Core Viewpoint - HWH International's stock price surged over 178% to $4.02, but the company's fundamentals remain under significant pressure [1] Financial Performance - HWH's earnings capability is under continuous strain, with an EBITDA margin of -128% and a net margin of -144.7%, indicating severe losses [1] - The company's gross margin remains relatively high at 60.5%, but overall profitability has not improved due to high costs and expenses [1] Market Sentiment - Market analysts generally hold a pessimistic view on HWH, believing that the fundamental challenges have not improved and there are no new positive developments to support a sustained stock price rebound [1] - In the consumer discretionary sector, particularly in the hotel, lodging, and leisure industry, HWH is underperforming and lacks competitive strength [1] Trading Analysis - Technical analysts identify $2.37 as a significant resistance level, and if the stock price cannot maintain above $1.86, it may face a risk of decline [1] Company Overview - HWH International Inc. is a membership-based lifestyle company that integrates online and offline services, providing a comprehensive platform focused on "health, wealth, and happiness" through consumption, education, and community experiences [1]

Core Viewpoint - HWH International's stock price surged over 178% to $4.02, despite facing significant fundamental challenges [1] Financial Performance - The company's earnings before interest and taxes (EBIT) margin stands at -128%, and the net profit margin is at -144.7%, indicating severe losses [1] - HWH maintains a relatively high gross margin of 60.5%, but overall profitability remains unaddressed due to high costs and expenses [1] Market Sentiment - Market analysts generally hold a pessimistic view on HWH, believing that the fundamental challenges have not improved and there are no new positive developments to support a sustained stock price rebound [1] - In the consumer discretionary sector, particularly in the hotel, lodging, and leisure industry, HWH is underperforming and lacks competitive strength [1] Technical Analysis - Technical analysts identify $2.37 as a significant resistance level, and if the stock price cannot hold above $1.86, it may face a risk of decline [1] Company Overview - HWH International Inc. is a membership-based lifestyle company that integrates online and offline services, providing a comprehensive platform focused on "health, wealth, and happiness" through consumption, education, and community experiences [1]

PART I. FINANCIAL INFORMATION This section presents the unaudited consolidated financial statements and management's discussion and analysis [Item 1. Financial Statements (Unaudited)](index=3&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) This section presents the unaudited consolidated financial statements of HWH International Inc. and its subsidiaries for the periods ended June 30, 2025, and December 31, 2024 (for balance sheets), and for the three and six months ended June 30, 2025 and 2024 (for statements of operations, comprehensive loss, changes in stockholders' equity, and cash flows). It also includes detailed notes explaining the company's organization, business operations, significant accounting policies, and specific financial statement line items [Consolidated Balance Sheets](index=3&type=section&id=Consolidated%20Balance%20Sheets%20at%20June%2030%2C%202025%20(Unaudited)%20and%20December%2031%2C%202024) The balance sheets detail the company's financial position, showing changes in assets, liabilities, and equity between periods - 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) - Current Assets decreased from **$9,588,697** to **$9,177,600**, primarily due to a decrease in Cash[8](index=8&type=chunk) | Metric | December 31, 2024 | June 30, 2025 | | :-------------------------------- | :---------------- | :---------------- | | Cash | $4,341,746 | $3,729,873 | | Total Current Assets | $9,588,697 | $9,177,600 | | Total Non-Current Assets | $933,725 | $1,425,100 | | TOTAL ASSETS | $10,522,422 | $10,602,700 | | Total Current Liabilities | $7,424,974 | $7,146,791 | | Total Non-Current Liabilities | $220,249 | $135,386 | | Total Stockholders' Equity | $2,877,199 | $3,320,523 | [Consolidated Statements of Operations and Other Comprehensive Loss](index=4&type=section&id=Consolidated%20Statements%20of%20Operations%20and%20Other%20Comprehensive%20Loss%20for%20the%20Three%20and%20Six%20Months%20Ended%20June%2030%2C%202025%20and%202024%20(Unaudited)) These statements present the company's revenues, expenses, and net income or loss over specified interim periods - For the three months ended June 30, 2025, the company reported a net income of **$75,977**, a significant improvement from a net loss of **$(403,641)** in the same period of 2024[10](index=10&type=chunk) - For the six months ended June 30, 2025, the net loss decreased substantially to **$(410,995)** from **$(1,740,160)** in the prior year period[10](index=10&type=chunk) | Metric | 3 Months Ended June 30, 2025 | 3 Months Ended June 30, 2024 | 6 Months Ended June 30, 2025 | 6 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 | | Net income (loss) | $75,977 | $(403,641) | $(410,995) | $(1,740,160) | | Basic Loss per common share | $(0.01) | $(0.12) | $(0.06) | $(0.55) | [Consolidated Statements of Changes in Stockholders' Equity](index=6&type=section&id=Consolidated%20Statements%20of%20Changes%20in%20Stockholders'%20Equity%20for%20the%20Three%20and%20Six%20Months%20Ended%20June%2030%2C%202025%20and%202024%20(Unaudited)) This statement outlines the changes in the company's equity components, including common stock and accumulated deficit - Total Stockholders' Equity increased from **$2,877,199** at December 31, 2024, to **$3,320,523** at June 30, 2025[14](index=14&type=chunk) - The increase was primarily driven by the issuance of Common Stock (**$1,409,858**) and warrants exercised (**$125**), partially offset by net loss and foreign currency translation adjustments[14](index=14&type=chunk) | Metric | December 31, 2024 | June 30, 2025 | | :------------------------------------------ | :---------------- | :---------------- | | Common Stock (shares) | 5,593,920 | 6,476,420 | | Common Stock (value) | $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 | | Total Stockholders' Equity | $2,877,199 | $3,320,523 | [Consolidated Statements of Cash Flows](index=8&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows%20for%20the%20Six%20Months%20Ended%20June%2030%2C%202025%20and%202024%20(Unaudited)) This statement details cash inflows and outflows from operating, investing, and financing activities for the period - Net cash used in operating activities decreased significantly from **$(1,129,040)** in H1 2024 to **$(528,424)** in H1 2025, primarily due to a gain on disposal of subsidiaries[17](index=17&type=chunk) - Net cash used in investing activities was **$(741,523)** in H1 2025, a substantial change from net cash provided by investing activities of **$20,554,735** in H1 2024, mainly due to cash withdrawn from trust account for redemptions in 2024[17](index=17&type=chunk) | Cash Flow Activity | 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 | [Notes to Unaudited Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Unaudited%20Consolidated%20Financial%20Statements) These notes provide essential details on the company's accounting policies, business operations, and specific financial items - The Company 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) - HWH International Inc. was originally a SPAC, Alset Capital Acquisition Corp., and completed its business combination on January 9, 2024, changing its name to HWH International Inc[20](index=20&type=chunk)[21](index=21&type=chunk) - The Company incurred a net loss and negative cash flow from operating activities in the six months ended June 30, 2025, raising substantial doubt about its ability to continue as a going concern, though management believes available cash and related party financing are sufficient for the next 12 months[73](index=73&type=chunk)[74](index=74&type=chunk) [NOTE 1 — DESCRIPTION OF ORGANIZATION, BUSINESS OPERATIONS](index=9&type=section&id=NOTE%201%20%E2%80%94%20DESCRIPTION%20OF%20ORGANIZATION%2C%20BUSINESS%20OPERATIONS) This note describes the company's core business, operational structure, and recent corporate transactions - 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. and completed a business combination on January 9, 2024, merging with HWH International Inc. (Nevada) and changing its name[20](index=20&type=chunk)[21](index=21&type=chunk) - The total consideration for the merger was **$125,000,000**, paid in **12,500,000** shares of common stock valued at **$10.00** per share[23](index=23&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) This note outlines the key accounting principles and methods used in preparing the consolidated financial statements - The consolidated financial statements are prepared in conformity with US GAAP and include all accounts of the Company and its majority-owned and