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What changed in Alset Inc.'s 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of Alset Inc.'s 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+324 added−391 removedSource: 10-K (2024-04-01) vs 10-K (2023-03-31)

Top changes in Alset Inc.'s 2023 10-K

324 paragraphs added · 391 removed · 226 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

56 edited+40 added−70 removed64 unchanged
Biggest changeRecent Agreements to Sell Additional Lots Agreement to Sell 110 Lots On March 16, 2023, the Seller entered into a Purchase and Sale Agreement (the “Purchase and Sale Agreement”) with Rausch Coleman Homes Houston, LLC, a Texas limited liability company (“Rausch Coleman”).
Biggest change(the “Seller”) entered into a Purchase and Sale Agreement (the “Purchase and Sale Agreement”) with Rausch Coleman Homes Houston, LLC, a Texas limited liability company (“Rausch Coleman”). Pursuant to the terms of the Purchase and Sale Agreement, the Seller has agreed to sell approximately 110 single-family detached residential lots which comprise a section of the Lakes at Black Oak.
We entered the biomedical and healthcare market by forming our biohealth division, which is engaged in developing, researching, testing, manufacturing, licensing and distributing (through retail, direct selling, network marketing and e-commerce) biohealth products and services. We strive to leverage our scientific know-how and intellectual property rights to provide solutions to pending healthcare issues. HWH World.
We entered the biomedical and healthcare market by forming our biohealth division, which is engaged in developing, researching, testing, manufacturing, licensing and distributing (through retail, direct selling, network marketing and e-commerce) biohealth products and services. We strive to leverage our scientific know-how and intellectual property rights to provide solutions to pending healthcare issues. 8 HWH World.
We are required to comply with government regulations and to make filings from time to time with various government entities. Such work is typically handled by outside contractors we retain. Digital Transformation Technology Business. Companies conducting business on the Internet are subject to a number of foreign and domestic laws and regulations.
We are required to comply with government regulations and to make filings from time to time with various government entities. Such work is typically handled by outside contractors we retain. 12 Digital Transformation Technology Business. Companies conducting business on the Internet are subject to a number of foreign and domestic laws and regulations.
The Company pays its property managers a monthly property management fee per property unit and a leasing fee. Potential Future Projects In addition to our main projects, we are embarking on residential construction activities in partnership with U.S. homebuilders, and have commenced discussions to acquire smaller U.S. residential construction projects.
The Company pays its property managers a monthly property management fee per property unit and a leasing fee. 7 Potential Future Projects In addition to our main projects, we are embarking on residential construction activities in partnership with U.S. homebuilders, and have commenced discussions to acquire smaller U.S. residential construction projects.
We have included our website address as an inactive textual reference only and the information contained in, and that can be accessed through, our website is not incorporated into and is not part of this report on Form 10-K.
We have included our website address as an inactive textual reference only and the information contained in, and that can be accessed through, our website is not incorporated into and is not part of this report on Form 10-K. 14
The issuance of the DSS Shares was be subject to the approval of the NYSE American (on which the common stock of DSS is listed) and DSS’s shareholders. The transaction closed on May 17, 2022. American Pacific Bancorp Inc.
The issuance of the DSS Shares was be subject to the approval of the NYSE American (on which the common stock of DSS is listed) and DSS’s shareholders. The transaction closed on May 17, 2022. 9 American Pacific Bancorp Inc.
(“Hapi Metaverse”) (formerly known as GigWorld Inc.), our 99.7% owned subsidiary. Its technology platform focuses on business-to-business, or B2B, solutions, such as communications and workflow, through instant messaging, international calling, social media, e-commerce. Hapi Metaverse’s latest investment into Value Exchange International Inc. (“VEII”) expanded our offering to retail business digital transformation such as supermarket and chain stores.
(“Hapi Metaverse”) (formerly known as GigWorld Inc.), our 99.6% owned subsidiary. Its technology platform focuses on business-to-business, or B2B, solutions, such as communications and workflow, through instant messaging, international calling, social media, e-commerce. Hapi Metaverse’s latest investment into Value Exchange International Inc. (“VEII”) expanded our offering to retail business digital transformation such as supermarket and chain stores.
Other competitors in our real estate business may have more substantial ties and experience in geographical areas in which we operate. 13 Our competitors may develop products, features or services that are similar to ours or that achieve greater acceptance, may undertake more far-reaching and successful product development efforts or marketing campaigns, or may adopt more aggressive pricing policies.
Other competitors in our real estate business may have more substantial ties and experience in geographical areas in which we operate. 11 Our competitors may develop products, features or services that are similar to ours or that achieve greater acceptance, may undertake more far-reaching and successful product development efforts or marketing campaigns, or may adopt more aggressive pricing policies.
The Note bears an interest rate of the one month LIBOR plus 375 basis points. Commissions on each letter of credit (“L/C”) are 1.5% per annum on the face amount of the L/C. Other standard lender fees apply in the event L/C is drawn down. The Note is a revolving line of credit.
The Note bore an interest rate of the one-month LIBOR plus 375 basis points. Commissions on each letter of credit (“L/C”) are 1.5% per annum on the face amount of the L/C. Other standard lender fees apply in the event L/C is drawn down. The Note is a revolving line of credit.
However, additional legislation, changes in rules promulgated by self-regulatory organizations or changes in the interpretation or enforcement of existing laws and rules, either in the United States or elsewhere, may directly affect our mode of operation and profitability. 15 Rigorous legal and compliance analysis of our businesses is endemic to our culture and risk management.
However, additional legislation, changes in rules promulgated by self-regulatory organizations or changes in the interpretation or enforcement of existing laws and rules, either in the United States or elsewhere, may directly affect our mode of operation and profitability. 13 Rigorous legal and compliance analysis of our businesses is endemic to our culture and risk management.
Killiney Kopitiam, founded in 1919, is a Singapore-based chain of mass-market, traditional kopitiam style service cafes selling traditional coffee and tea, along with a range of local delicacies such as Curry Chicken, Laksa, Mee Siam, and Mee Rebus. Hapi Cafes. The Company, through Hapi Café Inc.
Killiney Kopitiam, founded in 1919, is a Singapore-based chain of mass-market, traditional kopitiam style service cafes selling traditional coffee and tea, along with a range of local delicacies such as Curry Chicken, Laksa, Mee Siam, and Mee Rebus. Hapi Cafes. The Company, through Hapi Cafe Inc.
Previously, Alset Inc. and certain majority-owned subsidiaries collectively owned 132 single-family rental homes in Texas. 112 of these rental homes are owned by subsidiaries of American Home REIT Inc. (“AHR”). Alset Inc. owns 85.4% of Alset International Limited, and Alset International Limited indirectly owns approximately 99.9% of Alset EHome Inc.
Previously, Alset Inc. and certain majority-owned subsidiaries collectively owned 132 single-family rental homes in Texas. 112 of these rental homes are owned by subsidiaries of American Home REIT Inc. (“AHR”). Alset Inc. owns 85.5% of Alset International Limited, and Alset International Limited indirectly owns approximately 99.9% of Alset EHome Inc.
HWH World generates product sales via its direct sale model as products are sold to its members. Through the use of a Hapi Gig platform that combines e-commerce, social media and a customized rewards system, HWH Korea equips, trains and empowers its members. We compete with numerous direct sales companies in South Korea. 10 Vivacitas Oncology.
HWH World generates product sales via its direct sale model as products are sold to its members. Through the use of a Hapi Gig platform that combines e-commerce, social media and a customized rewards system, HWH Korea equips, trains and empowers its members. We compete with numerous direct sales companies in South Korea.
On May 28, 2014, the RBG Family, LLC entered into an Assignable Real Estate Sales Contract with NVR, Inc. (“NVR”) by which RBG Family, LLC would sell the 197 acres for $15 million to NVR.
Previously, on May 28, 2014, the RBG Family, LLC entered into the Assignable Real Estate Sales Contract with NVR, Inc. (“NVR”) by which RBG Family, LLC would sell the 197 acres for $15 million to NVR.
On November 4, 2021, Black Oak Ltd received $750,000 reimbursement from Aqua Texas pursuant to a contractual agreement whereby Aqua is obligated to pay 150 CCM Black Oak $6,000 for each connection made to an individual single-family home upon sale to the end customer.
On November 4, 2021, Lakes at Black Oak received $750,000 reimbursement from Aqua Texas pursuant to a contractual agreement whereby Aqua is obligated to pay 150 CCM Black Oak $6,000 for each connection made to an individual single-family home upon sale to the end customer.
Digital Transformation Technology Our digital transformation technology business unit is committed to enabling enterprises to engage in a digital transformation by providing support, implementation and development services with various technologies including blockchain, e-commerce, social media, artificial intelligent and metaverse. We commenced our technology business in 2015 through Hapi Metaverse Inc.
Digital Transformation Technology Our digital transformation technology business unit is committed to enabling enterprises to engage in a digital transformation by providing support, implementation and development services with various technologies including blockchain, e-commerce, social media, artificial intelligent customer service application and metaverse services. We commenced our technology business in 2015 through Hapi Metaverse Inc.
We manage our three principal businesses primarily through our 85.4% owned subsidiary, Alset International Limited (“Alset International”), a public company traded on the Singapore Stock Exchange. Through this subsidiary (and indirectly, through other public and private U.S. and Asian subsidiaries), we are actively developing real estate projects near Houston, Texas and in Frederick, Maryland, in our real estate segment.
We manage our three principal businesses primarily through our 85.5% owned subsidiary, Alset International Limited (“Alset International”), a public company traded on the Singapore Stock Exchange. Through this subsidiary (and indirectly, through other public and private U.S. and Asian subsidiaries), we are actively developing real estate projects near Houston, Texas, in our real estate segment.
During 2022 and 2021 the Company signed multiple purchase agreements to acquire 23 and 109 homes, respectively, in Montgomery and Harris Counties, Texas. By December 31, 2022, the acquisition of all 132 homes was completed with an aggregate purchase cost of $30,998,258. All of these purchased homes are properties of our rental business.
During 2022 and 2021 the Company signed multiple purchase agreements to acquire 20 and 112 homes, respectively, in Montgomery and Harris Counties, Texas. By December 31, 2022, the acquisition of all 132 homes was completed with an aggregate purchase cost of $30,998,258. All of these purchased homes are properties of our rental business.
We identify global businesses for acquisition, incubation and corporate advisory services, primarily related to our operating business segments. We also have ownership interests outside of Alset International, including a 36.9% equity interest in American Pacific Bancorp Inc., an indirect 15.5% equity interest in Holista CollTech Limited, a 45.2% equity interest in DSS Inc.
We identify global businesses for acquisition, incubation and corporate advisory services, primarily related to our operating business segments. We also have ownership interests outside of Alset International, including a 36.9% equity interest in American Pacific Bancorp Inc., an indirect 13% equity interest in Holista CollTech Limited, a 44.4% equity interest in DSS Inc.
The L/C Facility is not a revolving loan, and amounts advanced and repaid may not be re-borrowed. Repayment of the Development Loan Agreement was secured by $2,600,000 collateral fund and a Deed of Trust issued to M&T Bank on the property owned by SeD Maryland. As of December 31, 2022 and 2021, the principal balance of the loan was $0.
The L/C Facility is not a revolving loan, and amounts advanced and repaid may not be re-borrowed. Repayment of the Development Loan Agreement was secured by $2,600,000 collateral fund and a Deed of Trust issued to M&T Bank on the property owned by SeD Maryland. The outstanding balance of the revolving loan is now $0.
To date, we have spent approximately $57,581 on environmental studies and compliance. Such costs are reflected in capitalized construction costs in our financial statements.
To date, we have spent approximately $71,431 on environmental studies and compliance. Such costs are reflected in capitalized construction costs in our financial statements.
(“LiquidValue Development”), a 99.9%-owned U.S. subsidiary of Alset International, which owns, operates and manages real estate development projects with a focus on land subdivision developments (LiquidValue Development was formerly known as “SeD Intelligent Home Inc.”). We generally contract out all real estate development activities, working with engineers, surveyors, architects and general contractors through each phase, including planning, design and construction.
(“LiquidValue Development”), a 99.9%-owned U.S. subsidiary of Alset International, which owns, operates and manages real estate development projects with a focus on land subdivision developments. We generally contract out all real estate development activities, working with engineers, surveyors, architects and general contractors through each phase, including planning, design and construction.
In approximately fifty-three single-family of the 132 rental homes that were acquired by our subsidiary in 2022 and 2021, as part of our commitment to advancing smart and healthy, sustainable living, we have installed Tesla PV solar panels and Powerwalls.
In approximately 96 of the 132 single-family rental homes that were acquired by our subsidiary in 2022 and 2021as a part of our commitment to advancing smart and healthy sustainable living, we installed Tesla PV solar panels and Powerwalls.
(“HCI-T”), commenced operation of two cafés during 2022 and 2021, which are located in Singapore and South Korea. The cafes are operated by subsidiaries of HCI-T, namely Hapi Café SG Pte. Limited (“HCSG”) in Singapore and Hapi Café Korea Inc. (“HCKI”) in Seoul, South Korea.
(“HCI-T”), an indirect majority-owned subsidiary of the Company, commenced operation of two cafés during 2022 and 2021, which are located in Singapore and South Korea. The cafes are operated by subsidiaries of HCI-T, namely Hapi Cafe SG Pte. Ltd. (“HCSG”) in Singapore and Hapi Cafe Korea Inc. (“HCKI”) in Seoul, South Korea.
Holista CollTech Limited is a public Australian company that produces natural food ingredients (ASX: HCT). DSS is a multinational company operating businesses within nine divisions: product packaging, biotechnology, direct marketing, commercial lending, securities and investment management, alternative trading, digital transformation, secure living, and alternative energy. DSS Inc. is listed on the NYSE American (NYSE: DSS).
DSS is a multinational company operating businesses within nine divisions: product packaging, biotechnology, direct marketing, commercial lending, securities and investment management, alternative trading, digital transformation, secure living, and alternative energy. DSS Inc. is listed on the NYSE American (NYSE: DSS).
As a result of such share issuance, the Company’s ownership percentage of APB fell to 41.3% and subsequently to 36.9% at the end of 2022 due to APB’s share issuances. Alset Capital Acquisition Corp. On February 3, 2022 Alset Capital Acquisition Corp.
As a result of such share issuance, the Company’s ownership percentage of APB fell to 41.3% and subsequently to 36.9% at the end of 2022 due to APB’s share issuances. Planned Acquisition of New Energy Asia Pacific Inc.
As we expand internationally, government regulation concerning the Internet, and in particular, network neutrality, may be nascent or non-existent. Within such a regulatory environment, coupled with potentially significant political and economic power of local network operators, we could experience discriminatory or anti-competitive practices that could impede our growth, cause us to incur additional expense or otherwise negatively affect our business.
Within such a regulatory environment, coupled with potentially significant political and economic power of local network operators, we could experience discriminatory or anti-competitive practices that could impede our growth, cause us to incur additional expense or otherwise negatively affect our business.
In addition, laws and regulations relating to user privacy, freedom of expression, content, advertising, information security and intellectual property rights are being debated and considered for adoption by many countries throughout the world.
In addition, laws and regulations relating to user privacy, freedom of expression, content, advertising, information security and intellectual property rights are being debated and considered for adoption by many countries throughout the world. Online businesses face risks from some of the proposed legislation that could be passed in the future.
On October 28, 2022, 150 CCM Black Oak Ltd. (the “Seller”), entered into a Contract for Purchase and Sale and Escrow Instructions (the “Agreement”) with Century Land Holdings of Texas, LLC, a Colorado limited liability company (the “Buyer”).
(the “Seller”), a Texas Limited Partnership and subsidiary of the Company, entered into a Contract for Purchase and Sale and Escrow Instructions (the “Agreement”) with Century Land Holdings of Texas, LLC, a Colorado limited liability company (the “Buyer”).
Hapi Cafes are distinctive lifestyle café outlets that strive to revolutionize the way individuals dine, work, and live, by providing a conducive environment for everyone to relish the four facets – health and wellness, fitness, productivity, and recreation all under one roof.
Hapi Cafes are distinctive lifestyle café outlets that strive to revolutionize the way individuals dine, work, and live, by providing a conducive environment for everyone to relish the four facets – health and wellness, fitness, productivity, and recreation all under one roof. In February of 2024, HCI-T acquired an additional café in South Korea which has not yet commenced operations.
Revenue from Ballenger Run is anticipated to come from three main sources: ● sale of 479 entitled and constructed residential lots to NVR; ● sale of the lot for the 210 entitled multi-family units; and ● sale of 479 front foot benefit assessments. 5 On April 17, 2019, SeD Maryland Development LLC entered into a Development Loan Agreement with Manufacturers and Traders Trust Company (“M&T Bank”) which is comprised of: (1) a Note in the principal amount not to exceed at any one time outstanding the sum of $8,000,000, with a cumulative loan advance amount of $18,500,000, and (2) a letter of credit facility in an aggregate amount of up to $900,000 (the “L/C Facility”).
On April 17, 2019, SeD Maryland Development LLC entered into a Development Loan Agreement with Manufacturers and Traders Trust Company (“M&T Bank”) which is comprised of: (1) a Note in the principal amount not to exceed at any one time outstanding the sum of $8,000,000, with a cumulative loan advance amount of $18,500,000, and (2) a letter of credit facility in an aggregate amount of up to $900,000 (the “L/C Facility”).
Our financial statements did not consolidate Vivacitas Oncology, and we had not managed its operations. Other Business Activities In addition to our three principal business activities, we oversee several smaller other business activities at the present time, which we believe complement our three principal businesses. BMI Capital Partners.
Other Business Activities In addition to our three principal business activities, we oversee several smaller other business activities at the present time, which we believe complement our three principal businesses. BMI Capital Partners.
We are reviewing plans to add solar panels and related technologies at the balance of the single-family rental homes, where feasible. In addition, we have added technologies at many of the single-family rental homes such as (i) smart solar, thermostat, and energy usage controls; (ii) smart lighting controls; (iii) smart locks and security; and (iv) smart home automation devices.
In addition, we added technologies at many of the single-family rental homes such as (i) smart solar, thermostat, and energy usage controls; (ii) smart lighting controls; (iii) smart locks and security; and (iv) smart home automation devices. We believe these and other technologies will be attractive to renters.
Value Exchange International, Inc. is a provider of information technology services for businesses, and is traded on the OTCQB (OTCQB: VEII). New Electric CV Corporation is a publicly traded consumer products company (OTCPK: HIPH).
Value Exchange International, Inc. is a provider of information technology services for businesses, and is traded on the OTCQB (OTCQB: VEII).
We have also enhanced our technological capability from mobile application development to include artificial intelligent, augmented reality and the metaverse. While focusing on direct selling industry by building white label mobile applications for direct marketing and affiliate marketing brands, VEII has been working on I.T.
We have also enhanced our technological integration capability to include artificial intelligence in the area of customer service, augmented reality, and the metaverse. While focusing on development and integration services by building white label mobile applications for eCommerce and community engagement such as direct marketing and affiliate marketing, VEII has been working on I.T.
On December 10, 2014, NVR assigned this contract to SeD Maryland Development, LLC (“SeD Maryland”) in the Assignment and Assumption Agreement and entered into a series of Lot Purchase Agreements by which NVR purchased subdivided lots from SeD Maryland (the “Lot Purchase Agreements”).
On December 10, 2014, NVR assigned this contract to SeD Maryland Development, LLC in the Assignment and Assumption Agreement and entered into a series of Lot Purchase Agreements by which NVR would purchase subdivided lots from SeD Maryland Development, LLC. SeD Maryland Development’s acquisition of the 197 acres was funded in part from a $5.6 million deposit from NVR Inc.
LiquidValue Development’s main assets are two such subdivision development projects, one near Houston, Texas (known as Black Oak), and one in Frederick, Maryland (known as Ballenger Run). Our property development business is headquartered in Bethesda, Maryland. For the years ended December 31, 2022 and 2021, our property development business accounted for 29% and 70% of our total revenues, respectively.
LiquidValue Development’s main assets are two such subdivision development projects, one near Houston, Texas (known as Lakes at Black Oak), and one in Frederick, Maryland (known as Ballenger Run). Our property development business is headquartered in Bethesda, Maryland.
These factors may allow our competitors to respond more effectively than us to new or emerging technologies and changes in market conditions. By way of example, in our real estate business, some of our competitors already have the advantage of having created vertically integrated businesses, while other competitors have broader and deeper relationships with sources of financing.
By way of example, in our real estate business, some of our competitors already have the advantage of having created vertically integrated businesses, while other competitors have broader and deeper relationships with sources of financing.
SeD Maryland’s acquisition of the 197 acres was funded in part from a $5.6 million deposit from NVR. The balance of $10.05 million was derived from a total equity contribution of $15.2 million by SeD Ballenger, LLC (“SeD Ballenger”) and CNQC Maryland Development LLC (a unit of Qingjian International Group Co, Ltd, China, “CNQC”).
(“NVR”). The balance of $10.05 million was derived from a total equity contribution of $15.2 million by SeD Ballenger LLC (“SeD Ballenger”) and CNQC Maryland Development LLC (a unit of Qingjian International Group Co, Ltd, China, “CNQC”). The project is owned by SeD Maryland Development, LLC (“SeD Maryland”). SeD Maryland is 83.55% owned by SeD Ballenger and 16.45% by CNQC.
The Seller shall be required to complete certain improvements at the property at the Seller’s cost prior to the closing. Planned Alset Villas Project in Texas. In 2021, our subsidiary Alset EHome Inc. acquired approximately 19.5 acres of partially developed land near Houston, Texas which will be used to develop a community named Alset Villas (“Alset Villas”).
In 2021, our subsidiary Alset EHome Inc. acquired approximately 19.5 acres of partially developed land near Houston, Texas which was used to develop a community named Alset Villas (“Alset Villas”).
Additional Information The Company is subject to the information requirements of the Exchange Act, and, in accordance therewith, files annual, quarterly, and special reports, proxy statements and other information with the Commission. The Commission maintains an internet website at http://www.sec.gov that contains reports, proxy and information statements and other information regarding issuers that file electronically with the Commission.
The Commission maintains an internet website at http://www.sec.gov that contains reports, proxy and information statements and other information regarding issuers that file electronically with the Commission.
We also maintain offices in Singapore, Magnolia, Texas, Hong Kong and South Korea through leased spaces aggregating approximately 15,811 square feet, under leases expiring on various dates from May 2023 to August 2025. The leases have rental rates ranging from $2,300 to $23,020 per month.
We also maintain offices in Singapore, Hong Kong and South Korea through leased spaces aggregating approximately 15,811 square feet, under leases expiring on various dates from June 2024 to February 2027. The leases have rental rates ranging from $1,401 to $23,020 per month. Our total rent expense under these office leases was 1,087,585 and $767,306 in 2023 and 2022, respectively.
Online businesses face risks from some of the proposed legislation that could be passed in the future. 14 The adoption of any laws or regulations that adversely affect the growth, popularity or use of the Internet, including laws impacting Internet neutrality, could decrease the demand for our services and increase our cost of doing business.
The adoption of any laws or regulations that adversely affect the growth, popularity or use of the Internet, including laws impacting Internet neutrality, could decrease the demand for our services and increase our cost of doing business. As we expand internationally, government regulation concerning the Internet, and in particular, network neutrality, may be nascent or non-existent.
Pursuant to the terms of the Agreement, the Seller agreed to sell approximately 242 single-family detached residential lots in a residential community in the city of Magnolia, Texas, known as the “Lakes at Black Oak.” The parties agreed that the lots will be sold at a range of prices, and the Seller will also be entitled to receive a community enhancement fee for each lot sold.
Pursuant to the terms of the Agreement, the Seller agreed to sell approximately 242 single-family detached residential lots comprising a residential community in the city of Magnolia, Texas known as the “Lakes at Black Oak.” On November 28, 2022, the parties to the Agreement entered into an amendment to the Agreement (the “Amendment”).
Some of our competitors and potential competitors supply a wide variety of products and services, and have well-established relationships with our current and prospective customers. Most, if not all, of our current and potential competitors may have significantly greater resources or better competitive positions in certain product segments, geographic regions or user demographics than we do.
Most, if not all, of our current and potential competitors may have significantly greater resources or better competitive positions in certain product segments, geographic regions or user demographics than we do. These factors may allow our competitors to respond more effectively than us to new or emerging technologies and changes in market conditions.
Our total rent expense under these office leases was $767,306 and $587,685 in 2022 and 2021, respectively. We expect total rent expense to be approximately $944,807 under office leases in 2023. We believe our present office space and locations are adequate for our current operations and for near-term planned expansion.
We expect total rent expense to be approximately $911,209 under office leases in 2024. We believe our present office space and locations are adequate for our current operations and for near-term planned expansion. Employees As of April 1, 2024, we had a total of 60 full-time employees.
Competition is based upon several factors, including price, reputation, quality and brand recognition. Existing and future competitors may introduce products and services in the same markets we serve, and competing products or services may have better performance, lower prices, better functionality and broader acceptance than our products.
Existing and future competitors may introduce products and services in the same markets we serve, and competing products or services may have better performance, lower prices, better functionality and broader acceptance than our products. Our competitors may also add features to their products or services similar to features that presently differentiate our product and service offerings from theirs.
Our competitors may also add features to their products or services similar to features that presently differentiate our product and service offerings from theirs. This competition could result in increased sales and marketing expenses, thereby materially reducing our operating margins, and could harm our ability to increase, or cause us to lose, market share.
This competition could result in increased sales and marketing expenses, thereby materially reducing our operating margins, and could harm our ability to increase, or cause us to lose, market share. Some of our competitors and potential competitors supply a wide variety of products and services, and have well-established relationships with our current and prospective customers.
During the years ended on December 31, 2022 and 2021, the revenue from the other business activities described above was approximately 13% and 0% of the total revenue, respectively.
Additionally, through its subsidiary MOC HK Limited, the Company is focusing on operating café business in Hong Kong. During the years ended on December 31, 2023 and 2022, the revenue from the other business activities described above was approximately 5% and 13% of the total revenue, respectively. True Partner Capital Holding Limited.
Our future success will depend in part on our ability to attract, retain and motivate highly qualified technical and sales personnel for whom competition is intense. Our employees are not represented by any collective bargaining unit. We believe our relations with employees and contractors are good.
In addition to our full-time employees, we occasionally hire part-time employees and independent contractors to assist us in various operations, including real estate, research and product development and production. Our future success will depend in part on our ability to attract, retain and motivate highly qualified technical and sales personnel for whom competition is intense.
Services for major retailers in Asia and enhanced their offering with mobile applications and artificial intelligence. We believe that the increasing deployment of the GigWorld App (whether through white labeling by potential customers or otherwise) will allow for feedback from customers, and help us build a robust and scalable software.
Services for major retailers in Asia for retail solutions integration. We believe that the increasing deployment of the technology both in membership engagement as well as in the retail industry will allow for feedback from customers, and help us build a robust and scalable software.
On January 13, 2021, 150 CCM Black Oak, Ltd. purchased an approximately 6.3 acre tract of land in Montgomery County, Texas. The Company’s strategic acquisition contiguous to the Black Oak project is intended to provide additional lot yield, potential additional amenities and/or a solar farm to support the Company’s sustainable, healthy living concept.
On January 13, 2021, 150 CCM Black Oak, Ltd. purchased an approximately 6.3 acre tract of land in Montgomery County, Texas. O n October 28, 2022, 150 CCM Black Oak Ltd.
Agreement to Sell 189 Lots On March 17, 2023, the Seller entered into a Contract of Sale (the “Contract of Sale”) with Davidson Homes, LLC, an Alabama limited liability company (“Davidson Homes”).
The transaction closed on May 15, 2023. On March 17, 2023, 150 CCM Black Oak Ltd. (the “Seller”) entered into a Purchase and Sale Agreement (the “Purchase and Sale Agreement”) with Davidson Homes, LLC, an Alabama limited liability company (“Davidson”).
The aggregate purchase price and community enhancement fees were originally anticipated to be $12,881,000, with such purchase price to be adjusted accordingly, if the total number of lots increased or decreased prior to the closing of the transactions contemplated by the Agreement. On November 28, 2022, the parties to the Agreement entered into an amendment to the Agreement (the “Amendment”).
The aggregate purchase price and community enhancement fees are anticipated to equal to combined total of approximately $11 million for the two Agreements together; however, the purchase prices for each of the Agreements will be adjusted accordingly, if the total number of lots increases or decreases prior to the closing of the transactions contemplated by the Agreements.
Pursuant to the terms of the Purchase and Sale Agreement, the Seller has agreed to sell approximately 110 single-family detached residential lots which comprise a section of the Lakes at Black Oak. The price of the lots and certain community enhancement fees the Seller will be entitled to receive are anticipated to equal an aggregate of $6,586,250.
Pursuant to the terms of the Purchase and Sale Agreement, the Seller had agreed to sell approximately 189 single-family detached residential lots developed within section 2 of Lakes at Black Oak project. The sale of the first 94 lots closed on May 30, 2023. The sale of remaining lots closed on January 4, 2024.
Black Oak is a land infrastructure and subdivision development project situated in Magnolia, Texas, north of Houston. The site plan at Black Oak allows for approximately 550-600 residential lots of varying sizes. Through a partnership with 150 CCM Black Oak, Ltd., we had contracts to purchase seven contiguous parcels of land.
Our Lakes at Black Oak project is a land infrastructure development and sub-division project situated in Magnolia, Texas north of Houston.
Removed
(“DSS”), an 38.3% equity interest in Value Exchange International, Inc., a 0.8% equity interest in New Electric CV Corporation (formerly known as “American Premium Mining Corporation”) , and an interest in Alset Capital Acquisition Corp. (“Alset Capital”). American Pacific Bancorp Inc. is a financial network holding company.
Added
(“DSS”), an indirect 48.7% equity interest in Value Exchange International, Inc. and a 33.4% equity interest in Sharing Services Global Corporation. American Pacific Bancorp Inc. is a financial network holding company. Holista CollTech Limited is a public Australian company that produces natural food ingredients (ASX: HCT).
Removed
Alset Capital is a newly organized blank check company formed for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses and is listed on the Nasdaq (Nasdaq: ACAXU, ACAX, ACAXW and ACAXR).
Added
Sharing Services Global Corporation (OTCQB: SHRG), is a publicly traded company dedicated to building shareholder value by developing or acquiring businesses, products and technologies in the direct selling industry and other industries that augment the Company’s product and services portfolio, business competencies, and geographic reach.
Removed
Frederick, Maryland Property. In November 2015, through LiquidValue Development, we acquired Ballenger Run, a land subdivision development consisting of 197 acres, for $15.65 million. This property is presently zoned for 479 entitled residential lots and 210 entitled multi-family units. After several years of development, this project is now in its final phases.
Added
For the years ended December 31, 2023 and 2022, our property development business accounted for 82% and 29% of our total revenues, respectively. Frederick, Maryland Property. In November 2015, we completed the $15.65 million acquisition of Ballenger Run, a 197-acre land sub-division development located in Frederick County, Maryland.
Removed
The Company anticipates that the estimated construction costs (not including land costs and financing costs) for the final phases of the Ballenger Run project will be $249,133. The expected completion date for the final phases of the Ballenger Run project is June of 2023.
Added
Approximately $100,000 is collateral for outstanding letters of credit. The Company’s Ballenger Run project is nearly complete, as all lots have been sold and the Company is completing its final tasks related to the project. Lakes at Black Oak Property, Texas.
Removed
The project is owned by SeD Maryland is 83.55% owned by SeD Ballenger and 16.45% by CNQC. MacKenzie Equity Partners, owned by Charles MacKenzie, our Chief Development Officer and a Director of the Company’s subsidiary LiquidValue Development, has had a consulting agreement with a subsidiary of the Company since 2015.
Added
On July 3, 2018, our subsidiary 150 CCM Black Oak Ltd. entered into a Purchase and Sale Agreement with Houston LD, LLC for the sale of 124 lots within the Lakes at Black Oak project (the “Lakes at Black Oak Purchase Agreement”).
Removed
Per the terms of the agreement, as amended on January 1, 2018, the Company’s subsidiary pays a monthly fee of $20,000 for the consulting services. P ursuant to an agreement entered into in June of 2022, the Company’s subsidiary has paid $25,000 per month for consulting services, effective as of January 2022.
Added
Pursuant to the Lakes at Black Oak Purchase Agreement, it was agreed that 124 lots would be sold for a range of prices based on the lot type.
Removed
The Company incurred expenses of $350,000 and $360,000 for the years ended December 31, 2022 and 2021, respectively, which were capitalized as part of Real Estate on the Company’s Consolidated Balance Sheet as the services relate to property and project management. During 2022 and 2021, MacKenzie Equity Partners was granted additional $50,000 and $120,000 bonus payments, respectively.
Added
In addition, Houston LD, LLC agreed to contribute a “community enhancement fee” for each lot, collectively totaling $310,000 which was held in escrow. 150 CCM Black Oak, Ltd. agreed to apply these funds exclusively towards an amenity package on the property. 5 On October 12, 2018, 150 CCM Black Oak, Ltd. entered into an Amended and Restated Purchase and Sale Agreement (the “Amended and Restated Lakes at Black Oak Purchase Agreement”) for these 124 lots.
Removed
As of December 31, 2022 and 2021 the Company owed $25,000 and $80,000, respectively, to this entity.
Added
Pursuant to the Amended and Restated Lakes at Black Oak Purchase Agreement, the purchase price remained at $6,175,000. 150 CCM Black Oak, Ltd. was required to meet certain closing conditions and the timing for the closing was extended.
Removed
As part of the transaction during 2019, we incurred loan origination fees and closing fees in the amount of $381,823 and capitalized them into construction in process. On March 15, 2022, approximately $2,300,000 was released from collateral, leaving approximately $300,000 as collateral for outstanding letters of credit.
Added
On January 18, 2019, the sale of 124 lots at Lakes at Black Oak was completed for $6,175,000 and the community enhancement fee equal to $310,000 was delivered to the escrow account, which was later drawn and closed. An impairment of real estate of approximately $2.4 million related to this sale was recorded on December 31, 2018.
Removed
The proceeds from the Land Development Loan and Letter of Credit Facility were used in connection with the Ballenger Run project, including the development of certain single-family lots. The Loan Agreement contains standard representations and warranties.
Added
The revenue was recognized in January, 2019, when the sale was closed, and no gain or loss was recognized in January, 2019. On July 20, 2018, Lakes at Black Oak received $4,592,079 of district reimbursement for previous construction costs incurred in the land development.
Removed
LiquidValue Development Inc. will serve as the guarantor to the Land Development Loan and Letter of Credit Facility and has executed an Environmental Indemnification Agreement in favor of the Lender. Sale of Residential Lots to NVR The residential lots were contracted for sale under the Lot Purchase Agreements with NVR.
Added
Of this amount, $1,650,000 remained on deposit in the District’s Capital Projects Fund for the benefit of Lakes at Black Oak and to be released upon receipt of the evidence of the: (a) execution of a purchase agreement between Lakes at Black Oak and a home builder with respect to the Lakes at Black Oak development and (b) of the completion, finishing and making ready for home construction of at least 105 unfinished lots in the Lakes at Black Oak development.
Removed
NVR is a home builder engaged in the construction and sale of single-family detached homes, townhouses and condominium buildings. It also operates a mortgage banking and title services business. Under the Lot Purchase Agreements, NVR provided SeD Maryland Development LLC with an upfront deposit of $5.6 million and has agreed to purchase the lots at a range of prices.
Added
After entering the purchase agreement with Houston LD, LLC, the above requirements were met. The amount of the deposit was released to the Company.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

67 edited+12 added−18 removed148 unchanged
Biggest changeUnder the JOBS Act, we may take advantage of the above-described reduced reporting requirements and exemptions for up to five years after our initial sale of common equity pursuant to a registration statement declared effective under the Securities Act, or such earlier time that we no longer meet the definition of an emerging growth company.
Biggest changeFor instance, smaller reporting companies are not required to obtain an auditor attestation and report regarding management’s assessment of internal control over financial reporting, are not required to provide a compensation discussion and analysis, are not required to provide a pay-for-performance graph or CEO pay ratio disclosure, and may present only two years of audited financial statements and related MD&A disclosure. 27 Under the JOBS Act, we may take advantage of the above-described reduced reporting requirements and exemptions for up to five years after our initial sale of common equity pursuant to a registration statement declared effective under the Securities Act, or such earlier time that we no longer meet the definition of an emerging growth company.
These provisions include: ● authorize the issuance of “blank check” preferred stock that could be issued by our board of directors to help defend against a takeover attempt; 32 ● establish that advance notice requirements for nominating directors and proposing matters to be voted on by stockholders at stockholder meetings will be as provided in the bylaws; and ● provide that stockholders are only entitled to call a special meeting upon written request by 50% of the outstanding common stock.
These provisions include: ● authorize the issuance of “blank check” preferred stock that could be issued by our board of directors to help defend against a takeover attempt; ● establish that advance notice requirements for nominating directors and proposing matters to be voted on by stockholders at stockholder meetings will be as provided in the bylaws; and ● provide that stockholders are only entitled to call a special meeting upon written request by 50% of the outstanding common stock.
For example: ● we may not be able to identify suitable acquisition candidates or to consummate acquisitions on acceptable terms; ● we may pursue international acquisitions, which inherently pose more risks than domestic acquisitions; ● we compete with others to acquire complementary products, technologies and businesses, which may result in decreased availability of, or increased price for, suitable acquisition candidates; ● we may not be able to obtain the necessary financing, on favorable terms or at all, to finance any or all of our potential acquisitions; and ● we may ultimately fail to consummate an acquisition even if we announce that we plan to acquire a technology, product or business. 19 We may be unable to successfully integrate acquisitions, which may adversely impact our operations.
For example: ● we may not be able to identify suitable acquisition candidates or to consummate acquisitions on acceptable terms; ● we may pursue international acquisitions, which inherently pose more risks than domestic acquisitions; ● we compete with others to acquire complementary products, technologies and businesses, which may result in decreased availability of, or increased price for, suitable acquisition candidates; ● we may not be able to obtain the necessary financing, on favorable terms or at all, to finance any or all of our potential acquisitions; and ● we may ultimately fail to consummate an acquisition even if we announce that we plan to acquire a technology, product or business. 17 We may be unable to successfully integrate acquisitions, which may adversely impact our operations.
Despite our efforts, there is a risk that we will not be able to conclude, within the prescribed timeframe or at all, that our internal control over financial reporting is effective as required by Section 404. 30 If we are unable to address the weaknesses in our internal control over financial reporting, investors may lose confidence in our company and it could result in material errors in our financial statements.
Despite our efforts, there is a risk that we will not be able to conclude, within the prescribed timeframe or at all, that our internal control over financial reporting is effective as required by Section 404. 28 If we are unable to address the weaknesses in our internal control over financial reporting, investors may lose confidence in our company and it could result in material errors in our financial statements.
If we do not succeed in attracting new personnel or in retaining and motivating our current personnel, our business could be harmed. If we do not successfully develop new products and services, our business may be harmed.
If we do not succeed in attracting new personnel or in retaining and motivating our current personnel, our business could be harmed. 20 If we do not successfully develop new products and services, our business may be harmed.
If we are unable to sell our properties, products and services at acceptable prices relative to our costs, or if we fail to develop and introduce on a timely basis new products or services from which we can derive additional revenues, our financial results will suffer. 17 We cannot ensure the long-term successful operation of our business or the execution of our growth strategy.
If we are unable to sell our properties, products and services at acceptable prices relative to our costs, or if we fail to develop and introduce on a timely basis new products or services from which we can derive additional revenues, our financial results will suffer. 15 We cannot ensure the long-term successful operation of our business or the execution of our growth strategy.
In connection with the preparation of our Report on Form 10-K, an evaluation was carried out by management, with the participation of our Co-Chief Executive Officers and Co-Chief Financial Officers, of the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”) as of December 31, 2022.
In connection with the preparation of our Report on Form 10-K, an evaluation was carried out by management, with the participation of our Co-Chief Executive Officers and Co-Chief Financial Officers, of the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”) as of December 31, 2023.
Management determined that at December 31, 2022, we had a material weakness that relates to the relatively small number of staff. This limited number of staff prevents us from segregating duties within our internal control system and restricts our ability to timely evaluate the accuracy and completeness of our financial statement disclosures.
Management determined that at December 31, 2023, we had a material weakness that relates to the relatively small number of staff. This limited number of staff prevents us from segregating duties within our internal control system and restricts our ability to timely evaluate the accuracy and completeness of our financial statement disclosures.
This material weakness, which remained unremedied by the Company as of December 31, 2022, could result in a misstatement to the accounts and disclosures that would result in a material misstatement to our annual or interim consolidated financial statements that would not be prevented or detected.
This material weakness, which remained unremedied by the Company as of December 31, 2023, could result in a misstatement to the accounts and disclosures that would result in a material misstatement to our annual or interim consolidated financial statements that would not be prevented or detected.
During evaluation of our disclosure controls and procedures as of December 31, 2022, conducted as part of our annual audit and preparation of our annual financial statements, management conducted an evaluation of the effectiveness of the design and operations of our disclosure controls and procedures and concluded that our disclosure controls and procedures were not effective.
During evaluation of our disclosure controls and procedures as of December 31, 2023, conducted as part of our annual audit and preparation of our annual financial statements, management conducted an evaluation of the effectiveness of the design and operations of our disclosure controls and procedures and concluded that our disclosure controls and procedures were not effective.
The effect of foreign exchange rate changes on the intercompany loans (under ASC 830), which mostly consist of loans from Singapore to the United States and were approximately $51 million and $45 million on December 31, 2022 and 2021, respectively, are the reason for the significant fluctuation of foreign currency transaction Gain or Loss on the Consolidated Statements of Operations and Other Comprehensive Income.
The effect of foreign exchange rate changes on the intercompany loans (under ASC 830), which mostly consist of loans from Singapore to the United States and were approximately $23 million and $51 million on December 31, 2023 and 2022, respectively, are the reason for the significant fluctuation of foreign currency transaction Gain or Loss on the Consolidated Statements of Operations and Other Comprehensive Income.
Because the intercompany loan balances between Singapore and United States will remain at approximately $51 million over the next year, we expect this fluctuation of foreign exchange rates to still significantly impact the results of operations in 2023, especially given that the foreign exchange rate may and is expected to be volatile.
Because the intercompany loan balances between Singapore and United States will remain at approximately $23 million over the next year, we expect this fluctuation of foreign exchange rates to still significantly impact the results of operations in 2024, especially given that the foreign exchange rate may and is expected to be volatile.
Acquisitions may cause us to: ● issue common stock that would dilute our current stockholders’ ownership percentage; ● use a substantial portion of our cash resources; ● increase our interest expense, leverage and debt service requirements if we incur additional debt to pay for an acquisition; ● assume liabilities for which we do not have indemnification from the former owners; further, indemnification obligations may be subject to dispute or concerns regarding the creditworthiness of the former owners; ● record goodwill and non-amortizable intangible assets that are subject to impairment testing and potential impairment charges; ● experience volatility in earnings due to changes in contingent consideration related to acquisition earn-out liability estimates; ● incur amortization expenses related to certain intangible assets; ● lose existing or potential contracts as a result of conflict of interest issues; ● become subject to adverse tax consequences or deferred compensation charges; ● incur large and immediate write-offs; or ● become subject to litigation. 20 Our resources may not be sufficient to manage our expected growth; failure to properly manage our potential growth would be detrimental to our business.
Acquisitions may cause us to: ● issue common stock that would dilute our current stockholders’ ownership percentage; ● use a substantial portion of our cash resources; ● increase our interest expense, leverage and debt service requirements if we incur additional debt to pay for an acquisition; 18 ● assume liabilities for which we do not have indemnification from the former owners; further, indemnification obligations may be subject to dispute or concerns regarding the creditworthiness of the former owners; ● record goodwill and non-amortizable intangible assets that are subject to impairment testing and potential impairment charges; ● experience volatility in earnings due to changes in contingent consideration related to acquisition earn-out liability estimates; ● incur amortization expenses related to certain intangible assets; ● lose existing or potential contracts as a result of conflict-of-interest issues; ● become subject to adverse tax consequences or deferred compensation charges; ● incur large and immediate write-offs; or ● become subject to litigation.
While we do not believe that the time devoted to Alset Capital will undermine their ability to fulfill their duties with respect to our Company, if the business affairs of Alset Capital require them to devote substantial amounts of time to such affairs, it could limit their ability to devote time to our affairs which may have a negative impact on our operations. 21 Our international operations are subject to increased risks which could harm our business, operating results and financial condition.
While we do not believe that the time devoted to HWH International will undermine their ability to fulfill their duties with respect to our Company, if the business affairs of HWH International require them to devote substantial amounts of time to such affairs, it could limit their ability to devote time to our affairs which may have a negative impact on our operations. 19 Our international operations are subject to increased risks which could harm our business, operating results and financial condition.
We currently have no outstanding shares of preferred stock, or plans to issue any such shares in the future. 33
We currently have no outstanding shares of preferred stock, or plans to issue any such shares in the future. 31
Factors that could cause fluctuations in the market price of our common stock include the following: ● quarterly variations in our results of operations; ● results of operations that vary from the expectations of securities analysts and investors; ● results of operations that vary from those of our competitors; ● changes in expectations as to our future financial performance, including financial estimates by securities analysts; ● publication of research reports about us or the industries in which we participate; ● announcements by us or our competitors of significant contracts, acquisitions or capital commitments; ● announcements by third parties of significant legal claims or proceedings against us; ● changes affecting the availability of financing for smaller publicly traded companies like us; ● regulatory developments in the real estate, digital transformation technology or biohealth businesses; ● significant future sales of our common stock, and additions or departures of key personnel; ● the realization of any of the other risk factors presented in this Report; and ● general economic, market and currency factors and conditions unrelated to our performance. 31 In addition, the stock market in general has experienced significant price and volume fluctuations that have often been unrelated or disproportionate to operating performance of individual companies.
Factors that could cause fluctuations in the market price of our common stock include the following: ● quarterly variations in our results of operations; ● results of operations that vary from the expectations of securities analysts and investors; ● results of operations that vary from those of our competitors; ● changes in expectations as to our future financial performance, including financial estimates by securities analysts; ● publication of research reports about us or the industries in which we participate; ● announcements by us or our competitors of significant contracts, acquisitions or capital commitments; ● announcements by third parties of significant legal claims or proceedings against us; 29 ● changes affecting the availability of financing for smaller publicly traded companies like us; ● regulatory developments in the real estate, digital transformation technology or biohealth businesses; ● significant future sales of our common stock, and additions or departures of key personnel; ● the realization of any of the other risk factors presented in this Report; and ● general economic, market and currency factors and conditions unrelated to our performance.
Our officers, including our Chairman, Chief Executive Officer Chan Heng Fai, will allocate some of their time to Alset Capital, thereby causing potential conflicts of interest in their determination as to how much time to devote to our affairs. This potential conflict of interest could have a negative impact on our operations. Mr.
Our officers, including our Chairman, Chief Executive Officer Chan Heng Fai, will allocate some of their time to HWH International Inc., thereby causing potential conflicts of interest in their determination as to how much time to devote to our affairs. This potential conflict of interest could have a negative impact on our operations. Mr.
These sales may make it more difficult for us to sell equity or equity-related securities in the future at a time and price that we deem appropriate, or to use equity as consideration for future acquisitions. As of March 31, 2023, we have 250,000,000 shares of common stock authorized, and 9,235,119 shares of common stock outstanding.
These sales may make it more difficult for us to sell equity or equity-related securities in the future at a time and price that we deem appropriate, or to use equity as consideration for future acquisitions. As of April 1, 2024, we have 250,000,000 shares of common stock authorized, and 9,235,119 shares of common stock outstanding.
We own indirect interests in several publicly traded companies – most significantly, Alset International Limited, whose shares are listed on the Singapore Stock Exchange, DSS, Inc., whose shares are listed on the NYSE American LLC Exchange, Holista CollTech Limited, whose shares are listed on the Australian Stock Exchange, Value Exchange International Inc., whose shares are listed on OTCQB Venture Market of the OTC Markets Group, Inc. and Alset Capital Acquisition Corp., listed on the Nasdaq (LiquidValue Development Inc. and Hapi Metaverse Inc. are not currently traded on any exchange).
