What changed in this filing

/stocks — the workspaceLOADING

Item 1. Financial Statements

2023-08-14 compared with 2023-05-15 · 758 added, 621 removed, 1171 unchanged (54% of the section changed)

1 unchanged sentence

and Subsidiaries

Condensed Consolidated Balance Sheets

March 31, 2023

Consolidated Balance Sheets

June 30, 2023

December 31, 2022

12 unchanged sentences

Properties under Development

Operating Lease Right-Of-Use Asset

Operating Lease Right-Of-Use Assets, net

Cash and Marketable Securities Held in Trust Account

Property and Equipment, Net

5 unchanged sentences

Deferred Revenue

Operating Lease Liability

Operating Lease Liabilities - current

Notes Payable

Notes Payable - Related Parties

Notes Payable

Total Current Liabilities

Long-Term Liabilities:

Notes Payable

Operating Lease Liability

Operating Lease Liabilities - noncurrent

Total Liabilities

Temporary Equity

Class A Common Stock of Alset Capital Acquisition Corp subject to possible redemption;

1,976,036 shares at approximately

$ 10.16 per share as of June 30, 2023

Stockholders’ Equity:

3 unchanged sentences

250,000,000 shares authorized;

9,235,119 and

7,422,846 shares issued and outstanding on March 31, 2023 and December 31, 2022, respectively

9,235,119 and 7,422,846 shares issued and outstanding on June 30, 2023 and December 31, 2022, respectively *

Additional Paid in Capital

10 unchanged sentences

$ 153,490,336

accompanying notes to condensed consolidated unaudited financial statements.

The numbers of outstanding common stock were adjusted

retrospectively to reflect 20-for-1 reverse stock split on December

See accompanying notes to condensed consolidated financial statements.

and Subsidiaries

Condensed Consolidated Statements of Operations

and Other Comprehensive Loss

For the Three Months Ended March 31, 2023 and 2022

Consolidated Statements of Operations and Other Comprehensive Income

For the Three and Six Months Ended June 30, 2023

Three- Months Ended June 30,

Six- Months Ended June 30,

Digital Transformation Technology – related party

Total Revenue

3 unchanged sentences

Total Operating Expenses

Operating Losses from Operations

Income (Loss) from Operations

( 1,654,262 )

2 unchanged sentences

Interest Income

Foreign Exchange Transaction (Loss) Gain

Unrealized Loss on Securities Investment

Foreign Exchange Transaction Gain

Unrealized Gain (Loss) on Securities Investment

( 1,230,648 )

1 unchanged sentence

( 6,459,968 )

( 9,535,742 )

Realized Loss on Securities Investment

( 10,557,229 )

Loss on Investment Securities at Equity Method

( 2,918,668 )

( 10,688,542 )

( 6,355,451 )

Gain (Loss) on Investment on Security by Equity Method

Loss on Consolidation of Alset Capital Acquisition Corp.

( 21,657,036 )

Finance Costs

Other Income (Expense)

Total Other Expense, Net

1 unchanged sentence

( 8,328,599 )

Net Loss Income Before Income Taxes

( 13,156,354 )

( 14,383,397 )

Net Loss Before Income Taxes

( 5,813,406 )

( 9,982,861 )

( 10,136,588 )

( 17,691,200 )

Income Tax Expense

1 unchanged sentence

( 9,982,861 )

( 10,136,588 )

( 17,913,314 )

Net Loss Attributable to Non-Controlling Interest

3 unchanged sentences

$ ( 8,987,359 )

$ ( 9,665,736 )

$ ( 15,454,645 )

Other Comprehensive Loss, Net

1 unchanged sentence

Foreign Currency Translation Adjustment

( 2,183,883 )

( 3,514,595 )

( 1,087,940 )

( 4,163,735 )

Comprehensive Loss

1 unchanged sentence

( 13,498,047 )

( 11,224,528 )

( 22,086,763 )

Comprehensive Loss Attributable to Non-controlling Interests

( 2,286,174 )

( 3,371,569 )

Comprehensive Loss Attributable to Common Stockholders

1 unchanged sentence

$ ( 11,211,873 )

$ ( 10,598,008 )

$ ( 18,715,194 )

Net Loss Per Share - Basic and Diluted

Net Loss Per Share - Basic

Weighted Average Common Shares Outstanding - Basic and Diluted

The numbers of weighted average

outstanding common stock - basic and diluted were adjusted retrospectively to reflect 20-for-1 reverse stock split on December 28,

accompanying notes to condensed consolidated unaudited financial statements.

Weighted Average Common Shares Outstanding - Basic

numbers of weighted average outstanding common stock - basic and diluted were adjusted retrospectively to reflect 20-for-1 reverse

stock split on December 28, 2022

See accompanying notes to condensed consolidated financial statements.

and Subsidiaries

Condensed Consolidated Statements of Stockholders’

For the Three Months Ended March 31, 2023

Additional Paid in Capital

Other Comprehensive

Accumulated Deficit

Total Alset Stockholders’

Non-Controlling Interests

Total Stockholders’ Equity

Series A Preferred Stock

Series B Preferred Stock

Additional Paid in Capital

Other Comprehensive

Accumulated Deficit

Total Alset Stockholders’

Non-Controlling Interests

Total Stockholders’ Equity

Balance at January 1, 2023

Consolidated Statements of Stockholders’ Equity

For the Six Months Ended June 30, 2023

Preferred Stock

Comprehensive

Stockholders’

at January 1, 2023

$ 322,534,891

2 unchanged sentences

$ 148,663,115

Issuance of Common Stock

Foreign Currency Translations

of Common Stock

Currency Translations

( 3,857,886 )

1 unchanged sentence

( 4,323,182 )

Balance at March 31, 2023

at March 31, 2023

$ 325,967,000

2 unchanged sentences

$ 148,869,797

Currency Translations

( 1,849,049 )

( 2,183,883 )

( 5,807,850 )

( 5,813,406 )

at June 30, 2023

( 198,390,147 )

$ 140,872,508

and Subsidiaries

Condensed Consolidated Statements of Stockholders’

For the Three Months Ended March 31, 2022

Series A Preferred Stock

Series B Preferred Stock

Additional Paid in Capital

Other Comprehensive

Accumulated Deficit

Stockholders’ Equity

Non-Controlling Interests

Total Stockholders’ Equity

Balance at January 1, 2022

Consolidated Statements of Stockholders’ Equity

For the Six Months Ended June 30, 2022

Preferred Stock

Comprehensive

Stockholders’

at January 1, 2022

$ 296,181,977

2 unchanged sentences

$ 170,289,786

of Stock by Exercising Warrants

Related Party Note to Common Stock

Deconsolidate

Alset Capital Acquisition

from Purchase Stock DSS

Conversion Feature Intrinsic Value, Net

in Non-Controlling Interest

in Unrealized Loss on Investment

Currency Translations

( 6,467,286 )

2 unchanged sentences

( 7,930,453 )

Issuance of Stock by Exercising Warrants

Convert Related Party Note to Common Stock

Deconsolidate Alset Capital Acquisition

Gain from Purchase Stock DSS

Beneficial Conversion Feature Intrinsic Value, Net

Change in Non-Controlling Interest

Change in Unrealized Loss on Investment

Foreign Currency Translations

at March 31, 2022

$ 320,404,965

2 unchanged sentences

$ 188,494,081

Balance at March 31, 2022

$ 320,404,965

2 unchanged sentences

$ 188,494,081

of Common Stock

in Valuation on Investment

( 2,624,585 )

1 unchanged sentence

( 2,830,962 )

in Non-Controlling Interest

( 7,824,450 )

accompanying notes to condensed consolidated unaudited financial statements.

in Unrealized Loss on Investment

Currency Translations

( 3,002,167 )

( 3,514,595 )

( 8,987,359 )

( 9,982,861 )

at June 30, 2022

$ 322,302,515

$ ( 163,688,118 )

$ 159,320,949

$ 172,165,072

$ 322,302,515

$ ( 163,688,118 )

$ 159,320,949

$ 172,165,072

See accompanying notes to condensed consolidated financial statements.

and Subsidiaries

Condensed Consolidated Statements of Cash Flows

For the Three Months Ended March 31, 2023 and 2022

Cash Flows from Operating Activities

Net Loss from Operations

Consolidated Statements of Cash Flows

the Six Months Ended June 30, 2023 and 2022

Flows from Operating Activities

Loss from Operations

$ ( 10,136,588 )

$ ( 17,913,314 )

Adjustments to Reconcile Net Loss to Net Cash Used in Operating Activities:

Amortization of Right-Of-Use Assets

Amortization of Debt Discount

Foreign Exchange Transaction Loss (Gain)

Unrealized Loss on Securities Investment

Unrealized (Gain) Loss on Securities Investment - Related Party

to Reconcile Net Loss to Net Cash Provided by (Used in) Operating Activities:

of Right-Of-Use Assets

of Debt Discount

Loss on Consolidation of Alset Capital Acquisition Corp.

Exchange Transaction Gain

( 2,485,804 )

Realized Loss on Securities Investment

Loss on Equity Method Investment

Changes in Operating Assets and Liabilities

(Gain) Loss on Securities Investment

( 6,543,729 )

Account Receivables

Prepaid Expense

Trading Securities

Accounts Payable and Accrued Expenses

(Gain) Loss on Securities Investment - Related Party

( 11,109,151 )

Other Receivables - Related Parties

Deferred Revenue

Operating Lease Liability

Builder Deposits

Net Cash Used in Operating Activities

Loss on Securities Investment

Loss on Exchange of Investment Securities

Loan Forgiveness

Compensation Adjustment

( 1,185,251 )

on Equity Method Investment

in Operating Assets and Liabilities, net of acquisitions

( 2,274,959 )

Cash Flows from Investing Activities

Purchase of Fixed Assets

Purchase of Real Estate Properties

Purchase of Investment Securities

( 7,280,286 )

Issuing Loan Receivable - Related Party

( 4,593,961 )

Proceeds from Loan Receivable - Related Party

Net Cash Provided by (Used in) Investing Activities

Payable and Accrued Expenses

( 9,398,591 )

Cash Flows from Financing Activities

Proceeds from Common Stock Issuance

Conversion of Related Party Note to Common Stock

Repayment to Notes Payable

Net Cash Provided by Financing Activities

Net Increase (Decrease) in Cash and Restricted Cash

Receivables - Related Parties

( 2,551,127 )

Effects of Foreign Exchange Rates on Cash

Cash and Restricted Cash - Beginning of Period

Cash and Restricted Cash- End of Period

Restricted Cash

Total Cash and Restricted Cash

Supplementary Cash Flow Information

Cash Paid for Interest

Cash Paid for Taxes

Supplemental Disclosure of Non-Cash Investing and Financing Activities

Unrealized Gain (Loss) on Investment

Initial Recognition of ROU / Lease Liability

Deconsolidate Alset Capital Acquisition

Amortization of Debt Discount

Issuance of Stock by Exercising Warrants

accompanying notes to condensed consolidated unaudited financial statements.

Lease Liabilities

Cash Provided by (Used in) Operating Activities

( 16,125,804 )

Flows from Investing Activities

Receivable - Related Party

of Fixed Assets

of Real Estate Properties

Estate Improvements

of Investment Securities

( 6,662,017 )

Acquisition of Subsidiary

Loan Receivable - Related Party

( 1,628,010 )

from Loan Receivable - Related Party

Cash Used in Investing Activities

( 8,308,426 )

Flows from Financing Activities

from Common Stock Issuance

to Notes Payable

Cash Provided by Financing Activities

Increase (Decrease) in Cash and Restricted Cash

( 18,393,091 )

of Foreign Exchange Rates on Cash

and Restricted Cash - Beginning of Year

and Restricted Cash- End of Period

Cash and Restricted Cash

Supplementary

Cash Flow Information

Paid for Interest

Paid for Taxes

Disclosure of Non-Cash Investing and Financing Activities

Gain on Investment

Recognition of ROU / Lease Liability

Deconsolidate

Alset Capital Acquisition

$ ( 450,000 )

of Stock by Exercising Warrants

See accompanying notes to condensed consolidated financial statements.

and Subsidiaries

to Condensed Consolidated Financial Statements

the Three Months Ended March 31, 2023 and 2022

the Six Months Ended June 30, 2023 and 2022

NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

30 unchanged sentences

Company’s condensed consolidated financial statements include the financial position, results of operations and cash flows of the

following entities as of March 31, 2023 and December 31, 2022, as follows:

following entities as of June 30, 2023 and December 31, 2022, as follows:

OF SUBSIDIARIES

Attributable interest as of,

Name of subsidiary

consolidated under AEI

State or other jurisdiction of

incorporation or organization

March 31, 2023

December 31, 2022

Alset Global Pte.

Alset Business Development Pte.

Global eHealth Limited

Alset International Limited

Singapore Construction & Development Pte.

Art eStudio Pte.

Singapore Construction Pte.

Global BioMedical Pte.

Alset Innovation Pte.

Health Wealth Happiness Pte.

SeD Capital Pte.

LiquidValue Asset Management Pte.

Alset Solar Limited

Alset F&B One Pte.

Global TechFund of Fund Pte.

Singapore eChainLogistic Pte.

BMI Capital Partners International Limited.

SeD Perth Pty.

SeD Intelligent Home Inc.

United States of America

LiquidValue Development Inc.

United States of America

Alset EHome Inc.

United States of America

of subsidiary

or other jurisdiction of

interest as of,

incorporation

or organization

Business Development Pte.

eHealth Limited

International Limited

Construction & Development Pte.

Construction Pte.

BioMedical Pte.

Innovation Pte.

Wealth Happiness Pte.

Asset Management Pte.

Solar Limited

TechFund of Fund Pte.

eChainLogistic Pte.

Capital Partners International Limited.

Intelligent Home Inc.

States of America

Development Inc.

States of America

Black Oak GP, Inc.

United States of America

SeD Development USA Inc.

United States of America

States of America

Development USA Inc.

States of America

CCM Black Oak, Ltd.

United States of America

SeD Texas Home, LLC

United States of America

SeD Ballenger, LLC

United States of America

SeD Maryland Development, LLC

United States of America

SeD Development Management, LLC

United States of America

SeD Builder, LLC

United States of America

Hapi Metaverse Inc.

States of America

Texas Home, LLC

States of America

Ballenger, LLC

States of America

Maryland Development, LLC

States of America

Development Management, LLC

States of America

Metaverse Inc.

GigWorld Inc.)

United States of America

HotApp BlockChain Pte.

HotApp International Limited

HWH International, Inc.

United States of America

Health Wealth & Happiness Inc.

United States of America

HWH Multi-Strategy Investment, Inc.

United States of America

SeD REIT Inc.

United States of America

Gig Stablecoin Inc.

United States of America

HWH World Inc.

United States of America

HWH World Pte.

UBeauty Limited

WeBeauty Korea Inc

HWH World Limited

HWH World Inc.

GDC REIT Inc.

United States of America

BioHealth Water Inc.

United States of America

Impact BioHealth Pte.

American Home REIT Inc.

United States of America

Alset Solar Inc.

United States of America

Open House Inc.

United States of America

States of America

BlockChain Pte.

International Limited

International, Inc.

States of America

Wealth & Happiness Inc.

States of America

Multi-Strategy Investment, Inc.

States of America

Stablecoin Inc.

States of America

World Limited

States of America

of subsidiary

or other jurisdiction of

interest as of,

incorporation

or organization

States of America

BioHealth Pte.

Home REIT Inc.

States of America

Solar REIT Inc.

States of America

OpenBiz Inc.)

States of America

17 unchanged sentences

Cafe Korea, Inc.

Energy REIT Inc.

States of America

24 unchanged sentences

F&B (PLQ) Pte.

Shenzhen Leyouyou Catering Management Co., Ltd.

Dongguan Leyouyou Catering Management Co., Ltd.

Leyouyou Catering Management Co., Ltd.

Alset Capital Acquisition Corp.

United States of America

the Company indirectly holds percentage of shares of these entities less than 50%, the subsidiaries of the Company directly hold

16 unchanged sentences

those costs could also be allocated based on area method, the size of the lot compared to the total size of all lots in the project.

the Company purchases properties but does not receive the assessment information from the county, the Company allocates the values

between land and building based on the data of similar properties.

The Company makes appropriate adjustments once the assessment

from the county is received.

the Company purchases properties but does not receive the assessment information from the county, the Company allocates the values between

land and building based on the data of similar properties.

The Company makes appropriate adjustments once the assessment from the county

At the same time, any necessary adjustments to depreciation expense are made in the income statement.

On March 31, 2023 and December 31, 2022 the Company adjusted $ 0

and $ 4,791,997

between building and land, respectively.

During the three months ended March 31, 2023 and 2022, the Company adjusted depreciation

expenses of $ 0 and

respectively.

