What changed in this filing

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Item 7. Management’s Discussion and Analysis

2023-03-31 compared with 2022-03-31 · 516 added, 622 removed, 517 unchanged (69% of the section changed)

Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Form 10-K contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.

this purpose, any statements contained in this Form 10-K that are not statements of historical fact including, without limitation, statements

under “Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations” regarding the

Company’s financial position, business strategy and the plans and objectives of management for future operations, may be deemed

to be forward-looking statements.

Without limiting the foregoing, words such as “may”, “will”, “expect”,

“believe”, “anticipate”, “estimate” or “continue” or comparable terminology are intended

to identify forward-looking statements.

These statements by their nature involve substantial risks and uncertainties, and actual results

may differ materially depending on a variety of factors, many of which are not within our control.

These factors include by are not limited

to economic conditions generally and in the industries in which we may participate;

competition within our chosen industry, including

competition from much larger competitors;

technological advances and failure to successfully develop business relationships.

Such forward-looking

statements are based on the beliefs of management, as well as assumptions made by, and information currently available to, the Company’s

Actual results could differ materially from those contemplated by the forward-looking statements as a result of certain factors

detailed in our filings with the SEC.

following discussion and analysis of our financial condition and results of operations should be read in conjunction with the financial

statements and the notes thereto contained elsewhere in this Report.

Certain information contained in the discussion and analysis set

forth below includes forward-looking statements that involve risks and uncertainties.

are a diversified holding company principally engaged through our subsidiaries in the development of EHome communities and other

real estate, financial services, digital transformation technologies, biohealth activities and consumer products

with operations in the United States, Singapore, Hong Kong, Australia and South Korea.

We manage our three principal businesses primarily

through our 77% owned subsidiary, Alset International Limited, a public company traded on the Singapore Stock Exchange.

this subsidiary (and indirectly, through other public and private U.S.

real estate, financial services, digital transformation technologies, biohealth activities and consumer products with operations in

the United States, Singapore, Hong Kong, Australia and South Korea.

We manage our three principal businesses primarily through our

85.4% owned subsidiary, Alset International Limited, a public company traded on the Singapore Stock Exchange.

subsidiary (and indirectly, through other public and private U.S.

and Asian subsidiaries), we are actively developing real estate

projects near Houston, Texas and in Frederick, Maryland, in our real estate segment.

We have designed applications for enterprise messaging

and e-commerce software platforms in the United States and Asia in our digital transformation technology business unit.

Our biohealth

segment includes the sale of consumer products.

also have ownership interests outside of Alset International, including a 41.3% equity interest in American Pacific Bancorp

Inc., an indirect 15.8% equity interest in Holista CollTech Limited, a 15.5% equity interest in True Partner Capital Holding Limited,

a 24.9% equity interest in DSS Inc.

(“DSS”), an 18% equity interest in Value Exchange

International, Inc., a 17.5% equity interest in American Premium Water Corp ., and an interest in Alset Capital Acquisition

In our digital transformation technology

segment we focus on serving business-to-business (B2B) needs in e-commerce, collaboration and social networking functions.

Our biohealth segment includes the sale of consumer products.

We also have ownership interests

outside of Alset International, including a 36.9% equity interest in American Pacific Bancorp Inc., an indirect 15.5% equity interest

in Holista CollTech Limited, a 45.2% equity interest in DSS Inc.

(“DSS”), a 38.3% equity interest in Value

Exchange International, Inc., a 0.8% equity interest in New Electric CV Corporation (“NECV” formerly known as “American

Premium Mining Corporation” or “APM,” and earlier known as “American Premium Water Corp.”) , and an

interest in Alset Capital Acquisition Corp.

(“Alset Capital”).

American Pacific Bancorp Inc.

is a financial

network holding company.

Holista CollTech Limited is a public Australian company that produces natural food ingredients (ASX:

True Partner Capital Holding Limited is a public Hong Kong company which operates as a fund management company in the U.S.

and Hong Kong.

a financial network holding company.

Holista CollTech Limited is a public Australian company that produces natural food ingredients

DSS is a multinational company operating businesses within nine divisions:

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services for businesses, and is traded on the OTCQB (OTCQB:

American Premium Water Corp.

is a publicly traded consumer

products company (OTCPK:

Alset Capital is a newly organized blank check company formed for the purpose of effecting a merger,

capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses

and is listed on the Nasdaq (Nasdaq:

ACAXU, ACAX, ACAXW and ACAXR).

NECV is a publicly traded consumer products company (OTCPK:

Alset Capital is a newly organized blank check company formed for the purpose of effecting a merger, capital stock exchange, asset acquisition,

stock purchase, reorganization or similar business combination with one or more businesses and is listed on the Nasdaq (Nasdaq:

ACAX, ACAXW and ACAXR).

generally acquire majority and/or control stakes in innovative and promising businesses that are expected to appreciate in value over

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total revenue for the years ended December 31, 2022, and 2021, was $4,480,442 and $19,798,822, respectively.

Our net losses for

the years ended December 31, 2021 and 2020 were $119,017,591 and $5,100,318, respectively.

currently recognize revenue from the sale of our subdivision development properties, rental homes and the sale of our biohealth products.

Sales of real properties accounted for approximately 70%, revenue from houses rental accounted for approximately 2% and sales of biohealth

products accounted for approximately 28% of our total revenue in the year ended December 31, 2021.

Sales of real properties accounted

for approximately 84% and sales of biohealth products accounted for approximately 16% of our total revenue in the year ended December

Our net losses for the years

ended December 31, 2022, and 2021, were $46,212,505 and $119,017,591, respectively.

currently recognize revenue from the sale of our subdivision development properties, rental homes, the sale of our biohealth products

and other activities.

Sales of real properties accounted for approximately 29%, revenue from houses rental accounted for approximately

40%, sales of biohealth products accounted for approximately 17% and revenue from other activities accounted for approximately 13% of

our total revenue in the year ended December 31, 2022.

Sales of real properties accounted for approximately 70%, revenue from houses

rental accounted for approximately 2% and sales of biohealth products accounted for approximately 28% of our total revenue in the year

ended December 31, 2021.

a geographical perspective, we recognized 69% and 72% of our total revenue in the years ended December 31, 2022, and 2021, respectively,

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20% and 28% of our revenue in 2022 and 2021, respectively, was recognized from our sales in South Korea.

0% of our revenue in 2022 and 2021, respectively, was recognized from our sales in Singapore.

believe that, on an ongoing basis, revenue generated from our property development business will decline as a percentage of our total

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Estate Projects

extent to which the COVID-19 pandemic may impact our business will depend on future developments, which are highly uncertain and cannot

be predicted.

The COVID-19 pandemic’s far-reaching impact on the global economy could negatively affect various aspects of our

business, including demand for real estate.

From March 2020 through December 2021, we continued to sell lots at our Ballenger Run project

(in Maryland) for the construction of town homes to NVR.

Sales of such homes to NVR were 88 lots in 2021 and 121 in 2020.

Such town homes

are often buyers’ first home that generally did not require them to sell an existing home.

We believe low interest

rates encouraged home sales.

Many buyers opted to see home models at the project virtually.

This technology allowed them to ask

questions to sales staff and see the town homes.

Home closings often occurred electronically.

extent to which the COVID-19 pandemic may impact our business will depend on future developments.

The COVID-19 pandemic’s far-reaching

impact on the global economy could negatively affect various aspects of our business, including demand for real estate.

From March 2020

through December 2022, we continued to sell lots at our Ballenger Run project (in Maryland) for the construction of town homes to NVR.

At this time, all of the lots at Ballenger Run have been sold to NVR, however we continue to complete

our development requirements under our agreements with NVR.

We do not anticipate that the COVID-19 pandemic will have a material impact

on the timing of the completion of our remaining tasks at Ballenger Run.

have received strong indications that buyers and renters across the country are expressing interest in moving from more densely populated

urban areas to the suburbs.

