Business Overview

Alset Inc. is a diversified holding company with operations in the United States, Singapore, Hong Kong, Australia, South Korea, and China. The company is primarily engaged through its subsidiaries in the development of EHome communities and other real estate, financial services, digital transformation technologies, biohealth activities, and consumer products.

The company manages its three principal businesses through its 85.7% owned subsidiary, Alset International Limited, a public company traded on the Singapore Stock Exchange. Alset Inc. also has ownership interests in several other public and private companies, including American Pacific Financial, DSS Inc., Value Exchange International, Sharing Services Global Corporation, and Impact Biomedical Inc.

Alset Inc. generally acquires majority and/or control stakes in innovative and promising businesses that are expected to appreciate in value over time. The company focuses on building businesses in industries where its management team has in-depth knowledge and experience, or where it can provide value by advising on new markets and expansion.

Revenue Model

Alset Inc.’s total revenue for the years ended December 31, 2024 and 2023 was $21,115,899 and $22,088,507, respectively. The company’s net losses for the same periods were $4,165,816 and $61,278,733, respectively.

The company currently recognizes revenue from the sale of its subdivision development properties, rental homes, the sale of its biohealth products, food and beverage business, and other activities. Sales of real properties accounted for approximately 79% and 82% of total revenue in 2024 and 2023, respectively. Revenue from home rentals accounted for approximately 14% and 13% in 2024 and 2023, respectively, and revenue from other activities accounted for approximately 7% and 5% in 2024 and 2023, respectively.

The company believes that revenue generated from its property development business will decline as a percentage of total revenue, as it expects to experience greater revenue contribution from its rental business, digital transformation technology, biohealth businesses, food and beverage business, and future business acquisitions.

Matters that May or Are Currently Affecting Our Business

The primary challenges and trends that could affect or are affecting Alset Inc.’s financial results include:

• Its ability to improve revenue through cross-selling and revenue-sharing arrangements among its diverse group of companies.
• Its ability to identify complementary businesses for acquisition, obtain additional financing if needed, and profitably integrate them into its existing operations.
• Its ability to attract competent and skilled technical and sales personnel for each of its businesses at acceptable compensation levels to manage overhead.
• Its ability to control operating expenses as it expands each of its businesses and product and service offerings.

Summary of Significant Accounting Policies

Alset Inc.’s consolidated financial statements are prepared in accordance with U.S. GAAP. The company consolidates entities in which it owns more than 50% of the voting common stock and controls operations. The company uses estimates and critical accounting assumptions in areas such as allowance for doubtful accounts, recoverability and useful lives of property, plant and equipment, valuation of real estate assets, allocation of development costs and capitalized interest, valuation allowance of deferred taxes, contingencies, and equity compensation.

The company’s revenue recognition policies vary by segment, with the real estate segment recognizing revenue from property sales and rentals, the digital transformation technology segment recognizing revenue from software development, the biohealth segment recognizing revenue from product sales and annual memberships, and the other businesses segment recognizing revenue from food and beverage operations.

Real Estate Assets

Alset Inc.’s real estate assets are recorded at cost, except when acquired real estate assets meet the definition of a business combination, which are recorded at fair value. The company capitalizes interest, property taxes, insurance, and other incremental costs directly related to a project during the construction period. The company’s policy is to obtain independent third-party valuations for each major project as part of its assessment of potential impairment triggers.

Results of Operations

Alset Inc.’s revenue decreased from $22,088,507 in 2023 to $21,115,899 in 2024, primarily due to a decline in property sales. The company’s net loss decreased from $61,278,733 in 2023 to $4,165,816 in 2024, driven by changes in realized gains/losses on securities investments, equity method investment losses, and the loss on consolidation of HWH International Inc.

Liquidity and Capital Resources

Alset Inc.’s real estate assets decreased from $42,137,152 as of December 31, 2023, to $30,695,669 as of December 31, 2024, reflecting the sale of multiple lots in the Lakes at Black Oak project. The company’s cash increased from $26,921,727 as of December 31, 2023, to $27,243,787 as of December 31, 2024, and its total liabilities decreased from $9,066,700 to $6,563,126 over the same period.

The company believes that its available cash, debt, and equity financing are sufficient to fund its operations for at least the next 12 months.

Emerging Growth Company Status

Alset Inc. is an “emerging growth company” as defined in the JOBS Act and may take advantage of certain exemptions from various reporting requirements applicable to other public companies.