Alset Inc.

Alset Inc. is a diversified holding company operating through its subsidiaries in real estate, financial services, digital transformation technologies, biohealth activities, and consumer products across the United States, Singapore, Hong Kong, Australia, Republic of Korea, and the People's Republic of China. The company manages its three primary businesses through its 85.8% owned subsidiary, Alset International Limited ¹, which is publicly traded on the Singapore Stock Exchange. Alset Inc. aims to grow by acquiring majority and/or control stakes in innovative businesses that are expected to appreciate in value, focusing on industries where its management has expertise or can provide advisory value for market expansion. The company also maintains a portfolio of trading securities to generate profits from short-term market fluctuations.

The company's core business model involves generating revenue from the sale of subdivision development properties, rental homes, biohealth products, food and beverage businesses, and other activities. In the year ended December 31, 2025, revenue from home rentals accounted for approximately 52% ² of total revenue, while revenue from other activities accounted for approximately 48% ³. Sales of real properties contributed 0% ⁴ to total revenue in 2025. This represents a shift from the year ended December 31, 2024, when sales of real properties accounted for approximately 79% ⁵ of total revenue, home rentals for approximately 14% ⁶, and other activities for approximately 7% ⁷.

The real estate segment primarily operates through Alset Real Estate Holdings Inc., a 99.9%-owned U.S. subsidiary of Alset International ⁸. This segment focuses on land subdivision developments, such as the Lakes at Black Oak project near Houston, Texas, where developed lots are sold to builders. The company also expanded into single-family rental homes, owning 132 homes ⁹ in Montgomery and Harris Counties, Texas, acquired for an aggregate cost of $30,998,258 ¹⁰. These rental properties are equipped with smart home technologies, including Tesla PV solar panels and Powerwalls in approximately 96 of the 132 homes ¹¹.

The digital transformation technology segment, primarily through Hapi Metaverse Inc., a 99.6%-owned subsidiary ¹², provides business-to-business (B2B) solutions in e-commerce, collaboration, and social networking. This includes instant messaging, international calling, social media, and e-commerce platforms, with an expansion into artificial intelligence, augmented reality, and metaverse technologies. Hapi Metaverse is also the largest stockholder of Value Exchange International Inc. ¹³, which offers IT services for major retailers in Asia.

The biohealth segment, mainly through HWH International Inc. and its subsidiaries, focuses on developing, researching, testing, manufacturing, licensing, and distributing biohealth products and services. This segment previously included HWH World Inc. (HWHKOR), which distributed dietary supplements in South Korea through a direct sales model and the Hapi Gig platform. However, on April 23, 2025, the company completed the sale of its 100% equity interest in HWHKOR to AES Group Inc., generating a gain of $384,356 ¹⁴. The company also formerly held a 39.7% ownership ¹⁵ in Impact BioMedical Inc., but sold its entire equity interest between March 31, 2025, and April 4, 2025, for total proceeds of $4,184,575 ¹⁶, resulting in a recognized loss of $2,439,264 ¹⁷.

Other business activities include corporate and financial services, food and beverage businesses, and new venture businesses. This segment includes BMI Capital Partners International Limited, which offers consultancy services, and Alset F&B One Pte. Ltd., which operates Killiney Kopitiam restaurants in Singapore. The company ceased operations of Alset F&B (PLQ) Pte. Ltd. in the second quarter of 2024 ¹⁸ and Hapi Café Korea Inc. on September 13, 2025 ¹⁹. In 2023, new food and beverage subsidiaries were incorporated in the People's Republic of China. The company also holds a 36.9% equity interest ²⁰ in American Pacific Financial, Inc., a 43.6% equity interest ²¹ in DSS Inc., an indirect 45.8% equity interest ²² in Value Exchange International, Inc., a 29.0% equity interest ²³ in Sharing Services Global Corporation, and a 41.5% equity interest ²⁴ in New Energy Asia Pacific Company Limited.

For the year ended December 31, 2025, total revenue was $4,470,875 ²⁵, a significant decrease from $21,115,899 ²⁶ in 2024. The company reported a net loss of $49,350,566 ²⁷ in 2025, compared to a net loss of $4,165,816 ²⁸ in 2024. Basic and diluted EPS for 2025 was $(2.22) ²⁹, compared to $(0.43) ³⁰ in 2024. Cash and cash equivalents decreased from $27,243,787 ³¹ in 2024 to $25,184,990 ³² in 2025. Total liabilities increased from $6,563,126 ³³ in 2024 to $6,923,965 ³⁴ in 2025. The company's total assets increased to $136,587,114 ³⁵ as of December 31, 2025, from $96,761,977 ³⁶ as of December 31, 2024, primarily due to purchasing equity investments.

Year-over-year, total revenue decreased by $15,645,266 ³⁷, or 79% ³⁸. Real estate revenue declined by $16,778,914 ³⁹, or 86% ⁴⁰, while other business activities revenue increased by $133,718 ⁴¹, or 9% ⁴². Digital transformation technology revenue increased by $172 ⁴³, or 100% ⁴⁴, from $0 in 2024. Gross margin decreased from $8,333,275 ⁴⁵ in 2024 to $1,248,960 ⁴⁶ in 2025, primarily due to fewer lot sales in the Lakes at Black Oak project. Operating expenses increased by $3,949,191 ⁴⁷, or 32% ⁴⁸, from $12,450,351 ⁴⁹ in 2024 to $16,399,543 ⁵⁰ in 2025, mainly due to increased bonus payments to executives and professional fees.

During the reported period, the company completed the sale of remaining lots at Lakes at Black Oak on January 4, 2024, generating approximately $5.0 million ⁵¹ in revenue. Further lot sales from Lakes at Black Oak and Alset Villas projects closed on July 1, 2024, generating approximately $3.8 million ⁵², on October 10, 2024, generating approximately $3.9 million ⁵³, and on December 16, 2024, generating approximately $3.8 million ⁵⁴, respectively. The company also completed the sale of HWH World Inc. on April 23, 2025, generating a gain of $384,356 ⁵⁵. Between March 31, 2025, and April 4, 2025, the company sold its entire equity interest in Impact Biomedical Inc. for total proceeds of $4,184,575 ⁵⁶. On July 23, 2025, the company closed the acquisition of New Energy Asia Pacific Inc. for $83,000,000 ⁵⁷ in a convertible promissory note, which was immediately converted into 27,666,667 ⁵⁸ restricted shares of the company's common stock. The company repurchased 505,956 ⁵⁹ shares of its common stock for approximately $1,004,875 ⁶⁰ during 2025.

Management believes that the available cash on hand, along with available debt and equity financing, will be sufficient to fund operations for at least the next 12 months. The company anticipates that revenue generated from its property development business will decline as a percentage of total revenue, with greater contributions expected from its rental business, digital transformation technology, biohealth businesses, food and beverage business, and future business acquisitions.

A key growth area for the company is its home rental business, where it expects revenue to continue increasing as more rental houses are acquired and successfully leased. The company has already invested in enhancing 96 of its 132 single-family rental homes ⁶¹ with Tesla PV solar panels and Powerwalls, along with other smart home technologies, believing these features will be attractive to renters. Additionally, the company is actively pursuing residential development activities in partnership with U.S. homebuilders, with discussions underway to acquire smaller U.S. residential development projects in both for-sale and for-rent markets across diverse regions.

In its digital transformation technology segment, the company aims to enhance client digital transformation journeys through better consumer engagement and analytics by adding the latest technological frameworks, such as AI and Metaverse. The company's Hapi Metaverse Inc. subsidiary has already expanded its offerings to retail business digital transformation, including supermarket and chain stores, through its investment in Value Exchange International Inc.

Operationally, the company expects the fluctuation of foreign exchange rates to significantly impact its results of operations in 2026, particularly due to intercompany loans from Singapore to the United States, which were approximately $28 million ⁶² as of December 31, 2025. While the company does not expect to repay these intercompany loans in the short term, a future reduction in their amount would lessen this impact. The company also plans to appoint additional qualified personnel with financial accounting, GAAP, and SEC experience to remediate a material weakness identified in its internal control over financial reporting related to limited staff.

Regarding capital allocation, the company's board of directors approved a new stock repurchase program on June 23, 2025, authorizing the repurchase of up to $1,000,000 ⁶³ of its common stock. This program was increased by an additional $1,000,000 ⁶⁴ on September 29, 2025, and expired on December 31, 2025. The company repurchased 505,956 ⁶⁵ shares for approximately $1,004,875 ⁶⁶ during 2025. The company does not anticipate paying any cash dividends on its common stock for the foreseeable future, intending to retain all future earnings for operations, expansion, and debt repayment.

The company explicitly flagged several structural headwinds and execution risks. These include the challenge of improving revenue through cross-selling and revenue-sharing arrangements among its diverse group of companies, the ability to identify complementary businesses for acquisition and integrate them profitably, and the ability to attract and retain competent technical and sales personnel at acceptable compensation levels. Furthermore, controlling operating expenses as businesses and product offerings expand is a key challenge.

Geographic, regulatory, and macro factors identified as constraints include increased risks associated with international operations, such as trade barriers, tariffs, changes in trade regulations, difficulties in managing foreign operations due to distance, language, and cultural differences, and compliance with varied local laws and regulations. The company also notes potential impacts from political or social unrest, economic instability, human rights issues, and geopolitical events. The company's investment in New Energy Asia Pacific Company Limited, which focuses on distributing all-electric vehicles, charging stations, and batteries, experienced an impairment charge of approximately $30.1 million ⁶⁷ in 2025 due to delays in execution and commercialization of taxi delivery projects, revised cash flow projections, and changes in market conditions in the distributed energy sector, including broader global geopolitical uncertainty.

The company faces several material risks, including a material weakness in the design and effectiveness of its internal controls due to a relatively small number of staff, which could affect the accuracy and timeliness of financial reporting and lead to misstatements. The company has a history of annual net losses, with a net loss of $49,350,566 ⁶⁸ in 2025, and may not achieve or sustain profitability. Its growth strategy, heavily reliant on acquisitions, carries risks such as difficulty identifying suitable candidates, challenges in integration, and potential dilution from stock issuance or increased debt. General political, social, and economic conditions, including disruptions in financial markets, interest rate increases, trade wars, labor shortages, inflation, and geopolitical issues like the Russia-Ukraine conflict, could adversely affect demand for products and services and the value of real estate investments. The company's significant ownership interests in public companies with limited trading markets subject it to risks from stock price fluctuations and difficulty in disposing of shares. Dependence on the continued service of its founder, Chairman, and CEO, Chan Heng Fai, and the ability to recruit qualified personnel are critical, with potential conflicts of interest arising from officers allocating time to other ventures. Failure to protect intellectual property rights could lead to revenue loss, and new legislation or regulations related to patents could increase operating costs. The real estate business is exposed to market fluctuations, zoning and land use regulations, and potential health and safety incidents if it expands into homebuilding. International operations are subject to increased legal and regulatory risks, including trade barriers and foreign currency exchange rate volatility, with intercompany loans of approximately $28 million ⁶⁹ between Singapore and U.S. entities being particularly sensitive to exchange rate changes.

Management's message to shareholders conveys a commitment to growth through strategic acquisitions and organic business expansion, particularly in industries where the management team possesses in-depth knowledge and can provide value. The company aims to leverage its global network and capital resources to identify and integrate innovative and promising businesses. Management explicitly stated that the available cash on hand, along with available debt and equity financing, is believed to be sufficient to fund operations for at least the next 12 months. Key strategic priorities include improving revenue through cross-selling and revenue-sharing among its diverse companies, successfully identifying and integrating complementary businesses, attracting and retaining skilled technical and sales personnel, and controlling operating expenses as the business expands. The company also emphasizes its commitment to advancing smart and healthy sustainable living, as evidenced by investments in EHome communities and smart technologies in rental properties.