Alset Inc. 10-K Summary: Fiscal Year Ended December 31, 2025
Business Context and Reporting Period
Company: Alset Inc. (Ticker: AEI)
Reporting Period: Fiscal Year Ended December 31, 2025
Business Model: A diversified holding company operating through four segments: Real Estate (development and single-family rentals), Digital Transformation Technology (B2B solutions), Biohealth (consumer products), and Other Business Activities (financial services, F&B). The company is headquartered in Bethesda, Maryland, with significant operations in the U.S., Singapore, and Asia.
Key 2025 Events: Completed the acquisition of New Energy Asia Pacific Inc. (NEAPI) via stock issuance; sold its entire stake in Impact BioMedical Inc.; ceased operations of several F&B subsidiaries; and reorganized its property development business.
Key Financial Metrics
| Metric | 2025 | 2024 |
|---|---|---|
| Total Revenue | $4,470,875 | $21,115,899 |
| Net Loss | $(49,350,566) | $(4,165,816) |
| Operating Expenses | $19,621,458 | $25,232,975 |
| Cash and Cash Equivalents | $25,184,990 | $27,243,787 |
| Total Assets | $136,587,114 | $96,761,977 |
| Total Liabilities | $6,923,965 | $6,563,126 |
| Stockholders' Equity | $129,663,149 | $90,198,851 |
Note: The significant increase in Total Assets is primarily due to the acquisition of NEAPI recorded at fair value, offset by the net loss.
Material Changes vs. Prior Period
- Revenue Decline (-79%): Revenue dropped significantly due to the cessation of major property lot sales in 2025. In 2024, property sales accounted for 79% of revenue; in 2025, property sales were 0%. Rental revenue remained relatively stable at approximately $2.83 million.
- Net Loss Expansion: Net loss increased from $4.2 million to $49.4 million. This was driven primarily by a $30.1 million impairment charge on the equity method investment in New Energy Asia Pacific Company Limited (New Energy) and significant unrealized losses on securities investments.
- Segment Shift: The "Other" segment (including F&B and financial services) grew to 48% of total revenue in 2025, up from 7% in 2024, as the real estate development segment wound down.
- Equity Structure: The company issued 27.7 million shares to the CEO (Chan Heng Fai) in exchange for the NEAPI acquisition, increasing outstanding shares from ~9.2 million to ~38.9 million.
Guidance, Outlook, and Risks
Management Commentary:
- Real Estate: The company is transitioning from land development to a single-family rental model. It owns 132 rental homes in Texas, many equipped with solar and smart home technology. Future revenue is expected to stabilize through rentals and new development partnerships.
- Investments: The company actively manages a portfolio of trading securities and equity method investments. Management expects foreign exchange fluctuations on intercompany loans (approx. $28 million) to continue impacting results in 2026.
- Outlook: Management believes available cash and financing are sufficient for operations for the next 12 months.
- Internal Controls: Management identified a material weakness in internal controls over financial reporting due to a limited number of staff preventing segregation of duties. This remains unremediated as of December 31, 2025.
- Investment Volatility: Significant exposure to fluctuations in the value of equity method investments and trading securities, evidenced by the $30.1 million impairment in 2025.
- Related Party Transactions: Extensive transactions with related parties (including the CEO and affiliated entities like DSS, VEII, and SHRG) involving loans, convertible notes, and acquisitions.
- Concentration of Ownership: Chan Heng Fai owns approximately 90.5% of outstanding common stock, limiting minority shareholder influence.
Key Facts for Investor Verification
- Impairment Validity: Verify the assumptions used in the discounted cash flow model that led to the $30.1 million impairment of the New Energy investment.
- Internal Control Remediation: Confirm the timeline and specific steps management is taking to address the material weakness in internal controls and segregation of duties.
- Related Party Terms: Review the terms of the numerous convertible notes and loans issued to/from related parties (e.g., SHRG, VEII, DSS) to assess liquidity risks and potential conflicts of interest.
- Rental Portfolio Performance: Verify occupancy rates and rental income stability for the 132 single-family homes, as this is now the primary recurring revenue stream.
- Stock Dilution: Assess the impact of the 27.7 million shares issued for the NEAPI acquisition on future earnings per share and voting control.