Form 8-K/A - Current report: [Amend]

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K/A

(Amendment No. 1)

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): January 9, 2024

HWH International Inc.

(Exact name of registrant as specified in its charter)

Delaware

001-41254

87-3296100

(State or other jurisdiction

of incorporation)

(Commission

File Number)

(I.R.S. Employer

Identification No.)

4800 Montgomery Lane, Suite 210 Bethesda, MD		20814
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (301) 971-3955

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the Registrant under any of the following provisions (see General Instruction A.2. below):

☐	Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐	Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐	Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐	Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock, $0.0001 par value per share		HWH		The Nasdaq Global Market

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

EXPLANATORY NOTE

This Amendment No. 1 to the Form 8-K (the “Form 8-K”) originally filed by HWH International Inc., a Delaware corporation (the “Company”), on January 12, 2024 is being filed solely for the purpose of amending the historical financial statements provided under Item 9.01 in the Form 8-K to include the audited consolidated financial statements of HWH International Inc. as of December 31, 2023 and 2022, including the unaudited pro forma condensed combined financial information of the Company as of and for the year ended December 31, 2023, and December 31, 2022, and including the related Management’s Discussion and Analysis of Financial Condition and Results of Operations of the Company. This Amendment No. 1 does not amend any other item of the Form 8-K or purport to provide an update or a discussion of any developments at the Company subsequent to the filing date of the Form 8-K.

The Company’s Annual Report on Form 10-K for the period ended November 30, 2023, as filed with the Securities and Exchange Commission on February 28, 2024, is hereby incorporated by reference thereto.

Item 9.01

Financial Statements and Exhibits.

(a) Financial Statements of Businesses Acquired.

The consolidated financial statements of HWH International Inc. as of and for the years ended December 31, 2023 and 2022 are set forth in Exhibit 99.1 hereto and are incorporated herein by reference.

(b) Pro Forma Financial Information.

The unaudited pro forma condensed combined financial information of Alset Capital Acquisition Corp. and HWH International Inc. as of December 31, 2023 and for the year ended December 31, 2023 is set forth in Exhibit 99.2 hereto and is incorporated herein by reference.

Also included herewith as Exhibit 99.3 and incorporated by reference herein is the related Management’s Discussion and Analysis of Financial Condition and Results of Operations of HWH International Inc.

(d) Exhibits.

Exhibit No.		Description
99.1		Audited condensed consolidated financial statements of HWH International Inc. as of and for the year ended December 31, 2023 and 2022.
99.2		Unaudited pro forma condensed combined financial information of the Company as of and for the year ended December 31, 2023 and December 31, 2022.
99.3		Management’s Discussion and Analysis of Financial Condition and Results of Operations of HWH International Inc.
99.4		Consent of Independent Registered Public Accounting Firm
104		Cover Page Interactive Data File (the cover page XBRL tags are embedded within the inline XBRL document).

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date: March 25, 2024	HWH INTERNATIONAL INC.

	By:	/s/ Rongguo Wei
	Name:	Rongguo Wei
	Title:	Chief Financial Officer

Exhibit 99.1

HWH International Inc. and Subsidiaries

CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended

December 31, 2023 and 2022

Table of Contents

	Page
Report of Independent Registered Public Accounting Firm (PCAOB ID: 606)	1
Consolidated Balance Sheets as of December 31, 2023 and 2022 (as restated)	2
Consolidated Statements of Operations and Comprehensive Loss for the years ended December 31, 2023 and 2022 (as restated)	3
Consolidated Statements of Changes in Stockholders’ Equity (Deficit) for the years ended December 31, 2023 and 2022 (as restated)	4
Consolidated Statements of Cash Flows for the years ended December 31, 2023 and 2022 (as restated)	5
Notes to Consolidated Financial Statements	5

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of

HWH International Inc. and Subsidiaries

Bethesda, Maryland

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheets of HWH International Inc. and Subsidiaries (the “Company”) as of December 31, 2023 and 2022, and the related consolidated statements of operations and comprehensive loss, changes in stockholders’ equity, and cash flows for each of the years then ended, and the related notes (collectively referred to as the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the years then ended, in conformity with accounting principles generally accepted in the United States of America.

Restatement of Consolidated Financial Statements

As discussed in Note 3 to the consolidated financial statements, the 2022 consolidated financial statements have been restated to correct certain misstatements.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB and in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

GRASSI & CO., CPAs, P.C.

We have served as the Company’s auditor since 2022.

Jericho, New York

March 25, 2024

HWH International Inc. and Subsidiaries

Consolidated Balance Sheets

	December 31, 2023			December 31, 2022 (as restated)
ASSETS

Current Assets
Cash	$	878,803		$	1,651,088
Accounts Receivable, net		28,611			9,070
Inventory		1,977			34,126
Other receivables		41,203			35,717
Convertible note receivable - related party		-			198,125
Prepaid expenses		6,862			17,828
Total Current Assets	$	957,456		$	1,945,954

Non-Current Assets
Property and Equipment, net	$	129,230		$	166,338
Investment in associate, related party		-			155,369
Deposits		298,324			305,036
Operating lease right-of-use assets, net		598,508			973,069
Total Non-Current Assets	$	1,026,062		$	1,599,812

TOTAL ASSETS	$	1,983,518		$	3,545,766

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current Liabilities
Accounts payable and accrued expenses	$	137,199		$	60,771
Accrued commissions		85,206			143,383
Due to related parties, net		2,118,495			1,663,668
Operating lease liabilities - Current		429,687			419,303
Deferred revenue		-			21,198
Total Current Liabilities	$	2,770,587		$	2,308,323

Non-Current Liabilities
Operating lease liabilities - Non-current	$	182,380		$	559,330
Total Non-Current Liabilities	$	182,380		$	559,330

Commitments and Contingencies

Stockholders’ (Deficit) Equity
Preferred stock, US$0.001 par value; 10,000,000 shares authorized; none issued and outstanding as of December 31, 2023 and 2022	$	-		$	-
Common stock, US$.001 par value; 500,000,000 shares authorized; 10,000 shares issued and outstanding as of December 31, 2023, and 50,000,000 shares authorized; 10,000 shares issued and outstanding as of December 31, 2022		10			10
Accumulated other comprehensive loss		(197,040	)		(200,039	)
(Accumulated deficit) Retained earnings		(781,085	)		873,306
Total HWH International Inc. Stockholders’ (deficit) equity	$	(978,115	)	$	673,277
Non-controlling interests		8,666			4,836
Total Stockholders’ (Deficit) Equity		(969,449	)		678,113

TOTAL LIABILITIES AND STOCKHOLDERS’ (DEFICIT) EQUITY	$	1,983,518		$	3,545,766

The accompanying notes are an integral part of these consolidated financial statements.

HWH International Inc. and Subsidiaries

Consolidated Statements of Operations and Comprehensive Loss

	Year Ended December 31, 2023			Year Ended December 31, 2022 (As restated)

Revenues:
- Membership	$	12,293		$	751,452
- Non-membership		818,226			451,438
Total Revenue	$	830,519		$	1,202,890

Cost of revenues
- Membership	$	(13,827	)	$	(523,243	)
- Non-membership		(320,998	)		(165,122	)
Total Cost of revenue	$	(334,825	)	$	(688,365	)

Gross profit	$	495,694		$	514,525

Operating expenses
General and administrative expenses	$	(1,874,528	)	$	(1,471,898	)
Impairment of convertible note receivable – related party, and investment in associate, related party		(493,898	)		-
Total operating expenses	$	(2,368,426	)	$	(1,471,898	)

Other income (expense)
Other income	$	187,282		$	146,711
Unrealized gain (loss) on related party transactions		68,787			(29,551	)
Loss on equity method investment, related party		(33,898	)		(100,949	)
Total Other Income	$	222,171		$	16,211

Loss before provision for income taxes	$	(1,650,561	)	$	(941,162	)

Provision for income taxes		-			-

Net loss	$	(1,650,561	)	$	(941,162	)

Less: Net income attributable to the non-controlling interests	$	3,830		$	4,836

Net loss attributable to common shareholders	$	(1,654,391	)	$	(945,998	)

Other Comprehensive Income, Net of Tax:
Foreign currency translation adjustments	$	2,999		$	19,608
Total Other Comprehensive Income, Net of Tax:	$	2,999		$	19,608

Comprehensive Loss	$	(1,651,392	)	$	(926,390	)

Weighted average number of shares of common stock outstanding - basic and diluted		10,000			10,000

Net loss per common share - basic and diluted	$	(165.44	)	$	(94.60	)

The accompanying notes are an integral part of these consolidated financial statements.

HWH International Inc. and Subsidiaries

Consolidated Statements of Changes in Stockholders’ Equity (Deficit)

	Common stock (shares)		Common stock (amount)		Accumulated Other Comprehensive Loss			Retained Earnings (Accumulated Deficit)			Total HWH Int’l Inc. Stockholders’ equity (deficit)			Non-controlling interests		Total Stockholders’ equity (deficit)

Balances at December 31, 2021		10,000	$	10	$	(219,647	)	$	1,819,304		$	1,599,667		$	-	$	1,599,667

Net loss (as restated)									(945,998	)		(945,998	)		4,836		(941,162	)
Foreign currency translation adjustment						19,608			-			19,608				$	19,608

Balances at December 31, 2022 (as restated)		10,000	$	10	$	(200,039	)	$	873,306		$	673,277		$	4,836	$	678,113

Net loss		-		-					(1,654,391	)		(1,654,391	)		3,830		(1,650,561	)
Foreign currency translation adjustment		-		-		2,999			-			2,999			-		2,999

Balances at December 31, 2023		10,000	$	10	$	(197,040	)	$	($781,085	)	$	(978,115	)	$	8,666	$	(969,449	)

The accompanying notes are an integral part of these consolidated financial statements.

HWH International Inc. and Subsidiaries

Consolidated Statements of Cash Flows

	Year Ended December 31, 2023			Year Ended December 31, 2022 (as restated)
Cash flows from operating activities:
Net loss	$	(1,650,561	)	$	(941,162	)

Adjustments to reconcile net loss to net cash used in operating activities:
Unrealized (gain) loss on related party transactions		(68,787	)		29,551
Loss on equity method investment, related party		33,898			100,949
Depreciation expense		58,006			33,867
Non-cash lease expense		509,340			356,556
Impairment of convertible note receivable – related party, and investment in associate, related party		493,898			-
Inventory written off expenses		30,753			-

Change in operating assets and liabilities:
Receivable from related party		(13,973	)		83,233
Convertible note receivable - related party		(165,643	)		(121,403	)
Other receivables		89,900			67,175
Prepaid commissions		6,651			294,700
Deposits		1,008			(81,934	)
Inventory		184			10,566
Accounts payable and accrued expenses		70,669			48,223
Accrued commissions		(54,247	)		36,615
Income tax payable		-			(36,134	)
Value added tax withheld		(98,223	)		(82,981	)
Deferred revenue		(20,814	)		(641,029	)
Operating Lease Liabilities		(508,018	)		(365,324	)
Net cash used in operating activities	$	(1,285,959	)	$	(1,208,532	)

Cash flows from investing activities:
Purchases of property and equipment	$	(14,574	)	$	(166,855	)
Investment in an associate		-			(256,318	)
Net cash used in investing activities	$	(14,574	)	$	(423,173	)

Cash flows from financing activities:
Advance from related parties	$	526,323		$	718,671
Net cash provided by financing activities	$	526,323		$	718,671

Net (decrease) in cash		(774,210	)		(913,034	)
Effects of foreign exchange rate on cash		1,925			(86,692	)
Cash at beginning of year		1,651,088			2,650,814
Cash at end of year	$	878,803		$	1,651,088

Supplemental disclosure of non-cash investing and financing activities
Initial recognition of operating lease right-of-use asset and liability	$	125,331		$	1,134,004

The accompanying notes are an integral part of these consolidated financial statements.

HWH International Inc. and Subsidiaries

Notes to Consolidated Financial Statements

Note 1. Nature of Operations

HWH International Inc. (“HWH”) and its consolidated subsidiaries (collectively, the “Company”) operate a food and beverage (“F&B”) business in Singapore and South Korea. The Company operates a membership model in which individuals pay an upfront membership fee to become members. As members, these individuals receive discounted access to products and services offered by the Company’s affiliates. Previously, the Company had approximately 9,000 members, primarily in South Korea. Currently, this membership business has been temporarily suspended.

A reorganization of the Company’s legal entity structure was completed in July 2022. The reorganization involved the incorporation of HWH in March 2022 and the acquisition of companies under common control, F&B Holding Pte. Ltd. and F&B One Pte. Ltd in July 2022, as wholly owned subsidiaries of HWH. HWH is wholly-owned by Alset International Limited, a public company listed on the Singapore Exchange Securities Trading Limited. In the transactions under common control, financial statements and financial information were presented as of the beginning of the period as though the assets and liabilities had been transferred at that date.

The following chart describes the Company’s ownership of various subsidiaries:

The Company mainly focused on the F&B business in 2023. During the years ended December 31, 2023, and 2022, substantially all of the Company’s business was generated by its wholly owned subsidiaries, 2% and 63% from HWH World Inc. (“HWH Korea”) and 98% and 37% from F&B business respectively; 49% and 28% from Alset F&B One Pte. Ltd (“F&B1”), 6% and 2% from Hapi Café Korea Inc.(“HCKI”), 22% and 7% from Hapi Café SG Pte. Ltd. (“HCSGPL”) and 21% and 0% from Alset F&B (PLQ) Pte. Ltd. (“F&BPLQ”). HWH Korea was incorporated in the Republic of Korea (“South Korea”) on May 7, 2019. HWH Korea is in the business of sourcing and distributing dietary supplements and other health products through its network of members in South Korea. HWH Korea generates product sales via its direct sale model as products are sold to its members. Through the use of a Hapi Gig platform that combines e-commerce, social media, and a customized rewards system, HWH Korea equips, trains, and empowers its members. F&B1 was incorporated in Singapore on April 10, 2017, HCSGPL was incorporated in Singapore on April 4, 2022, and F&BPLQ was incorporated in Singapore on November 11, 2022. F&B1, HCSGPL, and F&BPLQ are in the F&B business in Singapore.

Note 2. Summary of Significant Accounting Policies

Basis of Presentation

The Company’s consolidated financial statements and related notes include all the accounts of the Company and its wholly owned subsidiaries. They have been prepared in accordance with the accounting principles generally accepted in the United States of America (“U.S. GAAP”). All intercompany transactions have been eliminated in consolidation.

Functional and Reporting Currency

The functional and reporting currency of the Company is the United States dollar (“$”). The financial records of the Company’s subsidiaries located in South Korea, Singapore, Hong Kong, and Malaysia are maintained in their local currencies, the Korean Won (₩) Singapore Dollar (S$) Hong Kong Dollar (HK$) and Malaysian Ringgit (MYR), which are also the functional currencies of these entities.

Use of estimates

The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the dates of the balance sheets and reported amounts of revenues and expenses during the reporting periods. Estimates are used in determining, among other items, allowance for credit losses, inventory reserve, income taxes and contingencies. Actual results could differ from these estimates.

Fair Value of Financial Instruments

The Company adopted Accounting Standards Codification (“ASC”) 820, “Fair Value Measurements and Disclosures”, for assets and liabilities measured at fair value on a recurring basis. ASC 820 defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. ASC 820 also establishes a fair value hierarchy, which requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 820 describes three levels of inputs that may be used to measure fair value:

Level 1: Observable inputs such as quoted market prices in active markets for identical assets or liabilities

Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data

Level 3: Unobservable inputs for which there is little or no market data, which require the use of the reporting entity’s own assumptions

For purpose of this disclosure, the fair value of a financial instrument is the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced sale or liquidation. The carrying values reported in balance sheets for current assets and liabilities approximate their estimated fair market values based on the short-term maturity of these instruments.

Cash and cash equivalents

The Company considers all highly liquid investments with a maturity of three months or less at the date of acquisition to be cash equivalents. There were no cash equivalents as of December 31, 2023 and 2022.

Inventory

Inventory is stated at the lower of cost or net realizable value. Cost is determined using the first-in, first-out method and includes all costs in bringing the inventories to their present location and condition. Net realizable value is the estimated selling price in the ordinary course of business less the estimated costs necessary to make the sale. As of December 31, 2023 and 2022, inventory consisted of finished goods procured from suppliers. The Company continuously evaluates the need for reserve for obsolescence and possible price concessions required to write-down inventory to its net realizable value. The Company determined that total inventory with original cost of $30,753 requires write off and recorded it in the cost of revenue (non-membership) for the year ended December 31, 2023.

Leases

The Company follows FASB ASC Topic 842 in accounting for its operating lease right-of-use assets and operating lease liabilities. At inception of a contract, the Company assesses whether a contract is, or contains, a lease. A contract is or contains a lease if it conveys the right to control the use of an identified asset for a period of time in exchange of a consideration. To assess whether a contract is or contains a lease, the Company assesses whether the contract involves the use of an identified asset, whether it has the right to obtain substantially all of the economic benefits from the use of the asset and whether it has the right to control the use of the asset. The right-of-use assets and related lease liabilities are recognized at the lease commencement date. The Company recognizes operating lease expenses on a straight-line basis over the lease term.

Right-of-use of assets

The right-of-use of asset is measured at cost, which comprises the amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and less any lease incentive received.

Lease liabilities

Lease liability is measured at the present value of the outstanding lease payments at the commencement date, discounted using the Company’s incremental borrowing rate. Lease payments included in the measurement of the lease liability comprise mainly of fixed lease payments.

Short-term leases and leases of low value assets

The Company has elected to not recognize right-of-use assets and lease liabilities for short-term leases that have a lease term of 12 months or less and leases of low value assets. Lease payments associated with these leases are expensed as incurred.

Property, Plant and Equipment

Property, plant and equipment are recorded at cost, less depreciation. Repairs and maintenance are expensed as incurred. Expenditures incurred as a consequence of acquiring or using the asset, or that increase the value or productive capacity of assets are capitalized. When property and equipment is retired, sold, or otherwise disposed of, the asset’s carrying amount and related accumulated depreciation are removed from the accounts and any gain or loss is included in statement of operations. Depreciation is computed by the reducing balance method (after considering their respective estimated residual values) over the estimated useful lives of the respective assets as follows:

Office Equipment		3 – 5 years
Furniture and Fittings		3 – 5 years
Kitchen Equipment		3 – 5 years
Operating Equipment		3 – 5 years
Leasehold Improvements		Shorter of lease life or asset life

The Company reviews the carrying value of property and equipment for impairment whenever events and circumstances indicate that the carrying value of an asset may not be recoverable from the estimated future cash flows expected to result from its use and eventual disposition. In cases where undiscounted expected future cash flows are less than the carrying value, an impairment loss is recognized equal to an amount by which the carrying value exceeds the fair value of assets. The factors considered by management in performing this assessment include current operating results, trends, and prospects, as well as the effects of obsolescence, demand, competition, and other economic factors.

Deposit:

Deposit represents mostly rental deposit paid for the office used.

Revenue Recognition

ASC 606 – Revenue from Contracts with Customers (“ASC 606”), establishes principles for reporting information about the nature, amount, timing and uncertainty of revenue and cash flows arising from the entity’s contracts to provide goods or services to customers.

