What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2023-05-15 compared with 2022-11-14 · 238 added, 295 removed, 184 unchanged (74% of the section changed)

13 unchanged sentences

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

We manage our principal businesses primarily through our 85.4% owned subsidiary,

We manage a significant portion of our businesses through our 85.4% owned subsidiary,

Alset International Limited, a public company traded on the Singapore Stock Exchange.

3 unchanged sentences

Maryland, in our real estate segment.

Recently, the Company expanded its real estate portfolio to single family rental homes, and we currently

own 132 homes that are rented or are available for rent.

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.

of September 30, 2022, additional interests we held, both directly and indirectly, included a 41.3% equity interest in American Pacific

Bancorp Inc., a 15.5% equity interest in Holista CollTech Limited, a 45.2% equity interest in DSS Inc.

(“DSS”), an 18.1%

equity interest in Value Exchange International, Inc., a 0.8% equity interest in American Premium Mining Corporation., and an interest

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.

also have ownership interests outside of Alset International, including a 36.9% equity interest in American Pacific Bancorp Inc., an

indirect 15.2% 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.

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OTCQB (OTCQB:

American Premium Mining Corporation is a publicly traded company that is engaged in crypto-mining (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).

of Securities of True Partner Limited

January 18, 2022, the Company entered into a stock purchase agreement with DSS, Inc., pursuant to which the Company agreed to sell, through

the transfer of subsidiary and otherwise, 62,122,908 shares of stock of True Partner Capital Holding Limited in exchange for 11,397,080

shares of the common stock of DSS.

On February 28, 2022 the Company entered into a revised Stock Purchase Agreement with DSS, Inc., pursuant

to which the Company has agreed to replace the January 18, 2022 agreement with a new agreement to sell a subsidiary holding 44,808,908

shares of stock of True Partner Capital Holding Limited, together with an additional 17,314,000 shares of True Partner Capital Holding

Limited (for a total of 62,122,908 shares, representing all of our shares in such entity) in exchange for 17,570,948 shares of common

stock of DSS (the “DSS Shares”).

The issuance of the DSS Shares was subject to the approval of the NYSE American (on which

the common stock of DSS is listed) and DSS’s shareholders.

The shareholders of DSS approved this transaction on May 17, 2022, and

the transaction subsequently closed.

of Shares of DSS

January 25, 2022, the Company agreed to purchase 44,619,423 shares of DSS’s common stock for a purchase price of $0.3810 per share,

for an aggregate purchase price of $17,000,000.

On February 28, 2022, the Company and DSS agreed to amend this stock purchase agreement.

The number of shares of the common stock of DSS that the Company agreed to purchase was reduced to 3,986,877 shares for an aggregate

purchase price of $1,519,000.

Such acquisition of shares of DSS closed on March 9, 2022.

of Note to DSS

February 25, 2022, Alset International entered into an assignment and assumption agreement with DSS (the “Assumption Agreement”)

pursuant to which DSS agreed to purchase a convertible promissory note from Alset International.

The note has a principal amount of $8,350,000

and had accrued but unpaid interest of $367,400 through May 15, 2022.

The note was issued by American Medical REIT, Inc.

The consideration

paid for the note was 21,366,177 shares of DSS’s common stock.

The number of DSS shares issued as consideration was calculated

by dividing $8,717,400, the aggregate of the principal amount and the accrued but unpaid interest under the Note, by $0.408 per share.

The closing of the Assumption Agreement and the issuance of the DSS shares described above was subject to the approval of the NYSE American

and DSS’s shareholders.

The shareholders of DSS approved this transaction on May 17, 2022.

July 12, 2022, Alset International entered into Amendment No.

1 to the Assumption Agreement.

Amendment No.

1 revised the Assumption Agreement

to remove an adjustment provision.

On July 12, 2022, the transactions contemplated by the Assumption Agreement and Amendment No.

consummated, Alset International assigned the Note to DSS, and DSS issued to Alset International 21,366,177 shares of DSS’s common

of Alset International shares

January 17, 2022 the Company entered into a securities purchase agreement with Chan Heng Fai, pursuant to which the Company agreed to

purchase from Chan Heng Fai 293,428,200 ordinary shares of Alset International for a purchase price of 29,468,977 newly issued shares

of the Company’s common stock.

On February 28, 2022, the Company and Chan Heng Fai entered into an amendment to this securities

purchase agreement pursuant to which the Company shall purchase these 293,428,200 ordinary shares of Alset International for a purchase

price of 35,319,290 newly issued shares of the Company’s common stock.

The closing of this transaction with Mr.

Chan is subject

to approval of the Nasdaq and the Company’s stockholders.

These 293,428,200 ordinary shares of Alset International represent approximately

8.4% of the 3,492,713,362 total issued and outstanding shares of Alset International.

The Company had a Special Meeting of Stockholders

to vote on the approval of this transaction on June 6, 2022.

Public Offering of Alset Capital Acquisition Corp.

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:

ACAXU, ACAX, ACAXW and ACAXR).

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

Our emphasis is on building businesses in industries where our management team has in-depth knowledge and experience, or where

our management can provide value by advising on new markets and expansion.

We have at times provided a range of global capital and management

services to these companies in order to gain access to Asian markets.

We have historically favored businesses that improve an individual’s

quality of life or that improve the efficiency of businesses through technology in various industries.

We believe our capital and management

services provide us with a competitive advantage in the selection of strategic acquisitions, which creates and adds value for our company

and our stockholders.

Capital Acquisition Corp.

February 3, 2022 Alset Capital Acquisition Corp.

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of Alset Capital.

Capital Acquisition Corp.

Merger Agreement with HWH International Inc.

September 9, 2022, Alset Capital entered into an agreement and plan of merger (the “Merger Agreement”) by and among Alset

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of Alset Capital, the shareholder of HWH and the satisfaction of certain other customary closing conditions.

May 1, 2023, Alset Capital amended its Investment Management Trust Agreement with Wilmington Trust, National Association, a national

banking association, which was entered into on January 31, 2022.

The Trust Agreement is now amended, in part, so that Alset Capital’s

ability to complete a business combination may be extended in additional increments of one month up to a total of twenty-one (21) additional

months from the closing date of its initial public offering, subject to the payment into the trust account by Alset Capital of one-third

of 1% of the funds remaining in the trust account following any redemptions in connection with the approval of the amendment to Alset

Capital’s Amended and Restated Certificate of Incorporation.

approved by its stockholders at the Special Meeting of Stockholders held on May 1, 2023 (the “Alset Capital Special Meeting”),

Alset Capital filed an amendment to its Amended and Restated Certificate of Incorporation with the Delaware Secretary of State on May

2, 2023, to (i) give Alset Capital the right to extend the date by which it has to consummate a business combination from May 3, 2023,

to November 3, 2023, on a month-to-month basis;

and (ii) expand the methods that it may employ to not become subject to the “penny

stock” rules of the Securities and Exchange Commission.

connection with the Alset Capital Special Meeting, 6,648,964 shares of the Class A Common Stock of Alset Capital were tendered for redemption.

Following this redemption, 2,449,786 shares of the Class A Common Stock of Alset Capital remain issued and outstanding, including 473,750

shares held by Alset Acquisition Sponsor, LLC and 1,976,036 public shares.

Alset Acquisition Sponsor, LLC owns 2,156,250 shares of Class

B Common Stock.

a Special Meeting of Stockholders on June 6, 2022, the stockholders approved the reincorporation of the Company in Texas and the change

1 unchanged sentence

business model.

Business Developments in our Home Rental Business

the Company expanded its real estate portfolio to single family rental houses.

During 2021 and early 2022, the Company, through its subsidiaries,

acquired 132 homes in Montgomery and Harris Counties, Texas.

approximately fifty of the 132 rental homes that were acquired, as part of our commitment to advancing smart and healthy sustainable

living, we have installed Tesla PV solar panels and Powerwalls.

We are reviewing plans to add solar panels and related technologies to

the balance of the single-family rental homes, where feasible.

In addition, we have added technologies at many of the single-family rental

homes such as (i) smart solar, thermostat, and energy usage controls;

(ii) smart lighting controls;

(iii) smart locks and security;

(iv) smart home automation devices.

