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INVESTMENTS MEASURED AT FAIR VALUE
 12 Months Ended
Dec. 31, 2024
Investments, All Other Investments [Abstract]  
INVESTMENTS MEASURED AT FAIR VALUE

12. INVESTMENTS MEASURED AT FAIR VALUE

 

Financial assets measured at fair value on a recurring basis are summarized below and disclosed on the consolidated balance sheets as of December 31, 2024 and 2023:

 

   Fair Value Measurement Using   Amount at 
   Level 1   Level 2   Level 3   Fair Value 
December 31, 2024                    
Assets                    
Investment Securities- Fair Value Option  $3,565,089   $7,463,324   $-   $11,028,413 
Investment Securities- Trading   2,612,293    2,061,230    -    4,673,523 
Warrants - APW   -    -    973    973 
Warrants - VEII   -    1,299,973    -    1,299,973 
Warrants - SHRG   -    13,272    -    13,272 
Convertible Loan Receivable - VEII   -    569,630    -    569,630 
Convertible Loan Receivable - SHRG   -    1,212,746    -    1,212,746 
Total Investment in Securities at Fair Value  $6,177,382   $12,620,175   $973   $18,798,530 

 

 

   Fair Value Measurement Using   Amount at 
   Level 1   Level 2   Level 3   Fair Value 
December 31, 2023                    
Assets                    
Investment Securities- Fair Value Option  $7,537,472   $2,100,720   $-   $9,638,192 
Investment Securities- Trading   35,036    1,779,601    -    1,814,637 
Convertible Note Receivable   -    -    77,307    77,307 
Warrants - APW   -    -    430    430 
Warrants - VEII   -    2,487,854    -    2,487,854 
Convertible Loan Receivable - VEII   -    1,207,627         1,207,627 
Total Investment in Securities at Fair Value  $7,572,508   $7,575,802   $77,737   $15,226,047 

 

Realized gain on investment securities for the year ended December 31, 2024 was $461,247 and realized loss on investment in securities for the year ended December 31, 2023 was $11,375,747. Unrealized loss on securities investment was $942,213 and $2,899,286 in the years ended December 31, 2024 and 2023, respectively. These losses were recorded directly to net loss. The change in fair value of the convertible note receivable in the years ended December 31, 2024 and 2023 was $287,812 and $0 gain, respectively, and was recorded in consolidated statements of stockholders’ equity.

 

For U.S. trading stocks, we use Bloomberg Market stock prices as the share prices to calculate fair value. For overseas stock, we use the stock price from local stock exchange to calculate fair value. The following chart shows details of the fair value of equity security investments at December 31, 2024 and 2023, respectively.

 

   Share price       Market Value    
   12/31/2024   Shares   12/31/2024   Valuation
                
DSS (Related Party)*  $0.900    3,961,210   $3,565,089   Investment in Securities at Fair Value
                   
Trading Stock            $2,612,293   Investment in Securities at Fair Value
                   
    Total Level 1 Equity Securities   $6,177,382    
                   
Holista  $0.008    1,000   $8   Investment in Securities at Fair Value
                   
New Electric CV (Related Party)  $0.000    354,039,000   $0   Investment in Securities at Fair Value
                   
AMBS  $0.000    20,000,000   $0   Investment in Securities at Fair Value
                   
Value Exchange (related Party)  $0.035    21,179,275   $749,746   Investment in Securities at Fair Value
                   
Sharing Services (Related Party)**  $1.000    89,732   $89,732   Investment in Securities at Fair Value
                   
Impact BioMedical (Related Party)  $

1.450

    

4,568,165

   $

6,623,838

   Investment in Securities at Fair Value
                   
Trading Stock            $2,061,230   Investment in Securities at Fair Value
                   
    Total Level 2 Equity Securities   $9,524,554    
Nervotech   N/A    1,666   $589   Investment in Securities at Cost
K Beauty   N/A    3,600   $16,733   Investment in Securities at Cost
Ideal Food and Beverages   N/A    19,000   $0   Investment in Securities at Cost
HapiTravel Holding   N/A    19,000   $140   Investment in Securities at Cost
                   
    Total Equity Securities    $15,719,398    

 

 

   Share price       Market Value    
   12/31/2023   Shares   12/31/2023   Valuation
                
DSS (Related Party)*  $2.400    3,140,613   $7,537,472   Investment in Securities at Fair Value
                   
Trading Stock            $35,036   Investment in Securities at Fair Value
                   
    Total Level 1 Equity Securities   $7,572,508    
                   
Holista  $0.007    36,159,845   $246,556   Investment in Securities at Fair Value
                   
New Electric CV (Related Party)  $0.000    354,039,000   $0   Investment in Securities at Fair Value
                   
AMBS  $0.001    20,000,000   $10,000   Investment in Securities at Fair Value
                   
Value Exchange (related Party)  $0.067    21,179,275   $1,429,602   Investment in Securities at Fair Value
                   
Sharing Services (Related Party)**  $4.620    89,732   $414,562   Investment in Securities at Fair Value
                   
Trading Stock            $1,779,601   Investment in Securities at Fair Value
                   
    Total Level 2 Equity Securities   $3,880,321    
Nervotech   N/A    1,666   $37,876   Investment in Securities at Cost
K Beauty   N/A    3,600   $16,636   Investment in Securities at Cost
                   
    Total Equity Securities    $11,507,341    

 

*On January 4, 2024 DSS Inc. effected a reverse stock split of 1 for 20.

 

**On September 13, 2024 Sharing Services effected a reverse stock split of 1 for 1,400.

 

Changes in the observable input values would likely cause material changes in the fair value of the Company’s Level 3 financial instruments. A significant increase (decrease) in this likelihood would result in a higher (lower) fair value measurement.

 

The table below provides a summary of the changes in fair value which are recorded through other income (loss), including net transfers in and/or out of all financial assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) during the years ended December 31, 2024 and 2023:

 

   Total 
Balance at January 1, 2023  $416,164 
Net gain   (338,427)
Balance at December 31, 2023  $77,737 
Impairment   (77,307)
Net gain   (543)
Balance at December 31, 2024  $973 

 

Vector Com Convertible Bond

 

On February 26, 2021, the Company invested approximately $88,599 in the convertible note of Vector Com Co., Ltd (“Vector Com”), a private company in South Korea. The interest rate is 2% per annum. The conversion price is approximately $21.26 per common share of Vector Com. As of December 31, 2023, the Management estimated the fair value of the note to be $77,307. The Company wrote off this loan at March 31, 2024.

 

Warrants

 

APW

 

On July 17, 2020, the Company purchased 122,039,000 shares, approximately 0.5% ownership, and 1,220,390,000 warrants with an exercise price of $0.0001 per share, from APW, for an aggregated purchase price of $122,039. During 2021, the Company exercised 232,000,000 of the warrants to purchase 232,000,000 shares of APW for the total consideration of $232,000, leaving the balance of outstanding warrants of 988,390,000 at December 31, 2021. The Company did not exercise any warrants during years ended December 31, 2023 and 2024. We value APW warrants under level 3 category through a Black Scholes option pricing model and the fair value of the warrants from APW was $973 as of December 31, 2024 and $430 as of December 31, 2023.

 

 

The fair value of the APW warrants under level 3 category as of December 31, 2024 and 2023 was calculated using a Black-Scholes valuation model valued with the following weighted average assumptions:

 

   December 31, 2024   December 31, 2023 
Stock Price  $0.0001   $0.0001 
Exercise Price  $0.001   $0.001 
Risk-free Interest Rate   4.62%   4.62%
Annualized volatility   869.4%   869.4%
Dividend Yield   0.00    0.00 
Year to Maturity   5.56    6.56 

 

VEII

 

On September 6, 2023, the Company received warrants to purchase shares of VEII, a related party listed company. For further details on this transaction, refer to Note 7 - Related Party Transactions, Note Receivable from a Related Party. As of December 31, 2024 and 2023, the fair value of the warrants was $1,299,973 and $2,487,854, respectively. The Company did not exercise any warrants during the years ended December 31, 2024 and 2023. The Company values VEII warrants under level 3 category through a Black Scholes option pricing model.

 

The fair value of the VEII warrants under level 3 category as of December 31, 2024 and 2023 was calculated using a Black-Scholes valuation model valued with the following weighted average assumptions:

 

   December 31, 2024   December 31, 2023 
Stock Price  $0.0354   $0.0677 
Exercise Price  $0.1770   $0.1770 
Risk-free Interest Rate   7.50%   8.50%
Annualized volatility   458.92%   275.85%
Dividend Yield   0.00    0.00 
Year to Maturity   3.68    4.68 

 

SHRG

 

On March 20, 2024, HWH International Inc., 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 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 Convertible Note nor exercised any of the warrants. As of December 31, 2024, the fair value of the warrants was $53,659.

 

The fair value of the SHRG warrants under level 2 category as of December 31, 2024, was calculated using binomial option pricing model valued with the following weighted average assumptions:

 

 SCHEDULE OF SIGNIFICANT INPUTS AND ASSUMPTIONS

   December 31, 2024 
Stock Price  $1.0000 
Exercise Price  $1.6800 
Risk-free Interest Rate   4.34%
Annualized volatility   204.14%
Dividend Yield   0.00 
Year to Maturity   4.21 

 

 

Convertible Loan Receivables

 

The Company has elected to recognize the convertible loan receivables at fair value and therefore there was no further evaluation of embedded features for bifurcation. The Company engaged third party valuation firm to perform the valuation of convertible loans. The fair value of the convertible loans is calculated using the binomial tree model based on probability of remaining as straight debt using discounted cash flow.

 

The following table presents summarized unaudited financial information for our investments that we elected the fair value option that would otherwise be accounted for under the equity method of accounting.

 

   Summarized Financial Information 
   Assets   Liabilities   Net Loss 
December 31, 2024               
APW*  $864,000   $1,049,000   $(63,000)
DSS*  $142,657,000   $72,979,000   $(21,016,000)
VEII*  $6,844,729   $10,744,581   $(640,853)
SHRG**  $6,257,230   $10,470,791   $(2,869,424)
                
December 31, 2023               
APW  $872,000   $837,000   $(594,000)
Holista  $3,893,309   $4,737,129   $(2,376,748)
DSS  $153,192,000   $69,978,000   $(77,524,000)
VEII  $5,218,993   $8,548,823   $(6,734,911)
SHRG***  $7,821,341   $8,641,133   $(6,364,992)

 

* Data derived from Financial Statement as of September 30, 2024, which was the latest available date source we could reach. 12-month Net Loss was estimated by adding one-third of 9-month Net Loss.
** Data derived from Financial Statement as of September 30, 2024, which was the latest available date source we could reach. 12-month Net Loss was estimated by doubling the 6-month Net Loss.
*** Data derived from Financial Statement for the nine months ended December 31, 2023. 12-month Net Loss was estimated by adding one-third of 9-month Net Loss.