What changed in this filing

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Item 7. Management’s Discussion and Analysis

2024-03-28 compared with 2023-04-03 · 452 added, 441 removed, 500 unchanged (64% 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

The following discussion and analysis provides

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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.

Distribution Business:

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.

Platform Business:

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.

The Group operates as a “financial

supermarket” offering over 1,800 financial products to a large universe of retail and corporate customers.

Healthcare Business:

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.

Fintech Business:

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

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

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.

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).

“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.

A collection of distribution channels, including

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

Our largest distribution channel is the FA Business,

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

In addition to the FA Business, during 2022, we

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

In addition to the FA Business, we continued

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

known as our Alternative Distribution Business.

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specific distribution opportunities.

Combined with our Digital Business, we now have

a well-diversified range of distribution channels and capabilities.

During 2023, we continued to make significant

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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:

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.

market knowledge and understanding.

productive and well-trained salesforce.

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).

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 year ended December 31, 2023, the Company

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portion of the revenues actually generated by the financial advisors currently associated with Focus.

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.

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

Platform Business

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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.

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:-

As of December 31, 2022, OnePlatform made $6.3

million in commissions and recurring service fees representing a 34% decline from 2021.

2022 revenues reflect only commission

and service fees generated after the business combination effected in November 2022.

OnePlatform also made $0.2 million in interest income

from loans it granted to customers.

OnePlatform further made commission income from the agency of real estate projects.

Fund (MPF) products, and international real estate referral and brokerage services.

The OnePlatform brand currently covers 90 insurance

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Business as of December 31, 2023 include:

An investment in Tandem Money Limited, a UK digital bank.

An investment in CurrencyFair Limited, a B2B and B2C payments

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

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.

US$ thousands (1)

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LC Healthcare Fund I, L.P.

(1) Carrying amount represents Fintech’s attributable interest

in the investment portfolio asset.

The Fintech Business previous investments

include an investment in Nutmeg, a UK-based digital wealth manager, focused on robo-advisory and digital wealth management services.

June 2021, JPMorgan Chase complete its 100% acquisition of Nutmeg.

Carrying amount represents Fintech’s

attributable interest in the investment portfolio asset.

During the year ended December 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.

As of December 31, 2023, the remaining fair value was less than $1,000.

Subsequent on February 5, 2024, the Company sold

all of its equity interest in LC Healthcare Fund I, L.P.

to an independent third party for a purchase price of $2.15 million.

Healthcare Business

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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.

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

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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.

Recent Development

Business Combination

On November 14, 2022, we consummated the Business

Combination with AGBA Acquisition Limited.

Pursuant to the Business Combination Agreement, AGBA Acquisition Limited became, through an

acquisition merger, the 100% owner of the issued and outstanding securities of each of TAG International Limited (“B2B” or

“TIL”) and TAG Asia Capital Holdings Limited (“Fintech” or “TAC”) ,

in exchange for 55,500,000 ordinary shares of AGBA, par value US$0.001 per share to TAG (subject to certain indemnity holdback provisions

as outlined in the Business Combination Agreement).

For more information, see Note 4 to the Company’s consolidated financial statements,

Reverse Recapitalization with AGBA Acquisition Limited.

The Business Combination is anticipated to be

accounted for as a reverse merger in accordance with U.S.

Under this method of accounting, we will be treated as the “acquired”

company for financial reporting purposes.

This determination was primarily based on TAG’s majority of the voting power of the post-combination

company, TAG’s senior management comprising all of the senior management of the post-combination company, and our operations comprising

the ongoing operations of the post-combination company.

Accordingly, for accounting purposes, the Business Combination will be treated

as the equivalent of our issuing shares for the net assets of AGBA, accompanied by a recapitalization.

The net assets of AGBA will be

stated at historical cost, with no goodwill or other intangible assets recorded.

Operations prior to the Business Combination will be

our continuing operation.

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.

Key Factors Affecting Our Results of Operations and Future Performance

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segments and generating operating revenue streams as follows:

Operating Revenues from Major Business

Operating Revenues

from Major Business Activities

Distribution Business

Facilitating the placement of insurance, investment, real estate and other financial products and services to our customers, through licensed brokers, in exchange for initial and ongoing commissions received from product providers, including insurance companies, fund houses and other product specialists.

Facilitating the placement of insurance, investment,

real estate and other financial products and services to our customers, through licensed brokers, in exchange for initial and ongoing

commissions received from product providers, including insurance companies, fund houses and other product specialists.

Platform Business

In exchange for receiving platform commissions or fees:

Providing access to financial products and services to licensed brokers.

Providing operational support for the submission and processing of product applications.

Providing supporting tools for commission calculations, customer engagement, sales team management, customer conversion, etc.

Providing access to financial products and services

to licensed brokers.

Providing operational support for the submission

and processing of product applications.

Providing supporting tools for commission calculations,

customer engagement, sales team management, customer conversion, etc.

Providing training resources and materials.

Facilitating the placement of investment products for the fund and/or product provider, in exchange for the fund management services

Providing the lending services whereby the Company makes secured and/or unsecured loans to creditworthy customers

Solicitation of real estate sales for the developers, in exchange for commissions

Facilitating the placement of investment products

for the fund and/or product provider, in exchange for the fund management services

Providing the lending services whereby the Company

makes secured and/or unsecured loans to creditworthy customers

Solicitation of real estate sales for the developers,

in exchange for commissions

Fintech Business

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in Hong Kong.

Operating Revenue and Other Gain (Loss)

Operating Revenue and Other Loss

We have disaggregated our operating revenue from

contracts with customers into categories based on the nature of the revenue, as well as other gains (losses) from our investment portfolio.

