United States securities and exchange commission logo
November 10, 2022
Heng Fai Ambrose Chan
Chairman and Chief Executive Officer
Alset Capital Acquisition Corp.
4800 Montgomery LN STE 210
Bethesda, MD 20814
Re: Alset Capital
Acquisition Corp.
Registration
Statement on Form S-4
Filed October 12,
2022
File No. 333-267841
Dear Heng Fai Ambrose Chan:
We have reviewed your registration statement and have the
following comments. In
some of our comments, we may ask you to provide us with information so
we may better
understand your disclosure.
Please respond to this letter by amending your registration
statement and providing the
requested information. If you do not believe our comments apply to your
facts and
circumstances or do not believe an amendment is appropriate, please tell
us why in your
response.
After reviewing any amendment to your registration statement and
the information you
provide in response to these comments, we may have additional comments.
Registration Statement on Form S-4 Filed October 12, 2022
Cover Page
1. Please disclose on your
prospectus cover, in the Q&A section, and in your prospectus
summary that Alset
Capital Acquisition Corp. and HWH are entities under the common
control of Alset Inc.
Disclose that Heng Fai Ambrose Chan is the controlling shareholder
of Alset Inc., an
executive officer and director of Alset Acquisition Corp., and executive
chairman and director
of HWH, and may be deemed to own 21.6% of HWH. Also
disclose the
individuals who serve as executive officers and directors of both Alset Inc.
and HWH, as you do on
page 201.
2. We note your disclosure
on pages 60-61 that assuming no redemptions, Mr. Chan and his
affiliates will
beneficially own approximately 54.9% of the economic interests of the post-
combination company,
and assuming maximum redemptions, Mr. Chan and his affiliates
Heng Fai Ambrose Chan
FirstName LastNameHeng Fai Ambrose Chan
Alset Capital Acquisition Corp.
Comapany 10,
November NameAlset
2022 Capital Acquisition Corp.
November
Page 2 10, 2022 Page 2
FirstName LastName
will beneficially own approximately 79.7% of the economic interests of
the post-
combination company. Please disclose on your prospectus cover that Mr.
Chan and his
affiliates will have a controlling interest in the post-combination
company and will control
matters submitted to shareholders such as the election of directors
and approval of
significant corporate transactions, and whether you intend to take
advantage of
the controlled company exemptions.
3. Please revise your disclosure regarding the ownership of the
post-combination company to
reflect the exercise of all dilutive securities. In addition, as it
appears Alset Sponsor is
controlled by Alset Inc., which is in turn controlled by Mr. Chan,
revise the line item for
Alset Sponsor to include all shares owned by Mr. Chan and Alset Inc.,
and ensure the line
item references each party by name. In this regard, it appears you are
splitting Mr. Chan's
shares between Alset Sponsor and HWH Holders. Include a separate line
item for HWH
Holders other than Alset and Mr. Chan, if any. Make conforming changes
throughout
your filing where you discuss the ownership of the post-combination
company, including
on pages 11-12, 32-33, and 116-117.
4. Where you discuss the ownership interests in the post-combination
company, we note
your disclosure that "new public shareholders will own approximately
20.3%." Please
clarify who is included in the "new public shareholder" category,
including whether it
includes any PIPE investors or backstop investors.
Q: May Alset, the Sponsor or Alset's directors, officers, advisors or their
affiliates purchase
shares..., page 11
5. Confirm your intent to comply, and revise your disclosure here and on
pages 79 and 83
accordingly, with the conditions set forth in the Compliance and
Disclosure Interpretation
located at Question 166.01 of the Tender Offers and Schedules
interpretations, located on
our website.
Questions and Answers for Stockholders of Alset
Q: What equity stake will current stockholders of Alset and the HWH Holders
hold in Alset after
the Closing?, page 11
6. Please revise the table on page 12 to allocate the dilutive securities
to each party identified
in the top half of the table, rather than including separate line
items for the public and
private warrants.
