COMMITMENTS AND CONTINGENCIES

9 Months Ended

Sep. 30, 2024

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS AND CONTINGENCIES

13. COMMITMENTS AND CONTINGENCIES

Lots Sales Agreement

● Ballenger Project

Certain arrangements for the sale of buildable lots to NVR require the Company to credit NVR with an amount equal to one year of the FFB assessment. Under ASC 606, the credits to NVR are not in exchange for a distinct good or service and accordingly, the amount of the credit was recognized as the reduction of revenue. As of September 30, 2024 and December 31, 2023, the accrued balance due to NVR was $189,475.

● Lakes at Black Oak Project

- Agreement to Sell 142 Lots and 63 Lots

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.” 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.

Leases

The Company leases offices in Maryland, Singapore, Hong Kong, South Korea and China through leased spaces aggregating approximately 30,000 square feet, under leases expiring on various dates from October 2024 to April 2029. The leases have rental rates ranging from $283 to $23,020 per month. Our total rent expense under these office leases was $292,620 and $274,980 in the three months ended September 30, 2024 and 2023, respectively. Our total rent expense under these office leases was $899,294 and $800,762 in the nine months ended September 30, 2024 and 2023, respectively. Total cash paid for operating leases was $933,864 and $846,983 for the nine months ended September 30, 2024 and 2023, respectively. The following table outlines the details of lease terms:

Office Location	Lease Term as of September 30, 2024
Singapore - AI	June 2023 to May 2026
Singapore – F&B	October 2024 to September 2027
Singapore – Four Seasons Park	July 2022 to September 2024
Singapore – Hapi Cafe	July 2024 to June 2026
Hong Kong - Office	October 2022 to October 2024
Hong Kong - Warehouse	November 2022 to October 2024
Hong Kong - Shop	October 2022 to September 2024
Hong Kong – Hapi Travel	September 2023 to August 2025
South Korea – Hapi Cafe	August 2022 to August 2025
South Korea – HWH World	August 2022 to July 2025
South Korea - Cafe	April 2024 to February 2027
Bethesda, Maryland	April 2024 to March 2027
China - Cafe	December 2023 - November 2024
China - Office	March 2023 – March 2027
China - Shop	June 2024 to April 2029
Taiwan - Cafe	May 2024 to October 2027

The Company adopted ASU No. 2016-02, Leases (Topic 842) (“ASU 2016-02”) to recognize a right-of-use asset and a lease liability for all the leases with terms greater than twelve months. We elected the practical expedient to not recognize operating lease right-of-use assets and operating lease liabilities for lease agreements with terms less than 12 months. Operating lease right-of-use assets and operating lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. As our leases do not provide a readily determinable implicit rates, we estimate our incremental borrowing rates to discount the lease payments based on information available at lease commencement. Our incremental borrowings rates are at a range from 0.35% to 7.2% in 2024 and 2023, which were used as the discount rates. The Company’s weighted-average remaining lease term relating to its operating leases are 2.32 years, with a weighted-average discount rate of the 3.76%. The balances of operating lease right-of-use assets and operating lease liabilities as of September 30, 2024 were $1,832,925 and $1,903,121 respectively. The balances of operating lease right-of-use assets and operating lease liabilities as of December 31, 2023 were $1,467,372 and $1,499,263, respectively.

The table below summarizes future payments due under these leases as of September 30, 2024.

For the Twelve Months Ending September 30:

2025	$	971,359
2026		584,477
2027		313,991
2028		40,951
2029		18,372
Total Minimum Lease Payments	$	1,929,150
Less: Effect of Discounting		(26,029	)
Present Value of Future Minimum Lease Payments		1,903,121
Less: Current Obligations under Leases		(941,356	)
Long-term Lease Obligations	$	961,765

Security Deposits

Our rental-home lease agreements require tenants to provide a one-month security deposits. The property management company collects all security deposits and maintains them in a trust account. The Company also has obligation to refund these deposits to the renters at the time of lease termination. As of September 30, 2024 and December 31, 2023, the security deposits held in the trust account were $316,510 and $309,688, respectively.