NOTE 6 – INTANGIBLE ASSETS, NET

During the year ended December 31, 2022, HWAC paid a developing fee of $3,517 in cash to a third party in designing and developing an application which can be embedded in certain large online platforms. The Company intends to use the application for online product sales, with an estimated useful life of 5 years. As of December 31, 2025 and 2024, the application was ready for use and the carrying value of the intangible assets totaled $1,609 and $2,226, respectively.

During the year ended December 31, 2024, HWAC entered into a contract with a third party to develop an online application and platform for its sale of products, for a total contract amount of RMB 380,000 (approximately $52,060). As of December 31, 2024, the progress of completion is estimated at 50%, and the Company has paid RMB 152,000 (approximately $21,126), with RMB 38,000 (approximately $5,281) in accrued liabilities. During the year ended December 31, 2025, it was determined that there was an impairment of the development in the amount and the accrued liabilities were no longer applicable, resulting in a total impairment loss of $10,575. As of December 31, 2025, the intangible assets under construction were $10,867. The difference in movement of the intangible assets is due to fluctuation in foreign exchange.