Unaudited Interim Financial Information

The unaudited condensed consolidated financial statements and related notes have been prepared in accordance with U.S. GAAP for interim financial information, within the rules and regulations of the United States Securities and Exchange Commission (the “SEC”). Certain information and disclosures normally included in the annual financial statements prepared in accordance with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations. The unaudited condensed consolidated financial statements have been prepared on a basis consistent with the audited financial statements and, in the opinion of management, reflect all adjustments, consisting of only normal recurring adjustments, necessary for the fair presentation of the results for the interim periods presented and of the financial condition as of the date of the interim balance sheet. The financial data and the other information disclosed in these notes to the unaudited condensed consolidated financial statements related to the three-month periods are unaudited. Unaudited interim results are not necessarily indicative of the results for the full fiscal year.

The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and the notes thereto for the year ended December 31, 2025 included in the Form 10-K filed with the SEC on April 15, 2026.

Use of Estimates

The preparation of the Company’s unaudited condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the unaudited condensed consolidated financial statements, and the reported amounts of revenues and expenses during the reporting period. Significant estimates and assumptions reflected in these unaudited condensed consolidated financial statements include, but are not limited to, the allowance for credit losses on accounts receivable, the valuation allowance against deferred tax assets, stock-based compensation, the fair value of equity instruments issued in connection with financing transactions, and the fair values of the consideration transferred, the identifiable assets acquired, the liabilities assumed, the previously held equity interest, and the non-controlling interest in connection with the business combination, including the fair value and useful life of the identifiable intangible asset. Actual results could differ materially from those estimates.

Concentrations

The Company’s ability to derive revenue is reliant on its relationship with KBROS, LLC (“KBROS”) who currently handles product for the CWS Platform and fulfills the products sold by clientele using our marketing services. The discontinuance of such relationship or termination of the CWS Platform agreements would have a material negative impact on the Company’s operations.

Fusion Five’s operations depend on third-party service providers, including its Execution Broker, trustee, payment processor, and technology provider. A termination or disruption of these relationships, failure by a service provider to comply with applicable laws and regulations, or deterioration in the financial condition of a material counterparty could adversely affect Fusion Five’s operations and its ability to provide trading access and process client transactions. Substantially all of Fusion Five’s customer securities transactions are executed through a single third-party broker (the “Execution Broker”), and Fusion Five is dependent on this broker for execution services.

Regulatory Requirements

Fusion Five is registered as a financial service provider on the New Zealand Financial Service Providers Register (“FSPR”). Based on Fusion Five’s current registered activities and regulatory status, Fusion Five was not subject to a specific minimum regulatory capital requirement in New Zealand as of June 30, 2026.

Cash Held on Behalf of Clients

Cash held on behalf of clients represents cash maintained in segregated accounts for the benefit of clients of the Company’s majority-owned subsidiary, Fusion Five Continents Securities Limited (“Fusion Five”), in connection with securities trading and settlement activities. Such funds are not available to finance the Company’s general operations. Cash held on behalf of clients is separately presented on the condensed consolidated balance sheets. The Company has classified clients’ monies as cash held on behalf of clients under the assets section of the condensed consolidated balance sheets and has recognized the corresponding obligation to the respective clients as a payable under the liabilities section.

Short-Term Investment – Broker Dealer and Payable – Broker Dealer

In accordance with ASC 321-10-35-1, Investments—Equity Securities, equity securities with readily determinable fair values are measured at fair value, with changes in fair value recognized in net income. Fair value measurements are determined in accordance with ASC Topic 820, Fair Value Measurement. ASC 820-10-35-37 establishes a three-level fair value hierarchy that gives the highest priority to unadjusted quoted prices in active markets for identical assets (Level 1).

