UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, ~~2022~~2023

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File No. 001-38909

AGBA GROUP HOLDING LIMITED

(Exact name of registrant as specified in its charter)

British Virgin Islands		N/A
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

AGBA Tower

68 Johnston Road

Wan Chai, Hong Kong SAR

N/A

(Address of Principal Executive Offices)

(Zip Code)

+852 3601 8000

(Registrant’s telephone number, including area code)

~~AGBA ACQUISITION LIMITED~~

Room 1108, 11th Floor, Block B
New Mandarin Plaza, 14 Science Museum Road
Tsimshatsui East, Kowloon, Hong Kong

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act): Yes ☐ No ☒

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Ordinary Shares	AGBA	NASDAQ Capital Market
Warrants	AGBAW	NASDAQ Capital Market

As of November ~~14, 2022,~~13, 2023, there were ~~1,398,642~~67,561,998 ordinary shares, par value $0.001 per share, issued and outstanding.

AGBA GROUP HOLDING LIMITED

~~(FORMERLY KNOWN AS AGBA ACQUISITION LIMITED)~~

Quarterly Report on Form 10-Q

TABLE OF CONTENTS

		Page


PART I – FINANCIAL INFORMATION		1 F-1

Item 1.	Financial Statements	F-1
	1

	Unaudited Condensed Consolidated Balance Sheets	F-1
	1

	Unaudited Condensed Consolidated Statements of Operations and Comprehensive Loss	F-2
	2

	Unaudited Condensed Consolidated Statements of Changes in Shareholders’ ~~Deficit~~(Deficit) Equity	3 F-3

	Unaudited Condensed Consolidated Statements of Cash Flows	4 F-4

	Notes to Unaudited Condensed Consolidated Financial Statements	5 F-5 to F-34

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	123

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	17
	29

Item 4.	Control and Procedures	17
	29

PART II – OTHER INFORMATION		3118

Item 1.	Legal Proceedings	18
	31

Item 1A.	Risk Factors	3118

Item 2.	Unregistered Sales of Equity Securities, ~~and~~ Use of Proceeds, and Issuer Purchases of Equity Securities	3118

Item 3.	Defaults Upon Senior Securities	19
	32

Item 4.	Mine Safety Disclosures	3219

Item 5.	Other Information	32 19

Item 6.	Exhibits	19
	33

SIGNATURES		34 20

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements

AGBA GROUP HOLDING LIMITED

~~AGBA GROUP HOLDING LIMITED~~

~~(FORMERLY KNOWN AS AGBA ACQUISITION LIMITED)~~

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

September 30,
2022 December 31,
2021
(Audited)
ASSETS
Current assets:
Cash $ 96,914 $ 164,863
Prepayment 1,866 -
Total current assets 98,780 164,863
Cash and investments held in trust account 38,928,442 40,441,469

TOTAL ASSETS $ 39,027,222 $ 40,606,332

LIABILITIES, TEMPORARY EQUITY AND SHAREHOLDERS’ DEFICIT
Current liabilities:
Accrued liabilities $ 8,798 $ 16,733
Note payable 5,266,243 3,710,390
Amount due to related party 1,645,353 952,761
Total current liabilities 6,920,394 4,679,884

Warrant liabilities 13,500 490,000
Deferred underwriting compensation 1,840,000 1,840,000
Total non-current liabilities 1,853,500 2,330,000

TOTAL LIABILITIES 8,773,894 7,009,884

Commitments and contingencies
Ordinary shares, subject to possible redemption: 3,362,871 and 3,646,607 shares (at redemption value) 38,928,442 40,441,469

Shareholders’ deficit:
Ordinary shares, $0.001 par value; 100,000,000 shares authorized; 1,375,000 shares issued and outstanding (excluding 3,362,871 and 3,646,607 shares subject to possible redemption) 1,375 1,375
Accumulated deficit (8,676,489 ) (6,846,396 )

Total shareholders’ deficit (8,675,114 ) (6,845,021 )

TOTAL LIABILITIES, TEMPORARY EQUITY AND SHAREHOLDERS’ DEFICIT $ 39,027,222 $ 40,606,332

(Currency expressed in United States Dollars (“US$”), except for number of shares)

	September 30, 2023			December 31, 2022
ASSETS				(Audited)
Current assets:
Cash and cash equivalents	$	1,622,425		$	6,449,876
Restricted cash		20,552,946			44,844,196
Accounts receivable, net		2,612,284			2,822,162
Accounts receivable, net, related parties		846,640			272,546
Loans receivable, net		524,504			517,479
Notes receivable, net		613,533			—
Asset held for sale		5,465,261			—
Income tax recoverable		376,027			260,120
Deposits, prepayments, and others receivable, net		2,120,619			589,786
Total current assets		34,734,239			55,756,165

Non-current assets:
Rental deposit, net		958,768			—
Loans receivable, net		1,059,957			1,072,392
Property and equipment, net		1,739,223			7,359,416
Right-of-use asset, net		11,926,714			—
Long-term investments, net		32,162,248			37,033,360
Total non-current assets		47,846,910			45,465,168

TOTAL ASSETS	$	82,581,149		$	101,221,333

LIABILITIES AND SHAREHOLDERS’ (DEFICIT) EQUITY
Current liabilities:
Accounts payable and accrued liabilities	$	18,057,184		$	20,274,429
Escrow liabilities		20,552,946			29,487,616
Borrowings		6,728,546			4,477,254
Borrowing, related party		5,000,000			—
Amounts due to the holding company		—			6,289,743
Lease liabilities		1,206,449			—
Forward share purchase liability		—			13,491,606
Income tax payable and provision		23,000,000			23,000,000
Total current liabilities		74,545,125			97,020,648

Non-current liabilities:
Lease liabilities		10,929,511			—
Warrant liabilities		1,067			4,548
Deferred tax liabilities		45,725			45,858
Total non-current liabilities		10,976,303			50,406

TOTAL LIABILITIES		85,521,428			97,071,054

Commitments and contingencies (Note 21)

Shareholders’ (deficit) equity:
Ordinary shares, $0.001 par value; 200,000,000 shares authorized, 67,561,998 and 58,376,985 shares issued and outstanding as of September 30, 2023 and December 31, 2022, respectively		67,562			58,377
Ordinary shares to be issued		—			1,665
Additional paid-in capital		72,435,372			43,870,308
Accumulated other comprehensive loss		(469,352	)		(384,938	)
Accumulated deficit		(74,973,861	)		(39,395,133	)
Total shareholders’ (deficit) equity		(2,940,279	)		4,150,279
TOTAL LIABILITIES AND SHAREHOLDERS’ (DEFICIT) EQUITY	$	82,581,149		$	101,221,333

See accompanying notes to unaudited condensed consolidated financial statements.

AGBA GROUP HOLDING LIMITED

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

AND COMPREHENSIVE LOSS

(Currency expressed in United States Dollars (“US$”), except for number of shares)

	Three months ended September 30,						Nine months ended September 30,
	2023			2022			2023			2022
Revenues:
Interest income:
Loans	$	41,472		$	38,260		$	117,805		$	137,454
Total interest income		41,472			38,260			117,805			137,454
Non-interest income:
Commissions		12,168,777			12,168,614			38,507,460			15,932,771
Recurring service fees		751,727			793,353			2,300,703			2,614,729
Total non-interest income		12,920,504			12,961,967			40,808,163			18,547,500
Total revenues from others		12,961,976			13,000,227			40,925,968			18,684,954

Non-interest income:
Recurring service fees		244,525			243,925			725,146			725,193
Total revenues from related parties		244,525			243,925			725,146			725,193
Total revenues		13,206,501			13,244,152			41,651,114			19,410,147

Operating cost and expenses:
Commission expense		(8,915,811	)		(8,037,869	)		(28,195,740	)		(11,219,182	)
Sales and marketing expense		(753,545	)		(1,456,739	)		(3,125,432	)		(2,088,391	)
Technology expense		(740,847	)		(335,404	)		(2,678,645	)		(618,501	)
Personnel and benefit expense		(7,764,353	)		(3,325,369	)		(22,671,813	)		(8,734,387	)
Other general and administrative expenses		(5,981,447	)		(1,093,733	)		(20,493,152	)		(3,175,351	)
Total operating cost and expenses		(24,156,003	)		(14,249,114	)		(77,164,782	)		(25,835,812	)

Loss from operations		(10,949,502	)		(1,004,962	)		(35,513,668	)		(6,425,665	)

Other income (expense):
Interest income		16,875			7,546			384,656			24,161
Interest expense		(393,013	)		(20,085	)		(805,789	)		(20,085	)
Foreign exchange (loss) gain, net		(864,383	)		(2,083,020	)		41,467			(4,690,476	)
Investment (loss) income, net		(792,907	)		741,811			488,589			(2,793,242	)
Change in fair value of warrant liabilities		1,106			—			3,481			—
Change in fair value of forward share purchase liability		—			—			(82,182	)		—
Loss on settlement of forward share purchase agreement		—			—			(378,895	)		—
Rental income		78,820			78,630			217,091			236,344
Sundry income		38,061			13,724			122,128			169,252
Total other expense, net		(1,915,441	)		(1,261,394	)		(9,454	)		(7,074,046	)

Loss before income taxes		(12,864,943	)		(2,266,356	)		(35,523,122	)		(13,499,711	)

Income tax expense		(55,886	)		(127,186	)		(55,606	)		(232,540	)

NET LOSS	$	(12,920,829	)	$	(2,393,542	)	$	(35,578,728	)	$	(13,732,251	)

Other comprehensive income (loss):
Foreign currency translation adjustment		15,555			(37,370	)		(84,414	)		(417,729	)

TOTAL COMPREHENSIVE LOSS	$	(12,905,274	)	$	(2,430,912	)	$	(35,663,142	)	$	(14,149,980	)

Weighted average number of ordinary shares outstanding – basic and diluted		67,505,476			55,500,000			64,401,341			55,500,000

Net loss per ordinary share – basic and diluted	$	(0.19	)	$	(0.04	)	$	(0.55	)	$	(0.25	)

See accompanying notes to unaudited condensed consolidated financial statements.

AGBA GROUP HOLDING LIMITED

UNAUDITED CONDESED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ (DEFICIT) EQUITY

(Currency expressed in United States Dollars (“US$”), except for number of shares)

	Three and Nine Months Ended September 30, 2023
	Ordinary shares				Ordinary shares to be issued						Additional		Accumulated other						Total shareholders’
	No. of shares		Amount		No. of shares			Amount			paid-in capital		comprehensive loss			Accumulated deficit			equity (deficit)

Balance as of January 1, 2023		58,376,985	$	58,377		1,665,000		$	1,665		$	43,870,308	$	(384,938	)	$	(39,395,133	)	$	4,150,279

Issuance of ordinary shares to settle finder fee		2,173,913		2,174		—			—			3,997,826		—			—			4,000,000
Share-based compensation		1,200,000		1,200		—			—			3,905,400		—			—			3,906,600
Forgiveness of amounts due to the holding company		—		—		—			—			3,000,000		—			—			3,000,000
Foreign currency translation adjustment		—		—		—			—			—		(133,204	)		—			(133,204	)
Net loss for the period		—		—		—			—			—		—			(12,072,610	)		(12,072,610	)
Balance as of March 31, 2023		61,750,898		61,751		1,665,000			1,665			54,773,534		(518,142	)		(51,467,743	)		2,851,065

Issuance of holdback shares		1,665,000		1,665		(1,665,000	)		(1,665	)		—		—			—			—
Share-based compensation		4,046,100		4,046		—			—			4,600,274		—			—			4,604,320
Forgiveness of amounts due to the holding company		—		—		—			—			5,600,000		—			—			5,600,000
Foreign currency translation adjustment		—		—		—			—			—		33,235			—			33,235
Net loss for the period		—		—		—			—			—		—			(10,585,289	)		(10,585,289	)

Balance as of June 30, 2023		67,461,998		67,462		—			—			64,973,808		(484,907	)		(62,053,032	)		2,503,331
Share-based compensation		100,000		100		—			—			3,468,180		—			—			3,468,280
Forgiveness of amounts due to the holding company		—		—		—			—			3,993,384		—			—			3,993,384
Foreign currency translation adjustment		—		—		—			—			—		15,555			—			15,555
Net loss for the period		—		—		—			—			—		—			(12,920,829	)		(12,920,829	)

Balance as of September 30, 2023		67,561,998	$	67,562		—		$	—		$	72,435,372	$	(469,352	)	$	(74,973,861	)	$	(2,940,279	)

	Three and Nine Months Ended September 30, 2022
	Ordinary shares				Ordinary shares to be issued				Additional		Receivable			Accumulated other			Retained earnings			Total
	No. of shares		Amount		No. of shares		Amount		paid-in capital		from the Shareholder			comprehensive loss			(accumulated deficit)			shareholders’ equity

Balance as of January 1, 2022		53,835,000	$	53,835		1,665,000	$	1,665	$	38,706,226	$	(29,562,195	)	$	(179,461	)	$	52,125,502		$	61,145,572

Special dividend to the holding company		—		—		—		—		—		29,562,195			—			(47,000,000	)		(17,437,805	)
Foreign currency translation adjustment		—		—		—		—		—		—			(274,351	)		—			(274,351	)
Net loss for the period		—		—		—		—		—		—			—			(447,394	)		(447,394	)

Balance as of March 31, 2022		53,835,000		53,835		1,665,000		1,665		38,706,226		—			(453,812	)		4,678,108			42,986,022
Foreign currency translation adjustment		—		—		—		—		—		—			(106,008	)		—			(106,008	)
Net loss for the period		—		—		—		—		—		—			—			(10,891,315	)		(10,891,315	)

Balance as of June 30, 2022		53,835,000		53,835		1,665,000		1,665		38,706,226		—			(559,820	)		(6,213,207	)		31,988,699
Advances to the holding company		—		—		—		—		—		(3,165,188	)		—			—			(3,165,188	)
Foreign currency translation adjustment		—		—		—		—		—		—			(37,370	)		—			(37,370	)
Net loss for the period		—		—		—		—		—		—			—			(2,393,542	)		(2,393,542	)

Balance as of September 30, 2022		53,835,000	$	53,835		1,665,000	$	1,665	$	38,706,226	$	(3,165,188	)	$	(597,190	)	$	(8,606,749	)	$	26,392,599

See accompanying notes to unaudited condensed consolidated financial statements.

AGBA GROUP HOLDING LIMITED

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Currency expressed in United States Dollars (“US$”))

	Nine months ended September 30,
	2023			2022
Cash flows from operating activities:
Net loss	$	(35,578,728	)	$	(13,732,251	)
Adjustments to reconcile net loss to net cash used in operating activities
Share-based compensation expense		11,979,200			—
Non-cash lease expense		854,470			—
Depreciation on property and equipment		238,315			288,230
Interest income on notes receivable		(23,217	)		—
Foreign exchange (gain) loss, net		(41,467	)		4,690,476
Investment (income) loss, net		(488,589	)		2,793,242
Allowance for credit losses on financial instruments		661,288			—
Change in fair value of warrant liabilities		(3,481	)		—
Change in fair value of forward share purchase liability		82,182			—
Loss on settlement of forward share purchase agreement		378,895			—
Reversal of annual bonus accrued in prior year		(3,763,847	)		—

Change in operating assets and liabilities:
Accounts receivable		(575,266	)		(1,537,618	)
Loans receivable		3,996			2,325,039
Deposits, prepayments, and others receivable		(2,938,425	)		(267,001	)
Accounts payable and accrued liabilities		5,546,602			2,768,147
Escrow liabilities		(8,934,670	)		192,395
Lease liabilities		(645,303	)		—
Income tax payable		(116,617	)		347,735
Net cash used in operating activities		(33,364,662	)		(2,131,606	)

Cash flows from investing activities:
Proceeds from sale of investments		3,976,657			1,849,650
Purchase of notes receivable		(589,086	)		—
Dividends received from long-term investments		1,404,303			—
Addition in long-term investments		—			(7,849,676	)
Purchase of property and equipment		(104,778	)		(870,360	)
Net cash provided by (used in) investing activities		4,687,096			(6,870,386	)

Cash flows from financing activities:
Advances from the holding company		6,303,641			198,778
Settlement of forward share purchase agreement		(13,952,683	)		—
Proceeds from borrowings		7,234,391			4,462,867
Dividend paid to the holding company		—			(17,437,805	)
Net cash used in financing activities		(414,651	)		(12,776,160	)

Effect on exchange rate change on cash, cash equivalents and restricted cash		(26,484	)		(364,313	)

Net change in cash, cash equivalent and restricted cash		(29,118,701	)		(22,142,465	)

BEGINNING OF PERIOD		51,294,072			73,081,407

END OF PERIOD	$	22,175,371		$	50,938,942

SUPPLEMENTAL CASH FLOW INFORMATION:
Cash received from income tax recoverable	$	—		$	125,311
Cash paid for income taxes	$	172,223		$	10,116
Cash paid for interest	$	774,249		$	—
Cash received from interest	$	361,439		$	24,161

Reconciliation to amounts on unaudited condensed consolidated balance sheets:
Cash and cash equivalents	$	1,622,425		$	16,260,750
Restricted cash		20,552,946			34,678,192

Total cash, cash equivalents and restricted cash	$	22,175,371		$	50,938,942

NON-CASH INVESTING AND FINANCING ACTIVITIES DISCLOSURE
Issuance of ordinary shares to settle finder fee	$	4,000,000		$	—
Forgiveness of amounts due to the holding company	$	12,593,384		$	—
Initial recognition of operating lease liabilities related to right-of-use asset	$	12,512,585		$	—
Purchase of property and equipment, through earnest deposit	$	—		$	7,205,118
Special dividend to the holding company offset with amounts due from the holding company	$	—		$	29,562,195

See accompanying notes to unaudited condensed consolidated financial statements.

AGBA GROUP HOLDING LIMITED

~~AGBA GROUP HOLDING LIMITED~~

~~(FORMERLY KNOWN AS AGBA ACQUISITION LIMITED)~~

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND
COMPREHENSIVE LOSS

Three months ended
September 30, Nine months ended
September 30,
2022 2021 2022 2021

General and administrative expenses $ (215,788 ) $ (180,831 ) $ (750,746 ) $ (439,395 )

Total operating expenses (215,788 ) (180,831 ) (750,746 ) (439,395 )

Other income (expense):
Change in fair value of warrant liabilities 536,500 (30,000 ) 476,500 (90,000 )
Dividend income 108,620 1,078 120,489 2,707
Interest income 3 10 6 10,700
Total other expense, net 645,123 (28,912 ) 596,995 (76,593 )

Income (loss) before income taxes 429,335 (209,743 ) (153,751 ) (515,988 )

Income taxes - - - -

NET INCOME (LOSS) 429,335 (209,743 ) (153,751 ) (515,988 )

Other comprehensive loss:
Change in unrealized gain on available-for-sale securities - - - -

COMPREHENSIVE INCOME (LOSS) $ 429,335 $ (209,743 ) $ (153,751 ) $ (515,988 )

Basic and diluted weighted average shares outstanding, ordinary share subject to possible redemption 3,362,871 3,963,110 3,487,135 4,056,087
Basic and diluted net income (loss) per share, ordinary share subject to possible redemption $ 0.14 $ (0.04 ) $ 0.10 $ (0.08 )

Basic and diluted weighted average shares outstanding, ordinary share attributable to AGBA Acquisition Limited 1,375,000 1,375,000 1,375,000 1,375,000
Basic and diluted net loss per share, ordinary share attributable to AGBA Acquisition Limited $ (0.04 ) $ (0.04 ) $ (0.38 ) $ (0.15 )

~~See accompanying notes to unaudited condensed consolidated financial statements.~~

~~AGBA GROUP HOLDING LIMITED~~

~~(FORMERLY KNOWN AS AGBA ACQUISITION LIMITED)~~

~~UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS’ DEFICIT~~

Ordinary shares Total
No. of
shares Amount Accumulated deficit
shareholders’
deficit

Balance as of January 1, 2022 1,375,000 $ 1,375 $ (6,846,396 ) $ (6,845,021 )

Accretion of carrying value to redemption value (547,992 ) (547,992 )
Net loss for the period - - (351,736 ) (351,736 )

Balance as of March 31, 2022 1,375,000 $ 1,375 $ (7,746,124 ) $ (7,744,749 )

Accretion of carrying value to redemption value - - (515,299 ) (515,299 )
Net loss for the period - - (231,350 ) (231,350 )

Balance as of June 30, 2022 1,375,000 $ 1,375 (8,492,773 ) (8,491,398 )

Accretion of carrying value to redemption value - - (613,051 ) (613,051 )
Net loss for the period - - 429,335 429,335

Balance as of September 30, 2022 1,375,000 $ 1,375 $ (8,676,489 ) $ (8,675,114 )

Ordinary shares Accumulated
other Total
No. of
shares Amount comprehensive
income Accumulated
deficit shareholders’
deficit

Balance as of January 1, 2021 (Restated) 1,375,000 $ 1,375 $ 10,173 $ (1,492,525 ) $ (1,480,977 )

Accretion of carrying value to redemption value - - - (2,845,420 ) (2,845,420 )
Unrealized holding gain on available-for-sales securities - - 482 - 482
Realized holding loss on available-for-sale securities - - (10,655 ) - (10,655 )
Net loss for the period - - - (131,804 ) (131,804 )

Balance as of March 31, 2021 1,375,000 $ 1,375 $ - $ (4,469,749 ) $ (4,468,374 )

Accretion of carrying value to redemption value - - (595,533 ) (595,533 )
Net loss for the period - - (174,441 ) (174,441 )

Balance as of June 30, 2021 1,375,000 $ 1,375 $ - $ (5,239,723 ) $ (5,238,348 )

Accretion of carrying value to redemption value - - - (595,544 ) (595,544 )
Net loss for the period - - - (209,743 ) (209,743 )

Balance as of September 30, 2021 1,375,000 $ 1,375 $ - $ (6,045,010 ) $ (6,043,635 )

~~See accompanying notes to unaudited condensed consolidated financial statements.~~

~~AGBA GROUP HOLDING LIMITED~~

~~(FORMERLY KNOWN AS AGBA ACQUISITION LIMITED)~~

~~UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS~~

Nine months ended
September 30,
2022 2021
Cash flows from operating activities
Net loss $ (153,751 ) $ (515,988 )
Adjustments to reconcile net loss to net cash used in operating activities
Change in fair value of warrant liabilities (476,500 ) 90,000
Interest income dividend income earned in cash and investments held in trust account (120,495 ) (13,407 )

Change in operating assets and liabilities:
(Increase) decrease in prepayments (1,866 ) 31,695
Decrease in accrued liabilities (7,935 ) (21,119 )
Cash used in operating activities (760,547 ) (428,819 )

Cash flows from financing activities
Advance from a related party 692,598 112,451
Net cash provided by financing activities 692,598 112,451

NET CHANGE IN CASH (67,949 ) (316,368 )

Cash, beginning of period 164,863 672,443

Cash, end of period $ 96,914 $ 356,075

SUPPLEMENTAL DISCLOSURE OF NON-CASH FINANCING ACTIVITIES:

Unrealized loss in Trust Account $ - $ (10,173 )
Accretion of carrying value to redemption value $ (1,676,342 ) $ (4,036,497 )
Proceeds of promissory notes deposited in Trust Account by a founder shareholder $ 1,555,853 $ 1,783,400
Cash payout to shareholders directly released from trust account due to share redemption $ (3,189,369 ) $ (6,680,520 )

~~See accompanying notes to unaudited condensed consolidated financial statements.~~

~~AGBA GROUP HOLDING LIMITED~~

~~(FORMERLY KNOWN AS AGBA ACQUISITION LIMITED)~~

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Currency expressed in United States Dollars (“US$”))

NOTE 1 ~~– ORGANIZATION~~— NATURE OF BUSINESS AND ~~BUSINESS BACKGROUND~~BASIS OF PRESENTATION

AGBA Group Holding Limited ~~(formerly known as AGBA Acquisition Limited)~~ (“AGBA” ~~and~~or the “Company”) ~~is a newly organized blank check company~~was incorporated on October 8, 2018 ~~under the laws of the~~in British Virgin ~~Islands for the purpose~~Islands.

The Company, through its subsidiaries, is operating a wealth and health platform, offering a wide range of ~~acquiring, engaging~~financial service and products, covering life insurance, pensions, property-casualty insurance, stock brokerage, mutual funds, lending, and real estate in ~~a share exchange, share reconstruction and amalgamation, purchasing all or substantially all of the assets of, entering into contractual arrangements, or engaging~~overseas. AGBA is also engaged in ~~any other similar~~financial technology business combination with one or more businesses or entities (an “initial business combination”). Although the Company is not limited to a particular geographic region, the Company intends to focus on operating businesses in the healthcare, education, entertainment and financial investments, managing an ensemble of fintech investments and healthcare investment and operating a health and wealth management platform with a broad spectrum of services ~~sectors that have their principal operations~~and value-added information in ~~China.~~health, insurance, investments and social sharing.

AGBA Merger Sub I Limited (“AMSI”) is a company incorporated on November 26, 2021, under the laws of the British Virgin Island for the purpose of effecting the business combination. AMSI is wholly owned by AGBA.

AGBA Merger Sub II Limited (“AMSII”) is a company incorporated on November 26, 2021, under the laws of the British Virgin Island for the purpose of effecting the business combination. AMSII is wholly owned by AGBA.

All activities through September 30, 2022 relate to the Company’s formation, completion of its initial public offering which occurred on May 16, 2019 and negotiation and consummation of the proposed business combination with TAG Holdings Limited (“TAG.”) The Company will not generate any operating revenues until after the completion of a business combination, at the earliest. The Company generates non-operating income in the form of interest income from the proceeds derived from the Initial Public Offering, which proceeds are held in trust.

~~The Company has selected December 31 as its fiscal year end and tax year end.~~

The accompanying unaudited condensed consolidated financial statements of the Company are presented in ~~U.S.~~United State dollars (“US$” or “$”) and have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and with the instructions to Form 10-Q and Regulation S-X of the Securities Exchange Commission. Certain information and footnote disclosures normally included in consolidated financial statements have been omitted pursuant to ~~the accounting and disclosure~~such rules and ~~regulations~~regulations. The consolidated balance sheet as of ~~the U.S. Securities and Exchange Commission (the “SEC”).~~

~~Financing~~

The registration statement for the Company’s initial public offering (the “Public Offering” as described in Note 4, “IPO”) was declared effective by the United States Securities and Exchange Commission (“SEC”) on May 13, 2019. The Company consummated the Public Offering on May 16, 2019 of 4,600,000 units at $10.00 per unit (the “Public Units”) and sold to the sponsor to purchase 225,000 units at $10 per unit (the “Private Units”). The Company received net proceeds of $46,716,219. The Company incurred $2,559,729 in initial public offering related costs, including $2,175,948 of underwriting fees and $383,781 of initial public offering costs.

~~Trust Account~~

Upon the closing of the Public Offering and the private placement, $46,000,000 was placed in a trust account (the “Trust Account”) with Continental Stock Transfer & Trust Company acting as trustee. The funds held in the Trust Account can be invested in United States government treasury bills, bonds or notes, having a maturity of 185 days or less or in money market funds meeting certain conditions under Rule 2a-7 promulgated under the Investment Company Act until the earlier of (i) the consummation of the Company’s initial business combination and (ii) the Company’s failure to consummate a business combination within 36 months (unless extended) from the closing of the Public Offering. Placing funds in the Trust Account may not protect those funds from third party claims against the Company. Although the Company will seek to have all vendors, service providers, prospective target businesses or other entities it engages, execute agreements with the Company waiving any claim of any kind in or to any monies held in the Trust Account, there is no guarantee that such persons will execute such agreements. The remaining net proceeds (not held in the Trust Account) may be used to pay for business, legal and accounting due diligence on prospective acquisitions and continuing general and administrative expenses. Additionally, the interest earned on the Trust Account balance may be released to the Company to pay the Company’s tax obligations.

~~Business Combination~~

Pursuant to Nasdaq listing rules, the Company’s initial business combination must occur with one or more target businesses having an aggregate fair market value equal to at least 80% of the value of the funds in the Trust Account (excluding any deferred underwriter’s fees and taxes payable on the income earned on the Trust Account), which the Company refers to as the 80% test, at the time of the execution of a definitive agreement for its initial business combination, although the Company may structure a business combination with one or more target businesses whose fair market value significantly exceeds 80% of the Trust Account balance. If the Company is no longer listed on Nasdaq, it will not be required to satisfy the 80% test. The Company currently anticipates structuring a business combination to acquire 100% of the equity interests or assets of the target business or businesses.

The Company may, however, structure a business combination where the Company merges directly with the target business or where the Company acquires less than 100% of such interests or assets of the target business in order to meet certain objectives of the target management team or shareholders or for other reasons, but the Company will only complete such business combination if the post-transaction company owns 50% or more of the outstanding voting securities of the target or otherwise owns a controlling interest in the target sufficient for it not to be required to register as an investment company under the Investment Company Act. If less than 100% of the equity interests or assets of a target business or businesses are owned or acquired by the post-transaction company, the portion of such business or businesses that is owned or acquired is what will be valued for purposes of the 80% test.

As set forth in the memorandum of association, the objects for which are established are unrestricted and the Company shall have full power and authority to carry out any object not prohibited by the Companies Law or as the same may be revised from time to time, or any other law of the British Virgin Islands.

The Company’s amended and restated memorandum and articles of association contains provisions designed to provide certain rights and protections to its ordinary shareholders prior to the consummation of the initial business combination. These provisions cannot be amended without the approval of 65% (or 50% if approved in connection with the initial business combination) of the Company’s outstanding ordinary shares attending and voting on such amendment. Since inception, the Company has sought to amend provisions of the amended and restated memorandum and articles of association relating to shareholders’ rights three times (at the February 5, 2021, November 2, 2021 and May 3, 2022 shareholders’ meeting). Each time, the Company provided dissenting public shareholders with the opportunity to redeem their public shares in connection with any such vote on any proposed amendments to the amended and restated memorandum and articles of association.

