What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2026-08-14 compared with 2026-05-14 · 239 added, 216 removed, 268 unchanged (63% of the section changed)

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technological advances and failure to successfully develop business relationships.

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

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

States, Singapore, Hong Kong, Australia, South Korea, 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.

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.

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.

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

Counties, Texas.

also hold minority ownership interests, including a 36.9% equity interest in American Pacific Financial, Inc., formerly known as American

Pacific Bancorp Inc.

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 63.6% of HWH International Inc.

We also have certain wholly owned subsidiaries that collectively own 132 single

family residential rental properties in Montgomery and Harris Counties, Texas.

also currently hold minority ownership interests, including a 36.9% equity interest in American Pacific Financial, Inc., formerly known

as American Pacific Bancorp Inc.

(“APF”), a 39.4% 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), 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.

American Premium

Water Corporation 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

DSS is a 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.

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

Value Exchange International,

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

Sharing Services Global Corporation,

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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

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.

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.

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

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

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

In addition to Mr.

Chan, three other members of the Board of Directors

of Alset Inc.

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

Recent Developments

Loans to Sharing Services Global Corp.

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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.

March 31, 2025, HWH entered into a securities purchase agreement with the 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

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.

In addition, 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.

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

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.

The 1 st Loan Agreement bears

an 8% interest rate.

March 31, 2025, HWH entered into a securities purchase agreement with the 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 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.

In addition, 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.

The 6 th SHRG

Convertible Note bears an 8% interest rate.

At the time of filing, HWH has not converted any of the note 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 note contemplated by the 7 th SHRG Convertible

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

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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

At the time of filing, HWH has not converted any of the note 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.

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 note 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

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

debt contemplated by the 10 th SHRG Convertible Note.

note 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.

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 note 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.

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 discretion.

At the time of filing, HWH has not converted any of the note 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 discretion.

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

13 th SHRG Convertible Note.

of New Energy Asia Pacific Inc.

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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

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 uncertainty.

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

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Wing Nin began as a street vendor in the 1960s and has expanded in recent years.

Today, Wing Nin has thirteen locations

Today, Wing Nin has fourteen locations

across Hong Kong.

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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.

On February 5, 2026, the Company

entered into agreements with HWH International Inc.

(“HWH”), a majority owned subsidiary of the Company.

The Company agreed

to sell to HWH 505,341,376 issued and outstanding shares of common stock, par value $0.0001 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”).

representing 99.55% of Hapi Metaverse’s outstanding capital, 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 “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 for

five (5) years.

The 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

determined that terminating the sale and purchase of the Hapi Metaverse Shares was in the best interests of both parties.

Purchase Agreements with DSS, Inc.

March 26, 2026, Alset International entered into a securities purchase agreement (“DSS SPA #1”) with DSS, pursuant to which

Alset International lent DSS $2,450,000, in exchange for a convertible promissory note (“DSS Note #1”) and warrants to purchase

16,554,055 shares of DSS common stock (“DSS Warrant #1”).

DSS Note #1 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.

the terms of DSS Note #1, 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.

The 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.

DSS Warrant #1 expires

on its fifth anniversary.

June 23, 2026, the Company entered into a securities purchase agreement (“DSS SPA #2”) with DSS pursuant to which the Company

loaned DSS $1,000,000, in exchange for a convertible promissory note (“DSS Note #2”) and warrants to purchase 17,777,776

shares of DSS common stock (“DSS Warrant #2”).

DSS Note #2 is payable upon demand.

DSS Note #2 will bear a simple interest

rate of 3% per annum.

Under the terms of DSS Note #2, the Company may convert any outstanding principal and interest into shares of DSS

common stock at $0.45 per share upon notice prior to maturity of DSS Note #2 five (5) years from the date of thereof.

DSS Warrant #2

will be exercisable into up to 17,777,776 shares of DSS common stock at an exercise price of $0.50 per share.

DSS Warrant #2 expires

on its third anniversary.

SPA #2, DSS Note #2, and DSS Warrant #2 require the approval of DSS’ stockholders, prior to the conversion of the note or exercise

of the warrants.

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

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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.

Lim Sheng Hon Danny, a director and officer

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

Chan Heng Fai and Chan Tung Moe, members of the Company’s Board of Directors, recused themselves from all deliberation

and voting regarding the Transaction Documents.

that May or Are Currently Affecting Our Business

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of Operations

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

of Statements of Operations for the Three and Six Months Ended June 30, 2026 and 2025

Three- Months Ended

Six-months Ended

June 30, 2026

June 30, 2025

June 30, 2026

June 30, 2025

Operating Expenses

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$ (3,854,423 )

$ (6,415,135 )

$ (8,854,844 )

Other Expenses

1 unchanged sentence

$ (6,085,681 )

$ (6,630,409 )

$ (11,615,507 )

Income Tax Expense

1 unchanged sentence

$ (8,841,142 )

$ (11,100,269 )

$ (18,346,034 )

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

Three-months Ended

June 30, 2026

June 30, 2025

Total Revenue

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.

Six-months Ended

June 30, 2026

June 30, 2025

Total Revenue

was $988,542 and $1,098,962 for the three months ended June 30, 2026 and 2025, respectively.

Revenue was $1,969,320 and $2,167,265 for

the six months ended June 30, 2026 and 2025, respectively.

from rental business was $724,313 and $716,042 in the three months ended June 30, 2026 and 2025, respectively.

Revenue from rental business

was $1,450,972 and $1,433,847 in the six months ended June 30, 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.

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addressed as one independent category.

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.

In the three months ended June 30, 2026 and 2025, the revenue from other businesses was $264,229

and $382,920, respectively.

In the six months ended June 30, 2026 and 2025, the revenue from other businesses was $518,348 and $733,418,

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:

Three-months Ended

June 30, 2026

June 30, 2025

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.

Six-months Ended

June 30, 2026

June 30, 2025

Total Cost of Sales

of sales decreased from $1,021,954 in the three months ended June 30, 2025 to $904,665 in the three months ended June 30, 2026.

of sales decreased from $1,990,898 in the six months ended June 30, 2025 to $1,610,333 in the six months ended June 30, 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.

gross margin decreased from $77,008 to $83,877 in the three months ended June 30, 2025 and 2026, respectively.

The gross margin decreased

from $176,367 to $358,987 in the six months ended June 30, 2025 and 2026, respectively.

The decrease of gross margin was caused by the

decrease in revenue in 2026.

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

Three-months Ended

June 30, 2026

June 30, 2025

Digital Transformation Technology

Total Operating Expenses

Six-months Ended

June 30, 2026

June 30, 2025

Digital Transformation Technology

Total Operating Expenses

$ (2,059,144 )

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.

decrease of operating expenses in the six months ended June 30, 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.

the three months ended June 30, 2026, the Company had other expense of $4,027,566 compared to other expense of $6,085,681 in the three

months ended June 30, 2025 .

the six months ended June 30, 2026, the Company had other expense of $6,630,409 compared to other expense of $11,615,507 in the six months

ended June 30, 2025.

The foreign exchange transaction loss/gain and realized loss on securities investment – related party

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

The foreign exchange transaction gain was $170,687 in the three months

ended June 30, 2026, compared to $4,834,398 loss in the three months ended June 30, 2025.

The foreign exchange transaction gain was $279,630

in the six months ended June 30, 2026, compared to $6,243,500 loss in the six months ended June 30, 2025.

The realized loss on securities

investment – related party was $0 and $2,438,848 in the three months ended June 30, 2026 and 2025, respectively.

The realized loss

on securities investment – related party was $0 and $2,438,848 in the six months ended June 30, 2026 and 2025, respectively.

the three months ended June 30, 2026 the Company had net loss of $5,844,986 compared to net loss of $8,841,142 in the three months ended

June 30, 2025.

In the six months ended June 30, 2026, the Company had net loss of $11,100,269 compared to net loss of $18,346,034 in

the six months ended June 30, 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.

real estate assets have decreased to $29,083,594 as of June 30, 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.

cash has decreased from $25,184,990 as of December 31, 2025 to $12,325,977 as of June 30, 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.

31, 2025 and $2,810,020 at June 30, 2026.

Our total assets have decreased to $124,940,908 as of June 30, 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

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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

of Cash Flows for the Six Months Ended June 30, 2026 and 2025

Six Months Ended

Net cash used in operating activities

1 unchanged sentence

$ (6,374,812 )

Net cash used in investing activities

Net cash (used in) provided by investing activities

$ (3,705,460 )

1 unchanged sentence

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.

cash used in operating activities was $9,171,536 in the six months ended June 30, 2026, as compared to net cash used in operating activities

of $6,374,812 in the same period of 2025.

Paying off payables and purchasing trading securities was the main reason for the cash used

in operating activities in 2026 and 2025.

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

cash provided by investing activities was $1,675,912 in the six months ended June 30, 2025, compared to net cash used of $3,705,460 in

the six months ended June 30, 2026.

In the six months ended June 30, 2026, the Company issued $4,532,533 in loans to related parties

and spent $87,831 to purchase fixed assets and $14,858 to purchase security investment.

1 unchanged sentence

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

In the six months ended June 30, 2025, the Company

issued $910,193 in loans to related parties and spent $144,842 to purchase fixed assets.

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

of related party loan.

At the same time, we received $117,804 from

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

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.

cash used in financing activities was $508,417 in the six months ended June 30, 2026, compared to net cash provided of $2,326,244 in

the six months ended June 30, 2025.

The cash used in financing activities in the six months ended June 30, 2026 was for repayment of

note payable of $513,233.

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 the first six months of 2025 was from proceeds from issuing common stock of $2,614,983.

In that same period, the Company repaid $261,097

$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

of note payable and repurchased its own stock for $27,642.

believe that inflation has not had a material impact on our results of operations for the six months ended June 30, 2026 or the year

ended December 31, 2025.

2 unchanged sentences

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

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

United States and which were approximately $30 million and $30 million on June 30, 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

11 unchanged sentences

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

At the present time, seasonal shifts are not having a significant impact on our operations.

Quantitative and Qualitative Disclosures about Market Risk

2 unchanged sentences

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

What changed 10-Q

Item 2. Management’s Discussion and Analysis