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Item 8. Financial Statements and Supplementary Data

2026-03-31 compared with 2025-03-31 · 1266 added, 1230 removed, 1362 unchanged (65% of the section changed)

3 unchanged sentences

31, 2025 and 2024

Reports of Independent Registered Public Accounting Firm (PCAOB ID:

Report of Independent Registered Public Accounting Firm (PCAOB ID:

of Independent Registered Public Accounting Firm (PCAOB ID:

Consolidated Balance Sheets at December 31, 2025 and 2024

6 unchanged sentences

and Subsidiaries

on the Consolidated Financial Statements

have audited the accompanying consolidated balance sheet of Alset Inc.

and its subsidiaries (collectively, the “Company”)

as of December 31, 2025, and the related consolidated statement of operations and other comprehensive loss, consolidated statement of

changes in stockholders’ equity, and consolidated statements of cash flows for the year ended December 31, 2025, including the

related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial

statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and the results of

its operations and its cash flow for the year ended December 31, 2025, in conformity with accounting principles generally accepted in

the United States of America.

consolidated financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion

on the Company’s consolidated financial statements based on our audit.

We are a public accounting firm registered with the Public

Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance

with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

conducted our audit in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain

reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

of our audit, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing

an opinion on the effectiveness of the Company’s internal control over financial reporting.

Accordingly, we express no such opinion.

audit included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due

to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence

regarding the amounts and disclosures in the consolidated financial statements.

Our audit also included evaluating the accounting principles

used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that our audit provide a reasonable basis for our opinion.

Company has significant transactions with related parties which are described in Notes 7 of the consolidated financial statements.

involving related parties cannot be presumed to be carried out on an arm’s length basis, as the requisite condition of competitive,

free market dealings may not exist.

Audit Matters

audit matters are matters arising from the current year audit of the consolidated financial statements that were communicated or required

to be communicated to the audit committee and that (1) relate to accounts or disclosures that are material to the financial statements

and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter

in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below,

providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

in Real Estate

disclosed in Note 5 to the consolidated financial statements, the Company owns real estate properties through their subsidiaries with

a net book value of approximately $29,620,952.

We identified the valuation of the real estate to be a critical audit matter.

principal consideration for our determination of management’s assessment of impairment of the real estate as a critical audit matter

is the high degree of subjective auditor judgment associated with evaluating management’s determination of impairment of the real

estate properties, which is primarily due to the complexity of the valuation models used and the sensitivity of the underlying significant

The key assumptions used within the valuation models included site valuations and various approaches such as cost, sales

comparison, etc.

The calculated fair values are sensitive to changes in these key assumptions.

the Critical Audit Matter was addressed in the Audit

audit procedures related to the determination of the fair value of the real estate properties included the following, among others:

obtained management’s rollforward of investments in real estate from December 31, 2024,

to December 31, 2025 and tested any material additions or disposals as applicable by vouching

to supporting documents.

obtained third party valuation reports from management that assess the fair value of the properties.

assessed the qualifications, competence

and objectivity of management engaged third-party specialist.

engaged a valuation firm to review the valuation reports provided by management to determine

if the reports were reasonable and acceptable based on the methodologies used by management’s

third-party valuation firm.

We also assessed the qualifications and competence of the valuation

compared the net book value of the real estate properties to the fair values of the properties

per the third-party valuation specialist to determine if the carrying value is less than

fair value and impairment was addressed properly.

assessed the sufficiency of the Company’s disclosure of its accounting for these real

estate properties included in Notes 5.

of Equity Method Investment for Impairment

disclosed in Notes 7 to the consolidated financial statements, the Company holds equity method investment through its subsidiaries with

a net book value of $52,705,000.

We identified the value of equity method investment to be a critical audit matter.

principal consideration for our determination of management’s assessment of impairment of the equity method investment as a critical

audit matter is the high degree of subjective auditor judgment associated with evaluating management’s analysis, which is primarily

due to the subjectivity of management’s qualitative and quantitative assumptions.

The conclusion of the impairment analysis is

sensitive to changes in these key assumptions.

the Critical Audit Matter was addressed in the Audit

audit procedures related to the evaluation of the equity method investment for impairment included the following, among others:

obtained management’s rollforward of equity method investments from December 31, 2024,

to December 31, 2025 and tested any material additions and disposals by vouching to agreements.

obtained third party valuation report from management that assess the fair value of the equity interest.

assessed the qualifications, competence

and objectivity of management engaged third-party specialist.

compared the net book value of the equity method investment to the fair value per the third-party

valuation specialist to determine if the carrying value is less than fair value and impairment

was addressed properly.

assessed the sufficiency of the Company’s disclosure of its accounting for these equity

method investments included in Note 7.

HTL International, LLC

have served as the Company’s auditor since 2025

Houston, Texas

OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

the Board of Directors and Stockholders of

and Subsidiaries

on the Financial Statements

have audited the accompanying consolidated balance sheets of Alset Inc.

have audited the accompanying consolidated balance sheet of Alset Inc.

and Subsidiaries, (the “Company”) as of December 31,

31, 2024, and 2023, and the related consolidated statements of operations and comprehensive loss, changes in stockholders’ equity,

and cash flows for each of the years in the two-year period ended December 31, 2024, and the related notes (collectively referred to

as the consolidated financial statements).

In our opinion, the consolidated financial statements present fairly, in all material respects,

the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for the

years for each of the years in the two-year period ended December 31, 2024, in conformity with accounting principles generally accepted

in the United States of America.

2024, and the related consolidated statements of operations and comprehensive loss, changes in stockholders’ equity, and cash flows

for the year ended December 31, 2024, and the related notes (collectively referred to as the consolidated financial statements).

opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of

December 31, 2024 and the results of its operations and its cash flows for the year ended December 31, 2024, in conformity with accounting

principles generally accepted in the United States of America.

consolidated financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion

on the Company’s consolidated financial statements based on our audits.

on the Company’s consolidated financial statements based on our audit.

We are a public accounting firm registered with the Public

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federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

conducted our audits in accordance with the standards of the PCAOB.

conducted our audit in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain

1 unchanged sentence

The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing

of our audit, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing

an opinion on the effectiveness of the Company’s internal control over financial reporting.

Accordingly, we express no such opinion.

audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether

due to error or fraud, and performing procedures that respond to those risks.

audit included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due

to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence

regarding the amounts and disclosures in the consolidated financial statements.

Our audits also included evaluating the accounting principles

Our audit also included evaluating the accounting principles

used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that our audits provide a reasonable basis for our opinion.

We believe that our audit provides a reasonable basis for our opinion.

Company has significant transactions with related parties which are described in Note 7 of the consolidated financial statements.

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& CO., CPAs, P.C .

have served as the Company’s auditor since 2022.

served as the Company’s auditor from 2022 to 2025.

and Subsidiaries

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Note Receivables - Related Parties, Net

Convertible Loan Receivables at Fair Value - Related Party

Convertible Note Receivables - Related Parties, Net

Convertible Note Receivables at Fair Value - Related Party

Prepaid Expense

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Total Current Assets

Rental Properties

Properties under Development

Real Estate - Rental Properties, Net

Property and Equipment, Net

Operating Lease Right-Of-Use Assets, Net

Convertible Note Receivables at Fair Value - Related Party

Investment in Securities at Fair Value - Related Party

Investment in Securities at Cost

Investment in Equity Method Securities

Other Receivables - Long Term, Net

Cash and Marketable Securities Held in Trust Account

Property and Equipment, Net

$ 136,587,114

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Accounts Payable and Accrued Expenses

Deferred Underwriting Compensation

Deferred Revenue

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Total Liabilities

Commitments and Contingencies

Temporary Equity

Class A Common Stock of HWH International Inc.

subject to possible redemption;

shares at approximately $ 51.76

per share as of December 31, 2023 *

Commitments and Contingencies (Note 14)

Stockholders’ Equity:

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39,401,786 and

9,235,119 shares issued and outstanding on December 31, 2024 and 2023, respectively

9,235,119 shares issued on December 31, 2025 and 2024, respectively;

38,895,830 and 9,235,119 shares outstanding on December 31, 2025 and 2024, respectively

Additional Paid in Capital

Treasury Stock at Cost ( 505,956 and 0 shares on December 31, 2025 and 2024, respectively)

Accumulated Deficit

1 unchanged sentence

( 251,851,540 )

Accumulated Other Comprehensive Income

Accumulated Other Comprehensive Income (Loss)

Total Alset Inc.

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$ 136,587,114

The common stock share amounts were adjusted retrospectively to reflect the 5-for-1 reverse stock split of HWH shares on February 24,

accompanying notes to consolidated financial statements.

and Subsidiaries

Consolidated Statements of Operations and Other Comprehensive Loss

For the Years Ended December 31, 2024 and 2023

Digital Transformation Technology - Related Party

Statements of Operations and Other Comprehensive Loss

the Years Ended December 31, 2025 and 2024

Total Revenue

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General and Administrative

Impairment of Note Receivable, Goodwill, Equipment and Investment

Impairments and Credit Loss Expense

Total Operating Expenses

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( 4,117,076 )

Other Income (Expense)

Other (Expense) Income

Interest Income

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Interest Expense

Foreign Exchange Transaction Gain (Loss)

Unrealized Gain on Securities Investment

Gain on Disposal of a Subsidiary

Foreign Exchange Transaction (Loss) Gain

( 1,930,505 )

Unrealized (Loss) Gain on Securities Investment

Unrealized Loss on Securities Investment - Related Party

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( 1,239,566 )

Realized Gain (Loss) on Securities Investment

Realized (Loss) Gain on Securities Investment

Realized Loss on Securities Investment - Related Party

( 2,439,265 )

Loss on Equity Method Investment

Realized Loss on Securities Investment

( 2,439,265 )

Loss on Equity Method Investment

( 2,132,825 )

Loss on Consolidation of Alset Capital Acquisition Corp.

( 3,234,851 )

Other Expense

Total Other Income (Expense), Net

Impairment of Equity Method Investment

Other Income, Net

Total Other (Expense) Income, Net

( 33,767,897 )

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$ ( 4,165,816 )

Other Comprehensive Loss

Other Comprehensive Gain (Loss)

Foreign Currency Translation Adjustment

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and Subsidiaries

Consolidated Statements of Stockholders’

For Two Year Period Ended December

Comprehensive

Stockholders’

Statements of Stockholders’ Equity

Two Years Period Ended December 31, 2025

Comprehensive

1 unchanged sentence

Stockholders’

January 1, 2022

Balance at January 1, 2024

$ 332,455,457

$ ( 247,885,656 )

Issuance of HWH Common Stock to EF Hutton for

Deferred Underwriting Compensation

Gain from SHRG Convertible Note and Warrants

Disposal of Hapi Travel Limited

Change in Non-Controlling Interest

Foreign Currency Translations

( 3,841,305 )

Issuance of Common Stock

Acquisition of Hapi Travel

Limited under Common Control

Foreign Currency Translations

Change in Non-Controlling

Gain from Conversion of VEII

Promissory Note to Stock and Warrants

( 4,480,570 )

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$ 334,023,233

Issuance of HWH Common Stock

to EF Hutton for Deferred Underwriting Compensation

Gain from SHRG Convertible

Notes and Warrants

Disposal of Hapi Travel Limited

Change in Non-Controlling

$ ( 849,862 )

$ ( 251,851,540 )

Issuance of Common Stock

Stock Based Compensation

Issuance of HWH Common Stock & Warrants

Gain from SHRG Warrants

Acquisition of LEH Insurance Group LLC

Change in Non-Controlling Interest

Treasury Stock Buyback

( 1,004,875 )

Foreign Currency Translations

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( 47,414,942 )

( 1,935,624 )

( 49,350,566 )

Balance at December 31, 2025

5 unchanged sentences

$ ( 299,266,482 )

$ 121,075,369

$ 129,663,149

accompanying notes to consolidated financial statements.

and Subsidiaries

Consolidated Statements of Cash Flows

For the Years Ended December 31, 2024

Statements of Cash Flows

the Years Ended December 31, 2025 and 2024

Cash Flows from Operating Activities

2 unchanged sentences

$ ( 4,165,816 )

Adjustments to Reconcile Net Loss to Net Cash Provided By Operating Activities:

Adjustments to Reconcile Net Loss to Net Cash (Used in) Provided by Operating Activities:

Non-Cash Lease Expenses

Loss on Consolidation of Alset Capital Acquisition Corp.

