What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2024-11-14 compared with 2024-08-13 · 545 added, 456 removed, 97 unchanged (91% of the section changed)

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

Forward-Looking

Form 10-Q contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.

this purpose, any statements contained in this Form 10-Q that are not statements of historical fact may be deemed to be forward-looking

Without limiting the foregoing, words such as “may”, “will”, “expect”, “believe”,

“anticipate”, “estimate” or “continue” or comparable terminology are intended to identify forward-looking

These statements by their nature involve substantial risks and uncertainties, and actual results may differ materially depending

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

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,

Management’s Discussion and Analysis

of Financial Condition and Results of Operations

Forward-Looking Statements

This Form 10-Q contains certain

forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.

For this purpose, any statements

contained in this Form 10-Q that are not statements of historical fact may be deemed to be forward-looking statements.

Without limiting

the foregoing, words such as “may”, “will”, “expect”, “believe”, “anticipate”,

“estimate” or “continue” or comparable terminology are intended to identify forward-looking statements.

statements by their nature involve substantial risks and uncertainties, and actual results may differ materially depending on a variety

of factors, many of which are not within our control.

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,

technological advances and failure to successfully develop business relationships.

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, 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.

Business Overview

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, South Korea and the People’s Republic of China.

We manage a significant

portion of our three principal businesses through our 85.7% 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.

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.

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

formerly known as American Pacific Bancorp Inc.

(“APF”), an indirect 13% equity interest in Holista CollTech Limited (“Holista”),

a 44.4% equity interest in DSS Inc.

and Alset International Limited collectively own 88.1% of HWH International Inc.

(described in further detail below).

have certain wholly owned subsidiaries that collectively own 132 single family residential rental properties in Montgomery and Harris

Counties, Texas.

also have minority ownership interests, including a 36.9% equity interest in American Pacific

Financial, Inc., formerly known as American Pacific Bancorp Inc.

(“APF”), a 44.4% equity interest in DSS Inc.

(“DSS”), an indirect 48.7% equity interest in Value Exchange International Inc.

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 Sharing Services Global Corporation (“SHRG”).

(“VEII”), a 0.5% equity

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

29% equity interest in Sharing Services Global Corporation (“SHRG”).

APF is a financial network holding company.

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

DSS is a multinational company operating businesses

within nine divisions:

product packaging, biotechnology, direct marketing, commercial lending, securities and investment management,

alternative trading, digital transformation, secure living, and alternative energy.

is a multinational company operating businesses within nine divisions:

product packaging, biotechnology, direct marketing,

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

alternative energy.

DSS is listed on the NYSE American (NYSE:

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:

SHRG markets and distributes health and wellness products, as well as member-based travel services,

using a direct selling business model.

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:

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

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

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

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

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

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

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

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

can provide value by advising on new markets and expansion.

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

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

We have historically favored businesses that improve an individual’s

3 unchanged sentences

and our stockholders.

of the Merger of Alset Capital Acquisition Corp.

Recent Developments

Consummation of the

Merger of Alset Capital Acquisition Corp.

and HWH International Inc.

1 unchanged sentence

completed a previously announced transaction.

On September 9, 2022, Alset Capital

Acquisition Corp., a Delaware corporation (“Alset Capital”) entered into an agreement and plan of merger (the “Merger

Agreement”) with our indirect subsidiary HWH International Inc., a Nevada corporation (“HWH”) and HWH Merger Sub Inc.,

a Nevada corporation and a wholly owned subsidiary of Alset Capital (“Merger Sub”).

The Company and its 85.5% owned subsidiary

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

to the Merger Agreement, on January 9, 2024, a Business Combination between Alset Capital and HWH was effected through the merger of

Merger Sub with and into HWH, with HWH surviving the merger as a wholly owned subsidiary of Alset Capital (the “Merger”),

and Alset Capital changing its name to HWH International Inc.

total consideration paid at the closing of the Merger by New HWH to the HWH shareholders was 12,500,000 shares of New HWH common stock.

Alset International owned the majority of the outstanding shares of HWH at the time of the business combination, and received 10,900,000

shares of New HWH as consideration for its shares of HWH.

HWH currently has 16,223,301 shares of common stock issued and outstanding.

Of these shares, a total of 13,577,375 shares of New HWH

common stock are now owned by the Sponsor and Alset International together.

In addition, the Sponsor owns warrants convertible into up

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

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 of the HWH Marketplace products through

of Rental Business from Majority-Owned Subsidiary

December 9, 2022, Alset Inc.

entered into an agreement with Alset EHome Inc.

and Alset International pursuant to which Alset Inc.

to reorganize the ownership of its home rental business.

Previously, Alset Inc.

and certain majority-owned subsidiaries collectively

owned 132 single-family rental homes in Texas.

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

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

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

Pursuant to this agreement, Alset Inc.

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

through Alset International’s subsidiaries.

sold AHR to Alset Inc.

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

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

This purchase price represents the book value of AHR

as of November 30, 2022.

closing of this transaction was approved by the shareholders of Alset International and the transaction was closed on January 13, 2023.

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

each of Alset International and Alset EHome Inc.

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

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

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

a public offering price of $2.20 per share.

The Underwriting Agreement 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 were payable by the Company.

Offering closed on February 8, 2023.

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

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

of 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 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.

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.

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

Agreement, pursuant to which SeD Capital purchased 39.8 shares (11.6%) 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.

of Certain Lots

October 28, 2022, 150 CCM Black Oak Ltd.

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

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

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

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

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

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

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

instead of 242 lots.

This transaction closed on April 13, 2023.

to Sell 110 Lots

March 16, 2023, 150 CCM Black Oak Ltd.

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

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

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

which comprise a section of the Lakes at Black Oak.

The transaction closed on May 15, 2023.

to Sell 189 Lots

March 17, 2023, 150 CCM Black Oak Ltd.

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

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

Pursuant to the terms

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

within section 2 of Lakes at Black Oak project.

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

The sale of remaining lots closed

on January 4, 2024.

to Sell 142 Lots and 63 Lots

On September 9, 2022, Alset

Capital Acquisition Corp., a Delaware corporation (“Alset Capital”) entered into an agreement and plan of merger (the

“Merger Agreement”) with our indirect subsidiary HWH International Inc., a Nevada corporation (“HWH Nevada”) and

HWH Merger Sub Inc., a Nevada corporation and a wholly owned subsidiary of Alset Capital (“Merger Sub”).

The Company and

its 85.7% owned subsidiary Alset International own Alset Acquisition Sponsor, LLC, the sponsor (the “Sponsor”) of Alset

to the Merger Agreement, on January 9, 2024, a Business Combination between Alset Capital and HWH Nevada was effected through the

merger of Merger Sub with and into HWH Nevada, with HWH Nevada surviving the merger as a wholly owned subsidiary of Alset Capital

(the “Merger”), and Alset Capital changing its name to HWH International Inc.

total consideration paid at the closing of the Merger by New HWH to the shareholders of HWH Nevada was 12,500,000 shares of New HWH

common stock.

Alset International owned the majority of the outstanding shares of HWH Nevada at the time of the business

combination, and received 10,900,000 shares of New HWH as consideration for its shares of HWH Nevada.

these transactions, HWH International Inc.

is now a purpose-driven lifestyle company encompassing differentiated offerings from four core

Hapi Marketplace, Hapi Cafe, Hapi Travel and Hapi Wealth Builder.

HWH International Inc.

seeks to develops new pathways to help

people in their pursuit of Health, Wealth and Happiness.

HWH International Inc.

is listed on the Nasdaq under the symbol HWH.

Purchase Agreement and Debt Conversion Agreements

September 24, 2024, HWH entered into two (2) debt conversion agreements with creditors (each an “Agreement,” or collectively,

the “Agreements”):

(i) Alset International Limited (which is HWH’s majority stockholder);

and (ii) Alset Inc.

in turn is Alset International Limited’s majority stockholder).

Each Agreement converts debt owed by HWH to the respective creditor

into shares of HWH’s common stock.

the terms of their respective Agreements, Alset Inc.

converted $300,000 of HWH’s debt into 476,190 shares of HWH’s common

stock, and Alset International Limited converted $3,501,759 of HWH’s debt into 5,558,347 shares of HWH’s common stock.

the Agreements, the debt conversions resulted in the issuance of newly issued shares of HWH’s common stock.

The price at which the

debt conversion was fixed was set at $0.63 per share of HWH common stock.

Cumulatively, the newly issued shares contemplated by the Agreements

represented 6,034,537 new shares of HWH’s common stock.

September 26, 2024, Alset Inc.

entered into a Stock Purchase Agreement (the “Stock Purchase Agreement”) with the Company’s

majority owned subsidiary, Alset International Limited.

Pursuant to the Stock Purchase Agreement, the Company will purchase 6,500,000

shares (the “Shares”) of HWH International Inc.

(the Nasdaq-listed company).

As consideration for the Shares, the Company

will issue a secured promissory note to Alset International Limited in the original principal amount of $4,095,000 (the “Promissory

The Promissory Note bears an interest rate of 5% per annum and a maturity date of September 26, 2026, and will be secured

by collateral specified in a security agreement (the “Security Agreement”), between the Company and Alset International Limited.

Chairman, Chief Executive Officer and majority stockholder, Chan Heng Fai, is also the Chairman and Chief Executive Officer of Alset International

Limited and the Chairman of HWH.

In addition, certain other members of our board are also officers and/or directors of Alset International

Limited and HWH.

closing of the transactions described above is contingent upon the approval of the stockholders of Alset International Limited and the

satisfaction of other closing conditions.

Purchase of Travel Business

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 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.

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 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 statements.

Sale of Certain Lots

Agreement to Sell 142 Lots and 63 Lots

November 13, 2023, 150 CCM Black Oak Ltd.

6 unchanged sentences

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.

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, 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

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

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.

The sale of the first 70 lots closed on July 1, 2024

generating approximately $3.8 million.

The sale of the additional 72 lots closed on October 10, 2024 generating approximately $3.9 million.

Issuance of Convertible Loans to Value Exchange

International, Inc.

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

Credit Agreement (the “1 st VEII Credit Agreement”) with VEII.

The 1 st VEII 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 1 st VEII

Credit Agreement at 8%.

The 1 st VEII 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”.

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 1 st VEII 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.

6, 2023, Hapi Metaverse converted $1,300,000 of the principal amount loaned to VEII into 7,344,632 shares of VEII’s Common Stock.

Under the terms of the 1 st VEII 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, Hapi Metaverse 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 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, Hapi Metaverse has not converted

14, 2023, Hapi Metaverse entered into a Convertible Credit Agreement (“2 nd VEII Credit Agreement”) with VEII.

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

The 2 nd VEII Credit Agreement was amended pursuant to an agreement

dated December 19, 2023.

Under the 2 nd VEII Credit Agreement, as amended, this amount can be converted into VEII’s Common

Shares pursuant to the terms of the 2 nd VEII 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 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

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

On July 15, 2024, the Company

entered into a Convertible Credit Agreement (“3 rd VEII Credit Agreement”) with VEII for an unsecured credit line

in the maximum amount of $110,000 (“2024 Credit Line”).

Advances of the principal under the 3 rd VEII Credit Agreement

accrue simple interest at 8% per annum.

Each Advance under the 3 rd VEII Credit Agreement and all accrued interest thereon may,

at the election of VEII, or the Company, be:

(1) repaid in cash;

(2) converted into shares of VEII Common Stock;

or (3) be repaid in a

combination of cash and shares of VEII Common Stock.

The principal amount of each Advance under the 3 rd VEII Credit Agreement

is due and payable on the third (3rd) annual anniversary of the date that the Advance is received by VEII along with any unpaid interest

accrued on the principal (the “Advance Maturity Date”).

Prior to the Advance Maturity Date, unpaid interest accrued on any

Advance shall be paid on the last business day of June and on the last business day of December of each year in which the Advance is outstanding

and not converted into shares of VEII Common Stock.

Company may prepay any Advance under the 3 rd VEII Credit Agreement and

interests accrued thereon prior to Advance Maturity Date without penalty or charge.

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

the Loan Amount.

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

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.

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

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.

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 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 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

exercisable into 208,333,333 shares of SHRG’s common stock at an exercise price of $0.0012 per share, the exercise period of the

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

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

SHRG Shares Dividend

Received from DSS

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 89,732 shares of SHRG following a 1-for-1,400

reverse split of SHRG Common Stock on September 12, 2024, representing 29% 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 27,106 shares of SHRG and

is a beneficial owner of approximately 43.5% of the issued and outstanding SHRG shares (including those shares owned by Alset Inc.

its majority-owned subsidiaries).

Issuance of Convertible Loans to Sharing Services

17, 2024, the Company received a Convertible Promissory Note (the “1 st SHRG Convertible Note”) from Sharing Services

Global Corp., 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 1 st SHRG 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 1 st SHRG Convertible

Note bears a 10% interest rate and has a scheduled maturity six (6) months from the date of the 1 st SHRG Convertible Note,

or July 17, 2024.

The terms of the note and maturity date were subsequently extended.

March 20, 2024, the Company’s subsidiary HWH International Inc.

entered into a securities

purchase agreement with SHRG, pursuant to which HWH purchased from SHRG a (i) Convertible Promissory Note (the “2 nd

SHRG Convertible Note) in the amount of $250,000, convertible into 148,810 shares of SHRG’s common stock at the option of

HWH, and (ii) certain warrants exercisable into 148,810 shares of SHRG’s common stock at an exercise price of $1.68 per

share, the exercise period of the warrant being five (5) years from the date of the securities purchase agreement, for an aggregate

purchase price of $250,000.

At the time of this filing, HWH has not converted any of the debt contemplated by the 2 nd

SHRG Convertible Note nor exercised any of the warrants.

9, 2024, HWH entered into a securities purchase agreement with SHRG, pursuant to which HWH purchased from SHRG a Convertible Promissory

Note (the “3 rd SHRG Convertible Note”) in the amount of $250,000, convertible into 89,286 shares of SHRG’s

common stock at the option of HWH for an aggregate purchase price of $250,000.

The 3 rd SHRG Convertible Note bears an 8% interest

rate and has a scheduled maturity three years from the date of the 3 rd SHRG Convertible Note.

Additionally, upon signing the

3 rd SHRG 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.

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

by the 3 rd SHRG Convertible Note.

6, 2024, HWH entered into a securities purchase agreement with SHRG, pursuant to which HWH purchased from SHRG a Convertible Promissory

Note (the “4 th SHRG Convertible Note”) in the amount of $250,000, convertible into 89,286 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 4 th SHRG Convertible Note.

Additionally, upon signing the 4 th

SHRG 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., effective immediately, due to personal reasons.

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

contemplated by the 4 th SHRG Convertible Note.

13, 2024, HWH entered into a securities purchase agreement with SHRG, pursuant to which HWH purchased from SHRG a Convertible Promissory

Note (the “5 th SHRG Convertible Note”) in the amount of $100,000, convertible into 35,714 shares of SHRG’s

common stock at the option of the Company for an aggregate purchase price of $100,000.

The 5 th SHRG Convertible Note bears

an 8% interest rate and has a scheduled maturity three years from the date of the 5 th SHRG Convertible Note.

Additionally,

upon signing the 5 th SHRG Convertible Note, SHRG owed the Company a commitment fee of 8% of the principal amount, $8,000 in

total, to 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 5 th SHRG Convertible Note.

Planned Acquisition of New Energy Asia Pacific Inc.

December 13, 2023, the Company entered into a term sheet (the “Term Sheet”), with Chan Heng Fai (the “Seller”),

the Chairman of the Board of Directors, Chief Executive Officer and largest stockholder of the Company.

to the Term Sheet, the Company will purchase from the Seller all of the issued and outstanding shares of New Energy Asia Pacific Inc.

(“NEAPI”), a corporation incorporated in the State of Nevada.

NEAPI owns 41.5% of the issued and outstanding shares of New

Energy Asia Pacific Limited (“New Energy”), a Hong Kong corporation.

the terms of the Term Sheet, the consideration for the acquisition of NEAPI will be $103,750,000, to be paid in the form of a convertible

promissory note (the “Note”) to be issued to the Seller.

The Note shall have a term of five years and shall pay interest at

a rate of 3% per annum.

Either the Company or the Seller may convert all or any portion of the outstanding debt contemplated by the Note

into shares of the Company’s common stock during the term of the Note.

The conversion price for the Note has been set at $12.00

per share (based on a calculation of the approximate adjusted NAV of the Company per share as at September 30, 2023) which is equivalent

to approximately 16 times the last market trading price of AEI of $0.75 as of December 12, 2023.

The closing of this acquisition will

be subject to certain standard closing conditions, including stockholder approval and no objection from Nasdaq.

focuses on distributing all-electric versions of special-purpose and transportation vehicles, charging stations and batteries.

intends for this to be a strategic move, in line with the Company’s commitment to advancing sustainable and eco-friendly solutions

for the future.

Currently, New Energy has a strong pipeline of demand, with signed collective sales secured via Memorandums of Understanding

totaling up to $42 million in value and continues to garner strong interest from local government departments and market demand.

will seek to significantly increase revenues in the coming months relating to both electric chargers and electric vehicles.

expertise extends across Asia, with established service and training centers in China and Hong Kong, and ongoing development planned in

various parts of the world.

The Seller is a member of the Board of Directors of New Energy.

Sheet was approved by the Audit Committee of the Board of Directors and by the Board of Directors of the Company.

The Company’s

Board of Directors has received a fairness opinion reflecting that the transaction is fair to the Company’s stockholders from a

financial point of view.

The Seller and his son, who is also a member of the Company’s Board of Directors, recused themselves from

all deliberation and voting regarding this acquisition and the Term Sheet.

and the Seller anticipate entering into definitive documents for this acquisition in the immediate future.

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.

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 Mr.

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

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

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.

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

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 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;

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

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

of Operations

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

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.

Matters that May or Are Currently Affecting Our

In 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 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;

● Our ability to control

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

● The effects of public

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

Results of Operations

Summary of Statements of Operations

for the Three and Nine Months Ended September 30, 2024 and 2023

Three- Months Ended

Six-months Ended

June 30, 2024

June 30, 2023

June 30, 2024

June 30, 2023

Nine-months Ended

September 30, 2024

September 30, 2023

September 30, 2024

September 30, 2023

Operating Expenses

6 unchanged sentences

$ (28,060,334 )

$ (13,156,354 )

$ (1,149,965 )

Income Tax Expense

$ (17,026,008 )

1 unchanged sentence

$ (27,162,596 )

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

The following tables set forth

period-over-period changes in revenue for each of our reporting segments:

Three-months Ended

June 30, 2024

June 30, 2023

$ (18,176,906 )

September 30, 2024

September 30, 2023

Digital Transformation Technology

Total Revenue

$ (18,026,802 )

Six-months Ended

June 30, 2024

June 30, 2023

Nine-months Ended

September 30, 2024

September 30, 2023

$ (9,229,658 )

2 unchanged sentences

$ (8,897,019 )

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

Revenue was $4,960,711 and $990,199

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.

Funds from such lot sales will substantially

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

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 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 $6,603 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

Inc., HWH World Inc (“HWH World”).

for the three months ended September 30, 2024 and 2023, respectively.

Revenue was $12,173,964 and $21,070,983 for the nine months ended

September 30, 2024 and 2023, respectively.

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

of 2024 contributed to lower revenue in this period.

In 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 were contingent on certain conditions which the parties to such contracts had to meet and were expected to generate approximately

$23 million of funds from operations, not including certain expenses that the Company was required to pay.

The sale of 335 lots closed

in the first six months of 2023 generating approximately $18.1 million revenue.

The sale of remaining lots closed on January 4, 2024 generating

approximately $5.0 million revenue.

On November 13, 2023, the Company

entered into two contracts with builders to sell multiple lots from its Lakes at Black Oak and Alset Villa projects.

The closing of these

transactions depends on the satisfaction of certain conditions.

The sale of the first 70 lots closed on July 1, 2024 generating approximately

$3.8 million.

The sale of the remaining 72 lots closed on October 10, 2024 generating approximately $3.9 million.

The Company plans to continue

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

Funds from such lot sales will substantially improve the Company’s

liquidity, strengthen its financial position and meet is working capital requirements.

Revenue from rental business was

$724,699 and $705,334 in the three months ended September 30, 2024 and 2023, respectively.

Revenue from rental business was $2,150,204

and $2,030,112 in the nine months ended September 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.

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 and $18,900 in the three and nine months ended September 30, 2024, respectively.

The revenue from the lease was $6,300 and

$10,500 in the three and nine months ended September 30, 2023.

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

The revenue from the lease

was $6,602 and $19,807 in the three and nine months ended September 30, 2024, respectively.

The Company operates its biohealth segment in the South Korean market through one of the subsidiaries of HWH International Inc.,

HWH World Inc (“HWH World”).

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

HWH World recognized $0

$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

overhead costs, including administrative functions not allocated to the reportable segments from global functional expenses.

financial services, food and beverage businesses and new venture businesses are small and diversified, and accordingly they are not separately

addressed as one independent category.

In the three months ended 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,

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

HWH World recognized $0 and $12,786 in revenue

in the nine months ended September 30, 2024 and 2023, respectively.

revenue from our Digital Transformation Technology segment, in the amount of $0 and $28,094, for the nine months ended September 30,

2024 and 2023, respectively, was for the services rendered to customers.

The Company began generating revenue from a project providing

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

in Hong Kong, on a monthly basis in 2022.

This service was terminated on June 30, 2023.

described as “Other” includes corporate and financial services, food and beverage business, digital transformation technology,

and new venture businesses.

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

of unallocated corporate overhead costs, including administrative functions not allocated to the reportable segments from global functional

The financial

services, food and beverage businesses and new venture businesses are small and diversified, and accordingly they are not separately addressed

as one independent category.

In the three months ended September 30, 2024 and 2023, the revenue from other businesses was $421,012 and

$278,545, respectively.

In the nine months ended September 30, 2024 and 2023, the revenue from other businesses was $1,176,260 and $802,741,

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

of Revenues and Operating Expenses

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

Cost of Revenues and Operating

The following tables sets forth

period-over-period changes in cost of revenues for each of our reporting segments:

Three-months Ended

June 30, 2024

June 30, 2023

$ (10,918,468 )

September 30, 2024

September 30, 2023

Digital Transformation Technology

Total Cost of Revenues

Nine-months Ended

September 30, 2024

September 30, 2023

$ (4,873,428 )

1 unchanged sentence

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.

$ (4,570,684 )

Cost of revenues increased from

$581,059 in the three months ended September 30, 2023 to $2,949,824 in the three months ended September 30, 2024.

Cost of revenues decreased

from $13,008,833 in the nine months ended September 30, 2023 to $8,438,149 in the nine months ended September 30, 2024.

The 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 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.

The gross margin increased from

$409,140 to $2,010,887 in the three months ended September 30, 2023 and 2024, respectively.

The gross margin decreased from $8,062,150

to $3,735,815 in the nine months ended September 30, 2023 and 2024, respectively.

The decrease of gross margin was caused by the decrease

in sales in the Lakes at Black Oak Project.

The following tables sets forth

period-over-period changes in operating expenses for each of our reporting segments.

Three-months Ended

June 30, 2023

June 30, 2022

September 30, 2024

September 30, 2023

Digital Transformation Technology

Total Operating Expenses

Six-months Ended

June 30, 2023

June 30, 2022

Nine-months Ended

September 30, 2024

September 30, 2023

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 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 $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 $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.

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

impairment of goodwill and investment.

Other Income (Expense)

months ended September 30, 2024, the Company had other income of $2,433,020 compared to other

expenses of $14,903,980 in the three months ended September 30, 2023.

In the nine months

ended September 30, 2024, the Company had other expenses of $6,994,516 compared to other

expenses of $28,060,334 in the nine months ended September 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 $679,204 in the nine months ended September 30, 2024, compared to $11,291,166 loss in the nine months ended September 30,

Loss on consolidation of subsidiary was $0 in the nine months ended September 30, 2024, compared to a loss of $21,657,036 in the

nine months ended September 30, 2023.

In the three months ended September

30, 2024 the Company had net income of $1,469,239 compared to net loss of $17,026,008 in the three months ended September 30, 2023.

the nine months ended September 30, 2024, the Company had net loss of $6,994,516 compared to net loss of $27,162,596 in the nine months

ended September 30, 2023.

Liquidity and Capital Resources

Our real estate assets have decreased

to $37,904,992 as of September 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.

Our cash has decreased from $26,921,727

as of December 31, 2023 to $16,679,183 as of September 30, 2024.

Our liabilities decreased from $9,066,700 at December 31, 2023 to $5,390,173

at September 30, 2024.

Our total assets have decreased to $98,788,837 as of September 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

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.

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 bore interest rate on 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 up to $900,000.

The L/C commission is 1.5% per annum on

the face amount of the L/C.

SeD Maryland Development LLC was also provided with

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

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.

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

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.

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.

On March 15, 2022, approximately

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

December 14, 2023 approximately $201,751 was released from collateral, leaving approximately $100,000 as collateral for outstanding letters

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.

5 unchanged sentences

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.

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

9 unchanged sentences

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 Six Months Ended June 30, 2024 and 2023

Six-months Ended

In addition, the Company

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

The 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.

Summary of Cash Flows for the Nine Months Ended

September 30, 2024 and 2023

Nine-months Ended

Net cash (used in) provided by operating activities

3 unchanged sentences

$ (21,370,610 )

Flows from 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.

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 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 $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.

Cash Flows from Operating Activities

Net cash used in operating activities

was $8,751,416 in the first nine months of 2024, as compared to net cash provided by operating activities of $8,255,675 in the same period

Property sales from the Black Oak project in 2023 were the main reason for the cash provided by operating activities in 2023.

Cash Flows from Investing Activities

Net cash provided by investing

activities was $18,707,934 in the first nine months of 2024, as compared to net cash used in investing activities of $748,188 in the same

period of 2023.

In the nine months ended September 30, 2024, the Company issued $1,368,083 in loans to related parties and $1,212,021

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.

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

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

Cash Flows from Financing Activities

Net cash used in financing activities

was $21,370,610 in the nine months ended September 30, 2024, compared to net cash provided of $3,408,560 in the nine months ended September

The cash used in financing activities in the first nine months of 2024 is caused by repayment of $398,000 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.

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

of Foreign Exchange Rates

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

United States and which were approximately $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

and Other Comprehensive Loss.

Because the intercompany loan balances between Singapore and United States will remain at approximately

$23 million over the next year, we expect this fluctuation of foreign exchange rates to still significantly impact the results of operations

in 2024, especially given that the foreign exchange rate may and is expected to be volatile.

If the amount of intercompany loan is lowered

in the future, the effect will be reduced.

The cash provided

by financing activities in the first nine months of 2023 is caused by the proceeds from stock issuance of $3,433,921.

Impact of Inflation

We believe that inflation has

not had a material impact on our results of operations for the nine months ended September 30, 2024 or the year ended December 31, 2023.

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

Impact of Foreign Exchange Rates

The 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 $26 million and $23 million on September 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 and Other Comprehensive

Because the intercompany loan balances between Singapore and United States will remain at approximately $26 million over the next

year, we expect this fluctuation of foreign exchange rates to still significantly impact the results of operations in 2024, especially

given that the foreign exchange rate may and is expected to be volatile.

If the amount of intercompany loan is lowered 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

are an “emerging growth company,” as defined in the JOBS Act, and we may take advantage of certain exemptions from various

reporting requirements that are applicable to other public companies that are not “emerging growth companies.” Section 107

of the JOBS Act provides that an “emerging growth company” can take advantage of the extended transition period provided

in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards.

In other words, an “emerging

growth company” can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies.

We have elected to take advantage of these exemptions until we are no longer an emerging growth company or until we affirmatively and

irrevocably opt out of this exemption.

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

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

Emerging Growth Company Status

We are an “emerging growth

company,” as defined in the JOBS Act, and we may take advantage of certain exemptions from various reporting requirements that are

applicable to other public companies that are not “emerging growth companies.” Section 107 of the JOBS Act provides that an

“emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities

Act for complying with new or revised accounting standards.

In other words, an “emerging growth company” can delay the adoption

of certain accounting standards until those standards would otherwise apply to private companies.

We have elected to take advantage of

these exemptions until we are no longer an emerging growth company or until we affirmatively and irrevocably opt out of this exemption.

The real estate business is subject

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

This may impact the expenses

of our subsidiary Alset EHome Inc.

from time to time.

In addition, should we commence building homes, we

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

Quantitative and Qualitative Disclosures about Market Risk

a “smaller reporting company” as defined by Item 10(f)(1) of Regulation S-K, the Company is not required to provide the information

required by this Item.

In addition, should we commence building homes, we are likely to experience periodic

spikes in sales as we commence the sales process at a particular location.

Quantitative and Qualitative Disclosures

about Market Risk

As a “smaller reporting

company” as defined by Item 10(f)(1) of Regulation S-K, the Company is not required to provide the information required by this

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