In accordance with ASC 606, revenue is recognized when a customer obtains control of promised goods or services. The amount of revenue recognized reflects the consideration to which the Company expects to be entitled to receive in exchange for these goods or services. The provisions of ASC 606 include a five-step process by which the determination of revenue recognition, depicting the transfer of goods or services to customers in amounts reflecting the payment to which the Company expects to be entitled in exchange for those goods or services. ASC 606 requires the Company to apply the following steps:

(1) identify the contract with the customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations in the contract; and (5) recognize revenue when, or as, performance obligations are satisfied.

The Company generates its revenue primarily from membership fees, product sales and F&B business.

Membership Fee: The Company collects an annual membership fee from its members. The fee is fixed, paid in full at the time upon joining the membership and is not refundable. The Company’s performance obligation is to provide its members the right to (a) purchase products from the Company, (b) access to certain back-office services, (c) receive commissions and (d) attend corporate events. The associated performance obligation is satisfied over time, generally over the term of the membership agreement which is for a one-year period. The Company recognizes revenue from membership fee over the one-year period of the membership.

Product Sales: The Company’s performance obligation is to transfer ownership of its products to its Members. The Company generally recognizes revenue when product is delivered to its members. Revenue is recorded net of applicable taxes, allowances, refund or returns. The Company receives the net sales price in cash or through credit card payments at the point of sale.

If any member returns a product to the Company on a timely basis, they may obtain a replacement product from the Company for such returned products. We do not have buyback program. However, when the customer requests a return and management decides that the refund is necessary, we initiate the refund after deducting all the benefits that a member has earned. The returns are deducted from our sales revenue on our financial statements. Allowances for product and membership returns are provided at the time the sale is recorded. This accrual is based upon historical return rates for each country and the relevant return pattern, which reflects anticipated returns to be received over a period of up to 12 months following the original sale. Product and membership returns for the years ended December 31, 2023 and 2022 were approximately $1,183 and $41,755, respectively. The table below represents a breakout of the returns related to product sales and the returns related to memberships:

	Returns
	Membership		Products		Total
	$		$		$

December 31, 2022		41,755		-		41,755
December 31, 2023		-		1,183		1,183

Food and Beverage: The revenue received from Food and Beverage business for the years ended December 31, 2023 and 2022 were $ 817,761 and $ 449,239 respectively.

Deferred Revenue

The Company records all unearned revenue from membership sales as deferred revenue. Deferred revenue was $0 as of December 31, 2023. Deferred revenue of $21,198 as of December 31, 2022 consisted of unearned membership fee of $21,198.

Contract assets and liabilities

Below is a summary of the beginning and ending balances of the Company’s contract assets and liabilities as of December 31, 2023 and 2022.

Prepaid Sales Commission	December 31, 2023			December 31, 2022

Balances at the beginning of the year	$	6,839		$	319,649
Movement for the year		(6,839	)		(312,810	)
Balances at the end of the year	$	0		$	6,839

Deferred Revenue	December 31, 2023			December 31, 2022

Balances at the beginning of the year	$	21,198		$	700,385
Movement for the year		(21,198	)		(679,187	)
Balances at the end of the year	$	0		$	21,198

Value-added Tax

The Company is obligated to pay value-added tax (“VAT”), among other things, on its inventory purchase as well as its rent payments and payment of professional fees. As of December 31, 2023 and 2022, included in other receivables was VAT paid of $37,179 and $32,607, respectively, due primarily to the purchase of inventory and payment of rents and accounting fees.

Cost of revenue

Cost of revenue is consisted of the cost of procuring finished goods from suppliers and related shipping and handling fees from 3^rd parties money platform, contractor fees for part-time staff, franchise commission and sales commission from membership business.

Below is a breakdown of the Company’s cost of revenue for the years ended December 31, 2023 and 2022.

December 31, 2023	Total

Finished goods	$	151,703
Related shipping		9,346
Handling fee		22,629
Contractor fee		30,977
Franchise commission		18,428
Sales commission		13,827
Inventory written off		30,753
Depreciation		57,162
Total of Cost of revenue	$	334,825

December 31, 2022

Finished goods	$	97,058
Related shipping		10,376
Handling fee		10,945
Contractor fee		18,568
Franchise commission		17,624
Sales commission		501,483
Depreciation		32,311
Total of Cost of revenue	$	688,365

Shipping and Handling Fees

The Company utilizes the practical expedient under ASC 606-10-25-18B to account for its shipping and handling as fulfillment activities, and not a promised service (a revenue element). Shipping and handling fees are included in costs of revenue within the statements of operations.

Commission Expense

The Company compensates its sales leaders with leadership incentives for services rendered, relating to the development, retention, and management of their sales organizations. Leadership incentives are payable based on achieved sales volume, which are recorded in cost of revenue. Member will get 25% commission of the membership fee income if the member successfully refers a new member to subscribe to the membership. The commission will be payable after the referee’s membership is confirmed and been paid by the new member.

Advertising Expenses

Costs incurred for advertising the Company’s products are charged to operations as incurred. Advertising expenses for the years ended December 31, 2023 and 2022 were $4,191 and $57,347, respectively.

Income Taxes

The Company accounts for income taxes pursuant to the provision of ASC 740-10, “Accounting for Income Taxes” (“ASC 740-10”), which requires, among other things, an asset and liability approach to calculating deferred income taxes. The asset and liability approach requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of temporary differences between the carrying amounts and the tax bases of assets and liabilities. A valuation allowance is provided to offset any net deferred tax assets for which management believes it is more likely than not that the net deferred tax asset will not be realized. Tax positions that meet the more likely than not recognition threshold are measured at the largest amount of tax benefit that is more than 50 percent likely of being realized upon settlement with the applicable taxing authority.

The Company follows the provision of ASC 740-10 related to Accounting for Uncertain Income Tax Positions. When tax returns are filed, there may be uncertainty about the merits of positions taken or the amount of the position that would be ultimately sustained. In accordance with the guidance of ASC 740-10, the benefit of a tax position is recognized in the financial statements in the period during which, based on all available evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions.

The Company has not recorded any unrecognized tax benefits. The Company’s policy is to recognize interest and penalties related to income taxes in income tax expense.

Earnings (Loss) per Share

Basic earnings (loss) per share is computed by dividing the net income (loss) attributable to the common shareholders by weighted average number of shares of common stock outstanding during the period. Fully diluted earnings (loss) per share is computed similar to basic income (loss) per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. There were no dilutive financial instruments issued or outstanding for the years ended December 31, 2023 and 2022.

Non-controlling interests

Non-controlling interests represent the equity in a subsidiary not attributable, directly or indirectly, to owners of the Company, and are presented separately in the consolidated statements of operation and comprehensive income, and within equity in the Consolidated Balance Sheets, separately from equity attributable to owners of the Company.

On December 31, 2023 and 2022, the aggregate non-controlling interests in the Company were ($3,830) and ($4,836), respectively.

Liquidity and Capital Resources

In the year of 2023, we incurred a net loss, a loss from operations and negative cash flow from operations as we expanded our business of operating cafés and restructured our membership business.

Notwithstanding the above, the Company believes that the available cash in the Company’s bank accounts, anticipated cash from operations, and financing availability from related parties are sufficient to fund our operations for at least the next 12 months. The Company’s capital requirements for the planned expansion are based on, among other items, geographical specific property costs, team requirements, and marketing steps needed. Our expansion shall consist of plans to take over leases of existing Hapi Cafes we currently do not own, as we look to add Hapi Cafes over the next two (2) years. If we take over these existing leases, it will require a minimum investment for each lease we take over for each Hapi Café. Proceeds received as a result of the anticipated business combination, will allow us to seek these expansion plans. Depending on the amount of proceeds we raise as part of the anticipated business combination, we may or may not need or seek additional funding or alter our strategic growth plans after the business combination is effectuated. There is no guarantee that we will be able to execute on our plans as laid out above.

The accompanying financial statements have been prepared assuming the Company will continue as a going concern and do not contain any adjustments that might be required should the Company be unable to continue as a going concern.

The Company has obtained a letter of financial support from Alset International Limited and Alset Inc., a direct and indirect owner of the Company, respectively. Alset International Limited and Alset Inc. committed to provide any additional funding required by the Company and would not demand repayment through twelve months from the issuance of these consolidated financial statements.

Recently Adopted Accounting Pronouncement

In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses: Measurement of Credit Losses on Financial Instruments (Topic 326). The update provides guidance on the measurement of credit losses for most financial assets and certain other instruments that are not measured at fair value through net income. The amendment replaces the current incurred loss impairment approach with a methodology to reflect expected credit losses and requires consideration of a broader range of reasonable and supportable information to explain credit loss estimates. The Company adopted the provisions of this new accounting standard at the beginning of fiscal 2023 using the modified retrospective approach and did not have a material impact on its consolidated financial statements.

Note 3. Restatement of Prior Year Presentation

In preparing our 2023 consolidated financial statements, the Company identified certain misstatements. We have restated the 2022 consolidated financial statement to correct the errors. These restatements are summarized below.