We believe these and other technologies will be attractive to renters and we continue to build and

pursue strategic, technological partnerships that will assist us as we expand our real estate business to include building homes for

rent and building homes for sale in the future.

Company has entered into a property management agreement with the property managers under which the property managers generally oversee

and direct the leasing, management and advertising of the properties in our portfolio, including collecting rents and acting as liaison

with the tenants.

The Company pays its property managers a monthly property management fee per property unit and a leasing fee.

of Rental Business from Majority-Owned Subsidiary

December 9, 2022, Alset Inc.

entered into an agreement with Alset EHome Inc.

and Alset International Limited pursuant to which Alset

agreed to reorganize the ownership of its home rental business.

Previously, Alset Inc.

and certain majority-owned subsidiaries collectively

owned 132 single-family rental homes in Texas.

112 of these rental homes are owned by subsidiaries of American Home REIT Inc.

owns 85.4% of Alset International Limited, and Alset International Limited indirectly owns approximately 99.9% of Alset EHome

closing of the transaction contemplated by this agreement was completed on January 13, 2023.

Pursuant to this agreement, Alset Inc.

become the direct owner of AHR and its subsidiaries that collectively own these 112 homes, instead of such homes being owned indirectly

through Alset International Limited’s subsidiaries.

sold AHR to Alset Inc.

for a total consideration of $26,250,933, including the forgiveness of debt in the amount of $13,900,000,

a promissory note in the amount of $11,350,933 and a cash payment of $1,000,000.

This purchase price represents the book value of AHR

as of November 30, 2022.

closing of this transaction was approved by the shareholders of Alset International Limited and the transaction was closed on January

Certain members of Alset Inc.’s Board of Directors and management are also members of the Board of Directors and management

of each of Alset International Limited and Alset EHome Inc.

February 6, 2023, we entered into an Underwriting Agreement (the “Underwriting Agreement”) in connection with an offering

(the “Offering”) of our common stock, par value $0.001 per share (the “Common Stock”), with Aegis Capital Corp.

(the “Underwriter”) as the underwriter, relating to an underwritten public offering of 1,727,273 shares of Common Stock at

a public offering price of $2.20 per share.

The Underwriting Agreement provides the Underwriter a 45-day option to purchase up to an

additional 212,863 shares of Common Stock to cover over-allotments, if any.

net proceeds to the Company from the Offering were approximately $3.3 million, after deducting underwriting discounts and the payment

of other offering expenses associated with the Offering that are payable by the Company.

Offering closed on February 8, 2023.

The Common Stock was being offered pursuant to an effective registration statement on Form S-3 (File

333-264234), as well as a prospectus supplement in connection with the Offering filed with the Securities and Exchange Commission.

of Certain Lots

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Pursuant to the terms of the Agreement, the Seller

has agreed to sell all of the approximately 242 single-family detached residential lots comprising a residential community in the city

of Magnolia, Texas known as the “Lakes at Black Oak.” The lots will be sold at a range of prices, and the Seller will also

be entitled to receive a community enhancement fee for each lot sold.

The aggregate purchase price and community enhancement fees are

anticipated to be $12,881,000, however, such purchase price will be adjusted accordingly, if the total number of lots increases or decreases

prior to the closing of the transactions contemplated by the Agreement.

closing of the transactions described in the Agreement depends on the satisfaction of certain conditions set forth therein.

be no assurance that such closings will be completed on the terms outlined herein or at all.

The Buyer has agreed to purchase the lots

in stages, with an estimated closing date of December of 2022 for the first 132 lots to be acquired, with the remainder to be acquired

through 2023.

Prior to such closing dates, the Buyer shall have a thirty (30) day inspection period in which to inspect the properties

agreed to sell all of the approximately 242 single-family detached residential lots comprising a residential community in the city of

Magnolia, Texas known as the “Lakes at Black Oak.”

November 28, 2022, the parties to the Agreement entered into an amendment to the Agreement, pursuant to

which the Seller agreed to sell approximately 131 lots instead of 242 lots, and the anticipated purchase price was reduced.