Q: How will the Sponsor and our directors and officers vote?, page 16
7. We note your disclosure here and on pages 92, 137 and 139 that you may
need only
3,033,500, or approximately 35.2%, of the 8,625,000 of your public
shares, to be voted at
the Special Meeting in favor of the Business Combination Proposal in
order to approve it,
yet we also note your disclosure on page 10 that you may need as few
as only 34,500, or
approximately 0.4%, of the 8,625,000 of your public shares, to be
voted in favor of the
Business Combination Proposal in order to approve it. Given the vote
required to approve
Heng Fai Ambrose Chan
Alset Capital Acquisition Corp.
November 10, 2022
Page 3
the Business Combination Proposal is a majority of the shares
outstanding and entitled to
vote at the Special Meeting, please revise your disclosure on pages
16, 92, 137 and 139 to
be consistent with the disclosure on page 10, i.e., assuming only a
quorum is present.
Q: What interests do Alset's current officers and directors have in the
Business Combination?,
page 16
8. Here and elsewhere as applicable in your filing, please include a new
bullet quantifying
Mr. Chan's interests in the proposed transaction, including his
percentage ownership of the
post-combination company and the Merger Consideration he is expected
to receive in the
proposed transaction and its relative value, include a new bullet
addressing the interests of
the directors and officers who serve as such for both HWH and Alset,
and quantify
any amounts subject to reimbursement. Also quantify the aggregate
amount that the
sponsor, its affiliates, and the company's officers and directors have
at risk that depends
on completion of a business combination.
Summary of the Proxy Statement/Prospectus, page 27
9. In an appropriate place in the summary, include a diagram of Alset's
and HWH's
organizational structures prior to and after the consummation of the
business
combination. With a view to providing investors a picture of the
common ownership and
how the entities are affiliated, include a depiction of the ownership
of Alset and HWH in
the diagram. Also include the affiliated entities with which HWH does
business, such as
DSS Inc., Sharing Services Global Corp., HWH World, Inc, The Happy Co.
and RBC Life
World, Inc., to which you refer throughout the filing, so that
investors understand how
they are affiliated. Make conforming changes to the Information about
HWH section
beginning on page 152.
Parties to the Business Combination
HWH, page 28
10. Please revise to provide more detail regarding the business of HWH,
including, for
example, a brief description of the products and services offered and
the company's
membership-driven structure.
Selected Historical Financial Information of Alset, page 50
11. It appears the financial information presented here for the unaudited
period for the six
months ended May 31, 2022 is inconsistent with the Management's
Discussion and
FirstName LastNameHeng Fai Ambrose Chan
Analysis of Financial Condition and Results of Operations presented on
page 149 and the
Comapany NameAlset
Unaudited Capital
Financial Acquisition
Statements Corp. on page F-18, which are for
the nine months
beginning
ended
November 10,August 31, 2022.
2022 Page 3 Please clarify or revise.
FirstName LastName
Heng Fai Ambrose Chan
FirstName LastNameHeng Fai Ambrose Chan
Alset Capital Acquisition Corp.
Comapany 10,
November NameAlset
2022 Capital Acquisition Corp.
November
Page 4 10, 2022 Page 4
FirstName LastName
Unaudited Pro Forma Condensed Combined Financial Information, page 51
12. Please revise your pro forma presentation to present the periods
required by paragraph (c)
of Article 11-02 of Regulation S-X.
Risk Factors, page 60
13. Include a risk factor addressing the anti-takeover provisions in the
proposed charter and
bylaws, including the limitation on who can call a special meeting of
stockholders,
advance notice provisions for bringing stockholder actions, and the
inability of
stockholders to act by written consent.
14. Include a risk factor that addresses the exclusive forum provision in
your proposed charter
and the related risks including, but not limited to, increased costs
to bring a claim and that
the provision can discourage claims or limit investors ability to
bring a claim in a judicial
forum that they find favorable, as well as any uncertainty about
enforceability of the
provision.
15. Include a risk factor addressing the waiver of the corporate
opportunities doctrine as
described in Article X of your proposed charter and the related risks.
Concentration of ownership among the Sponsor, Alset's existing executive
officers, directors and
their respective affiliates..., page 84
16. Consistent with the risk factors on pages 60-61, revise this risk
factor to reflect the fact
that assuming no redemptions, Mr. Chan and his affiliates will
beneficially own
approximately 54.9% of the economic interests of the post-combination
company, and
assuming maximum redemptions, Mr. Chan and his affiliates will
beneficially own
approximately 79.7% of the economic interests of the post-combination
company.
Background of the Business Combination, page 104
17. We note your disclosure that in mid May 2022, Alset began evaluating
HWH and started
engaging in conversations with HWH s management. Please disclose
which party made
the initial contact.
18. Please substantially revise the disclosure in this section to include
a detailed description of
the negotiations relating to the valuation of HWH. For example, it is
not clear which
party proposed the initial valuation, what the initial proposal was,
if and how the amount
evolved throughout the negotiations, and when agreement on the final
valuation and type
of consideration was reached. Disclose whether HWH and Alset
determined the amount
of consideration to be paid, or whether ValueScope recommended the
amount of
consideration to be paid. Refer to Item 1015(b)(5) of Regulation M-A.
19. We note your disclosure on page 57 that the pro forma financials
reflect a $30 million
PIPE, of which the terms have not been finalized. Please clarify
whether the agreed
valuation of $125 million reflects a $30 million PIPE. Disclose any
discussions about the
Heng Fai Ambrose Chan
FirstName LastNameHeng Fai Ambrose Chan
Alset Capital Acquisition Corp.
Comapany 10,
November NameAlset
2022 Capital Acquisition Corp.
November
Page 5 10, 2022 Page 5
FirstName LastName
need to obtain additional financing for the combined company, such as
the potential PIPE
transaction, and the negotiation/marketing processes undertaken to
date (e.g.,
identification of potential PIPE investors and how the terms of the
PIPE transaction may
be determined). Additionally, as applicable, please also disclose
whether the parties
intend to provide any valuations or other material information about
the Alset, HWH, or
the business combination transaction to potential PIPE investors that
are not expected to
be disclosed publicly.
20. We note your disclosure that in early June, 2022, Alset received a
copy of HWH s
corporate presentation from HWH. Please tell us whether the
presentation included any
financial projections that the Alset board reviewed, and if so,
include such projections in
your filing. In addition, we note your disclosure on page 106 that
Alset received a
financial model regarding HWH future businesses, their pricing model
and other key
assumptions. Please disclose this model in your filing.
21. Please provide a detailed description of the negotiations regarding
the letter of intent that
was executed on July 28, 2022 by HWH and Alset, including the material
terms of the
initial draft, the material terms included in the final executed
version, and how the
material terms evolved over the course of the negotiations. Please
include enough
information so that investors can fully understand how the final terms
were negotiated and
ultimately determined.
22. Please provide a detailed description of how the material terms of the
Merger Agreement
evolved throughout the exchange of several drafts, and if applicable,
describe how the
material terms differed from the letters of intent.
23. Please substantially revise your disclosure in this section to include
a chronological
description of the negotiations relating to material terms of the
transaction and ancillary
agreements, including, but not limited to, the type of consideration
to be paid to HWH
stockholders, any financial projections and any discussions relating
to the assumptions
underlying such projections, the control and governance of the
post-combination
company, director designation rights and organizational documents, and
the lock up
agreements. In your revised disclosure, please explain the the issues
and terms discussed
at the meetings, each party's position on such issues, and how you
reached agreement on
the final terms.
24. Throughout this section, identify the individuals from HWH and Alset
management who
attended each meeting and participated in the negotiations. In
addition, disclose when
Alset's board approved the business combination and which board
members participated
in the vote.
25. We note your disclosure that on August 24, 2022, Alset and HWH had a
call to discuss the
possibility of a private capital raise and timelines for finalizing
the definitive Merger
Agreement. Please elaborate on these discussions and, to the extent
additional financing
was not secured, discuss why.
Heng Fai Ambrose Chan
Alset Capital Acquisition Corp.
November 10, 2022
Page 6
ValueScope Opinion, page 111
26. We note your disclosure on page 111 that ValueScope was retained
"solely to advise the
Board on the valuation of the Acquired Assets, and not for the benefit
of any other person
or entity or to consider any other aspect of the Business
Combination," and your
disclosure on page 112 and on page D-2 of the opinion that the
ValueScope Opinion was
prepared "for the Board in connection with its consideration of the
Business Combination
and may not be relied upon by any other person or entity or for any
other
purpose." Please remove this language from your filing and ask
ValueScope to remove
this language from the opinion.
27. Disclose the financial forecasts prepared by Alset and HWH s
management that
ValueScope relied upon in conducting their analysis and the related
assumptions.
Elaborate upon the income analysis and guideline public company
nalysis ValueScope
prepared, consistent with Item 1015(b)(6) of Regulation M-A, which
requires disclosure
of the bases and methods used for the fairness opinion. In doing so,
include the various
inputs and assumptions used in the income analysis and disclose the
values ultimately
arrived at. Identify the guideline companies, explain how they are
reasonably comparable,
and disclose the various multiples and how they were determined.
Alset's Board of Directors' Reasons for the Approval of the Business
Combination, page 112
28. We note your disclosure here and on page 108 references an analysis
that the Alset board
considered in deciding to approve the transaction, including a
reference to financial results
and assumptions, but no analysis is included in the filing. Please
revise to include the
analysis.
29. Please clarify how the board considered the conflicts of interest
presented by the
affiliation between Alset and HWH and the overlapping nature of
directors and officers of
Alset and HWH in negotiating and recommending the business
combination.
30. Alset's charter waived the corporate opportunities doctrine. Please
address this potential
conflict of interest and whether it impacted your search for an
acquisition target.
31. Explain why Stockholder Liquidity was a factor that supported the
Board's decision to
recommend the transaction when your stockholders already hold shares
that are listed on
Nasdaq, and are therefore liquid.
32. We note your disclosure on page 109 that Alset s board received
certain preliminary sales
estimates that were prepared by HWH that it considered in its decision
to enter into the
Merger Agreement. Please disclose these estimates in the filing.
FirstName LastNameHeng Fai Ambrose Chan
33. Please remove the disclaimer on page 108 that "the inclusion of this
information in this
Comapany NameAlset
proxy Capital Acquisition
statement/statement Corp.
does not constitute an admission or
representation by Alset or
HWH
November 10,that
2022thePage
information
6 presented is material."
FirstName LastName
Heng Fai Ambrose Chan
FirstName LastNameHeng Fai Ambrose Chan
Alset Capital Acquisition Corp.
Comapany 10,
November NameAlset
2022 Capital Acquisition Corp.
November
Page 7 10, 2022 Page 7
FirstName LastName
Roles of Alset's Advisor in the Negotiation and Execution of the Business
Combination, page
114
34. We note that EF Hutton performed additional services after the IPO and
part of the IPO
underwriting fee was deferred and conditioned on completion of a
business combination.
Please quantify the aggregate fees payable to EF Hutton that are
contingent on completion
of the business combination.
The Charter Amendments Proposal, page 119
35. Please revise your disclosure in this section and throughout your
filing to clarify whether
the post-combination company will have five or seven directors. In
this regard, we note
your disclosure on page 119 that the combined company will have seven
directors and
your discussion of the seven directors on pages 170-173, yet the
disclosure on pages 120,
123, 189, and the Merger Agreement, proposed charter, and proposed
bylaws provide that
there will only be five directors.
Material U.S. Federal Income Tax Considerations, page 128
36. We note your disclosure that "the surrender by a U.S. Holder of the
shares of Common
Stock in exchange for the shares of Alset Common Stock pursuant to the
Business
Combination, when taken together with the other steps of the Business
Combination,
should qualify as a non-recognition transaction pursuant to Section
351(a) of the Code."
Accordingly, please revise to provide a "should" tax opinion related
to such material tax
consequences of the Business Combination you describe in this section.
Please also revise
your disclosure to explain why counsel cannot give a firm opinion,
describe the degree of
uncertainty in the opinion, and include a risk factor setting forth
the risks to investors of
uncertain tax treatment. Refer to Section III.A.2 of Staff Legal
Bulletin No. 19.
Management of Alset, page 141
37. As applicable, revise the bios for each of Alset's executive officers
and directors to reflect
their positions and experience with HWH entities, as disclosed on page
201. Make
conforming changes on page 170 where you discuss the post-combination
company as
well.
Alset's Management's Discussion and Analysis of Financial Condition and Results
of Operations
Off Balance Sheet Arrangements, page 151
38. We note your disclosures that Alset Capital Acquisition Corp.
accounted for its warrants
as liabilities in accordance with the guidance contained in ASC 815.
