockholder, pursuant to which Alset Inc. has provided the Company a non-revolving line of credit facility (the “Credit Facility”), which provides a maximum, aggregate credit line of up to $ 1,000,000 . During 2024, $ 300,000 was drawn from the loan, which was converted to equity on September 24, 2024. The remaining credit of $ 700,000 is available for draw as on March 31, 2026. Pursuant to the Credit Agreement, the Company may request an advance (each, an “Advance”) on the Credit Facility. Each Advance shall bear a simple interest rate of three percent ( 3 %) per annum. Each Advance and all accrued but unpaid interest shall be due and payable at the first (1 st ) anniversary of the effective date of the Credit Agreement. The Company may at any time during the term of the Credit Agreement prepay a portion or all amounts of its indebtedness without penalty. Each advance shall not be secured by a lien or other encumbrance on any of the Company’s assets, but shall be solely a general unsecured debt obligation of the Company. On April 14, 2025, the Company entered into an amendment (the “Amendment”) to this Credit Facility Agreement. Under the terms of the Amendment, the date upon which each advance made under the Credit Facility and all accrued but unpaid interest shall be due and payable was extended from April 24, 2025 to April 14, 2026. The Company obtained letters of financial support from Alset Inc. pursuant to which Alset Inc. committed to provide any additional funding required by the Company and would not demand repayment through twelve months from the filing of this Form 10-Q. Recent Accounting Pronouncement Management does not believe that any recently issued, but not effective, accounting standards, if currently adopted, would have a material effect on the Company’s condensed consolidated financial statements. Segment reporting On November 27, 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No. 2023-07, Improvements to Reportable Segment Disclosures (“ASU 2023-07”). ASU 2023-07 amends ASC 280, Segment Reporting (“ASC 280”) to expand segment disclosures by requiring disclosure of significant segment expenses that are regularly provided to the Company’s chief operating decision maker (“CODM”), the amount and description of other segment items, the title and position of the CODM, and an explanation of how the CODM uses the reported measure(s) of segment profit or loss in assessing segment performance and deciding how to allocate resources. ASU 2023-07 further permits disclosure of more than one measure of segment profit or loss and extends the full disclosure requirements of ASC 280 to companies with single reportable segments. The Company adopted ASU 2023-07 on December 31, 2025 on a retrospective basis. See —Segment reporting below for additional information. 11 In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740) – Improvements to Income Tax Disclosures (“ASU 2023-09”). ASU 2023-09 requires that an entity, on an annual basis, disclose additional income tax information, primarily related to the rate reconciliation and income taxes paid. The amendment in the ASU is intended to enhance the transparency and decision usefulness of income tax disclosures. The ASU’s amendments are effective for annual periods beginning after December 15, 2024. The Company adopted ASU 2023-09 for the year ended December 31, 2025. The adoption of this ASU did not have a material impact on our condensed consolidated financial statements. In November 2024, the FASB issued ASU 2024-04—Debt—Debt with Conversion and Other Options (Subtopic 470-20): Induced Conversions of Convertible Debt Instruments (“ASU 2024-04”) to improve the relevance and consistency in the application of induced conversion guidance in Subtopic 470-20, Debt—Debt with Conversion and Other Options. The amendments in ASU 2024-04 clarify the requirements for determining whether certain settlements of convertible debt instruments should be accounted for as an induced conversion. The amendments in ASU 2024-04 affect entities that settle convertible debt instruments for which the conversion privileges were changed to induce conversion. The amendments in ASU 2024-04 are effective for all entities for annual reporting periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods. Early adoption is permitted for all entities that have adopted the amendments in ASU 2020-06. The amendments in ASU 2024-04 permit an entity to apply the new guidance on either a prospective or a retrospective basis. The adoption of this ASU did not have a material impact on our condensed consolidated financial statements. Accounting pronouncements pending adoption On November 4, 2024, the FASB issued ASU No. 2024-03, Expense Disaggregation Disclosures (“ASU 2024-03”). ASU 2024-03 amends ASC 220, Comprehensive Income to expand income statement expense disclosures and require disclosure in the notes to the financial statements of specified information about certain costs and expenses. ASU 2024-03 is required to be adopted for fiscal years commencing after December 15, 2026, with early adoption permitted. The Company is currently evaluating the impact of adopting the standard on the condensed consolidated financial statements. In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270). This update enhances the clarity and organization of interim reporting and the applicability of Topic 270. It also clarifies the required form and content of interim financial statements, including requiring entities to disclose events since the end of the last annual reporting period that have a material impact on the entity. The standard is effective for interim reporting periods within annual periods beginning after December 15, 2027, with early adoption permitted. Entities may apply the update either prospectively or retrospectively. We are currently evaluating the impact of adopting this standard on our condensed consolidated financial statements and disclosures. Segment Reporting The Company reports its segment information to reflect the manner in which the CODM reviews and assesses performance. The Company’s Chief Executive Officer and President and Chief Operating Officer have joint responsibility as the CODM and review and assess the performance of the Company as a whole. The primary financial measures used by the CODM to evaluate performance and allocate resources are net income (loss) and operating income (loss). The CODM uses net income (loss) and operating income (loss) to evaluate the performance of the Company’s ongoing operations and as part of the Company’s internal planning and forecasting processes. Information on Net income (loss) and Operating income (loss) is disclosed in the Consolidated Statements of Operations. Segment expenses and other segment items are provided to the CODM on the same basis as disclosed in the Consolidated Statements of Operations. 12 NOTE 3 — ACCOUNTS RECEIVABLE, NET Accounts receivable, net at March 31, 2026 and December 31, 2025 was $ 3,096 and $ 3,324 , respectively, represent collection received by the credit card processor in F&B business and rent receivable. Accounts receivable is recorded at invoiced amounts net of an allowance for credit losses and does not bear interest. As of March 31, 2026 and December 31, 2025, the allowance for credit losses was an immaterial amount. The Company does not have any off-balance sheet credit exposure related to its customers. NOTE 4 — PROPERTY AND EQUIPMENT, NET The components of property and equipment are as follows: SCHEDULE OF PROPERTY AND EQUIPMENT, NET Total March 31, 2026 Cost: Office Equipment $ 38,951 Furniture and Fittings 5,814 Kitchen Equipment 32,231 Other Operating Equipment 12,209 Leasehold Improvements 157,244 Accumulated Depreciation: Office equipment $ ( 31,818 ) Furniture and Fittings ( 3,392 ) Kitchen Equipment ( 15,803 ) Other Operating Equipment ( 5,378 ) Leasehold Improvements ( 83,398 ) Impairment: Office equipment $ ( 7,165 ) Furniture and Fittings ( 2,433 ) Kitchen Equipment ( 12,518 ) Other Operating Equipment ( 6,861 ) Leasehold Improvements ( 61,147 ) Add: Foreign currency translation adjustment 397 Total, net $ 16,933 December 31, 2025 Cost: Office Equipment $ 39,021 Furniture and Fittings 5,839 Kitchen Equipment 31,960 Other Operating Equipment 12,263 Leasehold Improvements 159,518 Accumulated Depreciation: Office equipment $ ( 31,856 ) Furniture and Fittings ( 3,406 ) Kitchen Equipment ( 15,655 ) Other Operating Equipment ( 5,402 ) Leasehold Improvements ( 83,005 ) Impairment: Office equipment $ ( 7,165 ) Furniture and Fittings ( 2,433 ) Kitchen Equipment ( 12,518 ) Other Operating Equipment ( 6,861 ) Leasehold Improvements ( 61,147 ) Total, net $ 19,153 For the three months ended March 31, 2026 and 2025, the Company recorded depreciation expenses of $ 2,091 and $ 3,282 , respectively. There was no impairment of property and equipment during the three months ended March 31, 2026 and 2025. 13 NOTE 5 — INVESTMENTS Investments in equity securities without readily determinable fair values are measured at cost minus impairment adjusted by observable price changes in orderly transactions for the identical or a similar investment of the same issuer. These investments are measured at fair value on a nonrecurring basis when there are events or changes in circumstances that may have a significant adverse effect. An impairment is recognized in the consolidated statements of comprehensive income equal to the amount by which the carrying value exceeds the fair value of the investment. No impairment was recorded as of and for the three months ended March 31, 2026 and 2025. Ideal Food & Beverage Pte. Ltd. On March 14, 2024, the Company entered into a share subscription agreement through its subsidiary Alset F&B Holding Pte. Ltd. (“F&BH”) for 19,000 shares of Ideal Food & Beverage Pte. Ltd. (“IFBPL”), constituting 19 % of the issued shares of IFBPL. The investment amount was $ 14,010 paid to IFBPL on May 23, 2024. For the year ended December 31, 2024, the Company impaired this investment of $ 14,010 to $ 0 . On February 26, 2026, the Company entered into a share subscription agreement through F&BH for additional 19,000 shares of newly issued 100,000 shares of IFBPL. The investment amount was $ 14,974 paid to IFBPL on February 26, 2026. Following the new investment, the Company holds a total of 38,000 shares out of 200,000 total outstanding shares of IFBPL, representing 19 % of IFBPL’s outstanding shares. Sale of HWH World Inc. and Acquisition of AES Group Inc. On April 23, 2025, the Company completed the sale of HWH World Inc. (“HWHKOR”) by Health Wealth Happiness Pte. Ltd. (“HWHPL”) to AES Group Inc. (“AES”), a Korean entity. The sale was consummated under a term sheet signed on April 20, 2025, pursuant to which the Company agreed to transfer its 100 % equity interest in HWHKOR to AES. In exchange, AES agreed to issue new shares to the Company upon closing, representing 19.9 % of AES’s share capital, with a total cost basis of $ 1,354 . Total of $ 383,667 gain was generated from this deal and recorded in other non-operating income / (expenses) in the statement of operations. The disposal of HWH World Inc. had immaterial effect on the Company’s condensed consolidated financial statements and the deconsolidation did not meet the criteria for presentation as discontinued operations under ASC 205-20. Sale of Alset F&B One Pte. Ltd. On September 10, 2025, Alset F&B Holdings Pte. Ltd. (“F&BH”), entered into a sale and purchase agreement (the “Sale and Purchase Agreement”) with Alset International Limited (“AIL”), pursuant to which the F&BH agreed to sell 70% of the outstanding shares of its subsidiary, Alset F&B One Pte. Ltd. to the AIL in exchange for $170,754. Following this sale, F&BH will continue to own 20% of Alset F&B One. Total $ 21,611 loss was generated from this deal and recorded in other non-operating income / (expenses) in the statement of operations. Total $60,708 was generated from the fair value of the remaining 20% investment in Alset F&B One which is treated as basis of equity method investment. The deconsolidation did not meet the criteria for presentation as discontinued operations under ASC 205-20. 