April 13, 2023, the sale of the 131 lots was completed and the Seller received a total consideration of $6,615,500 from the Buyer.

Seller was required to develop and improve the property at the Seller’s cost pursuant to certain development plans and government

regulations prior to the closing described above.

to Sell 110 Lots

March 16, 2023, 150 CCM Black Oak Ltd.

(the “Seller”) entered into a Purchase and Sale Agreement (the “Purchase and

Sale Agreement”) with Rausch Coleman Homes Houston, LLC, a Texas limited liability company (“Rausch Coleman”).

to the terms of the Purchase and Sale Agreement, the Seller has agreed to sell approximately 110 single-family detached residential lots

which comprise a section of the Lakes at Black Oak.

The price of the lots and certain community enhancement fees the Seller will be entitled

to receive are anticipated to equal an aggregate of $6,586,250.

closing of the sale of these 110 lots depends on the satisfaction of certain conditions set forth in the Purchase and Sale Agreement.

There can be no assurance that such closings will be completed on the terms outlined herein or at all.

Commencing on March 16, 2023,

Rausch Coleman had a thirty (30) day inspection period in which to inspect the properties

and determine their suitability;

during such inspection period, the Buyer may decline to proceed with the closing of these transactions.

Seller shall be required to develop and improve the property at the Seller’s cost pursuant to certain development plans and government

regulations prior to the closings described above.

during such inspection period, Rausch Coleman was entitled to decline to proceed with the closing of

these transactions.

Rausch Coleman did not exercise its right to decline, and pursuant to the Purchase and Sale Agreement, has made an

additional deposit in escrow.

Through the date hereof, Rausch Coleman has deposited $957,250 in escrow.

Seller shall be required to complete certain improvements at the property at the Seller’s cost prior to the closing.

to Sell 189 Lots

March 17, 2023, the Seller entered into a Contract of Sale (the “Contract of Sale”) with Davidson Homes, LLC, an Alabama

limited liability company (“Davidson Homes”).

Pursuant to the terms of the Contract of Sale, the Seller has agreed to sell

approximately 189 single-family detached residential lots comprising an additional section of the Lakes at Black Oak.

The price of the

lots and certain community enhancement fees the Seller will be entitled to receive are anticipated to equal an aggregate of $10,022,500.

closing of the transactions described in the Contract of Sale depends on the satisfaction of certain conditions set forth therein.

can be no assurance that such closings will be completed on the terms outlined herein or at all.

Davidson Homes has agreed to purchase

the lots in stages, comprising an initial closing of 94 lots, the remaining lots to be purchase on or before December 29, 2023.

on March 17, 2023, Davidson Homes had a thirty (30) day inspection period in which to inspect the properties

and determine their suitability;

during such inspection period, Davidson Homes was entitled to decline to proceed with the closing of

these transactions.

Davidson Homes did not exercise its right to decline, and pursuant to the Contract of Sale, has made an additional

deposit in escrow.

Through the date hereof, Davidson Homes has deposited $1,425,000 in escrow.

Seller shall be required to complete certain improvements at the property at the Seller’s cost prior to the closing.

of Value Exchange International, Inc.

October 17, 2022, the Company’s subsidiary GigWorld Inc.

entered into a Stock Purchase Agreement (the “Agreement”)

with Chan Heng Fai, who is the Chairman of GigWorld’s Board of Directors and our Chairman, Chief Executive Officer and largest

Pursuant to the Agreement, GigWorld bought an aggregate of 7,276,163 shares of Value Exchange International, Inc.

a Nevada corporation, for the following purchase prices:

(i) $1,733,079.12 for 7,221,163 shares, representing a price of $.24 per share;

October 17, 2022, our majority-owned subsidiary Hapi Metaverse entered into a Stock Purchase Agreement (the “Stock Purchase Agreement”)

with Chan Heng Fai, who is the Chairman of Hapi Metaverse’s Board of Directors and the Chairman, Chief Executive Officer and largest

stockholder of Alset Inc.

Pursuant to the Stock Purchase Agreement, Hapi Metaverse bought an aggregate of 7,276,163 shares of Value Exchange

International Inc.

