Overview

HWH International Inc. is an early-stage and emerging growth company that operates a food and beverage (F&B) business in Singapore and South Korea. The company’s key business segments include:

• Hapi Marketplace: An online business-to-consumer marketplace featuring a wide range of product categories including wellness, elderly care, and auto accessories. The company plans to expand Hapi Marketplace to South Korea, Hong Kong, and other parts of Asia.

• Hapi Cafés: In-person, location-based social experiences that offer members the opportunity to build a sense of community. The company has opened proof-of-concept Hapi Café locations in Seoul and Singapore, with plans to open additional cafés.

• Hapi Wealth Builder: A program that provides courses, workshops, and coaching sessions to help members learn investment and wealth-building strategies. The company plans to open a dedicated Hapi Wealth hub in China.

• Travel Business: In the planning stage, this business aims to offer members exclusive access to discounted rates on travel-related services.

HWH International was originally incorporated as Alset Capital Acquisition Corp. in 2021 and completed a business combination with HWH Nevada in January 2024, at which point it changed its name to HWH International Inc.

Our Revenue Model

HWH International’s total revenue for 2024 and 2023 was $1,253,577 and $830,519, respectively, with a net loss of $2,606,504 and $1,076,662 for the same periods. The majority of revenue comes from food and beverage sales, which accounted for 100% and 98% of total revenue in 2024 and 2023, respectively. Membership fees made up the remaining 2% of revenue in 2023.

From a geographical perspective, the company recognized 94% and 92% of its total revenue in Singapore in 2024 and 2023, respectively, with the remaining revenue coming from South Korea.

Matters that May or Are Currently Affecting Our Business

Key challenges and trends that could impact HWH International’s financial results include:

• Ability to improve revenue through cross-selling and revenue-sharing arrangements
• Ability to identify and profitably integrate complementary businesses for acquisition
• Ability to attract and retain competent technical and sales personnel
• Ability to control operating expenses as the business expands

Summary of Significant Accounting Policies

HWH International’s consolidated financial statements are prepared in accordance with U.S. GAAP. Key accounting policies include:

• Revenue Recognition: The company recognizes revenue from product sales, membership fees, and food and beverage sales. Product returns are accrued based on historical rates.
• Cost of Revenue: Consists of the cost of procuring finished goods from suppliers and related shipping/handling fees.
• Use of Estimates: Management makes significant estimates and assumptions, including for allowance for credit losses, asset useful lives, and equity compensation.

Results of Operations

HWH International’s revenue increased from $830,519 in 2023 to $1,253,577 in 2024, driven by growth in the F&B business. Cost of revenue also increased from $334,825 to $651,721 over the same period.

Operating expenses decreased from $3,402,793 in 2023 to $3,027,024 in 2024, primarily due to lower professional fees related to the business combination.

The company reported a net loss of $2,606,504 in 2024, compared to a net loss of $1,076,662 in 2023. This was largely due to a decrease in interest income and an unrealized loss on a convertible note receivable.

Liquidity and Capital Resources

HWH International’s cash balance increased from $1,159,201 as of December 31, 2023 to $4,341,746 as of December 31, 2024. Total liabilities decreased from $6,207,178 to $3,531,523 over the same period.

The company believes it has sufficient cash and financing availability to fund operations for at least the next 12 months. It has a $1 million credit facility with its majority shareholder, Alset Inc., of which $700,000 remains available as of December 31, 2024.

Nasdaq Compliance

HWH International has faced several Nasdaq compliance issues, including failing to meet the minimum market value of listed securities and minimum bid price requirements. The company has been granted extensions and is currently listed on the Nasdaq Capital Market.

Contractual Obligations and Other Commitments

The company has various contractual obligations, including an administrative services agreement, an underwriting agreement, and a registration rights agreement. It also has lock-up agreements with certain shareholders following the business combination.

Impact of Inflation and Foreign Exchange Rates

Inflation has not had a material impact on the company’s results so far, but future inflation could adversely affect operations. Foreign exchange rate fluctuations, particularly between Singapore and South Korea, have impacted the company’s results due to intercompany loans.

Emerging Growth Company Status

HWH International qualifies as an “emerging growth company” under the JOBS Act and has elected to take advantage of certain reporting exemptions available to such companies.