HWH International Inc. 10-Q

Item 1. Financial Statements. HWH International Inc. and Subsidiaries Condensed Consolidated Balance Sheets (Unaudited) September 30, 2024 (Unaudited) December 31, 2023 (as restated) ASSETS Current Assets Cash $ 832,368 $ 1,159,201 Account receivable, net 35,067 28,611 Inventory 1,894 1,977 Other receivables, net 120,082 41,203 Convertible loans receivable - related party, at fair value 739,590 - Investment security – related party 3,891 - Prepaid expenses 17,542 106,862 Total Current Assets $ 1,750,434 $ 1,337,854 Non-Current Assets Property and equipment, net $ 36,718 $ 129,230 Cash and marketable securities held in Trust Account - 21,346,768 Deposits 406,479 298,324 Investment at cost 14,977 - Operating lease right-of-use assets, net 711,458 598,508 Total Non-Current Assets $ 1,169,632 $ 22,372,830 TOTAL ASSETS $ 2,920,066 $ 23,710,684 LIABILITIES AND STOCKHOLDERS’ DEFICIT Current Liabilities Accounts payable and accrued expenses $ 446,807 $ 167,354 Accrued commissions 82,154 85,206 Due to related parties, net 685,153 2,323,800 Operating lease liabilities - current 438,011 429,687 Deferred underwriting fee payable - 3,018,750 Notes payable - current 269,655 - Total Current Liabilities $ 1,921,780 $ 6,024,797 Non-Current Liabilities Operating lease liabilities - non-current $ 286,759 $ 182,380 Notes payable - non-current 962,640 - Total Non-Current Liabilities $ 1,249,399 $ 182,380 Commitments and Contingencies (Note 15) - - Temporary equity: Class A common stock subject to possible redemption; 1,976,036 shares (at approximately $ 10.35 per share) as of December 31, 2023 $ - $ 20,457,011 Stockholders’ Equity Preferred stock, $ 0.001 par value; 10,000,000 shares authorized; none issued and outstanding as of September 30, 2024 and December 31, 2023 - - Common stock, $ 0.0001 par value; 50,000,000 shares authorized; 22,257,838 and 10,000 issued and outstanding as of September 30, 2024 and December 31, 2023, respectively 2,226 1 Class A common stock, $ 0.0001 par value; 50,000,000 shares authorized; 0 and 473,750 issued and outstanding as of September 30, 2024 and December 31, 2023, respectively - 47 Class B common stock, $ 0.0001 par value; 50,000,000 shares authorized; 0 and 2,156,250 issued and outstanding as of September 30, 2024 and December 31, 2023, respectively - 216 Common stock value 2,226 1 Additional paid in capital 4,951,123 9 Accumulated other comprehensive loss ( 289,586 ) ( 197,040 ) Accumulated deficit ( 5,038,656 ) ( 2,765,403 ) Total HWH International Inc. Stockholders’ deficit $ ( 374,893 ) $ ( 2,962,170 ) Non-controlling interests 123,780 8,666 Total Stockholders’ Deficit ( 251,113 ) ( 2,953,504 ) TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT $ 2,920,066 $ 23,710,684 The accompanying notes are an integral part of these condensed consolidated financial statements. 1 HWH International Inc. and Subsidiaries Condensed Consolidated Statements of Operations and Other Comprehensive Loss For the Three and Nine Months Ended September 30, 2024 and 2023 (Unaudited) Three Months Ended September 30, 2024 Three Months Ended September 30, 2023 (as restated) Nine Months Ended September 30, 2024 Nine Months Ended September 30, 2023 (as restated) Revenue - Membership $ - $ - $ - $ 12,583 - Non-membership 345,523 226,907 966,515 610,084 Total Revenue $ 345,523 $ 226,907 $ 966,515 $ 622,667 Cost of revenue - Membership $ - $ ( 1,147 ) $ - $ ( 13,837 ) - Non-membership ( 185,654 ) ( 85,288 ) ( 478,436 ) ( 223,987 ) Total Cost of revenue $ ( 185,654 ) $ ( 86,435 ) $ ( 478,436 ) $ ( 237,824 ) Gross profit $ 159,869 $ 140,472 $ 488,079 $ 384,843 Operating expenses: General and administrative expenses $ ( 487,394 ) $ ( 570,043 ) $ ( 2,271,325 ) $ ( 1,888,900 ) Impairment of convertible note receivable – related party, and equity method investment - related party - - ( 42,328 ) - Impairment loss on goodwill - - ( 323,864 ) - Total Operating expenses $ ( 487,394 ) $ ( 570,043 ) $ ( 2,637,517 ) $ ( 1,888,900 ) Other income (expense) Other income $ 68,473 $ 331,041 $ 236,873 $ 1,905,445 Interest expense ( 18,451 ) - ( 55,279 ) - Foreign exchange transaction gain (loss) 114,689 ( 2,521 ) 99,616 - Loss on equity method investment - related party - ( 9,956 ) ( 14,744 ) ( 73,601 ) Unrealized loss on convertible note receivable – related party ( 374,329 ) - ( 394,331 ) - Total Other (expense) income $ ( 209,618 ) $ 318,564 $ ( 127,865 ) $ 1,831,844 (Loss) / income before provision for income taxes ( 537,143 ) ( 111,007 ) ( 2,277,303 ) 327,787 Provision for income taxes - ( 45,124 ) - ( 375,004 ) Net loss $ ( 537,143 ) $ ( 156,131 ) $ ( 2,277,303 ) $ ( 47,217 ) Less: Net income (loss) attributable to Non-Controlling Interests 11,349 1,559 ( 4,050 ) 3,759 Net loss attributable to common stockholders $ ( 548,492 ) $ ( 157,690 ) $ ( 2,273,253 ) $ ( 50,976 ) Other comprehensive (loss) income, net of tax: Foreign currency translation adjustment to common stockholders $ ( 28,118 ) $ ( 68,061 ) $ ( 92,546 ) $ 6,294 Foreign currency translation adjustment to non-controlling interests 134 - 134 - Total Other comprehensive (loss) income, net of tax: $ ( 27,984 ) $ ( 68,061 ) $ ( 92,412 ) $ 6,294 Comprehensive (loss) income attributable to common stockholders Net loss $ ( 548,492 ) $ ( 157,690 ) $ ( 2,273,253 ) $ ( 50,976 ) Foreign currency translation adjustment ( 28,118 ) ( 68,061 ) ( 92,546 ) 6,294 Total Comprehensive loss attributable to common stockholders $ ( 576,610 ) $ ( 225,751 ) $ ( 2,365,799 ) $ ( 44,682 ) Comprehensive income / (loss) attributable to non-controlling interests Net income / (loss) $ 11,349 $ 1,559 $ ( 4,050 ) $ 3,759 Foreign currency translation adjustment 134 - 134 - Total Comprehensive income / (loss) attributable to non-controlling interests $ 11,483 $ 1,559 $ ( 3,916 ) $ 3,759 1 2 3 4 5 6 Three Months Ended September 30, 2024 Three Months Ended September 30, 2023 Common stock Class A common stock Class B common stock Common stock Class A common stock Class B common stock Loss per common share Basic $ ( 0.03 ) $ - $ - $ ( 0.06 ) $ ( 0.06 ) $ ( 0.06 ) Diluted $ ( 0.03 ) $ - $ - $ ( 0.06 ) $ ( 0.06 ) $ ( 0.06 ) Weighted average number of common shares outstanding Basic 16,682,451 - - 10,000 473,750 2,156,250 Diluted 16,682,451 - - 10,000 473,250 2,156,250 1 2 3 4 5 6 Nine Months Ended September 30, 2024 Nine Months Ended September 30, 2023 Common stock Class A common stock Class B common stock Common stock Class A common stock Class B common stock Loss per common share Basic $ ( 0.14 ) $ ( 0.14 ) $ ( 0.14 ) $ ( 0.02 ) $ ( 0.02 ) $ ( 0.02 ) Diluted $ ( 0.14 ) $ ( 0.14 ) $ ( 0.14 ) $ ( 0.02 ) $ ( 0.02 ) $ ( 0.02 ) Weighted average number of common shares outstanding Basic 15,904,087 13,832 62,956 10,000 473,750 2,156,250 Diluted 15,904,087 13,832 62,956 10,000 473,750 2,156,250 The accompanying notes are an integral part of these condensed consolidated financial statements. 2 HWH International Inc. and Subsidiaries Condensed Consolidated Statements of Changes in Stockholders’ Deficit For the Three and Nine Months Ended September 30, 2024 and 2023 (Unaudited) Class A Common stock Class B Common stock Common Stock Accumulated Total HWH Shares Par Value $0.0001 Shares Par Value $0.0001 Shares Par Value $0.0001 Additional Paid in Capital Other Comprehensive (Loss) Accumulated Deficit International Inc. Stockholders’ deficit Non- controlling interests Total Stockholders’ deficit Balances at December 31, 2022 473,750 $ 47 2,156,250 $ 216 10,000 $ 1 $ 9 $ ( 200,039 ) $ ( 1,610,504 ) $ ( 1,810,270 ) $ 4,836 $ ( 1,805,434 ) Net income - - - - - - - - $ 171,127 $ 171,127 $ 722 $ 171,849 Foreign currency translation adjustment - - - - - - - $ 58,843 - $ 58,843 - $ 58,843 Balances at March 31, 2023 473,750 $ 47 2,156,250 $ 216 10,000 $ 1 $ 9 $ ( 141,196 ) $ ( 1,439,377 ) $ ( 1,580,300 ) $ 5,558 $ ( 1,574,742 ) Remeasurement of Class A common stock to redemption value - - - - - - - - $ ( 425,044 ) $ ( 425,044 ) - $ ( 425,044 ) Extension Loan - - - - - - - - $ ( 136,147 ) $ ( 136,147 ) - $ ( 136,147 ) Net (loss) income - - - - - - - - $ ( 64,413 ) $ ( 64,413 ) $ 1,478 $ ( 62,935 ) Foreign currency translation adjustment - - - - - - - $ 15,512 - $ 15,512 $ 15,512 Balances at June 30, 2023 473,750 $ 47 2,156,250 $ 216 10,000 $ 1 $ 9 $ ( 125,684 ) $ ( 2,064,981 ) $ ( 2,190,392 ) $ 7,036 $ ( 2,183,356 ) Remeasurement of Class A common stock to redemption value - - - - - - - - $ ( 169,752 ) $ ( 169,752 ) - $ ( 169,752 ) Extension Loan - - - - - - - - $ ( 69,158 ) $ ( 69,158 ) - $ ( 69,158 ) Net (loss) income - - - - - - - - $ ( 157,690 ) $ ( 157,690 ) $ 1,559 $ ( 156,131 ) Foreign currency translation adjustment - - - - - - - $ ( 68,061 ) - $ ( 68,061 ) $ ( 68,061 ) Balances at September 30, 2023 473,750 $ 47 2,156,250 $ 216 10,000 $ 1 $ 9 $ ( 193,745 ) $ ( 2,461,581 ) $ ( 2,655,053 ) $ 8,595 $ ( 2,646,458 ) Balances at December 31, 2023 473,750 $ 47 2,156,250 $ 216 10,000 $ 1 $ 9 $ ( 197,040 ) $ ( 2,765,403 ) $ ( 2,962,170 ) $ 8,666 $ ( 2,953,504 ) Issuance of Common Stock to EF Hutton for Deferred Underwriting Compensation - - - - 149,443 $ 15 $ 1,509,375 - - $ 1,509,390 - $ 1,509,390 Issuance of Common Stock during Merger - - - - 13,433,858 $ 1,344 $ ( 1,369 ) - - $ ( 25 ) - $ ( 25 ) Adjustment to Temporary Equity - - - - - - $ ( 645,860 ) - - $ ( 645,860 ) - $ ( 645,860 ) Convert Common Stock Class A and B to Common Stock ( 473,750 ) $ ( 47 ) ( 2,156,250 ) $ ( 216 ) 2,630,000 $ 263 - - - - - - Revaluation for SHRG note receivable and warrants - - - - - - $ 216,188 - - $ 216,188 - $ 216,188 Change in Non-Controlling Interest Ketomei - - - - - - - - - - $ 155,514 $ 155,514 Net (loss) income - - - - - - - - $ ( 1,336,838 ) $ ( 1,336,838 ) $ 319 $ ( 1,336,519 ) Foreign currency translation adjustment - - - - - - - $ 86,818 - $ 86,818 - $ 86,818 Balances at March 31, 2024 - - - - 16,223,301 $ 1,623 $ 1,078,343 $ ( 110,222 ) $ ( 4,102,241 ) $ ( 3,132,497 ) $ 164,499 $ ( 2,967,998 ) Revaluation for SHRG note receivable - - - - - - $ 59,907 - - $ 59,907 - $ 59,907 Change in Non-Controlling Interest Ketomei - - - - - - - - - - $ ( 36,484 ) $ ( 36,484 ) Net loss - - - - - - - - $ ( 387,923 ) $ ( 387,923 ) $ ( 15,718 ) $ ( 403,641 ) Foreign currency translation adjustment - - - - - - - $ ( 151,246 ) - $ ( 151,246 ) - $ ( 151,246 ) Balances at June 30, 2024 - - - - 16,223,301 $ 1,623 $ 1,138,250 $ ( 261,468 ) $ ( 4,490,164 ) $ ( 3,611,759 ) $ 112,297 $ ( 3,499,462 ) Balance - - - - 16,223,301 $ 1,623 $ 1,138,250 $ ( 261,468 ) $ ( 4,490,164 ) $ ( 3,611,759 ) $ 112,297 $ ( 3,499,462 ) AI and AIL Debt conversion to shares - - - - 6,034,537 603 $ 3,801,156 - - $ 3,801,759 - $ 3,801,759 Revaluation for SHRG note receivable - - - - - $ 11,717 - - $ 11,717 - $ 11,717 Net (loss) income - - - - - - - - $ ( 548,492 ) $ ( 548,492 ) $ 11,349 $ ( 537,143 ) Foreign currency translation adjustment - - - - - - - $ ( 28,118 ) - $ ( 28,118 ) $ 134 $ ( 27,984 ) Balances at September 30, 2024 - - - - 22,257,838 $ 2,226 $ 4,951,123 $ ( 289,586 ) $ ( 5,038,656 ) $ ( 374,893 ) $ 123,780 $ ( 251,113 ) Balance - - - - 22,257,838 $ 2,226 $ 4,951,123 $ ( 289,586 ) $ ( 5,038,656 ) $ ( 374,893 ) $ 123,780 $ ( 251,113 ) The accompanying notes are an integral part of these condensed consolidated financial statements. 3 HWH International Inc. and Subsidiaries Condensed Consolidated Statements of Cash Flows For the Nine Months Ended September 30, 2024 and 2023 (Unaudited) 2024 2023 Nine Months Ended September 30, 2024 Nine Months Ended September 30, 2023 (as restated) Cash flows from operating activities: Net loss $ ( 2,277,303 ) $ ( 47,217 ) Adjustments to reconcile net loss to net cash used in operating activities: Interest income - ( 1,744,115 ) Foreign exchange transaction gain ( 99,616 ) - Loss on equity method investment, related party 14,744 73,601 Depreciation expense 45,529 43,385 Non-cash lease expense 377,945 382,080 Inventory write off expenses - 9,743 Impairment of convertible note receivable – related party, and equity method investment - related party 42,328 - Impairment loss on goodwill 323,864 - Unrealized loss on convertible note receivable – related party 394,331 - Loss on disposal of equipment 5,882 - Impairment loss on equipment 69,343 - Changes in operating assets and liabilities: Account receivables 1,444 ( 4,877 ) Other receivables ( 75,971 ) ( 158,182 ) Prepaid expenses 90,461 ( 272,700 ) Deposit ( 96,115 ) 975 Inventory 138 ( 3,357 ) Accounts payable and accrued expenses 173,151 ( 69,649 ) Accrued commissions ( 2,085 ) ( 52,076 ) Deferred revenue - ( 20,269 ) Operating lease liabilities ( 392,143 ) ( 365,881 ) Net cash used in operating activities $ ( 1,404,073 ) $ ( 2,228,539 ) Cash flows from investing activities: Purchases of property and equipment $ ( 30,103 ) $ ( 13,395 ) Convertible loans receivable - related party ( 850,000 ) - Investment at cost ( 14,977 ) - Cash withdrawn from trust account for redemptions 21,102,871 68,351,348 Cash withdrawn from trust account available to the Company 243,897 919,547 Cash deposited into trust account - ( 205,305 ) Net cash provided by investing activities $ 20,451,688 $ 69,052,195 Cash flows from financing activities: Repayment of loans and borrowing $ ( 82,379 ) $ - Repayment of deferred underwriting compensation ( 325,000 ) - Proceeds from repayment of due from sponsor - 9,137 Proceeds from extension loan - 205,305 Advances from related parties 2,104,937 265,914 Borrowing from notes payable - related parties - 33,475 Repayment to notes payable - related parties - ( 33,475 ) Repayment of class A common stock ( 21,102,871 ) ( 68,351,348 ) Net cash used in financing activities $ ( 19,405,313 ) $ ( 67,870,992 ) Net decrease in cash $ ( 357,698 ) $ ( 1,047,336 ) Effects of foreign exchange rate on cash 30,865 ( 22,329 ) Cash at beginning of period 1,159,201 2,789,794 Cash at end of period $ 832,368 $ 1,720,129 Supplemental disclosure of non-cash investing and financing activities Issuance of HWH common stock to EF Hutton for deferred underwriting compensation $ 1,509,375 $ - Debt to equity conversion $ 3,801,759 $ - Cash paid for interest expenses $ 55,279 $ - Valuation gain from notes receivable and warrants - SHRG $ 287,812 $ - Initial recognition of operating lease right-of-use asset and liability $ 519,353 $ 75,764 The accompanying notes are an integral part of these condensed consolidated financial statements. 4 HWH International Inc. and Subsidiaries Notes to the Condensed Consolidated Financial Statements For the Nine Months Ended September 30, 2024 and 2023 (Unaudited) NOTE 1 — DESCRIPTION OF ORGANIZATION, BUSINESS OPERATIONS HWH International Inc. (“HWH”) and its consolidated subsidiaries (collectively, the “Company”) operate a food and beverage (“F&B”) business in Singapore and South Korea. The F&B business operates four cafés, two of which are located in South Korea and two in Singapore, as well as an online healthy food store serving customers in Singapore. The Company previously operated a membership model in which individuals paid an upfront membership fee to become members. As members, these individuals received discounted access to products and services offered by the Company’s affiliates. The Company had approximately 9,000 members, primarily in South Korea. Currently, this membership business has been temporarily suspended, however the Company intends to resume this business following the ongoing restructuring of the membership model. HWH International Inc. was originally incorporated in Delaware on October 20, 2021 under the name Alset Capital Acquisition Corp. The Company was formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses (the “Business Combination”). The Company consummated the Business Combination on January 9, 2024 and changed its name from “Alset Capital Acquisition Corp.” to “HWH International Inc.” The Company is an early stage and emerging growth company and, as such, the Company is subject to all of the risks associated with early stage and emerging growth companies. On September 9, 2022, the Company entered into an agreement and plan of merger (the “Merger Agreement”) by and among the Company, HWH International Inc., a Nevada corporation (the “HWH Nevada” or “Target”) and HWH Merger Sub Inc., a Nevada corporation and a wholly owned subsidiary of the Company (“Merger Sub”). The Company and Merger Sub are sometimes referred to collectively as the “ACAX Parties.” Pursuant to the Merger Agreement, a business combination between the Company and the Target was effected through the merger of Merger Sub with and into HWH Nevada, with the Target surviving the merger as a wholly owned subsidiary of the Company (the “Merger”). Upon the closing of the Merger (the “Closing”) on January 9, 2024, the Company changed its name to “HWH International Inc.” The board of directors of the Company (i) approved and declared advisable the Merger Agreement, the Ancillary Agreements (as defined in the Merger Agreement) and the transactions contemplated thereby and (ii) resolved to recommend approval of the Merger Agreement and related transactions by the stockholders of the Company. The Target was owned and controlled by certain member officers and directors of the Company and its sponsor. The Merger was consummated following the receipt of the required approval by the stockholders of the Company and the shareholders of the Target and the satisfaction of certain other customary closing conditions. The total consideration paid at Closing (the “Merger Consideration”) by the Company to the Target’s shareholders was $ 125,000,000 , and was payable in shares of the common stock, par value $ 0.0001 per share, of the Company (“Company Common Stock”). The number of shares of the Company Common Stock paid to the shareholders of the Target as Merger Consideration was 12,500,000 , with each share being valued at $ 10.00 . NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying unaudited condensed consolidated financial statements are presented in conformity with accounting principles generally accepted in the United States of America (“US GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). These interim financial statements have been prepared on the same basis as the Company’s annual financial statements and, in the opinion of management, reflect all adjustments, consisting only of normal recurring adjustments, which are necessary for a fair statement of the Company’s financial information. These interim results are not necessarily indicative of the results to be expected for the year ending December 31, 2024 or any other interim periods or for any other future years. These unaudited condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and the notes thereto included in the Company’s Form 10-K for the year ended November 30, 2023 filed on February 28, 2024 and audited consolidated financial statements of HWH Nevada for the year ended December 31, 2023 included in the form 8-K/A filed with SEC on March 25, 2024. 5 Through November 30, 2023, HWH (then known as Alset Capital Acquisition Corp.) reported on a twelve-month fiscal year that ended on November 30. In connection with the Business Combination, the Company’s fiscal year end was changed from November 30 to December 31. As a result of this change, the Company had a one-month transition period that began on December 1, 2023 and ended on December 31, 2023. For details see note 18 - Change in Fiscal Year. The condensed consolidated financial statements include all accounts of the Company and its majority owned and controlled subsidiaries. The Company consolidates entities in which it owns more than 50% of the voting common stock and controls operations. All intercompany transactions and balances among consolidated subsidiaries have been eliminated. The following chart describes the Company’s ownership of various subsidiaries: The Company mainly focuses on the F&B business. During the nine months ended September 30, 2024 and 2023, substantially all of the Company’s business was generated by its wholly owned subsidiaries, 0 % and 2 % from HWH World Inc. (“HWH Korea”), respectively, and 100 % and 98 % from F&B business, respectively. F&B business was generated by the following subsidiaries at September 30, 2024 and 2023, respectively: 37 % and 48 % from Alset F&B One Pte. Ltd (“F&B1”), 5 % and 6 % from Hapi Café Korea Inc.(“HCKI”), 20 % and 22 % from Hapi Café SG Pte. Ltd. (“HCSGPL”), 9 % and 22 % from Alset F&B (PLQ) Pte. Ltd. (“F&BPLQ”) and 29 % and 0 % from Ketomei Pte. Ltd. (“KPL”). HWH Korea was incorporated in the Republic of Korea (“South Korea”) on May 7, 2019. HWH Korea is in the business of sourcing and distributing dietary supplements and other health products through its network of members in South Korea. HWH Korea generates product sales via its direct sale model as products are sold to its members. Through the use of a Hapi Gig platform that combines e-commerce, social media, and a customized rewards system, HWH Korea equips, trains, and empowers its members. F&B1 was incorporated in Singapore on April 10, 2017, HCSGPL was incorporated in Singapore on April 4, 2022, F&BPLQ was incorporated in Singapore on November 11, 2022 and KPL was incorporated in Singapore on September 17, 2019. F&B1, HCSGPL, F&BPLQ and KPL are in the F&B business in Singapore. In the second quarter of 2024 the Company ceased operations of its subsidiary Alset F&B (PLQ) Pte. Ltd. Due to the closure of this subsidiary the Company wrote off $ 5,882 of fixed assets, which is included in general and administrative expenses, and recorded a gain on termination of lease of $ 248 , which is included in other income on the Company’s Statement of Operations for the nine months ended September 30, 2024. 6 Emerging Growth Company 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, as amended (the “JOBS Act”), and it may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the independent registered public accounting firm attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved. Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used. Functional and Reporting Currency The functional and reporting currency of the Company is the United States dollar (“$”). The financial records of the Company’s subsidiaries located in South Korea, Singapore, Hong Kong, and Malaysia are maintained in their local currencies, the Korean Won (₩), Singapore Dollar (S$), Hong Kong Dollar (HK$) and Malaysian Ringgit (MYR), which are also the functional currencies of these entities. Use of Estimates The preparation of the financial statements in conformity with US GAAP requires the Company’s management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the balance sheet. Making estimates requires management to exercise significant judgment. It is at least reasonably possible that the estimate of the effect of a condition, situation or set of circumstances that existed at the date of the balance sheet, which management considered in formulating its estimate, could change in the near term due to one or more future confirming events. Accordingly, the actual results could differ significantly from those estimates. Cash and Cash Equivalents The Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents. The Company had cash of $ 832,368 and $ 1,159,201 as of September 30, 2024 and December 31, 2023, respectively. The Company had no cash equivalents as of September 30, 2024 and December 31, 2023. 7 Investments held in Trust Account At September 30, 2024 and December 31, 2023, the Company had approximately $ 0 and $ 21 million, respectively, in investments in treasury securities held in the Trust Account. In connection with the closing of the Business Combination on January 9, 2024, Class A Common Stock stockholders redeemed 1,942,108 shares for approximately $ 21 million held in the Trust Account. The Trust Account was closed in May 2024. Fair Value of Financial Instruments The Company adopted Accounting Standards Codification (“ASC”) 820, “Fair Value Measurements and Disclosures”, for assets and liabilities measured at fair value on a recurring basis. ASC 820 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 describes three levels of inputs that may be used to measure fair value: Level 1: Observable inputs such as quoted market prices in active markets for identical assets or liabilities Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data Level 3: Unobservable inputs for which there is little or no market data, which require the use of the reporting entity’s own assumptions For purpose of this disclosure, the fair value of a financial instrument is the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced sale or liquidation. The carrying values reported in balance sheets for current assets and liabilities approximate their estimated fair market values based on the short-term maturity of these instruments. Investment Securities at Cost Investments in equity securities without readily determinable fair values are measured at cost minus impairment adjusted by observable price changes in orderly transactions for the identical or similar investments of the same issuer. These investments are measured at fair value on a nonrecurring basis when there are events or changes in circumstances that may have a significant adverse effect. An impairment loss is recognized in the condensed consolidated statements of comprehensive income equal to the amount by which the carrying value exceeds the fair value of the investment. Inventory Inventory is stated at the lower of cost or net realizable value. Cost is determined using the first-in, first-out method and includes all costs in bringing the inventories to their present location and condition. Net realizable value is an estimated selling price in the ordinary course of business less the estimated costs necessary to make the sale. As of September 30, 2024 and December 31, 2023, inventory consisted of finished goods procured from suppliers. The Company continuously evaluates the need for reserve for obsolescence and possible price concessions required to write-down inventory to its net realizable value. Leases The Company follows FASB ASC Topic 842 in accounting for its operating lease right-of-use assets and operating lease liabilities. At inception of a contract, the Company assesses whether a contract is, or contains, a lease. A contract is or contains a lease if it conveys the right to control the use of an identified asset for a period of time in exchange of a consideration. To assess whether a contract is or contains a lease, the Company assesses whether the contract involves the use of an identified asset, whether it has the right to obtain substantially all of the economic benefits from the use of the asset and whether it has the right to control the use of the asset. The right-of-use assets and related lease liabilities are recognized at the lease commencement date. The Company recognizes operating lease expenses on a straight-line basis over the lease term. For leases that contain related non-lease components, such as maintenance, the Company will account for these payments as a single lease component. Right-of-use of assets The right-of-use of asset is measured at cost, which comprises the amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and less any lease incentive received. 8 Lease liabilities Lease liability is measured at the present value of the outstanding lease payments at the commencement date, discounted using the Company’s incremental borrowing rate. Lease payments included in the measurement of the lease liability comprise mainly of fixed lease payments. Short-term leases and leases of low value assets The Company has elected to not recognize right-of-use assets and lease liabilities for short-term leases that have a lease term of 12 months or less and leases of low value assets. Lease payments associated with these leases are expensed as incurred. Property, Plant and Equipment Property, plant and equipment are recorded at cost, less depreciation. Repairs and maintenance are expensed as incurred. Expenditures incurred as a consequence of acquiring or using the asset, or that increase the value or productive capacity of assets are capitalized. When property and equipment is retired, sold, or otherwise disposed of, the asset’s carrying amount and related accumulated depreciation are removed from the accounts and any gain or loss is included in statement of operations. Depreciation is computed by the reducing balance method (after considering their respective estimated residual values) over the estimated useful lives of the respective assets as follows: SCHEDULE OF ESTIMATED USEFUL LIVES OF PROPERTY PLANT AND EQUIPMENT Office Equipment 3 – 5 years Furniture and Fittings 3 – 5 years Kitchen Equipment 3 – 5 years Operating Equipment 3 – 5 years Leasehold Improvements Shorter of lease life or asset life The Company reviews the carrying value of property and equipment for impairment whenever events and circumstances indicate that the carrying value of an asset may not be recoverable from the estimated future cash flows expected to result from its use and eventual disposition. In cases where undiscounted expected future cash flows are less than the carrying value, an impairment loss is recognized equal to an amount by which the carrying value exceeds the fair value of assets. The factors considered by management in performing this assessment include current operating results, trends, and prospects, as well as the effects of obsolescence, demand, competition, and other economic factors. As at September 30, 2024, the Company has determined the value-in-use to be zero based on the discounted cash flow of the cash generating unit (“CGU”), which involves the cash flow projections covering a 3-year period and the fair value less cost of disposal to be zero considering the re-sale value of these assets to be insignificant. Based on the assessment, the recoverable amount of the CGU was determined to be zero, which was below the carrying amount of these non-financial assets. Accordingly, impairment losses on plant and equipment of $ 97,594 are recognized in general and administrative expenses in the condensed consolidated statement of operations and other comprehensive loss for the financial year ended September 30, 2024. Deposit Deposit represents rental deposit paid for the office and the cafes used. Revenue Recognition ASC 606 – Revenue from Contracts with Customers (“ASC 606”), establishes principles for reporting information about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity’s contracts to provide goods or services to customers. In accordance with ASC 606, revenue is recognized when a customer obtains control of promised goods or services. The amount of revenue recognized reflects the consideration to which the Company expects to be entitled to receive in exchange for these goods or services. The provisions of ASC 606 include a five-step process by which the determination of revenue recognition, depicting the transfer of goods or services to customers in amounts reflecting the payment to which the Company expects to be entitled in exchange for those goods or services. ASC 606 requires the Company to apply the following steps: (1) identify the contract with the customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations in the contract; and (5) recognize revenue when, or as, performance obligations are satisfied. The Company generates its revenue primarily from membership fees, product sales and F&B business. Membership Fee: The Company collects an annual membership fee from its members. The fee is fixed, paid in full at the time upon joining the membership and is not refundable. The Company’s performance obligation is to provide its members the right to (a) purchase products from the Company, (b) access to certain back-office services, (c) receive commissions and (d) attend corporate events. The associated performance obligation is satisfied over time, generally over the term of the membership agreement which is for a one-year period. The Company recognizes revenue from membership fee over the one-year period of the membership. 9 Product Sales: The Company’s performance obligation is to transfer ownership of its products to its members. The Company generally recognizes revenue when product is delivered to its members. Revenue is recorded net of applicable taxes, allowances, refunds or returns. The Company receives the net sales price in cash or through credit card payments at the point of sale. If any member returns a product to the Company on a timely basis, they may obtain a replacement product from the Company for such returned product. We do not have buyback program. However, when the customer requests a return and management decides that the refund is necessary, we initiate the refund after deducting all the benefits that a member has earned. The returns are deducted from our sales revenue on our financial statements. Allowances for product and membership returns are provided at the time the sale is recorded. This accrual is based upon historical return rates for each country and the relevant return pattern, which reflects anticipated returns to be received over a period of up to 12 months following the original sale. Product and membership returns for the three months ended September 30, 2024 and 2023 were both $ 0 . Product and membership returns for the nine months ended September 30, 2024 and 2023 were $ 0 and $ 1,184 , respectively. The table below represents a breakout of the returns related to product sales and the returns related to memberships: SCHEDULE OF PRODUCT SALES AND RETURNS RELATED TO MEMBERSHIPS Membership Products Total Returns Membership Products Total For the three months ended: September 30, 2024 $ - $ - $ - September 30, 2023 $ - $ - $ - Revenue return $ - $ - $ - Membership Products Total Returns Membership Products Total For the nine months ended: September 30, 2024 $ - $ - $ - September 30, 2023 $ 1,184 $ - $ 1,184 Revenue returns 1,184 - 1,184 Food and Beverage : The revenue received from Food and Beverage business for the three months ended September 30, 2024 and 2023 was $ 345,523 and $ 226,907 , respectively. The revenue received from Food and Beverage business for the nine months ended September 30, 2024 and 2023 was $ 966,515 and $ 610,084 , respectively. Contract assets and liabilities Below is a summary of the beginning and ending balances of the Company’s contract assets and liabilities as of September 30, 2024 and December 31, 2023. SCHEDULE