14 NOTE 6 – NOTES PAYABLE D. Boral Capital, LLC On December 18, 2023, the Company entered into a Satisfaction and Discharge of Indebtedness Agreement in connection with an underwriting agreement previously entered into by HWH and D. Boral Capital LLC (“D. Boral Capital”) (formerly known as EF Hutton, LLC), a division of Benchmark Investments, LLC, under which in lieu of HWH tendering the full amount due of $ 3,018,750 , the underwriters accepted a combination of $ 325,000 in cash paid upon the closing of Business Combination, 149,443 shares of the Company’s common stock and a $ 1,184,375 promissory note as full satisfaction. This agreement was effective at the closing of Business Combination on January 9, 2024. The 149,443 shares were issued at the price of $ 10.10 , totaling the amount of $ 1,509,375 . The fair value of the HWH shares at issuance on January 9, 2024 was $ 2.82 per share or $ 421,429 . No gain or loss was recognized upon issuance of the shares on January 9, 2024, as this was an adjustment to prior underwriting costs accounted for in equity. The promissory note carries interest rate equal to SOFR (secured overnight financing rate for U.S. Government Securities Business Day published by the Federal Reserve Bank of New York) plus a margin of one percent. The principal amount of the promissory note and any accrued interest shall mature (i) partially in the event HWH completes an offering within one year of the date of the promissory note, the amount of outstanding debt maturing being proportionate to the amount of proceeds of the future offering, or (ii) in partial installments through October of 2028, the outstanding balance being paid annually until the balance owed is paid in full. The first installment of the note that was due in October 2024 was paid in January 2025, resulting in a default due to the delay in payment. The second installment of the note was paid in October 2025. We have concluded negotiations with D. Boral Capital LLC and cured the default stemming from the late payment of the installation due in October of 2024. As of March 31, 2026 total due to D. Boral Capital is $ 837,382 , which includes $ 710,625 in principal and $ 126,757 in interest. As of December 31, 2025 total due to D. Boral Capital was $ 829,182 , which includes $ 710,625 in principal and $ 118,557 in interest. The remaining principal will be repaid in three installments of $ 236,875 due in October of 2026, 2027, and 2028. Loans for Operations The Company’s subsidiary, Ketomei Pte Ltd (“Ketomei”) has a loan from DBS Bank Limited, which was used to fund Ketomei’s current operations. Ketomei owes the bank $ 22,316 and $ 22,415 at March 31, 2026 and December 31, 2025, respectively. NOTE 7 — DUE TO/FROM RELATED PARTIES Due to Alset Inc. Alset Inc. (“AEI”) is our ultimate holding company that is incorporated in the United States of America. The amount due to AEI represents short-term working capital advances to the Company for its daily operations. There is no written, executed agreement and the amount due to AEI is non-interest bearing. Since the amount due to AEI is due upon request, it is classified as a current liability. The amounts due to AEI at March 31, 2026 and December 31, 2025 are $569,614 and $569,614 respectively. Due to Alset International Limited. Alset International Limited (“AIL”) is incorporated in Singapore and is a fellow subsidiary of the common parent company, Alset Inc. The amount due to AIL represents short-term working capital advances to the Company for its daily operations. There is no written, executed agreement and the amount due to AIL is non-interest bearing. Since the amount due to AIL is due upon request, it is classified as a current liability. The amounts due to AIL at March 31, 2026 and December 31, 2025 are $ 4,675,492 and $ 4,653,037 , respectively. Due from Alset Business Development Pte. Limited. Alset Business Development Pte. Limited (“ABD”) is incorporated in Singapore and is a fellow subsidiary of Alset Inc. The amount due from ABD represents amount lent by ABD to Hapi Cafe Inc. for the investment in Ketomei Pte. Ltd in March 2022, and $ 5,000,000 lent from HWHPL to ABD in November 2024, with partial repayment of $ 707,000 received by the Company in December 2024. There is no written, executed agreement and the amount due from ABD is non-interest bearing. Since the amount due from ABD is due upon request, it is classified as a current asset. The amount due from ABD at March 31, 2026 and December 31, 2025 is $ 4,233,148 and $ 4,232,313 , respectively. Due from Hapi Metaverse Inc. Hapi Metaverse Inc. (“HMI”) is incorporated in the United States of America and is a fellow subsidiary of Alset Inc. The amount due from represents short-term working capital advances for the Company to finance its daily operations, $ 5,000 from HMI and $ 122,440 from HotApp International Limited, a subsidiary of HMI, during the three months ended March 31, 2026. There is no written, executed agreement and the amount due from HMI is non-interest bearing. Since the amount due from HMI is due upon request, it is classified as a current asset. The amount due from HMI at March 31, 2026 and December 31, 2025 is $ 127,440 and $ 381,461 , respectively. The decrease is mainly due to $ 382,932 impairment for the loan provided in HWHPL, and the related cost is included in general and administrative expenses. 15 NOTE 8 — RELATED PARTY TRANSACTIONS On March 20, 2024, the Company entered into a securities purchase agreement with Sharing Services Global Corporation (“SHRG”), pursuant to which the Company purchased from SHRG a (i) Convertible Promissory Note (“CN 1”) in the amount of $ 250,000 , convertible into 208,333,333 shares of SHRG’s common stock at the option of the Company, and (ii) certain warrants exercisable into 208,333,333 shares of SHRG’s common stock at an exercise price of $ 0.0012 per share, the exercise period of the warrant being five (5) years from the date of the securities purchase agreement, for an aggregate purchase price of $ 250,000 (“WRNT 1”). CN 1 bears a 6 % interest rate and has scheduled maturity on March 19, 2027 , three years from the date of the CN 1. At the time of filing, the Company has not converted any of the debt contemplated by CN 1 nor exercised any of the warrants. On May 9, 2024, the Company entered into a securities purchase agreement with Sharing Services Global Corporation, pursuant to which the Company purchased from SHRG a Convertible Promissory Note (“CN 2”) in the amount of $ 250,000 , convertible into 125,000,000 shares of SHRG’s common stock at the option of the Company for an aggregate purchase price of $ 250,000 . CN 2 bears an 8 % interest rate and has scheduled maturity on May 8, 2027 , three years from the date of the CN 2. Additionally, upon signing CN 2, SHRG owed the Company a commitment fee of 8 % of the principal amount, $ 20,000 in total, to be paid either in cash or in common stock of SHRG, at the discretion of the Company. At the time of filing, the Company has not converted any of the debt contemplated by CN 2. On June 6, 2024, the Company entered into a securities purchase agreement with Sharing Services Global Corporation, pursuant to which the Company purchased from SHRG a Convertible Promissory Note (“CN 3”) in the amount of $ 250,000 , convertible into 125,000,000 shares of SHRG’s common stock at the option of the Company for an aggregate purchase price of $ 250,000 . CN 3 bears an 8 % interest rate and has scheduled maturity on June 5, 2027 , three years from the date of the CN 3. Additionally, upon signing