The short-term investment – broker dealer of the Company’s majority-owned subsidiary, Fusion Five Continents Securities Limited (“Fusion Five”), consists of marketable securities maintained in custody with Fusion Five’s third-party Execution Broker in connection with client securities trading activities. The securities are held for the benefit of Fusion Five’s clients and are not maintained for Fusion Five’s proprietary investment purposes.

The securities are measured at fair value at each reporting date. Securities valued using quoted prices for identical securities in active markets are classified as Level 1. Realized and unrealized gains and losses on equity securities within the scope of ASC 321 are recognized in earnings and are not recognized in other comprehensive income. Realized gains and losses are determined based on the difference between the proceeds received and the carrying amount of securities sold, while unrealized gains and losses represent changes in the fair value of securities held at the reporting date.

Short-term investment – Broker dealer represents amounts maintained for authorized client securities trading and settlement activities. The corresponding Payable – Broker dealer represents Fusion Five’s obligation to return such funds to clients or apply the funds to authorized client transactions. These investments are restricted for the benefit of clients, are not available for the Company’s general operating purposes, and do not represent revenue of the Company. As of June 30, 2026 and December 31, 2025, Short-term investment – Broker dealer and the corresponding Payable – Broker dealer were $7,189,557 and nil, respectively.

Fusion Five’s short-term investment is subject to market risk arising from fluctuations in the market prices of securities. The securities are maintained in custody with the Execution Broker, and Fusion Five is also exposed to custodial, concentration, and counterparty credit risk associated with the Execution Broker.

Business Combinations

The Company accounts for business combinations using the acquisition method of accounting in accordance with ASC 805, Business Combinations. The cost of an acquisition comprises the consideration transferred, the fair value of any previously held equity interest in the acquiree, and the fair value of any non-controlling interest in the acquiree, and is allocated to the identifiable assets acquired and liabilities assumed based on their estimated fair values at the acquisition date, with any excess recorded as goodwill. For a business combination achieved in stages, the previously held equity interest is remeasured to its acquisition-date fair value and any resulting gain or loss is recognized in earnings. Non-controlling interest is measured at fair value as of the acquisition date. Acquisition-related costs are expensed as incurred. The fair values assigned to the assets acquired and liabilities assumed are provisional and may be retrospectively adjusted during the measurement period, which ends no later than one year from the acquisition date. See Note 4 — Business Combination.

Digital Assets

The Company accounts for its holdings of digital assets in accordance with ASC 350-60, Intangibles—Goodwill and Other—Crypto Assets, as amended by ASU 2023-08, Accounting for and Disclosure of Crypto Assets. Digital assets within the scope of ASC 350-60 are measured at fair value each reporting period, with changes in fair value recognized in net income. The Company determines fair value using quoted prices for identical assets in an active market accessible by the Company as of the measurement date, without adjustment for contractual sale restrictions, which the Company has concluded represents a Level 1 measurement within the fair value hierarchy of ASC 820, Fair Value Measurement. Realized gains and losses on the sale or disposition of digital assets, and unrealized gains and losses arising from the remeasurement of digital assets held at period end, are recognized within other income (expense) in the condensed consolidated statements of operations. Digital assets are classified as current or non-current based on the Company’s intent and ability to convert such assets to cash within twelve months of the balance sheet date.

Foreign Currency Translation

The functional currency of Fusion Five is the New Zealand dollar. The assets and liabilities of Fusion Five are translated into United States dollars at the exchange rate in effect at the balance sheet date, and revenues and expenses are translated at the average exchange rate for the period. Equity accounts are translated at historical exchange rates. The resulting translation adjustments are recorded in accumulated other comprehensive loss as a component of stockholders’ equity.

The exchange rates used to translate Fusion Five’s financial statements were as follows:

For the six months ended June 30, 2026, closing rate 0.568 US$: NZD, applied to Fusion Five’s assets and liabilities.

For the six months ended June 30, 2026, average rate 0.578 US$: NZD, applied to Fusion Five’s revenues and expenses.

