NOTE 4. RELATED PARTY PAYABLE AND NON-INTEREST-BEARING PAYABLE

Related Party Payables and Non-Interest-Bearing Payable

As of April 30, 2025 and July 31, 2024, amounts of $349,382 and $460,189, respectively, are payable to SH Qiaohong. The balances were mainly funding support from SH Qiaohong for operation. The funding support bears no interest and due on demand.

HFSH had payable balances to Shanghai Oversea Chinese Culture Media Ltd. (“SH Oversea”), in the amounts of $2,801,793 and $2,822,936 as of April 30, 2025 and July 31, 2024, respectively. The payable is funding support from SH Oversea for operation, bears no interest and due on demand.

The Company’s related party relationship with SH Qiaohong and SH Oversea, previously due to shared management with HFSH, ended as of August 15, 2024. Consequently, outstanding balances with these parties are no longer classified as related party receivables or payables but are now recognized as “Non-interest-bearing payable”. For comparative purposes, the related balance as of July 31, 2024, has also been reclassified accordingly.

Related Party loans

HFUS borrowed in the form of a short-term loan at 5% per annum from a related party, Hartford Hotel Investment Inc., an entity managed by the same management team. $3,144 and $11,375 of interest expenses were recorded during the three and nine months ended April 30, 2025, respectively. $4,667 and $14,998 of interest expenses were recorded during the three and nine months ended April 30, 2024, respectively. As of April 30, 2025 and July 31, 2024, the unpaid principal and interest amount of $244,346 and $402,971, respectively, will be due on demand.

Since February 2024, the Company borrowed a total of $376,900 in short-term loans at an annual interest rate of 5% from a relative of one of its current major shareholders (the former primary shareholder). On April 22, 2024, $29,022 of the principal was used to offset profits that the former shareholder allegedly earned in violation of Section 16(b) of the Securities Exchange Act. As of July 31, 2024, the outstanding balance of principal and interest on these loans was $174,309, payable on demand. Interest expense of $ - and $ 4,927 was recorded for the three and nine months ended April 30, 2025, respectively. On December 10, 2024, the outstanding loan balance of $355,436 (principal and interest) was converted to a non-interest-bearing advance from the former shareholder. This advance, combined with other related party payables, resulted in a total of $709,036 and $71,363 in outstanding operating advances from the former primary shareholder as of April 30, 2025, and July 31, 2024, respectively. These advances are non-interest-bearing and due on demand.

Other Related Party Transactions

The Company has leased approximately 543 square feet (50.4 square meters) of office space in Shanghai from SH Dubian, a company managed by a relative of a major shareholder. The lease term is from February 18, 2024, to February 17, 2026, at a fixed monthly rent of USD 638 (RMB 4,600).

The Company’s office space, located 8832 Glendon Way, Rosemead, CA 91770, is leased from a related party, a former primary shareholder and relative of a current major shareholder. The lease term is from January 1, 2025 to December 31, 2025, at a fixed monthly rent of USD 1,000.