[FORM 10-Q Cover Page](index=1&type=section&id=FORM%2010-Q%20Cover%20Page) This section details HWH International Inc.'s Form 10-Q filing for Q3 2025, identifying its filer status - HWH International Inc. filed its Form 10-Q for the quarterly period ended September 30, 2025. The company is a **non-accelerated filer**, a **smaller reporting company**, and an **emerging growth company**[1](index=1&type=chunk)[2](index=2&type=chunk)[3](index=3&type=chunk) Common Stock Information as of October 21, 2025 | Detail | Value | Market/Symbol | | :---------------------------------- | :---------- | :---------------------------------------- | | Common Stock, par value $0.0001 per share | HWH | The Nasdaq Capital Market | | Shares Issued and Outstanding | 6,476,400 shares | - | [Part I. Financial Information](index=4&type=section&id=Part%20I.%20Financial%20Information) This section presents the unaudited consolidated financial statements and management's discussion and analysis for the company [Item 1. Financial Statements (Unaudited)](index=4&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) This section presents HWH International Inc.'s unaudited consolidated financial statements for Q3 2025 and 2024 [Consolidated Balance Sheets](index=4&type=section&id=Consolidated%20Balance%20Sheets) This section details the company's financial position, including assets, liabilities, and equity, as of September 30, 2025, and December 31, 2024 Consolidated Balance Sheet Highlights (September 30, 2025 vs. December 31, 2024) | Metric | September 30, 2025 (Unaudited) ($) | December 31, 2024 ($) | | :----------------------------------- | :----------------------------- | :------------------ | | **ASSETS** | | | | Total Current Assets | $3,858,340 | $5,474,997 | | Total Non-Current Assets | $1,326,054 | $933,725 | | **TOTAL ASSETS** | **$5,184,394** | **$6,408,722** | | **LIABILITIES** | | | | Total Current Liabilities | $2,252,884 | $3,311,274 | | Total Non-Current Liabilities | $24,084 | $220,249 | | **Total Liabilities** | **$2,276,968** | **$3,531,523** | | **STOCKHOLDERS' EQUITY** | | | | Total Stockholders' Equity | $2,907,426 | $2,877,199 | - Total assets decreased by approximately **$1.22 million**, primarily driven by a decrease in current assets, including cash and convertible loans receivable. Total liabilities decreased by approximately **$1.25 million**, mainly due to a reduction in current liabilities such as due to related parties and notes payable. Total stockholders' equity saw a slight increase of approximately **$30,000**[9](index=9&type=chunk) [Consolidated Statements of Operations and Other Comprehensive Loss](index=5&type=section&id=Consolidated%20Statements%20of%20Operations%20and%20Other%20Comprehensive%20Loss) This section presents the company's financial performance, including revenue, expenses, and net loss, for Q3 2025 and 2024 Consolidated Statements of Operations Highlights (Three Months Ended September 30) | Metric | September 30, 2025 ($) | September 30, 2024 ($) | | :----------------------------------- | :------------------- | :------------------- | | Revenue | $206,778 | $345,523 | | Cost of revenue | $(83,196) | $(185,654) | | Gross profit | $123,582 | $159,869 | | Total Operating expenses | $(369,978) | $(487,394) | | Total Other non-operating (expense) income | $(48,698) | $(209,618) | | Net loss | $(299,618) | $(537,143) | | Net loss attributable to common stockholders | $(291,004) | $(548,492) | | Basic Loss per common share | $(0.04) | $(0.16) | | Diluted Loss per common share | $(0.04) | $(0.16) | Consolidated Statements of Operations Highlights (Nine Months Ended September 30) | Metric | September 30, 2025 ($) | September 30, 2024 ($) | | :----------------------------------- | :------------------- | :------------------- | | Revenue | $812,366 | $966,515 | | Cost of revenue | $(392,300) | $(478,436) | | Gross profit | $420,066 | $488,079 | | Total Operating expenses | $(1,600,381) | $(2,637,517) | | Total Other non-operating (expense) income | $517,174 | $(127,865) | | Net loss | $(710,613) | $(2,277,303) | | Net loss attributable to common stockholders | $(685,615) | $(2,273,253) | | Basic Loss per common share | $(0.11) | $(0.71) | | Diluted Loss per common share | $(0.11) | $(0.71) | - The company reported a **reduced net loss** for both the three and nine months ended September 30, 2025, compared to the same periods in 2024. Revenue decreased, but this was offset by a larger decrease in operating expenses and, for the nine-month period, a significant shift from other non-operating expense to income, primarily due to a **gain on disposal of subsidiaries**[11](index=11&type=chunk)[13](index=13&type=chunk) [Consolidated Statements of Changes in Stockholders' Equity](index=8&type=section&id=Consolidated%20Statements%20of%20Changes%20in%20Stockholders%27%20Equity) This section details changes in the company's stockholders' equity for the nine months ended September 30, 2025 Changes in Stockholders' Equity (Nine Months Ended September 30, 2025) | Metric | December 31, 2024 ($) | September 30, 2025 ($) | | :----------------------------------- | :------------------ | :------------------- | | Common Stock | $559 | $647 | | Additional Paid in Capital | $9,339,413 | $10,891,400 | | Accumulated Other Comprehensive Loss | $(257,598) | $(1,050,287) | | Accumulated Deficit | $(6,317,010) | $(7,002,625) | | Total HWH International Inc. Stockholders' Equity | $2,765,364 | $2,839,135 | | Non-controlling Interests | $111,835 | $68,291 | | **Total Stockholders' Equity** | **$2,877,199** | **$2,907,426** | - Stockholders' equity increased slightly from **$2.88 million** at December 31, 2024, to **$2.91 million** at September 30, 2025. This was driven by an increase in additional paid-in capital from common stock issuance and warrant exercises, partially offset by an increase in accumulated other comprehensive loss and accumulated deficit[15](index=15&type=chunk) - Key activities impacting equity during the nine months ended September 30, 2025, included the issuance of common stock (**$1,409,858**), warrants exercised (**$125**), revaluation for SHRG note receivable and warrants (**$87,131**), and a net loss of **$(565,131)** for the first quarter, followed by a net income of **$170,520** for the second quarter and a net loss of **$(291,004)** for the third quarter[15](index=15&type=chunk) [Consolidated Statements of Cash Flows](index=11&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) This section outlines the company's cash flows from operating, investing, and financing activities for Q3 2025 and 2024 Consolidated Statements of Cash Flows Highlights (Nine Months Ended September 30) | Cash Flow Activity | September 30, 2025 ($) | September 30, 2024 ($) | | :----------------------------------- | :------------------- | :------------------- | | Net cash used in operating activities | $(728,326) | $(1,404,073) | | Net cash (used in) / provided by investing activities | $(1,015,281) | $20,451,688 | | Net cash provided by / (used in) financing activities | $1,203,307 | $(19,405,313) | | Net decrease in cash | $(540,300) | $(357,698) | | Cash at end of period | $2,897,972 | $832,368 | - Net cash used in operating activities decreased significantly in 2025 compared to 2024, primarily due to a lower net loss and a gain on disposal of subsidiaries. Investing activities shifted from a large cash inflow in 2024 (due to trust account withdrawals) to a substantial cash outflow in 2025, driven by convertible loans receivable, investment in associates, and marketable securities purchases. Financing activities also reversed, providing cash in 2025 from common stock issuance and warrants, compared to a large cash outflow in 2024 due to redemptions of Class A Common Stock[19](index=19&type=chunk) [Notes to Unaudited Consolidated Financial Statements](index=13&type=section&id=Notes%20to%20Unaudited%20Consolidated%20Financial%20Statements) This section provides detailed explanations and disclosures supporting the unaudited consolidated financial statements [NOTE 1 — DESCRIPTION OF ORGANIZATION, BUSINESS OPERATIONS](index=13&type=section&id=NOTE%201%20%E2%80%94%20DESCRIPTION%20OF%20ORGANIZATION,%20BUSINESS%20OPERATIONS) HWH International Inc. operates an F&B business and develops Hapi Marketplace and Hapi Wealth Builder platforms, following a merger and public offering - HWH International Inc. operates a food and beverage (F&B) business in Singapore, with one café. It is also developing Hapi Marketplace (a B2C platform) and Hapi Wealth Builder (an educational program)[22](index=22&type=chunk)[23](index=23&type=chunk) - The company was originally Alset Capital Acquisition Corp., a SPAC, and completed a merger with HWH International Inc. (Nevada corporation) on **January 9, 2024**, changing its name to HWH International Inc.[24](index=24&type=chunk)[25](index=25&type=chunk) - In **January 2025**, the company closed a public offering of **632,500 shares** of common stock and **250,000 pre-funded warrants**, generating approximately **$1.76 million** in gross proceeds[29](index=29&type=chunk) [NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES](index=13&type=section&id=NOTE%202%20%E2%80%94%20SUMMARY%20OF%20SIGNIFICANT%20ACCOUNTING%20POLICIES) This note outlines the company's significant accounting policies, including basis of presentation, revenue recognition, and emerging growth company status - The company is an '**emerging growth company**' and has elected to use the extended transition period for complying with new or revised financial accounting standards[38](index=38&type=chunk)[39](index=39&type=chunk)[215](index=215&type=chunk) - Effective **September 30, 2025**, the company revised its cash flow statement presentation for related party advances and repayments, now separating 'Advances to related parties' and 'Advances from related parties' for greater transparency. This change was applied retrospectively[32](index=32&type=chunk) - The company's F&B business generated substantially all revenue, with contributions from subsidiaries like Alset F&B One (**42% in 2025**), Hapi Café SG Pte. Ltd. (**23% in 2025**), and Ketomei Pte. Ltd. (**27% in 2025**). Several F&B subsidiaries ceased operations or were sold in 2024-2025[36](index=36&type=chunk) Revenue from Food and Beverage Business | Period | September 30, 2025 ($) | September 30, 2024 ($) | | :----------------------------------- | :------------------- | :------------------- | | Three Months Ended | $206,778 | $345,523 | | Nine Months Ended | $812,366 | $966,515 | - The company incurred a net loss, loss from operations, and negative cash flow from operating cafés in the nine months ended September 30, 2025, raising substantial doubt about its ability to continue as a going concern. However, management believes available cash, anticipated operations, and related party financing are sufficient for the next **12 months**[75](index=75&type=chunk)[76](index=76&type=chunk) [NOTE 3 — ACCOUNTS RECEIVABLE, NET](index=23&type=section&id=NOTE%203%20%E2%80%94%20ACCOUNTS%20RECEIVABLE,%20NET) Accounts receivable, net, primarily from F&B business, decreased from **$17,546** at December 31, 2024, to **$7,771** at September 30, 2025 Accounts Receivable, Net | Date | Amount ($) | | :------------------- | :------- | | September 30, 2025 | $7,771 | | December 31, 2024 | $17,546 | [NOTE 4 — INVENTORY](index=23&type=section&id=NOTE%204%20%E2%80%94%20INVENTORY) Finished goods inventory decreased from **$1,574** at December 31, 2024, to **$1,113** at September 30, 2025 Inventory Balance (Finished Goods) | Date | Amount ($) | | :------------------- | :------- | | September 30, 2025 | $1,113 | | December 31, 2024 | $1,574 | [NOTE 5 — PROPERTY AND EQUIPMENT, NET](index=23&type=section&id=NOTE%205%20%E2%80%94%20PROPERTY%20AND%20EQUIPMENT,%20NET) Net property and equipment decreased from **$33,588** to **$21,844**, with depreciation falling due to asset disposals from café closures Property and Equipment, Net | Date | Amount ($) | | :------------------- | :------- | | September 30, 2025 | $21,844 | | December 31, 2024 | $33,588 | Depreciation Expenses (Nine Months Ended September 30) | Year | Amount ($) | | :------------------- | :------- | | 2025 | $22,881 | | 2024 | $45,529 | - The decrease in property and equipment and depreciation is partly due to the disposal of assets from the closure of the F&BPLQ café in 2024, resulting in a **$5,882 loss on disposal**[89](index=89&type=chunk) [NOTE 6 — INVESTMENTS](index=24&type=section&id=NOTE%206%20%E2%80%94%20INVESTMENTS) This note details investment activities, including impairment, a significant gain from HWH World Inc. sale, and a loss from Alset F&B One Pte. Ltd. sale - The company impaired its **$14,010** investment in Ideal Food & Beverage Pte. Ltd. to **$0** due to net liabilities as of December 31, 2024[91](index=91&type=chunk) - The sale of HWH World Inc. to AES Group Inc. on **April 23, 2025**, generated a **$383,667 gain**, recorded in other non-operating income[92](index=92&type=chunk) - On **September 10, 2025**, the company sold **70%** of Alset F&B One Pte. Ltd. for **$170,754**, resulting in a **$21,611 loss**. The remaining **20%** is now treated as an equity method investment valued at **$54,961**[93](index=93&type=chunk) [NOTE 7 – LOAN DUE TO THIRD PARTY](index=25&type=section&id=NOTE%207%20%E2%80%93%20LOAN%20DUE%20TO%20THIRD%20PARTY) The company has a **$1,184,375** promissory note with EF Hutton LLC, currently in default due to a late first installment payment - A **$1,184,375** promissory note to EF Hutton LLC (now D. Boral Capital LLC) was part of a settlement for deferred underwriting compensation. The first installment due in **October 2024** was paid late in **January 2025**, leading to a default status[94](index=94&type=chunk) [NOTE 8 — DUE TO ALSET INC.](index=25&type=section&id=NOTE%208%20%E2%80%94%20DUE%20TO%20ALSET%20INC.) Amounts due to Alset Inc. increased to **$569,614**, with a **$1,000,000** credit facility extended to **April 14, 2026** Amounts Due to Alset Inc. | Date | Amount ($) | | :------------------- | :------- | | September 30, 2025 | $569,614 | | December 31, 2024 | $209,614 | - Alset Inc. provides a **$1,000,000** non-revolving line of credit facility to the company, bearing **3%** simple interest. The due date for advances was extended to **April 14, 2026**[78](index=78&type=chunk)[79](index=79&type=chunk)[80](index=80&type=chunk)[96](index=96&type=chunk)[97](index=97&type=chunk) - In **September 2024**, **$300,000** of debt due to Alset Inc. was converted into **476,190 shares** of the company's common stock at **$0.63 per share**[98](index=98&type=chunk) [NOTE 9 — DUE TO/FROM RELATED PARTIES](index=26&type=section&id=NOTE%209%20%E2%80%94%20DUE%20TO/FROM%20RELATED%20PARTIES) This note details significant balances with related parties, including decreased amounts due to AIL and increased amounts due from ABD and HAIL Due to/from Related Parties | Related Party | September 30, 2025 ($) | December 31, 2024 ($) | | :----------------------------------- | :------------------- | :------------------- | | Due to Alset International Limited (AIL) | $4,651,995 | $5,096,047 | | Due from Alset Business Development Pte. Limited (ABD) | $4,233,165 | $4,113,701 | | Due from HotApp International Limited (HAIL) | $252,890 | - | - In **September 2024**, **$3,501,759** of debt due to AIL was converted into **5,558,347 shares** of the company's common stock at **$0.63 per share**[100](index=100&type=chunk) - AIL was released from its Letter of Continuing Financial Support to the Company on **April 14, 2025**[101](index=101&type=chunk) [NOTE 10 — RELATED PARTY TRANSACTIONS](index=27&type=section&id=NOTE%2010%20%E2%80%94%20RELATED%20PARTY%20TRANSACTIONS) This note details transactions with SHRG, including convertible notes and warrants, and the acquisition of L.E.H. Insurance Group, LLC, resulting in goodwill impairment - The company purchased eight convertible promissory notes (CN1-CN8) from Sharing Services Global Corporation (SHRG) between **March 2024** and **September 2025**, totaling **$1,480,000** in principal, along with associated warrants and commitment fees[106](index=106&type=chunk)[107](index=107&type=chunk)[109](index=109&type=chunk)[110](index=110&type=chunk)[113](index=113&type=chunk)[114](index=114&type=chunk)[118](index=118&type=chunk)[119](index=119&type=chunk) - SHRG is a related party due to common significant stockholders (Alset Inc. and Alset International Limited) and shared former CEO (John Thatch)[120](index=120&type=chunk) - The company acquired a **60%** interest in L.E.H. Insurance Group, LLC (LEH) in **February 2025** for **$75,000**, and the remaining **40%** in **August 2025** for **$40,000**. Goodwill of **$122,482** from these acquisitions was immediately written off[124](index=124&type=chunk)[125](index=125&type=chunk)[126](index=126&type=chunk) - A joint venture, HapiTravel Holding Pte. Ltd. (HTHPL), was formed in **April 2024**, with HWHPL holding **19%**. The company provided a **$137,658** loan to HTHPL in **November 2024**[127](index=127&type=chunk)[128](index=128&type=chunk) [NOTE 11 - FINANCIAL ASSETS AT FAIR VALUE](index=31&type=section&id=NOTE%2011%20-%20FINANCIAL%20ASSETS%20AT%20FAIR%20VALUE) This note details financial assets measured at fair value, including SHRG warrants, convertible loans, and marketable securities, with valuation methods and recognized gains/losses Financial Assets at Fair Value (September 30, 2025) | Asset | Level 1 ($) | Level 2 ($) | Fair Value ($) | | :----------------------------------- | :-------- | :---------- | :----------- | | Warrants – SHRG | - | $152 | $152 | | Convertible loans receivable – SHRG | - | $1,170,619 | $1,170,619 | | Marketable securities - Trading | $223,670 | - | $223,670 | | **Total Investment in securities at Fair Value** | **$223,670** | **$1,170,771** | **$1,394,441** | - SHRG warrants and convertible loans receivable are classified as **Level 2** financial instruments, with fair values calculated using binomial option pricing and binomial tree models, respectively, based on assumptions like risk-free interest rate, expected life, discount rate, and volatility[131](index=131&type=chunk)[132](index=132&type=chunk) - For the nine months ended September 30, 2025, the convertible note receivable with SHRG increased from **$744,652** to **$1,170,619**, with a revaluation loss of **$4,033**. The company also recognized **$1,895** in realized gains and **$8,607** in unrealized gains on marketable securities[134](index=134&type=chunk)[137](index=137&type=chunk) [NOTE 12 — STOCKHOLDERS' EQUITY](index=32&type=section&id=NOTE%2012%20%E2%80%94%20STOCKHOLDERS%27%20EQUITY) This note details the company's capital structure, including authorized stock, warrant activity, and the impact of a **1-for-5 reverse stock split** - The company's authorized capital stock consists of **55,000,000 shares** of common stock and **1,000,000 shares** of preferred stock. No preferred stock was outstanding as of September 30, 2025, or December 31, 2024[138](index=138&type=chunk) Warrant Activity (Nine Months Ended September 30, 2025) | Metric | Warrants for Common Shares (shares) | Weighted Average Exercise Price ($) | | :----------------------------------- | :------------------------- | :------------------------------ | | Warrants Outstanding as of Dec 31, 2024 | 909,874 | $57.5 | | Granted | 250,000 | $2.0 | | Exercised | (250,000) | $(2.0) | | Warrants Outstanding as of Sep 30, 2025 | 909,874 | $57.5 | - In **January 2025**, the company completed a public offering of **3,162,500 shares** of common stock and **1,250,000 pre-funded warrants**, generating approximately **$1.76 million** in gross proceeds. A **1-for-5 reverse stock split** was effective on **February 24, 2025**[149](index=149&type=chunk)[152](index=152&type=chunk) [NOTE 13 —LEASES](index=36&type=section&id=NOTE%2013%20%E2%80%94LEASES) The company's operating lease liabilities decreased from **$560,900** to **$127,629**, with lease expenses falling due to café closures Operating Lease Liabilities | Date | Right-of-use assets ($) | Lease liabilities - current ($) | Lease liabilities - non-current ($) | Total lease liabilities ($) | | :------------------- | :------------------ | :-------------------------- | :------------------------------ | :---------------------- | | September 30, 2025 | $124,034 | $103,545 | $24,084 | $127,629 | | December 31, 2024 | $548,757 | $340,651 | $220,249 | $560,900 | Total Lease Expenses (Nine Months Ended September 30) | Year | Amount ($) | | :------------------- | :------- | | 2025 | $223,046 | | 2024 | $377,945 | - The weighted-average remaining lease term is **1.12 years**, with a weighted-average discount rate of **3.44%**. The company utilizes practical expedients for short-term leases and non-lease components[153](index=153&type=chunk)[154](index=154&type=chunk) [NOTE 14 — COMMITMENTS AND CONTINGENCIES](index=37&type=section&id=NOTE%2014%20%E2%80%94%20COMMITMENTS%20AND%20CONTINGENCIES) No material legal proceedings or claims are pending against the company that could materially affect its business or financial condition - No material legal proceedings or claims are pending against the company that could reasonably be expected to have a material adverse effect on its business and financial condition[156](index=156&type=chunk) [NOTE 15 — CONCENTRATION RISK](index=38&type=section&id=NOTE%2015%20%E2%80%94%20CONCENTRATION%20RISK) The company faces concentration risk from uninsured cash balances (**$2,423,186**) and reliance on five major suppliers (**65%** of cost of revenue) Uninsured Cash Balances | Date | Amount ($) | | :------------------- | :----------- | | September 30, 2025 | $2,423,186 | | December 31, 2024 | $3,861,339 | - Five suppliers accounted for approximately **65%** of the company's total costs of revenue for the nine months ended September 30, 2025 (compared to **82%** in 2024), indicating a significant supplier concentration risk[158](index=158&type=chunk) [NOTE 16 — CORRECTION OF AN IMMATERIAL ERRORS IN PREVIOUSLY ISSUED FINANCIAL STATEMENTS](index=38&type=section&id=NOTE%2016%20%E2%80%94%20CORRECTION%20OF%20AN%20IMMATERIAL%20ERRORS%20IN%20PREVIOUSLY%20ISSUED%20FINANCIAL%20STATEMENTS) Immaterial errors in previously issued financial statements regarding non-controlling interests and related party balances were corrected, with no impact on net loss or investment fair value - Immaterial errors in the presentation of non-controlling interests and certain related party balances were reclassified for the period ended June 30, 2025, with no impact on net loss or investment fair value[159](index=159&type=chunk)[160](index=160&type=chunk)[161](index=161&type=chunk) [NOTE 17— SUBSEQUENT EVENTS](index=38&type=section&id=NOTE%2017%E2%80%94%20SUBSEQUENT%20EVENTS) On **October 6, 2025**, the company purchased a **$200,000** convertible promissory note from SHRG - On **October 6, 2025**, the company purchased a **$200,000** convertible promissory note from SHRG, convertible into SHRG common stock at **$0.006 per share**[162](index=162&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=39&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the company's financial condition, results of operations, business developments, and liquidity [Overview](index=39&type=section&id=Overview) HWH International Inc. is expanding beyond F&B into Hapi Marketplace and Hapi Wealth Builder, while refocusing F&B operations due to café closures - The company launched Hapi Marketplace in **November 2024**, a B2C platform with over **forty-seven product categories**, initially in the US with plans to expand to South Korea, Hong Kong, and other parts of Asia[165](index=165&type=chunk)[166](index=166&type=chunk) - Hapi Cafés, designed as standalone businesses and community hubs, have seen closures in Singapore (Alset F&B (PLQ) Pte. Ltd., Ketomei Pte. Ltd.) and South Korea (Hapi Café Korea Inc.) in **2024-2025** due to unsustainable revenue[167](index=167&type=chunk) - Hapi Wealth Builder, an educational program for equity investment and wealth-building, is developing digital content and targeting a rollout in selected regions later in **2025**, with a China headquarters planned[168](index=168&type=chunk)[169](index=169&type=chunk)[170](index=170&type=chunk) [Our Revenue Model](index=40&type=section&id=Our%20Revenue%20Model) The company's revenue is almost entirely from F&B sales, which decreased for Q3 2025, with Singapore accounting for the majority Total Revenue and Net Loss | Metric | Three Months Ended Sep 30, 2025 ($) | Three Months Ended Sep 30, 2024 ($) | Nine Months Ended Sep 30, 2025 ($) | Nine Months Ended Sep 30, 2024 ($) | | :------------------- | :------------------------------ | :------------------------------ | :----------------------------- | :----------------------------- | | Total Revenue | $206,778 | $345,523 | $812,366 | $966,515 | | Net Loss | $(299,618) | $(537,143) | $(710,613) | $(2,277,303) | - Food and beverage sales accounted for approximately **100%** of revenue for both the three and nine months ended September 30, 2025 and 2024[172](index=172&type=chunk) Revenue by Geography (Nine Months Ended September 30, 2025) | Region | Percentage of Total Revenue (%) | | :------------------- | :-------------------------- | | South Korea | 9% | | Singapore | 91% | [Matters that May or Are Currently Affecting Our Business](index=40&type=section&id=Matters%20that%20May%20or%20Are%20Currently%20Affecting%20Our%20Business) Key challenges include improving revenue, financing acquisitions, attracting skilled personnel, and controlling operating expenses during expansion - Challenges include improving revenue through cross-selling and revenue-sharing, identifying and financing complementary acquisitions, attracting skilled technical and sales personnel, and controlling operating expenses during business expansion[174](index=174&type=chunk) [Summary of Significant Accounting Policies](index=41&type=section&id=Summary%20of%20Significant%20Accounting%20Policies) This section reiterates the company's adherence to U.S. GAAP, use of estimates, and policies for revenue recognition and cost of revenue - Financial statements are prepared in accordance with **U.S. GAAP**, requiring management to make significant estimates and assumptions[175](index=175&type=chunk)[176](index=176&type=chunk) - Revenue from F&B business is recognized when products are delivered to customers, net of taxes, allowances, refunds, or returns[177](index=177&type=chunk)[179](index=179&type=chunk) - Cost of revenue