INVESTMENTS MEASURED AT FAIR VALUE

3 Months Ended

Mar. 31, 2024

Investments, All Other Investments [Abstract]

INVESTMENTS MEASURED AT FAIR VALUE

12. INVESTMENTS MEASURED AT FAIR VALUE

Financial assets measured at fair value on a recurring basis are summarized below and disclosed on the condensed consolidated balance sheet as of March 31, 2024 and December 31, 2023:

	Fair Value Measurement Using						Amount at
	Level 1		Level 2		Level 3		Fair Value
March 31, 2024
Assets
Investment Securities- Fair Value Option	$	5,684,510	$	945,306	$	-	$	6,629,816
Investment Securities- Trading		703,160		2,040,978		-		2,744,138
Warrants - NECV		-		-		973		973
Warrants - VEII		-		877,257		-		877,257
Warrants - SHRG		-		141,667		-		141,667
Convertible Loan Receivable - VEII		-		352,389		-		352,389
Convertible Loan Receivable - SHRG		-		587,303		-		587,303
Total Investment in Securities at Fair Value	$	6,387,670	$	4,944,900	$	973	$	11,333,543

	Fair Value Measurement Using						Amount at
	Level 1		Level 2		Level 3		Fair Value
December 31, 2023
Assets
Investment Securities- Fair Value Option	$	7,537,472	$	2,100,720	$	-	$	9,638,192
Investment Securities- Trading		35,036		1,779,601		-		1,814,637
Convertible Note Receivable		-		-		77,307		77,307
Warrants - NECV		-		-		430		430
Warrants - VEII		-		2,487,854		-		2,487,854
Convertible Loan Receivable - VEII		-		1,207,627		-		1,207,627
Total Investment in securities at Fair Value	$	7,572,508	$	7,575,802	$	77,737	$	15,226,047

Realized loss on investment securities for the three months ended March 31, 2024 and 2023 was $152,468 and $131,313, respectively. Unrealized loss on securities investment was $5,265,817 and $1,187,846 in the three months ended March 31, 2024 and 2023, respectively. These losses were recorded directly to net loss.

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 the local stock exchange to calculate fair value. The following chart shows details of the fair value of equity security investment at March 31, 2024 and December 31, 2023, respectively.

	Share price				Market Value
	3/31/2024		Shares		3/31/2024		Valuation
DSS (Related Party)	$	1.810		3,140,613	$	5,684,510	Investment in Securities at Fair Value – Related Party
Trading Stocks					$	703,160	Investment in Securities at Fair Value
		Total Level 1 Equity Securities			$	6,387,670
AMBS	$	0.000		20,000,000	$	2,000	Investment in Securities at Fair Value
Holista	$	0.007		36,199,845	$	236,122	Investment in Securities at Fair Value
New Electric CV (Related Party)	$	0.000		354,039,000	$	0	Investment in Securities at Fair Value – Related Party
Value Exchange (Related Party)	$	0.024		21,179,275	$	506,185	Investment in Securities at Fair Value – Related Party
Sharing Services (Related Party)	$	0.002		125,624,528	$	200,999	Investment in Securities at Fair Value – Related Party
Trading Stocks					$	2,040,978	Investment in Securities at Fair Value
		Total Level 2 Equity Securities			$	2,986,284
Nervotec		N/A		1,666	$	36,999	Investment in Securities at Cost
UBeauty		N/A		3,600	$	16,602	Investment in Securities at Cost
		Total Equity Securities			$	9,427,554

	Share price				Market Value
	12/31/2023		Shares		12/31/2023		Valuation
DSS (Related Party)	$	0.120		62,812,264	$	7,537,472	Investment in Securities at Fair Value – Related Party
Trading Stocks					$	35,036	Investment in Securities at Fair Value
		Total Level 1 Equity Securities			$	7,572,508
AMBS	$	0.001		20,000,000	$	10,000	Investment in Securities at Fair Value
Holista	$	0.007		36,159,845	$	246,556	Investment in Securities at Fair Value
New Electric CV (Related Party)	$	0.000		354,039,000	$	0	Investment in Securities at Fair Value – Related Party
Value Exchange (Related Party)	$	0.067		21,179,275	$	1,429,602	Investment in Securities at Fair Value – Related Party
Sharing Services (Related Party)	$	0.003		125,624,528	$	414,562	Investment in Securities at Fair Value – Related Party
Trading Stocks					$	1,779,601	Investment in Securities at Fair Value
		Total Level 2 Equity Securities			$	3,880,321
Nervotec		N/A		1,666	$	37,876	Investment in Securities at Cost
UBeauty		N/A		3,600	$	16,636	Investment in Securities at Cost
		Total Equity Securities			$	11,507,341