CN 3, SHRG owed the Company a commitment fee of 8 % of the principal amount, $ 20,000 in total, to be paid either in cash or in common stock of SHRG, at the discretion of the Company. At the time of filing, the Company has not converted any of the debt contemplated by CN 3. On August 13, 2024, the Company entered into a securities purchase agreement with Sharing Services Global Corporation, pursuant to which the Company purchased from SHRG a Convertible Promissory Note (“CN 4”) in the amount of $ 100,000 , convertible into 50,000,000 shares of SHRG’s common stock at the option of the Company for an aggregate purchase price of $ 100,000 . CN 4 bears an 8 % interest rate and has scheduled maturity on August 13, 2027 , three years from the date of the CN 4. Additionally, upon signing CN 4, SHRG owed the Company a commitment fee of 8 % of the principal amount, $ 8,000 in total, to be paid either in cash or in common stock of SHRG, at the discretion of the Company. At the time of filing, the Company has not converted any of the debt contemplated by CN 4. On January 15, 2025, the Company entered into a securities purchase agreement with Sharing Services Global Corporation pursuant to which the Company purchased from SHRG a Convertible Promissory Note (“CN 5”) with the principal amount of $ 150,000. CN 5 bears interest at a rate of 8 % per annum and matures on January 15, 2028. Under the terms of CN 5, the Company has the sole discretion to elect repayment in either cash or shares of SHRG common stock. In the event the Company elects repayment in shares, the number of shares issuable will be determined based on the average closing market price of SHRG’s common stock during the three trading days immediately preceding the repayment date. At the time of filing, the Company has not converted any of the debt contemplated by CN 5. On March 31, 2025, the Company entered into a securities purchase agreement with Sharing Services Global Corporation pursuant to which the Company purchased from SHRG a (i) Convertible Promissory Note (“CN 6”) in the amount of $ 150,000 , convertible into 187,500 shares of SHRG’s common stock at the option of the Company, and (ii) certain warrants exercisable into 937,500 shares of SHRG’s common stock at an exercise price of $ 0.85 per share, the exercise period of the warrant being three ( 3 ) years from the date of the securities purchase agreement, for an aggregate purchase price of $ 796,875 . (“WRNT 2”). At the time of filing, the Company has not converted any of the debt contemplated by CN 6 nor exercised any of the warrants. Additionally, upon signing CN 6, SHRG owed the Company a commitment fee of 8 % of the principal amount, $ 12,000 in total, to be paid either in cash or in common stock of SHRG, at the discretion of the Company. CN 6 bears an 8 % interest rate and has scheduled maturity on March 30, 2028 , three years from the date of the CN 6. At the time of filing, the Company has not converted any of the debt contemplated by CN 6 nor exercised any of the warrants. On April 21, 2025, the Company entered into a loan agreement (the “Loan Agreement 1”) with Sharing Services Global Corporation, under which the Company provided a loan to SHRG in the amount of $ 30,000 . The maturity date of the Loan Agreement 1 is April 21, 2026 . The Loan Agreement 1 bears a 10 % interest rate. On April 25, 2025, the Company entered into a loan agreement (the “Loan Agreement 2”) with Sharing Services Global Corporation, under which the Company provided a loan to SHRG in the amount of $ 250,000 . The maturity date of the Loan Agreement 2 is April 25, 2026 . The Loan Agreement 2 bears an 8 % interest rate. Additionally, upon execution of the Loan Agreement 2 SHRG incurred a commitment fee representing 5 % of the loan principal, $ 12,500 . 16 On June 27, 2025, the Company entered into a securities purchase agreement with Sharing Services Global Corporation pursuant to which the Company purchased from SHRG a Convertible Promissory Note (“CN 7”) in the amount of $ 60,000 , convertible into 10,000,000 shares of SHRG’s common stock at the option of the Company for an aggregate purchase price of $ 60,000 . Additionally, upon signing CN 7, SHRG owed the Company a commitment fee of 8 % of the principal amount $ 4,800 in total, to be paid either in cash or in common stock of SHRG, at the discretion of the Company. CN 7 bears an 8 % interest rate and has scheduled maturity on June 26, 2028 , three years from the date of the CN 7. At the time of filing, the Company has not converted any of the debt contemplated by CN 7. On September 17, 2025, the Company entered into a securities purchase agreement with Sharing Services Global Corporation pursuant to which the Company purchased from SHRG a Convertible Promissory Note (“CN 8”) in the amount of $ 70,000 , convertible into 11,666,667 shares of SHRG’s common stock at the option of the Company for an aggregate purchase price of $ 70,000 . Additionally, upon signing CN 8, SHRG owed the Company a commitment fee of 8 % of the principal amount, $ 5,600 in total, to be paid either in cash or in common stock of SHRG, at the discretion of the Company. CN 8 bears an 8 % interest rate and has scheduled maturity on September 16, 2028 , three years from the date of the CN 8. At the time of filing, the Company has not converted any of the debt contemplated by CN 8. On October 6, 2025, the Company entered into a securities purchase agreement with Sharing Services Global Corporation pursuant to which the Company purchased from SHRG a Convertible Promissory Note (“CN 9”) in the amount of $ 200,000 , convertible into 33,333,333 shares of SHRG’s common stock at the option of the Company for an aggregate purchase price of $ 200,000 . Additionally, upon signing CN 9, SHRG owed the Company a commitment fee of 8 % of the principal amount, $ 16,000 in total, to be paid either in cash or in common stock of SHRG, at the discretion of the Company. CN 9 bears an 8 % interest rate and has scheduled maturity on October 6, 2028 , three years from the date of the CN 9. At the time of filing, the Company has not converted any of the debt contemplated by CN 9. On December 10, 2025, the Company entered into a securities purchase agreement with Sharing Services Global Corporation pursuant to which the Company purchased from SHRG a Convertible Promissory Note (“CN 10”) in the amount of $ 150,000 , convertible into 25,000,000 shares of SHRG’s common stock at the option of the Company for an aggregate purchase price of $ 150,000 . Additionally, upon signing CN 10, SHRG owed the Company a commitment