The Company will either seek shareholder approval of any business combination at a meeting called for such purpose at which shareholders may seek to convert their shares into their pro rata share of the aggregate amount then on deposit in the Trust Account, less any taxes then due but not yet paid, or provide shareholders with the opportunity to sell their shares to the Company by means of a tender offer for an amount equal to their pro rata share of the aggregate amount then on deposit in the Trust Account, less any taxes then due but not yet paid. These shares have been recorded at redemption value and are classified as temporary equity, in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing Liabilities from Equity.” The Company will proceed with a business combination only if it will have net tangible assets of at least $5,000,001 upon consummation of the business combination and, solely if shareholder approval is sought, a majority of the outstanding ordinary shares of the Company voted are voted in favor of the business combination.

In connection with any shareholder vote required to approve any business combination, the initial shareholder s have agreed (i) to vote any of their respective shares, including the ordinary shares sold to the initial shareholders in connection with the organization of the Company (the “Initial Shares”), ordinary shares included in the Private Units sold in the private placement, and any ordinary shares which were initially issued in connection with the Public Offering, whether acquired in or after the effective date of the Public Offering, in favor of the initial business combination and (ii) not to convert such respective shares into a pro rata portion of the Trust Account or seek to sell their shares in connection with any tender offer the Company engages in.

On November 3, 2021, the Company entered into the business combination agreement, which provides for a business combination between AGBA and TAG and certain of TAG’s wholly owned subsidiaries – OnePlatform Holdings Limited (“OPH”), TAG Asia Capital Holdings Limited (“Fintech”), TAG International Limited (“B2B”), TAH Asset Partners Limited (“B2BSub”), and OnePlatform International Limited (“HKSub”). OPH through its wholly-owned subsidiaries, is engaged in business-to-business (or B2B) services, while Fintech through its wholly-owned subsidiaries, is engaged in the financial technology or fintech business. B2BSub is a wholly-owned subsidiary of B2B, and HKSub is a wholly owned subsidiary of B2BSub. In the business combination agreement, as amended, B2B, B2BSub, HKSub, OPH, Fintech, together with their respective subsidiaries are referred to as the “Group Parties”. Pursuant to the business combination agreement, as amended, OPH will first become a subsidiary of B2B through a merger with HKSub, with OPH as the surviving entity (the “OPH Merger”). Subsequently, (i) AMSI will merge with and into B2B; and AMSII will merge with and into Fintech (together with (i), the “Acquisition Merger”). In consideration of the Acquisition Merger, AGBA will issue 55,500,000 ordinary shares with a deemed price per share US$10.00 (“Aggregate Stock Consideration”) to TAG, in its capacity as sole shareholder of B2B and Fintech.

At the closing of the Acquisition Merger, AGBA shall issue the full amount of the Aggregate Stock Consideration, less three percent (3%) of the Aggregate Stock Consideration (the “Holdback Shares”), to TAG, in its capacity as sole shareholder of B2B and Fintech, subject to compliance with applicable law. Subject to the provisions of the business combination Agreement, AGBA will release the Holdback Shares at the end of six (6) months following the closing of the Acquisition Merger, which may be extended for an additional three-month period (the “Survival Period”), provided that the AGBA will be entitled to retain some or all of the Holdback Shares to satisfy certain indemnification claims during the Survival Period.

The business combination agreement, as amended, provides that, among other things, (i) the Outside Closing Date (as defined in the business combination agreement) of the proposed transactions contemplated by the business combination agreement shall be extended to December 31, 2022 from October 31, 2022, and (ii) each party shall use its reasonable best efforts to finalize all Additional Agreements (as defined in the business combination agreement) and other ancillary documents contemplated by the business combination agreement no later than December 31, 2022.

~~Liquidation and going concern~~

~~The Company initially had 12 months~~derived from the consummation of this offering to consummate the initial business combination. If the Company does not complete a business combination within 12 months from the consummation of the Public Offering, the Company will trigger an automatic winding up, dissolution and liquidation pursuant to the terms of the amended and restated memorandum and articles of association. As a result, this has the same effect as if the Company had formally gone through a voluntary liquidation procedure under the Companies Law. Accordingly, no vote would be required from our shareholders to commence such a voluntary winding up, dissolution and liquidation. However, the Company may extend the period of time to consummate a business combination ten times (for a total of up to 42 months from the consummation of the Public Offering to complete a business combination). As of the date of this report, the Company has extended ten times by an additional three months each time (for a total of up to 39 months from the consummation of the Public Offering to complete a business combination), and so it now has until November 16, 2022 to consummate a business combination. Pursuant to the terms of the current amended and restated memorandum and articles of association and the trust agreement between the Company and Continental Stock Transfer & Trust Company, LLC, in order to extend the time available for the Company to consummate our initial business combination, the Company’s insiders or their affiliates or designees, upon five days advance notice prior to the applicable deadline, must deposit into the Trust Account $0.15 per public share, on or prior to the date of the applicable deadline. The insider, AGBA Holding Limited, has received non-interest bearing, unsecured promissory notes equal to the amount of any such deposits (i.e., $460,000 for each of the first three extensions since May 2020, $594,467 for each of the next three extensions, $546,991 for each of next two extensions, and $504,431 for each of two extensions in May 2022 and August 2022) that will not be repaid in the event that we are unable to close a business combination unless there are funds available outside the Trust Account to do so. Such notes would either be paid upon consummation of the Company’s initial business combination, or, at the lender’s discretion, converted upon consummation of our business combination into additional Private Units at a price of $10.00 per unit. The Company’s shareholders have approved the issuance of the Private Units upon conversion of such notes, to the extent the holder wishes to so convert such notes at the time of the consummation of the Company’s initial business combination. In the event that the Company receives notice from the Company’s insiders five days prior to the applicable deadline of their intent to effect an extension, the Company intends to issue a press release announcing such intention at least three days prior to the applicable deadline. In addition, the Company intends to issue a press release the day after the applicable deadline announcing whether or not the funds had been timely deposited. If the Company is unable to consummate the Company’s initial business combination by November 16, 2022, the Company will, as promptly as possible but not more than ten business days thereafter, redeem 100% of the Company’s outstanding public shares for a pro rata portion of the funds held in the Trust Account, including a pro rata portion of any interest earned on the funds held in the Trust Account and not necessary to pay taxes, and then seek to liquidate and dissolve. However, the Company may not be able to distribute such amounts as a result of claims of creditors which may take priority over the claims of the Company’s public shareholders. In the event of dissolution and liquidation, the public rights will expire and will be worthless.

Accordingly, the Company may not be able to obtain additional financing. If the Company is unable to raise additional capital, it may be required to take additional measures to conserve liquidity, which could include, but not necessarily be limited to, curtailing operations, suspending the pursuit of a potential transaction, and reducing overhead expenses. The Company cannot provide any assurance that new financing will be available to it on commercially acceptable terms, if at all. These conditions raise substantial doubt about the Company’s ability to continue as a going concern for the next twelve months from the issuance of these unaudited condensedaudited consolidated financial statements ~~if a business combination is~~at that date, but does not ~~consummated~~include all the information and footnotes required by ~~November 16, 2022.~~U.S. GAAP. These unaudited condensed consolidated financial statements do not include any adjustments relating to the recovery of the recorded assets or the classification of the liabilities that might be necessary should the Company be unable to continue as a going concern.

~~NOTE 2 – SIGNIFICANT ACCOUNTING POLICIES~~

●	~~Basis of presentation~~

These accompanying unaudited condensed consolidated financial statements have been prepared in accordance with U.S. GAAP and pursuant to the rules and regulations of the SEC. The interim financial information provided is unaudited, but includes all adjustments which management considers necessary for the fair presentation of the results for these periods. Operating results for the interim period ended September 30, 2022 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 2022. The information included in this Form 10-Q should be read in conjunction with ~~Management’s Discussion and Analysis, and~~ the ~~unaudited condensed~~audited consolidated financial statements and notes thereto included in the Company’s annual report on Form 10-K for the ~~fiscal~~ year ended December 31, ~~2021, filed with the SEC on March 14,~~ 2022.

●	~~Principles of consolidation~~

The unaudited condensed consolidated financial statements as of September 30, 2023 and December 31, 2022 and for the three and nine months ended September 30, 2023 and 2022, in the opinion of management, include ~~the unaudited condensed financial statements~~all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the ~~Company~~Company’s financial condition, results of operations and ~~its subsidiaries. All significant intercompany transactions~~cash flows. The results of operations for the three and ~~balances between the Company~~nine months ended September 30, 2023 and ~~its subsidiaries~~2022 are ~~eliminated upon consolidation.~~

~~Subsidiaries are those entities in which the Company, directly or indirectly, controls more than one half~~not necessarily indicative of the ~~voting power;~~results to be expected for any other interim period or ~~has~~for the ~~power to govern~~entire year.

Certain prior period amounts have been reclassified for consistency with the ~~financial and operating policies, to appoint or remove~~current period presentation. These reclassifications had no effect on the ~~majority~~reported results of ~~the members of the board of directors, or to cast a majority of votes at the meeting of directors.~~

operations.

~~The~~NOTE 2 － SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

These accompanying unaudited condensed consolidated financial statements reflect the ~~activities of the Company and each of the following entities:~~

~~Name~~	~~Background~~	~~Ownership~~
~~AGBA Merger Sub I Limited (“AMSI”)~~	A British Island company Incorporated on November 26, 2021	~~100% Owned by AGBA~~
~~AGBA Merger Sub II Limited (“AMSII”)~~	A British Island company Incorporated on November 26, 2021	~~100% Owned by AGBA~~

●	~~Emerging growth company~~

The Company is an “emerging growth company,” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”), and it may take advantageapplication of certain ~~exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies including, but not limited to, not being required to comply with~~significant accounting policies as described in this note and elsewhere in the independent registered public accounting firm attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved.

Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’saccompanying unaudited condensed consolidated financial statements ~~with another public company which~~and notes.

●

Principal of Consolidation

The accompanying unaudited condensed consolidated financial statements include the financial statements of AGBA and its subsidiaries. A subsidiary is ~~neither~~ an ~~emerging growth company nor an emerging growth company which has opted out of using~~entity (including a structured entity), directly or indirectly, controlled by the ~~extended transition period difficult or impossible because~~Company. The financial statements of the ~~potential differences in~~subsidiaries are prepared for the same reporting period as the Company, using consistent accounting ~~standards used.~~policies. All intercompany transactions and balances between AGBA and its subsidiaries are eliminated upon consolidation.

●

Use of ~~estimates~~Estimates and Assumptions

The preparation of unaudited condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and ~~disclosure~~disclosures of contingent assets and liabilities atas of the date of the unaudited condensed consolidated financial statements and the reported amounts of ~~income~~revenues and expenses during the ~~reporting period.~~periods presented. Significant accounting estimates reflected in the Company’s unaudited condensed consolidated financial statements include the useful lives of property and equipment, impairment of long-lived assets, allowance for credit losses, notes receivable, share-based compensation, warrant liabilities, forward share purchase liability, provision for contingent liabilities, revenue recognition, income tax provision, deferred taxes and uncertain tax position, and allocation of expenses from holding company.

The inputs into the management’s judgments and estimates consider the economic implications of COVID-19 on the Company’s critical and significant accounting estimates. Actual results could differ from ~~those~~these estimates.

AGBA GROUP HOLDING LIMITED

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Currency expressed in United States Dollars (“US$”))

●

Foreign Currency Translation and Transaction

Transactions denominated in currencies other than the functional currency are translated into the functional currency at the exchange rates prevailing at the dates of the transaction. Monetary assets and liabilities denominated in currencies other than the functional currency are translated into the functional currency using the applicable exchange rates at the balance sheet dates. The resulting exchange differences are recorded in the statements of operations and comprehensive loss.

The reporting currency of the Company is US$ and the accompanying unaudited condensed consolidated financial statements have been expressed in US$. In addition, the Company and subsidiaries are operating in Hong Kong maintain their books and record in their local currency, Hong Kong dollars (“HK$”), which is a functional currency as being the primary currency of the economic environment in which their operations are conducted. In general, for consolidation purposes, assets and liabilities of its subsidiaries whose functional currency is not US$ are translated into US$, in accordance with ASC Topic 830-30, Translation of Financial Statement, using the exchange rate on the balance sheet date. Revenues and expenses are translated at average rates prevailing during the year. The gains and losses resulting from translation of financial statements of foreign subsidiaries are recorded as a separate component of accumulated other comprehensive income (loss) within the unaudited condensed consolidated statements of changes in shareholders’ (deficit) equity.

Translation of amounts from HK$ into US$ has been made at the following exchange rates for the nine months ended September 30, 2023 and 2022:

	September 30, 2023		September 30, 2022

Period-end HK$:US$ exchange rate		0.12771		0.12739
Period average HK$:US$ exchange rate		0.12766		0.12767

●

Cash and ~~cash equivalents~~Cash Equivalents

~~The Company considers all short-term~~Cash and cash equivalents consist primarily of cash in readily available checking and saving accounts. They consist of highly liquid investments ~~with an original maturity of~~that are readily convertible to cash and that mature within three months or less ~~when purchased~~from the date of purchase. The carrying amounts approximate fair value due to ~~be cash equivalents. There were no cash equivalents as~~the short maturities of ~~September 30, 2022 and December 31, 2021.~~these instruments. The Company maintains most of its bank accounts in Hong Kong.

●

Restricted Cash ~~and investments held in trust account~~

Restricted cash consist of funds held in escrow accounts reflecting (i) the restricted cash and cash equivalents maintained in certain bank accounts that are held for the exclusive interest of the Company’s customers and (ii) the full obligation to an investor in connection with the Meteora Backstop Agreement (see Note 4).

The Company restricts the use of the assets underlying the funds held in escrow to meet with regulatory or contractual requirements and classifies the assets as current based on their purpose and availability to fulfill its direct obligation under current liabilities.

●

Accounts Receivable, net

Accounts receivable, net include trade accounts due from customers in insurance brokerage and asset management businesses.

Accounts receivable, net are recorded at the invoiced amount and do not bear interest, which are due within contractual payment terms. The normal settlement terms of accounts receivable from insurance companies in the provision of brokerage agency services are within 30 days upon the execution of the insurance policies. Credit terms with the products providers of investment, unit and mutual funds and asset portfolio are mainly 90 days or a credit period mutually agreed between the contracting parties. The Company seeks to maintain strict control over its outstanding receivables to minimize credit risk. Overdue balances are reviewed regularly by senior management. Management reviews its receivables on a regular basis to determine if the allowance for credit losses is adequate, and provides allowance when necessary.

AGBA GROUP HOLDING LIMITED

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Currency expressed in United States Dollars (“US$”))

The Company does not hold any collateral or other credit enhancements over its accounts receivable balances.

●

Loans Receivable, net

Loans receivable, net are residential mortgage loans that carried at unpaid principal balances, less the allowance for credit losses on loans receivable and charge-offs.

Loans are placed on nonaccrual status when they are past due 180 days or more as to contractual obligations or when other circumstances indicate that collection is not probable. When a loan is placed on nonaccrual status, any interest accrued but not received is reversed against interest income. Payments received on a nonaccrual loan are either applied to protective advances, the outstanding principal balance or recorded as interest income, depending on an assessment of the ability to collect the loan. A nonaccrual loan may be restored to accrual status when principal and interest payments have been brought current and the loan has performed in accordance with its contractual terms for a reasonable period (generally six months).

If the Company determines that a loan is impaired, the Company next determines the amount of the impairment. The amount of impairment on collateral dependent loans is charged off within the given fiscal quarter. Generally, the amount of the loan and negative escrow in excess of the appraised value less estimated selling costs, for the fair value of collateral valuation method, is charged off. For all other loans, impairment is measured as described below in Allowance for Credit Losses on Financial Instruments.

●

Allowance for Credit Losses on Financial Instruments

In accordance with ASC Topic 326 “Credit Losses – Measurement of Credit Losses on Financial Instruments” (ASC Topic 326), the Company utilizes the current expected credit losses (“CECL”) model to determine an allowance that reflects its best estimate of the lifetime expected credit losses on accounts receivable, loans receivable, notes receivable, and deposits, prepayments and others receivable which is recorded as a liability to offset the receivables. The CECL model is prepared after considering historical experience, current conditions, and reasonable and supportable economic forecasts to estimate lifetime expected credit losses. Accounts receivable, loans receivable, notes receivable, and deposits, prepayments, and others receivable are written off when deemed uncollectible. Recoveries of receivables previously written off are recorded as a reduction of bad debt expense.

●

Long-Term Investments, net

The Company invests in equity securities with readily determinable fair values and equity securities that do not have readily determinable fair values.

Equity securities with readily determinable fair values are carried at fair value with any unrealized gains or losses reported in earnings.

Equity securities that do not have readily determinable fair values mainly consist of investments in privately-held companies. They are accounted for, at cost, less any impairment, plus or minus changes resulting from observable price changes in orderly transactions for the identical or similar investment of the same issuer.

At each reporting period, the Company makes a qualitative assessment considering impairment indicators to evaluate whether the investment is impaired.

AGBA GROUP HOLDING LIMITED

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Currency expressed in United States Dollars (“US$”))

●

Asset Held For Sale

Assets to be disposed of by sale are reported at the lower of the carrying value or fair value less cost to sell when the Company has committed to a sale agreement and would be reported separately as asset held for sale in the unaudited condensed consolidated balance sheets.

●

Property and Equipment, net

Property and equipment, net are stated at cost less accumulated depreciation and accumulated impairment losses, if any. Depreciation is calculated on the straight-line basis over the following expected useful lives from the date on which they become fully operational:

	Expected useful life

Land and building	Shorter of 50 years or lease term
Office improvement	3 years
Furniture, fixtures and equipment	5 years
Computer equipment	3 years
Motor vehicle	3 years

Expenditure for repairs and maintenance is expensed as incurred. When assets have retired or sold, the cost and related accumulated depreciation are removed from the accounts and any resulting gain or loss is recognized in the results of operations.

●

Impairment of Long-Lived Assets

In accordance with the provisions of ASC Topic 360, Impairment or Disposal of Long-Lived Assets, all long-lived assets such as property and equipment owned and held by the Company are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability of assets to be held and used is evaluated by a comparison of the carrying amount of an asset to its estimated future undiscounted cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impairment to be recognized is measured by the amount by which the carrying amounts of the assets exceed the fair value of the assets. No impairment losses were recognized for the three and nine months ended September 30, ~~2022~~2023 and ~~December 31, 2021,~~2022.

●

Revenue Recognition

The Company receives certain portion of its non-interest income from contracts with customers, which are accounted for in accordance with Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers (Topic 606) (“ASC Topic 606”).

ASC Topic 606 provided the ~~assets held~~following overview of how revenue is recognized from the Company’s contracts with customers. The Company recognizes revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services.

Step 1: Identify the contract(s) with a customer.

Step 2: Identify the performance obligations in the ~~Trust Account are held~~contract.

Step 3: Determine the transaction price – The transaction price is the amount of consideration in ~~cash and US Treasury securities.~~a contract to which an entity expects to be entitled in exchange for transferring promised goods or services to a customer.

AGBA GROUP HOLDING LIMITED

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Currency expressed in United States Dollars (“US$”))

Step 4: Allocate the transaction price to the performance obligations in the contract – Any entity typically allocates the transaction price to each performance obligation on the basis of the relative standalone selling prices of each distinct good or service promised in the contract.

Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation – An entity recognizes revenue when (or as) it satisfies a performance obligation by transferring a promised good or service to a customer (which is when the customer obtains control of that good or service). The amount of revenue recognized is the amount allocated to the satisfied performance obligation. A performance obligation may be satisfied at a point in time (typically for promises to transfer goods to a customer) or over time (typically for promises to transfer service to a customer).

Certain portion of the Company’s income is derived from contracts with customers, and as such, the revenue recognized depicts the transfer of promised goods or services to its customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The Company ~~classified investments that~~considers the terms of the contract and all relevant facts and circumstances when applying this guidance. The Company’s revenue recognition policies are ~~directly invested~~ in ~~U.S. Treasuries~~compliance with ASC Topic 606, as ~~available~~follows:

Commissions

The Company earns commissions from the sale of investment products to customers. The Company enters into commission agreements with customers which specify the key terms and conditions of the arrangement. Commissions are separately negotiated for ~~sales~~each transaction and ~~money market funds are classified in accordance~~generally do not include rights of return, credits or discounts, rebates, price protection or other similar privileges, and typically paid on or shortly after the transaction is completed. Upon the purchase of an investment product, the Company earns a commission from customers, calculated as a fixed percentage of the investment products acquired by its customers. The Company defines the “purchase of an investment product” for its revenue recognition purpose as the time when the customers referred by the Company has entered into a subscription contract with the ~~trading method. All marketable securities~~relevant product provider and, if required, the customer has transferred a deposit to an escrow account designated by the Company to complete the purchase of the investment products. After the contract is established, there are no significant judgments made when determining the one-time commission price. Therefore, commissions are recorded at ~~their estimated fair value. Unrealized gains and losses for available-for-sale securities are recorded~~point in ~~other comprehensive loss.~~ time when the investment product is purchased.

The Company ~~evaluates its investments~~also facilitates the arrangement between insurance providers and individuals or businesses by providing insurance placement services to ~~assess whether those with unrealized loss positions~~the insureds, and is compensated in the form of one-time commissions from the respective insurance providers. The Company primarily facilitates the placement of life, general and MPF insurance products. The Company determines that insurance providers are ~~other than temporarily impaired. Impairments are considered other than temporary if they are related to deterioration~~the customers.

The Company primarily earns commission income arising from the facilitation of the placement of an effective insurance policy, which is recognized at a point in ~~credit risk or if it is likely~~time when the performance obligation has been satisfied upon execution of the insurance policy as the Company ~~will sell~~has no future or ongoing obligation with respect to such policies. The commission fee rate, which is paid by the ~~securities before the recovery of the cost basis. Realized gains and losses and declines in value determined to be other than temporary are determined~~insurance providers, based on the ~~specific identification method~~terms specified in the service contract which are agreed between the Company and insurance providers for each insurance product being facilitated through the Company. The commission earned is equal to a percentage of the premium paid to the insurance provider. Commission from renewed policies is variable consideration and is recognized in subsequent periods when the uncertainty around variable consideration is subsequently resolved (e.g., when customer renews the policy).

In accordance with ASC Topic 606, Revenue Recognition: Principal Agent Considerations, the Company evaluates the terms in the agreements with its channels and independent contractors to determine whether or not the Company acts as the principal or as an agent in the arrangement with each party respectively. The determination of whether to record the revenue in a gross or net basis depends upon whether the Company has control over the services prior to transferring it. Control is demonstrated by the Company which is primarily responsible for fulfilling the provision of placement services through the Company’s licensed insurance brokers to provide agency services. The commissions from insurance providers are ~~reported in other income (expense), net~~recorded on a gross basis and commission paid to independent contractors or channel costs are recorded as commission expense in the unaudited condensed consolidated statements of operations and comprehensive loss.

The Company also offers the sale solicitation of real estate property to the final customers and is compensated in the form of commissions from the corresponding property developers pursuant to the service contracts. Commission income is recognized at a point of time upon the sale contracts of real estate property is signed and executed.

●

AGBA GROUP HOLDING LIMITED

~~Warrants liabilities~~

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Currency expressed in United States Dollars (“US$”))

Recurring service fees

The Company ~~accounts~~provides asset management services to investment funds or investment product providers in exchange for recurring service fees. Recurring service fees are determined based on the warrants in accordance with the guidance contained in ASC 815-40-15-7D and 7F under which the private warrants do not meet the criteria for equity treatment and must be recorded as liabilities. Accordingly,types of investment products the Company ~~classifies the private warrants as liabilities at their fair value~~distributes and adjusts the private warrants to fair value at each reporting period. This liability is subject to re-measurement at each balance sheet date until exercised, and any change in fair value is recognized in our consolidated statement of operations. The private warrants are ~~valued using a Black Scholes model.~~

●	~~Ordinary shares subject to possible redemption~~

The Company accounts for its ordinary shares subject to possible redemption in accordance with the guidance in ASC Topic 480 “Distinguishing Liabilities from Equity”. Ordinary shares subject to mandatory redemption (if any) are classifiedcalculated as a ~~liability instrument and are measured at fair value. Conditionally redeemable ordinary shares (including ordinary shares that feature redemption rights that are either within the control~~fixed percentage of the holder or subject to possible redemption upon the occurrence of uncertain events not solely within the Company’s control) are classified as temporary equity. At all other times, ordinary shares are classified as shareholders’ equity. The Company’s ordinary shares feature certain redemption rights that are considered to be outside of the Company’s control and subject to occurrence of uncertain future events. Accordingly, at and September 30, 2022 and December 31, 2021, 3,362,871 and 3,646,607 ordinary shares subject to possible redemption, respectively, are presented as temporary equity, outside of the shareholders’ equity section of the Company’s unaudited condensed consolidated balance sheets.

The Company has made a policy election in accordance with ASC 480-10-S99-3A and recognizes changes in redemption value in accumulated deficit immediately as if the end of the first reporting period after the IPO was the redemption date.

●	~~Fair value of financial instruments~~

~~The~~ fair value of the ~~Company’s assets~~total investment of the investment products, calculated daily. These customer contracts require the Company to provide investment management services, which represents a performance obligation that the Company satisfies over time. After the contract is established, there are no significant judgments made when determining the transaction price. As the Company provides these services throughout the contract term, for the method of calculating recurring service fees, revenue is calculated on a daily basis over the contract term, quarterly billed and ~~liabilities,~~recognized. Recurring service agreements do not include rights of return, credits or discounts, rebates, price protection, performance component or other similar privileges and the circumstances under which ~~qualify~~the fixed percentage fees, before determined, could be not subject to clawback. Payment of recurring service fees are normally on a regular basis (typically monthly or quarterly).

Interest income

The Company offers money lending services from loan origination in form of mortgage and personal loans. Interest income is recognized monthly in accordance with their contractual terms and recorded as ~~financial instruments under ASC Topic 820, “Fair Value Measurements and Disclosures,” approximates the carrying amounts represented~~interest income in the ~~accompanying~~unaudited condensed consolidated ~~balance sheets, primarily due to their short-term nature.~~statements of operations and comprehensive loss. The Company does not charge prepayment penalties from its customers. Interest income on mortgage and personal loans is recognized as it accrued using the effective interest method. Accrual of interest income on mortgage and personal loans is suspended at the earlier of the time at which collection of an account becomes doubtful or the account becomes 180 days delinquent.

Disaggregation of Revenue

The ~~fair value hierarchy is categorized~~Company has disaggregated its revenue from contracts with customers into ~~three levels~~categories based on the ~~inputs as follows:~~nature of the revenue. The following table presents the revenue streams by segments, with the presentation revenue categories presented on the unaudited condensed consolidated statements of operation and comprehensive loss for the periods indicated:

~~Level 1 —~~

	For the three months ended September 30, 2023
	Distribution Business		Platform Business
	Insurance brokerage service		Asset management service		Money lending service		Real estate agency service		Total

Interest income:
Loans	$	—	$	—	$	41,472	$	—	$	41,472

Non-interest income:
Commissions		11,875,830		292,933		—		14		12,168,777
Recurring service fees		—		996,252		—		—		996,252

	$	11,875,830	$	1,289,185	$	41,472	$	14	$	13,206,501

	For the three months ended September 30, 2022
	Distribution Business		Platform Business
	Insurance brokerage service		Asset management service		Money lending service		Real estate agency service		Total

Interest income:
Loans	$	—	$	—	$	38,260	$	—	$	38,260

Non-interest income:
Commissions		11,752,770		368,554		—		47,290		12,168,614
Recurring service fees		—		1,037,278		—		—		1,037,278

	$	11,752,770	$	1,405,832	$	38,260	$	47,290	$	13,244,152

Valuations based on unadjusted quoted prices in active markets for identical assets or liabilities that the Company has the ability to access. Valuation adjustments and block discounts are not being applied. Since valuations are based on quoted prices that are readily and regularly available in an active market, valuation of these securities does not entail a significant degree of judgment.

~~Level 2 —~~

Valuations based on (i) quoted prices in active markets for similar assets and liabilities, (ii) quoted prices in markets that are not active for identical or similar assets, (iii) inputs other than quoted prices for the assets or liabilities, or (iv) inputs that are derived principally from or corroborated by market through correlation or other means.

~~Level 3 —~~

~~Valuations based on inputs that are unobservable and significant to the overall fair value measurement.~~

AGBA GROUP HOLDING LIMITED

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Currency expressed in United States Dollars (“US$”))

	For the nine months ended September 30, 2023
	Distribution Business		Platform Business
	Insurance brokerage service		Asset management service		Money lending service		Real estate agency service		Total

Interest income:
Loans	$	—	$	—	$	117,805	$	—	$	117,805

Non-interest income:
Commissions		37,569,257		894,655		—		43,548		38,507,460
Recurring service fees		—		3,025,849		—		—		3,025,849

	$	37,569,257	$	3,920,504	$	117,805	$	43,548	$	41,651,114

	For the nine months ended September 30, 2022
	Distribution Business		Platform Business
	Insurance brokerage service		Asset management service		Money lending service		Real estate agency service		Total

Interest income:
Loans	$	—	$	—	$	137,454	$	—	$	137,454

Non-interest income:
Commissions		14,306,599		1,463,366		—		162,806		15,932,771
Recurring service fees		—		3,339,922		—		—		3,339,922

	$	14,306,599	$	4,803,288	$	137,454	$	162,806	$	19,410,147

●

Rental Income

Rental income represents monthly rental received from the Company’s tenants. The Company recognizes rental income on a straight-line basis over the lease term in accordance with the lease agreement.