includes the cost of procuring finished goods from suppliers and related shipping and handling fees[180](index=180&type=chunk) [Results of Operations](index=41&type=section&id=Results%20of%20Operations) The company experienced decreased revenue and cost of revenue due to café closures, reduced operating expenses, and a significantly lower net loss from a gain on disposal of subsidiaries Summary of Statements of Operations (Three and Nine Months Ended September 30) | Metric | 3 Months Ended Sep 30, 2025 ($) | 3 Months Ended Sep 30, 2024 ($) | 9 Months Ended Sep 30, 2025 ($) | 9 Months Ended Sep 30, 2024 ($) | | :----------------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Revenue | $206,778 | $345,523 | $812,366 | $966,515 | | Cost of revenue | $83,196 | $185,654 | $392,300 | $478,436 | | Operating expenses | $369,978 | $487,394 | $1,600,381 | $2,637,517 | | Other non-operating expenses / (income) | $48,698 | $209,618 | $(517,174) | $127,865 | | Provision for income taxes | $4,524 | - | $47,472 | - | | Net loss | $299,618 | $537,143 | $710,613 | $2,277,303 | - Revenue decreased in **2025** due to the cessation of café operations in Singapore and Korea in **August** and **September 2025**[182](index=182&type=chunk) - Operating expenses decreased primarily due to lower professional fees related to filings and the closure of cafés[185](index=185&type=chunk) - Other non-operating expenses decreased for the three-month period due to a reduction in unrealized loss on convertible note receivable. For the nine-month period, it shifted to income due to a **$383,677 gain on disposal of subsidiaries**[186](index=186&type=chunk) [Liquidity and Capital Resources](index=43&type=section&id=Liquidity%20and%20Capital%20Resources) Cash decreased, liabilities decreased, and total assets increased. Management believes available cash and related party financing are sufficient for the next **12 months** Liquidity and Capital Resources Overview | Metric | September 30, 2025 ($) | December 31, 2024 ($) | | :------------------- | :------------------- | :------------------- | | Cash | $2,897,972 | $4,341,746 | | Liabilities | $2,276,968 | $3,531,523 | | Total Assets | $5,184,394 | $6,408,722 | - The company believes its available cash, anticipated cash from operations, and financing from related parties are sufficient to alleviate substantial doubt about its ability to continue as a going concern for at least the next **12 months**[189](index=189&type=chunk)[192](index=192&type=chunk) - A **$1,000,000** credit facility from Alset Inc. has **$700,000** available for draw as of September 30, 2025. Alset International Limited's commitment to provide additional funding was released as of **September 30, 2025**[190](index=190&type=chunk)[193](index=193&type=chunk) [Summary of Cash Flows](index=43&type=section&id=Summary%20of%20Cash%20Flows) Net cash used in operating activities decreased, investing activities shifted to a significant outflow, and financing activities provided cash from stock issuance Summary of Cash Flows (Nine Months Ended September 30) | Cash Flow Activity | 2025 ($) | 2024 ($) | | :----------------------------------- | :----------- | :----------- | | Net cash used in operating activities | $(728,326) | $(1,404,073) | | Net cash (used in) / provided by investing activities | $(1,015,281) | $20,451,688 | | Net cash provided by / (used in) financing activities | $1,203,307 | $(19,405,313) | - The decrease in cash used in operating activities in **2025** was primarily due to a **$383,677 gain on disposal of HWH World Inc.**[195](index=195&type=chunk) - Investing activities in **2025** included significant payments for convertible loans receivable (**$430,000**), loans receivable (**$280,000**), investment in associate (**$54,621**), and marketable securities (**$207,933**)[196](index=196&type=chunk) - Financing activities in **2025** were positively impacted by **$1,409,983** from the issuance of common stock and warrants, while **2024** saw large cash outflows from redemptions of Class A Common Stock[197](index=197&type=chunk) [Nasdaq Compliance](index=44&type=section&id=Nasdaq%20Compliance) The company addressed Nasdaq listing deficiencies, including minimum bid price, through a **1-for-5 reverse stock split**, regaining compliance and maintaining its Nasdaq Capital Market listing - The company received notices from Nasdaq regarding non-compliance with minimum market value of listed securities (MVLS), market value of publicly held shares, and minimum bid price requirements[198](index=198&type=chunk)[200](index=200&type=chunk)[202](index=202&type=chunk) - A **1-for-5 reverse stock split** was effectuated on **February 24, 2025**, to address the bid price deficiency[203](index=203&type=chunk) - On **March 10, 2025**, the company regained compliance with Nasdaq's minimum bid price rule and is currently listed on the Nasdaq Capital Market[204](index=204&type=chunk) [Contractual Obligations](index=44&type=section&id=Contractual%20Obligations) As of **September 30, 2025**, the company had no long-term debt, capital lease, operating lease, purchase obligations, or other long-term liabilities - As of **September 30, 2025**, the company had no long-term debt, capital lease, operating lease, purchase obligations, or other long-term liabilities[205](index=205&type=chunk) [Administrative Services Agreement](index=45&type=section&id=Administrative%20Services%20Agreement) Monthly fees to Alset Management Group Inc. for administrative services ceased upon completion of the Business Combination - Monthly fees of **$10,000** to Alset Management Group Inc. for administrative services ceased upon completion of the Business Combination[207](index=207&type=chunk) [Underwriting Agreement](index=45&type=section&id=Underwriting%20Agreement) The company settled its deferred underwriting fee of **$3,018,750** with EF Hutton, LLC through cash, common stock, and a promissory note, granting a right of first refusal - A deferred underwriting fee of **$3,018,750** to EF Hutton, LLC was settled with **$325,000** cash, **149,443 shares** of common stock, and a **$1,184,375** promissory note[209](index=209&type=chunk) - EF Hutton, LLC was granted an irrevocable right of first refusal for all future public and private equity and debt offerings for **24 months** after the Business Combination closing[209](index=209&type=chunk) [Merger Agreement](index=45&type=section&id=Merger%20Agreement) The Business Combination, involving the merger of HWH Merger Sub Inc. into HWH International Inc. (Nevada), closed on **January 9, 2024**, with certain closing conditions waived - The Business Combination, involving the merger of HWH Merger Sub Inc. into HWH International Inc. (Nevada), closed on **January 9, 2024**, with certain closing conditions waived[210](index=210&type=chunk) [Registration Rights Agreement](index=45&type=section&id=Registration%20Rights%20Agreement) The company is obligated to register certain securities held by the Sponsor and other holders, aiming for effectiveness within **60 business days** post-closing - The company is obligated to register certain securities, including common stock and warrants held by the Sponsor and other holders, and to use best efforts to make the registration statement effective within **60 business days** after the Business Combination closing[211](index=211&type=chunk) [Lock-Up Agreements](index=46&type=section&id=Lock-Up%20Agreements) Certain HWH Holders and management are subject to Lock-Up Agreements, restricting common stock transfer for **nine months** post-closing, with early release conditions - Holders of more than **5%** of HWH Common Stock and certain management are subject to Lock-Up Agreements, restricting transfer of their shares for **nine months** post-closing, with conditions for early release[212](index=212&type=chunk) [Impact of Inflation](index=46&type=section&id=Impact%20of%20Inflation) Inflation has not materially impacted the company's results of operations for the nine months ended September 30, 2025, or the year ended December 31, 2024 - Inflation has not had a material impact on the company's results of operations for the nine months ended September 30, 2025, or the year ended December 31, 2024[213](index=213&type=chunk) [Impact of Foreign Exchange Rates](index=46&type=section&id=Impact%20of%20Foreign%20Exchange%20Rates) Fluctuations in foreign exchange rates on intercompany loans (approximately **$0.23 million**) are expected to continue impacting results due to volatility - Foreign exchange rate changes on intercompany loans (Singapore to South Korea, approximately **$0.23 million** as of September 30, 2025) are a primary reason for fluctuations in foreign currency transaction gains or losses[214](index=214&type=chunk) - These fluctuations are expected to continue impacting results due to exchange rate volatility, as intercompany loans are not expected to be repaid in the short term[214](index=214&type=chunk) [Emerging Growth Company Status](index=46&type=section&id=Emerging%20Growth%20Company%20Status) As an '**emerging growth company**,' the company utilizes exemptions from certain reporting requirements, including delaying new accounting standard adoption - The company is an '**emerging growth company**' and has elected to take advantage of the extended transition period for complying with new or revised accounting standards, delaying adoption until private companies are required to comply[215](index=215&type=chunk) [Controls and Procedures](index=47&type=section&id=Controls%20and%20Procedures) Management identified material weaknesses in internal control due to limited accounting personnel and inadequate policies, but the company is exempt from independent auditor attestation - Management identified **material weaknesses** in internal control over financial reporting as of **September 30, 2025**, due to limited accounting personnel (lack of proper segregation of duties) and inadequately established accounting policies and procedures[220](index=220&type=chunk)[228](index=228&type=chunk) - The company is not required to comply with the independent registered public accounting firm attestation requirements of Section 404 of the Sarbanes-Oxley Act due to its **emerging growth company status**[217](index=217&type=chunk) [Resignation of Chief Executive Officer](index=47&type=section&id=Resignation%20of%20Chief%20Executive%20Officer) John 'JT' Thatch resigned as Chief Executive Officer on October 3, 2025 - John 'JT' Thatch resigned from the position of Chief Executive Officer on **October 3, 2025**[221](index=221&type=chunk) [Appointment of New Chief Executive Officer](index=47&type=section&id=Appointment%20of%20New%20Chief%20Executive%20Officer) Chan Heng Fai, Chairman of the Board, was appointed as the new Chief Executive Officer on October 3, 2025 - Chan Heng Fai, Chairman of the Board, was appointed as the Chief Executive Officer on **October 3, 2025**[222](index=222&type=chunk) [Appointment of New Member of the Board of Directors](index=47&type=section&id=Appointment%20of%20New%20Member%20of%20the%20Board%20of%20Directors) Lim Sheng Hon Danny (Danny Lim), the company's Chief Operating Officer, was appointed to the Board of Directors on October 3, 2025 - Lim Sheng Hon Danny (Danny Lim), the Chief Operating Officer, was appointed as a member of the Board of Directors on **October 3, 2025**[223](index=223&type=chunk) [Item 3. Quantitative and Qualitative Disclosures Regarding Market Risk](index=47&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20Regarding%20Market%20Risk) As a smaller reporting company, HWH International Inc. is not required to provide quantitative and qualitative disclosures about market risk - As a **smaller reporting company**, HWH International Inc. is not required to provide quantitative and qualitative disclosures regarding market risk[224](index=224&type=chunk) [Item 4. Controls and Procedures](index=47&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls were effective, but identified material weaknesses in internal control due to limited personnel and inadequate policies - Management concluded that disclosure controls and procedures were **effective** as of **September 30, 2025**[226](index=226&type=chunk) - Material weaknesses in internal control over financial reporting include limited accounting personnel leading to inadequate segregation of duties, and a lack of well-defined accounting policies and procedures[228](index=228&type=chunk) - No changes in internal control over financial reporting materially affected, or are reasonably likely to materially affect, the company's internal control during the fiscal interim ended **September 30, 2025**[229](index=229&type=chunk) [Part II. Other Information](index=49&type=section&id=Part%20II.%20Other%20Information) This section provides additional information, including legal proceedings, risk factors, and exhibits [Item 1. Legal Proceedings](index=49&type=section&id=Item%201.%20Legal%20Proceedings) There are no legal proceedings to report - None[231](index=231&type=chunk) [Item 1A. Risk Factors](index=49&type=section&id=Item%201A.%20Risk%20Factors) As a smaller reporting company, HWH International Inc. is not required to provide risk factor disclosures - As a **smaller reporting company**, HWH International Inc. is not required to provide risk factor information[232](index=232&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=49&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This item is not applicable to the company for this reporting period - Not applicable[233](index=233&type=chunk) [Item 3. Defaults Upon Senior Securities](index=49&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) There are no defaults upon senior securities to report - None[234](index=234&type=chunk) [Item 4. Mine Safety Disclosures](index=49&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not Applicable[235](index=235&type=chunk) [Item 5. Other Information](index=49&type=section&id=Item%205.%20Other%20Information) There is no other information to report under this item - None[236](index=236&type=chunk) [Item 6. Exhibits](index=50&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed as part of, or incorporated by reference into, this Quarterly Report on Form 10-Q Key Exhibits Filed | Exhibit | Description | | :------ | :---------- | | 10.1 | Sale and Purchase Agreement with Alset International Limited dated September 10, 2025 | | 31.1 | Certification of Principal Executive Officer | | 31.2 | Certification of Principal Financial Officer | | 32.1 | Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350 | | 32.2 | Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350 | | 101.INS | Inline XBRL Instance Document | | 104 | Cover Page Interactive Data File | [SIGNATURES](index=51&type=section&id=SIGNATURES) This section includes the signatures of the Principal Executive Officer and Principal Accounting and Financial Officer - The report was signed by Chan Heng Fai, Chief Executive Officer (Principal Executive Officer), and Rongguo Wei, Chief Financial Officer (Principal Accounting and Financial Officer), on **October 21, 2025**[241](index=241&type=chunk)

