What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2023-11-14 compared with 2023-08-14 · 151 added, 139 removed, 279 unchanged (51% of the section changed)

24 unchanged sentences

indirect 14.1% equity interest in Holista CollTech Limited, a 44.8% equity interest in DSS Inc.

(“DSS”), a 38.3% equity

interest in Value Exchange International, Inc., a 0.5% 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 33.4% equity interest in Sharing Services Global Corp.

(“DSS”), a 48.7% equity interest

in Value Exchange International, Inc., a 0.5% 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 33.4% equity

interest in Sharing Services Global Corp.

American Pacific Bancorp Inc.

financial network holding company.

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

DSS is a multinational company operating businesses within nine divisions:

product packaging, biotechnology, consumer

marketing, commercial lending, securities and investment management, alternative trading, secure living, and alternative energy.

is a financial network holding company.

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

DSS is a multinational company

operating businesses within nine divisions:

product packaging, biotechnology, consumer marketing, commercial lending, securities and

investment management, alternative trading, secure living, and alternative energy.

is listed on the NYSE American (NYSE:

Value Exchange International, Inc.

is a provider of information technology services

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

is a provider of information technology services for businesses, and is traded on the OTCQB (OTCQB:

NECV is a publicly traded consumer products company (OTCPK:

markets and distributes health and wellness products, as well as member-based travel services, using a direct selling business

SHRG markets and distributes health and wellness products,

as well as member-based travel services, using a direct selling business model.

SHRG is traded on the OTCQB (OTCQB:

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HWH is an indirect subsidiary of the Company through its subsidiary Alset International

The Merger has not closed as of the date of this Report and is subject to the receipt of the required approval by the stockholders

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;

a 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)

revise Alset Capital’s right to extend the date by which it has to consummate a business combination;

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

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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

of the Company’s name to “Alset Inc.” The management believes that such new name will more fully reflect its current

business model.

August 1, 2023, Alset Capital held a Special Meeting of Stockholders.

In connection with this Special Meeting, Alset Capital’s

business combination with HWH International Inc.

was approved by its stockholders and certain amendments to Alset Capital’s Amended

and Restated Certification of Incorporation were also approved.

Alset Capital is working to close the business combination, subject to

the completion of certain closing conditions.

November 2, 2023, Alset Capital held an additional Special Meeting of Stockholders.

The stockholders of Alset Capital extended the date

before which the Company must complete a business combination from November 3, 2023, to February 3, 2024.

of Rental Business from Majority-Owned Subsidiary

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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 and its CEO holds a director position on Sentinel’s Board of Directors.

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 and its CEO holds a director

position on Sentinel’s Board of Directors.

of Certain Lots

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of Value Exchange International, Inc.

Shares and Conversion of Loan

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

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to the Stock Purchase Agreement.

September of 2023, the Company’s subsidiary Hapi Metaverse converted $1,300,000 of the principal amount loaned to VEII into 7,344,632

shares of VEII’s common stock.

Under the terms of the Credit Agreement, the Company’s subsidiary Hapi Metaverse received

common stock warrants to purchase a maximum of 36,723,160 shares of VEII common stock at an exercise price of $0.1770 per share.

warrants expire five (5) years from date of their issuance.

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

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

The effects of public health issues such as a major epidemic or pandemic, including the impact of COVID-19 on the economy and our business.

of Operations

of Statements of Operations for the Three and Six Months Ended June 30, 2023 and 2022

of Statements of Operations for the Three and Nine Months Ended September 30, 2023 and 2022

Three- Months Ended

Six-months Ended

Nine-months Ended

September 30, 2023

September 30, 2022

September 30, 2023

September 30, 2022

Operating Expenses

Other Expenses

Income Tax (Expense) Benefit

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

Three-months Ended

June 30, 2023

June 30, 2022

September 30, 2023

September 30, 2022

Digital Transformation Technology

Total Revenue

Six-months Ended

June 30, 2023

June 30, 2022

Nine-months Ended

September 30, 2023

September 30, 2022

Digital Transformation Technology

Total Revenue

was $19,153,848 and $926,340 for the three months ended June 30, 2023 and 2022, respectively.

was $990,199 and $721,905 for the three months ended September 30, 2023 and 2022, respectively.

Revenue was $21,070,983 and $3,600,482

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

The increase in property sales from the Black Oak Project in the second

quarter of 2023 contributed to higher revenue in this period.

for the nine months ended September 30, 2023 and 2022, respectively.

The increase in property sales from the Black Oak Project in the

second quarter of 2023 contributed to higher revenue in this period.

late 2022 and early 2023, the Company entered into three contracts with builders to sell multiple lots from its Black Oak project.

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May 2023, the Company entered into lease agreement for its model house located in Montgomery County, Texas (AHR Black Oak Lease Agreement”).

The revenue from the lease was $4,200 in the three and six months ending June 30, 2023.

The revenue from the lease was $6,300 and $10,500 in the three and nine months ending September 30, 2023.

2022 the last three homes in the Ballenger Project were sold.

In this project, builders were required to purchase a minimum number

of lots based on their applicable sale agreements.

In this project, builders were required to purchase a minimum number of

lots based on their applicable sale agreements.

We collected revenue only from the sale of lots to builders.

We are not involved

in the construction of homes at the present time.

from the sale of Front Foot Benefits (“FFBs”), assessed on Ballenger Run project lots, decreased from $37,725 in the

three months ended June 30, 2022 to $0 in the three months ended June 30, 2023.

We are not involved in the

construction of homes at the present time.

from the sale of Front Foot Benefits (“FFBs”), assessed on Ballenger Run project lots, decreased from $9,968 in the three

months ended September 30, 2022 to $0 in the three months ended September 30, 2023.

Income from the sale of FFBs decreased from $126,055

in the six months ended June 30, 2022 to $0 in the six months ended June 30, 2023.

The decrease is a result of the decreased sale of

properties to homebuyers in 2023.

from rental business was $690,967 and $403,900 in the three months ended June 30, 2023 and 2022, respectively.

Revenue from rental business

was $1,324,778 and $636,482 in the six months ended June 30, 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”).

in the nine months ended September 30, 2022 to $0 in the nine months ended September 30, 2023.

The decrease is a result of the decreased

sale of properties to homebuyers in 2023.

from rental business was $705,334 and $569,791 in the three months ended September 30, 2023 and 2022, respectively.

Revenue from rental

business was $2,030,112 and $1,206,273 in the nine months ended September 30, 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.

HWH World recognized $0 and $132,222 in revenue in the three months ended June 30, 2023 and 2022, respectively.

HWH World recognized

$12,587 and $749,693 in revenue in the six months ended June 30, 2023 and 2022, respectively.

$0 and $ 22,154 in revenue in the three months ended September 30, 2023 and 2022, respectively.

HWH World recognized $12,587 and $771,847

in revenue in the nine months ended September 30, 2023 and 2022, respectively.

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

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addressed as one independent category.

In the three months ended June 30, 2023 and 2022, the revenue from other businesses was $258,096

In the three months ended September 30, 2023 and 2022, the revenue from other businesses was $278,545

and $123,595, respectively.

In the six months ended June 30, 2023 and 2022, the revenue from other businesses was $524,395 and $196,267,

In the nine months ended September 30, 2023 and 2022, the revenue from other businesses was $802,741 and

$319,862, respectively, generated by Korean and Singaporean café shops and restaurants.

2 unchanged sentences

Three-months Ended

June 30, 2023

June 30, 2022

September 30, 2023

September 30, 2022

Digital Transformation Technology

Total Cost of Revenues

Six-months Ended

June 30, 2023

June 30, 2022

Nine-months Ended

September 30, 2023

September 30, 2022

Digital Transformation Technology

Total Cost of Revenues

of revenues increased from $550,677 in the three months ended June 30, 2022 to $11,738,493 in the three months ended June 30, 2023.

of revenues increased from $1,665,227 in the six months ended June 30, 2022 to $12,427,774 in the three months ended June 30, 2023.

increase is a result of the increase in sales in the Black Oak Project.

Capitalized construction expenses, finance costs and land costs

are allocated to sales.

of revenues decreased from $813,369 in the three months ended September 30, 2022 to $581,059 in the three months ended September 30,

Cost of revenues increased from $2,478,596 in the nine months ended September 30, 2022 to $13,008,833 in the three months ended

September 30, 2023.

The increase is a result of the increase in sales in the Black Oak Project.

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 increased from $375,663 to $7,415,355 in the three months ended June 30, 2022 and 2023, respectively.

The gross margin increased

from $1,213,350 to $7,653,010 in the six months ended June 30, 2022 and 2023, respectively.

The increase of gross margin was caused by

the increase in sales in the Black Oak Project.

gross margin increased from negative $91,464 to $409,140 in the three months ended September 30, 2022 and 2023, respectively.

margin increased from $1,121,886 to $8,062,150 in the nine months ended September 30, 2022 and 2023, respectively.

The increase of gross

margin was caused by the increase in sales in the Black Oak Project.

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

Three-months Ended

June 30, 2023

June 30, 2022

September 30, 2023

September 30, 2022

Digital Transformation Technology

Total Operating Expenses

Six-months Ended

June 30, 2023

June 30, 2022

Nine-months Ended

September 30, 2023

September 30, 2022

Digital Transformation Technology

Total Operating Expenses

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

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

caused by the decrease rental related expenses.

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Income (Expense)

the three months ended June 30, 2023, the Company had other expense of $10,922,902 compared to other expenses of $8,328,599 in the

three months ended June 30, 2022.

In the six months ended June 30, 2023, the Company had other expense of $13,156,354 compared to

other expenses of $14,383,397 in the six months ended June 30, 2022.

The change in realized and unrealized gain (loss) on securities

investments and loss on consolidation of Alset Capital Acquisition Corp.

are the primary reasons for the volatility in these two

Unrealized gain on securities investment was $18,840,726 in the three months ended June 30, 2023, compared to $6,867,375

loss in the three months ended June 30, 2022.

Unrealized gain on securities investment was $17,652,880 in the six months ended June

30, 2023, compared to $10,766,390 loss in the six months ended June 30, 2022.

Realized loss on security investment was $10,557,229

the three months ended June 30, 2023, compared to a loss of $2,918,668 in the three months ended June 30, 2022.

Realized loss on

security investment was $10,688,542 the six months ended June 30, 2023, compared to a loss of $6,355,451 in the six months ended

June 30, 2022.

Loss on consolidation was $21,657,036 in the three and six months ended June 30, 2023, compared to loss on

consolidation of $0 in the three and six months ended June 30, 2022.

the three months ended June 30, 2023 the Company had net loss of $5,813,406 compared to net loss of $9,982,861 in the three months ended

June 30, 2022.

In the six months ended June 30, 2023 the Company had net loss of $10,136,588 compared to net loss of $17,913,314 in the

six months ended June 30, 2022.

the three months ended September 30, 2023, the Company had other expense of $14,903,980 compared to other expenses of $ 11,163,538 in

the three months ended September 30, 2022.

In the nine months ended September 30, 2023, the Company had other expense of $28,060,334

compared to other expenses of $25,546,935 in the nine months ended September 30, 2022.

The change in realized and unrealized gain (loss)

on securities investments and loss on consolidation of Alset Capital Acquisition Corp.

are the primary reasons for the volatility in

these two periods.

Unrealized loss on securities investment was $10,742,675 in the three months ended September 30, 2023, compared to

$11,006,833 loss in the three months ended September 30, 2022.

Unrealized gain on securities investment was $6,910,205 in the nine months

ended September 30, 2023, compared to $ 21,773,223 loss in the nine months ended September 30, 2022.

Realized loss on security investment

was $602,624 the three months ended September 30, 2023, compared to a loss of $145,122 in the three months ended September 30, 2022.

Realized loss on security investment was $11,291,166 the nine months ended September 30, 2023, compared to a loss of $6,500,573 in the

nine months ended September 30, 2022.

Loss on consolidation was $21,657,036 in the three and nine months ended September 30, 2023, compared

to loss on consolidation of $0 in the three and nine months ended September 30, 2022.

the three months ended September 30, 2023 the Company had net loss of $17,026,008 compared to net loss of $13,081,391 in the three months

ended September 30, 2022.