We believe that our Ballenger Run project is well suited and positioned to accommodate those buyers.

latest phase for sale at Ballenger Run, involving single-family homes, has seen a high number of interested potential buyers signing

up for additional information and updates on home availability.

COVID-19 pandemic could impact the ability of our staff and contractors to continue to work, and our ability to conduct our operations

in a prompt and efficient manner.

To date, we experienced a slowdown in the construction of a clubhouse at the Ballenger Run project,

which was completed behind schedule.

We believe this delay was caused in part by policies requiring lower numbers of contractors working

in indoor spaces.

We believe this trend, should it continue, will encourage interest

in some of our projects.

COVID-19 pandemic could impact the ability to conduct our operations in a prompt and efficient manner.

In addition, the

COVID-19 pandemic may adversely impact the timeliness of local government in granting required approvals.

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may cause the completion of important stages in our real estate projects to be delayed.

our Black Oak project in Texas, we have strategically redesigned the lots for a smaller “starter home”

products that we believe will be more resilient in fluctuating markets.

Should we initiate sales at Black Oak, we believe the same implications

described above, regarding our Ballenger Run project, may apply to our Black Oak project (including the general trend of customers’

interest shifting from urban to suburban areas).

Unlike our Ballenger Run project, our Black Oak project may include our involvement

in single family rental home development.

April 6, 2020, the Company entered into a term note with M&T Bank with a principal amount of $68,502 pursuant to the Paycheck Protection

Program (“PPP Term Note”) under the Coronavirus Aid, Relief, and Economic Security Act.

The PPP Loan is evidenced by a promissory

The PPP Term Note bears interest at a fixed annual rate of 1.00%, with the first ten months of principal and interest deferred.

On November 26, 2020, $64,502 of this loan was forgiven by the United States Small Business Administration and $64,502 was recorded as

other income.

The remaining balance of $4,000 was paid back in December 2020.

our Black Oak project in Texas, we have strategically redesigned the lots for a smaller “starter home” products that we believe

will be more resilient in fluctuating markets.

Should we initiate sales at Black Oak, we believe the same implications described above,

regarding our Ballenger Run project, may apply to our Black Oak project (including the general trend of customers’ interest shifting

from urban to suburban areas).

Our Black Oak project may include our involvement in single family rental

home development.

February 11, 2021, the Company entered into a term note with M&T Bank with a principal amount of $68,502 pursuant to the Paycheck

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of an event of default.

June 18, 2020, Alset EHome Inc.

(formerly known as SeD Home Inc., SeD Home & REITs Inc.

and then Alset iHome Inc.) entered into a

Loan Agreement with M&T Bank.

Pursuant to this Loan Agreement, M&T Bank provided a non-revolving loan to Alset EHome Inc.

an aggregate amount of up to $2,990,000, as described in “Liquidity and Capital Resources” below.

It was intended for this

loan to be utilized to commence our residential initiatives.

T he loan was closed in June 2021.

PPP Term Note was unsecured and guaranteed by the United States Small Business Administration.

The Company applied to M&T Bank for

forgiveness of the PPP Term Note, with the amount which may be forgiven equal to at least 60% of payroll costs and other eligible payments

incurred by the Company, calculated in accordance with the terms of the CARES Act.

In April 2022 the Company received confirmation that

the PPP Loan was fully forgiven.

Business Activities

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staff works out of our Bethesda, Maryland office.

At our office in Texas, we received a 50% rent abatement for the month

staff has shifted to mostly working from home since March 2020, but this has had a minimal impact on our operations to date.

staff in Singapore and Hong Kong has been able to work from home when needed with minimal impact on our operations, however our staff’s

ability to travel between our Hong Kong and Singapore offices has been significantly limited, and our staff’s travel between the

offices has been suspended since March 2020.

The COVID-19 pandemic has also impacted the frequency with which our management

would otherwise travel to the Black Oaks project;

however, we have a contractor in Texas providing supervision of the project.

continues to regularly supervise the Ballenger Run project.

Limitations on the mobility of our management and staff may slow down our

ability to enter into new transactions and expand existing projects.

staff has shifted to mostly working from home since March 2020, but this has had a minimal impact on our operations to

Our staff in Singapore and Hong Kong has been able to work from home when needed with minimal impact on our operations,

however our staff’s ability to travel between our Hong Kong and Singapore offices has been significantly limited until early

The COVID-19 pandemic initially impacted the frequency with which our management would travel to the Black Oaks project,

however, this is no longer the case.

Limitations on the mobility of our

management and staff, should they arise in the future, could slow down our ability to enter into new transactions and expand existing

have not reduced our staff in connection with the COVID-19 pandemic.

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addition to the matters described above, the primary challenges and trends that could affect or are affecting our financial results include:

ability to improve our revenue through cross-selling and revenue-sharing arrangements among our diverse group of companies;

ability to identify complementary businesses for acquisition, obtain additional financing for these acquisitions, if and when needed,

and profitably integrate them into our existing operation;

ability to attract competent, skilled technical and sales personnel for each of our businesses at acceptable compensation levels

to manage our overhead;

ability to control our operating expenses as we expand each of our businesses and product and service offerings.

Our ability to improve

our revenue through cross-selling and revenue-sharing arrangements among our diverse group of companies;

Our ability to identify

complementary businesses for acquisition, obtain additional financing for these acquisitions, if and when needed, and profitably

integrate them into our existing operation;

Our ability to attract

competent, skilled technical and sales personnel for each of our businesses at acceptable compensation levels to manage our overhead;

Our ability to control

our operating expenses as we expand each of our businesses and product and service offerings.

of Significant Accounting Policies

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the conversion price of AEI’s Stock Market Price.

AEI’s Stock Market Price shall be $5.59 per share, equivalent to the average

of the five closing per share prices of AEI’s Common Stock preceding January 4, 2021 as quoted by Bloomberg L.P.

The above four

acquisitions from Chan Heng Fai were transactions between entities under common control.

AEI’s Stock Market Price shall be $111.80 per share, equivalent to the

average of the five closing per share prices of AEI’s Common Stock preceding January 4, 2021 as quoted by Bloomberg L.P.

four acquisitions from Chan Heng Fai were transactions between entities under common control.

October 15, 2020, American Pacific Bancorp (which subsequently became a majority-owned subsidiary of the Company) entered into an acquisition

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common control transactions resulted in the following basis of accounting for the financial reporting periods:

acquisition of the Warrants and True Partner stock were accounted for prospectively as of March 12, 2021 and they did not represent

a change in reporting entity.

acquisition of LVD, APB and HFL was under common control and was consolidated in accordance with ASC 850-50.

The consolidated financial

statements were retrospectively adjusted for the acquisition of LVD, APB and HFL, and the operating results of LVD, APB and HFL as

of January 1, 2020 for comparative purposes.

The acquisition of the

Warrants and True Partner stock were accounted for prospectively as of March 12, 2021 and they did not represent a change in reporting

The acquisition of LVD,

APB and HFL was under common control and was consolidated in accordance with ASC 850-50.

The consolidated financial statements were

retrospectively adjusted for the acquisition of LVD, APB and HFL, and the operating results of LVD, APB and HFL as of January 1,

2020 for comparative purposes.

stock price was $10.03 on March 12, 2021, the commitment date.

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following represents a disaggregation of our revenue recognition policies by segment:

Property Sales.

The Company’s main business is land development.

Part of the Company’s real estate business is land development.

The Company purchases land and develops it into residential

The developed lots are sold to builders (customers) for the construction of new homes.

The builders enter into a sales contract

with the Company before they take the lots.

The builders enter into a sales

contract with the Company before they take the lots.

The prices and timeline are determined and agreed upon in the contract.

The builders do the

inspections to make sure all conditions and requirements in contracts are met before purchasing the lots.

A detailed breakdown of the

five-step process for the revenue recognition of the Ballenger and Black Oak projects, which represented approximately 70% and 84% of

the Company’s revenue in the years ended on December 31, 2021 and 2020, respectively, is as follows:

builders do the inspections to make sure all conditions and requirements in contracts are met before purchasing the lots.

breakdown of the five-step process for the revenue recognition of the Ballenger and Black Oak projects, which represented

approximately 29% and 70% of the Company’s revenue in the years ended on December 31, 2022 and 2021, respectively, is as

the contract with a customer.

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credited or charged to straight-line rent receivable or straight-line rent liability, as applicable.

For the year ended December 31,

2021, the Company didn’t recognize any deferred revenue and collected all rents due.

For the years ended December 31,

2022 and 2021, the Company did not recognize any deferred revenue and collected all rents due.

Cost of Revenue.

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The Company’s performance obligation is to

transfer its products to its third-party independent distributors (“Distributors”).

The Company generally recognizes revenue

when product is shipped to its Distributors.

Company’s Distributors may receive distributor allowances, which are comprised of discounts, rebates and wholesale commission payments

from the Company.

Distributor allowances resulting from the Company’s sales of its products to its Distributors are recorded against

net sales because the distributor allowances represent discounts from the suggested retail price.

addition to distributor allowances, the Company compensates its sales leader Distributors 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.

The Company recognizes revenue when it ships products.

receives the net sales price in cash or through credit card payments at the point of sale.

a Distributor returns a product to the Company on a timely basis, they may obtain a replacement product from the Company for such returned

In addition, the Company maintains a buyback program pursuant to which it will repurchase products sold to a Distributor who

has decided to leave the business.

Allowances for product returns, primarily in connection with the Company’s buyback program,

are provided at the time the sale is recorded.

This accrual is based upon historical return rates for each country and the relevant return

pattern, which reflects anticipated returns to be received over a period of up to 12 months following the original sale.

transfer ownership of its products to its members.

The Company generally recognizes revenue when product is delivered to its members.

Revenue is recorded net of applicable taxes, allowances, refund or returns.

The Company receives the net sales price in cash or through

credit card payments at the point of sale.

any member returns a product to the Company on a timely basis, they may obtain a replacement product from the Company for such returned

We do not have buyback program.

However, when the customer requests a return and management decides that the refund is necessary,

we initiate the refund after deducting all the benefits that a member has earned.

The returns are deducted from our sales revenue on

our financial statements.

Allowances for product and membership returns are provided at the time the sale is recorded.

This accrual is

based upon historical return rates for each country and the relevant return pattern, which reflects anticipated returns to be received

over a period of up to 12 months following the original sale.

Product and membership returns for the years ended December 31, 2022 and

2021 were approximately $41,755 and $39,203, respectively.

Annual Membership.

The Company collects an annual membership fee from its Distributors.

The fee is fixed, paid in full at the

time of joining the membership and not refundable.

The Company’s performance obligation is to provide members to purchase products,

access to certain back office services, receive commissions and attend corporate events.

The obligation is satisfied over time.

recognizes revenue associated with the membership over the one-year period of the membership.

Before the membership fee is recognized

as revenue, it is recorded as deferred revenue.

The Company collects an annual membership fee from its members.

The fee is fixed, paid in full at the time

upon joining the membership;

the fee is not refundable.

The Company’s performance obligation is to provide its members the right

to (a) purchase products from the Company, (b) access to certain back-office services, (c) receive commissions and (d) attend corporate

The associated performance obligation is satisfied over time, generally over the term of the membership agreement which is for

a one-year period.

The Company recognizes revenue from membership fee over the one-year period of the membership.

and Beverage .

The Company, through Alset F&B One Pte.

F&B One”) and Alset F&B (PLQ) Pte.

(“Alset F&B PLQ”) each acquired a restaurant franchise licenses

at the end of 2021 and 2022 respectively, both of which have since commenced operations.

These licenses will allow Alset F&B One and

Alset F&B PLQ each to operate a Killiney Kopitiam restaurant in Singapore.

Killiney Kopitiam, founded in 1919, is a Singapore-based

chain of mass-market, traditional kopitiam style service cafes selling traditional coffee and tea, along with a range of local delicacies

such as Curry Chicken, Laksa, Mee Siam, and Mee Rebus.

The Company, through Hapi Café Inc.

(“HCI-T”), commenced operation of two cafés during 2022 and 2021, which

are located in Singapore and South Korea.

The cafes are operated by subsidiaries of HCI-T, namely Hapi Café SG Pte.

Limited (“HCSG”)

in Singapore and Hapi Café Korea Inc.

(“HCKI”) in Seoul, South Korea.

Hapi Cafes are distinctive lifestyle café

outlets that strive to revolutionize the way individuals dine, work, and live, by providing a conducive environment for everyone to relish

the four facets – health and wellness, fitness, productivity, and recreation all under one roof.

revenue earned from Food and Beverage business for the years ended December 31, 2022 and 2021 were $449,240 and $ 42,380

respectively.

performance obligations.

As of December 31, 2022 and 2021, there were no remaining performance obligations or continuing involvement,

as all service obligations within the other business activities segment have been completed.

Estate Assets

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The capitalized costs are recorded as part of the asset to which they relate and are reduced when lots are sold.

construction costs of approximately $6.0 million and $10.3 million for the years ended December 31, 2021 and 2020, respectively.

Company capitalized construction costs of approximately $3.2 million and $6.0 million in the years ended December 31, 2022 and 2021,

respectively.

December 31, 2022, total real estate property under development was $23.4 million, including:

held for development in the amount of $9.0 million (consisting of $7.7 million for Black Oak, $0.1 million for Ballenger Run, $0.7

million for Alset Villas and $0.5 million for our Perth project);

development costs in the amount of $3.4 million (consisting of $3.4 million for Black Oak);

finance costs were $3.2 million.

land held for development

in the amount of $7.9 million (consisting of $7.3 million for Black Oak and $0.6 million for Alset Villas);

capitalized development

costs in the amount of $12.3 million (consisting of $12 million for Black Oak and $0.3 million for Alset Villas);

capitalized finance costs

were $3.2 million.

December 31, 2021, total real estate property under development was $15.7 million, including:

held for development in the amount of $10.9 million (consisting of $6.9 million for Black Oak, $3.5 million for Ballenger Run and

$0.5 million for our Perth project);

development costs in the amount of $6.1 million (consisting of $1.2 million for Black Oak, $4.8 million for Ballenger Run and $0.1

million for our Perth project);

finance costs were $3.5 million.

land held for development

in the amount of $9.0 million (consisting of $7.7 million for Black Oak, $0.1 million for Ballenger Run, $0.7 million for Alset Villas

and $0.5 million for our Perth project);

capitalized development

costs in the amount of $3.4 million (consisting of $3.4 million for Black Oak);

capitalized finance costs

were $3.2 million.

December 31, 2022, the capitalized construction costs were as follows:

held for development

development Costs

Construction Costs

reimbursement

Ballenger Run

Land held for development

Capitalized development Costs

Hard Construction Costs

Project Management

Other Services

Impairment Reserve

Construction - Sold Lots

(39,889,863 )

(41,254,668 )

capitalized development costs

finance costs

property under development

Total capitalized development costs

Capitalized finance costs

Total property under development

December 31, 2021, the capitalized construction costs were as follows:

held for development

construction Costs

construction costs

reimbursement

Ballenger Run

Perth Project

Land held for development

Capitalized development Costs

Hard Construction Costs

Project Management

Other Services

BAN reimbursement

Impairment Reserve

Construction - Sold Lots

(39,805,188 )

(41,169,993 )

capitalized development costs

finance costs

property under development

Total capitalized development costs

Capitalized finance costs

Total property under development

December 31, 2021, there were no sales from the Perth project.

In addition, no sales agreement had been signed for this project.

The project was fully sold during year ended December 31, 2022.

2021, our subsidiary Alset EHome Inc.

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at Alset Villas for rent and/or for sale.

The Alset Villas project remains at the early stage.