●

Comprehensive Loss

ASC Topic 220, Comprehensive Income, establishes standards for reporting and display of comprehensive income, its components and accumulated balances. Comprehensive income as defined includes all changes in equity during a period from non-owner sources. Accumulated other comprehensive loss, as presented in the accompanying statements of shareholders’ (deficit) equity, consists of changes in unrealized gains and losses on foreign currency translation. This comprehensive loss is not included in the computation of income tax expense or benefit.

AGBA GROUP HOLDING LIMITED

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Currency expressed in United States Dollars (“US$”))

●

Employee Benefits

Full time employees of the Hong Kong subsidiaries participate in a defined contribution Mandatory Provident Fund retirement benefit scheme under the Hong Kong Mandatory Provident Fund Schemes Ordinance. Contributions are made by both the employer and the employee at the rate of 5% on the employee’s relevant salary, subject to a salary cap of HK$30,000.

●

Income Taxes

Income taxes are determined in accordance with the provisions of ASC Topic 740, Income Taxes (“ASC Topic 740”). Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted income tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. Any effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

ASC Topic 740 prescribes a comprehensive model for how companies should recognize, measure, present, and disclose in their financial statements uncertain tax positions taken or expected to be taken on a tax return. Under ASC Topic 740, tax positions must initially be recognized in the financial statements when it is more likely than not the position will be sustained upon examination by the tax authorities. Such tax positions must initially and subsequently be measured as the largest amount of tax benefit that has a greater than 50% likelihood of being realized upon ultimate settlement with the tax authority assuming full knowledge of the position and relevant facts.

For the three and nine months ended September 30, 2023 and 2022, the Company did not have any interest and penalties associated with tax positions. As of September 30, 2023 and December 31, 2022, the Company did not have any significant unrecognized uncertain tax positions.

The Company is subject to tax in local and foreign jurisdictions. As a result of its business activities, the Company files tax returns that are subject to examination by the relevant tax authorities.

●

Share-Based Compensation

The Company accounts for share-based compensation in accordance with the fair value recognition provision of ASC Topic 718, Stock Compensation. The Company grants share awards, including ordinary shares and restricted share units, to eligible participants. Share-based compensation expense for share awards is measured at fair value on the grant date. The fair value of restricted stock with either solely a service requirement or with the combination of service and performance requirements is based on the closing fair market value of the ordinary shares on the date of grant. Share-based compensation expense is recognized over the awards requisite service period. For awards with graded vesting that are subject only to a service condition, the expense is recognized on a straight-line basis over the service period for the entire award.

●

Net Loss Per Share

The Company computes earnings per share (“EPS”) in accordance with ASC Topic 260, Earnings per Share (“ASC Topic 260”). ASC Topic 260 requires companies to present basic and diluted EPS. Basic EPS is measured as net loss divided by the weighted average ordinary share outstanding for the period. Diluted EPS presents the dilutive effect on a per share basis of the potential ordinary shares (e.g., convertible securities, options and warrants) as if they had been converted at the beginning of the periods presented, or issuance date, if later. Potential ordinary shares that have an anti-dilutive effect (i.e., those that increase income per share or decrease loss per share) are excluded from the calculation of diluted EPS. During the three and nine months ended September 30, 2023 and 2022, there were no dilution impact.

●

Segment Reporting

ASC Topic 280, Segment Reporting, establishes standards for reporting information about operating segments on a basis consistent with the Company’s internal organizational structure as well as information about geographical areas, business segments and major customers in financial statements for details on the Company’s business segments.

AGBA GROUP HOLDING LIMITED

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Currency expressed in United States Dollars (“US$”))

The Company uses the management approach to determine reportable operating segments. The management approach considers the internal organization and reporting used by the Company’s chief operating decision maker (“CODM”) for making decisions, allocating resources and assessing performance. The Company’s CODM has been identified as the CEO, who reviews consolidated results when making decisions about allocating resources and assessing performance of the Company. Based on management’s assessment, the Company determined that it has the following operating segments:

Segments	Scope of Service	Business Activities

Distribution Business	Insurance Brokerage Business	- Facilitating the placement of insurance to our customers, through licensed brokers, in exchange for initial and ongoing commissions received from insurance companies.

Platform Business	- Asset Management Business	- Providing access to financial products and services to licensed brokers. - Providing operational support for the submission and processing of product applications. - Providing supporting tools for commission calculations, customer engagement, sales team management, customer conversion, etc. - Providing training resources and materials. - Facilitating the placement of investment products for the fund and/or product provider, in exchange for the fund management services.

	- Money Lending Service	- Providing the lending services whereby the Company makes secured and/or unsecured loans to creditworthy customers.

	- Real Estate Agency Service	- Solicitation of real estate sales for the developers, in exchange for commissions.

Fintech Business	Investment Holding	- Managing an ensemble of fintech investments.

Healthcare Business	Investment Holding	- Managing an ensemble of healthcare-related investments.

All of the Company’s revenues were generated in Hong Kong.

●

Leases

The Company follows ASC Topic 842, Leases (“ASC Topic 842”), utilizing the modified retrospective transition method with no adjustments to comparative periods presented. On February 25, 2016, the FASB issued Accounting Standards Update No. 2016-02, Leases (ASC Topic 842), to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing transactions. ASC Topic 842 requires that lessees recognize right-of-use asset and lease liabilities calculated based on the present value of lease payments for all lease agreements with terms that are greater than twelve months. It requires for leases longer than one year, a lessee to recognize in the statement of financial condition a right-of-use asset, representing the right to use the underlying asset for the lease term, and a lease liability, representing the liability to make lease payments. ASC Topic 842 distinguishes leases as either a finance lease or an operating lease that affects how the leases are measured and presented in the unaudited condensed consolidated statements of operations and comprehensive loss and statements of cash flows. ASC Topic 842 supersedes nearly all existing lease accounting guidance under GAAP issued by the Financial Accounting Standards Board (“FASB”) including ASC Topic 840, Leases.

AGBA GROUP HOLDING LIMITED

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Currency expressed in United States Dollars (“US$”))

When determining the lease term, the Company includes options to extend or terminate the lease when it is reasonably certain that it will exercise that option, if any. As the Company’s leases do not provide an implicit rate, the Company used an incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The Company has elected to adopt the following lease policies in conjunction with the adoption of ASU 2016-02: (i) for leases that have lease terms of 12 months or less and does not include a purchase option that is reasonably certain to exercise, the Company elected not to apply ASC 842 recognition requirements; and (ii) the Company elected to apply the package of practical expedients for existing arrangements entered into prior to January 1, 2021 to not reassess (a) whether an arrangement is or contains a lease, (b) the lease classification applied to existing leases, and (c) initial direct costs.

The accounting update also requires that for operating leases, a lessee recognize interest expense on the lease liability and the amortization of the right-of-use asset as a combined expense. In addition, this accounting update requires expanded disclosures about the nature and terms of lease agreements.

●

Related Parties

The Company follows the ASC Topic 850-10, Related Party for the identification of related parties and disclosure of related party transactions.

Pursuant to section 850-10-20 the related parties include: a) affiliates of the Company; b) entities for which investments in their equity securities would be required, absent the election of the fair value option under the Fair Value Option Subsection of section 825-10-15, to be accounted for by the equity method by the investing entity; c) trusts for the benefit of employees, such as pension and Income-sharing trusts that are managed by or under the trusteeship of management; d) principal owners of the Company; e) management of the Company; f) other parties with which the Company may deal if one party controls or can significantly influence the management or operating policies of the other to an extent that one of the transacting parties might be prevented from fully pursuing its own separate interests; and g) other parties that can significantly influence the management or operating policies of the transacting parties or that have an ownership interest in one of the transacting parties and can significantly influence the other to an extent that one or more of the transacting parties might be prevented from fully pursuing its own separate interests.

The financial statements shall include disclosures of material related party transactions, other than compensation arrangements, expense allowances, and other similar items in the ordinary course of business. However, disclosure of transactions that are eliminated in the preparation of consolidated or combined financial statements is not required in those statements. The disclosures shall include: a) the nature of the relationship(s) involved; b) a description of the transactions, including transactions to which no amounts or nominal amounts were ascribed, for each of the periods for which income statements are presented, and such other information deemed necessary to an understanding of the effects of the transactions on the financial statements; c) the dollar amounts of transactions for each of the periods for which income statements are presented and the effects of any change in the method of establishing the terms from that used in the preceding period; and d) amount due from or to related parties as of the date of each balance sheet presented and, if not otherwise apparent, the terms and manner of settlement.

●

Commitments And Contingencies

The Company follows the ASC Topic 450-20, Commitments to report accounting for contingencies. Certain conditions may exist as of the date the financial statements are issued, which may result in a loss to the Company but which will only be resolved when one or more future events occur or fail to occur. The Company assesses such contingent liabilities, and such assessment inherently involves an exercise of judgment. In assessing loss contingencies related to legal proceedings that are pending against the Company or un-asserted claims that may result in such proceedings, the Company evaluates the perceived merits of any legal proceedings or un-asserted claims as well as the perceived merits of the amount of relief sought or expected to be sought therein.

If the assessment of a contingency indicates that it is probable that a material loss has been incurred and the amount of the liability can be estimated, then the estimated liability would be accrued in the Company’s financial statements. If the assessment indicates that a potentially material loss contingency is not probable but is reasonably possible, or is probable but cannot be estimated, then the nature of the contingent liability, and an estimate of the range of possible losses, if determinable and material, would be disclosed.

AGBA GROUP HOLDING LIMITED

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Currency expressed in United States Dollars (“US$”))

Loss contingencies considered remote are generally not disclosed unless they involve guarantees, in which case the guarantees would be disclosed. Management does not believe, based upon information available at this time that these matters will have a material adverse effect on the Company’s financial position, results of operations or cash flows. However, there is no assurance that such matters will not materially and adversely affect the Company’s business, financial position, and results of operations or cash flows.

●

Fair Value Measurement

The Company follows the guidance of the ASC Topic 820-10, Fair Value Measurements and Disclosures (“ASC Topic 820-10”), with respect to financial assets and liabilities ~~which qualify as financial instruments under~~that are measured at fair value. ASC Topic ~~820, “Fair Value Measurements and Disclosures,” approximates~~820-10 establishes a three-tier fair value hierarchy that prioritizes the inputs used in measuring fair value as follows:

●

Level 1 : Inputs are based upon unadjusted quoted prices for identical instruments traded in active markets;

●

Level 2 : Inputs are based upon quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active, and model-based valuation techniques (e.g. Black-Scholes Option-Pricing model) for which all significant inputs are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Where applicable, these models project future cash flows and discount the future amounts to a present value using market-based observable inputs; and

●

Level 3 : Inputs are generally unobservable and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability. The fair values are therefore determined using model-based techniques, including option pricing models and discounted cash flow models.

The carrying ~~amounts represented in~~value of the ~~consolidated balance sheet. The fair values of~~Company’s financial instruments: cash and cash equivalents, restricted cash, accounts receivable, deposits, prepayments and ~~other current assets,~~others receivable, accounts payable and accrued ~~expenses, due to sponsor are estimated to approximate the carrying values as of September 30, 2022~~liabilities, escrow liabilities and ~~December 31, 2021~~amounts due to the ~~short maturities~~holding company approximate at their fair values because of ~~such~~the short-term nature of these financial instruments.

Management believes, based on the current market prices or interest rates for similar debt instruments, the fair value of loans receivable, notes receivable and borrowings approximate their carrying amounts. They are accounted at amortized cost, subject to impairment testing.

The following table presents information about the Company’s assets ~~and liabilities~~ that were measured at fair value on a recurring basis as of September 30, ~~2022~~2023 and December 31, ~~2021,~~2022 and indicates the fair value hierarchy of the valuation techniques the Company utilized to determine such fair value.

	September 30,		Quoted Prices In Active Markets		Significant Other Observable Inputs		Significant Other Unobservable Inputs		September 30,		Quoted Prices In Active Markets		Significant Other Observable Inputs		Significant Other Unobservable Inputs
Description	2022		(Level 1)		(Level 2)		(Level 3)		2023		(Level 1)		(Level 2)		(Level 3)

Assets:
U.S. Treasury Securities held in Trust Account*	$	38,928,442	$	38,928,442	$	-	$	-
Marketable equity securities									$	408	$	408	$	—	$	—
Non-marketable equity securities									$	32,161,840	$	—	$	—	$	32,161,840

Liabilities:
Warrant liabilities	$	13,500	$	-	$	-	$	13,500	$	1,067	$	—	$	—	$	1,067

December 31, Quoted Prices
In Active
Markets Significant
Other
Observable
Inputs Significant
Other
Unobservable
Inputs
Description 2021 (Level 1) (Level 2) (Level 3)
Assets:
U.S. Treasury Securities held in Trust Account* $ 40,441,469 $ 40,441,469 $ - $ -

Liabilities:
Warrant liabilities $ 490,000 $ - $ - $ 490,000

*	~~included in cash in the cash and investments held in trust account on the Company’s unaudited condensed consolidated balance sheets.~~

●	~~Concentration of credit risk~~

Financial instruments that potentially subject the Company to concentration of credit risk consist of cash and Trust Accounts in a financial institution which, at times may exceed the Federal depository insurance coverage of $250,000. The Company has not experienced losses on these accounts and management believes the Company is not exposed to significant risks on such accounts.

●	~~Income taxes~~

The Company complies with the accounting and reporting requirements of ASC Topic 740, “Income Taxes,” which requires an asset and liability approach to financial accounting and reporting for income taxes. Deferred income tax assets and liabilities are computed for differences between the financial statement and tax bases of assets and liabilities that will result in future taxable or deductible amounts, based on enacted tax laws and rates applicable to the periods in which the differences are expected to affect taxable income. Valuation allowances are established, when necessary, to reduce deferred tax assets to the amount expected to be realized.

~~ASC Topic 740 prescribes~~AGBA GROUP HOLDING LIMITED

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Currency expressed in United States Dollars (“US$”))

	December 31,		Quoted Prices In Active Markets		Significant Other Observable Inputs		Significant Other Unobservable Inputs
Description	2022		(Level 1)		(Level 2)		(Level 3)

Assets:
Marketable equity securities	$	2,443,593	$	2,443,593	$	—	$	—
Non-marketable equity securities	$	34,589,767	$	—	$	—	$	34,589,767

Liabilities:
Forward share purchase liability	$	13,491,606	$	—	$	—	$	13,491,606
Warrant liabilities	$	4,548	$	—	$	—	$	4,548

Fair value estimates are made at a ~~recognition threshold and a measurement attribute for~~specific point in time based on relevant market information about the financial ~~statement recognition~~instrument. These estimates are subjective in nature and ~~measurement~~involve uncertainties and matters of ~~tax positions taken or expected to~~significant judgment and, therefore, cannot be ~~taken~~determined with precision. Changes in ~~a tax return. For those benefits to be recognized, a tax position must be more-likely-than-not to be sustained upon examination by taxing authorities. The Company’s management determined that~~assumptions could significantly affect the British Virgin Islands is the Company’s major tax jurisdiction. The Company recognizes accrued interest and penalties related to unrecognized tax benefits, if any, as income tax expense. There were no unrecognized tax benefits and no amounts accrued for interest and penalties as of September 30, 2022 and December 31, 2021. The Company is currently not aware of any issues under review that could result in significant payments, accruals or material deviation from its position.estimates.

The Company may be subject to potential examination by foreign taxing authorities in the area of income taxes. These potential examinations may include questioning the timing, and amount of deductions, the nexus of income among various tax jurisdictions and compliance with foreign tax laws.

The Company’s tax provision is zero and it has no deferred tax assets. The Company is considered to be an exempted British Virgin Islands Company, and is presently not subject to income taxes or income tax filing requirements in the British Virgin Islands or the United States.

●

~~Net loss per share~~Recently Issued Accounting Pronouncements

Besides, there were no new standards or updates during the nine months ended September 30, 2023 that had a material impact on the unaudited condensed consolidated financial statements.

NOTE 3 — LIQUIDITY AND GOING CONCERN

The accompanying unaudited condensed consolidated financial statements were prepared assuming the Company ~~calculates~~will continue as a going concern, which contemplates continuity of operations, realization of assets, and liquidation of liabilities in the normal course of business. They do not include any adjustments that might be necessary should the Company be unable to continue as a going concern.

For the nine months ended September 30, 2023, the Company reported $35,578,728 net loss ~~per share in accordance with ASC Topic 260, “Earnings per Share”. In order to determine the~~and $33,364,662 net loss attributable to both the redeemable shares and non-redeemable shares, the Company first considered the undistributed loss allocable to both the redeemable ordinary shares and non-redeemable ordinary shares and the undistributed loss is calculated using the total net loss less any dividends paid. The Company then allocated the undistributed loss ratably based on the weighted average number of shares outstanding between the redeemable and non-redeemable ordinary shares. Any remeasurement of the accretion to redemption value of the ordinary shares subject to possible redemption was considered to be dividends paid to the public stockholders.cash outflows from operating activities. As of September 30, 2023, the Company had an accumulated deficit of $74,973,861 and cash and cash equivalents of $1,622,425.

The Company has determined that the prevailing conditions and ongoing liquidity risks encountered by the Company raise substantial doubt about the ability to continue as a going concern for at least one year following the date these unaudited condensed consolidated financial statements are issued. The ability to continue as a going concern is dependent on the Company’s ability to successfully implement its current operating plan and fund-raising exercises. The Company believes that it will be able to grow its revenue base and control expenditures. In parallel, the Company will monitor its capital structure and operating plans and search for potential funding alternatives in order to finance the development activities and operating expenses. These alternatives may include borrowings, raising funds through public equity or debt markets. However, the Company cannot predict the exact amount or timing of the alternatives, or guarantee those alternatives will be favorable to its shareholders. Any failure to obtain financing when required will have a material adverse impact on the Company’s business, operation and financial result.

Certain potential funding alternatives have been carried by the Company, as follows:

On September 7, 2023, the Company entered into an equity purchase agreement with an independent third party to agree to invest up to $50 million over a 36-month period (see Note 21).

Subsequent to the period end, on November 7, 2023, the Company signed private placement binding term sheets with an institutional investor, the Company’s Chief Executive Officer, Mr. Ng Wing Fai, and the Company’s management team pursuant to which the Company will receive gross proceeds of approximately $6,242,850, in consideration of (i) 8,918,357 ordinary shares of the Company (the “Ordinary Shares”), and (ii) warrants (the “Warrants”) to purchase up to 1,783,671 Ordinary Shares at a purchase price of $0.70 per Ordinary Share and associated Warrants. The Warrants have an exercise price of $1.00 per AGBA share and shall be exercised with more than $500,000 for each exercise (see Note 22).

With these funding initiatives, the Company believes that it would be able to strengthen its financial position, improve its liquidity, and enhance its ability to navigate the challenging market conditions.

NOTE 4 — RESTRICTED CASH

Pursuant to the Meteora Backstop Agreement dated November 9, 2022, the fund held in the escrow account for the forward share purchase is restricted to the Company ~~has not considered~~for the ~~effect~~nine months following the consummation of the ~~warrants sold~~Business Combination in November 2022, unless the ~~IPO to purchase an aggregate of 2,412,500~~investors (“Meteora”) sell the shares in the ~~calculation~~market or redeems the shares. Notwithstanding the sale of ~~diluted net loss per share, since~~shares by Meteora, the ~~exercise~~restricted cash will be used to settle any of the warrants is contingent upon the occurrence of future events and the inclusion of such warrants would be anti-dilutive and the Company did not have any other dilutive securities and other contracts that could, potentially, be exercised or converted into ordinary share and then share in the earnings of the Company. As a result, diluted loss per share is the same as basic loss per share for the period presented.Company’s repurchase obligations.

~~The net loss per share presented in the statements of operations is based on the following:~~

For the
Nine Months
Ended For the
Nine Months
Ended
September 30,
2022 September 30,
2021

Net loss $ (153,751 ) $ (515,988 )
Accretion of carrying value to redemption value (1,676,342 ) (4,036,497 )
Net loss including accretion of carrying value to redemption value $ (1,830,093 ) $ (4,552,485 )

For the
Three Months
Ended For the
Three Months
Ended
September 30,
2022 September 30,
2021

Net income (loss) $ 429,335 $ (209,743 )
Accretion of carrying value to redemption value (613,051 ) (595,544 )
Net loss including accretion of carrying value to redemption value $ (183,716 ) $ (805,287 )

For the
nine months ended
September 30, 2022 For the
nine months ended
September 30, 2021
Redeemable
ordinary shares Non-
Redeemable
ordinary shares Redeemable
ordinary shares Non-
Redeemable ordinary
shares
Basic and diluted net loss per share:
Numerators:
Allocation of net loss including carrying value to redemption value $ (1,312,547 ) $ (517,546 ) $ (3,399,922 ) $ (1,152,563 )
Accretion of carrying value to redemption value 1,676,342 - 4,036,497 -
Allocation of net income (loss) $ 363,795 $ (517,546 ) $ 636,575 $ (1,152,563 )
Denominators:
Weighted-average shares outstanding 3,487,135 1,375,000 4,056,087 1,375,000
Basic and diluted net loss per share $ 0.10 $ (0.38 ) $ 0.16 $ (0.84 )

AGBA GROUP HOLDING LIMITED

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Currency expressed in United States Dollars (“US$”))

On June 29, 2023, the Company and Meteora entered into an agreement to early terminate the Meteora Backstop Agreement. Prior to the termination, Meteora sold 1,191,016 shares in the open market at a price ranging from $1.51 to $1.61 per share.

Pursuant to the early termination clauses of Meteora Backstop Agreement, the Company released $14.0 million from restricted cash to settle the obligation to Meteora and retained $1.7 million which is reflected in the cash and cash equivalents on the unaudited condensed consolidated balance sheets.

Pursuant to the termination agreement, the Company is not obligated to purchase the remaining 124,949 shares (the “Shares”) from Meteora and they shall have no obligation to sell the Shares to the Company. In addition, they may dispose the Shares at its discretion in the open market not less than $2 per share before September 29, 2023 and no conditions or restrictions thereafter. As a result, the Company released the remaining $1.5 million from restricted cash to settle the obligation to Meteora. As of September 29, 2023, Meteora held 124,949 shares unsold.

With the early termination and sale of shares by Meteora, the forward share purchase liability (“FSP liability”) was fully settled and a loss on settlement of nil and $378,895 was recorded in the unaudited condensed consolidated statements of operations and comprehensive loss for the three and nine months ended September 30, 2023, respectively.

NOTE 5 — ACCOUNTS RECEIVABLE, NET

Accounts receivable, net consisted of the following:

	As of
	September 30, 2023			December 31, 2022

Accounts receivable	$	2,917,588		$	2,916,609
Accounts receivable – related parties		846,640			272,546
Less: allowance for credit losses		(305,304	)		(94,447	)
Accounts receivable, net	$	3,458,924		$	3,094,708

The accounts receivable due from related parties represented the management service rendered to the portfolio assets of related companies, which are controlled by the holding company, for a compensation of asset management service fee income at the predetermined rate based on the respective portfolio of asset values invested by the final customers. The amount is unsecured, interest-free and with a credit term mutually agreed.

The Company generally conducts its business with creditworthy third parties. The Company determines, on a quarterly basis, the probable losses and an allowance for credit losses determined in accordance with the CECL model, based on historical losses, current economic conditions, forecasted future economic and market considerations, and in some cases, evaluating specific customer accounts for risk of loss. Accounts receivable are written off after exhaustive collection efforts occur and the receivable is deemed uncollectible. In addition, receivable balances are monitored on an ongoing basis and its exposure to bad debts is not significant.

For the three and nine months ended September 30, 2023, the Company has assessed the probable loss and made an allowance for credit losses of $143,101 and $211,050 on accounts receivable, respectively.

For the three and nine months ended September 30, 2022, there was no expected credit losses to accounts receivable.

For the
three months ended
September 30, 2022 For the
three months ended
September 30, 2021
Redeemable
ordinary shares Non-
Redeemable
ordinary shares Redeemable
ordinary shares Non-
Redeemable ordinary
shares
Basic and diluted net loss per share:
Numerators:
Allocation of net loss including carrying value to redemption value $ (130,399 ) $ (53,317 ) $ (597,860 ) $ (207,427 )
Accretion of carrying value to redemption value 613,051 - 595,544 -
Allocation of net income (loss) $ 482,652 $ (53,317 ) $ (2,316 ) $ (207,427 )
Denominators:
Weighted-average shares outstanding 3,362,871 1,375,000 3,963,110 1,375,000
Basic and diluted net income (loss) per share $ 0.14 $ (0.04 ) $ (0.00 ) $ (0.15 )

AGBA GROUP HOLDING LIMITED

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Currency expressed in United States Dollars (“US$”))

NOTE 6 — LOANS RECEIVABLE, NET

The Company’s loans receivable, net was as follows:-

	As of
	September 30, 2023			December 31, 2022

Residential mortgage loans	$	1,585,875		$	1,589,871
Less: allowance for credit losses		(1,414	)		—
Loans receivable, net	$	1,584,461		$	1,589,871

Classifying as:
Current portion	$	524,504		$	517,479
Non-current portion		1,059,957			1,072,392
Loans receivable, net	$	1,584,461		$	1,589,871

The interest rates on loans issued ranged between 9.00% and 10.50% per annum for the nine months ended September 30, 2023 and 2022. Mortgage loans are secured by collateral in the pledge of the underlying residential properties owned by the borrowers.

Mortgage loans are made to either business or individual customers in Hong Kong for a period of 1 to 25 years, which are fully collateralized and closely monitored for counterparty creditworthiness, with such collateral having a fair value in excess of the carrying amount of the loans as of September 30, 2023 and December 31, 2022.

Estimated allowance for credit losses is determined on quarterly basis, in accordance with the CECL model, for general credit risk of the overall portfolio, which is relied on an assessment of specific evidence indicating doubtful collection, historical loss experience, loan balance aging and prevailing economic conditions. If there is an unexpected deterioration of a customer’s financial condition or an unexpected change in economic conditions, including macroeconomic events, the Company will assess the need to adjust the allowance for credit losses. Any such resulting adjustments would affect earnings in the period that adjustments are made.

For the three and nine months ended September 30, 2023, the Company has evaluated the probable losses and made an allowance for credit losses of $1,414 and $1,414 on loans receivable, respectively.

For the three and nine months ended September 30, 2022, the Company has evaluated the probable losses and no expected credit losses is determined.

NOTE 7 — ASSET HELD FOR SALE

On June 28, 2023, the Company entered into a provisional purchase and sale agreement with an independent third party to sell one of its office premises for a consideration of $6.15 million and the carrying amount of the asset held for sale was $5.47 million was reclassified from the property and equipment, net on that date.

On July 20, 2023, a formal purchase and sale agreement was signed. As of September 30, 2023, the Company received deposits of $0.6 million, in total.

Subsequently on October 17, 2023, the transaction has been completed and remaining consideration has been settled in cash.

NOTE 8 — NOTES RECEIVABLE, NET

On February 24, 2023, the Company entered into a subscription agreement and a convertible loan note instrument (collectively the “Agreements”) with Investment A. Pursuant to the Agreements, the Company agrees to subscribe an aggregate amount of $1,673,525 notes, in batches, which are payable on or before January 31, 2024 and bears a fixed interest rate of 8% per annum. The maturity of the notes receivable is on April 30, 2024.

●	~~Related parties~~

Parties, which can be a corporation or individual, are considered to be related if the Company has the ability, directly or indirectly, to control the other party or exercise significant influence over the other party in making financial and operational decisions. Companies are also considered to be related if they are subject to common control or common significant influence.

●	~~Recent accounting pronouncements~~

The Company has considered all new accounting pronouncements and has concluded that there are no new pronouncements that may have a material impact on the results of operations, financial condition, or cash flows, based on the current information.

AGBA GROUP HOLDING LIMITED

~~NOTE 3 — CASH AND INVESTMENT HELD IN TRUST ACCOUNT~~

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Currency expressed in United States Dollars (“US$”))

As of September 30, ~~2022, investment securities~~2023, the carrying amount of the notes receivable was $613,533, which including an interest receivable of $23,217.

In accordance with ASC Topic 326, the Company accounts for its allowance for credit losses on notes receivable using the CECL model. Periodic changes to the allowance for credit losses are recognized in the ~~Company’s Trust Account~~unaudited condensed consolidated statements of operations and comprehensive loss. For the three and nine months ended September 30, 2023, the Company has evaluated the probable losses on the notes receivable and no expected credit losses was determined.

NOTE 9 — LONG-TERM INVESTMENTS, NET

Long-term investments consisted of ~~$38,928,442~~the following:

	As of
	Ownership interest			September 30, 2023		Ownership interest			December 31, 2022

Marketable equity securities
Investment C		0.00	%^*	$	408		0.46	%	$	2,443,593

Non-marketable equity securities:
Investment A		8.37	%		5,575,031		8.37	%		5,717,678
Investment B		3.63	%		511,512		3.63	%		513,000
Investment D		4.49	%^#		16,179,057		4.92	%		16,030,943
Investment E		4.00	%		521,041		4.00	%		522,557
Investment F		4.00	%		9,375,199		4.00	%		11,805,589
Total					32,161,840					34,589,767

Net carrying value				$	32,162,248				$	37,033,360

^*	Less than 0.001%
^#	Decrease in percentage due to share dilution

Investments in ~~United States Treasury Bills and $0~~Marketable Equity Securities

Investments in cash. As of December 31, 2021, investment securities in the Company’s Trust Account consisted of $40,441,469 in United States Treasury Bills and $0 in cash. The Company classifies its United States Treasury securities as available-for-sale. Available-for-sale marketable securities are ~~recorded~~accounted for at their ~~estimated~~current market value with the changes in fair value recognized in net loss. Investment C was listed and publicly traded on Nasdaq Stock Exchange.

