What changed in this filing

/stocks — the workspaceLOADING

Item 7. Management’s Discussion and Analysis

2026-03-31 compared with 2025-03-31 · 262 added, 396 removed, 469 unchanged (58% of the section changed)

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

We manage our three principal businesses

primarily through our 85.7% owned subsidiary, Alset International Limited, a public company traded on the Singapore Stock Exchange (“Alset

International”).

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

We manage our three principal

businesses primarily through our 85.8% owned subsidiary, Alset International Limited, a public company traded on the Singapore Stock

Exchange (“Alset International”).

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

and Asian subsidiaries), we are

actively developing real estate projects near Houston, Texas in our real estate segment.

In our digital transformation technology segment,

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

Our biohealth segment

includes the sale of consumer products.

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.

Additionally,

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(“DSS”), an indirect 45.8% equity interest in Value Exchange International, Inc., a

29.0% equity interest in Sharing Services Global Corporation and 39.7% equity interest in Impact Biomedical Inc.

American Pacific

Financial, Inc.

29.0% equity interest in Sharing Services Global Corporation, and a 41.5% equity interest in New Energy Asia Pacific Company Limited.

American Pacific Financial, Inc.

is a financial network holding company.

DSS is a multinational company operating businesses with five divisions:

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

product packaging, biotechnology, direct marketing, commercial

lending, and securities and investment management.

is listed on the NYSE American (NYSE:

Exchange International, Inc.

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

Sharing Services Global Corporation (OTC Pink:

SHRG), is a publicly traded company dedicated to building shareholder value by

developing or acquiring businesses, products and technologies in the direct selling industry and other industries that augment the

Company’s product and services portfolio, business competencies, and geographic reach.

Impact BioMedical Inc.

is focused on

discovery, development, and commercialization of products and technologies to address unmet needs in human healthcare and wellness

for specialty biopharmaceuticals, antivirals, antimicrobials, consumer healthcare, and wellness products in the United

Impact BioMedical Inc.

is listed on NYSE American (NYSE:

Value Exchange International,

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

Sharing Services

Global Corporation (OTC:

SHRG), is a publicly traded company dedicated to building shareholder value by developing or acquiring businesses,

products and technologies in the direct selling industry and other industries that augment the Company’s product and services portfolio,

business competencies, and geographic reach.

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

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and our stockholders.

Additionally, the Company operates

a portfolio of trading securities with the objective of generating profits from short-term fluctuations in market prices.

The portfolio

is actively managed, and securities are bought and sold with the intent to realize gains from price movements within a short-term horizon.

Additionally,

the Company operates a portfolio of trading securities with the objective of generating profits from short-term fluctuations in market

The portfolio is actively managed, and securities are bought and sold with the intent to realize gains from price movements within

a short-term horizon.

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

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same basis as disclosed in the Consolidated Statements of Income.

CODMs do not evaluate performance or allocate resources based on segment assets, and therefore such information is not presented in the

Notes to the Financial Statements.

CODMs do not evaluate performance or allocate resources based on segment assets.

Revenue Model

total revenue for the years ended December 31, 2025, and 2024, was $4,470,875 and $21,115,899, respectively.

Our net losses for the

years ended December 31, 2024, and 2023, were $4,165,816 and $61,278,733, respectively.

Our net losses for the years

ended December 31, 2025, and 2024, were $49,350,566 and $4,165,816, respectively.

currently recognize revenue from the sale of our subdivision development properties, rental homes, the sale of our biohealth products,

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7% of our revenue in 2025 and 2024, respectively, was recognized from our sales in Singapore.

5% and 0% of our revenue in 2025 and 2024,

respectively, was recognized from our sales in Taiwan.

believe that, on an ongoing basis, revenue generated from our property development business will decline as a percentage of our total

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Significant estimates made by management include, but

are not limited to, allowance for doubtful accounts, recoverability and useful lives of property, plant and equipment, valuation of real

are not limited to, allowance for doubtful accounts, recoverability and useful lives of property and equipment, valuation of real

estate assets, allocation of development costs and capitalized interest to sold lots, the valuation allowance of deferred taxes, contingencies

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

On December 31, 2024

and 2023, the Company adjusted $0 and $951,349 between building and land, respectively.

During the years ended December 31,

2024 and 2023, the Company adjusted depreciation expenses of $0 and $17,525, respectively.

Recognition and Cost of Revenue

Recognition and Cost of Sales

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

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

A detailed breakdown of the five-step process for the revenue recognition of the Lakes at Black Oak project, which represented approximately

79% and 82% of the Company’s revenue in the years ended on December 31, 2024 and 2023, respectively, is as follows:

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

represented approximately 0% and 79% of the Company’s revenue in the years ended on December 31, 2025 and 2024, respectively, is

the contract with a customer.

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2025 and 2024, the Company did not recognize any deferred revenue and collected all rents due.

Cost of Revenue.

Cost of Sales.

Land acquisition costs are allocated to each lot based on the area method, the size of the lot comparing to the

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Utility expenses are paid directly by tenants.

Transformation Technology

Software Development Income.

Revenue is recognized when (or as) the Company transfers promised goods or services to its customers

in amounts that reflect the consideration to which the Company expects to be entitled to in exchange for those goods or services, which

occurs when (or as) the Company satisfies its contractual obligations and transfers over control of the promised goods or services to

its customers.

We generate revenue from a project involving provision of services and web/software development for customers.

to the provision of services, the agreements are less than one year with a cancellation clause and customers are typically billed on

a monthly basis.

Product Direct Sales.

The Company’s net sales consist of product sales.

The Company’s performance obligation is to

transfer ownership of its products to its members.

The Company generally recognizes revenue when product is delivered to its members.

Revenue is recorded net of applicable taxes, allowances, refund or returns.

The Company receives the net sales price in cash or through

credit card payments at the point of sale.

any member returns a product to the Company on a timely basis, they may obtain a replacement product from the Company for such returned

We do not have buyback program.

However, when the customer requests a return and management decides that the refund is necessary,

we initiate the refund after deducting all the benefits that a member has earned.

The returns are deducted from our sales revenue on

our financial statements.

Allowances for product and membership returns are provided at the time the sale is recorded.

This accrual is

based upon historical return rates for each country and the relevant return pattern, which reflects anticipated returns to be received

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

Product and membership returns for the years ended December 31, 2024 and

2023 were approximately $0 and $1,183, respectively.

Annual Membership.

The Company collects an annual membership fee from its members.

The fee is fixed, paid in full at the time

upon joining the membership and not refundable.

The Company’s performance obligation is to provide its members the right to (a)

purchase products from the Company, (b) access to certain back-office services, (c) receive commissions and (d) attend corporate events.

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

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

Food and Beverage .

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(“Alset F&B One”) and Alset F&B (PLQ)

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

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

Kopitiam restaurant in Singapore.

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

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

and Mee Rebus.

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

These licenses will allow Alset F&B One and Alset F&B PLQ each to operate a Killiney Kopitiam restaurant in Singapore.

Kopitiam, founded in 1919, is a Singapore-based chain of mass-market, traditional kopitiam style service cafes selling traditional coffee

and tea, along with a range of local delicacies such as Curry Chicken, Laksa, Mee Siam, and Mee Rebus.

In the second quarter of 2024,

the Company ceased operations of its subsidiary Alset F&B PLQ.

Company, through Hapi Café Inc.

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and recreation all under one roof.

On September 13, 2025, the Company ceased operations of its subsidiary Hapi Café Korea Inc.

2023 the Company incorporated new subsidiaries Guangdong LeFu Wealth Investment Consulting Co., Ltd.

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The café was closed on September 16, 2024 and the goodwill was impaired during the year ended December 31, 2024.

the second quarter of 2024, the Company ceased operations of its subsidiary Alset F&B (PLQ).

Due to the closure of this subsidiary,

the Company wrote off $5,820 of fixed assets, which is included in general and administrative expenses and recorded a gain on termination

of lease of $246, which is included in other income on the Company’s Statement of Operations for the year ended December 31, 2024.

revenue earned from Food and Beverage businesses for the years ended December 31, 2025 and 2024 were $1,641,605 and $1,507,715, respectively.

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

Company capitalized construction costs of approximately $0 million and $1.2 million in the years ended December 31, 2024 and 2023, respectively.

did not capitalize construction costs in the years ended December 31, 2025 and 2024.

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

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small projects.

In addition to the annual assessment of potential triggering events in accordance with ASC 360 – Property

Plant and Equipment (“ASC 360”), the Company applies a fair value-based impairment test to the net book value assets

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

In addition to the annual assessment of potential triggering events in accordance with ASC 360 – Property Plant

and Equipment (“ASC 360”), the Company applies a fair value-based impairment test to the net book value assets on an

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

Company did not record impairment on any of its projects during the years ended on December 31, 2025 and 2024.

Company did not have any real estate property under development as of December 31, 2024

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

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

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

finance costs were $1.2 million.

December 31, 2024, the capitalized construction costs were as follows:

Land held for development

Capitalized development costs:

Hard construction costs

Project management

Other services

Impairment reserve

Construction - sold lots

(23,624,001 )

(26,433,483 )

Total capitalized development costs

Capitalized finance costs

Total property under development

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

Land held for development

Capitalized development costs:

Hard construction costs

Project management

Other services

Impairment reserve

Construction - sold lots

(14,871,140 )

Total capitalized development costs

Capitalized finance costs

Total property under development

Company did not have any real estate property under development as of December 31, 2025 or December 31, 2024.

of Operations

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(25,232,975 )

Other Income (Expenses)

Other (Expenses) Income

(33,767,897 )

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Total revenue

$ (15,645,266 )

was $4,470,875 and $21,115,899 for the years ended December 31, 2025 and 2024, respectively.

The decrease in property sales in the 2024

caused lower revenue in this period.

The decrease in property sales in 2025 caused

lower revenue in this period.

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

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The sale of lots in Alset Villa project closed on December 17, 2024 generating approximately $3.8 million.

Revenue from the rental business

was $2,891,807 and $2,776,911 for the years ended December 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.

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 $25,200 and $16,800 in the years ended December 31, 2024 and 2023, respectively.

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

The revenue from

the lease was $26,409 in the year ended December 31, 2024.

from digital transformation technology segment consists primarily of the services rendered to customers in the amount of $0 and $28,117,

for the years ended December 31, 2024 and 2023, respectively.

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.

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

(“HWH World”).

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

HWH World recognized $0 and $12,758

in revenue in the years ended December 31, 2024 and 2023, respectively.

from the rental business was $2,829,270 and $2,891,807 for the years ended December 31, 2025 and 2024, respectively.

The Company expects

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

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

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In the years ended December 31, 2025 and 2024, the revenue from other businesses was $1,641,433

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

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

and $1,507,715, respectively, generated mainly by Korean, Taiwanese and Singaporean café shops and restaurants.

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

Years Ended December 31,

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$ (9,560,709 )

of revenue decreased from $14,576,209 in the year ended December 31, 2023 to $12,782,624 in the year ended December 31, 2024, as a result

of sales decreased from $12,782,624 in the year ended December 31, 2024 to $3,221,915 in the year ended December 31, 2025, as a result

of the decrease in the number of lots sold in the Lakes at Black Oak project.

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costs are allocated to sales.

gross margin increased from $7,512,298 to $8,333,275 in the years ended December 31, 2023 and 2024, respectively.

The increase of

gross margin was caused by the increase of gross margin from F&B business, mostly due to the increase in the sales in that

gross margin decreased from $8,333,275 to $1,248,960 in the years ended December 31, 2024 and 2025, respectively.

The decrease of gross

margin was caused by the decrease in the number of lots sold in the Lakes at Black Oak project.

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

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Total operating expenses

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

of goodwill and investment and increase in professional fees.

Income (Expense)

the year ended December 31, 2024, the Company had other income of $102,046 compared to other expense of $58,313,729 in the year ended

December 31, 2023.

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

of HWH International Inc.

Alset Capital Acquisition Corp.) are the primary reasons for the volatility in these two periods.

gain on securities investment was $461,247 in year ended December 31, 2024, compared to $11,375,747 loss in the year ended December 31,

Loss on equity method investment was $3,234,851 in year ended December 31, 2024, compared to $24,483,374 loss in the year ended

December 31, 2023.

Loss on consolidation of HWH International Inc.

was $0 in the year ended December 31, 2024, compared to $21,657,036

in the year ended December 31, 2023.

increase of operating expenses in the twelve months ended December 31, 2025 compared to the same period of 2024 was mostly caused by

increase in bonus payments to executives and professional fees.

(Expense) Income

the year ended December 31, 2025, the Company had other expense of $33,767,897 compared to other income of $102,046 in the year

ended December 31, 2024.

The changes in realized and unrealized gain/loss on securities investment and impairment of equity method

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

Realized loss on securities investment was $3,208,972 in

year ended December 31, 2025, compared to $461,247 gain in the year ended December 31, 2024.

Unrealized loss on securities

investment was $2,451,237 in year ended December 31, 2025, compared to $942,213 loss in the year ended December 31, 2024.

Additionally, in 2025 the Company impaired $30,185,404 of equity method investment.

the year ended December 31, 2025, the Company had net loss of $49,350,566 compared to net loss of $4,165,816 in the year ended December

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This decrease reflects

the sale of multiple lots in Lakes at Black Oak project during 2024.

cash has increased from $26,921,727 as of December 31, 2023 to $27,243,787 as of December 31, 2024.

Our liabilities decreased from $9,066,700

depreciation expenses on the rental properties.

cash has decreased from $27,243,787 as of December 31, 2024 to $25,184,990 as of December 31, 2025.

Our liabilities increased from $6,563,126

at December 31, 2024 to $6,923,965 at December 31, 2025.

Our total assets have decreased to $96,761,977 as of December 31, 2024 from

$126,314,028 as of December 31, 2023 due to the decrease in real estate assets and cash held in Trust Account.

On April 17, 2019, SeD Maryland Development LLC entered into a Development Loan Agreement with

Manufacturers and Traders Trust Company (“M&T Bank”) in the principal amount not to exceed at any one time outstanding

the sum of $8,000,000, with a cumulative loan advance amount of $18,500,000.

The line of credit 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.

Other standard lender fees apply in the event

the L/C is drawn down.

Our total assets have increased to $136,587,114 as of December 31, 2025 from

$96,761,977 as of December 31, 2024 due to purchasing equity investments.

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

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

amount of $18,500,000.

The line of credit 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.

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 was 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.

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

leaving approximately $100,000 as collateral for outstanding letters 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 was

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 and February 11, 2026, approximately $201,751 and $107,991, respectively, was released from collateral for

outstanding letters of credit.

November 13, 2023, 150 CCM Black Oak Ltd.

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approximately $3.8 million.

In addition, the Company will be entitled to receive certain reimbursements in the year ended December 31,

Company is entitled to receive certain developer reimbursements for the Lakes at Black Oak and Alset Villas projects.

The Company expects

that approximately $4.7 million of the receivable will be collected within the next twelve months.

Additionally,

the Company is entitled to receive certain developer reimbursements for the Lakes at Black Oak and Alset Villas projects.

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

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Years Ended December 31,

Net cash provided by operating activities

Net cash provided by (used in) investing activities

Net cash (used in) provided by operating activities

$ (5,927,532 )

Net cash (used in) provided by financing activities

Net cash provided by investing activities

Net cash provided by (used in) financing activities

$ (21,419,083 )

Flows from Operating Activities

cash provided by operating activities was $5,156,047 in the year ended December 31, 2024, as compared to net cash provided by operating

activities of $7,478,823 in the same period of 2023.

Property sales from the Lakes at Black Oak project in 2024 and 2023 were the main

reason for the cash provided by operating activities in those periods.

cash used in operating activities was $5,927,532 in the year ended December 31, 2025, as compared to net cash provided by operating activities

of $5,156,047 in the same period of 2024.

Purchase of trading securities was the main reason for the cash used in operating activities

Property sales from the Lakes at Black Oak project in 2024 were the main reason for the cash provided by operating activities

in that period.

Flows from Investing Activities

cash provided by investing activities was $17,468,306 in the year 2024, as compared to net cash used in investing activities of $2,128,986

cash provided by investing activities was $2,250,903 in the year 2025, as compared to net cash provided by investing activities of $17,468,306

in the same period of 2024.

In the year ended December 31, 2024 we invested $814,158 in marketable securities, issued $3,029,758 in promissory

notes ($1,811,881 of which was to related parties) and withdrew $21,102,871 cash for redemptions.

In the year ended December 31, 2023

we invested $756,078 in marketable securities, issued $3,338,081 in promissory notes to related parties and received $2,672,438 repayment

of promissory notes from related parties.

In the year ended December 31, 2025 we invested $40,000 in investment securities, issued $2,325,489 in promissory

notes to related parties, purchased $175,464 of fixed assets, sold related party equity security investments for $4,184,575 and received

a repayment of a loan from related party of $607,281.

In the year ended December 31, 2024 we invested $814,158 in investment securities,

issued $3,029,758 in promissory notes ($1,811,881 of which was to related parties) and withdrew $21,102,871 cash for redemptions.

Flows from Financing Activities

cash used in financing activities was $21,419,083 in the year ended December 31, 2024, compared to net cash provided of $3,187,489 the

cash provided by financing activities was $1,110,198 in the year ended December 31, 2025, compared to net cash used of $21,419,083 the

year ended December 31, 2024.

Cash used in financing activities in the year 2024 is primarily related to the repayment of Class A Common

Stock of $21,102,871 and repayment of note payable of $446,260.

Cash provided by financing activities in the year 2023 is primarily related

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

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

Cash provided by financing activities in the year 2025 is primarily related to the issuance of Common Stock

of $2,614,983.

Cash used in financing activities in the year 2024 is primarily related to the repayment of Class A Common Stock of $21,102,871

and repayment of note payable of $446,260.

Security Investments

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traded stock price at the close of the reporting period.

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

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

fair value is determined by quoted stock prices.

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

The Company does not have significant influence over AMBS as the

Company holds approximately 4.3% of the common shares of AMBS.

The stock fair value is determined by quoted stock prices.

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

(“Value Exchange International”

or “VEII”), an OTCQB listed company, for an aggregate subscription price of $650,000.

or “VEII”), an OTC listed company, for an aggregate subscription price of $650,000.

On October 17, 2022 the Company purchased

additional 7,276,163 common shares of VEII for an aggregate purchase price of $1,743,734.

On September 6, 2023, the Company

converted $1,300,000 of VEII loan into 7,344,632 common shares.

After these transactions, the Company owns approximately 48.7%

of VEII and exercises significant influence over it.

Our Chief Executive Officer, Chan Heng Fai, is also an owner of the common stock

of VEII (not including any common shares we hold).

Additionally, certain members of our board of directors serve as directors of Value

Exchange International.

On September 6, 2023, the Company converted

$1,300,000 of VEII loan into 7,344,632 common shares.

After these transactions, the Company owns approximately 45.8% of VEII and exercises

significant influence over it.

Our Chief Executive Officer, Chan Heng Fai, is also an owner of the common stock of VEII (not including

any common shares we hold).

Additionally, certain members of our board of directors serve as directors of Value Exchange International.

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

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

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

The First 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 First Credit Agreement at 8%.

The First 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”).

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

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

The 1 st 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 Credit Agreement

The 1 st 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

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

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The Loan Amount can be converted into shares of

VEII pursuant to the terms of the First 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.

VEII pursuant to the terms of the 1 st Credit Agreement for a period of three years.

There is no fixed price for the derivative

security until Hapi Metaverse converts the Loan Amount into shares of VEII Common Stock.

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

Under the terms of the First 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.

Under the terms of the 1 st 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 (“Second Credit Agreement”) with VEII.

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

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

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

the Second 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”).

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

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

On December 15, 2023, the Company loaned VEII $1,000,000.

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

December 19, 2023.

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

pursuant to the terms of the 2 nd Credit Agreement for a period of three years.

In the event that Hapi Metaverse converts this

loan into shares of VEII’s Common Stock, the conversion price shall be $0.045 per share.

In the event that Hapi Metaverse elects

to convert any portion of the loan into shares of VEII’s Common Stock in lieu of cash payment in satisfaction of that loan, then

VEII will issue to Hapi Metaverse five (5) detachable warrants for each share of VEII’s Common Stock issued in a conversion (“Warrants”).

Each Warrant will entitle the Company to purchase one (1) share of VEII’s Common Stock at a per-share exercise price equal to the

Conversion Price.

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

At the time of this filing, the

Company has not converted the Loan Amount.

At the time of this

filing, the Company has not converted the Loan Amount.

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

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method of accounting.

DSS Inc., American Premium Water Corporation (“APW”, d.b.a.

New Electric CV Corporation, “NECV”),

DSS Inc., HIPH World Inc.

American Premium Water Corporation and New Electric CV Corporation, “HIPH”),

Value Exchange International Inc., Sharing Services Global Corp.

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are publicly traded companies and fair value is determined by quoted stock prices.

The Company has significant influence but does not

have a controlling interest in these investments, and therefore, the Company’s investment could be accounted for under the equity

method of accounting or under fair value accounting.

The Company has (or had, in the case of Impact) significant

influence but does not have a controlling interest in these investments, and therefore, the Company’s investment could be accounted

for under the equity method of accounting or under fair value accounting.

Company has significant influence over DSS as we owned approximately 43.6% of the common stock of DSS as of December 31, 2025, and our

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

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

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

Apart from Chan Heng Fai, two other members

of the Board of Directors of Alset Inc.

are also members of the Board of Directors of DSS (Chan Tung Moe, our Co-Chief Executive Officer,

a son of Chan Heng Fai, and Lim Sheng Hon, Danny).

Apart from Chan Heng Fai, two other

members of the Board of Directors of Alset Inc.

are also members of the Board of Directors of DSS (Chan Tung Moe, our Co-Chief Executive

Officer, a son of Chan Heng Fai, and Lim Sheng Hon, Danny).

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

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

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

Additionally, our Chief

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

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

or we could elect the fair value option accounting.

Company has significant influence over HIPH as our Chief Executive Officer, Chan Heng Fai, is the majority owner of the common stock

of HIPH (not including any common shares we hold).

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

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

Company has significant influence over SHRG as the Company holds approximately 29.0% of the common shares of SHRG, our Chief Executive

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Additionally, our Chief Executive Officer is a significant stockholder of SHRG shares.

August 8, 2023, DSS Inc.

distributed shares of Impact Biomedical Inc., beneficially held by DSS, in the form of a dividend to the shareholders

of DSS common stock.

As a result of this distribution, the Company and its majority owned subsidiaries received 4,568,165 shares

of Impact, representing 39.7% of the issued and outstanding shares of Impact’s common stock.

Each share of Impact distributed

as part of the distribution is not eligible for resale until 180 days from the date Impact’s initial public offering becomes effective

under the Securities Act, subject to the discretion of DSS to lift the restriction sooner.

On September 17, 2024, Impact completed its

Initial Public Offering and its shares started to trade on New York Stock Exchange.

Based on the management’s analysis, the fair

value of Impact shares was approximately $0 at the distribution date and December 31, 2023.

The Company did not have a controlling

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

value option accounting.

Company had significant influence over Impact as the Company held approximately 39.7% of the common shares of Impact as of December 31,

The Company sold all its shareholding in Impact during first four months of 2025.

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

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July 17, 2020, the Company purchased 122,039,000 shares, approximately 0.5% ownership, and 1,220,390,000 warrants with an exercise price

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

We value APW warrants under level 3 category through a

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

$973 and $430 as of December 31, 2024 and 2023, respectively.

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

We value HIPH warrants under level 3 category through

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

and $973 as of December 31, 2025 and 2024.

changes in the fair values of the investment were recorded directly to accumulated other comprehensive income (loss).

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investment in Nervotec is $589, as the Company wrote off $37,287 of this investment.

September 30, 2020, the Company’s former indirect subsidiary, HWH Global Inc.

HWH International Inc.), acquired 3,800 shares,

approximately 19% ownership, in HWH World Company Limited (f.k.a.

Hyten Global (Thailand) Co., Ltd.) (“HWH World Co.”), a

private company, at a purchase price of $42,562.

HWH Global Inc.

was sold on December 31, 2023.

As of December 31, 2025, the value of the investment

is $0 as the Company written of the remaining balance.

May 31, 2021, the Company’s indirect subsidiary, UBeauty Limited, invested $19,609 in K Beauty Research Lab Co., Ltd (“K

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as well as Korea - originated beauty contents for the purpose of distribution to HWH’s membership distribution channel.

March 14, 2024, the Company entered into shares subscription agreement to subscription of shares in Ideal Food & Beverage Pte.

(“IFBPL”) with the subscription of 19,000 shares, constituting 19% of the shares of IFBPL.

The subscription

fee of $14,010 was paid to IFBPL on May 23, 2024.

The Company impaired this investment of $14,010 and total impairment expenses

were $14,205 due to net liabilities of IFBPL as of December 31, 2024.

April 25, 2024, the Company entered into a binding term sheet (the “Term Sheet”) through its subsidiary Health Wealth

Happiness Pte Ltd.

(“HWHPL”) outlining a joint venture with Chen Ziping, an experienced entrepreneur in the travel

industry, and Chan Heng Fai, the Company’s Executive Chairman, as a part of the Company’s strategy of building its

travel business in Asia.

April 25, 2024, the Company entered into a binding term sheet (the “Term Sheet”) through its subsidiary Health Wealth Happiness

(“HWHPL”) outlining a joint venture with Chen Ziping, an experienced entrepreneur in the travel industry, and Chan

Heng Fai, the Company’s Executive Chairman, as a part of the Company’s strategy of building its travel business in Asia.

The joint venture company (referred to here as the “JVC”) is known as HapiTravel Holding Pte.

The JVC was incorporated in July 2024 and is owned by:

The JVC was incorporated

in July 2024 and is owned by:

(a) HWHPL holds 19% of the shares in the JVC;

(b) Chan Heng Fai

and (c) the remaining 70% of the shares in the JVC are held by Chen Ziping.

(b) Chan Heng Fai holds 11%;

and (c) the remaining 70% of

the shares in the JVC are held by Chen Ziping.

April 23, 2025, the Company completed the sale of HWH World Inc.(“HWHKOR”) by Health Wealth Happiness Pte.

to AES Group Inc.

(“AES”), a Korean entity.

The sale was consummated under a term sheet signed on April 20, 2025, pursuant

to which the Company agreed to transfer its 100% equity interest in HWHKOR to AES.

In exchange, AES agreed to issue new shares, representing

19.9% of the enlarged share capital of AES to the Company upon closing.

Total of $384,356 gain was generated from this deal and recorded

in the Company’s statement of operations.

The disposal of HWHKOR had immaterial effect on the Company’s consolidated financial

statements and the deconsolidation did not meet the criteria for presentation as discontinued operations under ASC 205-20.

has been no indication of impairment or changes in observable prices via transactions of similar securities and is still carried at a

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Therefore, the Company has significant influence on AMRE.

The Company’s share of losses from AMRE exceeded the carrying

amount of the investment, and as a result, the Company suspended recognition of additional losses.

The Company will resume recognizing

its share of losses only to the extent that it subsequently becomes obligated to fund the investee’s losses or the investee returns

to profitability and the Company’s share of earnings exceeds its previously unrecognized losses.

Pacific Financial, Inc.

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

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

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

APF was consolidated

into the Company under common control accounting.

On September 8, 2021 APF sold 6,666,700 shares Series A Common Stock to DSS, Inc.

$40,000,200 cash.

As a result of the new share issuances, the Company’s ownership percentage of APF fell below 50% to 41.3% (and

subsequently to 36.9%) and the entity was deconsolidated in accordance with ASC 810-10.

Upon deconsolidation the Company elected to apply

the equity method accounting as the Company still retained significant influence.

During the year ended December 31, 2024 the investment

loss was $3,205,094.

Company owns 36.9% of the shares of the common stock of American Pacific Financial, Inc., formerly known as American Pacific Bancorp,

APF is organized for the purposes of being a financial network holding company, focused on providing commercial

loans and on acquiring equity positions in (i) undervalued commercial bank(s), bank holding companies and nonbanking licensed financial

companies operating in the United States, South East Asia, Taiwan, Japan and South Korea, and (ii) companies engaged in—nonbanking

activities closely related to banking, including loan syndication services, mortgage banking, trust and escrow services, banking technology,

loan servicing, equipment leasing, problem asset management, SPAC (special purpose acquisition company) consulting, and advisory capital

raising services.

The Company elected to apply the equity method accounting to its investment in APF, as the Company retains significant

influence over APF.

During the year ended December 31, 2025 the investment loss was $1,812,898.

As of December 31, 2024 and 2023, the

investment in APF was $4,221,296 and $7,426,390, respectively.

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

lent $76,723 to Ketomei Pte.

On March 21, 2022 HCI-T entered into an agreement pursuant to which the principal of the loan together with accrued interest were converted

into an investment in Ketomei.

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

After the conversion and

fund investment HCI-T held 28% of Ketomei as of December 31, 2023.

Ketomei is in the business of selling cooked food and drinks

through a subscription model.

At December 31, 2023, the Company wrote off the investment in Ketomei of $121,471, as the Company did not

believe it was be able to recover this investment.

On February 20, 2024, Hapi Cafe invested $312,064 for an additional 38.41%

ownership interest in Ketomei by converting $312,064 of convertible loan.

The loan was impaired at the year ended of December 31,

2023, therefore, $312,064 was transferred from impairment of convertible loan to impairment of equity method investment.

additional investment, Hapi Cafe owns 55.65% (the Company owns indirectly 45.5%) of Ketomei’s outstanding shares and

Ketomei is consolidated into the financial statements of the Company beginning on February 20, 2024.

During the year ended December 31, 2024

the investment loss was $3,205,094.

As of December 31, 2025 and 2024, the investment in APF was $2,408,398 and $4,221,296, respectively.

Brokers Company Inc.

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

Agreement, pursuant to which SeD Capital purchased 39.8 shares (10.4%) of the Common Stock of Sentinel Brokers Company Inc.

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

Sentinel is a broker-dealer operating primarily as a fiduciary

intermediary, facilitating institutional trading of municipal and corporate bonds as well as preferred stock, and is registered with

the Securities and Exchange Commission, is a member of the Financial Industry Regulatory Authority, Inc.

(“FINRA”), and is

a member of the Securities Investor Protection Corporation (“SIPC”).

The Company has significant influence over Sentinel

as our CEO holds a director position on Sentinel’s Board of Directors.

Additionally, DSS, of which we own 48.9% and have significant

influence over, owns 80.1% of Sentinel.

During the years ended December 31, 2024 and 2023, the investment loss in Sentinel was

$15,013 and $154,956, respectively.

Company’s indirect subsidiary, SeD Capital Pte Ltd (“SeD Capital”), owns 39.8 shares (8.8%) of the Common Stock of

Sentinel Brokers Company Inc.

(“Sentinel”).

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 our CEO holds

a director position on Sentinel’s Board of Directors.

Additionally, DSS, of which we own 43.6% and have significant influence over,

owns 91.24% of Sentinel.

During the years ended December 31, 2025 and 2024, the investment loss in Sentinel was $107,680 and $15,013,

respectively.

Investment in Sentinel was $2,070 and $109,750 at December 31, 2025 and 2024, respectively.

Energy Asia Pacific Company Limited

May 22, 2025, the Company entered into the Stock Purchase Agreement dated with Chan Heng Fai, pursuant to which the Company purchased

Chan all of the outstanding shares of New Energy Asia Pacific Inc.

(“NEAPI”) for a purchase price of $83,000,000

in the form of a promissory note convertible into newly issued shares of the Company’s common stock.

NEAPI owns 41.5% of the issued

and outstanding shares of New Energy Asia Pacific Company Limited (“New Energy”), a Hong Kong corporation.

New Energy focuses

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

During the year

ended December 31, 2025, the Company recognized its equity in loss of investee in New Energy of $212,246.

the year ended December 31, 2025, the Company recognized an impairment charge of approximately $30.1 million related to its investment

in New Energy.

The impairment was recognized after management determined that the decline in fair value below carrying value was other-than-temporary,

based on factors including:

in the execution and commercialization of New Energy’s taxi delivery projects;

cash flow projections, including slower ramp-up and longer implementation timelines;

in market conditions in the distributed energy sector, including broader global geopolitical

Company valued its investment using a discounted cash flow methodology based on updated assumptions.

The impairment primarily reflects delays in execution and cash flow realization, rather than a fundamental change in

business outlook.

the Company reduced the carrying amount of the investment to its estimated fair value of approximately $52.7 million as of December 31,

in Debt Securities

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and other company-specific information.

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

a private company in South Korea.

The interest rate of this note was 2% per annum.

The conversion price was approximately $21.26 per

common share of Vector Com.

As of December 31, 2023, the management estimated the fair value of the note to be $77,307.

The Company wrote

off this loan on March 31, 2024.

Interest Entity

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

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

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

The determination of which owner is the

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

interests of each interest holder in the VIE.

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

and is deemed to be the primary beneficiary.

A controlling financial interest has both of the following characteristics:

(i) the power

to direct the activities of the VIE that most significantly impact its economic performance;

and (ii) the obligation to absorb losses

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

Company identified Smart Reward Express Limited as a VIE and consolidated it into its financial statements.

believe that inflation has not had a material impact on our results of operations for the years ended December 31, 2025 and 2024.

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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.

and Procedures

are not currently required to maintain an effective system of internal controls as defined by Section 404 of the Sarbanes-Oxley Act.

Only in the event that we are deemed to be a large accelerated filer or an accelerated filer would we be required to comply with the

independent registered public accounting firm attestation requirement.

Further, for as long as we remain an emerging growth company as

defined in the JOBS Act, we intend to take advantage of certain exemptions from various reporting requirements that are applicable to

other public companies that are not emerging growth companies including, but not limited to, not being required to comply with the independent

registered public accounting firm attestation requirement.

Only in the event that we are deemed to be a large accelerated filer or an accelerated filer.

is responsible for the preparation and fair presentation of the financial statements included in this Report.

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SEC that permit us to provide only management’s report in this Report.

May 13, 2025, the Company received a notification letter from the Listing Qualifications Department of The Nasdaq Stock Market LLC (“Nasdaq”)

notifying the Company that, because the closing bid price for the Company’s common stock listed on Nasdaq was below $1.00 for 30

consecutive trading days, the Company no longer meets the minimum bid price requirement for continued listing on The Nasdaq Capital Market

under Nasdaq Marketplace Rule 5550(a)(2), requiring a minimum bid price of $1.00 per share (the “Minimum Bid Price Requirement”).

notification had no immediate effect on the listing of the Company’s common stock.

In accordance with Nasdaq Marketplace Rule 5810(c)(3)(A),

the Company was given a period of 180 calendar days from May 13, 2025, or until November 10, 2025, to regain compliance with the Minimum

Bid Price Requirement.

July 17, 2025, the Company received notice from Nasdaq that the Nasdaq Listing Qualifications Staff had determined that the Company regained

compliance with Nasdaq’s minimum $1 bid price per share requirement.

While the Company has regained compliance with the Minimum

Bid Price Requirement, there can be no assurance that the Company will be able to maintain compliance with the Minimum Bid Price Requirement

in the future.

Quantitative and Qualitative Disclosures About Market Risk

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

What changed 10-K

Item 7. Management’s Discussion and Analysis