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Item 2. Management’s Discussion and Analysis

2023-05-15 compared with 2022-11-17 · 538 added, 310 removed, 12 unchanged (99% of the section changed)

MANAGEMENT’S DISCUSSION AND ANALYSIS

OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

MANAGEMENT’S DISCUSSION AND

ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

References in this report (the “Quarterly

Report”) to “we,” “us” or the “Company” refer to AGBA Group Holding Limited (formerly known

as AGBA Acquisition Limited).

References to our “management” or our “management team” refer to our officers and

directors, references to the “Sponsor” refer to AGBA Holding Limited.

The following discussion and analysis of the Company’s

financial condition and results of operations should be read in conjunction with the unaudited condensed consolidated financial statements

and the notes thereto contained elsewhere in this Quarterly Report.

Certain information contained in the discussion and analysis set forth

below includes forward-looking statements that involve risks and uncertainties.

Report”) to “we,” “us”, “the Group” or the “Company” refer to AGBA Group Holding

References to our “management” or our “management team” refer to our officers and directors.

The following

discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction with the unaudited

condensed consolidated financial statements and the notes thereto contained elsewhere in this Quarterly Report.

Certain information contained

in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties.

Special Note Regarding Forward-Looking Statements

6 unchanged sentences

Words such as “expect,”

“believe,” “anticipate,” “intend,” “estimate,” “seek” and variations and similar

words and expressions are intended to identify such forward-looking statements.

Such forward-looking statements relate to future events

or future performance, but reflect management’s current beliefs, based on information currently available.

A number of factors could

cause actual events, performance or results to differ materially from the events, performance and results discussed in the forward-looking

“believe,” “anticipate,” “intend,” “estimate,” “seek” and variations and

similar words and expressions are intended to identify such forward-looking statements.

Such forward-looking statements relate to future

events or future performance, but reflect management’s current beliefs, based on information currently available.

A number of factors

could cause actual events, performance or results to differ materially from the events, performance and results discussed in the forward-looking

For information identifying important factors that could cause actual results to differ materially from those anticipated

in the forward-looking statements, please refer to the Risk Factors section of the Company’s registration statement on Form S-1

filed with the U.S.

Securities and Exchange Commission (the “SEC”).

The Company’s securities filings can be accessed

on the EDGAR section of the SEC’s website at www.sec.gov.

Except as expressly required by applicable securities law, the Company

disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future

events or otherwise.

Prior to our business combination, we were a blank check company incorporated

in the British Virgin Islands on October 8, 2018 and formed for the purpose of entering into a merger, share exchange, asset acquisition,

share purchase, recapitalization, reorganization or similar business combination with one or more businesses or entities.

Prior to our business combination, we had no revenue, had losses since

inception from incurring formation costs and have no operations other than the active solicitation of a target business with which to

complete a business combination.

We relied upon the sale of our securities and loans from our officers and directors to fund our operations.

On May 16, 2019, the Company consummated its initial

public offering of 4,600,000 units, which includes the full exercise of the over-allotment option.

Each Public Unit consists of one ordinary

share, one redeemable warrant, and one right to receive one-tenth (1/10) of an ordinary share upon the consummation of an initial business

Each redeemable warrant entitles the holder thereof to purchase one-half (1/2) of one ordinary share, and each ten rights

entitle the holder thereof to receive one ordinary share at the closing of a business combination.

The Units were sold at an offering

price of $10.00 per Unit, generating gross proceeds of $46,000,000.

Simultaneously with the closing of the initial business combination,

the Company consummated the private placement of 225,000 units at a price of $10.00 per Private Unit, generating total proceeds of $2,250,000.

A total of $46,000,000 of the net proceeds from the sale of Public Units in the initial business combination (including the over-allotment

option units) and the private placements were placed in a Trust Account established for the benefit of the Company’s public shareholders.

The Company incurred $2,559,729 in initial public offering related costs, including $2,175,948 of underwriting fees and $383,781 of initial

public offering costs.

On each of May 11, August 13 and November 10,

2020, we issued a $460,000 unsecured promissory note to the Sponsor, pursuant to which such amount was deposited into our Trust Account

in order to extend the amount of time we had available to complete a business combination from May 16, 2020 to February 16, 2021.

of February 10, May 11 and August 11, 2021, the Company issued an unsecured promissory note, in an amount of $594,467, to the Sponsor,

pursuant to which such amount had been deposited into the Trust Account in order to extend the amount of available time to complete a

business combination until November 16, 2021.

On each of November 10, 2021 and February 7, 2022, the Company issued an unsecured promissory

note in an amount of $546,991, to the Sponsor, pursuant to which such amount had been deposited into the Trust Account in order to extend

the amount of available time to complete a business combination until May 16, 2022.

Each of these promissory notes is non-interest bearing

and is payable upon the closing of a business combination.

In addition, each of the promissory notes may be converted, at the lender’s

discretion, into additional Private Units at a price of $10.00 per unit.

Upon the completion of business combination, these promissory

notes were fully converted.

We held our annual meeting of shareholders on

May 3, 2022 (the “2022 Annual Meeting”).

During the 2022 Annual Meeting, shareholders approved, among other things, (i) the

Fourth Amended and Restated Memorandum and Articles of Association to extend the date by which the Company has to consummate a business

combination two times for three additional months each time from May 16, 2022 to November 16, 2022;

(ii) an amendment to the Company’s

investment management trust agreement, dated May 14, 2019, as amended, by and between the Company and Continental Stock Transfer &

Trust Company to extend the time to complete a business combination to November 16, 2022;

and (iii) elected all of the five nominees for

directors to serve until the next annual meeting of shareholders approved.

On each of May 9, 2022, and August 9, 2022, we issued an unsecured

promissory note, in an amount of $504,431 to the Sponsor, pursuant to which such amount had been deposited into the Trust Account in order

to extend the amount of available time to complete a business combination until November 16, 2022.

Our management has broad discretion with respect

to the specific application of the net proceeds of the initial business combination and the private placement, although substantially

all of the net proceeds are intended to be applied generally towards consummating a business combination.

