Alset Inc. [AEI] Filings

10-Q 1 form10-q.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2024

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________to _________

001-39732

Commission File Number

Alset Inc.

(Exact name of registrant as specified in its charter)

texas

83-1079861

State or other jurisdiction of

incorporation or organization

(I.R.S. Employer

Identification No.)

4800 Montgomery Lane, Suite 210,

Bethesda, Maryland

20814

(Address of principal executive offices)

(Zip Code)

301-971-3940

Registrant’s telephone number, including area code

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class		Trading Symbol(s)		Name of Each Exchange on Which Registered
Common Stock, $0.001 par value		AEI		The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of August 13, 2024, there were 9,235,119 shares of the registrant’s common stock $0.001 par value per share, issued and outstanding.

Table of Contents

PART I FINANCIAL INFORMATION	F-1

Item 1. Financial Statements (Unaudited)	F-1

Condensed Consolidated Balance Sheets – June 30, 2024 (unaudited) and December 31, 2023	F-1

Condensed Consolidated Statements of Operations and Other Comprehensive Loss - Three and Six Months Ended June 30, 2024 and 2023 (unaudited)	F-2

Condensed Consolidated Statements of Stockholders’ Equity – Three and Six Months Ended June 30, 2024 and 2023 (unaudited)	F-3

Condensed Consolidated Statements of Cash Flows – Six Months Ended June 30, 2024 and 2023 (unaudited)	F-4

Notes to Condensed Consolidated Financial Statements (unaudited)	F-5 – F-37

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	3

Item 3. Quantitative and Qualitative Disclosure About Market Risk	13

Item 4. Controls and Procedures	13

PART II OTHER INFORMATION	13

Item 1. Legal Proceedings	13

Item 1A. Risk Factors	13

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	13

Item 3. Defaults Upon Senior Securities	13

Item 4. Mine Safety Disclosures	13

Item 5. Other Information	13

Item 6. Exhibits	14

SIGNATURES	15

Part I. Financial Information

Item 1. Financial Statements.

Alset Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

	(Unaudited)
	June 30, 2024			December 31, 2023
Assets:
Current Assets:
Cash and Cash Equivalents	$	18,932,861		$	26,921,727
Restricted Cash		830,519			967,566
Account Receivables, Net		79,220			77,517
Other Receivables, Net		6,678,578			2,576,454
Note Receivables - Related Parties, Net		1,636,823			1,693,946
Convertible Loan Receivables at Fair Value - Related Party		1,620,657			1,207,627
Prepaid Expense		142,138			253,689
Inventory		6,033			5,561
Investment in Securities at Fair Value		3,517,765			2,148,500
Investment in Securities at Fair Value - Related Party		8,719,925			11,869,920
Investment in Securities at Fair Value		8,719,925			11,869,920
Investment in Securities at Cost		67,515			54,512
Investment in Equity Method Securities		5,587,759			7,551,153
Deposits		130,002			133,063
Total Current Assets		47,949,795			55,461,235

Real Estate
Rental Properties		31,233,027			31,770,386
Properties under Development		9,508,868			10,366,766
Operating Lease Right-Of-Use Assets, Net		1,815,543			1,467,372
Deposits		467,193			337,606
Other Receivables - Long Term, Net		1,759,268			4,855,609
Cash and Marketable Securities Held in Trust Account		-			21,252,639
Goodwill		60,278			60,343
Property and Equipment, Net		666,849			742,072
Total Assets	$	93,460,821		$	126,314,028

Liabilities and Stockholders’ Equity:
Current Liabilities:
Accounts Payable and Accrued Expenses	$	2,455,899		$	4,372,792
Deferred Underwriting Compensation		-			3,018,750
Deferred Revenue		2,100			2,100
Operating Lease Liabilities		928,830			673,049
Notes Payable		318,745			30,744
Notes Payable - Related Parties		16,629			16,869
Notes Payable		16,629			16,869
Total Current Liabilities		3,722,203			8,114,304

Long-Term Liabilities:
Operating Lease Liabilities		951,355			826,214
Notes Payable		1,091,060			126,182
Total Liabilities		5,764,618			9,066,700

Temporary Equity
Class A Common Stock of Alset Capital Acquisition Corp subject to possible redemption; 1,976,036 shares at approximately $10.35 per share as of December 31, 2023		-			20,457,011

Stockholders’ Equity:
Preferred Stock, $0.001 par value; 25,000,000 shares authorized, none issued and outstanding
Common Stock, $0.001 par value; 250,000,000 shares authorized; 9,235,119 and 9,235,119 shares issued and outstanding on June 30, 2024 and December 31, 2023, respectively		9,235			9,235
Additional Paid in Capital		333,755,463			332,455,457
Accumulated Deficit		(255,894,428	)		(247,885,656	)
Accumulated Other Comprehensive Income		1,548,473			3,609,719
Total Alset Inc. Stockholders’ Equity		79,418,743			88,188,755
Non-controlling Interests		8,277,460			8,601,562
Total Stockholders’ Equity		87,696,203			96,790,317

Total Liabilities and Stockholders’ Equity	$	93,460,821		$	126,314,028

See accompanying notes to condensed consolidated financial statements.

F-1

Alset Inc. and Subsidiaries

Condensed Consolidated Statements of Operations and Other Comprehensive Loss

For the Three and Six Months Ended June 30, 2024 and 2023

(Unaudited)

	2024			2023			2024			2023
	Three- Months Ended June 30,						Six- Months Ended June 30,
	2024			2023			2024			2023

Revenue
Rental	$	705,011		$	690,967		$	1,425,505		$	1,324,778
Property		-			18,190,950			5,032,500			18,190,950
Biohealth		-			-			-			12,786
Other		422,035			271,931			755,248			552,270
Total Revenue		1,127,046			19,153,848			7,213,253			20,080,784
Operating Expenses
Cost of Sales		829,958			11,738,493			5,488,325			12,427,774
General and Administrative		2,798,137			2,305,859			6,048,990			4,633,244
Impairment of Note Receivable, Goodwill and Investment		308,423			-			751,922			-
Total Operating Expenses		3,936,518			14,044,352			12,289,237			17,061,018

(Loss) Income from Operations		(2,809,472	)		5,109,496			(5,075,984	)		3,019,766

Other Income (Expense)
Interest Income		122,415			92,388			343,155			131,666
Interest Income - Related Party		55,849			-			84,438			-
Interest Income		55,849			-			84,438			-
Interest Expense		(94,091	)		-			(113,214	)		-
Foreign Exchange Transaction Gain		845,350			1,150,830			2,038,986			362,528
Unrealized Gain on Securities Investment		247,319			9,027,846			423,953			6,543,729
Unrealized Gain (Loss) on Securities Investment - Related Party		1,429,392			9,812,880			(4,013,059	)		11,109,151
Unrealized Gain (Loss) on Securities Investment		1,429,392			9,812,880			(4,013,059	)		11,109,151
Realized Loss on Securities Investment		(192,205	)		(10,557,229	)		(344,673	)		(10,688,542	)
(Loss) Gain on Equity Method Investment		(856,724	)		219,888			(1,978,142	)		(48,388	)
Loss on Consolidation of Alset Capital Acquisition Corp.		-			(21,657,036	)		-			(21,657,036	)
Other Expense		(36,999	)		-			(38,570	)		-
Other Income		139,201			987,531			209,354			1,090,538
Total Other Income (Expense), Net		1,659,507			(10,922,902	)		(3,387,772	)		(13,156,354	)

Net Loss Before Income Taxes		(1,149,965	)		(5,813,406	)		(8,463,756	)		(10,136,588	)

Income Tax Expense		-			-			-			-

Net Loss		(1,149,965	)		(5,813,406	)		(8,463,756	)		(10,136,588	)

Net Income (Loss) Attributable to Non-Controlling Interest		89,149			(5,556	)		(454,985	)		(470,852	)

Net Loss Attributable to Common Stockholders	$	(1,239,114	)	$	(5,807,850	)	$	(8,008,771	)	$	(9,665,736	)

Net Loss	$	(1,149,965	)	$	(5,813,406	)	$	(8,463,756	)	$	(10,136,588	)
Other Comprehensive Loss
Foreign Currency Translation Adjustment		(1,253,895	)		(2,183,883	)		(2,064,408	)		(1,087,940	)
Total Comprehensive Loss		(2,403,860	)		(7,997,289	)		(10,528,164	)		(11,224,528	)

Less Comprehensive Loss Attributable to Non-controlling Interests		(93,209	)		(320,903	)		(351,419	)		(626,520	)
Total Comprehensive Loss Attributable to Common Shareholders		(2,310,651	)		(7,676,386	)		(10,176,745	)		(10,598,008	)

Net Loss Per Share - Basic and Diluted	$	(0.13	)	$	(0.63	)	$	(0.87	)	$	(1.09	)

Weighted Average Common Shares Outstanding - Basic and Diluted		9,235,119			9,235,119			9,235,119			8,845,250

See accompanying notes to condensed consolidated financial statements.

F-2

Alset Inc. and Subsidiaries

Condensed Consolidated Statements of Stockholders’ Equity

For the Six Months Ended June 30, 2024

(Unaudited)

	Shares		Par Value $0.001		Shares		Par Value $0.001		Shares		Par Value $0.001		Additional Paid in Capital		Accumulated Other Comprehensive Income			Accumulated Deficit			Total Alset Stockholders’ Equity			Non-Controlling Interests			Total Stockholders’ Equity
	Series A Preferred Stock				Series B Preferred Stock				Common Stock
	Shares		Par Value $0.001		Shares		Par Value $0.001		Shares		Par Value $0.001		Additional Paid in Capital		Accumulated Other Comprehensive Income			Accumulated Deficit			Total Alset Stockholders’ Equity			Non-Controlling Interests			Total Stockholders’ Equity
Balance at January 1, 2024		-	$	-		-	$	-		9,235,119	$	9,235	$	332,455,457	$	3,609,719		$	(247,885,656	)	$	88,188,755		$	8,601,562		$	96,790,317

Issuance of HWH Common Stock to EF Hutton LLC for Deferred Underwriting Compensation		-		-		-		-		-		-		1,098,952		-			-			1,098,952			410,423			1,509,375

Gain from SHRG Convertible Notes and Warrants		-		-		-		-		-		-		157,402		-			-			157,402			58,786			216,188

Change in Non-Controlling Interest after HWH De SPAC		-		-		-		-		-		-		-		(13,888	)		-			(13,888	)		13,888			-

Foreign Currency Translations		-		-		-		-		-		-		-		(992,871	)		-			(992,871	)		(169,061	)		(1,161,932	)

Net Loss		-		-		-		-		-		-		-		-			(6,769,658	)		(6,769,658	)		(544,134	)		(7,313,792	)

Balance at March 31, 2024		-	$	-		-	$	-		9,235,119	$	9,235	$	333,711,811	$	2,602,960		$	(254,655,314	)	$	81,668,692		$	8,371,464

Alset Inc. [AEI] Filings
10-Q	[2024-08-13]
10-Q	[2024-05-15]
10-K	[2024-04-01]
10-Q	[2023-11-14]
10-Q	[2023-08-14]
10-Q	[2023-05-15]
10-K	[2023-03-31]
10-Q	[2022-11-14]
10-Q	[2022-08-15]
10-Q	[2022-05-13]
10-K	[2022-03-31]
S-1	[2021-12-01]
10-Q	[2021-11-15]
10-Q	[2021-08-16]
S-1	[2021-07-23]
10-Q	[2021-05-24]
S-1	[2021-05-04]
10-K	[2021-04-14]
10-Q	[2020-12-29]
S-1	[2019-12-23]