fee of 8 % of the principal amount, $ 12,000 in total, to be paid either in cash or in common stock of SHRG, at the discretion of the Company. CN 10 bears an 8 % interest rate and has scheduled maturity on December 10, 2028 , three years from the date of the CN 10. At the time of filing, the Company has not converted any of the debt contemplated by CN 10. On January 2, 2026, the Company entered into a securities purchase agreement with Sharing Services Global Corporation pursuant to which the Company purchased from SHRG a Convertible Promissory Note (“CN 11”) in the amount of $ 40,000 , convertible into 6,666,667 shares of SHRG’s common stock at the option of the Company for an aggregate purchase price of $ 40,000 . Additionally, upon signing CN 11, SHRG owed the Company a commitment fee of 8 % of the principal amount, $ 3,200 in total, to be paid either in cash or in common stock of SHRG, at the discretion of the Company. CN 11 bears an 8 % interest rate and has scheduled maturity on January 1, 2029 , three years from the date of the CN 11. At the time of filing, the Company has not converted any of the debt contemplated by CN 11, and recorded at cost under convertible notes receivable - related party. On January 8, 2026, the Company entered into a securities purchase agreement with Sharing Services Global Corporation pursuant to which the Company purchased from SHRG a Convertible Promissory Note (“CN 12”) in the amount of $ 120,000 , convertible into 20,000,000 shares of SHRG’s common stock at the option of the Company for an aggregate purchase price of $ 120,000 . Additionally, upon signing CN 12, SHRG owed the Company a commitment fee of 8 % of the principal amount, $ 9,600 in total, to be paid either in cash or in common stock of SHRG, at the discretion of the Company. CN 12 bears an 8 % interest rate and has scheduled maturity on January 7, 2029 , three years from the date of the CN 12. At the time of filing, the Company has not converted any of the debt contemplated by CN 12, and recorded at cost under convertible notes receivable - related party. 17 On February 4, 2026, the Company entered into a securities purchase agreement with Sharing Services Global Corporation pursuant to which the Company purchased from SHRG a Convertible Promissory Note (“CN 13”) in the amount of $ 125,000 , convertible into 20,833,333 shares of SHRG’s common stock at the option of the Company for an aggregate purchase price of $ 125,000 . Additionally, upon signing CN 13, SHRG owed the Company a commitment fee of 8 % of the principal amount, $ 10,000 in total, to be paid either in cash or in common stock of SHRG, at the discretion of the Company. CN 13 bears an 8 % interest rate and has scheduled maturity on February 4, 2029 , three years from the date of the CN 13. At the time of filing, the Company has not converted any of the debt contemplated by CN 13, and recorded at cost under convertible notes receivable - related party. As of March 31, 2026 and December 31, 2025, a total of $ 133,700 and $ 110,900 in commitment fees, $ 174,094 and $ 147,504 of interest was recorded under other receivable, net and $ 14,499 and $ 0 of interest was recorded under other non-current asset, respectively. SHRG is a related party of the Company, as our stockholders Alset Inc. and Alset International Limited, in addition to certain entities affiliated with them, are significant stockholders of SHRG, and our former Chief Executive Officer, John Thatch, is also the Chief Executive Officer of SHRG. Acquisition of Hapi Metaverse Inc. On February 5, 2026, Alset Inc., the Company’s majority stockholder entered into a Stock Purchase Agreement with the Company, pursuant to which Alset Inc. agreed to sell to the Company 505,341,376 shares of Hapi Metaverse Inc. for a purchase price of $ 19,910,603 in the form of a promissory note convertible into newly issued shares of common stock of the Company at an exercise price of $ 1.85 per share, maturing five (5) years from the date of the term sheet, and bearing an interest rate of 1 % per annum. Under the terms of the transaction, upon the closing, the Company would become HMI’s largest stockholder. As of March 31, 2026, the closing had not yet occurred and the deal was cancelled on May 6, 2026. Other Receivables, Net Other receivables, net, are primarily composed of miscellaneous receivables from related parties, including interest accrued on loans to related parties. The remaining portion mainly represents VAT receivables expected to be refunded by the local government. As of March 31, 2026 and December 31, 2025, the amount of other receivable, net was $ 641,382 and $ 614,577 , respectively, including the amount due from related parties of $ 627,796 and $ 605,267 , respectively. The impairment of other receivables, net was $ 173,261 and $ 158,036 as of March 31, 2026 and December 31, 2025, respectively. HapiTravel Holding Pte. Ltd. On April 25, 2024, the Company entered into a binding term sheet (the “Term Sheet”) through its subsidiary Health Wealth Happiness Pte. Ltd., outlining a joint venture with Chen Ziping, an experienced entrepreneur in the travel industry, and Chan Heng Fai, HWH’s Executive Chairman, as a part of HWH’s strategy of building its travel business in Asia. The planned joint venture company (referred to here as the “JVC” or “HTHPL”) will be known as HapiTravel Holding Pte. Ltd. The JVC will be initially owned as follows: (a) HWHPL will hold 19 % of the shares in the JVC; (b) Mr. Chan will hold 11 %; and (c) the remaining 70 % of the shares in the JVC will be held by Mr. Chen. On November 6, 2024, the Company signed a loan agreement with HTHPL in the amount of $ 137,658 at an interest rate of 5 % per annum, the maturity date of which is on or before the second anniversary of the effective date. On December 18, 2024, the Company sold Hapi Travel Pte. Ltd. (“HTPL”) to HTHPL for a consideration of $ 834 . As of March 31, 2026 and December 31, 2025, HTHPL owed the Company a total of $ 1,787 and $ 26,623 , respectively, which is recorded in other receivables in the financial statements. This amount is presented net of the subscription fee of $ 190 that the Company owed for the 19 % shareholding in the JVC. 18 NOTE 9 - FINANCIAL ASSETS AT FAIR VALUE Financial assets measured at fair value on a recurring basis are summarized below and disclosed on the consolidated balance sheet as of March 31, 2026 and December 31, 2025: SCHEDULE OF FINANCIAL ASSETS MEASURED AT FAIR VALUE ON A RECURRING BASIS Fair Value Measurement Using Amount at Level 1 Level 2 Level 3 Fair Value March 31, 2026 