For the three and six months ended June 30, 2026, the Company recorded a foreign currency translation adjustment of $1,171, which is included within other comprehensive income (loss) in the condensed consolidated statements of operations. No comparative amount is presented for the three and six months ended June 30, 2025, as Fusion Five was not consolidated during that period.

Accounts Receivable

Accounts receivable are recorded at the gross billing amount less an allowance for any uncollectible accounts due from the customers. Accounts receivable do not bear interest.

Since January 1, 2024, the Company adopted Accounting Standards Update (“ASU”) No. 2016-13, Financial Instruments-Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments (“ASU 2016-13”), using the modified retrospective transition method. ASU 2016-13 replaces the existing incurred loss impairment model with an expected loss methodology, which will result in more timely recognition of credit losses. Upon adoption, the Company changed the impairment model to utilize a forward-looking current expected credit losses (CECL) model in place of the incurred loss methodology for financial instruments measured at amortized cost and receivables resulting from the application of ASC 606, including contract assets.

The Company maintains an allowance for credit losses and records the allowance for credit losses as an offset to accounts receivable and the estimated credit losses charged to the allowance is classified as “General and administrative expenses” in the unaudited condensed consolidated statements of comprehensive income. The Group assesses collectability by reviewing accounts receivable on aging schedules because the accounts receivable were primarily consisted of receivables arising from provision of marketing services, product sales, CWS platform and vault. In determining the amount of the allowance for credit losses, the Company considers historical collectability based on past due status, the age of the balances, current economic conditions, reasonable and supportable forecasts of future economic conditions, and other factors that may affect the Company’s ability to collect from customers. Delinquent account balances are written-off against the allowance for expected credit loss after management has determined that the likelihood of collection is not probable.

As of June 30, 2026 and December 31, 2025, the Company recorded an allowance for credit losses of $67,948 and $67,948, respectively. 

Impairment of Long-Lived Assets

For long-lived assets the Company evaluates for impairment whenever events or changes indicate that the carrying amount of an asset may no longer be recoverable. The Company assesses the recoverability of the long-lived assets by comparing the carrying value of the long-lived assets to the estimated undiscounted future cash flows expected to receive from use of the assets and their eventual disposition. Such assets are considered to be impaired if the sum of the expected undiscounted cash flows is less than the carrying amount of the assets. The impairment to be recognized is measured by the amount by which the carrying amount of the assets exceeds the fair value of the assets. The Company tests impairment of long-lived assets at the reporting unit level when impairment indicator appeared and recognizes impairment in the event at the carrying value exceeds the fair value of each reporting unit.

No impairment charge of long-lived assets was recorded for the three and six months ended June 30, 2026 and 2025.

Contract Liabilities

The Company recognizes contract liabilities in accordance with ASC 606, Revenue from Contracts with Customers. A contract liability represents the Company’s obligation to transfer goods or services to a customer for which the Company has received consideration before the related performance obligation has been satisfied. Contract liabilities are recognized as revenue when the Company satisfies the related performance obligation. Due to the generally short-term duration of the relevant contracts, all performance obligations are satisfied within one year. Where transaction prices for marketing services, product sales, CWS platform and vault are received upfront from the customers, such receipts are recorded as contract liabilities and recognized as revenues either over the contract period or point in time upon service rendered.

The following table presents the activity in contract liabilities for the six months ended June 30, 2026 and 2025:

As of June 30, 2026 and December 31, 2025, the Company had contract liabilities of $11,251 and $10,423, respectively, representing advance payments received from customers for goods or services not yet delivered. The Company expects to recognize the balance outstanding as of June 30, 2026, as revenue within the next twelve months as the related performance obligations are satisfied.