The following table presents the revenue streams by segments, with the presentation of revenue categories presented on the consolidated

statements of operations for the years indicated:

contracts with customers into categories based on the nature of the revenue, as well as other losses from our investment portfolio.

following table presents the revenue streams by segments, with the presentation of revenue categories presented on the consolidated statements

of operations for the years indicated:

For the year ended December 31,

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Non-interest incomes:

Recurring service fee

Recurring asset management service

Total revenues

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Non-interest incomes:

Recurring service fee

Recurring asset management service

Total revenues

Investment income, net

Investment loss, net

$ (8,937,431 )

prior to the consummation of Business Combination, which was effected in November 2022, commissions generated by the financial advisors currently associated with Focus, along with associated potential platform commissions and fees, were attributable to the Legacy Group.

Operating Costs

Commission Expense

Commission expense represent

the portion of premiums from insurance or investment products retained by financial consultants, pursuant to the terms of their respective

Commission expense represents the portion of

premiums from insurance or investment products retained by financial consultants, pursuant to the terms of their respective contracts.

Commission rates vary by market due to local practice, competition and regulations.

Commissions fluctuate directly in relation

to sales volume.

Commissions fluctuate directly in relation to sales

Sales and Marketing Expense

Sales and Marketing Expense primarily consist

Sales and Marketing Expense primarily consists

of personnel-related costs attributable to our sales and marketing personnel, marketing expense for brand promotion and spending on marketing

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Technology Expense

Technology expense primarily include personnel-related

Technology expense primarily includes personnel-related

costs attributable to our IT team, technology contractors, server facilities expenses, telecommunications expenses, software and hardware

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Personnel and Benefit Expense

Personnel and benefit expense primarily consist

Personnel and benefit expense primarily consists

of personnel-related costs and benefits, stock-based compensation costs for employees in our executive, accounting and finance, project

management, corporate development, office administration, legal and human resources functions.

Other General and Administrative Expenses

Legal and Professional Fees

Legal and Professional fees primarily consist

of certain professional consulting services in legal, audit, accounting and taxation, and others.

Other General and Administrative Expenses

primarily consist of rent and facilities expenses allocated based upon total direct costs, as well as, professional services fees,

such as consulting, audit, tax and legal fees, general corporate costs and allocated overhead expenses.

Other general and administrative expenses primarily

consist of rent and facilities expenses allocated based upon total direct costs, as well as, general corporate costs and allocated overhead expenses.

We expect that our general and administrative

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Non-interest income:

Recurring service fees

Recurring asset management service fees

Recurring asset management service fees, related party

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:

Operating expenses:

Interest expense

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Personnel and benefit expense

Legal and professional fees

Legal and professional fees, related party

Allowance for expected credit losses on financial instruments

Other general and administrative expenses

Total operating cost and expenses

Total operating expenses

Loss from operations

Other income (expense):

Bank interest income

Interest income, related party

Foreign exchange loss, net

Loss on equity method investments

Investment (loss) income, net

Interest income

Foreign exchange gain (loss), net

Investment loss, net

Change in fair value of warrant liabilities

Change in fair value of forward share purchase liability

Loss on settlement of forward share purchase liability

Gain on disposal of property and equipment

Rental income

Sundry income

Total other (expense) income, net

(Loss) income before income taxes

Total other expense, net

Loss before income taxes

Income tax expense

NET (LOSS) INCOME

The following table summarizes the major operating

revenues from the year ended December 31, 2023, as compared to the corresponding year ended December 31, 2022:

Years ended December 31,

(US$ in thousands)

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Business contributed 90.22% and 79.18% of the total revenue for the years ended December 31, 2023 and 2022, respectively.

Income from the

Distribution Business mainly related to commissions earned, which significantly increased by US$23.7 million, or 2,546.24%, from US$0.9 million

the Distribution Business mainly related to commissions earned, which significantly increased by US$24.3 million, or 98.65%, from US$24.6 million

in 2022 to US$48.9 million in 2023.

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

Prior to the consummation of Business Combination, which was effected in November 2022, 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 2022 and 2021.

revenue breakdown by product and type of contracts:

Summarized revenue breakdown by product and type

of contracts:

Years ended December 31,

(US$ in thousands)

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of the total revenue for the years ended December 31, 2023 and 2022, respectively.

Years ended December 31,

(US$ in thousands)

Recurring service fees

Recurring asset management service fees

Operating Expenses

Interest Expense

Interest expense increased by US$0.6

million for the year ended December 31, 2023, as compared to the year ended December 31, 2022.

The increase was mainly attributed to

the increase in short-term borrowings during the year.

Commission Expense

Years ended December 31,

(US$ in thousands)

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Healthcare Business

The Distribution Business contributed 89.47% and

8.59% of the total commission expense for the years ended December 31, 2022 and 2021, respectively.

The Distribution Business contributed 96.24%

and 89.47% of the total commission expense for the years ended December 31, 2023 and 2022, respectively.

Commission expense for the Distribution

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Sales and Marketing Expense

Sales and Marketing expense increased by US$10.9

Sales and marketing expense decreased by US$7.4

million for the year ended December 31, 2023, as compared to the year ended December 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.

The decrease in sales and marketing expense

is mainly attributed to lower spending associated with “AGBA” corporate branding and associated product campaigns for celebrating

the successful listing in last year.

Technology Expense

expense increased by US$0.8 million for the year ended December 31, 2022, as compared to the year ended December 31, 2021.

was primarily due to increased headcount to support anticipated growth in the business and platform expansion.

Technology expense increased by US$3.3 million

for the year ended December 31, 2023, as compared to the year ended December 31, 2022.

The increase was primarily due to increased headcount

to support anticipated growth in the business and platform expansion and the purchase of software system.

Personnel and Benefit Expense

Years ended December 31,

(US$ in thousands)

Personnel and benefit

Share based compensation

Personnel and benefit cost increased by

US$10.7 million for the year ended December 31, 2022, as compared to the year ended December 31, 2021.

Compensation to employees (share-based

Personnel and benefit cost increased by US$4.1

million for the year ended December 31, 2023, as compared to the year ended December 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 for employees

increased by US$1.2 million for the year ended December 31, 2023, as compared to the year ended December 31, 2022.

The increase was

primarily due to the settlement of accrued salaries to certain directors and employees of the Company and the amortization

of the fair value of the restricted share units.

