NOTE 5 – INTANGIBLE ASSETS, NET

Intangible assets, net consisted of the following:

SCHEDULE OF INTANGIBLE ASSETS, LESS ACCUMULATED AMORTIZATION 

Total amortization expense was $14,101 and $28,201 for the three and six months ended June 30, 2026, respectively, and $14,101 and $28,202 for the three and six months ended June 30, 2025, respectively. The Company expects to recognize amortization expense of $56,402 annually in each of the next five years.

On February 5, 2024, the Company, through its wholly owned subsidiary, Two Trees Beverages, entered into a new 15-year license agreement with Shine Time, LLC, licensing territories for Tim Smith Spirits® expanding its territories beyond the United States to include all members of the European Union, the United Kingdom, Norway, Switzerland, Iceland, Serbia, Turkey and Ukraine. The Company agreed to pay a royalty of 9% on branded products covered by the license agreement, or 4.5% of any sublicensed revenue under the agreement. During the year ended December 31, 2024, the Company paid $79,688 to Shine Time, LLC pursuant to the license agreement. An additional $112,500 was due under the terms of the license agreement by April 1, 2024. As of the filing date of this Quarterly Report on Form 10-Q, the Company has not paid such amount. The Company also agreed to issue to Shine Time, LLC 300,000 shares of the Company’s common stock with a fair value of $15,000. Such shares have not been issued as of the date of this report. As of June 30, 2026 and December 31, 2025, the royalty payable balance was $156,669 and $135,872, respectively, included in accounts payable and accrued expenses on the consolidated balance sheets.