Impairment of Note Receivable, Goodwill, Equipment and Investment

Foreign Transaction (Gain) Loss

( 3,039,135 )

Unrealized Gain on Securities Investment

Impairments and Credit Losses

Bad Debt write off

Gain on Sale of Stock of Subsidiary

Foreign Transaction Loss (Gain)

( 3,039,135 )

Stock Based Compensation

Unrealized Loss (Gain) on Securities Investment

Unrealized Loss on Securities Investment - Related Party

Realized (Gain) Loss on Securities Investment

Gain on Exchange of Investment Securities

Realized Loss (Gain) on Securities Investment

Realized Loss on Securities Investment-Related Party

Loss on Equity Method Investment

Impairment on Equity Method Investment

Changes in Operating Assets and Liabilities, net of acquisitions

1 unchanged sentence

( 2,010,341 )

( 6,707,079 )

Account Receivables

Other Receivables - Related Parties

Other Receivable - Related Parties

Prepaid Expense

1 unchanged sentence

( 11,083,406 )

( 2,095,867 )

Accounts Payable and Accrued Expenses

2 unchanged sentences

( 1,139,793 )

Net Cash (Used in) Provided by Operating Activities

( 5,927,532 )

Net Cash Provided by Operating Activities

Cash Flows from Investing Activities

Purchase of Fixed Assets

Purchase of Real Estate Improvements

Purchase of Investment Securities

Advance to Related Parties

Purchase of Equity Interest of a Subsidiary

Advance to Related Party

Proceed from Sales of Investment in Securities at Fair Value - Related Party

Collection of Advance to Related Parties

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Cash Withdrawn from Trust Account Available to the Company

Net Cash Provided by (Used in) Investing Activities

( 2,128,986 )

Net Cash Provided by Investing Activities

Cash Flows from Financing Activities

Proceeds from Common Stock Issuance

Deemed Distribution to Shareholder

Borrowing from a Commercial Loan

Buyback Treasury Stock

( 1,004,875 )

Proceeds from Note Payable

Repayment to Notes Payable

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( 21,102,871 )

Net Cash (Used in) Provided by Financing Activities

Net Cash Provided by (Used in) Financing Activities

( 21,419,083 )

Net Increase in Cash and Cash Equivalents and Restricted Cash

Net (Decrease) Increase in Cash and Cash Equivalents and Restricted Cash

( 2,576,431 )

Effects of Foreign Exchange Rates on Cash and Cash Equivalents

Cash and Cash Equivalents and Restricted Cash - Beginning of Year

Cash and Cash Equivalents and Restricted Cash - End of Year

Cash and Cash Equivalents

Cash and Cash Equivalents and Restricted Cash - Beginning of Period

Cash and Cash Equivalents and Restricted Cash- End of Period

Restricted Cash

Total Cash and Cash Equivalents and Restricted Cash

Supplementary Cash Flow Information

Total Cash and Restricted Cash

Supplemental Disclosure of Cash Flow Information

Cash Paid for Interest

Cash Paid for Taxes

Supplemental Disclosure of Non-Cash Investing and Financing Activities

Non-Cash Investing and Financing Activities

Initial Recognition of ROU / Lease Liability

Promissory Notes from HWH Investors

Promissory Notes Received in Exchange for Sale of HWH Common Stock to Investors

Issuance of HWH Common Stock to EF Hutton for Deferred Underwriting Compensation

Conversion of Ketomei Note Payable to Common Stock

Gain from SHRG Convertible Notes

Conversion of VEII Note Receivable to Common Stock

Gain from SHRG Warrants and Convertible Notes

Gain on Disposal of Hapi Travel

Warrants Received from VEII after Converting Note Receivable

Acquisition of NEAPI for Issued Shares

accompanying notes to consolidated financial statements.

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of Operations

(the “Company” or “AEI”), formerly known as Alset EHome International Inc.

and HF Enterprises Inc., was

incorporated in the State of Delaware on March 7, 2018 and 50 shares of common stock were issued to Chan Heng Fai, the founder, Chairman

and Chief Executive Officer of the Company.

On October 4, 2022, through a merger transaction, the Company was reincorporated in Texas.

AEI is a diversified holding company principally engaged through its 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.

The Company manages its principal businesses

primarily through its subsidiary, Alset International Limited (“Alset International”), a company publicly traded on the Singapore

Stock Exchange.

November 24, 2020 the Company held its initial public offering and the Company’s common stock began trading on Nasdaq Capital Market.

As a result, 108,000 shares were issued to public investors.

The Company’s net proceeds from this offering were approximately $ 13.2

May 13, 2021, July 30, 2021, December 8, 2021, and February 8, 2023 the Company held follow up offerings of its common shares.

of the offerings, the Company issued a total of 5,101,897 shares to public investors.

The Company’s net proceeds from these offerings

were approximately $ 108 million.

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

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

The accompanying consolidated financial statements include the operations

of the acquired entity from its acquisition date.

The acquisition has been accounted for as a business combination.

Accordingly, consideration

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

estimated fair values on the acquisition date.

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

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

As a result of the acquisition of HTL, a

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

excess of identifiable equity.

On December 17, 2024, this company was sold to HapiTravel Holding Pte.

for a consideration of $ 82,635

with $ 257,733 gain recognized for the deal.

The disposal of HTL had immaterial impact on the Company’s financial statements.

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

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 consolidated financial statements

were not retrospectively adjusted for the acquisition of HTL as of January 1, 2023 for comparative purposes because the historical

operations of HTL were deemed to be immaterial to the Company’s consolidated financial statements.

of December 31, 2024 and 2023, the total outstanding common shares of the Company were 9,235,119 .

(the “Company” or “AEI”) was incorporated in the State of Delaware on March 7, 2018.

AEI is a diversified

holding company principally engaged through its 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, the People’s Republic of China and Taiwan.

We manage a significant portion of our businesses

through our 85.8 % owned subsidiary, Alset International Limited (“Alset International”), a public company traded on

the Singapore Stock Exchange.

of December 31, 2025 and 2024, the total outstanding common shares of the Company were 38,895,830 and 9,235,119 , respectively.

Company has four operating segments based on the products and services we offer, which include three of our principal businesses –

real estate, digital transformation technology and biohealth – as well as a fourth category consisting of certain other business

Company’s real estate segment is comprised of LiquidValue Development Inc.

(“LiquidValue Development”) and American

Home REIT Inc.

Company’s real estate segment is comprised of Alset Real Estate Holdings Inc.

(“Alset RE Holdings”) and American Home

2014, Alset International commenced operations developing property projects and participating in third-party property development projects.

LiquidValue Development Inc., a 99.9 %-owned subsidiary of Alset International, owns, operates and manages real estate development projects

with a focus on land subdivision developments and home rental projects.

Alset RE Holdings, a 99.9 %-owned subsidiary of Alset International, owns, operates and manages real estate development projects with

a focus on land subdivision developments and home rental projects.

activities are generally contracted out, including planning, design and construction, as well as other work with engineers, surveyors,

1 unchanged sentence

The developed lots are then sold to builders for the construction of new homes.

LiquidValue Development’s

Alset RE Holdings’

primary real estate project is a subdivision development project near Houston, Texas, known as Lakes at Black Oak.

1 unchanged sentence

The Company rents these homes

The Company pursued this new endeavor in part to improve cash flow and smooth out the inconsistencies of income in residential

The Company pursued this endeavor in part to improve cash flow and smooth out the inconsistencies of income in residential

land development.

19 unchanged sentences

October 2019, the Company expanded its biohealth segment into the Korean market through one of the subsidiaries of HWH International

Inc., HWH World Inc (“HWH World”).

HWH World is in the business of sourcing and distributing dietary supplements and other

health products through its network of members in the Republic of Korea.

HWH World generates product sales via its direct sale model

as products are sold to its members.

Through the use of a Hapi Gig platform that combines e-commerce, social media and a customized rewards

system, HWH Korea equips, trains and empowers its members.

Inc., HWH World Inc (“HWHKOR”).

HWHKOR is in the business of sourcing and distributing dietary supplements and other health

products through its network of members in the Republic of Korea.

HWH World generates product sales via its direct sale model as products

are sold to its members.

Through the use of a Hapi Gig platform that combines e-commerce, social media and a customized rewards system,

HWH Korea equips, trains and empowers its members.

We compete with numerous direct sales companies in South Korea.

recognized $ 0 and $ 12,758 in revenue in the years ended December 31, 2024 and 2023, respectively.

As of December 31, 2024 and 2023, the

deferred revenue from biohealth segment was $ 0 and $ 0 , respectively.

Company hold 39.7 % ownership in Impact BioMedical Inc.

HWHKOR recognized

$ 0 and $ 0 in revenue in the years ended December 31, 2025 and 2024, respectively.

As of December 31, 2025 and 2024, the deferred revenue

from biohealth segment was $ 0 and $ 0 , respectively.

On April 23, 2025, the Company completed the sale of HWHKOR by Health Wealth Happiness

(“HWHPL”) 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.

Company formerly held 39.7 % ownership in Impact BioMedical Inc.

(“Impact BioMedical”).

2 unchanged sentences

biopharmaceuticals, antivirals, antimicrobials, consumer healthcare, and wellness products in the United States.

Between March 31, 2025

and April 4, 2025, the Company and its subsidiaries Alset International Limited and Global Biomedical Pte.

collectively sold the

Company’s entire equity interest in Impact Biomedical Inc.

IBO) (“Impact”) consisting of 4,568,165 shares of

Impact’s common stock.

The disposition of the Impact stock was made through several sales on the market through a broker.

transactions generated total proceeds of $ 4,184,575 and resulted in a recognized loss of $ 2,439,264 .

Business Activities

15 unchanged sentences

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

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

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 $2 46 , which is included in other income on the Company’s Statement of Operations for the year ended

December 31, 2024.

Company, through Hapi Café Inc.

7 unchanged sentences

and wellness, fitness, productivity, and recreation all under one roof.

February of 2024, HCI-T acquired an additional café in South Korea.

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.

10 unchanged sentences

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) Pte.

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.

In addition to above,

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.

addition to above, 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.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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SCHEDULE OF SUBSIDIARIES

Attributable interest

State or other jurisdiction of

Name of subsidiary consolidated under AEI

incorporation or organization

December 31, 2024

December 31, 2023

of subsidiary

jurisdiction of incorporation or

interest as of,

Alset Global Pte.

Alset Business Development Pte.

Alset Business Development

Global eHealth Limited

Alset International Limited

Singapore Construction & Development Pte.

Singapore Construction &

Development Pte.

Singapore Construction Pte.

2 unchanged sentences

SeD Capital Pte.

LiquidValue Asset Management Pte.

LiquidValue Asset Management

Alset Solar Limited

Alset F&B One Pte.

BMI Capital Partners International Limited

BMI Capital Partners International

SeD Perth Pty Ltd

1 unchanged sentence

United States of America

Winning Catering Group, Inc.

LiquidValue Development Inc.)

13 unchanged sentences

United States of America

SeD Maryland Development, LLC

United States of America

SeD Development Management, LLC

SeD Maryland Development,

United States of America

SeD Builder, LLC

SeD Development Management,

United States of America

Hapi Metaverse Inc.

GigWorld Inc.)

United States of America

1 unchanged sentence

HotApp International Limited

SeD REIT Inc.

United States of America

HWH World Inc.

United States of America

HWH World Pte.

UBeauty Limited

HWH World Limited

HWH World Inc.

Alset Energy Inc.

United States of America

BioHealth Water Inc.

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Hapi Robot Pte.

Impact BioHealth Pte.

American Home REIT Inc.

United States of America

Alset Solar Inc.

United States of America

Alset Capital Inc.

OpenBiz Inc.)

United States of America

Hapi Cafe Inc.

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Hapi Cafe Korea Inc.

Alset Management Group Inc.

United States of America

Alset Acquisition Sponsor, LLC

Alset Acquisition Sponsor,

United States of America

HWH International Inc.

Alset Capital Acquisition Corp.)

Delaware, United States of America

Delaware, United States of

Alset Spac Group Inc.

United States of America

Hapi Travel Pte.

Hapi WealthBuilder Pte.

Alset eVehicle Pte.

Hapi iRobot Pte.

Hapi Marketplace Pte.

Ltd.) (f.k.a.

HWH Marketplace Pte.

HWH International Inc.

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Hapi Cafe SG Pte.

Alset Reits Inc.

United States of America

HWH Merger Sub, Inc.

United States of America

Hapi Metaverse Inc.

Texas, United States of America

Hapi Cafe Limited

Hapi Group HK Limited (f.k.a.

MOC HK Limited)

Hapi Group HK Limited

AHR Texas Four, LLC

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Alset F&B (PLQ) Pte.

NewRetail-AI Inc.

United States of America

Hapi Robot Service Pte.

Hapi Acquisition Pte.

Hapi Travel Limited

Guangdong LeFu Wealth Investment Consulting Co., Ltd.

Shenzhen Leyouyou Catering Management Co., Ltd.)

Dongguan Leyouyou Catering Management Co., Ltd.