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.

Legal and Professional Fees

Years ended December 31,

(US$ in thousands)

Legal and other professional fees

Consulting fees (share-based related)

Legal and professional fees increased by US$12.3

million, or 974.33%, for the year ended December 31, 2023, as compared to the year ended December 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

Upon the Closing of the Business Combination,

the Share Award Scheme (the “Scheme”) was approved and adopted to recognize the contributions to the Business Combination

by eligible employees, directors, and consultants and to retain them for our continuing operations and the development of our businesses.

On December 13, 2022, we granted 5,507,600 ordinary

shares under the Scheme.

507,600 ordinary shares were vested immediately on the date of grant for compensating the contributions and prior

services by and performance of eligible employees.

The remaining 5,000,000 ordinary shares were granted as restricted share units (“RSUs”)

to employees and consultants as additional compensation.

These RSUs typically are vested over one to four years period from 2023 to 2026.

The weighted average grant-date fair value of the shares granted during the year ended December 31, 2022 was $2.47 per share.

On December 29, 2022, we granted 438,500 ordinary

shares under the Scheme to the directors and officers of the Company.

The weighted average grant-date fair value of the shares granted

during the year ended December 31, 2022 was $1.91 per share.

the year ended December 31, 2022, the Company recorded US$2.1 million in share-based

compensation expense.

There was no such expense during the year ended December 31, 2021.

attributed to the increase in the US legal counsel fees and the consulting fees incurred during the year.

Consulting fees under share-based compensation

for the year ended December 31, 2023 was mainly related to the corporate strategic consultancy and business marketing service rendered

by certain third party consultants, equal to 4,900,000 ordinary shares at the market price ranging from US$0.417 to US$2.158 per share.

Legal and Professional Fees, Related Party

Legal and professional fees, related party increased

by US$0.3 million for the year ended December 31, 2023, as compared to the year ended December 31, 2022.

The increase was primarily from

the advisory services rendered by a related company which owned by the Chairman of the Company.

Allowance For Expected Credit Losses on Financial

In accordance with Accounting Standards Codification

(“ASC”) Topic 326 “Credit Losses – Measurement of Credit Losses on Financial Instruments” (ASC Topic

326), the Company utilizes the current expected credit losses (“CECL”) model to determine an allowance that reflects its

best estimate of the expected credit losses on accounts receivable, loans receivable, notes receivable, and deposits, prepayments

and others receivable which is recorded as a liability to offset the receivables.

For the years ended December 31, 2023 and 2022, the

aggregated allowance for expected credit losses on accounts receivable, loans receivable, notes receivable, and other receivables was

US$1.1 million and US$0.02 million, respectively.

Other General and Administrative Expense

Years ended December 31,

(US$ in thousands)

Financial data subscription expense

Legal and professional fees

Management fee expense

Rent and facility expenses

Office rental and operating fees

Other operating expenses

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increased by US$4.6 million, or 92.97%, for the year ended December 31, 2023, as compared to the year ended December 31, 2022.

net increase was mainly due to the increase in financial data subscription expenses of US$0.3 million, depreciation of US$0.3 million,

management fee expense of US$0.7 million, others of US$0.4 million, offset by a decrease in legal and professional fees of US$0.8 million

and rent and facility expense of US$0.7 million.

net increase was mainly due to the increase in depreciation of US$0.9 million, and office rental and operating fees of US$3.1 million.

Upon the consummation of Business Combination, the post-combination entity has expensed more as a listed company, with a significant

increase in the office rental and operating fees increased were primarily attributed to the office and administrative expenses pay to

the holding company 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 holding company, with the increased occupancy

from business expansion.

Loss from Operations

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Other Income (Expense), net

Bank Interest Income

Bank interest income increased by US$0.05 million

Interest Income

Interest income increased by US$0.3 million

for the year ended December 31, 2023.

Interest Income, Related Party

No interest income was earned for the year ended

December 31, 2022, as compared to US$0.2 million of interest income for the year ended December 31, 2021.

Interest income, related

party mainly represented the bond interest income derived from certain corporate bonds issued by the shareholder, which were purchased

in September 2020.

Foreign Exchange Loss, net

Foreign exchange loss mainly represented the unrealized

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

The net foreign exchange

loss increased by US$1.73 million or 188.85% for the year ended December 31, 2022, as compared to the year ended December 31, 2021,

due to the stronger Sterling exchange rate.

Loss on Equity Method Investments

No loss on equity method investment was shared

by the Company for the year ended December 31, 2022, as compared to the year ended December 31, 2021.

Loss on equity method investment

mainly represented our share of the investees’ losses in Nutmeg, which was fully sold in September 2021.

Foreign Exchange Gain (Loss), net

Foreign exchange gain (loss), net 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$3.6 million or 134.39% for the year ended December 31, 2023, as compared to the net

foreign exchange loss for the year ended December 31, 2022, due to the stronger Sterling exchange rate.

Investment (Loss) Income, Net

Years ended December 31,

(US$ in thousands)

Unrealized loss in marketable equity securities

Realized gain from sale of marketable equity securities

Unrealized gain in non-marketable equity securities

Unrealized loss in non-marketable equity securities

Realized gain

Dividend income

Investment loss increased by US$139.2 million,

or 106.86%, for the year ended December 31, 2022, as compared to the year ended December 31, 2021, mainly as a result of the realized

gain on the sale of our investment into Nutmeg of US$139.1 million during the year ended December 31 2021.

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 year ended December 31, 2022, the change in fair value of liability was $5.4 million, as recognized

in the consolidated statements of operations.

Investment loss decreased by US$2.1 million,

or 23.03%, for the year ended December 31, 2023, as compared to the year ended December 31, 2022, mainly as a result of the increase

in realized gain from sale of marketable equity securities of $1.5 million, increase in dividend income of US$0.5 million, decrease in

unrealized loss in marketable equity securities of US$5.3 million, decrease in unrealized gain in non-marketable equity securities of

US$2.1 million, offset by increase in unrealized loss in non-marketable equity securities of US$3.2 million for the year ended December

Loss on settlement of forward share purchase

agreement was resulted from the early termination of the Meteora Backstop Agreement on June 29, 2023.

For the year ended December 31,

2023, the loss on settlement of forward share purchase agreement was $0.4 million recognized in the consolidated statements of operations

and comprehensive loss.

Gain on disposal of property and equipment

Gain on disposal of property and equipment was

resulted from the sale of office premises to an independent third party on July 20, 2023.

For the year ended December 31, 2023, the gain

on disposal of property and equipment was $0.7 million recognized in the consolidated statements of operations and comprehensive loss.

Rental Income

Rental income increased by US$0.3 million for

the year ended December 31, 2022, as compared to the year ended December 31, 2021, which was earned from the leasing of our owned office

Rental income was earned from the leasing of

our owned office premises.

For the year ended December 31, 2023, the rental income decreased by US$0.08 million, or 24.13%, as compared

to the year ended December 31, 2022 was resulted from the sale of one of the office premises during the year.

Income Tax Expense

Income tax expense decreased by US$23.4 million,

or 99.47%, for the year ended December 31, 2022, as compared to the year ended December 31, 2021, primarily attributable to potential

tax provision related to the capital gain on equity investments realized during the year ended December 31, 2021.

Net (Loss) Income

Income tax expense increased by US$0.2 million, or 129.60%, for the

year ended December 31, 2023, as compared to the year ended December 31, 2022, primarily attributable to the provision of income tax for

Net loss increased by US$4.7 million, or

146.15% for the year ended December 31, 2022, as compared to December 31, 2021, due primarily to the realized gain on the sale of our

investment into Nutmeg during the year ended December 31 2021.

10.52% for the year ended December 31, 2023, as compared to December 31, 2022, primarily due to the increase in operating expenses of

US$38.6 million, offset by the increase in revenues of US$23.1 million and decrease in other expense, net of US$11.0 million.

Liquidity and Capital Resources

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We have a history of operating losses and negative

For the year ended December 31, 2021, we achieved profitability primarily due to cash proceeds of approximately US$186.82 million

from the sale of its investment (Nutmeg) during the year.

The remaining balance from the sale proceeds of US$1.86 million was subsequently

received in January 2022.

We, in turn, repaid a net amount of approximately US$163.80 million to the shareholder to pay off outstanding

debt, and paid US$7.18 million as earnest deposit for the purchase of an office premise from the shareholder.

Also, we paid US$3.43 million

for the addition in long-term investments.

As of December 31, 2021, we had a cash balance of US$38.6 million.

During the year ended December 31, 2022, we reported

a net loss of US$44.52 million and reported a negative operating cash flow of US$19.30 million.

As of December 31, 2022, our cash balance

was US$6.45 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 December 31, 2022.

For the year ended December 31, 2023, we reported a net loss of US$49.2 million and reported a negative operating cash flow

of US$42.1 million.

As of December 31, 2023, our cash balance was US$1.9 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.

Our ability to continue as a going concern is

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from the outcome of these uncertainties.

On November 14, 2022, we completed our business

combination with AGBA Acquisition Limited.

We renamed the combined entity “AGBA Group Holding Limited” and our ordinary shares

and warrants began trading on the Nasdaq Capital Market on November 15, 2022 under the ticker symbols “AGBA” and “AGBAW,”

respectively.

Future Liquidity

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Our management expects that the primary cash

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

requirements in 2024 will be to fund capital expenditures for (i) expansion of the Distribution Business and (ii) Platform

If our sources of liquidity need to be augmented,

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As of December 31, 2023, we had cash and cash

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

equivalents totaling $1.9 million, and $16.8 million in restricted cash.

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

equivalents totalling $38.6 million, and $34.5 million in restricted cash.

equivalents totaling $6.4 million, and $44.8 million in restricted cash.

Comparison of the year ended December 31,

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for the years presented:

Year ended December 31,

(US$ in thousands)

Net cash used in operating activities

Net cash (used in) provided by 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

Net cash provided by (used in) investing activities

Net cash (used in) provided by financing activities

Effect on exchange rate change on cash

and cash equivalents

Net change in cash, cash equivalents and restricted

Cash, cash equivalents and restricted cash,

at the beginning

Cash, cash equivalents

and restricted cash, at the end

Representing as:-

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working capital:

Years ended December 31,

(US$ in thousands)

Total Current Assets

Total Current Liabilities

Working Capital (Deficit)

Working Deficit

The working deficit as of December 31, 2023 amounted

to approximately US$41.27 million, as compared to working capital of approximately US$22.42 million at December 31, 2021.

The decline in working capital was mainly due to the additional operating capital deployed in the business expansion.

to approximately US$22.22 million, as compared to approximately US$18.27 million at December 31, 2022, an increase of

US$3.96 million or 21.66%.

Cash Flows from Operating Activities

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December 31, 2022.

Net cash used in operating activities for the

year ended December 31, 2022 was primarily the result of a net loss of US$44.52 million, a decrease in loans receivable of US$2.32

million, and an increase in accounts payable and accrued liabilities of US$10.88 million.

These amounts were partially offset by the increase

in accounts receivable of US$1.95 million, deposits, prepayments, and other receivable of US$0.20 million, decrease in escrow liabilities

of US$5.00 million, income tax payable of US$0.28 million and non-cash adjustments consisting of unrealized investment loss of US$8.94 million,

net foreign exchange loss of US$2.64 million, share based compensation of US$2.09 million, change in fair value of forward share purchase

liability of US$5.39 million and depreciation of property and equipment of US$0.39 million.

Net cash used in operating activities for

the year ended December 31, 2021 was primarily the result of the net income of US$96.46 million, decreases in accounts receivable of US$1.74

million, loans receivable of US$16.73 million, and an increase in income tax payable of US$22.93 million.

These amounts were partially

offset by non-cash adjustments, consisting of realized gain on sale of Nutmeg of US$139.16 million, loss on equity method investments

of US$1.60 million, unrealized investment loss of US$8.87 million, an increase in deposits, prepayments, and other receivables of US$1.98

million, a decrease in accounts payable and accrued liabilities of US$0.43 million and a decrease in escrow liabilities of US$9.80 million.

the year ended December 31, 2023 was primarily the result of the net loss of US$49.21 million, an increase in accounts receivable of

US$1.19 million, increase in deposits, prepayments, and others receivable of US$2.50 million, decrease in escrow liabilities of

US$12.67 million, and decrease in lease liabilities of US$1.13 million.

These amounts were partially offset by the increase in

accounts payable and accrued liabilities of US$6.89 million, increase in income tax payable of US$0.54 million, and non-cash

adjustments consisting of share-based compensation expense of US$11.24 million, non-cash lease expense of US$1.50 million,

depreciation of property and equipment of US$0.26 million, interest income on notes receivable of US$0.03 million, interest expense

on borrowings of US$0.78 million, net foreign exchange gain of US$0.91 million, net investment loss of US$6.88 million, allowance

for expected credit losses on financial instruments of US$1.08 million, gain on disposal of property and equipment of US$0.66

million, loss on settlement of forward share purchase agreement of US$0.38 million, and reversal of over-accruals in prior year of

US$3.60 million.

Net cash used in operating activities for the year

ended December 31, 2022 was primarily the result of a net loss of US$44.52 million, a decrease in loans receivable of US$2.32 million,

and an increase in accounts payable and accrued liabilities of US$10.88 million.

These amounts were partially offset by the increase in

accounts receivable of US$1.95 million, deposits, prepayments, and other receivable of US$0.20 million, decrease in escrow liabilities

of US$5.00 million, income tax payable of US$0.28 million, unrealized investment loss of US$8.94 million, net foreign exchange loss

of US$2.64 million, share based compensation of US$2.09 million, change in fair value of forward share purchase liability of US$5.39 million

and depreciation of property and equipment of US$0.39 million.

Cash Flows from Investing Activities

Net cash used in investing activities for

the year ended December 31, 2022 of US$14.19 million was primarily due to proceeds from sale of investments of US$1.85 million,

and dividend received from long-term investments of $1.15 million, offset by the addition in long-term investments of US$16.23 million, and the purchase of property and equipment of US$0.97 million.

Net cash provided by investing activities for

the year ended December 31, 2021 of US$177.49 million, was primarily due to the proceeds from the sale of Nutmeg of US$186.82 million,

the proceeds from the redemption of short-term bond of US$1.29 million, partially offset by the addition in long-term investments of US$3.43

million and the payment of earnest deposit of US$7.18 million for the purchase of an office premise from the shareholder.

the year ended December 31, 2023 of US$10.79 million was primarily due to proceeds from sale of investments of US$3.98 million, dividend

received from long-term investments of US$1.67 million, proceeds from sale of property and equipment of US$6.13 million, offset by the

purchase of notes receivable of US$0.59 million, purchase of long-term investments of US$0.29 million, and purchase of property and equipment

of US$0.10 million.

Net cash used in investing activities for the

year ended December 31, 2022 of US$14.19 million was primarily due to proceeds from sale of investments of US$1.85 million, and

dividend received from long-term investments of $1.15 million, offset by the addition in long-term investments of US$16.23 million, and

the purchase of property and equipment of US$0.97 million.

Cash Flows from Financing Activities

Net cash provided by financing activities for

the year ended December 31, 2022 of US$12.14 million was primarily due to advances from the shareholder of US$9.75 million, proceeds from

Net cash used in financing activities for the

year ended December 31, 2023 of US$1.04 million was primarily due to advances from the holding company of US$9.34 million, proceeds from

borrowings of US$7.75 million, proceeds from private placement of US$1.85 million, offset by the settlement of forward share purchase

agreement of US$13.95 million, and repayments of borrowings of US$6.03 million.

Net cash provided by financing activities for the

year ended December 31, 2022 of US$12.14 million was primarily due to advances from the shareholder of US$9.75 million, proceeds from

borrowings of US$4.46 million, cash proceeds from reverse recapitalization of US$15.36 million, offset by the dividend distribution of

US$17.44 million to the shareholder that occurred in early 2022.

Net cash used in financing activities for the

year ended December 31, 2021 of US$163.87 million, was primarily due to the repayment of the shareholder’s loan of US$163.80 million.

Liquidity and Going Concern

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we reported significant sales growth with annual revenue of approximately US$54.19 million during 2023 (2022:

US$11.47 million), and resulting

with an operating loss of approximately US$28.35 million (2021:

US$31.08 million), and

resulting with an operating loss of approximately US$43.85 million (2022:

US$28.35 million).

We expect to continue our business growth, while closely

monitoring our future spending.

We expect to continue our business growth,

while closely monitoring our future spending.

Our ability to continue as a going concern is

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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.

structure and operating plans and search for potential funding alternatives in order to finance our business development activities and

operating expenses.

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

However, we cannot

predict the exact amount or timing of the alternatives, or guarantee those alternatives will be favorable to our shareholders.

to obtain financing when required will have a material adverse impact on our business, operation and financial result.

Certain funding alternatives have been carried by us, as follows:

On September 7, 2023, we entered into an equity

purchase agreement with Williamsburg, an independent third party to agree to invest up to

$50 million over a 36-month period.

On November 7, 2023, we entered into private

placement binding term sheets with an institutional investor, our Chief Executive Officer,

Ng Wing Fai, and our management team pursuant to which we will receive gross proceeds

of approximately $5,128,960, in consideration of (i) 7,349,200 ordinary shares of our ordinary

shares, and (ii) warrants to purchase up to 1,469,840 ordinary shares at a purchase price

of $0.70 per ordinary share and associated warrants.

As of December 31, 2023, the Company

received the proceeds of $1,850,310.

With these funding initiatives, our management

believes that we would be able to strengthen our financial position, improve our liquidity, and enhance our ability to navigate the challenging

market conditions.

Material Cash Requirements

We reported a net loss during the year ended December

However, we expect to generate profitable operating results within the foreseeable future, after a full recovery from the anti-pandemic

policy in Hong Kong and getting access to the collective sales capabilities force of the sale channels associated with our distribution

Our management expects sales volumes to return to levels previously recorded at the predecessor company prior to the pandemic,

especially with the re-opening of the Mainland border and the ongoing integration of Hong Kong into the Greater Bay area .

result, management expects our net cash position to expand in 2023 and to be in excess of 2021.

As of December 31, 2022, we had an accumulated

deficit of US$39.40 million.

Our material cash requirements are highly dependent upon additional financial support associated with our

its business operations for the next 12 – 18 months.

We reported a net loss during the year ended

December 31, 2023.

However, we expect to generate profitable operating results within the foreseeable future, after a full recovery from

the anti-pandemic policy in Hong Kong and getting access to the collective sales capabilities force of the sale channels associated with

our distribution business.

Our management expects sales volumes to return to levels previously recorded at the predecessor company prior

to the pandemic, especially with the re-opening of the Mainland border and the ongoing integration of Hong Kong into the Greater Bay

As a result, management expects our net cash position to expand in 2024 and to be in excess of 2022.

As of December 31,

2023, we had an accumulated deficit of US$65.60 million.

Our material cash requirements are highly dependent upon additional financial

support associated with our its business operations for the next 12 – 18 months.

Capital commitments

As of December 31, 2022, there were no capital

Notes Receivable Agreement — Pursuant

to the Agreements, subject to demand, the Company is committed to subscribe the notes of Investment A with an aggregate amount of $1,673,525,

in batches, which are payable on or before January 31, 2024.

As of December 31, 2023, the remaining committed subscription amount was

Sale and Purchase Agreement — Pursuant

to the Agreement entered with Sony Life Singapore Pte.

(“SLS”), the Company is committed to purchase 100% equity interest

in Sony Life Financial Advisers Pte.

for a cash consideration of SGD2,500,000 (equivalent to $1,882,000).

On December 28,2023, the

Company and SLS entered a second supplementary agreement to extend the closing date of the transaction from December 31, 2023 to March

Nasdaq Compliance — On September

20, 2023, the Company received written notice (the “Notice”) from the Listing Qualifications Department of The Nasdaq Stock

Market (“Nasdaq”) notifying the Company that, based on the closing bid price of the Company’s ordinary shares, par value

$0.001 per share (the “Ordinary Shares”), for the last 30 consecutive trading days, the Company no longer complies with the

minimum bid price requirement for continued listing on The Nasdaq Capital Market.

Nasdaq Listing Rule 5550(a)(2) requires listed securities

to maintain a minimum bid price of $1.00 per share (the “Minimum Bid Price Requirement”), and Nasdaq Listing Rule 5810(c)(3)(A)

provides that a failure to meet the Minimum Bid Price Requirement exists if the deficiency continues for a period of 30 consecutive trading

On March 20, 2024, the Company was granted by Nasdaq an additional 180 calendar days period or until September 16, 2024, to regain

the compliance.

Off-Balance Sheet Arrangements

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

We do not participate in transactions that create

relationships with unconsolidated entities or financial partnerships, often referred to as variable interest entities, or VIEs, 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.

Critical Accounting Policies and Estimates

Our audited consolidated

financial statements are prepared in accordance with accounting principles generally accepted in the United States of America, which require

us to make estimates and assumptions that affect the reported amounts of assets and liabilities as of the date of the financial statements,

the reported amounts of revenues and expenses during the reporting periods and the related disclosures in the audited consolidated financial

statements and accompanying footnotes.

Out of our significant accounting policies, which are described in “Note 2—Summary

of significant accounting policies” of our audited consolidated financial statements included under Item 8 of Part II in this Annual

Report, certain accounting policies are deemed “critical,” as they require our management’s highest degree of judgment,

estimates and assumptions.

While our management believes our judgments, estimates and assumptions are reasonable, they are based on information

presently available and actual results may differ significantly from those estimates under different assumptions and conditions.

● Basis of Presentation

The accompanying consolidated financial statements

are presented in United States dollars (“US$” or “$”) and have been prepared in accordance with accounting principles

generally accepted in the United States of America (“U.S.

GAAP”) and pursuant to the accounting and disclosure rules and regulations

Securities and Exchange Commission (the “SEC”).

The Business Combination was accounted for as

a reverse recapitalization in accordance with U.S.

GAAP (the “Reverse Recapitalization”).

Under this method of accounting,

AGBA is treated as the “acquired” company and both of TIL and TAC are treated as the acquirer for financial reporting purposes.

Accordingly, for accounting purposes, the Reverse Recapitalization was treated as the equivalent of TIL and TAC issuing stock for the

net assets of AGBA, accompanied by a recapitalization.

The net assets of AGBA are stated at historical cost, with no goodwill or other

intangible assets recorded.

Both of TIL and TAC were determined to be the accounting acquirer based on the following predominant factors:

● TIL and TAC’s shareholders have a

majority of voting rights in the Company;

● the Board and senior management are primarily composed of

individuals associated with TIL and TAC;

● the operations of TIL and TAC comprise the ongoing operations

of the Company.

The consolidated assets, liabilities and results

of operations prior to the Reverse Recapitalization are those of TIL and TAC.

On the Closing Date, and subject to the terms and conditions

of the Business Combination Agreement, AGBA became, through an acquisition merger, 100% owner of the issued and outstanding shares of

each TIL and TAC, in exchange for 55,500,000 AGBA Shares.

The shares and corresponding capital amounts and losses per share, prior to

the Business Combination, have been retroactively restated in the consolidated financial statements.

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”).

Under the 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

Our audited consolidated financial statements

are prepared in accordance with accounting principles generally accepted in the United States of America, which require us to make estimates

and assumptions that affect the reported amounts of assets and liabilities as of the date of the financial statements, the reported amounts

of revenues and expenses during the reporting periods and the related disclosures in the audited consolidated financial statements and

accompanying footnotes.

