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INVESTMENTS MEASURED AT FAIR VALUE
 12 Months Ended
Dec. 31, 2025
Investments, All Other Investments [Abstract]  
INVESTMENTS MEASURED AT FAIR VALUE

11. INVESTMENTS MEASURED AT FAIR VALUE

 

Financial assets measured at fair value on a recurring basis are summarized below and disclosed on the consolidated balance sheets as of December 31, 2025 and 2024:

 

   Fair Value Measurement Using   Amount at 
   Level 1   Level 2   Level 3   Fair Value 
December 31, 2025                    
Assets                    
Investment Securities at Fair Value - Related Parties  $3,683,925   $48,115   $-   $3,732,040 
Investment Securities at Fair Value - Third Parties    14,264,655    418,605    -    14,683,260 
Warrants - HIPH   -    -    973    973 
Warrants - VEII   -    18,301    -    18,301 
Warrants - SHRG   -    87    -    87 
Convertible Note Receivable - VEII   -    517,275    -    517,275 
Convertible Note Receivable - SHRG   -    1,736,829    -    1,736,829 
Total Investment in Securities at Fair Value  $17,948,580   $2,739,211   $973   $20,688,764 

 

 

   Fair Value Measurement Using   Amount at 
   Level 1   Level 2   Level 3   Fair Value 
December 31, 2024                    
Assets                    
Investment Securities at Fair Value - Related Parties   $3,565,089   $7,463,324   $-   $11,028,413 
Investment Securities at Fair Value - Third Parties   2,612,293    2,061,230    -    4,673,523 
Warrants - HIPH   -    -    973    973 
Warrants - VEII   -    1,299,973    -    1,299,973 
Warrants - SHRG   -    13,272    -    13,272 
Convertible Note Receivable - VEII   -    569,630    -    569,630 
Convertible Note Receivable - SHRG   -    1,212,746    -    1,212,746 
Total Investment in Securities at Fair Value  $6,177,382   $12,620,175   $973   $18,798,530 

  

Realized loss on investment securities for the year ended December 31, 2025 was $3,208,972 and realized gain on investment securities for the year ended December 31, 2024 was $461,247. Unrealized loss on securities investment was $2,451,237 and $942,213 in the years ended December 31, 2025 and 2024, respectively. These gains and losses were recorded directly to net loss.

 

The following chart shows details of the fair value of equity security investment at December 31, 2025 and December 31, 2024, respectively.

 

   Share price       Market Value    
   12/31/2025   Shares   12/31/2025   Valuation
                
DSS (Related Party)  $0.930    3,961,210   $3,683,925   Investment in Securities at Fair Value
                   
Investment Securities at Fair Value - Third Parties            $14,264,655   Investment in Securities at Fair Value
                   
    Total Level 1 Equity Securities   $17,948,580    
                   
Holista  $0.057    1,000   $57   Investment in Securities at Fair Value
                   
HIPH World (Related Party)  $0.000    354,039,000   $35,404   Investment in Securities at Fair Value
                   
AMBS  $0.000    20,000,000   $0   Investment in Securities at Fair Value
                   
Value Exchange (Related Party)  $0.001    21,179,275   $10,590   Investment in Securities at Fair Value
                   
Sharing Services (Related Party)  $0.023    89,732   $2,064   Investment in Securities at Fair Value
                   
Investment Securities at Fair Value - Third Parties            $418,605   Investment in Securities at Fair Value
                   
    Total Level 2 Equity Securities   $466,720    
Nervotec   N/A    1,666   $0   Investment in Securities at Cost
K Beauty   N/A    3,600   $16,696   Investment in Securities at Cost
Ideal Food and Beverages   N/A    19,000   $0   Investment in Securities at Cost
HapiTravel Holding   N/A    19,000   $148   Investment in Securities at Cost
AES Group Co. Ltd.   N/A    398   $1,382   Investment in Securities at Cost
                   
    Total Equity Securities    $18,433,526    

 

 

    Share price           Market Value      
    12/31/2024     Shares     12/31/2024     Valuation
                       
DSS (Related Party)   $ 0.900       3,961,210     $ 3,565,089     Investment in Securities at Fair Value
                             
Trading Stock                   $ 2,612,293     Investment in Securities at Fair Value
                             
      Total Level 1 Equity Securities     $ 6,177,382      
                             
Holista   $ 0.008       1,000     $ 8     Investment in Securities at Fair Value
                             
New Electric CV (Related Party)   $ 0.000       354,039,000     $ 0     Investment in Securities at Fair Value
                             
AMBS   $ 0.000       20,000,000     $ 0     Investment in Securities at Fair Value
                             
Value Exchange (related Party)   $ 0.035       21,179,275     $ 749,746     Investment in Securities at Fair Value
                             
Sharing Services (Related Party)   $ 1.000       89,732     $ 89,732     Investment in Securities at Fair Value
                             
Impact BioMedical (Related Party)   $ 1.450       4,568,165     $ 6,623,838     Investment in Securities at Fair Value
                             
Trading Stock                   $ 2,061,230     Investment in Securities at Fair Value
                             
      Total Level 2 Equity Securities     $ 9,524,554      
Nervotec     N/A       1,666     $ 589     Investment in Securities at Cost
K Beauty     N/A       3,600     $ 16,733     Investment in Securities at Cost
Ideal Food and Beverages     N/A       19,000     $ 0     Investment in Securities at Cost
HapiTravel Holding     N/A       19,000     $ 140     Investment in Securities at Cost
                             
      Total Equity Securities     $ 15,719,398      

 

Changes in the observable input values would likely cause material changes in the fair value of the Company’s Level 3 financial instruments. A significant increase (decrease) in this likelihood would result in a higher (lower) fair value measurement.

 

 

The table below provides a summary of the changes in fair value which are recorded through other income (loss), including net transfers in and/or out of all financial assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) during the years ended December 31, 2025 and 2024:

 

   Total 
Balance at January 1, 2024  $77,737 
Impairment   (77,307)
Net loss   543 
Balance at December 31, 2024  $973 
Net gain   - 
Net gain   - 
Balance at December 31, 2025  $973 

 

Vector Com Convertible Bond

 

On February 26, 2021, the Company invested approximately $88,599 in the convertible note of Vector Com Co., Ltd (“Vector Com”), a private company in South Korea. The interest rate is 2% per annum. The conversion price is approximately $21.26 per common share of Vector Com. As of December 31, 2023, the Management estimated the fair value of the note to be $77,307. The Company wrote off this loan at March 31, 2024.

 

Warrants

 

HIPH

 

On July 17, 2020, the Company purchased 122,039,000 shares, approximately 0.5% ownership, and 1,220,390,000 warrants with an exercise price of $0.0001 per share, from HIPH, for an aggregated purchase price of $122,039. During 2021, the Company exercised 232,000,000 of the warrants to purchase 232,000,000 shares of HIPH for the total consideration of $232,000, leaving the balance of outstanding warrants of 988,390,000 at December 31, 2021. The Company did not exercise any warrants during years ended December 31, 2025 and 2024. We value HIPH warrants under level 3 category through a Black Scholes option pricing model and the fair value of the warrants from HIPH was $973 as of December 31, 2025 and 2024.

  
The fair value of the HIPH warrants under level 3 category as of December 31, 2025 and 2024 was calculated using a Black-Scholes valuation model valued with the following weighted average assumptions: 

 

   December 31,
2025		   December 31,
2024		 
Stock Price  $0.0001   $0.0001 
Exercise Price  $0.001   $0.001 
Risk-free Interest Rate   4.62%   4.62%
Annualized volatility   869.4%   869.4%
Dividend Yield   0.00    0.00 
Year to Maturity   4.56    5.56 

 

VEII

 

On September 6, 2023, the Company received warrants to purchase shares of VEII, a related party listed company. For further details on this transaction, refer to Note 7 - Related Party Transactions, Note Receivable from a Related Party. As of December 31, 2025 and 2024, the fair value of the warrants was $18,301 and $1,299,973, respectively. The Company did not exercise any warrants during the years ended December 31, 2025 and 2024.

 

 

The fair value of the VEII warrants under level 3 category as of December 31, 2025 and 2024 was calculated using a Black-Scholes valuation model valued with the following weighted average assumptions:

 

   December 31,
2025		   December 31,
2024		 
Stock Price  $0.0005   $0.0354 
Exercise Price  $0.1770   $0.1770 
Risk-free Interest Rate   6.75%   7.50%
Annualized volatility   446.80%   458.92%
Dividend Yield   0.00    0.00 
Year to Maturity   2.68    3.68 

 

SHRG

 

On March 20, 2024, HWH International Inc., entered into a securities purchase agreement with SHRG, pursuant to which HWH purchased from SHRG a (i) Convertible Promissory Note in the amount of $250,000, convertible into 148,810 shares of SHRG’s common stock at the option of HWH, and (ii) certain warrants exercisable into 148,810 shares of SHRG’s common stock at an exercise price of $1.68 per share, the exercise period of the warrant being five (5) years from the date of the securities purchase agreement, for an aggregate purchase price of $250,000. At the time of this filing, HWH has not converted any of the debt contemplated by the Convertible Note nor exercised any of the warrants. As of December 31, 2025 and 2024, the fair value of the warrants was $12 and $13,272, respectively.

 

The fair value of the SHRG warrants under level 2 category as of December 31, 2025, was calculated using binomial option pricing model valued with the following weighted average assumptions:

 

  

December 31,

2025

   December 31,
2024		 
Stock Price  $0.0230   $1.0000 
Exercise Price  $1.6800   $1.6800 
Risk-free Interest Rate   3.56%   4.34%
Annualized volatility   390.99%   204.14%
Dividend Yield   0.00    0.00 
Year to Maturity   3.21    4.21 

 

On March 31, 2025, HWH entered into a securities purchase agreement with the SHRG, pursuant to which SHRG issued a convertible promissory note to HWH in the amount of $150,000. This SHRG Convertible Note is convertible into SHRG’s common stock at $0.80 per share at HWH’s option until maturity three (3) years from the date of the securities purchase agreement. In addition, SHRG granted HWH warrants exercisable into 937,500 shares of SHRG’s common stock. The warrants may be exercised for three (3) years from the date of the securities purchase agreement at an exercise price of $0.85 per share. At the time of this filing, HWH has not converted any of the debt contemplated by the Convertible Note nor exercised any of the warrants. As of December 31, 2025, the fair value of the warrants was $75.

 

The fair value of the 937,500 SHRG warrants under level 2 category as of December 31, 2025, was calculated using binomial option pricing model valued with the following weighted average assumptions:

 

   December 31,
2025		 
Stock Price  $0.0230 
Exercise Price  $0.8500 
Risk-free Interest Rate   3.49%
Annualized volatility   390.99%
Dividend Yield   0.00 
Year to Maturity   2.25 

 

 

Convertible Note Receivables

 

The Company has elected to recognize the convertible note receivables at fair value and therefore there was no further evaluation of embedded features for bifurcation. The Company engaged third party valuation firm to perform the valuation of convertible notes. The fair value of the convertible notes is calculated using the binomial tree model based on probability of remaining as straight debt using discounted cash flow.

 

 During the year ended December 31, 2025, the Company reclassified “Investment in securities at fair value – related party,” “Investment in security at cost,” “Investment in equity method securities” and some of “Convertible Note Receivables at Fair Value – Related Party” from current assets to noncurrent assets in the consolidated balance sheet based on management’s assessment of the expected holding period. This change in classification had no impact on the Company’s consolidated statements of operations, cash flows, or shareholders’ equity.

 

The following table presents summarized unaudited financial information for our investments that we elected the fair value option that would otherwise be accounted for under the equity method of accounting.

 

   Summarized Financial Information 
   Assets   Liabilities   Net Loss 
December 31, 2025               
HIPH  $12,627,000   $2,218,000   $(361,000)
DSS*  $92,123,000   $66,015,000   $(13,449,000)
VEII**  $6,844,729   $10,744,581   $(640,853)
SHRG***  $6,257,230   $10,470,791   $(2,869,424)
                
December 31, 2024               
HIPH  $12,684,000   $2,254,000   $(283,000)
DSS  $106,453,000   $73,737,000   $(53,706,000)
VEII**  $6,844,729   $10,744,581   $(640,853)
SHRG***  $6,257,230   $10,470,791   $(2,869,424)

 

* Data derived from Financial Statement as of September 30, 2025, which was the latest available date source we could reach. 12-month Net Loss was estimated by adding one-third of 9-month Net Loss.
** Data derived from Financial Statement as of September 30, 2024, which was the latest available date source we could reach. 12-month Net Loss was estimated by adding one-third of 9-month Net Loss.
*** Data derived from Financial Statement as of September 30, 2024, which was the latest available date source we could reach. 12-month Net Loss was estimated by doubling the 6-month Net Loss.