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 three months ended March 31, 2024 and 2023:

	Total
Balance at January 1, 2024	$	77,737
Impairment		(77,307	)
Total Gains		543
Balance at March 31, 2024	$	973

	Total
Balance at January 1, 2023	$	416,164
Total gains		62,348
Balance at March 31, 2023	$	478,512

Vector Com Convertible Bond

On February 26, 2021, the Company invested approximately $88,599 in the convertible note of Vector Com Co., Ltd (“Vector Com”), a private company in South Korea. The interest rate is 2% per annum. The conversion price is approximately $21.26 per common share of Vector Com. As of December 31, 2023, the Management estimated the fair value of the note to be $88,599. The Company wrote off this loan at March 31, 2024

Warrants

NECV

On July 17, 2020, the Company purchased 122,039,000 shares, approximately 9.99% ownership, and 1,220,390,000 warrants with an exercise price of $0.0001 per share, from NECV, for an aggregated purchase price of $122,039. During 2021, the Company exercised 232,000,000 of the warrants to purchase 232,000,000 shares of NECV for the total consideration of $232,000, leaving the balance of outstanding warrants of 988,390,000 at December 31, 2022. The Company did not exercise any warrants during three months ended March 31, 2024 and the year ended December 31, 2023. We value NECV warrants under level 3 category through a Black Scholes option pricing model and the fair value of the warrants from NECV was $973 as of March 31, 2024 and $430 as of December 31, 2023.

The fair value of the NECV warrants under level 3 category as of March 31, 2024 and December 31, 2023 was calculated using a Black-Scholes valuation model valued with the following weighted average assumptions:

	March 31, 2024			December 31, 2023
Stock Price	$	0.0001		$	0.0001
Exercise price		0.001			0.001
Risk free interest rate		4.62	%		4.62	%
Annualized volatility		869.4	%		869.4	%
Dividend Yield		0.00			0.00
Year to maturity		6.31			6.56

VEII

On September 6, 2023, the Company received warrants to purchase shares of VEII, a related party listed company. For further details on this transaction, refer to Note 7 - Related Party Transactions, Note Receivable from a Related Party Company. As of March 31, 2024 and December 31, 2023, the fair value of the warrants was $877,257 and $2,487,854, respectively. The Company did not exercise any warrants during the three months ended March 31, 2024 and the year ended December 31, 2023.

The fair value of the VEII warrants under level 2 category as of March 31, 2024, and December 31, 2023 was calculated using a Black-Scholes valuation model valued with the following weighted average assumptions:

	March 31, 2024			December 31, 2023
Stock price	$	0.0240		$	0.0677
Exercise price		0.1770			0.1770
Risk free interest rate		8.50	%		8.50	%
Annualized volatility		291.68	%		275.85	%
Dividend Yield	$	0.00		$	0.00
Year to maturity		4.43			4.68

SHRG

On March 20, 2024, HWH International Inc., a subsidiary of the Company (“HWH”), entered into a Securities Purchase Agreement (the “Securities Purchase Agreement”) with SHRG, pursuant to which HWH purchased from SHRG a (i) Convertible Promissory Note in the amount of $250,000, convertible into 208,333,333 shares of SHRG’s common stock at the option of HWH, and (ii) certain warrants exercisable into 208,333,333 shares of SHRG’s common stock at an exercise price of $0.0012 per share, the exercise period of the warrant being five (5) years from the date of the Securities Purchase Agreement, for an aggregate purchase price of $250,000. At the time of filing, HWH has not converted any of the debt contemplated by the Convertible Note nor exercised any of the warrants.

The fair value of the SHRG warrants under level 2 category as of March 31, 2024, was calculated using a Black-Scholes valuation model valued with the following weighted average assumptions:

	March 31, 2024
Stock price	$	0.0016
Exercise price		0.0012
Risk free interest rate		4.22	%
Annualized volatility		136.81	%
Dividend Yield	$	0.00
Year to maturity		4.96

Convertible Loan Receivables

The Company has elected to recognize the convertible loan receivables at fair value and therefore there was no further evaluation of embedded features for bifurcation. The Company engaged third party valuation firm to perform the valuation of convertible loans. The fair value of the convertible loans is calculated using the binomial tree model based on probability of remaining as straight debt using discounted cash flow.