| RELATED PARTY TRANSACTIONS | Personal Guarantees by Director As of December 31, 2020 and 2019, a director
of the Company had provided personal guarantees amounting to approximately $500,000 and $5,500,000, respectively, to secure external
loans from financial institutions for AEI and the consolidated entities. Sale of GigWorld subsidiary to DSS Asia On October 25, 2018, HIP, a wholly-owned subsidiary
of GigWorld Inc., entered into an equity purchase agreement (the “HotApps Purchase Agreement”) with DSS Asia, a Hong
Kong subsidiary of DSS International, pursuant to which HIP agreed to sell to DSS Asia all of the issued and outstanding shares
of HotApps Information Technology Co. Ltd., also known as Guangzhou HotApps, a wholly-owned subsidiary of HIP. Guangzhou HotApps
is primarily engaged in engineering work for software development, as well as, a number of outsourcing projects related to real
estate and lighting. Chan Heng Fai is the CEO of DSS Asia and DSS International. For further details on this transaction, refer
to Note 11 – Discontinued Operations. Sale of 18% of LiquidValue Asset Management
Pte. Ltd. On May 8, 2019, SeD Capital Pte. Ltd. entered
into a sale and purchase agreement to sell 522,000 ordinary shares (representing approximately 18% of the ownership) in LiquidValue
Asset Management Pte. Ltd. to LiquidValue Development Pte. Ltd. (“LVD”) for a cash of $46,190. Chan Heng Fai is the
owner of LVD. Sale of Impact Biomedical to DSS On April 27, 2020, Global BioMedical Pte Ltd
(“GBM”), one of our subsidiaries, entered into a share exchange agreement with DSS BioHealth Security, Inc. (“DBHS”),
a wholly owned subsidiary of Document Securities Systems Inc. (“DSS”), pursuant to which, DBHS agreed to acquire all
of the outstanding capital stock of Impact BioMedical Inc., a wholly owned subsidiary of GBM, through a share exchange. It was
agreed that the aggregate consideration to be issued to GBM for the Impact BioMedical shares would be the following: (i) 483,334
newly issued shares of DSS common stock; and (ii) 46,868 newly issued shares of a new series of DSS perpetual convertible preferred
stock with a stated value of $46,868,000, or $1,000 per share. The convertible preferred stock can be convertible into shares of
DSS common stock at a conversion price of $6.48 of preferred stock stated value per share of common stock, subject to a 19.9% beneficial
ownership conversion limitation (a so-called “blocker”) based on the total issued outstanding shares of common stock
of DSS beneficially owned by GBM. Holders of the convertible preferred stock will have no voting rights, except as required by
applicable law or regulation, and no dividends will accrue or be payable on the convertible preferred stock. The holders of convertible
preferred stock will be entitled to a liquidation preference of $1,000 per share, and DSS will have the right to redeem all or
any portion of the then outstanding shares of convertible preferred stock, pro rata among all holders, at a redemption price per
share equal to such liquidation value per share. Under ASU 2014-08, a disposal transaction meets
the definition of a discontinued operation if all of the following criteria are met:
1. The disposal group constitutes a component of an entity or a group of components of an entity
2. The component of an entity (or group of components of an entity) meets the held-for-sale classification criteria, is disposed of by sale, or is disposed of other than by sale (e.g., “by abandonment, in an exchange measured based on the recorded amount of the nonmonetary asset relinquished, or in a distribution to owners in a spinoff”).
3. The disposal of a component of an entity (or group of components of an entity) “represents a strategic shift that has (or will have) a major effect on an entity’s operations and financial results”. Impact Biomedical Inc. is a group of subsidiaries
of AEI and operates independently with its own financial reporting. The transaction is a disposal by sale and has a major effect
on AEI’s financial results. Since it meets all above test criteria, we treated this disposal transaction as a discontinued
operation in our financial statements. On August 21, 2020, the transaction closed and
Impact BioMedical Inc became a direct wholly owned subsidiary of DBHS. GBM received 483,334 shares of DSS common stock and 46,868
shares of DSS preferred stock, which preferred shares could be converted to 7,232,716 common shares (however, any conversion will
be subject to the blocker GBM has agreed to, as described above). After this transaction, we hold 500,001 shares of the common
stock of DSS. Additionally, our CEO, Chan Heng Fai is the owner of the common stock of DSS and is the executive Chairman of the
Board of Directors of DSS. The Company has elected the fair value option for the DSS common stock that would otherwise be accounted
for under the equity method of accounting. ASC 820, Fair Value Measurement and Disclosures, defines the fair value of the financial
assets. We value DSS common stock under level 1 category through quoted prices and preferred stock under level 3 category through
an Option-Pricing Method valuation model. The quoted price of DSS common stock was $6.95 as of August 21, 2020. The total fair
value of DSS common and preferred stocks GBM received as consideration for the disposal of Impact BioMedical was $46,248,171. As
of August 21, 2020, the net asset value of Impact BioMedical was $94,011. The difference of $46,154,160 was recorded as additional
paid in capital. We did not recognize gain or loss from this transaction as it was a related party transaction. For further details
on this transaction, refer to Note 11 – Discontinued Operations. On October 16, 2020, GBM converted 4,293 shares
of DSS Series A Preferred Stock having a par value of $0.02 per share in exchange for 662,500 restricted shares of DSS common stock
based upon a liquidation value of $1,000 and a conversion price of $6.48 per share. Our ownership of DSS was 19.9% after the conversion. Sale of iGalen International Inc. to an
officer of the Company On December 30, 2020, Health, Wealth Happiness
Pte Ltd (“HWH Pte Ltd”), a 100% owned subsidiary of the Company, sold 530,000 shares (its 53% ownership) of iGalen
International Inc., which owns 100% iGalen Inc., to an officer of the Company for $100. The net asset of iGalen International was
$(3,741,065) at the time of sales and $3,741,065 was recorded as additional paid in capital since it was a related party transaction.
No gain or loss was recognized. Under ASU 2014-08, the transaction did not meet
the definition of a discontinued operation. For the Company, the disposal of the iGalen does not make a strategic shift on our
operations and financial results. The Company did not recognize gain or Loss in the Statement of Operations as this is considered
as a related party transaction. Purchase Shares and Warrants from APW On July 17, 2020, the Company purchased 122,039,000
shares, approximately 9.99% ownership, and 1,220,390,000 warrants with an exercise price of $0.0001 per share, from APW, for an
aggregated purchase price of $122,039. We value APB warrants under level 3 category through a Black Scholes option pricing model
and the fair value of the warrants from APW were $860,342 as of July 17, 2020, the purchase date and $862,723 as of December 31,
2020. The difference of $945,769 of fair value of stock and warrants, total $1,067,808 and the purchase price $122,039, was recorded
as additional paid in capital as it was a related party transaction. Notes Payable During the year ended on December 31, 2017,
a director of the Company lent non-interest loans of $7,156,680, for the general operations of the Company. The loans are interest
free, not tradable, unsecured, and repayable on demand. On October 15, 2018, a formal lending agreement between the Alset International
and Chan Heng Fai was executed. Under the agreement, Chan Heng Fai provides a lending credit limit of approximately $10 million
for Alset International with interest rate 6% per annum for the outstanding borrowed amount, which commenced retroactively from
January 1, 2018. The loans are still not tradable, unsecured and repayable on demand. As of December 31, 2020 and 2019 the outstanding
principal balance of the loan is $0 and $4,246,604, respectively. Interest started to accrue on January 1, 2018 at 6% per annum.
During the years ended on December 31, 2020 and 2019, the interest expenses were $130,667 and $358,203, respectively. As of December
31, 2020 and 2019, the accrued interest total was $0 and $822,405, respectively. Chan Heng Fai provided interest-free due on
demand advance to AEI for the general operations. On December 31, 2020 and 2019, the outstanding balance was $178,400. Chan Heng Fai provided an interest-free, due
on demand advance to SeD Perth Pty. Ltd. for its general operations. On December 31, 2020 and 2019, the outstanding balance was
$14,379. On August 20, 2020, the Company acquired 30,000,000
common shares from Chan Heng Fai in exchange for a two-year non-interest bearing note of $1,333,429. On December 31, 2020 the amount
outstanding was $1,333,429. On May 1, 2018, Rajen Manicka, CEO and one of
the directors of iGalen International Inc., which holds 100% of iGalen Inc., provided a loan of approximately $367,246 to iGalen
Inc. (the “2018 Rajen Manicka Loan”). The term of 2018 Rajen Manicka Loan is ten years. The 2018 Rajen Manicka Loan
has an interest rate of 4.7% per annum. On March 8, March 27 and April 23, 2019, iGalen borrowed additional monies of $150,000,
$30,000 and $50,000, respectively, from Rajen Manicka, total $230,000 (the “2019 Rajen Manicka Loan”). The 2019 Rajen
Manicka Loan is interest free, not tradable, unsecured, and repayable on demand. As of December 31, 2019, the total outstanding
principal balance of the loans was $546,397, and was included in the Notes Payable – Related Parties balance on the Company’s
Consolidated Balance Sheets. During the years ended December 31, 2020 and 2019, the Company incurred $0 and $14,550 of interest
expense, respectively. The Company accrued interest of $0 at December 31, 2020 and 2019. On December 30, 2020, Company’s
subsidiary Health Wealth Happiness Pte. Ltd., sold its 53% interest in iGalen International to an officer of the Company. On August 13, 2019, iGalen International Inc.,
which holds 100% of iGalen Inc., borrowed $250,000 from Decentralized Sharing Services, Inc., a company whose sole shareholder
and director is Chan Heng Fai, our CEO. The term of the loan is 12 months, with an interest rate of 10% per annum. In addition,
Decentralized Sharing Services, Inc. received the right to receive 3% of any revenue received by iGalen International Inc. for
99 years. During the year ended December 31, 2020 the Company incurred $9,729 of interest expense and $0 from the right
to receive 3% of revenue. During the year ended December 31, 2019 the Company incurred $9,589 of interest expense and $0 from the
right to receive 3% of revenue. The amount outstanding on the loan as of December 31, 2020 and 2019 was $0 and $250,000, respectively.
The principal of $250,000 was paid off in June 2020. On November 3, 2019, iGalen Inc. borrowed $160,000
from iGalen Funding Inc., a company whose directors and shareholders include two members of the Board of iGalen Inc. The term of
the loan was 6 months, with an interest rate of 10% per annum. The expiration term was changed to due on demand after 6 months.
The amount outstanding on the loan as of December 31, 2020 and 2019 was $0 and $160,000, respectively. The accrued interest was
$0 and $2,542 as of December 31, 2020 and 2019, respectively. On January 24, 2017, SeD Capital Pte Ltd, a 100% owned subsidiary
of Alset International lent $350,000 to iGalen. The term of the loan was two years, with an interest rate of 3% per annum for the
first of year and 5% per annum for the second year. The expiration term was renewed as due on demand after two years with 5% per
annum interest rate. As of December 31, 2020, the outstanding principle was $350,000 and accrued interest was $61,555. As of December
31, 2019, it was intercompany loan and was eliminated as an intercompany transaction. Management Fees MacKenzie Equity Partners, owned by Charles
MacKenzie, a Director of the Company's subsidiary LiquidValue Development, has had a consulting agreement with the Company since
2015. Per the terms of the agreement, as amended on January 1, 2018, the Company pays a monthly fee of $15,000 with an additional
$5,000 per month due upon the close of the sale to Houston LD, LLC. Since January of 2019, the Company has paid a monthly fee of
$20,000 for these consulting services. The Company incurred expenses of $240,000 and $240,000 for the years ended December 31,
2020 and 2019, respectively, which were capitalized as part of Real Estate on the Company’s Consolidated Balance Sheet, as
the services relate to property and project management. As of December 31, 2020 and 2019 the Company owed $0 to this entity. Consulting Services A law firm owned by Conn Flanigan, a Director
of LiquidValue Development, performs consulting services to LiquidValue Development and some other subsidiaries of the Company.
The Company incurred expenses of $12,645 and $52,723 for the years ended December 31, 2020 and 2019, respectively. As of December
31, 2020 and 2019 there was no outstanding balance due to this entity. Rajen Manicka, the CEO of Holista
CollTech and Co-founder of iGalen International Inc., performs consulting services for iGalen Inc. iGalen Inc. incurred expenses
of $0 and $240,000 for the years ended December 31, 2020 and 2019, respectively. On December 31, 2020 and 2019, iGalen owed this
related party fees for consulting services in the amount of $0 and $671,403, respectively. The Consulting service with Rajen
Manicka was terminated on December 31, 2019. Chan Tung Moe, the consultant engaged with the
Company through Pop Motion Consulting Pte. Ltd., is the son of Chan Heng Fai, a director and the CEO of the Company. In August
of 2020 this consulting agreement was terminated, and Chan Tung Moe became an employee of Alset International as Chief Development
Officer. The Company incurred expense of $140,758 and $239,599 for the years ended December 31, 2020 and 2019, respectively. As
of December 31, 2020 and 2019, the Company owed Pop Motion consulting fee of $0 and $118,288, respectively. iGalen Inc. Affiliates iGalen Philippines and iGalen SDN are
related party entities which are owned by Dr. Rajen Manicka and are not owned by the Company. iGalen Inc. provides use of its
platform to collect sale revenue and payment of expenses for these entities without service fees. On December 31, 2019,
iGalen owed $342,695 to iGalen Philippines. iGalen was transferred to an officer of the Company as of December 30, 2020 with
all its liabilities. iGalen SDN had a consulting agreement to provide
accounting, administration and other logistic services to iGalen with a monthly fee $4,000. This agreement was terminated on December
31, 2019. The Company incurred expenses of $0 and $48,000 for the years ended December 31, 2020 and 2019, respectively. As of December
31, 2019, iGalen SDN owed iGalen $74,331. Medi Botanics Sdn Bhd, a subsidiary of Holista
CollTech, is only raw material and product suppliers of iGalen. Dr. Rajen Manicka is the controlling shareholder and a director
of both Medi Botanics Sdn Bhd and Holista CollTech. Medi Botanics Sdn Bhd supplied $0 and $480,821 raw materials and products to
iGalen in the years ended December 31, 2020 and 2019, respectively. On December 31, 2019, iGalen owed $956,300 to this entity,
respectively. Investment
in the Global Opportunity Fund On February 1, 2017, the Company invested $300,000
in Global Opportunity Fund (“Fund”), a mutual fund registered in the Cayman Islands and Chan Heng Fai is one of the
directors of this fund. This Fund was closed during November 2019 and is being liquidated. LiquidValue Asset Management Pte. Ltd.,
one of the subsidiaries of the Company, is the investment manager of the Fund and receives a management fee from the Fund at 2%
per annum of the aggregated net asset value of the investments and a performance fee of 20%. As of December 31, 2019, the Company
recorded a receivable $307,944 from the Global Opportunity Fund. In the years ended on December 31, 2020 and 2019, the management
fee and performance fee charged to the Fund were $0 and $4,894, respectively. On December 31, 2020 and 2019, the Fund owed accrued
management and performance fee receivable $0 and $15,484 respectively. On January 23, 2020,
the Company received $307,944 as a result of the liquidation of Global Opportunity Fund. Note Receivable
from a Related Party Company On March 2, 2020 LiquidValue Asset Management
Pte. Ltd. (“LiquidValue”) received a $200,000 Promissory Note from American Medical REIT Inc. (“AMRE”),
a company which is 36.1% owned by LiquidValue. Chan Heng Fai, Chan Tung Moe and Alan Lui from Alset International are directors
of American Medical REIT Inc. The note carries interests of 8% and is payable in two years. LiquidValue also received warrants
to purchase AMRE shares at the Exercise Price $5.00 per share. The amount of the warrants equals to the note principle divided
by the Exercise Price. If AMRE goes to IPO in the future and IPO price is less than $10.00 per share, the Exercise price shall
be adjusted downward to fifty percent (50%) of the IPO price. As of December 31, 2020, the fair market value of the warrants was
$0. The Company accrued $13,431 interest expenses as of December 31, 2020. Warrants Exercised
by DSS On June 30, 2020, the Company received a deposit
of $1,264,244 from Document Security Systems, Inc. for a warrant exercise to acquire 44,005,182 shares of Alset International at
a price approximately $0.03 per share. The transaction was closed in July 2020. Fai Heng Chan, our CEO, Chairman of our Board and controlling shareholder, is also
Chairman of the Board of Document Security Systems, Inc. and a significant shareholder of Document Security Systems, Inc. |