On November 3, 2021, the Company entered into

the business combination Agreement, which provides for a business combination between AGBA and TAG and certain of TAG’s wholly owned

subsidiaries – OPH, Fintech, B2B, B2BSub, and HKSub.

OPH through its wholly-owned subsidiaries, is engaged in business-to-business

(or B2B) services, while Fintech through its wholly-owned subsidiaries, is engaged in the financial technology or fintech business.

is a wholly-owned subsidiary of B2B, and HKSub is a wholly owned subsidiary of B2BSub.

In the business combination agreement, as amended,

B2B, B2BSub, HKSub, OPH, Fintech, together with their respective subsidiaries are referred to as the “Group Parties”.

to the business combination agreement, as amended, OPH will first become a subsidiary of B2B through a merger with HKSub, with OPH as

the surviving entity (the “OPH Merger”).

Subsequently, (i) AMSI will merge with and into B2B;

and AMSII will merge with and

into Fintech (together with (i), the “Acquisition Merger”).

In consideration of the Acquisition Merger, AGBA will issue 55,500,000

ordinary shares with a deemed price per share US$10.00 (“Aggregate Stock Consideration”) to TAG, in its capacity as sole shareholder

of B2B and Fintech.

At the closing of the Acquisition Merger, AGBA

shall issue the full amount of the Aggregate Stock Consideration, less three percent (3%) of the Aggregate Stock Consideration (the “Holdback

Shares”), to TAG, in its capacity as sole shareholder of B2B and Fintech, subject to compliance with applicable law.

the provisions of the business combination Agreement, AGBA will release the Holdback Shares at the end of six (6) months following the

closing of the Acquisition Merger, which may be extended for an additional three-month period (the “Survival Period”), provided

that the AGBA will be entitled to retain some or all of the Holdback Shares to satisfy certain indemnification claims during the Survival

On November 14, 2022, the Company completed its

business combination with TAG Holding Limited (“TAG”).

Through an acquisition merger, the Company has become the 100 % owner

of the issued and outstanding securities of each of TAG International Limited and TAG Asia Capital Holdings Limited, each formerly wholly-owned

subsidiaries of TAG.

The post-combination company has been renamed, “AGBA Group Holding Limited” and its ordinary shares and

warrants are expected to begin trading on the Nasdaq Capital Market (“Nasdaq”) on November 15, 2022 under the ticker symbols

“AGBA” and “AGBAW” respectively.

in the forward-looking statements, please refer to the Risk Factors section included in our 2022 Annual Report filed with the U.S.

and Exchange Commission (the “SEC”).

The Company’s securities filings can be accessed on the EDGAR section of the SEC’s

website at www.sec.gov.

Except as expressly required by applicable securities law, the Company disclaims any intention or obligation

to update or revise any forward-looking statements whether as a result of new information, future events or otherwise.

Business Overview

We are a leading one-stop financial supermarket

based in Hong Kong servicing over 400,000 individual and corporate customers.

We offer the broadest set of financial services and healthcare

products in the Guangdong-Hong Kong-Macao Greater Bay Area (GBA) through a tech-led ecosystem, enabling clients to unlock the choices

that best suit their needs.

We currently operate four major areas of businesses,

comprising of:

The Group’s powerful financial advisor business is the largest in the

market, it engages in the personal financial advisory business (including advising and sales

of a full range of financial services products including long-term life insurance, savings

and mortgages), with additional internal and external channels being developed and added.

The Group operates as a “financial supermarket” offering over 1,800

financial products to a large universe of retail and corporate customers.

Through the Group’s 4% stake in and a strategic partnership with HCMPS,

operating as one of the largest healthcare management organizations in the Hong Kong and

Macau region, with over 800 doctors in its network.

Established in 1979, it is one of the

most reputed healthcare brands in Hong Kong.

The Group has an ensemble of leading FinTech assets and businesses in Europe

and Hong Kong.

In addition to financial gains, the Group also derives substantial knowledge

transfers from its investee companies, supporting the development and growth of the Group’s

new business models.

Distribution Business

The Distribution Business comprises a variety

of captive financial services distribution channels.

We have built a market leading financial advisors distribution channel in Hong Kong.

We have also built other distribution channels alongside our market leading financial advisors business.

Our combined captive distribution channels enable

us to directly access one of the largest pools of customers accessible to independent financial services providers in Hong Kong.

Financial Advisors Business (“FA Business”)

“Focus” is engaged in the distribution of life insurance,

asset management, property-casualty and Mandatory Provident Fund products through its teams of independent financial advisors (brokers).

Alternative Distribution Business

A collection of distribution channels, including salaried financial

planners targeting HNWI, development teams pursuing corporate partnerships and incubating financial advisors teams.

Digital Business

AGBA Money is a direct-to-consumer digital app that provides various

financial products and services to retail customers.

Our largest distribution channel is the FA Business,

operating under the brand name Focus.

With its large salesforce of financial advisors, “Focus” provides a wide range of financial

products and independent advisory services to individual and corporate customers, primarily in connection with life insurance products.

Our FA Business has been the clear market leader in the insurance brokerage industry in Hong Kong for decades, building up a large and

highly productive salesforce.

As of March 31, 2023, there were around 1,600 financial advisors at “Focus”, organized into

32 sales teams.

Each team is led by a “tree head”, responsible for managing the financial advisors within their teams.

In addition to the FA Business, we continue to

expand our distribution footprint with the establishment and expansion of a number of additional distribution channels, collectively

known as our Alternative Distribution Business.

These distribution channels are targeted at specific customer segments and/or capturing

specific distribution opportunities.

Combined with our Digital Business, we now have

a well-diversified range of distribution channels and capabilities.

During 2022, we continued to make significant

investments into developing and expanding our financial advisors salesforce, broadening and deepening the product range, as well as upgrading

the supporting infrastructure.

Our infrastructure not only supports the financial consultants in engaging with their customers, it also

provides extensive operational support in relation to the processing of transactions, associated payment flows, as well as after-sales

Building our infrastructure required substantial investments into technological, operational and financial systems, as well

as the development of comprehensive operational and support teams (operations support, customer services, payments, etc.).

of the financial products offered to our customers are regulated, on top of the various operational requirements, we have built significant

internal capabilities in the areas of risk and internal control, as well as legal and compliance to ensure an appropriate level of regulatory

compliance and supervision.

As a result of our efforts to expand our distribution

capabilities and improve our supporting infrastructure, we have successfully developed these inter-related strategic assets:

● Vast customer base in Hong

Kong and growing customer base in Mainland China.

● State-of-the-art supporting

infrastructure.

● Relationships with and access

to a broad range of leading global financial product providers.

● Deep market knowledge and understanding.

● Highly productive and well-trained

We will continue to capitalize on these core

strategic assets and match them with the emerging opportunities in our three core industries (life insurance, wealth management and healthcare).

For the three months ended March 31, 2023, the

Company made $9.7 million from commission in the Distribution Business.

The revenue attributed to the Company during the first quarter

of 2023 only captured an insignificant portion of the revenues actually generated by the financial advisors currently associated with

Upon the re-opening of China Border, we will

continue to widen our distribution footprint and actively explore further opportunities to develop partnerships and generate customer

leads on the ground in Mainland China, as well as refining our abilities to service our customer base.

We expect sales volumes to return

to the levels previously recorded, prior to the pandemic period, especially with the re-opening of the Mainland border and the ongoing

integration of Hong Kong into the Greater Bay area.

Platform Business

The Platform business, through OPH and its subsidiaries,

is a one-stop financial supermarket with a breadth of products and services that is unrivaled in Hong Kong sourced from leading global

product providers.

The Platform Business was set up to take advantage

of the decades-long experience we built up in supporting the largest financial advisors salesforce in Hong Kong.

We were already servicing

a large pool of customers and in the process, built up a wide library of world class financial products and constructed a state-of-the-art

technological and operational infrastructure.

The Platform Business now operates this full-service

platform under its “OnePlatform” brand and has opened it up to banks, other financial institutions, family offices, brokers,

and individual independent financial advisors that are looking for support in advising and serving their retail clients.

Our technology-enabled Platform Business offers

a wide range of financial products, covering life insurance, pensions, property-casualty insurance, stock brokerage, mutual funds, money

lending and real estate agency.

In addition to its unrivaled product-shelf, the

Platform Business offers digital-enabled sales management and support solutions, business operations support, comprehensive customer

services, and training support.

Currently, our platform financial services and

investment products mainly comprise mutual fund distributions, portfolio management, money lending, insurance and Mandatory Provident

Fund (MPF) products, and international real estate referral and brokerage services, as discussed below:-

The OnePlatform brand currently covers 44 insurance

providers selling 657 products, and 40 asset management fund houses with over 1,000 products.

Fintech Business

The Fintech Business has collected an ensemble

of valuable fintech assets in its investment portfolio.

Fintech Business’ management team has strived to establish the business

as a leading name in the fintech investment sector.

Core Fintech investments held under the Fintech

Business as of March 31, 2023 include:

An investment in Tandem Money

Limited, a UK digital bank.

An investment in CurrencyFair

Limited, a B2B and B2C payments company.

An investment in Oscar Health

Inc., a US direct-to-consumer digital health insurer.

An investment in Goxip Inc.,

a fashion media platform based in Hong Kong.

An investment in LC Healthcare

Fund I, L.P., a PRC healthcare and healthtech investment fund.

Carrying amount in

US$ thousands (1)

Tandem Money Limited

CurrencyFair Limited

Oscar Health Inc.

LC Healthcare Fund I, L.P.

Carrying amount represents Fintech’s

attributable interest in the investment portfolio asset.

During the three months ended March 31, 2023,

the Company partially sold 993,108 shares of Oscar Health Inc.

on Nasdaq Stock Exchange with an average current market price of $4.01

per share, resulting with a realized gain of $1.5 million.

Healthcare Business

We currently hold a 4% equity stake in HCMPS,

one of the leading healthcare management organizations in Hong Kong.

Founded in 1979 and currently operating under

Jones Fok & Associates Medical Scheme Management Limited (“JFA”) brand, JFA is one of the most reputed healthcare

brands in Hong Kong.

It has four self-operated medical centers and a network of over 700 healthcare service providers – providing

healthcare schemes for more than 500 corporate clients with over 300,000 scheme members.

JFA’s clients include blue chip companies

from various industry and leading insurers.

Apart from Hong Kong, JFA is the largest operator in Macau with around 70 clinics.

JFA operates a city-wide medical network that

includes 340 general practitioners (“GP”), 11 laboratories and imaging centers, 273 specialist doctors, 25 physiotherapy

centers, 12 Chinese medicine practitioner clinics, all based in Hong Kong, and 69 GP clinics in Macau.

Over 380,000 out-patient and in-patient

visits are recorded annually through HCMPS’s medical network.

JFA offers its patients a full range of medical services, including

general services, specialist services, physiotherapy, Chinese medicine, dental, vaccination, X-ray, laboratories and imaging services.

We believe that the future of healthcare is in

“Smart Health” – technology that offers improved patient-care management and leverages data as the new tool for solving

complex healthcare challenges with reduced operating costs.

We will focus on technology/digitalization and consumerization of healthcare

to create an ecosystem empowering customers to proactively manage their health and well-being and to improve their access to healthcare

at a lower cost – with connectivity across the care continuum.

We believe that JFA has the captive customer base, infrastructure

and product/service offerings to optimize customer experience to further grab market share.

We are currently working to transform JFA into

the best medical care institution in Asia by 2025, redefining industry standards in the Greater Bay Area and offering market-leading

customer care and best-in-class infrastructure empowered by data analytics.

Results of Operations

Our entire activity from inception up to May 16,

2019 was in preparation for the initial public offering.

Since the initial public offering, our activity has been limited to the evaluation

of business combination candidates and engaging in activities in connection with the proposed business combination transaction with TAG,

and we will not be generating any operating revenues until the closing and completion of our business combination.

