Society Pass - Chapter 11 Case Summary

Society Pass has filed for Chapter 11 bankruptcy to avoid a value-destructive receivership prompted by an approximately $11.9 million judgment in favor of a former employee in connection with a disputed common stock purchase warrant. With its common stock also facing imminent Nasdaq delisting, the Company seeks to address and satisfy those claims under the Bankruptcy Code while preserving the operations and value of its non-debtor subsidiaries for the benefit of all stakeholders.

Business Description

Society Pass Incorporated (Nasdaq: SOPA) ("Society Pass"), along with its Debtor affiliate SoPa, Inc. ("SoPa," and collectively, the "Debtors" or the "Company"), is a holding company with diverse businesses across Southeast Asia, focusing on Singapore, Thailand, Indonesia, Vietnam, and the Philippines.

The Company's businesses include e-commerce platforms, digital media companies, travel platforms, and an artificial intelligence infrastructure company.

Corporate History

Society Pass completed an initial public offering and began trading on The Nasdaq Stock Market LLC ("Nasdaq") under the ticker SOPA in November 2021.

On May 14, 2026, Nasdaq's Listing Qualifications Department notified Society Pass that Nasdaq had determined to delist Society Pass' common stock, par value $0.0001 per share, effective as of the opening of business on May 21, 2026.

As of the Petition Date, the members of Society Pass' board of directors (the "Board") are Travis Washko, Vincent Puccio, Michael Freed, Michael Dunn Jr., Mark Carrington, and Jeremy Rosenthal, the newly appointed independent director.

Special Committee Formation

On May 11, 2026, the Board unanimously approved the formation of a special committee of the board (the "Special Committee") with a broad delegation of authority with respect to investigations and oversight of these Chapter 11 Cases, and appointed Mr. Rosenthal as an independent director and sole member of the Special Committee.
- The Board also unanimously approved Mr. Rosenthal's appointment as the sole director of SoPa, Inc.
Effective on May 11, 2026, the Board similarly approved the Independent Director Agreement between Society Pass and Restructuring Advisors LLC, d/b/a Rose Point Advisors ("Rose Point"), to provide Mr. Rosenthal's services as an independent director (the "Independent Director Agreement").

Prepetition Obligations

Society Pass' principal prepetition liability stems from a judgment entered against it in the Supreme Court for the State of New York, New York County (the "New York Court") in favor of Thomas O'Connor ("O'Connor"), a former employee, in connection with a Common Stock Purchase Warrant (the "Warrant").

The New York Court held that Society Pass was not fraudulently induced into entering into the employment agreement and Warrant and, therefore, the earlier partial summary judgment award for shares purchased under the Warrant amounting to approximately $6,615,934 (plus prejudgment interest), based on a valuation of $5,763 per share, would not be set aside.
- An additional amount of $824,109 (plus prejudgment interest) was awarded based on an additional 143 shares of Society Pass purchased under the Warrant prior to August 2019.
The total amount awarded to O'Connor under the Warrant, as reflected in the judgment entered on April 9, 2026, was $11,853,490.11 (inclusive of prejudgment interest).

Events Leading to Bankruptcy

The O'Connor Litigation and Trial Decision

On February 5, 2026, the New York Court issued a decision following trial in an employment action brought by O'Connor and CVO Advisors Pte. Ltd. ("CVO"), based on claims involving entitlement to salary payments and expense reimbursement, along with claims based on the alleged failure to deliver shares of Society Pass stock pursuant to the Warrant.

Prior to trial, O'Connor had prevailed on a motion for partial summary judgment with respect to 1,148 shares of Society Pass purchased under the Warrant. At trial, O'Connor sought to recover damages with respect to an additional 573 shares of Society Pass purchased under the Warrant.
Society Pass asserted counterclaims against O'Connor arising from alleged breach of contract, breach of fiduciary duty, tortious interference, and fraud.
The New York Court found that O'Connor fraudulently induced Society Pass to enter into subscription and software development agreements, ordered the return of shares issued under those agreements, and dismissed O'Connor's claims for salary and severance, holding that his "faithless servant" conduct barred any equity vesting under the Warrant from August 2019 forward.
- CVO's $8 million contract claims related to the Company's Series A Preferred Stock were rejected.

Escrow Designations and Receivership Motion

On April 8, 2026, the New York Court granted, in part, O'Connor's motion to restrain certain transfers by Society Pass and continued and expanded a previous escrow designation requirement, whereby shares were designated as in "escrow" with the company's transfer agent.

The New York Court ordered that Society Pass continue holding 3,000,000 common shares of Thoughtful Media Group Incorporated ("TMGX") with a designation that they are in escrow, and further designate 250,000 shares of NusaTrip Incorporated ("NusaTrip"), a company listed on the Nasdaq (Nasdaq: NUTR) but whose common stock has been halted from trading since October 9, 2025, as also being in escrow.
- Both TMGX and NusaTrip are non-debtor subsidiaries of Society Pass.
In addition to these and other enforcement activities, such as the service of restraining notices on Society Pass and various non-parties, the New York Court entered an order to show cause on April 16, 2026, why a receiver should not be appointed over the assets of Society Pass, including, among other assets:
- Society Pass' equity interests, voting, and economic rights, if any, in NusaTrip, TMGX, and other Society Pass subsidiaries (all of whom are non-debtor subsidiaries) such as Sapience AI, Inc., Sapience AI s.r.o., Gorilla Networks Pte. Ltd., and related entities;
- Society Pass' bank accounts, cash, and cash equivalents, wherever located; and
- Any of Society Pass' causes of action.
The hearing on the receivership motion was scheduled to occur before the New York Court on May 13, 2026.

Chapter 11 Filing

On May 12, 2026 (the "Petition Date"), the Debtors filed voluntary petitions for relief under Chapter 11 of the Bankruptcy Code. The Debtors continue to operate their business and manage their property as debtors and debtors in possession pursuant to Sections 1107(a) and 1108 of the Bankruptcy Code.

The Debtors filed their petitions to avoid a value-destructive receivership, address and satisfy O'Connor's claims in accordance with the Bankruptcy Code, address concerns and potential causes of action related to their publicly traded equity (which will shortly be delisted), maximize the recoveries for stakeholders including potentially recoveries for public shareholders, protect the operations and value of the Debtors' non-debtor subsidiaries, and otherwise preserve and maximize the Debtors' valuable assets, including claims and causes of action, for the benefit of all stakeholders.
As of the Petition Date, no creditors' committee has been appointed in the Chapter 11 Cases by the Office of the United States Trustee for the Southern District of Texas, and no request for the appointment of a trustee or examiner has been made.