Consolidated Statement of Operations and Other Comprehensive Loss for the Year Ended on December 31, 2022

	As Previously Reported			Restatement of Prior Year Presentation #			As Restated

Revenues:
- Membership	$	751,452		$	-		$	751,452
- Non-membership		451,438			-			451,438
Total Revenue	$	1,202,890		$	-		$	1,202,890

Cost of revenue
- Membership	$	(523,243	)	$	-		$	(523,243	)
- Non-membership		(132,811	)		(32,311	)		(165,122	)
Total Cost of revenue	$	(656,054	)	$	(32,311	)	$	(688,365	)

Gross profit	$	546,836		$	(32,311	)	$	514,525

Operating expenses:
General and administrative expenses	$	(1,583,174	)	$	111,276		$	(1,471,898	)
Total operating expenses	$	(1,583,174	)	$	111,276		$	(1,471,898	)

Other income (expense)
Other income	$	147,209		$	(498	)	$	146,711
Unrealized (loss) on related party transactions		-			(29,551	)		(29,551	)
Loss on equity method investment, related party		-			(100,949	)		(100,949	)
Total Other Income	$	147,209		$	(130,998	)	$	16,211

Loss before provision for income taxes	$	(889,129	)	$	(52,033	)	$	(941,162	)

Provision for income taxes		-			-			-

Net loss	$	(889,129	)	$	(52,033	)	$	(941,162	)

Less: Net (loss) income attributable to non-controlling interests		(4,836	)		9,672			4,836
Net loss attributable to common stockholders		(884,293	)		(61,705	)		(945,998	)

Other Comprehensive Income, Net of Tax:
Foreign exchange translation adjustment		24,444			(4,836	)		19,608
Total Other Comprehensive Income, Net of Tax:	$	24,444		$	(4,836	)	$	19,608

Comprehensive (loss):	$	(859,849	)	$	(66,541	)	$	(926,390	)

Weighted average number of shares of common stock outstanding - basic and diluted		10,000			10,000			10,000
Net loss per common share - basic and diluted		(88.43	)		(6.17	)		(94.60	)

# Being restated cost of revenue – non-membership was adjusted from $132,811 to $165,122, general and administrative expenses was adjusted from $1,583,174 to $1,471,898, other income was adjusted from $147,209 to $146,711, unrealized (loss) on related party transactions was adjusted from $0 to $29,551, loss on equity method investment, related party was adjusted from $0 to $100,949 and net (loss) income attributable to non-controlling interests was adjusted from ($4,836) to $4,836.

Consolidated Balance Sheet as of December 31, 2022

	As Previously Reported			Restatement of Prior Year Presentation #			As Restated
ASSETS

Current Assets
Cash and cash equivalents	$	1,651,088		$	-		$	1,651,088
Accounts receivable, net		9,070			-			9,070
Inventory		34,126			-			34,126
Other receivables		337,798			(302,081	)		35,717
Convertible note receivable - related party		-			198,125			198,125
Prepaid expenses		17,828			-			17,828
Total Current Assets	$	2,049,910		$	(103,956	)	$	1,945,954

Non-Current Assets
Property and Equipment, net	$	166,338		$	-		$	166,338
Investment in associate, related party		207,402			(52,033	)		155,369
Deposit		305,036			-			305,036
Operating lease right-of-use assets, net		973,069			-			973,069
Total Non-Current Assets	$	1,651,845		$	(52,033	)	$	1,599,812

TOTAL ASSETS	$	3,701,755		$	(155,989	)	$	3,545,766

LIABILITIES AND STOCKHOLDERS’ EQUITY

Current Liabilities
Accounts payable and accrued expenses	$	63,354		$	(2,583	)	$	60,771
Accrued commissions		143,383			-			143,383
VAT payable		101,373			(101,373	)		-
Due to related party, net		1,663,668			-			1,663,668
Operating lease liabilities - Current		419,303			-			419,303
Deferred revenue		21,198			-			21,198
Total Current Liabilities	$	2,412,279		$	(103,956	)	$	2,308,323

Non-Current Liabilities
Operating lease liabilities - Non-current	$	559,330		$	-		$	559,330
Total Non-Current Liabilities	$	559,330		$	-		$	559,330

Commitments and Contingencies

Stockholders’ Equity
Preferred stock, US$0.001 par value; 10,000,000 shares authorized; none issued and outstanding as of December 31, 2022	$	-		$	-		$	-
Common stock, US$.001 par value; 50,000,000 shares authorized; 10,000 shares issued and outstanding as of December 31, 2022		10			-			10
Accumulated other comprehensive loss		(195,203	)		(4,836	)		(200,039	)
Retained earnings		930,175			(56,869	)		873,306
Total HWH International Inc. Stockholders’ equity	$	734,982		$	(61,705	)	$	673,277
Non-controlling interests		(4,836	)		9,672			4,836
Total Stockholders’ Equity		730,146			(52,033	)		678,113

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	3,701,755		$	(155,989	)	$	3,545,766

# Being restated other receivables was adjusted from $337,798 to $35,717, convertible note receivable- related party was adjusted from $0 to $198,125, investment in associate, related party was adjusted and restated from $207,402 to $155,369, accounts payable and accrued expenses were adjusted from $63,354 to $60,771, VAT payable was adjusted from $101,373 to $0, accumulated other comprehensive loss was adjusted from ($195,203) to ($200,039), retained earnings was adjusted from $930,175 to $873,306, and non-controlling interest was adjusted from $(4,836) to $4,836.

Note 4. Accounts receivable, net

The receivable at December 31, 2023, 2022 and 2021 for $28,611, $9,070 and $2,519, respectively, represents collection received by the credit card processor in F&B business and rent receivable. Accounts receivable are recorded at invoiced amounts net of an allowance for credit losses and do not bear interest. The allowance for credit losses is the Company’s best estimate of the amount of probable credit losses in the Company’s existing accounts receivable. The measurement and recognition of credit losses involves the use of judgment. Management’s assessment of expected credit losses includes consideration of current and expected economic conditions, market and industry factors affecting the Company’s customers (including their financial condition), the aging of account balances, historical credit loss experience, customer concentrations, customer creditworthiness, and the existence of sources of payment The Company also establishes an allowance for credit losses for specific receivables when it is probable that the receivable will not be collected and the loss can be reasonably estimated. Accounts receivable considered uncollectible are charged against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. As of December 31, 2023 and 2022, the allowance for credit losses was an immaterial amount. The Company does not have any off-balance sheet credit exposure related to its customers.

Note 5. Prepaid commissions

During the normal course of business, the Company pays commission to its members for product sales as well as membership sales. Prepaid commissions are recorded for commissions paid on membership sales and recognized as an expense over the same period as the related membership revenue.

Note 6. Inventory

As of December 31, 2023 and 2022, the balance of finished goods was $1,977 and $34,126, respectively. During the year ended December 31, 2023, the Company wrote off $30,753 of expired, slow-moving and obsolete inventory. This was recorded in the Company’s consolidated statement of operations in cost of revenue (non-membership) during the year ended December 31, 2023. There was no provision for slow-moving or obsolete inventory during the year ended December 31, 2022.

Note 7. Property and Equipment, net

The components of property and equipment are as follows:

December 31, 2023	Total

Office Equipment	$	30,861
Furniture and Fittings		46,376
Kitchen Equipment		23,044
Operating Equipment		8,522
Leasehold Improvements	$	122,083

Depreciation:
Office equipment		(15,848	)
Furniture and Fittings		(31,518	)
Kitchen Equipment		(8,368	)
Operating Equipment		(3,373	)
Leasehold Improvements		(42,549	)
Total, net	$	129,230

December 31, 2022

Office Equipment	$	25,391
Furniture and Fittings		42,851
Kitchen Equipment		20,257
Operating Equipment		8,384
Leasehold Improvements		111,924

Depreciation:
Office Equipment		(23,449	)
Furniture and Fittings		(1,671	)
Kitchen Equipment		(3,240	)
Operating Equipment		(1,223	)
Leasehold Improvements		(12,886	)
Total, net	$	166,338

For the years ended December 31, 2023 and 2022, the Company recorded depreciation expenses of $58,006 and $33,867, respectively.

Note 8. Accrued Commissions

Accrued commissions as of December 31, 2023, and 2022 represent mainly sales commission payable. For the years ended December 31, 2023, and 2022, sales commission expenses of $13,827 and $501,483 respectively, were recorded and included in cost of revenue in the Company’s consolidated statement of operations.

Note 9. Income Taxes for years ended December 31, 2023 and 2022

The provision for income taxes consisted of the following:

		2023		2022
Current	$	-	$	-
Deferred		-		-
Total	$	-	$	-

	2023			2022
Income taxes at statutory rate		18.5	%		19.0	%
Change in valuation allowance		(18.5	)%		(19.0	)%
Other		-%			-%
Effective tax rate		-%			-%

Significant components of the Company’s deferred tax assets and liabilities are as follows:

	2023			2022
Deferred tax assets:
Receivable from related party	$	1,020		$	-
Inventory		6,766			-
Deferred Revenue		-			3,082
Lease Liability		126,336			202,209
Accrued Commission		18,745			31,544
Net Operating Loss		544,191			129,220
Total deferred tax assets	$	697,058		$	366,055

Deferred tax liabilities:
Prepaid commissions	$	-		$	(1,505	)
Right-of-Use Assets		(123,371	)		(200,996	)
Total deferred tax liabilities	$	(123,371	)	$	(202,501	)

Deferred tax assets / (liabilities), net	$	573,687		$	163,554
Less valuation allowance		(573,687	)		(163,554	)
Deferred tax asset c/f	$	-		$	-

After consideration of all the evidence, both positive and negative, management has recognized a valuation allowance with respect to its net deferred tax assets as at December 31, 2023 and 2022 as it believes it is unlikely that such deferred tax assets will be realized against taxable income in future years.

Note 10. Due to Alset Inc

Alset Inc (“AEI”) is the ultimate holding company that is incorporated in the United States of America. The amount due to AEI represents short-term working capital advances to the Company for its daily operations. There is no written, executed agreement and no financial/non-financial covenants and the amount due to AEI is non-interest bearing. Since the amount due to AEI is due upon request, it is classified as a current liability. The amounts due to AEI at December 31, 2023 and 2022 are $202,645 and $202,644 respectively.

Note 11. Due to Related Parties

Alset International Ltd. (“AIL”) is incorporated in Singapore and is a fellow subsidiary of the common parent company, Alset Inc. The amount due to AIL represents short-term working capital advances to the Company for its daily operations. There is no written, executed agreement and no financial/non-financial covenants and the amount due to AIL is non-interest bearing. Since the amount due to AIL is due upon request, it is classified as a current liability. The amounts due to AIL at December 31, 2023 and 2022 are $1,729,901 and $1,281,427 respectively.

Alset Business Development Pte. Ltd. (“ABD”) is incorporated in Singapore and is a fellow subsidiary of the common parent company, Alset Inc. The amount due to ABD represents amount loaned by ABD to Hapi Cafe Inc. (“HCI”) for the investment on Ketomei Pte. Ltd (“Ketomei”) in March 2022. There is no written, executed agreement and no financial/non-financial covenants and the amount due to ABD is non-interest bearing. Since the amount due to ABD is due upon request, it is classified as a current liability. The amounts due to ABD at December 31, 2023 and 2022 are $184,507 and $179,596 respectively.

BMI Capital International Ltd. (“BMI”) is incorporated in Hong Kong and is a fellow subsidiary of the common parent company, Alset Inc. The amount due to BMI represents short-term working capital advances to the Company for its daily operation. There is no written, executed agreement and no financial/non-financial covenants and the amount due to BMI is non-interest bearing. Since the amount due to BMI is due upon request, it is classified as a current liability. The amounts due to BMI at December 31, 2023 and 2022 are $1,442 and $0 respectively.

Note 12. Stockholders’ Equity

HWH has authorized 500,000,000 shares of common stock (par value $0.001 per share); and 10,000,000 shares of preferred stock (par value $0.001 per share). 10,000 shares of common stock and zero shares of preferred stock were issued and outstanding as of December 31, 2023 and 2022.

Note 13. Related Party Transactions

On December 31, 2023, the total convertible note receivable from Ketomei was $368,299, Considering ASC 326 and after reviewing the performance of Ketomei, the Company decided to record 100% impairment for the convertible note receivable and investment in associate (Note 18).

On June 10, 2021, Hapi Café Inc. (“HCI”) signed a convertible loan agreement with Ketomei Pte. Ltd. (“Ketomei”), pursuant to which HCI has agreed to grant Ketomei a loan of an aggregate principal amount of $75,525 (SG$100,000). On March 21, 2022, HCI signed a legally binding term sheet with Ketomei, and HCI has agreed to invest in Ketomei $258,186 (SG$350,000) for 28% interest in Ketomei. The investment was partially paid by the $75,525 (SG$100,000) loan borrowed to Ketomei and the accrued interest of $6,022 (SG$6,433). The balance of $183,311 (SG$243,567) was paid in cash.

On July 28, 2022 HCI entered into binding term sheet with Ketomei and Tong Leok Siong Constant, pursuant to which HCI lent Ketomei $43,254 (SG$60,000). This loan had a 0% interest rate for the first 60 days and an interest rate of 8% per annum afterwards.

On August 4, 2022, the same parties entered into another binding term sheet (the “Second Term Sheet”) pursuant to which HCI agreed to lend Ketomei up to $260,600 (SG$360,000) pursuant to a convertible loan, with a term of 12 months. After the initial 12 months, the interest on such loan will be 8%. As of August 31, 2023, the $263,766 (SG$360,000) loan was paid by the $214,903 (SG$293,310) loan borrowed to Ketomei and $48,862 (SG$66,690) was paid for the expenses on behalf of Ketomei. In addition, pursuant to the Second Term Sheet, the July 28, 2022, loan was modified to include conversion rights. The Parties agree that the conversion rate will be at approximately $0.022 per share.

On August 31, 2023, the same parties entered into another binding term sheet pursuant to which HCI agreed to lend Ketomei up to $36,634 (SG$50,000) pursuant to a convertible loan, with a term of 12 months. After the initial 12 months, the interest on such loan will be 3.5%. As of October 31, 2023, the $37,876 (SG$50,000) loan was paid to Ketomei.

On October 26, 2023, the same parties entered into another binding term sheet pursuant to which HCI agreed to lend Ketomei up to $37,876 (SG$50,000) pursuant to a non- convertible loan, with a term of 12 months. After the initial 12 months, the interest on such loan will be 3.5%. As of December 31, 2023, the $6,766 (SG$8,932) loan was paid to Ketomei. HCI will pay the balance of $31,110 (SG$41,068) to Ketomei in the future.

The amount due from Ketomei at December 31, 2023 and 2022 are $0 and $198,125 respectively.

Revenue from F&B business amounting to approximately $7,444 and $3,287 was related to corporate sales. That revenue was derived from corporate sales to related parties who purchased meals and paid for their staff, during the years ended December 31, 2023 and 2022, respectively.

Included in Accounts Receivable, net at December 31, 2023 and 2022 is $7,405 and $560, respectively, of amounts due from related parties.

Included in other income during the year ended December 31, 2023 and 2022 is $6,756 and $3,780, respectively of rental income from related parties.

Note 14. Leases

The Company has operating leases for its office spaces in South Korea and two F&B stores in Singapore. The related lease agreements do not contain any material residual value guarantees or material restrictive covenants. Since the Company’s leases do not provide an implicit rate that can be readily determined, management uses a discount rate based on the incremental borrowing rate. The Company’s weighted-average remaining lease term relating to its operating leases is 1.43 years, with a weighted-average discount rate is 3.85%.

The Company has also utilized the following practical expedients:

	●	Short-term leases – for leases that are for a period of 12 months or less, the Company will not apply the recognition requirements of ASC 842.
	●	For leases that contain related non-lease components, such as maintenance, the Company will account for these payments as a single lease component.

The current portion of operating lease liabilities and the non-current portion of operating lease liabilities are presented on the balance sheets. Total lease expenses amounted to $509,340 and $356,556 which were included in general and administrative expenses in the statements of operations for the years ended December 31, 2023 and 2022, respectively. Total cash paid for operating leases amounted to $580,580 and $355,746 for the years ended December 31, 2023 and 2022, respectively. In addition, the Company leases certain equipment on a short-term (12 months or less) basis. Total short-term lease expense of $14,348 and $11,034 is included in general and administrative expenses for the years ended December 31, 2023 and 2022, respectively. Supplemental balance sheet information related to operating leases was as follows:

	December 31, 2023

Right-of-use assets	$	598,508

Lease liabilities - current	$	429,687
Lease liabilities - non-current		182,380
Total lease liabilities	$	612,067

As of December 31, 2023, the aggregate future minimum rental payments under non-cancelable agreement are as follows:

Maturity of Lease Liabilities	Total

12 months ended December 31, 2024	$	446,002
12 months ended December 31, 2025		185,540
Total undiscounted lease payments		631,542
Less: Imputed interest		(19,475	)
Present value of lease liabilities		612,067
Operating lease liabilities - Current		429,687
Operating lease liabilities - Non-current	$	182,380

Note 15. Commitments and Contingencies

Contingencies

From time to time the Company may be named in claims arising in the ordinary course of business. Currently, no legal proceedings, government actions, administrative actions, investigations or claims are pending against the Company or involve the Company that, in the opinion of management, could reasonably be expected to have a material adverse effect on its business and financial condition. For all periods presented, the Company was not a party to any pending material litigation or other material legal proceedings.

Note 16. Disaggregation of Revenue

Selected financial information of the Company’s operating revenue for disaggregated revenue purposes by revenue source are as follows: Product sales only represent sales to members, not third parties who are not members.

	Year ended December 31, 2023		Year ended December 31, 2022
Membership Fee	$	12,293	$	751,452
Product Sales		465		2,198
Food and Beverage		817,761		449,240
Total	$	830,519	$	1,202,890

Note 17. Concentration Risk

The Company maintains cash balances at various financial institutions in different countries. These balances are usually secured by the central banks’ insurance companies. At times, these balances may exceed the insurance limits. As of December 31, 2023 and 2022, uninsured cash balances were $611,947 and $1,435,543, respectively.

Major Suppliers

For the year ended December 31, 2023, five suppliers accounted for approximately over 54% of the Company’s total costs of revenue.

For the year ended December 31, 2022, five suppliers accounted for approximately over 46% of the Company’s total costs of revenue.

Note 18. Investment in Associate & Convertible Note Receivable, related party

During the years ended December 31, 2022 and 2023, the Company held an equity method investment in a related party, Ketomei, and also had a convertible note receivable with Ketomei. The following table shows the activity of the investment and note during those two years.

	December 31, 2022		Additions		Loss on investment			Impairment			December 31, 2023
Investment in associate, related party	$	155,369	$	4,128	$	(33,898	)	$	(125,599	)	$	-
Convertible note receivable, related party		198,125		170,174		-			(368,299	)		-
Total	$	353,494	$	174,302	$	(33,898	)	$	(493,898	)	$	-

	December 31, 2021		Additions		Loss on investment			Impairment		December 31, 2022
Investment in associate, related party	$	-	$	256,318	$	(100,949	)	$	-	$	155,369
Convertible note receivable, related party		76,723		121,402		-			-		198,125
Total	$	76,723	$	377,720	$	(100,949	)	$	-	$	353,494

During the year, the Company impaired the investment in associate of $155,369 to $0 and convertible note receivable of $368,299 to $0.

Note 19. Subsequent Events

On January 9, 2024, the Company announced the completion of its previously announced business combination (the “Business Combination”), with Alset Capital Acquisition Corp. (“Alset”) (Nasdaq: “ACAX” for common stock and “ACAXR” for rights), The common stock of the combined company is expected to begin trading on The Nasdaq Global Market (“Nasdaq”) under the new ticker symbol “HWH”. The Business Combination was approved at a special meeting of Alset’s stockholders on August 1, 2023. Upon the closing of the Business Combination, the previously-trading Class A common stock, and rights of Alset ceased to trade with such rights entitling its holder to receive such one-tenth (1/10) of one share of Alset Class A common stock upon the closing of the Business Combination.

On February 20, 2024, the Company invested an additional $312,064 (SG$420,000) for an additional 38.41% ownership interest in Ketomei. After this additional investment, the Company will own 55.65% of Ketomei’s outstanding shares and Ketomei will be consolidated into the financial statements of HWH International Inc beginning on February 20, 2024.

Exhibit 99.2

UNAUDITED PRO FORMA COMBINED FINANCIAL INFORMATION

Introduction

The following unaudited pro forma combined financial statements of Alset present the combination of the historical financial information of Alset and HWH adjusted to give effect for the Business Combination. The following unaudited pro forma combined financial information has been prepared in accordance with Article 11 of Regulation S-X.

The unaudited pro forma combined balance sheet as of December 31, 2023, combines the historical balance sheet of Alset as of November 30, 2023 and the historical balance sheet of HWH as of December 31, 2023, on a pro forma basis as if the Business Combination and related transactions, summarized below, had been consummated on January 1, 2022, the beginning of the earliest period presented.

The unaudited pro forma combined statement of operations for the year ended December 31, 2023 combines the historical statements of operations of Alset for the year ended November 30, 2023 and HWH for the year ended December 31, 2023 on a pro forma basis as if the Business Combination and related transactions had been consummated on January 1, 2022, the beginning of the earliest period presented.

The unaudited pro forma combined statement of operations for the year ended December 31, 2022 combines the historical statements of operations of Alset for the year ended November 30, 2022 and HWH (as restated) for the year ended December 31, 2022 on a pro forma basis as if the Business Combination and related transactions had been consummated on January 1, 2022, the beginning of the earliest period presented.

The unaudited pro forma combined financial statements have been developed from and should be read in conjunction with:

● the accompanying notes to the unaudited pro forma combined financial statements;

● the historical audited financial statements of Alset as of and for the year ended November 30, 2023 and 2022 and the related notes thereto;

● the historical audited financial statements of HWH as of and for the year ended December 31, 2023 and 2022, and the related notes thereto;

● the sections entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations of ACAX” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations of HWH,” and other financial information relating to Alset and HWH, including the Merger Agreement.

The unaudited pro forma combined financial information has been presented for illustrative purposes only and does not necessarily reflect what the Combined Company’s financial condition or results of operations would have been had the Business Combination occurred on the dates indicated.

Further, the unaudited pro forma combined financial information also may not be useful in predicting the future financial condition and results of operations of the Combined Company. The actual financial position and results of operations may differ significantly from the pro forma amounts reflected herein due to a variety of factors. The unaudited transaction accounting adjustments represent management’s estimates based on information available as of the date of this unaudited pro forma combined financial information and are subject to change as additional information becomes available and analyses are performed. Assumptions and estimates underlying the unaudited pro forma adjustments set forth in the unaudited pro forma combined financial statements are described in the accompanying notes. The Combined Company believes that its assumptions and methodologies provide a reasonable basis for presenting all of the significant effects of the Business Combination based on information available to management at this time and that the transaction accounting adjustments give appropriate effect to those assumptions and are properly applied in the unaudited pro forma combined financial information.

Description of transaction

On September 9, 2022, Alset entered into an agreement and plan of merger (the “Merger Agreement”) by and among Alset, HWH and HWH Merger Sub Inc., a Nevada corporation and a wholly owned subsidiary of Alset (“Merger Sub”). Alset and Merger Sub are sometimes referred to collectively as the “Alset Parties.” Pursuant to the Merger Agreement, a business combination between Alset and HWH will be effected through the merger of Merger Sub with and into HWH, with HWH surviving the merger as a wholly owned subsidiary of Alset (the “Merger”). Upon the closing of the Merger (the “Closing”), it is anticipated that Alset will change its name to “HWH International, Inc.” The board of directors of Alset has (i) approved and declared advisable the Merger Agreement, the Ancillary Agreements (as defined in the Merger Agreement) and the transactions contemplated thereby and (ii) resolved to recommend approval of the Merger Agreement and related transactions by the stockholders of Alset.

The total consideration to be paid at Closing (the “Merger Consideration”) by Alset to the HWH shareholders will be $125,000,000, and will be payable in shares of Class A common stock, par value $0.0001 per share, of Alset (“Alset Common Stock”). The number of shares of the Alset Common Stock to be paid to the shareholders of HWH as Merger Consideration will be 12,500,000, with each share being valued at $10.00. All cash proceeds remaining in the trust will be used to pay transaction costs and as growth capital for HWH.

The Business Combination was approved at a special meeting of Alset’s stockholders on August 1, 2023. Following the approval of Business Combination, 39 of Alset’s public stockholders redeemed their common stock for cash even if they approved the Business Combination.

The unaudited pro forma combined financial information has been prepared based on final redemption of shares by stockholders.

The transaction is expected to be accounted for as a reverse recapitalization. Under the reverse recapitalization model, the Business Combination will be treated as HWH issuing equity for the net assets of Alset, with no goodwill or intangible assets recorded. Factors considered to determine that HWH is the acquirer include:

	●	HWH ownership interest post combination

	●	HWH’s business activities will be the business activities of the Combined Entity

Pro Forma Information

ALSET AND HWH

UNAUDITED PRO FORMA COMBINED BALANCE SHEET AS OF DECEMBER 31, 2023

(in thousands)

							Pro Forma				Pro Forma
							Adjustments				Combined
	HWH			ACAX			Following				Following
	(Historical)			(Historical)			Redemptions				Redemptions
ASSETS
Current assets:
Cash and cash equivalents	$	879		$	586		$	550		A		1,290
								(325	)	B
								(400	)	C
Accounts receivable		29			-			-				29
Prepaid expenses and other current assets		50			117			-				167
Total current assets		958			703			(175	)			1,486

Non-current assets:
Cash and marketable securities held in Trust Account		-			21,253			(21,253	)	A		-
Deposit		298			-			-				298
Right-of-use assets		599			-			-				599
Property and equipment, net		129			-			-				129
Total non-current assets		1,026			21,253			(21,253	)			1,026
TOTAL ASSETS		1,984			21,956			(21,428	)			2,512

LIABILITIES, TEMPORARY EQUITY AND STOCKHOLDERS’ EQUITY (DEFICIT)
Accounts payable and accrued expenses		222			632			-				854
Extension Loan – Related Party		-			205			-				205
Due to related party		2,119			-			-				2,119
Lease liability		430			-			-				430
Total current liabilities		2,771			837			-				3,608

Non-current liabilities:
Lease liability		182			-			-				182
Deferred underwriting fee payable		-			3,019			(3,019	)	B		-
Note Payable – Underwriter		-			-			1,184		B		1,184
Total non-current liabilities		182			3,019			(1,835	)			1,366
Total liabilities		2,953			3,856			(1,835	)			4,974

COMMITMENTS AND CONTINGENCIES

Temporary equity:
Class A and Class B common stock subject to possible redemption		-			20,457			(20,457	)	D		-

Stockholders’ equity (deficit):
Preferred Series A-2		-			-			-				-
Preferred Series A-1												-
Common stock		-			-			1		E		2
								1		D
Class A common stock		-			-			-		F		-

Class B common stock		-			-			-		F		-
Additional paid-in capital		-			-			863		D		(1,495	)
								(1	)	E
								(2,357	)	G

Accumulated other comprehensive income		(197	)		-			-				(197	)
Accumulated deficit		(781	)		(2,357	)		2,357		G		(781	)

Non-controlling interest		9			-			-				9
Total shareholders’ equity (deficit)		(969	)		(2,357	)		864				(2,462	)
TOTAL LIABILITIES, TEMPORARY EQUITY AND STOCKHOLDERS’ DEFICIT		1,984			21,956			(21,428	)			2,512

ALSET AND HWH

UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 2023

(in thousands, except per share data)

							Pro Forma				Pro Forma
							Adjustments				Combined
	HWH			ACAX			Following				Following
	(Historical)			(Historical)			Redemptions				Redemptions
Revenues	$	831		$	-		$	-			$	831
Cost of revenue		335			-			-				335
Gross profit		496			-			-				496

Operating costs and expenses:
Selling, general and administrative expenses		1,875			1,245			-				3,120
Impairment of convertible note receivable – related party, and investment in associate, related party		494			-			-				494
Total operating costs and expenses		2,369			1,245			-				3,614
Loss from operations		(1,873	)		(1,245	)		-				(3,118	)

Other income (expense):
Other income (expense)		187			-			-				187
Unrealized gain (loss) on related party transactions		69										69
Loss on equity method investment, related party		(34	)									(34	)
Interest income of Trust Account assets		-			2,216			(2,216	)	AA		-
Total other income (expense)		222			2,216			(2,216	)			222
Net income (loss) before income tax provision		(1,651	)		971			(2,216	)			(2,896	)
Income tax provision		-			(422	)		-				(422	)
Net income (loss)		(1,651	)		549			(2,216	)			(3,318	)
Net loss attributable to non-controlling interests		4			-			-				4
Net income (loss) attributable to common stockholders		(1,655	)		549			(2,216	)			(3,314	)

	HWH			ACAX		Following
	(Historical)			(Historical)		Redemptions
Weighted average shares outstanding - Common stock		10,000			-		-
Basic and diluted net income per share - Common stock		(165.44	)		-		-
Weighted average shares outstanding - Class A and Class B common stock subject to redemption		-			5,218,670		16,223,301
Basic and diluted net income per share - Class A and Class B common stock subject to redemption		-			0.07		(0.20	)
Weighted average shares outstanding - Class A and Class B non-redeemable common stock		-			2,156,250		-
Basic and diluted net income per share - Class A and Class B non-redeemable common stock		-			0.07		-

ALSET AND HWH

UNAUDITED PRO FORMA COMBINED STATEMENT OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 2022

(in thousands, except per share data)

							Pro Forma				Pro Forma
	HWH						Adjustments				Combined
	(Historical)			ALSET			Following				Following
	(as restated)			(Historical)			Redemptions				Redemptions
Revenues	$	1,203		$	-		$	-			$	1,203
Cost of revenue		688			-			-				688
Gross profit		515			-			-				515

Operating costs and expenses:
Selling, general and administrative expenses		1,472			690			700		BB		2,862
Total operating costs and expenses		1,472			690			700				2,862
Loss from operations		(957	)		(690	)		(700	)			(2,347	)

Other income (expense):
Other income (expense)		147										147
Unrealized gain (loss) on related party transactions		(30	)									(30	)
Loss on equity method investment, related party		(101	)									(101	)
Interest income of Trust Account assets					990			(990	)	AA		-
Total other income (expense)		16			990			(990	)			16
Net income (loss) before income tax provision		(941	)		300			(1,690	)			(2,331	)
Income tax provision		-			(187	)						(187	)
Net income (loss)		(941	)		113			(1,690	)			(2,518	)
Net loss attributable to non-controlling interests		5			-			-				5
Net (loss) income attributable to common stockholders		(946	)		113			(1,690	)			(2,523	)

	HWH			ACAX		Following
	(Historical)			(Historical)		Redemptions
Weighted average shares outstanding - Common stock		10,000			-		-
Basic and diluted net income per share - Common stock		(94.60	)		-		-
Weighted average shares outstanding - Class A and Class B common stock subject to redemption		-			7,478,425		16,073,803
Basic and diluted net income per share - Class A and Class B common stock subject to redemption		-			0.01		(0.16	)
Weighted average shares outstanding - Class A and Class B non-redeemable common stock		-			2,156,250		-
Basic and diluted net income per share - Class A and Class B non-redeemable common stock		-			0.01		-

NOTES TO THE UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS

Note 1 — Description of the Merger

Note 2 — Basis of Presentation

The unaudited pro forma combined financial information was prepared in accordance with Article 11 of SEC Regulation S-X as amended by the final rule, Release No. 33-10786 “Amendments to Financial Disclosures about Acquired and Disposed Businesses.” The historical financial information of Alset and HWH include transaction accounting adjustments to illustrate the estimated effect of the Business Combination and certain other adjustments to provide relevant information necessary for an understanding of the combined company upon consummation of the transactions described herein.

The unaudited pro forma combined financial information does not reflect the income tax effects of the transaction accounting adjustments as any change in the deferred tax balance would be offset by an increase in the valuation allowance given the Companies’ incurred losses during the historical period presented.

Alset fiscal year end is November and HWH’s fiscal year end of December.

Note 3 — Transaction Accounting Adjustments to Alset and HWH Unaudited Pro Forma Combined Balance Sheet as of December 31, 2023

The transaction accounting adjustments included in the unaudited pro forma combined balance sheet as of December 31, 2023 are as follows:

(A)

Reflects the reclassification of approximately $21 million of cash and cash equivalents held in the Trust Account at the balance sheet date that becomes available to fund expenses in connection with the Business Combination or future cash needs of the Company, net of $20 million of redemptions.

	(B)	Reflects the payment of approximately $3 million of deferred underwriters’ fees, of which $0.3 million is paid in cash, $1.2 million is a promissory note and $1.5 million is payable in shares of Combined Company (as agreed on, on December 18, 2023). The cash fees were paid at the closing out of the trust account.

	(C)	Reflects the payment of $250,000 of legal fee and $150,000 advisory fee paid upon closing of Business Combination.

(D)

Reflects the reclassification of approximately $20 million of common stock subject to redemption to permanent equity, net of $20 million of redemptions.

(E)

Represents the issuance of 12.5 million shares of the post-combination company’s Class A common stock to HWH equity holders as consideration for the acquisition.

(F)

Reflects the conversion of Class B shares held by the initial shareholders to Class A shares.

(G)

Reflects the reclassification of Alset’s historical accumulated deficit

Note 4 — Transaction Accounting Adjustments to Alset and HWH Unaudited Pro Forma Combined Statement of Operations for the Year Ended December 31, 2023

The transaction accounting adjustments included in the unaudited pro forma combined statement of operations for the year ended December 31, 2023 are as follows:

(AA) Reflects the elimination of realized and unrealized gains on the trust

Note 5 — Transaction Accounting Adjustments to Alset and HWH Unaudited Pro Forma Combined Statement of Operations for the Year Ended December 31, 2022

The transaction accounting adjustments included in the unaudited pro forma combined statement of operations for the year ended December 31, 2022 are as follows:

(AA) Reflects the elimination of realized and unrealized gains on the trust

(BB) Reflects transaction costs

Note 6 — Loss Per Share

Net loss per share calculated using the historical weighted average shares outstanding, and the issuance of additional shares in connection with the Business Combination assuming the shares were outstanding since January 1, 2022. As the Business Combination are being reflected as if they had occurred at the beginning of the periods presented, the calculation of weighted average shares outstanding for basic and diluted net loss per share assumes that the shares issuable relating to the Business Combination have been outstanding for the entire period presented. Warrants have been excluded from the calculation as they are anti-dilutive.

Exhibit 99.3

Management’s Discussion and Analysis of Financial Condition and Results of Operations

Forward-Looking Statements

Our analysis contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. For this purpose, any statements contained herein that are not statements of historical fact may be deemed to be forward-looking statements. Without limiting the foregoing, words such as “may”, “will”, “expect”, “believe”, “anticipate”, “estimate” or “continue” or comparable terminology are intended to identify forward-looking statements. These statements by their nature involve substantial risks and uncertainties, and actual results may differ materially depending on a variety of factors, many of which are not within our control. These factors include by are not limited to economic conditions generally and in the industries in which we may participate, competition within our chosen industry, including competition from much larger competitors, technological advances and failure to successfully develop business relationships.

Business Overview

HWH International Inc. (“HWH”) and its consolidated subsidiaries (collectively, the “Company”) operate food and beverage (“F&B”) business in Singapore and South Korea. The Company pursues purpose-driven business model that helps individuals develop new pathways in their pursuit of Health, Wealth, and Happiness. The Company operates a membership model where individuals pay an upfront membership fee to become members. As members, these individuals receive discounted access to products and services offered by the Company’s affiliates. The Company had approximately 9,000 members previously, primarily in South Korea. Currently, this membership business has been temporarily suspended.

The Company mainly focused on the F&B business in 2023. During the years ended December 31, 2023, and 2022, substantially all of the Company’s business was generated mainly by its wholly owned subsidiaries, 2% and 63% from HWH World Inc. (“HWH Korea”) and 98% and 37% from F&B business respectively; 49% and 28% from Alset F&B One Pte. Ltd (“F&B1”), 6% and 2% from Hapi Café Korea Inc.(“HCKI”), 22% and 7 % from Hapi Café SG Pte. Ltd. (“HCSGPL”) and 21% and 0% from Alset F&B (PLQ) Pte. Ltd. (“F&BPLQ”). HWH Korea was incorporated in the Republic of Korea (“South Korea”) on May 7, 2019. HWH Korea is in the business of sourcing and distributing dietary supplements and other health products through its network of members in South Korea. HWH Korea generates product sales via its direct sale model as products are sold to its members. Through the use of a Hapi Gig platform that combines e-commerce, social media, and a customized rewards system, HWH Korea equips, trains, and empowers its members. F&B1 was incorporated in Singapore on April 10, 2017, HCSGPL was incorporated in Singapore on April 4, 2022, and F&BPLQ was incorporated in Singapore on November 11, 2022. F&B1, HCSGPL, and F&BPLQ are in the F&B business in Singapore.

Our Revenue Model

Our total revenue for the years ended December 31, 2023 and 2022 was $830,519 and $1,202,890, respectively. Our net loss for the years ended December 31, 2023 and 2022 was $1,650,561 and $941,162, respectively.

We currently recognize revenue from the sale of products, memberships and food and beverages to customers. Sales of memberships accounted for approximately 1% of revenue in the year ended December 31, 2023, and approximately 62% of revenue in the year ended December 31, 2022. Sales of food and beverage accounted for approximately 99% and 38% of revenue in the years ended December 31, 2023, and 2022, respectively.

From a geographical perspective, we recognized 8% and 92% of our total revenue in the year ended on December 31, 2023, in South Korea and Singapore, respectively, and 65% and 35% in the year ended December 31, 2022, in South Korea and Singapore, respectively.

We believe that, on an ongoing basis, the revenue generated from sales of membership will decline as a percentage of our total revenue as we expect to experience greater revenue contribution from our café business and product sales.

Matters that May or Are Currently Affecting Our Business

In addition to the matters described above, the primary challenges and trends that could affect or are affecting our financial results include:

● Our ability to improve our revenue through cross-selling and revenue-sharing arrangements among our group of companies;

● Our ability to identify complementary businesses for acquisition, obtain additional financing for these acquisitions, if and when needed, and profitably integrate them into our existing operation;

● Our ability to attract competent and skilled technical and sales personnel for each of our businesses at acceptable compensation levels to manage our overhead; and

● Our ability to control our operating expenses as we expand each of our businesses and product and service offerings.

Summary of Significant Accounting Policies

Basis of Presentation and Principles of Consolidation

Use of Estimates and Critical Accounting Estimates and Assumptions

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenues and expenses during the reporting periods. Significant estimates made by management include, but are not limited to, allowance for credit losses, recoverability and useful lives of property, plant and equipment, the valuation allowance of deferred taxes, contingencies, and equity compensation. Actual results could differ from those estimates.

Revenue Recognition and Cost of Sales

Product Sales: The Company’s performance obligation is to transfer ownership of its products to its members. The Company generally recognizes revenue when a product is delivered to its member. Revenue is recorded net of applicable taxes, allowances, refund or returns. The Company receives the net sales price in cash or through credit card payments at the point of sale.

If any member returns a product to the Company on a timely basis, they may obtain a replacement product from the Company for such returned products. Allowances for product and membership returns are provided at the time the sale is recorded. This accrual is based upon historical return rates for each country and the relevant return pattern, which reflects anticipated returns to be received over a period of up to 12 months following the original sale. Product and membership return for the years ended December 31, 2023, and 2022 were $1,183 and $41,755, respectively.

Membership Fee: The Company collects an annual membership fee from its members. The fee is fixed, paid in full at the time of joining the membership and is not refundable. The Company’s performance obligation is to provide its members with the right to: (a) purchase products from the Company, (b) access to certain back-office services, (c) receive commissions and (d) attend corporate events. The associated performance obligation is satisfied over time, generally over the term of the membership agreement which is for a one-year period. The Company recognizes revenue from membership fee over the one-year period of membership.

Food and Beverage: The revenue earned from F&B business in the years ended December 31, 2023, and 2022 was $817,761 and $449,239, respectively.

Cost of Revenue: Cost of revenue consists of cost of procuring finished goods from suppliers and related shipping and handling fees.

Results of Operations

Summary of Statements of Operations for the Years Ended December 31, 2023 and 2022

	Years Ended December 31,
	2023			2022
				(As restated)
Revenue	$	830,519		$	1,202,890
Cost of revenue		334,825			688,365
Operating expenses		2,368,426			1,471,898
Other income (expense)		222,171			16,211
Provision for income taxes		-			-
Net loss	$	(1,650,561	)	$	(941,162	)

Revenue

Revenue was $830,519 and $1,202,890 for the years ended December 31, 2023 and 2022, respectively. Word of mouth, a social media presence, and the availability of meeting spaces are significant drivers of our revenue and revenue potential. Our revenue decreased in 2023 due to decreased sales of annual memberships, as management is in the process of focusing our sales more on the general audience instead of the leaders in South Korea.

The following table illustrates revenue earned from the sale of memberships for the years ended December 31, 2023 and 2022:

	2023		2022		Variance
Number of Memberships Sold		-		200		(200	)
Cash received from membership	$	-	$	194,286	$	(194,286	)

Additionally, we planned to launch a new program, but we are still discussing a model in which both members and the Company can mutually benefit. As a result of the plan to launch a new program, we slowed down sales starting in May of 2021, and membership sales were stopped in March of 2022 completely. Further, we started the Food and Beverage (“F&B”) business in 2022 and opened two cafés in Singapore, and one in South Korea. While we have in fact stopped membership sales as discussed above, we plan on resuming such membership sales, under the new model, in the upcoming quarter of 2024.

For the years ended December 31, 2023 and 2022, our revenue was generated as per the following:

	December 31, 2023		December 31, 2022
Membership Fee	$	12,293	$	751,452
Product Sales		465		2,198
Food and Beverage		817,761		449,240
Total	$	830,519	$	1,202,890

Cost of revenue

Cost of revenue decreased from $688,365 in the year ended December 31, 2022 to $334,825 in the year ended December 31, 2023. The decrease is a result of the decrease in sales of memberships and products to members. Membership sales decreased starting in May 2021, and came to a halt in March 2022 completely. This is driven by the changing dynamics of the consumer demand market and our sales team’s effectiveness.

Sales commissions decreased from $501,483 to $13,827 in the years ended December 31, 2022 and 2023, respectively, due to decrease in sale of memberships.

The gross margin decreased from $514,525 to $495,694 in the years ended December 31, 2022 and 2023, respectively. The decrease of gross margin was caused by the decrease in non-membership cost of revenue.

Operating expenses

Operating expenses increased from $1,471,898 to $2,368,426 in the years ended December 31, 2022 and 2023, respectively, due to general and administrative expenses increase from $1,471,898 to $1,874,528 in the years ended December 31, 2022 and 2023, respectively. The increase of general and administrative expenses in 2023 compared with 2022 was mostly caused by the increase in the operating expenses for the food and beverage business in Korea and Singapore and the professional fees related to business combination. Additionally, in 2023 there was a $493,898 increase in impairment of our equity method investment in and convertible note receivable from a related party, Ketomei Pte. Ltd.

Other income (expense)

In the year ended December 31, 2023, the Company had other income of $222,171 compared to other income of $16,211 in the year ended December 31, 2022. The increase is due to decrease in the loss on equity method investment, related party from $100,949 to $33,898 in the years ended December 31, 2022 and 2023, respectively.

Net loss

In the year ended December 31, 2023 the Company had net loss of $1,650,561 compared to net loss of $941,162 in the year ended December 31, 2022.

Liquidity and Capital Resources

Our cash has decreased from $1,651,088 as of December 31, 2022 to $878,803 as of December 31, 2023. Our liabilities increased from $2,867,653 at December 31, 2022 to $2,952,967 at December 31, 2023. Our total assets have decreased to $1,983,518 as of December 31, 2023 from $3,545,766 as of December 31, 2022.

The management believes that the available cash in the Company’s bank accounts, anticipated cash from operations, and financing availability from related parties is sufficient to fund our operations for at least the next 12 months. The Company’s capital requirements for the planned expansion are based on, among other items, geographical specific property costs, team requirements, and marketing steps needed. Our expansion shall consist of plans to take over leases of existing Hapi Cafes we currently do not own, as we look to add Hapi Cafes over the next two (2) years. If we take over these existing leases, it will require a minimum investment for each lease we take over for each Hapi Café. Proceeds received as a result of the anticipated business combination, will allow us to seek these expansion plans. Depending on the amount of proceeds we raise as part of the anticipated business combination, we may or may not need or seek additional funding or alter our strategic growth plans after the business combination is effectuated. There is no guarantee that we will be able to execute on our plans as laid out above.

Summary of Cash Flows for the Years Ended December 31, 2023 and 2022

	Years Ended December 31,
	2023			2022
				(As restated)
Net cash used in operating activities	$	(1,285,959	)	$	(1,208,532	)
Net cash used in investing activities	$	(14,574	)	$	(423,173	)
Net cash provided by financing activities	$	526,323		$	718,671

Cash Flows from Operating Activities

Net cash used in operating activities was $1,285,959 in the year ended of December 31, 2023, as compared to net cash used in operating activities of $1,208,532 in the same period of 2022. High net loss contributed to the increase of cash used in operating activities in the year ended of December 31, 2023.

Cash Flows from Investing Activities

Net cash used in investing activities was $14,574 in the year ended of 2023, as compared to net cash used in investing activities of $423,173 in the year ended 2022. In the year ended December 31, 2023 we paid $14,574 for purchases of property and equipment. In the year ended December 31, 2022 we paid $166,855 for purchases of property and equipment and $256,318 for investment in an associate.

Cash Flows from Financing Activities

Net cash provided by financing activities was $526,323 in the year ended of December 31, 2023, as compared to net cash provided by operating activities of $718,671 in the same period of 2022. In the year ended December 31, 2023 we received $526,323 from a related party. In the year ended December 31, 2022 we received $718,671 from a related party.

Equity Security Investments

Investment Securities under Equity Method Accounting

Ketomei Pte. Ltd.

The amount due from Ketomei at December 31, 2023 and 2022 are $0 and $198,125 respectively. The Company fully impaired the convertible loan with Ketomei during the year ended December 31, 2023.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements that are reasonably likely to have a current or future effect on our financial condition, revenues, results of operations, liquidity, or capital expenditures.

Impact of Inflation

We believe that inflation has not had a material impact on our results of operations for the year ended December 31, 2023 or the year ended December 31, 2022. We cannot assure you that future inflation will not have an adverse impact on our operating results and financial condition.

Impact of Foreign Exchange Rates

The effect of foreign exchange rate changes on the intercompany loans (under ASC 830), which mostly consist of loans from Singapore to South Korea and which were approximately $2.1 million and $1.6 million on December 31, 2023 and 2022, respectively, are the reason for the fluctuation of foreign currency transaction Gain on the Consolidated Statements of Operations and Other Comprehensive Income. Because the intercompany loan balances between Singapore and South Korea will remain at approximately $1.8 million over the next year, we expect this fluctuation of foreign exchange rates to still impact the results of operations in 2024, especially given that the foreign exchange rate may and is expected to be volatile. If the amount of intercompany loan is lowered in the future, the effect will also be reduced. However, at this moment, we do not expect to repay the intercompany loans in the short term.

Emerging Growth Company Status

We are an “emerging growth company,” as defined in the JOBS Act, and we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies.” Section 107 of the JOBS Act provides that an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. In other words, an “emerging growth company” can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to take advantage of these exemptions until we are no longer an emerging growth company or until we affirmatively and irrevocably opt out of this exemption.

Exhibit 99.4

Consent of Independent Registered Public Accounting Firm

We hereby consent to the inclusion in this Form 8-K of our report dated March 25, 2024, relating to the consolidated financial statements of HWH International Inc. and Subsidiaries as of and for the years ended December 31, 2023 and December 31, 2022. Our opinion also included an emphasis of matter paragraph relating to the restatement of the 2022 consolidated financial statements.


Grassi & Co., CPAs, P.C.

Jericho, New York
March 25, 2024

Cover	Jan. 09, 2024
Cover [Abstract]
Document Type	8-K/A
Amendment Flag	true
Amendment Description	Amendment No. 1
Document Period End Date	Jan. 09, 2024
Entity File Number	001-41254
Entity Registrant Name	HWH International Inc.
Entity Central Index Key	0001897245
Entity Tax Identification Number	87-3296100
Entity Incorporation, State or Country Code	DE
Entity Address, Address Line One	4800 Montgomery Lane
Entity Address, Address Line Two	Suite 210
Entity Address, City or Town	Bethesda
Entity Address, State or Province	MD
Entity Address, Postal Zip Code	20814
City Area Code	(301)
Local Phone Number	971-3955
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common Stock, $0.0001 par value per share
Trading Symbol	HWH
Security Exchange Name	NASDAQ
Entity Emerging Growth Company	true
Elected Not To Use the Extended Transition Period	false