On June 30, 2023 and

December 31, 2022, the Company adjusted $ 951,349 and $ 4,791,997 between building and land, respectively.

During the three months ended

June 30, 2023 and 2022, the Company adjusted depreciation expenses of $ 17,525 and $ 0 , respectively.

During the six months ended June

30, 2023 and 2022, the Company adjusted depreciation expenses of $ 17,525 and $ 0 , respectively.

and Cash Equivalents

2 unchanged sentences

to a known amount of cash and are subject to an insignificant risk of changes in values.

There were no cash equivalents as of March 31,

There were no cash equivalents as of June 30,

2023 and December 31, 2022.

9 unchanged sentences

and the account closed.

As of March 31, 2023 and December 31, 2022, the total balance of these two accounts was $ 309,295 and $ 309,219 ,

As of June 30, 2023 and December 31, 2022, the total balance of these two accounts was $ 309,372 and $ 309,219 ,

respectively.

5 unchanged sentences

Company puts money into brokerage accounts specifically for equity investment.

As of March 31, 2023 and December 31, 2022, the cash balance

As of June 30, 2023 and December 31, 2022, the cash balance

in these brokerage accounts was $ 354,802 and $ 385,304 , respectively.

held in Trust Account

June 30, 2023 the Company had approximately $ 20.8 million, in investments in treasury securities held in the Trust Account.

in the Trust Account are subject to redemption by investors of Alset Capital Acquisition Corp.

Receivables and Allowance for Doubtful Accounts

receivables is stated at amounts due from buyers, contractors, and all third parties, net of an allowance for doubtful accounts.

March 31, 2023 and December 31, 2022, the balance of account receivables was $ 54,976 and $ 46,522 , respectively.

June 30, 2023 and December 31, 2022, the balance of account receivables was $ 63,778 and $ 46,522 , respectively.

Company monitors its account receivables balances on a monthly basis to ensure that they are collectible.

7 unchanged sentences

of specific customers.

As of March 31, 2023 and December 31, 2022, the allowance was $ 0 .

As of June 30, 2023 and December 31, 2022, the allowance was $ 0 .

are stated at the lower of cost or net realizable value.

Cost is determined using the first-in, first-out method and includes all

costs in bringing the inventories to their present location and condition.

Net realizable value is the estimated selling price in

the ordinary course of business less the estimated costs necessary to make the sale.

As of March 31, 2023 and December 31, 2022,

inventory consisted of finished goods from HWH International Inc.

Cost is determined using the first-in, first-out method and includes all costs

in bringing the inventories to their present location and condition.

Net realizable value is the estimated selling price in the ordinary

course of business less the estimated costs necessary to make the sale.

As of June 30, 2023 and December 31, 2022, inventory consisted

of finished goods from HWH International Inc.

and its subsidiaries.

The Company continuously evaluates the need

for reserve for obsolescence and possible price concessions required to write-down inventories to net realizable value.

The Company continuously evaluates the need for reserve for obsolescence

and possible price concessions required to write-down inventories to net realizable value.

Securities at Fair Value

7 unchanged sentences

owner of approximately 14.7 % of common shares of Holista, 4.3 % of the common shares of AMBS and less than 0.1 % of common shares of True

Partner and Lucy.

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

Since 2021, the Company’s subsidiaries have maintained a portfolio of trading securities.

The objective is to

generate profits on short-term differences in market prices.

The Company does not have significant influence over any trading securities

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

The Company disposed the shares of Lucy in the first six

months of 2023.

2021, the Company’s subsidiaries have maintained a portfolio of trading securities.

The objective is to generate profits on short-term

differences in market prices.

The Company does not have significant influence over any trading securities in our portfolio and fair value

of these trading securities are determined by reference to 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

1 unchanged sentence

(“DSS”), New Electric CV Corporation (“NECV” formerly known as “American

Premium Mining Corporation” (“APM”)) and Value Exchange International Inc.

Premium Mining Corporation” (“APM”)), Value Exchange International Inc.

(“Value Exchange International”

or “VEII”) 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.

or “VEII”) and Sharing Services Global Corp.

(“SHRG”) 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.

Company has significant influence over DSS.

As of March 31, 2023 and December 31, 2022, the Company owned approximately 45.2 % of

the common stock of DSS, respectively.

As of June 30, 2023 and December 31, 2022, the Company owned approximately 44.8 % of the

common stock of DSS, respectively.

Our CEO is a stockholder and 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.

William Wu, Wong Shui Yeung and Joanne Wong

Hiu Pan, directors of the Company, are each also directors of DSS.

Chan Tung Moe, our

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

William Wu, Wong Shui Yeung and Joanne Wong Hiu

Pan, directors of the Company, are each also directors of DSS.

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 a director position

on NECV’s Board of Directors.

0.5 % of the common shares of NECV and one officer from the Company held a director position

on NECV’s Board of Directors until April of 2023.

Additionally, our CEO is a significant stockholder of

8 unchanged sentences

Wong Tat Keung).

Company has significant influence over SHRG as the Company is the beneficial owner of approximately 33.4 % of the common shares of

SHRG, our CEO holds a director position on SHRG’s Board of Directors and one of the officers of the Company is the CFO of SHRG.

Additionally, our CEO is a significant stockholder of SHRG shares.

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

2 unchanged sentences

refer to Note 8 - Related Party Transactions, Note Receivable from a Related Party Company .

As of March 31, 2023 and December

As of June 30, 2023 and December 31,

2022, AMRE was a private company.

1 unchanged sentence

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

After the conversion, the Company

owns approximately 15.8 % of AMRE.

After the conversion, the Company owns

approximately 15.8 % of AMRE.

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

50 unchanged sentences

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

as of September 30, 2022, a company concentrating on medical real estate.

as of June 30, 2023, a company concentrating on medical real estate.

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

7 unchanged sentences

Pacific Bancorp, Inc.

to Securities Purchase Agreement from March 12, 2021 the Company purchased 4,775,523

shares of the common stock of American Pacific

to Securities Purchase Agreement from March 12, 2021 the Company purchased 4,775,523 shares of the common stock of American Pacific Bancorp

(“APB”) and gained majority ownership in that entity.

APB was consolidated into the Company under common control

accounting (See Transactions between Entities under Common Control for details).

On September 8, 2021 APB sold 6,666,700

shares Series A Common Stock to DSS, Inc.

a result of the new share issuances, the Company’s ownership percentage of APB fell below 50% to 41.3%, and subsequently to 36.9%

and the entity was deconsolidated in accordance with ASC 810-10.

Upon deconsolidation the Company elected to apply the equity method

accounting as the Company still retained significant influence.

As a result of the deconsolidation, the Company recognized gain of approximately

The gain represents the difference between the fair

value of retained equity method investment of $ 30.8

million and the investment percentage of carrying

amount of APB’s net assets of $ 2.9

Considering the transaction was between

related parties, the Company recorded the gain as additional paid in capital in its equity.

During three months ended March 31, 2023

the investment loss was $ 17,749

and during three months ended March 31, 2022

the investment gain was $ 141,343 .

As of March 31, 2023 and December 31, 2022, the investment in APB was $ 31,650,497

and $ 31,668,246 ,

respectively.

Capital Acquisition Corp.

February 3, 2022, Alset Capital Acquisition Corp.

(“Alset Capital”), a special purpose acquisition company (SPAC) sponsored

by the Company and certain affiliates, closed its initial public offering of 7,500,000 units at $ 10.00 per unit (the “Offering”).

At the same time the exercise of underwriters’ over-allotment option of additional 1,125,000 units closed.

The Company is majority

owner of Alset Acquisition Sponsor, LLC, the sponsor (the “Sponsor”) of Alset Capital.

On February 3, 2022, the Sponsor purchased

473,750 units pursuant to a private placement for a purchase price of $ 4,737,500 .

Previously, the Sponsor had purchased 2,156,250 shares

of Class B common stock pursuant to a private placement for a purchase price of $ 25,000 .

After the Offering the Company holds 23.4 % of

Alset Capital.

Chan Heng Fai, the Chairman and CEO of the Company, is the CEO and director of Alset Capital.

In June 2022, the Company

made an adjustment of $ 2,830,961 to Additional Paid in Capital and the fair value of investment in Alset Capital, and reversed the previously

recorded unrealized loss of $ 237,578 , because of the change of valuation methods of the investment on Class B Common Stock and units

the company held.

Initially, the Company used market trading prices of Class A common stock and units to calculate the fair value of

these investment securities and recorded $ 237,578 unrealized loss on security investment during three months ended March 31, 2022.

June 2022, the Company determined the fair value of Class B common shares and units by using a put option model and a Monte Carlo simulation

considering some restrictions and risks related to these securities the Company held.

On September 30, 2022 the Company purchased the

remaining 10 % ownership in the Sponsor for $ 476,250 and currently owns 100 % of it.

During the three months ended March 31, 2023, the

Company recorded investment loss of $ 45,199 by equity method.

The Company’s investment in Alset Capital was $ 21,066,376 and $ 21,111,575

as of March 31, 2023 and December 31, 2022, respectively.

APB was consolidated into the Company under common control accounting

(See Transactions between Entities under Common Control for details).

On September 8, 2021 APB sold 6,666,700 shares Series A Common

Stock to DSS, Inc.

for $ 40,000,200 cash.

As a result of the new share issuances, the Company’s ownership percentage of APB fell

below 50% to 41.3%, and subsequently to 36.9% and the entity was deconsolidated in accordance with ASC 810-10.

Upon deconsolidation the

Company elected to apply the equity method accounting as the Company still retained significant influence.

As a result of the deconsolidation,

the Company recognized gain of approximately $ 28.2 million.

The gain represents the difference between the fair value of retained equity

method investment of $ 30.8 million and the investment percentage of carrying amount of APB’s net assets of $ 2.9 million.

the transaction was between related parties, the Company recorded the gain as additional paid in capital in its equity.

and six months ended June 30, 2023 the investment gain was $ 136,751 and $ 119,002 , respectively, and during three and six months ended

June 30, 2022 the investment gain was $ 18,678 and $ 160,021 , respectively.

As of June 30, 2023 and December 31, 2022, the investment in

APB was $ 31,787,248 and $ 31,668,246 , respectively.

June 10, 2021 the Company’s indirect subsidiary Hapi Cafe Inc.

6 unchanged sentences

Ketomei is in the business of selling cooked food and drinks.

months ended March 31, 2023 and 2022 the investment loss was $ 53,199 and $ 3,273 , respectively.

Investment in Ketomei was $ 154,203 and

$ 207,402 at March 31, 2023 and December 31, 2022, respectively.

and six months ended June 30, 2023 and 2022 the investment loss was $ 10,446 and $ 63,645 , and $ 29,786 and $ 33,059 , respectively.

in Ketomei was $ 143,757 and $ 207,402 at June 30, 2023 and December 31, 2022, respectively.

Brokers Company Inc.

May 22, 2023 the Company’s indirect subsidiary, SeD Capital Pte Ltd (“SeD Capital”), entered into a Stock Purchase

Agreement, pursuant to which SeD Capital purchased 39.8

shares ( 19.9 %)

of the Common Stock of Sentinel Brokers Company Inc.

(“Sentinel”) for the aggregate purchase price of $ 279,719 .

Sentinel is a broker-dealer operating primarily as a fiduciary intermediary, facilitating institutional trading of municipal and

corporate bonds as well as preferred stock, and is registered with the Securities and Exchange Commission, is a member of the

Financial Industry Regulatory Authority, Inc.

(“FINRA”), and is a member of the Securities Investor Protection

Corporation (“SIPC”).

The Company has significant influence over Sentinel as its CEO holds a director position on

Sentinel’s Board of Directors.

Additionally,

DSS, of which we own 44.8% and have significant influence over, owns 80.1% of Sentinel.

During three and six months ended

June 30, 2023 the investment loss in Sentinel was $ 7,990

and $ 7,990 ,

respectively.

Investment in Sentinel was $ 271,729

at June 30, 2023.

in Debt Securities

6 unchanged sentences

and other company-specific information.

Company invested $ 50,000 in a convertible promissory note of Sharing Services Global Corporation (“Sharing Services Convertible

Note”), a company quoted on the US OTC market.

The value of the convertible note is estimated by management using a Black-Scholes

valuation model.

Company invested $ 50,000 in a convertible promissory note of Sharing Services Global Corporation (“SHRG Convertible Note”),

a company quoted on the US OTC market.

The value of the convertible note was estimated by management using a Black-Scholes valuation

The fair value of the note was $ 9,799 on December 31, 2021.

The note was redeemed on July 14, 2022 and $ 50,000 principal

together with $ 28,636 accrued interests were received from Sharing Services.

The note was redeemed on July 14, 2022 and $ 50,000 principal together

with $ 28,636 accrued interests were received from Sharing Services.

February 26, 2021, the Company invested approximately $ 88,599 in the convertible note of Vector Com Co., Ltd (“Vector Com”),

3 unchanged sentences

$ 21.26 per common share of Vector Com.

As of March 31, 2023 and December 31, 2022, our management estimated the fair value of the note

As of June 30, 2023 and December 31, 2022, our management estimated the fair value of the note

to be $ 88,599 , the initial transaction price.

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of the VIE that could potentially be significant to it or the right to receive benefits from the VIE that could be significant to the

World Company Limited

is a direct sales company in Thailand.

The Company has a 19 % ownership and loaned $ 187,500 with zero interest and due on demand,

to HWH World Co.

The current level of equity in HWH World Co.

is not sufficient to determine if HWH World Co.

can operate on its own

without additional subordinated financial support.

The Company has a variable interest in HWH World Co., however, the Company is not

deemed to absorb losses or receive benefits that could potentially be significant to HWH World Co.

The Company does not also have

the ultimate power over the activities which can impact VIE’s economic performance, like developing company budgets or overseeing

and controlling the management.

The power to direct the activities are held by the manager in Thailand who owns 51 % of the HWH World

Therefore, the Company is not a primary beneficiary of this VIE and does not consolidate it.

On March 31, 2023 and December 31, 2022

variable interest and amount receivable in the non-consolidated VIE was $ 236,699 and $ 236,699 , respectively, which represents the Company’s

maximum risk of loss from non-consolidated VIE.

The Company applied ASC 321 and measured HWH World Co.

investment 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

Medical REIT Inc.

2021 the Company owned 3.4 % of AMRE and made a loan in the amount of $ 8,350,000 to AMRE, as well as two loans of $ 200,000 each, all with

8 % per annum interest rate.

One of the $ 200,000 loans was due on March 3, 2022, the other one is due on October 29, 2024.

The $ 8,350,000

loan is due on November 29, 2023.

The Company has a variable interest in AMRE.

However, the Company is not deemed to absorb losses or

receive benefits that could potentially be significant to AMRE.

The Company does not also have the ultimate power over the activities

which can impact VIE’s economic performance, like developing company budgets or overseeing and controlling the management.

power to direct these activities are held by the AMRE’s largest shareholder which owns approximately 80.8 % of AMRE and AMRE’s

management team.

Therefore, the Company is not a primary beneficiary of this VIE and does not consolidate it.

In March 2022, the Company

converted both $ 200,000 loans and accrued interests, together with accompanying warrants into AMRE common shares.

After the conversion

the Company owns 15.8 % of AMRE.

On July 12, 2022, pursuant to Assignment and Assumption Agreement from February 25, 2022, as amended

on July 12, 2022, the Company sold the $ 8,350,000 loan, together with accrued interest, to DSS for a purchase price of 21,366,177 shares

of DSS’s common stock.

The loss from this transaction of $ 1,089,675 was calculated as the difference between the face value of

promissory note together with accrued interest and the fair value of DSS stock on July 12, 2022, and was recorded under Other Expense

in Statement of Operations.

On March 31, 2023 and December 31, 2022 variable interest and amount receivable in the non-consolidated VIE

was $ 0 , which represents the Company’s maximum risk of loss from non-consolidated VIE.

Estate Assets

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

Company capitalized construction costs of approximately $ 2.5 million and $ 0.4 million for the three months ended March 31, 2023 and 2022,

Company capitalized construction costs of approximately $ 6.3 million and $ 2.6 million for the three months ended June 30, 2023 and 2022,

respectively.

Company’s policy is to obtain an independent third-party valuation for each major project in the United States as part of our

assessment of identifying potential triggering events for impairment.

Management may use the market comparison method to value other

relatively small projects, such as the project in Perth, Australia, which was completed during the year 2022.

In addition to the

annual assessment of potential triggering events in accordance with ASC 360 – Property Plant and Equipment (“ASC

360”), the Company applies a fair value-based impairment test to the net book value assets on an annual basis and on an

interim basis if certain events or circumstances indicate that an impairment loss may have occurred.

Company did not record impairment on any of its projects during the three months ended on March 31, 2023 and 2022.

The Company capitalized construction costs of approximately $ 8.8 million and $ 3 million for the six months ended June 30,

2023 and 2022, respectively.