GuangZhou Leyouyou Catering Management Co., Ltd

Guangdong LeFu Wealth Investment

Consulting Co., Ltd.

Dongguan Leyouyou Catering

Management Co., Ltd.

Robot Ai Trade Pte.

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United States of America

Hapi Café Sdn.

Insurance Group, LLC

United States of America

Hapi Wealth Builder Limited

LVD Merger Corp.

United States of America

Alset Real Estate Holdings

United States of America

New Energy Asia Pacific Inc.

United States of America

Alset Robot Inc.

United States of America

the Company indirectly holds percentage of shares of these entities less than 50%, the subsidiaries of the Company directly hold

more than 50% of shares of these entities, and therefore, they are still consolidated into the Company.

the year ended December 31, 2024, the Company disposed of few subsidiaries which had no or very minimal activities.

The disposal of these

entities had immaterial effect on the Company’s consolidated financial statements.

November 14, 2025, HWH International Inc.

(a Delaware company) completed a merger pursuant to which the Delaware parent merged with and

into its wholly owned Nevada subsidiary, with the Nevada entity surviving.

As a result, HWH International Inc., a Nevada corporation,

is the successor issuer under Rule 12g-3 of the Securities Exchange Act of 1934.

the years ended December 31, 2025 and 2024, the Company disposed of few subsidiaries which had no or very minimal activities.

of these entities had immaterial effect on the Company’s consolidated financial statements and their deconsolidation did not meet

the criteria for presentation as discontinued operations under ASC 205-20.

preparation of consolidated financial statements in conformity with U.S.

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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.

During the years ended

December 31, 2025 and 2024, the Company did not make any adjustment between building and land nor to depreciation expenses.

and Cash Equivalents

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that brokerage account was $ 0 and $ 832,065 , respectively.

Held in Trust Account

December 31, 2024 and 2023, the Company had approximately $ 0 and

$ 21.0 million,

respectively, in investments in treasury securities held in the Trust Account.

The funds in the Trust Account were subject to

redemption by investors of HWH International Inc.

(formerly known as Alset Capital Acquisition Corp.) The

funds in Trust Account were valued at Level 1 observable input.

Receivables and Allowance for Credit Losses

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losses is the Company’s best estimate of the amount of probable credit losses in the Company’s existing accounts receivable.

The measurement and recognition of credit losses involves the use of judgment.

The measurement and recognition of credit losses involve the use of judgment.

Management’s assessment of expected credit losses

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receivables include developer reimbursements for Lakes at Black Oak and Alset Villas projects.

The Company records an allowance for credit

losses based on previous collection experiences, the creditability of the organizations that are supposed to reimburse us, the forecasts

from the third-party engineering company and Moody’s credit ratings.

The allowance amount for these reimbursements was immaterial

at December 31, 2024 and 2023.

January 9, 2024, the Company sold 320,000 shares of HWH International Inc.

(“HWH”) to two investors ( 160,000 shares to

The consideration for each of the two purchases of stock was $ 8,000,000 , which was paid through the issuance of promissory notes

at the purchase price of $ 50 per share.

These promissory notes carry interest of 1.5 % and have maturity dates two years from the date

of the notes.

Each investor also entered into a Security Agreement.

Security interest in the brokerage account into which each investor

deposited the Shares (the “Collateral”) shall in each case serve as security for the Company’s repayment of their respective

promissory notes, and repossession of such Collateral by the Company shall be the sole recourse for non-payment.

On December 31, 2024,

HWH’s stock price was $ 0.64 .

The Company does not expect that investors will repay the promissory notes when due, as the value

of the shares is significantly lower than the original purchase price of $ 50 per share.

The Company expects that all the shares will

be returned to the Company at the notes’ maturity date and the notes will be canceled as well.

Accordingly, the Company has not

recognized the receivable or any gain or loss related to the transaction.

The Company accrues reimbursement receivables based on amounts it expects

to receive from each respective development partner.

Certain reimbursements received during

2025 included interest, and the related interest income of $ 2,444,365 is reflected in the consolidated statements of operations.

When the actual cash received exceeds the amounts previously accrued, the

excess is recognized in other income.

During the year ended December 31, 2025, the Company recorded $ 2.3 million in other income related

to such excess reimbursements.

December 31, 2025, $ 716,800 in reimbursement amounts remained outstanding and is included in other receivables on the consolidated balance

Company records an allowance for credit losses based on previous collection experiences, the creditability of the organizations that

are supposed to reimburse us, the forecasts from the third-party engineering company and Moody’s credit ratings.

The allowance

amount for these reimbursements was immaterial at December 31, 2025 and 2024.

are stated at the lower of cost or net realizable value.

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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.

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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

and 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 and 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.

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

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).

Executive Officer, Chan Heng Fai, is the majority owner of the common stock of HIPH (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

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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

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

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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value of the investment.

September 8, 2020, the Company’s indirect subsidiary, Hapi Robot Pte.

Impact Biohealth Pte.

Ltd.) acquired 1,666 shares,

approximately 1.45 % ownership, from Nervotec Pte Ltd (“Nervotec”), a private company, at the purchase price of $ 36,628 .

Company applied ASC 321 and measured Nervotec at cost, less any impairment, plus or minus changes resulting from observable price changes

in orderly transactions for an identical or similar investment of the same issuer.

As of December 31, 2024, the value of the 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, from HWH World Company Limited (f.k.a.

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

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

a private company, at a purchase price of $ 36,628 .

HWH Global Inc.

was sold on December 31, 2023.

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

for 18 % ownership.

K Beauty was established for sourcing, developing and producing variety of Korea-made beauty products 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.

The Company applied ASC 321 and measured Nervotec at cost, less any impairment, plus

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

As of December 31, 2024, the value of the investment in Nervotec is $ 589 , as the Company wrote off $ 37,287 of this investment.

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

Beauty”) for 18 % ownership.

K Beauty was established for sourcing, developing and producing variety of Korea-made beauty products

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

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

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in July 2024 and is owned by:

(a) HWHPL will hold 19%

of the shares in the JVC;

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

(b) Chan Heng Fai will hold 11%;

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

and (c) the remaining

70% of the shares in the JVC are to be 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

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.

After this 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.

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%

During the years ended December 31, 2024 and 2023, the investment loss in Sentinel was $ 15,013 and $1 54,956 , respectively.

Company’s indirect subsidiary, SeD Capital Pte Ltd (“SeD Capital”), owns 39.8 shares ( 8.76 %) 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 (the “Convertible Note”).

The Convertible Note bore a simple interest rate of 1 % per annum.

Under the terms of the Convertible Note, Mr.

Chan was able to

convert any outstanding principal and interest into shares of the Company’s common stock at $ 3.00 per share prior to maturity

of the Convertible Note five (5) years from the date of the Convertible Note.

On July 23, 2025, the date when the transaction was closed,

Chan converted the entire balance of the $ 83,000,000 Convertible Note into 27,666,667 restricted shares of the Company’s

common stock.

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

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.

represent refundable rental deposits paid in connection with office and café leases.

Deposits are classified as current assets

if the related lease agreements are scheduled to expire within twelve months from the balance sheet date.

Deposits associated with leases

extending beyond twelve months are classified as noncurrent assets.

As of December 31, 2025 and 2024, $ 75,108 and $ 210,495 of

deposits, respectively, were current and would be refundable within the next twelve months.

As of December 31, 2025 and 2024, $ 212,119 and

$ 272,281 of deposits, respectively, were noncurrent.

Estate Assets

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when lots are sold.

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

The Company did not capitalize construction costs during the years ended December 31, 2025 and 2024, respectively.

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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Company did no t record impairment on any of its projects during the years ended on December 31, 2025 and 2024.

under development

under development are properties being constructed for sale in the ordinary course of business, rather than to be held for the Company’s

own use, rental or capital appreciation.

properties are acquired with the intent to be rented to tenants.

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in February 2025.

Management intends to procure a new, tenant to occupy the premises after the office used for real estate sales is converted

back to a garage in the first quarter of 2025.

In the last quarter of 2025, the management procured a new tenant to occupy the premises, after the office used for

real estate sales was converted back to a garage.

July 14, 2023, 150 CCM Black Oak, Ltd.

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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 December 31, 2024 and 2023, respectively, is as follows:

five-step process for the revenue recognition of the Lakes at Black Oak and Alset Villa projects, which represented approximately 0 %

and 79 % of the Company’s revenue in the years ended December 31, 2025 and 2024, respectively, is as follows:

the contract with a customer.

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Utility expenses are paid directly by tenants.

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 a buyback program.

However, when a 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.

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 is 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 period.

the membership fee is recognized as revenue, it is recorded as deferred revenue.

Deferred revenue relating to membership was $ 0 and $ 0

at December 31, 2024 and 2023, respectively.

Starting in 2020 the revenue from sale of membership declined to $ 0 in 2022.

is currently working on a new membership model.

and Beverage .

The Company, through Alset F&B One and Alset F&B PLQ each acquired a restaurant franchise licenses at the end

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

These licenses allow Alset F&B One and Alset F&B

PLQ each to operate a Killiney Kopitiam restaurant in Singapore.

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

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

Laksa, Mee Siam, and Mee Rebus.

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

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

Hapi Cafes are distinctive lifestyle

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

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

February of 2024, HCI-T acquired an additional café in South Korea.

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

Shenzhen Leyouyou Catering

Management Co.

Ltd.) and Dongguan Leyouyou Catering Management Co., Ltd.

in the People’s Republic of China.

These companies will

be principally engaged in the food and beverage business in Mainland China.

Additionally,

through its subsidiary Hapi Group HK Limited (f.k.a.

MOC HK Limited), the Company is focusing on operating café business in Hong

This business was acquired on October 5, 2022.

During the acquisition, a goodwill of $ 60,343 had been generated for the Company.

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) Pte.

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.

performance obligations.

As of December 31, 2024 and 2023, there were no remaining performance obligations or continuing involvement,

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

Deferred Revenue

The Company recognizes deferred revenue when payments are

received in advance of fulfilling its performance obligations.

revenue at December 31, 2024, 2023, and 2022 was $ 2,100 , $ 18,714 , and $ 707,145 , respectively .

is recognized when (or as) the Company transfers promised goods or services or catering service 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 or catering service to its

of revenue consists of cost of procuring finished goods from suppliers and related shipping and handling fees.

Company accounts for stock-based compensation to employees in accordance with ASC 718, “Compensation-Stock Compensation”.

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to non-employees for goods and services.

During the years ended on December 31, 2024 and 2023, the Company recorded $ 0 as stock-based

compensation expense.

During the years ended on December 31, 2025 and 2024, the Company recorded $ 2,420,125 and $ 0

as stock-based compensation expense, respectively.

and reporting currency

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(the “reporting currency”).

functional and reporting currency of the Company is the United States dollar (“$”).

The financial records of the Company’s

subsidiaries located in Singapore, Hong Kong, Australia, South Korea and China are maintained in their local currencies, the Singapore

Dollar (“S$”), Hong Kong Dollar (“HK$”), Australian Dollar (“AUD”), South Korean Won (“KRW”)

and Chinese Yuan (“CN¥”), which are also the functional currencies of these entities.

functional and reporting currency of the Company is the United States dollar (“U.S.

The financial records of the

Company’s subsidiaries located in Singapore, Hong Kong, Australia, South Korea, the People’s Republic of China, and Taiwan

are maintained in their local currencies, the Singapore Dollar (S$), Hong Kong Dollar (HK$), Australian Dollar (“AUD”), South

Korean Won (“KRW”), Chinese Yuan (CN¥) and Taiwan Dollar (“NT$”), which are also the functional currencies

of these entities.

in foreign currencies

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the intercompany loans between Singapore entities and U.S.

The Company recorded $ 3,039,135 gain on foreign exchange during

the year ended on December 31, 2024 and $ 697,286 loss during the year ended on December 31, 2023.

The Company recorded $ 1,930,505 loss on foreign exchange during

the year ended on December 31, 2025 and $ 3,039,135 gain during the year ended on December 31, 2024.

The foreign currency transactional

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rates of exchange ruling at the balance sheet date.

The Company’s entities with functional currency of S$, HK$, AUD, KRW and CN¥,

translate their operating results and financial positions into the U.S.

The Company’s entities with functional currency of S$, HK$, AUD, KRW, CN¥

and NT$, translate their operating results and financial positions into the U.S.

dollar, the Company’s reporting currency.

Assets and liabilities

are translated using the exchange rates in effect on the balance sheet date.

Revenue, expense, gains and losses are translated using

the average rate for the year.

and liabilities are translated using the exchange rates in effect on the balance sheet date.

Revenue, expense, gains and losses are translated

using the average rate for the year.

Translation adjustments are reported as cumulative translation adjustments and are shown as a separate

component of comprehensive income (loss).

