INVESTMENTS MEASURED AT FAIR VALUE

12 Months Ended

Dec. 31, 2021

Investments, All Other Investments [Abstract]

INVESTMENTS MEASURED AT FAIR VALUE

14. INVESTMENTS MEASURED AT FAIR VALUE

Financial assets measured at fair value on a recurring basis are summarized below and disclosed on the consolidated balance sheets as of December 31, 2021 and 2020: 

			Fair Value Measurement Using
	Amount at Cost		Level 1		Level 2		Level 3		Amount at Fair Value
December 31, 2021
Assets
Investment Securities- Fair Value Option	$	72,000,301	$	25,320,694	$	-	$	-	$	25,320,694
Investment Securities- Trading		9,809,778		9,908,077		-		-		9,908,077
Convertible Note Receivable		138,599		-		-		98,398		98,398
Warrants - American Premium Water		696,791		-		-		1,009,854		1,009,854
Warrants - AMRE		-		-		-		-		-
Total Investment in Securities at Fair Value	$	82,645,469	$	35,228,771	$	-	$	1,108,252	$	36,337,023

			Fair Value Measurement Using
	Amount at Cost		Level 1		Level 2		Level 3		Amount at Fair Value
December 31, 2020
Assets
Investment securities- Fair Value Option	$	7,404,911	$	10,549,102	$	-	$	-	$	10,549,102
Investment securities- Trading		17,650		18,654		-		-		18,654
Convertible Preferred Stock		42,889,000		-		-		37,675,000		37,675,000
Convertible Note Receivable		50,000		-		-		66,978		66,978
Warrants - American Premium Water		860,342		-		-		862,723		862,723
Warrants - AMRE		-		-		-		-		-
Stock Options - Vivacitas		-		-		-		-		-
Total Investment in Securities at Fair Value	$	51,221,903	$	10,567,756	$	-	$	38,604,701	$	49,172,457

Realized loss on investment securities for the year ended December 31, 2021 and 2020 was $4,698,078 and $192,459, respectively. Unrealized loss on securities investment was $49,190,748 and $1,694,535 in the years ended December 31, 2021 and 2020, respectively. These losses were recorded directly to net loss. The change in fair value of the convertible note receivable in the years ended December 31, 2021 and 2020 was $57,179 and $19,486, respectively, and was recorded in consolidated statements of stockholders’ equity.

For U.S. trading stocks, we use Bloomberg Market stock prices as the share prices to calculate fair value. For overseas stock, we use the stock price from local stock exchange to calculate fair value. The following chart shows details of the fair value of equity security investments at December 31, 2021 and 2020, respectively.  

	Share price					Market Value
	12/31/2021		Shares			12/31/2021		Valuation
DSS (Related Party)	$	0.672		19,888,262	*	$	13,364,912	Investment in Securities at Fair Value
AMBS (Related Party)	$	0.016		20,000,000		$	328,000	Investment in Securities at Fair Value
Holista (Related Party)	$	0.034		43,626,621		$	1,489,179	Investment in Securities at Fair Value
American Premium Water (Related Party)	$	0.002		354,039,000		$	778,886	Investment in Securities at Fair Value
True Partner	$	0.119		62,122,908		$	7,409,717	Investment in Securities at Fair Value
Value Exchange	$	0.300		6,500,000		$	1,950,000	Investment in Securities at Fair Value
Trading Stock						$	9,908,077	Investment in Securities at Fair Value
		Total Level 1 Equity Securities				$	35,228,771
Nervotech		N/A		1,666		$	37,045	Investment in Securities at Cost
HWH World Co.		N/A		20,000		$	42,562	Investment in Securities at Cost
K Beauty		N/A		3,600		$	19,609	Investment in Securities at Cost
				Total Equity Securities		$	35,327,987

	Share price					Market Value
	12/31/2020		Shares			12/31/2020		Valuation
DSS (Related Party)	$	6.240		1,162,501	*	$	7,254,006	Investment in Securities at Fair Value
AMBS (Related Party)	$	0.008		20,000,000		$	160,000	Investment in Securities at Fair Value
Holista (Related Party)	$	0.055		46,226,673		$	2,565,468	Investment in Securities at Fair Value
American Premium Water (Related Party)	$	0.002		122,039,000		$	256,284	Investment in Securities at Fair Value
Optimum Bank (Related Party)	$	3.370		92,980		$	313,343	Investment in Securities at Fair Value
Trading Stock						$	18,654	Investment in Securities at Fair Value
		Total Level 1 Equity Securities				$	10,567,755
Vivacitas (Related Party)		N/A		2,480,000		$	200,128	Investment in Securities at Cost
Nervotech		N/A		1,666		$	37,826	Investment in Securities at Cost
HWH World Co.		N/A		20,000		$	42,562	Investment in Securities at Cost
				Total Equity Securities		$	10,848,271

* Ratio of 1-for-30 (the “Reverse Split”) was effective at 5:01 p.m. Eastern Time on May 7, 2020 (the “Effective Time”).

DSS convertible preferred stock

The DSS convertible preferred stock under level 3 category was valued on Option Pricing Method (OPM) in determining the fair value. As of December 31, 2020, the Company held 42,575 shares of DSS convertible preferred stock, which could convert to 6,570,216 common shares, with fair market value $37,675,000. As of August 21, 2020, the Company held 46,868 shares of DSS convertible preferred stock, which could convert to 7,232,716 common shares, with fair market value $42,889,000. The following table shows the parameters adopted in the valuation at the valuation dates.

	As of December 31, 2020			As of August 21, 2020
Stock price		6.24			6.95
Risk-free rate		0.93	%		0.63	%
Volatility		113.69	%		111.99	%
Expected Exit Date		December 31, 2023			August 21,2023
Dividend Yield		0.00			0.00

The selected stock prices represent the close market bid price of DSS on the valuation date. Risk-free interest rates were obtained from Bloomberg. The volatility is based on the historical volatility of the DSS common stock. We assumed a three-year life for the preferred stock and assumed that after three-years the Company would desire to begin receiving a return on this investment – either through a conversion or liquidation. Given the Beneficial Ownership limited on the exercise of the Series A Preferred Shares, we have assumed that Alset International will sell their common stocks in the Target Company such that their shareholding does not exceed 19.99% prior to conversion. We have assessed the Discount for Lack of Marketability (DLOM) of this interest using a put option method and adopted Black Scholes Option Pricing Model to estimate the DLOM

During the year ended December 31, 2021, Global BioMedical Pte Ltd. converted 42,575 preferred stock of DSS into 6,570,170 common shares of DSS.

Sharing Services Convertible Note

The fair value of the Sharing Services Convertible Note under level 3 category as of December 31, 2021 and 2020 was calculated using a Black-Scholes valuation model valued with the following weighted average assumptions:

	December 31, 2021			December 31, 2020
Dividend yield		0.00	%		0.00	%
Expected volatility		138.85	%		210.07	%
Risk free interest rate		3.25	%		0.13	%
Contractual term (in years)		0.76			1.76
Exercise price	$	0.15		$	0.15

We assumed dividend yield rate is 0.00% in Sharing Services. The volatility is based on the historical volatility of the Sharing Services’ common stock. Risk-free interest rates were obtained from U.S. Treasury rates for the applicable periods.

Changes in the observable input values would likely cause material changes in the fair value of the Company’s Level 3 financial instruments. A significant increase (decrease) in this likelihood would result in a higher (lower) fair value measurement.

The table below provides a summary of the changes in fair value which are recorded as other comprehensive income (loss), including net transfers in and/or out of all financial assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3) during the years ended December 31, 2021 and 2020:

	Total
Balance at January 1, 2020	$	26,209
Acquisition of APW Warrants		862,723
Net gain		40,769
Acquisition of DSS Preferred Stock		37,675,000
Balance at December 31, 2020	$	38,604,701
Net loss		(57,179	)
Conversion of DSS Preferred Stock		(37,439,270	)
Balance at December 31, 2021	$	1,108,252

Vector Com Convertible Bond

On February 26, 2021, the Company invested approximately $88,599 in the convertible bond of Vector Com Co., Ltd (“Vector Com”), a private company in South Korea. The interest rate is 2% per annum and maturity is two years. The conversion price is approximately $21.26, per common share of Vector Com. As of December 31, 2021, the management estimated that the fair value of this note remained unchanged from its initial purchase price.

Warrants

On March 2, 2020 and October 29, 2021, the Company received warrants to purchase shares of AMRE, a related party private startup company, in conjunction with the Company lending two $200,000 promissory notes. For further details on this transaction, refer to Note 9 - Related Party Transactions, Note Receivable from a Related Party Company. As of December 31, 2021 and 2020, AMRE was a private company. Based the management’s analysis, the fair value of the warrants was $0 as of December 31, 2021 and 2020.

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. During 2021, the Company exercised 232,000,000 of the warrants to purchase 232,000,000 shares of APW for the total consideration of 232,000, leaving the balance of outstanding warrants of 988,390,000 at December 31, 2021. We value APB warrants under level 3 category through a Black Scholes option pricing model and the fair value of the warrants from APW was $862,723 as of December 31, 2020 and $1,009,854 as of December 31, 2021.

The fair value of the APW warrants under level 3 category as of December 31, 2021 and 2020 was calculated using a Black-Scholes valuation model valued with the following weighted average assumptions:

	As of			As of
	December 31, 2021			December 31, 2020
Stock Price	$	0.0022		$	0.0021
Exercise Price	$	0.001		$	0.001
Risk-free Interest Rate		1.48	%		0.88	%
Annualized volatility		186.5	%		178.86	%
Dividend Yield		0.00			0.00
Year to Maturity		8.58			9.58

The following table presents summarized financial information for our investments that we elected the fair value option that would otherwise be accounted for under the equity method of accounting.

	Summarized Financial Information
	Assets		Liabilities		Net Income (Loss)
December 31, 2021
APW (Unaudited)*	$	395,258	$	3,990,098	$	(1,089,440	)
Holista**	$	5,012,451	$	2,275,422	$	(989,391	)
DSS*	$	219,076,000	$	19,784,000	$	(25,777,333	)
December 31, 2020
APW (Unaudited)	$	456,612	$	3,872,860	$	(861,031	)
Holista	$	6,208,762	$	2,628,463	$	3,926,026
DSS	$	91,919,000	$	15,374,000	$	1,418,000

*	Data derived from Financial Statement as of September 30, 2021 which was the latest available date source we could reach. 12-month Net Loss was estimated by adding one-third of 9-month Net Loss.
**	Data derived from Financial Statement as of June 30, 2021 which was the latest available date source we could reach. 12-month Net Loss was estimated by doubling 6-month Net Loss.