HWH International(US:HWH)2025-03-31 20:05Revenue 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 [101]. - 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 [101]. - Total revenue for the year ended December 31, 2024, was $1,253,577, a significant increase from $830,519 in 2023, representing a growth of approximately 51% [115]. - The company reported a net loss of $2,606,504 for the year ended December 31, 2024, compared to a net loss of $1,076,662 in 2023 [120]. - The company reported a gross profit margin of approximately 48% for the year ended December 31, 2023, compared to 60% in 2024, showing a decline in profitability [170]. - The company incurred a net loss of $1,076,662 for the year ended December 31, 2023, compared to a net income of $573,888 in the previous period [257]. - The company’s comprehensive loss for the year was $1,129,537, reflecting a foreign exchange translation adjustment loss of $49,045 [257]. Revenue Sources - Food and beverage sales accounted for approximately 100% of revenue in 2024, up from 98% in 2023, while membership sales dropped to 0% in 2024 from 2% in 2023 [102]. - Revenue from the Food and Beverage business for the years ended December 31, 2024 and 2023 was $1,253,577 and $817,761, respectively, indicating a significant increase [223]. Expenses and Costs - Cost of revenue rose from $334,825 in 2023 to $651,721 in 2024, driven by increased sales in the food and beverage business [116]. - Operating expenses decreased from $3,402,793 in 2023 to $3,027,024 in 2024, primarily due to reduced general and administrative expenses [118]. - Advertising expenses increased from $4,191 in 2023 to $19,472 in 2024, showing a significant investment in marketing [233]. - The total finished goods cost for the year ended December 31, 2024 was $492,113, compared to $151,703 in 2023, reflecting increased procurement costs [230]. Cash Flow and Assets - Cash increased from $1,159,201 as of December 31, 2023, to $4,341,746 as of December 31, 2024, while liabilities decreased from $6,207,178 to $3,531,523 [121]. - Net cash used in operating activities improved from $2,600,370 in 2023 to $1,659,999 in 2024, indicating better cash management [128]. - Total current assets as of December 31, 2023, amounted to $5,474,997, a substantial rise from $1,337,854 in 2024, reflecting an increase of approximately 309% [168]. - Cash and marketable securities held in the Trust Account as of December 31, 2024, were $21,346,768, indicating a significant asset position [168]. Membership and Expansion Plans - The company had approximately 9,811 members, primarily in South Korea, with plans to resume a new membership model based on yearly subscriptions [85][91]. - The company is transitioning to a tiered membership model with a yearly subscription basis, intending to resume membership sales [183]. - Hapi Cafés were opened in Seoul and Singapore, with plans for further expansion, although one café was closed due to unsustainable revenue [95]. - 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 [122]. Mergers and Acquisitions - The total consideration for the merger with HWH Nevada was $125,000,000, paid in shares valued at $10.00 each [89]. - The merger with HWH International Inc. was completed on January 9, 2024, resulting in a recapitalization with no goodwill or intangible assets recorded [253][254]. Financial Agreements and Liabilities - 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 [123]. - The company has a remaining credit line of $700,000 available from a Credit Facility Agreement with Alset Inc. [244]. - Amounts due to Alset Inc. at December 31, 2024 and 2023 were $209,614 and $202,645 respectively, classified as current liabilities due upon request [274]. - The Company established a Credit Facility Agreement with Alset Inc. providing a maximum credit line of $1,000,000, with advances bearing a simple interest rate of 3% per annum [275][276]. Internal Controls and Compliance - Management assessed internal controls over financial reporting as of December 31, 2024, identifying a material weakness due to limited staff experience with U.S. GAAP and SEC reporting [155]. - The Company plans to appoint additional qualified personnel to address the identified weaknesses in internal controls over financial reporting [155]. - The independent auditor's report confirmed that the consolidated financial statements present fairly the financial position of the Company as of December 31, 2024, and 2023 [162]. Currency and Economic Factors - The Company reported that inflation has not materially impacted its operations for the years ended December 31, 2024, and December 31, 2023 [149]. - Foreign exchange rate fluctuations affected intercompany loans, with balances of approximately $0.9 million and $2.1 million as of December 31, 2024, and 2023, respectively [150]. - The company experienced a foreign currency translation adjustment loss of $219,898 for the year ended December 31, 2023, compared to a loss of $49,045 in 2024, reflecting increased exposure to currency fluctuations [170]. Investments and Joint Ventures - A minority investment was made in a travel agency focusing on educational tours for students, expanding consumer travel services in Asia [188]. - The company entered into a joint venture on April 25, 2024, holding 19% of the shares in HapiTravel Holding Pte. Ltd. [265].