Alset(US:AEI)2025-05-15 20:19PART I FINANCIAL INFORMATION Comprehensive financial data for the period, including statements, notes, and management's analysis Item 1. Financial Statements (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 adjustments13 - The company issued 1,500,000 shares of common stock and warrants, contributing $1.2 million to stockholders' equity during the first quarter of 202513 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 countries2021 - 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 2025117 - 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 - 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 statements137138141 - 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 million175178 - 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 $1.00, and awarded 1,000,000 restricted shares to its CEO208210214 Management's Discussion and Analysis of Financial Condition and Results of Operations Management attributes the 82% revenue decline to completed real estate sales, with net loss widening due to lower revenues and higher expenses Revenue by Segment (in USD) | Segment | Q1 2025 | Q1 2024 | Change ($) | 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 2024257258 - 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 2024265 - 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 months269272 - 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 compliance225214 - 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 solutions249251 Item 3. Quantitative and Qualitative Disclosure About Market Risk 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-K281 Item 4. Controls and Procedures 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, 2025282 - No changes occurred during the quarter that materially affected, or are reasonably likely to materially affect, the company's internal control over financial reporting283 PART II OTHER INFORMATION Details on legal proceedings, risk factors, equity sales, defaults, mine safety, and other relevant disclosures Item 1. Legal Proceedings The company reported no material legal proceedings - Not applicable284 Item 1A. Risk Factors As a smaller reporting company, this section is not applicable - Not applicable to smaller reporting companies285 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds The company reported no unregistered sales of equity securities - Not applicable286 Item 3. Defaults Upon Senior Securities The company reported no defaults upon senior securities - None287 Item 4. Mine Safety Disclosures This section is not applicable to the company - Not Applicable288 Item 5. Other Information The company reported no other information - Not applicable289 Item 6. Exhibits 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 acquisition290 - Certifications from the Chief Executive Officers and Chief Financial Officers pursuant to Sections 302 and 906 of the Sarbanes-Oxley Act of 2002 are included290 SIGNATURES Formal attestations by authorized company officers confirming the accuracy and completeness of the report