10. ADVANCE PAYMENT TO DISTRIBUTOR

On March 25, 2025, the Company entered into a Distribution and Marketing Service Agreement with a Hong Kong entity pursuant to which the Company paid $529,000 for market access, brand development, and distribution services within the Asian market, excluding the Company’s SWOL Tequila product line. The amount has been recorded as a prepaid distribution and marketing cost.

On April 1, 2025, the Company entered into a Distribution and Marketing Services Agreement with a Hong Kong entity pursuant to which the entity agreed to provide market access, promotional services, and distribution of the Company’s products and CWSpirits.com platform within the Asian market, excluding the Company’s SWOL Tequila product line. The total fee paid by the Company under the agreement is $2,750,000, which has been recorded as a prepaid distribution and marketing cost.

Through the dates of termination described below, no amortization had been recorded with respect to either arrangement, pending commencement of services.

In April 2026, both arrangements were terminated, and the amounts previously paid, aggregating $3,279,000, were returned to the Company in the form of USDT, a digital asset. This USDT, together with USDT received from other sources, was subsequently applied toward the consideration for the acquisition of Fusion Five. As a result, the Company does not anticipate recording any expense or loss in connection with these arrangements. See Note 9 — Digital Assets and Note 4 — Business Combination.