OF CONTRACT ASSETS AND LIABILITIES September 30, 2024 December 31, 2023 Prepaid Sales Commission Balances at the beginning of the period $ - $ 6,839 Movement for the period - ( 6,839 ) Balances at the end of the period $ - $ - September 30, 2024 December 31, 2023 Deferred Revenue Balances at the beginning of the period $ - $ 21,198 Movement for the period - ( 21,198 ) Balances at the end of the period $ - $ - 10 Value-added Tax The Company is obligated to pay value-added tax (“VAT”), among other things, on its inventory purchase as well as its rent payments and payment of professional fees. As of September 30, 2024 and December 31, 2023, included in other receivables was VAT paid of $ 41,885 and $ 37,179 , respectively, due primarily to the purchase of inventory and payment of rents and accounting fees. Cost of revenue Cost of revenue consists of the cost of procuring finished goods from suppliers and related shipping and handling fees from 3 rd parties money platform, contractor fees for part-time staff, franchise commission and sales commission from membership business. Below is a breakdown of the Company’s cost of revenue for the three and nine months ended September 30, 2024 and 2023. For the three months ended: SCHEDULE OF COST OF REVENUE Total September 30, 2024 Finished goods $ 136,634 Related shipping 330 Handling fee 13,370 Contractor fee 15,846 Franchise commission 4,268 Sales commission - Depreciation 15,206 Total of Cost of revenue $ 185,654 September 30, 2023 Finished goods $ 39,568 Related shipping 2,278 Handling fee 6,141 Contractor fee 7,543 Franchise commission 5,316 Sales commission 1,147 Inventory written off 9,743 Depreciation 14,699 Total of Cost of revenue $ 86,435 For the nine months ended: Total September 30, 2024 Finished goods $ 342,845 Related shipping 3,717 Handling fee 36,847 Contractor fee 36,067 Franchise commission 13,768 Depreciation 45,192 Total of Cost of revenue $ 478,436 September 30, 2023 Finished goods $ 112,345 Related shipping 7,075 Handling fee 16,033 Contractor fee 21,979 Franchise commission 14,061 Sales commission 13,837 Inventory written off 9,743 Depreciation 42,751 Total of Cost of revenue $ 237,824 Shipping and Handling Fees The Company utilizes the practical expedient under ASC 606-10-25-18B to account for its shipping and handling as fulfillment activities, and not a promised service (a revenue element). Shipping and handling fees are included in costs of revenue within the statements of operations. Commission Expense The Company compensates its sales leaders with leadership incentives for services rendered, relating to the development, retention, and management of their sales organizations. Leadership incentives are payable based on achieved sales volume, which are recorded in cost of revenue. Member will get 25 % commission of the membership fee income if the member successfully refers a new member to subscribe to the membership. The commission will be payable after the referee’s membership is confirmed and been paid by the new member. 11 Advertising Expenses Costs incurred for advertising the Company’s products are charged to operations as incurred. Advertising expenses for the three months ended September 30, 2024 and 2023 were $ 8,124 and $ 2,679 , respectively. Advertising expenses for the nine months ended September 30, 2024 and 2023 were $ 14,690 and $ 3,888 , respectively. Income Taxes The Company accounts for income taxes pursuant to the provision of ASC 740-10, “Accounting for Income Taxes” (“ASC 740-10”), which requires, among other things, assets and liabilities approach to calculating deferred income taxes. The assets and liabilities approach requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amounts and the tax bases of assets and liabilities. A valuation allowance is provided to offset any net deferred tax assets for which management believes it is more likely than not that the net deferred tax assets will not be realized. Tax positions that meet the more likely than not recognition threshold are measured at the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority. The Company follows the provision of ASC 740-10 related to Accounting for Uncertain Income Tax Positions. When tax returns are filed, there may be uncertainty about the merits of positions taken or the amount of the position that would be ultimately sustained. In accordance with the guidance of ASC 740-10, the benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. The Company has not recorded any unrecognized tax benefits. The Company’s policy is to recognize interest and penalties related to income taxes in income tax expense. Earnings (Loss) per Share The Company presents basic and diluted earnings (loss) per share data for its common shares. Basic earnings (loss) per share is calculated by dividing the profit or loss attributable to common stock shareholders of the Company by the weighted-average number of common shares outstanding during the year, adjusted for treasury shares held by the Company. Diluted earnings (loss) per share is determined by adjusting the profit or loss attributable to common stock shareholders and the weighted-average number of common shares outstanding, adjusted for treasury shares held, for the effects of all dilutive potential ordinary shares, which comprise convertible securities, such as stock options, convertible bonds and warrants. At September 30, 2024 there were 4,549,370 potentially dilutive warrants outstanding. At September 30, 2023 there were 4,549,375 potentially dilutive warrants outstanding and 909,875 potentially dilutive underlying rights. Non-controlling interests Non-controlling interests represent the equity in a subsidiary not attributable, directly or indirectly, to owners of the Company, and are presented separately in the Consolidated Statements of Operations and Other Comprehensive Income, and within equity in the Consolidated Balance Sheets, separately from equity attributable to owners of the Company. On September 30, 2024 and December 31, 2023, the aggregate non-controlling interests in the Company were $ 123,780 and $ 8,666 , respectively. 12 Reclassifications Certain amounts in the prior period financial statements have been reclassified to conform with the current period’s presentation. Liquidity and Capital Resources In the nine months ended September 30, 2024, we incurred a net loss, a loss from operations and negative cash flow from operations as we expanded our business of operating cafés and restructured our membership business. Notwithstanding the above, the Company believes that the available cash in the Company’s bank accounts, anticipated cash from operations, and financing availability from related parties are sufficient to fund our operations for at least the next 12 months. The Company’s capital requirements for the planned expansion are based on, among other items, geographical specific property costs, team requirements, and marketing steps needed. Our expansion shall consist of plans to take over leases of existing Hapi Cafes we currently do not own, as we look to add Hapi Cafes over the next two (2) years. If we take over these existing leases, it will require a minimum investment for each lease we take over for each Hapi Café. There is no guarantee that we will be able to execute on our plans as laid out above. The accompanying financial statements have been prepared assuming the Company will continue as a going concern and do not contain any adjustments that might be required should the Company be unable to continue as a going concern. On April 24, 2024, the Company entered into a Credit Facility Agreement (the “Credit Agreement”) with Alset Inc., a Texas corporation and the Company’s indirect, majority stockholder, pursuant to which Alset Inc. has provided the Company a line of credit facility (the “Credit Facility”) which provides a maximum, aggregate credit line of up to $ 1,000,000 . As of September 30, 2024, there are no outstanding amounts related to the Credit Facility and the credit remains $ 700,000 available to draw as on September 30, 2024. Pursuant to the Credit Agreement, the Company may request an advance (each, an “Advance”) on the Credit Facility. Each Advance shall bear a simple interest rate of three percent (3%) per annum. Each Advance and all accrued but unpaid interest shall be due and payable at the first (1 st ) anniversary of the effective date of the Credit Agreement. The Company may at any time during the term of the Credit Agreement prepay a portion or all amounts of its indebtedness without penalty. Each advance shall not be secured by a lien or other encumbrance on any of the Company’s assets, but shall be solely a general unsecured debt obligation of the Company. The Company has obtained letters of financial support from Alset International Limited and Alset Inc., a direct and indirect majority owner of the Company, respectively. Alset International Limited and Alset Inc. committed to provide any additional funding required by the Company and would not demand repayment through twelve months from the issuance of these condensed consolidated financial statements. Recent accounting pronouncement Management does not believe that any recently issued, but not effective, accounting standards, if currently adopted, would have a material effect on the Company’s consolidated financial statements. In November 2023, the Financial Accounting Standards Board (FASB) issued ASU No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (ASU 2023-07), which requires an enhanced disclosure of significant segment expenses on an annual and interim basis. This guidance is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. Early adoption is permitted. Upon adoption, the guidance should be applied retrospectively to all prior periods presented in the financial statements. We do not expect the adoption of this guidance to have a material impact on our consolidated financial statements. NOTE 3 - MERGER WITH HWH INTERNATIONAL INC. (A NEVADA CORPORATION) HWH International Inc. (f.k.a. Alset Capital Acquisition Corp.; “SPAC”, the “Company”) was a special purpose acquisition company, incorporated in Delaware on October 20, 2021 and formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses. On January 9, 2024, the Company, HWH International Inc. (a Nevada corporation, “HWH Nevada”) and HWH Merger Sub Inc. consummated the merger (the “Reverse Recapitalization”) pursuant to an agreement and plan of merger dated as of September 9, 2022. The transaction was accounted for as a Reverse Recapitalization in accordance with US GAAP. Under this method of accounting, SPAC was treated as the “acquired” company for financial reporting purposes. This determination is primarily based on the fact that subsequent to the Reverse Recapitalization, HWH Nevada stockholders comprise a majority of voting power on the Company, most of senior management of HWH Nevada continued as senior management of the combined company and identified a majority of the members of the board of directors of the combined company, both companies are under common control; and HWH Nevada’s operations comprise the ongoing operations of the combined company. Accordingly, for accounting purposes, the Company is considered to be a continuation of HWH Nevada, with the net identifiable assets of SPAC deemed to have been acquired by HWH Nevada in exchange for HWH Nevada common shares accompanied by a recapitalization, with no goodwill or intangible assets recorded. 