Revenue Recognition

In accordance with FASB ASC 606, Revenue from Contracts with Customers¸ the Company determines revenue recognition through the following steps:

Revenue is recognized when performance obligations are satisfied through the transfer of control of promised goods to the Company’s customers in an amount that reflects the consideration expected to be received in exchange for transferring goods or services to customers. Control transfers once a customer has the ability to direct the use of, and obtain substantially all of the benefits from, the product. This includes the transfer of legal title, physical possession, the risks and rewards of ownership, and customer acceptance.

The Company derives its revenue from marketing services, sales via the CWS Platform, distribution of its SWOL Tequila and subscription-based membership revenue, and, following the acquisition of Fusion Five Continents Securities Limited (“Fusion Five”) on June 1, 2026, brokerage commission and platform income. Revenue is reported net of discounts.

Marketing Services

The Company provides integrated marketing services to third-party alcoholic beverage brands through its CWS Platform, including campaign strategy development, creation of promotional materials, and digital advertising execution over a defined campaign period, generally ranging from one to three months. In applying ASC 606-10-25-14, the Company has concluded that each contract contains a single performance obligation, as the promised services are not separately identifiable within the context of the contract and are combined to deliver a single integrated marketing campaign. In accordance with ASC 606-10-25-19, the Company determined that the individual services are not distinct, as they are highly interrelated and interdependent and do not provide benefit to the customer on a standalone basis. The services represent a series of distinct services that are substantially the same and have the same pattern of transfer.

Revenue is recognized over time in accordance with ASC 606-10-25-27, as the customer simultaneously receives and consumes the benefits of the services as they are performed. The Company measures progress using a time-elapsed output method over the campaign period. The Company has concluded that it acts as the principal under ASC 606-10-55-37A and 55-39, as it controls the services prior to transfer, maintains primary responsibility for fulfillment, and has discretion in directing third-party service providers. Accordingly, revenue is recognized on a gross basis. Revenue from marketing services is disaggregated and recognized over the campaign period, and contracts are generally short-term in nature; therefore, the Company does not disclose remaining performance obligations pursuant to the practical expedient in ASC 606-10-50-14(a).

CWS Platform

The Company sells wine and spirits directly to end customers through its CWSpirits.com platform. Each transaction contains a single performance obligation under ASC 606-10-25-14, consisting of delivery of the product to the customer. The Company determined that the product is distinct in accordance with ASC 606-10-25-19, as the customer can benefit from the product independently. Revenue is recognized at a point in time in accordance with ASC 606-10-25-30, when control transfers to the customer upon delivery.

The Company has concluded that it acts as the principal in these arrangements under ASC 606-10-55-37A and 55-39, as it establishes pricing, directs marketing activities, and bears financial inventory risk, including risk of loss. Accordingly, revenue is recognized on a gross basis. Revenue is disaggregated as e-commerce product revenue and recognized upon delivery, and the Company does not have material remaining performance obligations due to the short-term nature of transactions in accordance with ASC 606-10-50-14(a).

Product Sales

The Company generates wholesale revenue from the sale of SWOL Tequila, which is produced by a third-party manufacturer and delivered to CWS for retail distribution. Each arrangement contains a single performance obligation under ASC 606-10-25-14, consisting of delivery of the product to the customer. The Company determined that the product is distinct in accordance with ASC 606-10-25-19, as it can be consumed independently.

Revenue is recognized at a point in time in accordance with ASC 606-10-25-30, when control transfers upon delivery to the customer. The Company has concluded that it acts as the principal under ASC 606-10-55-37A and 55-39, as it controls the product prior to transfer, establishes pricing, and bears inventory and production risk. Accordingly, revenue is recognized on a gross basis. Revenue is disaggregated as wholesale product revenue and recognized upon delivery. Due to regulatory restrictions, ownership transfers upon delivery with no right of return. Remaining performance obligations are not material in accordance with ASC 606-10-50-14(a).