controlled subsidiaries[26](index=26&type=chunk)[28](index=28&type=chunk) - 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[33](index=33&type=chunk)[34](index=34&type=chunk) - Revenue is primarily generated from F&B product sales, recognized when control is transferred to customers, net of taxes, allowances, refunds, or returns[51](index=51&type=chunk)[53](index=53&type=chunk) [NOTE 3 — ACCOUNTS RECEIVABLE, NET](index=18&type=section&id=NOTE%203%20%E2%80%94%20ACCOUNTS%20RECEIVABLE%2C%20NET) This note details the composition and changes in the company's net accounts receivable balance - Accounts receivable, net, was **$22,948** at June 30, 2025, and **$17,546** at December 31, 2024[84](index=84&type=chunk) - These amounts primarily represent collections received by credit card processors in the F&B business and rent receivable[84](index=84&type=chunk) - The allowance for credit losses was an immaterial amount for both periods[84](index=84&type=chunk) [NOTE 4 — INVENTORY](index=18&type=section&id=NOTE%204%20%E2%80%94%20INVENTORY) This note provides information on the company's inventory valuation methods and balances - The balance of finished goods inventory was **$6,369** at June 30, 2025, an increase from **$1,574** at December 31, 2024[85](index=85&type=chunk) - Inventory is stated at the lower of cost or net realizable value, using the first-in, first-out (FIFO) method[42](index=42&type=chunk) - No provision for slow-moving or obsolete inventory was recorded during the three and six months ended June 30, 2025 and 2024[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) This note details the company's property and equipment, including depreciation and disposals - Net property and equipment decreased from **$33,588** at December 31, 2024, to **$31,876** at June 30, 2025[86](index=86&type=chunk) - Depreciation expenses for the six months ended June 30, 2025, were **$6,662**, significantly lower than **$30,209** for the same period in 2024[86](index=86&type=chunk) - In 2024, the Company recorded a **$5,820** loss on disposal of PPE due to the closure of the F&BPLQ café[86](index=86&type=chunk) [NOTE 6 — INVESTMENTS AT COST](index=18&type=section&id=NOTE%206%20%E2%80%94%20INVESTMENTS%20AT%20COST) This note describes the company's cost-method investments, including impairments and disposals of subsidiaries - The Company impaired its **$14,010** investment in Ideal Food & Beverage Pte. Ltd. (IFBPL) to **$0** as of December 31, 2024, due to IFBPL's net liabilities[88](index=88&type=chunk) - On April 23, 2025, the Company completed the sale of HWH World Inc. (HWHKOR) to AES Group Inc., generating a **$383,667** gain recorded in other non-operating income[90](index=90&type=chunk) - In exchange for HWHKOR, AES Group Inc. issued new shares representing **19.9%** of its enlarged share capital to the Company, valued at **$1,354**[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) This note details the terms and status of a promissory note owed to a third-party underwriter - On December 18, 2023, the Company settled a **$3,018,750** deferred underwriting fee with EF Hutton LLC (now D. Boral Capital LLC) by paying **$325,000** cash, issuing **149,443** common shares, and a **$1,184,375** promissory note[91](index=91&type=chunk) - The promissory note carries an interest rate of SOFR plus **1%** and matures partially upon future offerings or in installments through October 2028[91](index=91&type=chunk) - The Company defaulted on the first installment of the note due in October 2024, which was paid in January 2025, and is currently negotiating to resolve the default status[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.) This note explains the company's short-term working capital advances and credit facility with Alset Inc - The amount due to Alset Inc. (AEI), the ultimate holding company, for short-term working capital advances increased from **$209,614** at December 31, 2024, to **$459,614** at June 30, 2025[92](index=92&type=chunk) - AEI provided a non-revolving credit facility of up to **$1,000,000** to the Company, bearing a **3%** simple interest rate, with **$700,000** remaining available as of June 30, 2025[93](index=93&type=chunk)[94](index=94&type=chunk) - On September 24, 2024, **$300,000** of debt due to AEI was converted into **476,190** shares of the Company's common stock at **$0.63** per share[95](index=95&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) This note outlines balances and transactions with various related entities, including debt conversions - Due to Alset International Limited (AIL), a fellow subsidiary, decreased from **$5,096,047** at December 31, 2024, to **$5,052,090** at June 30, 2025[95](index=95&type=chunk) - AIL's debt of **$3,501,759** was fully converted into **5,558,347** shares of the Company's common stock at **$0.63** per share on September 24, 2024[96](index=96&type=chunk) - Due from Alset Business Development Pte. Limited (ABD) increased from **$4,113,701** at December 31, 2024, to **$4,231,148** at June 30, 2025[98](index=98&type=chunk) [NOTE 10 — RELATED PARTY TRANSACTIONS](index=22&type=section&id=NOTE%2010%20%E2%80%94%20RELATED%20PARTY%20TRANSACTIONS) This note details significant transactions and agreements with related parties, including convertible notes and acquisitions - The Company has purchased multiple convertible promissory notes (CN 1-7) from Sharing Services Global Corporation (SHRG) totaling **$1,210,000**, along with warrants, between March 2024 and June 2025[102](index=102&type=chunk)[103](index=103&type=chunk)[105](index=105&type=chunk) - SHRG is a related party, as Alset Inc. and Alset International Limited are significant stockholders, and HWH's CEO is also SHRG's CEO[114](index=114&type=chunk) - The Company acquired a **60%** interest in L.E.H. Insurance Group, LLC (LEH) from SHRG for **$75,000** on February 27, 2025, and recorded **$77,480** of goodwill which was immediately written off[123](index=123&type=chunk)[124](index=124&type=chunk) [NOTE 11 — STOCKHOLDERS' EQUITY](index=27&type=section&id=NOTE%2011%20%E2%80%94%20STOCKHOLDERS'%20EQUITY) This note provides information on the company's capital structure, stock issuances, and equity changes - As of June 30, 2025, the Company had **55,000,000** authorized common shares and **1,000,000** authorized preferred shares, with no preferred shares outstanding[129](index=129&type=chunk) - A **1-for-5** reverse stock split was approved on January 16, 2025, and became effective on February 24, 2025[143](index=143&type=chunk) - The Company completed a public offering on January 6, 2025, pricing **3,162,500** shares of common stock and **1,250,000** pre-funded warrants, generating approximately **$1.76** million in gross proceeds[139](index=139&type=chunk) [NOTE 12 —LEASES](index=29&type=section&id=NOTE%2012%20%E2%80%94LEASES) This note describes the company's operating lease arrangements for office spaces and F&B stores - 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%**[144](index=144&type=chunk) - Total lease expenses for the six months ended June 30, 2025, were **$174,679**, down from **$260,139** in the same period of 2024[146](index=146&type=chunk) [NOTE 13 — COMMITMENTS AND CONTINGENCIES](index=30&type=section&id=NOTE%2013%20%E2%80%94%20COMMITMENTS%20AND%20CONTINGENCIES) This note discloses any material commitments or contingent liabilities, including pending legal matters - As of the report date, no legal proceedings, government actions, administrative actions, investigations, or claims are pending against the Company 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) This note identifies significant concentrations of risk related to cash balances and key suppliers - Uninsured cash balances were **$3,143,531** at June 30, 2025, and **$3,861,339** at December 31, 2024[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) This note explains the correction of immaterial errors in prior financial statements and their impact - The Company identified an immaterial error in its Q1 2024 financial statements, resulting in an overstatement of Retained Earnings and understatement of Temporary Equity by approximately **$645,860**[152](index=152&type=chunk)[153](index=153&type=chunk) - Two immaterial errors were identified for the year ended December 31, 2024: an understatement of G&A expenses and overstatement of foreign currency translation adjustment by **$159,263**, and an understatement of unrealized gain on convertible note receivable and overstatement of additional paid-in capital by **$287,812**[154](index=154&type=chunk)[155](index=155&type=chunk)[156](index=156&type=chunk) - These errors were deemed immaterial to previously issued financial statements and have been corrected through revision in the accompanying comparative 2024 financial statements[157](index=157&type=chunk) [NOTE 16— SUBSEQUENT EVENTS](index=31&type=section&id=NOTE%2016%E2%80%94%20SUBSEQUENT%20EVENTS) This note discloses any significant events or transactions occurring after the balance sheet date - The Company evaluated events after the balance sheet date through