Assets Warrants – SHRG $ - $ 54 $ - $ 54 Convertible notes receivable – SHRG - 1,429,214 - 1,429,214 Marketable securities - Trading 99,615 - - 99,615 Total Investment in securities at Fair Value $ 99,615 $ 1,429,268 $ - $ 1,528,883 Fair Value Measurement Using Amount at Level 1 Level 2 Level 3 Fair Value December 31, 2025 Assets Warrants – SHRG $ - $ 87 $ - $ 87 Convertible notes receivable – SHRG - 1,478,419 - 1,478,419 Marketable securities - Trading 84,466 - - 84,466 Total Investment in securities at Fair Value $ 84,466 $ 1,478,506 $ - $ 1,562,972 The fair value of the SHRG warrants under level 2 category as of March 31, 2026 and December 31, 2025 were calculated using a binomial option pricing model valued with the following weighted average assumptions: SCHEDULE OF FAIR VALUE WEIGHTED AVERAGE ASSUMPTIONS March 31, 2026 December 31, 2025 WRNT 1 Stock price $ 0.0222 $ 0.023 Exercise price $ 1.68 $ 1.6800 Risk free interest rate 3.81 % 3.56 % Annualized volatility 403.615 % 390.99 % Dividend yield 0.00 % 0.00 % Year to maturity 2.97 3.21 March 31, 2026 December 31, 2025 WRNT 2 Stock price $ 0.0222 $ 0.023 Exercise price $ 0.85 $ 0.8500 Risk free interest rate 3.79 % 3.49 % Annualized volatility 403.615 % 390.99 % Dividend yield 0.00 % 0.00 % Year to maturity 2.00 2.25 Warrants measurement input 2.00 2.25 19 The Company has elected to recognize the convertible note at fair value and therefore there was no further evaluation of embedded features for bifurcation. The Company engaged third party valuation firm to perform the valuation of convertible notes. The fair value of the convertible notes is calculated using the binomial tree model based on probability of remaining as straight debt using discounted cash flow with the following assumptions: CN# 1 2 3 4 Valuation date March 31, 2026 March 31, 2026 March 31, 2026 March 31, 2026 Risk-free interest rate 3.657 % 3.669 % 3.680 % 3.706 % Expected life 0.96 year 1.11 year 1.18 year 1.37 year Discount rate 6.00 % 8.00 % 8.00 % 8.00 % Expected volatility 403.615 % 403.615 % 403.615 % 403.615 % Expected dividend yield 0 % 0 % 0 % 0 % Fair value $ 222,939 $ 225,404 $ 227,040 $ 88,837 CN# 5 6 7 8 Valuation date March 31, 2026 March 31, 2026 March 31, 2026 March 31, 2026 Risk-free interest rate 3.764 % 3.793 % 3.798 % 3.803 % Expected life 1.79 year 2.00 year 2.24 year 2.46 year Discount rate 8.00 % 8.00 % 8.00 % 8.00 % Expected volatility 403.615 % 403.615 % 403.615 % 403.615 % Expected dividend yield 0 % 0 % 0 % 0 % Fair value $ 140,436 $ 125,931 $ 50,580 $ 58,293 CN# 9 10 Valuation date March 31, 2026 March 31, 2026 Risk-free interest rate 3.805 % 3.809 % Expected life 2.52 year 2.69 year Discount rate 8.00 % 8.00 % Expected volatility 403.615 % 403.615 % Expected dividend yield 0 % 0 % Warrant measurement input 0 % 0 % Fair value $ 166,502 $ 123,252 Changes in the observable input values would likely cause material changes in the fair value of the Company’s Level 2 financial instruments. A significant increase (decrease) in this likelihood would result in a higher (lower) fair value measurement. During the three months ended March 31, 2026 and 2025, the Company held convertible notes receivable with SHRG. The following table shows the activity of the notes during the three ended March 31, 2026 and 2025. 20 SCHEDULE OF CONVERTIBLE NOTES RECEIVABLE, RELATED PARTY December 31, 2025 Additions Unrealized (Loss) March 31, 2026 Convertible note receivable, related party at fair value $ 1,478,419 $ - $ 49,205 $ 1,429,214 Total $ 1,478,419 $ - $ 49,205 $ 1,429,214 December 31, 2024 Additions Unrealized Gain March 31, 2025 Convertible note receivable, related party at fair value $ 744,652 $ 300,000 $ 16,720 $ 1,061,372 Total $ 744,652 $ 300,000 $ 16,720 $ 1,061,372 The Company remeasures its convertible note receivable from SHRG at fair value, with changes in fair value recognized in earnings. The carrying amount decreased from $ 1,478,419 at December 31, 2025 to $ 1,429,214 at March 31, 2026, resulting in an unrealized loss of $ 49,205 for the three months ended March 31, 2026. For the three months ended March 31, 2025, the carrying amount increased from $ 744,652 to $ 1,061,372 , resulting in an unrealized gain of $ 16,720 . Realized gain on marketable securities for the three months ended March 31, 2026 was $ 10,237 . Realized gain on marketable securities for the three months ended March 31, 2025 was $ 0 . These gains were recorded directly to net loss. NOTE 10 — STOCKHOLDERS’ EQUITY The total amount of authorized capital stock of the Company of 500,000,000 shares, consists of (a) 450,000,000 shares of common stock (the “Common Stock”), and (b) 50,000,000 shares of preferred stock (the “Preferred Stock”). As of March 31, 2026 and December 31, 2025, there were no shares of preferred stock outstanding. Warrants — Public Warrants may only be exercised for a whole number of shares. No fractional warrants will be issued upon separation of the Units and only whole warrants will trade. The Public Warrants became exercisable 30 days after the completion of a Business Combination. The Public Warrants will expire five years after the completion of the Business Combination. The Company will not be obligated to deliver any shares of common stock pursuant to the exercise of a warrant and will have no obligation to settle such warrant exercise unless a registration statement under the Securities Act covering the issuance of the shares of common stock issuable upon exercise of the warrants is then effective and a current prospectus relating to those shares of common stock is available, subject to the Company satisfying its obligations with respect to registration, or a valid exemption from registration is available. No warrant will be exercisable for cash or on a cashless basis, and the Company will not be obligated to issue any shares to holders seeking to exercise their warrants, unless the issuance of the shares upon such exercise is registered or qualified under the securities laws of the state of residence of the exercising holder, or an exemption from registration is available. Redemption of Warrants When the Price per Share of Common Stock Equals or Exceeds $18.00 — Once the warrants become exercisable, the Company may redeem the outstanding Public Warrants: ● in whole and not in part; ● at a price of $ 0.01 per Public Warrant; ● upon a minimum of 30 days’ prior written notice of redemption, or the 30-day redemption period to each warrant holder; and ● if, and only if, the last reported sale price of the common stock equals or exceeds $ 18.00 per share (as adjusted