For the three months ended September 30, 2022, we had a net income

of $429,335, which was comprised of dividend income and general and administrative expenses, as well as a gain from the change in fair

value of warrant liabilities.

For the three months ended September 30, 2021,

we had a net loss of $209,743, which was comprised of general and administrative expenses and a loss from change in fair value of warrant

For the nine months ended September 30, 2022,

we had a net loss of 153,751, which was comprised of interest and dividend income and general and administrative expenses, as well as

a gain from the change in fair value of warrant liabilities.

For the nine months ended September 30, 2021,

we had a net loss of $515,988, which was comprised of general and administrative expenses and a loss from change in fair value of warrant

Three month ended March 31,

(US$ in thousands)

Interest income:

Total interest income

Non-interest income:

Recurring service fees

Total non-interest income

Total revenues from others

Non-interest income:

Recurring service fees

Total revenues from related parties

Total revenues

Operating cost and expenses:

Interest expense

Commission expense

Sales and marketing expense

Technology expense

Personnel and benefit expense

Other general and administrative expenses

Total operating cost and expenses

Loss from operations

Other income (expense):

Bank interest income

Foreign exchange gain (loss), net

Investment income, net

Change in fair value of warrant liabilities

Change in fair value of forward share purchase liability

Rental income

Sundry income

Total other income, net

Loss before income taxes

Income tax benefit (expense)

The following table summarizes the major operating

revenues for the three months ended March 31, 2023 and 2022:

Three month ended March 31,

(US$ in thousands)

Business segment

Distribution Business

Platform Business

Fintech Business

Healthcare Business

Distribution Business

The Distribution

Business contributed 87.49% and 8.67% of the total revenue for the three months ended March 31, 2023 and 2022, respectively.

the Distribution Business mainly related to commissions earned, which significantly increased by US$9.5 million, or 5,282.22%, from US$0.2 million

in 2022 to US$9.7 million in 2023.

The largest segment of the Distribution Business is our FA Business, operated under the “Focus”

Commissions generated by the financial advisors currently associated with Focus, along with associated potential platform

commissions and fees, were attributable to the Legacy Group and as such not reflected in the results for the Distribution Business for

Summarized revenue breakdown by product and type

of contracts:

Three month ended March 31,

(US$ in thousands)

Life insurance

Property-casualty insurance

Mandatory provident fund and related revenues

By the type of contracts:

- New and or current year

Platform Business

The Platform Business contributed 12.51% and

91.33% of the total revenue for the three months ended March 31, 2023 and 2022, respectively.

Three month ended March 31,

(US$ in thousands)

Recurring service fees

Operating Expenses

Commission Expense

Three month ended March 31,

(US$ in thousands)

Business segment

Distribution Business

Platform Business

Fintech Business

Healthcare Business

The Distribution Business contributed 94.75%

and 9.70% of the total commission expense for the three months ended March 31, 2023 and 2022, respectively.

Commission expense for the

Distribution Business increased by US$6.8 million, or 10,064.71%, from US$0.07 million in 2022 to US$6.9 million in 2023.

of the increase in revenue associated with the Distribution Business, commission expense significantly increased.

Sales and Marketing Expense

Sales and Marketing expense increased by US$1.6

million for the three months ended March 31, 2023, as compared to the three months ended March 31, 2022.

The increase in sales and marketing

expense mainly reflects spending associated with “AGBA” corporate branding and associated product campaigns, celebrating

it’s the successful listing, through public relations, corporate video and campaigns, digital marketing and public advertisements.

Technology Expense

Technology expense increased by US$0.7 million

for the three months ended March 31, 2023, as compared to the three months ended March 31, 2022.

The increase was primarily due to increased

headcount to support anticipated growth in the business and platform expansion.

Personnel and Benefit Expense

Three month ended March 31,

(US$ in thousands)

Personnel and benefit

Share-based compensation to employees

Personnel and benefit cost increased by US$6.3

million for the three months ended March 31, 2023, as compared to the three months ended March 31, 2022.

The increase was primarily due

to the increased headcount to support the continuing growth of the Platform Business and Distribution Business.

Share-Based Compensation

Pursuant to the Share Award Scheme (the “Scheme”),

the Company filed S-8 registration statement to register 11,675,397 ordinary shares on February 24, 2023.

During the three months ended March 31, 2023,

the Company recorded US$1.3 million in share-based compensation expense on the restricted share units.

There was no such expense during

the three months ended March 31, 2022.

The fair value of the restricted share units is recognized over the period based on the derived

service period (usually the vesting period), on a straight-line basis.

Other General and Administrative Expenses

Three month ended March 31,

(US$ in thousands)

Financial data subscription expense

Legal and professional fees

Management fee expense

Share-based compensation (service related)

Other operating expenses

Total other general and administrative expenses

increased by US$4.9 million, or 544.93%, for the three months ended March 31, 2023, as compared to the three months ended March 31, 2022.

The net increase was mainly due to the increase in legal and professional fees of US$0.7 million, management fee expense of US$1.7 million,

share-based compensation of $2.6 million, offset by a decrease in financial data subscription expense of US$0.04 million.

Upon the consummation

of Business Combination, the post-combination entity has expensed more as a listed company, with a significant increase in the legal and

professional fees and management fee expense increased were primarily attributed to 1) the US legal counsel fee incurred and 2) the office

and administrative expenses pay to the shareholder for the use of office premises in Trust Tower and Hopewell Centre, including building

management fees, government rates and rent, office rent, lease-related interest, and depreciation actually incurred by the shareholder,

with the increased occupancy from business expansion.

Share-based compensation in the first quarter of 2023, was mainly related to marketing

consultancy service rendered by a third party consultant, payable by 1,200,000 ordinary shares at the market price of $2.1575 per share.

Loss from Operations

Loss from operations increased by US$12.7 million,

or 662.76%, for the three months ended March 31, 2023, as compared to the three months ended March 31, 2022.

The increase was mainly

attributable to the increase in operating expenses of US$21.7 million.

Other Income (Expense), Net

Bank Interest Income

Bank interest income increased by US$0.2 million

for the three months ended March 31, 2023, as compared to the three months ended March 31, 2022.

Foreign Exchange Gain (Loss), Net

Foreign exchange gain (loss) mainly represented

the unrealized net foreign exchange gain (loss) from the translation of long-term investments which are mostly denominated in Sterling.

The net foreign exchange gain increased by US$1.0 million or 215.59% for the three months ended March 31, 2023, as compared to the three

months ended March 31, 2022, due to the stronger Sterling exchange rate.

Investment Income, Net

Three month ended March 31,

(US$ in thousands)

Realized gain in marketable equity securities

Unrealized gain in marketable equity securities

Unrealized loss in non-marketable equity securities

Dividend income

Investment income decreased by US$0.4 million, or 19.82%, for the three

months ended March 31, 2023, as compared to the three months ended March 31, 2022, mainly as a result of the realized gain of US$1.5 million

on the sale of the shares of Oscar Health Inc.

in the open market at the average market price of $4.01 per shares and dividend income

of US$0.6 million, offset by unrealized loss in non-marketable equity securities of US$0.4 million, which was fewer than the unrealized

gain in marketable securities of US$2.1 million.

Change in fair value of forward share purchase

The forward share purchase liability (“FSP

liability”) under the Meteora Backstop Agreement is valued using a Black-Scholes model, which is considered to be Level 3 fair

value measurement on a recurring basis.

For the three months ended March 31, 2023, the change in fair value of liability was $0.1 million,

as recognized in the condensed consolidated statements of operations.

Income Tax Benefit (Expense)

Income tax benefit increased by US$0.4 million,

or 106.44% for the three months ended March 31, 2023, as compared to the three months ended March 31, 2022, primarily attributable to

the over provision of income tax for prior years.

Net loss increased by US$11.6 million, or 2,600.89%

for the three months ended March 31, 2023, as compared to March 31, 2022, due primarily to the increase in operating expenses of US$21.7

Liquidity and Capital Resources

As of September 30, 2022, we had cash of $96,914

outside our Trust Account available for working capital needs.

All remaining cash was held in the Trust Account and is generally unavailable

for our use, prior to the business combination.

On May 16, 2019, we consummated the initial public

offering of 4,600,000 Public Units (which includes the full exercise of the underwriter’s over-allotment option), at a price of

$10.00 per unit, generating gross proceeds of $46,000,000.

Simultaneously with the closing of the initial public offering, we consummated

the sale of 225,000 Private Units, at a price of $10.00 per unit, generating gross proceeds of $2,250,000.

Following the initial public offering and the

exercise of the over-allotment option, a total of $46,000,000 was placed in the Trust Account.

We incurred $2,559,729 in initial public

offering related costs, including $2,175,948 of underwriting fees and $383,781 of initial public offering costs.

Our liquidity needs have been satisfied to date

through receipt of $25,000 from the sale of the insider shares, note payable of $5,266,243 and advances from our Sponsor in an aggregate

amount of $1,645,353 outstanding as of September 30, 2022, and the remaining net proceeds from our initial public offering and private

We intend to use substantially all of the net

proceeds of the initial public offering, including the funds held in the Trust Account, to acquire a target business or businesses and

to pay our expenses relating thereto.

To the extent that our capital stock is used in whole or in part as consideration to effect our

business combination, the remaining proceeds held in the Trust Account, as well as any other net proceeds not expended, will be used as

working capital to finance the operations of the target business.

Such working capital funds could be used in a variety of ways including

continuing or expanding the target business’ operations, for strategic acquisitions and for marketing, research and development

of existing or new products.

Such funds could also be used to repay any operating expenses or finders’ fees which we had incurred

prior to the completion of our business combination if the funds available to us outside of the Trust Account were insufficient to cover

such expenses.

We intend to use the funds held outside the Trust

Account primarily for activities relating to consummating the proposed business combination with TAG.

If our estimates of the costs of consummating

our proposed business combination is less than the actual amount necessary to do so, or the amount of interest available to us from the

Trust Account is less than we expect as a result of the current interest rate environment, we may have insufficient funds available to

operate our business prior to our initial business combination.

Moreover, we may need to obtain additional financing either to consummate

our initial business combination or because we become obligated to redeem a significant number of our public shares upon consummation

of our initial business combination, in which case we may issue additional securities or incur debt in connection with such business combination.

Subject to compliance with applicable securities laws, we would only consummate such financing simultaneously with the consummation of

our initial business combination.

Following our initial business combination, if cash on hand is insufficient, we may need to obtain additional

financing in order to meet our obligations, and there is no assurance that such financing can be obtained on favorable terms, or at all.

We may need to seek additional capital through

loans or additional investments from members of our management team, but such members of our management team are not under any obligation

to advance funds to, or invest in, us.

In the event that the business combination does not close, we may use a portion of the working

capital held outside the Trust Account to repay such loaned amounts, but no proceeds from our Trust Account would be used for such repayment.

Such loans would be evidenced by promissory notes.

The notes would either be paid upon consummation of our business combination, without

interest, or, at the lender’s discretion, up to $500,000 of the notes may be converted upon consummation of our business combination

into additional Private Units at a price of $10.00 per unit.

The terms of such loans by our initial shareholders, officers and directors,

if any, have not been determined and no written agreements exist with respect to such loans.

Accordingly, the Company may not be able to obtain

additional financing.

If the Company is unable to raise additional capital, it may be required to take additional measures to conserve

liquidity, which could include, but not necessarily be limited to, curtailing operations, suspending the pursuit of a potential transaction,

and reducing overhead expenses.

The Company cannot provide any assurance that new financing will be available to it on commercially acceptable

terms, if at all.

These conditions raise substantial doubt about the Company’s ability to continue as a going concern if a business

combination is not consummated by November 16, 2022.

These unaudited condensed consolidated financial statements do not include any adjustments

relating to the recovery of the recorded assets or the classification of the liabilities that might be necessary should the Company be

unable to continue as a going concern.