(“VEII”) for the following purchase prices:

(i) $1,733,079.12 for 7,221,163 shares, representing a price

of $0.24 per share;

(ii) $2,314 for 10,000 shares, representing a price of $0.2314 per share;

(iii) $5,015 for 25,000 shares, representing a price of $.2006

(iii) $5,015 for 25,000 shares, representing

a price of $0.2006 per share;

and (iv) $3,326 for 20,000 shares, representing a price of $0.1663 per share.

Collectively, these purchases represent an aggregate

purchase price of $1,743,734.12 for 7,276,163 shares of VEII.

Such purchase prices were negotiated between the parties to the Agreement.

Chan and another member of GigWorld’s Board of Directors, Lum Kan Fai Vincent, are both members of the Board of Directors of VEII.

Collectively, these purchases

represent an aggregate purchase price of $1,743,734.12 for 7,276,163 shares of VEII.

Such purchase prices were negotiated between the

parties to the Stock Purchase Agreement.

Chan and another member of the Board of Directors of Hapi Metaverse, Lum Kan Fai Vincent, are both members of the Board of Directors

In addition to Mr.

Chan, two other members of our Board of Directors are also members of the Board of Directors of VEII (Mr.

Yeung and Mr.

Chan, two other members of the Board of Directors of Alset Inc.

are also members of the Board of Directors

Wong Shui Yeung and Mr.

Wong Tat Keung).

Following the acquisitions of shares pursuant to the Agreement, the Company now owns a total of 13,834,643

shares of VEII, representing 38.3% of VEII.

Impact of the COVID-19 Pandemic

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From March 2020

through the second quarter of 2022, we continued to sell lots at our Ballenger Run project (in Maryland) to NVR for the construction

of single-family homes.

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.

through March 2023, we continued to sell lots at our Ballenger Run project (in Maryland) for the construction of town homes to NVR.

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

2 unchanged sentences

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

In 2020, 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 space.

The infrastructure design, engineering and construction

for the Black Oak project, and other planned projects, could be impacted by the COVID-19 pandemic in the future.

In addition, we believe

the COVID-19 pandemic could continue to have an impact on supply chains and commodities in the future, which may impact our real estate

business by causing increased costs and longer project durations.

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

Accordingly, the COVID-19 pandemic

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

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

the COVID-19 pandemic 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).

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

Business Activities

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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 and our staff’s travel between the U.S.

significantly limited until earlier this year.

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

travel to the Black Oak project in 2020 and 2021;

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.

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 was significantly limited until early 2022.

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.

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 projects.

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

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of Operations

of Statements of Operations for the Three and Nine Months Ended September 30, 2022 and 2021

of Statements of Operations for the Three Months Ended March 31, 2023 and 2022

Three-months Ended

Nine-months Ended

September 30,

Operating Expenses

$ (3,016,666 )

$ (3,605,778 )

Other Expenses

following tables set forth period-over-period changes in revenue for each of our reporting segments:

Three Months Ended

September 30,

$ (2,233,452 )

Digital Transformation Technology

Total revenue

$ (6,054,798 )

Nine Months Ended

September 30,

Income Tax Expense

$ (4,323,182 )

$ (7,930,453 )

following tables set forth period-over-period changes in revenue for each of our reporting segments:

Three Months Ended

Digital Transformation Technology

1 unchanged sentence

$ (1,025,301 )

was $721,905 and $4,795,567 for the three months ended September 30, 2022 and 2021, respectively.

Revenue was $3,600,482 and $16,945,913

for the nine months ended September 30, 2022 and 2021, respectively.

The decrease in property sales from the Ballenger Project and direct

sales from our indirect subsidiary HWH World in the first nine months of 2022 contributed to lower revenue in those periods.

nine months of 2022 the last three homes in Ballenger Project were sold.

In this 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.

We are not involved in

the construction of homes at the present time.

was $926,936 and $1,952,237 for the three months ended March 31, 2023 and 2022, respectively.

The decrease in property sales from the

Ballenger Project and direct sales from our indirect subsidiary HWH World in the first three months of 2023 contributed to lower revenue

in this period.

In the first three months of 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 to

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

from the sale of Front Foot Benefits (“FFBs”), assessed on Ballenger project lots, decreased from $77,012 in the three months

ended September 30, 2021 to $9,968 in the three months ended September 30, 2022.

Income from the sale of FFBs, decreased from $431,458

in the nine months ended September 30, 2021 to $126,055 in the nine months ended September 30, 2022.

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 $569,792 and $133,302

in the three months ended September 30, 2022 and 2021, respectively.

Revenue from rental business was $1,206,273 and $155,249 in the

nine months ended September 30, 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 Korean market through one of the subsidiaries of Health Wealth Happiness

Ltd., HWH World Inc (“HWH World”).

ended March 31, 2022 to $0 in the three months ended March 31, 2023.

Remaining properties were sold to homebuyers in 2022, hence the

decrease in revenue in 2023.

from rental business was $633,811 and $232,582 in the three months ended March 31, 2023 and 2022, 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.

recognized $22,154 and $1,248,171 in revenue in three months ended September 30, 2022 and 2021, respectively.

HWH World recognized

and $4,919,844 in revenue in nine months ended September 30, 2022 and 2021, respectively.

The decrease in revenue from HWH World is caused

mainly by decreased sales of annual memberships, as management is in the process of reorganizing its business model in South Korea.

June 2022 the Company’s subsidiary GigWorld Inc., operating under our Digital Transformation Technology segment, started

providing services to its customer in Hong Kong, who is a related party to the Company, generating revenue of $6,365 and

$14,066 in the three and nine months ended September 30, 2022, 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 three months ended September 30, 2022 and 2021, the revenue from other businesses was $123,595 and $0, respectively,

generated by a Singaporean café shop operated by a subsidiary of the Company.

In the nine months ended September 30, 2022 and

2021, the revenue from other businesses was $319,862 and $0, respectively, generated by this Singaporean café shop.

$12,786 and $617,471 in revenue in the three months ended March 31, 2023 and 2022, 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 three months ended March 31, 2023 and 2022, the revenue from other businesses was $266,299

and $60,660, respectively, generated by Korean and Singaporean café shops and restaurants.

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

Three Months Ended

September 30,

$ (1,911,525 )

Digital Transformation Technology

Total Cost of Revenues

$ (1,391,032 )

Nine Months Ended

September 30,

$ (6,410,784 )

Digital Transformation Technology

Total Cost of Revenues

$ (6,031,609 )

of revenues decreased from $2,204,401 in the three months ended September 30, 2021 to $813,369 in the three months ended September 30,

Cost of revenues decreased from 8,510,205 in the nine months ended September 30, 2021 to $2,478,596 in the nine months ended September

of revenues decreased from $1,114,550 in the three months ended March 31, 2022 to $689,281 in the three months ended March 31, 2023.

The decrease is a result of the decrease in sales in the Ballenger Run project and HWH World sales.

Capitalized construction

expenses, finance costs and land costs are allocated to sales.

Capitalized construction expenses,

finance costs and land costs are allocated to sales.

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

gross margin decreased from $2,591,166 to negative $99,165 in the three months ended September 30, 2021 and 2022, respectively.

margin decreased from $8,435,708 to $1,121,886 in the nine months ended September 30, 2021 and 2022, respectively.

gross margin decreased from $837,687 to $237,655 in the three months ended March 31, 2022 and 2023, respectively.

The decrease of gross

2 unchanged sentences

Three Months Ended

September 30,

Digital transformation technology

Total operating expenses

Nine Months Ended

September 30,

Digital transformation technology

Total operating expenses

$ (6,965,713 )

increase of operating expenses of real estate in 2022 compared with 2021 was mostly caused by the increase in sales and rental related

Decrease in expenses in our biohealth business is caused by the decreased commission payments to our distributors, which is

connected to decreased sales.

decrease of operating expenses of real estate in the first three months of 2023 compared to the same period of 2022 was mostly caused

by the decrease in sales and rental related expenses.

Decrease in expenses in our biohealth business is caused by the decreased commission

payments to our distributors, which is connected to decreased sales.

Income (Expense)

the three months ended September 30, 2022, the Company had other expense of $11,163,538 compared to other expenses of $8,126,066 in the

three months ended September 30, 2021.