for stock splits, stock dividends, reorganization, recapitalizations and the like) for any 20 trading days within a 30-trading day period ending on the trading day prior to the date on which the Company sends the notice of redemption to warrant holders. If and when the warrants become redeemable by the Company, the Company may exercise its redemption right even if it is unable to register or qualify the underlying securities for sale under all applicable state securities laws. If the Company calls the Public Warrants for redemption, as described above, its management will have the option to require any holder that wishes to exercise the Public Warrants to do so on a “cashless basis,” as described in the warrant agreement. The exercise price and number of common stock issuable upon exercise of the Public Warrants may be adjusted in certain circumstances including in the event of a stock dividend, extraordinary dividend or recapitalization, reorganization, merger or consolidation. However, except as described below, the Public Warrants will not be adjusted for issuances of common stock at a price below its exercise price. Additionally, in no event will the Company be required to net cash settle the Public Warrants. 21 The Private Placement Warrants are identical to the Public Warrants underlying the Units sold in the Initial Public Offering except the Private Placement Warrants (including the common stock issuable upon exercise of the Private Placement Warrants) were not transferable, assignable or salable until 30 days after the completion of the Business Combination, subject to certain exceptions. The following table summarizes the warrant activity for the three months ended March 31, 2026 and 2025. SCHEDULE OF WARRANT ACTIVITY Warrants for Weighted Remaining Contractual Aggregate Common Average Term Intrinsic Shares Exercise Price (Years) Value Warrants Outstanding as of December 31, 2025 909,874 $ 57.5 3.03 $ - Warrants Vested and exercisable at December 31, 2025 909,874 $ 57.5 3.03 $ - Granted - $ - Exercised - $ - Forfeited, cancelled, expired - - Warrants Outstanding as of March 31, 2026 909,874 $ 57.5 2.78 $ - Warrants Vested and exercisable at March 31, 2026 909,874 $ 57.5 2.78 $ - Warrant for Weighted Remaining Contractual Aggregate Common Average Term Intrinsic Shares Exercise Price (Years) Value Warrants Outstanding as of December 31, 2024 909,874 $ 57.5 4.03 $ - Warrants Vested and exercisable at December 31, 2024 909,874 $ 57.5 4.03 $ - Granted 250,000 $ 2.0 Exercised ( 250,000 ) $ ( 2.0 ) Forfeited, cancelled, expired - - Warrants Outstanding as of March 31, 2025 909,874 $ 57.5 3.78 $ - Warrants Vested and exercisable at March 31, 2025 909,874 $ 57.5 3.78 $ - Public Offering On January 3, 2025, the Company announced the pricing of its public offering of 3,162,500 shares of common stock, par value $ 0.0001 per share (the “Shares”) and 1,250,000 pre-funded warrants to purchase shares of common stock (“Pre-Funded Warrants”). The Shares and Pre-Funded Warrants were offered at a public offering price of $ 0.40 per share and $ 0.3999 per Pre-Funded Warrant. The Pre-Funded Warrants were exercisable immediately upon issuance and have an exercise price of $ 0.0001 per share. The gross proceeds to the Company from the offering were approximately $ 1.76 million, before deducting placement agent fees and other offering expenses of approximately $ 355,017 . The offering was conducted pursuant to the Company’s registration statement on Form S-1 (File No. 333-282567), which was initially filed with the Securities and Exchange Commission on October 10, 2024, subsequently amended on October 23, 2024, December 4, 2024, and December 10, 2024, and declared effective on December 19, 2024. The offering closed on January 6, 2025. D. Boral Capital LLC (“D. Boral Capital”) was acting as the exclusive placement agent for the offering. Pursuant to the Placement Agency Agreement, the Company has agreed to pay D. Boral Capital a cash fee equal to 7.5 % of the gross proceeds from the offering, a non-accountable expense allowance equal to 1.0 % of the gross proceeds, and reimbursement for legal and out-of-pocket expenses up to $ 75,000 . The Reverse Stock Split On January 16, 2025, the holders of a majority of the issued and outstanding shares of common stock of the Company, approved by written consent, an amendment of the Company’s Amended and Restated Certificate of Incorporation to effect a reverse stock split of the Company’s common stock, par value $ 0.0001 per share, at a ratio of 1-for-5 (the “Reverse Stock Split”). The Reverse Stock Split was effectuated on February 24, 2025. Merger with HWH International Inc – Nevada On November 12, 2025, the Company entered into an agreement and plan of merger (“Merger Agreement”) with HWH International Inc., a Nevada corporation and a wholly owned subsidiary of the Company (“New HWH”). The Company determined it advisable and in the best interests of the Company and its stockholders that the Company merge with and into New HWH, with New HWH being the surviving corporation (the “Merger”), upon the terms and subject to the conditions set forth in the Merger Agreement. The Merger was completed on November 14, 2025. After the Merger, the total number of shares of capital stock which New HWH has the authority to issue is five hundred million ( 500,000,000 ), of which (i) four hundred and fifty million ( 450,000,000 ) shares be designated as common stock, par value of $ 0.0001 per share, which shares shall not be subject to any preemptive rights, and (ii) fifty million ( 50,000,000 ) shares of preferred stock, par value of $ 0.0001 per share. $ 10 of share capital from HWH International Inc. – Nevada was transferred to additional paid-in capital on November 14, 2025. 