Off-balance Sheet Financing Arrangements

We have no obligations, assets or liabilities

which would be considered off-balance sheet arrangements as of September 30, 2022.

We do not participate in transactions that create relationships

with unconsolidated entities or financial partnerships, often referred to as variable interest entities, which would have been established

for the purpose of facilitating off-balance sheet arrangements.

We have not entered into any off-balance sheet financing arrangements,

established any special purpose entities, guaranteed any debt or commitments of other entities, or purchased any non-financial assets.

Contractual Obligations

We do not have any long-term debt, capital lease

obligations, operating lease obligations or long-term liabilities other than an agreement to pay our Sponsor a monthly fee of $10,000

for general and administrative services, including office space, utilities and administrative services to the Company.

We began incurring

these fees on May 16, 2019 and will continue to incur these fees monthly until the earlier of the completion of the business combination

and the Company’s liquidation.

Also, we are committed to the below:

Registration Rights

The holders of our insider shares issued and outstanding

prior to our initial public offering, as well as the holders of the Private Units (and all underlying securities) and any securities our

initial shareholders, officers, directors or their affiliates may be issued in payment of working capital loans made to us, are entitled

to registration rights pursuant to a registration rights agreement entered into concurrently without initial public offering.

the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to our

consummation of a business combination.

We will bear the expenses incurred in connection with the filing of any such registration statements.

Underwriting Agreement

The underwriter is entitled to a cash underwriting

discount of six and half percent (6.5%), or $0.65 per unit, of the gross proceeds of the initial public offering.

Two and one-half percent

(2.5%), or $0.25 per share, is not contingent and has been paid at the closing of the initial public offering.

Four percent (4.0%), or

$0.40 per unit, is contingent on the closing of a business combination and will be deferred by the underwriters and be placed in the Trust

Such deferred amount will only be payable to the underwriters upon closing of a business combination.

Further, the deferred amount

paid to the underwriters upon the closing of a business combination will be reduced by two percent (2.0%), or $0.20 per unit, for each

unit that is redeemed by shareholders in connection with the business combination.

If the business combination is not consummated, the

deferred amount will be forfeited by the underwriters.

The underwriters will not be entitled to any interest accrued on the deferred amount.

Private Warrants

The Company classifies the private warrants as

liabilities at their fair value and adjusts the private warrants to fair value at each reporting period.

This liability is subject to

re-measurement at each balance sheet date until exercised, and any change in fair value is recognized in our statement of operations.

The private warrants are valued using a Black Scholes model.

Unit Purchase Option

The Company sold to Maxim for $100, an option

to purchase 276,000 units exercisable, at $11.50 per unit, between the first and fifth anniversary of the effective date of the registration

statement relating to our initial public offering.

The purchase option may be exercised for cash or on a cashless basis, at the holder’s

option, and expires on May 13, 2024.

The Company accounted for the unit purchase option, inclusive of the receipt of $100 cash payment,

as an expense of the Public Offering resulting in a charge directly to shareholders’ equity.

The Company estimates that the fair

value of the unit purchase option is approximately $747,960, or $2.71 per Unit, using the Black-Scholes option-pricing model.

value of the unit purchase option granted to the underwriters is estimated as of the date of grant using the following assumptions:

expected volatility of 35%, (2) risk-free interest rate of 2.18% and (3) expected life of four years between first and fifth anniversary

dates of the Effective Date.

The option and the units, as well as the ordinary shares and warrants to purchase ordinary shares that may

be issued upon exercise of the option, have been deemed compensation by FINRA and are therefore subject to a lock-up for a period of 180

days immediately following the effective date of the registration statement for our initial public offering pursuant to Rule 5110(g)(1)

of FINRA’s rules, during which time the option may not be sold, transferred, assigned, pledged or hypothecated, or be subject of

any hedging, short sale, derivative or put or call transaction that would result in the economic disposition of the securities.

Additionally,

the option may not be sold, transferred, assigned, pledged or hypothecated prior to May 13, 2020 except to any underwriters and selected

dealer participating in the offering and their bona fide officers or partners.

The option grants to holders demand and “piggy back”

rights for periods of five and seven years, respectively, from the effective date of the registration statement of which forms a part

with respect to the registration under the Securities Act of the securities directly and indirectly issuable upon exercise of the option.

We will bear all fees and expenses attendant to registering the securities, other than underwriting commissions which will be paid for

by the holders themselves.

The exercise price and number of units issuable upon exercise of the option may be adjusted in certain circumstances

including in the event of a share dividend, or our recapitalization, reorganization, merger or consolidation.

However, the option will

not be adjusted for issuances of ordinary shares at a price below its exercise price.

Right of First Refusal

Subject to certain conditions, the Company granted

Maxim, for a period of 18 months after the date of the consummation of the business combination, a right of first refusal to act as lead

underwriters or minimally as a co-manager, with at least 30% of the economics;

or, in the case of a three-handed deal, 20% of the economics,

for any and all future public and private equity and debt offerings.

In accordance with FINRA rule 5110(f)(2)(E)(i), such right of first

refusal shall not have a duration of more than three years from the effective date of the registration statement for our initial public

Critical Accounting Policies

The preparation of the unaudited condensed consolidated

financial statements and related disclosures in conformity with accounting principles generally accepted in the United States of America

(“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities,

disclosure of contingent assets and liabilities at the date of the unaudited condensed consolidated financial statements, and income and

expenses during the periods reported.

Actual results could materially differ from those estimates.

The Company has not identified any

significant accounting policies.

Ordinary Shares Subject To Possible Redemption

The Company accounts for its ordinary shares subject

to possible redemption in accordance with the guidance in ASC Topic 480 “ Distinguishing Liabilities from Equity .” Ordinary

share subject to mandatory redemption (if any) is classified as a liability instrument and is measured at fair value.

Conditionally redeemable

ordinary shares (including ordinary shares that feature redemption rights that are either within the control of the holder or subject

to redemption upon the occurrence of uncertain events not solely within the Company’s control) are classified as temporary equity.

At all other times, ordinary shares are classified as shareholders’ equity.