Company recorded other comprehensive loss of $ 4,480,570 from foreign currency translation for the year ended December 31, 2024 and $ 301,579

Company recorded other comprehensive gain of $ 1,699,153 from foreign currency translation for the year ended December 31, 2025 and $ 4,480,570

loss for the year ended December 31, 2024, in accumulated other comprehensive loss.

The foreign currency transactional gains and losses

are recorded in operations.

tax expense represents the sum of the current tax expense and deferred tax expense.

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The Company has not recorded any unrecognized tax benefits.

The Company recognizes interest

and penalties related to uncertain tax positions as a component of income tax expense in the consolidated statements of operations.

interest and penalties are included in the liability for unrecognized tax benefits in the consolidated balance sheets.

In the event that

an uncertain tax position is resolved favorably, previously accrued interest and penalties are reversed and recognized as a reduction

to income tax expense.

As of December 31, 2024, the Company has not recognized any interest or penalties related to uncertain tax positions

in the consolidated financial statements.

Company’s 2024, 2023 and 2022 tax returns remain open to examination.

Company recognizes interest and penalties related to uncertain tax positions as a component of income tax expense in the consolidated

statements of operations.

Accrued interest and penalties are included in the liability for unrecognized tax benefits in the consolidated

balance sheets.

In the event that an uncertain tax position is resolved favorably, previously accrued interest and penalties are reversed

and recognized as a reduction to income tax expense.

of December 31, 2025, the Company has not recognized any interest or penalties related to uncertain tax positions in the consolidated

financial statements.

Taxes in other countries

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comprise convertible securities, such as stock options, convertible bonds and warrants.

At December 31, 2024 there were 425,216 potentially

dilutive warrants outstanding.

At December 31, 2023 there were 425,216 potentially dilutive warrants outstanding.

At December 31, 2025 and 2024 there were 425,216

potentially dilutive warrants outstanding.

Value Measurements

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indicate that an impairment loss may have occurred.

The Company evaluates goodwill on an annual basis in the fourth quarter or more frequently, if the management believes

indicators of impairment exist.

Such indicators could include, but are not limited to (1) a significant adverse change in legal factors

or in business climate, (2) unanticipated competition, or (3) an adverse action or assessment by a regulator.

The Company first assesses

qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying

amount, including goodwill.

If management concludes that it is more likely than not that the fair value of a reporting unit is less than

its carrying amount, management conducts a quantitative goodwill impairment test.

The impairment test involves comparing the fair value

of the applicable reporting unit with its carrying value.

The Company estimates the fair values of its reporting units using a combination

of the income, or discounted cash flows, approach and the market approach, which utilizes comparable companies’ data.

If the carrying

amount of a reporting unit exceeds the reporting unit’s fair value, an impairment loss is recognized in an amount equal to that

excess, limited to the total amount of goodwill allocated to that reporting unit.

Loans and Investments

The Company evaluates

loans and investments for impairment at each reporting date.

For loans, impairment is recognized when it is probable that the Company

will be unable to collect all amounts due according to the contractual terms.

For investments, an impairment loss is recorded if the

decline in fair value is considered other-than-temporary.

Impairment losses are measured based on the difference between the carrying

amount and estimated fair value, with changes recognized in the consolidated statements of operations.

Financing Costs

costs, such as loan origination fee, administration fee, interests and other related financing costs, should be capitalized and recorded

on the balance sheet if these financing activities are directly associated with the development of real estates.

Financing Costs are allocated to lots sold based on the total expected development and interest costs of the completed project and allocating

a percentage of those costs based on the selling price of the sold lot compared to the expected sales values of all lots in the project.

If the allocation of capitalized financing costs based on the projection and relative expected sales value is impracticable, those costs

could also be allocated based on an area method, which uses the size of the lots compared to the total project area and allocates costs

based on their size.

of December 31, 2024 and 2023, the capitalized financing costs were $ 0 and $ 1,225,739 , respectively.

Company evaluates goodwill on an annual basis in the fourth quarter or more frequently, if the management believes indicators of impairment

Such indicators could include, but are not limited to (1) a significant adverse change in legal factors or in business climate,

(2) unanticipated competition, or (3) an adverse action or assessment by a regulator.

The Company first assesses qualitative factors

to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount, including goodwill.

If management concludes that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, management

conducts a quantitative goodwill impairment test.

The impairment test involves comparing the fair value of the applicable reporting unit

with its carrying value.

The Company estimates the fair values of its reporting units using a combination of the income, or discounted

cash flows, approach and the market approach, which utilizes comparable companies’ data.

If the carrying amount of a reporting

unit exceeds the reporting unit’s fair value, an impairment loss is recognized in an amount equal to that excess, limited to the

total amount of goodwill allocated to that reporting unit.

and Investments

Company evaluates loans and investments for impairment at each reporting date.

For loans, impairment is recognized when it is probable

that the Company will be unable to collect all amounts due according to the contractual terms.

For investments, an impairment loss is

recorded if the decline in fair value is considered other-than-temporary.

Impairment losses are measured based on the difference between

the carrying amount and estimated fair value, with changes recognized in the consolidated statements of operations.

and Equipment

Company reviews the carrying value of property and equipment for impairment whenever events and circumstances indicate that the carrying

value of an asset may not be recoverable from the estimated future cash flows expected to result from its use and eventual disposition.

In cases where undiscounted expected future cash flows are less than the carrying value, an impairment loss is recognized equal to an

amount by which the carrying value exceeds the fair value of assets.

The factors considered by management in performing this assessment

include current operating results, trends, and prospects, as well as the effects of obsolescence, demand, competition, and other economic

Party Transactions

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is also a related party.

Conversion Features

Company evaluates the conversion feature for whether it was beneficial as described in ASC 470-30.

The intrinsic value of a beneficial

conversion feature inherent to a convertible note payable, which is not bifurcated and accounted for separately from the convertible

note payable and may not be settled in cash upon conversion, is treated as a discount to the convertible note payable.

This discount

is amortized over the period from the date of issuance to the date the note is due using the effective interest method.

If the note payable

is retired prior to the end of its contractual term, the unamortized discount is expensed in the period of retirement to interest expense.

In general, the beneficial conversion feature is measured by comparing the effective conversion price, after considering the relative

fair value of detachable instruments included in the financing transaction, if any, to the fair value of the shares of common stock at

the commitment date to be received upon conversion.

Accounting Pronouncements

November 2023, the Financial Accounting Standards Board (FASB) issued ASU No.

2023-07, Segment Reporting (Topic 280):

Improvements to

Reportable Segment Disclosures (ASU 2023-07), which requires an enhanced disclosure of significant segment expenses on an annual and

interim basis.

This guidance is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years

beginning after December 15, 2024.

Early adoption is permitted.

Upon adoption, the guidance should be applied retrospectively to all

prior periods presented in the financial statements.

The Company adopted ASU 2023-07 on December 31, 2024 on a retrospective basis.

adoption of this guidance does not have a material impact on our consolidated financial statements.

December 2023, the FASB issued ASU No.

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The ASU’s amendments are effective for annual periods beginning after December 15, 2024.

The Company is currently evaluating the

impact that adoption of ASU 2023-09 will have on its financial statements.

The Company adopted ASU 2023-09 for the

year ended December 31, 2025.

The adoption of this ASU did not have a material impact on our consolidated financial statements.

Accounting pronouncements pending adoption

November 2024, the FASB issued ASU No.

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Disaggregation of Income Statement Expenses, which is intended to improve disclosures about

a public business entity’s expenses, primarily through additional disaggregation of income statement expenses.

public business entity’s expenses, primarily through additional disaggregation of income statement expenses.

ASU 2024-03 is effective

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to determine its impact on the Company’s disclosures.

November 2024, the FASB issued ASU 2024-04—Debt—Debt with Conversion and Other Options (Subtopic 470-20):

Induced Conversions

of Convertible Debt Instruments (“ASU 2024-04”) to improve the relevance and consistency in the application of induced conversion

guidance in Subtopic 470-20, Debt—Debt with Conversion and Other Options.

The amendments in ASU 2024-04 clarify the requirements

for determining whether certain settlements of convertible debt instruments should be accounted for as an induced conversion.

The amendments

in ASU 2024-04 affect entities that settle convertible debt instruments for which the conversion privileges were changed to induce conversion.

The amendments in ASU 2024-04 are effective for all entities for annual reporting periods beginning after December 15, 2025, and interim

reporting periods within those annual reporting periods.

Early adoption is permitted for all entities that have adopted the amendments

in ASU 2020-06.

The amendments in ASU 2024-04 permit an entity to apply the new guidance on either a prospective or a retrospective basis.

The Company is currently evaluating the impact of the adoption of ASU 2024-04 on the Company’s financial position, results

of operations or cash flows.

CONCENTRATIONS

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At times, these balances may exceed the insurance limits.

the year ended December 31, 2024, two customers accounted for approximately 30 %, and 70 % of the Company’s property and development

For the year ended December 31, 2023, three customers accounted for approximately 36 %, 36 %, and 28 % of the Company’s property

and development revenue.

the year ended December 31, 2025, no single customer accounted for 10 % or more of the Company’s property and development revenue.

For the year ended December 31, 2024, two customers accounted for approximately 30 %, and 70 % of the Company’s property and development

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

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as “Other” consist of corporate general and administrative activities which are not allocable to the four reportable segments.

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.

following table summarizes the Company’s segment information for the following balance sheet dates presented, and for the years

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SCHEDULE OF SEGMENT INFORMATION

Digital Transformation Technology

Transformation

Year Ended on December 31, 2025

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( 9,973,988 )

( 15,150,583 )

Other Income (Expense)

( 1,754,852 )

( 2,050,303 )

( 29,293,629 )

( 33,767,897 )

Net Income (Loss) Before Income Tax

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$ ( 39,267,617 )

Digital Transformation Technology

$ ( 48,918,480 )

Transformation

Year Ended on December 31, 2024

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( 8,964,666 )

Operating Income (Loss)

( 12,450,351 )

Operating Income (Loss)

( 1,079,465 )

Other Income (Expense)

( 8,201,857 )

( 4,117,076 )

Other Income (Expense)

( 2,947,968 )

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$ ( 4,015,030 )

December 31, 2024

Cash and Restricted Cash

December 31, 2023

Cash and Restricted Cash

REAL ESTATE ASSETS

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SCHEDULE OF REAL ESTATE ASSETS

Construction in Progress

Land Held for Development

Rental Properties

Total Real Estate Assets

& Improvements

Net Carrying Amount

at December 31, 2023

$ ( 2,077,337 )

( 1,074,717 )

$ ( 1,074,717 )

at December 31, 2024

$ ( 3,152,054 )

( 1,074,717 )

$ ( 1,074,717 )

at December 31, 2025

$ ( 4,226,771 )

family residential properties

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investment in those SFRs was $ 31 million.

Depreciation expense was $ 1,056,206 and $ 1,050,897 in years ended December 31, 2024 and 2023,

respectively.

Depreciation expense was $ 1,074,717 in years ended December 31, 2025 and 2024 and was included

in cost of sales.

These homes are located in Montgomery and Harris Counties, Texas.

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Loans for Operations

Promissory Note to EF Hutton LLC

Promissory Note to D.

Boral Capital LLC

Total notes payable

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was released from collateral, leaving approximately $ 100,000 as collateral for outstanding letters of credit.

Vehicle Loans

May 17, 2021, Alset International Limited entered into an agreement with Hong Leong Finance Limited to purchase a car for business.

total purchase price of the car, including associated charges, was approximately $ 184,596 .

Alset International paid an initial deposit

of $ 78,640 , and would make monthly instalment of approximately $ 1,300 , including interest of 1.88 % per annum, for the 84 months.

September 22, 2022 Alset International entered into an agreement with United Overseas Bank Limited to purchase additional car for business.

The total purchase price of the car, including associated charges, was approximately $ 182,430 .

Alset International paid an initial deposit

of $ 66,020 and would make monthly installments of approximately $ 1,472 , including interest of 1.88 % per annum, for the 84 months.

Both loans are personally guaranteed

by our Chairman, Chan Heng Fai.

minimum principal payments under existing motor vehicle loans at December 31, 2024 in each calendar year through the end of their terms

are as follows:

SCHEDULE OF FUTURE MINIMUM PAYMENTS

Total Future Payments

for Operations

Company’s subsidiary, Ketomei Pte Ltd (“Ketomei”) has a loan from DBS Bank Limited, which was used to fund Ketomei’s

current operations.

Ketomei owes DBS $ 34,156 at December 31, 2024.

Ketomei also borrowed $ 42,696 from an individual on February 21, 2022,

which consisted of principal of $ 36,807 and interest of $ 5,889 for 2 years at 8 % interest rate per annum.

Ketomei repaid $ 39,015 in 2024

and owes $ 3,681 at December 31, 2024, which will be repaid in 6 installments in 2025.

Note to EF Hutton LLC

Boral Capital LLC

December 18, 2023, the Company’s subsidiary, HWH International Inc.

entered into a Satisfaction and Discharge of Indebtedness

Agreement in connection with an underwriting agreement previously entered into by HWH and EF Hutton LLC (“EF Hutton”), a

division of Benchmark Investments, LLC, under which in lieu of HWH tendering the full amount due of $ 3,018,750 ,

entered into a Satisfaction and Discharge of Indebtedness Agreement

in connection with an underwriting agreement previously entered into by HWH and D.

Boral Capital LLC (“D.

Boral Capital”)

(previously known as EF Hutton LLC), a division of Benchmark Investments, LLC, under which in lieu of HWH tendering the full amount due

of $ 3,018,750 ,

the underwriters accepted a combination of $ 325,000

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promissory note as full satisfaction.

This agreement was effective at the closing of Business Combination on January 9, 2024.

This agreement was effective

at the closing of Business Combination on January 9, 2024.

shares were issued as of the price of $ 10.10 ,

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per share or $ 421,429 .

No gain or loss was recognized upon issuance of the shares on January 9, 2024 as this was an adjustment to prior underwriting costs

accounted for in equity.

No gain or loss was recognized upon issuance of the shares on January 9, 2024 as this was an adjustment to prior underwriting costs accounted

for in equity.

The promissory note carries interest rate equal to SOFR (secured overnight financing rate for U.S.

Government Securities Business Day published by the Federal Reserve Bank of New York) plus a margin of one percent.

The principal

amount of the promissory note and any accrued interest shall mature (i) partially in the event HWH completes an offering within one

year of the date of the promissory note, the amount of outstanding debt maturing being proportionate to the amount of proceeds of

the future offering, or (ii) in partial installments through October of 2028, the outstanding balance being paid annually until the

balance owed is paid in full.

The first installment of the note that was due in October 2024 was paid in January 2025, resulting in

a default due to the delay in payment.

We are currently in negotiations with EF Hutton to resolve the default status and restore the

account to good standing.

As of December 31, 2024, the Company accrued $ 70,970

in interest on the promissory note and owed $ 1,255,345

to EF Hutton.

Government Securities

Business Day published by the Federal Reserve Bank of New York) plus a margin of one percent.

The principal amount of the promissory

note and any accrued interest shall mature (i) partially in the event HWH completes an offering within one year of the date of the promissory

note, the amount of outstanding debt maturing being proportionate to the amount of proceeds of the future offering, or (ii) in partial

installments through October of 2028, the outstanding balance being paid annually until the balance owed is paid in full.

As of December

31, 2024, the Company accrued $ 70,970 in

interest on the promissory note and owed $ 1,255,345 to

Boral Capital.

The total due to D.

Boral Capital as of December 31, 2025, is $ 829,182 , which includes $ 710,625 in principal

and $ 118,557 in interest.

The remaining principal will be repaid in three installments of $ 236,875 due in October of 2026, 2027,

RELATED PARTY TRANSACTIONS

Shares and Warrants from APW

Shares and Warrants from HIPH

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.

The difference of $ 945,769 of fair value of stock and warrants, total $ 1,067,808

and the purchase price $ 122,039 , was recorded as additional paid in capital as it was a related party transaction.

Reorganization

of Home Rental Business

December 9, 2022, the Company entered into an agreement with Alset EHome Inc.

and Alset International Limited, two majority-owned subsidiaries

of the Company, pursuant to which the Company agreed to reorganize the ownership of its home rental business.

Previously, the Company

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.

The Company owns 85.7 % of Alset International Limited, and Alset International

Limited 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, the Company

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

through Alset International Limited’s subsidiaries.

sold AHR to the Company 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.

The promissory note carries interest rate of 7.2 % and matures on January 13, 2028.

closing of the transaction was approved by the shareholders of Alset International Limited.

Certain members of the Company’s Board

of Directors and management are also members of the Board of Directors and management of each of Alset International Limited and Alset

Shares Dividend Received from DSS

May 4, 2023, DSS distributed approximately 280 million shares 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 Limited, and certain subsidiaries of Alset International Limited, indirectly

received additional 55,197,696 shares of SHRG.

On September 12, 2024, SHRG completed 1 for 1,400 reverse stock split .

The Company and

its majority-owned subsidiaries now collectively own 89,732 shares of SHRG, representing 29.0 % of the issued and outstanding shares of

SHRG Common Stock (such number of SHRG shares held and ownership percentage do not include any shares held by affiliates of the Company

which we do not hold a majority interest in).

Additionally, our founder, Chairman and Chief Executive Officer, Chan Heng Fai, directly

and indirectly is the owner of additional shares of SHRG and is a beneficial owner of significant number of SHRG shares (including those

shares owned by Alset Inc.

and its majority-owned subsidiaries).

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

Purchase Agreement with HWH

November 25, 2024, the Company entered into a stock purchase agreement with HWH pursuant to which the Company agreed to purchase 4,411,764 newly

issued shares of the HWH’s common stock for a purchase price of $ 0.68 per share.

December 24, 2024, the Company entered into a stock purchase agreement with HWH pursuant to which the Company agreed to purchase 1,300,000 newly

issued shares of the HWH’s common stock for a purchase price of $ 0.45 per share.

Purchase Agreement with DSS

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Company and its various subsidiaries are collectively the largest shareholder of DSS.

The Company’s Chairman, Chief Executive

Officer and majority stockholder, Chan Heng Fai, is also the Executive Chairman of DSS and a significant stockholder of

Consolidation

of HWH International Inc.

Alset Capital Acquisition Corp.)

May 1, 2023, Alset Capital Acquisition Corp.

(now known as HWH International Inc.) (“Alset Capital”) held a Special Meeting

of Stockholders.

In connection with the Special Meeting and certain amendments to Alset Capital’s Amended and Restated Certificate

of Incorporation, 6,648,964 shares of Alset Capital’s Class A Common Stock were rendered for redemption.

Following the redemption,

2,449,786 shares of Class A Common Stock of Alset Capital remained issued and outstanding, including 473,750 shares held by the Company.

The Company also owned 2,156,250 shares of Alset Capital’s Class B Common Stock.

Following the redemptions, Company’s ownership

in Alset Capital has increased from 23.4 % of the total shares of common stock to 58.0 % of the total number of outstanding shares of the

The Company recognized $ 21,657,036 loss on the consolidation of Alset Capital.

The loss is included in Company’s Consolidated

Statement of Operations for the year ended December 31, 2023.

of Additional Shares of HWH International Inc.

November 25, 2024, the Company entered into a stock purchase agreement with HWH pursuant to which the Company agreed to purchase 4,411,764

newly issued shares of the HWH’s common stock for a purchase price of $ 0.68 per share.

December 24, 2024, the Company entered into a stock purchase agreement with HWH pursuant to which the Company agreed to purchase 1,300,000

newly issued shares of the HWH’s common stock for a purchase price of $ 0.45 per share.

The Company’s Chairman, Chief Executive Officer

and majority stockholder, Chan Heng Fai, is also the Executive Chairman of DSS and a significant stockholder of DSS.

Combination of Alset Capital Acquisition Corp.

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entered into an agreement and plan of merger (the “Merger Agreement”) with our indirect subsidiary HWH International Inc.,

a Nevada corporation 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 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”),

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

(“Merger Sub”).

The Company and its 85.8 % 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-NV was effected through the merger

of Merger Sub with and into HWH-NV, with HWH-NV 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 32,382,102 shares of common stock issued and outstanding.

Of these shares, a total of 25,213,331 shares of New HWH

common stock are now owned by the Sponsor, Alset International, and the Company directly.

In addition, the Sponsor owns warrants convertible

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

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

Alset International owned the majority of the outstanding shares of HWH-NV at the time of the Business Combination, and received 10,900,000

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

HWH currently has 7,476,400 shares of common stock issued and outstanding following a reverse stock split in early 2025.

Of these shares,

a total of 5,064,734 shares of New HWH common stock are now owned by the Sponsor, Alset International, and the Company directly.

the Sponsor owns warrants convertible into up to 47,375 shares of New HWH common stock upon exercise.

transaction described above was a transaction between entities under common control.

In the transactions under common control,

financial statements and financial information were presented as of the beginning of the period as though the assets and liabilities

had been transferred at that date.

The Company controlled both entities before and after the transaction and accordingly, the

transaction had no effect on the Company’s financial statements as the equity was eliminated in consolidation.

and Sale of Hapi Travel Ltd.

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

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

The accompanying consolidated financial statements include the operations

of the acquired entity from its acquisition date.

The acquisition has been accounted for as a business combination.

Accordingly, consideration

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

estimated fair values on the acquisition date.

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

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

As a result of the acquisition of HTL, a

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

excess of identifiable equity.

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

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 Consolidated financial statements

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

operations of HTL were deemed to be immaterial to the Company’s consolidated financial statements.

December 17, 2024, this company was sold to HapiTravel Holding Pte.

for a consideration of $ 82,635 with $ 257,733 gain recognized for the deal.

The disposal of HTL had immaterial impact on Company’s financial statements.

In the transactions under common control, financial

statements and financial information were presented as of the beginning of the period as though the assets and liabilities had been transferred

at that date.

The Company controlled both entities before and after the transaction and accordingly, the transaction had no effect on

the Company’s financial statements as the equity was eliminated in consolidation.

Notes to Value Exchange

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

January 27, 2023, Hapi Metaverse Inc.

and HIPH World Inc.

(together with Hapi Metaverse Inc., 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”.

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

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.

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 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

On December 31, 2024 the fair value of the remaining $ 100,000 of convertible note and warrants was $ 24,283 and $ 1,299,973 ,

respectively.

On December 31, 2023 the fair value of the remaining $ 100,000 of convertible note and warrants was $ 101,150 and $ 2,487,854 ,

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”.

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

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

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

Each Warrant will entitle the Lender to

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

The exercise period of each Warrant

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

On February 23, 2023, Hapi Metaverse loaned VEII $ 1,400,000 (the “Loan

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

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 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.

On December 31, 2025 the fair value of the remaining $ 100,000 of convertible note and

warrants was $ 10,860 and $ 18,301 , respectively.

On December 31, 2024 the fair value of the remaining $ 100,000 of convertible

note and warrants was $ 24,283 and $ 1,299,973 , respectively.

(For further details on fair value valuation refer to Note 11.

Investments Measured at Fair Value, Convertible Note Receivables).

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

On 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, until

December 14, 2026.

The principal under the 2 nd VEII Credit Agreement accrues simple interest at 8 % per annum.

the event that Hapi Metaverse converts this loan into shares of VEII’s Common Stock, the conversion price shall be $ 0.045 per

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.

The fair value of this convertible note on December 31, 2025 and 2024 was $ 377,925 and $ 447,480 ,

respectively.

2 unchanged sentences

Note Receivables).

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

On 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

The fair value of this convertible note on December 31, 2024 and 2023 was $ 447,480 and $ 1,106,477 , respectively.

details on fair value valuation refer to Note 11.

– Investments Measured at Fair Value, Convertible Note Receivables).

of this filing, the Company has not converted the Loan Amount.

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:

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

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;

(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.

time of this filing, the Company has not converted the Loan Amount.

The fair value of this convertible note on December 31, 2024 was

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.

may prepay any Advance under the 3 rd VEII Credit Agreement and interests accrued thereon prior to Advance Maturity Date

without penalty or charge.

The fair value of this convertible note on December 31, 2025 and 2024 was $ 100,633 and $ 97,867 , respectively.

(For further details on fair value valuation refer to Note 11.

– Investments Measured at Fair Value, Convertible Note Receivables).

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

issued a Convertible Promissory Note (the “VEII Convertible Promissory Note”) for $ 30,000 , dated as of March 28, 2025 to

as consideration for a loan in the same amount.

This amount can be converted into shares of VEII pursuant to the terms of

the VEII Convertible Promissory Note for a period of two years, until March 28, 2027.

Interest on the outstanding balance of this Note

shall accrue at a rate of 5 % per annum.

In the event that Alset Inc.

converts all or a portion of the indebtedness into shares of

VEII Common Stock, the conversion price shall be $ 0.0166 per share.

The fair value of this convertible note on December 31, 2025

was $ 27,857 .

(For further details on fair value valuation refer to Note 11.

– Investments Measured at Fair Value, Convertible Note

Receivables).

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

Notes to Sharing Services

January 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.

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, following the agreement of both

On November 12, 2024, the Company entered into terms with SHRG to waive all interest previously accrued under the 1 st

SHRG Convertible Note, and supersede the conditions thereof.

The principal $ 250,000 loan was carried forward under a new Convertible

Promissory Note (the “New Convertible Note”), and under the terms of the New Convertible Note, the Company may, at its discretion,

convert a portion or all of the original principal into shares of SHRG’s common stock at a fixed rate of $ 0.10 per share.

Convertible Note bears an 8 % interest rate and has a scheduled maturity of the second (2nd) anniversary of the date thereof, or November

The fair value of this New Convertible Note on December 31, 2024 was $ 468,093 .

January 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.

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.

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.

The new maturity date of the 1 st SHRG Convertible Note is November 5, 2026.

The fair value of this 1 st SHRG

Convertible Note on December 31, 2025 and 2024 was $ 258,409 and $ 468,093 , respectively.

(For further details on fair value valuation

1 unchanged sentence

– Investments Measured at Fair Value, Convertible Note Receivables).

At the time of this filing, the Company

has not converted the Loan Amount.

March 20, 2024, HWH International Inc., a subsidiary of the Company, 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.

31, 2024 the fair value of the 2 nd SHRG Convertible Note and warrants was $ 212,865 and $ 13,272 , respectively.

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 .

Convertible Note bears a 6 % interest rate and has scheduled maturity on March 20, 2027, three years from the date of the 2 nd SHRG

Convertible Note.

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.

On December 31, 2025 the fair value of the 2 nd SHRG Convertible Note and warrants

was $ 227,909 and $ 12 , respectively.

On December 31, 2024, the fair value of the 2 nd SHRG Convertible Note and warrants

was $ 212,708 and $ 13,272 , respectively.

(For further details on fair value valuation refer to Note 11.

– Investments Measured

at Fair Value, Convertible Note Receivables).

May 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, May 9, 2027.

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.

of this filing, HWH has not converted any of the debt contemplated by the 3 rd SHRG Convertible Note.

On December 31,

2025 and 2024, the fair value of the 3 rd SHRG Convertible Note was $ 231,679 and $ 230,871 , respectively.

details on fair value valuation refer to Note 11.

– Investments Measured at Fair Value, Convertible Note Receivables.)

May 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.

On December 31, 2024 the fair value of the 3 rd SHRG Convertible

Note was $ 230,871 .

June 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, June 6, 2027.

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.

time of this filing, HWH has not converted any of the debt contemplated by the 4 th SHRG Convertible Note.

31, 2025 and 2024, the fair value of the 4 th SHRG Convertible Note was $ 230,393 and $ 212,865 , respectively.

further details on fair value valuation refer to Note 11.

– Investments Measured at Fair Value, Convertible Note Receivables.)

August 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, August 13, 2027.

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

At the time of this filing, HWH has not converted any of the debt contemplated by the 5 th SHRG Convertible

On December 31, 2025 and 2024, the fair value of the 5 th SHRG Convertible Note was $ 91,066 and $ 88,209 , respectively.

(For further details on fair value valuation refer to Note 11.

– Investments Measured at Fair Value, Convertible

Note Receivables.)

– Investments Measured at Fair Value, Convertible Note Receivables.)

January 15, 2025, HWH entered into a Loan Agreement (the “1 st Loan Agreement”) with SHRG, under which HWH

provided a loan to SHRG in the amount of $ 150,000 .

HWH may convert a portion or all of the outstanding balance due under the loan 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

maturity of the 1 st Loan Agreement, January 15, 2028 .

The 1 st Loan Agreement bears an 8 % interest

At the time of this filing, HWH has not converted any of the debt contemplated by the 1 st Loan Agreement.

31, 2025, the fair value of the 1 st Loan Agreement was $ 160,941 .

(For further details on fair value valuation refer to

– Investments Measured at Fair Value, Convertible Note Receivables.)

March 31, 2025, HWH entered into a securities purchase agreement with SHRG, pursuant to which SHRG issued a convertible promissory note

to HWH in the amount of $ 150,000 (the “6 th SHRG Convertible Note”).

The 6 th SHRG Convertible

Note bears an 8 % interest rate.

The 6 th SHRG Convertible Note is convertible into SHRG’s common stock at $ 0.80 per

share at HWH’s option until maturity three (3) years from the date of the securities purchase agreement, March 31, 2028.

SHRG granted HWH warrants exercisable into 937,500 shares of SHRG’s common stock.

The warrants may be exercised for three

(3) years from the date of the securities purchase agreement at an exercise price of $ 0.85 per share, for an aggregate purchase

price of $ 796,875 .

At the time of this filing, HWH has not converted any of the debt contemplated by the 6 th SHRG Convertible

Note nor converted any warrants.

On December 31, 2025, the fair value of the 6 th SHRG Convertible Note and warrants was

$ 127,260 and $ 75 , respectively.

(For further details on fair value valuation refer to Note 11.

– Investments Measured at Fair

Value, Convertible Note Receivables.)

April 17, 2025, HWH entered into a Loan Agreement (the “2 nd Loan Agreement”) with SHRG, under which HWH provided

a loan to SHRG in the amount of $ 250,000 .

The 2 nd Loan Agreement bears an 8 % interest rate and has maturity date

on April 17, 2026 .

Additionally, upon execution SHRG incurred a commitment fee representing 5 % of the loan principal, $ 12,500 .

April 21, 2025 HWH entered into a Loan Agreement (the “3 rd Loan Agreement”) with SHRG, under which the Company

provided a loan to SHRG in the amount of $ 30,000 .

The maturity date of the 3 rd Loan Agreement is April 21, 2026 .

The Loan Agreement bears an 10 % interest rate.

June 27, 2025, 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 4 th SHRG Convertible Note.

On December 31, 2024, the fair value of the 4 th SHRG Convertible

Note was $ 212,865 .

Note (the “7 th SHRG Convertible Note”) in the amount of $ 60,000 , convertible into 10,000,000 shares

of SHRG’s common stock at the option of HWH for an aggregate purchase price of $ 60,000 , Additionally, upon signing the 7 th SHRG

Convertible Note, SHRG owed the Company a commitment fee of 8 % of the principal amount, $ 4,800 in total, to be paid either

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

The 7 th SHRG Convertible Note bears an 8 % interest

rate and has scheduled maturity on June 27, 2028 .

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

7 th SHRG Convertible Note.

On December 31, 2025, the fair value of the 7 th SHRG Convertible Note was

(For further details on fair value valuation refer to Note 11.

– Investments Measured at Fair Value, Convertible

Note Receivables.)

August 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 .

– Investments Measured at Fair Value, Convertible Note

Receivables.)

September 17, 2025, HWH entered into a securities purchase agreement with SHRG, pursuant to which HWH purchased from SHRG a Convertible

Promissory Note (the “8 th SHRG Convertible Note”) in the amount of $ 70,000 , convertible into 11,666,667 shares

of SHRG’s common stock at HWH’s option for an aggregate purchase price of $ 70,000 .

The 8 th SHRG Convertible Note

bears an 8 % interest rate and has a scheduled maturity three years from the date of the note, September 17, 2028.

Additionally,

upon signing the 8 th SHRG Convertible Note, SHRG owed HWH a commitment fee of 8 % of the principal amount, $ 5,600 in

total, to be paid either in cash or in common stock of SHRG, at HWH’s discretion.

At the time of filing, HWH has not converted

any of the debt contemplated by the 8 th SHRG Convertible Note.

On December 31, 2025, the fair value of the 8 th SHRG

Convertible Note was $ 59,621 .

(For further details on fair value valuation refer to Note 11.

– Investments Measured at Fair Value,

Convertible Note Receivables.)

October 6, 2025, HWH entered into a securities purchase agreement with SHRG, pursuant to which HWH purchased from SHRG a Convertible

Promissory Note (the “9 th SHRG Convertible Note”) in the amount of $ 200,000 , convertible into 33,333,333 shares

of SHRG’s common stock at HWH’s option for an aggregate purchase price of $ 200,000 .

The 9 th SHRG Convertible Note

bears an 8 % interest rate and has a scheduled maturity three years from the date of the note, October 6, 2028.

Additionally, upon

signing the 9 th SHRG Convertible Note, SHRG owed HWH a commitment fee of 8 % of the principal amount, $ 16,000 in

total, to be paid either in cash or in common stock of SHRG, at HWH’s discretion.

At the time of filing, HWH has not converted

any of the debt contemplated by the 8 th SHRG Convertible Note.

On December 31, 2025, the fair value of the 9 th SHRG

Convertible Note was $ 170,945 .

(For further details on fair value valuation refer to Note 11.

– Investments Measured at Fair Value,

Convertible Note Receivables.)

December 10, 2025, HWH entered into a securities purchase agreement with SHRG, pursuant to which HWH purchased from SHRG a Convertible

Promissory Note (the “10 th SHRG Convertible Note”) in the amount of $ 150,000 , convertible into 25,000,000 shares

of SHRG’s common stock at HWH’s option for an aggregate purchase price of $ 150,000 .

The 10 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.

Note bears an 8 % interest rate and has a scheduled maturity three years from the date of the note, December 10, 2028.

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.

On December 31, 2024, the fair value of the 5 th

SHRG Convertible Note was $ 88,209 .

upon signing the 10 th SHRG Convertible Note, SHRG owed HWH a commitment fee of 8 % of the principal amount, $ 12,000 in

total, to be paid either in cash or in common stock of SHRG, at HWH’s discretion.

At the time of filing, HWH has not converted

any of the debt contemplated by the 8 th SHRG Convertible Note.

On December 31, 2025, the fair value of the 10 th SHRG

Convertible Note was $ 126,081 .

(For further details on fair value valuation refer to Note 11.

– Investments Measured

at Fair Value, Convertible Note Receivables.)

– Investments Measured at Fair Value,

Convertible Note Receivables.)

to Related Party

February 20, 2024, the Company sent $ 550,000

to Sentinel Brokers Company Inc.

February 20, 2024, the Company sent $ 550,000 to Sentinel Brokers Company Inc.

(“Sentinel”).

The initial purpose of the transfer was to invest in shares of this

The transaction did not close as planned and $ 467,107 of the funds were returned, with $ 82,893 written off.

The Company has significant influence

over Sentinel as it holds 10.4 %

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

The initial purpose of the transfer

was to invest in shares of this company.

The transaction did not close as planned and $ 467,107 of the funds were returned, with $ 82,893

The Company has significant influence over Sentinel as it holds 8.8 % of outstanding shares of Sentinel and its CEO holds

a director position on Sentinel’s Board of Directors.

Insurance Group, LLC

November 19, 2024, HWH entered definitive agreements to acquire a controlling 60 % interest in L.E.H.

Insurance Group, LLC (“LEH”).

The acquisition closed on February 27, 2025.

This acquisition was facilitated through the purchase of shares from SHRG.

LEH is a licensed

insurance agency representing over 600 insurance companies, serving as an independent advisor to businesses and individuals.

personalized insurance solutions, offering expert guidance to meet the unique coverage needs of each customer.

LEH is in the early stages

of its development, has no employees on its payroll, and is yet to turn a profit.

The Company paid $ 75,000 for the acquisition and

recorded $ 74,024 of goodwill as result of the acquisition, which was immediately written off.

September 17, 2025, HWH entered into another definitive agreement to acquire the remaining 40 % interest in L.E.H.

Insurance Group,

The acquisition closed on August 27, 2025.

This acquisition was facilitated through the purchase of shares from SHRG.

paid $ 40,000 for the acquisition and recorded $ 45,003 of goodwill as result of the acquisition, which was immediately written

of December 31, 2025, the Company impaired goodwill of $ 116,648 to $ 0 , which was generated from net asset value during the acquisition.

Total impairment expenses were $ 116,648 .

Rental for the CEO

Company is renting an apartment in Singapore for its CEO and Chairman, Chan Heng Fai, as part of the compensation for his services.

Company paid $ 20,908 deposit for the apartment and had expenses of $ 91,203 and $ 119,326 in the years ended December 31, 2024 and 2023,

respectively.

Company paid $ 20,908 deposit for the apartment and had expenses of $ 0 and $ 91,203 in the years ended December 31, 2025 and 2024, respectively.

The lease expired in September 2024 and the Company did not extend that lease.

Facility Agreement with HWH

April 14, 2025, the Company entered into an amendment (the “Amendment”) to the Credit Facility Agreement with HWH International

dated April 24, 2024, pursuant to which the Company provided HWH a line of credit facility (the “Credit Facility”) which

provides a maximum, aggregate credit line of up to $ 1,000,000 .

Under the terms of the Amendment, the date upon which each advance made

under the Credit Facility and all accrued but unpaid interest shall be due and payable was extended from April 24, 2025 to April 14,

Further, pursuant to the Amendment, HWH released Alset International Limited from its obligations under its Letter of Continuing

Financial Support to HWH dated March 28, 2025.

The terms of the Company’s Letter of Continuing Financial Support to HWH were not

altered by the Amendment.

of IBO Shares

March 31, 2025 and April 4, 2025, the Company and its subsidiaries Alset International Limited and Global Biomedical Pte.

sold the Company’s entire equity interest in Impact Biomedical Inc.

IBO) (“Impact”) consisting of 4,568,165 shares

of Impact’s common stock.

The disposition of the Impact stock was made through several sales on the market through a broker.

transactions generated total proceeds of $ 4,184,575 and resulted in a recognized loss of $ 2,439,264 .

of New Energy Asia Pacific Inc.

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

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

The Company had agreed to 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,

for the consideration of $ 103,750,000 , to be paid in the form of a convertible promissory note to be issued to the Seller.

NEAPI owns 41.5 %

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

parties agreed to revise this agreement, and on May 8, 2025, the Company and the Seller entered into an Amended Term Sheet (the “Amended

Term Sheet”).

Under the terms of the Amended Term Sheet, the Company agreed to purchase from the Seller all of the outstanding

shares of NEAPI through a stock purchase agreement 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 (the “Convertible Note”).

The Convertible Note had an interest

rate of 1 % per annum.

Under the terms of the Convertible Note, the Seller was able to convert any outstanding principal and interest

into shares of the Company’s common stock at $ 3.00 per share upon ten (10) days’ notice prior to maturity of the

Convertible Note five (5) years from the date of the Amended Term Sheet, and upon maturity of the Convertible Note any outstanding principal

and accrued interest accrued thereunder would automatically be converted into shares of the Company’s common stock at the conversion

The closing of the transactions

contemplated by the Amended Term Sheet occurred on July 23, 2025.

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

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,

Heng Fai provided an interest-free, due on demand advance to SeD Perth Pty.

6 unchanged sentences

and December 31, 2024, the outstanding balance was $ 4,168 and $ 4,176 , respectively.

June and July 2025 Chan Heng Fai provided interest-free, due on demand advances to HWH International Inc.

for its general operations.

As of December 31, 2025, the outstanding balance was $ 4,263 .

Equity Partners, LLC, an entity owned by Charles MacKenzie, Chief Development Officer of the Company, has a consulting agreement with

1 unchanged sentence

Pursuant to an agreement entered into in June of 2022, as supplemented in August, 2023, the

Company’s subsidiary is paying $ 25,000 per month for consulting services.

In addition, MacKenzie Equity Partners has been paid

certain bonuses, including (i) a sum of $50,000 in June, 2022;

(ii) a sum of $50,000 in August 2023;

(iii) a sum of $50,000 in December

and (iv) a sum of $60,000 in June, 2024.

Company incurred expenses of $ 360,000 and $ 400,000 in the years ended December 31, 2024 and 2023, which were capitalized as part of Real

Estate on the balance sheet as the services relate to property and project management.

On December 31, 2024 and 2023, the Company owed

this related party $ 41,602 and $ 27,535 , respectively.

These amounts are included in Accounts Payable in the accompanying condensed consolidated

balance sheets.

Company’s subsidiary has paid $ 25,000 per month for consulting services.

In addition, MacKenzie Equity Partners, LLC

has been paid certain bonuses, including a sum of $60,000 in June 2024, $75,000 in May 2025 and $120,000 in December 2025 .

Company incurred expenses of $ 495,000 and $ 360,000 in the years ended December 31, 2025, and 2024, respectively, which in 2025

were expensed and in 2024 were capitalized as part of Real Estate on the balance sheet as the services relate to property and project

On December 31, 2025 and 2024, the Company owed this related party $ 39,529 and $ 27,535 , respectively.

These amounts

are included in Accounts Payable in the accompanying condensed consolidated balance sheets.

Global Consulting Inc., an entity owned by Anthony Chan, the former Chief Operating Officer of the Company, had a consulting agreement

5 unchanged sentences

Receivable from a Related Party

December 31, 2023, the total convertible note receivable from Ketomei, prior to impairment charges, was $ 368,299 .

Considering ASC 326

and after reviewing the performance of Ketomei, the Company decided to record 100 % impairment for the convertible note receivable and

equity method investment in 2023.

August 31, 2023, Hapi Café Inc.

2 unchanged sentences

up to $ 36,634 pursuant to a convertible loan, with a term of 12 months.

After the initial 12 months, the interest on such loan will be

After the initial 12 months, the interest on such loan will

This loan was written off upon the acquisition of Ketomei in February 2024.

October 26, 2023, the same parties entered into another binding term sheet pursuant to which HCI agreed to lend Ketomei up to $ 37,876

pursuant to a non- convertible loan, with a term of 12 months.

October 26, 2023, the same parties entered into another binding term sheet pursuant to which HCI agreed to lend Ketomei up to $ 37,876 pursuant

to a non- convertible loan, with a term of 12 months.

After the initial 12 months, the interest on such loan will be 3.5 %.

1 unchanged sentence

amount due from Ketomei at December 31, 2024 was $ 0 .

February 20, 2024, HCI-T invested $ 312,064 for an additional 38.41 % ownership interest in Ketomei by converting $ 312,064 of convertible

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 goodwill.

After this 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

October 13, 2021, the Company’s indirect subsidiary, BMI Capital Partners International Limited (“BMI”) entered into

a loan agreement with Liquid Value Asset Management Limited (“LVAML”), a subsidiary of DSS, pursuant to which BMI agreed

to lend $ 3,000,000 to LVAML.

The loan has variable interest rate and matured on January 12, 2023 , with automatic three-month extensions.

The purpose of the loan is to purchase a portfolio of trading securities by LVAM.

BMI participates in the losses and gains from portfolio

based on the calculations included in the loan agreement.

As of December 31, 2024 and 2023 LVAML owes the Company $ 463,995 and $ 534,671 ,

respectively.

February 20, 2024, HCI-T 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.

After this 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.

October 13, 2021 BMI Capital Partners International Limited (“BMI”) entered into a loan agreement with Liquid Value Asset

Management Limited (“LVAML”), a subsidiary of DSS, pursuant to which BMI agreed to lend $ 3,000,000 to LVAML.

has variable interest rate and matured on January 12, 2023 , with automatic three-month extensions.

The purpose of the loan is to

purchase a portfolio of trading securities by LVAM.

BMI participates in the losses and gains from portfolio based on the calculations

included in the loan agreement.

As of December 31, 2025 and 2024 LVAML owes the Company $ 33,036 and $ 463,995 , respectively.

September 28, 2023 Alset International Limited (“Alset International”) entered into loan agreement with Value Exchange International

1 unchanged sentence

The loan carries simple annual interest rate of 8 %.

December 31, 2024 and 2023 the Company accrued $ 40,000 and $ 10,000 interest, respectively, and VEII owed $ 550,000 and $ 510,000 , respectively,

to Alset International.

On November 6, 2024, the Company signed a loan agreement with HTHPL in

the amount of $ 137,658 at a rate of 5 % per annum, the maturity date of which is on or before the second anniversary of the effective date.

On December 18, 2024, the Company sold Hapi Travel Pte.

to HTHPL for a consideration of $ 834 .

As of December 31, 2024, HTHPL owed the Company a total of $ 139,370 , which

is recorded in other receivables in the financial statements.

October 4, 2022, the Company completed its F&B business acquisition of MOC, an F&B business started in Hong Kong.

The acquisition

has been accounted for as a business combination.

Accordingly, consideration paid by the Company to complete the acquisition was initially

allocated to the acquired assets and liabilities assumed based upon their estimated acquisition date fair values.

a result of the acquisition of MOC, goodwill of $ 60,343 generated in a business combination represents the purchase price of $ 70,523

in excess of identifiable tangible and intangible assets.

Goodwill and intangible assets that have an indefinite useful life are not

Instead, they are reviewed periodically for impairment.

September 16, 2024, the Company temporarily ceased the café business of MOC after the café’s lease expired and MOC

declined to enter into a new lease with the landlord.

The Company is searching for a better location to restart the business in the future.

As a result, the goodwill of $ 60,343 was fully impaired on December 31, 2024.

April 18, 2024, the Company completed its F&B business acquisition of HCTW, an F&B business started in Taiwan.

The accompanying

consolidated financial statements include the operations of the acquired entity from its acquisition date.

The acquisition has been accounted

for as a business combination.

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

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

of the date of acquisition, HCTW had a total of $ 429,962 due to a related party, Alset Business Development Pte.

Ltd, (“ABDPL”)

a fellow subsidiary of Alset Inc., our ultimate parent company.

HCTW borrowed the money from ABDPL since 2022 for its business start-up

and daily operations.

As a result of the acquisition of HCTW, the Company assumed HCTW’s amount due to ABDPL.

a result of the acquisition of HCTW, goodwill of $ 353,616 generated in a business combination represents the purchase price of $ 3,300

in excess of identifiable tangible and intangible assets.

Goodwill and intangible assets that have an indefinite useful life are not

Instead, they are reviewed periodically for impairment.

The Company impaired the goodwill of $ 353,616 as a loss in June of

2024 due to the poor financial situation of HCTW.

table below reflects the Company’s estimates of the acquisition date fair value of the assets acquired and liabilities assumed

for the 2024 acquisition:

SCHEDULE OF ESTIMATES OF ACQUISITION FAIR VALUE

Purchase Price

Total purchase consideration

Purchase Price Allocation

Assets acquired

Current assets

Property and Equipment, net

Operating lease right-of-use assets, net

Total assets acquired

Liabilities assumed:

Current liabilities

Due to related party

Operating lease liability

Total liabilities assumed

$ ( 843,792 )

Net assets acquired

$ ( 350,316 )

Total purchase consideration

Company evaluates goodwill on an annual basis in the fourth quarter or more frequently if the management believes indicators of impairment

Such indicators could include, but are not limited to (1) a significant adverse change in legal factors or in business climate,

(2) unanticipated competition, or (3) an adverse action or assessment by a regulator.

The Company first assesses qualitative factors

to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount, including goodwill.

If management concludes that it is more likely than not that the fair value of a reporting unit is less than its carrying amount, management

conducts a quantitative goodwill impairment test.

The impairment test involves comparing the fair value of the applicable reporting unit

with its carrying value.

The Company estimates the fair values of its reporting units using a combination of the income, or discounted

cash flows, approach and the market approach, which utilizes comparable companies’ data.

If the carrying amount of a reporting

unit exceeds the reporting unit’s fair value, an impairment loss is recognized in an amount equal to that excess, limited to the

total amount of goodwill allocated to that reporting unit.

following table summarizes changes in the carrying amount of goodwill for the years ended December 31, 2024 and 2023.

SCHEDULE OF GOODWILL

Balance at beginning of the period

acquisition of HCTW

impairment loss of goodwill of HCTW

impairment loss of goodwill of MOC

Foreign currency exchange adjustment

Balance as of end of the period

June 14, 2021, the Company filed an amendment (the “Amendment”) to its Third Amended and Restated Certificate of Incorporation,

as amended, to increase the Company’s authorized share capital.

The Amendment increased the Company’s authorized share capital

to 250,000,000 common shares and 25,000,000 preferred shares, from 20,000,000 common shares and 5,000,000 preferred shares, respectively.

As of December 31, 2024 the Company accrued $ 40,000 interest and VEII owed $ 550,000 , to Alset International.

The Company wrote off

this loan at March 31, 2025.

The Company recognized an impairment on this loan as it was past due and, at that time, management determined

that VEII’s operating performance had deteriorated.

November 6, 2024, the Company’s subsidiary signed a loan agreement with HapiTravel Holding Pte.

(“HTHPL”) in the

amount of $ 137,658 at a rate of 5 % per annum, the maturity date of which is on or before the second anniversary of the effective

During first quarter of 2025, the Company lent HTHPL additional $ 19,053 .

As of December 31, 2025 and 2024 the Company accrued $ 7,168 and

$ 1,018 interest, respectively, and impaired $ 139,514 at December 31, 2025.

As of December 31, 2025 and 2024 HTHPL owed $ 25,789 and

$ 139,370 , respectively, to the Company.

December 18, 2024, the Company’s subsidiary sold Hapi Travel Pte.

(“HTPL”) to HTHPL for a consideration of $ 834 .

December 17, 2024, the Company’s subsidiary entered into a shares purchase agreement with HTHPL, pursuant to which the Company

sold 500,000 ordinary shares of Hapi Travel Limited (“HTL”), representing 100 % of the issued and outstanding

share capital of HTL, in exchange for a promissory note in the amount of $ 82,635 , which bears a 6 % interest rate and has a scheduled

maturity two years from the date of the promissory note.

As of December 31, 2025 and 2024, the Company accrued $ 4,839 and $ 190 interest,

respectively, and HTHPL repaid $ 17,248 in 2025.

As of December 31, 2025 and 2024 HTHPL owed $ 70,043 and $ 82,635 , respectively,

to the Company.

January 23, 2025 the Company’s subsidiary entered into loan agreement with New Energy Asia Pacific Company Limited (“New

Energy Asia”), pursuant to which the Company agreed to lend $ 69,326 to New Energy Asia.

The loan carries simple annual interest

rate of 8 % and is due on January 23, 2026.

As of December 31, 2025 the Company accrued $ 5,197 interest and New Energy Asia

owed $ 74,614 , to the Company.

July 18, 2025, the Company’s subsidiary signed a loan agreement with HapiTravel Holding Pte.

Ltd in the amount of $ 279,027 at

a rate of 5 % per annum, the maturity date of which is on or before the third anniversary of the effective date.

As of December 31,

2025 the Company accrued $ 6,230 of interest.

As of December 31, 2025 HTHPL owed $ 286,555 to the Company.

August 20, 2025, the Company entered into a securities purchase agreement with DSS pursuant to which the Company purchased from DSS a

Convertible Promissory Note (the “DSS Convertible Note”) in the amount of $ 500,000 , convertible into shares of DSS’s

common stock at the Company’s option until maturity on July 31, 2028 .

The DSS Convertible Note bears interest at the Prime

Rate, which means the rate of interest quoted in the Wall Street Journal, Money Rates Section as the “Prime Rate.” At the

time of filing, the Company has not converted any of the debt contemplated by DSS Convertible Note.

As of December 31, 2025 the Company

accrued $ 12,579 interest and DSS owed $ 512,579 , to the Company.

August 22, 2025, the Company’s subsidiary paid a bill on behalf of Value Exchange International (Hong Kong) Limited (“VEIHK”),

a fellow subsidiary of VEII, in the amount of $ 34,190 as an interest-free loan, which is due on demand.

September 5, 2025, the Company’s subsidiary entered into a loan agreement with VEIHK, in the amount of $ 84,820 at a rate of 8 %

per annum, the maturity date of which is on or before the three months of the effective date.

The maturity date was subsequently extended

to September 4, 2026.

As of December 31, 2025 the Company accrued $ 2,189 interest and VEIHK owed $ 87,009 , to the Company.

October 1, 2025, the Company paid a bill on behalf of Value Exchange International Inc.

in the amount of $ 7,500 , which accrues 8 % interest

rate and is due on demand.

As of December 31, 2025 the Company accrued $ 150 interest and VEII owed $ 7,650 , to the Company.

Company has authorized share capital of 250,000,000 common shares and 25,000,000 preferred shares.

Company has designated 6,380 preferred shares as Series A Preferred Stock and 2,132 as Series B Preferred Stock.

December 6, 2022 the Company filed a certificate of Amendment to the Company’s Certificate of Formation with the Texas Secretary

of State to effect a 1-for-20 reverse stock split.

The reverse stock split was effective as of December 28, 2022.

of the Series A Preferred Stock shall be entitled to receive dividends equal, on an as-if-converted basis, to and in the same form as

16 unchanged sentences

and Hedging” and determined that the conversion option should be classified as equity.

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

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

(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 provides the Underwriter a 45-day option to purchase up to

an additional 212,863 shares of Common Stock to cover over-allotments, if any.

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

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

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.

December 31, 2024, there were 9,235,119 common shares issued and outstanding.

January 2, 2025, the Company entered into a securities purchase agreement with certain accredited investors (the “Purchasers”),

pursuant to which the Company agreed to sell and issue to the Purchasers an aggregate of 1,500,000 shares of common stock,

par value $ 0.001 per share, at a purchase price of $ 1.00 per share, in a registered direct offering (the “Offering”).

The Offering was made pursuant to the Company’s existing shelf registration statement filed with the Securities and Exchange Commission

(“Commission”) on April 11, 2022, and declared effective by the Commission on May 5, 2022.

A prospectus supplement to the

Registration Statement was filed with the Commission on January 3, 2025.

The closing of the Offering occurred on January 3, 2025.

Company received net proceeds from the Offering of approximately $ 1,200,000 , after deducting offering expenses payable of approximately

$ 300,000 , including the placement agent fees.

The Company used the net proceeds from the Offering for working capital and general corporate

In connection with the Offering, the Company entered into a Placement Agency Agreement with Aegis Capital Corp.

(the “Placement

Agent”), as the exclusive placement agent in connection with the Offering.

As compensation to the Placement Agent, the Company

paid the Placement Agent a cash fee of 7 % of the aggregate gross proceeds raised in the Offering and reimbursed certain expenses

of the Placement Agent.

December 31, 2025, there were 39,401,786

common shares issued and 38,895,830 common shares outstanding.

following table summarizes the warrant activity for the year ended December 31, 2025.

7 unchanged sentences

Warrants Vested and exercisable at December 31, 2025

A Common Stock of HWH International Inc.

Subject to Possible Redemption

Company accounts for its, and its subsidiaries’ common stock subject to possible redemption in accordance with the guidance enumerated

in ASC 480 “ Distinguishing Liabilities from Equity ”.

Common stock subject to possible redemption are classified as

a liability instrument and are measured at fair value.

Conditionally redeemable common stock (including shares of common stock that feature

redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not

solely within the Company’s control) are classified as temporary equity.

At all other times, shares of common stock are classified

as stockholders’ equity.

The Company’s Class A common stock features certain redemption rights that are considered by the

Company to be outside of the Company’s control and subject to the occurrence of uncertain future events.

Accordingly, at December

31, 2023, the Class A common stock of HWH International Inc.

subject to possible redemption in the amount of $ 20,457,011 , are presented

as temporary equity, outside of the stockholders’ equity section of the Company’s balance sheets.

On December 31, 2024, following

redemptions and closing of Business Combination, the temporary equity is $ 0 .

May 1, 2023, after the redemptions (for further details on this transaction refer to Note 7.

– Related Party Transactions, Consolidation

of HWH International Inc.), the Company consolidated HWH International Inc.

of HWH Shares to EF Hutton

of HWH Shares to D.

Boral Capital

December 18, 2023, the Company’s subsidiary, HWH International Inc.

entered into a Satisfaction and Discharge of Indebtedness Agreement

in connection with an underwriting agreement previously entered into by HWH and EF Hutton, a division of Benchmark Investments, LLC,

under which in lieu of HWH tendering the full amount due of $ 3,018,750 , the underwriters accepted a combination of $ 325,000 in cash paid

upon the closing of the Business Combination, 149,443 shares of the Company’s common stock and a $ 1,184,375 promissory note as

full satisfaction.

in connection with an underwriting agreement previously entered into by HWH and D.

Boral Capital, a division of Benchmark Investments,

LLC, under which in lieu of HWH tendering the full amount due of $ 3,018,750 , the underwriters accepted a combination of $ 325,000 in cash

paid upon the closing of the Business Combination, 149,443 shares of the Company’s common stock and a $ 1,184,375 promissory note

as full satisfaction.

This agreement was effective at the closing of Business Combination on January 9, 2024.

The 149,443 shares were issued

as of the price of $ 10.10 , totaling the amount of $ 1,509,375 .

The fair value of the HWH shares at issuance on January 9, 2024 was $ 2.82

per share or $ 421,429 .

No gain or loss was recognized upon issuance of the shares on January 9, 2024 as this was an adjustment to prior

underwriting costs accounted for in equity.

ACCUMULATED OTHER COMPREHENSIVE INCOME

The 149,443 shares were

issued as of the price of $ 10.10 , totaling the amount of $ 1,509,375 .

The fair value of the HWH shares at issuance on January 9, 2024

was $ 2.82 per share or $ 421,429 .

No gain or loss was recognized upon issuance of the shares on January 9, 2024 as this was an adjustment

to prior underwriting costs accounted for in equity.

April 15, 2025, the Board of Directors of the Company awarded Chairman and Chief Executive Officer Chan Heng Fai 1,000,000 restricted

shares of the Company’s common stock (the “Shares”).

The Shares were granted to Mr.

Chan as a compensation for services

rendered to the Company pursuant to the Company’s 2025 Incentive Compensation Plan, as adopted on March 17, 2025.

Under the terms

and conditions of the award, the Shares may not be sold, assigned, transferred, pledged, encumbered or otherwise disposed of until April

The Shares are not part of Mr.

Chan’s regular annual compensation and will not be awarded on a regularly recurring basis.

As of the date of the issuance of the Shares, the fair value thereof was $ 840,000 .

of Shares for Equity Investment

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

Chan all of the outstanding shares of 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 (the “Convertible Note”).

The Convertible Note bore a simple

interest rate of 1 % per annum.

Under the terms of the Convertible Note, Mr.

Chan was able to convert any outstanding principal and

interest into shares of the Company’s common stock at $ 3.00 per share prior to maturity of the Convertible Note five (5) years

from the date of the Convertible Note.

July 23, 2025, Mr.

Chan converted the entire balance of the $ 83,000,000 Convertible Note into 27,666,667 restricted shares

of the Company’s common stock.

Such securities were not registered under the Securities Act of 1933 and were issued pursuant to

the exemption under Section 4(2) of the Securities Act.

Repurchase Program

the year ended December 31, 2025, the Company repurchased 505,956 shares of its common stock for an aggregate purchase price

of approximately $ 1,004,875 .

The repurchased shares were recorded as treasury stock and accounted for under the cost method.

ACCUMULATED OTHER COMPREHENSIVE (LOSS) INCOME

following is a summary of the changes in the balances of accumulated other comprehensive income, net of tax:

SCHEDULE OF CHANGES IN ACCUMULATED OTHER COMPREHENSIVE INCOME, NET OF TAX

Unrealized Gains and Losses on Security Investment

Foreign Currency Translations

Change in Minority Interest

SCHEDULE OF CHANGES IN ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS), NET OF TAX

Balance at January 1, 2025

$ ( 3,960,871 )

Other Comprehensive Loss

$ ( 849,862 )

( 4,459,581 )

Other Comprehensive (Loss) Income

Balance at December 31, 2025

$ ( 2,505,799 )

$ ( 849,862 )

Unrealized Gains and Losses on Security Investment

Foreign Currency Translations

Change in Minority Interest

Balance at January 1, 2024

Balance Beginning

$ ( 119,566 )

Other Comprehensive Loss

( 3,841,305 )

( 4,459,581 )

Other Comprehensive (Loss) Income

( 3,841,305 )

( 4,459,581 )

Balance at December 31, 2024

$ ( 3,960,871 )

Balance at Ending

$ ( 849,862 )

$ ( 3,960,871 )

$ ( 849,862 )

Company generally rents its SFRs under lease agreements with a term of one year.

18 unchanged sentences

December 31, 2025

Investment Securities- Fair Value Option

Investment Securities- Trading

Warrants - APW

Investment Securities at Fair Value - Related Parties

Investment Securities at Fair Value - Third Parties

Warrants - HIPH

Warrants - VEII

Warrants - SHRG

Convertible Loan Receivable - VEII

Convertible Loan Receivable - SHRG

Convertible Note Receivable - VEII

Convertible Note Receivable - SHRG

Total Investment in Securities at Fair Value

1 unchanged sentence

December 31, 2024

Investment Securities- Fair Value Option

Investment Securities- Trading

Convertible Note Receivable

Warrants - APW

Investment Securities at Fair Value - Related Parties

Investment Securities at Fair Value - Third Parties

Warrants - HIPH

Warrants - VEII

Convertible Loan Receivable - VEII

Warrants - SHRG

Convertible Note Receivable - VEII

Convertible Note Receivable - SHRG

Total Investment in Securities at Fair Value

gain on investment securities for the year ended December 31, 2024 was $ 461,247 and realized loss on investment in securities for the

year ended December 31, 2023 was $ 11,375,747 .

Unrealized loss on securities investment was $ 942,213 and $ 2,899,286 in the years ended

December 31, 2024 and 2023, respectively.

These losses were recorded directly to net loss.

The change in fair value of the convertible

note receivable in the years ended December 31, 2024 and 2023 was $ 287,812 and $ 0 gain, respectively, and was recorded in consolidated

statements of stockholders’ equity.

trading stocks, we use Bloomberg Market stock prices as the share prices to calculate fair value.

For overseas stock, we use the

stock price from local stock exchange to calculate fair value.

The following chart shows details of the fair value of equity security

investments at December 31, 2024 and 2023, respectively.

loss on investment securities for the year ended December 31, 2025 was $ 3,208,972 and realized gain on investment securities for

the year ended December 31, 2024 was $ 461,247 .

Unrealized loss on securities investment was $ 2,451,237 and $ 942,213 in the

years ended December 31, 2025 and 2024, respectively.

These gains and losses were recorded directly to net loss.

following chart shows details of the fair value of equity security investment at December 31, 2025 and December 31, 2024, respectively.

SCHEDULE OF FAIR VALUE OF EQUITY SECURITY INVESTMENT

1 unchanged sentence