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ASSETS MEASURED AT FAIR VALUE
 6 Months Ended
Jun. 30, 2025
Assets Measured At Fair Value  
ASSETS MEASURED AT FAIR VALUE

11. ASSETS MEASURED AT FAIR VALUE

 

Financial assets measured at fair value on a recurring basis are summarized below and disclosed on the condensed consolidated balance sheet as of June 30, 2025 and December 31, 2024:

 

   Fair Value Measurement Using   Amount at 
   Level 1   Level 2   Level 3   Fair Value 
June 30, 2025                    
Assets                    
Investment Securities- Fair Value Option  $3,723,538   $540,530   $-   $4,264,068 
Investment Securities- Trading   3,239,287    3,770,682    -    7,009,969 
Warrants – NECV   -    -    973    973 
Warrants - VEII   -    701,602    -    701,602 
Warrants - SHRG   -    748    -    748 
Convertible Loan Receivable - VEII   -    586,418    -    586,418 
Convertible Loan Receivable - SHRG   -    1,330,294    -    1,330,294 
Total Assets at Fair Value  $6,962,825   $6,930,274   $973   $13,894,072 

 

   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 

 

 

Realized loss on investment securities for the three months ended June 30, 2025 was $2,929,288 and realized loss on investment securities for the three months ended June 30, 2024 was $192,205. Realized loss on investment securities for the six months ended June 30, 2025 was $3,109,384 and realized loss on investment securities for the six months ended June 30, 2024 was $344,673. Unrealized gain on securities investment was $2,236,652 and unrealized loss was $1,676,711 in the three months ended June 30, 2025 and 2024, respectively. Unrealized loss on securities investment was $1,284,095 and $3,589,106 loss in the six months ended June 30, 2025 and 2024, respectively. These gains and losses were recorded directly to net loss.

 

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 the local stock exchange to calculate fair value. The following chart shows details of the fair value of equity security investment at June 30, 2025 and December 31, 2024, respectively.

 

   Share price       Market Value    
   6/30/2025   Shares   6/30/2025   Valuation
                
DSS (Related Party)  $0.940    3,961,210   $3,723,538   Investment in Securities at Fair Value – Related Party
                   
Trading Stocks            $3,239,287   Investment in Securities at Fair Value
                   
    Total Level 1 Equity Securities    $6,962,825    
                   
AMBS  $0.000    20,000,000   $6,000   Investment in Securities at Fair Value
                   
Holista  $0.033    1,000   $33   Investment in Securities at Fair Value
                   
Value Exchange (Related Party)  $0.021    21,179,275   $444,765   Investment in Securities at Fair Value – Related Party
                   
New Electric CV (Related Party)  $0.000    354,039,000   $-   Investment in Securities at Fair Value – Related Party
                   
Sharing Services (Related Party)  $1.000    89,732   $89,732   Investment in Securities at Fair Value – Related Party
                   
Trading Stocks            $3,770,682   Investment in Securities at Fair Value
                   
    Total Level 2 Equity Securities    $4,311,212    
                   
Nervotec   N/A    1,666   $-   Investment in Securities at Cost
UBeauty   N/A    3,600   $16,548   Investment in Securities at Cost
Ideal Food and Beverages   N/A    19,000   $-   Investment in Securities at Cost
HapiTravel Holding   N/A    19,000   $142   Investment in Securities at Cost
AES Group Co. Ltd.   N/A    398   $1,466   Investment in Securities at Cost
    Total Equity Securities    $11,292,193    

 

 

   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 – Related Party
                   
Trading Stocks            $2,612,293   Investment in Securities at Fair Value
                   
    Total Level 1 Equity Securities   $6,177,382    
                   
AMBS  $0.000    20,000,000   $-   Investment in Securities at Fair Value
                   
Holista  $0.008    1,000   $8   Investment in Securities at Fair Value
                   
Value Exchange (Related Party)  $0.035    21,179,275   $749,746   Investment in Securities at Fair Value – Related Party
                   
Sharing Services (Related Party)  $1.000    89,732   $89,732   Investment in Securities at Fair Value – Related Party
                   
New Electric CV (Related Party)  $0.000    354,039,000   $-   Investment in Securities at Fair Value – Related Party
                   
Impact BioMedical (Related Party)  $1.45    4,568,165   $6,623,838   Investment in Securities at Fair Value – Related Party
                   
Trading Stocks            $2,061,230   Investment in Securities at Fair Value
                   
    Total Level 2 Equity Securities   $9,524,554    
                   
Nervotec   N/A    1,666   $589   Investment in Securities at Cost
UBeauty   N/A    3,600   $16,636   Investment in Securities at Cost
Ideal Food and Beverages   N/A    19,000   $-   Investment in Securities at Cost
HapiTravel Holding   N/A    19,000   $140   Investment in Securities at Cost
    Total Equity Securities   $15,719,398    

 

 

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 as other comprehensive 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 six months ended June 30, 2025 and 2024:

 

  

   Total 
Balance at January 1, 2025  $973 
Impairment   )
Total Gains   - 
Balance at March 31, 2025  $973 
Total Gains   - 
Balance at June 30, 2025  $973 

 

   Total 
Balance at January 1, 2024  $77,737 
Impairment   (77,307)
Total Gains   543 
Balance at March 31, 2024  $973 
Total Gains   - 
Balance at June 30, 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. The Company wrote off this loan at March 31, 2024.

 

Warrants

 

NECV

 

On July 17, 2020, the Company purchased 122,039,000 shares, approximately 9.99% ownership, and 1,220,390,000 warrants with an exercise price of $0.0001 per share, from NECV, 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 NECV for the total consideration of $232,000, leaving the balance of outstanding warrants of 988,390,000 at December 31, 2022. The Company did not exercise any warrants during six months ended June 30, 2025 and the year ended December 31, 2024. We value NECV warrants under level 3 category through a Black Scholes option pricing model and the fair value of the warrants from NECV was $973 as of June 30, 2025 and December 31, 2024.

 

 

The fair value of the NECV warrants under level 3 category as of June 30, 2025 and December 31, 2024 was calculated using a Black-Scholes valuation model valued with the following weighted average assumptions:

 

   June 30, 2025   December 31, 2024 
         
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   5.06    5.56 

 

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 Company. As of June 30, 2025 and December 31, 2024, the fair value of the warrants was $477,419 and $1,299,973, respectively. The Company did not exercise any warrants during the six months June 30, 2025 and the year ended December 31, 2024.

 

The fair value of the VEII warrants under level 2 category as of June 30, 2025, and December 31, 2024 was calculated using a Black-Scholes valuation model valued with the following weighted average assumptions:

 

SCHEDULE OF SIGNIFICANT INPUTS AND ASSUMPTIONS

   June 30, 2025   December 31, 2024 
         
Stock price  $0.0209   $0.0357 
Exercise price  $0.1770   $0.1770 
Risk free interest rate   7.50%   7.50%
Annualized volatility   235.00%   458.92%
Dividend Yield  $0.00   $0.00 
Year to maturity   3.18    3.68 

 

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 June 30, 2025 and December 31, 2024, the fair value of the warrants was $110 and $13,272, respectively.

 

 

The fair value of the 148,810 SHRG warrants under level 2 category as of June 30, 2025 and December 31, 2024, was calculated using binomial option pricing model valued with the following weighted average assumptions:

 

SCHEDULE OF SIGNIFICANT INPUTS AND ASSUMPTIONS

   June 30, 2025   December 31, 2024 
         
Stock price  $0.0387   $1.0000 
Exercise price  $1.6800   $1.6800 
Risk free interest rate   3.91%   4.34%
Annualized volatility   238.04%   204.14%
Dividend Yield  $0.00   $0.00 
Year to maturity   3.72    4.21 

 

On March 31, 2025, HWH entered into a securities purchase agreement with the SHRG, pursuant to which SHRG issued a convertible promissory note to HWH in the amount of $150,000. This SHRG Convertible Note is convertible into SHRG’s common stock at $0.80 per share at HWH’s option until maturity three (3) years from the date of the securities purchase agreement. In addition, SHRG granted HWH warrants exercisable into 937,500 shares of SHRG’s common stock. The warrants may be exercised for three (3) years from the date of the securities purchase agreement at an exercise price of $0.85 per share. 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 June 30, 2025, the fair value of the warrants was $638.

 

The fair value of the 937,500 SHRG warrants under level 2 category as of June 30, 2025, was calculated using binomial option pricing model valued with the following weighted average assumptions:

  

   June 30, 2025 
     
Stock price  $0.0387 
Exercise price  $0.8500 
Risk free interest rate   3.70%
Annualized volatility   238.04%
Dividend Yield  $0.00 
Year to maturity   2.75 

 

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.

 

During the six months ended June 30, 2025, the Company reclassified “Investment in securities at fair value – related party,” “Investment in security at cost,” “Investment in equity method securities” and some of “Convertible Loan Receivables at Fair Value – Related Party” from current assets to noncurrent assets in the consolidated balance sheet based on management’s assessment of the expected holding period. This change in classification had no impact on the Company’s consolidated statements of operations, cash flows, or shareholders’ equity.