Alset Inc

Previous wording

We are a diversified holding company principally engaged through our subsidiaries in the development of EHome communities and other real estate, financial services, digital transformation technologies, biohealth activities and consumer products with operations in the United States, Singapore, Hong Kong, Australia, South Korea and the People’s Republic of China. We manage our three principal businesses primarily through our 85.5% owned subsidiary, Alset International, a public company traded on the Singapore Stock Exchange. Through this subsidiary (and indirectly, through other public and private U.S. and Asian subsidiaries), we are actively developing real estate projects near Houston, Texas in our real estate segment. In our digital transformation technology segment, we focus on serving business-to-business (B2B) needs in e-commerce, collaboration and social networking functions. Our biohealth segment includes the sale of consumer products.

Current wording

We are a diversified holding company principally engaged through our subsidiaries in the development of EHome communities and other real estate, financial services, digital transformation technologies, biohealth activities and consumer products with operations in the United States, Singapore, Hong Kong, Australia, South Korea and the People’s Republic of China. We manage a significant portion of our three principal businesses through our 85.7% owned subsidiary, Alset International, a public company traded on the Singapore Stock Exchange. Through this subsidiary (and indirectly, through other public and private U.S. and Asian subsidiaries), we are actively developing real estate projects near Houston, Texas in our real estate segment. In our digital transformation technology segment, we focus on serving business-to-business (B2B) needs in e-commerce, collaboration and social networking functions. Our biohealth segment includes the sale of consumer products. Alset Inc. and Alset International Limited collectively own 88.1% of HWH International Inc. (described in further detail below). We also have certain wholly owned subsidiaries that collectively own 132 single family residential rental properties in Montgomery and Harris Counties, Texas.

Previous wording

We also have ownership interests outside of Alset International, including a 36.9% equity interest in American Pacific Financial, Inc., formerly known as American Pacific Bancorp Inc. (“APF”), an indirect 13% equity interest in Holista CollTech Limited (“Holista”), a 44.4% equity interest in DSS Inc. (“DSS”), an indirect 48.7% equity interest in Value Exchange International Inc. (“VEII”), a 0.5% equity interest in New Electric CV Corporation (“NECV”, formerly known as “American Wealth Mining Inc.”) and a 33.4% equity interest in Sharing Services Global Corporation (“SHRG”). APF is a financial network holding company. Holista is a public Australian company that produces natural food ingredients (ASX: HCT). DSS is a multinational company operating businesses within nine divisions: product packaging, biotechnology, direct marketing, commercial lending, securities and investment management, alternative trading, digital transformation, secure living, and alternative energy. DSS is listed on the NYSE American (NYSE: DSS). VEII is a provider of information technology services for businesses, and is traded on the OTCQB (OTCQB: VEII). NECV is a publicly traded consumer products company (OTCPK: HIPH). SHRG markets and distributes health and wellness products, as well as member-based travel services, using a direct selling business model. SHRG is traded on the OTCQB (OTCQB: SHRG).

Current wording

We also have minority ownership interests, including a 36.9% equity interest in American Pacific Financial, Inc., formerly known as American Pacific Bancorp Inc. (“APF”), a 44.4% equity interest in DSS Inc. (“DSS”), an indirect 48.7% equity interest in Value Exchange International Inc. (“VEII”), a 0.5% equity interest in New Electric CV Corporation (“NECV”, formerly known as “American Wealth Mining Inc.”) and a 29% equity interest in Sharing Services Global Corporation (“SHRG”). APF is a financial network holding company. DSS is a multinational company operating businesses within nine divisions: product packaging, biotechnology, direct marketing, commercial lending, securities and investment management, alternative trading, digital transformation, secure living, and alternative energy. DSS is listed on the NYSE American (NYSE: DSS). VEII is a provider of information technology services for businesses, and is traded on the OTCQB (OTCQB: VEII). NECV is a publicly traded consumer products company (OTCPK: HIPH). SHRG markets and distributes health and wellness products, as well as member-based travel services, using a direct selling business model. SHRG is traded on the OTCQB (OTCQB: SHRG).

Previous wording

On January 9, 2024, two entities affiliated with Alset Inc. completed a previously announced transaction. On September 9, 2022, Alset Capital Acquisition Corp., a Delaware corporation (“Alset Capital”) entered into an agreement and plan of merger (the “Merger Agreement”) with our indirect subsidiary HWH International Inc., a Nevada corporation (“HWH”) and HWH Merger Sub Inc., a Nevada corporation and a wholly owned subsidiary of Alset Capital (“Merger Sub”). The Company and its 85.5% owned subsidiary Alset International own Alset Acquisition Sponsor, LLC, the sponsor (the “Sponsor”) of Alset Capital.

Current wording

On January 9, 2024, two entities affiliated with Alset Inc. completed a previously announced transaction. On September 9, 2022, Alset Capital Acquisition Corp., a Delaware corporation (“Alset Capital”) entered into an agreement and plan of merger (the “Merger Agreement”) with our indirect subsidiary HWH International Inc., a Nevada corporation (“HWH Nevada”) and HWH Merger Sub Inc., a Nevada corporation and a wholly owned subsidiary of Alset Capital (“Merger Sub”). The Company and its 85.7% owned subsidiary Alset International own Alset Acquisition Sponsor, LLC, the sponsor (the “Sponsor”) of Alset Capital.

Previous wording

Pursuant to the Merger Agreement, on January 9, 2024, a Business Combination between Alset Capital and HWH was effected through the merger of Merger Sub with and into HWH, with HWH surviving the merger as a wholly owned subsidiary of Alset Capital (the “Merger”), and Alset Capital changing its name to HWH International Inc. (“New HWH”).

Current wording

Pursuant to the Merger Agreement, on January 9, 2024, a Business Combination between Alset Capital and HWH Nevada was effected through the merger of Merger Sub with and into HWH Nevada, with HWH Nevada surviving the merger as a wholly owned subsidiary of Alset Capital (the “Merger”), and Alset Capital changing its name to HWH International Inc. (“New HWH”).

Previous wording

The total consideration paid at the closing of the Merger by New HWH to the HWH shareholders was 12,500,000 shares of New HWH common stock. Alset International owned the majority of the outstanding shares of HWH at the time of the business combination, and received 10,900,000 shares of New HWH as consideration for its shares of HWH.

Current wording

The total consideration paid at the closing of the Merger by New HWH to the shareholders of HWH Nevada was 12,500,000 shares of New HWH common stock. Alset International owned the majority of the outstanding shares of HWH Nevada at the time of the business combination, and received 10,900,000 shares of New HWH as consideration for its shares of HWH Nevada.

Previous wording

On November 13, 2023, 150 CCM Black Oak Ltd. (the “Seller”), a Texas Limited Partnership, entered into two Contracts for Purchase and Sale and Escrow Instructions (each an “Agreement,” collectively, the “Agreements”) with Century Land Holdings of Texas, LLC, a Colorado limited liability company (the “Buyer”). Pursuant to the terms of one of the aforementioned Agreements, the Seller has agreed to sell approximately 142 single-family detached residential lots comprising a section of a residential community in the city of Magnolia, Texas known as the “Lakes at Black Oak.” The selling price of these lots is anticipated to equal approximately $7.4 million. On July 1, 2024, the Seller closed the sale of 70 of the lots contemplated by the Agreement, generating approximately $3.8 million. Pursuant to the other Agreement, the Seller has agreed to sell 63 single-family detached residential lots in the city of Magnolia, Texas. In 2021, our subsidiary Alset EHome Inc. acquired approximately 19.5 acres of partially developed land near Houston, Texas which was used to develop a community named Alset Villas (“Alset Villas”). Alset EHome was in the process of developing the 63 lots at Alset Villas in 2023. The selling price of these lots is anticipated to equal approximately $3.3 million. The closing of the transactions described above depends on the satisfaction of certain conditions. The sale of the first 70 lots closed on July 1, 2024 generating approximately $3.8 million.** **

Current wording

On November 13, 2023, 150 CCM Black Oak Ltd. (the “Seller”), a Texas Limited Partnership, entered into two Contracts for Purchase and Sale and Escrow Instructions (each an “Agreement,” collectively, the “Agreements”) with Century Land Holdings of Texas, LLC, a Colorado limited liability company (the “Buyer”). Pursuant to the terms of one of the aforementioned Agreements, the Seller has agreed to sell approximately 142 single-family detached residential lots comprising a section of a residential community in the city of Magnolia, Texas known as the “Lakes at Black Oak.” The selling price of these lots is anticipated to equal approximately $7.4 million. On July 1, 2024, the Seller closed the sale of 70 of the lots contemplated by the Agreement, generating approximately $3.8 million. Pursuant to the other Agreement, the Seller has agreed to sell 63 single-family detached residential lots in the city of Magnolia, Texas. In 2021, our subsidiary Alset EHome Inc. acquired approximately 19.5 acres of partially developed land near Houston, Texas which was used to develop a community named Alset Villas (“Alset Villas”). Alset EHome was in the process of developing the 63 lots at Alset Villas in 2023. The selling price of these lots is anticipated to equal approximately $3.3 million. The closing of the transactions described above depends on the satisfaction of certain conditions. The sale of the first 70 lots closed on July 1, 2024 generating approximately $3.8 million. The sale of the additional 72 lots closed on October 10, 2024 generating approximately $3.9 million.

