EUDA Health Holdings Ltd 10-Q

Item 1. Financial Statements. EUDA HEALTH HOLDINGS LIMITED AND SUBSIDIARIES UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS March 31, December 31, 2023 2022 (Unaudited) ASSETS CURRENT ASSETS Cash $ 837,292 $ 143,024 Restricted cash - 641,461 Accounts receivable, net 1,585,378 1,851,503 Other receivables 10,820 7,467 Due from related parties 277,962 267,863 Prepaid expenses and other current assets 198,123 222,633 Forward purchase receivables 21,892,527 21,892,527 Total Current Assets 24,802,102 25,026,478 PROPERTY AND EQUIPMENT, NET 27,892 31,628 OTHER ASSETS Prepaid expenses - non-current 453,887 478,061 Operating lease right-of-use assets 180,480 76,528 Finance lease right-of-use assets 14,417 16,345 Total Other Assets 648,784 570,934 Total Assets $ 25,478,778 $ 25,629,040 LIABILITIES AND SHAREHOLDERS’ DEFICIT CURRENT LIABILITIES Short term loans - bank and private lender $ 320,766 $ 204,240 Short term loans - related parties 274,200 - Promissory note 170,000 170,000 Convertible notes 2,619,625 2,619,625 Convertible notes - related parties 782,600 782,600 Accounts payable 1,836,497 1,635,483 Other payables and accrued liabilities 2,471,415 1,592,815 Other payables - related parties 1,667,759 1,521,945 Operating lease liability 108,942 79,959 Finance lease liabilities 7,338 7,186 Prepaid forward purchase liabilities 20,853,545 20,321,053 Taxes payable 219,613 186,150 Total Current Liabilities 31,332,300 29,121,056 OTHER LIABILITIES Operating lease liability - non-current 71,720 - Finance lease liabilities - non-current 13,323 15,015 Total Other Liabilities 85,043 15,015 Total Liabilities 31,417,343 29,136,071 COMMITMENTS AND CONTINGENCIES - - SHAREHOLDERS’ DEFICIT Ordinary shares, no par value, unlimited shares authorized, 20,191,770 shares outstanding as of March 31, 2023 and December 31, 2022 * 21,308,969 21,308,969 Accumulated deficit ( 27,118,434 ) ( 24,703,789 ) Accumulated other comprehensive loss ( 144,108 ) ( 125,689 ) Total Euda Health Holdings Limited Shareholders’ Deficit ( 5,953,573 ) ( 3,520,509 ) Noncontrolling interests 15,008 13,478 Total Shareholders’ Deficit ( 5,938,565 ) ( 3,507,031 ) Total Liabilities and Shareholders’ Deficit $ 25,478,778 $ 25,629,040 * Giving retroactive effect to reverse recapitalization effected on November 17, 2022 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 3 EUDA HEALTH HOLDINGS LIMITED AND SUBSIDIARIES UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS) March 31, March 31, For the Three Months Ended March 31, March 31, 2023 2022 (Unaudited) (Unaudited) REVENUES Medical services $ 791,711 $ 1,557,099 Medical services - related parties - 135 Product sales - 7,238 Property management services 907,023 1,102,391 Total Revenues 1,698,734 2,666,863 COST OF REVENUES Medical services 607,386 58,792 Medical services - related party - 493,843 Product sales - 9,255 Property management services 687,750 833,727 Total Cost of Revenues 1,295,136 1,395,617 GROSS PROFIT 403,598 1,271,246 OPERATING EXPENSES: Selling 404,771 368,092 General and administrative 1,975,607 824,896 Research and development - 2,946 Total Operating Expenses 2,380,378 1,195,934 LOSS FROM OPERATIONS ( 1,976,780 ) 75,312 OTHER INCOME (EXPENSE) Interest expense, net ( 11,377 ) ( 20,087 ) Gain on disposal of subsidiary - 30,055 Change in fair value of prepaid forward purchase liabilities ( 532,492 ) - Other income, net 108,396 145,537 Total Other Income (expense), net ( 435,473 ) 155,505 (LOSS) INCOME BEFORE INCOME TAXES ( 2,412,253 ) 230,817 PROVISION FOR INCOME TAXES 985 5,823 NET (LOSS) INCOME ( 2,413,238 ) 224,994 Less: Net income attributable to noncontrolling interest 1,407 2,409 NET (LOSS) INCOME ATTRIBUTABLE TO EUDA HEALTH HOLDINGS LIMITED $ ( 2,414,645 ) $ 222,585 NET (LOSS) INCOME ( 2,413,238 ) 224,994 FOREIGN CURRENCY TRANSLATION ADJUSTMENT ( 18,296 ) ( 4,014 ) TOTAL COMPREHENSIVE (LOSS) INCOME ( 2,431,534 ) 220,980 Less: Comprehensive income attributable to noncontrolling interest 1,530 2,217 COMPREHENSIVE (LOSS) INCOME ATTRIBUTABLE TO EUDA HEALTH HOLDINGS LIMITED $ ( 2,433,064 ) $ 218,763 WEIGHTED AVERAGE NUMBER OF ORDINARY SHARES * Basic and diluted * 20,191,770 9,253,333 Basic * 20,191,770 9,253,333 (LOSS) EARNINGS PER SHARE Basic and diluted $ ( 0.12 ) $ 0.02 Basic $ ( 0.12 ) $ 0.02 * Giving retroactive effect to reverse recapitalization effected on November 17, 2022 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 4 EUDA HEALTH HOLDINGS LIMITED AND SUBSIDIARIES UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CHANGE IN SHAREHOLDERS’ EQUITY (DEFICIT) Accumulated other Ordinary shares Retained comprehensive Noncontrolling Shares* Capital earnings income interest Total BALANCE, December 31, 2021 9,253,333 $ 334,863 $ 180,333 $ 6,036 $ 78,818 $ 600,050 Net income - - 222,585 - 2,409 224,994 Foreign currency translation adjustment - - - ( 3,822 ) ( 192 ) ( 4,014 ) BALANCE, March 31, 2022 (Unaudited) 9,253,333 $ 334,863 $ 402,918 $ 2,214 $ 81,035 $ 821,030 Accumulated other Ordinary shares Accumulated comprehensive Noncontrolling Shares* Capital deficit loss interest Total BALANCE, December 31, 2022 20,191,770 $ 21,308,969 $ ( 24,703,789 ) $ ( 125,689 ) $ 13,478 $ ( 3,507,031 ) Balance 20,191,770 $ 21,308,969 $ ( 24,703,789 ) $ ( 125,689 ) $ 13,478 $ ( 3,507,031 ) Net loss - - ( 2,414,645 ) - 1,407 ( 2,413,238 ) Net income (loss) - - ( 2,414,645 ) - 1,407 ( 2,413,238 ) Foreign currency translation adjustment - - - ( 18,419 ) 123 ( 18,296 ) BALANCE, March 31, 2023 (Unaudited) 20,191,770 $ 21,308,969 $ ( 27,118,434 ) $ ( 144,108 ) $ 15,008 $ ( 5,938,565 ) Balance 20,191,770 $ 21,308,969 $ ( 27,118,434 ) $ ( 144,108 ) $ 15,008 $ ( 5,938,565 ) * Giving retroactive effect to reverse recapitalization effected on November 17, 2022 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 5 EUDA HEALTH HOLDINGS LIMITED AND SUBSIDIARIES UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS March 31, March 31, For the Three Months Ended March 31, March 31, 2023 2022 (Unaudited) (Unaudited) CASH FLOWS FROM OPERATING ACTIVITIES: Net (loss) income $ ( 2,413,238 ) $ 224,994 Adjustments to reconcile net (loss) income to net cash provided by operating activities: Depreciation 3,981 6,950 Amortization of intangible assets - 29,544 Amortization of operating right-of-use asset 36,446 15,528 Amortization of finance right-of-use assets 2,055 2,026 Allowance for credit losses 35,719 11,939 Deferred taxes benefits - ( 5,022 ) Gain on disposal of subsidiary - ( 30,055 ) Change in fair value of prepaid forward purchase liabilities 532,492 - Change in operating assets and liabilities Accounts receivable 244,693 ( 264,618 ) Interest receivable from loan to third party - ( 7,813 ) Other receivables ( 3,286 ) ( 15,533 ) Prepaid expenses and other current assets 49,575 ( 12,768 ) Accounts payable 187,415 ( 2,304 ) Accounts payables - related party - ( 196,903 ) Other payables and accrued liabilities 869,985 7,274 Taxes payable 31,893 93 Operating lease liability ( 39,715 ) ( 15,528 ) Due from related party ( 7,923 ) - Net cash used in operating activities ( 469,908 ) ( 252,196 ) CASH FLOWS FROM INVESTING ACTIVITIES: Loan to third party - ( 25,889 ) Cash released upon disposal of a subsidiary - ( 3,437 ) Net cash used in investing activities - ( 29,326 ) CASH FLOWS FROM FINANCING ACTIVITIES: Repayments from other receivable - related parties - 10,531 Proceeds from short-term loans - bank and private lender 171,659 73,968 Repayments to short-term loans - bank and private lender ( 57,036 ) ( 20,885 ) Proceeds from short-term loans - related parties 274,200 - Borrowings from other payables - related parties 138,219 269,457 Payment of finance lease liabilities ( 1,714 ) ( 1,632 ) Net cash provided by financing activities 525,328 331,439 EFFECT OF EXCHANGE RATE CHANGES ( 2,613 ) ( 2,667 ) NET CHANGE IN CASH AND RESTRICTED CASH 52,807 47,250 CASH AND RESTRICTED CASH, beginning of the period 784,485 189,996 CASH, end of the period $ 837,292 $ 237,246 SUPPLEMENTAL CASH FLOW INFORMATION: Cash paid for income tax $ 9,353 $ 33,299 Cash paid for interest $ 6,090 $ 24,304 SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES: Initial recognition of operating right of use asset and lease liability $ 139,549 $ 125,834 The accompanying notes are an integral part of these unaudited condensed consolidated financial statements. 6 EUDA HEALTH HOLDINGS LIMITED AND SUBSIDIARIES NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (In U.S. dollars, unless stated otherwise) Note 1– Nature of business and organization EUDA Health Holdings Limited, which until November 17, 2022 was known as 8i Acquisition 2 Corp. (the “Company”, “EUDA” or “8i”) is a company incorporated on January 21, 2021, under the laws of the British Virgin Islands for the purpose of entering into a merger, share exchange, asset acquisition, stock purchase, recapitalization, reorganization or other similar business combination with one or more businesses or entities (a “Initial Business Combination”). The Company is an “emerging growth company”, as defined in Section 2(a) of the Securities Act of 1933, as amended (the “Securities Act”), as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). The Company’s efforts to identify a prospective target business were not limited to a particular industry or geographic location (excluding China). The Articles of Association prohibited the Company from undertaking the Initial Business Combination with any entity that conducts a majority of its business or is headquartered in China (including Hong Kong and Macau). On November 17, 2022 (the “Closing Date”), EUDA Health Holdings Limited, a British Virgin Islands business company (formerly known as 8i Acquisition 2 Corp.) (the “Company”), consummated the business combination contemplated by the Share Purchase Agreement (the “SPA”) between 8i Acquisition 2 Corp., a BVI business company (“8i”), EUDA Health Limited, a British Virgin Islands business company (“EHL”), Watermark Developments Limited, a British Virgin Islands business company (“Watermark” or the “Seller”), and Kwong Yeow Liew, dated April 11, 2022 and amended May 30, 2022, June 10, 2022, and September 7, 2022. As contemplated by the SPA, a business combination between 8i and EHL was effected by the purchase by 8i of all of the issued and outstanding shares of EHL from the Seller (the “Share Purchase”), resulting in EHL becoming a wholly owned subsidiary of 8i. In addition, in connection with the consummation of the Share Purchase, 8i has changed its name to “EUDA Health Holdings Limited.” See Note 4 - Reverse Recapitalization for further details. The Company, through its subsidiaries, operates its business in two segments, 1) engaged in the healthcare specialty group (other than general practice) business offering range of specialty care services to patients, and engaged in the medical facility general practice clinic that provides holistic care for various illnesses, and 2) engaged in the property management service that services shopping malls, business office building, or residential apartments. Reorganization under EUDA Health Limited (“EHL”) On August 3, 2021, EHL completed a reverse recapitalization (“Reorganization”) under common control of its then existing shareholders, who collectively owned all of the equity interests of Kent Ridge Health Private Limited (“KRHPL”), a holding company incorporated under the laws of the Singapore prior to the Reorganization, through the following transaction. ● On July 24, 2021, EHL acquired 100 % of the equity interests in Kent Ridge Healthcare Singapore Private Limited (“KRHSG”) through KRHPL for consideration of SG$ 1.0 . ● On July 24, 2021, EHL acquired 100 % of the equity interests in EUDA Private Limited (“EUDA PL”) through KRHPL for consideration of SG$ 1.0 . ● On August 1, 2021, Kent Ridge Health Limited (“KRHL”), EHL’s wholly owned subsidiary, acquired 100 % of the equity interests in Super Gateway Group Limited (“SGGL”) through KRHPL for consideration of SG$ 1.0 . ● On August 3, 2021, EHL acquired 100 % of the equity interests in Singapore Emergency Medical Assistance Private Limited (“SEMA”) through KRHPL for no consideration. 7 Before and after the Reorganization, the Company, together with its subsidiaries (as indicated above), is effectively controlled by the same shareholders, and therefore the Reorganization is considered as a recapitalization of entities under common control in accordance with Accounting Standards Codification (“ASC”) 805-50-25. The consolidation of the Company and its subsidiaries have been accounted for at historical cost and prepared on the basis as if the aforementioned transactions had become effective as of the beginning of the first period presented in the accompanying unaudited condensed consolidated financial statements in accordance with ASC 805-50-45-5. Reorganization under KRHPL Prior to the Reorganization, KRHPL entered into a Sales and Purchase of Shares Agreement (“KRHSG Agreement”) with the sole shareholder of KRHSG who is under common control of the majority shareholders of KRHPL on December 2, 2019. Pursuant to the KRHSG Agreement, KRHPL will acquire 100 % of the equity interests in KRHSG (“Reorganization of KRHSG”) for a total consideration of SG$ 1.0 (“Total Consideration”). The transaction was completed and effective on January 3, 2020. Since KRHSG and KRHPL are effectively controlled by the same shareholders of EHL, and therefore the Reorganization is under common control at carrying value. The financial statements of KRHSG are prepared on the basis as if the restructuring of KRHSG became effective as of the beginning of the first period presented in the accompanying unaudited condensed consolidated financial statements of EHL. Prior to the Reorganization, KRHPL entered into a Sales and Purchase of Shares Agreement (“EUDA PL Agreement”) with the sole shareholder of EUDA PL who is under common control of the majority shareholders of KRHPL on December 2, 2019. Pursuant to the EUDA PL Agreement, KRHPL will acquire 100 % of the equity interests in EUDA PL (“Reorganization of EUDA PL”) for a total consideration of SG$ 1.0 (“Total Consideration”). The transaction was completed and effective on January 3, 2020. Since EUDA PL and LRHPL are effectively controlled by the same shareholders of EHL, and therefore the Reorganization is under common control at carrying value. The financial statements of EUDA PL are prepared on the basis as if the restructuring of EUDA PL became effective as of the beginning of the first period presented in the accompanying unaudited condensed consolidated financial statements of EHL. Prior to the Reorganization, KRHPL entered into a Sales and Purchase of Shares Agreement (“SEMA Agreement”) with the sole shareholder of SEMA who is effectively controlled by the same shareholders of KRHPL on December 31, 2019. Pursuant to the SEMA PL Agreement, KRHPL will acquire 100 % of the equity interests in SEMA (“Reorganization of SEMA”) for no consideration. SEMA is a holding company and has no operations prior to December 31, 2019. The accompanying unaudited condensed consolidated financial statements reflect the activities of EUDA and each of the following entities: Schedule of consolidated financial statement Name Background Ownership EUDA Health Limited (“EHL”) ● A British Virgin Islands company Incorporated on June 8, 2021 100 % owned by EUDA ● A holding Company Kent Ridge Healthcare Singapore Pte. Ltd. (“KRHSG”) ● ● ● A Singapore company Incorporated on November 9, 2017 Multi-care specialty group offering range of specialty care services to patients. 100 % owned by EHL EUDA Private Limited (“EUDA PL”) ● ● ● A Singapore company Incorporated on April 13, 2018 A digital health company that provides a platform to serve the healthcare industry 100 % owned by EHL Zukitek Vietnam Private Limited Liability Company (“ZKTV PL”) ● ● ● A Vietnam company Incorporated on May 2, 2019 A Research and Development Company 100 % owned by EUDA PL Singapore Emergency Medical Assistance Private Limited (“SEMA”) ● ● ● A Singapore company Incorporated March 18, 2019 A holding company 100 % owned by EHL The Good Clinic Private Limited (“TGC”)(1) ● ● ● A Singapore company Incorporated on April 8, 2020 Medical facility general practice clinic that provides holistic care for various illnesses 100 % owned by SEMA 8 EUDA Doctor Private Limited (“ED PL”) ● ● ● A Singapore company Incorporated on December 1, 2021 A platform solution for doctors and physicians to find, connect, and collaborate with trusted peers, specialists, and other professionals 100 % owned by EHL ● Operation has not been commenced Kent Ridge Hill Private Limited (“KR Hill PL”) ● ● ● A Singapore company Incorporated on December 1, 2021 A B2B2C pharmaceutical and OTC drugs e-commerce platform to promote its drug products 100 % owned by EHL ● Operation has not been commenced Kent Ridge Health Limited (“KRHL”) ● ● ● A British Virgin Islands company Incorporated on June 8, 2021 A holding company 100 % owned by EHL Zukitech Private Limited (“Zukitech”) (“ZKT PL”) ● ● ● A Singapore company Incorporated on June 13, 2019 A holding company 100 % owned by KRHL Super Gateway Group Limited (“SGGL”) ● ● ● A British Virgin Islands company Incorporated on April 18, 2008 A holding company 100 % owned by KRHL Universal Gateway International Pte. Ltd. (“UGI”) ● ● ● ● A Singapore company Incorporated on September 30, 2000 Registered capital of RMB 5,000,000 A holding company 98.3 % owned by SGGL Melana International Pte. Ltd. (“Melana”) ● ● ● A Singapore company Incorporated on September 9, 2000 Property management service that services shopping malls, business office building, or residential apartments 100 % owned by UGI Tri-Global Security Pte. Ltd. (“Tri-Global”) ● ● ● A Singapore company Incorporated on August 10, 2000 Property security service that services shopping malls, business office building, or residential apartments 100 % owned by UGI UG Digitech Private Limited (“UGD”) ● ● ● A Singapore company Incorporated on August 16, 2001 A holding company 100 % owned by UGI 9 Nosweat Fitness Company Private Limited (“NFC”) ● ● ● A Singapore company Incorporated on July 6, 2021 A virtual personal training platform for fitness enthusiasts 100 % owned by KRHL ● Operation has not been commenced True Cover Private Limited (“TCPL”) ● ● ● A Singapore company Incorporated on December 1, 2021 A B2B e-claims healthcare insurance platform 100 % owned by KRHL ● Operation has not been commenced KR Digital Pte. Ltd. (“KR Digital”) (2) ● ● ● A Singapore company Incorporated on December 29, 2021 Development of software and applications 100 % owned by KRHL ● Operation has not been commenced Zukihealth Sdn. Bhd. (“Zukihealth”) (2) ● ● ● A Malaysian company Incorporated on February 15, 2018 Distribution of health care supplement products 100 % owned by KR Digital ● Operation has not been commenced (1) On March 1, 2022, SEMA, the Company’s wholly owned subsidiary, sold 100 % of the equity interest in TGC to an unrelated individual third party for a total consideration of SG$ 1.0 (see Note 5). (2) On April 19, 2022, the Company acquired 100 % equity interest of KR Digital Pte Ltd, (“KR Digital”), a Singapore Company, from Mr. Kelvin Chen, the Company’s Chief Executive Office (“CEO”) and shareholder for total consideration of SG$ 1 . Prior to the acquisition of KR Digital, on April 15, 2022, KR Digital acquired 100 % equity interest of Zukihealth Sdn Bhd, (“Zukihealth”), a Malaysia corporation, from Mr. Kelvin Chen, the Company’s CEO and shareholder for total consideration of SG$ 1 . Both KR Digital and Zukihealth have no operations prior to the acquisition in April 2022. KR Digital, through Zukihealth, is expected to carry out the distribution of health care products business. Note 2 – Going concern In assessing the Company’s going concern, the Company monitors and analyzes its cash on-hand and its operating and capital expenditure commitments. The Company’s liquidity needs are to meet its working capital requirements, operating expenses and capital expenditure obligations. Debt financing in the form of short-term borrowings from bank, private lender, third parties and related parties and cash generated from operations have been utilized to finance the working capital requirements of the Company. As of March 31, 2023, the Company’s working capital deficit was approximately $ 6.5 million, and the Company had cash of approximately $ 0.8 million. The Company has experienced recurring losses from operations and negative cash flows from operating activities since 2020. In addition, the Company had, and may potentially continue to have, an ongoing need to raise additional cash from outside sources to fund its expansion plan and related operations. Successful transition to attaining profitable operations is dependent upon achieving a level of revenues adequate to support the Company’s cost structure. In connection with the Company’s assessment of going concern considerations in accordance with Financial Accounting Standard Board’s Accounting Standards Update (“ASU”) 2014-15, “Disclosures of Uncertainties about an Entity’s Ability to Continue as a Going Concern,” management has determined that these conditions raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date that these unaudited condensed consolidated financial statements are issued. 10 If the Company is unable to generate sufficient funds to finance the working capital requirements of the Company within the normal operating cycle of a twelve-month period from the date of these unaudited condensed consolidated financial statements are issued, the Company may have to consider supplementing its available sources of funds through the following sources: ● other available sources of financing from Singapore banks and other financial institutions or private lender; ● financial support and credit guarantee commitments from the Company’s related parties; and ● equity financing. The Company can make no assurances that required financings will be available for the amounts needed, or on terms commercially acceptable to the Company, if at all. If one or all of these events does not occur or subsequent capital raises are insufficient to bridge financial and liquidity shortfall, there would likely be a material adverse effect on the Company and would materially adversely affect its ability to continue as a going concern. The unaudited condensed consolidated financial statements have been prepared assuming that the Company will continue as a going concern and, accordingly, do not include any adjustments that might result from the outcome of this uncertainty. Note 3 – Summary of significant accounting policies Basis of presentation The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for information pursuant to the rules and regulations of the Securities Exchange Commission (“SEC”). The unaudited condensed consolidated financial statements as of March 31, 2023 and for the three months ended March 31, 2023 reflect all adjustments (consisting of only normal recurring adjustments) considered necessary to present fairly the financial position, results of operations and cash flow for such interim periods. The results of operations for the three months ended March 31, 2023 are not necessarily indicative of results to be expected for the full year of 2023. Certain information and footnote disclosures normally included in the consolidated financial statements prepared in conformity with U.S. GAAP have been condensed or omitted pursuant to such rules and regulations. Accordingly, these unaudited condensed consolidated financial statements should be read in conjunction with the Company’s audited financial statements and the notes thereto, included in the Form 10-K for the fiscal year ended December 31, 2022, which was filed with the SEC on June 28, 2023. Principles of consolidation The unaudited condensed consolidated financial statements include the financial statements of the Company and its subsidiaries. All transactions and balances among the Company and its subsidiaries have been eliminated upon consolidation. A subsidiary is an entity in which the Company, directly or indirectly, controls more than one half of the voting power; or has the power to govern the financial and operating policies, to appoint or remove the majority of the members of the board of directors, or to cast a majority of votes at the meeting of directors. Use of estimates The preparation of the unaudited condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities as of the date of the unaudited condensed consolidated financial statements and the reported amounts of revenues and expenses during the periods presented. Significant accounting estimates reflected in the Company’s unaudited condensed consolidated financial statements include lease classification and liabilities, right-of-use assets, determinations of the useful lives and valuation of long-lived assets, estimates of allowances for doubtful accounts, estimates of impairment of long-lived assets, valuation of deferred tax assets, other provisions and contingencies, estimated fair value of earn-out shares, prepaid forward purchase liability and private warrants. Actual results could differ from these estimates. 11 Non-controlling interests For the Company’s non-wholly owned subsidiaries, a non-controlling interest is recognized to reflect portion of equity that is not attributable, directly or indirectly, to the Company. The cumulative results of operations attributable to non-controlling interests are also recorded as non-controlling interests in the Company’s unaudited condensed consolidated balance sheets and unaudited condensed consolidated statements of operations and comprehensive income (loss). Cash flows related to transactions with non-controlling interests are presented under financing activities in the unaudited condensed consolidated statements of cash flows. Segment reporting The Company’s chief operating decision-maker is identified as the chief executive officer who reviews financial information presented on a consolidated basis, accompanied by disaggregated information about revenues by different revenues streams for purposes of allocating resources and evaluating financial performance. Based on qualitative and quantitative criteria established by Accounting Standards Codification (“ASC”) 280, “Segment Reporting”, the Company considers itself to be operating within two operating and reportable segments as set forth in Note 15. Cash and restricted cash Cash represent cash on hand and demand deposits placed with banks or other financial institutions which are unrestricted as to withdrawal or use and have original maturities less than three months. Restricted cash represents cash held in bank account from 8i which was restricted due to the incomplete procedures of changing signers as of December 31, 2022. As of March 31, 2023, such restriction has been lifted and the remaining cash held in bank account has transfer to the Company’s operating bank account. Accounts receivable, net Accounts receivable are recorded at the invoiced amount less an allowance for any uncollectible accounts and do not bear interest, which are due after 30 to 90 days, depending on the credit term with customers. The carrying value of accounts receivable is reduced by an allowance that reflects the Company’s best estimate of the amounts that will not be collected. An allowance for doubtful accounts is recorded in the period when a loss is probable based on an assessment of specific evidence indicating collection is unlikely, historical bad debt rates, accounts aging, financial conditions of the customer and industry trends. Starting from January 1, 2023, the Company adopted ASU No.2016-13 “Financial Instruments – Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments” (“ASC Topic 326”). The Company used a modified retrospective approach, and the adoption does not have an impact on our unaudited condensed consolidated financial statements. Management also periodically evaluates individual customer’s financial condition, credit history, and the current economic conditions to make adjustments in the allowance when it is considered necessary. Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. The Company’s management continues to evaluate the reasonableness of the valuation allowance policy and update it if necessary. As of March 31, 2023 and December 31, 2022, the Company provided allowance for doubtful accounts of $ 234,827 and $ 197,438 , respectively. For the three months ended March 31, 2023 and 2022, the Company did not write off any account receivable. Prepaid expenses and other current assets Prepaid expenses and other current assets primarily include prepaid expenses paid to services providers, and other deposits. Management regularly evaluates past events and current conditions and changes in payment and realization trends and records allowances when management believes collection or realization of amounts due are at risk. Accounts considered uncollectable are written off against allowances after exhaustive efforts at collection are made. As of March 31, 2023 and December 31, 2022, no allowance for credit losses related to prepaid expenses was recorded. Property and equipment, net Property and equipment are stated at cost less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the assets with no residual value. The estimated useful lives are as follows: Schedule of property and equipment useful lives Expected useful lives Office equipment 3 years Medical equipment 3 years Leasehold improvement Shorter of the lease term or 5 years 12 The cost and related accumulated depreciation of assets sold or otherwise retired are eliminated from the accounts and any gain or loss is included in the unaudited condensed consolidated statements of operations and comprehensive income (loss). Expenditures for maintenance and repairs are charged to earnings as incurred, while additions, renewals and betterments, which are expected to extend the useful life of assets, are capitalized. The Company also re-evaluates the periods of depreciation to determine whether subsequent events and circumstances warrant revised estimates of useful lives. The Company reviews property and equipment for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. An asset is considered impaired if its carrying amount exceeds the future net undiscounted cash flows that the asset is expected to generate. If such asset is considered to be impaired, the impairment recognized is the amount by which the carrying amount of the asset, if any, exceeds its fair value determined using a discounted cash flow model. For the three months ended March 31, 2023 and 2022, there was no impairment of property and equipment recognized. Impairment for long-lived assets In accordance with ASC 360-10, Long-lived assets, including property and equipment with finite lives are reviewed for impairment whenever events or changes in circumstances (such as a significant adverse change to market conditions that will impact the future use of the assets) indicate that the carrying value of an asset may not be recoverable. The Company assesses the recoverability of the assets based on the undiscounted future cash flows the assets are expected to generate and recognize an impairment loss when estimated undiscounted future cash flows expected to result from the use of the asset plus net proceeds expected from disposition of the asset, if any, are less than the carrying value of the asset. If an impairment is identified, the Company would reduce the carrying amount of the asset to its estimated fair value based on a discounted cash flows approach or, when available and appropriate, to comparable market values. For the three months ended March 31, 2023 and 2022, the Company did no t recognize any impairment of long-lived assets. Warrants The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in Financial Accounting Standards Board (“FASB”) ASC 480, Distinguishing Liabilities from Equity (“ASC 480”) and ASC 815, Derivatives and Hedging (“ASC 815”). The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s own ordinary shares and whether the warrant holders could potentially require “net cash settlement” in a circumstance outside of the Company’s control, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding. For issued or modified warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of equity at the time of issuance. The Company determined that upon further review of the warrant agreements, the Company concluded that its warrants qualify for equity accounting treatment. Upon completion of the business combination, all of 8i’s public and private warrants remain outstanding were replaced by the Company’s public and private warrants. The Company treated such warrants replacement as a warrant modification and no incremental fair value was recognized. 13 Forward Purchase Receivables and Prepaid Forward Purchase Liabilities The Company recorded forward purchase receivables amounted to $ 21,892,527 as of March 31, 2023 and December 31, 2022 to account for the prepayment amount of the forward purchase agreement, as discussed in Note 7. The prepayment amount will be held in a deposit account until the valuation date (the second anniversary of the closing of the Business Combination, subject to certain acceleration provisions). At the Maturity Date, the Sellers are entitled to received $ 2.50 per Recycled Shares (“Maturity Consideration”) in cash or in shares. As of March 31, 2023, no shares were sold after Closing. In connection with the forward purchase agreement, the Company recognized prepaid forward purchase liabilities in accordance with ASC 480-10-25-8 as the Company has the obligation to pay cash to settle the maturity consideration. As of March 31, 2023 and December 31, 2022, prepaid forward purchase liabilities were amounted to $ 20,853,545 and $ 20,321,053 , respectively. Refer to Note 7 for further detail. Revenue recognition The Company follows the revenue accounting requirements of Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (Topic 606) (“Accounting Standards Codification (“ASC”) 606”). The core principle underlying the revenue recognition of this ASU allows the Company to recognize - revenue that represents the transfer of goods and services to customers in an amount that reflects the consideration to which the Company expects to be entitled in such exchange. This will require the Company to identify contractual performance obligations and determine whether revenue should be recognized at a point in time or over time, based on when control of goods and services transfers to a customer. To achieve that core principle, the Company applies five-step model to recognize revenue from customer contracts. The five-step model requires that the Company (i) identify the contract with the customer, (ii) identify the performance obligations in the contract, (iii) determine the transaction price, including variable consideration to the extent that it is probable that a significant future reversal will not occur, (iv) allocate the transaction price to the respective performance obligations in the contract, and (v) recognize revenue when (or as) the Company satisfies the performance obligation. The Company accounts for a contract with a customer when the contract is committed in writing, the rights of the parties, including payment terms, are identified, the contract has commercial substance and collectability is probable. Revenue recognition policies for each type of revenue stream are as follows: (1) Medical Services - Performance obligation satisfied at a point in time The Company operates on a unified technology health care platform which provide a full continuum of healthcare services integrated with healthcare data analytics to drive improved outcomes for patients. The Company operates the medical services on a business-to-business (B2B) platform, and serves the corporate customers involved in various industries. The Company is primarily generating revenue on a per healthcare visit basis for specialty medical visits for specialist treatment such as cardiology, dermatology and etc, at the time which the single performance obligation was satisfied. Such fees are paid by the corporate customers on behalf of their employees. The Company generally bills their corporate customers for the healthcare visit services on a weekly basis, or in arrears depending on the service, with payment terms generally between 30 to 90 days. There are not significant differences between the timing of revenue recognition and billing. Consequently, the Company has determined that the Company’s contracts do not include a financing component. Revenue is recognized in an amount that reflects the consideration that is expected in exchange for the service at a point in time at the time of the visit. In addition, the Company’s contracts do not generally contain refund provisions for fees earned related to services performed. The Company accounts for medical service revenue on a gross basis as the Company is acting as a principal in these transactions and is responsible for fulfilling the promise to provide the specified services, which the Company has control of the services and has the ability to direct the service providers to be performed to obtain substantially all the benefits. In making this determination, the Company also assesses whether it is primarily obligated in these transactions, is subject to inventory risk, has latitude in establishing prices, or has met several but not all of these indicators in accordance with ASC 606-10-55-36 through 40. 14 The Company recognizes the medical services revenue when the control of the specified services is transferred to its customer, which at a point in time at the time after completion of the visit. The Company also operates on a general practice clinic and generating such revenue on a per healthcare visit basis. Revenues are recognized when the visits are completed at a point in time at the time of the visit. (2) Product Sales - Performance obligation satisfied at a point in time The Company purchases, sells, and installs facial recognition and temperature measurement monitor system to corporate customer, where the product and the installation are interrelated and are not capable of being distinct since the customer cannot benefit from the product or installation either on its own. The Company recognized the products revenue when control of the product is passed to the customer, which is the point in time that the customers are able to direct the use of and obtain substantially all of the economic benefit of the goods after the installation by the Company’s technician. The transfer of control typically occurs at a point in time based on consideration of when the customer has an obligation to pay for the goods, and physical possession of, legal title to, and the risks and rewards of ownership of the goods has been transferred, and the customer has accepted the goods. Revenue is recognized net of estimates of variable consideration, including product returns, customer discounts and allowance. Historically, the Company has not experienced any significant returns. (3) Property Management Services - Performance obligation satisfied over a period of time The Company provides property management services in shopping malls, business office building, or residential apartments to all tenants and property owners. Property management services include common area property management services that contain cleaning, landscaping, public facilities maintenance and other traditional services and also include security property management services provided to all tenants and property owners. Each of the two services is within separate agreements. The Company identified common area property management services as a single performance obligation as the kinds of service in the contract are not capable of being distinct and identified the security management services as another single performance obligation as there is only one service that is to provide security services. The Company recognizes the common area property management revenue and security property management revenue on a straight-line basis over the terms of the common area property management agreement and security property management agreement, generally over one year period because its customer simultaneously receives and consumes the benefits provided by the Company throughout the performance obligations period. The Company has elected to apply the practical expedient to expense costs as incurred for incremental costs to obtain a contract when the amortization period would have been one year or less. As of March 31, 2023 and December 31, 2022, the Company did not have any contract assets. The Company recognized advance payments from its customer prior to revenue recognition as contract liability until the revenue recognition performance obligation are met. As of March 31, 2023 and December 31, 2022, the Company did not have any contract liability. 15 Disaggregated information of revenues by products/services are as follows: Schedule of revenue For the Three Months Ended March 31, 2023 March 31, 2022 (Unaudited) (Unaudited) Medical services – specialty cares $ 791,711 $ 1,496,211 Medical services – general practices - 60,888 Medical services – general practices (related parties) - 135 Medical services – subtotal 791,711 1,557,234 Product sales - 7,238 Property management services – common area management 668,827 817,698 Property management services – security 238,196 284,693 Property management services 907,023 1,102,391 Total revenues $ 1,698,734 $ 2,666,863 Cost of revenues (1) Medical Services Cost of revenues mainly consists of medical supplies purchased and medical service was provided by Cadence Health Pte. Ltd., a related party, prior to March 2022. Medical supplies purchased and medical service provided by the third party service providers were insignificant prior to March 2022. Beginning in April 2022, cost of revenues mainly consists of medical supplies purchased and medical service provided by third party service providers. (2) Product Sales Cost of revenues mainly consists of medical product or equipment purchased for resale. (3) Property Management Services Cost of revenues mainly consists of labor expenses incurred attributable to property management service. Disaggregated information of cost of revenues by products/services are as follows: Schedule of cost of revenue For the Three Months Ended March 31, 2023 March 31, 2022 (Unaudited) (Unaudited) Medical services – specialty cares $ 607,386 $ 43,432 Medical services – specialty cares (related party) - 493,843 Medical services – general practices - 15,360 Medical services – subtotal 607,386 552,635 Product sales - 9,255 Property management services – common area management 496,724 601,457 Property management services – security 191,026 232,270 Property management services 687,750 833,727 Total cost of revenues $ 1,295,136 $ 1,395,617 Defined contribution plan The full-time employees of the Company are entitled to the government mandated defined contribution plan. The Company is required to accrue and pay for these benefits based on certain percentages of the employees’ respective salaries, subject to certain ceilings, in accordance with the relevant government regulations, and make cash contributions to the government mandated defined contribution plan. Total expenses for the plans were $ 137,791 and $ 136,159 for the three months ended March 31, 2023 and 2022, respectively. 16 The related contribution plans include: Singapore subsidiaries - Central Provident Fund (“CPF”) – 17.00% based on employee’s monthly salary for employees aged 55 and below, reduces progressively to 7.5% as age increase ; - Skill Development Levy (“SDL”) – up to 0.25% based on employee’s monthly salary capped $ 8.3 (SGD 11.25 ) . Vietnam subsidiary - Social Insurance Fund (“SIF”) – 20% based on employee’s monthly salary ; - Trade Union Fee – 2.00 % of SIF Income taxes The Company accounts for income taxes in accordance with U.S. GAAP for income taxes. The charge for taxation is based on the results for the fiscal year as adjusted for items, which are non-assessable or disallowed. It is calculated using tax rates that have been enacted or substantively enacted by the balance sheet date. Deferred tax is calculated using the balance sheet liability method in respect of temporary differences arising from differences between the carrying amount of assets and liabilities in the unaudited condensed consolidated financial statements and the corresponding tax basis. In principle, deferred tax liabilities are recognized for all taxable temporary differences. Deferred tax assets are recognized to the extent that it is probable that taxable income will be utilized with prior net operating loss carried forwards using tax rates that are expected to apply to the period when the asset is realized or the liability is settled. Deferred tax is charged or credited in the income statement, except when it is related to items credited or charged directly to equity. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be utilized. Current income taxes are provided for in accordance with the laws of the relevant tax authorities. An uncertain tax position is recognized as a benefit only if it is “more likely than not” that the tax position would be sustained in a tax examination, with a tax examination being presumed to occur. The amount recognized is the largest amount of tax benefit that is greater than 50% likely of being realized on examination . For tax positions not meeting the “more likely than not” test, no tax benefit is recorded. No penalties and interest incurred related to underpayment of income tax for the three months ended March 31, 2023 and 2022. As of March 31, 2023, the tax returns of the Company’s Singapore entities for the calendar year from 2019 through 2022 remain open for statutory examination by Singapore tax authorities. The Company recognize interest and penalties related to unrecognized tax benefits, if any, on the income tax expense line in the accompanying unaudited condensed consolidated statement of operations. Accrued interest and penalties are included on the related tax liability line in the unaudited condensed consolidated balance sheet. The Company conducts much of its business activities in Singapore and is subject to tax in its jurisdiction. As a result of its business activities, the Company’s subsidiaries file separate tax returns that are subject to examination by the foreign tax authorities. Comprehensive income (loss) Comprehensive income (loss) consists of two components, net income and other comprehensive income. Other comprehensive income (loss) refers to revenue, expenses, gains and losses that under GAAP are recorded as an element of shareholders’ equity but are excluded from net income. Other comprehensive income (loss) consists of a foreign currency translation adjustment resulting from the Company not using the U.S. dollar as its functional currencies. 17 (Loss) earnings per share The Company computes (loss) earnings per share (“EPS”) in accordance with ASC 260, “Earnings per Share”. ASC 260 requires companies to present basic and diluted EPS. Basic EPS is measured as net income divided by the weighted average ordinary share outstanding for the period. Diluted EPS presents the dilutive effect on a per share basis of the potential ordinary shares (e.g., convertible securities, options and warrants) as if they had been converted at the beginning of the periods presented, or issuance date, if later. Potential ordinary shares that have an anti-dilutive effect (i.e., those that increase income per share or decrease loss per share) are excluded from the calculation of diluted EPS. The Company calculates basic and diluted (loss)/earnings per share as follows: Schedule of basic and diluted earnings per share 2023 2022 For the Three Months Ended March 31, 2023 2022 (Unaudited) (Unaudited) Numerator Net (loss) income $ ( 2,413,238 ) $ 224,994 Less: Net income attributable to noncontrolling interest 1,407 2,409 Net (loss)/income attributable to common shareholders, basic $ ( 2,414,465 ) $ 222,585 Denominator Weighted average number of shares outstanding, basic and diluted 20,191,770 9,253,333 (Loss)/Earnings per share, basic and diluted $ ( 0.12 ) $ 0.02 Earnings per share, basic $ ( 0.12 ) $ 0.02 As of March 31, 2023, the Company had dilutive securities from the outstanding convertible notes and warrants are convertible into 1,411,725 and 4,458,625 of the Company’s ordinary shares, respectively, were not included in the computation of dilutive loss per share because the inclusion of such convertible notes and warrants would be anti-dilutive. Fair value measurements Fair value is defined as the price that would be received for an asset, or paid to transfer a liability, in an orderly transaction between market participants at the measurement date. Valuation techniques maximize the use of observable inputs and minimize the use of unobservable inputs. When determining the fair value measurements for assets and liabilities, we consider the principal or most advantageous market in which it would transact and considers assumptions that market participants would use when pricing the asset or liability. The following summarizes the three levels of inputs required to measure fair value, of which the first two are considered observable and the third is considered unobservable: Level 1 - Unadjusted quoted prices in active markets for identical assets or liabilities. Level 2 - Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3 - Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. The fair value for certain assets and liabilities such as cash and restricted cash, accounts receivable, net, other receivables, prepaid expenses and other current assets, short-term loans, promissory note, convertible notes, accounts payable, other payables and accrued liabilities, and tax payables have been determined to approximate carrying amounts due to the short maturities of these instruments. The Company believes that its long-term loan to third party approximates the fair value based on current yields for debt instruments with similar terms. 18 The following table sets forth by level within the fair value hierarchy our financial liability that were accounted for at fair value on a recurring basis as of March 31, 2023 and December 31, 2022: Schedule of fair value hierarchy of financial liability Carrying Value at Fair Value Measurement at March 31, 2023 March 31, 2023 Level 1 Level 2 Level 3 (Unaudited) Prepaid forward purchase liabilities $ 20,853,545 $ - $ - $ 20,853,545 Carrying Value at Fair Value Measurement at December 31, 2022 December 31, 2022 Level 1 Level 2 Level 3 Prepaid forward purchase liabilities $ 20,321,053 $ - $ - $ 20,321,053 The following is a reconciliation of the beginning and ending balance of the financial liability measured at fair value on a recurring basis for the three months ended March 31, 2023 and for the year ended December 31, 2022: Schedule of reconciliation of financial liability measured at fair value on a recurring basis Prepaid forward purchase liabilities Beginning balance as of November 17, 2022 $ 7,409,550 Change in fair value of prepaid forward purchase liabilities 12,911,503 Balance as of December 31, 2022 $ 20,321,053 Change in fair value of prepaid forward purchase liabilities 532,492 Balance as of March 31, 2023 (unaudited) $ 20,853,545 Leases The Company accounts for leases in accordance with ASC 842. The Company entered into two agreements as a lessee to lease office equipment for general and administrative operations. If any of the following criteria are met, the Company classifies the lease as a finance lease: ● The lease transfers ownership of the underlying asset to the lessee by the end of the lease term; ● The lease grants the lessee an option to purchase the underlying asset that the Company is reasonably certain to exercise; ● The lease term is for 75% or more of the remaining economic life of the underlying asset, unless the commencement date falls within the last 25% of the economic life of the underlying asset; ● The present value of the sum of the lease payments equals or exceeds 90% of the fair value of the underlying asset; or ● The underlying asset is of such a specialized nature that it is expected to have no alternative use to the lessor at the end of the lease term. Leases that do not meet any of the above criteria are accounted for as operating leases. The Company combines lease and non-lease components in its contracts under Topic 842, when permissible. Finance and operating lease right-of-use (“ROU”) assets and lease liabilities are recognized at the commencement date based on the present value of lease payments over the lease term. Since the implicit rate for the Company’s leases is not readily determinable, the Company uses its incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments. The incremental borrowing rate is the rate of interest that the Company would have to pay to borrow, on a collateralized basis, an amount equal to the lease payments, in a similar economic environment and over a similar term. Lease terms used to calculate the present value of lease payments generally do not include any options to extend, renew, or terminate the lease, as the Company does not have reasonable certainty at lease inception that these options will be exercised. The Company generally considers the economic life of its finance or operating lease ROU assets to be comparable to the useful life of similar owned assets. The Company has elected the short-term lease exception, therefore operating lease ROU assets and liabilities do not include leases with a lease term of twelve months or less. Its leases generally do not provide a residual guarantee. The finance or operating lease ROU asset also excludes lease incentives. Lease expense is recognized on a straight-line basis over the lease term for operating lease. Meanwhile, the Company recognizes the finance leases ROU assets and interest on an amortized cost basis. The amortization of finance ROU assets is recognized on an accretion basis as amortization expense, while the lease liability is increased to reflect interest on the liability and decreased to reflect the lease payments made during the period. Interest expense on the lease liability is determined each period during the lease term as the amount that results in a constant periodic interest rate of the office equipment on the remaining balance of the liability. The Company reviews the impairment of its ROU assets consistent with the approach applied for its other long-lived assets. The Company reviews the recoverability of its long-lived assets when events or changes in circumstances occur that indicate that the carrying value of the asset may not be recoverable. The assessment of possible impairment is based on its ability to recover the carrying value of the asset from the expected undiscounted future pre-tax cash flows of the related operations. The Company has elected to include the carrying amount of operating lease liabilities in any tested asset group and includes the associated operating lease payments in the undiscounted future pre-tax cash flows. For the three months ended March 31, 2023 and 2022, the Company did not recognize impairment loss on its finance and operating lease ROU assets. Related parties Parties, which can be a corporation or individual, are considered to be related if the Company has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operating decisions. Companies are also considered to be related if they are subject to common control or common significant influence. Recently adopted accounting pronouncements The Company considers the applicability and impact of all accounting standards updates (“ASUs”). Management periodically reviews new accounting standards that are issued. Under the Jumpstart Our Business Startups Act of 2012, as amended (the “JOBS Act”), the Company meets the definition of an emerging growth company and has elected the extended transition period for complying with new or revised accounting standards, which delays the adoption of these accounting standards until they would apply to private companies. 19 In May 2019, the FASB issued ASU 2019-05, which is an update to ASU Update No. 2016-13, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which introduced the expected credit losses methodology for the measurement of credit losses on financial assets measured at amortized cost basis, replacing the previous incurred loss methodology. The amendments in Update 2016-13 added Topic 326, Financial Instruments—Credit Losses, and made several consequential amendments to the Codification. Update 2016-13 also modified the accounting for available-for-sale debt securities, which must be individually assessed for credit losses when fair value is less than the amortized cost basis, in accordance with Subtopic 326-30, Financial Instruments— Credit Losses—Available-for-Sale Debt Securities. The amendments in this Update address those stakeholders’ concerns by providing an option to irrevocably elect the fair value option for certain financial assets previously measured at amortized cost basis. For those entities, the targeted transition relief will increase comparability of financial statement information by providing an option to align measurement methodologies for similar financial assets. Furthermore, the targeted transition relief also may reduce the costs for some entities to comply with the amendments in Update 2016-13 while still providing financial statement users with decision-useful information. In November 2019, the FASB issued ASU No. 2019-10, which to update the effective date of ASU No. 2016-13 for private companies, not-for-profit organizations and certain smaller reporting companies applying for credit losses, leases, and hedging standard. The new effective date for these preparers is for fiscal years beginning after December 15, 2022. In March 2022, the FASB issued ASU No. 2022-02, which is to (1) eliminate the accounting guidance for TDRs by creditors in Subtopic 310-40, Receivables—Troubled Debt Restructurings by Creditors, while enhancing disclosure requirements for certain loan refinancings and restructurings by creditors when a borrower is experiencing financial difficulty, and (2) disclose current-period gross write offs by year of origination for financing receivables and net investments in leases within the scope of Subtopic 326-20, Financial Instruments—Credit Losses—Measured at Amortized Cost. ASU 2019-05 is effective for the Company for annual and interim reporting periods beginning January 1, 2023 as the Company is qualified as an emerging growth company. The Company has adopted this standard on January 1, 2023, and the adoption did not have a material impact on the Company’s unaudited condensed consolidated financial statements. Except as mentioned above, the Company does not believe other recently issued but not yet effective accounting standards, if currently adopted, would have a material effect on the Company’s unaudited condensed consolidated balance sheets, statements of operations and comprehensive income (loss) and statements of cash flows. Note 4 – Reverse Recapitalization On November 17, 2022, the Company consummated the Business Combination contemplated by the SPA between 8i, EHL, Watermark, and Kwong Yeow Liew, dated April 11, 2022 and amended May 30, 2022, June 10, 2022, and September 7, 2022. As contemplated by the SPA, a business combination between 8i and EHL was effected by the purchase by 8i of all of the issued and outstanding shares of EHL from Watermark, resulting in EHL becoming a wholly owned subsidiary of 8i. Upon the consummation of the Business Combination, the following events contemplated by the SPA occurred, based on EUDA’s capitalization as of November 17, 2022: ● all 1,500,000 issued and outstanding shares of EHL were converted into 14,000,000 shares of the Company’s no par value ordinary shares after giving effect to the exchange ratio of 9.33 (“Exchange Ratio”); and ● the entitlement of 4,000,000 shares (“Earnout Shares”) of the Company’s no par value ordinary shares issued to the Seller subject to the following four triggering events: ○ 1,000,000 additional Earnout Shares to be issued if during the period beginning on the Closing Date and ending on the first anniversary of the Closing Date, the Company’s share price is equal to or greater than Fifteen Dollars ($ 15.00 ) after the Closing Date; ○ 1,000,000 additional Earnout Shares to be issued if during the period beginning on the first anniversary of the Closing Date and ending on the second anniversary of the Closing Date, the Company’s share price is equal to or greater than Twenty Dollars ($ 20.00 ); ○ 1,000,000 additional Earnout Shares to be issued if the consolidated audited financial statements of EUDA for the fiscal year commencing January 1, 2023 and ending December 31, 2023, reflect that EUDA has achieved both of the following financial metrics for such fiscal year: (x) revenues of at least $ 20,100,000 and (y) net income attributable to EUDA of at least $ 3,600,000 . 20 ○ 1,000,000 additional Earnout Shares to be issued if the consolidated audited financial statements of EUDA for the fiscal year commencing January 1, 2024 and ending December 31, 2024, reflect that EUDA has achieved both of the following financial metrics for such fiscal year: (x) revenues of at least $ 40,100,000 and (y) net income attributable to EUDA of at least $ 10,100,000 . In connection with the closing the Business Combination: ● all 8i’s no par value public ordinary shares of 2,591,545 , net of the redemption of 6,033,455 shares of Company’s no par value ordinary shares, remained outstanding; ● all 8i’s no par value private ordinary shares of 292,250 remained outstanding; ● all 8i’s no par value founder shares of 2,156,250 remained outstanding; ● all 8i’s rights, consisting of 8,625,000 public rights and 292,250 private rights, automatically converted into an aggregate of 891,725 of the Company’s no par value ordinary shares; ● 200,000 shares of the Company’s no par value ordinary shares were issued to a service provider in connection with the business combination; ● 60,000 shares of the Company’s no par value ordinary shares were issued to a service provider in connection with the closing of transactions contemplated pursuant to certain share purchase agreement. Such issuance of the ordinary share serves the purpose of securing the repayment of $ 300,000 convertible promissory note to the service provider; The following table presents the number of the Company’s ordinary shares issued and outstanding immediately following the Reverse Recapitalization: Schedule of shares issued and outstanding reverse recapitalization Ordinary Shares 8i ordinary shares outstanding prior to Reverse Recapitalization 11,073,500 Less: redemption of 8i ordinary shares ( 6,033,455 ) Conversion of 8i rights 891,725 Shares issued to service providers 260,000 Conversion of EHL ordinary shares into 8i ordinary shares 14,000,000 Total shares outstanding 20,191,770 EHL was determined to be the accounting acquirer given EHL effectively controlled the combined entity after the SPAC Transaction. The transaction is not a business combination because 8i was not a business. The transaction is accounted for as a reverse recapitalization, which is equivalent to the issuance of shares by EHL for the net monetary assets of 8i, accompanied by a recapitalization. EHL is determined as the accounting acquirer and the historical financial statements of EHL became the Company’s historical financial statements, with retrospective adjustments to give effect of the reverse recapitalization. The net assets of 8i were recognized as of the closing date at historical cost, with no goodwill or other intangible assets recorded. Operations prior to the Merger are those of EHL and EHL’s operations are the only ongoing operations of EHL. In connection with the Reverse Recapitalization, the Company raised approximately $ 1.3 million of proceeds, presented as cash flows from financing activities, which included the contribution of approximately $ 87.1 million of funds held in 8i’s trust account, approximately $ 0.2 million of cash held in 8i’s operating cash account, net of approximately $ 60.8 million paid to redeem 6,033,455 public shares of 8i’s ordinary shares, approximately $ 3.0 million in transaction costs incurred by 8i, approximately $ 21.9 million prepayment of two forward purchase agreements, and repayments of a promissory note in the amount of $ 0.3 million issued to 8i’s related party. 21 The following table reconcile the elements of the Reverse Recapitalization to the consolidated statements of cash flows and the changes in shareholders’ deficit: Schedule of financial statements of reverse recapitalization November 18, 2022 Funds held in 8i’s trust account $ 87,074,185 Funds held in 8i’s operating cash account 248,499 Less: amount paid to redeem public shares of 8i’s ordinary shares ( 60,839,550 ) Less: payments of transaction costs incurred by 8i ( 2,965,646 ) Less: payments of forward purchase agreements ( 21,892,527 ) Less: repayments of promissory note – related party of 8i ( 300,000 ) Proceeds from the Reverse Recapitalization 1,324,961 Less: unpaid deferred underwriting fee ( 2,113,125 ) Less: unpaid transaction costs incurred by 8i ( 382,600 ) Less: payment and accrued expenses of transaction costs related to the Reverse Recapitalization ( 1,305,580 ) Add: non-cash net assets assumed from 8i 14,387,803 Net contributions from issuance of ordinary shares upon the Reverse Recapitalization $ 11,911,459 The shares and corresponding capital amounts and all per share data related to EHL’s outstanding ordinary shares prior to the Reverse Recapitalization have been retroactively adjusted using the Exchange Ratio. Note 5 – Disposition of Subsidiary Disposition of TGC On March 1, 2022, SEMA, the Company’s wholly owned subsidiary, sold 100 % of the equity interest in TGC to an unrelated individual for a total consideration of SG$ 1.0 (“TGC transaction”). TGC is not a significant subsidiary and the disposition of all of the equity interests in TGC did not constitute a strategic shift that would have a major effect on the Company’s operations and financial results. As a result, the results of operations for TGC were not reported as discontinued operations under the guidance of ASC 205 “ Presentation of Financial Statements. ” Note 6 – Accounts receivable, net Schedule of accounts receivable As of March 31, 2023 As of December 31, 2022 (Unaudited) Accounts receivable * $ 1,820,205 $ 2,048,941 Allowance for credit losses ( 234,827 ) ( 197,438 ) Total accounts receivable, net $ 1,585,378 $ 1,851,503 * As of March 31, 2022 and December 31, 2021, accounts receivable of up to approximately $ 0.6 million (SGD 0.8 million) were pledged to the short term loan from United Overseas Bank Limited (See Note 8). Movements of allowance for credit losses from account receivables are as follows: Schedule of movements of allowance for doubtful accounts March 31, 2023 December 31, 2022 (Unaudited) Beginning balance $ 197,438 $ 80,799 Addition 35,719 116,156 Exchange rate effect 1,670 483 Ending balance $ 234,827 $ 197,438 22 Note 7 – Forward Purchase Agreements On November 9, 2022 and November 13, 2022, 8i, EHL, and certain institutional investors, HB Strategies LLC (the “Seller 1”) and Alto Opportunity Master Fund, SPC - Segregated Master Portfolio B (“Seller 2”) entered into an agreement (the “Prepaid Forward Agreement 1” and “Prepaid Forward Agreement 2”), respectively, for an equity prepaid forward transaction (the “Prepaid Forward Transaction 1” and “Prepaid Forward Transaction 2”). Pursuant to the terms of the Prepaid Forward Agreements, Seller 1 and Seller 2 may (i) purchase through a broker in the open market, from holders of Shares other than 8i Acquisition or affiliates thereof, 8i Acquisition’s ordinary shares, no par value, (the “Shares”), or (ii) reverse Seller 1’s and Seller 2’s prior exercise of redemption rights as to Shares in connection with the Business Combination (all such purchased or reversed Shares, the “Recycled Shares 1” and “Recycled Shares 2”, respectively). While Seller 1 and Seller 2 has no obligation to purchase any Shares under the Prepaid Forward Agreement 1 and Prepaid Forward Agreement 2, the aggregate total Recycled Shares 1 and Recycled Shares 2 that may be purchased or reversed under the Prepaid Forward Agreement 1 and Prepaid Forward Agreement 2 shall be no more than 1,400,000 shares and 1,125,000 shares, respectively. Seller 1 and Seller 2 have agreed to hold the Recycled Shares 1 and Recycled Shares 2, for the benefit of (a) 8i Acquisition until the closing of the Business Combination (the “Closing”) and (b) the Company after the Closing (each a “Counterparty”). Seller 1 and Seller 2 also may not beneficially own greater than 9.9 % of issued and outstanding Shares following the Business Combination. The key terms of the forward contracts are as follows: - Sellers can terminate the Transaction no later than the later of: (a) Third Local Business Day following the Optional Early Termination (“OET”); (b) the first Payment Date after the OET Date which shall specify the quantity by which the Number of Shares is to be reduced (such quantity, the “Terminated Shares”) Seller shall terminate the Transaction in respect of any Shares sold on or prior to the Maturity Date. The Counterparty is entitled to an amount from the Seller equal to the number of terminated shares multiplied by the Reset Price. -Seller 1 and Seller 2 are entitled to receive the Maturity Consideration, an amount equal to the product of: (1) Number of Recycled Shares specified in the Pricing Date Notice, less(b) the number of Terminated Shares multiplied by (2) USD 2.50 (the “Maturity Consideration”), in cash. The Company can also pay the Seller 1 and Seller 2 shares based on the Company’s average volume weighted average share price (“VWAP”) of the Shares over 30 Scheduled Trading Days ending on the Maturity Date. Such settlement consideration or OET is considered to be an embedded feature (or instrument) with in the Prepaid Forward Transaction 1 and 2. - The Prepaid Forward Transaction 1 and 2 required physical settlement by repurchase of remaining of the recycled shares in exchange for cash and if either the amount to be paid or the settlement date varies based on specified conditions, the earlier of a) first anniversary of the closing of the transactions between Counterparty and EUDA on November 18, 2022 or b) the date specified by Seller in a written notice to be delivered at Seller’s discretion (not earlier than the day such notice is effective) after the occurrence of a VWAP Trigger Event, those instruments shall be measured subsequently at the amount of cash that would be paid under the conditions specified in the contract if settlement occurred at the reporting date, recognizing the resulting change in that amount from the previous reporting date as interest cost, which we recorded as change in fair value of prepaid forward purchase liability. In accordance with ASC 480, Distinguishing Liabilities from Equity , the Company has determined that the prepaid forward contract is a financial instrument other than a share that represent or are indexed to obligations to repurchase the issuer’s equity shares by transferring assets, referred to herein as the “prepaid forward purchase liability” on its consolidated balance sheets. The Company initially measure the prepaid forward purchase liability at fair value and measured subsequently at fair value with changes in fair value recognized in earnings. 23 As of the closing of the Business Combination on November 17, 2022, the fair value of the prepaid forward purchase liability was determined to be $ 7,409,550 . For the three months ended March 31, 2023, the change of fair value of the prepaid forward purchase liability was amounted to a loss of $ 532,492 . As of March 31, 2023 and December 31, 2022, the prepaid forward purchase liabilities amounted to $ 20,853,545 and $ 20,321,053 , respectively. Note 8 – Credit facilities Short-term loans – bank and private lender Outstanding balances on short-term bank loans consist of the following: Schedule of short-term loans Bank/Private lender Name Maturities Annual Interest Rate Collateral/ Guarantee As of March 31, 2023 As of December 31, 2022 (Unaudited) * United Overseas Bank Limited 90 days from disbursement 0.25 % plus prime rate of 5.25 % Collateral: Accounts receivable $ 187,086 $ 185,592 FS Capital Pte Ltd Due monthly from February 2023 to July 2024 9.6 % Guaranteed by Kelvin Chen Weiwen, the Company’s CEO and shareholder 133,680 - Funding Societies Pte. Ltd Due monthly from April 2022 to March 2023 30.0 % Guaranteed by Kelvin Chen Weiwen, the Company’s CEO and shareholder - 18,648 Total $ 320,766 $ 204,240 * On August 21, 2019, KRHSG entered into a revolving line of credit agreement with United Overseas Limited pursuant to which KRHSG may borrow up to approximately $ 593,208 (SGD 800,000 ) for operation purposes. The loan was guaranteed by Jamie Fan Wei Zhi, an immediate family member of a shareholder of the Company and secured by KRHSG’s account receivable (see Note 6). The loan bears an average annual interest rate of 5.50 % and its due within 90 days from the loan disbursement. The Company released Jamie Fan Wei Zhi as the guarantor of this loan on October 31, 2022. Short term loans – related parties Schedule of Short-term loans Related parties As of As of Lender Name Relationship Maturities Interest Rate Collateral/ Guarantee March 31, 2023 December 31, 2022 (Unaudited) James Tan * Major shareholder of the Company June 30, 2023 * 8 % None $ 145,450 $ - Alfred Lim Director of the Company March 31, 2023 (Extended to December 31, 2023) 8 % None 128,750 - Total $ 274,200 $ - * On May 16, 2023, the Company issued restricted ordinary shares to James Tan in full satisfaction of all obligations of the Company under this loan. See Note 16. 24 Promissory note Outstanding balances on promissory note consist of the following: Schedule of short-term loans Promissory note Lender Name Maturities Annual Interest Rate Collateral/ Guarantee As of March 31, 2023 As of December 31, 2022 (Unaudited) Kaufaman & Canoles, P. C. (“KC”) February 15, 2023 * 0.0 – 15.0 % None $ 170,000 $ 170,000 * This promissory note has a default interest of 15 % per annum beginning on February 15, 2023 until paid in full. In June 2023, the Company and KC has entered into a settlement agreement (“the Agreement”) to settle the promissory note. Pursuant to the Agreement, the Company shall pay KC (1) $ 100,000 within two days of the dates that the Company’s US counsel, Loeb & Loeb, confirm that it has received from KC all information and documents necessary for them to prepare an amended S-1 registration statement covering the resale of securities, (2) $ 60,000 within two business days after the date the first amendment to the registration statement is filed with the SEC, and (3) upon receipt of the payment in (1) and (2), KC agrees to waive the balance of the outstanding amount and additional amount, including any accrued interest. Convertible notes – third parties Outstanding balances on convertible notes consist of the following: Schedule of short-term loans Lender Name Maturities Annual Interest Rate Collateral/ Guarantee As of March 31, 2023 December 31, 2022 (Unaudited) Maxim Group LLC (“Maxim”) November 17, 2023 0.0 % Automatically be converted into the Company’s ordinary shares at $5.00 per share if the balance is not being repaid by the maturity date $ 2,113,125 $ 2,113,125 Menora Capital Pte Ltd (“Menora”) November 17, 2023 0.0 % Right to convert into the Company’s ordinary shares equal to the unpaid Principal Amount as of the Maturity Date divided by the five day VWAP Price of the Company’s ordinary shares immediately preceding the maturity date if the balance is not being repaid by the maturity date 87,500 87,500 Loeb & Loeb LLP (“Loeb”) November 17, 2023 0.0 % (1) 60,000 of the Company ordinary share has been issued to Loeb, which is subject to be returned and cancellation if the Company repaid the full or part of the convertible note, and (2) Loeb has the right to sell the ordinary shares in public market and the earning from the sales should be offset the remaining balance of the convertible note 300,000 300,000 Shine Link Limited (“Shine Link”) November 17, 2023 0.0 % Right to convert into the Company’s ordinary shares equal to the unpaid Principal Amount as of the Maturity Date divided by the five day VWAP Price of the Company’s ordinary shares immediately preceding the maturity date if the balance is not being repaid by the maturity date 119,000 119,000 Total $ 2,619,625 $ 2,619,625 25 Convertible notes – related parties Schedule of short-term loans Lender Name Maturities Annual Interest Rate Collateral/ Guarantee As of March 31, 2023 December 31, 2022 (Unaudited) 8i Holdings 2 Ptd Ltd (“8i Holding”) (1) November 17, 2023 0.0 % Right to convert into the Company’s ordinary shares equal to the unpaid Principal Amount as of the Maturity Date divided by the five day VWAP Price of the Company’s ordinary shares immediately preceding the maturity date if the balance is not being repaid by the maturity date $ 82,600 $ 82,600 Meng Dong (James) Tan (2) November 17, 2023 0.0 % Right to convert into the Company’s ordinary shares equal to the unpaid Principal Amount as of the Maturity Date divided by the five day VWAP Price of the Company’s ordinary shares immediately preceding the maturity date if the balance is not being repaid by the maturity date 700,000 700,000 Total $ 782,600 $ 782,600 1) Mr. Meng Dong (James) Tan, the Company’s related party who had more than 10 % ownership of the Company, is the sole shareholder and director of 8i Holdings 2 Pte. Ltd. Mr. Tan has sole voting and dispositive power over the shares. 2) Mr. Meng Dong (James) Tan, the Company’s related party has more than 10 % ownership of the Company. The Company determined that the embedded conversion feature from the convertible notes, related parties and third parties qualifies for the scope exception due to the embedded conversion feature indexed to the Company’s stock in accordance with ASC 815-40-15 and meet the equity requirement in accordance with ASC815-40-25. Note 9 – Other payables and accrued liabilities Schedule of other payables and accrued liabilities As of March 31, 2023 As of December 31, 2022 (Unaudited) Accrued expenses (i) $ 1,650,170 $ 671,743 Accrued payroll 583,385 730,037 Accrued interests (ii) 158,695 157,032 Others 79,165 34,003 Total other payables and accrued liabilities $ 2,471,415 $ 1,592,815 (i) Accrued expenses The balance of accrued expenses represented amount due to third parties service providers which include marketing consulting service, IT related professional service, legal, audit and accounting fees, and other miscellaneous office related expenses. (ii) Accrued interests The balance of accrued interests represented the balance of interest payable from short-term loan – bank, private lender, and third parties (See Note 8). 26 Note 10 – Related party balances and transactions Related party balances Schedule of related party balances Other receivables – related parties Name of Related Party Relationship Nature As of March 31, 2023 As of December 31, 2022 (Unaudited) KR Hill Capital Pte Ltd Shareholders of this entity also are the shareholders of the Company Related party advance, due on demand $ 241 $ 239 Kent Ridge Medical Ptd Ltd Shareholders of this entity also are the shareholders of the Company Related party advance, due on demand 249 247 Janic Limited Shareholder of the Company Related party advance, due on demand 730 724 Cadence Health Pte Ltd * Shareholders of this entity also are the shareholders of the Company 276,742 266,653 Total $ 277,962 $ 267,863 Other receivables $ 277,962 $ 267,863 * As of date of the issuance of these unaudited condensed consolidated financial statements, this receivable has been repaid by the related party. Convertible notes – related parties See Note 8 – Credit facilities, convertible notes – related parties. Other payables – related parties Name of Related Party Relationship Nature As of March 31, 2023 As of December 31, 2022 (Unaudited) Chee Yin Meh Shareholder of Scotgold Holding Ltd which is the shareholder of the Company Operating expense paid on behalf of the Company $ 123,728 $ 122,739 Kelvin Chen CEO and shareholder of the Company Operating expense paid on behalf of the Company 748,260 589,681 Kent Ridge Health Pte Ltd (1) Shareholders of this entity also are the shareholders of the Company Operating expense paid on behalf of the Company 696,340 696,508 Kent Ridge Pacific Pte Ltd Shareholders of this entity also are the shareholders of the Company Operating expense paid on behalf of the Company 15,065 20,303 Watermark Developments Ltd Shareholder of the Company Operating expense paid on behalf of the Company 56,396 55,945 Mount Locke Limited Shareholder of the Company Operating expense paid on behalf of the Company 3,747 3,753 UG Digital Sdn Bhd UGD, subsidiary of the Company owned 40% of this company Operating expense paid on behalf of the Company 24,223 33,016 Total $ 1,667,759 $ 1,521,945 Other payables $ 1,667,759 $ 1,521,945 (1) On December 16, 2022, the Company has signed a loan agreement (“Agreement”) with Kent Ridge Health Pte Ltd (“KRHPL”), a related party. Pursuant to the Agreement, KRHPL agreed to fully remit the loan payment to Koh Wee Sing on behalf of the Company. As a result, such short-term loan- third party was transfer to other payable, related parties under KRHPL’s balance as of March 31, 2023. 