What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-05-14 compared with 2025-11-14 · 368 added, 565 removed, 116 unchanged (89% of the section changed)

Management’s Discussion and Analysis

of Financial Condition and Results of Operations

Forward-Looking Statements

This Form 10-Q contains certain

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

For this purpose, any statements

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

Without limiting

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

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

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

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

These factors include but are not limited to economic conditions generally and in

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

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

Forward-Looking

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

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

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

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

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

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

These factors include but are not limited to economic conditions generally

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

technological advances and failure to successfully develop business relationships.

Business Overview

We are a diversified holding

company principally engaged through our subsidiaries in the development of EHome communities and other real estate, financial services,

digital transformation technologies, biohealth activities and consumer products with operations in the United States, Singapore, Hong

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

We manage a significant portion of our three principal businesses

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

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

and Asian subsidiaries), we are actively developing real estate projects

near Houston, Texas in our real estate segment.

In our digital transformation technology segment, we focus on serving business-to-business

(B2B) needs in e-commerce, collaboration and social networking functions.

Our biohealth segment includes the sale of consumer products.

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

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

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

We manage a significant portion

of our three principal businesses through our 85.8% owned subsidiary, Alset International Limited, a public company traded on the Singapore

Stock Exchange.

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

and Asian subsidiaries), we are actively

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

In our digital transformation technology segment, we

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

Our biohealth segment

includes the sale of consumer products.

and Alset International Limited collectively own 62.3% of HWH International Inc.

(described in further detail below).

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

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

Counties, Texas.

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(“APF”), a 43.6% equity interest in DSS Inc.

(“DSS”), an indirect 45.8% equity interest in

Value Exchange International Inc.

(“DSS”), an indirect 45.8% equity interest

in Value Exchange International Inc.

(“VEII”), a 0.5% equity interest in HIPH World Inc.

American Premium Water Corporation

and New Electric CV Corporation), and a 29% equity interest in Sharing Services Global Corporation (“SHRG”).

APF is a financial

network holding company.

DSS is a multinational company operating businesses with five divisions:

product packaging, biotechnology, direct

marketing, commercial lending, and securities and investment management.

and New Electric CV Corporation), a 29% equity interest in Sharing Services Global Corporation (“SHRG”) and a 41.5% equity

interest in New Energy Asia Pacific Company Limited (“New Energy”).

APF is a financial network holding company.

multinational company operating businesses with five divisions:

product packaging, biotechnology, direct marketing, commercial lending,

and securities and investment management.

is listed on the NYSE American (NYSE:

Value Exchange

International, Inc.

is a provider of information technology services for businesses, and is traded on the OTC Markets.

Sharing Services

Global Corporation, is a publicly traded company dedicated to building shareholder value by developing or acquiring businesses, products

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

business competencies, and geographic reach.

Value Exchange International, Inc.

a provider of information technology services for businesses, and is traded on the OTC Markets.

Sharing Services Global Corporation,

is a publicly traded company dedicated to building shareholder value by developing or acquiring businesses, products and technologies

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

and geographic reach.

Sharing Services Global Corporation is traded on the OTC Markets.

We generally acquire majority

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

Our emphasis is on building

businesses in industries where our management team has in-depth knowledge and experience, or where our management can provide value by

advising on new markets and expansion.

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

in order to gain access to Asian markets.

We have historically favored businesses that improve an individual’s quality of life or

that improve the efficiency of businesses through technology in various industries.

We believe our capital and management services provide

us with a competitive advantage in the selection of strategic acquisitions, which creates and adds value for our Company and our stockholders.

Additionally, the Company

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

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

Operating segments are defined

as components of an enterprise about which separate financial information is available that is evaluated regularly by the chief operating

decision makers (the “CODMs”), or decision–making group, in deciding how to allocate resources and in assessing performance.

The Company’s chief operating decision makers are the two Co-CEOs, who review and assess the performance of the Company as a whole.

New Energy focuses on distributing all-electric

versions of special-purpose and transportation vehicles, charging stations and batteries.

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

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

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

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

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

We have historically favored businesses that improve an individual’s

quality of life or that improve the efficiency of businesses through technology in various industries.

We believe our capital and management

services provide us with a competitive advantage in the selection of strategic acquisitions, which creates and adds value for our Company

and our stockholders.

Additionally,

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

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

a short-term horizon.

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

by the chief operating decision makers (the “CODMs”), or decision–making group, in deciding how to allocate resources

and in assessing performance.

The Company’s chief operating decision makers are the two Co-CEOs, who review and assess the performance

of the Company as a whole.

The Company reports its segment information to reflect the manner in which the CODMs review and assess performance.

The 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 activities.

In determination

of segments, the Company, together with its CODMs, considers factors that include the nature of business activities, allocation of resources

and management structure.

The primary financial measures

used by the CODMs to evaluate performance and allocate resources are net income (loss) and operating income (loss).

The CODMs use net

income (loss) and operating income (loss) to evaluate the performance of the Company’s ongoing operations and as part of the Company’s

internal planning and forecasting processes.

Information on net income (loss) and operating income (loss) is disclosed in the Consolidated

Statements of Operations.

Segment expenses and other segment items are provided to the CODMs on the same basis as disclosed in the Consolidated

Statements of Operations.

The CODMs do not evaluate

performance or allocate resources based on segment assets.

Recent Developments

Stock Compensation

On 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 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 activities.

In determination of segments, the Company, together with its CODMs, considers factors that include the nature of

business activities, allocation of resources and management structure.

primary financial measures used by the CODMs to evaluate performance and allocate resources are net income (loss) and operating income

The CODMs use net income (loss) and operating income (loss) to evaluate the performance of the Company’s ongoing operations

and as part of the Company’s internal planning and forecasting processes.

Information on net income (loss) and operating income

(loss) is disclosed in the Consolidated Statements of Operations.

Segment expenses and other segment items are provided to the CODMs

on the same basis as disclosed in the Consolidated Statements of Operations.

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 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 15, 2026.

The Shares are not part

Chan as 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.

Notice from NASDAQ

On May 13, 2025, the Company

received a letter from The Nasdaq Stock Market LLC indicating that the Company’s common stock had closed below the minimum $1.00

per share bid price requirement for 30 consecutive business days, and that the Company is therefore not in compliance with Nasdaq Listing

Rule 5550(a)(2).

The notification has no immediate effect on the listing of the Company’s common stock, and the Company has 180

calendar days to regain compliance with the minimum bid price requirement.

On July 17, 2025, Alset Inc.

(the “Company”) received notice from the Nasdaq Listing Qualifications Staff (the “Staff”) that the Staff has

determined that the Company has regained compliance with Nasdaq’s minimum $1 bid price per share requirement.

While the Company

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

with the Minimum Bid Price Requirement in the future.

Consummation of

the Merger of Alset Capital Acquisition Corp.

and HWH International Inc.

January 9, 2024, two entities affiliated with Alset Inc.

completed a previously announced transaction.

On September 9, 2022, Alset Capital

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

Agreement”) with our indirect subsidiary HWH International Inc., a Nevada corporation (“HWH Nevada”) 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 Nevada was effected through the merger

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

and Alset Capital changing its name to HWH International Inc.

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

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

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

these transactions, HWH International Inc.

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

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

HWH International Inc.

seeks to develop new pathways to help

people in their pursuit of health, wealth and happiness.

HWH International Inc.

is listed on the Nasdaq under the symbol HWH.

Stock Purchase

Agreement and Debt Conversion Agreements

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

the “Agreements”):

(i) Alset International Limited (significant stockholder of HWH);

and (ii) Alset Inc.

(which in turn is

Alset International Limited’s majority stockholder).

Each Agreement converts debt owed by HWH to the respective creditor into shares

of HWH’s common stock.

the terms of their respective Agreements, Alset Inc.

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

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

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

The price at which the

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

Cumulatively, the newly issued shares contemplated by the Agreements

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

September 26, 2024, Alset Inc.

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

majority owned subsidiary, Alset International Limited.

Pursuant to the Stock Purchase Agreement, the Company purchased 6,500,000 shares

(the “Shares”) of HWH International Inc.

(the Nasdaq-listed company).

As consideration for the Shares, the Company issued

a secured promissory note to Alset International Limited in the original principal amount of $4,095,000 (the “Promissory Note”).

The Promissory Note bears an interest rate of 5% per annum and a maturity date of September 26, 2026, and is secured by collateral specified

in a security agreement between the Company and Alset International Limited.

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

Limited and the Chairman of HWH.

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

Limited and HWH.

closing of the transactions described herein was contingent upon the approval of the stockholders of Alset International Limited (which

was approved on November 18, 2024) and the satisfaction of other closing conditions.

The transactions closed on November 20, 2024.

Sale of Certain Lots

Agreement to Sell 142 Lots and 63 Lots

On November 13, 2023, 150

CCM Black Oak Ltd.

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

Instructions (each an “Agreement,” collectively, the “Agreements”) with Century Land Holdings of Texas, LLC, a

Colorado limited liability company (the “Buyer”).

Pursuant to the terms of one of the aforementioned Agreements, the Seller

agreed to sell approximately 142 single-family detached residential lots comprising a section of a residential community in the city of

Magnolia, Texas known as the “Lakes at Black Oak.” On July 1, 2024, the Seller closed the sale of 70 of the lots contemplated

by the Agreement, generating approximately $3.8 million.

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

residential lots in the city of Magnolia, Texas.

In 2021, our subsidiary Alset EHome Inc.

acquired approximately 19.5 acres of partially

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

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

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

approximately $3.8 million.

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

of 63 lots at Alset Villas closed on December 16, 2024 generating approximately $3.8 million.

The Company has retained four

model lots within Section 1 of the property.

The Company intends to enter into contract-build agreements with local, regional or national

builders to construct single-family, for rent homes.

These elevations and floor plans will be carefully selected to suit the for-rent

tenants and/or for-sale customers.

The Company will also reserve the right to sell these homes in the event this is deemed to be the highest

and best use in the marketplace.

The Company expects to complete these homes within the next twelve months.

Issuance of Convertible Loans to Value Exchange

International, Inc.

On July 15, 2024, the Company

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

in the maximum amount of $110,000.

Advances of the principal under the 3 rd VEII Credit Agreement accrue simple interest at

8% per annum.

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

or the Company, be:

(1) repaid in cash;

(2) converted into shares of VEII Common Stock;

or (3) be repaid in a combination of cash and

shares of VEII Common Stock.

The principal amount of each Advance under the 3 rd VEII Credit Agreement is due and payable on

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

(the “Advance Maturity Date”).

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

the last business day of June and on the last business day of December of each year in which the Advance is outstanding and not converted

into shares of VEII Common Stock.

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

thereon prior to Advance Maturity Date without penalty or charge.

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

VEII issued a Convertible

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

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.

As of the date of the issuance of the Shares, the fair value thereof was $840,000.

May 13, 2025, the Company received a letter from The Nasdaq Stock Market LLC indicating that the Company’s common stock had closed

below the minimum $1.00 per share bid price requirement for 30 consecutive business days, and that the Company is therefore not in compliance

with Nasdaq Listing Rule 5550(a)(2).

The notification has no immediate effect on the listing of the Company’s common stock, and

the Company has 180 calendar days to regain compliance with the minimum bid price requirement.

July 17, 2025, Alset Inc.

(the “Company”) received notice from the Nasdaq Listing Qualifications Staff (the “Staff”)

that the Staff has determined that the Company has regained compliance with Nasdaq’s minimum $1 bid price per share requirement.

While the Company has regained compliance with the Minimum Bid Price Requirement, there can be no assurance that the Company will be

able to maintain compliance with the Minimum Bid Price Requirement in the future.

Loan to Value Exchange International, Inc.

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.

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.

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

converts all or a portion of the indebtedness

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

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

the Loan Amount.

Company currently owns a total of 21,179,275 shares (representing approximately 45.8%) of VEII.

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are also members of the Board of Directors of VEII (Wong Shui Yeung, Wong Tat Keung, and Lim Sheng Hon Danny).

Issuance of Convertible Loans to Sharing

Services Global Corp.

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.

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

entered into a securities purchase agreement with SHRG, pursuant

to which HWH purchased from SHRG a (i) Convertible Promissory Note (the “2 nd SHRG Convertible Note”) in the amount

of $250,000, convertible into 148,810 shares of SHRG’s common stock at the option of HWH, and (ii) certain warrants exercisable

into 148,810 shares of SHRG’s common stock at an exercise price of $1.68 per share, the exercise period of the warrant being five

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

SHRG Convertible Note bears a 6% interest rate and has scheduled maturity on March 20, 2027.

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.

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.

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.

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.

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.

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.

Loans to Sharing Services Global Corp.

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, 2026.

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, 2026, which was extended to January 15, 2028.

The 1 st Loan Agreement bears an 8% interest rate.

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The 6 th SHRG Convertible Note bears an 8% interest rate.

the time of filing, HWH has not converted any of the debt contemplated by the 6 th SHRG Convertible Note nor exercised any of

the warrants.

June 27, 2025, HWH entered into a securities purchase agreement with SHRG pursuant to which the Company purchased from SHRG a Convertible

Promissory 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

At the time of filing, HWH has not converted any of the debt contemplated by the 6 th SHRG Convertible Note nor exercised any

of the warrants.

June 27, 2025, HWH entered into a securities purchase agreement with SHRG pursuant to which the Company purchased from SHRG a

Convertible Promissory 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 a 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.

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

6 unchanged sentences

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.

Acquisition of New Energy Asia Pacific Inc.

On 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.

The parties mutually 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.

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 rate.