the report date and found no subsequent events or transactions requiring recognition or disclosure[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) This section provides management's perspective on the Company's financial condition and results of operations for the three and six months ended June 30, 2025, compared to the same periods in 2024. It covers business overview, revenue model, key factors affecting the business, significant accounting policies, detailed analysis of operating results, liquidity, cash flows, Nasdaq compliance, and the impact of external factors like inflation and foreign exchange rates [Overview](index=32&type=section&id=Overview) This section provides a general business overview, including new initiatives and operational strategies - The Company launched Hapi Marketplace on November 4, 2024, a business-to-consumer marketplace featuring over forty-seven product categories, with plans for expansion to South Korea, Hong Kong, and other parts of Asia[162](index=162&type=chunk)[163](index=163&type=chunk) - Hapi Cafés, operating in Seoul and Singapore, serve as in-person social experiences to build community and raise awareness for HWH products and services, with plans for additional locations[165](index=165&type=chunk) - Hapi Wealth Builder, a program for equity investment and wealth-building strategies, is scheduled for a rollout in selected regions later in 2025, with a China headquarters opening for tutorials and workshops[166](index=166&type=chunk)[167](index=167&type=chunk)[168](index=168&type=chunk) [Our Revenue Model](index=33&type=section&id=Our%20Revenue%20Model) This section describes the company's primary sources of revenue and their performance over the period - Total revenue for the three months ended June 30, 2025, was **$310,391**, a decrease from **$334,882** in the prior year. For the six months, revenue was **$605,588**, down from **$620,992**[169](index=169&type=chunk) - Net loss for the three months ended June 30, 2025, was **$675,774**, compared to **$403,641** in 2024. For the six months, net loss was **$1,162,746**, an improvement from **$1,740,160** in 2024[169](index=169&type=chunk) - Food and beverage sales accounted for approximately **100%** of revenue for both the three and six months ended June 30, 2025 and 2024[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) This section discusses key internal and external factors influencing the company's business and financial performance - The Company's financial results are affected by its ability to improve revenue through cross-selling and revenue-sharing arrangements within its group of companies[172](index=172&type=chunk) - Challenges include identifying complementary businesses for acquisition, securing additional financing for these acquisitions, and profitably integrating them[172](index=172&type=chunk) - The ability to attract competent technical and sales personnel at acceptable compensation levels and control operating expenses during business expansion are also critical factors[172](index=172&type=chunk) [Summary of Significant Accounting Policies](index=34&type=section&id=Summary%20of%20Significant%20Accounting%20Policies) This section reiterates the critical accounting policies and estimates used in financial reporting - The consolidated financial statements are prepared in accordance with U.S. GAAP and include all accounts of the Company and its wholly-owned subsidiaries, with intercompany transactions eliminated[173](index=173&type=chunk) - Management makes significant estimates and assumptions, including allowance for credit losses, recoverability and useful lives of property, plant and equipment, deferred tax valuation allowances, contingencies, and equity compensation[174](index=174&type=chunk) - Revenue from product sales and food and beverage is recognized when control is transferred to customers, net of applicable taxes, allowances, refunds, or returns[175](index=175&type=chunk)[177](index=177&type=chunk) [Results of Operations](index=34&type=section&id=Results%20of%20Operations) This section analyzes the company's financial performance, including revenue, expenses, and net income/loss - Revenue for the three months ended June 30, 2025, decreased to **$310,391** from **$334,882** in 2024. For the six months, revenue decreased to **$605,588** from **$620,992**[180](index=180&type=chunk) - Operating expenses significantly decreased from **$654,740** to **$488,681** for the three months and from **$2,150,123** to **$1,230,403** for the six months, primarily due to lower professional fees[183](index=183&type=chunk) - The Company reported a net income of **$75,977** for the three months ended June 30, 2025, compared to a net loss of **$(403,641)** in 2024. The six-month net loss decreased from **$1,740,160** to **$410,995**[185](index=185&type=chunk) [Liquidity and Capital Resources](index=36&type=section&id=Liquidity%20and%20Capital%20Resources) This section assesses the company's ability to meet short-term and long-term obligations and fund operations - Cash decreased from **$4,341,746** at December 31, 2024, to **$3,729,873** at June 30, 2025. Total liabilities decreased, while total assets increased slightly[186](index=186&type=chunk) - Management believes available cash, anticipated cash from operations, and financing from related parties are sufficient to fund operations for at least the next 12 months, despite prior net losses and negative operating cash flow[187](index=187&type=chunk) - The Company has a **$1,000,000** credit facility with Alset Inc., its majority stockholder, with **$700,000** remaining available as of June 30, 2025[188](index=188&type=chunk) [Summary of Cash Flows](index=36&type=section&id=Summary%20of%20Cash%20Flows%20for%20the%20Six%20Months%20Ended%20June%2030%2C%202025%20and%202024) This section summarizes the cash flow activities from operations, investing, and financing for the period - Net cash used in operating activities decreased to **$(528,424)** in H1 2025 from **$(1,129,040)** in H1 2024, primarily due to a gain on disposal of subsidiaries[192](index=192&type=chunk)[193](index=193&type=chunk) - Net cash used in investing activities was **$(741,523)** in H1 2025, a significant change from net cash provided of **$20,554,735** in H1 2024, mainly due to cash withdrawn from a trust account for redemptions in the prior year[192](index=192&type=chunk)[194](index=194&type=chunk) - Net cash provided by financing activities was **$578,857** in H1 2025, a reversal from net cash used of **$(19,741,963)** in H1 2024, driven by proceeds from common stock and warrant issuance[192](index=192&type=chunk)[195](index=195&type=chunk) [Nasdaq Compliance](index=37&type=section&id=Nasdaq%20Compliance) This section details the company's compliance status with Nasdaq listing requirements and related actions - The Company received multiple 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 between February and September 2024[197](index=197&type=chunk)[199](index=199&type=chunk)[201](index=201&type=chunk) - A **1-for-5** reverse stock split was effected on February 24, 2025, to address the bid price deficiency[202](index=202&type=chunk) - On March 10, 2025, Nasdaq notified the Company that it had regained compliance with the minimum bid price requirement (Rule 5550(a)(2)) and is currently listed on the Nasdaq Capital Market[203](index=203&type=chunk) [Contractual Obligations](index=37&type=section&id=Contractual%20Obligations) This section outlines the company's material contractual commitments and payment obligations - As of June 30, 2025, the Company did not have any long-term debt obligations, capital lease obligations, purchase obligations, or long-term liabilities[204](index=204&type=chunk) [Administrative Services Agreement](index=38&type=section&id=Administrative%20Services%20Agreement) This section describes the administrative services agreement and related payments with a management group - The Company previously paid Alset Management Group Inc. **$10,000** per month for office space, utilities, and administrative support, but ceased these payments upon completion of the initial Business Combination[205](index=205&type=chunk) [Underwriting Agreement](index=38&type=section&id=Underwriting%20Agreement) This section details the settlement of deferred underwriting fees and related agreements with an underwriter - The Company settled a **$3,018,750** deferred underwriting fee with EF Hutton (now D. Boral Capital LLC) by paying **$325,000** cash, issuing **149,443** common shares, and a **$1,184,375** promissory note, effective January 9, 2024[207](index=207&type=chunk) - EF Hutton was granted an irrevocable right of first refusal to act as the sole investment banker, book-runner, and/or placement agent for future public and private equity and debt offerings for **24** months after the Business Combination closing[207](index=207&type=chunk) [Merger Agreement](index=38&type=section&id=Merger%20Agreement) This section describes the terms and completion of the company's business combination and merger - The Company completed its Business Combination on January 9, 2024, through the merger of HWH Merger Sub Inc. with HWH International Inc. (Nevada), with the latter surviving as a wholly-owned subsidiary[208](index=208&type=chunk) - Certain closing conditions, including minimum cash available from the Trust Account (**$30,000,000**) and minimum net tangible assets (**$5,000,001**), were waived by the parties[208](index=208&type=chunk) [Registration Rights Agreement](index=38&type=section&id=Registration%20Rights%20Agreement) This section outlines the company's obligations to register certain securities held by investors - The Company is obligated to register certain securities, including common stock and warrants held by the Sponsor and those issued in the Private Placement, under a Registration Rights Agreement dated January 31, 2022[209](index=209&type=chunk) - The Company was required to file a resale registration statement within **15** business days and use best efforts to make it effective within **60** business days after the Business Combination closing[209](index=209&type=chunk) [Lock-Up Agreements](index=39&type=section&id=Lock-Up%20Agreements) This section details restrictions on the transfer of securities by certain stockholders and management - HWH Holders with more than **5%** of HWH Common Stock and certain management team members entered into Lock-Up Agreements, restricting the transfer of Restricted Securities[211](index=211&type=chunk) - The lock-up period ends on the earlier of nine months after closing, when the common stock price equals or exceeds **$12.00** for **20** trading days within a **30-day** period (commencing at least **150** days after closing), or upon a liquidation/merger transaction[211](index=211&type=chunk) [Impact of Inflation](index=39&type=section&id=Impact%20of%20Inflation) This section assesses the current and potential future effects of inflation on the company's 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[212](index=212&type=chunk) - However, there is no assurance that future inflation will not adversely impact operating results and financial condition[212](index=212&type=chunk) [Impact of Foreign Exchange Rates](index=39&type=section&id=Impact%20of%20Foreign%20Exchange%20Rates) This section discusses the influence of foreign currency fluctuations on the company's financial performance - Fluctuations in foreign currency transaction gains or losses, included in the Consolidated Statements of Operations, are primarily due to the effects of foreign exchange rate changes on intercompany loans between Singapore and South Korea[213](index=213&type=chunk) - These intercompany loans were approximately **$0.8** million at June 30, 2025, and **$0.9** million at December 31, 2024[213](index=213&type=chunk) - The Company expects foreign exchange rate volatility to continue impacting results in 2025, as intercompany loan balances are expected to remain around **$1** million in the short term[213](index=213&type=chunk) [Emerging Growth Company Status](index=39&type=section&id=Emerging%20Growth%20Company%20Status) This section clarifies the company's status as an emerging growth company and its elected exemptions - The Company is an 'emerging growth company' as defined in the JOBS Act[214](index=214&type=chunk) - It has elected to take advantage of exemptions from various reporting requirements, including the extended transition period for complying with new or revised accounting standards[214](index=214&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 International Inc. is not required to provide the detailed quantitative and qualitative disclosures regarding market risk typically required under this item - The Company is a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and is therefore not required to provide information on market risk[220](index=220&type=chunk) [Item 4. Controls and Procedures](index=40&type=section&id=Item%204.%20Controls%20and%20Procedures) This section details the Company's evaluation of its disclosure controls and procedures and changes in internal control over financial reporting. Management concluded that disclosure controls and procedures were effective as of June 30, 2025, but identified material weaknesses in internal control over financial reporting related to limited accounting personnel and inadequate policies/procedures - Management, with the participation of the principal executive and financial officers, concluded that disclosure controls and procedures were effective as of June 30, 2025[222](index=222&type=chunk) - No changes in internal control over financial reporting materially affected or are reasonably likely to materially affect internal control over financial reporting during the fiscal interim ended June 30, 2025[223](index=223&type=chunk) - Management identified material weaknesses in internal control over financial reporting, including limited accounting personnel leading to improper segregation of duties and a lack of well-defined accounting policies and procedures, resulting in untimely or inadequate financial close procedures[224](index=224&type=chunk) PART II. OTHER INFORMATION This section provides additional disclosures, including legal proceedings, risk factors, and exhibit listings [Item 1. Legal Proceedings](index=41&type=section&id=Item%201.%20Legal%20Proceedings) The Company reported no material legal proceedings pending against it as of the reporting date - No legal proceedings are pending against the Company[226](index=226&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 the risk factors information typically required under this item - The Company is a smaller reporting company and is not required to provide risk factors[227](index=227&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[228](index=228&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 for the reporting period - No defaults upon senior securities[229](index=229&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[230](index=230&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[231](index=231&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, the Quarterly Report on Form 10-Q, including amendments to the Certificate of Incorporation, certifications of principal officers, and XBRL documents - Exhibits include amendments to the Amended and Restated Certificate of Incorporation (**3.1**, **3.2**)[233](index=233&type=chunk) - Certifications of Principal Executive Officer and Principal Financial Officer are filed pursuant to Sections **302** and **906** of the Sarbanes-Oxley Act of 2002 (**31.1**, **31.2**, **32.1**, **32.2**)[233](index=233&type=chunk) - Inline XBRL documents (Instance, Schema, Calculation, Definition, Label, Presentation Linkbase Documents) and the Cover Page Interactive Data File are also included[233](index=233&type=chunk) PART III. SIGNATURES This section contains the official signatures of the company's principal executive and financial officers - The report is signed on behalf of HWH International Inc. by John Thatch, Chief Executive Officer (Principal Executive Officer), and Rongguo Wei, Chief Financial Officer (Principal Accounting and Financial Officer), on August 13, 2025[236](index=236&type=chunk)

PART I. [FINANCIAL INFORMATION](index=3&type=section&id=Part%20I.%20Financial%20Information) This section provides the unaudited condensed consolidated financial statements and management's discussion and analysis for HWH International Inc. [Item 1. Financial Statements (Unaudited)](index=3&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) This section presents the unaudited condensed consolidated financial statements and detailed notes for the reporting period [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) This statement presents the company's financial position, detailing assets, liabilities, and equity at specific points in time Condensed Consolidated Balance Sheets | Metric (in USD) | March 31, 2025 (Unaudited) (in USD) | December 31, 2024 (in USD) | | :--------------------------------- | :-------------------------- | :----------------- | | Total Current Assets | $5,907,510 | $5,474,997 | | Total Non-Current Assets | $623,820 | $933,725 | | **TOTAL ASSETS** | **$6,531,330** | **$6,408,722** | | Total Current Liabilities | $2,660,503 | $3,311,274 | | Total Non-Current Liabilities | $175,235 | $220,249 | | **TOTAL LIABILITIES** | **$2,835,738** | **$3,531,523** | | Total Stockholders' Equity | $3,695,592 | $2,877,199 | [Condensed Consolidated Statements of Operations and Other Comprehensive Loss](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Other%20Comprehensive%20Loss) This statement outlines the company's financial performance, including revenue, expenses, and net loss over a period Condensed Consolidated Statements of Operations and Other Comprehensive Loss | Metric (in USD) | Three Months Ended March 31, 2025 (in USD) | Three Months Ended March 31, 2024 (in USD) | | :------------------------------------------ | :--------------------------------- | :--------------------------------- | | Revenue | $295,197 | $286,110 | | Cost of revenue | ($147,603) | ($122,813) | | Gross profit | $147,594 | $163,297 | | Total Operating expenses | ($741,722) | ($1,495,383) | | Total Other income (expense) | $62,973 | ($4,433) | | Loss before provision for income taxes | ($531,155) | ($1,336,519) | | Income taxes | ($42,948) | $0 | | **Net loss** | **($574,103)** | **($1,336,519)** | | Net loss attributable to common stockholders | ($565,131) | ($1,336,838) | | Basic Loss per common share | ($0.09) | ($0.44) | | Diluted Loss per common share | ($0.09) | ($0.44) | [Condensed Consolidated Statements of Changes in Stockholders' Equity](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Stockholders'%20Equity) This statement details the changes in the company's equity accounts, including common stock, additional paid-in capital, and accumulated deficit Condensed Consolidated Statements of Changes in Stockholders' Equity | Metric (in USD) | December 31, 2024 (in USD) | March 31, 2025 (in USD) | | :------------------------------------------ | :----------------- | :----------------- | | Common stock, $0.0001 par value | $559 | $647 | | Additional paid in capital | $9,339,413 | $10,836,439 | | Accumulated other comprehensive loss | ($257,598) | ($360,547) | | Accumulated deficit | ($6,317,010) | ($6,882,141) | | Total HWH International Inc. Stockholders' Equity | $2,765,364 | $3,594,398 | | Non-controlling interests | $111,835 | $101,194 | | **Total Stockholders' Equity** | **$2,877,199** | **$3,695,592** | - The company issued **632,500 shares** of common stock and **250,000 warrants**, contributing to an increase in additional paid-in capital[14](index=14&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) This statement summarizes the cash inflows and outflows from operating, investing, and financing activities Condensed Consolidated Statements of Cash Flows | Cash Flow Activity (in USD) | Three Months Ended March 31, 2025 (in USD) | Three Months Ended March 31, 2024 (in USD) | | :--------------------------------- | :--------------------------------- | :--------------------------------- | | Net cash used in operating activities | ($555,333) | ($638,211) | | Net cash used in investing activities | ($300,000) | ($252,072) | | Net cash provided by financing activities | $656,229 | $749,949 | | Net decrease in cash | ($199,104) | ($140,334) | | Cash at end of period | $4,176,546 | $999,506 | - Proceeds from the issuance of common stock and warrants amounted to **$1.41 million** in Q1 2025[17](index=17&type=chunk) [Notes to Unaudited Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed explanations and disclosures supporting the unaudited condensed consolidated financial statements [NOTE 1 — DESCRIPTION OF ORGANIZATION, BUSINESS OPERATIONS](index=8&type=section&id=NOTE%201%20%E2%80%94%20DESCRIPTION%20OF%20ORGANIZATION,%20BUSINESS%20OPERATIONS) This section provides key financial and operational details - HWH International Inc. operates an F&B business in Singapore and South Korea, including four cafés and an online healthy food store[19](index=19&type=chunk) - The company completed a business combination on January 9, 2024, and changed its name from "Alset Capital Acquisition Corp." to "HWH International Inc."[20](index=20&type=chunk)[21](index=21&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) [NOTE 2 — SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES](index=8&type=section&id=NOTE%202%20%E2%80%94%20SUMMARY%20OF%20SIGNIFICANT%20ACCOUNTING%20POLICIES) This section provides key financial and operational details - 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[31](index=31&type=chunk)[32](index=32&type=chunk) - The functional and reporting currency is the United States dollar, with subsidiaries maintaining records in their local currencies (Korean Won, Singapore Dollar, Hong Kong Dollar, Malaysian Ringgit)[33](index=33&type=chunk) - Revenue is primarily generated from product sales and F&B business, recognized when control of goods or services is transferred to the customer[49](index=49&type=chunk)[51](index=51&type=chunk)[53](index=53&type=chunk) Cost of Revenue Component Details | Cost of Revenue Component | Three Months Ended March 31, 2025 (in USD) | Three Months Ended March 31, 2024 (in USD) | | :------------------------ | :--------------------------------- | :--------------------------------- | | Finished goods | $109,006 | $78,507 | | Related shipping | $12,931 | $2,275 | | Handling fee | $11,566 | $10,927 | | Contractor fee | $8,254 | $11,855 | | Franchise commission | $3,350 | $4,953 | | Depreciation | $2,496 | $14,530 | | **Total Cost of revenue** | **$147,603** | **$122,813** | - The company incurred a net loss and negative cash flow from operations in Q1 2025, raising substantial doubt about its ability to continue as a going concern, though management believes available cash and financing from related parties are sufficient for the next 12 months[70](index=70&type=chunk)[71](index=71&type=chunk) [NOTE 3 — ACCOUNTS RECEIVABLE, NET](index=17&type=section&id=NOTE%203%20%E2%80%94%20ACCOUNTS%20RECEIVABLE,%20NET) This section provides key financial and operational details Accounts Receivable, Net | Metric (in USD) | March 31, 2025 (in USD) | December 31, 2024 (in USD) | | :---------------------- | :----------------- | :----------------- | | Accounts receivable, net | $35,106 | $17,546 | [NOTE 4 — INVENTORY](index=17&type=section&id=NOTE%204%20%E2%80%94%20INVENTORY) This section provides key financial and operational details Inventory | Metric (in USD) | March 31, 2025 (in USD) | December 31, 2024 (in USD) | | :-------- | :----------------- | :----------------- | | Inventory | $2,585 | $1,574 | [NOTE 5 — PROPERTY AND EQUIPMENT, NET](index=17&type=section&id=NOTE%205%20%E2%80%94%20PROPERTY%20AND%20EQUIPMENT,%20NET) This section provides key financial and operational details Property and Equipment, Net | Metric (in USD) | March 31, 2025 (in USD) | December 31, 2024 (in USD) | | :-------------------------- | :----------------- | :----------------- | | Property and equipment, net | $32,133 | $33,588 | - Depreciation expenses decreased significantly from **$0.01 million** in Q1 2024 to **$0.003 million** in Q1 2025[84](index=84&type=chunk) [NOTE 6 — INVESTMENTS AT COST](index=17&type=section&id=NOTE%206%20%E2%80%94%20INVESTMENTS%20AT%20COST) This section provides key financial and operational details - No impairment was recorded for investments at cost for the three months ended March 31, 2025[85](index=85&type=chunk) - In 2024, an investment of **$0.01 million** in Ideal Food & Beverage Pte. Ltd. was impaired to **$0** due to net liabilities[86](index=86&type=chunk) [NOTE 7 – LOAN DUE TO THIRD PARTY](index=19&type=section&id=NOTE%207%20%E2%80%93%20LOAN%20DUE%20TO%20THIRD%20PARTY) This section provides key financial and operational details - Ketomei Pte Ltd owes DBS Bank Limited **$0.03 million** as of March 31, 2025[87](index=87&type=chunk) - The company defaulted on a promissory note to EF Hutton LLC due to a delayed payment in January 2025[88](index=88&type=chunk) [NOTE 8 — DUE TO ALSET INC.](index=19&type=section&id=NOTE%208%20%E2%80%94%20DUE%20TO%20ALSET%20INC.) This section provides key financial and operational details Due to Alset Inc. | Metric (in USD) | March 31, 2025 (in USD) | December 31, 2024 (in USD) | | :---------------- | :----------------- | :----------------- | | Due to Alset Inc. | $209,614 | $209,614 | - Alset Inc. provided a **$1.00 million** credit facility, with **$0.70 million** available as of March 31, 2025[90](index=90&type=chunk) - The due date for advances was extended to April 14, 2026[91](index=91&type=chunk) [NOTE 9 — DUE TO/FROM RELATED PARTIES](index=19&type=section&id=NOTE%209%20%E2%80%94%20DUE%20TO/FROM%20RELATED%20PARTIES) This section provides key financial and operational details Related Party Balances | Related Party (in USD) | March 31, 2025 (in USD) | December 31, 2024 (in USD) | | :--------------------------------- | :----------------- | :----------------- | | Due to Alset International Limited | $5,044,200 | $5,096,047 | | Due from Alset Business Development Pte. Limited | $4,111,623 | $4,113,701 | | Due from HotApp International Limited | $253,003 | N/A | | Due from Hapi Cafe Limited | $128,569 | N/A | - Alset International Limited was released from its financial support obligations to the company on April 14, 2025[94](index=94&type=chunk) [NOTE 10 — RELATED PARTY TRANSACTIONS](index=20&type=section&id=NOTE%2010%20%E2%80%94%20RELATED%20PARTY%20TRANSACTIONS) This section provides key financial and operational details - The company acquired an additional **38.41% ownership** in Ketomei, increasing its stake to **55.65%**, by converting a **$0.31 million** convertible loan[101](index=101&type=chunk) - The company purchased multiple convertible promissory notes (CN 1-6) from Sharing Services Global Corporation (SHRG) totaling **$1.30 million**, bearing **8% interest**[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) - The company acquired a controlling **60% interest** in L.E.H. Insurance Group, LLC (LEH) for **$0.08 million**, recording and immediately writing off **$0.08 million** in goodwill[118](index=118&type=chunk) - John Thatch, the CEO, is also CEO of LEH and SHRG[119](index=119&type=chunk) - The company entered a joint venture for HapiTravel Holding Pte. Ltd. (HTHPL), holding a **19% stake**, and provided a loan of **$0.14 million** to HTHPL[120](index=120&type=chunk)[121](index=121&type=chunk) [NOTE 11 — STOCKHOLDERS' EQUITY](index=24&type=section&id=NOTE%2011%20%E2%80%94%20STOCKHOLDERS'%20EQUITY) This section provides key financial and operational details Warrant Activity | Warrant Activity | As of Dec 31, 2024 | Granted | Exercised | Forfeited, cancelled, expired | As of Mar 31, 2025 | | :--------------------------------- | :----------------- | :-------- | :-------- | :---------------------------- | :----------------- | | Warrants Outstanding | 909,874 | 250,000 | (250,000) | - | 909,874 | | Weighted Average Exercise Price | $57.5 | $2.0 | ($2.0) | - | $57.5 | - 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[134](index=134&type=chunk) - A **1-for-5 reverse stock split** became effective on February 24, 2025[139](index=139&type=chunk) [NOTE 12 —LEASES](index=26&type=section&id=NOTE%2012%20%E2%80%94LEASES) This section provides key financial and operational details Lease Metrics | Lease Metric (in USD) | March 31, 2025 (in USD) | December 31, 2024 (in USD) | | :-------------------------- | :----------------- | :----------------- | | Right-of-use assets | $448,901 | $548,757 | | Lease liabilities - current | $285,084 | $340,651 | | Lease liabilities - non-current | $175,235 | $220,249 | | Total lease liabilities | $460,319 | $560,900 | - Total lease expenses decreased from **$0.13 million** in Q1 2024 to **$0.11 million** in Q1 2025[143](index=143&type=chunk) [NOTE 13 — COMMITMENTS AND CONTINGENCIES](index=27&type=section&id=NOTE%2013%20%E2%80%94%20COMMITMENTS%20AND%20CONTINGENCIES) This section provides key financial and operational details - No material legal proceedings or claims are pending against the company[144](index=144&type=chunk) [NOTE 14 — CONCENTRATION RISK](index=28&type=section&id=NOTE%2014%20%E2%80%94%20CONCENTRATION%20RISK) This section provides key financial and operational details Uninsured Cash Balances | Metric (in USD) | March 31, 2025 (in USD) | December 31, 2024 (in USD) | | :-------------------- | :----------------- | :----------------- | | Uninsured cash balances | $3,765,439 | $3,861,339 | - Five suppliers accounted for over **76%** of total costs of revenue in Q1 2025, indicating significant supplier concentration[146](index=146&type=chunk) [NOTE 15 — CONVERTIBLE NOTES RECEIVABLE, RELATED PARTY](index=28&type=section&id=NOTE%2015%20%E2%80%94%20CONVERTIBLE%20NOTES%20RECEIVABLE,%20RELATED%20PARTY) This section provides key financial and operational details Convertible Note Receivable, Related Party | Metric (in USD) | December 31, 2024 (in USD) | Additions (in USD) | Unrealized Gain (in USD) | March 31, 2025 (in USD) | | :------------------------------------ | :----------------- | :-------- | :-------------- | :----------------- | | Convertible note receivable, related party | $744,652 | $300,000 | $16,720 | $1,061,372 | - The company recognized an unrealized gain of **$0.02 million** on convertible notes receivable from SHRG in Q1 2025[149](index=149&type=chunk) [NOTE 16 – CORRECTION OF AN IMMATERIAL ERROR IN PREVIOUSLY ISSUED FINANCIAL STATEMENTS](index=29&type=section&id=NOTE%2016%20%E2%80%93%20CORRECTION%20OF%20AN%20IMMATERIAL%20ERROR%20IN%20PREVIOUSLY%20ISSUED%20FINANCIAL%20STATEMENTS) This section provides key financial and operational details - An immaterial error in Q1 2024 overstated Retained Earnings by **$0.65 million**, with no impact on net income or total equity[151](index=151&type=chunk) - An immaterial error in FY 2024 understated general and administrative expenses by **$0.16 million**, increasing net loss and decreasing total equity by the same amount[152](index=152&type=chunk) [NOTE 17 — SUBSEQUENT EVENTS](index=29&type=section&id=NOTE%2017%20%E2%80%94%20SUBSEQUENT%20EVENTS) This section provides key financial and operational details - The Credit Facility Agreement with Alset Inc. was amended on April 14, 2025, extending the due date for advances to April 14, 2026[154](index=154&type=chunk) - Alset International Limited was released from its Letter of Continuing Financial Support to the company on April 14, 2025[154](index=154&type=chunk) - The company provided a **$0.25 million** loan to Sharing Services Global Corp. (SHRG) on April 17, 2025, bearing an **8% interest**[155](index=155&type=chunk) - On April 23, 2025, the company sold HWH World Inc. to AES Group Inc. in exchange for a **19.9% equity interest** in AES[156](index=156&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=30&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's financial condition, results of operations, liquidity, and business outlook [Cautionary Note Regarding Forward-Looking Statements](index=30&type=section&id=Cautionary%20Note%20Regarding%20Forward-Looking%20Statements) This section provides key financial and operational details - The report contains forward-looking statements subject to risks and uncertainties that may cause actual results to differ materially[159](index=159&type=chunk) [Overview](index=30&type=section&id=Overview) This section provides key financial and operational details [Hapi Marketplace](index=30&type=section&id=Hapi%20Marketplace) This section provides key financial and operational details - Hapi Marketplace, a B2C platform with over 47 product categories, launched in the U.S. on November 4, 2024, with plans for expansion into Asia and robotics[160](index=160&type=chunk)[161](index=161&type=chunk) [Hapi Cafés](index=31&type=section&id=Hapi%20Caf%C3%A9s) This section provides key financial and operational details - Hapi Cafés serve as in-person social experiences to build community and promote HWH's products, with plans for expansion[162](index=162&type=chunk) - One Hapi Café location was closed in Q2 2024 due to unsustainable revenue, with efforts refocused on other growth ventures[162](index=162&type=chunk) [Hapi Wealth Builder](index=31&type=section&id=Hapi%20Wealth%20Builder) This section provides key financial and operational details - Hapi Wealth Builder offers in-person courses and workshops on equity investment and wealth-building strategies, targeting a 2025 rollout in selected regions and opening a China headquarters[163](index=163&type=chunk)[164](index=164&type=chunk)[165](index=165&type=chunk) [Our Revenue Model](index=31&type=section&id=Our%20Revenue%20Model) This section provides key financial and operational details Revenue and Net Loss | Metric (in USD) | Three Months Ended March 31, 2025 (in USD) | Three Months Ended March 31, 2024 (in USD) | | :---------------- | :--------------------------------- | :--------------------------------- | | Total Revenue | $295,197 | $286,110 | | Net Loss | ($574,103) | ($1,336,519) | - Food and beverage sales accounted for **100%** of revenue in both Q1 2025 and Q1 2024[166](index=166&type=chunk) - In Q1 2025, **89%** of revenue was from Singapore and **11%** from South Korea, compared to **96%** and **4%** respectively in Q1 2024[167](index=167&type=chunk) [Matters that May or Are Currently Affecting Our Business](index=31&type=section&id=Matters%20that%20May%20or%20Are%20Currently%20Affecting%20Our%20Business) This section provides key financial and operational details - Key challenges include improving revenue through cross-selling, integrating acquisitions, attracting skilled personnel, and controlling operating expenses during expansion[168](index=168&type=chunk) [Summary of Significant Accounting Policies](index=32&type=section&id=Summary%20of%20Significant%20Accounting%20Policies) This section provides key financial and operational details [Basis of Presentation and Principles of Consolidation](index=32&type=section&id=Basis%20of%20Presentation%20and%20Principles%20of%20Consolidation) This section provides key financial and operational details - Consolidated financial statements include all accounts of the company and its wholly-owned subsidiaries, prepared under U.S. GAAP[170](index=170&type=chunk) [Use of Estimates and Critical Accounting Estimates and Assumptions](index=32&type=section&id=Use%20of%20Estimates%20and%20Critical%20Accounting%20Estimates%20and%20Assumptions) This section provides key financial and operational details - Significant estimates include allowance for credit losses, asset recoverability and useful lives, deferred tax valuation, contingencies, and equity compensation[171](index=171&type=chunk) [Revenue Recognition and Cost of Sales](index=32&type=section&id=Revenue%20Recognition%20and%20Cost%20of%20Sales) This section provides key financial and operational details - Revenue from product sales and food & beverage is recognized upon delivery to customers[172](index=172&type=chunk)[174](index=174&type=chunk) - Cost of revenue includes finished goods, shipping, and handling fees[175](index=175&type=chunk) [Results of Operations](index=32&type=section&id=Results%20of%20Operations) This section provides key financial and operational details [Revenue](index=33&type=section&id=Revenue_MD&A) This section provides key financial and operational details Revenue | Metric (in USD) | Three Months Ended March 31, 2025 (in USD) | Three Months Ended March 31, 2024 (in USD) | | :------- | :--------------------------------- | :--------------------------------- | | Revenue | $295,197 | $286,110 | - Revenue increase in Q1 2025 was driven by increased F&B business in Singapore due to a new café opening[177](index=177&type=chunk) [Cost of revenue](index=33&type=section&id=Cost%20of%20revenue_MD&A) This section provides key financial and operational details Cost of Revenue and Gross Margin | Metric (in USD) | Three Months Ended March 31, 2025 (in USD) | Three Months Ended March 31, 2024 (in USD) | | :-------------- | :--------------------------------- | :--------------------------------- | | Cost of revenue | $147,603 | $122,813 | | Gross margin | $147,594 | $163,297 | [Operating expenses](index=33&type=section&id=Operating%20expenses_MD&A) This section provides key financial and operational details Operating Expenses | Metric (in USD) | Three Months Ended March 31, 2025 (in USD) | Three Months Ended March 31, 2024 (in USD) | | :------------------------ | :--------------------------------- | :--------------------------------- | | Operating expenses | $741,722 | $1,495,383 | | General and administrative expenses | $664,242 | $1,129,191 | - The decrease in operating expenses was mainly due to lower professional fees related to 10-Q and S-4 filings[179](index=179&type=chunk) [Other income (expense)](index=33&type=section&id=Other%20income%20(expense)_MD&A) This section provides key financial and operational details Other Income (Expense) | Metric (in USD) | Three Months Ended March 31, 2025 (in USD) | Three Months Ended March 31, 2024 (in USD) | | :--------------------------------- | :--------------------------------- | :--------------------------------- | | Other income (expense) | $62,973 | ($4,433) | | Foreign exchange transaction gain (loss) | $66,070 | ($49,571) | [Net loss](index=33&type=section&id=Net%20loss_MD&A) This section provides key financial and operational details Net Loss | Metric (in USD) | Three Months Ended March 31, 2025 (in USD) | Three Months Ended March 31, 2024 (in USD) | | :------- | :--------------------------------- | :--------------------------------- | | Net loss | ($574,103) | ($1,336,519) | [Liquidity and Capital Resources](index=34&type=section&id=Liquidity%20and%20Capital%20Resources) This section provides key financial and operational details Liquidity and Capital Resources | Metric (in USD) | March 31, 2025 (in USD) | December 31, 2024 (in USD) | | :----------------- | :----------------- | :----------------- | | Cash | $4,176,546 | $4,341,746 | | Liabilities | $2,835,738 | $3,531,523 | | Total Assets | $6,531,330 | $6,408,722 | - The company believes it has sufficient liquidity for the next 12 months through available cash, anticipated operations, and a **$0.70 million** remaining credit line from Alset Inc.[183](index=183&type=chunk)[184](index=184&type=chunk) - Alset Inc. provides letters of financial support, committing to additional funding and not demanding repayment for 12 months[187](index=187&type=chunk) [Nasdaq Compliance](index=35&type=section&id=Nasdaq%20Compliance) This section provides key financial and operational details - The company received notices of non-compliance with Nasdaq's MVLS, market value of publicly held shares, and minimum bid price requirements[192](index=192&type=chunk)[194](index=194&type=chunk)[196](index=196&type=chunk) - A **1-for-5 reverse stock split** became effective on February 24, 2025[197](index=197&type=chunk) - The company regained compliance with the Nasdaq minimum bid price requirement on March 10, 2025, and is now listed on the Nasdaq Capital Market[198](index=198&type=chunk) [Contractual Obligations](index=35&type=section&id=Contractual%20Obligations) This section provides key financial and operational details - As of March 31, 2025, the company had no long-term debt, capital lease, operating lease, purchase, or other long-term liabilities[199](index=199&type=chunk) [Administrative Services Agreement](index=36&type=section&id=Administrative%20Services%20Agreement) This section provides key financial and operational details - Monthly administrative service fees of **$0.01 million** to Alset Management Group Inc. ceased upon completion of the Business Combination[200](index=200&type=chunk) [Underwriting Agreement](index=36&type=section&id=Underwriting%20Agreement) This section provides key financial and operational details - A deferred underwriting fee of **$3.02 million** to EF Hutton was satisfied with **$0.33 million** cash, **149,443 common shares**, and a **$1.18 million** promissory note[202](index=202&type=chunk) - EF Hutton was granted an irrevocable right of first refusal for future equity and debt offerings for 24 months post-Business Combination[202](index=202&type=chunk) [Merger Agreement](index=36&type=section&id=Merger%20Agreement) This section provides key financial and operational details - The Business Combination was consummated on the Closing Date, with HWH Nevada becoming a wholly-owned subsidiary and the company changing its name to "HWH International Inc."[203](index=203&type=chunk)[204](index=204&type=chunk) - Certain closing conditions, including minimum cash in the Trust Account (**$30M**) and net tangible assets (**$5M**), were waived[204](index=204&type=chunk) [Registration Rights Agreement](index=36&type=section&id=Registration%20Rights%20Agreement) This section provides key financial and operational details - The company is obligated to register common stock and warrants held by the Sponsor and other entities within 15 business days of the Business Combination closing, aiming for effectiveness within 60 business days[205](index=205&type=chunk) [Lock-Up Agreements](index=37&type=section&id=Lock-Up%20Agreements) This section provides key financial and operational details - HWH shareholders and management are subject to a nine-month lock-up period on common stock received from the Merger, with early release conditions[207](index=207&type=chunk) [Termination of Subscription Agreement](index=37&type=section&id=Termination%20of%20Subscription%20Agreement) This section provides key financial and operational details - The Subscription Agreement with Meteora was terminated, and a settlement of **$0.30 million** was paid/retained by Meteora[208](index=208&type=chunk) [Impact of Inflation](index=37&type=section&id=Impact%20of%20Inflation) This section provides key financial and operational details - Inflation has not had a material impact on operations for Q1 2025 or FY 2024, but future impact is uncertain[209](index=209&type=chunk) [Impact of Foreign Exchange Rates](index=37&type=section&id=Impact%20of%20Foreign%20Exchange%20Rates) This section provides key financial and operational details - Foreign exchange rate fluctuations on intercompany loans (approx. **$0.8 million** between Singapore and South Korea) significantly impact transaction gains/losses and are expected to remain volatile in 2025[210](index=210&type=chunk) [Emerging Growth Company Status](index=37&type=section&id=Emerging%20Growth%20Company%20Status) This section provides key financial and operational details - As an "emerging growth company," the company utilizes exemptions under the JOBS Act, including delaying adoption of new accounting standards[211](index=211&type=chunk) [Item 3. Quantitative and Qualitative Disclosures Regarding Market Risk](index=38&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 regarding market risk - As a smaller reporting company, HWH International Inc. is exempt from providing quantitative and qualitative disclosures regarding market risk[217](index=217&type=chunk) [Item 4. Controls and Procedures](index=38&type=section&id=Item%204.%20Controls%20and%20Procedures) Management evaluates disclosure controls and reports on internal control over financial reporting [Evaluation of Disclosure Controls and Procedures](index=38&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) This section provides key financial and operational details - The company's disclosure controls and procedures were evaluated and deemed effective as of March 31, 2025[219](index=219&type=chunk) [Changes in Internal Control over Financial Reporting](index=38&type=section&id=Changes%20in%20Internal%20Control%20over%20Financial%20Reporting) This section provides key financial and operational details - No material changes in internal control over financial reporting occurred during Q1 2025[220](index=220&type=chunk) - Management identified material weaknesses in internal control over financial reporting, including limited accounting personnel (leading to inadequate segregation of duties) and a lack of well-defined, timely financial close procedures[216](index=216&type=chunk)[221](index=221&type=chunk) PART II. [OTHER INFORMATION](index=39&type=section&id=Part%20II.