Company’s policy is to obtain an independent third-party valuation for each major project in the United States as part of our assessment

of identifying potential triggering events for impairment.

Management may use the market comparison method to value other relatively

small projects, such as the project in Perth, Australia, which was completed during the year 2022.

In addition to the annual assessment

of potential triggering events in accordance with ASC 360 – Property Plant and Equipment (“ASC 360”), the Company

applies a fair value-based impairment test to the net book value assets on an annual basis and on an interim basis if certain events

or circumstances indicate that an impairment loss may have occurred.

Company did not record impairment on any of its projects during the three and six months ended on June 30, 2023 and 2022.

Agreements to Sell Lots

to Sell 110 Lots

October 28, 2022, 150 CCM Black Oak Ltd.

(the “Seller”), a Texas Limited Partnership and subsidiary of the Company, entered

into a Contract for Purchase and Sale and Escrow Instructions (the “Agreement”) with Century Land Holdings of Texas, LLC,

a Colorado limited liability company (the “Buyer”).

Pursuant to the terms of the Agreement, the Seller agreed to sell approximately

242 single-family detached residential lots comprising a residential community in the city of Magnolia, Texas known as the “Lakes

at Black Oak.” On November 28, 2022, the parties to the Agreement entered into an amendment to the Agreement (the “Amendment”).

Pursuant to the Amendment, the parties agreed that the Buyer would purchase approximately 131 single-family detached residential lots,

instead of 242 lots.

This transaction closed on April 13, 2023.

March 16, 2023, 150 CCM Black Oak Ltd.

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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, 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

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.

The transaction closed on May 15, 2023.

March 17, 2023, 150 CCM Black Oak Ltd.

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

Sale Agreement”) with Davidson Homes, LLC, an Alabama limited liability company (“Davidson”).

Pursuant to the terms

of the Purchase and Sale Agreement, the Seller has agreed to sell approximately 189 single-family detached residential lots developed

within section 2 of Black Oak project.

The sale of the first 94 lots closed on May 30, 2023.

The sale of remaining lots is estimated

to close at the end of the year 2023.

under development

2 unchanged sentences

properties are acquired with the intent to be rented to tenants.

As of March 31, 2022 and December 31, 2022, the Company owned 132 homes.

As of June 30, 2022 and December 31, 2022, the Company owned 132 homes.

The aggregate purchase cost of all the homes is $ 30,998,258 .

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down to its estimated fair value.

The Company did not recognize any impairment losses during three months ended March 31, 2023 and 2022.

The Company did not recognize any impairment losses during three and six months ended June 30, 2023

Recognition and Cost of Revenue

28 unchanged sentences

A detailed breakdown of the five-step process

for the revenue recognition of the Ballenger project, which represented approximately 0 % and 32 %, respectively, of the Company’s

revenue in the three months ended on March 31, 2023 and 2022, is as follows:

for the revenue recognition of the Ballenger project and Black Oak project, which represented approximately 0 % and 42 % for Ballenger

and 91 % and 0 % for Black Oak, respectively, of the Company’s revenue in the six months ended on June 30, 2023 and 2022, is as follows:

the contract with a customer.

29 unchanged sentences

within deferred revenues and other payables on the Company’s condensed consolidated balance sheets.

revenue is subject to an evaluation for collectability on several factors, including payment history, the financial strength of the tenant

and any guarantors, historical operations and operating trends of the property, and current economic conditions.

If our evaluation of

these factors indicates that it is not probable that we will recover substantially all of the receivable, rental revenue is limited to

the lesser of the rental revenue that would be recognized on a straight-line basis (as applicable) or the lease payments that have been

collected from the lessee.

Differences between rental revenue recognized and amounts contractually due under the lease agreements are

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

For the three months ended March

31, 2023, the Company did not recognize any deferred revenue and collected all rents due.

revenue is subject to an evaluation for collectability on several factors, including payment history, the financial strength of the

tenant and any guarantors, historical operations and operating trends of the property, and current economic conditions.

evaluation of these factors indicates that it is not probable that we will recover substantially all of the receivable, rental

revenue is limited to the lesser of the rental revenue that would be recognized on a straight-line basis (as applicable) or the

lease payments that have been collected from the lessee.

Differences between rental revenue recognized and amounts contractually due

under the lease agreements are credited or charged to straight-line rent receivable or straight-line rent liability, as applicable.

For the three and six months ended June 30, 2023, the Company did not recognize any deferred revenue and collected all rents

of the Front Foot Benefit Assessments

17 unchanged sentences

During the three months

ended on March 31, 2023 and 2022, we recognized revenue of $ 0 and $ 77,012 from the FFB assessments, respectively

ended on June 30, 2023 and 2022, we recognized revenue of $ 0 and $ 37,725 from the FFB assessments, respectively.

During the six months

ended on June 30, 2023 and 2022, we recognized revenue of $ 0 and $ 116,088 from the FFB assessments, respectively.

of Real Estate Sale

28 unchanged sentences

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

Product and membership returns for the three months ended March 31, 2023

Product and membership returns for the three months ended June 30, 2023

and 2022 were approximately $ 0 and $ 15,412 , respectively.

Product and membership returns for the six months ended June 30, 2023 and 2022

were approximately $ 1,143 and $ 50,940 , respectively.

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 events.

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

one-year period.

Before the membership fee is recognized as revenue, it is recorded as deferred revenue.

Deferred revenue relating

to membership was $ 0

at March 31, 2023 and December 31, 2022, respectively.

Starting in 2020 the revenue from sale of membership declined to $ 0

The Company is currently working on a new membership model.

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 events.

The associated performance

obligation is satisfied over time, generally over the term of the membership agreement which is for a one-year period.

Before the membership

fee is recognized as revenue, it is recorded as deferred revenue.

Deferred revenue relating to membership was $ 0 and $ 21,198 at June

30, 2023 and December 31, 2022, respectively.

Starting in 2020 the revenue from sale of membership declined to $ 0 in 2022.

is currently working on a new membership model.

Company, through Alset F&B One Pte.

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and wellness, fitness, productivity, and recreation all under one roof.

In recent months the Company incorporated two

new subsidiaries Shenzhen Leyouyou Catering Management Co., Ltd.

and Dongguan Leyouyou Catering Management Co., Ltd.

People’s Republic of China.

Both companies will be principally engaged in the food and beverage business in Mainland

Additionally, through its subsidiary MOC HK Limited, the Company is focusing

on operating café business in Hong Kong.

recent months the Company incorporated two new subsidiaries Shenzhen Leyouyou Catering Management Co., Ltd.

and Dongguan Leyouyou Catering

Management Co., Ltd.

in the People’s Republic of China.

Both companies will be principally engaged in the food and beverage business

in Mainland China.

Additionally,

through its subsidiary MOC HK Limited, the Company is focusing on operating café business in Hong Kong.

performance obligations

of March 31, 2023 and December 31, 2022, there were no remaining performance obligations or continuing involvement, as all service obligations

of June 30, 2023 and December 31, 2022, there were no remaining performance obligations or continuing involvement, as all service obligations

within the other business activities segment have been completed.

7 unchanged sentences

to non-employees for goods and services.

During the three months ended on March 31, 2023 and 2022, the Company recorded $ 0 as stock-based

compensation expense.

During the three and six months ended on June 30, 2023 and 2022, the Company recorded $ 0 as

stock-based compensation expense.

and reporting currency

6 unchanged sentences

Company’s subsidiaries located in Singapore, Hong Kong, Australia and South Korea are maintained in their local currencies, the

Singapore Dollar (S$), Hong Kong Dollar (HK$), Australian Dollar (“AUD”) and South Korean Won (“KRW”), which

are also the functional currencies of these entities.

Singapore Dollar (S$), Hong Kong Dollar (HK$), Australian Dollar (“AUD”), South Korean Won (“KRW”) and Chinese

Yuan (CN¥), which are also the functional currencies of these entities.

in foreign currencies

4 unchanged sentences

the intercompany loans between Singapore entities and U.S.

The Company recorded foreign exchange loss of $ 788,302 and $ 408,095

gain during the three months ended on March 31, 2023 and 2022, respectively.

The foreign currency transactional gains and losses are

recorded in operations.

The Company recorded foreign exchange gain of $ 1,150,830 and $ 2,077,709

during the three months ended on June 30, 2023 and 2022, respectively.

The Company recorded foreign exchange gain of $ 362,528 and $ 2,485,804

during the six months ended on June 30, 2023 and 2022, respectively.

The foreign currency transactional gains and losses are recorded

in operations.

of consolidated entities’ financial statements

1 unchanged sentence

rates of exchange ruling at the balance sheet date.

The Company’s entities with functional currency of S$, HK$, AUD and KRW, translate

their operating results and financial positions into the U.S.

The Company’s entities with functional currency of S$, HK$, AUD, KRW and CN¥,

translate their operating results and financial positions into the U.S.

dollar, the Company’s reporting currency.

5 unchanged sentences

component of comprehensive income (loss).

Company recorded other comprehensive gain of $ 1,095,943 from foreign currency translation for the three months ended March 31, 2023 and

$ 649,140 loss for the three months ended March 31, 2022, in accumulated other comprehensive loss.

Company recorded other comprehensive loss of $ 2,183,883 from foreign currency translation for the three months ended June 30, 2023 and

$ 3,514,595 loss for the three months ended June 30, 2022, in accumulated other comprehensive loss.

The Company recorded other comprehensive

loss of $ 1,087,940 from foreign currency translation for the six months ended June 30, 2023 and $ 4,163,735 loss for the six months ended

June 30, 2022, in accumulated other comprehensive loss.

Non-controlling

3 unchanged sentences

Sheets, separately from equity attributable to owners of the Company.

March 31, 2023 and December 31, 2022, the aggregate non-controlling interests in the Company were $ 10,703,531 and $ 11,009,149 , respectively.

June 30, 2023 and December 31, 2022, the aggregate non-controlling interests in the Company were $ 10,363,141 and $ 11,009,149 , respectively.

Financing Costs

6 unchanged sentences

based on their size.

of March 31, 2023 and December 31, 2022, the capitalized financing costs were $ 3,247,739 .

of June 30, 2023 and December 31, 2022, the capitalized financing costs were $ 1,225,739 and $ 3,247,739 , respectively.

Conversion Features

39 unchanged sentences

implementation of ASU 2016-13 to fiscal years beginning after December 15, 2022 for smaller reporting companies.

The Company is currently

evaluating the impact of ASU 2016-13 on its future consolidated financial statements.

The Company adopted these requirements prospectively, effective on the first day of the year 2023.

March 2020, the FASB issued ASU 2020-04, Reference Rate Reform (Topic 848):

9 unchanged sentences

as of March 12, 2020 through December 31, 2024.

The Company does not believe that ASU 2020-04 will have significant impact on its future consolidated financial statements.

The Company does not believe that ASU 2020-04 will have significant impact on its future

consolidated financial statements.

pronouncement not yet adopted

13 unchanged sentences

At times, these balances may exceed the insurance limits.

As of March 31, 2023 and December 31, 2022,

As of June 30, 2023 and December 31, 2022,

uninsured cash and restricted cash balances were $ 26,119,471 and $ 15,723,599 , respectively.

the year ended December 31, 2022, two customers accounted for approximately 81 %, and 19 % of the Company’s property and development

the three months ended June 30, 2023, three customers accounted for approximately 37 %, 36 % and 27 % of the Company’s property

development revenue.

For the three months ended June 30, 2022, two customers accounted for approximately 85 %, and 15 % of the

Company’s property development revenue.

For the six months ended June 30, 2023, three customers accounted for approximately 37 %, 36 %,

and 27 % of the Company’s property development revenue.

For the six months ended June 30, 2022, three customers accounted for

approximately 42 %, 49 % and 9 % of the Company’s property development revenue.

segments are defined as components of an enterprise about which separate financial information is available that is evaluated regularly

9 unchanged sentences

and reported as “Other” consist of corporate general and administrative activities which are not allocable to the four reportable

following table summarizes the Company’s segment information for the following balance sheet dates presented, and for the three

months ended March 31, 2023 and 2022:

following table summarizes the Company’s segment information for the following balance sheet dates presented, and for the six months

ended June 30, 2023 and 2022:

OF SEGMENT INFORMATION

1 unchanged sentence

Biohealth Business

Three Months Ended on March 31, 2023

Cost of Sales

Operating Expenses

( 1,606,175 )

( 2,327,385 )

Operating Loss

( 1,407,882 )

( 2,089,730 )

Other Income (Expense)

( 1,061,068 )

( 1,492,064 )

( 2,233,452 )

Net Loss Before Income Tax

( 1,191,499 )

( 2,899,946 )

( 4,323,182 )

Digital Transformation Technology

Biohealth Business

Three Months Ended on March 31, 2022

Six Months Ended on June 30, 2023

Cost of Sales

4 unchanged sentences

( 4,633,244 )

Operating (Loss) Income

( 1,168,001 )

( 1,653,541 )

Other Expense

( 1,205,349 )

( 4,394,547 )

Operating Loss

( 2,577,008 )

7 unchanged sentences

$ ( 10,136,588 )

March 31, 2023

Cash and Restricted Cash

December 31, 2022

Cash and Restricted Cash

Transformation Technology

Months Ended on June 30, 2022

(Loss) Income

Income (Expense)

Loss Before Income Tax

and Restricted Cash

REAL ESTATE ASSETS

of March 31, 2023 and December 31, 2022, real estate assets consisted of the following:

of June 30, 2023 and December 31, 2022, real estate assets consisted of the following:

OF REAL ESTATE ASSETS

June 30, 2023

December 31, 2022

Construction in Progress

3 unchanged sentences

family residential properties

of March 31, 2023 and December 31, 2022, the Company owned 132 Single Family Residential Properties (“SFRs”).

of June 30, 2023 and December 31, 2022, the Company owned 132 Single Family Residential Properties (“SFRs”).

The Company’s

aggregate investment in those SFRs was $ 31 million.

Depreciation expense was $ 243,702 and $ 140,635 in the three months ended March 31,

Depreciation expense was $ 276,125 and $ 173,119 in the three months ended June 30,

2023 and 2022, respectively.

Depreciation expense was $ 519,827 and $ 318,743 in the six months ended June 30, 2023 and 2022, respectively.

These homes are located in Montgomery and Harris Counties, Texas.

following table presents the summary of our SRFs as of March 31, 2023:

following table presents the summary of our SRFs as of June 30, 2023:

OF SINGLE FAMILY RESIDENTIAL PROPERTIES

Average Investment

BUILDER DEPOSITS

12 unchanged sentences

3rd Amendment to the Lot Purchase Agreement.

On March 31, 2023 and December 31, 2022, there was $ 0 held on deposit.

On June 30, 2023 and December 31, 2022, there was $ 0 held on deposit.

Remaining balance

1 unchanged sentence

NOTES PAYABLE

of March 31, 2023 and December 31, 2022, notes payable consisted of the following:

of June 30, 2023 and December 31, 2022, notes payable consisted of the following:

OF NOTES PAYABLE

14 unchanged sentences

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

As of June 30,

2023, the outstanding balance of the revolving loan was $0 .

As part of the transaction, the Company incurred loan origination fees

and closing fees in the amount of $ 381,823 and capitalized it into construction in process.

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

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

As part of the transaction, the Company incurred loan origination fees and

closing fees in the amount of $ 381,823 and capitalized it into construction in process.

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

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

Protection Program Loan

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of $ 66,020 and would make monthly installments of approximately $ 1,472 , including interest of 1.88 % per annum, for the 84 months.

minimum principal payments under existing motor vehicle loans at March 31, 2023 in each calendar year through the end of their terms

are as follows:

minimum principal payments under existing motor vehicle loans at June 30, 2023 in each calendar year through the end of their terms are

OF FUTURE MINIMUM PAYMENTS

6 unchanged sentences

level 3 category through a Black Scholes option pricing model and the fair value of the NECV warrants were $ 860,342 as of July 17, 2020,

the purchase date, $ 389,910 as of March 31, 2023 and $ 327,565 as of December 31, 2022.

the purchase date, $ 47,115 as of June 30, 2023 and $ 327,565 as of December 31, 2022.

The difference of $ 945,769 of fair value of stock

12 unchanged sentences

agreement’s effective date, was recorded as other expense in the Company’s Statement of Operations.

Shares Dividend Received from DSS

May 4, 2023, DSS distributed approximately 280 million shares of Sharing Services Global Corporation (“SHRG”) beneficially

held by DSS and its subsidiaries in the form of a dividend to the shareholders of DSS common stock.

As a result of this distribution,

the Company directly received 70,426,832 shares of SHRG, and through its majority-owned subsidiary Alset International Limited, and certain

subsidiaries of Alset International Limited, indirectly received additional 55,197,696 shares of SHRG.