27 Short term loans – related parties See Note 8 – Credit facilities, short term loans – related parties. Related party transactions Schedule of related party transactions Revenue from related parties Name of Related Party Relationship Nature For the Three Months Ended March 31, 2023 For the Three Months Ended March 31, 2022 (Unaudited) (Unaudited) Cadence Health Pte Ltd Shareholders of this entity also are the shareholders of the Company Sales of swab test, and other medical related product - 135 Revenue from related parties Shareholders of this entity also are the shareholders of the Company Sales of swab test, and other medical related product - 135 Purchase from related parties Name of Related Party Relationship Nature For the Three Months Ended March 31, 2023 For the Three Months Ended March 31, 2022 (Unaudited) (Unaudited) Cadence Health Pte Ltd Shareholders of this entity also are the shareholders of the Company Medical service fee provided for the third party medical service revenue $ - $ 493,843 Purchase from related parties Shareholders of this entity also are the shareholders of the Company Medical service fee provided for the third party medical service revenue $ - $ 493,843 Rental expenses Name of Related Party Relationship Nature For the Three Months Ended March 31, 2023 For the Three Months Ended March 31,2022 (Unaudited) (Unaudited) Kent Ridge Pacific Pte Ltd Shareholders of this entity also are the shareholders of the Company Office rental $ 26,579 $ 41,537 Rental Expenses Shareholders of this entity also are the shareholders of the Company Office rental $ 26,579 $ 41,537 28 Note 11 – Shareholders’ equity Warrants In connection with the reverse recapitalization, the Company has assumed 8,917,250 Warrants outstanding, which consisted of 8,625,000 Public Warrants and 292,250 Private Warrants. Both of the Public Warrants and private warrant met the criteria for equity classification. Warrants became exercisable on the later of (a) the completion of the reverse recapitalization or (b) 12 months from the closing of the initial public offering (“IPO”). The warrants will expire five years after the completion of a reverse recapitalization or earlier upon redemption or liquidation. As of March 31, 2023, the Company had 8,625,000 Public Warrants outstanding and 292,250 Private Warrants outstanding. Each whole Public Warrant and Private Warrant entitles the registered holder to purchase one-half share of the Company’s ordinary share at a price of $ 11.50 per share, subject to the following conditions discussed below. The Company may redeem the Public Warrants and Private Warrants in whole and not in part, at a price of $ 0.01 per warrant: ● at any time while the warrants are exercisable and prior to their expiration, ● upon not less than 30 days’ prior written notice of redemption to each warrant holder, ● if, and only if, the reported last sale price of the ordinary shares equals or exceeds $ 16.50 per share (as adjusted for share splits, share dividends, reorganizations and recapitalizations), for any 20 trading days within a 30 trading days period ending on the third trading business day prior to the notice of redemption to warrant holders, and, ● if, there is a current registration statement in effect with respect to the Ordinary Shares underlying the Warrants for each day in the 30-day trading period and continuing each day thereafter until the Redemption Date or the cashless exercise of the Warrants is exempt from the registration requirements under the Securities Act of 1933, as amended (the “Act”) If the Company calls the warrants for redemption as described above, management will have the option to require all holders that wish to exercise the warrants to do so on a “cashless basis,” as described in the warrant agreement. The exercise price and number of ordinary shares issuable upon exercise of the warrants may be adjusted for splits, dividends, recapitalizations and other similar events. Additionally, in no event will the Company be required to net cash settle the warrants. The only difference between Public Warrants and Private Warrants is that the Private Warrants will not be transferable, assignable or salable until after the completion of reverse recapitalization. The summary of warrants activity is as follows: Schedule of warrant activities Warrants Outstanding Ordinary Shares Issuable Weighted Average Exercise Price Average Remaining Contractual Life December 31, 2021 - - $ 11.50 4.88 Granted 8,917,250 4,458,625 - - December 31, 2022 8,917,250 4,458,625 $ 11.50 4.88 Granted - - - - March 31, 2023 (unaudited) 8,917,250 4,458,625 $ 11.50 4.63 29 Earnout shares As part of the Business Combination, Watermark is entitled to the 4,000,000 Earnout Shares of the Company’s no par value ordinary shares subject to the following four triggering events: ● 1,000,000 additional Earnout Shares to be issued if during the period beginning on the Closing Date and ending on the first anniversary of the Closing Date, the Company’s share price is equal to or greater than Fifteen Dollars ( $ 15.00 ) after the Closing Date (“Triggering Event 1”); ● 1,000,000 additional Earnout Shares to be issued if during the period beginning on the first anniversary of the Closing Date and ending on the second anniversary of the Closing Date, the Company’s share price is equal to or greater than Twenty Dollars ( $ 20.00 ) (“Triggering Event 2”); ● 1,000,000 additional Earnout Shares to be issued if the consolidated audited financial statements of EUDA for the fiscal year commencing January 1, 2023 and ending December 31, 2023, reflect that EUDA has achieved both of the following financial metrics for such fiscal year: (x) revenues of at least $ 20,100,000 and (y) net income attributable to EUDA of at least $ 3,600,000 (“Triggering Event 3”); ● 1,000,000 additional Earnout Shares to be issued if the consolidated audited financial statements of EUDA for the fiscal year commencing January 1, 2024 and ending December 31, 2024, reflect that EUDA has achieved both of the following financial metrics for such fiscal year: (x) revenues of at least $ 40,100,00 0 and (y) net income attributable to EUDA of at least $ 10,100,000 (“Triggering Event 4”). The Earnout Shares are accounted for as equity classified equity instruments, were included as merger consideration as part of the Reverse Recapitalization and recorded in capital. The fair value of the Earnout Shares was estimated using a model based on multiple stock price paths developed through the use of a Monte Carlo simulation that incorporates into the valuation the possibility that the market condition targets may not be satisfied. The fair value of the Earnout Shares for Triggering Event 1 and 2 was estimated using the following assumptions: Schedule of earnout shares for triggering event Closing date November 17, 2022 Share price of the Company as of closing date $ 5.21 Average daily return rate 0.02 % Daily volatility for Triggering Event 1 4.74 % Daily volatility for Triggering Event 2 4.30 % Risk-free rate for Triggering Event 1 4.75 % Risk-free rate for Triggering Event 2 4.49 % Grant Price for Trigging Event 1 $ 15.0 Grant Price for Trigging Event 2 $ 20.0 As a result, the Company determined the fair value of the Earnout Shares for Triggering Event 1 and 2 is amounted to $ 1,926,610 and $ 3,273,019 , respectively, and recorded the same amount in consolidated statements of change in shareholders’ deficit and consolidated statements of operations and comprehensive income (loss) as earnout share payment for the year ended December 31,2022. In addition, Company determined that the probabilities of achieving the revenue and net income thresholds are nil for Triggering Event 3 and 4 and estimated the fair value of the Earnout Shares of nil. Note 12 – Income taxes British Virgin Islands KRHL and SGGL are incorporated in the British Virgin Islands and are not subject to tax on income or capital gains under current British Virgin Islands law. In addition, upon payments of dividends by these entities to their shareholders, no British Virgin Islands withholding tax will be imposed. 30 Vietnam The Company’s subsidiary operating in Vietnam is subject to the Vietnam Income Tax at a standard income tax rate of 20 %. Malaysia The Company’s subsidiary operating in Malaysia is governed by the income tax laws of Malaysia and the income tax provision in respect of operations in Malaysia is calculated at the applicable tax rates on the taxable income for the periods based on existing legislation, interpretations and practices in respect thereof. Under the Income Tax Act of Malaysia, enterprises that incorporated in Malaysia are usually subject to a unified 24 % enterprise income tax rate while preferential tax rates, tax holidays and even tax exemption may be granted on case-by-case basis. Singapore The Company’s subsidiaries incorporated in Singapore and is subject to Singapore Profits Tax on the taxable income as reported in its statutory financial statements adjusted in accordance with relevant Singapore tax laws. The applicable tax rate is 17 % in Singapore, with 75% of the first $ 7,503 (SGD 10,000 ) taxable income and 50% of the next $ 142,549 (SGD 190,000 ) taxable income are exempted from income tax. The United States and foreign components of loss before income taxes were comprised of the following: Schedule of components of loss before income taxes For the Three Months Ended March 31, 2023 For the Three Months Ended March 31, 2022 (Unaudited) (Unaudited) Singapore $ ( 612,426 ) $ 231,151 Foreign ( 1,799,827 ) ( 334 ) Total (loss) income before income taxes $ ( 2,412,253 ) $ 230,817 The provision for income taxes consisted of the following: Schedule of provision for income taxes For the Three Months Ended March 31, 2023 For the Three Months Ended March 31, 2022 (Unaudited) (Unaudited) Current $ 985 $ 10,845 Deferred - ( 5,022 ) Provision for income taxes $ 985 $ 5,823 The following table sets forth the significant components of the aggregate deferred tax assets and liabilities of the Company as of: Schedule of deferred tax assets and liabilities March 31, 2023 December 31, 2022 (Unaudited) Deferred Tax Assets/Liabilities Net operating loss carryforwards $ 854,539 $ 749,309 Allowance for doubtful account * 39,921 33,564 Net lease liability 1,724 823 Less: valuation allowance ( 896,184 ) ( 783,696 ) Deferred tax assets, net $ - $ - * The valuation allowance on all deferred tax assets increased by $ 112,488 as of March 31, 2023 from December 31, 2022. 31 As of March 31, 2023 and December 31, 2022, the Company had net operating losses carry forward (including temporary taxable difference of bad debt expense) of approximately $ 5.2 million and $ 4.4 million, respectively, from the Company’s Singapore subsidiaries. The net operating losses from the Singapore subsidiaries can be carried forward indefinitely. Due to the limited operating history of certain Singapore subsidiaries, the Company is uncertain when these net operating losses can be utilized. As a result, the Company provided a 100% allowance on deferred tax assets on net operating losses (including temporary taxable difference of bad debt expense) of approximately $ 0.9 million and $ 0.7 million related to Singapore subsidiaries as of March 31, 2023 and December 31, 2022, respectively. As of March 31, 2023 and December 31, 2022, the Company had net operating losses carry forward of approximately $ 18,000 and $ 18,000 , respectively, from the Company’s Vietnam subsidiary. The net operating losses from the Vietnam subsidiary can be carried forward for five years and expiring from the year 2025 to 2027. Due to the Vietnam subsidiary have been operating at losses and the Company believes it is more likely than not that its Vietnam operations will be unable to fully utilize its deferred tax assets related to the net operating losses in the foreseeable future. As a result, the Company provided a 100% allowance on deferred tax assets on net operating losses of approximately $ 4,000 and $ 4,000 related to its Vietnam subsidiary as of March 31, 2023 and December 31, 2022, respectively. As of March 31, 2023 and December 31, 2022, the Company had net operating losses carry forward of approximately $ 15,000 and $ 15,000 from the Company’s Malaysia subsidiary. The net operating losses from the Malaysia subsidiary can be carried forward for seven years. Due to the Malaysia subsidiary have been operating at losses and the Company believes it is more likely than not that its Malaysia operations will be unable to fully utilize its deferred tax assets related to the net operating losses in the foreseeable future. As a result, the Company provided a 100% allowance on deferred tax assets on net operating losses of approximately $ 4,000 and $ 4,000 related to its Malaysia subsidiary as of March 31, 2023 and December 31, 2022, respectively. Uncertain tax positions The Company evaluates each uncertain tax position (including the potential application of interest and penalties) based on the technical merits, and measure the unrecognized benefits associated with the tax positions. As of March 31, 2023 and December 31, 2022, the Company did not have any significant unrecognized uncertain tax positions. The Company did not incur interest and penalties tax for the three months ended March 31, 2023 and 2022. Taxes payable consist of the following: Schedule of taxes payable March 31, 2023 December 31, 2022 (Unaudited) GST taxes payable $ 162,725 $ 125,695 Income taxes payable 56,888 60,455 Totals $ 219,613 $ 186,150 32 Note 13 – Concentrations risks (a) Major customers For the three months ended March 31, 2023 and 2022, no customer accounted for 10 % or more of the Company’s total revenues. As of March 31, 2023 and December 31, 2022, no customer accounted for 10 % or more of the total balance of accounts receivable. (b) Major vendors For the three months ended March 31, 2023, no vendor accounted for 10 % or more of the Company’s total purchases. For the three months ended March 31, 2022, one vendor which is the Company’s related party accounted for approximately 35.4 % of the Company’s total purchases. As of March 31, 2023, two vendors accounted for 27.5 % and 18.7 % of the Company’s total balance of accounts payable, respectively. As of December 31, 2022, two vendors accounted for 27.9 % and 12.1 % of the Company’s total balance of accounts payable, respectively. (c) Credit risk Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash. The Singapore Deposit Insurance Corporation Limited (SDIC) insures deposits in a Deposit Insurance (DI) Scheme member bank or finance company up to approximately $ 57,000 (SGD 75,000 ) per account. As of March 31, 2023 and December 31, 2022, the Company had cash balance of $ 181,395 and $ 138,710 was maintained at DI Scheme banks in Singapore, of $ 19,086 and nil was subject to credit risk, respectively. The Federal Deposit Insurance Corporation (FDIC) standard insurance amount is up to $ 250,000 per depositor per insured bank. As of March 31, 2023 and December 31, 2022, the Company had cash and restricted cash balance of $ 641,436 and $ 641,461 was maintained at banks in the United States, of $ 391,436 and $ 391,461 was subject to credit risk, respectively. While management believes that these financial institutions are of high credit quality, it also continually monitors their credit worthiness. The Company is also exposed to risk from accounts receivable and other receivables. These assets are subject to credit evaluations. An allowance has been made for estimated unrecoverable amounts which have been determined by reference to past default experience and the current economic environment. (d) Interest rate risk The Company is exposed to interest rate risk while the Company has short-term bank, private lender, and third-party loans outstanding. Although interest rates for short-term loans are typically fixed for the terms of the loans, the terms are typically twelve months and interest rates are subject to change upon renewal. Note 14 – Commitments and contingencies Contingencies Legal From time to time, the Company is party to certain legal proceedings, as well as certain asserted and un-asserted claims. Amounts accrued, as well as the total amount of reasonably possible losses with respect to such matters, individually and in the aggregate, are not deemed to be material to the unaudited condensed consolidated financial statements. On March 30, 2022, the State Courts of the Republic of Singapore had reached a verdict that the Company’s subsidiaries, KRHSG and Melana (Defendants) is liable to compensate Jamie Fan Wei Zhi (Plaintiff), the Company’s related party for failing to procure the release of the Plaintiff from the guarantees to secure a credit line from United Overseas Bank before December 31, 2020. The Defendants agree to compensate the Plaintiff the sum of $ 3,704 (SGD 5,000 ) per month as guarantor fee starting from January 1, 2021 until the Defendants procured the release of the Plaintiff as the guarantor of the loan. The Defendants released Jamie Fan Wei Zhi as the guarantor of the loan on October 31, 2022. As of December 31, 2022, the Company has paid Jamie Fan Wei Zhi $ 74,966 (SGD 100,000 ), and no more balance outstanding. 33 As of March 31, 2023, the Company is not currently a party to any material legal proceedings, investigation or claims. However, the Company may, from time to time, be involved in legal matters arising in the ordinary course of its business. While the Company is not presently subject to any material legal proceedings, there can be no assurance that such matters will not arise in the future or that any such matters in which the Company is involved, or which may arise in the ordinary course of the Company’s business, will not at some point proceed to litigation or that such litigation will not have a material adverse effect on the business, financial condition or results of operations of the Company. Note 15 – Segment information The Company presents segment information after elimination of inter-company transactions. In general, revenue, cost of revenue and operating expenses are directly attributable, or are allocated, to each segment. The Company allocates costs and expenses that are not directly attributable to a specific segment, such as those that support infrastructure across different segments, to different segments mainly on the basis of usage, revenue or headcount, depending on the nature of the relevant costs and expenses. The Company does not allocate assets to its segments as the Chief Operating Decision Maker (“CODM”) does not evaluate the performance of segments using asset information. The Company evaluates performance and determines resource allocations based on a number of factors with the primary measurements being revenues and income/loss from operations of the Company’s two reportable segments: 1) Medical Services and 2) Property Management Services. The following tables present the summary of each segment’s revenue, loss from operations, income (loss) before income taxes and net income (loss) which is considered as a segment operating performance measure, for the three months ended March 31, 2023 and 2022: Schedule of segment reporting information . For the Three Months Ended March 31, 2023 Property Medical Management Services Services Total (Unaudited) (Unaudited) (Unaudited) Revenues $ 791,711 $ 907,023 $ 1,698,734 Loss from operations $ ( 696,185 ) $ ( 13,305 ) $ ( 709,490 ) Income (loss) before income taxes $ ( 697,161 ) $ 84,735 $ ( 612,426 ) Net income (loss) $ ( 698,146 ) $ 84,735 $ ( 613,411 ) Reconciliation of the Company’s segment net loss before income taxes to the unaudited condensed consolidated statement of operation and comprehensive income (loss)’s net loss before income taxes for the three months ended March 31, 2023 is as follows: Schedule of consolidated statement of operation and comprehensive income (loss) net loss before income taxes Segment loss before income tax $ ( 612,426 ) Change in fair value of prepaid forward purchase liabilities ( 532,492 ) Other corporate expenses ( 1,267,335 ) Consolidated net loss before income taxes $ ( 2,412,253 ) . For the Three Months Ended March 31, 2022 Property Medical Management Services Services Total (Unaudited) (Unaudited) (Unaudited) Revenues $ 1,564,472 $ 1,102,391 $ 2,666,863 Loss from operations $ 62,081 $ 13,231 $ 75,312 Income (loss) before income taxes $ 68,697 $ 162,120 $ 230,817 Net income (loss) $ 79,978 $ 145,016 $ 224,994 The accounting principles for the Company’s revenue by segment are set out in Note 3. As of March 31, 2023, the Company’s total assets were composed of $ 1,859,127 for medical services, $ 527,980 for property management services and $ 23,091,671 for corporate. As of December 31, 2022, the Company’s total assets were composed of $ 2,176,405 for medical services, $ 335,068 for property management services and $ 23,117,567 for corporate. 34 As substantially all of the Company’s long-lived assets are located in Singapore and all of the Company’s revenue is derived from Singapore, no geographical information is presented. Note 16 – Subsequent events The Company evaluated all events and transactions that occurred after March 31, 2023 up through the date the Company issued these unaudited condensed consolidated financial statements. Other than the event disclosed below, there was no other subsequent event occurred that would require recognition or disclosure in the Company’s unaudited condensed consolidated financial statements. On April 24, 2023, James Tan loaned the Company an additional $ 332,750 (the “Tan Second Loan”) at 8 % interest per annum, which matures on the earlier of June 30, 2023 or within seven days of the Company receiving the proceeds from the sales of securities in the private placement (the “Private Placement”). Pursuant to the terms of the Tan Second Loan, the Company agreed to issue to James Tan a new promissory note in the principal amount of $ 145,450 dated April 24, 2023 (the “Tan First Loan”) to replace the Initial Tan Loan. The Tan First Loan contained the same payment terms as the Tan Second Loan. On May 15, 2023, James Tan entered into a third loan agreement with the Company pursuant to which James Tan agreed to loan the Company an additional $ 22,500 (the “Tan Third Loan”), provided that the Company issued a new promissory note to James Tan in the principal amount of $ 700,000 (the “Tan 2023 Note”) to replace the James Tan’s convertible note balance as of December 31, 2022 (see note 8) (the “Tan 2022 Note”). The Tan Third Loan would bear interest at 8 % per annum, and would be repaid upon the earlier of June 30, 2023 or within seven days of the Company receiving the proceeds from the sales of securities in the Private Placement. On May 15, 2023, the Company issued to James Tan the Tan 2023 Note to replace the Tan 2022 Note. The Tan 2023 Note was an interest-free convertible promissory note in the aggregate principal amount of $ 700,000 . On May 15, 2023, James Tan elected to convert the entire unpaid principal in the amount of $ 700,000 of the Tan 2023 Note into ordinary shares of the Company at $ 1.00 per share in accordance with the terms of the Tan 2023 Note. On May 16, 2023, the Company issued to James Tan 700,000 ordinary shares in full satisfaction of the Tan 2023 Note. Pursuant to the terms of the Tan 2023 Note, the Company has agreed to register the 700,000 ordinary shares for resale. The Company refers to these 700,000 restricted ordinary shares as the “Converted Shares.” This conversion is likely resulted in modification of the convertible notes as the five-day VWAP Price of the Company’s ordinary shares immediately preceding the conversion date is higher than $1.00 and reduced the carrying amount of the convertible debt instrument with a corresponding increase in additional paid-in capital . On May 16, 2023, the Company signed settlement agreement (“Settlement Agreement”) with James Tan, pursuant to which the Company agreed to issue to James Tan an aggregate of 478,200 restricted ordinary shares of the Company in full satisfaction of all obligations of the Company under the Tan First Loan and the Tan Second Loan. On May 16, 2023, the Company signed settlement agreements (“Settlement Agreements 2”) with two third parties, Shine Link, and Menora, and a related party, 8i Holding, pursuant to which the Company agreed to issue to Shine Link, Menora, and 8i Holding 87,500 , 119,000 , and 82,600 restricted ordinary shares of the Company, respectively, in full satisfaction of all obligations of the Company under the convertible notes balance set forth in Note 8 from Shine Link, Menora, and 8i Holding. These conversions are likely resulted in modification of the convertible notes as the five-day VWAP Price of the Company’s ordinary shares immediately preceding the conversion date is higher than $1.00 and reduced the carrying amount of the convertible debt instrument with a corresponding increase in additional paid-in capital. On May 16, 2023, the Company signed settlement agreement (“Chen Settlement Agreement”) with Kelvin Chen, the CEO of the Company, pursuant to which the Company agreed to issue to Kelvin Chen an aggregate of 850,306 restricted ordinary shares of the Company in full satisfaction of Kelvin Chen’s claim for an aggregate amount of $ 850,306 provided to KRHSG from time to time since inception. Upon issuance of the restricted ordinary shares, the balance own to Kelvin Chen reduced to nil. In order to comply with Nasdaq’s shareholder approval requirement for issuance of stock to an executive officer of a company pursuant to Nasdaq Listing Rule 5635(c), the Company and Dr. Chen amended the Chen Settlement Agreement by entering into a Supplemental Agreement (the “Supplemental Agreement”) on June 6, 2023, so that the shares issued to Dr. Chen would be issued at a per share price not less than the closing bid price of $ 1.47 per share on May 15, 2023, the day prior to the execution of the Chen Settlement Agreement. Pursuant to the Supplemental Agreement, Dr. Chen has agreed to release and discharge KRHSG of all claims in return for 578,439 ordinary shares at $ 1.47 per share, the closing bid price of EUDA ordinary shares on May 15, 2023. Dr. Chen has agreed to forfeit and surrender 271,867 ordinary shares of the 850,306 ordinary shares issued to him on May 16, 2023. Between May 16 and May 22, 2023, the Company issued and sold to eight accredited investors an aggregate of 940,000 ordinary shares (the “Placement Shares”) at $ 1.00 per share for an aggregate to purchase price of $ 940,000 in a private placement in reliance upon the exemption from registration provided by Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”), and Rule 506 promulgated thereunder. On June 8, 2023, the Company and the Seller 1 and Seller 2 (together, the “ Sellers”) entered into amendments to the Prepaid Forward Agreements (together, the “Amendments”), to amend the definition of “Maturity Consideration,” such that, Maturity Consideration shall consist of 800,000 ordinary shares of the Company to be issued to the Sellers by the Company. Pursuant to the Prepaid Forward Agreements, the maturity date of the Prepaid Forward Transaction 1 and 2 (together, the “Prepaid Forward Transactions”) (the “Maturity Date”) may be accelerated by the Sellers after any occurrence wherein during any 30 consecutive trading-day period, the dollar volume-weighted average price of Company’s ordinary shares for 20 trading days is less than $ 3.00 per share. Pursuant to the Amendments, the parties agreed that the Prepaid Forward Transactions shall be accelerated as of the date of the Amendments, and accordingly, the 800,000 ordinary shares (or 1,600,000 ordinary shares in the aggregate), became immediately due and payable to the Sellers upon execution of the Amendments. The Amendments provide the Sellers with registration rights for the ordinary shares issuable as Maturity Consideration, and also prohibit the Sellers from selling such ordinary shares on any exchange business day in an amount greater than 15 % of the daily trading volume of the Company’s ordinary shares on such day. In addition, as of June 8, 2023 (the “Maturity Date”), the Sellers became entitled to retain (a) the remaining prepayment amount paid from the Company’s trust account to the Sellers upon consummation of the Company’s business combination, and (b) the remaining ordinary shares held by each Seller that were subject to the Prepaid Forward Transactions. Pursuant to the Amendments, no other fees, consideration or other amounts are due to the Seller or the Company upon the Maturity Date. 35