Out of our significant accounting policies, which are described in “Note 3—Summary of significant

accounting policies” of our audited consolidated financial statements included under Item 8 of Part II in this Annual Report, certain

accounting policies are deemed “critical,” as they require our management’s highest degree of judgment, estimates and

While our management believes our judgments, estimates and assumptions are reasonable, they are based on information presently

available and actual results may differ significantly from those estimates under different assumptions and conditions.

Use of Estimates and Assumptions

The preparation of consolidated financial statements

in conformity with U.S.

GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities

and disclosures of contingent assets and liabilities as of the date of the consolidated financial statements and the reported amounts

of revenues and expenses during the years presented.

Significant accounting estimates reflected in the Company’s consolidated financial

statements include the useful lives of property and equipment, impairment of long-lived assets, allowance for doubtful accounts, share-based compensation, warrant liabilities, forward share purchase liability, provision for contingent liabilities, revenue recognition,

income tax provision, deferred taxes and uncertain tax position, and allocation of expenses from the shareholder.

The preparation of consolidated financial

statements in conformity with U.S.

GAAP requires management to make estimates and assumptions that affect the reported amounts of

assets and liabilities and disclosures of contingent assets and liabilities as of the date of the consolidated financial statements

and the reported amounts of revenues and expenses during the years presented.

Significant accounting estimates reflected in the

Company’s consolidated financial statements include the useful lives of property and equipment, impairment of long-lived

assets, allowance for expected credit losses, notes receivable, share-based compensation, warrant liabilities, forward share

purchase liability, provision for contingent liabilities, revenue recognition, leases, income tax provision, deferred taxes and

uncertain tax position, and allocation of expenses from the holding company.

The inputs into the management’s judgments

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Long-Term Investments, net

The Company invests in debt securities, equity

securities with readily determinable fair values, equity securities that do not have readily determinable fair values, and equity method

Investment in debt securities consist of corporate

bonds issued by the Company’s shareholder.

Debt securities are classified as held-to-maturity and carried at cost, adjusted for

the amortization of premiums and the accretion of discounts using the level-yield method over the remaining period until maturity.

premiums and discounts are recognized in interest income using the interest method over the terms of the securities.

The Company invests in equity securities with

readily determinable fair values and equity securities that do not have readily determinable fair values.

Equity securities with readily determinable fair

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

Investments in an entity in which the ownership

is greater than 20% but less than 50%, or where other facts and circumstances indicate that the Company has the ability to exercise significant

influence over the operating and financing policies of an entity, are accounted for using the equity method in accordance with ASC Topic

Investments – Equity Method and Joint Ventures .

Equity method investments are recorded initially at cost and adjusted

subsequently to recognize the share of the earnings, losses or other changes in capital of the investee entity after the date of acquisition.

The Company periodically reviews the investments for other than temporary declines in fair value below cost and more frequently when events

or changes in circumstances indicate that the carrying value of an asset may not be recoverable.

At each reporting period, the Company makes a

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Warrant Liabilities

The Company accounts

for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms

and applicable authoritative guidance in ASC Topic 480, Distinguishing Liabilities from Equity (“ASC 480”) and ASC

Topic 815, Derivatives and Hedging (“ASC 815”).

The assessment considers whether the warrants are freestanding financial

instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements

for equity classification under ASC 815, including whether the warrants are indexed to the Company’s own ordinary shares and whether

the warrant holders could potentially require “net cash settlement” in a circumstance outside of the Company’s control,

among other conditions for equity classification.

This assessment, which requires the use of professional judgment, is conducted at the

time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding.

For issued or modified

warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a component of equity at

the time of issuance.

For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required

to be recorded as liabilities at their initial fair value on the date of issuance, and each balance sheet date thereafter.

the estimated fair value of the warrants are recognized as a non-cash gain or loss on the consolidated statements of operations.

accounts for its Public Warrants as equity and the Private Warrants as liabilities.

The Company accounts for warrants as either equity-classified

or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance

in ASC Topic 480, Distinguishing Liabilities from Equity (“ASC 480”) and ASC Topic 815, Derivatives and Hedging

The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet

the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under

ASC 815, including whether the warrants are indexed to the Company’s own ordinary shares and whether the warrant holders could potentially

require “net cash settlement” in a circumstance outside of the Company’s control, among other conditions for equity

classification.

This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as

of each subsequent quarterly period end date while the warrants are outstanding.

For issued or modified warrants that meet all

of the criteria for equity classification, the warrants are required to be recorded as a component of equity at the time of issuance.

For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are required to be recorded

as liabilities at their initial fair value on the date of issuance, and each balance sheet date thereafter.

Changes in the estimated fair

value of the warrants are recognized as a non-cash gain or loss on the consolidated statements of operations.

The Company accounts for

its Public Warrants as equity and the Private Warrants as liabilities.

Revenue Recognition

The Company receives certain portion of its non-interest

The Company earns and receives most of its non-interest

income from contracts with customers, which are accounted for in accordance with Accounting Standards Update (“ASU”) No.

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is signed and executed.

The Company provides asset management services

to investment funds or investment product providers in exchange for recurring service fees.

Recurring service fees are determined based

on the types of investment products the Company distributes and are calculated as a fixed percentage of the fair value of the total investment

of the investment products, calculated daily.

These customer contracts require the Company to provide investment management services,

which represents a performance obligation that the Company satisfies over time.

After the contract is established, there are no significant

judgments made when determining the transaction price.

As the Company provides these services throughout the contract term, for the method

of calculating recurring service fees, revenue is calculated on a daily basis over the contract term, quarterly billed and recognized.

Recurring service agreements do not include rights of return, credits or discounts, rebates, price protection, performance component or

other similar privileges and the circumstances under which the fixed percentage fees, before determined, could be not subject to clawback.

Payment of recurring service fees are normally on a regular basis (typically monthly or quarterly).

Asset Management Service Fees

The Company provides asset management

services to investment funds or investment product providers in exchange for recurring asset management service fees.

asset management service fees are determined based on the types of investment products the Company distributes and are calculated as

a fixed percentage of the fair value of the total investment of the investment products, calculated daily.

These customer contracts

require the Company to provide investment management services, which represents a performance obligation that the Company satisfies

After the contract is established, there are no significant judgments made when determining the transaction price.

Company provides these services throughout the contract term, for the method of calculating recurring asset management service fees,

revenue is calculated on a daily basis over the contract term, quarterly billed and recognized.

Recurring service agreements do not

include rights of return, credits or discounts, rebates, price protection, performance component or other similar privileges and the

circumstances under which the fixed percentage fees, before determined, could be not subject to clawback.

Payment of recurring

asset management service fees are normally on a regular basis (typically monthly or quarterly).

Interest Income

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value as follows:

based upon unadjusted quoted prices for identical instruments traded in active markets;

based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that

are not active, and model-based valuation techniques (e.g.

Black-Scholes Option-Pricing model) for which all significant inputs are observable

in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Where applicable,

these models project future cash flows and discount the future amounts to a present value using market-based observable inputs;

Inputs are generally

unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset

or liability.

The fair values are therefore determined using model-based techniques, including option pricing models and discounted cash

Inputs are based upon unadjusted quoted prices for identical instruments traded in active markets;

Inputs are based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques (e.g.

Black-Scholes Option-Pricing model) for which all significant inputs are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Where applicable, these models project future cash flows and discount the future amounts to a present value using market-based observable inputs;

Inputs are generally unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability.

The fair values are therefore determined using model-based techniques, including option pricing models and discounted cash flow models.

The carrying value of the Company’s financial

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are not yet effective will not have a material impact on its financial position or results of operations upon adoption.

In June 2022, the FASB issued Accounting Standards

Recently adopted

accounting standards

In June 2016, the Financial Accounting Standards

Board (FASB) issued Accounting Standards Update No.

2016 - 13, Financial Instruments - Credit Losses (Topic 326):

Measurement of Credit

Losses on Financial Instruments (“ASU 2016 - 13”).

ASU 2016 - 13 added a new impairment model (known as the CECL model) that

is based on expected losses rather than incurred losses.

Under the new guidance, an entity recognizes as an allowance its estimate of

expected credit losses.

The CECL model applies to most debt instruments, accounts receivables, notes receivables, loans receivable, financial

guarantee contracts, and other loan commitments.

The CECL model does not have a minimum threshold for recognition of impairment losses

and entities will need to measure expected credit losses on assets that have a low risk of loss.

As an emerging growth company, the

Company was permitted to adopt the new standard for fiscal years beginning after December 15, 2022, including interim periods within those

fiscal years.

The Company has adopted the new standard effective January 1, 2023, which didn’t have a material impact on the consolidated

financial statements.

New accounting

standards not yet adopted

In November 2023, the FASB issued Accounting Standards

Update (“ASU”) No.

2022-03 Fair Value Measurements (Topic 820):

Fair Value Measurement of Equity Securities Subject to Contractual Sale

Restrictions .

These amendments clarify that a contractual restriction on the sale of an equity security is not considered part of

the unit of account of the equity security and, therefore, is not considered in measuring fair value.

This guidance is effective for public

business entities for fiscal years, including interim periods within those fiscal years, beginning after December 15, 2023.

Early adoption

is permitted.

The Company has assessed ASU 2022-03 and early adopted the guidance during the second quarter of 2022.

The adoption did

not have a material impact on the Company’s consolidated financial statements.

In June 2016, the

Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2016-13, Financial Instruments — Credit

Losses (Topic 326).

The new standard amends guidance on reporting credit losses for assets held at amortized cost basis

and available-for-sale debt securities.

In February 2020, the FASB issued ASU 2020-02, Financial Instruments-Credit Losses

(Topic 326) and Leases (Topic 842) — Amendments to SEC Paragraphs Pursuant to SEC Staff Accounting Bulletin No.

Update to SEC Section on Effective Date Related to Accounting Standards Update No.

2016-02, Leases (Topic 842), which

amends the effective date of the original pronouncement for smaller reporting companies.

ASU 2016-13 and its amendments will

be effective for the Company for interim and annual periods in fiscal years beginning after December 15, 2022.

The Company believes

the adoption will modify the way the Company analyses financial instruments, but it does not anticipate a material impact on results of

The Company is in the process of determining the effects the adoption will have on its consolidated financial statements.

the above-mentioned pronouncements, there are no new recent issued accounting standards that will have a material impact on the consolidated

balance sheets, statements of operations and cash flows.

2023-07, Segment Reporting (Topic 280), Improvements to Reportable Segment Disclosures.

of the update was to improve financial reporting by requiring disclosures of incremental segment information on an annual and interim

basis for all public entities to enable investors to develop more decision-useful financial analyses.

The amendments in this ASU are effective

for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, with early

adoption permitted and requires retrospective application to all periods presented in the consolidated financial statements.

is evaluating the impact on the Company’s consolidated financial statements.

In December 2023, the FASB issued ASU 2023-09,

Income Taxes (Topic 740):

Improvements to Income Tax Disclosures (ASU 2023-09), which requires disclosure of incremental income tax information

within the rate reconciliation and expanded disclosures of income taxes paid, among other disclosure requirements.

ASU 2023-09 is effective

for fiscal years beginning after December 15, 2024.

Early adoption is permitted.

The Company’s management does not believe the adoption

of ASU 2023-09 will have a material impact on its consolidated financial statements and disclosures.

Except for the above-mentioned pronouncements,

there are no new recent issued accounting standards that will have a material impact on the consolidated balance sheets, statements of

operations and cash flows.

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

1 unchanged sentence

to make disclosures under this Item.

FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Our financial statements and the notes thereto

begin on page F-1 of this Annual Report.

CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS

ON ACCOUNTING AND FINANCIAL DISCLOSURE

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

What changed 10-K

Item 7. Management’s Discussion and Analysis