We own indirect interests in several publicly traded companies – most significantly, Alset International Limited, whose shares are listed on the Singapore Stock Exchange, DSS, Inc., whose shares are listed on the NYSE American LLC Exchange, Holista CollTech Limited, whose shares are listed on the Australian Stock Exchange, Sharing Services, whose shares are listed on OTCQB Venture Market of the OTC Markets Group, Inc., Value Exchange International Inc., whose shares are listed on OTCQB Venture Market of the OTC Markets Group, Inc. and HWH International Inc., whose shares are trading on the Nasdaq Global Markets; (LiquidValue Development Inc. and Hapi Metaverse Inc. are not currently traded on any exchange).
Should we commence manufacturing in China, and if tariffs or other restrictions are placed on foreign imports, including on any of our products manufactured overseas for sale in the United States, or any related counter-measures are taken by other countries, our business and results of operations may be materially harmed. 28 These tariffs have the potential to significantly raise the cost of any products we may manufacture in China.
Should we commence manufacturing in China, and if tariffs or other restrictions are placed on foreign imports, including on any of our products manufactured overseas for sale in the United States, or any related counter-measures are taken by other countries, our business and results of operations may be materially harmed.
In addition to the annual assessment of potential triggering events in accordance with ASC 360 – Property Plant and Equipment (“ASC 360”), we apply a fair value-based impairment test to the net book value assets on an annual basis and on an interim basis if certain events or circumstances indicate that an impairment loss may have occurred. 27 Fluctuations in foreign currency exchange rates affect our operating results.
In addition to the annual assessment of potential triggering events in accordance with ASC 360 – Property Plant and Equipment (“ASC 360”), we apply a fair value-based impairment test to the net book value assets on an annual basis and on an interim basis if certain events or circumstances indicate that an impairment loss may have occurred.
Under current SEC rules, however, we will continue to qualify as a “smaller reporting company” for so long as we have a public float (i.e., the market value of common equity held by non-affiliates) of less than $250 million as of the last business day of our most recently completed second fiscal quarter. 29 Investors may find our shares less attractive due to our reliance on these exemptions.
Under current SEC rules, however, we will continue to qualify as a “smaller reporting company” for so long as we have a public float (i.e., the market value of common equity held by non-affiliates) of less than $250 million as of the last business day of our most recently completed second fiscal quarter.
With respect to the 40% asset test, most of the entities through which we and our majority-owned and/or controlled subsidiaries will own assets will in turn be majority-owned and/or controlled subsidiaries that will not themselves be investment companies and will not be relying on the exceptions from the definition of investment company under Section 3(c)(1) or Section 3(c)(7) (relating to private investment companies).
With respect to the 40% asset test, most of the entities through which we and our majority-owned and/or controlled subsidiaries will own assets will in turn be majority-owned and/or controlled subsidiaries that will not themselves be investment companies and will not be relying on the exceptions from the definition of investment company under Section 3(c)(1) or Section 3(c)(7) (relating to private investment companies). 21 With respect to the primarily engaged test, we, together with our majority-owned and/or controlled subsidiaries, are a holding company and do not intend to invest or trade in securities.
A sudden and significant increase in traffic on our customers’ websites or demand from mobile users could strain the capacity of the software, hardware and telecommunications systems that we deploy or use. This could lead to slower response times or system failures.
A sudden and significant increase in traffic on our customers’ websites or demand from mobile users could strain the capacity of the software, hardware and telecommunications systems that we deploy or use. This could lead to slower response times or system failures. Our failure to protect our network against damage from any of these events could harm our business.
Our failure to protect our network against damage from any of these events could harm our business. 25 Public scrutiny of Internet privacy and security issues may result in increased regulation and different industry standards, which could deter or prevent us from providing our current products and solutions to our members and customers, thereby harming our business.
Public scrutiny of Internet privacy and security issues may result in increased regulation and different industry standards, which could deter or prevent us from providing our current products and solutions to our members and customers, thereby harming our business.
Concentration of ownership of our common stock by our principal stockholder will limit new investors from influencing significant corporate decisions. As of March 31, 2023, our principal stockholder Chan Heng Fai owns approximately 51.1% of our outstanding shares of common stock.
Concentration of ownership of our common stock by our principal stockholder will limit new investors from influencing significant corporate decisions. As of April 1, 2024, our principal stockholder Chan Heng Fai owns approximately 53.5% of our outstanding shares of common stock.
These officers may not commit their full time to our affairs, which may result in a conflict of interest in allocating their time between our operations and Alset Capital’s operations. These officers are engaged in Alset Capital and are not obligated to contribute any specific number of hours per week to our affairs.
These officers may not commit their full time to our affairs, which may result in a conflict of interest in allocating their time between our operations and the operations of our subsidiaries or other business ventures. These officers are not obligated to contribute any specific number of hours per week to our affairs.
A portion of our revenues arises from international operations. Revenues generated and expenses incurred by our international subsidiaries are often denominated in the currencies of the local countries.
Fluctuations in foreign currency exchange rates affect our operating results. A portion of our revenues arises from international operations. Revenues generated and expenses incurred by our international subsidiaries are often denominated in the currencies of the local countries.
The current administration has put into place tariffs and other trade restrictions. The current or future administrations may additionally alter trade agreements and terms between the United States and China, among other countries, including limiting trade and/or imposing tariffs on imports from such countries.
The current or future administrations may additionally alter trade agreements and terms between the United States and China, among other countries, including limiting trade and/or imposing tariffs on imports from such countries. In addition, China, among others, has either threatened or put into place retaliatory tariffs of their own.
We may fail to adequately manage our anticipated future growth. Any growth in our operations will place a significant strain on our administrative, financial and operational resources and increase demands on our management and on our operational and administrative systems, controls and other resources.
Any growth in our operations will place a significant strain on our administrative, financial and operational resources and increase demands on our management and on our operational and administrative systems, controls and other resources.
In such a case, there can be no assurance that we will be able to shift manufacturing and supply agreements to non-impacted countries, including the United States, to reduce the effects of the tariffs.
These tariffs have the potential to significantly raise the cost of any products we may manufacture in China. In such a case, there can be no assurance that we will be able to shift manufacturing and supply agreements to non-impacted countries, including the United States, to reduce the effects of the tariffs.
For the years ended December 31, 2022 and 2021, we had revenue of $4,480,442 and $19,798,822, respectively, and net losses of $46,212,505 and $119,017,591 in the years ended December 31, 2022 and 2021, respectively. Our failure to increase our revenues or improve our gross margins will harm our business.
For the years ended December 31, 2023 and 2022, we had revenue of $22,088,507 and $4,480,442, respectively, and net losses of $61,278,733 and $46,212,505 in the years ended December 31, 2023 and 2022, respectively. Our failure to increase our revenues or improve our gross margins will harm our business.
Delays and cost overruns could affect our ability to respond to technological changes, evolving industry standards, competitive developments or customer requirements and harm our business and operating results. 22 Your investment return may be reduced if we are required to register as an investment company under the Investment Company Act; if we or our majority-owned and/or controlled operating subsidiaries become an unregistered investment company, then we would need to modify our business philosophy and/or make other changes to our asset composition.
Your investment return may be reduced if we are required to register as an investment company under the Investment Company Act; if we or our majority-owned and/or controlled operating subsidiaries become an unregistered investment company, then we would need to modify our business philosophy and/or make other changes to our asset composition.
With respect to the primarily engaged test, we, together with our majority-owned and/or controlled subsidiaries, are a holding company and do not intend to invest or trade in securities. Rather, through our majority-owned and/or controlled subsidiaries, we will be primarily engaged in the non-investment company businesses of these subsidiaries, namely, real estate, digital transformation technology and biohealth.
Rather, through our majority-owned and/or controlled subsidiaries, we will be primarily engaged in the non-investment company businesses of these subsidiaries, namely, real estate, digital transformation technology and biohealth.
We cannot assure you that foreign courts would enforce liabilities predicated on U.S. federal securities laws in original actions commenced in such foreign jurisdiction, or judgments of U.S. courts obtained in actions based upon the civil liability provisions of U.S. federal securities laws.
We cannot assure you that foreign courts would enforce liabilities predicated on U.S. federal securities laws in original actions commenced in such foreign jurisdiction, or judgments of U.S. courts obtained in actions based upon the civil liability provisions of U.S. federal securities laws. 25 We may be required to record a significant charge to earnings if our real estate properties become impaired.
Anti-takeover provisions in our charter documents could discourage, delay or prevent a change in control of our company and may affect the trading price of our common stock.
Any failure to meet guidance or analysts’ expectations could have a material adverse effect on the trading price or volume of our stock. 30 Anti-takeover provisions in our charter documents could discourage, delay or prevent a change in control of our company and may affect the trading price of our common stock.
Such conditions could impact real estate fundamentals and result in lower occupancy, lower rental rates, and declining values in our real estate portfolio and in the collateral securing our loan investments.
The impact of these measures, as well as potential responses to them by Russia, is unknown. Such conditions could impact real estate fundamentals and result in lower occupancy, lower rental rates, and declining values in our real estate portfolio and in the collateral securing our loan investments.
Violations of laws and regulations also could result in prohibitions on our ability to operate in one or more countries and could materially damage our reputation, our ability to attract and retain employees, or our business, results of operations and financial condition.
Violations of laws and regulations also could result in prohibitions on our ability to operate in one or more countries and could materially damage our reputation, our ability to attract and retain employees, or our business, results of operations and financial condition. 26 If tariffs or other restrictions are placed on foreign imports or any related counter-measures are taken by other countries, our business and results of operations could be harmed.
Finally, new rules regarding the burden of proof in patent enforcement actions could significantly increase the cost of our enforcement actions, and new standards or limitations on liability for patent infringement could negatively impact any revenue we might derive from such enforcement actions.
Finally, new rules regarding the burden of proof in patent enforcement actions could significantly increase the cost of our enforcement actions, and new standards or limitations on liability for patent infringement could negatively impact any revenue we might derive from such enforcement actions. 22 For our real estate business, the market for real estate is subject to fluctuations that may impact the value of the land or housing inventory that we hold, which may impact the price of our common stock.
Significant challenges or delays in our innovation and development of new products, technologies and indications could have an adverse impact on our long-term success. Our continued growth and success depend on our ability to innovate and develop new and differentiated products and services that address the evolving health care needs of patients, providers and consumers.
Our continued growth and success depend on our ability to innovate and develop new and differentiated products and services that address the evolving health care needs of patients, providers and consumers.
Insurance may not cover, or may be insufficient to cover, such losses, and premiums may rise. Adverse weather conditions, natural disasters and man-made disasters may delay our real estate development projects or cause additional expenses.
Health and safety incidents could result in the loss of the services of valued employees and contractors and expose us to significant litigation and fines. Insurance may not cover, or may be insufficient to cover, such losses, and premiums may rise. Adverse weather conditions, natural disasters and man-made disasters may delay our real estate development projects or cause additional expenses.
We cannot be certain when or whether we will be able to develop, license or otherwise acquire companies, products and technologies, whether particular product candidates will be granted regulatory approval, and, if approved, whether the products will be commercially successful. 26 We pursue product development through internal research and development as well as through collaborations, acquisitions, joint ventures and licensing or other arrangements with third parties.
We cannot be certain when or whether we will be able to develop, license or otherwise acquire companies, products and technologies, whether particular product candidates will be granted regulatory approval, and, if approved, whether the products will be commercially successful.
In all of these contexts, developing new products, particularly biotechnology products, requires a significant commitment of resources over many years. Only a very few biopharmaceutical research and development programs result in commercially viable products.
We pursue product development through internal research and development as well as through collaborations, acquisitions, joint ventures and licensing or other arrangements with third parties. In all of these contexts, developing new products, particularly biotechnology products, requires a significant commitment of resources over many years. Only a very few biopharmaceutical research and development programs result in commercially viable products.
To the extent stock options are issued pursuant to our 2018 Incentive Compensation Plan in the future and ultimately exercised, there will be further dilution of the common stock. See “Dilution”. Future sales, or the perception of future sales, of a substantial amount of our shares of common stock could depress the trading price of our common stock.
Investors purchasing our common stock may be diluted by the issuance of stock options. To the extent stock options are issued pursuant to our 2018 Incentive Compensation Plan in the future and ultimately exercised, there will be further dilution of the common stock. See “Dilution”.
This could impact our ability to raise funds in the future. We will incur increased costs as a result of being a U.S. public company, and our management expects to devote substantial time to public company compliance programs. As a public company, we incur significant legal, insurance, accounting and other expenses that we did not incur as a private company.
Investors may find our shares less attractive due to our reliance on these exemptions. This could impact our ability to raise funds in the future. We will incur increased costs as a result of being a U.S. public company, and our management expects to devote substantial time to public company compliance programs.
Should the price of real estate decline in the areas in which we have purchased land, the price at which we will be able to sell lots to home builders, or if we build houses, the price at which we can sell such houses to buyers, will decline. 24 Zoning and land use regulations impacting the land development and homebuilding industries may limit our activities and increase our expenses, which would adversely affect our financial results.
Should the price of real estate decline in the areas in which we have purchased land, the price at which we will be able to sell lots to home builders, or if we build houses, the price at which we can sell such houses to buyers, will decline.
Additionally, in the event of the liquidation, dissolution or winding up of any of our subsidiaries, creditors of that subsidiary (including trade creditors) will generally be entitled to payment from the assets of that subsidiary before those assets can be distributed to us.
Additionally, in the event of the liquidation, dissolution or winding up of any of our subsidiaries, creditors of that subsidiary (including trade creditors) will generally be entitled to payment from the assets of that subsidiary before those assets can be distributed to us. 16 Our significant ownership interests in public companies listed on limited public trading markets subjects us to risks relating to the sale of their shares and the fluctuations in their stock prices.
Disruptions in the financial markets could adversely affect the value of our real estate investments. Concerns over economic recession, the COVID-19 pandemic, interest rate increases, policy priorities of the U.S. presidential administration, trade wars, labor shortages, or inflation may contribute to increased volatility and diminished expectations for the economy and markets.
Concerns over economic recession interest rate increases, policy priorities of the U.S. presidential administration, trade wars, labor shortages, or inflation may contribute to increased volatility and diminished expectations for the economy and markets. Additionally, concern over geopolitical issues may also contribute to prolonged market volatility and instability.
Any failure of our network could lead to significant disruptions in our businesses, which could damage our reputation, reduce our revenues or otherwise harm our businesses. All of our businesses and, in particular, our digital transformation technology business unit, are dependent upon providing our customers with fast, efficient and reliable services.
All of our businesses and, in particular, our digital transformation technology business unit, are dependent upon providing our customers with fast, efficient and reliable services.
As a “smaller reporting company”, the Company is not required to provide the information required by this item, but below are the risk factors the Company believes investors should consider before purchasing any of the Company’s securities. 16 Risks Related to Our Company Management has identified a material weakness in the design and effectiveness of our internal controls, which, if not remediated, could affect the accuracy and timeliness of our financial reporting and result in misstatements in our financial statements.
Risks Related to Our Company Management has identified a material weakness in the design and effectiveness of our internal controls, which, if not remediated, could affect the accuracy and timeliness of our financial reporting and result in misstatements in our financial statements.
Because the markets for many of our products and services are subject to rapid change, we may need to expand and/or evolve our product and service offerings quickly.
Because the markets for many of our products and services are subject to rapid change, we may need to expand and/or evolve our product and service offerings quickly. Delays and cost overruns could affect our ability to respond to technological changes, evolving industry standards, competitive developments or customer requirements and harm our business and operating results.
Our management may use a market comparison method to value other relatively small projects, such as the project in Perth, Australia.
Our policy is to obtain an independent third-party valuation for each major project in the United States to identify triggering events for impairment. Our management may use a market comparison method to value other relatively small projects, such as the project in Perth, Australia.
If we commence operations in the homebuilding business, we will be exposed to the danger of health and safety risks to our employees and contractors. Health and safety incidents could result in the loss of the services of valued employees and contractors and expose us to significant litigation and fines.
Health and safety incidents that occur in connection with our potential expansion into the homebuilding business could be costly with uninsured losses. If we commence operations in the homebuilding business, we will be exposed to the danger of health and safety risks to our employees and contractors.
Our insurance, if any, may not cover all potential claims to which we are exposed or may not be adequate to indemnify us for all liabilities that may be exposed. Any imposition of liability that is not covered by insurance or is in excess of insurance coverage would reduce our net worth and working capital and increase our operating losses.
Our insurance, if any, may not cover all potential claims to which we are exposed or may not be adequate to indemnify us for all liabilities that may be exposed.
Some or all of the assumptions of any future guidance that we furnish may not materialize or may vary significantly from actual future results. Any failure to meet guidance or analysts’ expectations could have a material adverse effect on the trading price or volume of our stock.
Some or all of the assumptions of any future guidance that we furnish may not materialize or may vary significantly from actual future results.
If we do not adequately protect our intellectual property rights, we may experience a loss of revenue and our operations may be materially harmed.
In addition, our contracts would be unenforceable unless a court required enforcement and a court could appoint a receiver to take control of our company and liquidate our business. If we do not adequately protect our intellectual property rights, we may experience a loss of revenue and our operations may be materially harmed.
These circumstances can also result in damage to brand image, brand equity and consumer trust in our products. Product recalls could in the future prompt government investigations and inspections, the shutdown of manufacturing facilities, continued product shortages and related sales declines, significant remediation costs, reputational damage, possible civil penalties and criminal prosecution.
Product recalls could in the future prompt government investigations and inspections, the shutdown of manufacturing facilities, continued product shortages and related sales declines, significant remediation costs, reputational damage, possible civil penalties and criminal prosecution. 24 Significant challenges or delays in our innovation and development of new products, technologies and indications could have an adverse impact on our long-term success.
We could also be adversely affected by such factors as changes in foreign currency rates and weak economic and political conditions in each of the countries in which we operate. 18 Disruptions in the financial markets and uncertain economic conditions could adversely affect the value of our real estate investments.
In addition, an economic downturn could impact the valuation and collectability of certain long-term receivables held by us. We could also be adversely affected by such factors as changes in foreign currency rates and weak economic and political conditions in each of the countries in which we operate.
The U.S. government and other governments in jurisdictions have imposed severe economic sanctions and export controls against Russia and Russian interests, have removed Russia from the SWIFT system, and have threatened additional sanctions and controls. The impact of these measures, as well as potential responses to them by Russia, is unknown.
For example, the conflict between Russia and Ukraine has led to disruption, instability and volatility in global markets and industries. The U.S. government and other governments in jurisdictions have imposed severe economic sanctions and export controls against Russia and Russian interests, have removed Russia from the SWIFT system, and have threatened additional sanctions and controls.
If tariffs or other restrictions are placed on foreign imports or any related counter-measures are taken by other countries, our business and results of operations could be harmed. At the present time, we do not sell any products produced in China and have no plans to commence manufacturing in China; however, this may change at some point in the future.
At the present time, we do not sell any products produced in China and have no plans to commence manufacturing in China; however, this may change at some point in the future. The current administration has put into place tariffs and other trade restrictions.
The Sarbanes-Oxley Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act, Nasdaq Capital Market listing requirements and other applicable securities rules and regulations impose various requirements on public companies. Our management and administrative staff need to devote a substantial amount of time to comply with these requirements.
As a public company, we incur significant legal, insurance, accounting and other expenses that we did not incur as a private company. The Sarbanes-Oxley Act, the Dodd-Frank Wall Street Reform and Consumer Protection Act, Nasdaq Capital Market listing requirements and other applicable securities rules and regulations impose various requirements on public companies.
These factors would significantly harm our revenues, results of operations, financial condition, business prospects and our ability to make distributions to our stockholders. The coronavirus or other adverse public health developments could have a material and adverse effect on our business operations, financial condition and results of operations.
These factors would significantly harm our revenues, results of operations, financial condition, business prospects and our ability to make distributions to our stockholders. We have made and expect to continue to make acquisitions as a primary component of our growth strategy.
A class action suit against us could result in significant liabilities and, regardless of the outcome, could result in substantial costs and the diversion of our management’s attention and resources. Investors purchasing our common stock may be diluted by the issuance of stock options.
In the past, following periods of volatility in the market price of a company’s securities, securities class action litigation has often been instituted. A class action suit against us could result in significant liabilities and, regardless of the outcome, could result in substantial costs and the diversion of our management’s attention and resources.
Our ability to gain the necessary approvals is not certain, and the expense and timing of approval processes may increase in ways that adversely impact our profits. Health and safety incidents that occur in connection with our potential expansion into the homebuilding business could be costly with uninsured losses.
We will need to obtain the approval of various government agencies to expand our operations into new areas and to commence the building of homes. Our ability to gain the necessary approvals is not certain, and the expense and timing of approval processes may increase in ways that adversely impact our profits.
These broad market factors may seriously harm the market price of our common stock, regardless of our operating performance. In the past, following periods of volatility in the market price of a company’s securities, securities class action litigation has often been instituted.
In addition, the stock market in general has experienced significant price and volume fluctuations that have often been unrelated or disproportionate to operating performance of individual companies. These broad market factors may seriously harm the market price of our common stock, regardless of our operating performance.
Chan, our Chairman and Chief Executive Officer, and Mr. Wei, our Chief Financial Officer, also serve in these positions for Alset Capital, and Mr. Chan additionally also serves as a director of Alset Capital.
Wei, our Chief Financial Officer, also serves in this position for HWH International Inc., and Mr. Chan, our Chairman, serves as a director of HWH International. These officers may not commit their full time to our affairs, which may result in a conflict of interest in allocating their time between our operations and HWH International’s operations.
We must comply with zoning and land use regulations impacting the land development and home building industries. We will need to obtain the approval of various government agencies to expand our operations into new areas and to commence the building of homes.
Zoning and land use regulations impacting the land development and homebuilding industries may limit our activities and increase our expenses, which would adversely affect our financial results. We must comply with zoning and land use regulations impacting the land development and home building industries.
Removed
Our significant ownership interests in public companies listed on limited public trading markets subjects us to risks relating to the sale of their shares and the fluctuations in their stock prices.
Added
As a “smaller reporting company”, the Company is not required to provide the information required by this item, but below are the risk factors the Company believes investors should consider before purchasing any of the Company’s securities.
Removed
In addition, an economic downturn could impact the valuation and collectability of certain long-term receivables held by us.
Added
Disruptions in the financial markets and uncertain economic conditions could adversely affect the value of our real estate investments. Disruptions in the financial markets could adversely affect the value of our real estate investments.
Removed
Additionally, concern over geopolitical issues may also contribute to prolonged market volatility and instability. For example, the conflict between Russia and Ukraine has led to disruption, instability and volatility in global markets and industries.
Added
Our resources may not be sufficient to manage our expected growth; failure to properly manage our potential growth would be detrimental to our business. We may fail to adequately manage our anticipated future growth.
Removed
In December 2019, a novel strain of coronavirus (COVID-19) was first identified in Wuhan, Hubei Province, China, and has since spread to a number of other countries, including the United States. The coronavirus, or other adverse public health developments, could have a material and adverse effect on our business operations.
Added
Our officers will allocate some of their time to other business ventures including but not limited to subsidiaries of our Company, thereby limiting the amount of time they are able to devote to our affairs. This potential time management conflict could have a negative impact on our operations.
Removed
The coronavirus’ far-reaching impact on the global economy could negatively affect various aspects of our business, including demand for real estate. In addition, the coronavirus could directly impact the ability of our staff and contractors to continue to work, and our ability to conduct our operations in a prompt and efficient manner.
Added
Several of our officers and directors also serve as officers and directors of entities where we are the direct or indirect majority stockholder, including but not limited to Alset International Limited, HWH International Inc., Liquidvalue Development Inc. and Hapi Metaverse Inc.
Removed
The coronavirus may adversely impact the timeliness of local government in granting required approvals. Accordingly, the coronavirus may cause the completion of important stages in our projects to be delayed. The extent to which the coronavirus may impact our business will depend on future developments, which are highly uncertain and cannot be predicted.
Added
In addition, some of our officers and directors also serve as officers and directors of other businesses, including business that we hold a non-majority position in.
Removed
For more information on this matter, see “Management’s Discussion and Analysis of Financial Condition and Results of Operations- Financial Impact of the COVID-19 Pandemic.” We have made and expect to continue to make acquisitions as a primary component of our growth strategy.

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Item 2. Properties

Properties — owned and leased real estate

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Biggest changeTogether with the additional tract of land there are approximately 550-600 lots to be platted for the Company’s future endeavors. This does not include the 124 lots sold to Rausch Coleman. 150 CCM Black Oak Ltd is the primary developer responsible for all infrastructure development. This property is included in the Southeast Management District.
Biggest changeOn January 13, 2021, 150 CCM Black Oak, Ltd. purchased an approximately 6.3 acre tract of land in Montgomery County. The Company has sold off residential lots at this location. CCM Black Oak Ltd is the primary developer responsible for all infrastructure development. This property is included in Harris County Improvement District #17.
Item 2. Properties. Black Oak The Black Oak property is located in Montgomery County in Magnolia, Texas. This property is located east of FM 2978 via Standard Road to Dry Creek Road and South of the Woodlands, one of the most successful, fastest growing master planned communities in Texas. This residential land development initially consisted of approximately 162 acres.
This property is located east of FM 2978 via Standard Road to Dry Creek Road and South of the Woodlands, one of the most successful, fastest growing master planned communities in Texas. This residential land development initially consisted of approximately 162 acres.
Planned Alset Villas Project in Texas In 2021, our subsidiary Alset EHome Inc. acquired approximately 19.5 acres of partially developed land near Houston, Texas which will be used to develop a community named Alset Villas (“Alset Villas”). Alset EHome is targeting to develop approximately 63 homes at Alset Villas for rent and/or for sale.
Alset Villas In 2021, our subsidiary Alset EHome Inc. acquired approximately 19.5 acres of partially developed land near Houston, Texas which will be used to develop a community named Alset Villas (“Alset Villas”). Alset EHome is developing 63 lots at Alset Villas.
By December 31, 2022, the acquisition of the 132 homes was completed with an aggregate purchase cost of $30,998,258. 34
Rental Properties During 2021 and 2022 the Company signed multiple purchase agreements to acquire 132 homes in Montgomery and Harris Counties, Texas. By December 31, 2022, the acquisition of the 132 homes was completed with an aggregate purchase cost of $30,998,258.
Removed
On January 13, 2021, 150 CCM Black Oak, Ltd. purchased an approximately 6.3 acre tract of land in Montgomery County. The Company’s strategic acquisition contiguous to the Black Oak project is intended to provide additional lot yield, potential additional amenities and/or a solar farm to support the Company’s sustainable, healthy living concept.
Added
Item 2. Properties. Our executive offices are located at 4800 Montgomery Lane, Suite 210, Bethesda, MD 20814, and our telephone number is (301) 971-3955. Lakes at Black Oak The Lakes at Black Oak property is located in Montgomery County in Magnolia, Texas.
Removed
The Alset Villas project is currently in the engineering and design phase to achieve final record plat. Ballenger Run Ballenger Run is a residential land development project located in Frederick County in Frederick, Maryland. This property is located approximately 40 miles from Washington, DC, 50 miles from Baltimore and is located less than four miles from I-70 and I-270.
Added
Sale of the 63 lots is pending closing of a Contract for Purchase and Sale and Escrow Instructions, entered into by the Company’s subsidiary 150 CCM Black Oak, Ltd. and Century Land Holdings of Texas, LLC on November 13, 2023.
Removed
Ballenger Run is situated on approximately 197 acres of land and entitled for 689 residential units consisting of 479 residential Lots and 210 multi-family units. SeD Maryland Development, LLC is the primary developer responsible for all infrastructure development. Rental Properties During 2021 and 2022 the Company signed multiple purchase agreements to acquire 132 homes in Montgomery and Harris Counties, Texas.
Added
In the first 96 of the 112 rental homes that were acquired, as a part of our commitment to advancing smart and healthy sustainable living, we installed Tesla PV solar panels and Powerwalls.
Added
In addition, we added technologies at many of the single-family rental homes such as (i) smart solar, thermostat, and energy usage controls; (ii) smart lighting controls; (iii) smart locks and security; and (iv) smart home automation devices. We believe these and other technologies will be attractive to renters. 32

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeWith regard to intellectual property matters which may arise, if we are unable to obtain an outcome which sufficiently protects our rights, successfully defends our use or allows us time to develop non-infringing technology and content or to otherwise alter our business practices on a timely basis in response to the claims against us, our business, prospects and competitive position may be adversely affected. 35 Item 4.
Biggest changeWith regard to intellectual property matters which may arise, if we are unable to obtain an outcome which sufficiently protects our rights, successfully defends our use or allows us time to develop non-infringing technology and content or to otherwise alter our business practices on a timely basis in response to the claims against us, our business, prospects and competitive position may be adversely affected.
Added
Item 4. Mine Safety Disclosures Not applicable. 33 PART II

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

2 edited+1 added−0 removed0 unchanged
Biggest changeFinancial Statements and Supplementary Data 57 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosures 105 Item 9A. Controls and Procedures 105 Item 9B. Other Information 105
Biggest changeFinancial Statements and Supplementary Data 52 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosures 99 Item 9A. Controls and Procedures 99 Item 9B. Other Information 99 Item 9C. Disclosure Regarding Foreign Jurisdictions That Prevent Inspections 99 PART III Item 10. Directors, Executive Officers and Corporate Governance 100 Item 11. Executive Compensation 105 Item 12.
Item 4. Mine Safety Disclosures 36 PART II Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities 36 Item 6 Reserved 37 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 38 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 56 Item 8.
Item 4. Mine Safety Disclosures 33 PART II Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities 34 Item 6 [ Reserved ] 35 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations 35 Item 7A. Quantitative and Qualitative Disclosures About Market Risk 51 Item 8.
Added
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 108 Item 13. Certain Relationships and Related Transactions, and Director Independence 109 Item 14. Principal Accounting Fees and Services 116 PART IV Item 15. Exhibit and Financial Statement Schedules 117 Item 16. Form 10-K Summary 121 Signatures 122 2 PART I

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

5 edited+0 added−1 removed10 unchanged
Biggest changeOn January 17, 2022 the Company entered into a securities purchase agreement with Chan Heng Fai pursuant to which the Company agreed to purchase from Chan Heng Fai 293,428,200 ordinary shares of Alset International for a purchase price of 1,473,449 newly issued shares of the Company’s common stock.
Biggest changeSuch restricted shares were issued pursuant to the exemption provided by Regulation D promulgated under the Securities Act of 1933, as amended. 34 On January 17, 2022 the Company entered into a securities purchase agreement with Chan Heng Fai pursuant to which the Company agreed to purchase from Chan Heng Fai 293,428,200 ordinary shares of Alset International for a purchase price of 1,473,449 newly issued shares of the Company’s common stock.
In connection with the issuance of these securities, the Company relied upon the exemption from registration provided by Section 4(a)(2) under the Securities Act of 1933, as amended, for transactions not involving a public offering. Purchases of Equity Securities by the issuer and affiliated purchasers The Company did not repurchase any shares of the Company’s common stock during 2022.
In connection with the issuance of these securities, the Company relied upon the exemption from registration provided by Section 4(a)(2) under the Securities Act of 1933, as amended, for transactions not involving a public offering. Purchases of Equity Securities by the issuer and affiliated purchasers The Company did not repurchase any shares of the Company’s common stock during 2023.
Holders As of March 31, 2023, the Company had six shareholders of record. Such number does not include shareholders holding shares in nominee or “street name”. Dividends Since inception, we have not paid any dividends on our common stock. We currently do not anticipate paying any cash dividends in the foreseeable future on our common stock.
Holders As of April 1, 2024, the Company had seven (7) shareholders of record. Such number does not include shareholders holding shares in nominee or “street name”. Dividends Since inception, we have not paid any dividends on our common stock. We currently do not anticipate paying any cash dividends in the foreseeable future on our common stock.
Performance graph Not applicable to smaller reporting companies. 36 Recent sales of unregistered securities; use of proceeds from registered securities On December 13, 2021 the Company entered into a Securities Purchase Agreement with Chan Heng Fai for the issuance and sale of a convertible promissory note in favor of Chan Heng Fai, in the principal amount of $6,250,000.
Recent sales of unregistered securities; use of proceeds from registered securities On December 13, 2021 the Company entered into a Securities Purchase Agreement with Chan Heng Fai for the issuance and sale of a convertible promissory note in favor of Chan Heng Fai, in the principal amount of $6,250,000.
No options or other equity awards have been granted under the Plan. The reservation of shares under the Incentive Compensation Plan was cancelled in May 2021.
No options or other equity awards have been granted under the Plan. The reservation of shares under the Incentive Compensation Plan was cancelled in May 2021. Performance graph Not applicable to smaller reporting companies.
Removed
Such restricted shares were issued pursuant to the exemption provided by Regulation D promulgated under the Securities Act of 1933, as amended.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

91 edited+40 added−73 removed79 unchanged
Biggest changeOn December 31, 2022, the capitalized construction costs were as follows: Ballenger Run Black Oak Alset Villas Total Land held for development $ - $ 7,304,064 $ 639,062 $ 7,943,126 Capitalized development Costs Hard Construction Costs 29,253,317 10,960,927 - 40,214,245 Engineering 3,632,588 3,306,281 194,510 7,133,379 Consultation 340,528 121,698 16,950 479,176 Project Management 4,335,183 2,702,175 - 7,037,359 Legal 375,672 256,693 - 632,365 Taxes 1,325,086 1,204,186 43,770 2,573,042 Other Services 627,487 47,276 - 674,763 Impairment Reserve - (5,230,828 ) - (5,230,828 ) Construction - Sold Lots (39,889,863 ) (1,364,805 ) - (41,254,668 ) Total capitalized development costs $ - $ 12,003,603 $ 255,230 $ 12,258,833 Capitalized finance costs $ 3,247,739 Total property under development $ 23,449,698 On December 31, 2021, the capitalized construction costs were as follows: Ballenger Run Black Oak Alset Villas Perth Project Total Land held for development $ 125,497 $ 7,725,446 $ 639,062 $ 528,399 $ 9,018,404 Capitalized development Costs Hard Construction Costs 29,244,223 8,865,369 - - 38,109,592 Engineering 3,626,928 2,852,710 - - 6,479,638 Consultation 340,528 109,826 - - 450,354 Project Management 4,285,533 2,597,175 - - 6,882,708 Legal 375,585 237,970 - - 613,555 Taxes 1,326,734 985,440 - - 2,312,174 Other Services 605,657 33,791 - 80,797 720,245 BAN reimbursement - (5,738,461 ) - - (5,738,461 ) Impairment Reserve - (5,230,828 ) - - (5,230,828 ) Construction - Sold Lots (39,805,188 ) (1,364,805 ) - - (41,169,993 ) Total capitalized development costs $ - $ 3,348,187 $ - $ 80,797 $ 3,428,984 Capitalized finance costs $ 3,247,739 Total property under development $ 15,695,127 45 Through December 31, 2021, there were no sales from the Perth project.
Biggest changeOn December 31, 2023, the capitalized construction costs were as follows: Lakes at Black Oak Alset Villas Total Land held for development $ 2,743,730 $ 639,062 $ 3,382,792 Capitalized development Costs: Hard Construction Costs 14,549,098 63,079 16,612,177 Engineering 3,563,359 206,998 3,770,357 Consultation 114,073 17,750 131,523 Project Management 5,481,101 - 5,481,101 Legal 288,863 2,485 291,348 Taxes 1,365,155 117,950 1,483,105 Other Services 78,701 11,891 90,592 Impairment Reserve (5,230,828 ) - (5,230,828 ) Construction - Sold Lots (14,871,140 ) - (14,871,140 ) Total capitalized development costs $ 5,338,382 $ 419,853 $ 5,758,235 Capitalized finance costs $ 1,225,739 Total property under development $ 10,366,766 On December 31, 2022, the capitalized construction costs were as follows: Ballenger Run Lakes at Black Oak Alset Villas Total Land held for development $ - $ 7,304,064 $ 639,062 $ 7,943,126 Capitalized development Costs: Hard Construction Costs 29,253,317 10,960,927 - 40,214,245 Engineering 3,632,588 3,306,281 194,510 7,133,379 Consultation 340,528 121,698 16,950 479,176 Project Management 4,335,183 2,702,175 - 7,037,359 Legal 375,672 256,693 - 632,365 Taxes 1,325,086 1,204,186 43,770 2,573,042 Other Services 627,487 47,276 - 674,763 Impairment Reserve - (5,230,828 ) - (5,230,828 ) Construction - Sold Lots (39,889,863 ) (1,364,805 ) - (41,254,668 ) Total capitalized development costs $ - $ 12,003,603 $ 255,230 $ 12,258,833 Capitalized finance costs $ 3,247,739 Total property under development $ 23,449,698 Through December 31, 2023, there were no sales from the Perth and Ballenger projects.
K Beauty was established for sourcing, developing and producing variety of Korea-made beauty products as well as Korea - originated beauty contents for the purpose of distribution to HWH’s membership distribution channel. 52 There has been no indication of impairment or changes in observable prices via transactions of similar securities and is still carried at a cost.
K Beauty was established for sourcing, developing and producing variety of Korea-made beauty products as well as Korea - originated beauty contents for the purpose of distribution to HWH’s membership distribution channel. There has been no indication of impairment or changes in observable prices via transactions of similar securities and is still carried at a cost.
We do not anticipate that the COVID-19 pandemic will have a material impact on the timing of the completion of our remaining tasks at Ballenger Run. We have received strong indications that buyers and renters across the country are expressing interest in moving from more densely populated urban areas to the suburbs.
We do not anticipate that the COVID-19 pandemic will have a material impact on the timing of the completion of our remaining tasks at Ballenger Run. 36 We have received strong indications that buyers and renters across the country are expressing interest in moving from more densely populated urban areas to the suburbs.
We generate revenue from a project involving provision of services and web/software development for customers. In respect to the provision of services, the agreements are less than one year with a cancellation clause and customers are typically billed on a monthly basis. 43 Biohealth ● Product Direct Sales. The Company’s net sales consist of product sales.
We generate revenue from a project involving provision of services and web/software development for customers. In respect to the provision of services, the agreements are less than one year with a cancellation clause and customers are typically billed on a monthly basis. Biohealth ● Product Direct Sales. The Company’s net sales consist of product sales.
APB was consolidated into the Company under common control accounting (See Transactions between Entities under Common Control for details). On September 8, 2021 APB sold 6,666,700 shares of Series A Common Stock to DSS, Inc. for $40,000,200 cash.
APB was consolidated into the Company under common control accounting (See Transactions between Entities under Common Control for details). On September 8, 2021 APB sold 6,666,700 shares Series A Common Stock to DSS, Inc. for $40,000,200 cash.
The required time and expenses needed to complete the Black Oak and Alset Villas projects will be influenced by the strategy, or mix of strategies, we utilize at each project.
The required time and expenses needed to complete the Lakes at Black Oak and Alset Villas projects will be influenced by the strategy, or mix of strategies, we utilize at each project.
The Company recognizes revenue from membership fee over the one-year period of the membership. Other Businesses ● Food and Beverage . The Company, through Alset F&B One Pte. Ltd. (“Alset F&B One”) and Alset F&B (PLQ) Pte. Ltd.
The Company recognizes revenue from membership fee over the one-year period of the membership. 39 Other Businesses ● Food and Beverage . The Company, through Alset F&B One Pte. Ltd. (“Alset F&B One”) and Alset F&B (PLQ) Pte. Ltd.
On April 17, 2019, SeD Maryland Development LLC entered into a Development Loan Agreement with Manufacturers and Traders Trust Company (“M&T Bank”) in the principal amount not to exceed at any one time outstanding the sum of $8,000,000, with a cumulative loan advance amount of $18,500,000. The line of credit bears interest rate on LIBOR plus 375 basis points.
On April 17, 2019, SeD Maryland Development LLC entered into a Development Loan Agreement with Manufacturers and Traders Trust Company (“M&T Bank”) in the principal amount not to exceed at any one time outstanding the sum of $8,000,000, with a cumulative loan advance amount of $18,500,000. The line of credit bore interest rate on LIBOR plus 375 basis points.
Differences between rental revenue recognized and amounts contractually due under the lease agreements are credited or charged to straight-line rent receivable or straight-line rent liability, as applicable. For the years ended December 31, 2022 and 2021, the Company did not recognize any deferred revenue and collected all rents due. ● Cost of Revenue.
Differences between rental revenue recognized and amounts contractually due under the lease agreements are credited or charged to straight-line rent receivable or straight-line rent liability, as applicable. For the years ended December 31, 2023 and 2022, the Company did not recognize any deferred revenue and collected all rents due. ● Cost of Revenue.
Further, because of changes in conditions, the effectiveness of internal control over financial reporting may vary over time. In order to ensure that our internal control over financial reporting is effective, management regularly assesses controls and did so most recently for its financial reporting as of December 31, 2022.
Further, because of changes in conditions, the effectiveness of internal control over financial reporting may vary over time. In order to ensure that our internal control over financial reporting is effective, management regularly assesses controls and did so most recently for its financial reporting as of December 31, 2023.
The note was redeemed on July 14, 2022 and $50,000 principal together with $28,636 accrued interests were received from Sharing Services. On February 26, 2021, the Company invested approximately $88,599 in the convertible note of Vector Com Co., Ltd (“Vector Com”), a private company in South Korea. The interest rate is 2% per annum and maturity is two years.
The note was redeemed on July 14, 2022 and $50,000 principal together with $28,636 accrued interests were received from Sharing Services. On February 26, 2021, the Company invested approximately $88,599 in the convertible note of Vector Com Co., Ltd (“Vector Com”), a private company in South Korea. The interest rate is 2% per annum.
In connection with management’s evaluation of the effectiveness of our company’s internal control over financial reporting as of December 31, 2022, management determined that our company did not maintain effective controls over financial reporting due to having a limited staff.
In connection with management’s evaluation of the effectiveness of our company’s internal control over financial reporting as of December 31, 2023, management determined that our company did not maintain effective controls over financial reporting due to having a limited staff.
As a result of the new share issuances, the Company’s ownership percentage of APB fell below 50% to 41.3% and the entity was deconsolidated in accordance with ASC 810-10. Upon deconsolidation the Company elected to apply the equity method accounting as the Company still retained significant influence.
As a result of the new share issuances, the Company’s ownership percentage of APB fell below 50% to 41.3% (and subsequently to 36.9%) and the entity was deconsolidated in accordance with ASC 810-10. Upon deconsolidation the Company elected to apply the equity method accounting as the Company still retained significant influence.
DSS, of which we own 45.2% and have significant influence over, owns 80.8% of AMRE. Therefore, the Company has significant influence on AMRE. American Pacific Bancorp, Inc. Pursuant to Securities Purchase Agreement from March 12, 2021 the Company purchased of 4,775,523 shares of the common stock of American Pacific Bancorp Inc. (“APB”) and gained majority ownership in that entity.
DSS, of which we own 44.4% and have significant influence over, owns 80.4% of AMRE. Therefore, the Company has significant influence on AMRE. American Pacific Bancorp, Inc. Pursuant to Securities Purchase Agreement from March 12, 2021 the Company purchased 4,775,523 shares of the common stock of American Pacific Bancorp Inc. (“APB”) and gained majority ownership in that entity.
We manage our three principal businesses primarily through our 85.4% owned subsidiary, Alset International Limited, a public company traded on the Singapore Stock Exchange. Through this subsidiary (and indirectly, through other public and private U.S. and Asian subsidiaries), we are actively developing real estate projects near Houston, Texas and in Frederick, Maryland, in our real estate segment.
We manage our three principal businesses primarily through our 85.5% owned subsidiary, Alset International Limited, a public company traded on the Singapore Stock Exchange. Through this subsidiary (and indirectly, through other public and private U.S. and Asian subsidiaries), we are actively developing real estate projects near Houston, Texas in our real estate segment.
Because the intercompany loan balances between Singapore and United States will remain at approximately $51 million over the next year, we expect this fluctuation of foreign exchange rates to still significantly impact the results of operations in the year 2023, especially given that the foreign exchange rate may and is expected to be volatile.
Because the intercompany loan balances between Singapore and United States will remain at approximately $23 million over the next year, we expect this fluctuation of foreign exchange rates to still significantly impact the results of operations in the year 2024, especially given that the foreign exchange rate may and is expected to be volatile.
We generally acquire majority and/or control stakes in innovative and promising businesses that are expected to appreciate in value over time. Our emphasis is on building businesses in industries where our management team has in-depth knowledge and experience, or where our management can provide value by advising on new markets and expansion.
SHRG is traded on the OTCQB (OTCQB: SHRG). We generally acquire majority and/or control stakes in innovative and promising businesses that are expected to appreciate in value over time. Our emphasis is on building businesses in industries where our management team has in-depth knowledge and experience, or where our management can provide value by advising on new markets and expansion.
Our Perth project in Australia was relatively small, and based on management’s recommendations the land was sold in 2022. 49 Black Oak Black Oak is a land infrastructure and subdivision project situated in Magnolia, Texas, north of Houston. This project is owned by certain subsidiaries of Alset International.
Our Perth project in Australia was relatively small, and based on management’s recommendations the land was sold in 2022. 45 Lakes at Black Oak Lakes at Black Oak is a land infrastructure and subdivision project situated in Magnolia, Texas, north of Houston. This project is owned by certain subsidiaries of Alset International.
This accrual is based upon historical return rates for each country and the relevant return pattern, which reflects anticipated returns to be received over a period of up to 12 months following the original sale. Product and membership returns for the years ended December 31, 2022 and 2021 were approximately $41,755 and $39,203, respectively. ● Annual Membership.
This accrual is based upon historical return rates for each country and the relevant return pattern, which reflects anticipated returns to be received over a period of up to 12 months following the original sale. Product and membership returns for the years ended December 31, 2023 and 2022 were approximately $1,183 and $41,755, respectively. ● Annual Membership.
Impairment losses are recognized in other expense when a decline in value is deemed to be other-than-temporary. American Medical REIT Inc. LiquidValue Asset Management Pte. Ltd. (“LiquidValue”), a subsidiary of the Company owns 15.8% of American Medical REIT Inc. (“AMRE”), a company concentrating on medical real estate.
Impairment losses are recognized in other expense when a decline in value is deemed to be other-than-temporary. AMRE LiquidValue Asset Management Pte. Ltd. (“LiquidValue”), a subsidiary of the Company owns 15.8% of AMRE, a company concentrating on medical real estate.
During the years ended December, 2022 and 2021, we recognized revenue in the amounts of $126,737 and $289,375 from FFB assessments, respectively. 42 ● Rental Revenue. The Company leases real estate properties to its tenants under leases that are predominately classified as operating leases, in accordance with ASC 842, Leases (“ASC 842”).
During the years ended December, 2023 and 2022, we recognized revenue in the amounts of $0 and $126,737 from FFB assessments, respectively. ● Rental Revenue. The Company leases real estate properties to its tenants under leases that are predominately classified as operating leases, in accordance with ASC 842, Leases (“ASC 842”).
Sales of real properties accounted for approximately 29%, revenue from houses rental accounted for approximately 40%, sales of biohealth products accounted for approximately 17% and revenue from other activities accounted for approximately 13% of our total revenue in the year ended December 31, 2022.
Sales of real properties accounted for approximately 29%, revenue from home rentals accounted for approximately 40%, sales of biohealth products accounted for approximately 17%, and revenue from other activities accounted for approximately 13% of our total revenue in the year ended December 31, 2022.
Significant estimates made by management include, but are not limited to, allowance for doubtful accounts, recoverability and useful lives of property, plant and equipment, valuation of real estate assets, allocation of development costs and capitalized interest to sold lots, the valuation allowance of deferred taxes, contingencies and equity compensation. Actual results could differ from those estimates.
Significant estimates made by management include, but are not limited to, allowance for doubtful accounts, recoverability and useful lives of property, plant and equipment, valuation of real estate assets, allocation of development costs and capitalized interest to sold lots, the valuation allowance of deferred taxes, contingencies and equity compensation.
A detailed breakdown of the five-step process for the revenue recognition of the Ballenger and Black Oak projects, which represented approximately 29% and 70% of the Company’s revenue in the years ended on December 31, 2022 and 2021, respectively, is as follows: Identify the contract with a customer.
A detailed breakdown of the five-step process for the revenue recognition of the Ballenger and Lakes at Black Oak projects, which represented approximately 82% and 29% of the Company’s revenue in the years ended on December 31, 2023 and 2022, respectively, is as follows: Identify the contract with a customer.
We value NECV warrants under level 3 category through a Black Scholes option pricing model and the fair value of the warrants from NECV were $860,342 as of July 17, 2020, the purchase date and $327,565 and $1,009,854 as of December 31, 2022 and 2021, respectively.
We value NECV warrants under level 3 category through a Black Scholes option pricing model and the fair value of the warrants from NECV were $860,342 as of July 17, 2020, the purchase date and $430 and $327,565 as of December 31, 2023 and 2022, respectively.
The Company has significant influence over DSS as we owned approximately 45.2% of the common stock of DSS as of December 31, 2022, and our Chief Executive Officer, Chan Heng Fai, is an owner of the common stock of DSS (not including any common or preferred shares we hold).
The Company has significant influence over DSS as we owned approximately 44.4% of the common stock of DSS as of December 31, 2023, and our Chief Executive Officer, Chan Heng Fai, is an owner of the common stock of DSS (not including any common or preferred shares we hold).
From a geographical perspective, we recognized 69% and 72% of our total revenue in the years ended December 31, 2022, and 2021, respectively, in the United States. 20% and 28% of our revenue in 2022 and 2021, respectively, was recognized from our sales in South Korea. 11% and 0% of our revenue in 2022 and 2021, respectively, was recognized from our sales in Singapore.
From a geographical perspective, we recognized 95% and 69% of our total revenue in the years ended December 31, 2023, and 2022, respectively, in the United States. 0% and 20% of our revenue in 2023 and 2022, respectively, was recognized from our sales in South Korea. 5% and 11% of our revenue in 2023 and 2022, respectively, was recognized from our sales in Singapore.
Holista CollTech Limited is a public Australian company that produces natural food ingredients (ASX: HCT). DSS is a multinational company operating businesses within nine divisions: product packaging, biotechnology, direct marketing, commercial lending, securities and investment management, alternative trading, digital transformation, secure living, and alternative energy. DSS Inc. is listed on the NYSE American (NYSE: DSS).
American Pacific Bancorp Inc. is a financial network holding company. Holista CollTech Limited is a public Australian company that produces natural food ingredients (ASX: HCT). DSS is a multinational company operating businesses within nine divisions: product packaging, biotechnology, direct marketing, commercial lending, securities and investment management, alternative trading, digital transformation, secure living, and alternative energy.
We believe our capital and management services provide us with a competitive advantage in the selection of strategic acquisitions, which creates and adds value for our company and our stockholders. 38 Our Revenue Model Our total revenue for the years ended December 31, 2022, and 2021, was $4,480,442 and $19,798,822, respectively.
We believe our capital and management services provide us with a competitive advantage in the selection of strategic acquisitions, which creates and adds value for our company and our stockholders. Our Revenue Model Our total revenue for the years ended December 31, 2023, and 2022, was $22,088,507 and $4,480,442, respectively.
Our net losses for the years ended December 31, 2022, and 2021, were $46,212,505 and $119,017,591, respectively. We currently recognize revenue from the sale of our subdivision development properties, rental homes, the sale of our biohealth products and other activities.
Our net losses for the years ended December 31, 2023, and 2022, were $61,278,733 and $46,212,505, respectively. We currently recognize revenue from the sale of our subdivision development properties, rental homes, the sale of our biohealth products and other activities.
The Company has elected the fair value options for the equity securities noted above that would otherwise be accounted for under the equity method of accounting to better match the measurement of assets and liabilities in the Consolidated Statements of Operations.
Additionally, our CEO is a significant stockholder of SHRG shares. The Company has elected the fair value options for the equity securities noted above that would otherwise be accounted for under the equity method of accounting to better match the measurement of assets and liabilities in the Consolidated Statements of Operations.
“Other” includes certain costs that are not allocated to the reportable segments, primarily consisting of unallocated corporate overhead costs, including administrative functions not allocated to the reportable segments from global functional expenses. The financial services, food and beverage businesses and new venture businesses are small and diversified, and accordingly they are not separately addressed as one independent category.
The category described as “Other” includes corporate and financial services, food and beverage business and new venture businesses. “Other” includes certain costs that are not allocated to the reportable segments, primarily consisting of unallocated corporate overhead costs, including administrative functions not allocated to the reportable segments from global functional expenses.
During the year ended December 31, 2021, the Company’s subsidiaries established a portfolio of trading securities. The objective is to generate profits on short-term differences in market prices. The Company does not have significant influence over any trading securities in our portfolio and fair value of these trading securities are determined by quoted stock prices.
The objective is to generate profits on short-term differences in market prices. The Company does not have significant influence over any trading securities in our portfolio and fair value of these trading securities are determined by quoted stock prices.
Hyten Global (Thailand) Co., Ltd.) (“HWH World Co.”), a private company, at a purchase price of $42,562. On May 31, 2021, the Company invested $19,609 in K Beauty Research Lab Co., Ltd (“K Beauty”) for 18% ownership.
Hyten Global (Thailand) Co., Ltd.) (“HWH World Co.”), a private company, at a purchase price of $42,562. The Company’s subsidiary holding equity in HWH World Co. was sold on December 31, 2023. 48 On May 31, 2021, the Company invested $19,609 in K Beauty Research Lab Co., Ltd (“K Beauty”) for 18% ownership.
Matters that May or Are Currently Affecting Our Business In addition to the matters described above, the primary challenges and trends that could affect or are affecting our financial results include: ● Our ability to improve our revenue through cross-selling and revenue-sharing arrangements among our diverse group of companies; ● Our ability to identify complementary businesses for acquisition, obtain additional financing for these acquisitions, if and when needed, and profitably integrate them into our existing operation; ● Our ability to attract competent, skilled technical and sales personnel for each of our businesses at acceptable compensation levels to manage our overhead; and ● Our ability to control our operating expenses as we expand each of our businesses and product and service offerings. 40 Summary of Significant Accounting Policies Basis of Presentation and Principles of Consolidation Our consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S.
Matters that May or Are Currently Affecting Our Business In addition to the matters described above, the primary challenges and trends that could affect or are affecting our financial results include: ● Our ability to improve our revenue through cross-selling and revenue-sharing arrangements among our diverse group of companies; ● Our ability to identify complementary businesses for acquisition, obtain additional financing for these acquisitions, if and when needed, and profitably integrate them into our existing operation; ● Our ability to attract competent, skilled technical and sales personnel for each of our businesses at acceptable compensation levels to manage our overhead; and ● Our ability to control our operating expenses as we expand each of our businesses and product and service offerings.
Capitalized construction expenses, finance costs and land costs are allocated to sales. We anticipate the total cost of sales to increase as revenue increases. The gross margin decreased from $8,497,008 to $748,452 in the years ended December 31, 2021 and 2022, respectively.
Capitalized construction expenses, finance costs and land costs are allocated to sales. We anticipate the total cost of sales to increase as revenue increases. The gross margin increased from $748,452 to $7,512,298 in the years ended December 31, 2022 and 2023, respectively.
On December 31, 2022, total real estate property under development was $23.4 million, including: ● land held for development in the amount of $7.9 million (consisting of $7.3 million for Black Oak and $0.6 million for Alset Villas); ● capitalized development costs in the amount of $12.3 million (consisting of $12 million for Black Oak and $0.3 million for Alset Villas); and ● capitalized finance costs were $3.2 million. 44 On December 31, 2021, total real estate property under development was $15.7 million, including: ● land held for development in the amount of $9.0 million (consisting of $7.7 million for Black Oak, $0.1 million for Ballenger Run, $0.7 million for Alset Villas and $0.5 million for our Perth project); ● capitalized development costs in the amount of $3.4 million (consisting of $3.4 million for Black Oak); and ● capitalized finance costs were $3.2 million.
On December 31, 2022, total real estate property under development was $23.4 million, including: ● land held for development in the amount of $7.9 million (consisting of $7.3 million for Lakes at Black Oak and $0.6 million for Alset Villas); ● capitalized development costs in the amount of $12.3 million (consisting of $12 million for Lakes at Black Oak and $0.3 million for Alset Villas); and ● capitalized finance costs were $3.2 million.
The Company had significant influence over Holista as the Company and its CEO are the beneficial owner of approximately 15.5% of the outstanding shares of Holista and our CEO had a position on the Board of Directors of Holista from July of 2013 until June of 2021.
The Company had significant influence over Holista as the Company holds approximately 13% of the outstanding shares of Holista and our CEO had a position on the Board of Directors of Holista from July of 2013 until June of 2021.
In our digital transformation technology segment we focus on serving business-to-business (B2B) needs in e-commerce, collaboration and social networking functions. Our biohealth segment includes the sale of consumer products.
In our digital transformation technology segment we focus on serving business-to-business (B2B) needs in e-commerce, collaboration and social networking functions.
The Company has significant influence but does not have a controlling interest in these investments, and therefore, the Company’s investment could be accounted for under the equity method of accounting or elect fair value accounting.
(“SHRG”) are publicly traded companies and fair value is determined by quoted stock prices. The Company has significant influence but does not have a controlling interest in these investments, and therefore, the Company’s investment could be accounted for under the equity method of accounting or elect fair value accounting.
Hapi Cafes are distinctive lifestyle café outlets that strive to revolutionize the way individuals dine, work, and live, by providing a conducive environment for everyone to relish the four facets – health and wellness, fitness, productivity, and recreation all under one roof.
The cafes are operated by subsidiaries of HCI-T, namely HCSG in Singapore and HCKI in Seoul, South Korea. Hapi Cafes are distinctive lifestyle café outlets that strive to revolutionize the way individuals dine, work, and live, by providing a conducive environment for everyone to relish the four facets – health and wellness, fitness, productivity, and recreation all under one roof.
In accordance with ASU 2016-01, the Company records all equity investments with readily determinable fair values at fair value calculated by the publicly traded stock price at the close of the reporting period. Amarantus BioScience Holdings (“AMBS”) and True Partner Capital Holding Limited (“True Partner”) are publicly traded companies.
In accordance with ASU 2016-01, the Company records all equity investments with readily determinable fair values at fair value calculated by the publicly traded stock price at the close of the reporting period. Amarantus BioScience Holdings (“AMBS”) is a publicly traded company.
The decrease of gross margin was caused by the decrease of gross margin of HWH World, mostly due to the decrease in the sales and from decrease in property sales. The following table sets forth period-over-period changes in operating expenses for each of our reporting segments.
The increase of gross margin was caused by the increase of gross margin from real estate segment and F&B business, mostly due to the increase in the sales. The following table sets forth period-over-period changes in operating expenses for each of our reporting segments.
Rental revenue is subject to an evaluation for collectability on several factors, including payment history, the financial strength of the tenant and any guarantors, historical operations and operating trends of the property, and current economic conditions.
These amounts are presented within deferred revenues and other payables on the Company’s consolidated balance sheets. Rental revenue is subject to an evaluation for collectability on several factors, including payment history, the financial strength of the tenant and any guarantors, historical operations and operating trends of the property, and current economic conditions.
Killiney Kopitiam, founded in 1919, is a Singapore-based chain of mass-market, traditional kopitiam style service cafes selling traditional coffee and tea, along with a range of local delicacies such as Curry Chicken, Laksa, Mee Siam, and Mee Rebus. The Company, through Hapi Café Inc.
Killiney Kopitiam, founded in 1919, is a Singapore-based chain of mass-market, traditional kopitiam style service cafes selling traditional coffee and tea, along with a range of local delicacies such as Curry Chicken, Laksa, Mee Siam, and Mee Rebus. The Company, through HCI-T, commenced operation of two cafés during 2022 and 2021, which are located in Singapore and South Korea.
Realized gains and losses on debt securities are recognized in the net income in the consolidated statements of comprehensive income. The Company monitors its investments for other-than-temporary impairment by considering factors including, but not limited to, current economic and market conditions, the operating performance of the companies including current earnings trends and other company-specific information.
The Company monitors its investments for other-than-temporary impairment by considering factors including, but not limited to, current economic and market conditions, the operating performance of the companies including current earnings trends and other company-specific information.
Impact of Foreign Exchange Rates The effect of foreign exchange rate changes on the intercompany loans (under ASC 830), which mostly consist of loans from Singapore to the United States and which were approximately $51 million and $45 million on December 31, 2022 and 2021, respectively, are the reason for the significant fluctuation of foreign currency transaction Gain or Loss on the Consolidated Statements of Operations and Other Comprehensive Income.
We cannot assure you that future inflation will not have an adverse impact on our operating results and financial condition. 50 Impact of Foreign Exchange Rates The effect of foreign exchange rate changes on the intercompany loans (under ASC 830), which mostly consist of loans from Singapore to the United States and which were approximately $23 million and $51 million on December 31, 2023 and 2022, respectively, are the reason for the significant fluctuation of foreign currency transaction Gain or Loss on the Consolidated Statements of Operations and Other Comprehensive Income.
On July 17, 2020, the Company purchased 122,039,000 shares, approximately 9.99% ownership, and 1,220,390,000 warrants with an exercise price of $0.0001 per share, from NECV, for an aggregated purchase price of $122,039.
In March 2022, both loans, together with warrants were converted into common shares of AMRE. After the conversion, the Company owns approximately 15.8% of AMRE. On July 17, 2020, the Company purchased 122,039,000 shares, approximately 9.99% ownership, and 1,220,390,000 warrants with an exercise price of $0.0001 per share, from NECV, for an aggregated purchase price of $122,039.
Currently the Black Oak project does not have any financing from third parties. Ballenger Run The Company’s Ballenger Run project is nearly complete, as all lots have been sold and the Company is completing its final tasks related to the project.
Currently the Lakes at Black Oak project does not have any financing from third parties. Ballenger Run The Ballenger Run is a 197-acre land sub-division development project located in Frederick County, Maryland. The Ballenger Run project is nearly complete, as all lots have been sold and the Company is completing its final tasks related to the project.
The expected completion date for the final phases of the Ballenger Run project is June of 2023. At the present time, the Company is also considering expanding its current policy of selling buildable lots to include a strategy of building housing for sale or rent, particularly at our Black Oak and Alset Villas properties.
Real Property Financing Arrangements At the present time, the Company is considering expanding its current policy of selling buildable lots to include a strategy of building housing for sale or rent, particularly at our Lakes at Black Oak and Alset Villas properties.
The Company did not have a controlling interest and therefore the Company’s investment would be accounted for under equity method accounting or could elect the fair value option accounting.
The Company did not have a controlling interest and therefore the Company’s investment would be accounted for under equity method accounting or could elect the fair value option accounting. The Company has significant influence over NECV as the Company holds approximately 0.5% of the common shares of NECV.
Net Loss In the year ended December 31, 2022, the Company had net loss of $46,212,505 compared to net loss of $119,017,591 in the year ended December 31, 2021. Liquidity and Capital Resources Our real estate assets have increased to $54,618,729 as of December 31, 2022, from $40,515,380 as of December 31, 2021.
Net Loss In the year ended December 31, 2023, the Company had net loss of $61,278,733 compared to net loss of $46,212,505 in the year ended December 31, 2022. Liquidity and Capital Resources Our real estate assets have decreased to $42,137,152 as of December 31, 2023, from $54,618,729 as of December 31, 2022.
On February 11, 2021, the Company entered into a term note with M&T Bank with a principal amount of $68,502 pursuant to the Paycheck Protection Program (“PPP Term Note”) under the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”). The PPP Loan is evidenced by a promissory note.
We believe this trend, should it continue, will encourage interest in some of our projects. On February 11, 2021, the Company entered into a term note with M&T Bank with a principal amount of $68,502 pursuant to the Paycheck Protection Program (“PPP Term Note”) under the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”).
Summary of Cash Flows for the Years Ended December 31, 2022 and 2021 Years Ended December 31, 2022 2021 Net cash used in operating activities $ (31,855,435 ) $ (16,684,360 ) Net cash used in investing activities $ (15,123,041 ) $ (56,044,001 ) Net cash provided by financing activities $ 6,057,481 $ 103,417,404 Cash Flows from Operating Activities Net cash used in operating activities was $31,855,435 in the year ended December 31, 2022, as compared to net cash used in operating activities of $16,684,360 in the same period of 2021.
Summary of Cash Flows for the Years Ended December 31, 2023 and 2022 Years Ended December 31, 2023 2022 Net cash provided by (used in) operating activities $ 7,478,823 $ (31,855,435 ) Net cash used in investing activities $ (2,128,986 ) $ (15,123,041 ) Net cash provided by financing activities $ 3,187,489 $ 6,057,481 Cash Flows from Operating Activities Net cash provided by operating activities was $7,478,823 in the year ended December 31, 2023, as compared to net cash used in operating activities of $31,855,435 in the same period of 2022.
Rental revenue recognition begins when the tenant controls the space and continues through the term of the related lease. Generally, at the end of the lease term, the Company provides the tenant with a one-year renewal option, including mostly the same terms and conditions provided under the initial lease term, subject to rent increases.
Generally, at the end of the lease term, the Company provides the tenant with a one-year renewal option, including mostly the same terms and conditions provided under the initial lease term, subject to rent increases. 38 The Company defers rental revenue related to lease payments received from tenants in advance of their due dates.
GAAP”). The consolidated financial statements include all accounts of the Company and its majority owned and controlled subsidiaries. The Company consolidates entities in which it owns more than 50% of the voting common stock and controls operations. All intercompany transactions and balances among consolidated subsidiaries have been eliminated.
The Company consolidates entities in which it owns more than 50% of the voting common stock and controls operations. All intercompany transactions and balances among consolidated subsidiaries have been eliminated. Use of Estimates and Critical Accounting Estimates and Assumptions The preparation of financial statements in conformity with U.S.
The revenue earned from Food and Beverage business for the years ended December 31, 2022 and 2021 were $449,240 and $ 42,380 respectively. ● Remaining performance obligations. As of December 31, 2022 and 2021, there were no remaining performance obligations or continuing involvement, as all service obligations within the other business activities segment have been completed.
As of December 31, 2023 and 2022, there were no remaining performance obligations or continuing involvement, as all service obligations within the other business activities segment have been completed.
Revenue Recognition and Cost of Revenue The following represents a disaggregation of our revenue recognition policies by segment: Real Estate ● Property Sales. Part of the Company’s real estate business is land development. The Company purchases land and develops it into residential communities. The developed lots are sold to builders (customers) for the construction of new homes.
Actual results could differ from those estimates. 37 Revenue Recognition and Cost of Revenue The following represents a disaggregation of our revenue recognition policies by segment: Real Estate ● Property Sales. Part of the Company’s real estate business is land development. The Company purchases land and develops it into residential communities.
On March 15, 2022, approximately $2,300,000 was released from collateral, leaving approximately $300,000 as collateral for outstanding letters of credit. As of December 31, 2022 and 2021, the principal balance of the loan was $0.
On March 15, 2022, approximately $2,300,000 was released from collateral, leaving approximately $300,000 as collateral for outstanding letters of credit. On December 14, 2023 approximately $201,751 was released from collateral, leaving approximately $100,000 as collateral for outstanding letters of credit.
As of December 31, 2021 and 2022, the Management estimated the fair value of the note to be $88,599, the initial transaction price. 54 Variable Interest Entity Under Financial Accounting Standards Board (“FASB”) Accounting Standard Codification (“ASC”) 810, Consolidation , when a reporting entity is the primary beneficiary of an entity that is a variable interest entity (“VIE”), as defined in ASC 810, the VIE must be consolidated into the financial statements of the reporting entity.
Variable Interest Entity Under FASB Accounting Standard Codification (“ASC”) 810, Consolidation , when a reporting entity is the primary beneficiary of an entity that is a variable interest entity (“VIE”), as defined in ASC 810, the VIE must be consolidated into the financial statements of the reporting entity.
(“AMRE”), a related party private startup company, in conjunction with the Company lending two $200,000 promissory notes. For further details on this transaction, refer to Note 8 to Company’s Financial Statements, Related Party Transactions, Note Receivable from a Related Party Company. As of December 31, 2022 and 2021, AMRE was a private company.
For further details on this transaction, refer to Note 8 to Company’s Financial Statements, Related Party Transactions, Note Receivable from a Related Party Company. As of December 31, 2023 and 2022, AMRE was a private company. Based on management’s analysis, the fair value of the warrants and the stock option was $0 as of December 31, 2021.
Cash Flows from Financing Activities Net cash provided by financing activities was $6,057,481 in the year ended December 31, 2022, compared to net cash provided of $103,417,404 the year ended December 31, 2021. Cash provided by financing activities in the year 2022 is primarily related the proceeds from stock issuance of $6,213,000 and borrowing from a commercial loan of $123,633.
Cash Flows from Financing Activities Net cash provided by financing activities was $3,187,489 in the year ended December 31, 2023, compared to net cash provided of $6,057,481 the year ended December 31, 2022. Cash provided by financing activities in the year 2023 is primarily related to the proceeds from stock issuance of $3,433,921.
The builders enter into a sales contract with the Company before they take the lots. The prices and timeline are determined and agreed upon in the contract. The builders do the inspections to make sure all conditions and requirements in contracts are met before purchasing the lots.
The builders do the inspections to make sure all conditions and requirements in contracts are met before purchasing the lots.
Our total assets have decreased to $153,490,336 as of December 31, 2022 from $184,210,143 as of December 31, 2021 due to the decrease in cash.
Our total assets have decreased to $126,314,028 as of December 31, 2023 from $153,490,336 as of December 31, 2022 due to the decrease in real estate assets and equity method investment.
Sales of real properties accounted for approximately 70%, revenue from houses rental accounted for approximately 2% and sales of biohealth products accounted for approximately 28% of our total revenue in the year ended December 31, 2021.
Sales of real properties accounted for approximately 82%, revenue from home rentals accounted for approximately 13% and revenue from other activities accounted for approximately 5% of our total revenue in the year ended December 31, 2023.
The capitalized costs are recorded as part of the asset to which they relate and are reduced when lots are sold. The Company capitalized construction costs of approximately $3.2 million and $6.0 million in the years ended December 31, 2022 and 2021, respectively.
The capitalized costs are recorded as part of the asset to which they relate and are reduced when lots are sold.
We collected revenue from the sale of lots to builders. We are not involved in the construction of homes at the present time. Income from the sale of Front Foot Benefits (“FFBs”), assessed on Ballenger Run project lots, decreased from $289,375 in the year ended December 31, 2021 to $126,737 in year ended December 31, 2022.
Income from the sale of Front Foot Benefits (“FFBs”), assessed on Ballenger Run project lots, decreased from $126,737 in the year ended December 31, 2022 to $0 in year ended December 31, 2023. The decrease is a result of the decreased sale of properties to homebuyers in 2023.
Ketomei is in the business of selling cooked food and drinks. During the year ended December 31, 2022 the investment loss was $48,916. Investment in Ketomei was $207,402 at December 31, 2022. Investment in Debt Securities Debt securities are reported at fair value, with unrealized gains and losses (other than impairment losses) recognized in accumulated other comprehensive income or loss.
Investment in Debt Securities Debt securities are reported at fair value, with unrealized gains and losses (other than impairment losses) recognized in accumulated other comprehensive income or loss. Realized gains and losses on debt securities are recognized in the net income in the consolidated statements of comprehensive income.
Our Chief Executive Officer, Chan Heng Fai, is also an owner of the common stock of Value Exchange International (not including any common shares we hold). Additionally, certain members of our board of directors serve as directors of Value Exchange International. The stock’s fair value is determined by quoted stock prices.
Additionally, our Chief Executive Officer, Chan Heng Fai, is a majority owner of the common stock of NECV (not including any common shares we hold).
On December 31, 2022 and 2021 variable interest and amount receivable in the non-consolidated VIE was $0 and $8,901,285, respectively, which represents the Company’s maximum risk of loss from non-consolidated VIE. 55 Impact of Inflation We believe that inflation has not had a material impact on our results of operations for the years ended December 31, 2022 and 2021.
Impact of Inflation We believe that inflation has not had a material impact on our results of operations for the years ended December 31, 2023 and 2022.
Value Exchange International, Inc. is a provider of information technology services for businesses, and is traded on the OTCQB (OTCQB: VEII). NECV is a publicly traded consumer products company (OTCPK: HIPH).
DSS is listed on the NYSE American (NYSE: DSS). VEII is a provider of information technology services for businesses, and is traded on the OTCQB (OTCQB: VEII). NECV is a publicly traded consumer products company (OTCPK: HIPH). SHRG markets and distributes health and wellness products, as well as member-based travel services, using a direct selling business model.
The Company does not have significant influence over AMBS and True Partner as the Company is the beneficial owner of approximately 4.3% of the common shares of AMBS and owned 15.5% of True Partner in 2021.
The Company does not have significant influence over AMBS as the Company holds approximately 4.3% of the common shares of AMBS. The stock fair value is determined by quoted stock prices.
After the sale, the Company still owns approximately 99% of Hapi Metaverse’s total outstanding shares. 48 The management believes that the available cash on hand, available debt and equity financing are sufficient to fund our operations for at least the next 12 months.
In addition, the Company will be entitled to receive certain reimbursements in the year ended December 31, 2024 and 2025. The management believes that the available cash on hand, available debt and equity financing are sufficient to fund our operations for at least the next 12 months.
Operating Expenses The following table sets forth period-over-period changes in cost of revenue for each of our reporting segments: Years Ended December 31, Change 2022 2021 Dollars Percentage Real Estate $ 3,016,200 $ 11,073,756 $ (8,057,556 ) -73 % Digital Transformation Technology 23,423 - 23,423 100 % Biohealth 523,534 214,019 309,515 145 % Other 168,833 14,039 154,794 1,103 % Total cost of sales $ 3,731,990 $ 11,301,814 $ (7,569,824 ) -67 % Cost of revenue decreased from $11,301,814 in the year ended December 31, 2021 to $3,731,990 in the year ended December 31, 2022, as a result of the decrease in the number of lots sold in the Ballenger Run and sales in HWH World business.
Operating Expenses The following table sets forth period-over-period changes in cost of revenue for each of our reporting segments: Years Ended December 31, Change 2023 2022 Dollars Percentage Real Estate $ 13,915,144 $ 3,016,200 $ 10,898,944 361 % Digital Transformation Technology 9,145 23,423 (14,278 ) -61 % Biohealth 54,529 523,534 (469,005 ) -90 % Other 597,391 168,833 428,558 254 % Total cost of sales $ 14,576,209 $ 3,731,990 $ 10,844,219 291 % Cost of revenue increased from $3,731,990 in the year ended December 31, 2022 to $14,576,209 in the year ended December 31, 2023, as a result of the increase in the number of lots sold in the Lakes at Black Oak project and sales in F&B business.
The project was fully sold during year ended December 31, 2022. In 2021, our subsidiary Alset EHome Inc. acquired approximately 19.5 acres of partially developed land near Houston, Texas which will be used to develop a community named Alset Villas (“Alset Villas”). Alset EHome is targeting to develop approximately 63 homes at Alset Villas for rent and/or for sale.
Pursuant to the other Agreement, the Seller has agreed to sell 63 single-family detached residential lots (the “Alset Villas Agreement”) in the city of Magnolia, Texas. In 2021, our subsidiary Alset EHome Inc. acquired approximately 19.5 acres of partially developed land near Houston, Texas which was used to develop a community named Alset Villas (“Alset Villas”).
The Company has elected the fair value option for the equity securities noted below that would otherwise be accounted for under the equity method of accounting. Holista CollTech Limited (“Holista”), DSS Inc. (“DSS”) and New Electric CV Corporation (“NECV”, formerly known as “American Premium Mining Corporation” or “APM”)are publicly traded companies and fair value is determined by quoted stock prices.
The Company has elected the fair value option for the equity securities noted below that would otherwise be accounted for under the equity method of accounting. Holista CollTech Limited (“Holista”), DSS Inc. (“DSS”) and NECV, Value Exchange International Inc. (“Value Exchange International” or “VEII”) and Sharing Services Global Corp.
In the years ended December 31, 2022 and 2021, the revenue from other businesses was $568,248 and $42,377, respectively, generated by Korean and Singaporean café shops and restaurants.
The financial services, food and beverage businesses and new venture businesses are small and diversified, and accordingly they are not separately addressed as one independent category. In the years ended December 31, 2023 and 2022, the revenue from other businesses was $1,083,971 and $568,248, respectively, generated mainly by Korean and Singaporean café shops and restaurants.
Results of Operations Summary of Consolidated Statements of Operations and Other Comprehensive Loss for the Years Ended December 31, 2022 and 2021 Years Ended December 31, 2022 2021 Revenue $ 4,480,442 $ 19,798,822 Operating Expenses (11,569,816 ) (34,792,944 ) Other Expenses (39,123,131 ) (103,489,455 ) Income Tax Expense - (534,014 ) Net Loss $ (46,212,505 ) $ (119,017,591 ) Revenue The following table sets forth period-over-period changes in revenues for each of our reporting segments: Years Ended December 31, Change 2022 2021 Dollars Percentage Real Estate $ 3,088,628 $ 14,213,379 $ (11,124,751 ) -78 % Digital Transformation Technology 69,915 - 69,915 100 % Biohealth 753,651 5,543,066 (4,789,415 ) -86 % Other 568,248 42,377 525,871 1,241 % Total revenue $ 4,480,442 $ 19,798,822 $ (15,318,380 ) -77 % Revenue was $4,480,442 and $19,798,822 for the years ended December 31, 2022 and 2021, respectively.
Lots in these projects were fully sold during year ended December 31, 2022. 41 Results of Operations Summary of Consolidated Statements of Operations and Other Comprehensive Loss for the Years Ended December 31, 2023 and 2022 Years Ended December 31, 2023 2022 Revenue $ 22,088,507 $ 4,480,442 Operating Expenses (24,961,161 ) (11,569,816 ) Other Expenses (58,313,729 ) (39,123,131 ) Income Tax Expense (92,350 ) - Net Loss $ (61,278,733 ) $ (46,212,505 ) Revenue The following table sets forth period-over-period changes in revenues for each of our reporting segments: Years Ended December 31, Change 2023 2022 Dollars Percentage Real Estate $ 20,963,661 $ 3,088,628 $ 17,875,033 579 % Digital Transformation Technology 28,117 69,915 (41,798 ) -60 % Biohealth 12,758 753,651 (740,893 ) -98 % Other 1,083,971 568,248 515,723 91 % Total revenue $ 22,088,507 $ 4,480,442 $ 17,608,065 393 % Revenue was $22,088,507 and $4,480,442 for the years ended December 31, 2023 and 2022, respectively.
HWH World operates based on a direct sale model of health supplements. HWH World recognized $753,651 and $5,543,066 in revenue in the years ended December 31, 2022 and 2021, respectively. The category described as “Other” includes corporate and financial services, food and beverage business and new venture businesses.
HWH World operates based on a direct sale model of health supplements. HWH World recognized $12,758 and $753,651 in revenue in the years ended December 31, 2023 and 2022, respectively. The revenue from this segment decreased in 2023 due to decreased sales of annual memberships.
The change in unrealized loss from related party securities investment and financing costs are the primary reasons for the volatility in these two periods. Unrealized loss on related party securities investment was $23,556,219 in year ended December 31, 2022, compared to $47,231,084 loss in the year ended December 31, 2021.
The change in realized loss on securities investment, loss on equity method investment and loss on consolidation of Alset Capital Acquisition Corp. are the primary reasons for the volatility in these two periods. Realized loss on securities investment was $11,375,747 in year ended December 31, 2023, compared to $7,308,580 loss in the year ended December 31, 2022.

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