The Company’s ordinary shares feature certain

redemption rights that are considered to be outside of the Company’s control and subject to occurrence of uncertain future events.

Net Income (Loss) Per Share

The Company calculates net loss per share in accordance

with ASC Topic 260, “Earnings per Share.” Basic loss per share is computed by dividing the net loss by the weighted-average

number of ordinary shares outstanding during the period, excluding ordinary shares subject to possible conversion.

Diluted loss per share

is computed by dividing net loss by the weighted average number of ordinary shares outstanding, plus to the extent dilutive, the incremental

number of ordinary shares to settle rights and other ordinary share equivalents (currently none are outstanding), as calculated using

the treasury stock method.

Ordinary shares subject to possible conversion at September 30, 2022, which are not currently redeemable and

are not redeemable at fair value, have been excluded from the calculation of basic and diluted loss per share since such shares, if redeemed,

only participate in their pro rata share of the Trust Account earnings.

The Company has not considered the effect of rights that convert

into 276,000 ordinary shares in the unit purchase option sold to the underwriter, in the calculation of diluted loss per share, since

the conversion of the rights into ordinary is contingent upon the occurrence of future events.

Warrant Liabilities

The Company accounts for the warrants in accordance

with the guidance contained in ASC 815-40-15-7D and 7F under which the private warrants do not meet the criteria for equity treatment

and must be recorded as liabilities.

Accordingly, the Company classifies the private warrants as liabilities at their fair value and adjusts

the private warrants to fair value at each reporting period.

This liability is subject to re-measurement at each balance sheet date until

exercised, and any change in fair value is recognized in our statement of operations.

The private warrants are valued using a Black Scholes

Sources of Liquidity

We have a history of operating losses and negative

During the three months ended March 31, 2023, we reported a net loss of US$12.1 million and reported a negative operating

cash flow of US$10.2 million.

As of March 31, 2023, our cash balance was US$3.7 million for working capital use.

Our management estimates

that currently available cash will not be able to provide sufficient funds to meet the planned obligations for the next 12 months starting

March 31, 2023.

Our ability to continue as a going concern is

dependent on our ability to successfully implement our plans.

Our management believes that it will be able to continue to grow our revenue

base and control expenditures.

In parallel, AGBA continually monitors its capital structure and operating plans and evaluates various

potential funding alternatives that may be needed in order to finance our business development activities, general and administrative

expenses, and growth strategy.

These alternatives include external borrowings, raising funds through public equity, or tapping debt markets.

Although there is no assurance that, if needed, we will be able to pursue these fundraising initiatives and have access to the capital

markets going forward.

The unaudited condensed consolidated financial statements attached to this Form 10-Q do not include any adjustments

that might result from the outcome of these uncertainties.

Future Liquidity

On a recurring basis, the primary future cash

needs of the Company will be focused on operating activities, working capital, capital expenditures, investment, regulatory and compliance

The ability of the Company to fund these needs will depend, in part, on its ability to generate or raise cash in the future, which

is subject to general economic, financial, competitive, regulatory, and other factors that are beyond its control.

The ability to fund our operating needs will

depend on its future ability to continue to generate positive cash flow from operations and raise capital in the capital markets.

management believe that we will meet known or reasonably likely future cash requirements through the combination of cash flows from operating

activities, available cash balances, and external borrowings and fund raising.

Our management expects that the primary cash requirements

in 2023 will be to fund capital expenditures for (i) expansion of the Distribution Business and (ii) Platform Business.

If our sources of liquidity need to be augmented,

additional cash requirements would likely need to be financed through the issuance of debt or equity securities;

however, there can be

no assurances that we will be able to obtain additional debt or equity financing on acceptable terms, or at all, in the future.

We expect that operating losses could continue

into the foreseeable future as we continue to invest in growing our businesses.

Based upon our current operating plans, our management

believes that cash and equivalents will not be able to provide sufficient funds to its operations for at least the next 12 months from

the date of its unaudited condensed consolidated financial statements provided with this Form 10-Q.

However, these forecasts involve

risks and uncertainties, and actual results could vary materially.

Our future capital requirements may vary materially

from those currently planned and will depend on many factors, including our rate of revenues growth, the timing and extent of spending

on sales and marketing, the expansion of sales and marketing activities, the timing of new product introductions, market acceptance of

our brand, and overall economic conditions.

We may also seek additional capital to fund our operations, including through the sale of

equity or debt financings.

To the extent that we raise additional capital through the future sale of equity, the ownership interest of

our stockholders will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect

the rights of our existing shareholders.

The incurrence of debt financing would result in debt service obligations and the instruments

governing such debt could provide for operating and financing covenants that would restrict our operations.

As of March 31, 2023, we had cash and cash equivalents

totalling US$3.7 million, and US$45.0 million in restricted cash.

As of December 31, 2022, we had cash and cash

equivalents totalling US$6.4 million, and US$44.8 million in restricted cash.

The following table summarizes our cash flows

for the periods presented:

Three month ended March 31,

(US$ in thousands)

Net cash (used in) provided by operating activities

Net cash provided by (used in) investing activities

Net cash provided by (used in) financing activities

Effect on exchange rate change on cash and cash equivalents

Net change in cash, cash equivalents and restricted cash

Cash, cash equivalents and restricted cash, at the beginning

Cash, cash equivalents and restricted cash, at the end

Representing as:

Cash and cash equivalents

Restricted cash – forward share purchase agreement

Restricted cash – fund held in escrow

The following table sets forth a summary of our

working capital:

(US$ in thousands)

Total Current Assets

Total Current Liabilities

Working Deficit

The working deficit as of March 31, 2023 and

December 31, 2022 was amounted to approximately US$40.52 million and US$41.27 million, respectively, a decline of US$0.7 million or 1.81%.

Cash Flows from Operating Activities

Net cash used in operating activities was US$10.2

million for the three months ended March 31, 2023, as compared to net cash provided by operating activities of US$1.3 million for the

three months ended March 31, 2022.

Net cash used in operating activities for the three months ended March

31, 2023 was primarily the result of the net loss of US$12.1 million, an increase in accounts receivable of US$0.5 million, increase in

deposit, prepayments, and other receivables of US$0.5 million, decrease in escrow liabilities of US$0.02 million and decrease in income

tax payable of US$0.2 million.

These amounts were partially offset by the decrease in loans receivables of US$0.1 million, increase in

accounts payable and accrued liabilities of US$1.2 million, and non-cash adjustments consisting of share-based compensation expense of

US$3.9 million, depreciation of property and equipment of US$0.1 million, net foreign exchange gain of US$0.6 million, net investment

income of US$1.7 million, and change in fair value of forward share purchase liability of US$0.08 million.

Net cash provided by operating activities for

the three months ended March 31, 2022 was primarily the result of the net loss of US$0.4 million, a decrease in loans receivable of US$2.3

million, and an increase in escrow liabilities of US$1.7 million.

These amounts were partially offset by the increase in accounts receivable

of US$0.04 million, deposits, prepayments, and other receivable of US$0.06 million, decrease in accounts payable and accrued liabilities

of US$1.0 million, and non-cash adjustments consisting of unrealized investment income of US$2.1 million, net foreign exchange loss of

US$0.5 million, and depreciation of property and equipment of US$0.1 million.

Cash Flows from Investing Activities

Net cash provided by investing activities for

the three months ended March 31, 2023 of US$4.0 million was primarily due to proceeds from sale of investments of US$4.0 million, dividend

received from long-term investments of US$0.6 million, offset by the purchase of notes receivable of US$0.6 million.

Net cash used in investing activities for the

three months ended March 31, 2022 of US$6.9 million was primarily due to proceeds from sale of investments of US$1.9 million, offset

by the purchase of property and equipment of US$0.9 million, and payment of earnest deposit of US$7.8 million for the purchase of an

office premise from the shareholder.

Cash Flows from Financing Activities

Net cash provided by financing activities for

the three months ended March 31, 2023 of US$3.5 million was primarily due to advances from the shareholder of US$1.7 million and proceeds

from borrowings of US$1.8 million..

Net cash used in financing activities for the

three months ended March 31, 2022 of US$14.5 million was primarily due to advances from the shareholder of US$2.9 million, offset by

the dividend distribution of US$17.4 million to the shareholder.

Liquidity and Going Concern

Our unaudited condensed consolidated

financial statements have been prepared on a going concern basis, which contemplates continuity of operations, realization of

assets, and liquidation of liabilities in the normal course of business.

The management of the Company estimates that currently

available cash will not be able to provide sufficient funds to meet the Company’s planned obligations for the next 12 months

from the date that these unaudited condensed consolidated financial statements were made available to be issued.

For the three months ended March 31, 2023, we

reported a net loss of approximately US$12.1 million.

With a significant increase in our operating costs, described in the paragraph

below, we had an accumulated deficit of approximately US$51.5 million as of March 31, 2023.

However, coupled with its business expansion,

we reported significant sales growth with total revenue of approximately US$11.1 million for the three months ended March 31, 2023 (2022:

US$2.1 million), and resulted with an operating loss of approximately US$14.6 million (2022:

US$1.9 million).

We expect to continue our

business growth, while closely monitoring our future spending.

Our ability to continue as a going concern is

dependent on the management’s ability to successfully implement its plans.

Our management team believes that we will be able to

continue to grow our revenue base and control our expenditures.

In parallel, our management team will continually monitor our capital

structure and operating plans and evaluate various potential funding alternatives that may be needed in order to finance our business

development activities, general and administrative expenses and growth strategy.

We intend to raise additional capital through

private placements of debt and equity securities, but there can be no assurance that these funds will be available on terms acceptable,

or will be sufficient to enable us to fully complete its development activities or sustain operations.

If we are unable to raise sufficient

additional funds, we will have to develop and implement a plan to further extend payables, reduce overhead, or scale back our current

business plan until sufficient additional capital is raised to support further operations.

There can be no assurance that such a plan

will be successful.

Capital Commitments

Forward Share Purchase Agreement —

Pursuant to the Meteora Backstop Agreement, subject to demand, the Company is committed to purchase up to 2,500,000 shares of its issued

and outstanding ordinary shares from the investors in nine months following the consummation of Business Combination in November 2022.

As of March 31, 2023, the Company accounted the related committed liability as forward share purchase liability of $13,573,788.

Notes Receivable Agreement — Pursuant

to the Agreements, subject to demand, the Company is committed to subscribe the notes of CurrencyFair Limited with an aggregate amount

of $1,673,525, in batches, which are payable on or before January 31, 2024.

As of March 31, 2023, the remaining committed subscription

amount was $1,084,439.

Capital Contribution in LC Healthcare Fund

— As of March 31, 2023, the remaining committed capital amount in LC Healthcare Fund I, L.P.

was $331,432.

Off-Balance Sheet Arrangements

We are not party to any off-balance sheet transactions.

We have no guarantees or obligations other than those which arise out of normal business operations.

We have not engaged in any off-balance sheet

financial arrangements that have or are reasonably likely to have a material current or future effect on our financial condition, changes

in financial condition, net revenue or expenses, results of operations, liquidity, capital expenditures, or capital resources.

Stock Repurchase Program

On April 18, 2023, our

Board of Directors approved the repurchase of 1,000,000 ordinary shares (the “2023 Share Repurchase Program”).

2023 Share Repurchase Program, we are authorized to re-purchase up to 1,000,000 ordinary shares at a maximum price of $10 per share from

the open market, for a term of one year, no later than April 18, 2024.

Critical Accounting Policies, Judgements and

The preparation of financial statements in

conformity with GAAP requires us to make judgments, estimates, and assumptions in the preparation of our unaudited condensed

consolidated financial statements.

Actual results could differ from those estimates.

There have been no material changes to our

critical accounting policies and estimates as reported in our 2022 Annual Report.

QUANTITATIVE AND QUALITATIVE DISCLOSURES

ABOUT MARKET RISK

As a “smaller reporting company”

as defined by Item 10 of Regulation S-K, we are not required to provide 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