In the nine months ended September 30, 2022, the Company had other expense of $25,546,935 compared

to other expenses of $87,293,906 in the nine months ended September 30, 2021.

The change in realized and unrealized loss on securities

investments and finance costs are the primary reasons for the volatility in these two periods.

Unrealized loss on securities investment

was $11,006,833 in the three months ended September 30, 2022, compared to $5,268,531 loss in the three months ended September 30, 2021.

Unrealized loss on securities investment was $21,773,223 in the nine months ended September 30, 2022, compared to $35,972,445 loss in

the nine months ended September 30, 2021.

Realized loss on security investment was $145,122 the three months ended September 30, 2022,

compared to a loss of $2,515,949 in the three months ended September 30, 2021.

Realized loss on security investment was $6,500,573 the

nine months ended September 30, 2022, compared to a loss of $2,218,988 in the nine months ended September 30, 2021.

Finance gain was

$887 in the three months ended September 30, 2022, compared to costs of $27,798 in the three months ended September 30, 2021.

costs were $450,000 the nine months ended September 30, 2022, compared to costs of $50,871,869 in the nine months ended September 30,

the three months ended September 30, 2022 the Company had net loss of $13,081,391 compared to net loss of $8,074,484 in the three months

ended September 30, 2021.

In the nine months ended September 30, 2022 the Company had net loss of $30,994,705 compared to net loss of

$92,771,369 in the nine months ended September 30, 2021.

the three months ended March 31, 2023, the Company had other expense of $2,233,452 compared to other expenses of $6,054,798 in the three

months ended March 31, 2022.

The change in realized and unrealized loss on securities investments and other income are the primary reasons

for the volatility in these two periods.

Unrealized loss on securities investment was $1,187,846 in the three months ended March 31,

2023, compared to $3,899,015 loss in the three months ended March 31, 2022.

Realized loss on security investment was $131,313 the three

months ended March 31, 2023, compared to a loss of $3,436,783 in the three months ended March 31, 2022.

Other income was $103,007 in

the three months ended March 31, 2023, compared to other income of $1,284,893 in the three months ended March 31, 2022.

the three months ended March 31, 2023 the Company had net loss of $4,323,182 compared to net loss of $7,930,453 in the three months ended

March 31, 2022.

and Capital Resources

real estate assets have increased to $51,583,814 as of September 30, 2022 from $40,515,380 as of December 31, 2021.

real estate assets have increased to $57,572,049 as of March 31, 2023 from $54,618,729 as of December 31, 2022.

This increase primarily

reflects the additional rental properties we purchased in first nine months of 2022.

In the nine months ended September 30, 2022, we

purchased twenty-three homes, which will be used in the Company’s rental business.

Our rental properties assets were $31,485,036

as of September 30, 2022.

In the first nine months of 2022, one of the Company’s subsidiaries sold two plots of land it owns in

Australia (which had been planned to be part of the SeD Perth project).

cash has decreased from $56,061,309 as of December 31, 2021 to $22,605,541 as of September 30, 2022.

Our liabilities decreased from $13,920,357

at December 31, 2021 to $5,104,600 at September 30, 2022.

Our total assets have decreased to $164,664,506 as of September 30, 2022 from

$184,210,143 as of December 31, 2021 mainly due to decrease in cash.

reflects an increase in the capitalized costs related to the construction in progress recorded on the Black Oak project.

cash has increased from $17,827,383 as of December 31, 2022 to $18,675,450 as of March 31, 2023.

Our liabilities increased from $4,827,221

at December 31, 2022 to $6,819,685 at March 31, 2023.

Our total assets have increased to $155,689,482 as of March 31, 2023 from $153,490,336

as of December 31, 2022 mainly due to increase in real estate assets.

management believes that the available cash in bank accounts and favorable cash revenue from real estate projects are sufficient to fund

our operations for at least the next 12 months.

of Cash Flows for the Nine Months Ended September 30, 2022 and 2021

Nine Months Ended September 30,

of Cash Flows for the Three Months Ended March 31, 2023 and 2022

Three Months Ended March 31,

Net cash used in operating activities

1 unchanged sentence

$ (5,293,582 )

Net cash used in investing activities

$ (15,031,318 )

Net cash provided by (used in) investing activities

$ (7,311,776 )

1 unchanged sentence

Flows from Operating Activities

cash used in operating activities was $28,331,829 in the first nine months of 2022, as compared to net cash used in operating activities

cash used in operating activities was $3,289,083 in the first three months of 2023, as compared to net cash used in operating activities

of $5,293,582 in the same period of 2022.

