MEZZANINE EQUITY

6 Months Ended

Jun. 30, 2024

Mezzanine Equity

MEZZANINE EQUITY

7. MEZZANINE EQUITY

On September 30, 2022, the Company issued to Porta Capital Limited, Bru Haas (B) Sdn Bhd, Bru Haas Sdn Bhd, Clicque Technology Sdn Bhd, Tilla Network Limited and Porta Network Inc., the Company’s related parties (collectively as the “Related Parties”), an aggregate of 5,898,256 shares of Series B Convertible Preferred Stock, par value $0.0001 per share (the “Series B Preferred Stock”), of the Company pursuant to certain Debt Conversion Agreements, each dated September 30, 2022 (the “Debt Conversion Agreement”), between the Related Parties and the Company. Pursuant to the Board Resolution dated September 28, 2022, approving the adoption of certain rights and preferences of Series B Preferred Shares, the Agreements included the following rights: (i) dividend rights where each share of Series B Preferred Stock accrues an annual dividend of 8% and (ii) redemption rights only at the option of the Company at a rate of 110% during the period ending 360 days after the Issue Date. The price per Series B Preferred Stock is 0.80 USD. The Series B Preferred Shares were issued on September 30, 2022 in exchange for all or a portion of the balances due to each Related Party as of June 30, 2022. Because all of the shareholders of the Series B Preferred Shares are related parties of the company and majority owned by the the same majority owner of the Company, it's determined that the preferred shareholders can control the Company's ability to exercise its redemption right at any time and therefore, mezzanine equity classification is appropriate in accordance with ASC - 480, Distinguishing Liabilities from Equity.

Preferred Stock – Series B – As of December 31, 2022	$	5,284,837
Dividends of Series B Convertible Preferred Stock as of December 31, 2023		377,488
Preferred Stock – Series B – As of December 31, 2023		5,662,325
Dividends of Series B Convertible Preferred Stock as of March 31, 2024		94,372
Preferred Stock – Series B – As of March 31, 2024		5,756,697
Dividends of Series B Convertible Preferred Stock as of June 30, 2024		94,372
Preferred Stock – Series B – As of June 30, 2024	$	5,851,069