New Energy focuses on distributing

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

The Company intends for this to

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

Seller is a member of the Board of Directors of New Energy and is a stockholder of New Energy.

The closing of the transactions

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

Purchase of DSS Shares

On May 21, 2024, the Company

entered into a Securities Purchase Agreement (the “DSS Securities Purchase Agreement”) with the Company’s Chairman and

Chief Executive Officer, Chan Heng Fai, and Heng Fai Holdings Limited, a company wholly owned by Mr.

Pursuant to the DSS Securities

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

These shares include 979,325 shares of

DSS common stock to be acquired from Mr.

Chan and 2,978 shares to be acquired from Heng Fai Holdings Limited (collectively, the “Shares”).

The Shares represent approximately 13.9% of the total issued and outstanding shares of DSS as of the date hereof.

As consideration for

the Shares, the Company will issue a total of 3,316,488 shares of its common stock to Mr.

Chan and Heng Fai Holdings Limited.

The consideration

to be paid for the Shares is based on the relevant market closing price of DSS common stock and the Company’s common stock as of

Approval of the transactions

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

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

Chan, recused themselves from discussion and voting

on the approval of such transaction and the acquisition of the DSS Shares.

The closing of the transactions

contemplated by the DSS Securities Purchase Agreement remained subject to the approval of the Company’s stockholders and no objection

from the Nasdaq.

The parties subsequently mutually agreed not to proceed with this transaction.

At the time of filing, HWH has not converted any of the debt contemplated by the 8 th

SHRG Convertible Note.

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 9 th SHRG Convertible Note.

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 note, December 10, 2028.

Additionally, 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 10 th SHRG Convertible Note.

January 2, 2026, HWH entered into a securities purchase agreement with SHRG, pursuant to which HWH purchased from SHRG a Convertible

Promissory Note (the “11 th SHRG Convertible Note”) in the amount of $40,000, convertible into 6,666,667 shares

of SHRG’s common stock at HWH’s option for an aggregate purchase price of $40,000.

The 11 th SHRG Convertible Note

bears an 8% interest rate and has a scheduled maturity three years from the date of the note, January 2, 2029.

Additionally, upon signing

the 11 th SHRG Convertible Note, SHRG owed HWH a commitment fee of 8% of the principal amount, $3,200 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 11 th SHRG Convertible Note.

January 8, 2026, HWH entered into a securities purchase agreement with SHRG, pursuant to which HWH purchased from SHRG a Convertible

Promissory Note (the “12 th SHRG Convertible Note”) in the amount of $120,000, convertible into SHRG common stock

at $0.006 per share at HWH’s option.

The 12 th SHRG Convertible Note bears an 8% interest rate and has a scheduled maturity

three years from the date of the note, January 8, 2029.

Additionally, upon signing the 12 th SHRG Convertible Note, SHRG owed

HWH a commitment fee of 8% of the principal amount, $9,600 in total, to be paid either in cash or in common stock of SHRG, at HWH’s

At the time of filing, HWH has not converted any of the debt contemplated by the 12 th SHRG Convertible Note.

February 4, 2026, HWH entered into a securities purchase agreement with SHRG, pursuant to which HWH purchased from SHRG a Convertible

Promissory Note (the “13 th SHRG Convertible Note”) in the amount of $125,000, convertible into SHRG common stock

at $0.006 per share at HWH’s option.

The 13 th SHRG Convertible Note bears an 8% interest rate and has a scheduled maturity

three years from the date of the note, February 4, 2029.

Additionally, upon signing the 13 th SHRG Convertible Note, SHRG owed

HWH a commitment fee of 8% of the principal amount, $10,000 in total, to be paid either in cash or in common stock of SHRG, at HWH’s

At the time of filing, HWH has not converted any of the debt contemplated by the 13 th SHRG Convertible Note.

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 mutually 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

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

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

solutions for the future.

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

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

in New Energy.

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

based on factors including:

delays in the execution and

commercialization of New Energy’s taxi delivery projects;

revised 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.

Reorganization

52 unchanged sentences

across Hong Kong.

Matters that May or Are Currently Affecting

In addition to the matters

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

● Our ability to improve

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

● Our ability to identify

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

them into our existing operations;

● Our ability to attract

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

● Our ability to control

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

● The effects of public

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

Results of Operations

Summary of Statements of

Operations for the Three and Nine Months Ended September 30, 2025 and 2024

Three- Months Ended

Nine-months Ended

September 30,

Sale of Shares of Hapi Metaverse Inc.

to HWH International Inc.

February 5, 2026, the Company entered into a term sheet (the “Term Sheet”), with HWH International Inc.

a majority owned subsidiary of the Company.