The payment of accrued bonus due to director of $3,614,749 contributed to the decrease of cash

in operating activities in the first nine months of 2022.

Development of real estate and other expenses were the main reason for the cash used in operating

activities in 2023.

Flows from Investing Activities

cash used in investing activities was $15,031,318 in the first nine months of 2022, as compared to net cash used in investing activities

cash provided by investing activities was $671,484 in the first three months of 2023, as compared to net cash used in investing activities

of $7,311,776 in the same period of 2022.

In the nine months ended September 30, 2022 we invested $8,479,968 in marketable securities,

$6,057,493 to purchase real estate properties and $1,082,225 in real estate property improvements.

In the nine months ended September

30, 2021 we invested $19,308,318 in marketable securities, $11,081,491 to purchase real estate properties and $327,603 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

and $840,000 from the repayment of promissory note from related party.

In the three months ended March 31, 2023 we invested $412,500 in marketable securities, issued

$1,521,368 in loans to related parties and received $2,613,629 from repayment of related party notes receivable.

In the three months

ended March 31, 2022 we invested $6,585,294 in marketable securities and invested $722,817 to purchase real estate properties.

Flows from Financing Activities

cash provided by financing activities was $5,996,133 in the nine months ended September 30, 2022, compared to net cash provided of $77,237,040

in the nine months ended September 30, 2021.

The increase in cash provided by financing activities in the first nine months of 2022 is

primarily caused by the proceeds from stock issuance of $6,213,000.

Additionally, the Company repaid $216,867 to loan payable.

the nine months ended September 30, 2021, we received cash proceeds of $73,157,884 from stock issuance, $2,975,194 from exercise of subsidiary

warrants, $280,000 from the sale of our GigWorld shares to individual investors and $68,502 from a loan.

The Company also distributed

$1,398,250 to one minority interest investor and borrowed $5,545,195 from related parties.

Sheet Arrangements

do not have any off-balance sheet arrangements that are reasonably likely to have a current or future effect on our financial condition,

revenues, results of operations, liquidity or capital expenditures.

believe that inflation has not had a material impact on our results of operations for the nine months ended September 30, 2022 or the

year ended December 31, 2021.

Our current and anticipated costs in our real estate and other business lines have increased due to recent

inflation, including projected costs of materials and salaries, and such increases may be significant as we engage in additional operations.

We cannot assure you that future inflation will not have an adverse impact on our operating results and financial condition.

cash provided by financing activities was $3,433,921 in the three months ended March 31, 2023, compared to net cash provided of $6,044,640

in the three months ended March 31, 2022.

The cash provided by financing activities in the first three months of 2023 is caused by the

proceeds from stock issuance of $3,433,921.

During the three months ended March 31, 2022, we received $6,213,000 from conversion of related

party note payable to common stock and we repaid $168,360 of related party debt.

believe that inflation has not had a material impact on our results of operations for the three months ended March 31, 2023 or the year

ended December 31, 2022.

We cannot assure you that future inflation will not have an adverse impact on our operating results and financial

of Foreign Exchange Rates

effect of foreign exchange rate changes on the intercompany loans (under ASC 830), which mostly consist of loans from Singapore to the

United States and which were approximately $43 million and $43 million on September 30, 2022 and December 31, 2021, respectively, are

the reason for the significant fluctuation of foreign currency transaction Gain or Loss on the Condensed Consolidated Statements of Operations

United States and which were approximately $37 million and $51 million on March 31, 2023 and December 31, 2022, respectively, are the

reason for the significant fluctuation of foreign currency transaction Gain or Loss on the Condensed Consolidated Statements of Operations

and Other Comprehensive Loss.

23 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis