What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2024-08-13 compared with 2024-05-15 · 277 added, 179 removed, 276 unchanged (62% of the section changed)

Discussion and Analysis of Financial Condition and Results of Operations

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

Forward-Looking

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on a variety of factors, many of which are not within our control.

These factors include by are not limited to economic conditions generally

These factors include but are not limited to economic conditions generally

and in the industries in which we may participate, competition within our chosen industry, including competition from much larger competitors,

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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, 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

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

and social networking functions.

States, Singapore, Hong Kong, Australia, South Korea and the People’s Republic of China.

We manage our three principal businesses

primarily through our 85.5% owned subsidiary, Alset International, 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 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.

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to 236,875 shares of New HWH common stock upon exercise.

HWH is in the midst of implementing the new membership model described below (the “New Model”), that operates on a yearly

subscription basis.

New HWH intends to resume membership sales, albeit under the New Model, in approximately 2nd quarter of 2024.

HWH is in the midst of implementing the new membership model (the “New Model”), that operates on a yearly subscription basis.

New HWH intends to resume membership sales, albeit under the New Model.

Members get exclusive discounts on HWH Marketplace products, priority invites to product launch events and other parties, and can earn

passive income when a member’s referral signs up for membership or makes an initial purchase through the HWH Marketplace products

through them.

passive income when a member’s referral signs up for membership or makes an initial purchase of the HWH Marketplace products through

of Rental Business from Majority-Owned Subsidiary

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a public offering price of $2.20 per share.

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

The Underwriting Agreement provided the Underwriter a 45-day option to purchase up to 212,863

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

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

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

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

Offering closed on February 8, 2023.

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of Travel Business

June 14, 2023, the Company’s subsidiary completed acquisition of Hapi Travel Limited (“HTL”), an online travel business

started in Hong Kong and under common control of the Company.

The accompanying consolidated financial statements include the operations

of the acquired entity from its acquisition date.

The acquisition has been accounted for as a business combination.

Accordingly, consideration

paid by the Company to complete the acquisition is initially allocated to the acquired assets and liabilities assumed based upon their

estimated fair values on the acquisition date.

The recorded amounts for assets acquired and liabilities assumed are provisional and subject

to change during the measurement period, which is up to 12 months from the acquisition date.

As a result of the acquisition of HTL, a

deemed dividend of $214,174 was generated as a result of the business combination, which represents the purchase price of $214,993 in

excess of identifiable equity.

June 14, 2023, the Company’s subsidiary completed acquisition of Hapi Travel Limited (“HTL”), an online travel

business started in Hong Kong and under common control of the Company.

The accompanying condensed consolidated financial statements

include the operations of the acquired entity from its acquisition date.

The acquisition has been accounted for as a business

Accordingly, consideration paid by the Company to complete the acquisition is initially allocated to the acquired

assets and liabilities assumed based upon their estimated fair values on the acquisition date.

The recorded amounts for assets

acquired and liabilities assumed are provisional and subject to change during the measurement period, which is up to 12 months from

the acquisition date.

As a result of the acquisition of HTL, a deemed dividend of $214,174 was generated as a result of the business

combination, which represents the purchase price of $214,993 in excess of identifiable equity.

common control transaction described above resulted in the following basis of accounting for the financial reporting periods:

The acquisition

of HTL was accounted for prospectively as of June 14, 2023 as this did not represent a change in reporting entity.

The acquisition of HTL

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

The Consolidated financial statements were not retrospectively

adjusted for the acquisition of HTL as of January 1, 2022 for comparative purposes because the historical operations of HTL were

deemed to be immaterial to the Company’s consolidated financial statements.

was accounted for prospectively as of June 14, 2023 as this did not represent a change in reporting entity.

acquisition of HTL was under common control and was consolidated in accordance with ASC 850-50.

The condensed consolidated financial

statements were not retrospectively adjusted for the acquisition of HTL as of January 1, 2022 for comparative purposes because the

historical operations of HTL were deemed to be immaterial to the Company’s condensed consolidated financial

of Sentinel Brokers Company Inc.

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Investor Protection Corporation (“SIPC”).

The Company has significant influence over Sentinel and its CEO holds a director

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

position on Sentinel’s Board of Directors.

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on January 4, 2024.

to Sell 142 Lots and 63 Lots

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 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.

On July 1, 2024, the Seller closed the sale of 70 of the lots contemplated by the Agreement, generating

approximately $3.8 million.

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

lots in the city of Magnolia, Texas.

In 2021, our subsidiary Alset EHome Inc.

acquired approximately 19.5 acres of partially

developed land near Houston, Texas which was used to develop a community named Alset Villas (“Alset Villas”).

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.

sale of the first 70 lots closed on July 1, 2024 generating approximately $3.8 million.

of Convertible Loans to Value Exchange International, Inc.

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

The Loan Amount can be converted into shares of VEII pursuant to the terms of the Credit Agreement for a period of three

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

January 27, 2023, Hapi Metaverse 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, Hapi Metaverse 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

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

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

15, 2023, Hapi Metaverse loaned VEII $1,000,000.

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

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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.

Each Warrant will entitle Hapi Metaverse

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

At the time of this filing, Hapi Metaverse has not converted

the Loan Amount.

Company currently owns a total of 21,179,275 shares (representing approximately 48.7%) of VEII.

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

founder, Chairman and Chief Executive Officer, Chan Heng Fai, and another member of the Board of Directors of Hapi Metaverse, Lum Kan

Fai Vincent, are both members of the Board of Directors of VEII.

In addition to Mr.

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

are also members of the Board of Directors

Wong Shui Yeung and Mr.

Wong Tat Keung).

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).

Shares Dividend Received from DSS

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

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

As a result of this distribution,

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

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

The Company and its majority-owned subsidiaries now

collectively own 125,624,528 shares of SHRG, representing 33.4% of the issued and outstanding shares of SHRG Common Stock (such number

of SHRG shares held and ownership percentage do not include any shares held by affiliates of the Company which we do not hold a majority

interest in).

Additionally, our founder, Chairman and Chief Executive Officer, Chan Heng Fai, directly and indirectly is the owner of

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

by Alset Inc.

May 4, 2023, DSS distributed approximately 280 million shares of SHRG beneficially held by DSS and its subsidiaries in the form of a

dividend to the shareholders of DSS common stock.

As a result of this distribution, the Company directly received 70,426,832 shares of

SHRG, and through its majority-owned subsidiary Alset International, and certain subsidiaries of Alset International, indirectly received

additional 55,197,696 shares of SHRG.

The Company and its majority-owned subsidiaries now collectively own 125,624,528 shares of SHRG,

representing 33.4% of the issued and outstanding shares of SHRG Common Stock (such number of SHRG shares held and ownership percentage

do not include any shares held by affiliates of the Company which we do not hold a majority interest in).

Our CEO, Chan Heng Fai, directly

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

(including those shares owned by Alset Inc.

and its majority-owned subsidiaries).

of Convertible Loans to Sharing Services Global Corp.

January 17, 2024, the Company received a Convertible Promissory Note (the “Convertible Note”) from Sharing Services Global

(“SHRG”), an affiliate of the Company, in exchange for a $250,000 loan made by the Company to SHRG.

The Company may

convert a portion or all of the outstanding balance due under the Convertible Note into shares of SHRG’s common stock at the average

closing market price of SHRG stock within the last three (3) days from the date of conversion notice.

The Convertible Note bears a 10%

interest rate and has a scheduled maturity six (6) months from the date of the Convertible Note, or July 17, 2024.

March 20, 2024, HWH International Inc., a subsidiary of the Company (“HWH”), entered into a Securities Purchase Agreement

(the “Securities Purchase Agreement”) with SHRG, pursuant to which HWH purchased from SHRG a (i) Convertible Promissory Note

January 17, 2024, the Company received a Convertible Promissory Note (the “Convertible Note”) from SHRG, in exchange for

a $250,000 loan made by the Company to SHRG.

The Company may convert a portion or all of the outstanding balance due under the Convertible

Note into shares of SHRG’s common stock at the average closing market price of SHRG stock within the last three (3) days from the

date of conversion notice.