The Alset Villas project is currently in the engineering and design phase to achieve final

of Operations

of Consolidated Statements of Operations and Other Comprehensive Loss for the Years Ended December 31, 2022 and 2021

Ended December 31,

Years Ended December 31,

Operating Expenses

(11,569,816 )

(34,792,944 )

Other Expenses

(39,123,131 )

from Discontinued Operations

(103,489,455 )

Income Tax Expense

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following table sets forth period-over-period changes in revenues for each of our reporting segments:

Ended December 31,

Years Ended December 31,

$ (11,124,751 )

Digital Transformation Technology

Total revenue

$ (15,318,380 )

was $4,480,442 and $19,798,822 for the years ended December 31, 2022 and 2021, respectively.

increase in rental revenue and direct sales from our indirect subsidiary HWH World in the 2021 contributed to higher revenue in this

For our Ballenger Project, builders are required to purchase a minimum number of lots based on their applicable sale agreements.

We collect revenue from the sale of lots to builders.

decrease in property sales and direct sales from our indirect subsidiary HWH World in the 2022 contributed to lower revenue in this period.

In the year ended December 31, 2022 the last three homes in Ballenger Project were sold.

In this project, builders

were required to purchase a minimum number of lots based on their applicable sale agreements.

We collected revenue from the sale of lots

We are not involved in the construction of homes at the present time.

from the sale of Front Foot Benefits (“FFBs”), assessed on Ballenger Run project lots, increased from $273,620 in the year

from the sale of Front Foot Benefits (“FFBs”), assessed on Ballenger Run project lots, decreased from $289,375 in the year

ended December 31, 2021 to $126,737 in year ended December 31, 2022.

The increase is a mixed result of the decreased sale of properties

to homebuyers in 2021 and sale of FFBs of a higher value.

The decrease is a result of the decreased sale of properties to

homebuyers in 2022.

the second quarter of 2021, the Company started renting homes to tenants.

Revenue from this rental business was $327,296 for the year

ended December 31, 2021.

The Company expects that the revenue from this business will continue to increase as we acquire more rental

houses and successfully rent them.

from our biohealth segment in the year ended December 31, 2020 included direct sales by iGalen Inc.

(formerly known as iGalen

USA, LLC), which was 100% owned by iGalen International Inc., Alset International’s 53%-owned subsidiary.

On December 30, 2020

Alset International’s ownership of iGalen International was sold to one of the directors of iGalen International.

During the year

ended December 31, 2020, the revenue from iGalen Inc.

recent years, the Company expanded its biohealth segment to the South Korean market through one of the subsidiaries of Health

Wealth Happiness Pte.

Ltd., HWH World Inc (“HWH World”).

HWH World, similarly to iGalen Inc., operates based on a direct

sale model of health supplements.

HWH World recognized $5,543,066 and $2,504,944 in revenue in the year ended December 31, 2021 and 2020,

respectively.

category described as “Other” includes corporate and financial services and new venture businesses.

“Other” includes

certain costs that are not allocated to the reportable segments, primarily consisting of unallocated corporate overhead costs, including

administrative functions not allocated to the reportable segments from global functional expenses.

financial services and new venture businesses are small and diversified, and accordingly they are not separately addressed as one independent

In the years ended December 31, 2021 and 2020, the revenue from other businesses was $42,377 and $0, respectively, generated

by Korean café shop.

Revenue from the rental business was $1,810,011 and $327,296

for the years ended December 31, 2022 and 2021, respectively.

The Company expects that the revenue from this business will continue to

increase as we acquire more rental houses and successfully rent them.

recent years, the Company expanded its biohealth segment to the South Korean market through one of the subsidiaries of HWH International

Inc., HWH World Inc (“HWH World”).

HWH World operates based on a direct sale model of health supplements.

HWH World recognized

$753,651 and $5,543,066 in revenue in the years ended December 31, 2022 and 2021, respectively.

category described as “Other” includes corporate and financial services, food and beverage business and new venture businesses.

“Other” includes certain costs that are not allocated to the reportable segments, primarily consisting of unallocated corporate

overhead costs, including administrative functions not allocated to the reportable segments from global functional expenses.

financial services, food and beverage businesses and new venture businesses are small and diversified, and accordingly they are not separately

addressed as one independent category.

In the years ended December 31, 2022 and 2021, the revenue from other businesses was $568,248

and $42,377, respectively, generated by Korean and Singaporean café shops and restaurants.

following table sets forth period-over-period changes in cost of revenue for each of our reporting segments:

Ended December 31,

(As Restated)

cost of sales

Years Ended December 31,

$ (8,057,556 )

Digital Transformation Technology

Total cost of sales

$ (7,569,824 )

of revenue decreased from $11,301,814 in the year ended December 31, 2021 to $3,731,990 in the year ended December 31, 2022, as a result

of the decrease in the number of lots sold in the Ballenger Run.

Capitalized construction expenses, finance costs and land costs are

allocated to sales.

of the decrease in the number of lots sold in the Ballenger Run and sales in HWH World business.

Capitalized construction expenses, finance

costs and land costs are allocated to sales.

We anticipate the total cost of sales to increase as revenue increases.

gross margin increased from $4,152,626 to $8,497,008 in the years ended December 31, 2020 and 2021, respectively.

The increase of gross

margin was caused by the increase of gross margin of HWH World, mostly due to the increase in the

sales and from increase in rental income.

gross margin decreased from $8,497,008 to $748,452 in the years ended December 31, 2021 and 2022, respectively.

The decrease of gross

margin was caused by the decrease of gross margin of HWH World, mostly due to the decrease in the

sales and from decrease in property sales.

following table sets forth period-over-period changes in operating expenses for each of our reporting segments.

Ended December 31,

2020 (As Restated)

Digital transformation technology

Discontinued Operations

(13,422,592 )

Total operating expenses

increase of operating expenses of real estate segment in 2021 compared with 2020 was mostly caused by the increase of sales related expenses.

Increase in expenses in our biohealth business is caused by the increased commission payments to our distributors, which is connected

to increased sales.

Additionally, the increase in professional fees, employee salaries and bonuses and directors’ remuneration

in our other businesses contributed to increased operating expenses in the year ended December 31, 2021, as compared to the year ended

December 31, 2020.

$ (15,653,304 )

decrease in sales related expenses and bonuses in our businesses contributed to decreased operating expenses in the year ended December

31, 2022, as compared to the year ended December 31, 2021.

Income (Expense)

the year ended December 31, 2021, the Company had other expense of $103,489,455 compared to other expense of $2,489,599 in the year ended

December 31, 2020.

The change in unrealized loss on securities investment and on financing costs are the primary reasons for the volatility

in these two periods.

Unrealized loss on securities investment was $49,190,748 in year ended December 31, 2021, compared to $1,694,535

loss in the year ended December 31, 2020.

Finance costs were $50,871,869 in the year ended December 31, 2021, compared to a $109,916

in the year ended December 31, 2020.

April 27, 2020, Global BioMedical Pte Ltd (“GBM”), one of our subsidiaries, entered into a share exchange agreement with

DSS BioHealth Security, Inc.

(“DBHS”), a wholly owned subsidiary of DSS, Inc.

(“DSS”), pursuant to which, DBHS

agreed to acquire all of the outstanding capital stock of Impact BioMedical Inc, a wholly owned subsidiary of GBM, through a share exchange.

It was agreed that the aggregate consideration to be issued to GBM for the Impact BioMedical shares would be the following:

newly issued shares of DSS common stock;

and (ii) 46,868 newly issued shares of a new series of DSS perpetual convertible preferred stock

with a stated value of $46,868,000 ($1,000 per share).

The convertible preferred stock will be convertible into shares of DSS common

stock at a conversion price of $6.48 of preferred stock stated value per share of common stock, subject to a 19.9% beneficial ownership

conversion limitation (a so-called “blocker”) based on the total issued outstanding shares of common stock of DSS beneficially

owned by GBM.

