Alset Inc. (AEI) - Q2 2026 10-Q Summary
Business Context and Reporting Period
Company: Alset Inc. (AEI)
Filing Type: Form 10-Q (Unaudited)
Period Ended: June 30, 2026
Business Overview: A diversified holding company operating in real estate (132 single-family rentals in Texas), digital transformation technology, biohealth, and financial services. The company manages significant operations through its 85.8% owned subsidiary, Alset International Limited (Singapore Stock Exchange).
Going Concern: Management previously identified substantial doubt regarding the company's ability to continue as a going concern due to recurring losses. However, management believes this doubt has been alleviated based on current liquidity ($12.3M cash) and expected operating cash inflows.
Key Financial Metrics (Six Months Ended June 30, 2026)
| Metric | Amount (USD) |
|---|---|
| Total Revenue | $1,969,320 |
| Net Loss | $(11,100,269) |
| Net Loss Attributable to Common Stockholders | $(9,794,425) |
| Net Loss Per Share (Basic & Diluted) | $(0.25) |
| Cash and Cash Equivalents | $12,325,977 |
| Total Assets | $124,940,908 |
| Total Liabilities | $2,810,020 |
| Accumulated Deficit | $(309,060,907) |
Material Changes vs. Prior Period
- Revenue: Decreased 9% to $1.97M from $2.17M in the prior year period. Real Estate revenue increased slightly (1%), while "Other" revenue (F&B, financial services) declined 29%.
- Net Loss: Improved significantly, decreasing 39% to $11.1M from $18.3M in the prior year period.
- Other Income/Expense: Volatility driven by foreign exchange and securities. The company recorded a foreign exchange gain of $279,630 compared to a loss of $6.2M in the prior year. Unrealized losses on securities investments totaled approximately $7.4M.
- Liquidity: Cash decreased by approximately $12.9M (from $25.2M to $12.3M) primarily due to operating cash outflows and net cash used in investing activities ($3.7M).
- Debt: Total liabilities decreased from $6.9M to $2.8M. Notably, the company settled a promissory note with D. Boral Capital LLC for $500,000 cash, recognizing a $339,185 gain on debt extinguishment.
Outlook, Risks, and Unusual Items
- Subsequent Event (Loss of Control): On August 10, 2026, the company lost controlling interest in its subsidiary HWH International Inc. (HWH) following a sale to Smart Dynamics Technology Limited. The company will deconsolidate HWH in the Q3 2026 filing. The gain or loss on this transaction has not yet been determined.
- Investment Impairments: The company recognized a $30.1M impairment charge in late 2025 related to its investment in New Energy Asia Pacific Inc. due to project delays and market conditions. The carrying value was reduced to approximately $52.7M.
- Related Party Transactions: Significant activity involves convertible notes and loans with related parties (DSS, VEII, SHRG, HWH). The company issued over $4.5M in loans to related parties during the six-month period.
- Foreign Exchange Risk: The company holds approximately $30M in intercompany loans between Singapore and U.S. entities. Fluctuations in exchange rates significantly impact reported earnings (e.g., $280k gain in 2026 vs. $6.2M loss in 2025).
- Internal Controls: Management concluded that disclosure controls and procedures were not effective as of June 30, 2026.
Investor Verification Checklist
- Deconsolidation Impact: Verify the accounting treatment and potential gain/loss recognition regarding the loss of control of HWH International Inc. in the upcoming Q3 filing.
- Cash Burn Rate: Assess the sustainability of operations given the $12.3M cash balance and $9.2M net cash used in operating activities for the six-month period.
- Related Party Exposure: Review the collectability of the $4.5M+ in loans issued to related parties (SHRG, DSS, etc.) and the valuation of associated convertible notes and warrants.
- Investment Valuation: Scrutinize the fair value assumptions for the $52.5M investment in New Energy Asia Pacific and the portfolio of trading securities which generated significant unrealized losses.
- Internal Controls: Evaluate the specific material weaknesses identified in disclosure controls and the remediation plan.