The Company and its majority-owned

subsidiaries now collectively own 125,624,528 shares of SHRG, representing 33.4 % of the issued and outstanding shares of SHRG Common

Stock (such number of SHRG shares held and ownership percentage do not include any shares held by affiliates of the Company which we

do not hold a majority interest in).

Additionally, our founder, Chairman and Chief Executive Officer, Chan Heng Fai, directly and indirectly

is the owner of an additional 37,947,756 shares of SHRG and is a beneficial owner of approximately 43.5 % of SHRG shares (including those

shares owned by Alset Inc.

and its majority-owned subsidiaries).

Consolidation

of Alset Capital Acquisition Corp.

May 1, 2023, Alset Capital Acquisition Corp.

(“Alset Capital”) held a Special Meeting of Stockholders.

In connection with

the Special Meeting and certain amendments to Alset Capital’s Amended and Restated Certificate of Incorporation, 6,648,964

shares of Alset Capital’s Class A Common

Stock were rendered for redemption.

Following the redemption, 2,449,786

shares of Class A Common Stock of Alset Capital

remained issued and outstanding, including 473,750

shares held by the Company.

The Company also

owns 2,156,250

shares of Alset Capital’s Class B Common

Following the redemptions, Company’s ownership in Alset Capital has increased from 23.4 %

of the total shares of common stock to 57.1 %

of the total number of outstanding shares of

the two classes.

The Company recognized $ 21,657,036 loss on the consolidation of Alset Capital.

The loss is included in Finance

Costs on the Company’s Consolidated Statement of Operations for the three and six months ended June 30, 2023.

of Hapi Travel Ltd.

June 14, 2023, one of the Company’s subsidiaries acquired Hapi Travel Ltd.

from Business Mobile Intelligence Ltd., a company 100 %

owed by our CEO and majority stockholder, Chan Heng Fai, for consideration of $ 214,993 .

On November 17, 2021, Chan Heng Fai had acquired Hapi Travel Ltd.

(formerly known as Travel Panda Ltd.) from Chan Hei Wai, an

individual unaffiliated with the Company.

Heng Fai provided an interest-free, due on demand advance to SeD Perth Pty.

for its general operations.

As of March 31, 2023 and

As of June 30, 2023 and

December 31, 2022, the outstanding balance was $ 12,343 and $ 12,668 , respectively.

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for its general operations.

As of March 31, 2023 and

As of June 30, 2023 and

December 31, 2022, the outstanding balance was $ 4,138 and $ 4,158 , respectively.

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and (iii) a sum of $50,000 upon the successful leasing of 30 homes in the Alset of Black Oak development.

Company incurred expenses of $ 75,000 and $ 60,000 in the three months ended March 31, 2023 and 2022, respectively, which were capitalized

as part of Real Estate on the balance sheet as the services relate to property and project management.

In June 2022, MacKenzie Equity

Partners was paid $ 50,000 bonus payment (as described above).

On March 31, 2023 and December 31, 2022, the Company owed this related

party $ 25,000 and $ 25,000 , respectively.

Company incurred expenses of $ 75,000 and $ 150,000 in the three and six months ended June 30, 2023, respectively, and $ 140,000 and $ 200,000

in the three and six months ended June 30, 2022, respectively, which were capitalized as part of Real Estate on the balance sheet as

the services relate to property and project management.

In June 2022, MacKenzie Equity Partners was paid $ 50,000 bonus payment (as described

On June 30, 2023 and December 31, 2022, the Company owed this related party $ 25,000 and $ 25,000 , respectively.

Receivable from Related Party

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on July 12, 2022, and was recorded under Other Expense in Statement of Operations.

of March 31, 2023 and December 31, 2022, the Company provided advances for operation of $ 236,699 to HWH World Co., a direct sales company

of June 30, 2023 and December 31, 2022, the Company provided advances for operation of $ 236,699 to HWH World Co., a direct sales company

in Thailand of which the Company holds approximately 19 % ownership.

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38.3 % of Value Exchange International.

Due to differences in purchase prices the director owes the Company $ 2,545 .

Company paid some operating expenses for Alset Capital Acquisition Corp., a special purpose acquisition company of which the Company

holds 23.4 %.

The advances are interest free with no set repayment terms.

As of March 31, 2023 and December 31, 2022, the balance of these

advances was $ 0 .

July 28, 2022 Hapi Café Inc.

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After the initial 12 months, the interest on such loan

will be 8 % .

In addition, pursuant to the Second Term Sheet, the July 28, 2022 loan was modified to include conversion rights.

2022, Ketomei drew $ 29,922 from the loan.

As of March 31, 2023 and December 31, 2022, Ketomei owed $ 219,841 and $ 197,596 to Hapi Café,

As of June 30, 2023 and December 31, 2022, Ketomei owed $ 260,961 and $ 198,162 to Hapi Café,

respectively.

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BMI participates in the losses and gains from portfolio based on the calculations included in the loan agreement.

As of March 31, 2023 and December 31, 2022 LVAML owes the Company $ 559,938 and $ 3,042,811 , respectively.

On January 27, 2023, the Company’s subsidiary Hapi Metaverse

As of June 30, 2023 and December 31, 2022 LVAML owes the Company $ 516,165 and $ 3,042,811 , respectively.

January 27, 2023, the Company’s subsidiary Hapi Metaverse Inc.

and New Electric CV Corp.

(“NECV,” and together with Hapi Metaverse Inc., the “Lenders”) entered into a Convertible

Credit Agreement (the “Credit Agreement”) with Value Exchange International, Inc.

(“Value Exchange”), a Nevada

The Credit Agreement provides Value Exchange with a maximum credit line of $ 1,500,000 (“Maximum Credit Line”)

with simple interest accrued on any advances of the money under the Credit Agreement at 8 %.

The principal amount of any advance of money

under the Credit Agreement (each being referred to as an “Advance”) is due in a lump sum, balloon payment on the third annual

anniversary of the date of the Advance (“Advance Maturity Date”).

Accrued and unpaid interest on any Advance is due and payable

on a semi-annual basis with interest payments due on the last business day of June and last business day of December of each year.

may demand that any portion or all of the unpaid principal amount of any Advance as well as accrued and unpaid interest thereon may be

paid by shares of Value Exchange Common Stock in lieu of cash payment.

As of 31 March 2023, $ 1,400,000.00 of credit was used, and interest

income of $ 11,047 is included in interest income for the three months ended March 31, 2023.

(“NECV,” and together with

Hapi Metaverse Inc., the “Lenders”) entered into a Convertible Credit Agreement (the “Credit Agreement”) with

Value Exchange International, Inc.

(“Value Exchange”), a Nevada corporation.

The Credit Agreement provides Value Exchange

with a maximum credit line of $ 1,500,000 (“Maximum Credit Line”) with simple interest accrued on any advances of the money

under the Credit Agreement at 8 % .

The principal amount of any advance of money under the Credit Agreement (each being referred to as

an “Advance”) is due in a lump sum, balloon payment on the third annual anniversary of the date of the Advance (“Advance

Maturity Date”).

Accrued and unpaid interest on any Advance is due and payable on a semi-annual basis with interest payments due

on the last business day of June and last business day of December of each year.

A Lender may demand that any portion or all of the unpaid

principal amount of any Advance as well as accrued and unpaid interest thereon may be paid by shares of Value Exchange Common Stock in

lieu of cash payment.

As of June 30, 2023, $ 1,400,000 of credit was used, and interest income of $ 27,923 and $ 38,970 is included in interest

income in the three and six months ended June 30, 2023, respectively.

Company and its subsidiaries continually evaluate potential acquisitions that align with the Company’s plans.

Starting an F&B

business in Hong Kong, China, and Taiwan can be an excellent opportunity due to the large consumer market, diverse food culture, high

demand for international cuisine, favorable business environment, skilled labor force, and opportunities for growth.

October 4, 2022, the Company completed its first F&B business acquisition of MOC HK Limited (“MOC”), a F&B business

started in Hong Kong.

The accompanying consolidated financial statements include the operations of the acquired entity from its acquisition

The acquisition has been accounted for as a business combination.

Accordingly, consideration paid by the Company to complete the

acquisition is initially allocated to the acquired assets and liabilities assumed based upon their estimated acquisition date fair values.

The recorded amounts for assets acquired and liabilities assumed are provisional and subject to change during the measurement period,

which is up to 12 months from the acquisition date.

a result of the acquisition of MOC, goodwill of $ 60,363 generated in a business combination represents the purchase price of $ 70,523

in excess of identifiable tangible and intangible assets.

Goodwill and intangible assets that have an indefinite useful life are not

Instead, they are reviewed periodically for impairment.