PART I. FINANCIAL INFORMATION Presents HWH International Inc.'s unaudited consolidated financial statements and related disclosures for Q2 2025 and 2024 [Item 1. Financial Statements (Unaudited)](index=3&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) Presents HWH International Inc.'s unaudited consolidated financial statements and detailed notes for the periods ended June 30, 2025 and 2024 [Consolidated Balance Sheets](index=3&type=section&id=Consolidated%20Balance%20Sheets) Details HWH International Inc.'s financial position, including assets, liabilities, and equity, as of June 30, 2025, and December 31, 2024 Consolidated Balance Sheets (in US Dollars) | Metric | June 30, 2025 (Unaudited) | December 31, 2024 | | :----------------------------------- | :------------------------ | :------------------ | | **Assets** | | | | Total Current Assets | $9,177,600 | $9,588,697 | | Total Non-Current Assets | $1,425,100 | $933,725 | | **TOTAL ASSETS** | **$10,602,700** | **$10,522,422** | | **Liabilities & Stockholders' Equity** | | | | Total Current Liabilities | $7,146,791 | $7,424,974 | | Total Non-Current Liabilities | $135,386 | $220,249 | | Total Stockholders' Equity | $3,320,523 | $2,877,199 | | **TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY** | **$10,602,700** | **$10,522,422** | - Total assets increased slightly from **$10,522,422** at December 31, 2024, to **$10,602,700** at June 30, 2025[8](index=8&type=chunk) - Total liabilities decreased from **$7,645,223** to **$7,282,177**, while total stockholders' equity increased from **$2,877,199** to **$3,320,523**[8](index=8&type=chunk)[185](index=185&type=chunk) [Consolidated Statements of Operations and Other Comprehensive Loss](index=4&type=section&id=Consolidated%20Statements%20of%20Operations%20and%20Other%20Comprehensive%20Loss) Reports HWH International Inc.'s revenues, expenses, and net income or loss for the three and six months ended June 30, 2025 and 2024 Consolidated Statements of Operations and Other Comprehensive Loss (in US Dollars) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------------ | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Revenue | $310,391 | $334,882 | $605,588 | $620,992 | | Cost of revenue | $(161,501) | $(169,969) | $(309,104) | $(292,782) | | Gross profit | $148,890 | $164,913 | $296,484 | $328,210 | | Total Operating expenses | $(488,681) | $(654,740) | $(1,230,403) | $(2,150,123) | | Total Other non-operating income | $415,768 | $86,186 | $565,872 | $81,753 | | Income (loss) before income taxes | $75,977 | $(403,641) | $(368,047) | $(1,740,160) | | Net income (loss) | $75,977 | $(403,641) | $(410,995) | $(1,740,160) | | Net income (loss) attributable to common stockholders | $83,389 | $(387,923) | $(394,611) | $(1,724,761) | | Basic Loss per common share | $(0.01) | $(0.12) | $(0.06) | $(0.55) | | Diluted Loss per common share | $(0.01) | $(0.12) | $(0.06) | $(0.55) | - The company reported a **net income of $75,977** for the three months ended June 30, 2025, a significant improvement from a net loss of **$(403,641)** in the same period of 2024[10](index=10&type=chunk)[184](index=184&type=chunk) - For the six months ended June 30, 2025, the net loss decreased to **$(410,995)** from **$(1,740,160)** in the prior year period[10](index=10&type=chunk)[184](index=184&type=chunk) - Revenue decreased slightly for both the three-month and six-month periods ended June 30, 2025, compared to 2024, while gross profit also saw a decrease[10](index=10&type=chunk)[179](index=179&type=chunk)[181](index=181&type=chunk) - Operating expenses significantly decreased, and other non-operating income saw a substantial increase, primarily due to a gain on disposal of subsidiaries[10](index=10&type=chunk)[182](index=182&type=chunk)[183](index=183&type=chunk) [Consolidated Statements of Changes in Stockholders' Equity](index=6&type=section&id=Consolidated%20Statements%20of%20Changes%20in%20Stockholders'%20Equity) Outlines the changes in HWH International Inc.'s stockholders' equity for the six months ended June 30, 2025 and 2024 Consolidated Statements of Changes in Stockholders' Equity (in US Dollars) | Metric | December 31, 2024 | June 30, 2025 | | :----------------------------------- | :------------------ | :------------------------ | | Common Stock | $559 | $647 | | Additional Paid-in Capital | $9,051,601 | $10,749,308 | | Accumulated Other Comprehensive Loss | $(257,598) | $(811,200) | | Accumulated Deficit | $(6,029,198) | $(6,711,621) | | Total HWH International Inc. Stockholders' Equity | $2,765,364 | $3,227,134 | | Non-controlling Interests | $111,835 | $93,389 | | Total Stockholders' Equity | $2,877,199 | $3,320,523 | - Total stockholders' equity increased from **$2,877,199** at December 31, 2024, to **$3,320,523** at June 30, 2025, driven by an increase in additional paid-in capital from common stock issuance and warrants exercised, despite an increase in accumulated other comprehensive loss and accumulated deficit[14](index=14&type=chunk) [Consolidated Statements of Cash Flows](index=8&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Summarizes HWH International Inc.'s cash inflows and outflows from operating, investing, and financing activities for the six months ended June 30, 2025 and 2024 Consolidated Statements of Cash Flows (in US Dollars) | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------------------------------------------ | :----------------------------- | :----------------------------- | | Net cash used in operating activities | $(528,424) | $(1,129,040) | | Net cash (used in) / provided by investing activities | $(741,523) | $20,554,735 | | Net cash provided by / (used in) financing activities | $578,857 | $(19,741,963) | | Net decrease in cash | $(691,090) | $(316,268) | | Cash at end of period | $3,729,873 | $821,353 | - Net cash used in operating activities decreased significantly from **$(1,129,040)** in H1 2024 to **$(528,424)** in H1 2025, primarily due to a gain on disposal of subsidiaries[17](index=17&type=chunk)[191](index=191&type=chunk)[192](index=192&type=chunk) - Investing activities shifted from a net cash provided of **$20.55 million** in H1 2024 to a net cash used of **$(741,523)** in H1 2025, mainly due to convertible note and loan receivables to related parties and purchase of financial assets[17](index=17&type=chunk)[193](index=193&type=chunk) - Financing activities also saw a major swing, providing **$578,857** in H1 2025 compared to using **$(19.74) million** in H1 2024, largely due to proceeds from common stock and warrants issuance[17](index=17&type=chunk)[194](index=194&type=chunk) [Notes to Unaudited Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Unaudited%20Consolidated%20Financial%20Statements) Provides detailed explanations of HWH International Inc.'s accounting policies and specific financial statement line items [NOTE 1 — DESCRIPTION OF ORGANIZATION, BUSINESS OPERATIONS](index=9&type=section&id=NOTE%201%20%E2%80%94%20DESCRIPTION%20OF%20ORGANIZATION%2C%20BUSINESS%20OPERATIONS) Describes HWH International Inc.'s business, recent corporate actions, and operational structure - HWH International Inc. operates a food and beverage (F&B) business in Singapore and South Korea, including three cafés and an online healthy food store[19](index=19&type=chunk) - The company was originally incorporated as Alset Capital Acquisition Corp. in October 2021 and completed a business combination with HWH International Inc. (Nevada) on January 9, 2024, changing its name to HWH International Inc[20](index=20&type=chunk)[21](index=21&type=chunk) - The total merger consideration was **$125,000,000**, paid in **12,500,000** shares of common stock[23](index=23&type=chunk) - On January 6, 2025, the company closed a public offering of **632,500** shares of common stock and **250,000** pre-funded warrants, generating approximately **$1.76 million** in gross proceeds[24](index=24&type=chunk) - A **1-for-5 reverse stock split** was effective on February 24, 2025[24](index=24&type=chunk) [NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES](index=9&type=section&id=NOTE%202%20%E2%80%94%20SUMMARY%20OF%20SIGNIFICANT%20ACCOUNTING%20POLICIES) Outlines HWH International Inc.'s key accounting principles, revenue recognition, and going concern considerations - The company's financial statements are prepared in conformity with US GAAP and consolidate all majority-owned and controlled subsidiaries[26](index=26&type=chunk)[28](index=28&type=chunk) - Substantially all revenue for the six months ended June 30, 2025 and 2024, was generated by the F&B business, primarily from subsidiaries in Singapore (F&B1, HCSGPL, KPL) and South Korea (HCKI)[31](index=31&type=chunk) - HWH is an 'emerging growth company' and has elected to use the extended transition period for complying with new or revised financial accounting standards[33](index=33&type=chunk)[34](index=34&type=chunk) - The functional and reporting currency is the U.S. dollar, while subsidiaries maintain records in local currencies[35](index=35&type=chunk) - Revenue is primarily generated from F&B product sales, recognized when control is transferred to customers[51](index=51&type=chunk)[53](index=53&type=chunk) - Cost of revenue includes finished goods, shipping, handling, contractor fees, and franchise commissions[59](index=59&type=chunk)[61](index=61&type=chunk) - Advertising expenses significantly increased from **$6,566** in H1 2024 to **$107,094** in H1 2025[63](index=63&type=chunk) - The company's net loss, operating loss, and negative cash flow from operations raise substantial doubt about its ability to continue as a going concern[73](index=73&type=chunk)[74](index=74&type=chunk) - Management believes available cash, anticipated cash from operations, and financing from related parties (Alset Inc.) are sufficient for the next 12 months, including a **$700,000** remaining credit line[76](index=76&type=chunk)[78](index=78&type=chunk) [NOTE 3 — ACCOUNTS RECEIVABLE, NET](index=18&type=section&id=NOTE%203%20%E2%80%94%20ACCOUNTS%20RECEIVABLE%2C%20NET) Details the composition and changes in HWH International Inc.'s net accounts receivable Accounts Receivable, Net (in US Dollars) | Metric | June 30, 2025 | December 31, 2024 | | :-------------------- | :------------ | :------------------ | | Accounts receivable, net | $22,948 | $17,546 | - Accounts receivable, net, primarily from credit card processors in the F&B business and rent, increased to **$22,948** as of June 30, 2025, from **$17,546** as of December 31, 2024[84](index=84&type=chunk) - The allowance for credit losses remains immaterial[84](index=84&type=chunk) [NOTE 4 — INVENTORY](index=18&type=section&id=NOTE%204%20%E2%80%94%20INVENTORY) Provides information on HWH International Inc.'s inventory balances and valuation policies Inventory (in US Dollars) | Metric | June 30, 2025 | December 31, 2024 | | :------- | :------------ | :------------------ | | Inventory | $6,369 | $1,574 | - Inventory, consisting of finished goods, increased to **$6,369** as of June 30, 2025, from **$1,574** as of December 31, 2024[85](index=85&type=chunk) - No provision for slow-moving or obsolete inventory was recorded[85](index=85&type=chunk) [NOTE 5 — PROPERTY AND EQUIPMENT, NET](index=18&type=section&id=NOTE%205%20%E2%80%94%20PROPERTY%20AND%20EQUIPMENT%2C%20NET) Presents HWH International Inc.'s property and equipment balances and associated depreciation expenses Property and Equipment, Net (in US Dollars) | Metric | June 30, 2025 | December 31, 2024 | | :-------------------------- | :------------ | :------------------ | | Total Property and equipment, net | $31,876 | $33,588 | | Depreciation expenses (3 months) | $3,380 | $15,666 | | Depreciation expenses (6 months) | $6,662 | $30,209 | - Net property and equipment decreased slightly to **$31,876** at June 30, 2025, from **$33,588** at December 31, 2024[86](index=86&type=chunk) - Depreciation expenses for the three and six months ended June 30, 2025, were **$3,380** and **$6,662**, respectively, significantly lower than the prior year periods[86](index=86&type=chunk) [NOTE 6 — INVESTMENTS AT COST](index=18&type=section&id=NOTE%206%20%E2%80%94%20INVESTMENTS%20AT%20COST) Discusses HWH International Inc.'s investments and the gain from the disposal of a subsidiary - The company impaired its **$14,010** investment in Ideal Food & Beverage Pte. Ltd. to **$0** due to net liabilities as of December 31, 2024[88](index=88&type=chunk) - On April 23, 2025, HWH completed the sale of HWH World Inc. to AES Group Inc., generating a **$383,667** gain recorded in other non-operating income[90](index=90&type=chunk) [NOTE 7 – LOAN DUE TO THIRD PARTY](index=20&type=section&id=NOTE%207%20%E2%80%93%20LOAN%20DUE%20TO%20THIRD%20PARTY) Details HWH International Inc.'s loan obligations to a third party and current negotiation status - The company entered into a Satisfaction and Discharge of Indebtedness Agreement with EF Hutton LLC (now D. Boral Capital LLC) on December 18, 2023, settling a **$3,018,750** underwriting fee with **$325,000** cash, **149,443** common shares, and a **$1,184,375** promissory note[91](index=91&type=chunk) - The first installment of the promissory note, due October 2024, was paid in January 2025, resulting in a default that is currently under negotiation[91](index=91&type=chunk) [NOTE 8 — DUE TO ALSET INC.](index=20&type=section&id=NOTE%208%20%E2%80%94%20DUE%20TO%20ALSET%20INC.) Reports amounts owed to Alset Inc. and the terms of the credit facility Due to Alset Inc. (in US Dollars) | Metric | June 30, 2025 | December 31, 2024 | | :-------------------- | :------------ | :------------------ | | Amount due to AEI | $459,614 | $209,614 | | Outstanding interest on Credit Facility | $3,164 | $0 | - The amount due to Alset Inc. (AEI), the ultimate holding company, for short-term working capital advances increased to **$459,614** at June 30, 2025, from **$209,614** at December 31, 2024[92](index=92&type=chunk)[94](index=94&type=chunk) - A **$1,000,000** credit facility from AEI was amended on April 14, 2025, extending the due date for advances to April 14, 2026, with **$700,000** remaining available for draw[93](index=93&type=chunk)[94](index=94&type=chunk) [NOTE 9 — DUE TO/FROM RELATED PARTIES](index=21&type=section&id=NOTE%209%20%E2%80%94%20DUE%20TO%2FFROM%20RELATED%20PARTIES) Summarizes HWH International Inc.'s balances with various related parties for working capital and other transactions Due To/From Related Parties (in US Dollars) | Metric | June 30, 2025 | December 31, 2024 | | :-------------------------------- | :------------ | :------------------ | | Due to Alset International Limited | $5,052,090 | $5,096,047 | | Due from Alset Business Development Pte. Limited | $4,231,148 | $4,113,701 | | Due from HotApp International Limited | $250,653 | $0 | - Amounts due to Alset International Limited (AIL) for working capital advances decreased slightly to **$5,052,090** at June 30, 2025[95](index=95&type=chunk) - AIL was released from its financial support obligations to the company on April 14, 2025[97](index=97&type=chunk) - Amounts due from Alset Business Development Pte. Limited increased to **$4,231,148**, and a new amount of **$250,653** is due from HotApp International Limited as of June 30, 2025[98](index=98&type=chunk)[99](index=99&type=chunk) [NOTE 10 — RELATED PARTY TRANSACTIONS](index=22&type=section&id=NOTE%2010%20%E2%80%94%20RELATED%20PARTY%20TRANSACTIONS) Describes HWH International Inc.'s transactions with related parties, including convertible notes and new acquisitions - The company has multiple convertible promissory notes (CN 1-7) and warrants with Sharing Services Global Corporation (SHRG), a related party[102](index=102&type=chunk)[103](index=103&type=chunk)[105](index=105&type=chunk)[106](index=106&type=chunk)[109](index=109&type=chunk)[110](index=110&type=chunk)[111](index=111&type=chunk)[112](index=112&type=chunk)[113](index=113&type=chunk) - As of June 30, 2025, the total fair value of warrants and convertible loans receivable from SHRG was **$1,084,861**, up from **$757,924** at December 31, 2024[116](index=116&type=chunk) - The company also provided loans to SHRG totaling **$280,000** in April 2025[116](index=116&type=chunk) - HWH acquired a **60%** interest in L.E.H. Insurance Group, LLC (LEH) on February 27, 2025, for **$75,000**, recording **$77,480** of goodwill which was immediately written off[123](index=123&type=chunk)[124](index=124&type=chunk) - LEH is an early-stage insurance agency with no employees and no profit yet[125](index=125&type=chunk) - The company also has a joint venture, HapiTravel Holding Pte. Ltd. (HTHPL), and HTHPL owed HWH **$171,343** as of June 30, 2025[126](index=126&type=chunk)[127](index=127&type=chunk) [NOTE 11 — STOCKHOLDERS' EQUITY](index=27&type=section&id=NOTE%2011%20%E2%80%94%20STOCKHOLDERS'%20EQUITY) Details HWH International Inc.'s capital structure, including common stock, warrants, and recent equity offerings - The company's authorized capital stock consists of **55,000,000** shares of common stock and **1,000,000** shares of preferred stock, with no preferred stock outstanding[129](index=129&type=chunk) - A **1-for-5 reverse stock split** was effected on February 24, 2025[138](index=138&type=chunk) - As of June 30, 2025, there were **909,874** warrants outstanding with a weighted average exercise price of **$57.5** and a remaining contractual term of **3.53 years**[143](index=143&type=chunk) - On January 3, 2025, the company priced a public offering of **3,162,500** common shares and **1,250,000** pre-funded warrants, generating approximately **$1.76 million** in gross proceeds before expenses[139](index=139&type=chunk) [NOTE 12 —LEASES](index=29&type=section&id=NOTE%2012%20%E2%80%94LEASES) Provides information on HWH International Inc.'s operating lease assets, liabilities, and expenses Leases (in US Dollars) | Metric | June 30, 2025 | December 31, 2024 | | :-------------------------- | :------------ | :------------------ | | Right-of-use assets | $325,130 | $548,757 | | Lease liabilities - current | $197,235 | $340,651 | | Lease liabilities - non-current | $135,386 | $220,249 | | Total lease liabilities | $332,621 | $560,900 | - The company has operating leases for office spaces and F&B stores in South Korea and Singapore[144](index=144&type=chunk) - The weighted-average remaining lease term is **1.78 years** with a weighted-average discount rate of **2.95%**[146](index=146&type=chunk) - Total lease expenses for the six months ended June 30, 2025, were **$174,679**, down from **$260,139** in the prior year[146](index=146&type=chunk) [NOTE 13 — COMMITMENTS AND CONTINGENCIES](index=30&type=section&id=NOTE%2013%20%E2%80%94%20COMMITMENTS%20AND%20CONTINGENCIES) States that HWH International Inc. is not currently involved in any material litigation or claims - As of the report date, the company is not a party to any pending material litigation, government actions, administrative actions, investigations, or claims that are expected to have a material adverse effect on its business and financial condition[147](index=147&type=chunk) [NOTE 14 — CONCENTRATION RISK](index=31&type=section&id=NOTE%2014%20%E2%80%94%20CONCENTRATION%20RISK) Highlights HWH International Inc.'s concentration risks related to cash balances and key suppliers - The company maintains uninsured cash balances of **$3,143,531** as of June 30, 2025, and **$3,861,339** as of December 31, 2024, at various financial institutions[149](index=149&type=chunk) - For the three and six months ended June 30, 2025, five suppliers accounted for over **59%** and **70%** of the company's total costs of revenue, respectively, indicating significant supplier concentration[150](index=150&type=chunk) [NOTE 15– CORRECTION OF AN IMMATERIAL ERRORS IN PREVIOUSLY ISSUED FINANCIAL STATEMENTS](index=31&type=section&id=NOTE%2015%E2%80%93%20CORRECTION%20OF%20AN%20IMMATERIAL%20ERRORS%20IN%20PREVIOUSLY%20ISSUED%20FINANCIAL%20STATEMENTS) Explains the correction of immaterial errors in HWH International Inc.'s prior financial statements - The company identified and corrected immaterial errors in previously issued financial statements for the three months ended March 31, 2024, and the year ended December 31, 2024[152](index=152&type=chunk) - These corrections included an overstatement of Retained Earnings by **$645,860**, an understatement of general and administrative expenses by **$159,263**, and an understatement of unrealized gain on convertible note receivable by **$287,812**[153](index=153&type=chunk)[154](index=154&type=chunk)[155](index=155&type=chunk) - The corrections did not materially impact net income or total equity for the periods presented[156](index=156&type=chunk)[157](index=157&type=chunk) [NOTE 16— SUBSEQUENT EVENTS](index=31&type=section&id=NOTE%2016%E2%80%94%20SUBSEQUENT%20EVENTS) Confirms that HWH International Inc. has evaluated and found no subsequent events requiring disclosure - The company has evaluated events occurring after the balance sheet date through the report date and determined that no subsequent events or transactions require recognition or disclosure in the consolidated financial statements[158](index=158&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=32&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses financial condition, results of operations, liquidity, capital resources, and Nasdaq compliance for Q2 2025 and 2024 [Cautionary Note Regarding Forward-Looking Statements](index=32&type=section&id=Cautionary%20Note%20Regarding%20Forward-Looking%20Statements) Warns that this report contains forward-looking statements subject to risks and uncertainties - This report contains forward-looking statements based on current expectations and projections, which are subject to known and unknown risks, uncertainties, and assumptions that may cause actual results to differ materially[161](index=161&type=chunk) [Overview](index=32&type=section&id=Overview) Provides an overview of HWH International Inc.'s business initiatives, including Hapi Marketplace and Hapi Wealth Builder program - HWH International Inc. launched its business-to-consumer Hapi Marketplace on November 4, 2024, initially in the U.S. with plans to expand to South Korea, Hong Kong, and other parts of Asia, featuring over **47** product categories and expanding into robotics[162](index=162&type=chunk)[163](index=163&type=chunk) - The company operates Hapi Cafés in Seoul and Singapore, with a new café opened in Seoul in May 2024, aiming to build community and raise awareness for HWH products[164](index=164&type=chunk)[165](index=165&type=chunk) - The Hapi Wealth Builder program, targeting a rollout in selected regions in late 2025, will offer education in equity investment and wealth-building strategies, with a China headquarters opening to support this initiative[166](index=166&type=chunk)[167](index=167&type=chunk) [Our Revenue Model](index=33&type=section&id=Our%20Revenue%20Model) Describes HWH International Inc.'s primary revenue sources and geographical distribution Revenue and Net Loss (in US Dollars) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Total Revenue | $310,391 | $334,882 | $605,588 | $620,992 | | Net Loss | $(675,774) | $(403,641) | $(1,162,746) | $(1,740,160) | - Food and beverage sales accounted for approximately **100%** of the company's revenue for both the three and six months ended June 30, 2025 and 2024[169](index=169&type=chunk) - Geographically, **90%** of total revenue for the six months ended June 30, 2025, was recognized in Singapore, with **10%** in South Korea[170](index=170&type=chunk) [Matters that May or Are Currently Affecting Our Business](index=33&type=section&id=Matters%20that%20May%20or%20Are%20Currently%20Affecting%20Our%20Business) Identifies key factors influencing HWH International Inc.'s business performance and growth - Ability to improve revenue through cross-selling and revenue-sharing arrangements within the group[171](index=171&type=chunk) - Ability to identify and integrate complementary businesses for acquisition, and obtain necessary financing[171](index=171&type=chunk) - Ability to attract skilled technical and sales personnel at acceptable compensation levels[171](index=171&type=chunk) - Ability to control operating expenses while expanding businesses and product/service offerings[171](index=171&type=chunk) [Summary of Significant Accounting Policies](index=34&type=section&id=Summary%20of%20Significant%20Accounting%20Policies) Summarizes HWH International Inc.'s critical accounting policies and management estimates - The consolidated financial statements are prepared in accordance with U.S. GAAP, consolidating all wholly-owned subsidiaries[172](index=172&type=chunk) - Management's significant estimates include allowance for credit losses, recoverability and useful lives of property, plant and equipment, deferred tax valuation allowance, contingencies, and equity compensation[173](index=173&type=chunk)[174](index=174&type=chunk) - Revenue from product sales and food and beverage is recognized when control is transferred to customers, net of taxes, allowances, and returns[175](index=175&type=chunk)[176](index=176&type=chunk) - Cost of revenue includes finished goods, shipping, and handling fees[177](index=177&type=chunk) [Results of Operations](index=34&type=section&id=Results%20of%20Operations) Analyzes HWH International Inc.'s financial performance for the three and six months ended June 30, 2025 and 2024 [Revenue](index=35&type=section&id=Revenue) Details HWH International Inc.'s revenue trends for the three and six months ended June 30, 2025 and 2024 Revenue (in US Dollars) | Period | 2025 Revenue | 2024 Revenue | Change (%) | | :-------------------- | :----------- | :----------- | :--------- | | Three Months Ended June 30 | $310,391 | $334,882 | -7.31% | | Six Months Ended June 30 | $605,588 | $620,992 | -2.48% | - Revenue decreased slightly for both the three and six months ended June 30, 2025, compared to the same periods in 2024[179](index=179&type=chunk) - The company attributes the increase in 2025 revenue (relative to the prior year's trend) to increased F&B business in Singapore following a new café opening in April 2024[179](index=179&type=chunk) [Cost of revenue](index=35&type=section&id=Cost%20of%20revenue) Examines HWH International Inc.'s cost of revenue and gross margin changes for the reporting periods Cost of Revenue and Gross Margin (in US Dollars) | Period | 2025 Cost of Revenue | 2024 Cost of Revenue | Change (%) | | :-------------------- | :------------------- | :------------------- | :--------- | | Three Months Ended June 30 | $161,501 | $169,969 | -4.98% | | Six Months Ended June 30 | $309,104 | $292,782 | +5.57% | | Gross Margin (3 months) | $148,890 | $164,913 | -9.72% | | Gross Margin (6 months) | $296,484 | $328,210 | -9.67% | - Cost of revenues decreased for the three months ended June 30, 2025, but increased for the six months ended June 30, 2025, reflecting changes in F&B sales[180](index=180&type=chunk) - Gross margin decreased for both periods, despite the increase in F&B revenue[181](index=181&type=chunk) [Operating expenses](index=35&type=section&id=Operating%20expenses) Analyzes HWH International Inc.'s operating expenses, highlighting significant decreases Operating Expenses (in US Dollars) | Period | 2025 Operating Expenses | 2024 Operating Expenses | Change (%) | | :-------------------- | :---------------------- | :---------------------- | :--------- | | Three Months Ended June 30 | $488,681 | $654,740 | -25.36% | | Six Months Ended June 30 | $1,230,403 | $2,150,123 | -42.78% | - Operating expenses significantly decreased for both the three and six months ended June 30, 2025, primarily due to lower general and administrative expenses, specifically reduced professional fees related to 10-Q and S-4 filings[182](index=182&type=chunk) [Other non-operating income (expense)](index=35&type=section&id=Other%20non-operating%20income%20(expense)) Discusses HWH International Inc.'s other non-operating income, primarily from subsidiary disposal Other Non-Operating Income (in US Dollars) | Period | 2025 Other Non-Operating Income | 2024 Other Non-Operating Income | Change (%) | | :-------------------- | :------------------------------ | :------------------------------ | :--------- | | Three Months Ended June 30 | $415,768 | $86,186 | +382.42% | | Six Months Ended June 30 | $565,872 | $81,753 | +592.10% | - Other non-operating income saw a substantial increase for both periods, mainly driven by a **$383,667** gain on disposal of subsidiaries in 2025[183](index=183&type=chunk) [Net income (loss)](index=35&type=section&id=Net%20income%20(loss)) Reports HWH International Inc.'s net income or loss and significant improvements for the reporting periods Net Income (Loss) (in US Dollars) | Period | 2025 Net Income (Loss) | 2024 Net Income (Loss) | Change ($) | | :-------------------- | :--------------------- | :--------------------- | :--------- | | Three Months Ended June 30 | $75,977 | $(403,641) | +$479,618 | | Six Months Ended June 30 | $(410,995) | $(1,740,160) | +$1,329,165 | - The company achieved a **net income of $75,977** for the three months ended June 30, 2025, a significant improvement from a net loss in the prior year[184](index=184&type=chunk) - The net loss for the six months ended June 30, 2025, also substantially decreased compared to the same period in 2024[184](index=184&type=chunk) [Liquidity and Capital Resources](index=36&type=section&id=Liquidity%20and%20Capital%20Resources) Assesses HWH International Inc.'s cash position, liabilities, and ability to meet short-term obligations Liquidity and Capital Resources (in US Dollars) | Metric | June 30, 2025 | December 31, 2024 | | :--------- | :------------ | :------------------ | | Cash | $3,729,873 | $4,341,746 | | Liabilities | $7,282,177 | $7,645,223 | | Total Assets | $10,602,700 | $10,522,422 | - Cash decreased from **$4,341,746** at December 31, 2024, to **$3,729,873** at June 30, 2025[185](index=185&type=chunk) - Liabilities decreased, while total assets slightly increased[185](index=185&type=chunk) - Despite a net loss and negative operating cash flow, management believes current cash, anticipated operations, and related-party financing (including a **$700,000** available credit line from Alset Inc.) are sufficient for the next 12 months[186](index=186&type=chunk)[187](index=187&type=chunk)[188](index=188&type=chunk)[189](index=189&type=chunk)[190](index=190&type=chunk) [Summary of Cash Flows for the Six Months Ended June 30, 2025 and 2024](index=36&type=section&id=Summary%20of%20Cash%20Flows%20for%20the%20Six%20Months%20Ended%20June%2030%2C%202025%20and%202024) Provides a summary of HWH International Inc.'s cash flow activities for the six-month periods [Cash Flows from Operating Activities](index=36&type=section&id=Cash%20Flows%20from%20Operating%20Activities) Details HWH International Inc.'s cash flows from operating activities and key drivers of change Net Cash Used in Operating Activities (in US Dollars) | Period | Net Cash Used in Operating Activities | | :-------------------- | :---------------------------------- | | Six Months Ended June 30, 2025 | $(528,424) | | Six Months Ended June 30, 2024 | $(1,129,040) | - Net cash used in operating activities decreased by over **50%** to **$(528,424)** in H1 2025, primarily due to a **$383,667** gain on disposal of subsidiaries[191](index=191&type=chunk)[192](index=192&type=chunk) [Cash Flows from Investing Activities](index=36&type=section&id=Cash%20Flows%20from%20Investing%20Activities) Explains HWH International Inc.'s cash flows from investing activities, including shifts in investment patterns Net Cash (Used in) / Provided by Investing Activities (in US Dollars) | Period | Net Cash (Used in) / Provided by Investing Activities | | :-------------------- | :------------------------------------------ | | Six Months Ended June 30, 2025 | $(741,523) | | Six Months Ended June 30, 2024 | $20,554,735 | - Investing activities shifted from a net cash provided of **$20,554,735** in H1 2024 to a net cash used of **$(741,523)** in H1 2025[191](index=191&type=chunk)[193](index=193&type=chunk) - This change was driven by payments for convertible note receivables (**$360,000**), loan receivables (**$280,000**), and financial asset purchases (**$100,152**) in 2025, contrasting with significant cash withdrawals from trust accounts in 2024[193](index=193&type=chunk) [Cash Flows from Financing Activities](index=36&type=section&id=Cash%20Flows%20from%20Financing%20Activities) Summarizes HWH International Inc.'s cash flows from financing activities and major funding sources Net Cash Provided by / (Used in) Financing Activities (in US Dollars) | Period | Net Cash Provided by / (Used in) Financing Activities | | :-------------------- | :------------------------------------------ | | Six Months Ended June 30, 2025 | $578,857 | | Six Months Ended June 30, 2024 | $(19,741,963) | - Financing activities generated **$578,857** in cash in H1 2025, a significant turnaround from a net cash outflow of **$(19,741,963)** in H1 2024[191](index=191&type=chunk)[194](index=194&type=chunk) - This was primarily due to proceeds from common stock and warrants issuance (**$1,409,983**) and advances from related parties (**$1,055,702**) in 2025, offsetting repayments to related parties and notes payable[194](index=194&type=chunk) [Nasdaq Compliance](index=37&type=section&id=Nasdaq%20Compliance) Reports on HWH International Inc.'s compliance status with Nasdaq listing requirements - HWH received multiple notices from Nasdaq regarding non-compliance with listing rules, including minimum market value of listed securities (MVLS), market value of publicly held shares, and minimum bid price[196](index=196&type=chunk)[197](index=197&type=chunk)[198](index=198&type=chunk) - Following a **1-for-5 reverse stock split** effective February 24, 2025, the company regained compliance with the minimum bid price requirement on March 10, 2025, and is currently listed on the Nasdaq Capital Market[199](index=199&type=chunk)[200](index=200&type=chunk)[201](index=201&type=chunk)[202](index=202&type=chunk) [Contractual Obligations](index=37&type=section&id=Contractual%20Obligations) States HWH International Inc.'s contractual obligations as of June 30, 2025 - As of June 30, 2025, the company did not have any long-term debt obligations, capital lease obligations, purchase obligations, or long-term liabilities[203](index=203&type=chunk) [Administrative Services Agreement](index=38&type=section&id=Administrative%20Services%20Agreement) Describes the termination of HWH International Inc.'s administrative services agreement - The company ceased paying monthly fees of **$10,000** to Alset Management Group Inc. for administrative services upon the completion of the initial Business Combination[204](index=204&type=chunk) [Underwriting Agreement](index=38&type=section&id=Underwriting%20Agreement) Details HWH International Inc.'s settlement of underwriting fees and related agreements - The company settled a deferred underwriting fee of **$3,018,750** with EF Hutton (now D. Boral Capital LLC) through a combination of cash, common stock, and a promissory note[205](index=205&type=chunk) - EF Hutton also holds an irrevocable right of first refusal for future equity and debt offerings for **24 months** post-Business Combination[206](index=206&type=chunk) [Merger Agreement](index=38&type=section&id=Merger%20Agreement) Summarizes the key terms and closing of HWH International Inc.'s business combination - The Business Combination, approved by stockholders on August 1, 2023, and closed on January 9, 2024, involved the merger of HWH Merger Sub Inc. into HWH International Inc. (Nevada)[207](index=207&type=chunk) - Certain closing conditions, including minimum cash in the Trust Account and net tangible assets, were waived by the parties[207](index=207&type=chunk) [Registration Rights Agreement](index=38&type=section&id=Registration%20Rights%20Agreement) Outlines HWH International Inc.'s obligations regarding the registration of certain securities - Under the Registration Rights Agreement, the company is obligated to register certain securities, including common stock and warrants held by the Sponsor and those issued in the Private Placement, within **15 business days** after the Business Combination closing and use best efforts to make the registration statement effective within **60 business days**[208](index=208&type=chunk) [Lock-Up Agreements](index=39&type=section&id=Lock-Up%20Agreements) Describes the lock-up restrictions on HWH International Inc.'s common stock held by certain parties - HWH Holders with over **5%** of common stock and certain management team members entered Lock-Up Agreements, restricting the transfer of their shares for a period commencing from the Closing and ending on the earlier of **nine months** after closing, or when the stock price reaches **$12.00 per share** for **20 trading days** within a **30-trading day** period after **150 days** post-closing, or upon a liquidation/merger event[210](index=210&type=chunk) [Impact of Inflation](index=39&type=section&id=Impact%20of%20Inflation) Assesses the impact of inflation on HWH International Inc.'s operations and financial results - Management believes inflation has not had a material impact on the company's results of operations for the six months ended June 30, 2025, or the year ended December 31, 2024, but cannot assure that future inflation will not have an adverse impact[211](index=211&type=chunk) [Impact of Foreign Exchange Rates](index=39&type=section&id=Impact%20of%20Foreign%20Exchange%20Rates) Discusses the impact of foreign exchange rate fluctuations on HWH International Inc.'s intercompany loans - Fluctuations in foreign currency transaction gains or losses are primarily due to the effects of foreign exchange rate changes on intercompany loans between Singapore and South Korea, which were approximately **$0.8 million** at June 30, 2025[212](index=212&type=chunk) - These fluctuations are expected to continue in 2025 due to anticipated volatility in exchange rates, as the intercompany loan balances are not expected to be repaid in the short term[212](index=212&type=chunk) [Emerging Growth Company Status](index=39&type=section&id=Emerging%20Growth%20Company%20Status) Explains HWH International Inc.'s status as an emerging growth company and related exemptions - As an 'emerging growth company' under the JOBS Act, HWH has elected to take advantage of exemptions from certain reporting requirements, including delaying the adoption of new or revised accounting standards until they apply to private companies[213](index=213&type=chunk) [Item 3. Quantitative and Qualitative Disclosures Regarding Market Risk](index=40&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20Regarding%20Market%20Risk) As a smaller reporting company, HWH is exempt from market risk disclosures - The company is a smaller reporting company and is not required to provide quantitative and qualitative disclosures regarding market risk[219](index=219&type=chunk) [Item 4. Controls and Procedures](index=40&type=section&id=Item%204.%20Controls%20and%20Procedures) Management evaluated disclosure controls and procedures, finding them effective, but noted material weaknesses in internal control over financial reporting - Management, including the principal executive and financial officers, concluded that disclosure controls and procedures were effective as of June 30, 2025[220](index=220&type=chunk)[221](index=221&type=chunk) - No changes in internal control over financial reporting materially affected or are reasonably likely to materially affect the company's internal control over financial reporting during the fiscal interim ended June 30, 2025[222](index=222&type=chunk) - Material weaknesses identified in internal control over financial reporting include: limited accounting personnel preventing proper segregation of duties, and lack of well-defined accounting policies and procedures leading to untimely or ineffective financial close procedures[223](index=223&type=chunk) PART II. OTHER INFORMATION Presents additional information not included in the financial statements, such as legal proceedings and exhibits [Item 1. Legal Proceedings](index=41&type=section&id=Item%201.%20Legal%20Proceedings) The company reported no material legal proceedings - There are no legal proceedings pending against the company that could reasonably be expected to have a material adverse effect on its business and financial condition[225](index=225&type=chunk) [Item 1A. Risk Factors](index=41&type=section&id=Item%201A.%20Risk%20Factors) As a smaller reporting company, HWH International Inc. is not required to provide risk factor disclosures - As a smaller reporting company, HWH International Inc. is not required to provide the information regarding risk factors[226](index=226&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=41&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This item is not applicable to the company for the reporting period - This item is not applicable[227](index=227&type=chunk) [Item 3. Defaults Upon Senior Securities](index=41&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reported no defaults upon senior securities - There were no defaults upon senior securities[228](index=228&type=chunk) [Item 4. Mine Safety Disclosures](index=41&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - This item is not applicable[229](index=229&type=chunk) [Item 5. Other Information](index=41&type=section&id=Item%205.%20Other%20Information) The company reported no other information required under this item - No other information is reported under this item[230](index=230&type=chunk) [Item 6. Exhibits](index=42&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed as part of, or incorporated by reference into, this Quarterly Report on Form 10-Q - Exhibits filed include amendments to the Certificate of Incorporation, certifications of principal executive and financial officers (pursuant to Sarbanes-Oxley Act Sections 302 and 906), and various Inline XBRL documents[231](index=231&type=chunk)[232](index=232&type=chunk) SIGNATURES Provides the official signatures for the report [Signatures](index=43&type=section&id=Signatures) The report is signed on behalf of HWH International Inc. by its CEO and CFO on August 13, 2025 - The report was signed by John Thatch, Chief Executive Officer, and Rongguo Wei, Chief Financial Officer, on August 13, 2025[234](index=234&type=chunk)[235](index=235&type=chunk)

Financial Performance - Total revenue for the three months ended March 31, 2025, was $295,197, an increase from $286,110 in the same period of 2024, reflecting a growth of approximately 3.8%[166] - The net loss decreased significantly from $1,336,519 in Q1 2024 to $574,103 in Q1 2025, representing a reduction of about 57.0%[181] - Operating expenses decreased from $1,495,383 in Q1 2024 to $741,722 in Q1 2025, a decline of approximately 50.5%[179] - The cost of revenue increased from $122,813 in Q1 2024 to $147,603 in Q1 2025, resulting in a gross margin decrease from $163,297 to $147,594[178] Revenue Sources - Revenue from food and beverage sales accounted for approximately 100% of total revenue in both Q1 2025 and Q1 2024[166] - The geographical revenue distribution shifted, with 11% of total revenue coming from South Korea and 89% from Singapore in Q1 2025, compared to 4% and 96% in Q1 2024, respectively[167] Business Expansion - The company plans to expand its Hapi Marketplace, initially launching in the United States with over 47 product categories, and aims to expand to South Korea and Hong Kong soon[160] - Hapi Cafés are being developed as community-focused locations to enhance customer engagement and awareness of HWH products, with proof-of-concept locations opened in Seoul and Singapore[162] Financial Position - Cash decreased from $4,341,746 as of December 31, 2024, to $4,176,546 as of March 31, 2025, while total assets increased from $6,408,722 to $6,531,330 during the same period[182] - The Company reported no long-term debt obligations or liabilities as of March 31, 2025[199] Compliance and Regulatory Matters - The Company was notified by Nasdaq that its market value of publicly held shares was below the minimum $15,000,000 for 30 consecutive trading days, requiring compliance by August 20, 2024[194] - The Company received a notice from Nasdaq indicating that its bid price was below the minimum $1 required for continued listing, with a compliance deadline of March 3, 2025[196] - A 1-for-5 reverse stock split was filed on February 18, 2025, effective February 24, 2025[197] - The Company regained compliance with Nasdaq Listing Rule 5550(a)(2) as the closing bid price was $1.00 or greater from February 24, 2025 to March 7, 2025[198] Administrative and Financial Agreements - The Company agreed to pay $10,000 per month for administrative services, which ceased after the initial Business Combination[200] - The underwriters were entitled to a deferred fee of $3,018,750, which was settled with a combination of cash, shares, and a promissory note[202] Corporate Changes - The Business Combination was approved on August 1, 2023, and closed on January 9, 2024, resulting in the Company changing its name to "HWH International Inc."[204] - The Company is classified as an "emerging growth company," allowing it to take advantage of certain reporting exemptions[211] Internal Controls - Management assessed the effectiveness of internal controls over financial reporting as of March 31, 2025, identifying material weaknesses[216]

Revenue and Financial Performance - Total revenue for the years ended December 31, 2024, and 2023 was $1,253,577 and $830,519, respectively, indicating a significant increase in revenue [103]. - Total revenue increased from $830,519 in 2023 to $1,253,577 in 2024, representing a growth of 51% [117]. - Food and Beverage revenue rose significantly from $817,761 in 2023 to $1,253,577 in 2024, indicating a substantial increase in sales [117]. - The net loss for the years ended December 31, 2024, and 2023 was $2,606,504 and $1,076,662, respectively, reflecting a worsening financial position [115]. - The net loss widened from $1,076,662 in 2023 to $2,606,504 in 2024, highlighting ongoing financial challenges [122]. - The company reported a net loss attributable to common stockholders for the year ended December 31, 2023, was $2,590,731, compared to a loss of $1,080,492 in 2024, reflecting a significant increase in losses [171]. - The company’s comprehensive loss for the year was $1,129,537, reflecting a significant impact from foreign exchange translation adjustments [258]. Membership and Customer Base - The company had approximately 9,811 members, primarily in South Korea, with a new membership model planned to operate on a yearly subscription basis [87][93]. - The company currently has approximately 9,811 founding members, with a cap of 10,000, and plans to resume membership sales under a new yearly subscription model [184]. - The company is in the process of restructuring its membership model to enhance member benefits and engagement [184]. - The business model is shifting towards a tiered membership structure with a broader range of products and services available to members [182]. Operational Developments - Hapi Marketplace, launched on November 4, 2024, features over 47 product categories and aims for expansion across Asia [95]. - Hapi Cafés opened in Seoul and Singapore in 2022, with plans for further openings to enhance community engagement and membership growth [97]. - The company plans to expand by taking over leases of existing Hapi Cafes over the next two years, although execution is not guaranteed [124]. - The company plans to expand its travel business, offering exclusive access to discounts on various travel services for members [98]. - Hapi Wealth Builder program is set to launch in 2025, focusing on education in equity investment and wealth-building strategies [101]. Financial Position and Assets - Cash increased significantly from $1,159,201 at the end of 2023 to $4,341,746 at the end of 2024, indicating improved liquidity [123]. - Total current assets as of December 31, 2023, were $5,474,997, a substantial rise from $1,337,854 in 2024 [169]. - Total liabilities as of December 31, 2023, amounted to $3,311,274, compared to $6,024,798 in 2024, indicating a decrease in liabilities [169]. - Cash and marketable securities held in the Trust Account were $21,346,768 as of December 31, 2024, indicating a significant asset position [169]. - The total cash at the end of 2024 was $4,341,746, up from $1,159,201 at the end of 2023 [175]. Expenses and Cost Management - Cost of revenue doubled from $334,825 in 2023 to $651,721 in 2024, primarily due to increased sales in the Food and Beverage business [118]. - Operating expenses decreased from $3,402,793 in 2023 to $3,027,024 in 2024, mainly due to reduced general and administrative expenses [120]. - Advertising expenses increased from $4,191 in 2023 to $19,472 in 2024, showing a significant investment in marketing [234]. - The Company incurred Delaware franchise tax of $48,180 and $205,000 for the years ended December 31, 2024 and 2023, respectively, showing a decrease in tax liability [238]. Compliance and Regulatory Matters - The company received a notice from Nasdaq regarding non-compliance with the minimum market value requirement, with a compliance period until September 3, 2024 [133]. - The Company is classified as an "emerging growth company" and is taking advantage of certain exemptions from various reporting requirements under the JOBS Act [152]. - The Company has determined that it did not maintain effective controls over financial reporting as of December 31, 2024, constituting a material weakness, and plans to appoint additional qualified personnel to address this issue [156]. Related Party Transactions and Financing - The Company has significant transactions with related parties, which may not be conducted on an arm's length basis, as noted in the consolidated financial statements [167]. - The company entered into a Credit Facility Agreement with Alset Inc. for a maximum credit line of $1,000,000, with $700,000 available for draw as of December 31, 2024 [125]. - The company has drawn $300,000 from the Credit Facility, which was converted to equity, impacting the cash flow statement [245]. - Amounts due to Alset Inc. at December 31, 2024 and 2023 were $209,614 and $202,645 respectively, classified as current liabilities [275]. - A debt of $300,000 due to Alset Inc. was converted into 476,190 shares at a price of $0.63 per share on September 24, 2024 [278]. Impairments and Write-offs - The company recorded an impairment loss on goodwill of $323,864 for the year ended December 31, 2023, with no such loss reported in 2024 [171]. - As of December 31, 2024, the company recorded an impairment of $14,205 related to its investment in Ideal Food & Beverage Pte. Ltd. [270]. - The impairment loss on goodwill for 2024 was $323,864, indicating a potential decline in asset value [175]. - The company ceased operations of its subsidiary Alset F&B (PLQ) Pte. Ltd. in Q2 2024, resulting in a write-off of $5,878 in fixed assets [198].

Financial Performance - Total revenue for the three months ended September 30, 2024, was $345,523, a 52.5% increase from $226,907 in the same period of 2023[148] - Total revenue for the nine months ended September 30, 2024, was $966,515, up 55.2% from $622,667 in the same period of 2023[148] - The net loss for the three months ended September 30, 2024, was $537,143, compared to a net loss of $156,131 in the same period of 2023[148] - The net loss for the nine months ended September 30, 2024, was $2,277,303, significantly higher than the net loss of $47,217 in the same period of 2023[148] - Net loss for Q3 2024 was $537,143 compared to $156,131 in Q3 2023, and for the first nine months, the net loss was $2,277,303 compared to $47,217 in 2023[167] Revenue Composition - Food and beverage sales accounted for approximately 100% of revenue in the three months ended September 30, 2024, and 2023[149] - The company recognized 6% of total revenue in South Korea and 94% in Singapore for the three months ended September 30, 2024[150] Operational Metrics - Cost of revenues increased from $86,435 in Q3 2023 to $185,654 in Q3 2024, and from $237,824 in the first nine months of 2023 to $478,436 in 2024, driven by increased sales in the F&B business[162] - Gross margin rose from $140,472 in Q3 2023 to $159,869 in Q3 2024, and from $384,843 in the first nine months of 2023 to $488,079 in 2024, attributed to higher F&B revenue[164] - Operating expenses decreased from $570,043 in Q3 2023 to $487,394 in Q3 2024, but increased from $1,888,900 in the first nine months of 2023 to $2,637,517 in 2024 due to rising general and administrative expenses[165] Cash Flow and Assets - Cash decreased from $1,159,201 as of December 31, 2023, to $832,368 as of September 30, 2024, while total assets fell from $23,710,684 to $2,920,066 in the same period[167] - Net cash used in operating activities was $1,404,073 in the first nine months of 2024, a decrease from $2,228,539 in the same period of 2023[174] - Net cash provided by investing activities was $20,451,688 in the first nine months of 2024, down from $69,052,195 in 2023[175] Strategic Initiatives - The company has 9,811 founding members, with a cap of 10,000, who will enjoy continuous membership benefits[140] - Hapi Marketplace launched on November 4, 2024, featuring over 47 product categories, with plans for expansion into South Korea and Hong Kong[141] - Hapi Wealth program is set for a soft launch in November 2024 in China, with an official launch in January 2025, targeting North America in 2025[146] - The company plans to open additional Hapi Cafés as part of its strategy to grow memberships and enhance community engagement[143] - The company plans to expand by taking over leases of existing Hapi Cafes over the next two years, although execution of these plans is not guaranteed[168] Financial Agreements and Market Position - A Credit Facility Agreement was established with Alset Inc. providing a maximum credit line of $1,000,000, with $700,000 available to draw as of September 30, 2024[169] - The company received a notice from Nasdaq regarding deficiencies in market value, leading to a hearing request to avoid delisting[177] - The Company entered into a Subscription Agreement with Meteora, which was later terminated, resulting in a payment of $200,000 to Meteora and allowing them to retain $100,000 already paid[187] Economic and Regulatory Environment - Inflation has not materially impacted the Company's results for the nine months ended September 30, 2024, or the year ended December 31, 2023[188] - Foreign exchange rate changes affected intercompany loans, with balances of approximately $0.7 million and $2.1 million on September 30, 2024, and December 31, 2023, respectively, and are expected to continue impacting operations in 2024[189] - The Company is classified as an "emerging growth company" and is utilizing exemptions from certain reporting requirements under the JOBS Act[190] Internal Controls and Reporting - Management assessed the effectiveness of internal controls over financial reporting as of December 31, 2023, and identified material weaknesses due to limited staff experience with U.S. GAAP and SEC reporting[195] - There were no changes in internal control over financial reporting during the fiscal quarter ended September 30, 2024, that materially affected the controls[200] - The Company conducted an evaluation of disclosure controls and procedures as of September 30, 2024, concluding that they were effective during the reporting period[199] Future Outlook and Growth - The company reported a significant increase in revenue, reaching $1.2 billion, representing a 15% year-over-year growth[204] - User data showed a total of 5 million active users, up from 4 million in the previous quarter, indicating a 25% increase[204] - The company provided an optimistic outlook for the next quarter, projecting revenue growth of 10% to 12%[204] - New product launches are expected to contribute an additional $200 million in revenue over the next fiscal year[204] - The company is investing $50 million in research and development for new technologies aimed at enhancing user experience[204] - Market expansion efforts are underway in Europe, targeting a 20% increase in market share by the end of the year[204] - The company completed a strategic acquisition of a smaller tech firm for $300 million, expected to enhance its product offerings[204] - Cost management strategies have led to a 5% reduction in operational expenses, improving overall profitability[204] - The company plans to increase its marketing budget by 30% to support new product launches and market penetration[204] - Customer satisfaction ratings improved to 90%, reflecting the success of recent service enhancements[204]

Financial Performance - Total revenue for Q2 2024 was $334,882, a 71.5% increase from $195,198 in Q2 2023[94] - Total revenue for the first half of 2024 was $620,992, up 57.0% from $395,760 in the same period of 2023[94] - Net loss for Q2 2024 was $403,641, compared to a net loss of $62,935 in Q2 2023[94] - Net loss for the first half of 2024 was $1,740,160, contrasting with a net income of $108,914 in the first half of 2023[94] - Membership fee revenue for the three months ended June 30, 2024, was $12,583, compared to $6 for the same period in 2023, representing a significant increase[100] - Product sales for the six months ended June 30, 2024, totaled $620,992, up from $395,760 in the same period of 2023, indicating a growth of approximately 57%[100] - Total food and beverage revenue for the six months ended June 30, 2024, was $334,882, compared to $195,198 for the same period in 2023, reflecting an increase of about 71%[100] Operating Expenses and Margins - Operating expenses increased from $582,466 in Q2 2023 to $654,740 in Q2 2024, primarily due to increased general and administrative expenses[99] - The gross margin increased from $121,578 in Q2 2023 to $164,913 in Q2 2024, attributed to higher food and beverage revenue[99] Cash Flow and Liabilities - Net cash used in operating activities decreased to $1,129,040 for the six months ended June 30, 2024, from $1,379,468 in the same period of 2023, a reduction of approximately 18%[102] - Net cash provided by investing activities was $20,554,734 for the six months ended June 30, 2024, down from $69,023,066 in the same period of 2023, a decline of about 70%[102] - The company’s cash decreased from $1,159,201 as of December 31, 2023, to $821,353 as of June 30, 2024, a drop of approximately 29%[101] - Total liabilities increased from $6,207,178 at December 31, 2023, to $6,567,743 at June 30, 2024, an increase of about 6%[101] Membership and Expansion Plans - The company has 9,811 founding members, with a cap of 10,000, who will enjoy continuous membership benefits[91] - The company plans to implement a new yearly subscription-based membership model, with exclusive discounts and passive income opportunities for members[91] - Hapi Cafés are positioned as integral to the business model, with locations opened in Seoul and Singapore, and plans for further expansion[93] - The company has plans to expand by taking over leases of existing Hapi Cafes over the next two years, although execution is not guaranteed[101] Financial Support and Credit Facilities - A Credit Facility Agreement was established with Alset Inc. providing a maximum credit line of $1,000,000 at a simple interest rate of 3% per annum[101] - The company has received letters of financial support from Alset International Limited and Alset Inc. to provide additional funding as needed for the next 12 months[101] Internal Controls and Compliance - The company is not currently required to maintain an effective system of internal controls as defined by Section 404 of the Sarbanes-Oxley Act[114] - As of December 31, 2023, management assessed that the company did not maintain effective controls over financial reporting, constituting a material weakness[114] - The company plans to appoint additional qualified personnel with financial accounting, GAAP, and SEC experience to remediate identified weaknesses[114] - The financial statements have been prepared in conformity with U.S. GAAP and reflect management's judgment and estimates[114] - The company intends to take advantage of exemptions from various reporting requirements applicable to other public companies as an emerging growth company[114] - Management regularly assesses internal controls, with the most recent assessment conducted as of December 31, 2023[114] - The company does not include an attestation report from its registered public accounting firm regarding internal control over financial reporting[114] - The effectiveness of internal control over financial reporting may vary over time due to changes in conditions[114] - The company is classified as a smaller reporting company and is not required to provide certain market risk disclosures[114] - Management recognizes inherent limitations in the effectiveness of internal controls, including human error and circumvention[114]

Financial Performance - Total revenue for the three months ended March 31, 2024, was $286,110, an increase from $200,562 in the same period of 2023, representing a growth of approximately 42.7%[84] - The net loss for the three months ended March 31, 2024, was $1,336,519, compared to a net income of $171,849 for the same period in 2023, indicating a significant decline in profitability[86] - Revenue from food and beverage sales increased from $187,776 in Q1 2023 to $286,110 in Q1 2024, reflecting growth in the café business[88] - The company anticipates that revenue from membership sales will decline as a percentage of total revenue, with greater contributions expected from café operations and product sales[84] Operating Expenses - Operating expenses increased from $736,391 in Q1 2023 to $1,495,383 in Q1 2024, primarily due to higher general and administrative expenses related to the food and beverage business[87] Cash Flow and Financing - Cash decreased from $22,505,969 as of December 31, 2023, to $999,506 as of March 31, 2024, while liabilities increased from $4,372,803 to $5,526,158 during the same period[89] - Net cash used in investing activities was $252,072 for the three months ended March 31, 2024, compared to $8,227 for the same period in 2023, indicating a significant increase in investment spending[91] - Net cash provided by financing activities was $749,948 for the three months ended March 31, 2024, compared to $182,730 for the same period in 2023, reflecting a substantial increase in financing[92] - The company received $1,101,255 from a related party during the three months ended March 31, 2024, compared to $182,730 in the same period of 2023[92] Business Expansion and Programs - The company plans to expand its Hapi Café locations globally, having opened proof-of-concept cafés in Seoul and Singapore in 2022, with further openings planned as the business model is refined[83] - The Hapi Wealth Builder program is in the planning stage, with a launch expected in 2024, focusing on financial education and investment opportunities for members[83] - The company has capped the total number of founding members at 10,000, with 9,811 currently enrolled, who will receive ongoing membership benefits[81] Mergers and Obligations - The merger with HWH International Inc. was completed on January 9, 2024, with Alset changing its name to "HWH International Inc."[95] - The company has a deferred fee obligation of $3,018,750 to underwriters, which will be satisfied through a combination of cash, shares, and a promissory note[94] Internal Controls and Compliance - The company did not maintain effective controls over financial reporting as of December 31, 2023, due to a limited staff with U.S. GAAP and SEC reporting experience, constituting a material weakness[104] - The company plans to appoint additional qualified personnel to address the identified weaknesses in internal controls[104] - The company is classified as an "emerging growth company" and is taking advantage of certain exemptions from reporting requirements[102] Economic Factors - The company expects fluctuations in foreign exchange rates to impact operations in 2024, particularly due to intercompany loans totaling approximately $2.7 million[101] - Inflation has not had a material impact on the company's results of operations for the three months ended March 31, 2024[100] Signatures - The report was signed by John Thatch, CEO, and Rongguo Wei, CFO, on May 15, 2024[109]

Financial Performance - For the years ended November 30, 2023 and 2022, the Company reported net income of $548,873 and $113,541, respectively[74]. - As of November 30, 2023, the Company had $585,654 in cash and a working capital deficit of $134,421[72]. - The Sponsor funded extension payments totaling $205,305 during the year ended November 30, 2023[65]. Shareholder Activities - The Company did not repurchase any shares of its common stock during 2023 and 2022[54]. - Class A Common Stock stockholders redeemed 6,648,964 shares for approximately $68.4 million held in the Trust Account[65]. Business Operations - As of November 30, 2023, the Company had not commenced any operations and generated no operating revenues prior to its initial Business Combination[58]. - The Company amended its Trust Agreement to extend the deadline for completing a business combination to February 3, 2024[66]. - The company reported no off-balance sheet arrangements as of November 30, 2023[82]. Initial Public Offering - The Initial Public Offering raised approximately $87.1 million, which was placed in the Trust Account, with $1.9 million available for operating expenses[61]. - The total consideration for the Merger was $125 million, payable in 12.5 million shares of common stock valued at $10.00 each[70]. - The company paid a cash underwriting discount of $0.20 per Unit, totaling $1,725,000[79]. - The underwriters are entitled to a deferred fee of $0.35 per Unit, amounting to $3,018,750, payable only upon completion of a Business Combination[79]. Regulatory and Compliance - The company qualifies as an "emerging growth company" and is exempt from certain reporting requirements applicable to other public companies[84]. - The company has elected not to opt out of the extended transition period for new or revised financial accounting standards, allowing it to adopt standards at the same time as private companies[85]. Economic Impact - The company does not believe inflation had a material impact on its business, revenues, or operating results during the reported period[82].

Company Overview - HWH International Inc. is a purpose-driven lifestyle company with offerings from four core pillars: HWH Marketplace, Hapi Cafe, Hapi Travel Destination, and Hapi Wealth Builder, aimed at helping individuals pursue Health, Wealth, and Happiness [4] - Alset Capital Acquisition Corp. is a special purpose acquisition company formed to engage in mergers and similar business combinations, having begun trading on the Nasdaq Stock Market in February 2022 [5] Business Combination - Alset Capital Acquisition Corp. has completed its business combination with HWH International Inc., which was approved by Alset's stockholders on August 1, 2023 [2] - The common stock of the combined company is expected to commence trading on The Nasdaq Global Market under the ticker symbol "HWH" on January 9, 2024 [1][2] Growth Potential - The business combination and the subsequent listing of HWH's common stock are anticipated to support HWH's growth momentum in the rapidly growing GIG economy [3]

Financial Position - As of August 31, 2023, the company had cash of $812,293 and working capital of $371,474[98]. - As of August 31, 2023, there were no amounts outstanding under any Working Capital Loans[98]. Financial Performance - For the three months ended August 31, 2023, the company reported a net loss of $176,025, compared to a net income of $122,132 for the same period in 2022[103]. - For the nine months ended August 31, 2023, the company had a net income of $779,883, significantly up from $14,650 in the same period in 2022[103]. Operations and Revenue - The company has not commenced any operations and has not generated any revenues to date[102]. - The company expects to incur increased expenses due to being a public company, including legal and compliance costs[102]. Trust Account and IPO - The company placed $87,112,500 in the Trust Account from the Initial Public Offering proceeds, with $1,874,050 allocated for operating expenses[92]. - The company redeemed 6,648,964 shares for approximately $68.4 million held in the Trust Account during the Special Meeting on May 1, 2023[96]. - The company has a maximum of 21 months from the closing of the Initial Public Offering to complete its initial Business Combination[94]. Business Strategy - The company intends to focus its search for business combination targets within the real estate industry[88]. Regulatory Status - The company qualifies as an "emerging growth company" under the JOBS Act, allowing it to take advantage of certain reporting exemptions[111]. - The company has chosen not to opt out of the extended transition period for new or revised financial accounting standards, which may complicate financial statement comparisons with other public companies[112]. - The company is classified as a smaller reporting company and is not required to provide certain market risk disclosures[113].