In the nine months ended September 30, 2023 the Company had net loss of $27,162,596 compared to net loss of

$30,994,705 in the nine months ended September 30, 2022.

and Capital Resources

real estate assets have decreased to $39,445,204 as of June 30, 2023 from $54,618,729 as of December 31, 2022.

real estate assets have decreased to $39,905,237 as of September 30, 2023 from $54,618,729 as of December 31, 2022.

This decrease primarily

reflects the sale of properties in the Black Oak project.

cash has increased from $17,827,383 as of December 31, 2022 to $28,827,961 as of June 30, 2023.

cash has increased from $17,827,383 as of December 31, 2022 to $28,038,818 as of September 30, 2023.

Our liabilities increased from $4,827,221

$4,827,221 at December 31, 2022 to $8,152,468 at June 30, 2023.

Our total assets have increased to $168,441,811 as of June 30, 2023

from $153,490,336 as of December 31, 2022 mainly due to increase in cash held in Trust Account after the consolidation of Alset

Capital Acquisition Corp.

at December 31, 2022 to $8,149,184 at September 30, 2023.

Our total assets have increased to $157,014,408 as of September 30, 2023 from

$153,490,336 as of December 31, 2022 mainly due to increase in cash held in Trust Account after the consolidation of Alset Capital Acquisition

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 Three Months Ended June 30, 2023 and 2022

Six-months Ended

of Cash Flows for the Three Months Ended September 30, 2023 and 2022

Nine-months Ended

Net cash provided by (used in) operating activities

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Flows from Operating Activities

cash provided by operating activities was $7,409,770 in the first six months of 2023, as compared to net cash used in operating activities

cash provided by operating activities was $8,255,675 in the first nine months of 2023, as compared to net cash used in operating activities

of $28,331,829 in the same period of 2022.

2 unchanged sentences

Flows from Investing Activities

cash used in investing activities was $606,983 in the first six months of 2023, as compared to net cash used in investing activities

cash used in investing activities was $748,188 in the first nine months of 2023, as compared to net cash used in investing activities

of $15,031,318 in the same period of 2022.

In the six months ended June 30, 2023 we invested $907,212 in marketable securities, issued

$1,628,010 in loans to related parties and received $2,674,653 from repayment of related party notes receivable.

In the six months ended

June 30, 2022 we invested $6,662,017 in marketable securities, invested $722,817 to purchase real estate properties and $602,161 in real

estate improvements.

In the nine months ended September 30, 2023 we invested $734,688 in real estate improvements,

issued $1,693,455 in loans to related parties and received $2,675,735 from repayment of related party notes receivable.

In the nine months

ended September 30, 2022 we invested $8,479,968 in marketable securities, invested $6,057,493 to purchase real estate properties and

$1,082,225 in real estate improvements.

Flows from Financing Activities

cash provided by financing activities was $3,416,971 in the six months ended June 30, 2023, compared to net cash provided of $6,041,139

in the six months ended June 30, 2022.

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

from stock issuance of $3,433,921.

During the six months ended June 30, 2022, we received $6,213,000 from conversion of related party

note payable to common stock and we repaid $171,861 of debt.

believe that inflation has not had a material impact on our results of operations for the three months ended June 30, 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

cash provided by financing activities was $3,408,560 in the nine months ended September 30, 2023, compared to net cash provided of $

5,996,133 in the nine months ended September 30, 2022.

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

caused by the proceeds from stock issuance of $3,433,921.

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

of 2022 was primarily caused by the proceeds from stock issuance of $6,213,000.

believe that inflation has not had a material impact on our results of operations for the three months ended September 30, 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 condition.

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 $37 million and $51 million on June 30, 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

United States and which were approximately $40 million and $51 million on September 30, 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.

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irrevocably opt out of this exemption.

real estate business is subject to seasonal shifts in costs as certain work is more likely to be performed at certain times of the

real estate business is subject to seasonal shifts in costs as certain work is more likely to be performed at certain times of the year.

This may impact the expenses of our subsidiary Alset EHome Inc.

from time to time.

In addition, should we commence building

homes, we are likely to experience periodic spikes in sales as we commence the sales process at a particular location.

In addition, should we commence building homes, we

are likely to experience periodic spikes in sales as we commence the sales process at a particular location.

Quantitative and Qualitative Disclosures about Market Risk

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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