What changed in this filing

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Item 7. Management’s Discussion and Analysis

2024-04-01 compared with 2023-03-31 · 348 added, 522 removed, 511 unchanged (63% of the section changed)

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

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

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

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

We manage our three principal businesses primarily through our

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

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

and Asian subsidiaries), we are actively developing real estate

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

In our digital transformation technology

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

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

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

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

We manage our three principal businesses primarily through our 85.5% owned subsidiary,

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

Through this subsidiary (and indirectly, through

other public and private U.S.

and Asian subsidiaries), we are actively developing real estate projects near Houston, Texas in our real

estate segment.

In our digital transformation technology segment we focus on serving business-to-business (B2B) needs in e-commerce,

collaboration and social networking functions.

Our biohealth segment includes the sale of consumer products.

We also have ownership interests

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

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

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

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

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

interest in Alset Capital Acquisition Corp.

(“Alset Capital”).

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

indirect 13% equity interest in Holista CollTech Limited, a 44.4% equity interest in DSS, an indirect 48.7% equity interest in VEII,

a 0.5% equity interest in New Electric CV Corporation (“NECV”, formerly known as “American Wealth Mining Inc.”) and a 33.4% equity interest in SHRG .

American Pacific Bancorp Inc.

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commercial lending, securities and investment management, alternative trading, digital transformation, secure living, and alternative

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:

DSS is listed on the NYSE American (NYSE:

VEII 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:

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

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

ACAX, ACAXW and ACAXR).

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:

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

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and other activities.

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

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

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

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

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

ended December 31, 2021.

Sales of real properties accounted for approximately 82%, revenue from home rentals accounted for approximately

13% and revenue from other activities accounted for approximately 5% of our total revenue in the year ended December 31, 2023.

of real properties accounted for approximately 29%, revenue from home rentals accounted for approximately 40%, sales of biohealth products

accounted for approximately 17%, and revenue from other activities accounted for approximately 13% of our total revenue in the year ended

December 31, 2022.

a geographical perspective, we recognized 95% and 69% of our total revenue in the years ended December 31, 2023, and 2022, respectively,

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in some of our projects.

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

In addition, the

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

Accordingly, the COVID-19 pandemic

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

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

will be more resilient in fluctuating markets.

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

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

from urban to suburban areas).

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

home development.

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

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the PPP Loan was fully forgiven.

Business Activities

COVID-19 pandemic may adversely impact our potential to expand our business activities in ways that are difficult to assess or predict.

The COVID-19 pandemic continues to evolve.

The COVID-19 pandemic has impacted, and may continue to impact, the global supply of certain

goods and services in ways that may impact the sale of products to consumers that we, or companies we may invest in or partner with,

will attempt to make.

The COVID-19 pandemic may prevent us from pursuing otherwise attractive opportunities.

pandemic has impacted our operations in South Korea;

since the start of the pandemic, the South Korean government has at various times

placed certain restrictions on business meetings to reduce the spread of COVID-19.

Such restrictions have impacted our ability to recruit

potential affiliate sales personnel, and to introduce products to a larger audience.

staff works out of our Bethesda, Maryland office.

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

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

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

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

however, this is no longer the case.

Limitations on the mobility of our

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

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

To date, we did not have to expend significant resources related

to employee health and safety matters related to the COVID-19 pandemic.

We have a small staff, however, and the inability of any significant

number of our staff to work due to illness or the illness of a family member could adversely impact our operations.

that May or Are Currently Affecting Our Business

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

Our ability to improve

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

Our ability to identify

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

integrate them into our existing operation;

Our ability to attract

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

Our ability to control

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

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

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

and profitably integrate them into our existing operation;

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

to manage our overhead;

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

of Significant Accounting Policies

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Actual results could differ from those estimates.

between Entities under Common Control

March 12, 2021, the Company entered into a Securities Purchase Agreement (the “SPA”) with Chan Heng Fai, the founder, Chairman

and Chief Executive Officer of the Company, for four proposed transactions, consisting of (i) purchase of certain warrants (the “Warrants”)

to purchase 1,500,000,000 shares of Alset International Limited, which was valued at $28,363,966;

(ii) purchase of all of the issued

and outstanding stock of LiquidValue Development Pte Ltd.

(“LVD”), which was valued at $173,395;

(iii) purchase of 62,122,908

ordinary shares in True Partner Capital Holding Limited (HKG:

8657) (“True Partner”), which was valued at $6,729,629;

(iv) purchase of 4,775,523 shares of the common stock of American Pacific Bancorp Inc.