Holders of the convertible preferred stock will have no voting rights, except as required by applicable law or regulation,

and no dividends will accrue or be payable on the convertible preferred stock.

The holders of convertible preferred stock will be entitled

to a liquidation preference of $1,000 per share, and DSS will have the right to redeem all or any portion of the then outstanding shares

of convertible preferred stock, pro rata among all holders, at a redemption price per share equal to such liquidation value per share.

ASU 2014-08, a disposal transaction meets the definition of a discontinued operation if all of the following criteria are met:

disposal group constitutes a component of an entity or a group of components of an entity.

component of an entity (or group of components of an entity) meets the held-for-sale classification criteria, is disposed of by sale,

or is disposed of other than by sale (e.g., “by abandonment, in an exchange measured based on the recorded amount of the nonmonetary

asset relinquished, or in a distribution to owners in a spinoff”).

disposal of a component of an entity (or group of components of an entity) “represents a strategic shift that has (or will

have) a major effect on an entity’s operations and financial results”.

BioMedical Inc and its subsidiaries have financial reporting.

The transaction is a disposal by sale and has a major effect on our financial

Since it meets all of the test criteria set forth above, we have treated this disposal transaction as a discontinued operations

in our financial statements.

August 21, 2020, the transaction closed and Impact BioMedical Inc became a direct wholly owned subsidiary of DBHS.

GBM received 483,334

shares of DSS common stock and 46,868 shares of DSS preferred stock, which preferred shares could be converted to 7,232,716 common shares

(however, any conversion will be subject to the blocker GBM has agreed to, as described above).

After this transaction, we held 500,001

shares of the common stock of DSS, representing 9.7% of the outstanding common stock of DSS.

Our CEO, Chan Heng Fai is an owner of the

common stock of DSS (not including any common or preferred shares we held) and is the executive chairman of the board of directors of

The Company has elected the fair value option for the DSS common stock that would otherwise be accounted for under the equity method

of accounting.

ASC 820, Fair Value Measurement and Disclosures, defines the fair value of the financial assets.

We value DSS common stock

under level 1 category through quoted prices and preferred stock under level 2 category through the value of the common shares into which

the preferred shares are convertible.

The quoted price of DSS common stock was $6.95 as of August 21, 2020.

The total fair value of DSS

common and preferred stocks GBM received as consideration for the disposal of Impact BioMedical was $46,284,171.

As of August 21, 2020,

the net asset value of Impact BioMedical was $94,011.

The difference of $46,190,160 was recorded as additional paid in capital.

not recognize gain or loss from this transaction as it was a related party transaction.

the years ended December 31, 2021 and 2020, the discontinued operation loss from Impact BioMedical Inc was $0 and $417,438, respectively.

October 16, 2020, GBM converted an aggregate of 4,293 shares of Series A Convertible Preferred Stock into 662,500 shares of the common

stock of DSS.

On May 25, 2021 and again on June 21, 2021, GBM converted an aggregate of 42,575 shares of Series A Convertible Preferred

Stock into 6,570,170 shares of the common stock of DSS.

On September 3, 2021, the Company purchased additional 12,155,591 common shares

We now own approximately 24.9% of the common stock of DSS, and our CEO, Chan Heng Fai, owns an additional 3.1% of the common

stock of DSS (not including any common shares we hold).

the year ended December 31, 2022, the Company had other expense of $39,123,131 compared to other expense of $103,489,455 in the year

ended December 31, 2021.

The change in unrealized loss from related party securities investment and financing costs are the primary

reasons for the volatility in these two periods.

Unrealized loss on related party securities investment was $23,556,219 in year ended

December 31, 2022, compared to $47,231,084 loss in the year ended December 31, 2021.

Finance costs were $450,000 in the year ended December

31, 2022, compared to $50,871,869 in the year ended December 31, 2021.

Finance costs in both years were related to the amortization of beneficial conversion feature (BVC).

the year ended December 31, 2022, the Company had net loss of $46,212,505 compared to net loss of $119,017,591 in the year ended December

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This increase primarily

reflects the acquisition of 109 new rental properties in 2021.

Our cash has increased from $24,965,946 as of December 31, 2020 to $56,061,309

as of December 31, 2021.

Our liabilities increased from $8,889,226 at December 31, 2020 to $13,537,003 at December 31, 2021.

assets have increased to $184,210,143 as of December 31, 2021 from $107,713,745 as of December 31, 2020 due to the increase in cash and

investments in securities.

reflects the acquisition of 132 new rental properties during 2022 and 2021.

Our cash has decreased from $56,061,309 as of December 31,

2021 to $17,827,383 as of December 31, 2022.

Our liabilities decreased from $13,920,357 at December 31, 2021 to $4,827,221 at December

Our total assets have decreased to $153,490,336 as of December 31, 2022 from $184,210,143 as of December 31, 2021 due to the

decrease in cash.

April 17, 2019, SeD Maryland Development LLC entered into a Development Loan Agreement with Manufacturers and Traders Trust Company (“M&T

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is secured by a $2,600,000 collateral fund and a Deed of Trust issued to the Lender on the property owned by SeD Maryland.

On June 18, 2020, Alset EHome

2022, approximately $2,300,000 was released from collateral, leaving approximately $300,000 as collateral for outstanding letters of

June 18, 2020, Alset EHome Inc.

entered into a Loan Agreement with M&T Bank.

Pursuant to this Loan Agreement, M&T Bank provided a non-revolving loan to

Alset EHome Inc.

Pursuant to this Loan Agreement, M&T Bank provided

a non-revolving loan to Alset EHome Inc.

in an aggregate amount of up to $2,990,000.

Repayment of this loan was secured by a deed of trust issued to the

Lender on the property owned by certain subsidiaries of Alset EHome Inc.

Certain subsidiaries of our company were the guarantors

of this loan.

Repayment of this loan was secured by a deed of

trust issued to the Lender on the property owned by certain subsidiaries of Alset EHome Inc.

Certain subsidiaries of our company were

the guarantors of this loan.

The loan was closed in June 2021.

April 6, 2020, the Company entered into a term note with M&T Bank with a principal amount of $68,502 pursuant to the Paycheck Protection

Program (“PPP Term Note”) under the Coronavirus Aid, Relief, and Economic Security Act.

The PPP Loan is evidenced by a promissory

The PPP Term Note bears interest at a fixed annual rate of 1.00%, with the first ten months of principal and interest deferred.

On November 26, 2020, $64,502 of this loan was forgiven by the United States Small Business Administration and $64,502 was recorded as

other income.

The remaining balance of $4,000 was paid back in December 2020.

February 11, 2021, the Company entered into a term note with M&T Bank with a principal amount of $68,502 pursuant to the Paycheck

5 unchanged sentences

of an event of default.

the year ended on December 31, 2017, Chan Heng Fai provided non-interest loans of $7,156,680 for the general operations of the Company.

The loans are interest free, not tradable, unsecured, and repayable on demand.

On October 15, 2018, a formal lending agreement between

Alset International and Chan Heng Fai was executed.

Under the agreement, Chan Heng Fai provides a lending credit limit of approximately

$10 million for Alset International with an interest rate of 6% per annum for the outstanding borrowed amount, which commenced retroactively

from January 1, 2018.

The loans are still not tradable, unsecured and repayable on demand.

As of December 31, 2021 and 2020, the outstanding

principal balance of the Related Party Loan was $0 and $178,400, respectively.

Chan Heng Fai confirmed through a letter that he would

not demand the repayment within a year.

Interest started to accrue on January 1, 2018 at 6% per annum.

During the years ended December

31, 2021 and 2020, the interest expenses were $0 and $130,667, respectively.

As of December 31, 2021 and 2020, the accrued interest total

was $0 and $0, respectively.

Heng Fai provided an interest-free, due on demand, advance to the Company for the general operations of the Company.

On December 31,

2021 and 2020, the outstanding balance was $0 and $1,511,429, respectively.

January to December, 2021, the Company sold 280,000 shares of GigWorld to international investors with the amount of $478,300,

PPP Term Note was unsecured and guaranteed by the United States Small Business Administration.

The Company applied to M&T Bank for

forgiveness of the PPP Term Note, with the amount which may be forgiven equal to at least 60% of payroll costs and other eligible payments

incurred by the Company, calculated in accordance with the terms of the CARES Act.

In April 2022 the Company received confirmation that

the PPP Loan was fully forgiven.

January to December 2021, the Company sold 280,000 shares of Hapi Metaverse to international investors with the amount of $478,300,

which was booked as addition paid-in capital.

The Company held 505,667,376 shares of the total outstanding shares 506,898,576 before

After the sale, the Company still owns approximately 99% of GigWorld’s total outstanding shares.

January to December, 2020, the Company sold 497,300 shares of GigWorld to international investors with the amount of $478,300, which

was booked as addition paid-in capital.

The Company held 505,667,376 shares of the total outstanding shares 506,898,576 before the sale.

After the sale, the Company still owns approximately 99% of GigWorld’s total outstanding shares.

The Company held 505,667,376 shares of the 506,898,576 outstanding shares before

After the sale, the Company still owns approximately 99% of Hapi Metaverse’s total outstanding shares.

management believes that the available cash on hand, available debt and equity financing are sufficient to fund our operations for at

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of Cash Flows for the Years Ended December 31, 2022 and 2021

Ended December 31,

(As Restated)

cash (used in) provided by operating activities

Years Ended December 31,

Net cash used in operating activities

$ (31,855,435 )

cash (used in) provided by investing activities

$ (16,684,360 )

cash provided by financing activities

Net cash used in investing activities

$ (15,123,041 )

$ (56,044,001 )

Net cash provided by financing activities

$ 103,417,404

Flows from Operating Activities

cash used in operating activities was $16,684,360 in the year ended December 31, 2021, as compared to net cash provided by operating

activities of $317,612 in the same period of 2020.

The higher purchase of trading securities for investment purposes explained the increased

cash flow used in operating activities during year 2021.

cash used in operating activities was $31,855,435 in the year ended December 31, 2022, as compared to net cash used in operating activities

of $16,684,360 in the same period of 2021.

The purchase of trading securities for investment purposes and high property development costs

explained the increased cash flow used in operating activities during year 2022.

Flows from Investing Activities

cash used in investing activities was $56,044,001 in the year 2021, as compared to net cash provided by investing activities of

cash used in investing activities was $15,123,041 in the year 2022, as compared to net cash used in investing activities of $56,044,001

in the same period of 2021.

In the year ended December 31, 2022 we invested $8,429,620 in marketable securities, $6,824,730 to purchase

real estate properties and improvements and $377,864 in promissory notes to a related party.

At the same time, we received approximately

$1 million from a related party loan receivable.

In the year ended December 31, 2021 we invested $19,390,318 in marketable securities,

$25,362,146 to purchase real estate properties and $11,878,605 in promissory notes of a related party.

At the same time, we received approximately

$2.5 million from the sale of Vivacitas Oncology to a related party.

During the year ended December 31, 2020, we received $301,976 from

the liquidation of Global Opportunity Fund and $2.1 million from sale of investments.

We also lent $200,000 in a promissory note to a

related party and invested $201,229 in securities.

At the same time, we received

approximately $2.5 million from the sale of Vivacitas Oncology to a related party.

Flows from Financing Activities

1 unchanged sentence

the year ended December 31, 2021.

The increase in cash provided by financing activities in the year 2021 is primarily caused by the proceeds

from stock issuance of $104,565,659 and exercise of subsidiary warrants of $3,249,339.

During the year ended December 31, 2021,

we also received cash proceeds of $280,000 from the sale of our GigWorld shares to individual investors and $68,502 from a loan.

Additionally,

the Company distributed $2,549,750 to one minority interest investor, borrowed $5,545,495 from related parties and repaid

$7,057,324 to related parties.

During the year ended December 31, 2020, we received cash proceeds of $13,202,123 from the issuance

of stock, $11,380,460 from exercise of subsidiary warrants, we distributed $411,250 to one minority interest investor and repaid $6,644,542

of related party loan.

Cash provided by financing activities in the year 2022 is primarily related the proceeds from stock

issuance of $6,213,000 and borrowing from a commercial loan of $123,633.

Additionally, the Company repaid $279,152 to note payable.

increase in cash provided by financing activities in the year 2021 is primarily caused by the proceeds from stock issuance of $104,565,659

and exercise of subsidiary warrants of $3,249,339.

During the year ended December 31, 2021, we also received cash proceeds of $280,000

from the sale of our Hapi Metaverse shares to individual investors and $68,502 from a loan.

Additionally, the Company distributed $2,549,750

to one minority interest investor, borrowed $5,545,495 from related parties and repaid $7,057,324 to related parties.

Property Financing Arrangements

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the Black Oak and Alset Villas projects will be influenced by the strategy, or mix of strategies, we utilize at each project.

Perth project in Australia is relatively small, representing approximately 2% of our total projects included in the estimated property

costs and forecasted revenue, and the development plan of this project is contingent on the local market.

We have been monitoring the

local market, which has seen no significant improvement to date, and we will consider development once it is more confident in the market.

Perth project in Australia was relatively small, and based on management’s recommendations the land was sold in 2022.

Oak is a land infrastructure and subdivision project situated in Magnolia, Texas, north of Houston.

1 unchanged sentence

subsidiaries of Alset International.

Currently the Black Oak project does not have any financing from third parties.

The Company’s

Ballenger Run project is nearly complete, as all lots have been sold and the Company is completing its final tasks related to the project.

November 2015, through LiquidValue Development, we completed the $15.7 million acquisition of Ballenger Run, a 197-acre land subdivision

19 unchanged sentences

and a Deed of Trust issued to the Lender on the property owned by SeD Maryland.

is expected to be discontinued after 2021.

Our line of credit agreement provides procedures for determining a replacement or alternative

rate in the event that LIBOR is unavailable.

However, there can be no assurances as to whether such replacement or alternative rate will

be more or less favorable than LIBOR.

We intend to monitor the developments with respect to the potential phasing out of LIBOR after

2021 and will work with our lenders to ensure any transition away from LIBOR will have minimal impact on our financial condition.

however, can provide no assurances regarding the impact of the discontinuation of LIBOR on the interest rate that we would be required

to pay or on our financial condition.

On March 15, 2022, approximately $2,300,000 was released

from collateral, leaving approximately $300,000 as collateral for outstanding letters of credit.

of December 31, 2022 and 2021, the principal balance of the loan was $0.

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traded stock price at the close of the reporting period.

Amarantus BioScience Holdings (“AMBS”) and

True Partner Capital Holding Limited (“True Partner”) are publicly traded companies.

The Company does

not have significant influence over AMBS and True Partner as the Company is the beneficial owner of approximately 5.3% of the common

shares of AMBS and 15.5% of True Partner.

Amarantus BioScience Holdings (“AMBS”) and True Partner Capital

Holding Limited (“True Partner”) are publicly traded companies.

The Company does not have significant influence over AMBS

and True Partner as the Company is the beneficial owner of approximately 4.3% of the common shares of AMBS and owned 15.5% of True Partner

The stock fair value is determined by quoted stock prices.

April 12, 2021 the Company acquired 6,500,000 common shares of Value Exchange International, Inc.

12, 2021, the Company acquired 6,500,000 common shares of Value Exchange International, Inc.

(“Value Exchange International”),

an OTC listed company, for an aggregate subscription price of $650,000.

After the transaction the Company owns approximately 18% of Value

Exchange International and does not have significant influence on it.

The stock’s fair value is determined by quoted stock prices.

On October 17, 2022 the Company purchased additional 7,276,163

common shares of Value Exchange International for an aggregate purchase price of $1,743,734.

After these transactions the Company owns

approximately 38.3% of Value Exchange International and exercises significant influence over it.

Our Chief Executive Officer, Chan Heng

Fai, is also an owner of the common stock of Value Exchange International (not including any common shares we hold).

Additionally, certain

members of our board of directors serve as directors of Value Exchange International.

The stock’s fair value is determined by quoted

stock prices.

the year ended December 31, 2021, the Company’s subsidiaries established a portfolio of trading securities.

3 unchanged sentences

in our portfolio and fair value of these trading securities are determined by quoted stock prices.

Company has elected the fair value option for the equity securities noted below that would otherwise be accounted for under the equity

method of accounting.

Holista CollTech Limited (“Holista”), DSS Inc.

(“DSS”) and American Premium Water Corp

(“APW”) are publicly traded companies and fair value is determined by quoted stock prices.

The Company has elected the fair

value option for the equity securities noted below that would otherwise be accounted for under the equity method of accounting.

CollTech Limited (“Holista”), DSS Inc.

(“DSS”) and New Electric CV Corporation

(“NECV”, formerly known as “American Premium Mining Corporation” or “APM”)are publicly traded companies

and fair value is determined by quoted stock prices.

The Company has significant influence but does not have a controlling interest in

these investments, and therefore, the Company’s investment could be accounted for under the equity method of accounting or elect

fair value accounting.

The Company has significant influence

but does not have a controlling interest in these investments, and therefore, the Company’s investment could be accounted for under

the equity method of accounting or elect fair value accounting.

Company has significant influence over DSS as we owned approximately 24.9% of the common stock of DSS as of December 31, 2021, and our

Chief Executive Officer, Chan Heng Fai, is an owner of the common stock of DSS (not including any common or preferred shares we hold).

In addition, our Chief Executive Officer is the Chairman of the Board of Directors of DSS.

Tung Moe, our Co-Chief Executive Officer and the son of Chan Heng Fai, is also a director of DSS.

The Company did not have a controlling

interest and therefore the Company’s investment would be accounted for under equity method accounting or could elect the fair value

option accounting.

Company had significant influence over Holista as the Company and its CEO are the beneficial owner of approximately 15.8% of the outstanding

shares of Holista and our CEO had a position on the Board of Directors of Holista from July of 2013 until June of 2021.

The Company did

not have a controlling interest and therefore the Company’s investment would be accounted for under equity method accounting or

could elect the fair value option accounting.

Company has significant influence over APW as the Company is the beneficial owner of approximately 17.5% of the common shares of APW

and one officer from the Company holds a director position of APW’s board.

The Company did not have a controlling interest and

therefore the Company’s investment would be accounted for under equity method accounting or could elect the fair value option accounting.

Company has elected the fair value options for the equity securities noted above that would otherwise be accounted for under the equity

method of accounting to better match the measurement of assets and liabilities in the Consolidated Statements of Operations.

and DSS are publicly traded companies and fair value of these equity investments is determined by the quoted stock prices.

31, 2021 and 2020, the fair value (calculated by market trading prices on the end dates of the periods) of total held equity stock of

American Premium Water, Holista and DSS was $15,632,977 and $10,075,758, respectively.

Company accounts for certain of its investments in real estate funds without readily determinable fair values in accordance with ASU

2015-07, Fair Value Measurement (Topic 820):

Disclosures for Investments in Certain Entities That Calculate Net Asset Value per

Share (or Its Equivalent) (“ASC 820”).

As of December 31, 2019 the Company maintained an investment in a real estate

fund, The Global Opportunity Fund.

This fund invests primarily in the U.S.

and met the criteria within ASC 820.

Chan Heng Fai, the Chairman

and CEO of the Company, was also one of the directors of the Global Opportunity Fund.

The fair values of the investments in this class

have been estimated using the net asset value of the Company’s ownership interest in Global Opportunity Fund.

The fund was closed

during November 2019 and is being liquidated.

As of December 31, 2019, the Company recorded a receivable $307,944 from the Global Opportunity

These monies were received on January 23, 2020.

March 2, 2020 and October 29, 2021, the Company received warrants to purchase shares of American Medical REIT Inc.

a related party private startup company, in conjunction with the Company lending two $200,000 promissory notes.

details on this transaction, refer to Note 9 to Company’s Financial Statements, Related Party Transactions, Note Receivable from

a Related Party Company.

As of December 31, 2021 and 2020, AMRE was a private company.

Based on management’s analysis, the fair

value of the warrants and the stock option was $0 as of December 31, 2021 and 2020.

over DSS as we owned approximately 45.2% of the common stock of DSS as of December 31, 2022, and our Chief Executive Officer, Chan Heng

Fai, is an owner of the common stock of DSS (not including any common or preferred shares we hold).

In addition, our Chief Executive Officer

is the Chairman of the Board of Directors of DSS.

Chan Tung Moe, our Co-Chief Executive Officer and the son of Chan Heng Fai, is also

a director of DSS.

The Company did not have a controlling interest and therefore the Company’s investment would be accounted for

under equity method accounting or could elect the fair value option accounting.

The Company had significant influence

over Holista as the Company and its CEO are the beneficial owner of approximately 15.5% of the outstanding shares of Holista and our CEO

had a position on the Board of Directors of Holista from July of 2013 until June of 2021.

The Company did not have a controlling interest

and therefore the Company’s investment would be accounted for under equity method accounting or could elect the fair value option

The Company has significant influence

over NECV as the Company is the beneficial owner of approximately 0.8% of the common shares of NECV and one officer from the Company holds

an executive and director position of NECV’s board.

Additionally, our Chief Executive Officer, Chan Heng Fai, is also an owner of

the common stock of NECV (not including any common shares we hold).

The Company did not have a controlling interest and therefore the

Company’s investment would be accounted for under equity method accounting or could elect the fair value option accounting.

The Company has elected the fair

value options for the equity securities noted above that would otherwise be accounted for under the equity method of accounting to better

match the measurement of assets and liabilities in the Consolidated Statements of Operations.

Value Exchange International, Holista and

DSS are publicly traded companies and fair value of these equity investments is determined by the quoted stock prices.

On December 31,

2022 and 2021, the fair value (calculated by market trading prices on the end dates of the periods) of total held equity stock of Value

Exchange International, Holista and DSS was $13,503,533 and $16,821,636, respectively.

On March 2, 2020, and October

29, 2021, the Company received warrants to purchase shares of American Medical REIT Inc.

(“AMRE”), a related party private

startup company, in conjunction with the Company lending two $200,000 promissory notes.

For further details on this transaction, refer

to Note 8 to Company’s Financial Statements, Related Party Transactions, Note Receivable from a Related Party Company.

As of December

31, 2022 and 2021, AMRE was a private company.

Based on management’s analysis, the fair value of the warrants and the stock option

was $0 as of December 31, 2021.

In March 2022, both loans, together with warrants were converted into common shares of AMRE.

conversion, the Company owns approximately 15.8% of AMRE.

Company held a stock option to purchase 250,000 shares of Vivacitas common stock at $1 per share at any time prior to the date of a public

1 unchanged sentence

As of December 31, 2020, Vivacitas was a private company.

Based on management’s analysis, the fair value

of the Vivacitas stock option was $0 as of December 31, 2020.

On March 18, 2021 the Company sold the subsidiary holding the ownership

and stock option in Vivacitas to an indirect subsidiary of DSS.

For further details on this transaction, refer to Note 9 - Related Party

Transactions, Sale of Investment in Vivacitas to DSS .

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 APW, for an aggregated purchase price of $122,039.

We value APB warrants under level 3 category through a

Black Scholes option pricing model and the fair value of the warrants from APW were $860,342 as of July 17, 2020, the purchase date and

$1,009,854 and $862,723 as of December 31, 2021 and 2020, respectively.

April 27, 2020, Global BioMedical Pte Ltd (“GBM”), one of our subsidiaries, entered into a share exchange agreement with

DSS BioHealth Security, Inc.

(“DBHS”), a wholly owned subsidiary of DSS, Inc.

(“DSS”), a related party of the

Company, pursuant to which, DBHS agreed to acquire all of the outstanding capital stock of Impact BioMedical Inc., a wholly owned subsidiary

of GBM, through a share exchange.

On August 21, 2020, the transaction closed and Impact BioMedical Inc became a direct wholly owned subsidiary

GBM received 483,334 shares of DSS common stock and 46,868 shares of DSS preferred stock, which preferred shares could be converted

to 7,232,716 common shares.

On October 5, 2020 the Company converted 4,293 of these preferred shares into 662,500 common shares.

May 25, 2021 and again on June 21, 2021, GBM converted an aggregate of 42,575 shares of Series A Convertible Preferred Stock into 6,570,170

shares of the common stock of DSS.

On September 3, 2021, the Company purchased additional 12,155,591 common shares of DSS.

Company has elected the fair value option for the DSS common stock that would otherwise be accounted for under the equity method of accounting.

We value DSS preferred stock under level 3 category through the Option-Pricing Method (“OPM”) to allocate the equity value

between common and preferred shares.

The OPM relies on the Black-Scholes-Merton model.

As of December 31, 2021 and 2020, the fair market

value of the DSS preferred stock was $0 and $37,675,000, respectively.

For further details on this transaction, refer to Note 9 to Company’s

Financial Statements – Related Party Transactions, Note 13 – Discontinued Operations and Note 14 – Investments Measured

at Fair Value.

On March 18, 2021 the Company sold the subsidiary holding

the ownership and stock option in Vivacitas to an indirect subsidiary of DSS.

For further details on this transaction, refer to Note

8 - Related Party Transactions, Sale of Investment in Vivacitas to DSS .

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.

We value NECV warrants under level 3 category through a Black Scholes option pricing

model and the fair value of the warrants from NECV were $860,342 as of July 17, 2020, the purchase date and $327,565 and $1,009,854 as

of December 31, 2022 and 2021, respectively.

Company accounts for certain of its investments in funds without readily determinable fair values in accordance with ASU No.

Fair Value Measurement (Topic 820):

Disclosures for Investments in Certain Entities That Calculate Net Asset Value per Share (or Its

Equivalent) (“2015-07”).

In the first six months of 2022 the Company invested $100,000 in Class A Shares of Novum Alpha

Global Opportunity Digital Asset Fund I SP, a segregated portfolio of Novum Alpha SPC (“Novum Alpha Fund”).

This fund invests

in long-short digital assets.

The Company subscribed in participating shares which are redeemable and non-voting.

The Company closed

the fund in July 2022 recording $74,827 loss on this investment.

changes in the fair values of the investment were recorded directly to accumulated other comprehensive income (loss).

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listed on an exchange, with a purchase cost of $200,128.

We measure Vivacitas at cost, less any

impairment, plus or minus changes resulting from observable price changes in orderly transactions for an identical or similar investment

of the same issuer.

Our ownership in Vivacitas was sold on March 18, 2021 to DSS for $2,480,000.

The difference of $2,279,872 between

the selling price and our original investment cost was recorded as additional paid capital considering a related party transaction.

further details on this transaction, refer to Note 9 – Related Party Transactions, Sale of Investment in Vivacitas to DSS .

We measure Vivacitas at cost, less any impairment, plus or minus changes resulting

from observable price changes in orderly transactions for an identical or similar investment of the same issuer.

Our ownership in Vivacitas

was sold on March 18, 2021 to DSS for $2,480,000.

The difference of $2,279,872 between the selling price and our original investment

cost was recorded as additional paid capital considering a related party transaction.

For further details on this transaction, refer

to Note 8 – Related Party Transactions, Sale of Investment in Vivacitas to DSS .

September 8, 2020, the Company acquired 1,666 shares, approximately 1.45% ownership, from Nervotec Pte Ltd (“Nervotec”),

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plus or minus changes resulting from observable price changes in orderly transactions for an identical or similar investment of the same

September 30, 2020, the Company acquired 20,000 shares, approximately 19% ownership, from HWH World

Company Limited (f.k.a.

Hyten Global (Thailand) Co., Ltd.) (“HWH World Co.”) , a private company, at a purchase price

HWH World Co.

is a direct sales company in Thailand.

The Company does not have

significant influence on HWH World Co.

and applied ASC 321 and measured HWH

at cost, less any impairment, plus or minus changes resulting from observable price changes in orderly transactions

for an identical or similar investment of the same issuer.

September 30, 2020, the Company acquired 3,800 shares, approximately 19% ownership, from HWH World Company Limited (f.k.a.

(Thailand) Co., Ltd.) (“HWH World Co.”), a private company, at a purchase price of $42,562.

May 31, 2021, the Company invested $19,609 in K Beauty Research Lab Co., Ltd (“K Beauty”) for 18% ownership.

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(“LiquidValue”), a subsidiary of the Company owns 15.8% of American Medical REIT Inc.

a startup REIT company concentrating on medical real estate.

AMRE acquires state-of-the-art, purpose-built healthcare facilities and

leases them to leading clinical operators with dominant market share under secure triple net leases.

AMRE targets hospitals (both Critical

Access and Specialty Surgical), Physician Group Practices, Ambulatory Surgical Centers, and other licensed medical treatment facilities.

Chan Heng Fai, our CEO, is the executive chairman and director of AMRE.

LiquidValue did not invest equity but lend a loan to AMRE.

detail in Note 9 to Company’s Financial Statements, Related Party Transactions.

On balance sheet, the prorate loss from AMRE was

not recorded as a liability because the Company is not liable for the obligations of AMRE and is not committed to provide additional

financial support.

April 25, 2018, BioLife Sugar, Inc.

(“BioLife”), a subsidiary consolidated under Alset International, entered into joint

venture agreement with Quality Ingredients, LLC (“QI”).

The agreement created an entity called Sweet Sense, Inc.

Sense”), which was 50% owned by BioLife and 50% owned by QI.

Management believes its investment of 50% represents significant influence

over Sweet Sense and accounts for the investment under the equity method of accounting.

As of December 31, 2018, BioLife had contributed

$55,000 to the joint venture and recorded its proportionate share losses totaling $44,053 recorded as loss on investment in security

by equity method in the Condensed Consolidated Statements of Operations and Other Comprehensive Loss.

November 8, 2019, Impact BioMedical Inc., a subsidiary of the Company, purchased 50% of Sweet Sense from QI for $91,000 and recorded

a loss from acquisition in the amount of $90,001.

As of November 8, 2019, the total investment in joint venture was equal to $91,000

and the proportionate losses totaled $90,001.

The transaction was not in the scope of ASC 805 Business Combinations since the acquisition

was accounted for an asset purchase instead of a business combination.

As an asset acquisition, the Company recorded the transaction

at cost and applied ASC 730 to expense in-process research and development cost, the major cost of Sweet Sense.

Consequently, Sweet Sense

was an 81.8% owned subsidiary of Alset International, and therefore, was consolidated into the Company’s condensed consolidated

financial statements as of December 31, 2020.

On August 20, 2020 Impact BioMedical Inc.

to one of DSS’s subsidiaries.

As a subsidiary of Impact BioMedical Inc., Sweet Sense was in the discontinued operations of Impact

BioMedical Inc.

April 27, 2020, Global BioMedical Pte Ltd (“GBM”), one of our subsidiaries, entered into a share exchange agreement with

DSS BioHealth Security, Inc.

(“DBHS”), a wholly owned subsidiary of DSS, Inc.

(“DSS”), pursuant to which, DBHS

agreed to acquire all of the outstanding capital stock of Impact BioMedical Inc., a wholly owned subsidiary of GBM, through a share exchange.

It was agreed that the aggregate consideration to be issued to GBM for the Impact BioMedical shares would be the following:

newly issued shares of DSS common stock;

and (ii) 46,868 newly issued shares of a new series of DSS perpetual convertible preferred stock

with a stated value of $46,868,000, or $1,000 per share.

The convertible preferred stock can be convertible into shares of DSS common