During the ~~accompanying~~nine months ended September 30, ~~2022~~2023, the Company sold 993,108 shares of Investment C at the average market price of $4.01 per share, resulting with a realized gain of $1,541,736.

As of September 30, 2023 and December 31, ~~2021 consolidated balance sheets. The carrying value, including gross unrealized holding gain as other comprehensive income and~~2022, Investment C was recorded at fair value of ~~held to marketable securities on September 30, 2022~~$408 and ~~December 31, 2021 is as follows:~~

Carrying Value
as of September 30,
2022 (Unaudited) Gross Unrealized
Holding
Gain Fair Value
as of
September 30,
2022 (Unaudited)

Available-for-sale marketable securities
U.S. Treasury Securities $ 38,928,442 $ - $ 38,928,442

Carrying Value
as of December 31,
2021 (Audited) Gross Unrealized
Holding
Gain Fair Value
as of
December 31,
2021
(Audited)

Available-for-sale marketable securities:
U.S. Treasury Securities $ 40,441,469 $ - $ 40,441,469

~~NOTE 4 — PUBLIC OFFERING~~

~~On May 16, 2019, the Company sold 4,600,000 units~~$2,443,593, which were traded at a closing price of ~~$10.00~~$5.57 and $2.46 per ~~Public Unit~~share, respectively.

Investments in Non-Marketable Equity Securities

Investments in non-marketable equity securities consist of investments in limited liability companies in which the Company’s interests are deemed minor and long-term, strategic investments in companies that are in various stages of development, and investments in a close-ended partnership funds which concentrated in the ~~Public Offering. Each Public Unit consists of one ordinary share~~healthcare sector. These investments do not have readily determinable fair values and, therefore, are reported at cost, minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or similar investment of the Company, $0.001 par value per share (the “Public Shares”), one redeemable warrant (the” Public Warrants”) and one right (the “Public Rights”). Each Public Warrant entitles the holder to purchase one-half (1/2) of one ordinary share at an exercise price of $11.50 per whole share (see Note 6). Each Public Right entitles the holder to receive one-tenth (1/10) of an ordinary share upon consummation of an initial business combination. In addition, the Company has granted Maxim Group LLC, the underwriter of the Public Offering, a 45-day option to purchase up to 225,000 Public Units solely to cover over-allotments, if any.same issuer.

If the Company does not complete its business combination within the necessary time period described in Note 1, the Public Rights will expire and be worthless. Since the Company is not required to net cash settle the rights and the rights are convertible upon the consummation of an initial business combination, the management determined that the Public Rights are classified within shareholders’ equity as “Additional paid-in capital” upon their issuance in accordance with ASC 815-40. The proceeds from the sale are allocated to Public Shares and Public Rights based on the relative fair value of the securities in accordance with ASC 470-20-30. The value of the Public Shares and Public Rights will be based on the closing price paid by investors.

AGBA GROUP HOLDING LIMITED

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Currency expressed in United States Dollars (“US$”))

Management assesses each of these investments on an individual basis, subject to a periodic impairment review and considers qualitative and quantitative factors including the investee’s financial condition, the business outlook for its products and technology, its projected results and cash flow, financing transactions subsequent to the acquisition of the investment, the likelihood of obtaining subsequent rounds of financing and cash usage. The Company ~~paid~~is not required to determine the fair value of these investments unless impairment indicators existed. When an ~~upfront underwriting discount~~impairment exists, the investment will be written down to its fair value by recording the corresponding charge as a component of ~~$1,150,000 (2.5%)~~other income (expense), net. Fair value is estimated using the best information available, which may include cash flow projections or other available market data.

The following table presents the changes in fair value of non-marketable equity securities which are measured using Level 3 inputs as of September 30, 2023 and December 31, 2022:

	As of
	September 30, 2023			December 31, 2022

Balance at beginning of period/year	$	34,589,767		$	25,496,534
Additions		—			16,228,690
Adjustments:
Downward adjustments		(2,457,537	)		(6,898,549	)
Upward adjustments		—			2,137,021
Foreign exchange adjustment		29,610			(2,373,929	)
Balance at end of period/year	$	32,161,840		$	34,589,767

Cumulative unrealized gains and losses, included in the carrying value of the Company’s non-marketable equity securities:

	As of
	September 30, 2023			December 31, 2022

Downward adjustments (including impairment)	$	(29,712,137	)	$	(27,254,600	)
Upward adjustments	$	6,209,357		$	6,209,357

Investment loss (income), net is recorded as other income (expense) and consisted of the following:

	For the three months September 30,
	2023			2022

Marketable equity securities:
Unrealized (loss) gain from the changes in fair value – Investment C	$	(11	)	$	741,811

Non-marketable equity securities:
Unrealized loss – Investment F		(1,029,766	)		—
Dividend income		236,870			—
Investment (loss) income, net	$	(792,907	)	$	741,811

	For the nine months ended September 30,
	2023			2022

Marketable equity securities:
Unrealized gain (loss) from the changes in fair value – Investment C	$	87		$	(2,793,242	)
Realized gain from sale of Investment C		1,541,736			—

Non-marketable equity securities:
Unrealized losses – Investment F		(2,457,537	)		—
Dividend income		1,404,303			—
Investment income (loss), net	$	488,589		$	(2,793,242	)

AGBA GROUP HOLDING LIMITED

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Currency expressed in United States Dollars (“US$”))

NOTE 10 — PROPERTY AND EQUIPMENT, NET

Property and equipment, net consisted of the following:

	As of
	September 30, 2023			December 31, 2022

As cost:
Land and building	$	1,880,409		$	7,881,202
Furniture, fixtures and equipment		39,630			13,412
Computer equipment		242,621			164,536
Motor vehicles		108,678			108,994
		2,271,338			8,168,144
Less: accumulated depreciation		(532,115	)		(808,728	)
Property and equipment, net	$	1,739,223		$	7,359,416

Depreciation expense for the three months ended September 30, 2023 and 2022 were $22,821 and $95,878, respectively.

Depreciation expense for the nine months ended September 30, 2023 and 2022 were $238,315 and $288,230, respectively.

On June 28, 2023, the carrying amount of an office premises of $5.47 million was reclassified to asset held for sale as the Company entered into a provisional purchase and sale agreement with an independent third party to sell the office premises in October 2023 (see Note 7).

NOTE 11 — BORROWINGS

	As of
	September 30, 2023		December 31, 2022

Mortgage borrowings	$	6,281,574	$	4,477,254
Short-term borrowings		5,446,975		—
Total	$	11,728,546	$	4,477,254

Mortgage Borrowings

In September 2022, the Company obtained a mortgage loan from a finance company in Hong Kong, which bears interest at a fixed rate of 10.85% per ~~unit offering price~~annum, is repayable in October 2023. The loan was secured with the office premises which classified as asset held for sale. Subsequent to the ~~underwriter at the closing of the Public Offering, with an additional fee of $1,840,000 (the “Deferred Discount”) of 4.0% of the gross offering proceeds payable upon the Company’s~~ completion of the ~~business combination. The Deferred Discount will become payable to~~sales in October 2023, the ~~underwriter from the amounts held in the Trust Account solely in the event~~loan was settled (see Note 7).

In February 2023, the Company ~~completes its business combination. In the event that~~obtained another mortgage loan from another finance company in Hong Kong, which bears an average interest rate at 13.75% per annum, is repayable in February 2024. The loan was secured with an office premises held by the Company, ~~does not close the business combination, the underwriter has waived its right to receive the Deferred Discount. The underwriter is not entitled to any interest accrued on the Deferred Discount.~~located in Hong Kong.

~~Simultaneously with the closing of the Public Offering, the Company consummated a private placement of 210,000 Private Units, at $10.00 per unit, purchased by the sponsor.~~

~~Simultaneously with the sale of the over-allotment units, the Company consummated a private placement of 15,000 Private Units, at $10.00 per unit, purchased by the sponsor.~~

~~The Private Units are identical to the units sold in the Public Offering except that the private warrants are non-redeemable and may be exercised on a cashless basis.~~

~~NOTE 5 – RELATED PARTY TRANSACTIONS~~

~~Insider Shares~~

In October 2018, the Company’s Chief Executive Officer, subscribed for an aggregate of 1,000 of ordinary shares for an aggregate purchase price of $1, or approximately $0.001 per share. On February 22, 2019, the Company issued an aggregate of 1,149,000 Ordinary Shares to AGBA Holding Limited for an aggregate purchase price of $25,000 in cash.

The initial shareholders have agreed, subject to certain limited exceptions, not to transfer, assign or sell any of their insider shares until, with respect to 50% of the insider shares, the earlier of six months after the consummation of a business combination and the date on which the closing price of the ordinary shares equals or exceeds $12.50 per share (as adjusted for share splits, share dividends, reorganizations, recapitalizations and the like) for any 20 trading days within a 30-trading day period commencing after a business combination and, with respect to the remaining 50% of the insider shares, until the six months after the consummation of a business combination, or earlier, in either case, if, subsequent to a business combination, the Company completes a liquidation, merger, stock exchange or other similar transaction which results in all of the Company’s shareholders having the right to exchange their ordinary shares, securities or other property.

~~Administrative Services Agreement~~

The Company is obligated to pay AGBA Holding Limited, a company owned by the insiders, a monthly fee of $10,000 for general and administrative services. However, pursuant to the terms of such agreement, the Company may delay payment of such monthly fee upon a determination by the Company’s audit committee that the Company lack sufficient funds held outside the trust to pay actual or anticipated expenses in connection with the initial business combination. Any such unpaid amount will accrue without interest and be due and payable no later than the date of the consummation of our initial business combination.

~~Related Party Loan~~

In order to meet the working capital needs following the consummation of the Public Offering, the initial shareholders, officers and directors or their affiliates may, but are not obligated to, loan the Company funds, from time to time or at any time, in whatever amount they deem reasonable in their sole discretion. Each loan would be evidenced by a promissory note. The notes would either be paid upon consummation of our initial business combination, without interest, or, at the lender’s discretion, up to $500,000 of the notes may be converted upon consummation of our business combination into Private Units at a price of $10.00 per unit (which, for example, would result in the holders being issued units to acquire 55,000 ordinary shares (which includes 5,000 shares issuable upon conversion of rights) and warrants to purchase 25,000 ordinary shares if $500,000 of notes were so converted). The Company’s shareholders have approved the issuance of the units and underlying securities upon conversion of such notes, to the extent the holder wishes to so convert them at the time of the consummation of our initial business combination. If the Company does not complete a business combination, the loans will not be repaid.

~~Related Party Extensions Loan~~

AGBA GROUP HOLDING LIMITED

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

~~The~~(Currency expressed in United States Dollars (“US$”))

Short-term Borrowings

In September 2023, the Company ~~initially had 12 months~~obtained a short-term borrowing of $5.0 million from the ~~consummation~~Company’s major shareholder of ~~this offering~~ultimate holding company, which bears interest at a fixed rate of 12.00% per annum, repayable in October 2023. The borrowing is secured by a lien on the partial equity interest in Investment D owned by the Company. Subsequently in October 2023, the Company entered into an agreement to ~~consummate~~extend the ~~initial business combination. However,~~maturity date to November 30, 2023.

In September 2023, the Company obtained another short-term borrowing of $0.4 million from an independent third party, which is unsecured, bears interest at a fixed rate of 6.00% per annum and repayable in October 2023. The borrowing was subsequently settled in October 2023.

NOTE 12 — FORWARD SHARE PURCHASE LIABILITY

During the nine months ended September 30, 2023, subject to the sale of shares by investors and early termination of the Meteora Backshop Agreement (see Note 4), FSP liability was fully settled with a loss of $378,895 recorded in the unaudited condensed consolidated statements of operations and comprehensive loss.

The FSP liability as of December 31, 2022 under the Meteora Backstop Agreement is valued by an independent valuer using a Black-Scholes model, which is considered to be Level 3 fair value measurement. The following table present the quantitative information regarding Level 3 fair value measurement of the FSP liability:

Input	December 31, 2022

Share price	$	1.54
Risk-free interest rate		4.16	%
Volatility		52.19	%
Exercise price	$	12.34
Term		0.61 years

For the three and nine months ended September 30, 2023, the change in fair value of FSP liability was nil and $82,182, respectively, which were charged to unaudited condensed consolidated statements of operations and comprehensive loss.

NOTE 13 — LEASE

Operating lease right-of-use (“ROU”) asset and liabilities are recognized at commencement date based on the present value of ~~this report,~~lease payments over the lease term. ROU asset represents the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. Generally, the implicit rate of interest (“discount rate”) in arrangements is not readily determinable and the Company utilizes its incremental borrowing rate in determining the present value of lease payments. The Company’s incremental borrowing rate is a hypothetical rate based on its understanding of what its credit rating would be. The operating lease ROU asset includes any lease payments made and excludes lease incentives.

During the nine months ended September 30, 2023, the Company has ~~extended~~entered into a commercial operating lease with an independent third party for the ~~period~~use of ~~time~~an office in Hong Kong. The lease has an original term exceeding 1 year, but not more than 3 years with an option to ~~consummate~~renew a ~~business combination nine times by an additional three months each time (for a total~~further term of ~~up to 39 months from~~3 years. At lease inception, after consideration, the ~~consummation of~~Company was certain that the ~~Public Offering to complete a business combination). Pursuant to~~renewal option would be exercised, after the ~~terms of~~original term. The operating lease is included in “Right-of-use asset, net” on the ~~current amended~~unaudited condensed consolidated balance sheets and restated memorandum and articles of association and the trust agreement between us and Continental Stock Transfer & Trust Company, in order to extend the time available for us to consummate its initial business combination,represents the Company’s ~~insiders or their affiliates or designees, upon five days advance notice prior~~right to use the ~~applicable deadline, must deposit into~~underlying asset during the Trust Account $0.15 per public share, on or prior to the date of the applicable deadline. The insiders have received non-interest bearing, unsecured promissory notes equal to the amount of any such deposits (i.e., $460,000 for each of the first three extensions since May 2020, $594,467 for each of the next three extensions, $546,991 for each of next two extensions, and $504,431 for each of the recent extension in May 2022 and August 2022). Such notes would either be paid upon consummation of its initial business combination, or, at the lender’s discretion, converted upon consummation of its business combination into additional Private Units at a price of $10.00 per unit.

On each of May 11, 2020, August 12, 2020, and November 10, 2020, the Company issued an unsecured promissory note in an amount of $460,000 to the sponsor, pursuant to which such amount had been deposited into the Trust Account in order to extend the amount of available time to complete a business combination until February 16, 2021. On each of February 5, May 11, August 11, 2021, the Company issued an unsecured promissory note, in an amount of $594,467, to the sponsor, pursuant to which such amount had been deposited into the Trust Account in order to extend the amount of available time to complete a business combination until November 16, 2021. On each of November 10, 2021 and February 7, 2022, the Company issued an unsecured promissory note in an amount of $546,991, to the sponsor, pursuant to which such amount had been deposited into the Trust Account in order to extend the amount of available time to complete a business combination until May 16, 2022. On each of May 9, 2022, and August 9, 2022, the Company issued an unsecured promissory note in an amount of $540,331, to the sponsor, pursuant to which such amount had been deposited into the Trust Account in order to extend the amount of available time to complete a business combination until November 16, 2022. As of September 30, 2022 and December 31, 2021, the note payable balance of $5,266,243 and $3,710,390, respectively. Upon the completion of business combination, these promissory notes were fully converted.

On May 3, 2022, the Company’s shareholders approved the proposal to amend the Company’s amended and restated memorandum and articles of association to extend the date by which the Company has to consummate a business combination two times for three additional months each time from May 16, 2022 to November 16, 2022. On May 9, 2022, the Company issued an unsecured promissory note in an amount of $504,431 to the sponsor, pursuant to which such amount had been deposited into the Trust Account in order to extend the amount of available time to complete a business combination until August 16, 2022. On August 9, 2022, the Company issued an unsecured promissory note in an amount of $504,431 to the sponsor, pursuant to which such amount had been deposited into the Trust Account in order to extend the amount of available time to complete a business combination until November 16, 2022. All these Notes are non-interest bearing and are payable upon the closing of a business combination. In addition, the Notes may be converted, at the lender’s discretion, into additional Private Units at a price of $10.00 per unit.

~~Related Party Advances~~

In the event the sponsor pays for any expense or liability on behalf of the Company, then such payments would be accounted for as loan to the Company by the sponsor. The sponsor, AGBA Holding Limited, has paid the expenses incurred by the Company an aggregate of $1,645,353 on a non-interest bearing basis as of September 30, 2022.

~~As of September 30, 2022 and December 31, 2021, the Company owed a balance of $1,645,353 and $952,761 to AGBA Holding Limited, respectively.~~

~~NOTE 6 – SHAREHOLDERS’ DEFICIT~~

~~Ordinary Shares~~

~~The Company is authorized to issue 100,000,000 ordinary shares at par $0.001.~~

lease term. The Company’s ~~shareholders of record~~obligation to make lease payments are ~~entitled to one vote for each share held~~included in “Lease liabilities” on ~~all matters to be voted on by shareholders. In connection with any vote held to approve our initial business combination, all of~~ the initial shareholders, as well as all of the officers and directors, have agreed to vote their respective ordinary shares owned by them immediately prior to this offering and any shares purchased in this offering or following this offering in the open market in favor of the proposed business combination.unaudited condensed consolidated balance sheets.

~~In October 2018, the Company’s Chief Executive Officer, subscribed for an aggregate of 1,000 of ordinary shares for an aggregate purchase price of $1, or approximately $0.001 per share.~~

~~On February 22, 2019, the Company issued an aggregate of 1,149,000 founder shares to the sponsor for an aggregate purchase price of $25,000 in cash.~~

~~On May 16, 2019, the Company issued 225,000 ordinary shares under the private placement of 225,000 Private Units at $10 per unit, to the sponsor.~~

~~As of September 30, 2022 and December 31, 2021, 1,375,000 ordinary shares issued and outstanding excluding 3,362,871 and 3,646,607 shares were subject to possible redemption, respectively.~~

~~Accumulated Other Comprehensive Income (Loss)~~

~~The table below presents the changes in accumulated other comprehensive income (loss) (“AOCI”), including the reclassification out of AOCI.~~

		Available- for-sale securities
~~Balance as of January 1, 2022~~	$	-
~~Other comprehensive income before reclassifications~~		-
~~Amounts reclassified from AOCI into interest income~~		-
~~Balance as of September 30, 2022~~	$	-

Available-
for-sale
securities
Balance as of January 1, 2021 $ 10,173
Other comprehensive income before reclassifications 482
Amounts reclassified from AOCI into interest income (10,655 )
Balance as of September 30, 2021 $ -

~~Rights~~

AGBA GROUP HOLDING LIMITED

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

~~Except~~(Currency expressed in cases where the Company is not the surviving company in a business combination, each holder of a right will automatically receive one-tenth (1/10) of an ordinary share upon consummation of the initial business combination. In the event the Company will not be the surviving company upon completion of the initial business combination, each holder of a right will be required to affirmatively convert his, her or its rights in order to receive the one-tenth (1/10) of a share underlying each right upon consummation of the business combination. The Company will not issue fractional shares in connection with an exchange of rights. Fractional shares will either be rounded downUnited States Dollars (“US$”))

Supplemental balance sheet information related to the ~~nearest whole share or otherwise addressed~~operating lease was as follows:

	As of
	September 30, 2023

Operating lease:
Right-of-use asset, net	$	11,926,714

Lease liabilities:
Current lease liabilities		1,206,449
Non-current lease liabilities		10,929,511
Total lease liabilities	$	12,135,960

Operating lease expense for the three and nine months ended September 30, 2023 was $640,920 and $854,470, respectively. There was no operating lease expense for the three and nine months ended September 30, 2022.

Other supplemental information about the Company’s operating lease as of September 30, 2023 are as follow:

Weighted average discount rate			6.58	%
Weighted average remaining lease term (years)			5.67

Maturities of operating lease liabilities as of September 30, 2023 were as follows:

For the year ending September 30,	Operating lease

2024	$	1,936,642
2025		1,936,642
2026		2,355,135
2027		3,192,121
2028		3,192,121
Thereafter		2,128,081
Total minimum lease payments		14,740,742
Less: imputed interest		(2,604,782	)
Total operating lease liabilities	$	12,135,960

NOTE 14 — WARRANT LIABILITIES

The private warrants are accounted for as liabilities in accordance with ASC 480 and are presented as liabilities on the ~~applicable provisions~~unaudited condensed consolidated balance sheets. As of September 30, 2023 and December 31, 2022, there were 225,000 private warrants outstanding.

The fair value of the ~~British Virgin Islands law.~~ private warrants is valued by an independent valuer using a Binominal pricing model. The warrants were classified as Level 3 due to the use of unobservable inputs.

The key inputs in the Binominal pricing model were as follows at their measurement dates:

Input	September 30, 2023			December 31, 2022

Share price	$	0.60		$	1.54
Risk-free interest rate		4.67	%		4.16	%
Volatility		58.00	%		52.19	%
Exercise price	$	11.50		$	11.50
Term		4.37 years			5.0 years

As ~~a result, you must hold rights~~of September 30, 2023 and December 31, 2022, the aggregate value of the private warrants was $1,067 and $4,548, respectively. The changes in ~~multiples~~fair value for the three and nine months ended September 30, 2023 was $1,106 and $3,481, respectively.

AGBA GROUP HOLDING LIMITED

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Currency expressed in United States Dollars (“US$”))

NOTE 15 — SHAREHOLDERS’ (DEFICIT) EQUITY

Ordinary shares

As of ~~10 in order to receive shares for all of your rights upon closing of a business combination. If we are unable to complete an initial business combination within the required time period~~September 30, 2023 and December 31, 2022, the Company ~~redeems~~has authorized share of 200,000,000 ordinary shares with a par value $0.001.

On March 21, 2023, the ~~public~~Company issued 2,173,913 ordinary shares to Apex Twinkle Limited to partially settle the finder fee payable.

On May 22, 2023, the Company issued 946,100 ordinary shares to the directors and officers of the Company under the Share Award Scheme (the “Scheme”) for compensating the ~~funds held~~contributions of prior services and performance, which was approved and granted previously in December 2022.

On June 6, 2023, the ~~Trust Account, holders~~holdback shares of ~~rights will not receive any~~1,665,000 ordinary shares were fully released and issued.

During the nine months ended September 30, 2023, pursuant to the Scheme, the Company issued in aggregate of ~~such funds for their rights~~4,400,000 ordinary shares to certain consultants to compensate the services rendered.

As of September 30, 2023 and ~~the rights will expire worthless.~~December 31, 2022, there were 67,561,998 and 58,376,985 ordinary shares issued and outstanding, respectively.

Public Warrants

Each ~~Public Warrant~~public warrant entitles the holder thereof to purchase one-half (1/2) of one ordinary share at a price of $11.50 per full share, subject to ~~adjustment.~~adjustment as discussed herein. The warrants became exercisable 90 days after the Closing of the Business Combination and will expire five years after the Closing of the Business Combination, at 5:00 p.m., New York City time, or earlier upon redemption or liquidation. Pursuant to the warrant agreement, a warrant holder may exercise its warrants only for a whole number of shares. This means that only an even number of warrants may be exercised at any given time by a warrant holder.

~~No Public Warrants will be~~Once the warrants become exercisable, ~~for cash unless~~ the Company has an effective and current registration statement covering the ordinary shares issuable upon exercise of the warrants and a current prospectus relating to such ordinary shares. It is the Company’s current intention to have an effective and current registration statement covering the ordinary shares issuable upon exercise of the warrants and a current prospectus relating to such ordinary shares in effect promptly following consummation of an initial business combination.

Notwithstanding the foregoing, if a registration statement covering the ordinary shares issuable upon exercise of the Public Warrants is not effective within 90 days following the consummation of our initial business combination, Public Warrant holders may until such time as there is an effective registration statement and during any period when we shall have failed to maintain an effective registration statement, exercise warrants on a cashless basis pursuant to an available exemption from registration under the Securities Act. In such event, each holder would pay the exercise price by surrendering the warrants for that number of ordinary shares equal to the quotient obtained by dividing (x) the product of the number of ordinary shares underlying the warrants, multiplied by the difference between the exercise price of the warrants and the “fair market value” (defined below) by (y) the fair market value. The “fair market value” shall mean the average reported last sale price of the ordinary shares for the 10 trading days ending on the day prior to the date of exercise. For example, if a holder held 300 warrants to purchase 150 shares and the fair market value on the date prior to exercise was $15.00, that holder would receive 35 shares without the payment of any additional cash consideration. If an exemption from registration is not available, holders will not be able to exercise their warrants on a cashless basis.

The warrants will become exercisable on the later of the completion of an initial business combination and May 13, 2020. The warrants will expire at 5:00 p.m., New York City time, on the fifth anniversary of our completion of an initial business combination, or earlier upon redemption.

~~The Company may redeem~~call the outstanding warrants (including any outstanding warrants issued upon exercise of the unit purchase option issued to Maxim Group LLC)~~, in whole and not in part, at a price of $0.01 per warrant:~~ for redemption:

●

in whole and not in part;

●

at ~~any time while the warrants are exercisable,~~a price of $0.01 per warrant;


●	upon a minimum of 30 days’ prior written notice of redemption,


●	if, and only if, the last sales price of the ordinary shares equals or exceeds $16.50 per share for any 20 trading days within a 30 trading day period ending three business days before the Company send the notice of redemption, and


●	if, and only if, there is a current registration statement in effect with respect to the ordinary shares underlying such warrants at the time of redemption and for the entire 30-day trading period referred to above and continuing each day thereafter until the date of redemption.

If the foregoing conditions are satisfied and the Company would issue a notice of redemption, each warrant holder can exercise his, her or its warrant prior to the scheduled redemption date. However, the price of the ordinary shares may fall below the $16.50 trigger price as well as the $11.50 warrant exercise price per full share after the redemption notice is issued and not limit our ability to complete the redemption.

The redemption criteria for the warrants have been established at a price which is intended to provide warrant holders a reasonable premium to the initial exercise price and provide a sufficient differential between the then-prevailing share price and the warrant exercise price so that if the share price declines as a result of our redemption call, the redemption will not cause the share price to drop below the exercise price of the warrants.

If the Company ~~call~~calls the warrants for redemption as described above, ~~our~~the management of the Company will have the option to require all holders that wish to exercise warrants to do so on a “cashless basis.” In such event, each holder would pay the exercise price by surrendering the whole warrants for that number of ordinary shares equal to the quotient obtained by dividing (x) the product of the number of ordinary shares underlying the warrants, multiplied by the difference between the exercise price of the warrants and the “fair market value” (defined below) by (y) the fair market value. The “fair market value” shall mean the average reported last sale price of the ordinary shares for the 10 trading days ending on the third trading day prior to the date on which the notice of redemption is sent to the holders of warrants. Whether the Company will exercise our option to require all holders to exercise their warrants on a “cashless basis” will depend on a variety of factors including the price of our ordinary shares at the time the warrants are called for redemption, the Company’s cash needs at such time and concerns regarding dilutive share issuances.

~~NOTE 7 – ORDINARY SHARE SUBJECT TO POSSIBLE REDEMPTION~~

~~The Company accounts for its ordinary shares subject to possible redemption in accordance with the guidance in ASC Topic 480 “~~~~Distinguishing Liabilities from Equity~~.” Ordinary shares subject to mandatory redemption (if any) are classified as a liability instrument and are measured at fair value. Conditionally redeemable ordinary shares (including ordinary shares that feature redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company’s control) are classified as temporary equity. At all other times, ordinary shares are classified as shareholders’ equity. The Company’s ordinary shares feature certain redemption rights that are subject to the occurrence of uncertain future events and considered to be outside of the Company’s control. Accordingly, at September 30, 2022 and December 31, 2021, 3,362,871 and 3,646,607 ordinary shares subject to possible redemption, respectively, are presented as temporary equity, outside of the shareholders’ equity section of the Company’s unaudited condensed consolidated balance sheets.

~~On May 16, 2019, the Company sold 4,600,000 units at a price of $10.00 per Public Unit in the Public Offering.~~

On February 8, 2021, 636,890 shares were redeemed by certain shareholders at a price of approximately $10.49 per share, including interest generated and extension payments deposited in the Trust Account, in an aggregate amount of $6,680,520.

On November 10, 2021, 316,503 shares were redeemed by certain shareholders at a price of approximately $10.94 per share, including interest generated and extension payments deposited in the Trust Account, in an aggregate amount of $3,462,565.

~~On April 29, 2022, 283,736 shares were redeemed by certain shareholders at a price of approximately $11.24 per share, in an aggregate principal amount of $3,189,369.~~

For the
Nine Months Ended
September 30, 2022 For the
Year Ended
December 31,
2021
Total ordinary shares issued 5,975,000 5,975,000
Share issued classified as equity (1,375,000 ) (1,375,000 )
Share redemption (1,237,129 ) (953,393 )
Ordinary shares, subject to possible redemption 3,362,871 3,646,607

~~NOTE 8 – FAIR VALUE MEASUREMENTS~~

The fair value of the Company’s financial assets and liabilities reflects management’s estimate of amounts that the Company would have received in connection with the sale of the assets or paid in connection with the transfer of the liabilities in an orderly transaction between market participants at the measurement date. In connection with measuring the fair value of its assets and liabilities, the Company seeks to maximize the use of observable inputs (market data obtained from independent sources) and to minimize the use of unobservable inputs (internal assumptions about how market participants would price assets and liabilities). The following fair value hierarchy is used to classify assets and liabilities based on the observable inputs and unobservable inputs used in order to value the assets and liabilities:

Level 1: Quoted prices in active markets for identical assets or liabilities. An active market for an asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis.

Level 2: Observable inputs other than Level 1 inputs. Examples of Level 2 inputs include quoted prices in active markets for similar assets or liabilities and quoted prices for identical assets or liabilities in markets that are not active.

~~Level 3: Unobservable inputs based on our assessment of the assumptions that market participants would use in pricing the asset or liability.~~

The following table presents information about the Company’s assets and liabilities that were measured at fair value on a recurring basis as of September 30, 2022 and December 31, 2021, and indicates the fair value hierarchy of the valuation techniques the Company utilized to determine such fair value.

September 30,
2022 Quoted Prices In
Active Markets Significant
Other
Observable
Inputs Significant
Other
Unobservable
Inputs
Description (Unaudited) (Level 1) (Level 2) (Level 3)
Assets:
U.S. Treasury Securities held in Trust Account* $ 38,928,442 $ 38,928,442 $ — $ —

Liabilities:
Warrant liabilities $ 13,500 $ — $ — $ 13,500

December 31,
2021 Quoted Prices In
Active Markets Significant
Other Observable
Inputs Significant
Other
Unobservable
Inputs
Description (Audited) (Level 1) (Level 2) (Level 3)
Assets:
U.S. Treasury Securities held in Trust Account* $ 40,441,469 $ 40,441,469 $ - $ -

Liabilities:
Warrant liabilities $ 490,000 $ - $ - $ 490,000

*	~~included in cash and investments held in trust account on the Company’s balance sheet.~~

~~The private warrants are accounted for as liabilities in accordance with ASC 815-40 and are presented within warrant liabilities on the unaudited condensed consolidated balance sheets.~~

AGBA GROUP HOLDING LIMITED

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Currency expressed in United States Dollars (“US$”))

Private Warrants

The ~~Company established~~private warrants are identical to the ~~initial fair value for~~public warrants, except that the private warrants ~~on May 16, 2019,~~and the ~~date~~ordinary shares issuable upon the exercise of ~~the Company’s IPO, using a Black-Scholes model. The Company allocated the proceeds received from the sale of Private Units, first to~~ the private warrants ~~based on their fair values as determined at initial measurement, with~~were not transferable, assignable or salable until after the ~~remaining proceeds recorded as ordinary shares~~completion of the Business Combination, subject to ~~possible redemption,~~certain limited exceptions. Additionally, the private warrants will be exercisable on a cashless basis and ~~ordinary shares based on their relative fair values recorded at~~will be non-redeemable so long as they are held by the initial ~~measurement date. The~~purchasers or their permitted transferees. If the private warrants ~~were classified as Level 3 at~~are held by someone other than the initial ~~measurement date due~~purchasers or their permitted transferees, the private warrants will be redeemable by the Company and exercisable by such holders on the same basis as the public warrants.

The private warrants are accounted as liabilities, remeasured to fair value on a recurring basis, with changes in fair value recorded to the ~~use~~unaudited condensed consolidated statements of ~~unobservable inputs.~~operations and comprehensive loss (see Note 14).

~~The key inputs into the binomial model and Black-Scholes model were as follows at their measurement dates:~~

September 30,
2022 December 31,
2021
May 16,
2019
(Initial
measurement)

Input
Share price $ 11.44 $ 11.02 $ 10.00
Risk-free interest rate 0.30 % 1.21 % 2.18 %
Volatility 0.20 % 47 % 55 %
Exercise price $ 11.50 $ 11.50 $ 11.50
Warrant life 5 years 5 years 5 years

As of September 30, ~~2022~~2023 and December 31, ~~2021,~~2022, there were 4,600,000 public warrants and 225,000 private warrants outstanding.

Share Award Scheme

On February 24, 2023, pursuant to the ~~aggregate~~Scheme, the Company registered 11,675,397 ordinary shares to be issued. As of September 30, 2023, the Company issued 5,346,100 ordinary shares under the Scheme.

The fair value of the ~~private warrants was $0.013 and $0.49 million, respectively. The change in~~ordinary shares granted under the scheme is measured based on the closing price of the Company’s ordinary shares as reported by Nasdaq Exchange on the date of grant.

For those ordinary shares vested immediately on the date of grant, the fair value is recognized as share-based compensation expense in the unaudited condensed consolidated statements of operations and comprehensive loss.

For the restricted share units (“RSUs”), the fair value is recognized over the period based on the derived service period (usually the vesting period), on a straight-line basis. The valuations assume no dividends will be paid. The Company has assumed 10% forfeitures.

During the three and nine months ended September 30, 2023, the Company recorded $3,468,280 and $11,979,200 share-based compensation expense, respectively, which is included in the operating cost and expenses in the unaudited condensed consolidated statements of operations and comprehensive loss.

As of September 30, 2023, total unrecognized compensation remaining to be recognized in future periods for RSUs totaled $7.1 million. They are expected to be recognized over the weighted average period of 2.0 years.

A summary of the activities for the Company’s RSUs as of September 30, 2023 and December 31, 2022 is as follow:

	As of
	September 30, 2023				December 31, 2022
	Number of RSUs		Weighted Average Grant Price		Number of RSUs		Weighted Average Grant Price

Outstanding, beginning of period/year		5,000,000	$	2.47		—	$	—
Granted		—	$	—		5,000,000	$	2.47
Outstanding, end of period/year		5,000,000	$	2.47		5,000,000	$	2.47

Forgiveness of Amounts Due to the Holding Company

During the three and nine months ended September 30, 2023, TAG agreed to forgive the Company $4.0 million and $12.6 million, in aggregate, respectively representing certain amounts due to it and treat as additional paid-in capital.

AGBA GROUP HOLDING LIMITED

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Currency expressed in United States Dollars (“US$”))

NOTE 16 — OPERATING COST AND EXPENSES

Commission Expense

Pursuant to the terms of respective contracts, commission expense represents certain premiums from insurance or investment products paid to agents. Commission rates vary by market due to local practice, competition, and regulations. The Company charged commission expense on a systematic basis that is consistent with the revenue recognition.

During the three months ended September 30, 2023 and 2022, the Company recorded $8,915,811 and $8,037,869 commission expenses, respectively.

During the nine months ended September 30, 2023 and 2022, ~~was approximately $477,000. The change in fair value for~~the Company recorded $28,195,740 and $11,219,182 commission expenses, respectively.

Personnel and Benefit Expense

Personnel and benefit expense mainly consisted of salaries and bonus paid and payable to the employees of the Company. During the nine months ended September 30, ~~2021~~2023, the Company reversed the annual bonus of $3.8 million that was ~~approximately $90,000.~~already accrued for the year ended December 31, 2022.

During the three months ended September 30, 2023 and 2022, the Company recorded $7,764,353 and $3,325,369 personnel and benefit expense, respectively.

During the nine months ended September 30, 2023 and 2022, the Company recorded $22,671,813 and $8,734,387 personnel and benefit expense, respectively.

Other General and Administrative Expenses

The Company incurred different types of expenditures under other general and administrative expenses. They primarily consist of depreciation of property and equipment, legal and professional fees, and management fee expenses which are allocated for certain corporate office expenses.

During the three months ended September 30, 2023 and 2022, the Company recorded $5,981,447 and $1,093,733 other general and administrative expenses, respectively.

During the nine months ended September 30, 2023 and 2022, the Company recorded $20,493,152 and $3,175,351 other general and administrative expenses, respectively.

~~To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Because~~NOTE 17 — INCOME TAXES

The provision for income taxes consisted of the inherent uncertainty of valuation, those estimated values may be materially higher or lower than the values that would have been used had a ready market for the investments existed. Accordingly, the degree of judgment exercised by the Company in determining fair value is greatest for investments categorized in Level 3. Level 3 financial liabilities consist of the private warrant liability for which there is no current market for these securities such that the determination of fair value requires significant judgment or estimation. Changes in fair value measurements categorized within Level 3 of the fair value hierarchy are analyzed each period based on changes in estimates or assumptions and recorded as appropriate.

~~NOTE 8 – COMMITMENTS AND CONTINGENCIES~~following:

	Three months ended September 30,				Nine months ended September 30,
	2023		2022		2023		2022

Current tax	$	55,886	$	127,186	$	55,606	$	232,540

~~Risks and Uncertainties~~

Management has evaluated the impact of the COVID-19 pandemic on the industry and has concluded that while it is reasonably possible that the virus could have a negative effect on the Company’s future financial position, results of its operations and/or search for a target company, there has been a significant impact as of the date of these unaudited condensed consolidated financial statements. The unaudited condensed consolidated financial statements do not include any adjustments that might result from the future outcome of this uncertainty.

~~Registration Rights~~

The holders of our insider shares issued and outstanding on the date of this prospectus, as well as the holders of the Private Units (and all underlying securities) and any securities our initial shareholders, officers, directors or their affiliates may be issued in payment of working capital loans made to us, are be entitled to registration rights pursuant to a registration rights agreement entered into concurrently without initial public offering. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to our consummation of a business combination. We will bear the expenses incurred in connection with the filing of any such registration statements.

~~Underwriting Agreement~~AGBA GROUP HOLDING LIMITED

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Currency expressed in United States Dollars (“US$”))

The Company’s subsidiaries that are subject to taxes in the jurisdictions in which they operate, as follows:

British Virgin Islands

The Company is incorporated in the British Virgin Islands and is not subject to taxation. In addition, upon payments of dividends by these entities to their shareholder, no British Virgin Islands withholding tax will be imposed.

Hong Kong

The Company’s subsidiaries operating in Hong Kong is subject to the Hong Kong Profits Tax at the income tax rates ranging from 8.25% to 16.5% on the assessable income arising in Hong Kong during its tax year.

The following table sets forth the significant components of the deferred tax liabilities and assets of the Company as of September 30, 2023 and December 31, 2022:

	September 30, 2023			December 31, 2022

Deferred tax liabilities:
Accelerated depreciation	$	45,725		$	45,858
Deferred tax assets, net:
Net operating loss carryforwards		8,818,813			5,461,370
Less: valuation allowance		(8,818,813	)		(5,461,370	)
		—			—

As of September 30, 2023 and December 31, 2022, the operations incurred $53.4 million and $33.1 million, respectively of cumulative net operating losses which can be carried forward to offset future taxable income. Net operating loss can be carried forward indefinitely but cannot be carried back to prior years. There are no group relief provisions for losses or transfers of assets under Hong Kong tax regime. Each company within a corporate group is taxed as a separate entity. The Company has provided for a full valuation allowance against the deferred tax assets on the expected future tax benefits from the net operating loss carryforwards as the management believes that it is more likely that these assets will not be realized in the future. The valuation allowance is reviewed annually.

Uncertain tax positions

The Company evaluates the uncertain tax position (including the potential application of interest and penalties) based on the technical merits, and measure the unrecognized benefits associated with the tax positions. As of September 30, 2023 and December 31, 2022, the Company did not have any significant unrecognized uncertain tax positions. The Company did not incur any interest and penalties related to potential underpaid income tax expenses for the nine months ended September 30, 2023 and 2022 and also did not anticipate any significant increases or decreases in unrecognized tax benefits in the next 12 months from September 30, 2023.

AGBA GROUP HOLDING LIMITED

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Currency expressed in United States Dollars (“US$”))

NOTE 18 — SEGMENT INFORMATION

Currently, the Company has four business segments comprised of the following products and services:

Segments		Scope of Business Activities

Distribution Business		- Facilitating the placement of insurance to our customers, through licensed brokers, in exchange for initial and ongoing commissions received from insurance companies.

Platform Business		- Providing access to financial products and services to licensed brokers. - Providing operational support for the submission and processing of product applications. - Providing supporting tools for commission calculations, customer engagement, sales team management, customer conversion, etc. - Providing training resources and materials. - Facilitating the placement of investment products for the fund and/or product provider, in exchange for the fund management services.

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

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

Fintech Business		Managing an ensemble of fintech investments.

Healthcare Business		Managing an ensemble of healthcare-related investments.

The four business segments were determined based primarily on how the chief operating decision maker views and evaluates the operations. Operating results are regularly reviewed by the chief operating decision maker to make decisions about resources to be allocated to the segment and to assess its performance. Other factors, including market separation and customer specific applications, go-to-market channels, products and services are considered in determining the formation of these operating segments.

The following tables present the summary information by segment for the three and nine months ended September 30, 2023 and 2022:

	For the three months ended September 30, 2023
	Distribution Business		Platform Business			Fintech Business			Healthcare Business		Total

Revenue, net
- Interest income	$	—	$	41,472		$	—		$	—	$	41,472
- Non-interest income		11,875,830		1,289,199			—			—		13,165,029
		11,875,830		1,330,671			—			—		13,206,501

Commission expense		8,592,596		323,215			—			—		8,915,811
Depreciation on property and equipment		261		15,439			7,121			—		22,821
Income (loss) from operations		2,084,397		(5,487,680	)		(7,546,219	)		—		(10,949,502	)
Investment loss, net		—		—			(792,907	)		—		(792,907	)
Total assets as of September 30, 2023	$	16,283,632	$	33,054,207		$	32,722,269		$	521,041	$	82,581,149

AGBA GROUP HOLDING LIMITED

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Currency expressed in United States Dollars (“US$”))

	For the three months ended September 30, 2022
	Distribution Business		Platform Business			Fintech Business			Healthcare Business		Total

Revenue, net
- Interest income	$	—	$	38,260		$	—		$	—	$	38,260
- Non-interest income		11,752,770		1,453,122			1,563			—		13,207,455
Less: inter-segment		—		—			(1,563	)		—		(1,563	)
		11,752,770		1,491,382			—			—		13,244,152

Commission expense		7,655,418		382,451			—			—		8,037,869
Depreciation on property and equipment		251		95,532			95			—		95,878
Income (loss) from operations		1,087,410		(1,548,819	)		(543,553	)		—		(1,004,962	)
Investment income, net		—		—			741,811			—		741,811
Total assets as of September 30, 2022	$	5,656,231	$	53,250,392		$	36,127,334		$	519,767	$	95,553,724

	For the nine months ended September 30, 2023
	Distribution Business		Platform Business			Fintech Business			Healthcare Business		Total

Revenue, net
- Interest income	$	—	$	117,805		$	—		$	—	$	117,805
- Non-interest income		37,569,257		3,964,052			—			—		41,533,309
		37,569,257		4,081,857			—			—		41,651,114

Commission expense		27,133,073		1,062,667			—			—		28,195,740
Depreciation on property and equipment		783		216,953			20,579			—		238,315
Income (loss) from operations		5,337,353		(9,542,528	)		(31,308,493	)		—		(35,513,668	)
Investment income, net		—		—			488,589			—		488,589
Total assets as of September 30, 2023	$	16,283,632	$	33,054,207		$	32,722,269		$	521,041	$	82,581,149

	For the nine months ended September 30, 2022
	Distribution Business			Platform Business			Fintech Business			Healthcare Business		Total

Revenue, net
- Interest income	$	—		$	137,454		$	—		$	—	$	137,454
- Non-interest income		14,306,599			4,966,094			4,330			—		19,277,023
Less: inter-segment		—			—			(4,330	)		—		(4,330	)
		14,306,599			5,103,548			—			—		19,410,147

Commission expense		9,630,556			1,588,626			—			—		11,219,182
Depreciation on property and equipment		623			286,817			790			—		288,230
Loss from operations		(1,680,985	)		(3,594,692	)		(1,149,988	)		—		(6,425,665	)
Investment loss, net		—			—			(2,793,242	)		—		(2,793,242	)
Total assets as of September 30, 2022	$	5,656,231		$	53,250,392		$	36,127,334		$	519,767	$	95,553,724

All of the Company’s customers, operations and assets are based in Hong Kong.

NOTE 19 — RELATED PARTY BALANCES AND TRANSACTIONS

In support of the Company’s efforts and cash requirements, it may rely on advances from related parties until such time that the Company can support its operations or attains adequate financing through sales of its equity or traditional debt financing. There is no formal written commitment for continued support by the holding company. Amounts represent advances or amounts paid in satisfaction of liabilities.

AGBA GROUP HOLDING LIMITED

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Currency expressed in United States Dollars (“US$”))

Related party balances consisted of the following:

		As of
		September 30, 2023		December 31, 2022

Accounts receivable	(a)	$	846,640	$	272,546
Borrowing	(b)	$	5,000,000		—
Amounts due to the holding company	(c)	$	—	$	6,289,743

(a)	Accounts receivable due from related parties represented the management service rendered to two individual close-ended investment private funds registered in the Cayman Islands, which is controlled by the holding company.

(b)	Borrowing is obtained from the Company’s major shareholder of ultimate holding company. The amount was secured, interest-bearing and repayable in October 2023 (see Note 11).

(c)

Amounts due to the holding company are those nontrade payables arising from transactions between the Company and the holding company, such as advances made by the holding company on behalf of the Company, advances made by the Company on behalf of the holding company, and allocated shared expenses paid by the holding company. During the three and nine months ended September 30, 2023, amounts due to the holding company of $4.0 million and $12.6 million, respectively, were forgiven (see Note 15).

In the ordinary course of business, during the three and nine months ended September 30, 2023 and 2022, the Company involved with transactions, either at cost or current market prices and on the normal commercial terms among related parties. The ~~underwriter~~following table provides the transactions with these parties for the periods as presented (for the portion of such period that they were considered related):

		Three months ended September 30,				Nine months ended September 30,
		2023		2022		2023		2022

Asset management service income	(d)	$	244,525	$	243,925	$	725,146	$	725,193
Commission expenses	(e)		—		75,165		—		131,182
Office rental and operating fees	(f)		1,123,804		559,366		4,895,849		1,563,673
General and administrative expense allocated	(g)		—		272,132		1,722		817,968
Purchase of investment from the holding company	(h)		—		—		—		6,560,122
Purchase of office building from the holding company	(i)		—		—		—		5,896,301
Declaration of special dividends to the holding company	(j)	$	—	$	—	$	—	$	47,000,000

(d)

Under the management agreement, the Company shall provide management service to the portfolio assets held by two individual close-ended investment private funds in the Cayman Islands, which is controlled by the holding company, for a compensation of asset management service fee income at the predetermined rate based on the respective portfolio of asset values invested by the final customers.

(e)	Commission fee on insurance brokerage and asset management referral at the predetermined rate based on the service fee.

(f)

Pursuant to the service agreement, the Company agreed to pay the office and administrative expenses to the holding company for the use of office premises, including, among other things, building management fees, government rates and rent, office rent, and lease-related interest and depreciation that were actually incurred by the holding company. Also, the holding company charged back the reimbursement of legal fee and debt collection fee in the ordinary course of business.

AGBA GROUP HOLDING LIMITED

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Currency expressed in United States Dollars (“US$”))

(g)	Certain amounts of general and administrative expenses were allocated by the holding company.

(h)	The Company purchased 4,158,963 shares of Investment A from the holding company and the transaction was completed on April 20, 2022 based on the historical cost to the holding company.

(i)	The Company purchased an office building from the holding company in January 2022, based on its historical carrying amount.

(j)

On January 18, 2022, TAG Asia Capital Holdings Limited approved to declare and distribute a special dividend of $47 million to TAG Holdings Limited, the shareholder who represented 1 ordinary share of TAG Asia Capital Holdings Limited. The dividends were paid by offsetting the receivable due from the holding company and the remaining balance was paid by cash. The special dividend distribution was made due to the investment income from the sale of Nutmeg in September 2021.

Apart from the transactions and balances detailed elsewhere in these accompanying unaudited condensed consolidated financial statements, the Company has no other significant or material related party transactions during the periods presented.

NOTE 20 — CONCENTRATIONS OF RISK

The Company is ~~entitled~~exposed to the following concentrations of risk:

(a)

Major customers

For the three and nine months ended September 30, 2023, the customers who accounted for 10% or more of the Company’s revenues and its outstanding receivable balances at period-end dates, are presented as follows:

	Three months ended September 30, 2023					Nine months ended September 30, 2023					September 30, 2023
Customer	Revenues		Percentage of revenues			Revenues		Percentage of revenues			Accounts receivable

Customer A	$	4,286,883		32	%	$	10,852,942		26	%	$	902,895
Customer B		^*		^*		$	5,561,429		13	%	$	—
Customer C	$	1,503,454		11	%	$	4,609,083		11	%	$	25,027
Customer D	$	1,581,322		12	%	$	4,633,225		11	%	$	58,443

^*	Less than 10%

For the three and nine months ended September 30, 2022, there was no single customer who accounted for 10% or more of the Company’s revenues.

All of the Company’s major customers are located in Hong Kong.

(b)	Credit risk

Financial instruments that potentially subject the Company to credit risk consist of cash and cash equivalents, restricted cash, accounts receivable, loans receivable and notes receivable. Cash equivalents are maintained with high credit quality institutions, the composition and maturities of which are regularly monitored by management. The Hong Kong Deposit Protection Board pays compensation up to a limit of HK$500,000 (approximately $63,855) if the bank with which an individual/a company hold its eligible deposit fails. As of September 30, 2023, cash ~~underwriting discount~~balance of ~~six~~$1.6 million and ~~half percent (6.5%~~fund held in escrow of $20.6 million were maintained at financial institutions in Hong Kong, of which approximately $21.8 million was subject to credit risk. While management believes that these financial institutions are of high credit quality, it also continually monitors their credit worthiness.

AGBA GROUP HOLDING LIMITED

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Currency expressed in United States Dollars (“US$”),)

For accounts receivable, loans receivable and notes receivable, the Company determines, on a continuing basis, the probable losses and sets up an allowance for credit losses and loan losses based on the estimated realizable value. Credit of money lending business is controlled by the application of credit approvals, limits and monitoring procedures.

The Company uses internally-assigned risk grades to estimate the capability of borrowers to repay the contractual obligations of their loan agreements as scheduled or ~~$0.65 per unit,~~at all. The Company’s internal risk grade system is based on experiences with similarly graded loans and the assessment of borrower credit quality, such as, credit risk scores, collateral and collection history. Individual credit scores are assessed by credit bureau, such as TransUnion. Internal risk grade ratings reflect the credit quality of the ~~gross proceeds~~borrower, as well as the value of collateral held as security. To minimize credit risk, the Company requires collateral arrangements to all mortgage loans and has policies and procedures for validating the reasonableness of the ~~initial public offering. Two~~collateral valuations on a regular basis. Management believes that these policies effectively manage the credit risk from advances.

The Company’s third-party customers that represent more than 10% of total combined loans receivable, and ~~one-half percent (2.5%), or $0.25 per share,~~their related net loans receivable balance as a percentage of total combined loans receivable, as of September 30, 2023 and December 31, 2022 were as follows:

	As of
	September 30, 2023			December 31, 2022

Customer E		37.3	%		37.4	%
Customer F		31.6	%		31.6	%
Customer G		31.1	%		31.0	%

(c)

Economic and political risk

The Company’s major operations are conducted in Hong Kong. Accordingly, the political, economic, and legal environments in Hong Kong, as well as the general state of Hong Kong’s economy may influence the Company’s business, financial condition, and results of operations.

(d)

Exchange rate risk

The Company cannot guarantee that the current exchange rate will remain steady; therefore there is ~~not contingent~~a possibility that the Company could post the same amount of profit for two comparable periods and ~~has been paid at the closing~~because of the ~~initial public offering. Four percent (4.0%),~~fluctuating exchange rate actually post higher or ~~$0.40 per unit,~~lower profit depending on exchange rate of HKD converted to US$ and Sterling on that date. The exchange rate could fluctuate depending on changes in political and economic environments without notice.

For the three months ended September 30, 2023 and 2022, the Company recorded the foreign exchange loss of $864,383 and $2,083,020, respectively, mainly attributable from the long-term investments which are mostly denominated in Sterling.

For the nine months ended September 30, 2023 and 2022, the Company recorded the foreign exchange gain of $41,467 and exchange loss of $4,690,476, respectively, mainly attributable from the long-term investments which are mostly denominated in Sterling.

(e)

Liquidity risk

Liquidity risk is ~~contingent on~~ the ~~closing of a business combination and will be deferred by~~risk that the underwriters and be placed in the Trust Account. Such deferred amount will only be payable to the underwriters upon closing of a business combination. Further, the deferred amount paid to the underwriters upon the closing of a business combination will be reduced by two percent (2.0%), or $0.20 per unit, for each unit that is redeemed by shareholders in connection with the business combination. If the business combination is not consummated, the deferred amount will be forfeited by the underwriters. The underwritersCompany will not be ~~entitled~~able to ~~any interest accrued on~~meet its financial obligations as they become due. The Company’s policy is to ensure that it has sufficient cash to meet its liabilities when they become due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the ~~deferred amount.~~Company’s reputation. A key risk in managing liquidity is the degree of uncertainty in the cash flow projections. If future cash flows are fairly uncertain, the liquidity risk increases.

~~Unit Purchase Option~~

AGBA GROUP HOLDING LIMITED

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Currency expressed in United States Dollars (“US$”))

NOTE 21 — COMMITMENTS AND CONTINGENCIES

Litigation — From time to time, the Company is involved in various legal proceedings and claims in the ordinary course of business. The Company ~~sold~~currently is not aware of any legal proceedings or claims that it believes will have, individually or in the aggregate, a material adverse effect on its business, financial condition, operating results, or cash flows.

As at September 30, 2023, the Company involved with various legal proceedings:-

Action Case: HCA702/2018 On March 27, 2018, the writ of summons was issued against the Company and seven related companies of the former shareholder by the Plaintiff. This action alleged the infringement of certain registered trademarks currently registered under the Plaintiff. On February 23, 2023, the Court granted leave for this action be set down for trial of 13 days, and the trial will commence on November 25, 2024. Legal counsel of the Company will continue to ~~Maxim~~handle in this matter. At this stage in the proceedings, it is unable to determine the probability of the outcome of the matter or the range of reasonably possible loss, if any.

Action Case: HCA765/2019 On April 30, 2019, the writ of summons was issued against the Company’s subsidiary, three related companies and the former directors, shareholders and financial consultant by the Plaintiff. This action alleged the deceit and misrepresentation from an inducement of the fund subscription and claimed for ~~$100,~~compensatory damage of approximately $2 million (equal to HK$17.1million). The case is on-going and parties have yet to attempt mediation. Legal counsel of the Company will continue to handle this matter. At this stage in the proceedings, it is unable to determine the probability of the outcome of the matter or the range of reasonably possible loss, if any.

Action Case: HCA2097 and 2098/2020 On December 15, 2020, the writs of summons were issued against the Company and the former consultant by the Plaintiff. This action alleged the misrepresentation and conspiracy causing the loss from the investment in corporate bond and claimed for compensatory damage of approximately $1.67 million (equal to HK$13 million). The Company previously made $0.84 million as contingency loss for the year ended December 31, 2021. Parties participated in a mediation held on March 25, 2022 and negotiated for settlement through without prejudice correspondence, no settlement was reached. The case is on-going and legal counsel of the Company will continue to handle this matter. At this stage in the proceedings, it is unable to determine the probability of the outcome of the matter or the range of reasonably possible loss, if any.

The Company makes a provision for a liability relating to legal matters when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. These provisions are reviewed at least each fiscal quarter and adjusted to reflect the impacts of negotiations, estimate settlements, legal rulings, advice of legal counsel and other information and events pertaining to a particular matter. Legal fees are expensed in the period in which they are incurred.

Notes Receivable Agreement — Pursuant to the Agreements, subject to demand, the Company is committed to subscribe the notes of Investment A with an ~~option~~aggregate amount of $1,673,525, in batches, which are payable on or before January 31, 2024. As of September 30, 2023, the remaining committed subscription amount was $1,084,439.

Capital Contribution in Investment F — Pursuant to the subscription agreement, being a limited partner of Investment F, subject to demand, the Company was committed to contribute an aggregate capital amount of $10 million. As of September 30, 2023, the remaining committed capital amount in Investment F was $304,489.

Sale and Purchase Agreement — Pursuant to the agreement dated April 5, 2023, entered with Sony Life Singapore Pte. Ltd. (“SLS”), an independent third party, the Company is committed to purchase ~~276,000 units exercisable, at $11.50 per unit commencing at any time between~~100% equity interest in Sony Life Financial Advisers Pte. Ltd. for a cash consideration of SGD2,500,000 (equivalent to $1,882,000). On September 26, 2023, the ~~first~~Company and ~~fifth anniversary of~~SLS entered into a supplementary agreement to extend the ~~effective~~closing date of the ~~registration statement relating~~transaction from September 30, 2023 to ~~our initial public offering. The~~December 31, 2023.

AGBA GROUP HOLDING LIMITED

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Currency expressed in United States Dollars (“US$”))

Equity Purchase Agreement — Pursuant to the equity purchase ~~option may~~agreement dated September 7, 2023, entered into with Williamsburg Venture Holdings, LLC (“Williamsburg”), an independent third party, it agreed to invest up to $50 million over a 36-month period. During the term, the Company shall be ~~exercised for cash or on a cashless basis, at the holder’s option,~~entitled to put, and ~~expires on May 13, 2024. The Company accounted for the unit~~Williamsburg shall be obligated to purchase, ~~option, inclusive~~such number of ordinary shares of the ~~receipt~~Company at price determined. In consideration, the Company is committed to issue 600,000 ordinary shares to Williamsburg. Pursuant to the registration rights agreement, the issuance of ~~$100 cash payment, as an expense of~~shares was subject to the ~~Public Offering resulting in~~registration process with SEC.

Nasdaq Compliance — On September 20, 2023, the Company received a ~~charge directly to shareholders’ equity. The Company estimates~~written notice (the “Notice”) from Nasdaq, notifying that the ~~fair value~~Company had publicly traded under $1.00 per share for a period of 30 consecutive trading days or more, which failed to comply with Nasdaq Listing Rule 5550(a)(2) and Nasdaq Listing Rule 5810(c)(3)(A). The Notice had no immediate effect but, before March 18, 2024, the ~~unit purchase option is approximately $747,960, or $2.71~~Company was required to regain compliance by trading at least $1.00 per ~~Unit, using~~share for a minimum of 10 consecutive trading days. Otherwise, after the ~~Black-Scholes option-pricing model. The fair value of~~date, subject to other requirements and conditions, the ~~unit purchase option~~Company may proceed to ~~be granted to the underwriters is estimated as~~delisting procedures. As of the date of ~~grant using~~ the ~~following assumptions: (1) expected volatility of 35%, (2) risk-free interest rate of 2.18% and (3) expected life of four years between first and fifth anniversary dates~~unaudited condensed consolidated financial statements, the Company is still consecutively trading under $1.00, directors of the ~~effective date. The option~~Company are investigating actions, where appropriate, to regain the compliance, by March 18, 2024.

NOTE 22 — SUBSEQUENT EVENTS

On October 17, 2023, the Company completed to sell the office premises, which classified as asset held for sale as of September 30, 2023, for a consideration of $6.15 million (See Note 7).

On November 7, 2023, the Company signed private placement binding term sheets with an institutional investor, the Company’s Chief Executive Officer, Mr. Ng Wing Fai, and the ~~units, as well as~~Company’s management team pursuant to which the Company will receive gross proceeds of approximately $6,242,850, in consideration of (i) 8,918,357 ordinary shares of the Company, and (ii) warrants to purchase ~~ordinary shares that may be issued upon exercise of the option, have been deemed compensation by The Financial Industry Regulatory Authority (“FINRA”) and are therefore subject~~up to a lock-up for a period of 180 days immediately following the effective date of the registration statement of which this prospectus forms a part or the commencement of sales in the Public Offering pursuant to Rule 5110(g)(1) of FINRA’s rules, during which time the option may not be sold, transferred, assigned, pledged or hypothecated, or be subject of any hedging, short sale, derivative or put or call transaction that would result in the economic disposition of the securities. Additionally, the option may not be sold, transferred, assigned, pledged or hypothecated prior to May 13, 2020, except to any underwriters and selected dealer participating in the offering and their bona fide officers or partners. The option grants to holders demand and “piggy back” rights for periods of five and seven years, respectively, from the effective date of the registration statement of which forms a part with respect to the registration under the Securities Act of the securities directly and indirectly issuable upon exercise of the option. We will bear all fees and expenses attendant to registering the securities, other than underwriting commissions which will be paid for by the holders themselves. The exercise price and number of units issuable upon exercise of the option may be adjusted in certain circumstances including in the event of a stock dividend, or our recapitalization, reorganization, merger or consolidation. However, the option will not be adjusted for issuances of1,783,671 ordinary shares at a purchase price ~~below its~~of $0.70 per ordinary share and associated warrants. The warrants have an exercise ~~price.~~price of $1.00 per AGBA share and shall be exercised with more than $500,000 for each exercise.

~~Right of First Refusal~~

Subject to certain conditions, the Company granted Maxim, for a period of 18 months after the date of the consummation of the business combination, a right of first refusal to act as lead underwriters or minimally as a co-manager, with at least 30% of the economics; or, in the case of a three-handed deal, 20% of the economics, for any and all future public and private equity and debt offerings. In accordance with ~~FINRA rule 5110(f)(2)(E)(i)~~ASC Topic 855, “Subsequent Events”, ~~such right~~which establishes general standards of ~~first refusal shall not have a duration~~accounting for and disclosure of ~~more than three years from~~events that occur after the ~~effective~~balance sheet date ofbut before unaudited condensed consolidated financial statements are issued, the ~~registration statement for our initial public offering.~~

~~NOTE 9 – RECLASSIFICATION OF PRIOR YEAR PRESENTATION~~

Certain prior period amounts have been reclassified for consistency with the current period presentation. These reclassifications had no effect on the reported results of operations. An adjustment has been made to the Unaudited Condensed Consolidated Statement of Changes In Shareholders’ Deficit for period ended September 30, 2022, to reclassify the Capital contribution from extension deposit to the trust account.

~~NOTE 10 – SUBSEQUENT EVENTS~~

~~The~~ Company has evaluated all events or transactions that occurred after September 30, ~~2022,~~2023, up ~~through the date the Company issued~~to November 14, 2023 that the unaudited condensed consolidated financial ~~statements.~~

~~On November 10, 2022, the Company convened its extraordinary general meeting (the “Special Meeting”)~~statements were available to approve the business combination with TAG and certain of TAG’s wholly owned subsidiaries. An aggregate of 3,339,229 Ordinary Shares were redeemed in connection with the Special Meeting. The final redemption price is $11.617 per share redeemed.

On November 14, 2022, the Company completed its business combination with TAG Holding Limited (“TAG”). Through an acquisition merger, the Company has become the 100% owner of the issued and outstanding securities of each of TAG International Limited and TAG Asia Capital Holdings Limited, each formerly wholly-owned subsidiaries of TAG. The post-combination company has been renamed, “AGBA Group Holding Limited” and its ordinary shares and warrants are expected to begin trading on the Nasdaq Capital Market (“Nasdaq”) on November 15, 2022 under the ticker symbols “AGBA” and “AGBAW” respectively.be issued.

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

References in this report (the “Quarterly Report”) to “we,” “us”, “the Group” or the “Company” refer to AGBA Group Holding ~~Limited (formerly known as AGBA Acquisition Limited).~~Limited. References to our “management” or our “management team” refer to our officers and ~~directors, references to the “Sponsor” refer to AGBA Holding Limited.~~directors. The following discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction with the unaudited condensed consolidated financial statements and the notes thereto contained elsewhere in this Quarterly Report. Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties.

Special Note Regarding Forward-Looking Statements

This Quarterly Report includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Exchange Act that are not historical facts and involve risks and uncertainties that could cause actual results to differ materially from those expected and projected. All statements, other than statements of historical fact included in this Form 10-Q including, without limitation, statements in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” regarding the Company’s financial position, business strategy and the plans and objectives of management for future operations, are forward-looking statements. Words such as “expect,” “believe,” “anticipate,” “intend,” “estimate,” “seek” and variations and similar words and expressions are intended to identify such forward-looking statements. Such forward-looking statements relate to future events or future performance, but reflect management’s current beliefs, based on information currently available. A number of factors could cause actual events, performance or results to differ materially from the events, performance and results discussed in the forward-looking statements. For information identifying important factors that could cause actual results to differ materially from those anticipated in the forward-looking statements, please refer to the Risk Factors section ~~of the Company’s registration statement on Form S-1~~included in our 2022 Annual Report filed with the U.S. Securities and Exchange Commission (the “SEC”). The Company’s securities filings can be accessed on the EDGAR section of the SEC’s website at www.sec.gov. Except as expressly required by applicable securities law, the Company disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise.

Business Overview

~~Prior to our business combination, we were~~We are a ~~blank check company incorporated~~leading one-stop financial supermarket based in Hong Kong servicing over 400,000 individual and corporate customers. We offer the broadest set of financial services and healthcare products in the ~~British Virgin Islands on October 8, 2018 and formed for~~Guangdong-Hong Kong-Macao Greater Bay Area (GBA) through a tech-led ecosystem, enabling clients to unlock the ~~purpose of entering into a merger, share exchange, asset acquisition, share purchase, recapitalization, reorganization or similar business combination with one or more businesses or entities.~~choices that best suit their needs.

~~Prior to our business combination, we had no revenue, had losses since inception from incurring formation costs and have no operations other than the active solicitation~~We currently operate four major areas of ~~a target business with which to complete a business combination. We relied upon the sale of our securities and loans from our officers and directors to fund our operations.~~businesses, comprising of:

Distribution Business: The Group’s powerful financial advisor business is the largest in the market, it engages in the personal financial advisory business (including advising and sales of a full range of financial services products including long-term life insurance, savings and mortgages), with additional internal and external channels being developed and added.

On May 16, 2019, the Company consummated its initial public offering of 4,600,000 units, which includes the full exercise of the over-allotment option. Each Public Unit consists of one ordinary share, one redeemable warrant, and one right to receive one-tenth (1/10) of an ordinary share upon the consummation of an initial business combination. Each redeemable warrant entitles the holder thereof to purchase one-half (1/2) of one ordinary share, and each ten rights entitle the holder thereof to receive one ordinary share at the closing of a business combination. The Units were sold at an offering price of $10.00 per Unit, generating gross proceeds of $46,000,000. Simultaneously with the closing of the initial business combination, the Company consummated the private placement of 225,000 units at a price of $10.00 per Private Unit, generating total proceeds of $2,250,000. A total of $46,000,000 of the net proceeds from the sale of Public Units in the initial business combination (including the over-allotment option units) and the private placements were placed in a Trust Account established for the benefit of the Company’s public shareholders. The Company incurred $2,559,729 in initial public offering related costs, including $2,175,948 of underwriting fees and $383,781 of initial public offering costs.

Platform Business: The Group operates as a “financial supermarket” offering over 1,800 financial products to a large universe of retail and corporate customers.

Healthcare Business: Through the Group’s 4% stake in and a strategic partnership with HCMPS, operating as one of the largest healthcare management organizations in the Hong Kong and Macau region, with over 800 doctors in its network. Established in 1979, it is one of the most reputed healthcare brands in Hong Kong.

Fintech Business: The Group has an ensemble of leading FinTech assets and businesses in Europe and Hong Kong. In addition to financial gains, the Group also derives substantial knowledge transfers from its investee companies, supporting the development and growth of the Group’s new business models.

~~On each~~Distribution Business

The Distribution Business comprises a variety of ~~May 11, August 13~~captive financial services distribution channels. We have built a market leading financial advisors distribution channel in Hong Kong. We have also built other distribution channels alongside our market leading financial advisors business.

Our combined captive distribution channels enable us to directly access one of the largest pools of customers accessible to independent financial services providers in Hong Kong.

Channel		Description
Financial Advisors Business (“FA Business”)		“Focus” is engaged in the distribution of life insurance, asset management, property-casualty and Mandatory Provident Fund products through its teams of independent financial advisors (brokers).

Alternative Distribution Business		A collection of distribution channels, including salaried financial planners targeting HNWI, development teams pursuing corporate partnerships and incubating financial advisors teams.

Digital Business		AGBA Money is a direct-to-consumer digital app that provides various financial products and services to retail customers.

Our largest distribution channel is the FA Business, operating under the brand name Focus. With its large salesforce of financial advisors, “Focus” provides a wide range of financial products and ~~November 10, 2020, we issued~~independent advisory services to individual and corporate customers, primarily in connection with life insurance products. Our FA Business has been the clear market leader in the insurance brokerage industry in Hong Kong for decades, building up a ~~$460,000 unsecured promissory note~~large and highly productive salesforce. As of September 30, 2023, there were around 1,261 financial advisors at “Focus”, organized into 28 sales teams. Each team is led by a “tree head”, responsible for managing the financial advisors within their teams.

In addition to the ~~Sponsor, pursuant~~FA Business, we continue to ~~which such amount was deposited~~expand our distribution footprint with the establishment and expansion of a number of additional distribution channels, collectively known as our Alternative Distribution Business. These distribution channels are targeted at specific customer segments and/or capturing specific distribution opportunities.

Combined with our Digital Business, we now have a well-diversified range of distribution channels and capabilities.

During 2022, we continued to make significant investments into developing and expanding our ~~Trust Account~~financial advisors salesforce, broadening and deepening the product range, as well as upgrading the supporting infrastructure. Our infrastructure not only supports the financial consultants in order to extend the amount of time we had available to complete a business combination from May 16, 2020 to February 16, 2021. On each of February 10, May 11 and August 11, 2021, the Company issued an unsecured promissory note,engaging with their customers, it also provides extensive operational support in ~~an amount of $594,467,~~relation to the ~~Sponsor, pursuant to which such amount had been deposited~~processing of transactions, associated payment flows, as well as after-sales services. Building our infrastructure required substantial investments into technological, operational and financial systems, as well as the ~~Trust Account in order to extend the amount~~development of ~~available time to complete a business combination until November 16, 2021. On each of November 10, 2021~~comprehensive operational and February 7, 2022, the Company issued an unsecured promissory note in an amount of $546,991, to the Sponsor, pursuant to which such amount had been deposited into the Trust Account in order to extend the amount of available time to complete a business combination until May 16, 2022. Each of these promissory notes is non-interest bearing and is payable upon the closing of a business combination. In addition, eachsupport teams (operations support, customer services, payments, etc.). Since many of the ~~promissory notes may be converted, at~~financial products offered to our customers are regulated, on top of the ~~lender’s discretion, into additional Private Units at a price~~various operational requirements, we have built significant internal capabilities in the areas of ~~$10.00 per unit. Upon the completion~~risk and internal control, as well as legal and compliance to ensure an appropriate level of ~~business combination, these promissory notes were fully converted.~~regulatory compliance and supervision.

~~We held~~As a result of our ~~annual meeting of shareholders on May 3, 2022 (the “2022 Annual Meeting”). During the 2022 Annual Meeting, shareholders approved, among other things, (i) the Fourth Amended~~efforts to expand our distribution capabilities and Restated Memorandum and Articles of Association to extend the date by which the Company has to consummate a business combination two times for three additional months each time from May 16, 2022 to November 16, 2022; (ii) an amendment to the Company’s investment management trust agreement, dated May 14, 2019, as amended, by and between the Company and Continental Stock Transfer & Trust Company to extend the time to complete a business combination to November 16, 2022; and (iii) elected all of the five nominees for directors to serve until the next annual meeting of shareholders approved. On each of May 9, 2022, and August 9, 2022,improve our supporting infrastructure, we issued an unsecured promissory note, in an amount of $504,431 to the Sponsor, pursuant to which such amount had been deposited into the Trust Account in order to extend the amount of available time to complete a business combination until November 16, 2022. have successfully developed these inter-related strategic assets:

●

Vast customer base in Hong Kong and growing customer base in Mainland China.

Our management has broad discretion with respect to the specific application of the net proceeds of the initial business combination and the private placement, although substantially all of the net proceeds are intended to be applied generally towards consummating a business combination.

●

State-of-the-art supporting infrastructure.

●

Relationships with and access to a broad range of leading global financial product providers.

●

Deep market knowledge and understanding.

●

Highly productive and well-trained salesforce.

~~On November 3, 2021,~~We will continue to capitalize on these core strategic assets and match them with the ~~Company entered into the business combination Agreement, which provides for a business combination between AGBA~~emerging opportunities in our three core industries (life insurance, wealth management and TAG and certain of TAG’s wholly owned subsidiaries – OPH, Fintech, B2B, B2BSub, and HKSub. OPH through its wholly-owned subsidiaries, is engaged in business-to-business (or B2B) services, while Fintech through its wholly-owned subsidiaries, is engaged in the financial technology or fintech business. B2BSub is a wholly-owned subsidiary of B2B, and HKSub is a wholly owned subsidiary of B2BSub. In the business combination agreement, as amended, B2B, B2BSub, HKSub, OPH, Fintech, together with their respective subsidiaries are referred to as the “Group Parties”healthcare). Pursuant to the business combination agreement, as amended, OPH will first become a subsidiary of B2B through a merger with HKSub, with OPH as the surviving entity (the “OPH Merger”). Subsequently, (i) AMSI will merge with and into B2B; and AMSII will merge with and into Fintech (together with (i), the “Acquisition Merger”). In consideration of the Acquisition Merger, AGBA will issue 55,500,000 ordinary shares with a deemed price per share US$10.00 (“Aggregate Stock Consideration”) to TAG, in its capacity as sole shareholder of B2B and Fintech.

~~Results of Operations~~

Our entire activity from inception up to May 16, 2019 was in preparation for the initial public offering. Since the initial public offering, our activity has been limited to the evaluation of business combination candidates and engaging in activities in connection with the proposed business combination transaction with TAG, and we will not be generating any operating revenues until the closing and completion of our business combination.

For the three ~~months ended September 30, 2022, we had a net income of $429,335, which was comprised of dividend income~~ and ~~general and administrative expenses, as well as a gain from the change in fair value of warrant liabilities.~~

~~For the three months ended September 30, 2021, we had a net loss of $209,743, which was comprised of general and administrative expenses and a loss from change in fair value of warrant liabilities.~~

~~For the~~ nine months ended September 30, ~~2022,~~2023, the Company made $11.9 million and $37.6 million, respectively from commission in the Distribution Business. The revenue attributed to the Company during the first quarter of 2023 only captured an insignificant portion of the revenues actually generated by the financial advisors currently associated with Focus.

Upon the re-opening of China Border, we ~~had a net loss of 153,751, which was comprised of interest~~will continue to widen our distribution footprint and ~~dividend income~~actively explore further opportunities to develop partnerships and ~~general and administrative expenses,~~generate customer leads on the ground in Mainland China, as well as ~~a gain from~~refining our abilities to service our customer base. We expect sales volumes to return to the ~~change in fair value~~levels previously recorded, prior to the pandemic period, especially with the re-opening of ~~warrant liabilities.~~the Mainland border and the ongoing integration of Hong Kong into the Greater Bay area.

~~For the nine months ended September 30, 2021, we had a net loss of $515,988, which was comprised of general and administrative expenses and a loss from change in fair value of warrant liabilities.~~Platform Business

~~Liquidity~~The Platform business, through OPH and ~~Capital Resources~~its subsidiaries, is a one-stop financial supermarket with a breadth of products and services that is unrivaled in Hong Kong sourced from leading global product providers.

AsThe Platform Business was set up to take advantage of the decades-long experience we built up in supporting the largest financial advisors salesforce in Hong Kong. We were already servicing a large pool of customers and in the process, built up a wide library of world class financial products and constructed a state-of-the-art technological and operational infrastructure.

The Platform Business now operates this full-service platform under its “OnePlatform” brand and has opened it up to banks, other financial institutions, family offices, brokers, and individual independent financial advisors that are looking for support in advising and serving their retail clients.

Our technology-enabled Platform Business offers a wide range of financial products, covering life insurance, pensions, property-casualty insurance, stock brokerage, mutual funds, money lending and real estate agency.

In addition to its unrivaled product-shelf, the Platform Business offers digital-enabled sales management and support solutions, business operations support, comprehensive customer services, and training support.

Currently, our platform financial services and investment products mainly comprise mutual fund distributions, portfolio management, money lending, insurance and Mandatory Provident Fund (MPF) products, and international real estate referral and brokerage services, as discussed below:-

The OnePlatform brand currently covers 74 insurance providers selling over 1,200 products, and 45 asset management fund houses with over 970 products.

Fintech Business

The Fintech Business has collected an ensemble of valuable fintech assets in its investment portfolio. Fintech Business’ management team has strived to establish the business as a leading name in the fintech investment sector.

Core Fintech investments held under the Fintech Business as of September 30, 2022, we had cash of $96,914 outside our Trust Account available for working capital needs. All remaining cash was held in the Trust Account and is generally unavailable for our use, prior to the business combination.2023 include:

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

On May 16, 2019, we consummated the initial public offering of 4,600,000 Public Units (which includes the full exercise of the underwriter’s over-allotment option), at a price of $10.00 per unit, generating gross proceeds of $46,000,000. Simultaneously with the closing of the initial public offering, we consummated the sale of 225,000 Private Units, at a price of $10.00 per unit, generating gross proceeds of $2,250,000.

An investment in CurrencyFair Limited, a B2B and B2C payments company.

An investment in Oscar Health Inc., a US direct-to-consumer digital health insurer.

Following the initial public offering and the exercise of the over-allotment option, a total of $46,000,000 was placed in the Trust Account. We incurred $2,559,729 in initial public offering related costs, including $2,175,948 of underwriting fees and $383,781 of initial public offering costs.

An investment in Goxip Inc., a fashion media platform based in Hong Kong.

An investment in LC Healthcare Fund I, L.P., a PRC healthcare and healthtech investment fund.

	Carrying amount in US$ thousands ⁽¹⁾
	September 30, 2023		December 31, 2022
Tandem Money Limited		16,179		16,031
CurrencyFair Limited		5,575		5,718
Oscar Health Inc.⁽²⁾		—		2,443
Goxip Inc.		512		513
LC Healthcare Fund I, L.P.		9,375		11,805

~~Our liquidity needs have been satisfied to date through receipt of $25,000 from the sale~~Notes:

(1)

Carrying amount represents Fintech’s attributable interest in the investment portfolio asset.

(2)

During the nine months ended September 30, 2023, the Company partially sold 993,108 shares of Oscar Health Inc. on Nasdaq Stock Exchange with an average current market price of $4.01 per share, resulting with a realized gain of $1.5 million.

Healthcare Business

We currently hold a 4% equity stake in HCMPS, one of the ~~insider shares, note payable of $5,266,243 and advances from our Sponsor~~leading healthcare management organizations in ~~an aggregate amount of $1,645,353 outstanding as of September 30, 2022, and the remaining net proceeds from our initial public offering and private placement.~~Hong Kong.

~~We intend to use substantially all~~Founded in 1979 and currently operating under the Dr. Jones Fok & Associates Medical Scheme Management Limited (“JFA”) brand, JFA is one of the ~~net proceeds~~most reputed healthcare brands in Hong Kong. It has four self-operated medical centers and a network of over 700 healthcare service providers – providing healthcare schemes for more than 500 corporate clients with over 300,000 scheme members. JFA’s clients include blue chip companies from various industry and leading insurers. Apart from Hong Kong, JFA is the ~~initial public offering,~~largest operator in Macau with around 70 clinics.

JFA operates a city-wide medical network that includes 340 general practitioners (“GP”), 11 laboratories and imaging centers, 273 specialist doctors, 25 physiotherapy centers, 12 Chinese medicine practitioner clinics, all based in Hong Kong, and 69 GP clinics in Macau. Over 380,000 out-patient and in-patient visits are recorded annually through HCMPS’s medical network. JFA offers its patients a full range of medical services, including general services, specialist services, physiotherapy, Chinese medicine, dental, vaccination, X-ray, laboratories and imaging services.

We believe that the ~~funds held~~future of healthcare is in “Smart Health” – technology that offers improved patient-care management and leverages data as the new tool for solving complex healthcare challenges with reduced operating costs. We will focus on technology/digitalization and consumerization of healthcare to create an ecosystem empowering customers to proactively manage their health and well-being and to improve their access to healthcare at a lower cost – with connectivity across the care continuum. We believe that JFA has the captive customer base, infrastructure and product/service offerings to optimize customer experience to further grab market share.

We are currently working to transform JFA into the best medical care institution in Asia by 2025, redefining industry standards in the ~~Trust Account, to acquire a target business or businesses~~Greater Bay Area and to pay our expenses relating thereto. To the extent that our capital stock is used in whole or in part as consideration to effect our business combination, the remaining proceeds held in the Trust Account, as well as any other net proceeds not expended, will be used as working capital to finance the operations of the target business. Such working capital funds could be used in a variety of ways including continuing or expanding the target business’ operations, for strategic acquisitionsoffering market-leading customer care and for marketing, research and development of existing or new products. Such funds could also be used to repay any operating expenses or finders’ fees which we had incurred prior to the completion of our business combination if the funds available to us outside of the Trust Account were insufficient to cover such expenses.best-in-class infrastructure empowered by data analytics.

~~We intend to use the funds held outside the Trust Account primarily for activities relating to consummating the proposed business combination with TAG.~~

If our estimates of the costs of consummating our proposed business combination is less than the actual amount necessary to do so, or the amount of interest available to us from the Trust Account is less than we expect as a result of the current interest rate environment, we may have insufficient funds available to operate our business prior to our initial business combination. Moreover, we may need to obtain additional financing either to consummate our initial business combination or because we become obligated to redeem a significant number of our public shares upon consummation of our initial business combination, in which case we may issue additional securities or incur debt in connection with such business combination. Subject to compliance with applicable securities laws, we would only consummate such financing simultaneously with the consummation of our initial business combination. Following our initial business combination, if cash on hand is insufficient, we may need to obtain additional financing in order to meet our obligations, and there is no assurance that such financing can be obtained on favorable terms, or at all.

We may need to seek additional capital through loans or additional investments from members of our management team, but such members of our management team are not under any obligation to advance funds to, or invest in, us. In the event that the business combination does not close, we may use a portion of the working capital held outside the Trust Account to repay such loaned amounts, but no proceeds from our Trust Account would be used for such repayment. Such loans would be evidenced by promissory notes. The notes would either be paid upon consummation of our business combination, without interest, or, at the lender’s discretion, up to $500,000 of the notes may be converted upon consummation of our business combination into additional Private Units at a price of $10.00 per unit. The terms of such loans by our initial shareholders, officers and directors, if any, have not been determined and no written agreements exist with respect to such loans.

Accordingly, the Company may not be able to obtain additional financing. If the Company is unable to raise additional capital, it may be required to take additional measures to conserve liquidity, which could include, but not necessarily be limited to, curtailing operations, suspending the pursuit of a potential transaction, and reducing overhead expenses. The Company cannot provide any assurance that new financing will be available to it on commercially acceptable terms, if at all. These conditions raise substantial doubt about the Company’s ability to continue as a going concern if a business combination is not consummated by November 16, 2022. These unaudited condensed consolidated financial statements do not include any adjustments relating to the recovery of the recorded assets or the classification of the liabilities that might be necessary should the Company be unable to continue as a going concern.

~~Off-balance Sheet Financing Arrangements~~

We have no obligations, assets or liabilities which would be considered off-balance sheet arrangements as of September 30, 2022. We do not participate in transactions that create relationships with unconsolidated entities or financial partnerships, often referred to as variable interest entities, which would have been established for the purpose of facilitating off-balance sheet arrangements. We have not entered into any off-balance sheet financing arrangements, established any special purpose entities, guaranteed any debt or commitments of other entities, or purchased any non-financial assets.

~~Contractual Obligations~~Results of Operations

We do not have any long-term debt, capital lease obligations, operating lease obligations or long-term liabilities other than an agreement to pay our Sponsor a monthly fee of $10,000 for general and administrative services, including office space, utilities and administrative services to the Company. We began incurring these fees on May 16, 2019 and will continue to incur these fees monthly until the earlier of the completion of the business combination and the Company’s liquidation. Also, we are committed to the below:Three months ended September 30, 2023 vs. Three months ended September 30, 2022

	Three months ended September 30,
	2023			2022			Variance
	(US$ in thousands)						$			%
Revenues:
Interest income:
Loans	$	41		$	38			3			7.89
Total interest income		41			38			3			7.89
Non-interest income:
Commissions		12,169			12,169			—			—
Recurring service fees		752			793			(41	)		(5.17	)
Total non-interest income		12,921			12,962			(41	)		(0.32	)
Total revenues from others		12,962			13,000			(38	)		(0.29	)
Non-interest income:
Recurring service fees		245			244			1			0.41
Total revenues from related parties		245			244			1			0.41
Total revenues		13,207			13,244			(37	)		(0.28	)
Operating cost and expenses:
Commission expense		(8,916	)		(8,038	)		878			10.92
Sales and marketing expense		(754	)		(1,457	)		(703	)		(48.25	)
Technology expense		(741	)		(335	)		406			121.19
Personnel and benefit expense		(7,764	)		(3,325	)		4,439			133.50
Other general and administrative expenses		(5,982	)		(1,094	)		4,888			446.80
Total operating cost and expenses		(24,157	)		(14,249	)		9,908			69.53
Loss from operations		(10,950	)		(1,005	)		9,945			989.55
Other income (expense):
Interest income		17			7			10			142.86
Interest expense		(393	)		(20	)		373			1,865.00
Foreign exchange loss, net		(864	)		(2,083	)		(1,219	)		(58.52	)
Investment (loss) income, net		(793	)		742			(1,535	)		(206.87	)
Change in fair value of warrant liabilities		1			—			1			N/A
Rental income		79			79			—			—
Sundry income		38			14			24			171.43
Total other expense, net		(1,915	)		(1,261	)		654			51.86
Loss before income taxes		(12,865	)		(2,266	)		10,599			467.74
Income tax expense		(56	)		(127	)		(71	)		(55.91	)
NET LOSS	$	(12,921	)	$	(2,393	)		10,528			439.95

~~Registration Rights~~Revenue

The ~~holders of our insider shares issued~~following table summarizes the major operating revenues for the three months ended September 30, 2023 and outstanding prior to our initial public offering, as well as the holders of the Private Units (and all underlying securities) and any securities our initial shareholders, officers, directors or their affiliates may be issued in payment of working capital loans made to us, are entitled to registration rights pursuant to a registration rights agreement entered into concurrently without initial public offering. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to our consummation of a business combination. We will bear the expenses incurred in connection with the filing of any such registration statements.2022:

~~Underwriting Agreement~~

	Three months ended September 30,
	2023		2022		Variance
	(US$ in thousands)				$			%
Business segment
Distribution Business	$	11,876	$	11,753		123			1.05
Platform Business		1,331		1,491		(160	)		(10.73	)
Fintech Business		—		—		—			—
Healthcare Business		—		—		—			—
TOTAL	$	13,207	$	13,244		(37	)		(0.28	)

The underwriter is entitled to a cash underwriting discount of six and half percent (6.5%), or $0.65 per unit, of the gross proceeds of the initial public offering. Two and one-half percent (2.5%), or $0.25 per share, is not contingent and has been paid at the closing of the initial public offering. Four percent (4.0%), or $0.40 per unit, is contingent on the closing of a business combination and will be deferred by the underwriters and be placed in the Trust Account. Such deferred amount will only be payable to the underwriters upon closing of a business combination. Further, the deferred amount paid to the underwriters upon the closing of a business combination will be reduced by two percent (2.0%), or $0.20 per unit, for each unit that is redeemed by shareholders in connection with the business combination. If the business combination is not consummated, the deferred amount will be forfeited by the underwriters. The underwriters will not be entitled to any interest accrued on the deferred amount.

~~Private Warrants~~

The Company classifies the private warrants as liabilities at their fair value and adjusts the private warrants to fair value at each reporting period. This liability is subject to re-measurement at each balance sheet date until exercised, and any change in fair value is recognized in our statement of operations. The private warrants are valued using a Black Scholes model.

~~Unit Purchase Option~~Distribution Business

The ~~Company sold to Maxim for $100, an option to purchase 276,000 units exercisable, at $11.50 per unit, between the first~~Distribution Business contributed 89.92% and ~~fifth anniversary~~88.74% of the ~~effective date~~total revenue for the three months ended September 30, 2023 and 2022, respectively. Income from the Distribution Business mainly related to commissions earned from insurance policies, which slightly increased by US$0.1 million, or 1.05%, from US$11.8 million in 2022 to US$11.9 million in 2023. The largest segment of the ~~registration statement relating to~~Distribution Business is our ~~initial public offering.~~ FA Business, operated under the “Focus” brand name.

Summarized revenue breakdown by product and type of contracts:

	Three months ended September 30,
	2023		2022		Variance
	(US$ in thousands)				$			%
By product:
Life insurance	$	11,147	$	11,516		(369	)		(3.20	)
Property-casualty insurance		467		88		379			430.68
Mandatory provident fund and related revenues		262		149		113			75.84
		11,876		11,753		123			1.05

By the type of contracts:
- New and or current year		11,496		11,418		78			0.68
- Recurring		380		335		45			13.43
TOTAL	$	11,876	$	11,753		123			1.05

Platform Business

The ~~purchase option may be exercised for cash or on a cashless basis, at~~Platform Business contributed 10.08% and 11.26% of the ~~holder’s option, and expires on May 13, 2024. The Company accounted~~total revenue for the ~~unit purchase option, inclusive~~three months ended September 30, 2023 and 2022, respectively.

	Three months ended September 30,
	2023		2022		Variance
	(US$ in thousands)				$			%
Commission	$	293	$	416		(123	)		(29.57	)
Recurring service fees		996		1,037		(41	)		(3.95	)
Loans		42		38		4			10.53
TOTAL	$	1,331	$	1,491		(160	)		(10.73	)

Operating Expenses

Commission Expense

	Three months ended September 30,
	2023		2022		Variance
	(US$ in thousands)				$			%
Business segment
Distribution Business	$	8,593	$	7,655		938			12.25
Platform Business		323		383		(60	)		(15.67	)
Fintech Business		—		—		—			—
Healthcare Business		—		—		—			—
TOTAL	$	8,916	$	8,038		878			10.92

The Distribution Business contributed 96.38% and 95.24% of the ~~receipt of $100 cash payment, as an~~total commission expense offor the ~~Public Offering resulting~~three months ended September 30, 2023 and 2022, respectively. Commission expense for the Distribution Business increased by US$0.9 million, or 12.25%, from US$7.7 million in ~~a charge directly~~2022 to ~~shareholders’ equity.~~US$8.6 million in 2023. The Company estimates that the fair value of the unit purchase option is approximately $747,960, or $2.71 per Unit, using the Black-Scholes option-pricing model. The fair value of the unit purchase option grantedincrease mainly attributed to the ~~underwriters is estimated as of~~bonus payment during the ~~date of grant using~~three months ended September 30, 2023 to retain the following assumptions: (1) expected volatility of 35%, (2) risk-free interest rate of 2.18% and (3) expected life of four years between first and fifth anniversary dates of the Effective Date. The option and the units, as well as the ordinary shares and warrants to purchase ordinary shares that may be issued upon exercise of the option, have been deemed compensation by FINRA and are therefore subject to a lock-up for a period of 180 days immediately following the effective date of the registration statement for our initial public offering pursuant to Rule 5110(g)(1) of FINRA’s rules, during which time the option may not be sold, transferred, assigned, pledged or hypothecated, or be subject of any hedging, short sale, derivative or put or call transaction that would result in the economic disposition of the securities. Additionally, the option may not be sold, transferred, assigned, pledged or hypothecated prior to May 13, 2020 except to any underwriters and selected dealer participating in the offering and their bona fide officers or partners. The option grants to holders demand and “piggy back” rights for periods of five and seven years, respectively, from the effective date of the registration statement of which forms a part with respect to the registration under the Securities Act of the securities directly and indirectly issuable upon exercise of the option. We will bear all fees and expenses attendant to registering the securities, other than underwriting commissions which will be paid for by the holders themselves. The exercise price and number of units issuable upon exercise of the option may be adjusted in certain circumstances including in the event of a share dividend, or our recapitalization, reorganization, merger or consolidation. However, the option will not be adjusted for issuances of ordinary shares at a price below its exercise price.financial advisors.

~~Right of First Refusal~~

Subject to certain conditions, the Company granted Maxim, for a period of 18 months after the date of the consummation of the business combination, a right of first refusal to act as lead underwriters or minimally as a co-manager, with at least 30% of the economics; or, in the case of a three-handed deal, 20% of the economics, for any and all future public and private equity and debt offerings. In accordance with FINRA rule 5110(f)(2)(E)(i), such right of first refusal shall not have a duration of more than three years from the effective date of the registration statement for our initial public offering.

~~Critical Accounting Policies~~

The preparation of the unaudited condensed consolidated financial statements and related disclosures in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the unaudited condensed consolidated financial statements, and income and expenses during the periods reported. Actual results could materially differ from those estimates. The Company has not identified any significant accounting policies.

~~Ordinary Shares Subject To Possible Redemption~~

~~The Company accounts for its ordinary shares subject to possible redemption in accordance with the guidance in ASC Topic 480 “~~~~Distinguishing Liabilities from Equity~~.” Ordinary share subject to mandatory redemption (if any) is classified as a liability instrument and is measured at fair value. Conditionally redeemable ordinary shares (including ordinary shares that feature redemption rights that are either within the control of the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company’s control) are classified as temporary equity. At all other times, ordinary shares are classified as shareholders’ equity. The Company’s ordinary shares feature certain redemption rights that are considered to be outside of the Company’s control and subject to occurrence of uncertain future events.

~~Net Income (Loss) Per Share~~

~~The Company calculates net loss per share in accordance with ASC Topic 260,~~ ~~“Earnings per Share.”~~ Basic loss per share is computed by dividing the net loss by the weighted-average number of ordinary shares outstanding during the period, excluding ordinary shares subject to possible conversion. Diluted loss per share is computed by dividing net loss by the weighted average number of ordinary shares outstanding, plus to the extent dilutive, the incremental number of ordinary shares to settle rights and other ordinary share equivalents (currently none are outstanding), as calculated using the treasury stock method. Ordinary shares subject to possible conversion at September 30, 2022, which are not currently redeemable and are not redeemable at fair value, have been excluded from the calculation of basic and diluted loss per share since such shares, if redeemed, only participate in their pro rata share of the Trust Account earnings. The Company has not considered the effect of rights that convert into 276,000 ordinary shares in the unit purchase option sold to the underwriter, in the calculation of diluted loss per share, since the conversion of the rights into ordinary is contingent upon the occurrence of future events.

Sales and Marketing Expense

Sales and Marketing expense decreased by US$0.7 million for the three months ended September 30, 2023, as compared to the three months ended September 30, 2022. The decrease in sales and marketing expense is mainly attributed to lower spending associated with “AGBA” corporate branding and associated product campaigns for celebrating the successful listing in last year.

Technology Expense

Technology expense increased by US$0.4 million for the three months ended September 30, 2023, as compared to the three months ended September 30, 2022. The increase was primarily due to increased headcount to support the continuing growth in the business expansion.

Personnel and Benefit Expense

	Three months ended September 30,
	2023		2022		Variance
	(US$ in thousands)				$		%
Personnel and benefit	$	6,446	$	3,325		3,121		93.86
Share-based compensation to employees		1,318		—		1,318		N/A
TOTAL	$	7,764	$	3,325		4,439		133.50

Personnel and benefit cost increased by US$3.1 million for the three months ended September 30, 2023, as compared to the three months ended September 30, 2022. The increase was primarily due to the increased headcount to support the continuing growth of the Platform Business and Distribution Business.

Share-Based Compensation

Pursuant to the Share Award Scheme (the “Scheme”), the Company filed S-8 registration statement to register 11,675,397 ordinary shares on February 24, 2023.

During the three months ended September 30, 2023, the Company recorded US$1.3 million in share-based compensation expense on the restricted share units. There was no such expense during the three months ended September 30, 2022. The fair value of the restricted share units is recognized over the period based on the derived service period (usually the vesting period), on a straight-line basis.

Other General and Administrative Expenses

	Three months ended September 30,
	2023		2022		Variance
	(US$ in thousands)				$			%
Depreciation	$	23	$	96		(73	)		(76.04	)
Financial data subscription expense		154		132		22			16.67
Legal and professional fees		1,379		245		1,134			462.86
Office rental and operating fees		1,221		560		661			118.04
Share-based compensation (service related)		2,151		—		2,151			N/A
Other operating expenses		1,054		61		993			1,627.87
TOTAL	$	5,982	$	1,094		4,888			446.80

Total other general and administrative expenses increased by US$4.9 million, or 446.80%, for the three months ended September 30, 2023, as compared to the three months ended September 30, 2022. The net increase was mainly due to the increase in legal and professional fees of US$1.1 million, office rental and operating fees of US$0.7 million, and share-based compensation of $2.2 million. Upon the consummation of Business Combination, the post-combination entity has expensed more as a listed company, with a significant increase in the legal and professional fees and office rental and operating fees increased were primarily attributed to 1) the US legal counsel fee incurred and 2) the office and administrative expenses pay to the holding company for the use of office premises in Trust Tower and Hopewell Centre, including building management fees, government rates and rent, office rent, lease-related interest, and depreciation actually incurred by the holding company, with the increased occupancy from business expansion. Share-based compensation for the three months ended September 30, 2023 was mainly related to marketing consultancy service rendered by certain third party consultants.

Loss from Operations

Loss from operations increased by US$9.9 million, or 989.55%, for the three months ended September 30, 2023, as compared to the three months ended September 30, 2022. The increase was mainly attributable to the increase in operating expenses of US$9.9 million.

Other Income (Expense), Net

Interest Income

Interest income increased by US$0.01 million for the three months ended September 30, 2023, as compared to the three months ended September 30, 2022.

~~Warrant Liabilities~~Interest Expense

~~The Company accounts~~Interest expense increased by US$0.4 million for the three months ended September 30, 2023, as compared to the three months ended September 30, 2022. The increase was mainly attributed to the increase in short-term borrowings during the period.

Foreign Exchange Loss, Net

Foreign exchange loss mainly represented the unrealized net foreign exchange gain (loss) from the translation of long-term investments which are mostly denominated in Sterling. The net foreign exchange loss decreased by US$1.2 million or 58.52% for the three months ended September 30, 2023, as compared to the three months ended September 30, 2022, due to the stronger Sterling exchange rate.

Investment (Loss) Income, Net

	Three month ended September 30,
	2023			2022		Variance
	(US$ in thousands)					$			%
Unrealized gain in marketable equity securities	$	—		$	742		(742	)		(100.00	)
Unrealized loss in non-marketable equity securities		(1,030	)		—		1,030			N/A
Dividend income		237			—		237			N/A
TOTAL	$	(793	)	$	742		(1,535	)		(206.87	)

Investment loss decreased by US$1.5 million, or 206.87%, for the three months ended September 30, 2023, as compared to the three months ended September 30, 2022, mainly as a result of the unrealized loss in non-marketable equity securities of US$1.0 million, offset by dividend income of US$0.2 million for the three months ended September 30, 2023 as compared to $0.7 million unrealized gain in marketable equity securities for the same period ended in 2022.

Income Tax Expense

Income tax expense decreased by US$0.07 million, or 55.91% for the three months ended September 30, 2023, as compared to the three months ended September 30, 2022, primarily attributable to the over provision of income tax for prior years.

Net Loss

Net loss increased by US$10.5 million, or 439.95% for the three months ended September 30, 2023, as compared to September 30, 2022, primarily due to the increase in operating cost and expenses of US$9.9 million and increase in other expense, net of US$0.7 million.

Nine months ended September 30, 2023 vs Nine months ended September 30, 2022

	Nine months ended September 30,
	2023			2022			Variance
	(US$ in thousands)						$			%
Revenues:
Interest income:
Loans	$	118		$	137			(19	)		(13.87	)
Total interest income		118			137			(19	)		(13.87	)
Non-interest income:
Commissions		38,507			15,933			22,574			141.68
Recurring service fees		2,301			2,615			(314	)		(12.01	)
Total non-interest income		40,808			18,548			22,260			120.01
Total revenues from others		40,926			18,685			22,241			119.03
Non-interest income:
Recurring service fees		725			725			—			—
Total revenues from related parties		725			725			—			—
Total revenues		41,651			19,410			22,241			114.59
Operating cost and expenses:
Commission expense		(28,196	)		(11,219	)		16,977			151.32
Sales and marketing expense		(3,125	)		(2,088	)		1,037			49.66
Technology expense		(2,678	)		(619	)		2,059			332.63
Personnel and benefit expense		(22,672	)		(8,734	)		13,938			159.58
Other general and administrative expenses		(20,493	)		(3,176	)		17,317			545.25
Total operating cost and expenses		(77,164	)		(25,836	)		51,328			198.67
Loss from operations		(35,513	)		(6,426	)		29,087			452.65
Other income (expense):
Interest income		385			24			361			1,504.17
Interest expense		(806	)		(20	)		786			3,930.00
Foreign exchange gain (loss), net		41			(4,690	)		4,731			100.87
Investment income (loss), net		489			(2,793	)		3,282			117.51
Change in fair value of warrant liabilities		3			—			3			N/A
Change in fair value of forward share purchase liability		(82	)		—			(82	)		N/A
Loss on settlement of forward share purchase agreement		(379	)		—			(379	)		N/A
Rental income		217			236			(19	)		(8.05	)
Sundry income		122			169			(47	)		(27.81	)
Total other expense, net		(10	)		(7,074	)		(7,064	)		(99.86	)
Loss before income taxes		(35,523	)		(13,500	)		22,023			163.13
Income tax expense		(56	)		(232	)		(176	)		(75.86	)
NET LOSS	$	(35,579	)	$	(13,732	)		21,847			159.10

Revenue

The following table summarizes the major operating revenues for the nine months ended September 30, 2023 and 2022:

	Nine months ended September 30,
	2023		2022		Variance
	(US$ in thousands)				$			%
Business segment
Distribution Business	$	37,569	$	14,307		23,262			162.59
Platform Business		4,082		5,103		(1,021	)		(20.01	)
Fintech Business		—		—		—			—
Healthcare Business		—		—		—			—
TOTAL	$	41,651	$	19,410		22,241			114.59

Distribution Business

The Distribution Business contributed 90.20% and 73.71% of the total revenue for the nine months ended September 30, 2023 and 2022, respectively. Income from the Distribution Business mainly related to commissions earned, which significantly increased by US$23.3 million, or 162.59%, from US$14.3 million in 2022 to US$37.6 million in 2023. The largest segment of the Distribution Business is our FA Business, operated under the “Focus” brand name. Commissions generated by the financial advisors currently associated with Focus, along with associated potential platform commissions and fees, were attributable to the Legacy Group and as such not reflected in the results for the Distribution Business for 2022.

Summarized revenue breakdown by product and type of contracts:

	Nine months ended September 30,
	2023		2022		Variance
	(US$ in thousands)				$		%
By product:
Life insurance	$	35,286	$	14,014		21,272		151.79
Property-casualty insurance		1,523		136		1,387		1,019.85
Mandatory provident fund and related revenues		760		157		603		384.08
		37,569		14,307		23,262		162.59
By the type of contracts:
- New and or current year		36,944		13,718		23,226		169.31
- Recurring		625		589		36		6.11
TOTAL	$	37,569	$	14,307		23,262		162.59

Platform Business

The Platform Business contributed 9.80% and 26.29% of the total revenue for the nine months ended September 30, 2023 and 2022, respectively.

	Nine months ended September 30,
	2023		2022		Variance
	(US$ in thousands)				$			%
Commission	$	938	$	1,626		(688	)		(42.31	)
Recurring service fees		3,026		3,340		(314	)		(9.40	)
Loans		118		137		(19	)		(13.87	)
TOTAL	$	4,082	$	5,103		(1,021	)		(20.01	)

Operating Expenses

Commission Expense

	Nine months ended September 30,
	2023		2022		Variance
	(US$ in thousands)				$			%
Business segment
Distribution Business	$	27,133	$	9,630		17,503			181.75
Platform Business		1,063		1,589		(526	)		(33.10	)
Fintech Business		—		-—		—			—
Healthcare Business		—		—		—			—
TOTAL	$	28,196	$	11,219		16,977			151.32

The Distribution Business contributed 96.23% and 85.84% of the total commission expense for the nine months ended September 30, 2023 and 2022, respectively. Commission expense for the Distribution Business increased by US$17.5 million, or 181.75%, from US$9.6 million in 2022 to US$27.1 million in 2023. As a result of the increase in revenue associated with the Distribution Business, commission expense relatively increased.

Sales and Marketing Expense

Sales and Marketing expense increased by US$1.0 million for the nine months ended September 30, 2023, as compared to the nine months ended September 30, 2022. The increase in sales and marketing expense mainly reflects spending associated with “AGBA” corporate branding and associated product campaigns, celebrating it’s the successful listing, through public relations, corporate video and campaigns, digital marketing and public advertisements.

Technology Expense

Technology expense increased by US$2.1 million for the nine months ended September 30, 2023, as compared to the nine months ended September 30, 2022. The increase was primarily due to increased headcount to support the continuing growth in the business expansion.

Personnel and Benefit Expense

	Nine months ended September 30,
	2023		2022		Variance
	(US$ in thousands)				$		%
Personnel and benefit	$	18,719	$	8,734		9,985		114.32
Share-based compensation to employees		3,953		—		3,953		N/A
TOTAL	$	22,672	$	8,734		13,938		159.58

Personnel and benefit cost increased by US$10.0 million for the nine months ended September 30, 2023, as compared to the nine months ended September 30, 2022. The increase was primarily due to the increased headcount to support the continuing growth of the Platform Business and Distribution Business.

Share-Based Compensation

Pursuant to the Share Award Scheme (the “Scheme”), the Company filed S-8 registration statement to register 11,675,397 ordinary shares on February 24, 2023.

During the nine months ended September 30, 2023, the Company recorded US$4.0 million in share-based compensation expense on the restricted share units. There was no such expense during the nine months ended September 30, 2022. The fair value of the restricted share units is recognized over the period based on the derived service period (usually the vesting period), on a straight-line basis.

Other General and Administrative Expenses

	Nine months ended September 30,
	2023		2022		Variance
	(US$ in thousands)				$			%
Depreciation on property and equipment	$	238	$	288		(50	)		(17.36	)
Financial data subscription expense		293		401		(108	)		(26.93	)
Legal and professional fees		4,474		711		3,763			529.25
Office rental and operating fees		5,089		1,564		3,525			225.38
Share-based compensation (service related)		8,026		—		8,026			N/A
Other operating expenses		2,373		212		2,161			1,019.34
TOTAL	$	20,493	$	3,176		17,317			545.25

Total other general and administrative expenses increased by US$17.3 million, or 545.25%, for the nine months ended September 30, 2023, as compared to the nine months ended September 30, 2022. The net increase was mainly due to the increase in legal and professional fees of US$3.8 million, office rental and operating fees of US$3.5 million, share-based compensation of US$8.0 million, other operating expenses of US$2.2 million, offset by a decrease in financial data subscription expense of US$0.1 million. Upon the consummation of Business Combination, the post-combination entity has expensed more as a listed company, with a significant increase in the legal and professional fees and office rental and operating fees increased were primarily attributed to 1) the US legal counsel fee incurred and 2) the office and administrative expenses pay to the holding company for the use of office premises in Trust Tower and Hopewell Centre, including building management fees, government rates and rent, office rent, lease-related interest, and depreciation actually incurred by the holding company, with the increased occupancy from business expansion. Share-based compensation for the nine months ended September 30, 2023 was mainly related to marketing consultancy services rendered by certain third party consultants, payable by aggregated 4,400,000 ordinary shares at the market price ranging from $0.860 to $2.124 per share.

Loss from Operations

Loss from operations increased by US$29.1 million, or 452.65%, for the nine months ended September 30, 2023, as compared to the nine months ended September 30, 2022. The increase was mainly attributable to the increase in operating expenses of US$51.3 million and offset by the increase in revenues of US$22.2 million.

Other Income (Expense), Net

Interest Income

Interest income increased by US$0.4 million for the nine months ended September 30, 2023, as compared to the nine months ended September 30, 2022.

Interest Expense

Interest expense increased by US$0.8 million for the nine months ended September 30, 2023, as compared to the nine months ended September 30, 2022. The increase was mainly attributed to the increase in borrowings during the period.

Foreign Exchange Gain (Loss), Net

Foreign exchange gain (loss) mainly represented the unrealized net foreign exchange gain (loss) from the translation of long-term investments which are mostly denominated in Sterling. The net foreign exchange gain increased by US$4.7 million or 100.87% for the nine months ended September 30, 2023, as compared to the nine months ended September 30, 2022, due to the stronger Sterling exchange rate.

Investment Income (Loss), Net

	Nine month ended September 30,
	2023			2022			Variance
	(US$ in thousands)						$			%
Unrealized loss in marketable equity securities	$	—		$	(2,793	)		(2,793	)		(100.00	)
Realized gain in marketable equity securities		1,543			—			1,543			N/A
Unrealized loss in non-marketable equity securities		(2,458	)		—			2,458			N/A
Dividend income		1,404			—			1,404			N/A
TOTAL	$	489		$	(2,793	)		3,282			117.51

Investment income increased by US$3.3 million, or 117.51%, for the nine months ended September 30, 2023, as compared to the nine months ended September 30, 2022, mainly as a result of the realized gain of US$1.5 million on the sale of the shares of Oscar Health Inc. in the open market at the average market price of $4.01 per shares and dividend income of US$1.4 million, offset by unrealized loss in non-marketable equity securities of US$2.5 million, which was fewer than the unrealized loss in marketable securities of US$2.8 million.

Loss on settlement of forward share purchase agreement

Loss on settlement of forward share purchase agreement was resulted from the early termination of the Meteora Backstop Agreement on June 29, 2023. For the nine months ended September 30, 2023, the loss on settlement of forward share purchase agreement was $0.4 million recognized in the unaudited condensed consolidated statements of operations and comprehensive loss.

Income Tax Expense

Income tax expense decreased by US$0.2 million, or 75.86% for the nine months ended September 30, 2023, as compared to the nine months ended September 30, 2022, primarily attributable to the over provision of income tax for prior years.

Net Loss

Net loss increased by US$21.8 million, or 159.10% for the nine months ended September 30, 2023, as compared to nine months ended September 30, 2022, primarily due to the increase in operating cost and expenses of US$51.3 million, offset by the increase in revenues of US$22.2 million and increase in other expense, net of US$7.1 million.

Liquidity and Capital Resources

Sources of Liquidity

We have a history of operating losses and negative cash flow. During the nine months ended September 30, 2023, we reported a net loss of US$35.6 million and reported a negative operating cash flow of US$33.4 million. As of September 30, 2023, our cash balance was US$1.6 million for working capital use. Our management estimates that currently available cash will not be able to provide sufficient funds to meet the planned obligations for the next 12 months starting September 30, 2023.

Our ability to continue as a going concern is dependent on our ability to successfully implement our plans. Our management believes that it will be able to continue to grow our revenue base and control expenditures. In parallel, AGBA continually monitors its capital structure and operating plans and evaluates various potential funding alternatives that may be needed in order to finance our business development activities, general and administrative expenses, and growth strategy. These alternatives include external borrowings, raising funds through public equity, or tapping debt markets. Although there is no assurance that, if needed, we will be able to pursue these fundraising initiatives and have access to the capital markets going forward. The unaudited condensed consolidated financial statements attached to this Form 10-Q do not include any adjustments that might result from the outcome of these uncertainties.

Future Liquidity

On a recurring basis, the primary future cash needs of the Company will be focused on operating activities, working capital, capital expenditures, investment, regulatory and compliance costs. The ability of the Company to fund these needs will depend, in part, on its ability to generate or raise cash in the future, which is subject to general economic, financial, competitive, regulatory, and other factors that are beyond its control.

The ability to fund our operating needs will depend on its future ability to continue to generate positive cash flow from operations and raise capital in the capital markets. Our management believe that we will meet known or reasonably likely future cash requirements through the combination of cash flows from operating activities, available cash balances, and external borrowings and fund raising. Our management expects that the primary cash requirements in 2023 will be to fund capital expenditures for (i) expansion of the Distribution Business and (ii) Platform Business.

If our sources of liquidity need to be augmented, additional cash requirements would likely need to be financed through the issuance of debt or equity securities; however, there can be no assurances that we will be able to obtain additional debt or equity financing on acceptable terms, or at all, in the future.

We expect that operating losses could continue into the foreseeable future as we continue to invest in growing our businesses. Based upon our current operating plans, our management believes that cash and cash equivalents will not be able to provide sufficient funds to its operations for at least the next 12 months from the date of its unaudited condensed consolidated financial statements provided with this Form 10-Q. However, these forecasts involve risks and uncertainties, and actual results could vary materially.

Our future capital requirements may vary materially from those currently planned and will depend on many factors, including our rate of revenues growth, the timing and extent of spending on sales and marketing, the expansion of sales and marketing activities, the timing of new product introductions, market acceptance of our brand, and overall economic conditions. We may also seek additional capital to fund our operations, including through the sale of equity or debt financings. To the extent that we raise additional capital through the future sale of equity, the ownership interest of our stockholders will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of our existing shareholders. The incurrence of debt financing would result in debt service obligations and the instruments governing such debt could provide for operating and financing covenants that would restrict our operations.

Cash Flows

As of September 30, 2023, we had cash and cash equivalents totalling US$1.6 million, and US$20.6 million in restricted cash.

As of December 31, 2022, we had cash and cash equivalents totalling US$6.4 million, and US$44.8 million in restricted cash.

The following table summarizes our cash flows for the periods presented:

	Nine months ended September 31,
	2023			2022
	(US$ in thousands)
Net cash used in operating activities	$	(33,365	)	$	(2,132	)
Net cash provided by (used in) investing activities		4,687			(6,870	)
Net cash used in financing activities		(415	)		(12,776	)
Effect on exchange rate change on cash and cash equivalents		(26	)		(364	)
Net change in cash, cash equivalents and restricted cash		(29,119	)		(22,142	)
Cash, cash equivalents and restricted cash, at the beginning		51,294			73,081
Cash, cash equivalents and restricted cash, at the end		22,175			50,939
Representing as:
Cash and cash equivalents		1,622			16,261
Restricted cash – fund held in escrow		20,553			34,678
	$	22,175		$	50,939

The following table sets forth a summary of our working capital:

	September 30, 2023			December 31, 2022			Variance
	(US$ in thousands)						$			%
Total Current Assets	$	34,734		$	55,756			(21,022	)		(37.70	)
Total Current Liabilities		74,545			97,021			(22,476	)		(23.17	)
Working Deficit		(39,811	)		(41,265	)		(1,454	)		(3.52	)

Working Deficit

The working deficit as of September 30, 2023 and December 31, 2022 was amounted to approximately US$39.8 million and US$41.3 million, respectively, a decrease of US$1.5 million or 3.52%.

Cash Flows from Operating Activities

Net cash used in operating activities was US$33.4 million and US$2.1 million for the nine months ended September 30, 2023 and 2022, respectively.

Net cash used in operating activities for the nine months ended September 30, 2023 was primarily the result of the net loss of US$35.6 million, an increase in accounts receivable of US$0.6 million, increase in deposits, prepayments, and others receivable of US$2.9 million, decrease in escrow liabilities of US$8.9 million, decrease in lease liabilities of US$0.6 million and decrease in income tax payable of US$0.1 million. These amounts were partially offset by the increase in accounts payable and accrued liabilities of US$5.5 million, and non-cash adjustments consisting of share-based compensation expense of US$12.0 million, non-cash lease expense of US$0.9 million, depreciation of property and equipment of US$0.2 million, interest income on notes receivable of US$0.02 million, net foreign exchange gain of US$0.04 million, net investment income of US$0.5 million, allowance for credit losses on financial instruments of US$0.7 million, loss on settlement of forward share purchase agreement of US$0.4 million and reversal of annual bonus accrued in prior year of US$3.8 million.

Net cash used in operating activities for the nine months ended September 30, 2022 was primarily the result of the net loss of US$13.7 million, decrease in loans receivable of US$2.3 million, an increase in accounts payable and accrued liabilities of US$2.8 million, an increase in escrow liabilities of US$0.2 million, an increase in income tax payable of US$0.3 million, and non-cash adjustments consisting of unrealized investment loss of US$2.8 million, net foreign exchange loss of US$4.7 million, and depreciation on property and equipment of US$0.3 million. These amounts were partially offset by the increase in accounts receivable of US$1.5 million, increase in deposits, prepayments, and others receivable of US$0.3 million.

Cash Flows from Investing Activities

Net cash provided by investing activities for the nine months ended September 30, 2023 of US$4.7 million was primarily due to proceeds from sale of investments of US$4.0 million, dividend received from long-term investments of US$1.4 million, offset by the purchase of notes receivable of US$0.6 million and purchase of property and equipment of US$0.1 million.

Net cash used in investing activities for the nine months ended September 30, 2022 of US$6.9 million was primarily due to the proceeds from sale of investments of US$1.8 million, offset by the purchase of property and equipment of US$0.9 million, and payment of earnest deposit of US$7.8 million for the purchase of long-term investments.

Cash Flows from Financing Activities

Net cash used in financing activities for the nine months ended September 30, 2023 of US$0.4 million was primarily due to advances from holding company of US$6.3 million, proceeds from borrowings of US$7.2 million, offset by the settlement of forward share purchase agreement of US$14.0 million.

Net cash used in financing activities for the nine months ended September 30, 2022 of US$12.8 million was primarily due to advances from the holding company of US$0.2 million, proceeds from borrowings of US$4.5 million, offset by the dividend distribution of US$17.4 million to the holding company.

Liquidity and Going Concern

Our unaudited condensed consolidated financial statements have been prepared on a going concern basis, which contemplates continuity of operations, realization of assets, and liquidation of liabilities in the normal course of business. The management of the Company estimates that currently available cash will not be able to provide sufficient funds to meet the Company’s planned obligations for the next 12 months from the date that these unaudited condensed consolidated financial statements were made available to be issued.

For the nine months ended September 30, 2023, we reported a net loss of approximately US$35.6 million. With a significant increase in our operating costs, described in the paragraph below, we had an accumulated deficit of approximately US$75.0 million as of September 30, 2023.

However, coupled with its business expansion, we reported significant sales growth with total revenue of approximately US$41.7 million for the nine months ended September 30, 2023 (2022: US$19.4 million), and resulted with an operating loss of approximately US$35.5 million (2022: US$6.4 million). We expect to continue our business growth, while closely monitoring our future spending.

Our ability to continue as a going concern is dependent on the management’s ability to successfully implement its plans and fund-raising exercises. Our management team believes that we will be able to continue to grow our revenue base and control our expenditures. In parallel, our management team will continually monitor our capital structure and operating plans and search for potential funding alternatives in order to finance our business development activities and operating expenses. These alternatives may include borrowings, raising funds through public equity or debt markets. However, we cannot predict the exact amount or timing of the alternatives, or guarantee those alternatives will be favorable to our shareholders. Any failure to obtain financing when required will have a material adverse impact on our business, operation and financial result.

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

1.	On September 7, 2023, we entered into an equity purchase agreement with an independent third party to agree to invest up to $50 million over a 36-month period.

On November 7, 2023, we signed private placement binding term sheets with an institutional investor, our Chief Executive Officer, Mr. Ng Wing Fai, and our management team pursuant to which we will receive gross proceeds of approximately $6,242,850, in consideration of (i) 8,918,357 ordinary shares of our ordinary shares, and (ii) warrants to purchase up to 1,783,671 ordinary shares at a purchase price of $0.70 per ordinary share and associated warrants. The warrants have an exercise price of $1.00 per our ordinary share and shall be exercised with more than $500,000 for each exercise.

With these funding initiatives, our management believes that we would be able to strengthen our financial position, improve our liquidity, and enhance our ability to navigate the challenging market conditions.

Capital Commitments

Notes Receivable Agreement — Pursuant to the Agreements, subject to demand, the Company is committed to subscribe the notes of Investment A with an aggregate amount of $1,673,525, in batches, which are payable on or before January 31, 2024. As of September 30, 2023, the remaining committed subscription amount was $1,084,439.

Capital Contribution in L.C. Healthcare Fund I, L.P. — As of September 30, 2023, the remaining committed capital amount in Investment F was $304,489.

Sale and Purchase Agreement — Pursuant to the Agreement entered with Sony Life Singapore Pte. Ltd. (“SLS”), the Company is committed to purchase 100% equity interest in Sony Life Financial Advisers Pte. Ltd. for a cash consideration of SGD2,500,000 (equivalent to $1,882,000). On September 26, 2023, the Company and SLS entered a supplementary agreement to extend the closing date of the transaction from September 30, 2023 to December 31, 2023.

Equity Purchase Agreement — Pursuant to the Agreement entered with Williamsburg Venture Holdings, LLC (the “Investor”), pursuant to which the Investor agreed to invest up to Fifty Million Dollars ($50,000,000) over a 36-month period (unless otherwise determined therein) in accordance with the ~~guidance contained~~terms and conditions of an Equity Purchase Agreement, dated as of September 7, 2023, by and between the Company and the Investor (the “Equity Purchase Agreement”). During the term, the Company shall be entitled to put to the Investor, and the Investor shall be obligated to purchase, such number of ordinary shares of the Company (such shares, the “Put Shares”) and at such price as are determined in ~~ASC 815-40-15-7D~~accordance with the Equity Purchase Agreement. The per share purchase price for the Put Shares shall be the average of the highest and ~~7F under~~lowest traded price of the ordinary shares on the principal market for five (5) consecutive trading days immediately preceding the relevant Closing Date (defined therein), as reported by Bloomberg Finance L.P. or other reputable source. Further, in consideration of the Company’s Put rights, the Investor shall be entitled to 600,000 ordinary shares of the Company within no later than 5 trading days from the date of the Equity Purchase Agreement and pursuant to the Equity Purchase Agreement, the Investor may not acquire at any point, more than 5% of the outstanding ordinary shares of the Company. In connection with the Equity Purchase Agreement, the parties also entered into a Registration Rights Agreement (the “Registration Rights Agreement”) pursuant to which the ~~private warrants do not~~Company agreed to register with the SEC the ordinary shares issuable under the Equity Purchase Agreement, among other securities.

Nasdaq Compliance— On September 20, 2023, the Company received written notice (the “Notice”) from the Listing Qualifications Department of The Nasdaq Stock Market (“Nasdaq”) notifying the Company that, based on the closing bid price of the Company’s ordinary shares, par value $0.001 per share (the “Ordinary Shares”), for the last 30 consecutive trading days, the Company no longer complies with the minimum bid price requirement for continued listing on The Nasdaq Capital Market. Nasdaq Listing Rule 5550(a)(2) requires listed securities to maintain a minimum bid price of $1.00 per share (the “Minimum Bid Price Requirement”), and Nasdaq Listing Rule 5810(c)(3)(A) provides that a failure to meet the ~~criteria~~Minimum Bid Price Requirement exists if the deficiency continues for ~~equity treatment~~a period of 30 consecutive trading days.

Off-Balance Sheet Arrangements

We are not party to any off-balance sheet transactions. We have no guarantees or obligations other than those which arise out of normal business operations.

We have not engaged in any off-balance sheet financial arrangements that have or are reasonably likely to have a material current or future effect on our financial condition, changes in financial condition, net revenue or expenses, results of operations, liquidity, capital expenditures, or capital resources.

Stock Repurchase Program

On April 18, 2023, our Board of Directors approved the repurchase of 1,000,000 ordinary shares (the “2023 Share Repurchase Program”). Under the 2023 Share Repurchase Program, we are authorized to re-purchase up to 1,000,000 ordinary shares at a maximum price of $10 per share from the open market, for a term of one year, no later than April 18, 2024.

Critical Accounting Policies, Judgements and ~~must be recorded~~Estimates

The preparation of financial statements in conformity with GAAP requires us to make judgments, estimates, and assumptions in the preparation of our unaudited condensed consolidated financial statements. Actual results could differ from those estimates. There have been no material changes to our critical accounting policies and estimates as liabilities. Accordingly, the Company classifies the private warrants as liabilities at their fair value and adjusts the private warrants to fair value at each reporting period. This liability is subject to re-measurement at each balance sheet date until exercised, and any change in fair value is recognizedreported in our ~~statement of operations. The private warrants are valued using a Black Scholes model.~~2022 Annual Report on Form 10-K.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

~~The net proceeds~~As a “smaller reporting company” as defined by Item 10 of the IPO held in the Trust Account may be invested in U.S. government treasury bills, notes, or bonds with a maturity of 180 days or less or in certain money market funds that invest solely in US treasuries. DueRegulation S-K, we are not required to ~~the short-term nature of these investments, we believe there will be no associated material exposure to interest rate risk.~~provide information required by this Item.

ITEM 4. CONTROLS AND PROCEDURES

Disclosure controls and procedures are controls and other procedures that are designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, to allow timely decisions regarding required disclosure.

Evaluation of Disclosure Controls and Procedures

~~Disclosure controls are procedures that are designed~~Our management, with the ~~objective~~participation and supervision of ~~ensuring~~our Chief Executive Officer and our Chief Financial Officer, have evaluated our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) as of the end of the period covered by this Quarterly Report on Form 10-Q. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that, as of the end of the period covered by this Quarterly Report on Form 10-Q, our disclosure controls and procedures are effective to provide reasonable assurance that information we are required to ~~be disclosed~~disclose in ~~our~~ reports ~~filed~~that we file or submit under the Exchange Act ~~such as this Report,~~ is recorded, processed, summarized, and reported within the time ~~period~~periods specified in ~~the SEC’s~~SEC rules and ~~forms. Disclosure controls are also designed with the objective of ensuring~~forms, and that such information is accumulated and communicated to our management, including ~~the chief executive officer~~our Chief Executive Officer and ~~chief financial officer,~~Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. Our management evaluated, with the participation of our current chief executive officer and chief financial officer (our “Certifying Officers”), the effectiveness of our disclosure controls and procedures as of March 22, 2022, pursuant to Rule 13a-15(b) under the Exchange Act. Based upon that evaluation, our Certifying Officers concluded that, our disclosure controls and procedures were not effective.

We do not expect that our disclosure controls and procedures will prevent all errors and all instances of fraud. Disclosure controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the disclosure controls and procedures are met. Further, the design of disclosure controls and procedures must reflect the fact that there are resource constraints, and the benefits must be considered relative to their costs. Because of the inherent limitations in all disclosure controls and procedures, no evaluation of disclosure controls and procedures can provide absolute assurance that we have detected all our control deficiencies and instances of fraud, if any. The design of disclosure controls and procedures also is based partly on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.

Our internal control over financial reporting did not result in the proper classification of our warrants. Since their issuance on May 16, 2019, our warrants have been accounted for as derivative liabilities within our consolidated balance sheet. We evaluated the warrants under Accounting Standards Codification (“ASC”) Subtopic 815-40, Contracts in Entity’s Own Equity. ASC Section 815-40-15 addresses equity versus liability treatment and classification of equity-linked financial instruments, including warrants, and states that a warrant may be classified as a component of equity only if, among other things, the warrant is indexed to the issuer’s ordinary shares. Under ASC Section 815-40-15, a warrant is not indexed to the issuer’s ordinary shares if the terms of the warrant require an adjustment to the exercise price upon a specified event and that event is not an input to the fair value of the warrant. As a result, the Public Warrants shall be classified as equity. After discussion and evaluation with our independent auditors, we have concluded that our Public Warrants should be presented as component of equity.

In addition, the Company concluded it should restate its financial statements to classify all ordinary shares subject to possible redemption in temporary equity. In accordance with the SEC and its staff’s guidance on redeemable equity instruments, ASC Topic 480, ~~Distinguishing Liabilities from Equity~~ (ASC 480), paragraph 10-S99, redemption provisions not solely within the control of the Company require ordinary shares subject to redemption to be classified outside of permanent equity. The Company had previously classified a portion of its ordinary shares in permanent equity. Although the Company did not specify a maximum redemption threshold, its charter provides that currently, the Company will not redeem its public shares in an amount that would cause its net tangible assets to be less than $5,000,001. The Company considered that the threshold would not change the nature of the underlying shares as redeemable and thus would be required to be disclosed outside equity. As a result, the Company restated its previously filed financial statements to classify all ordinary shares as temporary equity and to recognize accretion from the initial book value to redemption value at the time of its IPO and in accordance with ASC 480. The change in the carrying value of redeemable shares of ordinary shares resulted in charges against additional paid-in capital and accumulated deficit.

~~As a result, management identified these material weaknesses in our internal control over financial reporting related to the accounting for warrants and ordinary shares subject to possible redemption.~~

To remediate these material weaknesses, we developed a remediation plan with assistance from our accounting advisors and have dedicated significant resources and efforts to the remediation and improvement of our internal control over financial reporting. While we have processes to identify and appropriately apply applicable accounting requirements, we plan to enhance our system of evaluating and implementing the complex accounting standards that apply to our financial statements. Our plans at this time include providing enhanced access to accounting literature, research materials and documents and increased communication among our personnel and third-party professionals with whom we consult regarding complex accounting applications. The elements of our remediation plan can only be accomplished over time, and we can offer no assurance that these initiatives will ultimately have the intended effects. For a discussion of management’s consideration of the material weakness identified related to our accounting for a significant and unusual transaction related to the warrants we issued in connection with our initial public offering.

Changes in Internal Control Over Financial Reporting

During the most recently completed fiscal quarter, there has been no change in our internal control over financial reporting that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. ~~In light~~

Limitations on Effectiveness of Controls and Procedures

The effectiveness of any system of internal control over financial reporting, including ours, is subject to inherent limitations, including the ~~revision~~exercise of ~~our~~judgment in designing, implementing, operating, and evaluating the controls and procedures, and the inability to eliminate misconduct completely. Accordingly, any system of internal control over financial ~~statements, we plan to enhance our processes to identify~~reporting, including ours, no matter how well designed and appropriately apply applicable accounting requirements to better evaluate and understand the nuances of the complex accounting standards that apply to our financial statements. Our plans at this time include providing enhanced access to accounting literature, research materials and documents and increased communication among our personnel and third-party professionals with whom we consult regarding complex accounting applications. The elements of our remediation planoperated, can only ~~be accomplished over time,~~provide reasonable, not absolute assurances. In addition, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. We intend to continue to monitor and weupgrade our internal controls as necessary or appropriate for our business, but there can ~~offer~~be no assurance that ~~these initiatives~~such improvements will ~~ultimately have the intended effects.~~be sufficient to provide us with effective internal control over financial reporting.

The Company performed additional analysis and procedures with respect to accounts impacted by the material weakness in order to conclude that its unaudited condensed consolidated financial statements in this Form 10-Q as of and for the fiscal quarter ended September 30, 2022, are fairly presented, in all material respects, in accordance with GAAP.

PART II - OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS.

~~None.~~As at September 30, 2023, the Company involved with various legal proceedings:-

Action Case: HCA702/2018 On March 27, 2018, the writ of summons was issued against the Company and seven related companies of the former shareholder by the Plaintiff. This action alleged the infringement of certain registered trademarks currently registered under the Plaintiff. On February 23, 2023, the Court granted leave for this action be set down for trial of 13 days, and the trial will commence on November 25, 2024. Legal counsel of the Company will continue to handle in this matter. At this stage in the proceedings, it is unable to determine the probability of the outcome of the matter or the range of reasonably possible loss, if any.

Action Case: HCA765/2019 On April 30, 2019, the writ of summons was issued against the Company’s subsidiary, three related companies and the former directors, shareholders and financial consultant by the Plaintiff. This action alleged the deceit and misrepresentation from an inducement of the fund subscription and claimed for compensatory damage of approximately $2 million (equal to HK$17.1million). The case is on-going and parties have yet to attempt mediation. Legal counsel of the Company will continue to handle in this matter. At this stage in the proceedings, it is unable to determine the probability of the outcome of the matter or the range of reasonably possible loss, if any.

Action Case: HCA2097 and 2098/2020 On December 15, 2020, the writs of summons were issued against the Company and the former consultant by the Plaintiff. This action alleged the misrepresentation and conspiracy causing the loss from the investment in corporate bond and claimed for compensatory damage of approximately $1.67 million (equal to HK$13 million). The Company previously made $0.84 million as contingency loss for the year ended December 31, 2021. Parties participated in a mediation held on March 25, 2022 and negotiated for settlement through without prejudice correspondence, no settlement was reached. The case is on-going and legal counsel of the Company will continue to handle this matter. At this stage in the proceedings, it is unable to determine the probability of the outcome of the matter or any further potential loss, if any.

ITEM 1A. RISK FACTORS.

As smaller reporting company we are not required to make disclosures under this Item.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES, ~~AND~~ USE OF ~~PROCEEDS.~~PROCEEDS, AND ISSUER PURCHASES OF EQUITY SECURITIES.

~~On May 16, 2019,~~Purchases of Equity Securities by the Issuer and Affiliated Purchasers

The Company ~~consummated~~approved a share repurchase program on April 18, 2023 authorizing to purchase up to 1,000,000 ordinary shares at a maximum price of $10 per share from the open market, for a term of one year, expiry in April 2024. The Company did not repurchase ordinary shares or entered into 10b5-1 plan during the three months period ended September 30, 2023. The Company adopted its ~~initial public offering~~share repurchase plan with the goal of ~~4,600,000 Units, which includes~~returning excess capital to shareholders in accordance with our capital allocation policy. The share repurchase plan permits the ~~full~~ exercise of the ~~underwriter’s over-allotment option of 600,000 Units. Each Unit consists of one~~plan through open-market repurchases, private transactions and other similar transactions.

Company Rule 10b5-1 Trading Arrangements

The Company did not repurchase ordinary share (“Ordinary Share”), one warrant (“Warrant”) entitling its holder to purchase one-half of one Ordinary Share at a price of $11.50 per whole share, and one right to receive 1/10 of an Ordinary Share atshares or entered into 10b5-1 plan during the ~~closing~~three months period ended September 30, 2023.

Other Information

During the quarter ended September 30, 2023, none of the Company’s ~~initial business combination. The Units were sold at an offering price~~directors or officers who are subject to the filing requirements of ~~$10.00 per Unit, generating gross proceeds of $46,000,000. Simultaneously with the closing~~Section 16 of the ~~initial public offering, the Company consummated the private placement (“Private Placement”) of 225,000 units (the “Private Units”) at~~Securities Exchange Act adopted or terminated a ~~price of $10.00 per Private Unit, generating total proceeds of $2,250,000. The net proceeds from the sale of Units~~“Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as those terms are defined in ~~the initial public offering (including the over-allotment option units) and the Private Placement were placed in a Trust Account established for the benefit of the Company’s public shareholders.~~Regulation S-K, Item 408.

The Private Units are identical to the units sold in the initial public offering. Our Sponsor, which purchased all of the Private Units, agreed (A) to vote the private shares underlying the Private Units (the “Private Shares”) and any public shares acquired by it in favor of any proposed business combination, (B) not to propose, or vote in favor of, an amendment to our memorandum and articles of association that would affect the substance or timing of our obligation to redeem 100% of our public shares if we do not complete our initial business combination within the time specified in our amended and restated memorandum and articles of association, unless we provide our public shareholders with the opportunity to redeem their ordinary shares upon approval of any such amendment at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned on the funds held in the Trust Account and not previously released to us to pay our franchise and income taxes, divided by the number of then outstanding public shares, (C) not to convert any shares (including the Private Shares) into the right to receive cash from the Trust Account in connection with a shareholder vote to approve our proposed initial business combination (or sell any shares they hold to us in a tender offer in connection with a proposed initial business combination) or a vote to amend the provisions of our memorandum and articles of association relating to the substance or timing of our obligation to redeem 100% of our public shares if we do not complete our initial business combination within the time specified in our amended and restated memorandum and articles of association and (D) that the Private Shares shall not be entitled to be redeemed for a pro rata portion of the funds held in the Trust Account if a business combination is not consummated. Additionally, our Sponsor agreed not to transfer, assign or sell any of the Private Units or underlying securities (except to the same permitted transferees as the insider shares and provided the transferees agree to the same terms and restrictions as the permitted transferees of the insider shares must agree to, each as described above) until the completion of our initial business combination.

As of May 16, 2019, a total of $46,000,000 of the net proceeds from the initial public offering (including the over-allotment) and the Private Placement were in a Trust Account established for the benefit of the Company’s public shareholders.

We paid a total of $1,150,000 in underwriting discounts and commissions (not including the 4.0% deferred underwriting commission payable at the consummation of initial business combination) and approximately $383,781 for other costs and expenses related to our formation and the initial public offering.

~~For a description of the use of the proceeds generated in our IPO, see Part I, Item 2 of this Form 10-Q.~~

On each of May 11, 2020, August 12, 2020, and November 10, 2020, we issued an unsecured promissory note in an amount of $460,000 to the sponsor, pursuant to which such amount had been deposited into the Trust Account in order to extend the amount of available time to complete a business combination until February 16, 2021. On each of February 5, May 11, August 11, 2021, we issued an unsecured promissory note, in an amount of $594,467, to the sponsor, pursuant to which such amount had been deposited into the Trust Account in order to extend the amount of available time to complete a business combination until November 16, 2021. On each of November 10, 2021 and February 7, 2022, we issued an unsecured promissory note in an amount of $546,991, to the sponsor, pursuant to which such amount had been deposited into the Trust Account in order to extend the amount of available time to complete a business combination until May 16, 2022. On each of May 9, 2022, and August 9, 2022, we issued an unsecured promissory note in an amount of $504,431 to the sponsor, pursuant to which such amount had been deposited into the Trust Account in order to extend the amount of available time to complete a business combination until November 16, 2022. All these notes (the “Notes”) are non-interest bearing and are payable upon the closing of a business combination. In addition, the Notes may be converted, at the lender’s discretion, into additional Private Units at a price of $10.00 per unit.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES.

None.

ITEM 4. MINE SAFETY DISCLOSURES.

Not applicable.

ITEM 5. OTHER INFORMATION.

~~None.~~Not applicable.

ITEM 6. EXHIBITS.

The following exhibits are filed as part of, or incorporated by reference into, this Quarterly Report on Form 10-Q.

No.		Description of Exhibit
26*		Purchases of Equity Securities by the Issuer and Affiliated Purchasers
31.1*		Certification of Principal Executive Officer Pursuant to Securities Exchange Act Rules 13a-14(a) and 15(d)-14(a), as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2*		Certification of Principal Financial Officer Pursuant to Securities Exchange Act Rules 13a-14(a) and 15(d)-14(a), as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32**		Certification of Principal Executive Officer and Principal Financial and Accounting Officer Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS*		Inline XBRL Instance Document
101.CAL*		Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.SCH*		Inline XBRL Taxonomy Extension Schema Document
101.DEF*		Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB*		Inline XBRL Taxonomy Extension Labels Linkbase Document
101.PRE*		Inline XBRL Taxonomy Extension Presentation Linkbase Document
104		Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

*	Filed herewith.
**	Furnished.

SIGNATURES

Pursuant to the requirements of Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	AGBA GROUP HOLDING LIMITED

Date: November ~~16, 2022~~14, 2023	By:	/s/ Ng Wing Fai
	Name:	Ng Wing Fai
	Title:	Chief Executive Officer
		(Principal Executive Officer)

Date: November ~~16, 2022~~14, 2023	By:	/s/ Shu Pei Huang, Desmond
	Name:	Shu Pei Huang, Desmond
	Title:	Chief Financial Officer
		(Principal Financial and Accounting Officer)

~~iso4217:USD xbrli:shares~~

	September 30, 2022			December 31, 2021
				(Audited)
ASSETS
Current assets:
Cash	$	96,914		$	164,863
Prepayment		1,866			-
Total current assets		98,780			164,863
Cash and investments held in trust account		38,928,442			40,441,469

TOTAL ASSETS	$	39,027,222		$	40,606,332

LIABILITIES, TEMPORARY EQUITY AND SHAREHOLDERS’ DEFICIT
Current liabilities:
Accrued liabilities	$	8,798		$	16,733
Note payable		5,266,243			3,710,390
Amount due to related party		1,645,353			952,761
Total current liabilities		6,920,394			4,679,884

Warrant liabilities		13,500			490,000
Deferred underwriting compensation		1,840,000			1,840,000
Total non-current liabilities		1,853,500			2,330,000

TOTAL LIABILITIES		8,773,894			7,009,884

Commitments and contingencies
Ordinary shares, subject to possible redemption: 3,362,871 and 3,646,607 shares (at redemption value)		38,928,442			40,441,469

Shareholders’ deficit:
Ordinary shares, $0.001 par value; 100,000,000 shares authorized; 1,375,000 shares issued and outstanding (excluding 3,362,871 and 3,646,607 shares subject to possible redemption)		1,375			1,375
Accumulated deficit		(8,676,489	)		(6,846,396	)

Total shareholders’ deficit		(8,675,114	)		(6,845,021	)

TOTAL LIABILITIES, TEMPORARY EQUITY AND SHAREHOLDERS’ DEFICIT	$	39,027,222		$	40,606,332

	Nine months ended September 30,
	2022			2021
Cash flows from operating activities
Net loss	$	(153,751	)	$	(515,988	)
Adjustments to reconcile net loss to net cash used in operating activities
Change in fair value of warrant liabilities		(476,500	)		90,000
Interest income dividend income earned in cash and investments held in trust account		(120,495	)		(13,407	)

Change in operating assets and liabilities:
(Increase) decrease in prepayments		(1,866	)		31,695
Decrease in accrued liabilities		(7,935	)		(21,119	)
Cash used in operating activities		(760,547	)		(428,819	)

Cash flows from financing activities
Advance from a related party		692,598			112,451
Net cash provided by financing activities		692,598			112,451

NET CHANGE IN CASH		(67,949	)		(316,368	)

Cash, beginning of period		164,863			672,443

Cash, end of period	$	96,914		$	356,075

SUPPLEMENTAL DISCLOSURE OF NON-CASH FINANCING ACTIVITIES:

Unrealized loss in Trust Account	$	-		$	(10,173	)
Accretion of carrying value to redemption value	$	(1,676,342	)	$	(4,036,497	)
Proceeds of promissory notes deposited in Trust Account by a founder shareholder	$	1,555,853		$	1,783,400
Cash payout to shareholders directly released from trust account due to share redemption	$	(3,189,369	)	$	(6,680,520	)

	December 31,		Quoted Prices In Active Markets		Significant Other Observable Inputs		Significant Other Unobservable Inputs
Description	2021		(Level 1)		(Level 2)		(Level 3)
Assets:
U.S. Treasury Securities held in Trust Account*	$	40,441,469	$	40,441,469	$	-	$	-

Liabilities:
Warrant liabilities	$	490,000	$	-	$	-	$	490,000

	For the Nine Months Ended			For the Nine Months Ended
	September 30, 2022			September 30, 2021

Net loss	$	(153,751	)	$	(515,988	)
Accretion of carrying value to redemption value		(1,676,342	)		(4,036,497	)
Net loss including accretion of carrying value to redemption value	$	(1,830,093	)	$	(4,552,485	)

	For the Three Months Ended			For the Three Months Ended
	September 30, 2022			September 30, 2021

Net income (loss)	$	429,335		$	(209,743	)
Accretion of carrying value to redemption value		(613,051	)		(595,544	)
Net loss including accretion of carrying value to redemption value	$	(183,716	)	$	(805,287	)

	For the nine months ended September 30, 2022						For the nine months ended September 30, 2021
	Redeemable ordinary shares			Non- Redeemable ordinary shares			Redeemable ordinary shares			Non- Redeemable ordinary shares
Basic and diluted net loss per share:
Numerators:
Allocation of net loss including carrying value to redemption value	$	(1,312,547	)	$	(517,546	)	$	(3,399,922	)	$	(1,152,563	)
Accretion of carrying value to redemption value		1,676,342			-			4,036,497			-
Allocation of net income (loss)	$	363,795		$	(517,546	)	$	636,575		$	(1,152,563	)
Denominators:
Weighted-average shares outstanding		3,487,135			1,375,000			4,056,087			1,375,000
Basic and diluted net loss per share	$	0.10		$	(0.38	)	$	0.16		$	(0.84	)

	Carrying Value as of September 30, 2022 (Unaudited)		Gross Unrealized Holding Gain		Fair Value as of September 30, 2022 (Unaudited)

Available-for-sale marketable securities
U.S. Treasury Securities	$	38,928,442	$	-	$	38,928,442

	Carrying Value as of December 31, 2021 (Audited)		Gross Unrealized Holding Gain		Fair Value as of December 31, 2021 (Audited)

Available-for-sale marketable securities:
U.S. Treasury Securities	$	40,441,469	$	-	$	40,441,469

	Available- for-sale securities
Balance as of January 1, 2021	$	10,173
Other comprehensive income before reclassifications		482
Amounts reclassified from AOCI into interest income		(10,655	)
Balance as of September 30, 2021	$	-

	For the Nine Months Ended September 30, 2022			For the Year Ended December 31, 2021
Total ordinary shares issued		5,975,000			5,975,000
Share issued classified as equity		(1,375,000	)		(1,375,000	)
Share redemption		(1,237,129	)		(953,393	)
Ordinary shares, subject to possible redemption		3,362,871			3,646,607

	September 30, 2022		Quoted Prices In Active Markets		Significant Other Observable Inputs		Significant Other Unobservable Inputs
Description	(Unaudited)		(Level 1)		(Level 2)		(Level 3)
Assets:
U.S. Treasury Securities held in Trust Account*	$	38,928,442	$	38,928,442	$	—	$	—

Liabilities:
Warrant liabilities	$	13,500	$	—	$	—	$	13,500

	December 31, 2021		Quoted Prices In Active Markets		Significant Other Observable Inputs		Significant Other Unobservable Inputs
Description	(Audited)		(Level 1)		(Level 2)		(Level 3)
Assets:
U.S. Treasury Securities held in Trust Account*	$	40,441,469	$	40,441,469	$	-	$	-

Liabilities:
Warrant liabilities	$	490,000	$	-	$	-	$	490,000

	September 30, 2022			December 31, 2021			May 16, 2019 (Initial measurement)
Input
Share price	$	11.44		$	11.02		$	10.00
Risk-free interest rate		0.30	%		1.21	%		2.18	%
Volatility		0.20	%		47	%		55	%
Exercise price	$	11.50		$	11.50		$	11.50
Warrant life		5 years			5 years			5 years