(“APB”), which was valued at $28,653,138.

The total amount of above four transactions was $63,920,129, payable on the Closing Date by the Company, in the convertible promissory

notes (“Alset CPNs”), which, subject to the terms and conditions of the Alset CPNs and the Company’s shareholder approval,

shall be convertible into shares of the Company’s common stock (“AEI Common Stock”), par value $0.001 per share, at

the conversion price of AEI’s Stock Market Price.

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

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

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

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

agreement to acquire 3,500,001 common shares of HengFeng Finance Limited (“HFL”), representing 100% of the common shares

of HFL, in consideration for $1,500,000, to be satisfied by the issuance and allotment of 250,000 shares of the Class A Common Stock

of American Pacific Bancorp.

HFL is incorporated in Hong Kong with limited liability.

The principal activities of HFL are money lending,

securities trading and investment.

This transaction closed on April 21, 2021.

This transaction between the Company and Chan Heng Fai

is under common control of Chan Heng Fai.

In third quarter of 2021 APB was deconsolidated due to our loss of majority ownership.

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

The acquisition of the

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

The acquisition of LVD,

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

The consolidated financial statements were

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

2020 for comparative purposes.

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

The Beneficial Conversion Feature (“BCF”) intrinsic value

was $50,770,192 for the four convertible promissory notes and was recorded as debt discount of convertible notes after these transactions.

The debt discount attributable to the BCF is amortized over period from issuance to the date that the debt becomes convertible using

the effective interest method.

If the debt is converted, the discount is amortized to finance cost in full immediately.

On May 13, 2021

and June 14, 2021 all Alset CPNs of $63,920,128 and accrued interests of $306,438 were converted into 2,123 shares of series B preferred

stock and 458,198 shares of common stock of the Company.

Recognition and Cost of Revenue

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

Property Sales.

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

The Company purchases land and develops it into residential

The Company purchases land and develops

it into residential communities.

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

The builders enter into a sales

contract with the Company before they take the lots.

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

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

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

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

enter into a sales contract with the Company before they take the lots.

The prices and timeline are determined and agreed upon in the

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

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

approximately 82% and 29% of the Company’s revenue in the years ended on December 31, 2023 and 2022, respectively, is as follows:

the contract with a customer.

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

and Beverage .

Food and Beverage .

The Company, through Alset F&B One Pte.

F&B One”) and Alset F&B (PLQ) Pte.

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

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

These licenses will allow Alset F&B One and

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

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

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

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

The Company, through Hapi Café Inc.

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

are located in Singapore and South Korea.

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

Limited (“HCSG”)

in Singapore and Hapi Café Korea Inc.

(“HCKI”) in Seoul, South Korea.

Hapi Cafes are distinctive lifestyle café

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

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

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

respectively.

performance obligations.

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

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

(“Alset F&B One”) and Alset F&B (PLQ)

(“Alset F&B PLQ”) each acquired a restaurant franchise licenses at the end of 2021 and 2022 respectively, both

of which have since commenced operations.

These licenses will allow Alset F&B One and Alset F&B PLQ each to operate a Killiney

Kopitiam restaurant in Singapore.

Killiney Kopitiam, founded in 1919, is a Singapore-based chain of mass-market, traditional kopitiam

style service cafes selling traditional coffee and tea, along with a range of local delicacies such as Curry Chicken, Laksa, Mee Siam,

and Mee Rebus.

Company, through HCI-T, commenced operation of two cafés during 2022 and 2021, which are located in Singapore and South Korea.

cafes are operated by subsidiaries of HCI-T, namely HCSG in Singapore and HCKI in Seoul, South Korea.

Hapi Cafes are distinctive lifestyle

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

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

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

Management Co., Ltd.

and GuangZhou Leyouyou Catering Management Co., Ltd in the People’s Republic of China.

The three 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.

revenue earned from Food and Beverage business for the years ended December 31, 2023 and 2022 were $1,019,634 and $449,240 respectively.

Remaining performance obligations.

As of December 31, 2023 and 2022, there were no remaining performance obligations or continuing

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

Estate Assets

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December 31, 2023, total real estate property under development was $10.4 million, including:

land held for development

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

capitalized development

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

capitalized finance costs

were $3.2 million.

held for development in the amount of $3.4 million (consisting of $2.8 million for Lakes at Black Oak and $0.6 million for Alset

development costs in the amount of $5.8 million (consisting of $5.3 million for Lakes at Black Oak and $0.5 million for Alset Villas);

finance costs were $1.2 million.

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

land held for development

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

and $0.5 million for our Perth project);

capitalized development

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

capitalized finance costs

were $3.2 million.

held for development in the amount of $7.9 million (consisting of $7.3 million for Lakes at Black Oak and $0.6 million for Alset

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

finance costs were $3.2 million.

December 31, 2023, the capitalized construction costs were as follows:

Ballenger Run

Lakes at Black Oak

Land held for development

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Ballenger Run

Perth Project

Lakes at Black Oak

Land held for development

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Other Services

BAN reimbursement

Impairment Reserve

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Total property under development

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

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

2021, our subsidiary Alset EHome Inc.

acquired approximately 19.5 acres of partially developed land near Houston, Texas which will be

used to develop a community named Alset Villas (“Alset Villas”).

Alset EHome is targeting to develop approximately 63 homes

at Alset Villas for rent and/or for sale.

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

December 31, 2023, there were no sales from the Perth and Ballenger projects.

Lots in these projects were fully sold during year ended

December 31, 2022.

of Operations

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Years Ended December 31,

$ (11,124,751 )

Digital Transformation Technology

Total revenue

$ (15,318,380 )

was $22,088,507 and $4,480,442 for the years ended December 31, 2023 and 2022, respectively.

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

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

In this project, builders

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

We collected revenue from the sale of lots

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

increase in property sales, rental revenue and food and beverages sales in the 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 Lakes at Black Oak project.

The sales contemplated by these contracts are contingent on certain conditions which the parties to such contracts will need to meet

and are expected to generate approximately $22 million of funds from operations, not including certain expenses that the Company will

be required to pay.

The sale of 335 lots closed during 2023 generating approximately $18.2 million revenue.

from the sale of Front Foot Benefits (“FFBs”), assessed on Ballenger Run project lots, decreased from $126,737 in the year

ended December 31, 2022 to $0 in year ended December 31, 2023.

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

homebuyers in 2022.

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

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

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

from the rental business was $2,776,911 and $1,810,011 for the years ended December 31, 2023 and 2022, respectively.

The Company expects

that the revenue from this business will continue to increase as we acquire more rental houses and successfully rent them.

from digital transformation technology segment consists primarily of the services rendered to customers in the amount of $28,117 and

$69,915, for the years ended December 31, 2023 and 2022, respectively.

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

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

In 2022 the Company began generating revenue from a project providing

AI chatbot services to Value Exchange Int’l (Hong Kong) Limited, a related company and a subsidiary of VEII located in Hong Kong.

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”).

Inc., HWH World.

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

HWH World recognized

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

HWH World recognized $12,758 and $753,651 in

revenue in the years ended December 31, 2023 and 2022, respectively.

The revenue from this segment decreased in 2023 due to decreased

sales of annual memberships.

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

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In the years ended December 31, 2023 and 2022, the revenue from other businesses was $1,083,971

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

and $568,248, respectively, generated mainly by Korean and Singaporean café shops and restaurants.

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

Years Ended December 31,

$ (8,057,556 )

Digital Transformation Technology

Total cost of sales

$ (7,569,824 )

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

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

Capitalized construction expenses, finance

costs and land costs are allocated to sales.

of revenue increased from $3,731,990 in the year ended December 31, 2022 to $14,576,209 in the year ended December 31, 2023, as a result

of the increase in the number of lots sold in the Lakes at Black Oak project and sales in F&B business.

Capitalized construction

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

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

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

The decrease of gross

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

sales and from decrease in property sales.

gross margin increased from $748,452 to $7,512,298 in the years ended December 31, 2022 and 2023, respectively.

The increase of gross

margin was caused by the increase of gross margin from real estate segment and F&B business,

mostly due to the increase in the sales.

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

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Digital transformation technology

(13,422,592 )

Total operating expenses

$ (15,653,304 )

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

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

increase in sales related expenses contributed to increased operating expenses in the year ended December 31, 2023, as compared to the

year ended December 31, 2022.

Income (Expense)

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

ended December 31, 2021.

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

reasons for the volatility in these two periods.

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

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

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

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

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

the year ended December 31, 2023, the Company had other expense of $58,313,729 compared to other expense of $39,123,131 in the year ended

December 31, 2022.

The change in realized loss on securities investment, loss on equity method investment and loss on consolidation of

Alset Capital Acquisition Corp.

are the primary reasons for the volatility in these two periods.

Realized loss on securities investment

was $11,375,747 in year ended December 31, 2023, compared to $7,308,580 loss in the year ended December 31, 2022.

Loss on equity method

investment was $24,483,374 in year ended December 31, 2023, compared to $685,533 loss in the year ended December 31, 2022.

Loss on consolidation

of Alset Capital Acquisition Corp.

was $21,657,036 in the year ended December 31, 2023, compared to $0 in the year ended December 31,

the year ended December 31, 2023, the Company had net loss of $61,278,733 compared to net loss of $46,212,505 in the year ended December

and Capital Resources

real estate assets have increased to $54,618,729 as of December 31, 2022, from $40,515,380 as of December 31, 2021.

This increase primarily

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

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

real estate assets have decreased to $42,137,152 as of December 31, 2023, from $54,618,729 as of December 31, 2022.

This decrease reflects

the sale of multiple lots in Lakes at Black Oak project during 2023.

Our cash has increased from $17,827,383 as of December 31, 2022

to $26,921,727 as of December 31, 2023.

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

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

decrease in cash.

Our liabilities increased from $4,827,221 at December 31, 2022 to $9,066,700 at December 31,

Our total assets have decreased to $126,314,028 as of December 31, 2023 from $153,490,336 as of December 31, 2022 due to the decrease

in real estate assets and equity method investment.

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

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amount of $18,500,000.

The line of credit bears interest rate on LIBOR plus 375 basis points.

The line of credit bore interest rate on LIBOR plus 375 basis points.

SeD Maryland Development LLC was also provided

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

June 18, 2020, Alset EHome Inc.

entered into a Loan Agreement with M&T Bank.

Pursuant to this Loan Agreement, M&T Bank provided

a non-revolving loan to Alset EHome Inc.

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

Repayment of this loan was secured by a deed of

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

Certain subsidiaries of our company were

the guarantors of this loan.

The loan was closed in June 2021.

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

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

The PPP Loan is evidenced by a promissory note.

The PPP Term Note bears interest at a fixed annual rate of 1.00%, with the first sixteen

months of principal and interest deferred or until we apply for the loan forgiveness.

The PPP Term Note may be accelerated upon the occurrence

of an event of default.

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

The Company applied to M&T Bank for

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

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

In April 2022 the Company received confirmation that

the PPP Loan was fully forgiven.

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

which was booked as addition paid-in capital.

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

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

On December 14, 2023 approximately $201,751 was released from collateral, leaving approximately

$100,000 as collateral for outstanding letters of credit.

future development timeline of Lakes at Black Oak will be based on multiple conditions, including the amount of funds which may be raised

from capital markets, the loans we may secure from third party financial institutions, and government reimbursements which may be received.

The development will be step by step and expenses will be contingent on the amount of funding we will receive.

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

The sales contemplated by these contracts are contingent on certain conditions which the parties to such contracts will

need to meet and are expected to generate approximately $22 million of funds from operations, not including certain expenses that

the Company will be required to pay.

In addition, the Company will be entitled to receive certain reimbursements in the year ended

December 31, 2024 and 2025.

The sale of 335 lots closed in the first six months of 2023 generating approximately $18.1 million

November 13, 2023, 150 CCM Black Oak Ltd.

(the “Seller”), a Texas Limited Partnership, entered into two Contracts for Purchase

and Sale and Escrow Instructions (each an “Agreement,” collectively, the “Agreements”) with Century Land Holdings

of Texas, LLC, a Colorado limited liability company (the “Buyer”).

Pursuant to the terms of one of the aforementioned Agreements,

the Seller has agreed to sell approximately 142 single-family detached residential lots (the “Section 4 Agreement”) comprising

a section of a residential community in the city of Magnolia, Texas known as the “Lakes at Black Oak.” The selling price

of these lots is anticipated to equal approximately $7.4 million.

Pursuant to the other Agreement, the Seller has agreed to sell 63 single-family

detached residential lots (the “Alset Villas Agreement”) in the city of Magnolia, Texas.

In 2021, our subsidiary Alset EHome

acquired approximately 19.5 acres of partially developed land near Houston, Texas which was used to develop a community named Alset

Villas (“Alset Villas”).

Alset EHome was in the process of developing the 63 lots at Alset Villas in 2023.

The selling price

of these lots is anticipated to equal approximately $3.3 million.

The closing of the transactions described above depends on the satisfaction

of certain conditions, and is expected to take place during the second quarter of 2024.

In addition, the Company will be entitled to

receive certain reimbursements in the year ended December 31, 2024 and 2025.

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

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Years Ended December 31,

Net cash used in operating activities

$ (31,855,435 )

Net cash provided by (used in) operating activities

$ (31,855,435 )

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Net cash provided by financing activities

$ 103,417,404

Flows from Operating Activities

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

cash provided by operating activities was $7,478,823 in the year ended December 31, 2023, as compared to net cash used in operating activities

of $31,855,435 in the same period of 2022.

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

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

Property sales from the Lakes at Black Oak project in 2023 were the main reason for the cash

provided by operating activities in that period.

Flows from Investing Activities

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in the same period of 2022.

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

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

At the same time, we received approximately

$1 million from a related party loan receivable.

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

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

At the same time, we received

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

In the year ended December 31, 2023 we invested $756,078 in marketable securities, issued $3,338,081 in promissory

notes to related parties and received $2,672,438 repayment of promissory notes from related parties.

In the year ended December 31, 2022

we invested $8,429,620 in marketable securities, $6,824,730 to purchase real estate properties and improvements and $377,864 in promissory

notes to a related party.

At the same time, we received approximately $1 million from a related party loan receivable.

Flows from Financing Activities

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the year ended December 31, 2022.

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

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

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

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

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

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

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

Additionally, the Company distributed $2,549,750

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

Cash provided by financing activities in the year 2023 is primarily related to the proceeds from stock

issuance of $3,433,921.

During the year ended December 31, 2023, we also repaid $31,499 of a note payable.

Cash provided by financing

activities in the year 2022 is primarily related to the proceeds from stock issuance of $6,213,000 and borrowing from a commercial loan

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

Property Financing Arrangements

Alset International, we have three property development projects.

Ballenger Run and Black Oak projects are the major projects.

Company anticipates that the estimated construction costs (not including land costs and financing costs) for the final phases of the

Ballenger Run project will be $0.2 million.

The expected completion date for the final phases of the Ballenger Run project is June of

the present time, the Company is also considering expanding its current policy of selling buildable lots to include a strategy of building

housing for sale or rent, particularly at our Black Oak and Alset Villas properties.

The required time and expenses needed to complete

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

the present time, the Company is considering expanding its current policy of selling buildable lots to include a strategy of building

housing for sale or rent, particularly at our Lakes at Black Oak and Alset Villas properties.

The required time and expenses needed

to complete the Lakes at Black Oak and Alset Villas projects will be influenced by the strategy, or mix of strategies, we utilize at

each project.

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

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

This project is owned by certain

subsidiaries of Alset International.

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

The Company’s

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

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

development located in Frederick County, Maryland.

Previously, on May 28, 2014, the RBG Family, LLC entered into the Assignable Real

Estate Sales Contract with NVR, Inc.

(“NVR”) by which RBG Family, LLC would sell the 197 acres for $15 million to NVR.

December 10, 2014, NVR assigned this contract to SeD Maryland Development, LLC in the Assignment and Assumption Agreement and entered

into a series of Lot Purchase Agreements by which NVR would purchase subdivided lots from SeD Maryland Development, LLC (the “Lot

Purchase Agreements”).

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

Bank”) in the principal amount not to exceed at any one time outstanding the sum of $8,000,000, with a cumulative loan advance

amount of $18,500,000.

The line of credit bears interest of LIBOR plus 375 basis points.

SeD Maryland Development LLC was also provided

with a Letter of Credit (“L/C”) Facility in an aggregate amount of $900,000.

The L/C commission is 1.5% per annum on the

face amount of the L/C.

Other standard lender fees will apply in the event the L/C is drawn down.

The L/C Facility is not a revolving

loan, and amounts advanced and repaid may not be re-borrowed.

Repayment of the Loan Agreement is secured by $2.6 million collateral fund

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

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

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

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

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

This project is owned by

certain subsidiaries of Alset International.

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

Ballenger Run is a 197-acre land sub-division development project located in Frederick County, Maryland.

The Ballenger Run project is

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

This project had a

revolver loan from M&T Bank in the principal amount not to exceed at any one time outstanding the sum of $8,000,000, with a cumulative

loan advance amount of $18,500,000.

This loan has expired in 2022.

Security Investments

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traded stock price at the close of the reporting period.

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

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

The Company does not have significant influence over AMBS

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

The stock fair value is determined by quoted stock prices.

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

(“Value Exchange International”),

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

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

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

After these transactions the Company owns

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

Our Chief Executive Officer, Chan Heng

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

Additionally, certain

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

The stock’s fair value is determined by quoted

stock prices.

Amarantus BioScience Holdings (“AMBS”) is a publicly traded company.

The Company does not have significant influence over AMBS as the Company holds approximately 4.3% of the common shares of AMBS.

fair value is determined by quoted stock prices.

subsidiary, Hapi Metaverse, entered into Securities Purchase Agreements pursuant to which the Company purchased 6,500,000 and 7,276,163

shares of Value Exchange International, Inc., a Nevada corporation (“VEII”) on April 8, 2021 and October 17, 2022 respectively.

January 27, 2023, the Company and New Electric CV Corporation (together with the Company, the “Lenders”) entered into a Convertible

Credit Agreement (the “Credit Agreement”) with VEII.

The Credit Agreement provides VEII with a maximum credit line of $1,500,000

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

The Credit Agreement grants conversion rights

to each Lender.

Each Advance shall be convertible, in whole or in part, into shares of VEII’s Common Stock at the option of the

Lender who made that Advance (being referred to as a “Conversion”), at any time and from time to time, at a price per share

equal the “Conversion Price”.

In the event that a Lender elects to convert any portion of an Advance into shares of VEII

Common Stock in lieu of cash payment in satisfaction of that Advance, then VEII would issue to the Lender five (5) detachable warrants

for each share of VEII’s Common Stock issued in a Conversion (“Warrants”).

Each Warrant will entitle the Lender to

purchase one (1) share of Common Stock at a per-share exercise price equal to the Conversion Price.

The exercise period of each Warrant

will be five (5) years from date of issuance of the Warrant.

On February 23, 2023, Hapi Metaverse

loaned VEII $1,400,000 (the “Loan Amount”).

The Loan Amount can be converted into shares of VEII pursuant to the terms of

the Credit Agreement for a period of three years.

There is no fixed price for the derivative security until Hapi Metaverse converts the

Loan Amount into shares of VEII Common Stock.

September 6, 2023, the Company converted $1,300,000 of the principal amount loaned to VEII into 7,344,632 shares of VEII’s Common

Under the terms of the Credit Agreement, Hapi Metaverse received Warrants to purchase a maximum of 36,723,160 shares of VEII’s

Common Stock at an exercise price of $0.1770 per share.

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

December 14, 2023, Hapi Metaverse entered into a Convertible Credit Agreement (“Credit Agreement”) with VEII.

15, 2023, the company loaned VEII $1,000,000.

The Credit Agreement was amended pursuant to an agreement dated December 19, 2023.

the Credit Agreement, as amended, this amount can be converted into VEII’s Common Shares pursuant to the terms of the Credit Agreement

for a period of three years.

In the event that Hapi Metaverse converts this loan into shares of VEII’s Common Stock, the conversion

price shall be $0.045 per share.

In the event that Hapi Metaverse elects to convert any portion of the loan into shares of VEII’s

Common Stock in lieu of cash payment in satisfaction of that loan, then VEII will issue to Hapi Metaverse five (5) detachable warrants

for each share of VEII’s Common Stock issued in a conversion (“Warrants”).

Each Warrant will entitle the company to

purchase one (1) share of VEII’s Common Stock at a per-share exercise price equal to the Conversion Price.

The exercise period

of each Warrant will be five (5) years from date of issuance of the Warrant.

At the time of this filing, the company has not converted

the Loan Amount.

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

In addition to Mr.

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

are also members of the Board of Directors

of VEII (Wong Shui Yeung and Wong Tat Keung).

The Company currently owns a total of 21,120,795 shares (representing approximately 48.55%)

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

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

The Company has elected the fair

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

CollTech Limited (“Holista”), DSS Inc.

(“DSS”) and New Electric CV Corporation

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

and fair value is determined by quoted stock prices.

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

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

fair value accounting.

The Company has significant influence

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

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

In addition, our Chief Executive Officer

is the Chairman of the Board of Directors of DSS.

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

a director of DSS.

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

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

The Company had significant influence

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

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

equity method of accounting.

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

(“DSS”) and NECV,

Value Exchange International Inc.

(“Value Exchange International” or “VEII”) and Sharing Services Global

(“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 we owned approximately 44.4% of the common stock of DSS as of December 31, 2023, and our

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

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

Chan Tung Moe, our Co-Chief Executive Officer

and the son of Chan Heng Fai, is also a director of DSS.

The Company did not have a controlling interest and therefore the Company’s

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

Company had significant influence over Holista as the Company holds approximately 13% of the outstanding shares of Holista and our CEO

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

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

The Company has significant influence

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

an executive and director position of NECV’s board.

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

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

The Company did not have a controlling interest and therefore the

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

The Company has elected the fair

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

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

Value Exchange International, Holista and

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

On December 31,

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

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

On March 2, 2020, and October

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

(“AMRE”), a related party private

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

For further details on this transaction, refer

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

As of December

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

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

was $0 as of December 31, 2021.

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

conversion, the Company owns approximately 15.8% of AMRE.

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

offering by Vivacitas.

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

On March 18, 2021 the Company sold the subsidiary holding

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

For further details on this transaction, refer to Note

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

On July 17, 2020, the Company

purchased 122,039,000 shares, approximately 9.99% ownership, and 1,220,390,000 warrants with an exercise price of $0.0001 per share, from

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

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

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

of December 31, 2022 and 2021, respectively.

Company has significant influence over NECV as the Company holds approximately 0.5% of the common shares of NECV.

Additionally, our Chief

Executive Officer, Chan Heng Fai, is a majority owner of the common stock of NECV (not including any common shares we hold).

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

or could elect the fair value option accounting.

Company has significant influence over SHRG as the Company holds approximately 33.4% of the common shares of SHRG, our CEO holds a director

and chairman position on SHRG’s Board of Directors and three of the directors of the Company are the directors of SHRG.

Additionally,

our CEO is a significant stockholder of SHRG shares.

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

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

VEII, Holista,

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

31, 2023 and 2022, the fair value (calculated by market trading prices on the end dates of the periods) of total held equity stock of

VEII, Holista, DSS and SHRG was $9,628,189 and $13,503,533, respectively.

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

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

For further details on

this transaction, refer to Note 8 to Company’s Financial Statements, Related Party Transactions, Note Receivable from a Related

Party Company.

As of December 31, 2023 and 2022, AMRE was a private company.

Based on management’s analysis, the fair value of

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

In March 2022, both loans, together with warrants were converted into

common shares of AMRE.

After the conversion, the Company owns approximately 15.8% of AMRE.

July 17, 2020, the Company purchased 122,039,000 shares, approximately 9.99% ownership, and 1,220,390,000 warrants with an exercise price

of $0.0001 per share, from NECV, for an aggregated purchase price of $122,039.

We value NECV warrants under level 3 category through

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

and $430 and $327,565 as of December 31, 2023 and 2022, respectively.

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

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value of the investment.

Company had an equity holding of 13.1% in Vivacitas Oncology Inc.

(“Vivacitas”), a private company that is currently not

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

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

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

Our ownership in Vivacitas

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

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

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

For further details on this transaction, refer

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

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

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

The Company’s subsidiary

holding equity in HWH World Co.

was sold on December 31, 2023.

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

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Impairment losses are recognized in other expense when a decline in value is deemed to be other-than-temporary.

Medical REIT Inc.

Asset Management Pte.

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

a company concentrating on medical real estate.

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

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

AMRE targets hospitals (both Critical Access and

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

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

DSS, of which we own 45.2% and have significant influence over, owns 80.8%

Therefore, the Company has significant influence on AMRE.

(“LiquidValue”), a subsidiary of the Company owns 15.8% of AMRE, a company concentrating on medical

AMRE acquires state-of-the-art, purpose-built healthcare facilities and leases them to leading clinical operators with dominant

market share under secure triple net leases.

AMRE targets hospitals (both Critical Access and Specialty Surgical), Physician Group Practices,

Ambulatory Surgical Centers, and other licensed medical treatment facilities.

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

DSS, of which we own 44.4% and have significant influence over, owns 80.4% of AMRE.

Therefore, the Company has significant influence

Pacific Bancorp, Inc.

to Securities Purchase Agreement from March 12, 2021 the Company purchased of 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 of Series

A Common Stock to DSS, Inc.

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 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 $2.6 million, the Company’s investment percentage of carrying amount of APB’s net assets of $2.9 million.

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

September 8 to December 31, 2021, the investment loss was $51,999.

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.

During the year ended

December 31, 2023 the investment loss was $24,241,856.

During the year ended December 31, 2022 the investment gain was $867,117.

As of December 31, 2022 and 2021, the investment in APB was $31,668,246 and $30,801,129, 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.

During the year ended December 31, 2022, the Company

recorded investment loss of $203,713 by equity method.

On September 30, 2022 the Company purchased the remaining 10% ownership in the

Sponsor for $476,250 and currently owns 100% of it.

The Company’s investment in Alset Capital was $21,111,575 as of December 31,

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

(“Hapi Cafe”) lent $76,723 to Ketomei Pte Ltd (“Ketomei”).

On March 21, 2022 Hapi Cafe entered into an agreement pursuant to which the principal of the loan together with accrued interest were

converted into an investment in Ketomei.

December 31, 2023 and 2022, the investment in APB was $7,426,390 and $31,668,246, respectively.

June 10, 2021 the Company’s indirect subsidiary HCI-T lent $76,723 to Ketomei Pte Ltd (“Ketomei”).

On March 21, 2022

Hapi Cafe entered into an agreement pursuant to which the principal of the loan together with accrued interest were converted into an

investment in Ketomei.

At the same time, Hapi Cafe invested an additional $179,595 in Ketomei.

After the conversion

and fund investment the Company now holds 28% of Ketomei.

After the conversion and fund investment

the Company now holds 28% of Ketomei.

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

During the year

ended December 31, 2022 the investment loss was $48,916.

During the years ended December 31,

2023 and 2022 the investment gain was $36,438 and $48,916 loss, respectively.

Investment in Ketomei was $155,369 at December 31, 2022.

At December 31, 2023, the Company wrote off the investment in Ketomei of $121,471, as the Company does not believe it will be able to

recover this investment.

On February 20, 2024, the Company invested additional $312,064 (SG$420,000) for an additional 38.41% ownership interest

After this additional investment, the Company will own 55.65% of Ketomei’s outstanding shares and Ketomei will be consolidated

into the Company’s financial statements beginning on February 20, 2024.

Brokers Company Inc.

May 22, 2023 the Company’s indirect subsidiary, SeD Capital Pte.

(“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.

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 44.4% and have significant influence over, owns 80.1%

During the year ended December 31, 2023 the investment loss in Sentinel was $154,956.

Investment in Sentinel was $124,763

at December 31, 2023.

in Debt Securities

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a private company in South Korea.

The interest rate is 2% per annum and maturity is two years.

The interest rate is 2% per annum.

The conversion price is approximately

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As of December 31, 2022 and 2023, the Management estimated the fair value of the note to be $88,599,

the initial transaction price.

and $77,307, respectively.

Interest Entity

Financial Accounting Standards Board (“FASB”) Accounting Standard Codification (“ASC”) 810, Consolidation ,

when a reporting entity is the primary beneficiary of an entity that is a variable interest entity (“VIE”), as defined in

ASC 810, the VIE must be consolidated into the financial statements of the reporting entity.

The determination of which owner is the

primary beneficiary of a VIE requires management to make significant estimates and judgments about the rights, obligations, and economic

interests of each interest holder in the VIE.

FASB Accounting Standard Codification (“ASC”) 810, Consolidation , when a reporting entity is the primary beneficiary

of an entity that is a variable interest entity (“VIE”), as defined in ASC 810, the VIE must be consolidated into the financial

statements of the reporting entity.

The determination of which owner is the primary beneficiary of a VIE requires management to make

significant estimates and judgments about the rights, obligations, and economic interests of each interest holder in the VIE.

Company evaluates its interests in VIE’s on an ongoing basis and consolidates any VIE in which it has a controlling financial interest

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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 lent a loan of $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 permit it to 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.

Moreover, the Company does not 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 Co.

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

On December 31, 2022 and 2021 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 December 31, 2022 and 2021 variable interest and amount receivable in the non-consolidated VIE was $0

and $8,901,285, respectively, which represents the Company’s maximum risk of loss from non-consolidated VIE.

believe that inflation has not had a material impact on our results of operations for the years ended December 31, 2023 and 2022.

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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-K

Item 7. Management’s Discussion and Analysis