Vault

The Company offers a subscription-based membership program that provides customers with access to exclusive benefits, including discounts, free shipping, and promotional offers. Each subscription arrangement contains a single performance obligation under ASC 606-10-25-14, consisting of the provision of ongoing membership benefits over the subscription term. In accordance with ASC 606-10-25-19, the Company determined that the membership services are not distinct individually but represent a series of services that are substantially the same and provided continuously over the subscription period.

Revenue is recognized over time in accordance with ASC 606-10-25-27, as the customer simultaneously receives and consumes the benefits of the membership. Revenue is recognized on a straight-line basis over the subscription period. The Company has concluded that it acts as the principal under ASC 606-10-55-37A and 55-39, as it controls the membership program and establishes pricing. Accordingly, revenue is recognized on a gross basis. Prior to the acquisition of the CWS Platform, the Company acted as an agent and recognized net revenue. Revenue is disaggregated as subscription revenue and recognized over the subscription period. The Company records reserves for chargebacks and cancellations based on historical experience, and remaining performance obligations are not disclosed for contracts with an original expected duration of one year or less in accordance with ASC 606-10-50-14(a).

Brokerage Commission and Platform Income

Fusion Five earns commissions and platform income from securities brokerage services based on transaction volume and platform fees charged per transaction. When a client executes a securities trading transaction, brokerage commission and platform fee is recognized at a point in time when the performance obligation has been satisfied by the completion of the trade and the service has been passed to the client. Brokerage commission income and platform fee are accrued on a trade-date basis, as this is when the underlying financial instrument is identified, the pricing of the brokerage service is agreed upon, and the promised services are delivered to the client. Commission fees and platform fees are charged directly from the client’s account when transactions are settled. Securities trading transactions cannot be cancelled once executed and are not refundable.

The transaction price consists of the commission fees and platform fee charged to the client. Because these services are provided together, are highly interdependent, and no separate allocation of the transaction price is required in accordance with ASC 606-10-25-19, they are accounted for as a single performance obligation, which is satisfied when the related trade is executed.

These activities are provided together as part of the Company’s trading service and are treated as one performance obligation. The transaction price consists of the commission fees and platform fee charged to customers. The Company determines the rates and fees charged to its customers. Since the services are provided together, no separate allocation of the transaction price is required. Revenue is recognized when the related service is provided and, for transaction-based fees, when the related trade is executed.

For each customer transaction, the Company provides access to the trading platform, helps process the customer’s trading instructions, and arranges for the trade to be executed through the Execution Broker. These services are provided together as one overall trading service. Therefore, the Company treats them as one performance obligation for each transaction.

Principal vs. Agent Considerations

The Company evaluates whether it acts as a principal or an agent in each revenue arrangement in accordance with ASC 606-10-55-36 through 55-40, considering whether it controls the promised good or service before transfer to the customer, bears inventory risk, and has pricing discretion. Where the Company is the principal, revenue is recorded gross. Where the Company is the agent, revenue is recorded net. The Company has determined it acts as principal for CWS Platform transactions and SWOL Tequila sales, and Fusion Five’s brokerage commission and platform income, and records revenue on a gross basis accordingly. With respect to Fusion Five’s brokerage services, the Company is responsible for providing the trading platform and transaction facilitation services and for setting the commission and platform fees charged to clients; accordingly, the Company has concluded it is the principal and recognizes these revenues on a gross basis. Trade execution, custody, and settlement are provided by a third-party licensed securities broker (the “Execution Broker”), and fees paid to the Execution Broker are recorded as cost of revenue rather than deducted from revenue.

Disaggregation of Revenue

The following is a summary of the disaggregation of revenue for the three and six months ended June 30, 2026 and 2025:

The following table presents the timing of recognition of revenue for the three and six months ended June 30, 2026 and 2025:

General and Administrative Expenses

General and administrative expenses consist primarily of costs associated with the general management and administration of the Company’s business that are not directly attributable to the provision of goods or services to customers. Such costs include administrative service costs, bank charges, professional and legal fees, and general corporate overhead.