Accordingly, Alset
classifies the warrants as liabilities at their fair value and
adjusted the warrants to fair
value at each reporting period. This liability is subject to
re-measurement at each balance
sheet date until exercised, and any change in fair value is recognized
in our statement of
operations. This appears to be inconsistent with the disclosure in
your financial
Heng Fai Ambrose Chan
Alset Capital Acquisition Corp.
November 10, 2022
Page 8
statements starting on pages F-18 which does not appear to present
warrants as liabilities
or adjustments for changes in fair value. Please clarify or revise.
Information About HWH, page 152
39. Revise to include a brief description of the company's recent
reorganization and the
reasons for it. Disclose when the company began operations.
40. Throughout this section, please revise to provide more specific
disclosure regarding the
expected timing for launching your products and services in the
pipeline. For example,
you state that HWH Marketplace, Hapi Travel Destinations, and Hapi
Wealth Builder are
all in the development stage, but it is not clear when the company
currently estimates or is
targeting that they will become operational.
Membership, page 153
41. Please provide more robust disclosure about how the company
compensates its members
for product and membership sales, and include a description of the
general terms of the
company's agreements with members. In this regard, we note your
disclosure on page F-
45 that "the Company compensates its sales leaders with leadership
incentives for services
rendered, relating to the development, retention, and management of
their sales
organizations. Leadership incentives are payable based on achieved
sales volume, which
are recorded in general and administrative expenses. Member will get
25% commission
of the membership fee income if the member successfully refers a new
member to
subscribe to the membership. The commission will be payable after the
referee s
membership is confirmed and been paid by the new member." We also note
your
disclosure on page 158 that HWH is "in no way a multi-level marketing
company," and,
on the other hand, your disclosure on pages 74 and 201 that HWH's
affiliates engage in
multi-level marketing. Please advise.
Products, page 155
42. Please clarify which of the products listed you currently offer. In
this regard, we note
your disclosure that you currently offer limited SHRG products,
supplied by SHRG, and
researched RBC Life, at the Singapore Hapi Caf .
Government Regulation, page 159
43. Your disclosure in this section and in your risk factors focuses
primarily on regulatory
regimes in the United States, yet we note HWH currently derives 99% of
its revenue from
Korea and 1% from Singapore. Please revise to include a more robust
discussion of the
FirstName LastNameHeng Fai Ambrose Chan
regulations applicable to the company in Korea and Singapore, including
whether there
Comapany NameAlset
are any Capital
government Acquisition
agencies Corp.to the FDA that regulate the
production,
comparable
marketing,
November and
10, 2022 sale8of HWH's products.
Page
FirstName LastName
Heng Fai Ambrose Chan
FirstName LastNameHeng Fai Ambrose Chan
Alset Capital Acquisition Corp.
Comapany 10,
November NameAlset
2022 Capital Acquisition Corp.
November
Page 9 10, 2022 Page 9
FirstName LastName
Human Capital/ Employees, page 160
44. We note your disclosure on page 60 that none of the executive officers
or members of the
senior management team in place at HWH are employed full-time by HWH,
rather, all of
these individuals are employed by and work full-time for HWH s
affiliates. Revise this
section to discuss these arrangements, as it appears the disclosure
currently relates to Alset
or a SPAC instead.
Material Contracts, page 160
45. Please describe in greater detail the material terms of the agreements
referenced here and
file each agreement as an exhibit to the registration statement. Refer
to Item 610(b)(10) of
Regulation S-K. In addition, we note your disclosure that for the
years ended December
31, 2021 and 2020 and the six months ended June 30, 2022 and 2021, two
suppliers
accounted for approximately over 98% of the Company s total costs of
revenue. Please
describe the material terms of any arrangements with such suppliers
here and file any
agreements as exhibits to the registration statement. Lastly, we note
your disclosure that
you conduct a substantial portion of your business through
arrangements with your
affiliates, but you do not have written agreements with these
affiliates. Accordingly,
please describe the material terms of the material verbal arrangements
under which you
have conducted business with these affiliates.
Executive Compensation of HWH, page 161
46. We note your disclosure on page 87 that the combined company expects
to grant equity
awards to employees, directors, and consultants under its stock
incentive plans. Please
disclose the material terms of such incentive plans in this section
and file related plan
documents as exhibits to the registration statement.
