Quarterly Report for Quarter Ending June 30, 2025 (Form 10-Q)

Management's Discussion and Analysis of Financial Condition and Results of Operations

This Form 10-Q contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. For this purpose, any statements contained in this Form 10-Q that are not statements of historical fact may be deemed to be forward-looking statements. Without limiting the foregoing, words such as "may", "will", "expect", "believe", "anticipate", "estimate" or "continue" or comparable terminology are intended to identify forward-looking statements. These statements by their nature involve substantial risks and uncertainties, and actual results may differ materially depending on a variety of factors, many of which are not within our control. These factors include by are not limited to economic conditions generally and in the industries in which we may participate, competition within our chosen industry, including competition from much larger competitors, technological advances and failure to successfully develop business relationships.

The Company's chief operating decision makers are the two Co-CEOs, who review and assess the performance of the Company as a whole. The Company reports its segment information to reflect the manner in which the chief operating decision makers (the "CODMs") review and assess performance. Both land development projects and rental business are included in our only reporting segment - real estate.

The primary financial measures used by the CODMs to evaluate performance and allocate resources are net income (loss) and operating income (loss). The CODMs use net income (loss) and operating income (loss) to evaluate the performance of the Company's ongoing operations and as part of the Company's internal planning and forecasting processes. Information on net income (loss) and operating income (loss) is disclosed in the Consolidated Statements of Operations. Segment expenses and other segment items are provided to the CODMs on the same basis as disclosed in the Consolidated Statements of Operations.

The CODMs do not evaluate performance or allocate resources based on segment assets, and therefore such information is not presented in the Notes to the Financial Statements.

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the financial statements and the notes thereto contained elsewhere in this Report. Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties.

Acquisition Agreement and Plan of Merger

On May 30, 2025, the Company entered into an Acquisition Agreement and Plan of Merger (the "Acquisition Agreement") with (i) SeD Intelligent Home Inc., a Nevada corporation and the majority shareholder of the Company ("SeD"); (ii) LVD Merger Corp., a Nevada corporation and wholly owned subsidiary of the Company (the "Merger Sub"); (iii) Winning Catering Management Limited, a British Virgin Islands corporation ("Winning Group"); (iv) Winning Holdings Limited, a British Virgin Islands corporation ("Winning Holdings"); and (v) Pure Talent Group Limited, a British Virgin Islands corporation ("PTGL" and collectively with SeD, the Merger Sub, the Winning Group and Winning Holdings, the "Parties").

Pursuant to the terms of the Acquisition Agreement, the Merger Sub will merge with and into Winning Group (the "Merger"), with Winning Group surviving the Merger. Following the Merger, Winning Group will become a wholly owned subsidiary of the Company.

In connection with the Merger and as part of the transaction structure, the Parties also agreed that: 3,754,897,728 new fully paid, non-assessable shares of the Company's common stock will be issued to Winning Holdings and 234,681,108 shares will be issued to PTGL. At the closing of these transactions (the "Closing"), (i) Winning Holdings will own 80% of the issued and outstanding shares of the Company; (ii) SeD and other existing stockholders will retain 15% of the Company's shares; and (iii) PTGL will own 5% of the Company's shares.

On July 10, 2025 the Company received the written consent of its majority shareholder to amend the Company's Certificate of Incorporation in order to authorize the issuance of common stock adequate to complete the transactions contemplated hereby. The Company intends to increase its authorized shares from 1,000,000,000 shares to 5,000,000,000 shares, par value $0.001 per share.

In addition, as noted above, prior to the Closing, the Company will grant the Company's existing stockholders shares of an entity that will hold substantially all of the Company's existing assets.

Winning Group's principal line of business is Wing Nin, a Hong Kong food and beverage brand. Renowned for its cart noodles, a Hong Kong staple, Wing Nin sells customizable bowls featuring a choice of noodle bases, a wide array of toppings, and a rich homemade spicy curry sauce. Wing Nin began as a street vendor in the 1960s and has expanded in recent years. Today, Wing Nin has eleven locations across Hong Kong. Wing Nin continues to innovate through product development, improvement in training and operations, and central kitchen automation.

The Acquisition Agreement contains representations, warranties, covenants, and conditions to Closing. The boards of directors of the Company, the Merger Sub, and Winning Group have each approved the Acquisition Agreement and the transactions contemplated therein.

On August 1, 2025, the Company entered into a Contribution Agreement (the "Contribution Agreement") with Alset Real Estate Holdings Inc., a wholly owned subsidiary of the Company ("Alset Real Estate Holdings").

Pursuant to the terms of the Contribution Agreement, the Company agreed to transfer its ownership of all of the issued and outstanding shares of Alset EHome Inc., a subsidiary of the Company that owns substantially all of the assets and liabilities of the Company, to Alset Real Estate Holdings. In consideration for the transfer of 5,000 shares of Alset EHome Inc., Alset Real Estate Holdings agreed to issue 704,043,224 shares of its common stock to the Company.

The Contribution Agreement represents a step toward the Company's plan to conduct a pro rata distribution of all of its shares of Alset Real Estate Holdings to the stockholders of the Company.

This transaction closed on August 1, 2025.

Results of Operations for the Three and Six Months Ended June 30, 2025 and 2024:

Revenue

Revenue was $6,602 for the three months ended June 30, 2025 as compared to $12,903 for the three months ended June 30, 2024. Revenue was $17,811 for the six months ended June 30, 2025 as compared to $5,058,305 for the six months ended June 30, 2024. The decrease in revenue is mainly caused by the fact that the remaining properties in the Lakes at Black Oak and Alset Villas projects were sold in 2024.

In late 2022 and early 2023, the Company entered into three contracts with builders to sell multiple lots from its Lakes at Black Oak project. The sales contemplated by these contracts were contingent on certain conditions which the parties to such contracts had to meet. The sale of 335 lots closed in the first six months of 2023. The sale of remaining lots closed on January 4, 2024 generating approximately $5.0 million revenue.

In May 2023, the Company entered into lease agreement for its model house located in Montgomery County, Texas. The revenue from the lease was $0 and $6,300 in the three months ended June 30, 2025 and 2024, respectively. The revenue from the lease was $4,606 and $12,600 in the six months ended June 30, 2025 and 2024, respectively. This lease was terminated in February 2025. Management intends to procure a new tenant to occupy the premises, after the office used for real estate sales is converted back to a garage.

In January 2024, the Company entered into lease agreement for another model house located in Montgomery County, Texas. The revenue from the lease was $6,603 and $6,603 in the three months ended June 30, 2025 and 2024, respectively. The revenue from the lease was $13,205 and $13,205 in the six months ended June 30, 2025 and 2024, respectively.

Cost of Revenue

All cost of revenue in the three and six months ended on June 30, 2025 came from model homes lease agreements. All cost of revenue in the three and six months ended on June 30, 2024 came from our Lakes at Black Oak project and model homes lease agreements. The gross margin ratio for Lakes at Black Oak project in the first six months ended 2025 and 2024 was approximately 0% and 22%, respectively. The decrease in cost of revenue and decrease in gross margin is caused by the decrease in property sales from the Lakes at Black Oak project in 2025. The last lots in Lakes at Black Oak project were sold during 2024. The gross margin ratio for model homes lease agreements in the first six months ended June 30, 2025 and 2024 was approximately (25)% and 56%, respectively.

General and Administrative Expenses

The general and administrative expenses decreased to $173,823 for the three months ended June 30, 2025 from $522,790 for the three months ended June 30, 2024, due to reallocation of refund paid to customer from general and administrative expenses to other non-operating expense in three months ended on June 30, 2025. General and administrative expenses increased from $833,547 in the six months ended June 30, 2024 to $1,263,602 in the six months ended June 30, 2025, due to increase in bonuses and professional fees paid.

Other Non-operating Income (Expense)

In the three months ended June 30, 2025, the Company had other non-operating expense of $93,078 compared to other non-operating income of $223,348 in the three months ended June 30, 2024. In the six months ended June 30, 2025, the Company's other non-operating income was $281,504 as compared to other non-operating income of $496,434 in the six months ended June 30, 2024. The decrease in other income was caused by the reallocation of refund paid to customer from general and administrative expenses to other expense in three months ended on June 30, 2025. The Company has been notified by a purchaser of certain lots that they mistakenly overpaid by $450,000 in December 2024. The repayment of $450,000 was recorded in the Company's books in the first quarter of 2025 as an expense.

Net Income (Loss)

The Company had a net loss of $264,926 for the three months ended on June 30, 2025 and a net loss of $291,090 for the three months ended on June 30, 2024.The Company had a net loss of $983,241for the six months ended on June 30, 2025 and a net income of $804,694 for the six months ended on June 30, 2024. The decrease in net income was mostly caused by the decrease in property sales. All remaining lots in Lakes at Black Oak and Alset Villas projects were sold during 2024.

Liquidity and Capital Resources

Our real estate assets have decreased to $606,240 as of June 30, 2025 from $615,495 as of December 31, 2024. This decrease is primarily caused by the depreciation expenses from our rental properties. Our liabilities decreased from $2,991,375 at December 31, 2024 to $2,029,125 at June 30, 2025. This decrease is primarily caused by the decrease in accounts payable and accrued interest. The Company has been notified by a purchaser of certain lots that they mistakenly overpaid by $450,000 in December 2024. The repayment of $450,000 was recorded in the Company's books in the first quarter of 2025 as payable. Our total assets have decreased to $36,847,183 as of June 30, 2025 from $38,792,674 as of December 31, 2024.

As of June 30, 2025, we had cash in the amount of $3,136,533, compared to $2,762,935 as of December 31, 2024.

In late 2022 and early 2023, the Company entered into three contracts with builders to sell multiple lots from its Lakes at Black Oak project. The sales contemplated by these contracts were contingent on certain conditions which the parties to such contracts had to meet. The sale of 335 lots closed in the first six months of 2023. The sale of remaining lots closed on January 4, 2024 generating approximately $5.0 million revenue.

On November 13, 2023, the Company entered into two Contracts for Purchase and Sale and Escrow Instructions (each an "Agreement," collectively, the "Agreements") with Century Land Holdings of Texas, LLC, a Colorado limited liability company (the "Buyer"). Pursuant to the terms of one of the aforementioned Agreements, the Seller agreed to sell approximately 142 single-family detached residential lots comprising a section of a residential community in the Lakes at Black Oak. The selling price of these lots was anticipated to equal approximately $7.4 million. Pursuant to the other Agreement, the Seller agreed to sell 63 single-family detached residential lots in the city of Magnolia, Texas. In 2021, our subsidiary Alset EHome Inc. acquired approximately 19.5 acres of partially developed land near Houston, Texas which was used to develop a community named Alset Villas. Alset EHome was in the process of developing the 63 lots at Alset Villas in 2023. The closing of the transactions described above depended on the satisfaction of certain conditions. On July 1, 2024, the Seller closed the sale of 70 of the lots contemplated by that certain Agreement, generating approximately $3.8 million. The sale of the remaining 72 lots at Lakes at Black Oak closed on October 10, 2024 generating approximately $3.9 million. The sale of 63 lots at Alset Villas closed on December 16, 2024 generating approximately $3.8 million.

The Company is entitled to receive certain developer reimbursements for the Lakes at Black Oak and Alset Villas projects. The Company expects that approximately $7.8 million of the receivable will be collected.

The Company has obtained a letter of financial support from Alset Inc., an indirect owner of the Company. Alset Inc. committed to provide any additional funding required by the Company and would not demand repayment for the next twelve months from the filing of this Form 10-Q.

Summary of Cash Flows

A summary of cash flows from operating, investing and financing activities for the six months ended June 30, 2025 and 2024 are as follows:

		2025				2024
Net Cash (Used in) Provided by Operating Activities		$	(1,326,348	)		$	570,024
Net Cash Provided by (Used in) Investing Activities		$	1,700,000			$	(232	)
Net Cash Provided by Financing Activities		$	-			$	480,172
Net Change in Cash		$	373,652			$	1,049,964
Cash and restricted cash at beginning of the period		$	2,870,809			$	1,882,081
Cash and restricted cash at end of the period		$	3,244,461			$	2,932,045

Cash Flows from Operating Activities

Cash flows from operating activities include costs related to assets ultimately planned to be sold, including land purchased for development and resale, and costs related to construction, which were capitalized in the book in 2024. In the six months ended June 30, 2025, cash used in operating activities was $1,326,348 compared to cash provided of $570,024 in the six months ended June 30, 2024. Property sales from the Lakes at Black Oak project in 2024 was the main reason for the cash provided by operating activities in 2024.

Cash Flows from Investing Activities

Cash flows provided by investing activities in the six months ended June 30, 2025 of $1,700,000 were from the repayment of note receivable from a related party. Cash flows used in investing activities in the six months ended June 30, 2024 were for purchasing fixed asset. Additionally, in six months ended June 30, 2024, the Company issues $2,443,692 in note to related party and received a repayment of the full amount in that same period.

Cash Flows from Financing Activities

In the six months ended June 30, 2024, the Company borrowed $3,066,308 and repaid $2,586,136 to a related party loan. There was no cash provided by or used in financing activities during the six months ended June 30, 2025.

Seasonality

The real estate business is subject to seasonal shifts in costs as certain work is more likely to be performed at certain times of year. This may impact the expenses of Alset EHome Inc. from time to time. In addition, should we commence building homes, we are likely to experience periodic spikes in sales as we commence the sales process at a particular location.

Critical Accounting Policy and Estimates

The Company's condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America ("US GAAP"). For detail accounting policy and estimates information, please see Note 1 in the condensed consolidated financial statements.