Fusion Five Continents Securities Limited (“Fusion Five”) records within general and administrative expenses losses arising from the conversion and settlement of client funding balances, when such losses are borne by Fusion Five rather than its clients. Fusion Five’s clients fund their accounts through an external trust company using USDT, a digital stablecoin, which the trust company converts into fiat currency before transferring the resulting funds to Fusion Five’s account with its Execution Broker. Differences between the amount maintained with the trust company and the amount transferred to the Execution Broker, including conversion spreads and related settlement losses borne by Fusion Five, are recognized as general and administrative expenses when the conversion and settlement occur, measured based on the actual amount deducted or retained by the trust company.

Because Fusion Five bears these losses, the corresponding client deposit liability is not reduced; instead, the loss is recognized in the condensed consolidated statements of operations, with a corresponding reduction in the amount due from the trust company. Costs directly attributable to the provision of client trading services, including software subscription costs and software installation costs, are excluded from general and administrative expenses and are presented within cost of revenue.

Stock-Based Compensation

ASC 718-10 requires that share-based payment transactions with employees and non-employees, such as share options, be measured based on the grant-date fair value of the equity instrument issued and recognized as compensation expense over the requisite service period, with a corresponding addition to equity. Under this method, compensation cost related to employee share options or similar equity instruments is measured at the grant date based on the fair value of the award and is recognized over the period during which an employee is required to provide service in exchange for the award, which generally is the vesting period.

Net Income (Loss) per Share

Net earnings or loss per share is computed by dividing net income or loss by the weighted-average number of common shares outstanding during the period, excluding shares subject to redemption or forfeiture. The Company presents basic and diluted net loss per share. As there were no potentially dilutive securities outstanding as of June 30, 2026 and 2025, diluted net income (loss) per share is the same as basic net income (loss) per share for each period. The Company had no dilutive instruments outstanding as of June 30, 2026.

Segment Information

An operating segment is a component of the Company that engages in business activities from which it may earn revenue and incur expenses and is identified on the basis of the internal financial reports that are provided to and regularly reviewed by the Company’s chief operating decision maker in order to allocate resources and assess performance of the segment.

In accordance with ASC 280, Segment Reporting, operating segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating decision maker (the “CODM”) in deciding how to allocate resources and in assessing performance. The Company uses the management approach in determining its operating and reportable segments, which considers the internal organization and reporting used by the Company’s CODM for making operating decisions and assessing performance as the source for determining the Company’s reportable segments. The Company’s CODM is its Chief Executive Officer.

Following the acquisition of Fusion Five Continents Securities Limited (“Fusion Five”) on June 1, 2026 (see Note 4 — Business Combination), the Company has determined that it operates in two reportable segments: (i) beverage alcohol, comprising the Company’s marketing services, e-commerce, and product distribution operations, and (ii) financial services, comprising Fusion Five’s securities brokerage operations. These segments do not have similar economic characteristics — they operate under different regulatory regimes, serve different customer bases, and have fundamentally different revenue and margin structures — and are managed and evaluated separately by the CODM.

Recently Issued Accounting Pronouncements

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280) — Improvements to Reportable Segment Disclosures, which requires enhanced disclosures about significant segment expenses and other segment items regularly provided to the chief operating decision maker, and expands interim disclosure requirements. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early adoption permitted. The Company adopted ASU 2023-07 for the fiscal year ended December 31, 2024, on a retrospective basis. The adoption affected disclosures only and did not have a material impact on the Company’s consolidated financial statements.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740) — Improvements to Income Tax Disclosures, which requires enhanced disclosures in the annual rate reconciliation, including specific categories of reconciling items, and disaggregation of income taxes paid by federal, state, and foreign jurisdictions. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024, with early adoption permitted. The Company adopted ASU 2023-09 for the fiscal year ended December 31, 2025. The adoption affected disclosures only and did not have a material impact on the Company’s consolidated financial statements.