Agreements with HWH's Named Executive Officers and Potential Payments Upon
Termination
or Change of Control, page 161
47. We note your disclosure that although HWH has not entered into
employment agreements
with any of its senior executive officers or members of its management
team, all of those
individuals have entered into employment agreements with affiliates of
HWH. Please
describe the terms of such agreements and file the agreements as
exhibits to the
registration statement.
HWH's Management's Discussion and Analysis of Financial Condition and Results
of Operations
Financial Impact of the COVID-19 Pandemic, page 164
48. We note your disclosure on page 152 that while you had been profitable
and growing, the
COVID-19 pandemic had a material adverse effect on your business.
Please provide more
specific qualitative and quantitative disclosure, here and in the risk
factors, regarding the
impact of the COVID-19 pandemic on your business.
Heng Fai Ambrose Chan
FirstName LastNameHeng Fai Ambrose Chan
Alset Capital Acquisition Corp.
Comapany 10,
November NameAlset
2022 Capital Acquisition Corp.
November
Page 10 10, 2022 Page 10
FirstName LastName
Results of Operations, page 165
49. Please expand your discussion to provide quantified analysis of the
significant drivers
behind material changes in your results of operations. For each period
discussed, please
quantify the change in revenue and cost of revenue for each revenue
stream and the
impact of changes on the material drivers and discuss the underlying
causes for these
changes. Refer to Item 303(a)(3) of Regulation S-K and SEC Release
33-8350.
50. Please include a breakdown of your revenue generated by sales of
memberships and
revenue generated by sales of products.
Liquidity and Capital Resources, page 166
51. We note your disclosure that you are continuing to develop several
products and services
and planning to open 50 new Hapi Cafes in the next two years. Please
revise to include a
discussion of any known trends or uncertainties regarding the capital
requirements for this
planned expansion. Refer to Item 303(b)(1) of Regulation S-K. Please
address how the
company expects to fund such projects and any implications this may
have on your
operations.
Description of Securities of Alset
Certain Anti-Takeover Provisions of Delaware Law and the Proposed Charter, page
185
52. Revise this section to include a discussion of the provision included
in the proposed
charter preventing stockholders from acting by written consent.
Security Ownership of Certain Beneficial Owners and Management, page 204
53. We note your disclosure in footnote (2) that Mr. Chan may be deemed to
share beneficial
ownership of the securities held of record by Alset Acquisition
Sponsor, LLC.
Accordingly, please revise the total for Mr. Chan to include the
shares held by Alset
Acquisition Sponsor, LLC, as you did in Alset's IPO prospectus. In
addition, identify
the natural persons who hold voting or dispositive control over the
shares beneficially
owned by Alset International Limited, and to the extent Mr. Chan may
be deemed to share
beneficial ownership of the securities held by Alset International
Limited, include those
shares in his individual total as well. Please also revise to include
each individual director
and executive officer individually in the table, as well as a line
item for the aggregate
holdings of all directors and executive officers. Refer to Item 403(b)
of Regulation S-K.
HWH International Inc. and Subsidiaries
Notes to Consolidated Financial Statements
Revenue Recogntion, page F-44
54. We note your disclosure that product returns for the year ended
December 31, 2021 was
approximately $39,203. This appears to be greater than the actual
product sales of $6,233
disclosed on page F-50. Please tell us why your product returns exceed
your product sales
Heng Fai Ambrose Chan
FirstName LastNameHeng Fai Ambrose Chan
Alset Capital Acquisition Corp.
Comapany 10,
November NameAlset
2022 Capital Acquisition Corp.
November
Page 11 10, 2022 Page 11
FirstName LastName
for the year ended December 31, 2021.
55. We note your disclosure that the "Company maintains a buyback program
pursuant to
which it will repurchase products sold to any member who has decided
to leave the
business." Considering your history of product returns, please tell us
why a reserve has
not been recorded for product returns for the years ended December 31,
2021 and 2020.
56. We note your disclosure that for product sales you recognize revenue
when the product is
shipped to members. However, at December 31, 2020, you reported
deferred revenues of
approximately $270,722 due to the goods in transit for product sales.
Please clarify or
revise.