The Convertible Note bears a 10% interest rate and has a scheduled maturity six (6) months from the date of

the Convertible Note, or July 17, 2024.

The maturity date was subsequently extended.

March 20, 2024, HWH International Inc., a subsidiary of the Company (“HWH”), entered into a securities purchase agreement with SHRG, pursuant to which HWH purchased from SHRG a (i) Convertible Promissory Note

in the amount of $250,000, convertible into 208,333,333 shares of SHRG’s common stock at the option of HWH, and (ii) certain warrants

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warrant being five (5) years from the date of the securities purchase agreement, for an aggregate purchase price of $250,000.

time of filing, HWH has not converted any of the debt contemplated by the Convertible Note nor exercised any of the warrants.

time of this filing, HWH has not converted any of the debt contemplated by the Convertible Note nor exercised any of the warrants.

May 9, 2024, HWH entered into a securities purchase agreement with SHRG, pursuant to

which HWH purchased from SHRG a Convertible Promissory Note (the “Convertible Note”) in the amount of $250,000, convertible

into 125,000,000 shares of SHRG’s common stock at the option of HWH for an aggregate purchase price of $250,000.

The Convertible

Note bears an 8% interest rate and has a scheduled maturity three years from the date of the Convertible Note.

Additionally, upon signing

the Convertible Note, SHRG owns the Company commitment fee of 8% of the principal amount, which will be paid either in cash or in common

stock of SHRG, at the discretion of the Company.

June 6, 2024, the Company entered into a securities purchase agreement with SHRG, pursuant

to which HWH purchased from SHRG a Convertible Promissory Note (the “Convertible Note”) in the amount of $250,000, convertible

into 125,000,000 shares of SHRG’s common stock at the option of HWH for an aggregate purchase price of $250,000.

The Convertible

Note bears an 8% interest rate and has a scheduled maturity three years from the date of the Convertible Note.

Additionally, upon signing

the Convertible Note, SHRG owns the Company commitment fee of 8% of the principal amount $20,000 in total, which will be paid either

in cash or in common stock of SHRG, at the discretion of the Company.

At the time of this filing, HWH has not converted any of the debt

contemplated by the Convertible Note.

of Chief Operating Officer

March 10, 2024, Anthony S.

Chan resigned as Chief Operating Officer of Alset Inc.

(the “Company”), effective immediately,

due to personal reasons.

Chan resigned as Chief Operating Officer of Alset Inc., effective immediately, due to personal reasons.

Chan’s resignation is not the result of any disagreement with the Company.

Chan remains as a consultant

to the Company.

of DSS Shares

May 21, 2024, the Company entered into a Securities Purchase Agreement (the “DSS Securities Purchase Agreement”) with

the Company’s Chairman and Chief Executive Officer, Chan Heng Fai, and Heng Fai Holdings Limited, a company wholly owned by

Pursuant to the DSS Securities Purchase Agreement, the Company will purchase 982,303 shares of DSS Inc., a NYSE-listed

These shares include 979,325 shares of DSS common stock to be acquired from Mr.

Chan and 2,978 shares to be acquired from

Heng Fai Holdings Limited (collectively, the “Shares”).

The Shares represent approximately 13.9% of the total issued and

outstanding shares of DSS as of the date hereof.

As consideration for the Shares, the Company will issue a total of 3,316,488 shares

of its common stock to Mr.

Chan and Heng Fai Holdings Limited.

The consideration to be paid for the Shares is based on the relevant

market closing price of DSS common stock and the Company’s common stock as of May 3, 2024.

of the transactions described herein was granted by the Board of Directors of the Company (“the Board”) during a meeting

of the Board held on May 6, 2024.

Chan and Chan Tung Moe, another member of the Board and the son of Mr.

Chan, recused themselves

from discussion and voting on the approval of such transaction and the acquisition of the DSS Shares.

closing of the transactions contemplated by the DSS Securities Purchase Agreement remains subject to the approval of the

Company’s stockholders and no objection from the Nasdaq.

that May or Are Currently Affecting Our Business

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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

and profitably integrate them into our existing operations;

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

to manage our overhead;

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of Operations

of Statements of Operations for the Three Months Ended March 31, 2024 and 2023

of Statements of Operations for the Three and Six Months Ended June 30, 2024 and 2023

Three- Months Ended

March 31, 2024

March 31, 2023

Six-months Ended

June 30, 2024

June 30, 2023

June 30, 2024

June 30, 2023

Operating Expenses

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$ (14,044,352 )

Other Expenses

$ (12,289,237 )

$ (17,061,018 )

Income Tax Expense

Other Income (Expenses)

$ (10,922,902 )

$ (3,387,772 )

$ (13,156,354 )

$ (1,149,965 )

$ (5,813,406 )

$ (8,463,756 )

$ (10,136,588 )

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

Three-months Ended

March 31, 2024

March 31, 2023

June 30, 2024

June 30, 2023

$ (18,176,906 )

Digital Transformation Technology

Total Revenue

was $6,086,207 and $926,936 for the three months ended March 31, 2024 and 2023, respectively.

The increase in property sales from the

Lakes at Black Oak Project in the first three months of 2024 contributed to higher revenue in this period.

$ (18,026,802 )

Six-months Ended

June 30, 2024

June 30, 2023

$ (13,057,723 )

Digital Transformation Technology

Total Revenue

$ (12,867,531 )

was $1,127,046 and $19,153,848 for the three months ended June 30, 2024 and 2023, respectively.

Revenue was $7,213,253 and $20,080,784

for the six months ended June 30, 2024 and 2023, respectively.

The decrease in property sales from the Lakes at Black Oak Project in

the first half of 2024 contributed to lower revenue in this period.

Company plans to continue its near-term focus on lot sales to regional and national builders.

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improve the Company’s liquidity, strengthen its financial position and meet is working capital requirements.

from rental business was $707,592 and $633,811 in the three months ended March 31, 2024 and 2023, 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 rental business was $705,011 and $690,967 in the three months ended June 30, 2024 and 2023, respectively.

Revenue from rental business

was $1,425,505 and $1,324,778 in the six months ended June 30, 2024 and 2023, respectively.

The Company expects that the revenue from

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

May 2023, the Company entered into lease agreement for one of its model houses located in Montgomery County, Texas.

The revenue from

the lease was $6,300 in the three months ended March 31, 2024.

the lease was $6,300 and $12,600 in the three and six months ended June 30, 2024, respectively.

The revenue from the lease was $4,200

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

January 2024, the Company entered into lease agreement for another model house located in Montgomery County, Texas.

The revenue from

the lease was $6,602 in the three months ended March 31, 2024.

the lease was $6,603 and $13,205 in the three and six months ended June 30, 2024, respectively.

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

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HWH World recognized

$535 and $ 12,786 in revenue in the three months ended March 31, 2024 and 2023, respectively.

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

$0 and $0 in revenue in the three months ended June 30, 2024 and 2023, respectively.

HWH World recognized $0 and $12,587 in revenue in

the six months ended June 30, 2024 and 2023, respectively.

category described as “Other” includes corporate and financial services, food and beverage business, digital transformation technology, as it was minimal in 2024, and new venture businesses.

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

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addressed as one independent category.

In the three months ended March 31, 2024 and 2023, the revenue from other businesses was $332,678

and $1,083,971, respectively, generated by Korean, Singaporean and Chinese café shops and restaurants.

In the three months ended June 30, 2024 and 2023, the revenue from other businesses was $422,035

and $271,931, respectively.

In the six months ended June 30, 2024 and 2023, the revenue from other businesses was $755,248 and $552,270,

respectively, generated by Korean, Singaporean and Chinese café shops and restaurants.

of Revenues and Operating Expenses

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Three-months Ended

March 31, 2024

March 31, 2023

June 30, 2024

June 30, 2023

$ (10,918,468 )

Digital Transformation Technology

Total Cost of Revenues

of revenues increased from $689,281 in the three months ended March 31, 2023 to $4,658,367 in the three months ended March 31, 2024.

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

Capitalized construction expenses, finance costs

and land costs are allocated to sales.

$ (10,908,535 )

Digital Transformation Technology

Total Cost of Revenues

of revenues decreased from $11,738,493 in the three months ended June 30, 2023 to $829,958 in the three months ended June 30, 2024.

of revenues decreased from $12,427,774 in the six months ended June 30, 2023 to $5,488,325 in the six months ended June 30, 2024.

decrease is a result of the decrease in sales in the Lakes at 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 $237,655 to $1,427,840 in the three months ended March 31, 2023 and 2024, respectively.

The increase of gross

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

gross margin decreased from $7,415,355 to $297,088 in the three months ended June 30, 2023 and 2024, respectively.

The gross margin decreased

from $7,653,010 to $1,724,928 in the six months ended June 30, 2023 and 2024, respectively.

The decrease of gross margin was caused by

the decrease 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

March 31, 2024

March 31, 2023

June 30, 2023

June 30, 2022

Digital Transformation Technology

Total Operating Expenses

increase of operating expenses in the first three months of 2024 compared to the same period of 2023 was mostly caused by recording of

goodwill and investment.

Six-months Ended

June 30, 2023

June 30, 2022

Digital Transformation Technology

Total Operating Expenses

increase of operating expenses in the first half of 2024 compared to the same period of 2023 was mostly caused by recording of goodwill

and investment.

Income (Expense)

the three months ended March 31, 2024, the Company had other expenses of $5,047,279 compared to other expenses of $2,233,452 in the three

months ended March 31, 2023.

The gain on sale of stock of subsidiary and foreign exchange transaction gain are the primary reason for

the volatility in these two periods.

Gain on the sale of stock of subsidiary was $15,695,977 in the three months ended March 31, 2024,

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

Foreign exchange transaction gain was $1,193,636 the three months ended

March 31, 2024, compared to a loss of $788,302 in the three months ended March 31, 2023.

the three months ended March 31, 2024 the Company had net loss of $7,313,792 compared to net loss of $4,323,182 in the three months ended

March 31, 2023.

the three months ended June 30, 2024, the Company had other income of $1,659,507 compared to other expenses of $10,922,902 in the three

months ended June 30, 2023.

In the six months ended June 30, 2024, the Company had other expenses of $3,387,772 compared to other expenses

of $13,156,354 in the six months ended June 30, 2023.

The loss on sale of securities and loss on consolidation of subsidiary are the

primary reason for the volatility in these two periods.

Realized loss on security investment was $344,673 in the six months ended June

30, 2024, compared to $10,688,542 loss in the six months ended June 30, 2023.

Loss on consolidation of subsidiary was $0 the six months

ended June 30, 2024, compared to a loss of $21,657,036 in the six months ended June 30, 2023.

the three months ended June 30, 2024 the Company had net loss of $1,149,965 compared to net loss of $5,813,406 in the three months ended

June 30, 2023.

In the six months ended June 30, 2024, the Company had net loss of $8,463,756 compared to net loss of $10,136,588 in the

six months ended June 30, 2023.

and Capital Resources

real estate assets have decreased to $39,883,629 as of March 31, 2024 from $42,137,152 as of December 31, 2023.

decrease reflects the sale of multiple lots in Lakes at Black Oak project during first three months of 2024.

cash has decreased from $26,921,727 as of December 31, 2023 to $23,727,542 as of March 31, 2024.

real estate assets have decreased to $40,741,895 as of June 30, 2024 from $42,137,152 as of December 31, 2023.

This decrease primarily

reflects the sale of properties in the Lakes at Black Oak project.

cash has decreased from $26,921,727 as of December 31, 2023 to $18,932,861 as of June 30, 2024.

Our liabilities decreased from $9,066,700

at December 31, 2023 to $6,670,132 at March 31, 2024.

Our total assets have decreased to $96,710,288 as of March 31, 2024 from $126,314,028

as of December 31, 2023 mainly due to decrease in cash held in Trust Account after shareholders of HWH International Inc.

redeemed their

at December 31, 2023 to $5,764,618 at June 30, 2024.

Our total assets have decreased to $93,460,821 as of June 30, 2024 from $126,314,028

as of December 31, 2023 mainly due to decrease in cash held in Trust Account after shareholders

of HWH International Inc.

redeemed their shares.

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

4 unchanged sentences

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

The L/C commission will be 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 loan is a revolving line

The L/C commission is 1.5% per annum on

the face amount of the L/C.

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

The loan is a revolving line of credit.

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

Repayment of the Loan Agreement is

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

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

21 unchanged sentences

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.

of certain conditions.

The sale of the first 70 lots closed on July 1, 2024 generating approximately $3.8 million.

addition, the Company will be entitled to receive certain reimbursements in the years ended December 31, 2024 and 2025.

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 March 31, 2024 and 2023

Three-months Ended

Net cash used in operating activities

$ (1,509,247 )

$ (3,289,083 )

Net cash (used in) provided by investing activities

of Cash Flows for the Six Months Ended June 30, 2024 and 2023

Six-months Ended

Net cash (used in) provided by operating activities

$ (5,897,249 )

Net cash provided by (used in) investing activities

Net cash (used in) provided by financing activities

$ (21,351,570 )

Flows from Operating Activities

cash used in operating activities was $1,509,247 in the first three months of 2024, as compared to net cash used operating activities

cash used in operating activities was $5,897,249 in the first six months of 2024, as compared to net cash provided by operating activities

of $7,409,770 in the same period of 2023.

Capitalization of real estate expenses was the main reason for the cash used in operating activities

Prepayment of expenses and investment in trading securities were the main reason for the cash used in 2024

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

by operating activities in 2023.

Flows from Investing Activities

cash used in investing activities was $1,758,503 in the first three months of 2024, as compared to net cash provided by investing activities

of $671,484 in the same period of 2023.

In the three months ended March 31, 2024 we invested $646,785 in marketable securities, issued

$1,144,317 in loans to related parties and received $34,671 from repayment of related party notes receivable.

In the three months ended

March 31, 2023 we invested $412,500 in marketable securities, issued $1,521,368 in loans to related parties and received $2,613,629 from

repayment of related party notes receivable.

cash provided by investing activities was $19,616,855 in the first six months of 2024, as compared to net cash used in investing

activities of $606,983 in the same period of 2023.

In the six months ended June 30, 2024 issued $1,118,864 in loans to related

parties and $577,285 in loans receivable.

At the same time, we received $101,096 from repayment of related party loan and withdrew cash from trust account of $21,102,871 for redemption of HWH’s shares.

months ended June 30, 2023 we invested $692,219 in marketable securities, issued $1,628,010 in loans to related parties and received

$2,674,653 from repayment of related party notes receivable.

Flows from Financing Activities

cash used in financing activities was $240,182 in the three months ended March 31, 2024, compared to net cash provided of $3,433,921

in the three months ended March 31, 2023.

In the first three months of 2024 the Company borrowed $119,621 from a third part loan and

repaid $359,803 of note payable.

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

from stock issuance of $3,433,921.

believe that inflation has not had a material impact on our results of operations for the three months ended March 31, 2024 or the year

cash used in financing activities was $21,351,570 in the six months ended June 30, 2024, compared to net cash provided of $3,416,971

in the six months ended June 30, 2023.

The cash used in financing activities in the first six months of 2024 is caused by repayment

of $378,960 of note payable and repayment of HWH’s shares of $21,102,871.

In that same period, the Company borrowed $130,261 from commercial loan.

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.

believe that inflation has not had a material impact on our results of operations for the six months ended June 30, 2024 or the year

ended December 31, 2023.

2 unchanged sentences

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 $23 million and $23 million on March 31, 2024 and December 31, 2023, respectively, are the

United States and which were approximately $37 million and $23 million on June 30, 2024 and December 31, 2023, respectively, are the

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

4 unchanged sentences

If the amount of intercompany loan is lowered

in the future, the effect will also be reduced.

However, at this moment, we do not expect to repay the intercompany loans in the short

in the future, the effect will be reduced.

However, at this moment, we do not expect to repay the intercompany loans in the short term.

Growth Company Status

16 unchanged sentences

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis