LEASES

12 Months Ended

Dec. 31, 2025

Leases

LEASES

13. LEASES

Leases

The Company leases offices in Maryland, Singapore, Hong Kong, South Korea, China and Taiwan through leased spaces aggregating approximately 25,000 square feet, under leases expiring on various dates from May 2026 to April 2029. The leases have rental rates ranging from $1,321 to $23,020 per month. Our total rent expense under these leases was $793,279 and $1,192,776 in the years ended December 31, 2025 and 2024, respectively. The total cash paid for rent under these leases was $668,178 and $1,202,866 in the years ended December 31, 2025 and 2024, respectively. The following table outlines the details of lease terms:

Office Location	Lease Term as of December 31, 2025
Singapore - AI	June 2023 to May 2026
Singapore – F&B	October 2024 to September 2027
Singapore – Hapi Cafe	July 2024 to June 2026
South Korea – Hapi Cafe	March 2024 to February 2027
Bethesda, Maryland, USA	April 2024 to March 2027
China - Office	March 2023 – March 2027
China - Shop	June 2024 to April 2029
Taiwan - Cafe	May 2024 to October 2027
Taiwan - Office	August 2024 to August 2026
Hong Kong - Office	February 2025 to January 2028

The Company adopted ASU No. 2016-02, Leases (Topic 842) (“ASU 2016-02”) to recognize a right-of-use asset and a lease liability for all the leases with terms greater than twelve months. We elected the practical expedient to not recognize operating lease right-of-use assets and operating lease liabilities for lease agreements with terms of 12 months or less. Operating lease right-of-use assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. As our leases do not provide a readily determinable implicit rates, we estimate our incremental borrowing rates to discount the lease payments based on information available at lease commencement. Our incremental borrowings rates are at a range from 2.59% to 7.22% per annum in 2025 and 2024, which were used as the discount rates. At December 31, 2025 the weighted average remaining lease term is 1.63 years and weighted average discount rate is 3.77%. The balances of operating lease right-of-use assets and operating lease liabilities as of December 31, 2025 were $494,957 and $910,951. The balances of operating lease right-of-use assets and operating lease liabilities as of December 31, 2024 were $1,468,913 and $1,525,169, respectively.

The table below summarizes future payments due under these leases as of December 31, 2024.

For the Twelve Months Ended December 31:

2026	$	598,372
2027		295,099
2028		62,889
2029		10,498
Total Minimum Lease Payments		966,858
Less: Effect of Discounting		(55,907	)
Present Value of Future Minimum Lease Payments		910,951
Less: Current Obligations under Leases		(578,916	)
Long-term Lease Obligations	$	332,035

 Impairment of Right-of-Use Assets

As of December 31, 2025, the Company recorded impairment on right-of-use assets of $392,733 under operating expenses. Management evaluated the operational results and identified that the Company’s F&B business has continued to incur losses and is not expected to generate profit in the foreseeable future. Therefore, the Company impaired the right-of-use assets of $399,615 for those locations during the year ended December 31, 2025. The difference between impairment loss and decrease of right-of-use assets of $6,882 is related to the foreign exchange translation impact.

Security Deposits

Our rental-home lease agreements require tenants to provide a one-month security deposits. The property management company collects all security deposits and maintains them in a trust account. The Company also has obligation to refund these deposits to the renters at the time of lease termination. As of December 31, 2025 and 2024, the security deposits held in the trust account were $293,135 and $303,518, respectively.