22 NOTE 1 1 — LEASES The Company has operating leases for its one F&B store in South Korea and one F&B stores in Singapore as of March 31, 2026. The related lease agreements do not contain any material residual value guarantees or material restrictive covenants. Since the Company’s leases do not provide an implicit rate that can be readily determined, management uses a discount rate based on the incremental borrowing rate. The Company’s weighted-average remaining lease term relating to its operating leases is 0.74 years, with a weighted-average discount rate of 3.89 %. The Company has also utilized the following practical expedients: ● Short-term leases – for leases that are for a period of 12 months or less, the Company will not apply the recognition requirements of ASC 842. ● For leases that contain related non-lease components, such as maintenance, the Company will account for these payments as a single lease component. The current portion of operating lease liabilities and the non-current portion of operating lease liabilities are presented in the balance sheets. Total lease expenses amounted to $ 30,572 and $ 109,129 , which were included in general and administrative expenses in the statements of operations for the three months ended March 31, 2026 and 2025, respectively. Total cash paid for operating leases amounted to $ 122,071 and $ 109,104 for the three months ended March 31, 2026 and 2025, respectively. In addition, the Company leases certain equipment on a short-term (12 months or less) basis. Total short-term lease expense of $ 1,212 and $ 3,762 is included in general and administrative expenses for the three months ended March 31, 2026 and 2025, respectively. Supplemental balance sheet information related to operating leases is as follows: SCHEDULE OF BALANCE SHEET INFORMATION RELATED TO OPERATING LEASES March 31, 2026 December 31, 2025 Right-of-use assets $ 60,576 $ 92,655 Lease liabilities - current $ 63,149 $ 84,122 Lease liabilities - non-current - 11,785 Total lease liabilities $ 63,149 $ 95,907 As of March 31, 2026, the aggregate future minimum rental payments under non-cancelable agreements are as follows: SCHEDULE OF AGGREGATE FUTURE MINIMUM RENTAL PAYMENTS Maturity of Lease Liabilities Total 12 months ended March 31, 2027 $ 64,364 Total undiscounted lease payments $ 64,364 Less: Imputed interest ( 1,215 ) Present value of lease liabilities $ 63,149 Operating lease liabilities - Current 63,149 Operating lease liabilities - Non-current $ - 23 NOTE 12 — COMMITMENTS AND CONTINGENCIES From time to time the Company may be named in claims arising in the ordinary course of business. Currently, no legal proceedings, government actions, administrative actions, investigations or claims are pending against the Company or involve the Company that, in the opinion of management, could reasonably be expected to have a material adverse effect on its business and financial condition. For all periods presented, the Company was not a party to any pending material litigation or other material legal proceedings. NOTE 1 3 — CONCENTRATION RISK The Company maintains cash balances at various financial institutions in different countries. These balances are usually secured by the central banks’ insurance companies. At times, these balances may exceed the insurance limits. As of March 31, 2026 and December 31, 2025, uninsured cash balances were $ 1,123,393 and $ 1,624,957 , respectively. Major Suppliers For the three months ended March 31, 2026, five suppliers accounted for approximately over 59 % of the Company’s total costs of revenue. For the three months ended March 31, 2025, five suppliers accounted for approximately over 76 % of the Company’s total costs of revenue. NOTE 14 — SUBSEQUENT EVENTS The Company has evaluated all subsequent events and transactions through May 13, 2026, the date that the condensed consolidated financial statements were available to be issued and noted no subsequent events requiring financial statement recognition or disclosure other than noted below: Satisfaction and Discharge of Indebtedness Agreement On April 16, 2026, the Company and D. Boral Capital, LLC (“D. Boral Capital”) entered into an amendment to the Satisfaction and Discharge of Indebtedness Agreement dated December 18, 2023. Under the terms of the amendment, D. Boral Capital accepted a one-time payment of $ 500,000 from the Company as satisfaction of the Company’s further obligations and indebtedness under the Satisfaction and Discharge of Indebtedness Agreement and the promissory note in lieu of principal and interest otherwise owed and scheduled to be paid. The settlement for $ 500,000 was paid on April 20, 2026. Term Sheet for Investment in the Company On May 5, 2026, the Company entered into a term sheet (the “Term Sheet”) with Smart Dynamics Technology Limited, a company incorporated in the British Virgin Islands (the “Investor”), pursuant to which the Company has agreed to sell to the Investor, for an aggregate purchase price of $ 10,000,000 : (i) 20,000,000 newly issued unregistered shares of the Company’s common stock; and (ii) warrants to purchase 160,000,000 newly issued, unregistered shares of the Company’s common stock at an exercise price of $ 0.63 per share, exercisable immediately and expiring on the fourth anniversary of their issuance. The Term Sheet contains certain provisions which would, upon the closing of the transactions contemplated by the Term Sheet, grant the Investor anti-dilution rights for a period of two years from the closing in which the Company would not be able to sell new equity securities without the consent of the Investor, subject to certain exceptions. Further, upon the closing, the Investor would be given the right to appoint three directors to the Company’s Board of Directors, subject to the conditions described in the Term Sheet. Pursuant to the Term Sheet, the Company would be required to file a registration statement registering the 20,000,000 shares issuable to the Investor within sixty days of the closing. The Company and the investor anticipate entering into definitive agreements for the transactions described above in the immediate future. The closing of the transaction contemplated by the Term Sheet will be subject to standard closing conditions, including the approval by the stockholders of the Company holding a majority of the Company’s common stock. Termination of Planned Acquisition of Hapi Metaverse Inc. On May 6, 2026, the Company entered into a Termination Agreement with Alset Inc., and mutually agreed to not proceed with the closing of the acquisition of Hapi Metaverse Inc. Planned Amendment to 2025 Incentive Compensation Plan The Company’s Board of Directors and Compensation Committee have approved an amendment to the Company’s 2025 Incentive Compensation Plan to permit the Company to issue up to an additional 2,000,000 shares of the Company’s common stock to officers, directors, employees and certain other persons who have provided, or shall provide, services to the Company, in addition to those shares already authorized under such plan. Pursuant to the Term Sheet, any such shares granted as compensation will have a lock up of 12 months. Pursuant to Nasdaq Listing Rules, the Company will be required to seek the approval of stockholders holding a majority of our issued and outstanding common stock in order to materially amend the 2025 Incentive Compensation Plan. 24