%20Other%20Information) This section includes disclosures on legal proceedings, risk factors, sales of equity securities, defaults, mine safety, and exhibits [Item 1. Legal Proceedings](index=39&type=section&id=Item%201.%20Legal%20Proceedings) There are no legal proceedings pending against the company that are expected to have a material adverse effect on its business or financial condition - No material legal proceedings are pending against the company[223](index=223&type=chunk) [Item 1A. Risk Factors](index=39&type=section&id=Item%201A.%20Risk%20Factors) As a smaller reporting company, HWH International Inc. is exempt from providing risk factor disclosures - As a smaller reporting company, HWH International Inc. is exempt from providing risk factor disclosures[224](index=224&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=39&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 - Not applicable[225](index=225&type=chunk) [Item 3. Defaults Upon Senior Securities](index=39&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) There were no defaults upon senior securities during the reporting period - No defaults upon senior securities occurred[226](index=226&type=chunk) [Item 4. Mine Safety Disclosures](index=39&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not applicable[227](index=227&type=chunk) [Item 5. Other Information](index=39&type=section&id=Item%205.%20Other%20Information) No other information is reported under this item - No other information to report[228](index=228&type=chunk) [Item 6. Exhibits](index=40&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 - The exhibits include the Placement Agency Agreement, amendments to the Certificate of Incorporation, and certifications from executive officers[230](index=230&type=chunk) PART III. [Signatures](index=41&type=section&id=Part%20III.%20Signatures) This section contains the official certifications and signatures of the company's executive officers [Signatures](index=41&type=section&id=Signatures) The report is signed by John Thatch, Chief Executive Officer, and Rongguo Wei, Chief Financial Officer, certifying its accuracy and compliance - The report was signed by John Thatch (CEO) and Rongguo Wei (CFO) on May 15, 2025[233](index=233&type=chunk)

Core Points - HWH International Inc. announced a 1-for-5 reverse stock split effective February 24, 2025, to comply with Nasdaq Capital Market minimum bid price requirements [1] - The reverse stock split will automatically reclassify every 5 shares into one new share without modifying any rights or preferences of the common stock [2] - Stockholders will receive cash payments for any fractional shares resulting from the reverse stock split, calculated based on the closing price on the effective date [3] Additional Information - The reverse stock split was approved by the majority of stockholders and the Board of Directors on January 16, 2025 [2] - HWH International Inc. operates in four core areas: Hapi Marketplace, Hapi Cafe, Hapi Travel, and Hapi Wealth Builder, focusing on health, wealth, and happiness [5] - Further details regarding the reverse stock split can be found in the definitive information statement filed with the SEC on January 28, 2025 [4]

BETHESDA, MD, Jan. 06, 2025 (GLOBE NEWSWIRE) -- HWH International Inc. (the “Company”) (NASDAQ: HWH), a purpose-driven lifestyle company, today announced the closing of its public offering (the “Offering”) with aggregate gross proceeds to the Company of $1,764,875, prior to deducting fees and other expenses payable by the Company. The Offering consisted of 3,125,000 shares of common stock and 1,250,000 pre-funded warrants to purchase 1,250,000 shares of common stock. Each share of common stock (or pre-funde ...

Core Insights - HWH International Inc. and Sharing Services Global Corporation are collaborating in the robotics field, with HWH highlighting SHRG's membership in the Association for Advancing Automation (A3) and participation in the A3 Business Forum in January 2025 [6][13] - The demand for automation is increasing, with non-automotive industries accounting for 56% of robot orders, while automotive customers contributed 44% [2] - A3 Market Intelligence reported an 8.8% increase in robot sales in North America in Q3 2024, with 7,329 robots sold valued at $475 million, and a 14.1% increase in units ordered [7][14] Company Overview - HWH International Inc. is focused on providing a Robot-as-a-Service (RaaS) model, allowing businesses to access advanced robotic solutions without significant upfront costs [2][14] - The RaaS model features flexibility, comprehensive support, and customization to meet the specific needs of various industries [8] - HWH operates under a purpose-driven lifestyle approach, offering services across four core pillars: Hapi Marketplace, Hapi Cafe, Hapi Travel, and Hapi Wealth Builder [14] Industry Trends - Labor shortages and the need for efficiency are driving businesses to adopt automation as a key strategy for competitiveness [14] - The automotive sector is experiencing mixed results, with Automotive Component orders increasing by 61%, while Automotive OEM orders decreased by 15% [2] - The integration of robots into everyday life is expected to create growth opportunities for businesses engaging with the robotics industry [13]

Core Insights - HWH International Inc. is expanding its Hapi Cafe brand across Asia, currently operating outlets in Singapore and South Korea, with plans for further growth [1][6] - The Hapi Cafe initiative focuses on promoting health, wealth, and happiness through nutritious meal offerings and educational programs [2][3][4] - The company is launching Hapi Cafe X, a new operating model aimed at enhancing brand exposure with minimal investment, targeting competitive markets like China [6][7] Business Model and Strategy - Hapi Cafe embodies a 4-in-1 philosophy that integrates health, wealth, and happiness into its offerings [2][8] - The flagship stores in Korea, Taiwan, and Singapore have received positive customer feedback, reinforcing the company's vision [3] - The Hapi Wealth Education program is being implemented through workshops and seminars at Hapi Cafe locations, starting with a soft launch in Dongguan, China [4] Expansion Plans - HWH is revamping existing Hapi Cafes in Taiwan and Korea to enhance the overall customer experience [5] - The company plans to roll out Hapi Cafe X in China and other Asian countries in the first half of 2025, collaborating with fitness centers and co-working spaces [6][7] - The strategic approach aims to build membership and brand presence while navigating a competitive coffee shop landscape [7]

Core Insights - HWH International Inc. has established a joint venture in its Hapi Travel business, holding a 19% interest, aimed at expanding its travel operations in China and the ASEAN region [1][2] Group 1: Joint Venture and Operations - The joint venture, HapiTravel Holding Pte. Ltd., is a wholly owned foreign enterprise in Singapore, focusing on education tours, conference tour packages, and a B2B hotel booking system [2] - The joint venture and its predecessors have generated over US$18 million in revenue during the first three quarters of 2024 [3] - Hapi Travel has successfully launched its educational tour business in Hong Kong and plans to establish subsidiaries in Singapore and Malaysia to meet growing travel demand [3] Group 2: Company Vision and Mission - The company emphasizes its mission to promote health, wealth, and happiness, which is central to its operations [4] - HWH International Inc. operates under four core pillars: Hapi Marketplace, Hapi Cafe, Hapi Travel, and Hapi Wealth Builder, aiming to create differentiated offerings [4]

Core Insights - HWH International Inc. has announced a strategic partnership with Asia Business College to launch the Hapi Wealth program in China in Q1 2025 [1][2] - Hapi Wealth aims to provide comprehensive knowledge in equity investment and wealth-building strategies, with a successful soft launch in November 2024 [2][4] - The program will establish a dedicated headquarters in China to facilitate in-person tutorials and workshops [3] Company Strategy - The partnership with Asia Business College will enhance the delivery of educational materials in both Chinese and English, with plans for additional languages [4] - HWH plans to utilize its network of Hapi Cafés for program sessions and community-building efforts, targeting key locations across Asia [5] - Asia is identified as a foundational market for Hapi Wealth, with lessons from this experience informing future expansion into North America [6] Mission and Vision - Hapi Wealth is designed to empower individuals towards financial independence and resilience, aligning with HWH's vision of promoting health, wealth, and happiness [7] - The program emphasizes a community-centric approach to make wealth-building accessible and effective [7] - HWH International Inc. operates under four core pillars: Hapi Marketplace, Hapi Cafe, Hapi Travel, and Hapi Wealth Builder, focusing on helping individuals pursue health, wealth, and happiness [8]