UNITED STATES SECURITIES AND EXCHANGE COMMISSION For the quarterly period ended June 30, 2025 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from __________to _________ 001-39732 Commission File Number Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Alset Inc. (Exact name of registrant as specified in its charter) TEXAS 83-1079861 State or other jurisdiction of ...

Core Viewpoint - Alset Inc. has announced a new stock repurchase program authorizing the buyback of up to $1,000,000 of its outstanding common stock, reflecting confidence in the company's long-term prospects and commitment to shareholder value [1][5]. Summary by Sections Stock Repurchase Program - The stock repurchase program is authorized to be executed until December 31, 2025, or until the full amount is utilized [2]. - The company has granted its broker complete discretion over repurchase decisions within agreed pricing and size parameters, with the option to suspend or discontinue the program at any time [3]. Company Overview - As of June 23, 2025, Alset Inc. had 11,735,119 shares of common stock issued and outstanding [4]. - Alset Inc. is a diversified holding company focused on developing smart and sustainable home communities, financial services, digital transformation technologies, biohealth activities, and consumer products [6]. Management Perspective - The Chairman and CEO of Alset Inc. stated that the current market price does not reflect the company's intrinsic value, emphasizing the diversified portfolio and strategic growth initiatives [5].

[PART I FINANCIAL INFORMATION](index=4&type=section&id=PART%20I%20FINANCIAL%20INFORMATION) Comprehensive financial data for the period, including statements, notes, and management's analysis [Item 1. Financial Statements (Unaudited)](index=4&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) Unaudited Q1 2025 financial statements show decreased revenue, increased net loss, and a decline in assets and cash flow Condensed Consolidated Balance Sheets Condensed Consolidated Balance Sheet Highlights (in USD) | Account | March 31, 2025 (Unaudited) | December 31, 2024 (Audited) | | :--- | :--- | :--- | | **Assets** | | | | Cash and Cash Equivalents | $25,194,810 | $27,243,787 | | Total Current Assets | $54,055,693 | $59,760,342 | | Real Estate - Rental Properties | $30,426,990 | $30,695,669 | | **Total Assets** | **$90,464,745** | **$96,761,977** | | **Liabilities & Equity** | | | | Total Current Liabilities | $4,818,269 | $5,476,601 | | **Total Liabilities** | **$5,654,372** | **$6,563,126** | | **Total Stockholders' Equity** | **$84,810,373** | **$90,198,851** | Condensed Consolidated Statements of Operations and Other Comprehensive Income Condensed Consolidated Statements of Operations (in USD) | Metric | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Total Revenue | $1,068,303 | $6,086,207 | | Loss from Operations | ($3,932,118) | ($2,266,513) | | Net Loss | ($9,504,892) | ($7,313,792) | | Net Loss Attributable to Common Stockholders | ($8,333,477) | ($6,769,658) | | Net Loss Per Share - Basic and Diluted | ($0.78) | ($0.73) | Condensed Consolidated Statements of Stockholders' Equity - Total stockholders' equity decreased from **$90.2 million** at the beginning of 2025 to **$84.8 million** at March 31, 2025, primarily driven by a net loss of **$9.5 million**, partially offset by common stock issuance and foreign currency adjustments[13](index=13&type=chunk) - The company issued **1,500,000** shares of common stock and warrants, contributing **$1.2 million** to stockholders' equity during the first quarter of 2025[13](index=13&type=chunk) Condensed Consolidated Statements of Cash Flows Condensed Consolidated Statements of Cash Flows (in USD) | Cash Flow Activity | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net Cash Used in Operating Activities | ($3,756,154) | ($1,509,247) | | Net Cash Used in Investing Activities | ($461,505) | ($1,758,503) | | Net Cash Provided by (Used in) Financing Activities | $2,333,452 | ($240,182) | | **Net Decrease in Cash** | **($1,884,207)** | **($3,507,932)** | Notes to Condensed Consolidated Financial Statements (Unaudited) - The company is a diversified holding company with four operating segments: real estate, digital transformation technology, biohealth, and other business activities, operating across multiple countries[20](index=20&type=chunk)[21](index=21&type=chunk) - For the three months ended March 31, 2024, one customer in the property development business accounted for **100%** of that segment's revenue, with no such concentration in 2025[117](index=117&type=chunk) - The company holds significant influence over publicly traded companies including DSS, Inc. (**43.6%** ownership), Value Exchange International Inc. (**48.7%** ownership), and Sharing Services Global Corp. (**29.0%** ownership, accounted for using the fair value option)[43](index=43&type=chunk) - A business combination between Alset Capital Acquisition Corp. and HWH International Inc. on January 9, 2024, was treated as a common control transaction with no effect on consolidated financial statements[137](index=137&type=chunk)[138](index=138&type=chunk)[141](index=141&type=chunk) - On January 2, 2025, the company sold **1,500,000** shares of common stock in a registered direct offering, receiving net proceeds of approximately **$1.2 million**[175](index=175&type=chunk)[178](index=178&type=chunk) - Subsequent to quarter-end, the company sold its equity interest in Impact Biomedical Inc., received a Nasdaq non-compliance notice for its stock price falling below **$1.00**, and awarded **1,000,000** restricted shares to its CEO[208](index=208&type=chunk)[210](index=210&type=chunk)[214](index=214&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=48&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management attributes the **82%** revenue decline to completed real estate sales, with net loss widening due to lower revenues and higher expenses Revenue by Segment (in USD) | Segment | Q1 2025 | Q1 2024 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Real Estate | $717,805 | $5,752,994 | ($5,035,189) | -88% | | Biohealth | $0 | $535 | ($535) | -100% | | Other | $350,498 | $332,678 | $17,820 | 5% | | **Total Revenue** | **$1,068,303** | **$6,086,207** | **($5,017,904)** | **-82%** | - The decrease in revenue is mainly attributed to the sale of the remaining properties in the Lakes at Black Oak and Alset Villas projects during 2024[257](index=257&type=chunk)[258](index=258&type=chunk) - Operating expenses increased by **14%** YoY, primarily due to impairment of goodwill and a note receivable, and a **$450,000** expense for an overpayment by a lot purchaser in 2024[265](index=265&type=chunk) - The company's cash position decreased from **$27.2 million** at year-end 2024 to **$25.2 million** as of March 31, 2025, with management believing available cash and **$8 million** in expected reimbursements are sufficient for the next 12 months[269](index=269&type=chunk)[272](index=272&type=chunk) - On May 13, 2025, Nasdaq issued a non-compliance notice due to the stock price falling below **$1.00** for **30** consecutive business days, granting **180** days to regain compliance[225](index=225&type=chunk)[214](index=214&type=chunk) - The company plans to acquire New Energy Asia Pacific Inc. (NEAPI) from its CEO for **$83 million** via a convertible promissory note, marking a strategic move into sustainable solutions[249](index=249&type=chunk)[251](index=251&type=chunk) [Item 3. Quantitative and Qualitative Disclosure About Market Risk](index=59&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosure%20About%20Market%20Risk) As a "smaller reporting company," Alset Inc. is not required to provide the information for this item - The Company is not required to provide information for this item as it qualifies as a "smaller reporting company" under Regulation S-K[281](index=281&type=chunk) [Item 4. Controls and Procedures](index=59&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures were not effective as of March 31, 2025 - Management concluded that the company's disclosure controls and procedures were not effective as of March 31, 2025[282](index=282&type=chunk) - No changes occurred during the quarter that materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting[283](index=283&type=chunk) [PART II OTHER INFORMATION](index=59&type=section&id=PART%20II%20OTHER%20INFORMATION) Details on legal proceedings, risk factors, equity sales, defaults, mine safety, and other relevant disclosures [Item 1. Legal Proceedings](index=59&type=section&id=Item%201.%20Legal%20Proceedings) The company reported no material legal proceedings - Not applicable[284](index=284&type=chunk) [Item 1A. Risk Factors](index=59&type=section&id=Item%201A.%20Risk%20Factors) As a smaller reporting company, this section is not applicable - Not applicable to smaller reporting companies[285](index=285&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=59&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reported no unregistered sales of equity securities - Not applicable[286](index=286&type=chunk) [Item 3. Defaults Upon Senior Securities](index=59&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reported no defaults upon senior securities - None[287](index=287&type=chunk) [Item 4. Mine Safety Disclosures](index=59&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This section is not applicable to the company - Not Applicable[288](index=288&type=chunk) [Item 5. Other Information](index=59&type=section&id=Item%205.%20Other%20Information) The company reported no other information - Not applicable[289](index=289&type=chunk) [Item 6. Exhibits](index=60&type=section&id=Item%206.%20Exhibits) The report includes key agreements for securities, compensation, and acquisition, along with required CEO and CFO certifications - Key exhibits filed include agreements related to a securities purchase, placement agency services, an incentive compensation plan, and an amended term sheet for a potential acquisition[290](index=290&type=chunk) - Certifications from the Chief Executive Officers and Chief Financial Officers pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act of 2002 are included[290](index=290&type=chunk) [SIGNATURES](index=61&type=section&id=SIGNATURES) Formal attestations by authorized company officers confirming the accuracy and completeness of the report

PART I [Business](index=5&type=section&id=Item%201%2E%20Business) Alset Inc. is a diversified holding company operating through its subsidiary in real estate, technology, and biohealth, with a strategy of acquiring and incubating businesses focused on sustainable living - Alset Inc. is a **diversified holding company** with three principal business segments: real estate, digital transformation technology, and biohealth, primarily managed through its **85.7% owned subsidiary**, Alset International Limited[13](index=13&type=chunk)[15](index=15&type=chunk) Revenue Contribution by Segment (FY 2024 vs FY 2023) | Segment | 2024 Revenue % | 2023 Revenue % | | :--- | :--- | :--- | | Property Development | 79% | 82% | | Other Business Activities | 7% | 5% | - The company holds **significant equity interests** in several other publicly traded companies, including **DSS Inc. (48.9%)**, **Value Exchange International, Inc. (indirect 48.7%)**, **Sharing Services Global Corporation (29.0%)**, and **Impact Biomedical Inc. (39.7%)**[14](index=14&type=chunk) - The real estate segment includes the development of EHome communities, with a key project being 'Lakes at Black Oak' near Houston, Texas, and a portfolio of **132 single-family rental homes**[25](index=25&type=chunk)[32](index=32&type=chunk)[37](index=37&type=chunk) - A key strategic initiative is the planned acquisition of New Energy Asia Pacific Inc (NEAPI) from the company's CEO for **$103.75 million** to expand into the electric vehicle market[56](index=56&type=chunk)[57](index=57&type=chunk)[58](index=58&type=chunk) [Risk Factors](index=16&type=section&id=Item%201A%2E%20Risk%20Factors) The company faces significant risks from a material weakness in internal controls, a history of net losses, and high dependence on its founder and CEO who holds majority ownership - Management has identified a **material weakness in internal controls** due to a limited number of staff, preventing proper segregation of duties and timely financial disclosure evaluation[98](index=98&type=chunk)[99](index=99&type=chunk)[100](index=100&type=chunk) Recent Financial Performance | Fiscal Year | Revenue | Net Loss | | :--- | :--- | :--- | | 2024 | $21,115,899 | $(4,165,816) | | 2023 | $22,088,507 | $(61,278,733) | - The company operates as a holding company and is **dependent on distributions from its subsidiaries** to meet obligations[103](index=103&type=chunk) - Several officers and directors serve in similar roles at subsidiaries and other non-majority owned businesses, creating **potential conflicts of interest** in time allocation[115](index=115&type=chunk)[117](index=117&type=chunk) - The company's success is **significantly dependent on its founder, Chairman, and CEO**, Chan Heng Fai, whose loss could materially harm the business[120](index=120&type=chunk) - The principal stockholder, Chan Heng Fai, owns approximately **62.6% of the outstanding common stock**, giving him significant influence over corporate decisions[176](index=176&type=chunk) [Unresolved Staff Comments](index=33&type=section&id=Item%201B%2E%20Unresolved%20Staff%20Comments) This section is not applicable as the company is a smaller reporting company - Not applicable to smaller reporting companies[180](index=180&type=chunk) [Cybersecurity](index=33&type=section&id=Item%201C%2E%20Cybersecurity) The company integrates cybersecurity into its risk management framework, with oversight by the Audit Committee and day-to-day management led by the CEO - Cybersecurity risk management is integrated into the company's broader risk management framework to foster a company-wide culture of security[182](index=182&type=chunk) - The Board's **Audit Committee has been delegated oversight** of cybersecurity, data privacy, and other IT risks, receiving periodic reports from management[184](index=184&type=chunk)[185](index=185&type=chunk) - The management team, led by the CEO, is responsible for assessing and managing material risks from cybersecurity threats[186](index=186&type=chunk) - The company reports that it has **not encountered any cybersecurity challenges** that have materially impaired its operations or financial standing[183](index=183&type=chunk) [Properties](index=33&type=section&id=Item%202%2E%20Properties) The company's main properties include the 'Lakes at Black Oak' development and a portfolio of 132 single-family rental homes in Texas - The company's primary real estate development project is 'Lakes at Black Oak' in Magnolia, Texas, where it has retained four model lots to build single-family rental homes[188](index=188&type=chunk)[189](index=189&type=chunk) - The 'Alset Villas' community, comprising 63 lots, was **fully sold** to Century Land Holdings of Texas, LLC in December 2024[191](index=191&type=chunk) - The company owns **132 single-family rental homes** in Montgomery and Harris Counties, Texas, acquired for a total cost of **$30,998,258**[192](index=192&type=chunk)[193](index=193&type=chunk) [Legal Proceedings](index=35&type=section&id=Item%203%2E%20Legal%20Proceedings) The company is not a party to any pending legal proceedings, and none are known to be contemplated - The Company is **not currently a party to any pending legal proceedings**, and none are known to be contemplated[196](index=196&type=chunk) [Mine Safety Disclosures](index=35&type=section&id=Item%204%2E%20Mine%20Safety%20Disclosures) This section is not applicable to the company - Not applicable[198](index=198&type=chunk) PART II [Market for Registrant's Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities](index=36&type=section&id=Item%205%2E%20Market%20for%20Registrant's%20Common%20Equity%2C%20Related%20Stockholder%20Matters%2C%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's common stock (AEI) trades on Nasdaq, with five shareholders of record as of March 2025, and it does not anticipate paying dividends or repurchasing stock - The company's common stock trades on the **Nasdaq Capital Market** under the symbol **'AEI'**[200](index=200&type=chunk) - As of March 31, 2025, there were **5 shareholders of record**, not including those holding shares in 'street name'[201](index=201&type=chunk) - The company has **never paid dividends** on its common stock and does not plan to in the foreseeable future, retaining earnings for growth[202](index=202&type=chunk) - The company **did not repurchase any of its equity securities** during 2024[206](index=206&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=36&type=section&id=Item%207%2E%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Revenue decreased 4% to $21.1 million in 2024, but the net loss significantly narrowed to $4.2 million from $61.3 million due to gains on securities and investments Consolidated Financial Summary (FY 2024 vs FY 2023) | Metric | 2024 | 2023 | | :--- | :--- | :--- | | Total Revenue | $21,115,899 | $22,088,507 | | Net Loss | $(4,165,816) | $(61,278,733) | Revenue by Segment (FY 2024 vs FY 2023) | Segment | 2024 Revenue | 2023 Revenue | Change % | | :--- | :--- | :--- | :--- | | Real Estate | $19,608,184 | $20,963,661 | -6% | | Digital Transformation | $0 | $28,117 | -100% | | Biohealth | $0 | $12,758 | -100% | | Other | $1,507,715 | $1,083,971 | 39% | | **Total** | **$21,115,899** | **$22,088,507** | **-4%** | - The **significant decrease in net loss** was primarily due to a realized gain on securities investment of **$461,247** in 2024 versus a loss of **$11,375,747** in 2023[273](index=273&type=chunk) - Cash and cash equivalents increased slightly to **$27.2 million** at year-end 2024, while total assets decreased to **$96.8 million** from $126.3 million[276](index=276&type=chunk) - Net cash provided by operating activities was **$5.2 million** in 2024, down from $7.5 million in 2023, mainly from property sales[282](index=282&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=52&type=section&id=Item%207A%2E%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) This section is not applicable as the company is a smaller reporting company - Not applicable to smaller reporting companies[329](index=329&type=chunk) [Financial Statements and Supplementary Data](index=53&type=section&id=Item%208%2E%20Financial%20Statements%20and%20Supplementary%20Data) Consolidated financial statements show decreased assets to $96.8 million and a narrowed net loss of $4.2 million in 2024, with stockholders' equity at $90.2 million Consolidated Balance Sheet Highlights | Account | Dec 31, 2024 | Dec 31, 2023 | | :--- | :--- | :--- | | Cash and Cash Equivalents | $27,243,787 | $26,921,727 | | Total Assets | $96,761,977 | $126,314,028 | | Total Liabilities | $6,563,126 | $9,066,700 | | Total Stockholders' Equity | $90,198,851 | $96,790,317 | Consolidated Statement of Operations Highlights | Account | 2024 | 2023 | | :--- | :--- | :--- | | Total Revenue | $21,115,899 | $22,088,507 | | Loss from Operations | $(4,117,076) | $(2,872,654) | | Net Loss | $(4,165,816) | $(61,278,733) | | Net Loss Per Share | $(0.43) | $(6.52) | Consolidated Cash Flow Highlights | Activity | 2024 | 2023 | | :--- | :--- | :--- | | Net cash provided by operating activities | $5,156,047 | $7,478,823 | | Net cash provided by (used in) investing activities | $17,468,306 | $(2,128,986) | | Net cash (used in) provided by financing activities | $(21,419,083) | $3,187,489 | [Changes in and Disagreements with Accountants on Accounting and Financial Disclosures](index=107&type=section&id=Item%209%2E%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosures) This section is not applicable to the company - Not applicable[619](index=619&type=chunk) [Controls and Procedures](index=107&type=section&id=Item%209A%2E%20Controls%20and%20Procedures) Management concluded disclosure controls were ineffective due to a material weakness from limited staffing, with plans to remediate by hiring additional qualified personnel - Management concluded that **disclosure controls and procedures were ineffective** as of December 31, 2024[621](index=621&type=chunk) - A **material weakness** was identified due to limited staff, which prevents segregation of duties and restricts timely evaluation of financial statement disclosures[624](index=624&type=chunk) - The company plans to remediate the material weakness by **hiring additional qualified personnel** with relevant financial and SEC reporting experience[627](index=627&type=chunk) [Other Information](index=108&type=section&id=Item%209B%2E%20Other%20Information) No directors or officers adopted or terminated Rule 10b5-1 trading arrangements during the fourth quarter of 2024 - No directors or officers adopted or terminated any Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during the quarter ended December 31, 2024[628](index=628&type=chunk) [Disclosure Regarding Foreign Jurisdictions That Prevent Inspections](index=108&type=section&id=Item%209C%2E%20Disclosure%20Regarding%20Foreign%20Jurisdictions%20That%20Prevent%20Inspections) This section is not applicable to the company - Not applicable[629](index=629&type=chunk) PART III [Directors, Executive Officers and Corporate Governance](index=109&type=section&id=Item%2010%2E%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) The company is led by founder and CEO Chan Heng Fai, with a board structure that includes Audit, Nominations, and Compensation committees composed of independent directors - The executive team is led by founder, Chairman, and CEO **Chan Heng Fai**, and Co-CEO **Chan Tung Moe**[631](index=631&type=chunk) - Chan Heng Fai has extensive experience in banking, finance, and corporate restructuring and serves on the boards of several affiliated companies[632](index=632&type=chunk)[633](index=633&type=chunk)[634](index=634&type=chunk) - The Board of Directors has three main committees: **Audit, Nominations and Corporate Governance, and Compensation**, with the Audit Committee including a designated financial expert[663](index=663&type=chunk)[664](index=664&type=chunk) - The company has adopted a written **code of ethics** and an **insider trading policy** applicable to all directors, officers, and employees[659](index=659&type=chunk)[662](index=662&type=chunk) [Executive Compensation](index=115&type=section&id=Item%2011%2E%20Executive%20Compensation) Executive compensation is led by CEO Chan Heng Fai's $448,430 salary, with bonuses tied to market cap growth and a new 2025 incentive plan for up to 2.1 million shares 2024 Named Executive Officer Compensation | Name | Position | 2024 Salary | 2024 Bonus | 2024 Total Compensation | | :--- | :--- | :--- | :--- | :--- | | Chan Heng Fai | Chairman & CEO | $448,430 | - | $448,430 | | Chan Tung Moe | Co-CEO | $293,640 | $83,141 | $376,781 | | Lui Wai Leung Alan | Co-CFO | $199,326 | - | $199,326 | | Rongguo Wei | Co-CFO | $232,073 | - | $232,073 | | Charles MacKenzie | Chief Development Officer | - | - | $360,000 (All Other) | - CEO Chan Heng Fai's employment agreement entitles him to **bonus payments equal to 5% of the growth in market capitalization** and 5% of the growth in net asset value annually[678](index=678&type=chunk) - In 2024, compensation for independent members of the Board of Directors was increased to **$5,000 per quarter**[695](index=695&type=chunk) - The 2018 Incentive Compensation Plan was replaced by the **2025 Incentive Compensation Plan**, covering up to **2,147,024 shares** of common stock[689](index=689&type=chunk)[617](index=617&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=119&type=section&id=Item%2012%2E%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Founder and CEO Chan Heng Fai beneficially owns 62.6% of outstanding common stock, giving him significant control over the company - As of March 31, 2025, there were **10,735,119 shares of common stock outstanding**[699](index=699&type=chunk) Beneficial Ownership of Principal Stockholder | Name | Shares Beneficially Owned | Percentage of Outstanding Shares | | :--- | :--- | :--- | | Chan Heng Fai | 6,718,742 | 62.6% | - All directors and executive officers as a group beneficially own 6,718,742 shares, representing **62.6% of the outstanding common stock**[701](index=701&type=chunk) [Certain Relationships and Related Transactions, and Director Independence](index=120&type=section&id=Item%2013%2E%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) The company engages in numerous related-party transactions, notably the planned $103.75 million acquisition of a company from its CEO and various loans to affiliates - The company has a planned acquisition of New Energy Asia Pacific Inc from its CEO, Chan Heng Fai, for **$103.75 million**, to be paid in a convertible promissory note[742](index=742&type=chunk)[743](index=743&type=chunk)[745](index=745&type=chunk) - On January 9, 2024, affiliated entities Alset Capital Acquisition Corp and HWH International Inc **completed a business combination**, with the combined entity now trading as HWH International Inc (Nasdaq: HWH)[717](index=717&type=chunk)[719](index=719&type=chunk)[721](index=721&type=chunk) - The company reorganized its home rental business by purchasing American Home REIT Inc (AHR) from its subsidiary for **$26.25 million**[729](index=729&type=chunk)[730](index=730&type=chunk)[731](index=731&type=chunk) - The company and its subsidiaries have provided **multiple convertible loans** to affiliates Value Exchange International Inc (VEII) and Sharing Services Global Corp (SHRG) throughout 2023 and 2024[733](index=733&type=chunk)[747](index=747&type=chunk)[749](index=749&type=chunk) [Principal Accounting Fees and Services](index=127&type=section&id=Item%2014%2E%20Principal%20Accounting%20Fees%20and%20Services) The company paid its auditor, Grassi & Co, a total of $274,343 in 2024, down from $330,341 in 2023, primarily for audit services Accounting Fees Paid (FY 2024 vs FY 2023) | Fee Category | 2024 | 2023 | | :--- | :--- | :--- | | Audit Fees | $268,178 | $275,370 | | Audit-Related Fees | $0 | $48,806 | | Tax Fees | $6,165 | $6,165 | | All Other Fees | $0 | $0 | | **Total** | **$274,343** | **$330,341** | - The company engaged **Grassi & Co., CPAs, P.C.** as its independent registered public accounting firm for the fiscal year ending December 31, 2024[759](index=759&type=chunk) PART IV [Exhibit and Financial Statement Schedules](index=128&type=section&id=Item%2015%2E%20Exhibit%20and%20Financial%20Statement%20Schedules) This section lists the consolidated financial statements and all exhibits filed with the Form 10-K, including material contracts and required certifications - This section lists the consolidated financial statements filed with the report, including the Balance Sheets, Statements of Operations, Statements of Stockholders' Equity, and Statements of Cash Flows[762](index=762&type=chunk) - A detailed list of exhibits is provided, including underwriting agreements, certificates of incorporation, bylaws, material contracts, incentive plans, and required certifications under the Sarbanes-Oxley Act[763](index=763&type=chunk)[764](index=764&type=chunk)[769](index=769&type=chunk) [Form 10-K Summary](index=131&type=section&id=Item%2016%2E%20Form%2010-K%20Summary) No Form 10-K summary is provided in this section - None[768](index=768&type=chunk)

Company Overview - Alset Inc. is a diversified company engaged in the development of EHome communities, real estate, financial services, digital transformation technologies, biohealth activities, and consumer products with operations in the United States, Singapore, Hong Kong, and South Korea [1][4] - The company's mission is to provide a healthy living ecosystem that drives long-term exponential growth, building liquidity and value for shareholders [4] Recent Offering - Alset Inc. announced the closing of a registered direct offering for an aggregate of 1,500,000 shares of common stock at a purchase price of $1.00 per share, resulting in gross proceeds of approximately $1.5 million before expenses [1][2] - The offering was conducted under Nasdaq rules and was made pursuant to an effective shelf registration statement previously filed with the U.S. Securities and Exchange Commission (SEC) [3] Use of Proceeds - The net proceeds from the offering, along with existing cash, are expected to be used for general corporate purposes and working capital [2]

Core Viewpoint - Alset Inc. has announced a registered direct offering with institutional investors for approximately $1.5 million in common stock and pre-funded warrants at a price of $1.00 per share, aiming to utilize the proceeds for general corporate purposes and working capital [1][3]. Group 1: Offering Details - The offering includes the sale of 1,500,000 shares of common stock or pre-funded warrants, priced at $1.00 per share for common stock and $0.999 for each pre-funded warrant [2]. - Pre-funded warrants are immediately exercisable and can be exercised at any time until fully exercised, with a one-for-one decrease in the number of common stock shares offered for each pre-funded warrant sold [2]. Group 2: Financial Proceeds and Use - The aggregate gross proceeds from the offering are expected to be approximately $1.5 million, with the transaction anticipated to close on or about January 3, 2025, pending customary closing conditions [3]. - The net proceeds from the offering, along with existing cash, will be used for general corporate purposes and working capital [3]. Group 3: Legal and Regulatory Aspects - Aegis Capital Corp. is acting as the exclusive placement agent for the offering, while Sichenzia Ross Ference Carmel LLP and Kaufman & Canoles, P.C. are serving as U.S. counsel for the company and Aegis Capital Corp., respectively [4]. - The offering is made under an effective shelf registration statement previously filed with the SEC, with a final prospectus supplement to be filed and available on the SEC's website [5].

Ownership and Equity Interests - Alset Inc. owns 85.7% of Alset International, which is traded on the Singapore Stock Exchange, and collectively owns 88.1% of HWH International Inc. [245] - Alset Inc. has minority ownership interests, including a 36.9% equity interest in American Pacific Financial, Inc., a 44.4% equity interest in DSS Inc., and a 48.7% equity interest in Value Exchange International Inc. [246] - The Company currently owns 21,179,275 shares of VEII, representing approximately 48.7% ownership [264] - The company received 70,426,832 shares of SHRG directly and 55,197,696 shares indirectly through its majority-owned subsidiaries, totaling 89,732 shares after a 1-for-1,400 reverse split, representing 29% of SHRG's issued and outstanding shares [265] Mergers, Acquisitions, and Stock Transactions - The merger between Alset Capital and HWH Nevada resulted in the issuance of 12,500,000 shares of New HWH common stock, with Alset International receiving 10,900,000 shares [250] - Alset Inc. converted $300,000 of HWH's debt into 476,190 shares of HWH's common stock, and Alset International Limited converted $3,501,759 of HWH's debt into 5,558,347 shares of HWH's common stock [253] - Alset Inc. entered into a Stock Purchase Agreement to purchase 6,500,000 shares of HWH International Inc. for $4,095,000, secured by a promissory note with a 5% interest rate [254] - The acquisition of Hapi Travel Limited resulted in a deemed dividend of $214,174 due to the purchase price exceeding identifiable equity [257] - Hapi Metaverse converted $1,300,000 of the principal amount loaned to VEII into 7,344,632 shares of VEII's Common Stock and received warrants to purchase 36,723,160 shares at $0.1770 per share [261] - The company issued a $250,000 convertible loan to SHRG with a 10% interest rate, convertible into SHRG shares at the average closing market price within three days of conversion notice [266] - HWH International purchased a $250,000 convertible note from SHRG, convertible into 148,810 shares of SHRG common stock, along with warrants for 148,810 shares at $1.68 per share [267] - HWH International entered into a $250,000 convertible note with SHRG, convertible into 89,286 shares of SHRG common stock at an 8% interest rate [268] - The company plans to acquire New Energy Asia Pacific Inc. for $103,750,000, payable via a convertible promissory note with a 3% annual interest rate and a conversion price of $12.00 per share [272] Revenue and Financial Performance - The company's revenue for the three months ended September 30, 2024, was $4,960,711, a 401% increase compared to $990,199 in the same period in 2023 [280] - Revenue from the Real Estate segment for the three months ended September 30, 2024, was $4,539,699, a 538% increase compared to $711,634 in the same period in 2023 [280] - The company's net loss for the nine months ended September 30, 2024, was $6,994,516, compared to a net loss of $27,162,596 in the same period in 2023 [279] - The company had net income of $1,469,239 in the three months ended September 30, 2024 compared to a net loss of $17,026,008 in the same period of 2023 [297] - Gross margin increased from $409,140 to $2,010,887 in the three months ended September 30, 2023 and 2024, respectively [293] - Cost of revenues increased from $581,059 in the three months ended September 30, 2023 to $2,949,824 in the three months ended September 30, 2024 [291][292] - Operating expenses increased from $2,486,044 in the three months ended September 30, 2023 to $2,974,667 in the three months ended September 30, 2024 [294] Real Estate and Lot Sales - The sale of 142 single-family residential lots in Magnolia, Texas, is anticipated to generate approximately $7.4 million, with $3.8 million already realized from the sale of 70 lots [259] - The company expects to improve liquidity and financial position through continued lot sales to regional and national builders, with recent sales generating approximately $7.7 million [282][283] - Revenue from the lease of model houses in Montgomery County, Texas was $6,300 and $18,900 for the three and nine months ended September 30, 2024, respectively [285][286] - The company anticipates selling 142 single-family residential lots for approximately $7.4 million and 63 lots for approximately $3.3 million in the Lakes at Black Oak project [303] Cash Flow and Financing Activities - Cash decreased from $26,921,727 as of December 31, 2023 to $16,679,183 as of September 30, 2024 [299] - Net cash used in financing activities was $21,370,610 in the nine months ended September 30, 2024, compared to net cash provided of $3,408,560 in the same period in 2023 [307] - Repayment of $398,000 of note payable and $21,102,871 of HWH's shares contributed to the cash used in financing activities in the first nine months of 2024 [307] - The company borrowed $130,261 from a commercial loan in the first nine months of 2024 [307] - Proceeds from stock issuance of $3,433,921 contributed to the cash provided by financing activities in the first nine months of 2023 [307] Foreign Exchange and Market Risks - Foreign exchange rate changes on intercompany loans of approximately $26 million and $23 million on September 30, 2024 and December 31, 2023, respectively, caused significant fluctuations in foreign currency transaction gain or loss [309] - The company expects foreign exchange rate fluctuations to significantly impact results of operations in 2024 due to the intercompany loan balance remaining at approximately $26 million [309] - Inflation has not had a material impact on the company's results of operations for the nine months ended September 30, 2024 or the year ended December 31, 2023 [308] Business Segments and Revenue Sources - HWH World, the company's biohealth segment in South Korea, recognized $0 and $12,786 in revenue for the nine months ended September 30, 2024 and 2023, respectively [287] - Revenue from the Digital Transformation Technology segment was $0 and $28,094 for the nine months ended September 30, 2024 and 2023, respectively [288] - Revenue from other businesses, including financial services, food and beverage, and new ventures, was $421,012 and $1,176,260 for the three and nine months ended September 30, 2024, respectively [290] Regulatory and Reporting Considerations - The company is an "emerging growth company" and may take advantage of certain exemptions from reporting requirements under the JOBS Act [310] - The real estate business is subject to seasonal shifts in costs, which may impact expenses of subsidiary Alset EHome Inc [311] - The company is not required to provide quantitative and qualitative disclosures about market risk as a "smaller reporting company" [312] New Energy and Electric Vehicles - New Energy Asia Pacific has signed MOUs totaling $42 million in value for electric vehicles and charging stations, with plans to expand revenues significantly in the coming months [273]

Mergers and Acquisitions - Alset Inc. completed the merger with HWH International Inc. on January 9, 2024, resulting in the issuance of 12,500,000 shares of New HWH common stock, with Alset International receiving 10,900,000 shares[140]. - The acquisition of Hapi Travel Limited on June 14, 2023, was accounted for as a business combination, generating a deemed dividend of $214,174 due to the purchase price exceeding identifiable equity[144]. - Alset Inc. purchased 112 single-family rental homes in Texas for a total consideration of $26,250,933, which included debt forgiveness of $13,900,000[142]. Revenue and Financial Performance - For the three months ended June 30, 2024, the company reported revenue of $1,127,046, a decrease from $19,153,848 for the same period in 2023[157]. - Total revenue for the three months ended June 30, 2024, was $1,127,046, a decrease of 94% from $19,153,848 in the same period of 2023[159]. - Revenue from the real estate segment for the six months ended June 30, 2024, was $6,458,005, down 67% from $19,515,728 in 2023[159]. - Revenue from rental business increased to $705,011 for the three months ended June 30, 2024, compared to $690,967 in 2023[159]. - The company recognized $0 in revenue from its biohealth segment for the three months ended June 30, 2024, down from $12,786 in 2023[159]. Expenses and Losses - Operating expenses for the three months ended June 30, 2024, were $3,936,518, compared to $14,044,352 for the same period in 2023[157]. - The net loss for the three months ended June 30, 2024, was $1,149,965, down from a net loss of $5,813,406 for the same period in 2023[157]. - Operating expenses increased by 35% to $3,106,560 for the three months ended June 30, 2024, compared to $2,305,859 in 2023[162]. - The gross margin decreased from $7,415,355 to $297,088 for the three months ended June 30, 2023, and 2024, respectively[161]. - Total cost of revenues decreased by 93% to $829,958 for the three months ended June 30, 2024, from $11,738,493 in 2023[161]. Cash Flow and Financial Position - Cash decreased from $26,921,727 as of December 31, 2023, to $18,932,861 as of June 30, 2024[165]. - Net cash used in operating activities was $5,897,249 in the first six months of 2024, compared to $7,409,770 provided in the same period of 2023[167]. - Net cash provided by investing activities was $19,616,855 in the first six months of 2024, a significant increase from $606,983 used in the same period of 2023[168]. - Net cash used in financing activities was $21,351,570 in the first six months of 2024, compared to $3,416,971 provided in the same period of 2023[169]. - The company issued $1,118,864 in loans to related parties and withdrew $21,102,871 from a trust account for redemption of shares in the first six months of 2024[168]. Investments and Ownership - The company currently owns 21,179,275 shares of VEII, representing approximately 48.7% of VEII's common stock[150]. - Alset Inc. holds a 36.9% equity interest in American Pacific Financial, Inc., and a 44.4% equity interest in DSS Inc., among other investments[139]. - On May 4, 2023, DSS distributed approximately 280 million shares of SHRG, resulting in the company receiving 70,426,832 shares directly and an additional 55,197,696 shares indirectly[151]. - The company and its subsidiaries now collectively own 125,624,528 shares of SHRG, representing 33.4% of the issued and outstanding shares of SHRG[151]. - Hapi Metaverse loaned VEII $1,400,000 on February 23, 2023, which can be converted into shares of VEII for a period of three years[150]. - Hapi Metaverse converted $1,300,000 of the principal amount loaned to VEII into 7,344,632 shares of VEII's Common Stock on September 6, 2023[150]. - The company entered into a Convertible Promissory Note with SHRG for a $250,000 loan, convertible into shares at an average closing market price[152]. Strategic Focus and Challenges - The company is facing challenges in improving revenue through cross-selling and identifying complementary businesses for acquisition[155]. - The company plans to focus on lot sales to improve liquidity and strengthen its financial position[159]. - New HWH is implementing a new membership model that operates on a yearly subscription basis, offering exclusive discounts and passive income opportunities for members[141]. Other Considerations - The company expects foreign exchange rate fluctuations to significantly impact operations in 2024, with intercompany loans of approximately $37 million as of June 30, 2024[171]. - The company is classified as an "emerging growth company" and is utilizing exemptions from certain reporting requirements under the JOBS Act[172]. - The real estate business is subject to seasonal shifts, which may impact expenses and sales spikes when commencing new projects[173].

[PART I FINANCIAL INFORMATION](index=3&type=section&id=PART%20I%20FINANCIAL%20INFORMATION) Presents unaudited financial statements, management's discussion, market risk, and controls for Q1 2024 [Item 1. Financial Statements (Unaudited)](index=3&type=section&id=Item%201.%20Financial%20Statements%20%28Unaudited%29) Presents Alset Inc.'s unaudited condensed consolidated financial statements for Q1 2024, showing increased revenue but a wider net loss [Condensed Consolidated Balance Sheets](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets decreased to **$96.7 million** from **$126.3 million**, primarily due to reduced trust account cash after redemptions Condensed Consolidated Balance Sheet Highlights (in USD) | Account | March 31, 2024 | December 31, 2023 | | :--- | :--- | :--- | | **Total Current Assets** | $48,132,390 | $55,461,235 | | **Total Assets** | **$96,710,288** | **$126,314,028** | | **Total Current Liabilities** | $4,635,740 | $8,114,304 | | **Total Liabilities** | **$6,670,132** | **$9,066,700** | | **Total Stockholders' Equity** | **$90,040,156** | **$96,790,317** | - The significant decrease in total assets was mainly driven by the reduction of 'Cash and Marketable Securities Held in Trust Account' from **$21.3 million** to **$0** after the HWH International Inc. business combination and related redemptions[6](index=6&type=chunk)[27](index=27&type=chunk) [Condensed Consolidated Statements of Operations and Other Comprehensive Loss](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Other%20Comprehensive%20Loss) Revenue increased to **$6.1 million**, but net loss widened to **$6.8 million** due to unrealized investment losses Q1 2024 vs Q1 2023 Performance (in USD) | Metric | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | **Total Revenue** | $6,086,207 | $926,936 | | **Loss from Operations** | ($2,266,513) | ($2,089,730) | | **Net Loss** | ($7,313,792) | ($4,323,182) | | **Net Loss Attributable to Common Stockholders** | ($6,769,658) | ($3,857,886) | | **Net Loss Per Share (Basic and Diluted)** | ($0.73) | ($0.46) | - The increase in net loss was significantly impacted by a **$5.4 million** unrealized loss on related-party securities investments in Q1 2024, compared to a **$1.3 million** gain in Q1 2023[8](index=8&type=chunk) [Condensed Consolidated Statements of Stockholders' Equity](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Stockholders%27%20Equity) Stockholders' equity decreased to **$90.0 million** from **$96.8 million**, primarily due to net loss and foreign currency translation - Total stockholders' equity decreased by approximately **$6.8 million** during Q1 2024, from **$96,790,317** to **$90,040,156**[10](index=10&type=chunk)[11](index=11&type=chunk) - Key changes in equity included a net loss of **$7.3 million** and an other comprehensive loss of **$1.2 million** from foreign currency translation adjustments[11](index=11&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash used in operating activities decreased to **$1.5 million**, while investing activities reversed to a net use of **$1.8 million** Cash Flow Summary (in USD) | Cash Flow Activity | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | **Net Cash Used in Operating Activities** | ($1,509,247) | ($3,289,083) | | **Net Cash (Used in) Provided by Investing Activities** | ($1,758,503) | $671,484 | | **Net Cash (Used in) Provided by Financing Activities** | ($240,182) | $3,433,921 | | **Net (Decrease) Increase in Cash** | ($3,507,932) | $816,322 | [Notes to Unaudited Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) Provides detailed accounting policies, significant events including the HWH business combination, related-party transactions, and segment information - The company operates through four segments: real estate, digital transformation technology, biohealth, and other business activities, with a significant portion managed through its **85.5%** owned subsidiary, Alset International Limited[19](index=19&type=chunk)[66](index=66&type=chunk) - On January 9, 2024, the business combination between Alset Capital Acquisition Corp. and HWH International Inc. was completed, with HWH surviving as a subsidiary[86](index=86&type=chunk) - The company has agreements to sell a total of **205 lots** (142 lots and 63 lots) from its Lakes at Black Oak and Alset Villas projects, with closings expected in Q2 2024[118](index=118&type=chunk) - For the three months ended March 31, 2024, one customer accounted for approximately **100%** of the Company's property development revenue[65](index=65&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=37&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses diversified operations, strategic developments, and financial performance, highlighting increased revenue but wider net loss [Business Overview and Recent Developments](index=37&type=section&id=Business%20Overview%20and%20Recent%20Developments) Details the company's diversified holdings and recent strategic actions, including the HWH merger and convertible loan issuances - The company is a diversified holding company with significant equity interests in APF (**36.9%**), Holista (**13%**), DSS (**44.4%**), VEII (**48.7%**), and SHRG (**33.4%**)[126](index=126&type=chunk) - Completed the merger of Alset Capital Acquisition Corp. and HWH International Inc. on January 9, 2024, with the combined entity named HWH International Inc. ("New HWH")[127](index=127&type=chunk)[128](index=128&type=chunk) - Issued convertible loans to affiliates Value Exchange International, Inc. (VEII) and Sharing Services Global Corp. (SHRG) in Q1 2024 and late 2023[137](index=137&type=chunk)[139](index=139&type=chunk) [Results of Operations](index=42&type=section&id=Results%20of%20Operations) Revenue surged **557%** to **$6.1 million** driven by real estate sales, but net loss increased to **$7.3 million** due to higher expenses Revenue by Segment (in USD) | Segment | Q1 2024 | Q1 2023 | Change (%) | | :--- | :--- | :--- | :--- | | Real Estate | $5,752,994 | $633,811 | 808% | | Biohealth | $535 | $12,786 | -96% | | Digital Transformation Technology | $0 | $14,040 | -100% | | Other | $332,678 | $266,299 | 25% | | **Total Revenue** | **$6,086,207** | **$926,936** | **557%** | - The increase in property sales from the Lakes at Black Oak Project was the primary contributor to the significant revenue growth in Q1 2024[143](index=143&type=chunk) - Gross margin increased from **$237,655** in Q1 2023 to **$1,427,840** in Q1 2024 due to higher sales from the Lakes at Black Oak Project[145](index=145&type=chunk) [Liquidity and Capital Resources](index=44&type=section&id=Liquidity%20and%20Capital%20Resources) Cash decreased to **$23.7 million**, and total assets declined to **$96.7 million**, though management expects sufficient liquidity for 12 months Key Liquidity Metrics (in USD) | Metric | March 31, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Cash | $23,727,542 | $26,921,727 | | Total Assets | $96,710,288 | $126,314,028 | | Total Liabilities | $6,670,132 | $9,066,700 | - Management believes that available cash and favorable cash revenue from real estate projects are sufficient to fund operations for at least the next 12 months[147](index=147&type=chunk) - Future development of the Lakes at Black Oak project is contingent on funds raised from capital markets, third-party loans, and government reimbursements[147](index=147&type=chunk) [Item 3. Quantitative and Qualitative Disclosure About Market Risk](index=46&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosure%20About%20Market%20Risk) The company is exempt from market risk disclosure requirements due to its status as a smaller reporting company - The company is exempt from this disclosure requirement due to its status as a "smaller reporting company" as defined by Regulation S-K[156](index=156&type=chunk) [Item 4. Controls and Procedures](index=46&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls were not effective as of March 31, 2024, with no material changes to internal controls - Management concluded that the company's disclosure controls and procedures were not effective as of March 31, 2024[156](index=156&type=chunk) - No changes in internal control over financial reporting occurred during the quarter that materially affected, or are reasonably likely to materially affect, these controls[156](index=156&type=chunk) [PART II OTHER INFORMATION](index=46&type=section&id=PART%20II%20OTHER%20INFORMATION) Covers legal proceedings, risk factors, exhibits, and other required disclosures for the reporting period [Items 1-5: Legal Proceedings, Risk Factors, and Other Disclosures](index=46&type=section&id=Items%201-5) No legal proceedings, unregistered sales, defaults, or other material information to report, with risk factors not applicable - Item 1. Legal Proceedings: Not applicable[156](index=156&type=chunk) - Item 1A. Risk Factors: Not applicable to smaller reporting companies[156](index=156&type=chunk) - Items 2, 3, 4, 5: No information to report[156](index=156&type=chunk) [Item 6. Exhibits](index=47&type=section&id=Item%206.%20Exhibits) Lists filed exhibits, including CEO and CFO certifications and Inline XBRL documents for interactive data - Exhibits filed include certifications from the Chief Executive Officers and Chief Financial Officers pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act[157](index=157&type=chunk) - The filing includes Inline XBRL Instance, Schema, Calculation, Definition, Label, and Presentation documents[157](index=157&type=chunk)

Part I [Business](index=4&type=section&id=Item%201.%20Business.) Alset Inc. is a diversified holding company primarily engaged in real estate development, digital transformation technologies, and biohealth, with real estate being the largest revenue contributor in 2023 - The company is a diversified holding company with three main segments: Real Estate, Digital Transformation Technology, and Biohealth, primarily managed through its **85.5% owned subsidiary, Alset International Limited**[6](index=6&type=chunk) - The real estate segment, focused on developing EHome communities and single-family rentals near Houston, Texas, was the **primary revenue driver in 2023**[6](index=6&type=chunk)[9](index=9&type=chunk) - The company's growth strategy focuses on acquiring majority stakes in businesses where its management, led by Chairman and CEO Chan Heng Fai, can add value, particularly in expanding to Asian markets[6](index=6&type=chunk) Revenue Contribution by Business Segment (2023 vs 2022) | Business Segment | 2023 Revenue % | 2022 Revenue % | | :--- | :--- | :--- | | Property Development | 82% | 29% | | Other Business Activities | 5% | 13% | [Our Current Operations](index=6&type=section&id=Our%20Current%20Operations) The company's operations are segmented into Real Estate, Digital Transformation Technology, Biohealth, and Other Business Activities, encompassing property development, B2B e-commerce, health product distribution, and diverse strategic investments - The Real Estate business consists of two main activities: property development (selling developed lots to builders) and a home rental business with **132 single-family homes in Texas**[9](index=9&type=chunk)[13](index=13&type=chunk) - In 2023, the company entered into agreements to sell a combined **434 lots** from its 'Lakes at Black Oak' project and **63 lots** from 'Alset Villas', with closings occurring in 2023 and extending into 2024[10](index=10&type=chunk)[11](index=11&type=chunk) - The Digital Transformation business, through Hapi Metaverse, focuses on B2B solutions including e-commerce, social media, and metaverse services, and holds a significant stake in Value Exchange International Inc. (VEII)[15](index=15&type=chunk) - The Biohealth segment, primarily through HWH World, distributes dietary supplements in South Korea using a direct sales model[17](index=17&type=chunk) - Other business activities include corporate advisory services via BMI Capital Partners, operating Killiney Kopitiam restaurant franchises and Hapi Cafes in Asia, and a planned acquisition of New Energy Asia Pacific Inc. for **$103.75 million** via a convertible note[18](index=18&type=chunk)[19](index=19&type=chunk) [Risk Factors](index=16&type=section&id=Item%201A.%20Risk%20Factors.) The company faces significant risks including material weakness in internal controls, a history of net losses, challenges in integrating acquisitions, reliance on key personnel, and high stock concentration by the CEO - Management has identified a **material weakness in internal controls** due to a limited number of staff, preventing proper segregation of duties and potentially affecting the accuracy and timeliness of financial reporting[33](index=33&type=chunk) - The company has a history of significant net losses, which may continue and negatively impact its ability to achieve business objectives[34](index=34&type=chunk) Recent Financial Performance (in USD) | Metric | 2023 | 2022 | | :--- | :--- | :--- | | Revenue | $22,088,507 | $4,480,442 | | Net Loss | ($61,278,733) | ($46,212,505) | - The company's success is highly dependent on its founder, Chairman, and CEO, Chan Heng Fai; the loss of his services could have a material adverse effect on the business[43](index=43&type=chunk) - Principal stockholder Chan Heng Fai owns approximately **53.5%** of the outstanding common stock, giving him significant influence over corporate decisions[68](index=68&type=chunk) [Unresolved Staff Comments](index=33&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments.) This item is not applicable as the company qualifies as a smaller reporting company - Not applicable to smaller reporting companies[72](index=72&type=chunk) [Cybersecurity](index=33&type=section&id=Item%201C.%20Cybersecurity.) Cybersecurity risk management is integrated into the company's overall framework, and no material cybersecurity challenges have impacted operations or financial condition to date - Cybersecurity risk management is integrated into the company's broader risk management framework[73](index=73&type=chunk) - The company reports that it has not encountered any cybersecurity challenges that have materially impaired its operations or financial standing[73](index=73&type=chunk) [Properties](index=33&type=section&id=Item%202.%20Properties.) The company's key properties include the Lakes at Black Oak and Alset Villas residential developments, alongside a portfolio of 132 single-family rental homes in Texas, many featuring sustainable technologies - The Lakes at Black Oak property in Magnolia, Texas, is a key residential land development project where the company has been selling developed lots[74](index=74&type=chunk) - The Alset Villas community, also near Houston, consists of **19.5 acres** where **63 lots** are being developed for sale[75](index=75&type=chunk) - The company owns a portfolio of **132 rental homes** in Montgomery and Harris Counties, Texas, with an aggregate purchase cost of **$30,998,258**; many of these homes feature smart and sustainable technologies, including Tesla solar panels and Powerwalls[76](index=76&type=chunk) [Legal Proceedings](index=33&type=section&id=Item%203.%20Legal%20Proceedings) Litigation involving former subsidiary iGalen International Inc. was resolved via a settlement agreement in April 2022, and the company does not anticipate material adverse effects from current legal matters - Litigation involving former subsidiary iGalen International Inc. and Gara Group, Inc. was resolved via a settlement agreement on **April 13, 2022**[77](index=77&type=chunk) - The company does not currently believe that the final outcome of any ongoing legal matters will have a material adverse effect on its business, financial condition, or results of operations[77](index=77&type=chunk) [Mine Safety Disclosures](index=34&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company's operations - Not applicable[78](index=78&type=chunk) Part II [Market for Registrant's Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities](index=35&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%2C%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's common stock trades on Nasdaq under "AEI", has seven shareholders of record, has never paid dividends, and did not repurchase shares in 2023 - The company's common stock is traded on the Nasdaq Capital Market under the symbol **\"AEI\"**[80](index=80&type=chunk) - The company has never paid dividends and does not plan to in the foreseeable future, retaining earnings for growth[81](index=81&type=chunk) - In January 2022, a convertible promissory note of **$6,250,000** held by Chairman Chan Heng Fai was converted into **500,000 shares** of common stock[83](index=83&type=chunk) - In July 2022, the company issued **1,765,964 shares** of common stock to Chan Heng Fai to purchase **293,428,200 ordinary shares** of Alset International Limited[84](index=84&type=chunk) - No shares of the company's common stock were repurchased during 2023[85](index=85&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=36&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) In 2023, revenue surged to **$22.1 million** driven by real estate sales, yet net loss widened to **$61.3 million** due to increased other expenses, while operating cash flow improved to **$7.5 million** and cash position increased to **$26.9 million** [Results of Operations](index=43&type=section&id=Results%20of%20Operations) Total revenue increased by **393%** to **$22.1 million** in 2023, primarily from real estate sales, but net loss widened to **$61.3 million** due to increased operating and other expenses, including significant investment losses Revenue by Segment | Segment | 2023 (USD) | 2022 (USD) | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Real Estate | $20,963,661 | $3,088,628 | $17,875,033 | 579% | | Digital Transformation Technology | $28,117 | $69,915 | ($41,798) | -60% | | Biohealth | $12,758 | $753,651 | ($740,893) | -98% | | Other | $1,083,971 | $568,248 | $515,723 | 91% | | **Total Revenue** | **$22,088,507** | **$4,480,442** | **$17,608,065** | **393%** | Consolidated Operations Summary | Metric | 2023 (USD) | 2022 (USD) | | :--- | :--- | :--- | | Total Revenue | $22,088,507 | $4,480,442 | | Operating Expenses | ($24,961,161) | ($11,569,816) | | Other Expenses | ($58,313,729) | ($39,123,131) | | **Net Loss** | **($61,278,733)** | **($46,212,505)** | - The increase in Other Expenses was primarily driven by a realized loss on securities investment of **$11.4 million**, a loss on equity method investment of **$24.5 million**, and a loss on the consolidation of Alset Capital Acquisition Corp. of **$21.7 million**[111](index=111&type=chunk) [Liquidity and Capital Resources](index=45&type=section&id=Liquidity%20and%20Capital%20Resources) As of December 31, 2023, cash increased to **$26.9 million**, total assets decreased to **$126.3 million**, and net cash from operations significantly improved to **$7.5 million**, with management confident in funding future operations Key Balance Sheet Items | Item | Dec 31, 2023 (USD) | Dec 31, 2022 (USD) | | :--- | :--- | :--- | | Cash | $26,921,727 | $17,827,383 | | Real Estate Assets | $42,137,152 | $54,618,729 | | Total Assets | $126,314,028 | $153,490,336 | | Total Liabilities | $9,066,700 | $4,827,221 | Summary of Cash Flows | Cash Flow Activity | 2023 (USD) | 2022 (USD) | | :--- | :--- | :--- | | Net cash from operating activities | $7,478,823 | ($31,855,435) | | Net cash used in investing activities | ($2,128,986) | ($15,123,041) | | Net cash from financing activities | $3,187,489 | $6,057,481 | - Management believes that available cash, along with debt and equity financing, is sufficient to fund operations for at least the next **12 months**[114](index=114&type=chunk) [Financial Statements and Supplementary Data](index=53&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents the company's audited consolidated financial statements for 2023 and 2022, including the independent auditor's report, balance sheets, statements of operations, equity, cash flows, and accompanying notes - The independent auditor's report highlights significant transactions with related parties, noting that such transactions cannot be presumed to be at arm's length[136](index=136&type=chunk) [Notes to Consolidated Financial Statements](index=60&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) The notes detail accounting policies, consolidation basis, revenue recognition, investment valuation, significant related-party transactions, and disclose a material weakness in internal controls due to limited staff - The company's ownership of its primary operating subsidiary, Alset International, was **85.5%** as of December 31, 2023[142](index=142&type=chunk) - The company has elected the fair value option for equity securities where it has significant influence but not control, including its investments in DSS, Inc. (**44.4% ownership**) and Sharing Services Global Corp. (**33.4% ownership**)[158](index=158&type=chunk) - The company's investment in American Pacific Bancorp Inc. (APB) is accounted for under the equity method, and it recognized a loss of **$24.2 million** from this investment in 2023[162](index=162&type=chunk) - On January 13, 2023, the company reorganized its home rental business, acquiring direct ownership of American Home REIT Inc. (AHR) from a subsidiary for a total consideration of **$26.3 million**, which included forgiveness of debt and a promissory note[211](index=211&type=chunk) [Controls and Procedures](index=102&type=section&id=Item%209A.%20Controls%20and%20Procedures.) Management concluded that disclosure controls and procedures were ineffective as of December 31, 2023, due to a material weakness from limited staff, with plans to remediate by hiring additional qualified personnel - Management concluded that disclosure controls and procedures were **ineffective** as of December 31, 2023[259](index=259&type=chunk) - A **material weakness** was identified due to limited staff, which prevents segregation of duties and hinders timely and accurate financial statement disclosure evaluation[259](index=259&type=chunk) - The company plans to remediate the material weakness by appointing additional qualified personnel with financial accounting, GAAP, and SEC experience[260](index=260&type=chunk) Part III [Directors, Executive Officers and Corporate Governance](index=103&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance.) The company's leadership, including founder Chairman and CEO Chan Heng Fai, comprises experienced professionals, many with roles in affiliated companies, and the Board maintains independent Audit, Nominations, and Compensation Committees - The leadership team is headed by founder, Chairman, and CEO Chan Heng Fai, age **79**[261](index=261&type=chunk) - Many executive officers and directors hold concurrent positions in affiliated or subsidiary companies, such as Alset International, DSS, Inc., and HWH International Inc[261](index=261&type=chunk)[262](index=262&type=chunk) - The Board of Directors maintains an Audit Committee, a Nominations and Corporate Governance Committee, and a Compensation Committee, each composed of independent directors Wong Tat Keung, William Wu, and Wong Shui Yeung[270](index=270&type=chunk) [Executive Compensation](index=108&type=section&id=Item%2011.%20Executive%20Compensation.) Executive compensation, particularly for CEO Chan Heng Fai, is heavily performance-based, with bonuses tied to market capitalization and net asset value growth, while other executives and directors receive salaries and fees Summary Compensation for Named Executive Officers | Name | Position | Total Compensation (2022 USD) | | :--- | :--- | :--- | | Chan Heng Fai | Chairman and CEO | $7,836,133 | | Chan Tung Moe | Co-CEO & Director | $289,536 | | Charles MacKenzie | Chief Development Officer | $350,000 | - CEO Chan Heng Fai's compensation is primarily driven by bonuses tied to **5%** of the annual growth in the company's market capitalization and **5%** of the annual growth in its Net Asset Value (NAV)[276](index=276&type=chunk) - No stock options or other equity awards were granted to any named executive officers during the year ended December 31, 2023[276](index=276&type=chunk) [Security Ownership of Certain Beneficial Owners and Management](index=111&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters.) As of April 1, 2024, Chairman and CEO Chan Heng Fai is the principal stockholder, beneficially owning **53.3%** of outstanding common stock, granting him significant influence over corporate matters - As of April 1, 2024, Chairman and CEO Chan Heng Fai beneficially owned **4,922,818 shares**, constituting **53.3%** of the outstanding common stock[282](index=282&type=chunk) - All directors and executive officers as a group beneficially own **53.3%** of the common stock, with the ownership concentrated in Mr. Chan[282](index=282&type=chunk) [Certain Relationships and Related Transactions, and Director Independence](index=112&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence.) The company engages in numerous related-party transactions, primarily with entities affiliated with CEO Chan Heng Fai, including significant acquisitions, share purchases, loans, and exchanges, all subject to audit committee review - The company has a planned acquisition of New Energy Asia Pacific Inc. from Chairman Chan Heng Fai for a **$103.75 million** convertible promissory note with a conversion price of **$12.00 per share**[304](index=304&type=chunk) - In January 2023, the company reorganized its rental business by purchasing American Home REIT Inc. from its subsidiary, Alset EHome Inc., for **$26.3 million**, a transaction involving debt forgiveness and a promissory note[299](index=299&type=chunk) - The company's subsidiary, Hapi Metaverse, provided convertible loans to and purchased shares of Value Exchange International Inc. (VEII), an affiliated company where several Alset directors also serve on the board[299](index=299&type=chunk)[300](index=300&type=chunk)[301](index=301&type=chunk) - In 2022, the company sold its shares of True Partner Limited to affiliated company DSS, Inc. in exchange for **17.6 million shares** of DSS common stock[291](index=291&type=chunk) [Principal Accounting Fees and Services](index=119&type=section&id=Item%2014.%20Principal%20Accounting%20Fees%20and%20Services) For fiscal year 2023, the company paid its independent registered public accounting firm, Grassi & Co., CPAs, P.C., a total of **$330,341** for audit, audit-related, and tax services Accounting Fees | Fee Category | 2023 (USD) | 2022 (USD) | | :--- | :--- | :--- | | Audit Fees | $275,370 | $294,750 | | Audit-Related Fees | $48,806 | $24,500 | | Tax Fees | $6,165 | $6,000 | | All Other Fees | $0 | $0 | | **Total** | **$330,341** | **$325,250** | Part IV [Exhibit and Financial Statement Schedules](index=120&type=section&id=Item%2015.%20Exhibit%20and%20Financial%20Statement%20Schedules) This section lists the consolidated financial statements and a comprehensive array of exhibits filed with or incorporated by reference into the Form 10-K, including corporate governance and material contracts - This section lists the financial statements and all exhibits filed with the report, such as material contracts and corporate documents[309](index=309&type=chunk)[310](index=310&type=chunk) [Form 10-K Summary](index=121&type=section&id=Item%2016.%20Form%2010-K%20Summary) This item is not applicable - None[314](index=314&type=chunk)