57. We note that you present contract assets of $928,543 at December 31,
2020 and $319,659
at December 31, 2021 for prepaid sales commission. We also note your
disclosures
regarding commissions in Note 4 and Note 7. Please tell us your
customary business
practice to prepay commissions, the performance obligation of the
member to earn the
commission and your basis for recording them as current assets.
Note 3. Receivable from related party, net, page F-47
58. You disclose that the related party receivable represents collection
received by the related
party on behalf of the Company for amounts invoiced by the Company to
its members in
connection with membership and product sales. We note you recorded
$57,730 and
$318,137 as an allowance for doubtful accounts based on a dispute of
amounts collected.
Please tell us your basis for recognizing this as a bad debt expense
and cite the specific
authoritative accounting literature you utilized to support your
accounting treatment.
59. You disclose that HWH World, Inc. used to process your direct
marketing network sales
in South Korea but this arrangement was cancelled in April 2021.
Please explain which
entity is currently providing the payment processing service.
Note 10. Due to Alset International Ltd., page F-49
60. Please disclose the amount that is due to Alset International Ltd. for
amounts paid on
behalf of Health Wealth Happiness Pte. Ltd. for its daily operation.
Note 9. Due to Alset Inc. , page F-49
61. Please disclose the amount that is due to Alset Inc. for amounts paid
on behalf of Hapi
Caf Inc. for its development.
Note 16. Concentration Risk, page F-50
62. You state the Company maintains cash balances at various financial
institutions in
different countries. Please disclose if you hold cash balances in Hong
Kong or China.
63. You disclose two suppliers accounted for approximately 98% of the
Company s total
costs of revenue. Please tell us whether either of your major
suppliers are a related party.
Heng Fai Ambrose Chan
Alset Capital Acquisition Corp.
November 10, 2022
Page 12
Financial Statements for Six Months Ended June 30, 2022
Note 2. Summary of Significant Accounting Policies, page F-64
64. Please revise your financial statements for the six months ended June
30, 2022 for the
applicable comments issued on the financial statements for the years
ended December 31,
2021 and 2020.
General
65. We note you duplicate the Management's Discussion and Analysis and
Results of
Operations in the F-pages for both Alset and HWH International Inc.
Please revise.
66. We note that EF Hutton was an underwriter for the initial public
offering of Alset and has
advised on the business combination transaction with HWH, as well as
ValueScope.
Please tell us, with a view to disclosure, whether you have received
notice from EF
Hutton, ValueScope, or any other financial advisor about it ceasing
involvement in your
transaction and how that may impact your deal or the deferred
underwriting compensation
owed to EF Hutton for Alset's initial public offering.
67. With a view toward disclosure, please tell us whether your sponsor is,
is controlled by, or
has substantial ties with a non-U.S. person. Please also tell us whether
anyone or any
entity associated with or otherwise involved in the transaction, is, is
controlled by, or has
substantial ties with a non-U.S. person. If so, also include risk factor
disclosure that
addresses how this fact could impact your ability to complete your
initial business
combination. For instance, discuss the risk to investors that you may
not be able to
complete your initial business combination should the transaction be
subject to review by
a U.S. government entity, such as the Committee on Foreign Investment in
the United
States (CFIUS), or ultimately prohibited. Further, disclose that the
time necessary for
government review of the transaction or a decision to prohibit the
transaction could
prevent you from completing an initial business combination and require
you to liquidate.
Disclose the consequences of liquidation to investors, such as the
losses of the investment
opportunity in a target company, any price appreciation in the combined
company, and the
warrants,
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Page 13 10, 2022 Page 13
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We remind you that the company and its management are responsible for
the accuracy
and adequacy of their disclosures, notwithstanding any review, comments, action
or absence of
action by the staff.
Refer to Rules 460 and 461 regarding requests for acceleration. Please
allow adequate
time for us to review any amendment prior to the requested effective date of
the registration
statement.
You may contact Nasreen Mohammed at 202-551-3773 or Angela Lumley at
202-551-
3398 if you have questions regarding comments on the financial statements and
related
matters. Please contact Taylor Beech at 202-551-4515 or Lilyanna Peyser at
202-551-3222 with
any other questions.
Sincerely,
Division of
Corporation Finance
Office of Trade &
Services
cc: Darrin M. Ocasio, Esq.