June 14, 2023, the Company completed acquisition of Hapi Travel Limited (“HTL”), an online travel business started in Hong

The accompanying consolidated financial statements include the operations of the acquired entity from its acquisition date.

acquisition has been accounted for as a business combination.

Accordingly, consideration paid by the Company to complete the acquisition

is initially allocated to the acquired assets and liabilities assumed based upon their estimated acquisition date fair values.

amounts for assets acquired and liabilities assumed are provisional and subject to change during the measurement period, which is up

to 12 months from the acquisition date.

a result of the acquisition of HTL, goodwill of $ 214,174 generated in a business combination represents the purchase price of $ 214,993

in excess of identifiable tangible and intangible assets.

Goodwill and intangible assets that have an indefinite useful life are not

Instead, they are reviewed periodically for impairment.

Company evaluates goodwill on an annual basis in the fourth quarter or more frequently, if management believes indicators of impairment

Such indicators could include, but are not limited to (1) a significant adverse change in legal factors or in business climate,

(2) unanticipated competition, or (3) an adverse action or assessment by a regulator.

The Company first assesses qualitative factors

to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount, including goodwill.

If management concludes that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, management

conducts a quantitative goodwill impairment test.

The impairment test involves comparing the fair value of the applicable reporting unit

with its carrying value.

The Company estimates the fair values of its reporting units using a combination of the income, or discounted

cash flows, approach and the market approach, which utilizes comparable companies’ data.

If the carrying amount of a reporting

unit exceeds the reporting unit’s fair value, an impairment loss is recognized in an amount equal to that excess, limited to the

total amount of goodwill allocated to that reporting unit.

The Company’s evaluation of goodwill completed during the period resulted

in no impairment losses.

table below reflects the Company’s estimates of the acquisition date fair value of the assets acquired and liabilities assumed

for the 2022 and 2023 acquisition:

OF ESTIMATES OF ACQUISITION FAIR VALUE

Acquisition Date

October 4, 2022

June 14, 2023

Purchase Price

Total purchase consideration

Purchase Price Allocation

Assets acquired

Current assets

Property and Equipment, net

Operating lease right-of-use assets, net

Total assets acquired

Liabilities assumed:

Current liabilities

Operating lease liability

Accrued taxes

Total liabilities assumed

Net assets acquired

Total purchase consideration

following table summarizes changes in the carrying amount of goodwill at June 30, 2023 and December 31, 2022

June 30, 2023

December 31, 2022

Balance at beginning of the period/year

Foreign currency exchange adjustment

Balance as of end of the period/year

June 14, 2021, the Company filed an amendment (the “Amendment”) to its Third Amended and Restated Certificate of Incorporation,

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

March 31, 2023, there were 9,235,119 common shares issued and outstanding.

following table summarizes the warrant activity for the three months ended March 31, 2023.

June 30, 2023, there were 9,235,119 common shares issued and outstanding.

following table summarizes the warrant activity for the six months ended June 30, 2023.

OF WARRANT ACTIVITY

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Forfeited, cancelled, expired

Warrants Outstanding as of March 31, 2023

Warrants Vested and exercisable at March 31, 2023

Warrants Outstanding as of June 30, 2023

Warrants Vested and exercisable at June 30, 2023

of Ownership of Alset International

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to these transactions the Company’s ownership of Alset International changed from 76.8 % as of December 31, 2021 to 85.4 % as of

March 31, 2023 and December 31, 2022.

June 30, 2023 and December 31, 2022.

Note Converted into Shares

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price of $ 75,000,000 .

A Common Stock of Alset Capital Acquisition Corp.

Subject to Possible Redemption

Company accounts for its, and its subsidiaries’ common stock subject to possible redemption in accordance with the guidance enumerated

in ASC 480 “ Distinguishing Liabilities from Equity ”.

Common stock subject to possible redemption are classified as

a liability instrument and are measured at fair value.

Conditionally redeemable common stock (including shares of common stock that feature

redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not

solely within the Company’s control) are classified as temporary equity.

At all other times, shares of common stock are classified

as stockholders’ equity.

The Company’s Class A common stock features certain redemption rights that are considered by the

Company to be outside of the Company’s control and subject to the occurrence of uncertain future events.

Accordingly, at June 30,

2023, the Class A common stock of Alset Capital Acquisition Corp.

subject to possible redemption in the amount of $ 20,075,127 , are presented

as temporary equity, outside of the stockholders’ equity section of the Company’s balance sheets.

On May 1, 2023, after the redemptions (for further

details on this transaction refer to Note 8.

– Related Party Transactions, Consolidation of Alset Capital Acquisition Corp.), the

Company consolidated Alset Capital.

As of June 30, 2023, non-controlling interest of $ ( 658,292 ) was recorded as temporary equity, since

these non-controlling interests are considered redeemable noncontrolling interests in accordance with ASC 810-10 and ASC 480-10-S99-3A.

Company generally rents its SFRs under lease agreements with a term of one or two years .

Future minimum rental revenue under existing

leases on our properties at March 31, 2023 in each calendar year through the end of their terms are as follows:

leases on our properties at June 30, 2023 in each calendar year through the end of their terms are as follows:

OF FUTURE MINIMUM RENTAL PAYMENTS

Total Future Receipts

Future Receipts

Management Agreements

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

For the three months ended March 31, 2023 and 2022, property management fees incurred by the property managers were $ 31,950 and $ 11,025 ,

respectively.

For the three months ended March 31, 2023 and 2022, leasing fees incurred by the property managers were $ 25,010 and $ 25,790 ,

For the three months ended June 30, 2023 and 2022, property management fees incurred by the property managers were $ 34,650 and $ 20,990 ,

respectively.

For the six months ended June 30, 2023 and 2022, property management fees incurred by the property managers were $ 66,600

and $ 32,015 , respectively.

For the three months ended June 30, 2023 and 2022, leasing fees incurred by the property managers were $ 41,745

and $ 87,035 , respectively.

For the six months ended June 30, 2023 and 2022, leasing fees incurred by the property managers were $ 66,755

and $ 112,825 , respectively.

ACCUMULATED OTHER COMPREHENSIVE INCOME

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Balance at March 31, 2023

Other Comprehensive Loss

( 1,849,049 )

Balance at June 30, 2023

$ ( 791,512 )

Unrealized Gains and Losses on Security Investment

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$ ( 367,895 )

Balance at beginning

$ ( 367,895 )

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$ ( 867,862 )

Balance at end

$ ( 867,862 )

Other Comprehensive Income

( 3,002,167 )

Balance at June 30, 2022

$ ( 3,870,029 )

INVESTMENTS MEASURED AT FAIR VALUE

assets measured at fair value on a recurring basis are summarized below and disclosed on the condensed consolidated balance sheet as

of March 31, 2023 and December 31, 2022:

of June 30, 2023 and December 31, 2022:

OF FINANCIAL ASSETS MEASURED AT FAIR VALUE ON A RECURRING BASIS

Fair Value Measurement Using

March 31, 2023

June 30, 2023

Investment Securities- Fair Value

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Total Investment in securities at Fair Value

loss on investment securities for the three months ended March 31, 2023 was $ 131,313 and realized loss on investment securities for the

three months ended March 31, 2022 was $ 3,436,783 .

Unrealized loss on securities investment was $ 1,187,846 and $ 3,899,015 in the three

months ended March 31, 2023 and 2022, respectively.

These gains and losses were recorded directly to net income (loss).

The change in

fair value of the convertible note receivable in the three months ended March 31, 2023 and 2022 was $ 0 and $ 9,123 , respectively, and

was recorded in condensed consolidated statements of stockholders’ equity.

loss on investment securities for the six months ended June 30, 2023 was $ 10,688,542 and realized loss on investment securities for the

six months ended June 30, 2022 was $ 6,355,451 .

Unrealized loss on securities investment was $ 17,652,880 and $ 10,766,390 in the six months

ended June 30, 2023 and 2022, respectively.

These gains and losses were recorded directly to net loss.

The change in fair value of the

convertible note receivable in the six months ended June 30, 2023 and 2022 was $ 0 and $ 9,123 , respectively, and was recorded in condensed

consolidated statements of stockholders’ equity.

trading stocks, we use Bloomberg Market stock prices as the share prices to calculate fair value.

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The following chart shows details of the fair value of equity security

investment at March 31, 2023 and December 31, 2022, respectively.

investment at June 30, 2023 and December 31, 2022, respectively.

SCHEDULE OF FAIR VALUE OF EQUITY SECURITY INVESTMENT

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