Pursuant to the Term Sheet, the Company agreed to sell to the HWH 505,341,376 issued and

outstanding shares of common stock, par value $0.0001 (the “Shares”), of Hapi Metaverse Inc.

(“Hapi Metaverse”),

representing 99.55% of Hapi Metaverse’s outstanding capital.

the terms of the Term Sheet, the Company agreed to sell the Shares through a stock purchase agreement for a purchase price of $19,910,603.00

in the form of a promissory note convertible into newly issued shares of HWH’s common stock (the “Stock Purchase Agreement,”

and the “Convertible Note”).

Under the terms of the Convertible Note, the Company could convert any outstanding principal

and interest into shares of HWH’s common stock at $1.85 per share upon ten (10) days’ notice prior to maturity of the Convertible

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

interest accrued thereunder would automatically be converted into shares of HWH’s common stock at the conversion rate.

closing of the transaction contemplated by the Term Sheet would be subject to standard closing conditions, including the approval by

the stockholders of HWH holding a majority of HWH’s common stock.

The Company and certain affiliates of the Company own the majority

of HWH’s common stock.

February 5, 2026, the Company entered into the Stock Purchase Agreement with HWH, reflecting the terms set forth in the Term Sheet.

stockholders holding a majority of HWH’s issued and outstanding shares approved the proposed transaction.

Company and its subsidiary HWH subsequently agreed to terminate the purchase and sale of the Hapi Metaverse Shares, and the agreements

contemplating the same, on the terms and subject to the conditions set forth in a Termination Agreement dated May 6, 2026.

The management

of the Company and HWH have determined that terminating the sale and purchase of the Hapi Metaverse Shares is in the best interests of

both parties.

the terms of the May 6, 2026 Termination Agreement, neither HWH nor the Company has any further rights or obligations pursuant to the

Term Sheet, the Stock Purchase Agreement, or the Convertible Note.

Neither the Company nor HWH paid any penalties or fees in connection

with the termination.

Purchase Agreement with DSS, Inc.

March 26, 2026, Alset International Limited (“Alset International”) entered into a securities purchase agreement (the “DSS

SPA”) with DSS, Inc., pursuant to which Alset International lent DSS $2,450,000, in exchange for a convertible promissory note

(the “DSS Note”) and warrants to purchase 16,554,055 shares of DSS common stock (the “DSS Warrants”).

DSS Note bears a simple interest rate of 3% per annum.

Under the terms of the DSS Note, Alset International may convert any outstanding

principal and interest into shares of DSS common stock at $0.74 per share upon notice prior to maturity of the DSS Note five (5) years

from the date of thereof.

DSS Warrants to be issued to Alset International are to purchase up to 16,554,055 shares of DSS common stock at an exercise price of

$0.93 per share.

The DSS Warrants expire on their fifth anniversary.

Company holds a significant equity interest in DSS directly and through its subsidiaries.

The Company and DSS are related parties under

the common control of the Company’s Chairman and Chief Executive Officer, Chan Heng Fai, who is also the Chairman of DSS.

Tung Moe, a director and Co-Chief Executive Officer of the Company, is also a director of DSS.

Lim Sheng Hon Danny, a director of the

Company, is also a director of DSS.

Three of the Company’s independent directors, Joanne Wong Hiu Pan, Wong Shui Yeung, and William

Wu are also directors of DSS.

The Transaction Documents were approved by the Company’s Board of Directors and Audit Committee.

that May or Are Currently Affecting Our Business

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

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

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

and profitably integrate them into our existing operations;

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

to manage our overhead;

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

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

of Operations

of Statements of Operations for the Three Months Ended March 31, 2026 and 2025

Operating Expenses

1 unchanged sentence

$ (5,000,421 )

$ (12,432,650 )

Other Expenses

$ (2,602,843 )

Other Income (Expenses)

$ (5,529,826 )

Income Tax Expense

Net Income (Loss)

$ (5,255,283 )

$ (9,504,892 )

The following tables set forth

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

Transformation Technology

Nine-months Ended

September 30,

Digital Transformation Technology

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

Total Revenue

Revenue was $998,828 and $4,960,711 for the three months ended September

30, 2025 and 2024, respectively.

Revenue was $3,166,093 and $12,173,964 for the nine months ended September 30, 2025 and 2024, respectively.

The decrease in revenue is mainly caused by the fact that the remaining properties in the Lakes at Black Oak and Alset Villas projects

were sold in 2024.

In late 2022 and early 2023,

the Company entered into three contracts with builders to sell multiple lots from its Lakes at Black Oak project.

The sales contemplated

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

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

The sale of 335

lots closed in the first nine months of 2023 generating approximately $18.1 million revenue.

The sale of remaining lots closed on January

4, 2024 generating approximately $5.0 million revenue.

Revenue from rental business

was $692,890 and $724,699 in the three months ended September 30, 2025 and 2024, respectively.

Revenue from rental business was $2,126,737

and $2,150,204 in the nine months ended September 30, 2025 and 2024, respectively.

The Company expects that the revenue from this business

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

was $980,778 and $1,068,303 for the three months ended March 31, 2026 and 2025, respectively.

from rental business was $726,659 and $717,805 in the three months ended March 31, 2026 and 2025, respectively.

The Company expects that

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

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

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

primarily consisting of unallocated corporate overhead costs, including administrative functions not allocated to the reportable segments

from global functional expenses.

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

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

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

addressed as one independent category.

In the three months ended September 30, 2025 and 2024, the revenue from other businesses was $305,938

and $421,012, respectively.

In the nine months ended September 30, 2025 and 2024, the revenue from other businesses was $1,039,205 and

$1,176,260, respectively, generated by Korean, Singaporean and Chinese café shops and restaurants.

Cost of Revenues and Operating

The following tables sets

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

Transformation Technology

Cost of Revenues

Nine-months Ended

September 30,

$ (5,977,184 )

Digital Transformation Technology

Total Cost of Revenues

$ (6,061,205 )

Cost of revenues decreased from $2,949,824 in the three months ended September

30, 2024 to $756,369 in the three months ended September 30, 2025.

Cost of revenues decreased from $8,438,149 in the nine months ended

September 30, 2024 to $2,376,944 in the nine months ended September 30, 2025.

The decrease in cost of revenue is caused by the decrease

in property sales from the Lakes at Black Oak project in 2025.

The last lots in Lakes at Black Oak project were sold during 2024.

The gross margin decreased

from $2,010,887 to $242,459 in the three months ended September 30, 2024 and 2025, respectively.

The gross margin decreased from $3,735,815

to $789,149 in the nine months ended September 30, 2024 and 2025, respectively.

The decrease of gross margin was caused by the decrease

in sales in the Lakes at Black Oak Project.

The following tables sets

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

Transformation Technology

Operating Expenses

Nine-months Ended

September 30,

In the three months ended March 31, 2026 and 2025, the revenue from other businesses was $254,119

and $350,498, respectively, generated by Korean, Singaporean and Chinese café shops and restaurants.

of Sales and Operating Expenses

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

Total Cost of Sales

of sales decreased from $777,529 in the three months ended March 31, 2025 to $705,668 in the three months ended March 31, 2026.

decrease in cost of sales is caused by the decrease in cost from F&B business in 2025.

gross margin changed from $290,774 to $275,110 in the three months ended March 31, 2025 and 2026, respectively.

The decrease of gross

margin was caused by the decrease in revenue in 2025.

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

Digital Transformation Technology

Total Operating Expenses

increase of operating expenses in the first nine months of 2025 compared to the same period of 2024 was mostly caused by the bonus paid

Other Income (Expense)

the three months ended September 30, 2025, the Company had other income of $ 4,547,503 compared to other income of $2,433,020 in the three

months ended September 30, 2024.

In the nine months ended September 30, 2025, the Company had other expense of $ 7,068,004 compared to

other expense of $954,752 in the nine months ended September 30, 2024 .

The loss/gain on foreign exchange transaction is the primary

reason for the volatility in these two periods.

Foreign exchange transaction gain was $1,448,155 in the three months ended September 30,

2025, compared to $3,673,699 loss in the three months ended September 30, 2024.

Foreign exchange transaction loss was $4,795,345 in the

nine months ended September 30, 2025, compared to $1,634,713 loss in the nine months ended September 30, 2024.

In the three months ended

September 30, 2025 the Company had net income of $1,964,001 compared to net income of $1,469,239 in the three months ended September 30,

In the nine months ended September 30, 2025, the Company had net loss of $16,382,033 compared to net loss of $6,994,516 in the nine

months ended September 30, 2024.

Liquidity and Capital Resources

Our real estate assets have

decreased to $29,889,632 as of September 30, 2025 from $30,695,669 as of December 31, 2024.

This decrease reflects depreciation expenses

on the rental properties.

Our cash has decreased from

$27,243,787 as of December 31, 2024 to $25,459,416 as of September 30, 2025.

Our liabilities decreased from $6,563,126 at December 31,

2024 to $4,711,668 at September 30, 2025.

Our total assets have increased to $169,106,722 as of September 30, 2025 from $96,761,977 as

of December 31, 2024 mainly due to increase in value of investment securities and purchasing equity investment.

$ (1,295,342 )

decrease of operating expenses in the three months ended March 31, 2026 compared to the same period of 2025 was mostly caused by the

decrease in impairments and bonuses.

Income (Expense)

the three months ended March 31, 2026, the Company had other expense of $2,602,843 compared to other expense of $5,529,826 in the three

months ended March 31, 2025 .

The unrealized loss/gain

on security investment is the primary reason for the volatility in these two periods.

The unrealized loss on security investments was

$2,571,644 in the three months ended March 31, 2026, compared to $3,520,747 loss in the three months ended March 31, 2025.

the three months ended March 31, 2026, the Company had net loss of $5,255,283 compared to net loss of $9,504,892 in the three months

ended March 31, 2025.

and Capital Resources

real estate assets have decreased to $29,352,273 as of March 31, 2026 from $29,620,952 as of December 31, 2025.

This decrease reflects

depreciation expenses on the rental properties.

cash has decreased from $25,184,990 as of December 31, 2025 to $21,478,610 as of March 31, 2026.

Our liabilities were $6,923,965 at December

31, 2025 and $3,985,867 at March 31, 2026.

Our total assets have decreased to $131,741,859 as of March 31, 2026 from $136,587,114 as

of December 31, 2025 mainly due to decrease in value of investment securities and purchasing equity investment.

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

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

of $18,500,000.

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

amount of $18,500,000.

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

SeD Maryland Development LLC was also provided with

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

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

face amount of the L/C.

SeD Maryland Development LLC was also provided

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

The L/C commission is 1.5% per annum on

the face amount of the L/C.

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

The loan is a revolving line of credit.

L/C Facility is not a revolving loan, and amounts advanced and repaid may not be re-borrowed.

Repayment of the Loan Agreement is secured

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

On March 15, 2022, approximately

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

On December 14,

2023 approximately $201,751 was released from collateral, leaving approximately $100,000 as collateral for outstanding letters of credit.

On November 13, 2023, the

Company entered into two Contracts for Purchase and Sale and Escrow Instructions (each an “Agreement,” collectively, the “Agreements”)

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

Pursuant to the terms of one

of the aforementioned Agreements, the Seller agreed to sell approximately 142 single-family detached residential lots comprising a section

of a residential community in the Lakes at Black Oak.

The selling price of these lots was anticipated to equal approximately $7.4 million.

Pursuant to the other Agreement, the Seller agreed to sell 63 single-family detached residential lots in the city of Magnolia, Texas.

In 2021, our subsidiary Alset EHome Inc.

acquired approximately 19.5 acres of partially developed land near Houston, Texas which was used

to develop a community named Alset Villas.

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

of the transactions described above depended on the satisfaction of certain conditions.

On July 1, 2024, the Seller closed the sale of

70 of the lots contemplated by that certain Agreement, generating approximately $3.8 million.

The sale of the remaining 72 lots at Lakes

at Black Oak closed on October 10, 2024 generating approximately $3.9 million.

The sale of 63 lots at Alset Villas closed on December

16, 2024 generating approximately $3.8 million.

Additionally, the Company

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

The management believes that

the available cash in bank accounts and favorable cash revenue from real estate projects are sufficient to fund our operations for at

least the next 12 months.

Summary of Cash Flows for the Nine Months Ended

September 30, 2025 and 2024

cash (used in) provided by operating activities

cash provided by investing activities

cash provided by (used in) financing activities

Cash Flows from Operating

Net cash used in operating

activities was $5,491,443 in the first nine months of 2025, as compared to net cash used in operating activities of $8,751,416 in the

same period of 2024.

Purchase of trading securities and paying off payables in 2025 were the main reason for the cash used in operating

activities in that period.

Cash Flows from Investing

Net cash provided by investing

activities was $18,707,934 in the nine months ended September 30, 2024, compared to net cash provided of $614,518 in the nine months ended

September 30, 2025.

In the nine months ended September 30, 2025, the Company issued $1,918,240 in loans to related parties and spent $205,851

to purchase fixed assets and $40,000 to purchase security investment.

At the same time, we received $165,466 from repayment of related

party loan and $2,613,143 from the sale of securities of a related party.

In the nine months ended September 30, 2024, the Company issued

$1,368,083 in loans to related parties and $1,212,021 in loans receivable.

At the same time, we received $101,096 from repayment of related

party loan and withdrew cash from trust account of $21,102,871 for redemption of HWH’s shares.

Cash Flows from Financing

Net cash provided by

financing activities was $1,997,810 in the nine months ended September 30, 2025, compared to net cash used of $21,370,610 in the

nine months ended September 30, 2024.

The cash provided by financing activities in the first nine months of 2025 was from proceeds

from issuing common stock of $2,614,983.

In that same period, the Company repaid $275,374 of note payable, repurchased its own stock

for $420,273 and borrowed $78,474 from commercial loan.

The cash used in financing activities in the first nine months of 2024 is

caused by repayment of $398,000 of note payable and repayment of HWH’s shares of $21,102,871.

In that same period, the Company

borrowed $130,261 from commercial loan.

Impact of Inflation

We believe that inflation

has not had a material impact on our results of operations for the nine months ended September 30, 2025 or the year ended December 31,

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

Impact of Foreign Exchange Rates

The effect of foreign exchange

rate changes on the intercompany loans (under ASC 830), which mostly consist of loans from Singapore to the United States and which were

approximately $30 million and $30 million on September 30, 2025 and December 31, 2024, respectively, are the reason for the significant

fluctuation of foreign currency transaction Gain or Loss on the Condensed Consolidated Statements of Operations and Other Comprehensive

Because the intercompany loan balances between Singapore and United States will remain at approximately $30 million over the next

year, we expect this fluctuation of foreign exchange rates to still significantly impact the results of operations in 2025, especially

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

If the amount of intercompany loan is lowered in the future,

the effect will be reduced.

The L/C Facility is not a revolving loan, and amounts advanced and repaid may not be re-borrowed.

Repayment of the Loan Agreement is

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

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

On December 14, 2023 and February 11, 2026, approximately $201,751 and $107,991, respectively, was released from collateral for

outstanding letters of credit.

In February 2026, the remaining outstanding letter of credit was fully released, and the related letter-of-credit

facility was closed.

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

management believes that the available cash in bank accounts and favorable cash revenue from real estate projects are sufficient to fund

our operations for at least the next twelve months from the filing of this Form 10-Q.

of Cash Flows for the Three Months Ended March 31, 2026 and 2025

Net cash used in operating activities

$ (1,491,037 )

$ (3,756,154 )

Net cash used in investing activities

$ (2,657,460 )

Net cash (used in) provided by financing activities

Flows from Operating Activities

cash used in operating activities was $1,491,037 in the three months ended March 31, 2026, as compared to net cash used in operating

activities of $3,756,154 in the same period of 2025.

Paying off payables in 2025 was the main reason for the cash used in operating activities

in that period.

Flows from Investing Activities

cash used in investing activities was $461,505 in the three months ended March 31, 2025, compared to net cash used of $2,657,460 in the

three months ended March 31, 2026.

In the three months ended March 31, 2026, the Company issued $3,510,278 in loans to related parties

and spent $6,870 to purchase fixed assets and $14,907 to purchase security investment.

At the same time, we received $775,961 from repayment

of related party loan and $98,634 from the sale of securities of a related party.

In the three months ended March 31, 2025, the Company

issued $479,297 in loans to related parties and spent $61,244 to purchase fixed assets.

At the same time, we received $79,036 from repayment

of related party loan.

Flows from Financing Activities

cash used in financing activities was $6,152 in the three months ended March 31, 2026, compared to net cash provided of $2,333,452 in

the three months ended March 31, 2025.

The cash used in financing activities in the three months ended March 31, 2026 was for repayment

of note payable of $10,968.

At the same time the Company borrowed $4,816 from a note payable.

The cash provided by financing activities

in the first three months of 2025 was from proceeds from issuing common stock of $2,613,526.

In that same period, the Company repaid

$280,074 of note payable.

believe that inflation has not had a material impact on our results of operations for the three months ended March 31, 2026 or the year

ended December 31, 2025.

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

of Foreign Exchange Rates

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

United States and which were approximately $30 million and $30 million on March 31, 2026 and December 31, 2025, respectively, are the

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

and Other Comprehensive Loss.

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

$30 million over the next year, we expect this fluctuation of foreign exchange rates to still significantly impact the results of operations

in 2025, especially given that the foreign exchange rate may and is expected to be volatile.

If the amount of intercompany loan is lowered

in the future, the effect will be reduced.

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

Emerging Growth Company Status

We are an “emerging

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

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

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

Securities Act for complying with new or revised accounting standards.

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

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

We have elected to take

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

The real estate business is

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

This may impact the expenses

of our subsidiary Alset EHome Inc.

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

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

from time to time.

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

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

Quantitative and Qualitative Disclosures

about Market Risk

As a “smaller reporting

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

In addition, should we commence building homes, we

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

Quantitative and Qualitative Disclosures about Market Risk

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

required by this Item.

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis