AEI 10-K & 10-Q changes, risk factors and insider trading
Alset Inc. · Nasdaq · Real Estate · CIK 1750106 · All filings on SEC.gov
At a glance
What changed in the latest 10-K
Risk Factors
Removed heading “We are an “emerging growth company” and our election to delay adoption of new or revised accounting standards applicable to public companies may result in our consolidated financial statements not being comparable to those of some other public companies. As a result of this and other reduced disclosure requirements applicable to emerging growth companies, our shares may be less attractive to investors.”
Largest changes
“We are an “emerging growth company” and our election to delay adoption of new or revised accounting standards applicable to public companies may result in our consolidated financial statements not being comparable to those of some other public companies. As a result of this and other reduced disclosure requirements applicable to emerging growth companies, our shares may be less attractive to investors.”see in full comparison
“Under the JOBS Act, we may take advantage of the above-described reduced reporting requirements and exemptions for up to five years after our initial sale of common equity pursuant to a registration statement declared effective under the Securities Act, or such earlier time that we no longer meet the definition of an emerging growth company. …”see in full comparison
“Certain of these reduced reporting requirements and exemptions were already available to us due to the fact that we also qualify as a “smaller reporting company” under SEC rules. …”see in full comparison
“We intend to take advantage of all of these reduced reporting requirements and exemptions, including the longer phase-in periods for the adoption of new or revised financial accounting standards under §107 of the JOBS Act. Our election to use the phase-in periods may make it difficult to compare our consolidated financial statements to those of non-emerging growth companies and other emerging growth companies that have opted out of the phase-in periods under §107 of the JOBS Act.”see in full comparison
“As a company with less than $1.07 billion in revenue during our last completed fiscal year, we qualify as an “emerging growth company” under the JOBS Act. An emerging growth company may take advantage of specified reduced reporting requirements that are otherwise generally applicable to public companies. In particular, as an emerging growth company, we:”see in full comparison
“Investors may find our shares less attractive due to our reliance on these exemptions. This could impact our ability to raise funds in the future.”see in full comparison
Full comparison: every changed paragraph (11)
We
own indirect interests in several publicly traded companies – most significantly, Alset International Limited, whose shares are
listed on the Singapore Stock Exchange, DSS, Inc., whose shares are listed on the NYSE American LLC Exchange, Sharing Services Global
Corporation, whose shares are listedquoted on the OTC PinkExpert Market of the OTC Markets Group, Inc., Value Exchange International Inc., whose
shares are
listed on OTCQBOTC VentureExpert Market of the OTC Markets Group, Inc., and HWH International Inc., whose shares are trading on the Nasdaq
Capital Global
MarketsMarket; (LiquidValueWinning DevelopmentCatering Group, Inc. and Hapi Metaverse Inc. are not currently traded on any exchange). The average trading
volume volume
of the public shares is limited for some of these companies. In view of the limited public trading markets for some of these shares,
there can be no assurance that we would succeed in obtaining a price for these shares equal to the price quoted for such shares in their
respective trading markets at the time of sale or that we would not incur a loss on our shares should we determine to dispose our shareholding
in any of these companies in the future. Additionally, on an ongoing basis, fluctuations in the stock prices of these companies are likely
to be reflected in the market price of our common stock. Given the limited public trading markets in some of these public companies,
stock price fluctuations in our price may be significant.
Several
of our officers and directors also serve as officers and directors of entities where we are the direct or indirect majority stockholder,
including but not limited to Alset International Limited, HWH International Inc., LiquidValue Development Inc. and Hapi Metaverse Inc.
In addition, some of our officers
and directors also serve as officers and directors of other businesses, including businesses that we
hold a non-majority positions in.
These officers may not commit their full time to our affairs, which may result in a conflict of interest
in allocating their time between
our operations and the operations of our subsidiaries or other business ventures. These officers are
not obligated to contribute any
specific number of hours per week to our affairs. While we do not believe that the time devoted to other
affairs will undermine their
ability to fulfill their duties with respect to our Company, if the business affairs of our subsidiaries
or other ventures require them
to devote substantial amounts of time to such affairs, it could limit their ability to devote time to
our affairs which may have a negative
impact on our operations.
Our
officers, including our Chairman,Chairman and Chief Executive Officer Chan Heng Fai, will allocate some of their time to HWH International Inc.,
thereby causing potential conflicts of interest in their determination as to how much time to devote to our affairs. This potential conflict
of interest could have a negative impact on our operations.
Rongguo Wei, our Chief Financial Officer, also serves in this position for HWH International Inc. (“HWH International”), and Chan Heng Fai, our Chairman, serves as a director and Chief Executive Officer of HWH International. These officers may not commit their full time to our affairs, which may result in a conflict of interest in allocating their time between our operations and HWH International’s operations. These officers are engaged in HWH International and are not obligated to contribute any specific number of hours per week to our affairs. While we do not believe that the time devoted to HWH International will undermine their ability to fulfill their duties with respect to our Company, if the business affairs of HWH International require them to devote substantial amounts of time to such affairs, it could limit their ability to devote time to our affairs which may have a negative impact on our operations.
We
are an “emerging growth company” and our election to delay adoption of new or revised accounting standards applicable to
public companies may result in our consolidated financial statements not being comparable to those of some other public companies. As
a result of this and other reduced disclosure requirements applicable to emerging growth companies, our shares may be less attractive
to investors.
As
a company with less than $1.07 billion in revenue during our last completed fiscal year, we qualify as an “emerging growth company”
under the JOBS Act. An emerging growth company may take advantage of specified reduced reporting requirements that are otherwise generally
applicable to public companies. In particular, as an emerging growth company, we:
We
intend to take advantage of all of these reduced reporting requirements and exemptions, including the longer phase-in periods for the
adoption of new or revised financial accounting standards under §107 of the JOBS Act. Our election to use the phase-in periods may
make it difficult to compare our consolidated financial statements to those of non-emerging growth companies and other emerging growth
companies that have opted out of the phase-in periods under §107 of the JOBS Act.
Certain
of these reduced reporting requirements and exemptions were already available to us due to the fact that we also qualify as a “smaller
reporting company” under SEC rules. For instance, smaller reporting companies are not required to obtain an auditor attestation
and report regarding management’s assessment of internal control over financial reporting, are not required to provide a compensation
discussion and analysis, are not required to provide a pay-for-performance graph or CEO pay ratio disclosure, and may present only two
years of audited financial statements and related MD&A disclosure.
Under
the JOBS Act, we may take advantage of the above-described reduced reporting requirements and exemptions for up to five years after our
initial sale of common equity pursuant to a registration statement declared effective under the Securities Act, or such earlier time
that we no longer meet the definition of an emerging growth company. In this regard, the JOBS Act provides that we would cease to be
an “emerging growth company” if we have more than $1.07 billion in annual revenue, have more than $700 million in market
value of our common stock held by non-affiliates, or issue more than $1.0 billion in principal amount of non-convertible debt over a
three-year period. Under current SEC rules, however, we will continue to qualify as a “smaller reporting company” for so
long as we have a public float (i.e., the market value of common equity held by non-affiliates) of less than $250 million as of the last
business day of our most recently completed second fiscal quarter.
Investors
may find our shares less attractive due to our reliance on these exemptions. This could impact our ability to raise funds in the future.
As
of March 31, 2025,2026, we have 250,000,000 shares of common stock authorized, and 10,735,11938,895,830 shares of common stock outstanding. Of these
shares, 7,577,357 shares are freely tradable.
Management's Discussion & Analysis (MD&A)
New heading “New Energy Asia Pacific Company Limited”
New heading “Nasdaq Compliance”
Removed heading “Digital Transformation Technology”
Removed heading “Ketomei Pte. Ltd.”
Removed heading “Variable Interest Entity”
Removed heading “Emerging Growth Company Status”
Largest changes
The increase of operating expenses in the twelve monthssee in full comparisonofended2024December 31, 2025 compared to the same period of20232024 was mostly caused byrecording impairmentof goodwill and investment andincrease in bonus payments to executives and professional fees.
“On June 10, 2021 the Company’s indirect subsidiary Hapi Café Inc. lent $76,723 to Ketomei Pte. Ltd. (“Ketomei”). On March 21, 2022 HCI-T entered into an agreement pursuant to which the principal of the loan together with accrued interest were converted into an investment in Ketomei. At the same time, Hapi Cafe invested an additional $179,595 in Ketomei. After the conversion and fund investment HCI-T held 28% of Ketomei as of December 31, 2023. Ketomei is in the business of selling cooked food and drinks through a subscription model. …”see in full comparison
“We are an “emerging growth company,” as defined in the JOBS Act, and we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies.” Section 107 of the JOBS Act provides that an “emerging growth company” can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. …”see in full comparison
“We are not currently required to maintain an effective system of internal controls as defined by Section 404 of the Sarbanes-Oxley Act. Only in the event that we are deemed to be a large accelerated filer or an accelerated filer would we be required to comply with the independent registered public accounting firm attestation requirement. …”see in full comparison
“In the year ended December 31, 2025, the Company had other expense of $33,767,897 compared to other income of $102,046 in the year ended December 31, 2024. The changes in realized and unrealized gain/loss on securities investment and impairment of equity method investment are the primary reasons for the volatility in these two periods. Realized loss on securities investment was $3,208,972 in year ended December 31, 2025, compared to $461,247 gain in the year ended December 31, 2024. …”see in full comparison
Full comparison: every changed paragraph (86)
We
are a diversified holding company principally engaged through our subsidiaries in the development of EHome communities and other real
estate, financial services, digital transformation technologies, biohealth activities and consumer products with operations in the United
States, Singapore, Hong Kong, Australia, South Korea andKorea, the People’s Republic of China.China and Taiwan. We manage our three principal
businesses businesses
primarily through our 85.7%85.8% owned subsidiary, Alset International Limited, a public company traded on the Singapore Stock
Exchange (“Alset
International”). Through this subsidiary (and indirectly, through other public and private U.S. and Asian
subsidiaries), we are
actively developing real estate projects near Houston, Texas in our real estate segment. In our digital transformation
technology segment,
we focus on serving business-to-business (B2B) needs in e-commerce, collaboration and social networking functions.
Our biohealth segment
includes the sale of consumer products.
Additionally,
we have ownership interests outside of Alset International, including a 36.9% equity interest in American Pacific Financial, Inc., a
48.9%43.6% equity interest in DSS Inc. (“DSS”), an indirect 48.7%45.8% equity interest in Value Exchange International, Inc., a
29.0% equity interest in Sharing Services Global CorporationCorporation, and 39.7%a 41.5% equity interest in ImpactNew BiomedicalEnergy Inc.Asia Pacific Company Limited. American Pacific
Financial, Inc. is a financial network holding company.
DSS is a multinational company operating businesses with five divisions:
product packaging, biotechnology, direct marketing, commercial
lending, and securities and investment management. DSS Inc. is listed on the NYSE American (NYSE: DSS). Value
Exchange International,
Inc. is a provider of information technology services for businesses, and is traded on the OTCQBOTC Expert Market (OTCQBOTC:
VEII). Sharing Services
Global Corporation (OTC Pink: SHRG), is a publicly traded company dedicated to building shareholder value by
developing or acquiring businesses,
products and technologies in the direct selling industry and other industries that augment the
Company’s product and services portfolio,
business competencies, and geographic reach. Impact BioMedical Inc. is focused on
discovery, development, and commercialization of products and technologies to address unmet needs in human healthcare and wellness
for specialty biopharmaceuticals, antivirals, antimicrobials, consumer healthcare, and wellness products in the United
States. Impact BioMedical Inc. is listed on NYSE American (NYSE: IBO).
The
CODMs do not evaluate performance or allocate resources based on segment assets, and therefore such information is not presented in the
Notes to the Financial Statements.assets.
From
a geographical perspective, we recognized 93%52% and 95%93% of our total revenue in the years ended December 31, 2024,2025, and 2023,2024, respectively,
in the United States. 0%1% and 0% of our revenue in 20242025 and 2023,2024, respectively, was recognized from our sales in South Korea. 42% and
7% and 5%
of our revenue in 20242025 and 2023,2024, respectively, was recognized from our sales in Singapore. 5% and 0% of our revenue in 2025 and 2024,
respectively, was recognized from our sales in Taiwan.
The
preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements
and the reported amounts of revenues and expenses during the reporting periods. Significant estimates made by management include, but
are not limited to, allowance for doubtful accounts, recoverability and useful lives of property, plantproperty and equipment, valuation of real
estate assets, allocation of development costs and capitalized interest to sold lots, the valuation allowance of deferred taxes, contingencies
and equity compensation. Actual results could differ from those estimates.
When
the Company purchases properties but does not receive the assessment information from the county, the Company allocates the values between
land and building based on the data of similar properties. The Company makes appropriate adjustments once the assessment from the county
is received. At the same time, any necessary adjustments to depreciation expense are made in the income statement. On December 31, 2024
and 2023, the Company adjusted $0 and $951,349 between building and land, respectively. During the years ended December 31,
2024 and 2023, the Company adjusted depreciation expenses of $0 and $17,525, respectively.
Revenue
Recognition and Cost of RevenueSales
●
Property Sales. Part of the Company’s real estate business is land development. The Company purchases land and develops
it into residential communities. The developed lots are sold to builders (customers) for the construction of new homes. The builders
enter into a sales contract with the Company before they take the lots. The prices and timeline are determined and agreed upon in the
contract. The builders do the inspections to make sure all conditions and requirements in contracts are met before purchasing the lots.
A detailed breakdown of the five-step process for the revenue recognition of the Lakes at Black Oak project,and Alset Villas projects, which
represented approximately
79% 0% and 82%79% of the Company’s revenue in the years ended on December 31, 20242025 and 2023,2024, respectively, is
as follows:
●
Cost of Revenue.Sales. Land acquisition costs are allocated to each lot based on the area method, the size of the lot comparing to the
total size of all lots in the project. Development costs and capitalized interest are allocated to lots sold based on the total expected
development and interest costs of the completed project and allocating a percentage of those costs based on the selling price of the
sold lot compared to the expected sales values of all lots in the project.
Digital
Transformation Technology
●
Software Development Income. Revenue is recognized when (or as) the Company transfers promised goods or services to its customers
in amounts that reflect the consideration to which the Company expects to be entitled to in exchange for those goods or services, which
occurs when (or as) the Company satisfies its contractual obligations and transfers over control of the promised goods or services to
its customers. We generate revenue from a project involving provision of services and web/software development for customers. In respect
to the provision of services, the agreements are less than one year with a cancellation clause and customers are typically billed on
a monthly basis.
Biohealth
●
Product Direct Sales. The Company’s net sales consist of product sales. The Company’s performance obligation is to
transfer ownership of its products to its members. The Company generally recognizes revenue when product is delivered to its members.
Revenue is recorded net of applicable taxes, allowances, refund or returns. The Company receives the net sales price in cash or through
credit card payments at the point of sale.
If
any member returns a product to the Company on a timely basis, they may obtain a replacement product from the Company for such returned
products. We do not have buyback program. However, when the customer requests a return and management decides that the refund is necessary,
we initiate the refund after deducting all the benefits that a member has earned. The returns are deducted from our sales revenue on
our financial statements. Allowances for product and membership returns are provided at the time the sale is recorded. This accrual is
based upon historical return rates for each country and the relevant return pattern, which reflects anticipated returns to be received
over a period of up to 12 months following the original sale. Product and membership returns for the years ended December 31, 2024 and
2023 were approximately $0 and $1,183, respectively.
●
Annual Membership. The Company collects an annual membership fee from its members. The fee is fixed, paid in full at the time
upon joining the membership and not refundable. The Company’s performance obligation is to provide its members the right to (a)
purchase products from the Company, (b) access to certain back-office services, (c) receive commissions and (d) attend corporate events.
The associated performance obligation is satisfied over time, generally over the term of the membership agreement which is for a one-year
period. The Company recognizes revenue from membership fee over the one-year period of the membership.
● Food and Beverage. The Company, through Alset F&B One Pte. Ltd. (“Alset F&B One”) and Alset F&B (PLQ) Pte. Ltd. (“Alset F&B PLQ”), each acquired a restaurant franchise licenses at the end of 2021 and 2022 respectively. These licenses will allow Alset F&B One and Alset F&B PLQ each to operate a Killiney Kopitiam restaurant in Singapore. Killiney Kopitiam, founded in 1919, is a Singapore-based chain of mass-market, traditional kopitiam style service cafes selling traditional coffee and tea, along with a range of local delicacies such as Curry Chicken, Laksa, Mee Siam, and Mee Rebus. In the second quarter of 2024, the Company ceased operations of its subsidiary Alset F&B PLQ.
The cafes are operated by subsidiaries of HCI-T, namely Hapi Café SG Pte. Ltd. in Singapore and Hapi Café Korea Inc. in Seoul, South Korea. Hapi Cafes are distinctive lifestyle café outlets that strive to revolutionize the way individuals dine, work, and live, by providing a conducive environment for everyone to relish the four facets – health and wellness, fitness, productivity, and recreation all under one roof. On September 13, 2025, the Company ceased operations of its subsidiary Hapi Café Korea Inc.
In
the second quarter of 2024, the Company ceased operations of its subsidiary Alset F&B (PLQ). Due to the closure of this subsidiary,
the Company wrote off $5,820 of fixed assets, which is included in general and administrative expenses and recorded a gain on termination
of lease of $246, which is included in other income on the Company’s Statement of Operations for the year ended December 31, 2024.
Real estate assets are recorded at cost, except when acquired real estate assets meet the definition of a business combination in accordance with ASC 805, “Business Combinations,” which are recorded at fair value. Interest, property taxes, insurance and other incremental costs (including salaries) directly related to a project are capitalized during the construction period of major facilities and land improvements. The capitalization period begins when activities to develop the parcel commence and ends when the asset constructed is completed. The capitalized costs are recorded as part of the asset to which they relate and are reduced when lots are sold. The Company did not capitalize construction costs in the years ended December 31, 2025 and 2024.
The
Company capitalized construction costs of approximately $0 million and $1.2 million in the years ended December 31, 2024 and 2023, respectively.
The
Company did not have any real estate property under development as of December 31, 20242025 On
or December 31, 2023, total real estate property under development was $10.4 million, including:2024.
On
December 31, 2024, the capitalized construction costs were as follows:
On
December 31, 2023, the capitalized construction costs were as follows:
Revenue
was $21,115,899$4,470,875 and $22,088,507$21,115,899 for the years ended December 31, 20242025 and 2023,2024, respectively. The decrease in property sales in the2025 2024caused
caused lower revenue in this period.
In
May 2023, the Company entered into lease agreement for one of its model houses located in Montgomery County, Texas. The revenue from
the lease was $25,200 and $16,800 in the years ended December 31, 2024 and 2023, respectively.
In
January 2024, the Company entered into lease agreement for another model house located in Montgomery County, Texas. The revenue from
the lease was $26,409 in the year ended December 31, 2024.
Revenue
from digital transformation technology segment consists primarily of the services rendered to customers in the amount of $0 and $28,117,
for the years ended December 31, 2024 and 2023, respectively. The Company began generating revenue from a project providing AI chatbot
services to Value Exchange Int’l (Hong Kong) Limited, a related company of the Company and a subsidiary of VEII located in Hong
Kong, on a monthly basis in 2022. This service was terminated on June 30, 2023.
The
Company operates its biohealth segment in the South Korean market through one of the subsidiaries of HWH International Inc., HWH World
Inc. (“HWH World”). HWH World operates based on a direct sale model of health supplements. HWH World recognized $0 and $12,758
in revenue in the years ended December 31, 2024 and 2023, respectively.
The
financial services, food and beverage businesses and new venture businesses are small and diversified, and accordingly they are not separately
addressed as independent categories. In the years ended December 31, 20242025 and 2023,2024, the revenue from other businesses was $1,507,715$1,641,433
and $1,083,971,$1,507,715, respectively, generated mainly by KoreanKorean, Taiwanese and Singaporean café shops and restaurants.
The
following table sets forth period-over-period changes in cost of revenuesales for each of our reporting segments:
Cost
of revenuesales decreased from $14,576,209 in the year ended December 31, 2023 to $12,782,624 in the year ended December 31, 2024,2024 to $3,221,915 in the year ended December 31, 2025, as a result
of the decrease in the number of lots sold in the Lakes at Black Oak project. Capitalized construction expenses, finance costs and land
costs are allocated to sales.
The
gross margin increaseddecreased from $7,512,298$8,333,275 to $8,333,275$1,248,960 in the years ended December 31, 20232024 and 2024,2025, respectively. The increasedecrease of gross
gross margin was caused by the increase of gross margin from F&B business, mostly due to the increasedecrease in the salesnumber of lots sold in that
business.the Lakes at Black Oak project.
The
following table sets forth period-over-period changes in operating expenses for each of our reporting segments.segments:
The
increase of operating expenses in the twelve months ofended 2024December 31, 2025 compared to the same period of 20232024 was mostly caused by recording impairment
of goodwill and investment and increase in bonus payments to executives and professional fees.
Other
Income (Expense) Income
In the year ended December 31, 2025, the Company had other expense of $33,767,897 compared to other income of $102,046 in the year ended December 31, 2024. The changes in realized and unrealized gain/loss on securities investment and impairment of equity method investment are the primary reasons for the volatility in these two periods. Realized loss on securities investment was $3,208,972 in year ended December 31, 2025, compared to $461,247 gain in the year ended December 31, 2024. Unrealized loss on securities investment was $2,451,237 in year ended December 31, 2025, compared to $942,213 loss in the year ended December 31, 2024. Additionally, in 2025 the Company impaired $30,185,404 of equity method investment.
In
the year ended December 31, 2024, the Company had other income of $102,046 compared to other expense of $58,313,729 in the year ended
December 31, 2023. The change in realized gain/loss on securities investment, loss on equity method investment and loss on consolidation
of HWH International Inc. (f.k.a. Alset Capital Acquisition Corp.) are the primary reasons for the volatility in these two periods. Realized
gain on securities investment was $461,247 in year ended December 31, 2024, compared to $11,375,747 loss in the year ended December 31,
2023. Loss on equity method investment was $3,234,851 in year ended December 31, 2024, compared to $24,483,374 loss in the year ended
December 31, 2023. Loss on consolidation of HWH International Inc. was $0 in the year ended December 31, 2024, compared to $21,657,036
in the year ended December 31, 2023.
In the year ended December 31, 2025, the Company had net loss of $49,350,566 compared to net loss of $4,165,816 in the year ended December 31, 2024.
In
the year ended December 31, 2024, the Company had net loss of $4,165,816 compared to net loss of $61,278,733 in the year ended December
31, 2023.
Our
real estate assets have decreased to $29,620,952 as of December 31, 2025, from $30,695,669 as of December 31, 2024, from $42,137,152 as of December 31, 2023.2024. This decrease reflects
depreciation expenses on the salerental of multiple lots in Lakes at Black Oak project during 2024.properties.
Our
cash has increaseddecreased from $26,921,727 as of December 31, 2023 to $27,243,787 as of December 31, 2024.2024 to $25,184,990 as of December 31, 2025. Our liabilities decreasedincreased from $9,066,700$6,563,126
at December 31, 20232024 to $6,563,126$6,923,965 at December 31, 2024.2025. Our total assets have decreasedincreased to $136,587,114 as of December 31, 2025 from
$96,761,977 as of December 31, 2024 from
$126,314,028 as of December 31, 2023 due to thepurchasing decreaseequity in real estate assets and cash held in Trust Account.investments.
On
April 17, 2019, SeD Maryland Development LLC entered into a Development Loan Agreement with
Manufacturers and Traders Trust Company (“M&T
Bank”) in the principal amount not to exceed at any one time outstanding
the sum of $8,000,000, with a cumulative loan advance
amount of $18,500,000. The line of credit bore interest rate on LIBOR plus 375
basis points. SeD Maryland Development LLC was also provided
with a Letter of Credit (“L/C”) Facility in an aggregate amount
of up to $900,000. The L/C commission is 1.5% per annum on
the face amount of the L/C. Other standard lender fees apply in the event
the L/C is drawn down. The loan is a revolving line of credit.
The L/C Facility is not a revolving loan, and amounts advanced and repaid
may not be re-borrowed. Repayment of the Loan Agreement was
secured by a $2,600,000 collateral fund and a Deed of Trust issued to the
Lender on the property owned by SeD Maryland. On March 15,
2022, approximately $2,300,000 was released from collateral, leaving approximately
$300,000 as collateral for outstanding letters of
credit. On December 14, 2023 and February 11, 2026, approximately $201,751 and $107,991, respectively, was released from collateral,
leaving approximately $100,000 as collateral for
outstanding letters of credit.
On
November 13, 2023, 150 CCM Black Oak Ltd. (the “Seller”), a Texas Limited Partnership, entered into two Contracts for Purchase
and Sale and Escrow Instructions (each an “Agreement,” collectively, the “Agreements”) with Century Land Holdings
of Texas, LLC, a Colorado limited liability company (the “Buyer”). Pursuant to the terms of one of the aforementioned Agreements,
the Seller has agreed to sell approximately 142 single-family detached residential lots (the “Section 4 Agreement”) comprising
a section of a residential community in the city of Magnolia, Texas known as the “Lakes at Black Oak.” Pursuant to the other
Agreement, the Seller has agreed to sell 63 single-family detached residential lots (the “Alset Villas Agreement”) in the
city of Magnolia, Texas. In 2021, our subsidiary Alset EHome Inc. acquired approximately 19.5 acres of partially developed land near
Houston, Texas which was used to develop a community named Alset Villas (“Alset Villas”). Alset EHome was in the process
of developing the 63 lots at Alset Villas in 2023. The closing of the transactions described above depended on the satisfaction of certain
conditions. The sale of the first 70 lots closed on July 1, 2024 generating approximately $3.8 million and the sale of the 72 lots closed
on October 10, 2024 generating approximately $3.9 million. The sale of lots in Alset Villa project closed on December 17, 2024 generating
approximately $3.8 million. In addition, the Company will be entitled to receive certain reimbursements in the year ended December 31,
2025.
TheAdditionally,
the Company is entitled to receive certain developer reimbursements for the Lakes at Black Oak and Alset Villas projects. The Company expects
that approximately $4.7 million of the receivable will be collected within the next twelve months.
Net
cash providedused byin operating activities was $5,156,047$5,927,532 in the year ended December 31, 2024,2025, as compared to net cash provided by operating activities
activities of $7,478,823$5,156,047 in the same period of 2023.2024. Purchase of trading securities was the main reason for the cash used in operating activities
during 2025. Property sales from the Lakes at Black Oak project in 2024 and 2023 were the main
reason for the cash provided by operating activities
in thosethat periods.period.
Net
cash provided by investing activities was $17,468,306$2,250,903 in the year 2024,2025, as compared to net cash usedprovided inby investing activities of $2,128,986$17,468,306
in the same period of 2023.2024. In the year ended December 31, 2025 we invested $40,000 in investment securities, issued $2,325,489 in promissory
notes to related parties, purchased $175,464 of fixed assets, sold related party equity security investments for $4,184,575 and received
a repayment of a loan from related party of $607,281. In the year ended December 31, 2024 we invested $814,158 in marketableinvestment securities,
issued $3,029,758 in promissory
notes ($1,811,881 of which was to related parties) and withdrew $21,102,871 cash for redemptions. In the year ended December 31, 2023
we invested $756,078 in marketable securities, issued $3,338,081 in promissory notes to related parties and received $2,672,438 repayment
of promissory notes from related parties.
Net
cash usedprovided inby financing activities was $21,419,083$1,110,198 in the year ended December 31, 2024,2025, compared to net cash providedused of $3,187,489$21,419,083 the
year ended December 31, 2023.2024. Cash provided by financing activities in the year 2025 is primarily related to the issuance of Common Stock
of $2,614,983. Cash used in financing activities in the year 2024 is primarily related to the repayment of Class A Common
Stock of $21,102,871
and repayment of note payable of $446,260. Cash provided by financing activities in the year 2023 is primarily related
to the proceeds from stock issuance of $3,433,921. During the year ended December 31, 2023, we also repaid $31,499 of a note payable.
The
Company accounts for certain of its investments in equity securities in accordance with ASU 2016-01 Financial Instruments—Overall
(Subtopic 825- 10): Recognition and Measurement of Financial Assets and Financial Liabilities (“ASU 2016-01”). In accordance
with ASU 2016-01, the Company records all equity investments with readily determinable fair values at fair value calculated by the publicly
traded stock price at the close of the reporting period. Amarantus BioScience Holdings (“AMBS”) is a publicly traded company.
The Company does not have significant influence over AMBS as the Company holds approximately 4.3% of the common shares of AMBS. The stock
fair value is determined by quoted stock prices.
Amarantus BioScience Holdings (“AMBS”) is a publicly traded company. The Company does not have significant influence over AMBS as the Company holds approximately 4.3% of the common shares of AMBS. The stock fair value is determined by quoted stock prices.
On
April 12, 2021, the Company acquired 6,500,000 common shares of Value Exchange International, Inc. (“Value Exchange International”
or “VEII”), an OTCQBOTC listed company, for an aggregate subscription price of $650,000. On October 17, 2022 the Company purchased
additional 7,276,163 common shares of VEII for an aggregate purchase price of $1,743,734. On September 6, 2023, the Company converted
converted $1,300,000 of VEII loan into 7,344,632 common shares. After these transactions, the Company owns approximately 48.7%
45.8% of VEII and exercises
significant influence over it. Our Chief Executive Officer, Chan Heng Fai, is also an owner of the common stock
of VEII (not including
any common shares we hold). Additionally, certain members of our board of directors serve as directors of Value
Exchange International.
The stock’s fair value is determined by quoted stock prices.
On
January 27, 2023, the Company and New Electric CV Corporation (together with the Company, the “Lenders”) entered into a Convertible
Credit Agreement (the “First1st Credit Agreement”) with VEII. The First1st Credit Agreement provides VEII with
a maximum credit
line of $1,500,000 with simple interest accrued on any advances of the money under the First1st Credit Agreement
at 8%. The First1st Credit
Agreement grants conversion rights to each Lender. Each Advance shall be convertible, in whole or in
part, into shares of VEII’s
Common Stock at the option of the Lender who made that Advance (being referred to as a “Conversion”),
at any time and from
time to time, at a price per share equal the “Conversion Price”. In the event that a Lender elects to
convert any portion
of an Advance into shares of VEII Common Stock in lieu of cash payment in satisfaction of that Advance, then VEII
would issue to the
Lender five (5) detachable warrants for each share of VEII’s Common Stock issued in a Conversion (“Warrants”).
Each Each
Warrant will entitle the Lender to purchase one (1) share of Common Stock at a per-share exercise price equal to the Conversion
Price. Price.
The exercise period of each Warrant will be five (5) years from date of issuance of the Warrant. On February 23, 2023, the Company’s
subsidiary Hapi Metaverse Inc. loaned VEII $1,400,000 (the “Loan Amount”). The Loan Amount can be converted into shares of
VEII pursuant to the terms of the First1st Credit Agreement for a period of three years. There is no fixed price for the derivative
security security
until Hapi Metaverse converts the Loan Amount into shares of VEII Common Stock.
On
September 6, 2023, the Company converted $1,300,000 of the principal amount loaned to VEII into 7,344,632 shares of VEII’s Common
Stock. Under the terms of the First1st Credit Agreement, Hapi Metaverse received Warrants to purchase a maximum of 36,723,160 shares
of of
VEII’s Common Stock at an exercise price of $0.1770 per share. Such warrants expire five (5) years from date of their issuance.
On
December 14, 2023, Hapi Metaverse entered into a Convertible Credit Agreement (“Second2nd Credit Agreement”) with VEII.
On December
15, 2023, the Company loaned VEII $1,000,000. The Second2nd Credit Agreement was amended pursuant to an agreement dated
December 19, 2023.
Under the Second2nd Credit Agreement, as amended, this amount can be converted into VEII’s Common Shares
pursuant to the terms of
the Second2nd Credit Agreement for a period of three years. In the event that Hapi Metaverse converts this
loan into shares of VEII’s
Common Stock, the conversion price shall be $0.045 per share. In the event that Hapi Metaverse elects
to convert any portion of the loan
into shares of VEII’s Common Stock in lieu of cash payment in satisfaction of that loan, then
VEII will issue to Hapi Metaverse
five (5) detachable warrants for each share of VEII’s Common Stock issued in a conversion (“Warrants”).
Each Warrant
will entitle the Company to purchase one (1) share of VEII’s Common Stock at a per-share exercise price equal to the
Conversion Conversion
Price. The exercise period of each Warrant will be five (5) years from date of issuance of the Warrant. At the time of this
filing, the
Company has not converted the Loan Amount.
The
Company has elected the fair value option for the equity securities noted below that would otherwise be accounted for under the equity
method of accounting. DSS Inc., HIPH World Inc. (f.k.a. American Premium Water Corporation (“APW”, d.b.a.and New Electric CV Corporation, “NECVHIPH”),
Value Exchange International Inc., Sharing Services Global Corp. (“SHRG”) and Impact Biomedical Inc. (“Impact”)
are publicly traded companies and fair value is determined by quoted stock prices. The Company has (or had, in the case of Impact) significant
influence but does not
have a controlling interest in these investments, and therefore, the Company’s investment could be accounted
for under the equity
method of accounting or under fair value accounting.
The
Company has significant influence over APWHIPH as the Company holds approximately 0.5% of the common shares of APW. Additionally, our Chief
Executive Officer, Chan Heng Fai, is the majority owner of the common stock
of APWHIPH (not including any common shares we hold). The Company
did not have a controlling interest and therefore the Company’s
investment would be accounted for under equity method accounting
or we could elect the fair value option accounting.
The Company had significant influence over Impact as the Company held approximately 39.7% of the common shares of Impact as of December 31, 2024. The Company sold all its shareholding in Impact during first four months of 2025.
On
August 8, 2023, DSS Inc. distributed shares of Impact Biomedical Inc., beneficially held by DSS, in the form of a dividend to the shareholders
of DSS common stock. As a result of this distribution, the Company and its majority owned subsidiaries received 4,568,165 shares
of Impact, representing 39.7% of the issued and outstanding shares of Impact’s common stock. Each share of Impact distributed
as part of the distribution is not eligible for resale until 180 days from the date Impact’s initial public offering becomes effective
under the Securities Act, subject to the discretion of DSS to lift the restriction sooner. On September 17, 2024, Impact completed its
Initial Public Offering and its shares started to trade on New York Stock Exchange. Based on the management’s analysis, the fair
value of Impact shares was approximately $0 at the distribution date and December 31, 2023. The Company did not have a controlling
interest and therefore the Company’s investment would be accounted for under equity method accounting or we could elect the fair
value option accounting.
On
July 17, 2020, the Company purchased 122,039,000 shares, approximately 0.5% ownership, and 1,220,390,000 warrants with an exercise price
of $0.0001 per share, from APW,HIPH, for an aggregated purchase price of $122,039. We value APWHIPH warrants under level 3 category through
a a
Black Scholes option pricing model and the fair value of the warrants from APWHIPH were $860,342 as of July 17, 2020, the purchase date and
$973 and $430$973 as of December 31, 20242025 and 2023, respectively.2024.
On September 8, 2020, the Company’s indirect subsidiary, Hapi Robot Pte. Ltd. (f.k.a. Impact Biohealth Pte. Ltd.), acquired 1,666 shares, approximately 1.45% ownership, from Nervotec Pte Ltd (“Nervotec”), a private company, at the purchase price of $36,628. The Company applied ASC 321 and measured Nervotec at cost, less any impairment, plus or minus changes resulting from observable price changes in orderly transactions for an identical or similar investment of the same issuer. As of December 31, 2024, the value of the investment in Nervotec is $589, as the Company wrote off $37,287 of this investment. As of December 31, 2025, the value of the investment is $0 as the Company written of the remaining balance.
On
September 30, 2020, the Company’s former indirect subsidiary, HWH Global Inc. (f.k.a. HWH International Inc.), acquired 3,800 shares,
approximately 19% ownership, in HWH World Company Limited (f.k.a. Hyten Global (Thailand) Co., Ltd.) (“HWH World Co.”), a
private company, at a purchase price of $42,562. HWH Global Inc. was sold on December 31, 2023.
What changed in the latest 10-Q
Risk Factors
Not applicable to smaller reporting companies.
No wording changes found in this section.
Full comparison: every changed paragraph (0)
Management's Discussion & Analysis (MD&A)
Removed heading “Stock Compensation”
Removed heading “Notice from NASDAQ”
Removed heading “Convertible Loan to Value Exchange International, Inc.”
Largest changes
“Under the terms of the May 6, 2026 Termination Agreement, neither HWH nor the Company has any further rights or obligations pursuant to the Term Sheet, the Stock Purchase Agreement, or the Convertible Note. Neither the Company nor HWH paid any penalties or fees in connection with the termination.”see in full comparison
“In the three months ended June 30, 2026, the Company had other expense of $4,027,566 compared to other expense of $6,085,681 in the three months ended June 30, 2025. In the six months ended June 30, 2026, the Company had other expense of $6,630,409 compared to other expense of $11,615,507 in the six months ended June 30, 2025. The foreign exchange transaction loss/gain and realized loss on securities investment – related party are the primary reasons for the volatility in these two periods. …”see in full comparison
“On June 23, 2026, the Company entered into a securities purchase agreement (“DSS SPA #2”) with DSS pursuant to which the Company loaned DSS $1,000,000, in exchange for a convertible promissory note (“DSS Note #2”) and warrants to purchase 17,777,776 shares of DSS common stock (“DSS Warrant #2”). DSS Note #2 is payable upon demand. DSS Note #2 will bear a simple interest rate of 3% per annum. …”see in full comparison
Full comparison: every changed paragraph (52)
We
also currently hold minority ownership interests, including a 36.9% equity interest in American Pacific Financial, Inc., formerly known
as American
Pacific Bancorp Inc. (“APF”), a 43.6%39.4% equity interest in DSS Inc. (“DSS”), an indirect 45.8% equity
interest interest
in Value Exchange International Inc. (“VEII”), a 0.5% equity interest in HIPH World Inc. (f.k.a. American Premium
Water Corporation
and New Electric CV Corporation), a 29% equity interest in Sharing Services Global Corporation (“SHRG”)
and a 41.5% equity
interest in New Energy Asia Pacific Company Limited (“New Energy”). APF is a financial network holding
company. DSS is a
multinational company operating businesses with five divisions: product packaging, biotechnology, direct marketing,
commercial lending,
and securities and investment management. DSS Inc. is listed on the NYSE American (NYSE: DSS). Value Exchange International,
Inc. is
a provider of information technology services for businesses, and is traded on the OTC Markets. Sharing Services Global Corporation,
is a publicly traded company dedicated to building shareholder value by developing or acquiring businesses, products and technologies
in the direct selling industry and other industries that augment the Company’s product and services portfolio, business competencies,
and geographic reach. Sharing Services Global Corporation is traded on the OTC Markets. New Energy focuses on distributing all-electric
versions of special-purpose and transportation vehicles, charging stations and batteries.
Stock
Compensation
On
April 15, 2025, the Board of Directors of the Company awarded Chairman and Chief Executive Officer Chan Heng Fai 1,000,000 restricted
shares of the Company’s common stock (the “Shares”). The Shares were granted to Mr. Chan as compensation for services
rendered to the Company pursuant to the Company’s 2025 Incentive Compensation Plan, as adopted on March 17, 2025. Under the terms
and conditions of the award, the Shares may not be sold, assigned, transferred, pledged, encumbered or otherwise disposed of until April
15, 2026. The Shares are not part of Mr. Chan’s regular annual compensation and will not be awarded on a regularly recurring basis.
As of the date of the issuance of the Shares, the fair value thereof was $840,000.
Notice
from NASDAQ
On
May 13, 2025, the Company received a letter from The Nasdaq Stock Market LLC indicating that the Company’s common stock had closed
below the minimum $1.00 per share bid price requirement for 30 consecutive business days, and that the Company is therefore not in compliance
with Nasdaq Listing Rule 5550(a)(2). The notification has no immediate effect on the listing of the Company’s common stock, and
the Company has 180 calendar days to regain compliance with the minimum bid price requirement.
On
July 17, 2025, Alset Inc. (the “Company”) received notice from the Nasdaq Listing Qualifications Staff (the “Staff”)
that the Staff has determined that the Company has regained compliance with Nasdaq’s minimum $1 bid price per share requirement.
While the Company has regained compliance with the Minimum Bid Price Requirement, there can be no assurance that the Company will be
able to maintain compliance with the Minimum Bid Price Requirement in the future.
Convertible
Loan to Value Exchange International, Inc.
VEII
issued a Convertible Promissory Note (the “VEII Convertible Promissory Note”) for $30,000, dated as of March 28, 2025 to
Alset Inc. as consideration for a loan in the same amount. This amount can be converted into shares of VEII pursuant to the terms of
the VEII Convertible Promissory Note for a period of two years. In the event that Alset Inc. converts all or a portion of the indebtedness
into shares of VEII Common Stock, the conversion price shall be $0.0166 per share. At the time of this filing, the Company has not converted
the Loan Amount.
The
Company currently owns a total of 21,179,275 shares (representing approximately 45.8%) of VEII.
Our
founder, Chairman and Chief Executive Officer, Chan Heng Fai, and another member of the Board of Directors of Hapi Metaverse, Lum Kan
Fai Vincent, are both members of the Board of Directors of VEII. In addition to Mr. Chan, three other members of the Board of Directors
of Alset Inc. are also members of the Board of Directors of VEII (Wong Shui Yeung, Wong Tat Keung, and Lim Sheng Hon Danny).
On
March 31, 2025, HWH entered into a securities purchase agreement with the SHRG, pursuant to which SHRG issued a convertible
promissory promissory
note to HWH in the amount of $150,000 (the “6th SHRG Convertible Note”). The 6th SHRG
Convertible Note
is convertible into SHRG’s common stock at $0.80 per share at HWH’s option until maturity three (3)
years from the date of
the securities purchase agreement, March 31, 2028. In addition, SHRG granted HWH warrants exercisable into
937,500 shares of SHRG’s
common stock. The warrants may be exercised for three (3) years from the date of the securities
purchase agreement at an exercise price
of $0.85 per share, for an aggregate purchase price of $796,875. The 6th SHRG
Convertible Note bears an 8% interest rate.
At the time of filing, HWH has not converted any of the debtnote contemplated by the
6th SHRG Convertible Note nor exercised any
of the warrants.
On
June 27, 2025, HWH entered into a securities purchase agreement with SHRG pursuant to which the Company purchased from SHRG a Convertible
Convertible Promissory Note (the “7th SHRG Convertible Note”) in the amount of $60,000, convertible into
10,000,000 shares
of SHRG’s common stock at the option of HWH for an aggregate purchase price of $60,000, Additionally, upon
signing the 7th
SHRG Convertible Note, SHRG owed the Company a commitment fee of 8% of the principal amount $4,800 in
total, to be paid either in cash
or in common stock of SHRG, at the discretion of HWH. The 7th SHRG Convertible Note
bears an 8% interest rate and has a scheduled
maturity on June 27, 2028. At the time of filing, HWH has not converted any of the
debt note contemplated by the 7th SHRG Convertible
Note.
On
September 17, 2025, HWH entered into a securities purchase agreement with SHRG, pursuant to which HWH purchased from SHRG a Convertible
Promissory Note (the “8th SHRG Convertible Note”) in the amount of $70,000, convertible into 11,666,667 shares
of SHRG’s common stock at HWH’s option for an aggregate purchase price of $70,000. The 8th SHRG Convertible Note
bears an 8% interest rate and has a scheduled maturity three years from the date of the note. Additionally, upon signing the 8th
SHRG Convertible Note, SHRG owed HWH a commitment fee of 8% of the principal amount, $5,600 in total, to be paid either in cash or in
common stock of SHRG, at HWH’s discretion. At the time of filing, HWH has not converted any of the debtnote contemplated by the 8th
SHRG Convertible Note.
On
October 6, 2025, HWH entered into a securities purchase agreement with SHRG, pursuant to which HWH purchased from SHRG a Convertible
Promissory Note (the “9th SHRG Convertible Note”) in the amount of $200,000, convertible into 33,333,333
shares shares
of SHRG’s common stock at HWH’s option for an aggregate purchase price of $200,000. The 9th SHRG
Convertible Note
bears an 8% interest rate and has a scheduled maturity three years from the date of the note, October 6, 2028.
Additionally, upon signing
the 9th SHRG Convertible Note, SHRG owed HWH a commitment fee of 8% of the principal amount,
$16,000 in total, to be paid
either in cash or in common stock of SHRG, at HWH’s discretion. At the time of filing, HWH has
not converted any of the debtnote contemplated
by the 9th SHRG Convertible Note.
On
December 10, 2025, HWH entered into a securities purchase agreement with SHRG, pursuant to which HWH purchased from SHRG a Convertible
Promissory Note (the “10th SHRG Convertible Note”) in the amount of $150,000, convertible into 25,000,000 shares
of SHRG’s common stock at HWH’s option for an aggregate purchase price of $150,000. The 10th SHRG Convertible
Note bears an 8% interest rate and has a scheduled maturity three years from the date of the note, December 10, 2028. Additionally, upon
signing the 10th SHRG Convertible Note, SHRG owed HWH a commitment fee of 8% of the principal amount, $12,000 in total, to
be paid either in cash or in common stock of SHRG, at HWH’s discretion. At the time of filing, HWH has not converted any of the
debtnote contemplated by the 10th SHRG Convertible Note.
On
January 2, 2026, HWH entered into a securities purchase agreement with SHRG, pursuant to which HWH purchased from SHRG a Convertible
Promissory Note (the “11th SHRG Convertible Note”) in the amount of $40,000, convertible into 6,666,667
shares shares
of SHRG’s common stock at HWH’s option for an aggregate purchase price of $40,000. The 11th SHRG
Convertible Note
bears an 8% interest rate and has a scheduled maturity three years from the date of the note, January 2, 2029.
Additionally, upon signing
the 11th SHRG Convertible Note, SHRG owed HWH a commitment fee of 8% of the principal amount,
$3,200 in total, to be paid
either in cash or in common stock of SHRG, at HWH’s discretion. At the time of filing, HWH has not
converted any of the debtnote contemplated
by the 11th SHRG Convertible Note.
On
January 8, 2026, HWH entered into a securities purchase agreement with SHRG, pursuant to which HWH purchased from SHRG a Convertible
Promissory Note (the “12th SHRG Convertible Note”) in the amount of $120,000, convertible into SHRG common
stock stock
at $0.006 per share at HWH’s option. The 12th SHRG Convertible Note bears an 8% interest rate and has a
scheduled maturity
three years from the date of the note, January 8, 2029. Additionally, upon signing the 12th SHRG
Convertible Note, SHRG owed
HWH a commitment fee of 8% of the principal amount, $9,600 in total, to be paid either in cash or in
common stock of SHRG, at HWH’s
discretion. At the time of filing, HWH has not converted any of the debtnote contemplated by the
12th SHRG Convertible Note.
On
February 4, 2026, HWH entered into a securities purchase agreement with SHRG, pursuant to which HWH purchased from SHRG a
Convertible Convertible
Promissory Note (the “13th SHRG Convertible Note”) in the amount of $125,000, convertible into
SHRG common stock
at $0.006 per share at HWH’s option. The 13th SHRG Convertible Note bears an 8% interest rate and
has a scheduled maturity
three years from the date of the note, February 4, 2029. Additionally, upon signing the 13th
SHRG Convertible Note, SHRG owed
HWH a commitment fee of 8% of the principal amount, $10,000 in total, to be paid either in cash or
in common stock of SHRG, at HWH’s
discretion. At the time of filing, HWH has not converted any of the debtnote contemplated by the
13th SHRG Convertible Note.
On
September 22, 2025, LiquidValue Development Inc. changed its name to “Winning Catering Group, Inc.” in anticipation of a
planned merger pursuant to an Acquisition Agreement and Plan of Merger (the “Acquisition Agreement”) entered into on May
30, 2025 (such merger has not yet closed as of the date hereof). The Acquisition Agreement was entered into by LVD with (i) SeD Intelligent
Home Inc., a Nevada corporation, the majority shareholder of LVD and an indirect majority-owned subsidiary of the Company (“SeD”);
(ii) LVD Merger Corp., a Nevada corporation and wholly owned subsidiary of LVD (the “Merger Sub”); (iii) Winning Catering
Management Limited, a British Virgin Islands corporation (“Winning Group”); (iv) Winning Holdings Limited, a British Virgin
Islands corporation (“Winning Holdings”); and (iv) Pure Talent Group Limited, a British Virgin Islands corporation (“PTGL”
and collectively, the “Parties”). Pursuant to the terms of the Acquisition Agreement, the Merger Sub will merge with and
into Winning Group (the “Merger”), with Winning Group surviving the Merger. Following the Merger, Winning Group will become
a wholly owned subsidiary of LVD. In connection with the Merger and as part of the transaction structure, the Parties also agreed that:
3,754,897,728 new fully paid, non-assessable shares of LVD’s common stock will be issued to Winning Holdings and 234,681,108 shares
will be issued to PTGL. At the closing of these transactions, (i) Winning Holdings will own 80% of the issued and outstanding shares
of LVD; (ii) SeD and other existing stockholders will retain 15% of the LVD’s shares; and (iii) PTGL will own 5% of LVD’s
shares. Winning Group’s principal line of business is Wing Nin, a Hong Kong food and beverage brand. Renowned for its cart noodles,
a Hong Kong staple, Wing Nin sells customizable bowls featuring a choice of noodle bases, a wide array of toppings, and a rich homemade
spicy curry sauce. Wing Nin began as a street vendor in the 1960s and has expanded in recent years. Today, Wing Nin has thirteenfourteen locations
across Hong Kong.
On
February 5, 2026, the Company
entered into a term sheet (the “Term Sheet”),agreements with HWH International Inc. (“HWH”),
a majority owned subsidiary of the Company. Pursuant to the Term Sheet, theThe Company agreed
to sell to the HWH 505,341,376 issued and
outstanding shares of common stock, par value $0.0001 (the “Shares”), of Hapi Metaverse Inc. (“Hapi Metaverse”),
representing 99.55% of Hapi Metaverse’s outstanding capital.capital, for a purchase price of $19,910,603.00 in the form of a promissory
note convertible into newly issued shares of HWH’s common stock (the “Convertible Note”). Under the terms of the Convertible
Note, the Company could convert any outstanding principal and interest into shares of HWH’s common stock at $1.85 per share for
five (5) years.
Under
the terms of the Term Sheet, the Company agreed to sell the Shares through a stock purchase agreement for a purchase price of $19,910,603.00
in the form of a promissory note convertible into newly issued shares of HWH’s common stock (the “Stock Purchase Agreement,”
and the “Convertible Note”). Under the terms of the Convertible Note, the Company could convert any outstanding principal
and interest into shares of HWH’s common stock at $1.85 per share upon ten (10) days’ notice prior to maturity of the Convertible
Note five (5) years from the date of the Term Sheet, and upon maturity of the Convertible Note any outstanding principal and accrued
interest accrued thereunder would automatically be converted into shares of HWH’s common stock at the conversion rate.
The
closing of the transaction contemplated by the Term Sheet would be subject to standard closing conditions, including the approval by
the stockholders of HWH holding a majority of HWH’s common stock. The Company and certain affiliates of the Company own the majority
of HWH’s common stock.
On
February 5, 2026, the Company entered into the Stock Purchase Agreement with HWH, reflecting the terms set forth in the Term Sheet. The
stockholders holding a majority of HWH’s issued and outstanding shares approved the proposed transaction.
The
Company and its subsidiary
HWH subsequently agreed to terminate the purchase and sale of the Hapi Metaverse Shares, and the agreements
contemplating the same, on
the terms and subject to the conditions set forth in a Termination Agreement dated May 6, 2026. The management
of the Company and HWH have
determined that terminating the sale and purchase of the Hapi Metaverse Shares iswas in the best interests of
both parties.
Under
the terms of the May 6, 2026 Termination Agreement, neither HWH nor the Company has any further rights or obligations pursuant to the
Term Sheet, the Stock Purchase Agreement, or the Convertible Note. Neither the Company nor HWH paid any penalties or fees in connection
with the termination.
Securities
Purchase AgreementAgreements with DSS, Inc.
March 2026 SPA
On
March 26, 2026, Alset International Limited (“Alset International”) entered into a securities purchase agreement (the “DSS
SPA”) with DSS, Inc., pursuant to which Alset International lent DSS $2,450,000, in exchange for a convertible promissory note
(the “DSS Note”) and warrants to purchase 16,554,055 shares of DSS common stock (the “DSS Warrants”).
TheOn
March 26, 2026, Alset International entered into a securities purchase agreement (“DSS SPA #1”) with DSS, pursuant to which
Alset International lent DSS $2,450,000, in exchange for a convertible promissory note (“DSS Note #1”) and warrants to purchase
16,554,055 shares of DSS common stock (“DSS Warrant #1”). DSS Note #1 bears a simple interest rate of 3% per annum. Under
the terms of the DSS Note,Note #1, Alset International may convert any outstanding
principal and interest into shares of DSS common stock at $0.74
per share upon notice prior to maturity of the DSS Note five (5) years
from the date of thereof. The DSS Warrants to be issued to Alset
International are to purchase up to 16,554,055 shares of DSS common stock at an exercise price of $0.93 per share. DSS Warrant #1 expires
on its fifth anniversary.
On June 23, 2026, the Company entered into a securities purchase agreement (“DSS SPA #2”) with DSS pursuant to which the Company loaned DSS $1,000,000, in exchange for a convertible promissory note (“DSS Note #2”) and warrants to purchase 17,777,776 shares of DSS common stock (“DSS Warrant #2”). DSS Note #2 is payable upon demand. DSS Note #2 will bear a simple interest rate of 3% per annum. Under the terms of DSS Note #2, the Company may convert any outstanding principal and interest into shares of DSS common stock at $0.45 per share upon notice prior to maturity of DSS Note #2 five (5) years from the date of thereof. DSS Warrant #2 will be exercisable into up to 17,777,776 shares of DSS common stock at an exercise price of $0.50 per share. DSS Warrant #2 expires on its third anniversary.
DSS SPA #2, DSS Note #2, and DSS Warrant #2 require the approval of DSS’ stockholders, prior to the conversion of the note or exercise of the warrants.
The
DSS Warrants to be issued to Alset International are to purchase up to 16,554,055 shares of DSS common stock at an exercise price of
$0.93 per share. The DSS Warrants expire on their fifth anniversary.
The
Company holds a significant equity interest in DSS directly and through its subsidiaries. The Company and DSS are related parties under
the common control of the Company’s Chairman and Chief Executive Officer, Chan Heng Fai, who is also the Chairman of DSS. Chan
Tung Moe, a director and Co-Chief Executive Officer of the Company, is also a director of DSS. Lim Sheng Hon Danny, a director and officer
of the
Company, is also a director of DSS. Three of the Company’s independent directors, Joanne Wong Hiu Pan, Wong Shui Yeung,
and William
Wu are also directors of DSS. The Transaction Documents were approved by the Company’s Board of Directors and Audit
Committee. Committee.Chan Heng Fai and Chan Tung Moe, members of the Company’s Board of Directors, recused themselves from all deliberation
and voting regarding the Transaction Documents.
Summary
of Statements of Operations for the Three and Six Months Ended MarchJune 31,30, 2026 and 2025
Revenue
was $980,778$988,542 and $1,068,303$1,098,962 for the three months ended MarchJune 31,30, 2026 and 2025, respectively. Revenue was $1,969,320 and $2,167,265 for
the six months ended June 30, 2026 and 2025, respectively.
Revenue
from rental business was $726,659$724,313 and $717,805$716,042 in the three months ended MarchJune 31,30, 2026 and 2025, respectively. Revenue from rental business
was $1,450,972 and $1,433,847 in the six months ended June 30, 2026 and 2025, respectively. The Company expects that
the revenue from
this business will continue to increase as we acquire more rental houses and successfully rent them.
The
financial services, food and beverage businesses and new venture businesses are small and diversified, and accordingly they are not separately
addressed as one independent category. In the three months ended MarchJune 31,30, 2026 and 2025, the revenue from other businesses was $254,119$264,229
and $350,498,$382,920, respectively. In the six months ended June 30, 2026 and 2025, the revenue from other businesses was $518,348 and $733,418,
respectively, generated by Korean, Singaporean and Chinese café shops and restaurants.
Cost
of sales decreased from $777,529$1,021,954 in the three months ended MarchJune 31,30, 2025 to $705,668$904,665 in the three months ended MarchJune 31,30, 2026. Cost
of sales decreased from $1,990,898 in the six months ended June 30, 2025 to $1,610,333 in the six months ended June 30, 2026. The
decrease in cost of sales is caused by the decrease in cost from F&B business in 2025.
The
gross margin changeddecreased from $290,774$77,008 to $275,110$83,877 in the three months ended MarchJune 31,30, 2025 and 2026, respectively. The gross margin decreased
from $176,367 to $358,987 in the six months ended June 30, 2025 and 2026, respectively. The decrease of gross
margin was caused by the
decrease in revenue in 2025.2026.
The
decrease of operating expenses in the threesix months ended MarchJune 31,30, 2026 compared to the same period of 2025 was mostly caused by the decrease
decrease in impairments and bonuses.
In the three months ended June 30, 2026, the Company had other expense of $4,027,566 compared to other expense of $6,085,681 in the three months ended June 30, 2025. In the six months ended June 30, 2026, the Company had other expense of $6,630,409 compared to other expense of $11,615,507 in the six months ended June 30, 2025. The foreign exchange transaction loss/gain and realized loss on securities investment – related party are the primary reasons for the volatility in these two periods. The foreign exchange transaction gain was $170,687 in the three months ended June 30, 2026, compared to $4,834,398 loss in the three months ended June 30, 2025. The foreign exchange transaction gain was $279,630 in the six months ended June 30, 2026, compared to $6,243,500 loss in the six months ended June 30, 2025. The realized loss on securities investment – related party was $0 and $2,438,848 in the three months ended June 30, 2026 and 2025, respectively. The realized loss on securities investment – related party was $0 and $2,438,848 in the six months ended June 30, 2026 and 2025, respectively.
In
the three months ended March 31, 2026, the Company had other expense of $2,602,843 compared to other expense of $5,529,826 in the three
months ended March 31, 2025. The unrealized loss/gain
on security investment is the primary reason for the volatility in these two periods. The unrealized loss on security investments was
$2,571,644 in the three months ended March 31, 2026, compared to $3,520,747 loss in the three months ended March 31, 2025.
In
the three months ended MarchJune 31,30, 2026 the Company had net loss of $5,844,986 compared to net loss of $8,841,142 in the three months ended
June 30, 2025. In the six months ended June 30, 2026, the Company had net loss of $5,255,283$11,100,269 compared to net loss of $9,504,892$18,346,034 in
the threesix months
ended MarchJune 31,30, 2025.
Our
real estate assets have decreased to $29,352,273$29,083,594 as of MarchJune 31,30, 2026 from $29,620,952 as of December 31, 2025. This decrease reflects
depreciation expenses on the rental properties.
Our
cash has decreased from $25,184,990 as of December 31, 2025 to $21,478,610$12,325,977 as of MarchJune 31,30, 2026. Our liabilities were $6,923,965 at December
31, 2025 and $3,985,867$2,810,020 at MarchJune 31,30, 2026. Our total assets have decreased to $131,741,859$124,940,908 as of MarchJune 31,30, 2026 from $136,587,114 as of
of December 31, 2025 mainly due to decrease in value of investment securities and purchasing equity investment.
Summary
of Cash Flows for the ThreeSix Months Ended MarchJune 31,30, 2026 and 2025
Net
cash used in operating activities was $1,491,037$9,171,536 in the threesix months ended MarchJune 31,30, 2026, as compared to net cash used in operating activities
activities of $3,756,154$6,374,812 in the same period of 2025. Paying off payables inand 2025purchasing trading securities was the main reason for the cash used
in operating activities
in that2026 period.and 2025.
Net
cash usedprovided inby investing activities was $461,505$1,675,912 in the threesix months ended MarchJune 31,30, 2025, compared to net cash used of $2,657,460$3,705,460 in
the the
threesix months ended MarchJune 31,30, 2026. In the threesix months ended MarchJune 31,30, 2026, the Company issued $3,510,278$4,532,533 in loans to related parties
and spent $6,870$87,831 to purchase fixed assets and $14,907$14,858 to purchase security investment. At the same time, we received $775,961$831,128 from repayment
of related party loan and $98,634 from the sale of securities of a related party. In the threesix months ended MarchJune 31,30, 2025, the Company
issued $479,297$910,193 in loans to related parties and spent $61,244$144,842 to purchase fixed assets. At the same time, we received $79,036$117,804 from
repayment repayment
of related party loan.loan and $2,613,143 from the sale of securities of a related party.
Net
cash used in financing activities was $6,152$508,417 in the threesix months ended MarchJune 31,30, 2026, compared to net cash provided of $2,333,452$2,326,244 in
the threesix months ended MarchJune 31,30, 2025. The cash used in financing activities in the threesix months ended MarchJune 31,30, 2026 was for repayment of
of note payable of $10,968.$513,233. At the same time the Company borrowed $4,816 from a note payable. The cash provided by financing activities
in the first threesix months of 2025 was from proceeds from issuing common stock of $2,613,526.$2,614,983. In that same period, the Company repaid $261,097
$280,074 of note payable.payable and repurchased its own stock for $27,642.
We
believe that inflation has not had a material impact on our results of operations for the threesix months ended MarchJune 31,30, 2026 or the year
ended December 31, 2025. We cannot assure you that future inflation will not have an adverse impact on our operating results and financial
condition.
The
effect of foreign exchange rate changes on the intercompany loans (under ASC 830), which mostly consist of loans from Singapore to the
United States and which were approximately $30 million and $30 million on MarchJune 31,30, 2026 and December 31, 2025, respectively, are the
reason for the significant fluctuation of foreign currency transaction Gain or Loss on the Condensed Consolidated Statements of Operations
and Other Comprehensive Loss. Because the intercompany loan balances between Singapore and United States will remain at approximately
$30 million over the next year, we expect this fluctuation of foreign exchange rates to still significantly impact the results of operations
in 2025,2026, especially given that the foreign exchange rate may and is expected to be volatile. If the amount of intercompany loan is lowered
in the future, the effect will be reduced. However, at this moment, we do not expect to repay the intercompany loans in the short term.
The real estate business is subject to seasonal shifts in costs as certain work is more likely to be performed at certain times of the year. This may impact the expenses of our subsidiary Alset EHome Inc. from time to time. In addition, should we commence building homes, we are likely to experience periodic spikes in sales as we commence the sales process at a particular location. At the present time, seasonal shifts are not having a significant impact on our operations.
AEI insider buying and selling (Form 4)
Since 2026-04-11, insiders reported open-market purchases in 0 Form 4 filings and open-market sales in 0 filings. Totals add up every open-market (code P and S) line in those filings, using the prices reported in the filings. Awards, option exercises, tax withholding and gifts are listed below but not counted.
No Form 4 stock transactions in this period.
Well-known investors holding AEI (13F)
| Investor | Quarter | Shares | Reported value | % of their 13F | Change vs prior quarter |
|---|---|---|---|---|---|
| Renaissance Technologies | 2026-06-30 | 103,366 | $148.8K | 0.0% | Reduced 4% |
| Two Sigma Investments | 2026-06-30 | 14,744 | $21.2K | 0.0% | Reduced 33% |