SEC Form 10-Q filed by HWH International Inc.

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2025

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________ to __________

Commission File No. 001-41254

HWH INTERNATIONAL INC.

(Exact name of registrant as specified in its charter)

Delaware		87-3296100
(State or other jurisdiction		(I.R.S. Employer
of incorporation or organization)		Identification No.)

4800 Montgomery Lane, Suite 210

Bethesda, MD 20814

(Address of Principal Executive Offices, including zip code)

301-971-3955

(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

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

Title of each class	Trading Symbol	Name of each exchange on which registered

Common Stock, par value $0.0001 per share	HWH	The Nasdaq Capital Market

Securities registered pursuant to Section 12(g) of the Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☐ No ☒

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☒

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

☐	Large accelerated filer	☐	Accelerated filer
☒	Non-accelerated filer	☒	Smaller reporting company
		☒	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. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act): Yes ☐ No ☒

As of May 15, 2025, there were 6,476,400 shares of Common Stock, par value $0.0001 per share of the Company issued and outstanding.

HWH INTERNATIONAL INC.

Form 10-Q For the Quarter Ended March 31, 2025

Table of Contents

		Page
Part I. Financial Information		1

Item 1.	Financial Statements (Unaudited)	1
	Condensed Consolidated Balance Sheets at March 31, 2025 (Unaudited) and December 31, 2024	1
	Condensed Consolidated Statements of Operations and Other Comprehensive Loss for the Three Months Ended March 31, 2025 and 2024 (Unaudited)	2
	Condensed Consolidated Statements of Changes in Stockholders’ Equity for the Three Months Ended March 31, 2025 and 2024 (Unaudited)	3
	Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2025 and 2024 (Unaudited)	4
	Notes to Unaudited Condensed Consolidated Financial Statements	5
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	26
Item 3.	Quantitative and Qualitative Disclosures Regarding Market Risk	34
Item 4.	Controls and Procedures	34

Part II. Other Information		35

Item 1.	Legal Proceedings	35
Item 1A.	Risk Factors	35
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	35
Item 3.	Defaults Upon Senior Securities	35
Item 4.	Mine Safety Disclosures	35
Item 5.	Other Information	35
Item 6.	Exhibits	36

Part III. Signatures		37

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements.

HWH International Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

	March 31, 2025 (Unaudited)			December 31, 2024
ASSETS

Current Assets
Cash	$	4,176,546		$	4,341,746
Account receivable, net		35,106			17,546
Inventory		2,585			1,574
Other receivables, net		313,455			342,712
Deposit		209,409			-
Convertible loans receivable - related party, at fair value		1,061,372			744,652
Investment security – related party		101,125			13,272
Prepaid expenses		7,912			13,495
Total Current Assets	$	5,907,510		$	5,474,997

Non-Current Assets
Property and equipment, net	$	32,133		$	33,588
Deposit		142,645			351,240
Investment at cost		141			140
Operating lease right-of-use assets, net		448,901			548,757
Total Non-Current Assets	$	623,820		$	933,725

TOTAL ASSETS	$	6,531,330		$	6,408,722

LIABILITIES AND STOCKHOLDERS’ DEFICIT

Current Liabilities
Accounts payable and accrued expenses	$	545,229		$	483,430
Accrued commissions		73,104			73,022
Due to related parties, net		760,619			1,191,960
Operating lease liabilities - current		285,084			340,651
Notes payable - current		981,595			1,222,211
Deferred revenue		14,872			-
Total Current Liabilities	$	2,660,503		$	3,311,274

Non-Current Liabilities
Operating lease liabilities - non-current	$	175,235		$	220,249
Total Non-Current Liabilities	$	175,235		$	220,249

Commitments and Contingencies (Note 13)		-			-

Stockholders’ Equity
Preferred stock, $0.0001 par value; 1,000,000 shares authorized; none issued and outstanding as of March 31, 2025 and December 31, 2024		-			-
Common stock, $0.0001 par value; 55,000,000 shares authorized; 6,476,400 and 5,593,920 issued and outstanding as of March 31, 2025 and December 31, 2024*		647			559
Additional paid in capital		10,836,439			9,339,413
Accumulated other comprehensive loss		(360,547	)		(257,598	)
Accumulated deficit		(6,882,141	)		(6,317,010	)
Total HWH International Inc. Stockholders’ Equity	$	3,594,398		$	2,765,364
Non-controlling interests		101,194			111,835
Total Stockholders’ Equity		3,695,592			2,877,199

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	6,531,330		$	6,408,722

*	The common stock share amounts were adjusted retrospectively to reflect the 5-for-1 reverse stock split on February 24, 2025

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

HWH International Inc. and Subsidiaries

Condensed Consolidated Statements of Operations and Other Comprehensive Loss

For the Three Months Ended March 31, 2025 and 2024 (Unaudited)

	Three Months Ended March 31, 2025			Three Months Ended March 31, 2024

Revenue	$	295,197		$	286,110

Cost of revenue	$	(147,603	)	$	(122,813	)

Gross profit	$	147,594		$	163,297

Operating expenses:
General and administrative expenses	$	(664,242	)	$	(1,129,191	)
Impairment of convertible note receivable – related party, and equity method investment - related party		-			(366,192	)
Impairment loss on goodwill		(77,480	)		-
Total Operating expenses	$	(741,722	)	$	(1,495,383	)

Other income (expense)
Other income	$	29,587		$	78,013
Interest expense		(50,126	)		(18,131	)
Foreign exchange transaction gain (loss)		66,070			(49,571	)
Loss on equity method investment - related party		-			(14,744	)
Unrealized gain on convertible note receivable – related party		17,442			-
Total Other income (expense)	$	62,973		$	(4,433	)

Loss before provision for income taxes		(531,155	)		(1,336,519	)

Income taxes		(42,948	)		-

Net loss	$	(574,103	)	$	(1,336,519	)

Less: Net (loss) income attributable to non-controlling Interests		(8,972	)		319

Net loss attributable to common stockholders	$	(565,131	)	$	(1,336,838	)

Net Loss		(574,103	)		(1,336,519	)
Other comprehensive income, net of tax:
Foreign currency translation adjustment	$	(102,965	)	$	86,818
Total comprehensive loss, net of tax:	$	(677,068	)	$	(1,249,701	)

Less Comprehensive (loss) income attributable to non-controlling interests		(8,988	)		319
Total Comprehensive loss attributable to common stockholders	$	(668,080	)	$	(1,250,020	)


	Three Months Ended March 31, 2025							Three Months Ended March 31, 2024
		Common stock			Class A common stock		Class B common stock		Common stock			Class A common stock			Class B common stock
Loss per common share
Basic	$	(0.09	)	$	-	$	-	$	(0.44	)	$	(0.44	)	$	(0.44	)
Diluted	$	(0.09	)	$	-	$	-	$	(0.44	)	$	(0.44	)	$	(0.44	)

Weighted average number of common shares outstanding*
Basic*		6,416,274			-		-		2,959,591			8,330			37,912
Diluted*		6,416,274			-		-		2,959,591			8,330			37,912

*	The numbers of weighted average outstanding common stock - basic and diluted were adjusted retrospectively to reflect the 5-for-1 reverse stock split on February 24, 2025

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

HWH International Inc. and Subsidiaries

Condensed Consolidated Statements of Changes in Stockholders’ Equity (Deficit)

For the Three Months Ended March 31, 2025 and 2024

(Unaudited)

	Shares		Par Value $0.0001		Shares		Par Value $0.0001		Shares		Par Value $0.0001		Additional Paid in Capital			Other Comprehensive (Loss) Income			Accumulated Deficit			Stockholders’ Equity (Deficit)			Non- controlling interests			Stockholders’ Equity (Deficit)
	Class A Common stock				Class B Common stock				Common Stock				Additional			Accumulated Other						Total HWH International Inc.			Non-			Total
	Shares		Par Value $0.0001		Shares		Par Value $0.0001		Shares		Par Value $0.0001		Paid in Capital			Comprehensive Loss			Accumulated Deficit			Stockholders’ Equity			controlling interests			Stockholders’ Equity
Balances at December 31, 2024		-		-		-		-		5,593,920	$	559	$	9,339,413		$	(257,598	)	$	(6,317,010	)	$	2,765,364		$	111,835		$	2,877,199

Issuance of Common Stock		-		-		-		-		632,500	$	63	$	1,409,795			-			-		$	1,409,858			-		$	1,409,858
Warrants exercised to Common Stock		-		-		-		-		250,000	$	25	$	100	)		-			-		$	125			-		$	125
Revaluation for SHRG note receivable and warrants		-		-		-		-		-		-	$	87,131			-			-		$	87,131			-		$	87,131
Acquisition of LEH Insurance Group LLC		-		-		-		-		-		-		-			-			-	)		-		$	(1,653	)	$	(1,653	)
Net loss		-		-		-		-		-		-		-			-		$	(565,131	)	$	(565,131	)	$	(8,972	)	$	(574,103	)
Foreign currency translation adjustment		-		-		-		-		-		-		-		$	(102,949	)		-		$	(102,949	)	$	(16	)	$	(102,965	)

Balances at March 31, 2025		-		-		-		-		6,476,420	$	647	$	10,836,439		$	(360,547	)	$	(6,882,141	)	$	3,594,398		$	101,194		$	3,695,592

	Class A Common stock						Class B Common stock						Common Stock				Additional			Accumulated Other						Total HWH International Inc.			Non-		Total
	Shares			Par Value $0.0001			Shares			Par Value $0.0001			Shares		Par Value $0.0001		Paid in Capital			Comprehensive Loss			Accumulated Deficit			Stockholders’ Deficit			controlling interests		Stockholders’ Deficit
Balances at December 31, 2023		94,750		$	9			431,250		$	43			2,000	$	-	$	155,984		$	(197,051	)	$	(3,567,016	)	$	(3,608,031	)	$	8,666	$	(3,599,365	)
Balances		94,750		$	9			431,250		$	43			2,000	$	-	$	155,984		$	(197,051	)	$	(3,567,016	)	$	(3,608,031	)	$	8,666	$	(3,599,365	)

Issuance of Common Stock to EF Hutton for Deferred Underwriting Compensation		-			-			-			-			29,889	$	3	$	1,509,387			-			-		$	1,509,390			-	$	1,509,390
Issuance of Common Stock during Merger		-			-			-			-			2,686,772	$	269	$	(294	)		-			-		$	(25	)		-	$	(25	)
Convert Common Stock Class A and B to Common Stock		(94,750	)	$	(9	)		(431,250	)	$	(43	)		526,000	$	52		-			-			-			-			-		-
Revaluation for SHRG note receivable and warrants		-			-			-			-			-		-	$	216,188			-			-		$	216,188		$	-	$	216,188
Change in Non-Controlling Interest Ketomei		-			-			-			-			-		-		-			-			-			-		$	155,514	$	155,514
Net loss		-			-			-			-			-		-		-			-		$	(1,336,838	)	$	(1,336,838	)	$	319	$	(1,336,519	)

Foreign currency translation adjustment		-			-			-			-			-		-		-		$	86,818			-		$	86,818		$	-	$	(86,818	)

Balances at March 31, 2024		-			-			-			-			3,244,661	$	324	$	1,881,265		$	(110,233	)	$	(4,903,854	)	$	(3,132,498	)	$	164,499	$	(2,967,999	)
Balances		-			-			-			-			3,244,661	$	324	$	1,881,265		$	(110,233	)	$	(4,903,854	)	$	(3,132,498	)	$	164,499	$	(2,967,999	)

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

HWH International Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows

For the Three Months Ended March 31, 2025 and 2024 (Unaudited)

Three Months

Ended

March 31, 2025

Three Months

Ended

March 31, 2024

Cash flows from operating activities:

(1,336,519