Previous wording

On January 27, 2023, Hapi Metaverse and New Electric CV Corporation (together with the Company, the “Lenders”) entered into a Convertible Credit Agreement (the “Credit Agreement”) with VEII. The Credit Agreement provides VEII with a maximum credit line of $1,500,000 with simple interest accrued on any advances of the money under the Credit Agreement at 8%. The Credit Agreement grants conversion rights to each Lender. Each Advance shall be convertible, in whole or in part, into shares of VEII’s Common Stock at the option of the Lender who made that Advance (being referred to as a “Conversion”), at any time and from time to time, at a price per share equal the “Conversion Price”. In the event that a Lender elects to convert any portion of an Advance into shares of VEII Common Stock in lieu of cash payment in satisfaction of that Advance, then VEII would issue to the Lender five (5) detachable warrants for each share of VEII’s Common Stock issued in a Conversion (“Warrants”). Each Warrant will entitle the Lender to purchase one (1) share of Common Stock at a per-share exercise price equal to the Conversion Price. The exercise period of each Warrant will be five (5) years from date of issuance of the Warrant. On February 23, 2023, Hapi Metaverse loaned VEII $1,400,000 (the “Loan Amount”). The Loan Amount can be converted into shares of VEII pursuant to the terms of the Credit Agreement for a period of three years. There is no fixed price for the derivative security until Hapi Metaverse converts the Loan Amount into shares of VEII Common Stock.

Current wording

On January 27, 2023, Hapi Metaverse and New Electric CV Corporation (together with the Company, the “Lenders”) entered into a Convertible Credit Agreement (the “1 st VEII Credit Agreement”) with VEII. The 1 st VEII Credit Agreement provides VEII with a maximum credit line of $1,500,000 with simple interest accrued on any advances of the money under the 1 st VEII Credit Agreement at 8%. The 1 st VEII Credit Agreement grants conversion rights to each Lender. Each Advance shall be convertible, in whole or in part, into shares of VEII’s Common Stock at the option of the Lender who made that Advance (being referred to as a “Conversion”), at any time and from time to time, at a price per share equal the “Conversion Price”. In the event that a Lender elects to convert any portion of an Advance into shares of VEII Common Stock in lieu of cash payment in satisfaction of that Advance, then VEII would issue to the Lender five (5) detachable warrants for each share of VEII’s Common Stock issued in a Conversion (“Warrants”). Each Warrant will entitle the Lender to purchase one (1) share of Common Stock at a per-share exercise price equal to the Conversion Price. The exercise period of each Warrant will be five (5) years from date of issuance of the Warrant. On February 23, 2023, Hapi Metaverse loaned VEII $1,400,000 (the “Loan Amount”). The Loan Amount can be converted into shares of VEII pursuant to the terms of the 1 st VEII Credit Agreement for a period of three years. There is no fixed price for the derivative security until Hapi Metaverse converts the Loan Amount into shares of VEII Common Stock.

Previous wording

On September 6, 2023, Hapi Metaverse converted $1,300,000 of the principal amount loaned to VEII into 7,344,632 shares of VEII’s Common Stock. Under the terms of the Credit Agreement, Hapi Metaverse received Warrants to purchase a maximum of 36,723,160 shares of VEII’s Common Stock at an exercise price of $0.1770 per share. Such warrants expire five (5) years from date of their issuance.

Current wording

On September 6, 2023, Hapi Metaverse converted $1,300,000 of the principal amount loaned to VEII into 7,344,632 shares of VEII’s Common Stock. Under the terms of the 1 st VEII Credit Agreement, Hapi Metaverse received Warrants to purchase a maximum of 36,723,160 shares of VEII’s Common Stock at an exercise price of $0.1770 per share. Such warrants expire five (5) years from date of their issuance.

Previous wording

On December 14, 2023, Hapi Metaverse entered into a Convertible Credit Agreement (“Credit Agreement”) with VEII. On December 15, 2023, Hapi Metaverse loaned VEII $1,000,000. The Credit Agreement was amended pursuant to an agreement dated December 19, 2023. Under the Credit Agreement, as amended, this amount can be converted into VEII’s Common Shares pursuant to the terms of the Credit Agreement for a period of three years. In the event that Hapi Metaverse converts this loan into shares of VEII’s Common Stock, the conversion price shall be $0.045 per share. In the event that Hapi Metaverse elects to convert any portion of the loan into shares of VEII’s Common Stock in lieu of cash payment in satisfaction of that loan, then VEII will issue to Hapi Metaverse five (5) detachable warrants for each share of VEII’s Common Stock issued in a conversion (“Warrants”). Each Warrant will entitle Hapi Metaverse to purchase one (1) share of VEII’s Common Stock at a per-share exercise price equal to the Conversion Price. The exercise period of each Warrant will be five (5) years from date of issuance of the Warrant. At the time of this filing, Hapi Metaverse has not converted the Loan Amount.

Current wording

On December 14, 2023, Hapi Metaverse entered into a Convertible Credit Agreement (“2 nd VEII Credit Agreement”) with VEII. On December 15, 2023, Hapi Metaverse loaned VEII $1,000,000. The 2 nd VEII Credit Agreement was amended pursuant to an agreement dated December 19, 2023. Under the 2 nd VEII Credit Agreement, as amended, this amount can be converted into VEII’s Common Shares pursuant to the terms of the 2 nd VEII Credit Agreement for a period of three years. In the event that Hapi Metaverse converts this loan into shares of VEII’s Common Stock, the conversion price shall be $0.045 per share. In the event that Hapi Metaverse elects to convert any portion of the loan into shares of VEII’s Common Stock in lieu of cash payment in satisfaction of that loan, then VEII will issue to Hapi Metaverse five (5) detachable warrants for each share of VEII’s Common Stock issued in a conversion (“Warrants”). Each Warrant will entitle Hapi Metaverse to purchase one (1) share of VEII’s Common Stock at a per-share exercise price equal to the Conversion Price. The exercise period of each Warrant will be five (5) years from date of issuance of the Warrant. At the time of this filing, Hapi Metaverse has not converted the Loan Amount.

Previous wording

On May 4, 2023, DSS distributed approximately 280 million shares of SHRG beneficially held by DSS and its subsidiaries in the form of a dividend to the shareholders of DSS common stock. As a result of this distribution, the Company directly received 70,426,832 shares of SHRG, and through its majority-owned subsidiary Alset International, and certain subsidiaries of Alset International, indirectly received additional 55,197,696 shares of SHRG. The Company and its majority-owned subsidiaries now collectively own 125,624,528 shares of SHRG, representing 33.4% of the issued and outstanding shares of SHRG Common Stock (such number of SHRG shares held and ownership percentage do not include any shares held by affiliates of the Company which we do not hold a majority interest in). Our CEO, Chan Heng Fai, directly and indirectly is the owner of an additional 37,947,756 shares of SHRG and is a beneficial owner of approximately 43.5% of SHRG shares (including those shares owned by Alset Inc. and its majority-owned subsidiaries).

Current wording

On May 4, 2023, DSS distributed approximately 280 million shares of SHRG beneficially held by DSS and its subsidiaries in the form of a dividend to the shareholders of DSS common stock. As a result of this distribution, the Company directly received 70,426,832 shares of SHRG, and through its majority-owned subsidiary Alset International, and certain subsidiaries of Alset International, indirectly received additional 55,197,696 shares of SHRG. The Company and its majority-owned subsidiaries now collectively own 89,732 shares of SHRG following a 1-for-1,400 reverse split of SHRG Common Stock on September 12, 2024, representing 29% of the issued and outstanding shares of SHRG Common Stock (such number of SHRG shares held and ownership percentage do not include any shares held by affiliates of the Company which we do not hold a majority interest in). Our CEO, Chan Heng Fai, directly and indirectly is the owner of an additional 27,106 shares of SHRG and is a beneficial owner of approximately 43.5% of the issued and outstanding SHRG shares (including those shares owned by Alset Inc. and its majority-owned subsidiaries).

Previous wording

On January 17, 2024, the Company received a Convertible Promissory Note (the “Convertible Note”) from SHRG, in exchange for a $250,000 loan made by the Company to SHRG. The Company may convert a portion or all of the outstanding balance due under the Convertible Note into shares of SHRG’s common stock at the average closing market price of SHRG stock within the last three (3) days from the date of conversion notice. The Convertible Note bears a 10% interest rate and has a scheduled maturity six (6) months from the date of the Convertible Note, or July 17, 2024. The maturity date was subsequently extended.

Current wording

On January 17, 2024, the Company received a Convertible Promissory Note (the “1 st SHRG Convertible Note”) from Sharing Services Global Corp., an affiliate of the Company, in exchange for a $250,000 loan made by the Company to SHRG. The Company may convert a portion or all of the outstanding balance due under the 1 st SHRG Convertible Note into shares of SHRG’s common stock at the average closing market price of SHRG stock within the last three (3) days from the date of conversion notice. The 1 st SHRG Convertible Note bears a 10% interest rate and has a scheduled maturity six (6) months from the date of the 1 st SHRG Convertible Note, or July 17, 2024. The terms of the note and maturity date were subsequently extended.

Previous wording

On March 20, 2024, HWH International Inc., a subsidiary of the Company (“HWH”), entered into a securities purchase agreement with SHRG, pursuant to which HWH purchased from SHRG a (i) Convertible Promissory Note in the amount of $250,000, convertible into 208,333,333 shares of SHRG’s common stock at the option of HWH, and (ii) certain warrants exercisable into 208,333,333 shares of SHRG’s common stock at an exercise price of $0.0012 per share, the exercise period of the warrant being five (5) years from the date of the securities purchase agreement, for an aggregate purchase price of $250,000. At the time of this filing, HWH has not converted any of the debt contemplated by the Convertible Note nor exercised any of the warrants.

Current wording

On March 20, 2024, the Company’s subsidiary HWH International Inc. entered into a securities purchase agreement with SHRG, pursuant to which HWH purchased from SHRG a (i) Convertible Promissory Note (the “2 nd SHRG Convertible Note) in the amount of $250,000, convertible into 148,810 shares of SHRG’s common stock at the option of HWH, and (ii) certain warrants exercisable into 148,810 shares of SHRG’s common stock at an exercise price of $1.68 per share, the exercise period of the warrant being five (5) years from the date of the securities purchase agreement, for an aggregate purchase price of $250,000. At the time of this filing, HWH has not converted any of the debt contemplated by the 2 nd SHRG Convertible Note nor exercised any of the warrants.

Previous wording

On May 9, 2024, HWH entered into a securities purchase agreement with SHRG, pursuant to which HWH purchased from SHRG a Convertible Promissory Note (the “Convertible Note”) in the amount of $250,000, convertible into 125,000,000 shares of SHRG’s common stock at the option of HWH for an aggregate purchase price of $250,000. The Convertible Note bears an 8% interest rate and has a scheduled maturity three years from the date of the Convertible Note. Additionally, upon signing the Convertible Note, SHRG owns the Company commitment fee of 8% of the principal amount, which will be paid either in cash or in common stock of SHRG, at the discretion of the Company.

Current wording

On May 9, 2024, HWH entered into a securities purchase agreement with SHRG, pursuant to which HWH purchased from SHRG a Convertible Promissory Note (the “3 rd SHRG Convertible Note”) in the amount of $250,000, convertible into 89,286 shares of SHRG’s common stock at the option of HWH for an aggregate purchase price of $250,000. The 3 rd SHRG Convertible Note bears an 8% interest rate and has a scheduled maturity three years from the date of the 3 rd SHRG Convertible Note. Additionally, upon signing the 3 rd SHRG Convertible Note, SHRG owns the Company commitment fee of 8% of the principal amount, which will be paid either in cash or in common stock of SHRG, at the discretion of the Company. At the time of this filing, HWH has not converted any of the debt contemplated by the 3 rd SHRG Convertible Note.

Previous wording

On June 6, 2024, the Company entered into a securities purchase agreement with SHRG, pursuant to which HWH purchased from SHRG a Convertible Promissory Note (the “Convertible Note”) in the amount of $250,000, convertible into 125,000,000 shares of SHRG’s common stock at the option of HWH for an aggregate purchase price of $250,000. The Convertible Note bears an 8% interest rate and has a scheduled maturity three years from the date of the Convertible Note. Additionally, upon signing the Convertible Note, SHRG owns the Company commitment fee of 8% of the principal amount $20,000 in total, which will be paid either in cash or in common stock of SHRG, at the discretion of the Company. At the time of this filing, HWH has not converted any of the debt contemplated by the Convertible Note.

Current wording

On June 6, 2024, HWH entered into a securities purchase agreement with SHRG, pursuant to which HWH purchased from SHRG a Convertible Promissory Note (the “4 th SHRG Convertible Note”) in the amount of $250,000, convertible into 89,286 shares of SHRG’s common stock at the option of HWH for an aggregate purchase price of $250,000. The Convertible Note bears an 8% interest rate and has a scheduled maturity three years from the date of the 4 th SHRG Convertible Note. Additionally, upon signing the 4 th SHRG Convertible Note, SHRG owns the Company commitment fee of 8% of the principal amount $20,000 in total, which will be paid either in cash or in common stock of SHRG, at the discretion of the Company. At the time of this filing, HWH has not converted any of the debt contemplated by the 4 th SHRG Convertible Note.

Previous wording

Summary of Statements of Operations for the Three and Six Months Ended June 30, 2024 and 2023

Current wording

Summary of Statements of Operations for the Three and Nine Months Ended September 30, 2024 and 2023

Previous wording

Revenue was $1,127,046 and $19,153,848 for the three months ended June 30, 2024 and 2023, respectively. Revenue was $7,213,253 and $20,080,784 for the six months ended June 30, 2024 and 2023, respectively. The decrease in property sales from the Lakes at Black Oak Project in the first half of 2024 contributed to lower revenue in this period.

Current wording

Revenue was $4,960,711 and $990,199 for the three months ended September 30, 2024 and 2023, respectively. Revenue was $12,173,964 and $21,070,983 for the nine months ended September 30, 2024 and 2023, respectively. The decrease in property sales from the Lakes at Black Oak Project in the first nine months of 2024 contributed to lower revenue in this period.

Previous wording

Revenue from rental business was $705,011 and $690,967 in the three months ended June 30, 2024 and 2023, respectively. Revenue from rental business was $1,425,505 and $1,324,778 in the six months ended June 30, 2024 and 2023, respectively. The Company expects that the revenue from this business will continue to increase as we acquire more rental houses and successfully rent them.

Current wording

Revenue from rental business was $724,699 and $705,334 in the three months ended September 30, 2024 and 2023, respectively. Revenue from rental business was $2,150,204 and $2,030,112 in the nine months ended September 30, 2024 and 2023, respectively. The Company expects that the revenue from this business will continue to increase as we acquire more rental houses and successfully rent them.

Previous wording

In May 2023, the Company entered into lease agreement for one of its model houses located in Montgomery County, Texas. The revenue from the lease was $6,300 and $12,600 in the three and six months ended June 30, 2024, respectively. The revenue from the lease was $4,200 in the three and six months ended June 30, 2023.

Current wording

In May 2023, the Company entered into lease agreement for one of its model houses located in Montgomery County, Texas. The revenue from the lease was $6,300 and $18,900 in the three and nine months ended September 30, 2024, respectively. The revenue from the lease was $6,300 and $10,500 in the three and nine months ended September 30, 2023.

Previous wording

In January 2024, the Company entered into lease agreement for another model house located in Montgomery County, Texas. The revenue from the lease was $6,603 and $13,205 in the three and six months ended June 30, 2024, respectively.

Current wording

In January 2024, the Company entered into lease agreement for another model house located in Montgomery County, Texas. The revenue from the lease was $6,602 and $19,807 in the three and nine months ended September 30, 2024, respectively.

Previous wording

In recent years, the Company expanded its biohealth segment to the South Korean market through one of the subsidiaries of HWH International Inc., HWH World Inc (“HWH World”). HWH World operates based on a direct sale model of health supplements. HWH World recognized $0 and $0 in revenue in the three months ended June 30, 2024 and 2023, respectively. HWH World recognized $0 and $12,587 in revenue in the six months ended June 30, 2024 and 2023, respectively.

Current wording

The Company operates its biohealth segment in the South Korean market through one of the subsidiaries of HWH International Inc., HWH World Inc (“HWH World”). HWH World operates based on a direct sale model of health supplements. HWH World recognized $0 and $0 in revenue in the three months ended September 30, 2024 and 2023, respectively. HWH World recognized $0 and $12,786 in revenue in the nine months ended September 30, 2024 and 2023, respectively.

Previous wording

The category described as “Other” includes corporate and financial services, food and beverage business, digital transformation technology, as it was minimal in 2024, and new venture businesses. “Other” includes certain costs that are not allocated to the reportable segments, primarily consisting of unallocated corporate overhead costs, including administrative functions not allocated to the reportable segments from global functional expenses.

Current wording

The category described as “Other” includes corporate and financial services, food and beverage business, digital transformation technology, and new venture businesses. “Other” includes certain costs that are not allocated to the reportable segments, primarily consisting of unallocated corporate overhead costs, including administrative functions not allocated to the reportable segments from global functional expenses.

Previous wording

The financial services, food and beverage businesses and new venture businesses are small and diversified, and accordingly they are not separately addressed as one independent category. In the three months ended June 30, 2024 and 2023, the revenue from other businesses was $422,035 and $271,931, respectively. In the six months ended June 30, 2024 and 2023, the revenue from other businesses was $755,248 and $552,270, respectively, generated by Korean, Singaporean and Chinese café shops and restaurants.

Current wording

The financial services, food and beverage businesses and new venture businesses are small and diversified, and accordingly they are not separately addressed as one independent category. In the three months ended September 30, 2024 and 2023, the revenue from other businesses was $421,012 and $278,545, respectively. In the nine months ended September 30, 2024 and 2023, the revenue from other businesses was $1,176,260 and $802,741, respectively, generated by Korean, Singaporean and Chinese café shops and restaurants.

Previous wording

Cost of revenues decreased from $11,738,493 in the three months ended June 30, 2023 to $829,958 in the three months ended June 30, 2024. Cost of revenues decreased from $12,427,774 in the six months ended June 30, 2023 to $5,488,325 in the six months ended June 30, 2024. The decrease is a result of the decrease in sales in the Lakes at Black Oak project. Capitalized construction expenses, finance costs and land costs are allocated to sales. We anticipate the total cost of revenues to increase as revenue increases.

Current wording

Cost of revenues increased from $581,059 in the three months ended September 30, 2023 to $2,949,824 in the three months ended September 30, 2024. Cost of revenues decreased from $13,008,833 in the nine months ended September 30, 2023 to $8,438,149 in the nine months ended September 30, 2024. The decrease is a result of the decrease in sales in the Lakes at Black Oak project. Capitalized construction expenses, finance costs and land costs are allocated to sales. We anticipate the total cost of revenues to increase as revenue increases.

Previous wording

The gross margin decreased from $7,415,355 to $297,088 in the three months ended June 30, 2023 and 2024, respectively. The gross margin decreased from $7,653,010 to $1,724,928 in the six months ended June 30, 2023 and 2024, respectively. The decrease of gross margin was caused by the decrease in sales in the Black Oak Project.

Current wording

The gross margin increased from $409,140 to $2,010,887 in the three months ended September 30, 2023 and 2024, respectively. The gross margin decreased from $8,062,150 to $3,735,815 in the nine months ended September 30, 2023 and 2024, respectively. The decrease of gross margin was caused by the decrease in sales in the Lakes at Black Oak Project.

Previous wording

The increase of operating expenses in the first half of 2024 compared to the same period of 2023 was mostly caused by recording of goodwill and investment.

Current wording

The increase of operating expenses in the first nine months of 2024 compared to the same period of 2023 was mostly caused by recording impairment of goodwill and investment.

Previous wording

In the three months ended June 30, 2024, the Company had other income of $1,659,507 compared to other expenses of $10,922,902 in the three months ended June 30, 2023. In the six months ended June 30, 2024, the Company had other expenses of $3,387,772 compared to other expenses of $13,156,354 in the six months ended June 30, 2023. The loss on sale of securities and loss on consolidation of subsidiary are the primary reason for the volatility in these two periods. Realized loss on security investment was $344,673 in the six months ended June 30, 2024, compared to $10,688,542 loss in the six months ended June 30, 2023. Loss on consolidation of subsidiary was $0 the six months ended June 30, 2024, compared to a loss of $21,657,036 in the six months ended June 30, 2023.

Current wording

In the three months ended September 30, 2024, the Company had other income of $2,433,020 compared to other expenses of $14,903,980 in the three months ended September 30, 2023. In the nine months ended September 30, 2024, the Company had other expenses of $6,994,516 compared to other expenses of $28,060,334 in the nine months ended September 30, 2023. The loss on sale of securities and loss on consolidation of subsidiary are the primary reason for the volatility in these two periods. Realized loss on security investment was $679,204 in the nine months ended September 30, 2024, compared to $11,291,166 loss in the nine months ended September 30, 2023. Loss on consolidation of subsidiary was $0 in the nine months ended September 30, 2024, compared to a loss of $21,657,036 in the nine months ended September 30, 2023.

Previous wording

In the three months ended June 30, 2024 the Company had net loss of $1,149,965 compared to net loss of $5,813,406 in the three months ended June 30, 2023. In the six months ended June 30, 2024, the Company had net loss of $8,463,756 compared to net loss of $10,136,588 in the six months ended June 30, 2023.

Current wording

In the three months ended September 30, 2024 the Company had net income of $1,469,239 compared to net loss of $17,026,008 in the three months ended September 30, 2023. In the nine months ended September 30, 2024, the Company had net loss of $6,994,516 compared to net loss of $27,162,596 in the nine months ended September 30, 2023.

Previous wording

Our real estate assets have decreased to $40,741,895 as of June 30, 2024 from $42,137,152 as of December 31, 2023. This decrease primarily reflects the sale of properties in the Lakes at Black Oak project.

Current wording

Our real estate assets have decreased to $37,904,992 as of September 30, 2024 from $42,137,152 as of December 31, 2023. This decrease primarily reflects the sale of properties in the Lakes at Black Oak project.

Previous wording

Our cash has decreased from $26,921,727 as of December 31, 2023 to $18,932,861 as of June 30, 2024. Our liabilities decreased from $9,066,700 at December 31, 2023 to $5,764,618 at June 30, 2024. Our total assets have decreased to $93,460,821 as of June 30, 2024 from $126,314,028 as of December 31, 2023 mainly due to decrease in cash held in Trust Account after shareholders of HWH International Inc. redeemed their shares.

Current wording

Our cash has decreased from $26,921,727 as of December 31, 2023 to $16,679,183 as of September 30, 2024. Our liabilities decreased from $9,066,700 at December 31, 2023 to $5,390,173 at September 30, 2024. Our total assets have decreased to $98,788,837 as of September 30, 2024 from $126,314,028 as of December 31, 2023 mainly due to decrease in cash held in Trust Account after shareholders of HWH International Inc. redeemed their shares.

Previous wording

Summary of Cash Flows for the Six Months Ended June 30, 2024 and 2023

Current wording

Summary of Cash Flows for the Nine Months Ended September 30, 2024 and 2023

Previous wording

Net cash used in operating activities was $5,897,249 in the first six months of 2024, as compared to net cash provided by operating activities of $7,409,770 in the same period of 2023. Property sales from the Black Oak project in 2023 were the main reason for the cash provided by operating activities in 2023.

Current wording

Net cash used in operating activities was $8,751,416 in the first nine months of 2024, as compared to net cash provided by operating activities of $8,255,675 in the same period of 2023. Property sales from the Black Oak project in 2023 were the main reason for the cash provided by operating activities in 2023.

Previous wording

Net cash provided by investing activities was $19,616,855 in the first six months of 2024, as compared to net cash used in investing activities of $606,983 in the same period of 2023. In the six months ended June 30, 2024 issued $1,118,864 in loans to related parties and $577,285 in loans receivable. At the same time, we received $101,096 from repayment of related party loan and withdrew cash from trust account of $21,102,871 for redemption of HWH’s shares. In the six months ended June 30, 2023 we invested $692,219 in marketable securities, issued $1,628,010 in loans to related parties and received $2,674,653 from repayment of related party notes receivable.

Current wording

Net cash provided by investing activities was $18,707,934 in the first nine months of 2024, as compared to net cash used in investing activities of $748,188 in the same period of 2023. In the nine months ended September 30, 2024, the Company issued $1,368,083 in loans to related parties and $1,212,021 in loans receivable. At the same time, we received $101,096 from repayment of related party loan and withdrew cash from trust account of $21,102,871 for redemption of HWH’s shares. In the nine months ended September 30, 2023 we invested $734,688 in real estate improvements, issued $1,693,455 in loans to related parties and received $2,675,735 from repayment of related party notes receivable.

Previous wording

Net cash used in financing activities was $21,351,570 in the six months ended June 30, 2024, compared to net cash provided of $3,416,971 in the six months ended June 30, 2023. The cash used in financing activities in the first six months of 2024 is caused by repayment of $378,960 of note payable and repayment of HWH’s shares of $21,102,871. In that same period, the Company borrowed $130,261 from commercial loan. The cash provided by financing activities in the first six months of 2023 is caused by the proceeds from stock issuance of $3,433,921.

Current wording

Net cash used in financing activities was $21,370,610 in the nine months ended September 30, 2024, compared to net cash provided of $3,408,560 in the nine months ended September 30, 2023. The cash used in financing activities in the first nine months of 2024 is caused by repayment of $398,000 of note payable and repayment of HWH’s shares of $21,102,871. In that same period, the Company borrowed $130,261 from commercial loan. The cash provided by financing activities in the first nine months of 2023 is caused by the proceeds from stock issuance of $3,433,921.

Previous wording

We believe that inflation has not had a material impact on our results of operations for the six months ended June 30, 2024 or the year ended December 31, 2023. We cannot assure you that future inflation will not have an adverse impact on our operating results and financial condition.

Current wording

We believe that inflation has not had a material impact on our results of operations for the nine months ended September 30, 2024 or the year ended December 31, 2023. We cannot assure you that future inflation will not have an adverse impact on our operating results and financial condition.

Previous wording

The effect of foreign exchange rate changes on the intercompany loans (under ASC 830), which mostly consist of loans from Singapore to the United States and which were approximately $37 million and $23 million on June 30, 2024 and December 31, 2023, respectively, are the reason for the significant fluctuation of foreign currency transaction Gain or Loss on the Condensed Consolidated Statements of Operations and Other Comprehensive Loss. Because the intercompany loan balances between Singapore and United States will remain at approximately $23 million over the next year, we expect this fluctuation of foreign exchange rates to still significantly 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 be reduced. However, at this moment, we do not expect to repay the intercompany loans in the short term.

Current wording

The effect of foreign exchange rate changes on the intercompany loans (under ASC 830), which mostly consist of loans from Singapore to the United States and which were approximately $26 million and $23 million on September 30, 2024 and December 31, 2023, respectively, are the reason for the significant fluctuation of foreign currency transaction Gain or Loss on the Condensed Consolidated Statements of Operations and Other Comprehensive Loss. Because the intercompany loan balances between Singapore and United States will remain at approximately $26 million over the next year, we expect this fluctuation of foreign exchange rates to still significantly 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 be reduced. However, at this moment, we do not expect to repay the intercompany loans in the short term.