NOTE 5 – ACCOUNTS RECEIVABLE (PAYABLE) – RELATED PARTY

Accounts receivable — related party represents receivables in the ordinary course of business attributable to certain mobile game revenues that, for administrative reasons, were collected by a related party and that the related party has not yet remitted back to the Company. Accounts receivable — related party is non-interest bearing and due on demand. The related party, SDE Inc. (“SDE”), is 100% owned and controlled by the wife of the Founder, Chief Executive Officer, Chief Strategy Officer and Chairman of the Company. In January 2024, the Company entered into an offset agreement with SDE. The Company has the right to offset payables due to the related party for royalties, internet, server, and datacenter costs (“IDC”) and marketing costs as they are determinable, mutual, and the right is enforceable by law. The Company will offset $0.5 million per month, or $6.0 million annually, beginning in January 2024, until the receivable has been collected or offset in full. During the three months ended March 31, 2026 and 2025, the Company made cash payments to SDE in the amount of $10.0 million and $9.4 million, respectively, and anticipates continuing to make cash payments to SDE in future years. As of March 31, 2026 and December 31, 2025, the outstanding balance of net accounts (payable) receivable from related party was as follows:

SCHEDULE OF ACCOUNTS RECEIVABLE (PAYABLE) - RELATED PARTY

Snail Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements