GOODWILL

9 Months Ended

Sep. 30, 2024

Goodwill and Intangible Assets Disclosure [Abstract]

GOODWILL

8. GOODWILL

The Company continually evaluates potential acquisitions that align with the Company’s plans, namely, starting the F&B business in Asia. Starting an F&B business in Hong Kong, China, and Taiwan can be an excellent opportunity due to the large consumer market, diverse food culture, high demand for international cuisine, favorable business environment, skilled labor force, and opportunities for growth. On October 4, 2022, the Company completed its F&B business acquisition of MOC HK Limited (“MOC”), a F&B business started in Hong Kong. The accompanying condensed consolidated financial statements include the operations of the acquired entity from its acquisition date. The acquisition has been accounted for as a business combination. Accordingly, consideration paid by the Company to complete the acquisition is initially allocated to the acquired assets and liabilities assumed based upon their estimated acquisition date fair values.

As a result of the acquisition of MOC, goodwill of $60,343 generated in a business combination represents the purchase price of $70,523 in excess of identifiable tangible and intangible assets. Goodwill and intangible assets that have an indefinite useful life are not amortized. Instead, they are reviewed periodically for impairment.

On September 16, 2024, the Company temporarily ceased the café business of MOC after the café’s lease expired and MOC declined to enter into a new lease with the landlord. The Company is searching for a better location to restart the business in the future. As a result, the goodwill of $60,343 was fully impaired on September 30, 2024.

On April 18, 2024, Hapi Acquisition Pte Ltd (“HAPL”), the Company’s subsidiary, completed acquisition of Hapi Café Company Limited (“HCTW”), an F&B business started in Taiwan. The accompanying condensed consolidated financial statements include the operations of the acquired entity from its acquisition date. The acquisition has been accounted for as a business combination. Accordingly, consideration paid by HAPL to complete the acquisition is initially allocated to the acquired assets and liabilities assumed based upon their estimated acquisition date fair values.

As of the date of acquisition, HCTW had a total of $429,962 due to a related party, Alset Business Development Pte. Ltd, (“ABDPL”) a subsidiary of the Company. HCTW borrowed the money from ABDPL since 2022 for its business start-up and daily operations. As a result of the acquisition of HCTW, the Company eliminated amounts due to ABDPL.

As a result of the acquisition of HCTW, goodwill of $353,616 generated in a business combination represents the purchase price of $3,300 in excess of identifiable tangible and intangible assets. Goodwill and intangible assets that have an indefinite useful life are not amortized. Instead, they are reviewed periodically for impairment. The Company impaired the goodwill $353,616 as a loss during the nine months ended September 30, 2024 due to the poor financial situation of HCTW.

The table below reflects the Company’s estimates of the acquisition date fair value of the assets acquired and liabilities assumed for the 2024 acquisition:

	HCTW
Purchase Price
Cash	$	3,300
Total purchase consideration	$	3,300
Purchase Price Allocation
Assets acquired
Current assets	$	24,175
Deposit		41,987
Property and Equipment, net		47,890
Operating lease right-of-use assets, net		379,424
Total assets acquired	$	493,476
Liabilities assumed:
Current liabilities	$	(2,680	)
Due to related party		(429,962	)
Operating lease liability		(411,150	)
Total liabilities assumed	$	(843,792	)
Net assets acquired	$	(350,316	)
Goodwill	$	353,616
Total purchase consideration	$	3,300

The Company evaluates goodwill on an annual basis in the fourth quarter or more frequently if management believes indicators of impairment exist. Such indicators could include, but are not limited to (1) a significant adverse change in legal factors or in business climate, (2) unanticipated competition, or (3) an adverse action or assessment by a regulator. The Company first assesses qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount, including goodwill. If management concludes that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, management conducts a quantitative goodwill impairment test. The impairment test involves comparing the fair value of the applicable reporting unit with its carrying value. The Company estimates the fair values of its reporting units using a combination of the income, or discounted cash flows, approach and the market approach, which utilizes comparable companies’ data. If the carrying amount of a reporting unit exceeds the reporting unit’s fair value, an impairment loss is recognized in an amount equal to that excess, limited to the total amount of goodwill allocated to that reporting unit. The Company’s evaluation of goodwill completed during the year resulted in no impairment losses.

The following table summarizes changes in the carrying amount of goodwill for the nine months ended September 30, 2024 and the year ended December 31, 2023.

	September 30, 2024			December 31, 2023
Balance at beginning of the period	$	60,273		$	60,343
Add: acquisition of HCTW		353,616			-
Less: impairment loss of goodwill of HCTW		(353,616	)		-
Less: impairment loss of goodwill of MOC		(60,557	)		-
Foreign currency exchange adjustment		284			(70	)
Balance as of end of the period	$	-		$	60,273