13 In connection with the Business Combination: ● The holders of 8,591,072 Public Shares properly exercised their right to have such shares redeemed for a full pro rata portion of the trust account holding the proceeds from the IPO. ● Immediately prior to the consummation of the Reverse Recapitalization (i) each of the 1,972,896 shares of SPAC’s Class A Common Stock was cancelled and converted into 1,972,896 shares of the Company’s common stock; (ii) each of the issued and outstanding 2,156,250 shares of SPAC’s Class B Common Shares were converted into 2,156,250 shares of SPAC’s Class A Common Stock and subsequently into 2,156,250 shares of the Company’s common stock; (iii) each of the SPAC’s 476,890 units were split into their component securities; and (iv) 909,875 new shares of the Company’s common stock were issued in connection with the conversion of the SPAC’s rights into the Company’s common shares. ● 12,500,000 shares of the Company’s common stock were delivered as consideration in the Business Combination ● 149,443 shares of the Company’s common stock were issued to a third party as payment for $ 1,509,375 of underwriting compensation. The transaction described above was a transaction between entities under common control. SPAC, prior to the Business Combination, was 26 % owned by Alset International Limited, a public company listed on the Singapore Exchange Securities Trading Limited and 32 % owned by Alset Inc., the ultimate owner of both SPAC and HWH Nevada. HWH Nevada was wholly-owned by Alset International Limited. In the transactions under common control, financial statements and financial information were presented as of the beginning of the period as though the assets and liabilities had been transferred at that date. SCHEDULE OF RESTATED CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS AND BALANCE SHEETS Condensed Consolidated Statement of Operations and Other Comprehensive Loss for the Nine Months Ended on September 30, 2023 As SPAC previously booked Merger with HWH-NV As restated Revenue -Membership $ - $ 12,583 $ 12,583 -Non-membership - 610,084 610,084 Total revenue $ - $ 622,667 $ 622,667 Cost of revenue -Membership $ - $ ( 13,837 ) $ ( 13,837 ) -Non-membership - ( 223,987 ) ( 223,987 ) Total cost of revenue $ - $ ( 237,824 ) $ ( 237,824 ) Gross profit $ - $ 384,843 $ 384,843 Operating expenses: General and administrative expenses $ ( 563,301 ) $ ( 1,325,599 ) $ ( 1,888,900 ) Total operating expenses $ ( 563,301 ) $ ( 1,325,599 ) $ ( 1,888,900 ) Other income (expenses) Other income $ 1,744,115 $ 161,330 $ 1,905,445 Loss on equity method investment, related party - ( 73,601 ) ( 73,601 ) Total other income $ 1,744,115 $ 87,729 $ 1,831,844 Income (loss) before provision for income taxes $ 1,180,814 ( 853,027 ) 327,787 Provision for income taxes ( 375,004 ) - ( 375,004 ) Net income (loss) $ 805,810 $ ( 853,027 ) $ ( 47,217 ) Less: Net income attributable to Non-Controlling Interests - 3,759 3,759 Net income (loss) attributable to the common shareholders $ 805,810 $ ( 856,786 ) $ ( 50,976 ) Other comprehensive income: Foreign exchange translation adjustment - 6,294 6,294 Total Other comprehensive income, net of tax $ - $ 6,294 $ 6,294 Comprehensive income (loss): $ 805,810 $ ( 850,492 ) $ ( 44,682 ) 14 Condensed Consolidated Balance Sheet as of December 31, 2023 As SPAC previously booked Merger with HWH-NV As restated ASSETS Current Assets Cash $ 280,398 $ 878,803 $ 1,159,201 Account receivable, net - 28,611 28,611 Inventory - 1,977 1,977 Other receivables, net - 41,203 41,203 Prepaid expenses 100,000 6,862 106,862 Total Current Assets $ 380,398 $ 957,456 $ 1,337,854 Non-Current Assets Property and equipment, net $ - $ 129,230 $ 129,230 Cash and marketable securities held in Trust Account 21,346,768 - 21,346,768 Deposits - 298,324 298,324 Operating lease right-of-use assets, net - 598,508 598,508 Total Non-Current Assets $ 21,346,768 $ 1,026,062 $ 22,372,830 TOTAL ASSETS $ 21,727,166 $ 1,983,518 $ 23,710,684 LIABILITIES AND STOCKHOLDERS’ EQUITY Current Liabilities Accounts payable and accrued expenses $ 30,155 $ 137,199 $ 167,354 Accrued commissions - 85,206 85,206 Due to related parties, net 205,305 2,118,495 2,323,800 Operating lease liabilities - current - 429,687 429,687 Deferred underwriting fee payable 3,018,750 - 3,018,750 Total Current Liabilities $ 3,254,210 $ 2,770,587 $ 6,024,797 Non-Current Liabilities Operating lease liabilities - Non-current $ - $ 182,380 $ 182,380 Total Non-Current Liabilities $ - $ 182,380 $ 182,380 Commitments and Contingencies - - - Temporary equity: Class A common stock subject to possible redemption; 1,976,036 shares (at approximately $ 10.35 per share) as of December 31, 2023 $ 20,457,011 $ - $ 20,457,011 Stockholders’ Equity Preferred stock, $ 0.001 par value; 10,000,000 shares authorized; none issued and outstanding as of December 31, 2023 - - - Common stock, $ 0.0001 par value; 50,000,000 shares authorized; 10,000 issued and outstanding as of December 31, 2023 - 1 1 Class A common stock, $ 0.0001 par value; 50,000,000 shares authorized; 473,750 issued and outstanding as of December 31, 2023 47 - 47 Class B common stock, $ 0.0001 par value; 50,000,000 shares authorized; 2,156,250 issued and outstanding as of December 31, 2023 216 - 216 Common stock value 216 - 216 Additional paid in capital - 9 9 Accumulated other comprehensive loss - ( 197,040 ) ( 197,040 ) Accumulated deficit ( 1,984,318 ) ( 781,085 ) ( 2,765,403 ) Total Stockholders’ Deficit $ ( 1,984,055 ) $ ( 978,115 ) $ ( 2,962,170 ) Non-controlling interests - 8,666 8,666 Total Stockholders’ Deficit ( 1,984,055 ) ( 969,449 ) ( 2,953,504 ) TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT $ 21,727,166 $ 1,983,518 $ 23,710,684 NOTE 4 — ACCOUNTS RECEIVABLE, NET Accounts receivable, net at September 30, 2024, December 31, 2023, September 30, 2023 and December 31, 2022 of $ 35,067 , $ 28,611 , $ 24,189 and $ 9,070 , respectively, represent collection received by the credit card processor in F&B business and rent receivable. Accounts receivable are recorded at invoiced amounts net of an allowance for credit losses and do not bear interest. The allowance for credit losses is the Company’s best estimate of the amount of probable credit losses in the Company’s existing accounts receivable. The measurement and recognition of credit losses involves the use of judgment. Management’s assessment of expected credit losses includes consideration of current and expected economic conditions, market and industry factors affecting the Company’s customers (including their financial condition), the aging of account balances, historical credit loss experience, customer concentrations, customer creditworthiness, and the existence of sources of payment. The Company also establishes an allowance for credit losses for specific receivables when it is probable that the receivable will not be collected and the loss can be reasonably estimated. Accounts receivable considered uncollectible are charged against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. As of September 30, 2024 and December 31, 2023, the allowance for credit losses was an immaterial amount. The Company does not have any off-balance sheet credit exposure related to its customers. NOTE 5 — PREPAID COMMISSIONS During the normal course of business, the Company pays commission to its members for product sales as well as membership sales. Prepaid commissions are recorded for commissions paid on membership sales and recognized as an expense over the same period as the related membership revenue. 15 NOTE 6 — INVENTORY As of September 30, 2024 and December 31, 2023, the balance of finished goods was $ 1,894 and $ 1,977 , respectively. There is no provision for slow-moving or obsolete inventory during the three and nine months ended September 30, 2024. During the three and nine months ended September 30, 2023, the Company wrote off $ 9,743 of expired, slow-moving and obsolete inventory. This was recorded in the Company’s consolidated statement of operations in cost of revenue (non-membership) during the three and nine months ended September 30, 2023. NOTE 7 — PROPERTY AND EQUIPMENT, NET The components of property and equipment are as follows: SCHEDULE OF PROPERTY AND EQUIPMENT, NET Total September 30, 2024 Cost: Office Equipment $ 40,145 Furniture and Fittings 44,878 Kitchen Equipment 29,279 Operating Equipment 12,292 Leasehold Improvements 143,736 Accumulated Depreciation: Office equipment ( 32,283 ) Furniture and Fittings ( 42,439 ) Kitchen Equipment ( 13,523 ) Operating Equipment ( 5,195 ) Leasehold Improvements ( 67,835 ) Impairment: Office equipment ( 7,182 ) Furniture and Fittings ( 2,439 ) Kitchen Equipment ( 9,469 ) Operating Equipment ( 3,658 ) Leasehold Improvements ( 49,589 ) Total, net $ 36,718 December 31, 2023 Cost: Office Equipment $ 30,861 Furniture and Fittings 46,376 Kitchen Equipment 23,044 Operating Equipment 8,522 Leasehold Improvements 122,083 Accumulated Depreciation: Office Equipment ( 15,848 ) Furniture and Fittings ( 31,518 ) Kitchen Equipment ( 8,368 ) Operating Equipment ( 3,373 ) Leasehold Improvements ( 42,549 ) Total, net $ 129,230 For the three months ended September 30, 2024 and 2023, the Company recorded depreciation expenses of $ 15,320 and $ 14,910 , and impairment of property and equipment of $ 69,343 and $ 0 , respectively. For the nine months ended September 30, 2024 and 2023, the Company recorded depreciation expenses of $ 45,529 and $ 43,385 and impairment of property and equipment of $ 69,343 and $ 0 , respectively. The impairment was determined by the Company based on the discounted cash flow of the cash generating unit (“CGU”), which involves the cash flow projections covering a 3-year period and the fair value less cost of disposal. Based on the assessment, the recoverable amount of the CGU was determined to be zero, which was below the carrying amount of these non-financial assets. As of September 30, 2024, the Company disposed the office equipment, at cost of $ 7,429 , and the furniture and fittings, at cost of $ 2,784 , from F&BPLQ due to close down of café. $ 5,882 loss on disposal of PPE was recorded in the general and administrative expenses. NOTE 8 — INVESTMENTS AT COST Investments in equity securities without readily determinable fair values are measured at cost minus impairment adjusted by observable price changes in orderly transactions for the identical or a similar investment of the same issuer. These investments are measured at fair value on a nonrecurring basis when there are events or changes in circumstances that may have a significant adverse effect. An impairment loss is recognized in the consolidated statements of comprehensive income equal to the amount by which the carrying value exceeds the fair value of the investment. No impairment was recorded as of and for the nine months ended September 30, 2024. Joint Venture On April 25, 2024, the Company entered into a binding term sheet (the “Term Sheet”) through its subsidiary Health Wealth Happiness Pte. Ltd. (“HWHPL”) outlining a joint venture with Chen Ziping, an experienced entrepreneur in the travel industry, and Chan Heng Fai Ambrose, HWH’s Executive Chairman, as a part of HWH’s strategy of building its travel business in Asia. The planned joint venture company (referred to here as the “JVC”) will be known as HapiTravel Holding Pte. Ltd. The JVC will be initially owned as follows: (a) HWHPL will hold 19 % of the shares in the JVC; (b) Mr. Chan will hold 11 %; and (c) the remaining 70 % of the shares in the JVC are to be held by Mr. Chen. As of September 30, 2024, HapiTravel Holding Pte. Ltd. has not opened a bank account and the Company has not paid the subscription fee. Ideal Food & Beverage Pte. Ltd. On March 14, 2024, the Company entered into a share subscription agreement through its subsidiary Alset F&B Holding Pte. Ltd. (“F&BH”) for Ideal Food & Beverage Pte. Ltd. (“IFBPL”) with the subscription of 19,000 shares constituting 19 % of the issued shares of IFBPL. The subscription fee of $ 14,010 was paid to IFBPL on May 23, 2024. NOTE 9 — COMMISSIONS EXPENSE Accrued commissions as of September 30, 2024 and December 31, 2023 represent mainly sales commission payable. For the three months ended September 30, 2024 and 2023, sales commission expenses of $ 0 and $ 1,147 respectively, were recorded and included in cost of revenue in the Company’s consolidated statement of operations. For the nine months ended September 30, 2024 and 2023, sales commission expenses of $ 0 and $ 13,837 respectively, were recorded and included in cost of revenue in the Company’s consolidated statement of operations. 16 NOTE 10 – LOAN DUE TO THIRD PARTY Loans for Operations The Company’s subsidiary, Ketomei Pte Ltd (“Ketomei”) has a loan from DBS Bank Limited, which was used to fund Ketomei’s current operations. Ketomei owes the bank $ 43,236 at September 30, 2024. Ketomei also borrowed funds from an individual to whom Ketomei owes $4,684 at September 30, 2024. Promissory Note to EF Hutton LLC On December 18, 2023, the Company’s subsidiary, HWH International Inc. entered into a Satisfaction and Discharge of Indebtedness Agreement in connection with an underwriting agreement previously entered into by HWH and EF Hutton LLC (“EF Hutton”), a division of Benchmark Investments, LLC, under which in lieu of HWH tendering the full amount due of $ 3,018,750 , the underwriters accepted a combination of $ 325,000 in cash paid upon the closing of Business Combination, 149,443 shares of the Company’s common stock and a $ 1,184,375 promissory note as full satisfaction. This agreement was effective at the closing of Business Combination on January 9, 2024. The 149,443 shares were issued as of the price of $ 10.10 , totaling the amount of $ 1,509,375 . The fair value of the HWH shares at issuance on January 9, 2024 was $ 2.82 per share or $ 421,429 . No gain or loss was recognized upon issuance of the shares on January 9, 2024 as this was an adjustment to prior underwriting costs accounted for in equity. The promissory note carries interest rate equal to SOFR (secured overnight financing rate for U.S. Government Securities Business Day published by the Federal Reserve Bank of New York) plus a margin of one percent. The principal amount of the promissory note and any accrued interest shall mature (i) partially in the event HWH completes an offering within one year of the date of the promissory note, the amount of outstanding debt maturing being proportionate to the amount of proceeds of the future offering, or (ii) in partial installments through October of 2028, the outstanding balance being paid annually until the balance owed is paid in full. NOTE 11 — DUE TO ALSET INC . Alset Inc (“AEI”) is our ultimate holding company that is incorporated in the United States of America. The amount due to AEI represents short-term working capital advances to the Company for its daily operations. There is no written, executed agreement and no financial/non-financial covenants and the amount due to AEI is non-interest bearing. Since the amount due to AEI is due upon request, it is classified as a current liability. The amounts due to AEI at September 30, 2024 and December 31, 2023 are $ 210,927 and $ 202,645 respectively. On April 24, 2024, the Company entered into a Credit Facility Agreement (the “Credit Agreement”) with Alset Inc., pursuant to which AEI has provided the Company a line of credit facility (the “Credit Facility”) which provides a maximum, aggregate credit line of up to $ 1,000,000 . Pursuant to the Credit Agreement, the Company may request an advance (each, an “Advance”) on the Credit Facility. Each Advance shall bear a simple interest rate of three percent ( 3 %) per annum. Each Advance and all accrued but unpaid interest shall be due and payable at the first (1 st ) anniversary of the effective date of the Credit Agreement. The Company may at any time during the term of the Credit Agreement prepay a portion or all amounts of its indebtedness without penalty. Each Advance shall not be secured by a lien or other encumbrance on any of the Company’s assets, but shall be solely a general unsecured debt obligation of the Company. On September 24, 2024 the Company drew $ 300,000 from the credit line and accrued $ 3,164 in interest. On September 30, 2024, $ 0 of this amount remained outstanding. On September 24, 2024, the Company entered into a Debt Conversion Agreement (the “AEI Conversion”) with Alset Inc., pursuant to which a debt of $ 300,000 due to AEI was converted into shares of the Company’s common stock at a price per share of $ 0.63 for a total of 476,190 shares NOTE 12 — DUE TO/FROM RELATED PARTIES Due to Alset International Limited. Alset International Limited (“AIL”) is incorporated in Singapore and is a fellow subsidiary of the common parent company, Alset Inc. The amount due to AIL represents short-term working capital advances to the Company for its daily operations. There is no written, executed agreement and no financial/non-financial covenants and the amount due to AIL is non-interest bearing. Since the amount due to AIL is due upon request, it is classified as a current liability. The amounts due to AIL at September 30, 2024 and December 31, 2023 are $ 281,140 and $ 1,729,901 , respectively. On September 24, 2024, the Company entered into a Debt Conversion Agreement (the “AIL Conversion”) with Alset International Limited, pursuant to which a debt of $ 3,501,759 due to AIL was converted into shares of the Company’s common stock at a price per share of $ 0.63 for a total of 5,558,347 shares. Due to Alset Business Development Pte. Limited. Alset Business Development Pte. Limited (“ABD”) is incorporated in Singapore and is a fellow subsidiary of the common parent company, Alset Inc. The amount due to ABD represents amount loaned by ABD to Hapi Cafe Inc. (“HCI”) for the investment in Ketomei Pte. Ltd (“Ketomei”) in March 2022. There is no written, executed agreement and no financial/non-financial covenants and the amount due to ABD is non-interest bearing. Since the amount due to ABD is due upon request, it is classified as a current liability. The amounts due to ABD at September 30, 2024 and December 31, 2023 are $ 190,097 and $ 184,507 , respectively. Due to BMI Capital Partners International Limited. BMI Capital Partners International Limited (“BMI”) is incorporated in Hong Kong and is a fellow subsidiary of the common parent company, Alset Inc. The amount due to BMI represents short-term working capital advances to the Company for its daily operations. There is no written, executed agreement and no financial/non-financial covenants and the amount due to BMI is non-interest bearing. Since the amount due to BMI is due upon request, it is classified as a current liability. The amounts due to BMI at September 30, 2024 and December 31, 2023 are $ 2,992 and $ 1,442 , respectively. 17 General and Administrative Services Commencing on the date the Company’s common stock was first listed on the Nasdaq, the Company has agreed to pay to Alset Management Group Inc. a total of $ 10,000 per month for office space, utilities, and secretarial and administrative support for up to 24 months. Upon completion of the Business Combination, the Company ceased paying these monthly fees. During the nine months ended September 30, 2024 and 2023, the Company recorded a charge of $ 0 and $ 90,000 , to the statement of operations pursuant to the agreement. Related Party Loans Working Capital Loans In order to finance transaction costs in connection with a Business Combination, the Sponsor or an affiliate of the Sponsor, or certain of the Company’s officers and directors were permitted to, but were not obligated to, loan the Company funds as may be required (“Working Capital Loans”). Such Working Capital Loans would be evidenced by promissory notes. The notes were to be repaid upon completion of a Business Combination, without interest, or, at the lender’s discretion, up to $ 1,500,000 of the notes may be converted upon completion of a Business Combination into units at a price of $ 10.00 per unit. Such units would be identical to the Private Placement Units. The Business Combination has closed, and there are no amounts outstanding under these Working Capital Loans. No amounts were converted into the units at the Business Combination. Extension Loan On May 1, 2023, the Company amended the Investment Management Trust Agreement (the “Trust Agreement”) with Wilmington Trust, National Association, a national banking association, which was entered into on January 31, 2022. On May 2, 2023 the Company filed an Amendment to the Amended and Restated Certificate of Incorporation. The Trust Agreement and Amended and Restated Certificate of Incorporation were amended, in part, so that the Company’s ability to complete a business combination was extended in additional increments of one month up to a total of twenty-one (21) additional months from the closing date of the Offering, subject to the payment into the trust account by the Company of one-third of 1% of the funds remaining in the trust account following any redemptions in connection with the approval of the amendment to the Company’s Amended and Restated Certificate of Incorporation. The Sponsor funded the first 30-day extension payment on May 3, 2023. The Sponsor also made subsequent extension payments on June 5 th and July 6 th of $ 68,928 and $ 69,158 , respectively. The Sponsor was entitled to the repayment of these extension payments, without interest. As of September 30, 2024 and December 31, 2023 there was $ 0 and $ 205,305 outstanding under the extension loan, respectively. NOTE 13 — RELATED PARTY TRANSACTIONS On August 31, 2023, Hapi Café Inc. and Ketomei Pte. Ltd. entered into a binding term sheet pursuant to which HCI agreed to lend Ketomei up to $ 36,634 pursuant to a convertible loan, with a term of 12 months. After the initial 12 months, the interest on such loan will be 3.5 %. This loan was written off upon the acquisition of Ketomei in February 2024. On October 26, 2023, the same parties entered into another binding term sheet pursuant to which HCI agreed to lend Ketomei up to $ 37,876 pursuant to a non- convertible loan, with a term of 12 months. After the initial 12 months, the interest on such loan will be 3.5 %. This loan was written off upon the acquisition of Ketomei in February 2024. On February 20, 2024, the Company invested additional $ 312,064 for an additional 38.41 % ownership interest in Ketomei by converting $ 312,064 of convertible loan. The loan was impaired at the year ended December 31, 2023, therefore, $ 312,064 was transferred from impairment of convertible loan to impairment of equity method investment. After this additional investment, the Company owns 55.65 % of Ketomei’s outstanding shares and Ketomei is consolidated into the financial statements of the Company beginning on February 20, 2024. On March 20, 2024, the Company entered into a securities purchase agreement with Sharing Services Global Corporation (“SHRG”), pursuant to which the Company purchased from SHRG a (i) Convertible Promissory Note (“CN 1”) in the amount of $ 250,000 , convertible into 208,333,333 shares of SHRG’s common stock at the option of the Company, and (ii) certain warrants exercisable into 208,333,333 shares of SHRG’s common stock at an exercise price of $ 0.0012 per share, the exercise period of the warrant being five (5) years from the date of the securities purchase agreement, for an aggregate purchase price of $ 250,000 . At the time of filing, the Company has not converted any of the debt contemplated by CN 1 nor exercised any of the warrants. On May 9, 2024, the Company entered into a securities purchase agreement with Sharing Services Global Corporation, pursuant to which the Company purchased from SHRG a Convertible Promissory Note (“CN 2”) in the amount of $ 250,000 , convertible into 125,000,000 shares of SHRG’s common stock at the option of the Company for an aggregate purchase price of $ 250,000 . CN 2 bears an 8 % interest rate and has a scheduled maturity three years from the date of the CN 2. Additionally, upon signing CN 2, SHRG owed the Company a commitment fee of 8 % of the principal amount, $ 20,000 in total, to be paid either in cash or in common stock of SHRG, at the discretion of the Company. On June 6, 2024, the Company entered into a securities purchase agreement with Sharing Services Global Corporation, pursuant to which the Company purchased from SHRG a Convertible Promissory Note (“CN 3”) in the amount of $ 250,000 , convertible into 125,000,000 shares of SHRG’s common stock at the option of the Company for an aggregate purchase price of $ 250,000 . CN 3 bears an 8 % interest rate and has a scheduled maturity three years from the date of the CN 3. Additionally, upon signing CN 3, SHRG owed the Company a commitment fee of 8 % of the principal amount, $ 20,000 in total, to be paid either in cash or in common stock of SHRG, at the discretion of the Company. On August 13, 2024, the Company entered into a securities purchase agreement with Sharing Services Global Corporation, pursuant to which the Company purchased from SHRG a Convertible Promissory Note (“CN 4”) in the amount of $ 100,000 , convertible into 50,000,000 shares of SHRG’s common stock at the option of the Company for an aggregate purchase price of $ 100,000 . CN 4 bears an 8 % interest rate and has a scheduled maturity three years from the date of the CN 4. Additionally, upon signing CN 4, SHRG owed the Company a commitment fee of 8 % of the principal amount, $ 8,000 in total, to be paid either in cash or in common stock of SHRG, at the discretion of the Company. As of September 30, 2024, a total of $ 48,000 in commitment fees and $ 23,526 of convertible note interest was recorded under other receivable. SHRG is a related party of our Company, as our stockholders Alset Inc. and Alset International Limited, in addition to certain entities affiliated with them, are significant stockholders of SHRG, and our Chief Executive Officer and Chairman are also the Chief Executive Officer and Chairman, respectively, of SHRG. 18 Financial assets measured at fair value on a recurring basis are summarized below and disclosed on the consolidated balance sheet as of September 30, 2024: SCHEDULE OF FINANCIAL ASSETS MEASURED AT FAIR VALUE ON A RECURRING BASIS Fair Value Measurement Using Amount at Level 1 Level 2 Level 3 Fair Value September 30, 2024 Assets Warrants – SHRG $ - $ 3,891 $ - $ 3,891 Convertible loans receivable – SHRG - 739,590 - 739,590 Total Investment in securities at Fair Value $ - $ 743,481 $ - $ 743,481 The fair value of the SHRG warrants under level 2 category as of September 30, 2024 was calculated using a binomial option pricing model valued with the following weighted average assumptions: SCHEDULE OF FAIR VALUE WEIGHTED AVERAGE ASSUMPTIONS September 30, 2024 Stock price $ 0.1000 Exercise price $ 1.6800 Risk free interest rate 3.56 % Annualized volatility 167.12 % Dividend Yield $ 0.00 % Year to maturity 4.46 Warrants measurement input 4.46 The Company has elected to recognize the convertible loan at fair value and therefore there was no further evaluation of embedded features for bifurcation. The Company engaged third party valuation firm to perform the valuation of convertible loans. The fair value of the convertible loans is calculated using the binomial tree model based on probability of remaining as straight debt using discounted cash flow with the following assumptions: March 18, 2024 May 9, 2024 June 6, 2024 August 13, 2024 As of September 30, 2024 CN# 1 2 3 4 Issued date March 18, 2024 May 9, 2024 June 6, 2024 August 13, 2024 Risk-free interest rate 3.598 % 3.585 % 3.578 % 3.561 % Expected life 2.46 year 2.60 year 2.68 year 2.87 year Discount rate 6.00 % 8.00 % 8.00 % 8.00 % Expected volatility 185.574 % 185.574 % 185.574 % 185.574 % Expected dividend yield 0 % 0 % 0 % 0 % Debt measurement input 0 % 0 % 0 % 0 % Fair value $ 212,558 $ 224,894 $ 214,893 $ 87,245 Changes in the observable input values would likely cause material changes in the fair value of the Company’s Level 2 financial instruments. A significant increase (decrease) in this likelihood would result in a higher (lower) fair value measurement. Revenue from F&B business amounting to approximately $ 555 and $ 2,209 during the three months ended September 30, 2024 and 2023, respectively, was related to corporate sales. Revenue from F&B business amounting to approximately $ 3,904 and $ 4,981 during the nine months ended September 30, 2024 and 2023, respectively, was related to corporate sales. That revenue was derived from corporate sales to related parties who purchased meals and paid for their staff. Included in Accounts Receivable, net at September 30, 2024 and December 31, 2023 is $ 11,683 and $ 7,405 , respectively, of amounts due from related parties. Included in other income during the three months ended September 30, 2024 and 2023 is $ 1,646 and $ 1,681 , respectively of rental income from related parties. Included in other income during the nine months ended September 30, 2024 and 2023 is $ 4,902 and $ 5,071 , respectively of rental income from related parties. NOTE 14 — STOCKHOLDERS’ EQUITY The total amount of authorized capital stock of the Company is 56,000,000 shares, consisting of (a) 55,000,000 shares of common stock, and (b) 1,000,000 shares of preferred stock . As of September 30, 2024, there were no shares of preferred stock outstanding. The Company previously had shares of Class B common stock outstanding, which automatically converted into Class A common stock at the time of the Business Combination, on a one-for-one basis. Rights - Each holder of a right automatically received one-tenth (1/10) of one share of common stock upon consummation of the Business Combination. Warrants — Public Warrants may only be exercised for a whole number of shares. No fractional warrants will be issued upon separation of the Units and only whole warrants will trade. The Public Warrants became exercisable 30 days after the completion of the Business Combination. The Public Warrants will expire five years after the completion of the Business Combination. The Company will not be obligated to deliver any shares of Class A common stock pursuant to the exercise of a warrant and will have no obligation to settle such warrant exercise unless a registration statement under the Securities Act covering the issuance of the shares of Class A common stock issuable upon exercise of the warrants is then effective and a current prospectus relating to those shares of Class A common stock is available, subject to the Company satisfying its obligations with respect to registration, or a valid exemption from registration is available. No warrant will be exercisable for cash or on a cashless basis, and the Company will not be obligated to issue any shares to holders seeking to exercise their warrants, unless the issuance of the shares upon such exercise is registered or qualified under the securities laws of the state of residence of the exercising holder, or an exemption from registration is available. 19 Redemption of Warrants When the Price per Share of Class A Common Stock Equals or Exceeds $18.00 — Once the warrants become exercisable, the Company may redeem the outstanding Public Warrants: ● in whole and not in part; ● at a price of $ 0.01 per Public Warrant; ● upon a minimum of 30 days’ prior written notice of redemption, or the 30-day redemption period to each warrant holder; and ● if, and only if, the last reported sale price of the Class A common stock equals or exceeds $ 18.00 per share (as adjusted for stock splits, stock dividends, reorganization, recapitalizations and the like) for any 20 trading days within a 30-trading day period ending on the trading day prior to the date on which the Company sends the notice of redemption to warrant holders. If and when the warrants become redeemable by the Company, the Company may exercise its redemption right even if it is unable to register or qualify the underlying securities for sale under all applicable state securities laws. If the Company calls the Public Warrants for redemption, as described above, its management will have the option to require any holder that wishes to exercise the Public Warrants to do so on a “cashless basis,” as described in the warrant agreement. The exercise price and number of common stock issuable upon exercise of the Public Warrants may be adjusted in certain circumstances including in the event of a stock dividend, extraordinary dividend or recapitalization, reorganization, merger or consolidation. However, except as described below, the Public Warrants will not be adjusted for issuances of common stock at a price below its exercise price. Additionally, in no event will the Company be required to net cash settle the Public Warrants. The Private Placement Warrants are identical to the Public Warrants underlying the Units being sold in the Initial Public Offering except the Private Placement Warrants (including the Class A common stock issuable upon exercise of the Private Placement Warrants) were transferable, assignable or salable until 30 days after the completion of an Initial Business Combination, subject to certain exceptions. The following table summarizes the warrant activity for the nine months ended September 30, 2024 and 2023. SCHEDULE OF WARRANT ACTIVITY Warrant for Weighted Remaining Contractual Aggregate Common Average Term Intrinsic Shares Exercise Price (Years) Value Warrants Outstanding as of December 31, 2023 4,549,375 $ 11.5 5.03 $ - Warrants Vested and exercisable at December 31, 2023 4,549,375 $ 11.5 5.03 $ - Granted - - Exercised - - Forfeited, cancelled, expired ( 5 ) - Warrants Outstanding as of September 30, 2024 4,549,370 $ 11.5 4.28 $ - Warrants Vested and exercisable at September 30, 2024 4,549,370 $ 11.5 4.28 $ - Warrant for Weighted Remaining Contractual Aggregate Common Average Term Intrinsic Shares Exercise Price (Years) Value Warrants Outstanding as of December 31, 2022 4,549,375 $ 11.5 6.03 $ - Warrants Vested and exercisable at December 31, 2022 4,549,375 $ 11.5 6.03 $ - Granted - - Exercised - - Forfeited, cancelled, expired - - Warrants Outstanding as of September 30, 2023 4,549,375 $ 11.5 5.28 $ - Warrants Vested and exercisable at September 30, 2023 4,549,375 $ 11.5 5.28 $ - Issuance of HWH Shares to EF Hutton On December 18, 2023, the Company entered into a Satisfaction and Discharge of Indebtedness Agreement in connection with an underwriting agreement previously entered into by the Company and EF Hutton, a division of Benchmark Investments, LLC, under which in lieu of the Company tendering the full amount due of $ 3,018,750 , the underwriters accepted a combination of $ 325,000 in cash payable upon the closing of the Business Combination, 149,443 shares of the Company’s common stock and a $ 1,184,375 promissory note as full satisfaction. This agreement was effective at the closing of the Business Combination on January 9, 2024. The 149,443 shares were issued at the price of $ 10.10 , totaling the amount of $ 1,509,375 . The fair value of the Company shares at issuance on January 9, 2024 was $ 2.82 per share or $ 421,429 . No gain or loss was recognized upon issuance of the shares on January 9, 2024 as this was an adjustment to prior underwriting costs accounted for in equity. NOTE 15 — LEASES The Company has operating leases for its office spaces, one F&B store in South Korea and two F&B stores in Singapore. In the second quarter of 2024, the Company ceased its operations of F&BPLQ and recorded a gain on termination of the operating lease of $ 248 , which is included in other income on the Company’s Statement of Operations for the nine months ended September 30, 2024. The related lease agreements do not contain any material residual value guarantees or material restrictive covenants. Since the Company’s leases do not provide an implicit rate that can be readily determined, management uses a discount rate based on the incremental borrowing rate. The Company’s weighted-average remaining lease term relating to its operating leases is 1.92 years, with a weighted-average discount rate of 3.78 %. The Company has also utilized the following practical expedients: ● Short-term leases – for leases that are for a period of 12 months or less, the Company will not apply the recognition requirements of ASC 842. ● For leases that contain related non-lease components, such as maintenance, the Company will account for these payments as a single lease component. 20 The current portion of operating lease liabilities and the non-current portion of operating lease liabilities are presented on the balance sheets. Total lease expenses amounted to $ 117,806 and $ 126,042 , which were included in general and administrative expenses in the statements of operations for the three months ended September 30, 2024 and 2023, respectively. Total lease expenses amounted to $ 377,945 and $ 382,080 , which were included in general and administrative expenses in the statements of operations for the nine months ended September 30, 2024 and 2023, respectively. Total cash paid for operating leases amounted to $ 134,884 and $ 139,044 for the three months ended September 30, 2024 and 2023, respectively. Total cash paid for operating leases amounted to $ 391,884 and $ 425,951 for the nine months ended September 30, 2024 and 2023, respectively. In addition, the Company leases certain equipment on a short-term (12 months or less) basis. Total short-term lease expense of $ 6,881 and $ 20,237 is included in general and administrative expenses for the three months ended September 30, 2024 and 2023, respectively. Total short-term lease expense of $ 17,200 and $ 22,585 is included in general and administrative expenses for the nine months ended September 30, 2024 and 2023, respectively. Supplemental balance sheet information related to operating leases was as follows: SCHEDULE OF BALANCE SHEET INFORMATION RELATED TO OPERATING LEASES September 30, 2024 December 31, 2023 Right-of-use assets $ 711,458 $ 598,508 Lease liabilities - current $ 438,011 $ 429,687 Lease liabilities - non-current 286,759 182,380 Total lease liabilities $ 724,770 $ 612,067 As of September 30, 2024, the aggregate future minimum rental payments under non-cancelable agreements are as follows: SCHEDULE OF AGGREGATE FUTURE MINIMUM RENTAL PAYMENTS Maturity of Lease Liabilities Total 12 months ending September 30, 2025 $ 456,321 12 months ending September 30, 2026 187,707 12 months ending September 30, 2027 106,436 Total undiscounted lease payments $ 750,464 Less: Imputed interest ( 25,694 ) Present value of lease liabilities $ 724,770 Operating lease liabilities - Current 438,011 Operating lease liabilities - Non-current $ 286,759 NOTE 16 — COMMITMENTS AND CONTINGENCIES From time to time the Company may be named in claims arising in the ordinary course of business. Currently, no legal proceedings, government actions, administrative actions, investigations or claims are pending against the Company or involve the Company that, in the opinion of management, could reasonably be expected to have a material adverse effect on its business and financial condition. For all periods presented, the Company was not a party to any pending material litigation or other material legal proceedings. NOTE 17 — DISAGGREGATION OF REVENUE Selected financial information of the Company’s operating revenue for disaggregated revenue purposes by revenue source are as follows: Product sales only represent sales to members, not third parties who are not members. SCHEDULE OF DISAGGREGATION OF REVENUE Three Months Ended September 30, 2024 Three Months Ended September 30, 2023 Membership Fee $ - $ - Product Sales - - Food and Beverage 345,523 226,907 Total $ 345,523 $ 226,907 Revenue $ 345,523 $ 226,907 Nine Months Ended September 30, 2024 Nine Months Ended September 30, 2023 Membership Fee $ - $ 12,583 Product Sales - 184 Food and Beverage 966,515 609,900 Total $ 966,515 $ 622,667 Revenue $ 966,515 $ 622,667 21 NOTE 18 — CONCENTRATION RISK The Company maintains cash balances at various financial institutions in different countries. These balances are usually secured by the central banks’ insurance companies. At times, these balances may exceed the insurance limits. As of September 30, 2024 and December 31, 2023, uninsured cash balances were $ 799,659 and $ 21,989,947 , respectively. Major Suppliers For the three and nine months ended September 30, 2024, five suppliers accounted for approximately over 79 % and 82 % of the Company’s total costs of revenue, respectively. For the three and nine months ended September 30, 2023, five suppliers accounted for approximately over 67 % and 60 % of the Company’s total costs of revenue, respectively. NOTE 19 — INVESTMENT IN ASSOCIATE & CONVERTIBLE NOTES RECEIVABLE, RELATED PARTY Until February 20, 2024, the Company held an equity method investment in a related party, Ketomei, and also had a convertible note receivable with Ketomei. The following table shows the activity of the investment and note during the nine months ended September 30, 2024. SCHEDULE OF EQUITY METHOD INVESTMENT IN A RELATED PARTY December 31, 2023 Additions Loss on investment Impairment September 30, 2024 Investment in associate, related party $ - $ 14,744 $ ( 14,744 ) $ - $ - Convertible note receivable, related party - 42,328 - ( 42,328 ) - Total $ - $ 57,072 $ ( 14,744 ) $ ( 42,328 ) $ - December 31, 2022 Additions Loss on investment Impairment September 30, 2023 Investment in associate, related party $ 155,369 $ 51,532 $ ( 70,336 ) $ - $ 136,565 Convertible note receivable, related party 198,125 128,021 - - 326,146 Total $ 353,494 $ 179,553 $ ( 70,336 ) $ - $ 462,711 During the first nine months of 2024, the Company impaired convertible note receivable of $ 42,328 to $ 0 and total impairment expenses were $ 42,328 . On February 20, 2024, the Company invested an additional $ 312,064 for an additional 38.41 % ownership interest in Ketomei by converting $ 312,064 of convertible loan. The loan was impaired at the year ended December 31, 2023, therefore, $ 312,064 was transferred from impairment of convertible loan to impairment of equity method investment. After this additional investment, the Company owns 55.65 % of Ketomei’s outstanding shares and Ketomei is consolidated into the financial statements of HWH International Inc. beginning on February 20, 2024. During the nine months ended September 30, 2024, the Company held convertible notes receivable with SHRG. The following table shows the activity of the notes during the nine months ended September 30, 2024. SCHEDULE OF EQUITY METHOD INVESTMENT IN A RELATED PARTY December 31, 2023 Additions Net Unrealized Losses September 30, 2024 Convertible note receivable - related party $ - $ 850,000 $ 110,410 $ 739,590 Total $ - $ 850,000 $ 110,410 $ 739,590 During the nine months ended September 30, 2024, the Company revalued the convertible note receivable with SHRG of $ 850,000 to $ 739,590 . The total $ 256,555 revaluated loss amount was booked in unrealized loss on convertible note receivable – related party and $ 146,145 revaluated gain amount was booked in additional paid in capital as this was a related party transaction. 22 NOTE 20 — CHANGE IN FISCAL YEAR In connection with the Business Combination, the Company changed its fiscal year from November 30 to December 31. The Company has recently reported its audited financial statements on form 10-K for the year ended November 30, 2023. The Company’s financial statement for one month of December 2023, that were not previously reported include expenses related to business combination, ordinary business expenses and investment income. HWH INTERNATIONAL INC. (Formerly known as Alset Capital Acquisition Corp.) CONDENSED CONSOLIDATED BALANCE SHEETS SCHEDULE OF CONSOLIDATED BALANCE SHEETS AND STATEMENTS OF OPERATIONS December 31, 2023 ASSETS Current assets: Cash $ 280,398 Other current assets 100,000 Total current assets 380,398 Cash and marketable securities held in Trust Account 21,346,768 Total assets $ 21,727,166 LIABILITIES AND STOCKHOLDERS’ DEFICIT Current liabilities: Accounts payable and accrued expenses $ 30,155 Extension Loan – Related Party 205,305 Total current liabilities 235,460 Deferred underwriting compensation 3,018,750 Total liabilities 3,254,210 Commitments and contingencies - Temporary equity: Class A common stock subject to possible redemption; 1,976,036 shares (at approximately $ 10.35 per share) as of December 31, 2023 20,457,011 Stockholders’ deficit: Preferred stock, $ 0.0001 par value; 1,000,000 shares authorized; none issued and outstanding - Class A common stock, $ 0.0001 par value; 50,000,000 shares authorized; 473,750 issued and outstanding (excluding 1,976,036 shares subject to possible redemption) as of December 31, 2023 47 Class B common stock, $ 0.0001 par value; 5,000,000 shares authorized; 2,156,250 shares issued and outstanding as of December 31, 2023 216 Common stock, value 216 Accumulated deficit ( 1,984,318 ) Total stockholders’ deficit ( 1,984,055 ) Total liabilities and stockholders’ deficit $ 21,727,166 23 HWH INTERNATIONAL INC. (Formerly known as Alset Capital Acquisition Corp.) CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS For the One Month Ended December 31, 2023 EXPENSES Administration fee - related party $ 10,000 General and administrative 610,841 TOTAL EXPENSES 610,841 OTHER INCOME Investment income earned on cash and marketable securities held in Trust Account 94,130 Other Income 155,763 TOTAL OTHER INCOME 249,893 Pre-tax loss 370,948 Income tax expense - Net loss $ 370,948 NOTE 21 — SUBSEQUENT EVENT The Company has evaluated events that have occurred after the balance sheet date through the date of this report and determined that there were no subsequent events or transactions that required recognition or disclosure in the condensed consolidated financial statements. 24