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, 2023

☐	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 14, 2023, 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, 2023 and December 31, 2022	F-1

Condensed Consolidated Statements of Operations and Other Comprehensive Loss - Three and Six Months Ended June 30, 2023 and 2022	F-2

Condensed Consolidated Statements of Stockholders’ Equity – Three and Six Months Ended June 30, 2023 and 2022	F-3

Condensed Consolidated Statements of Cash Flows – Six Months Ended June 30, 2023 and 2022	F-4

Notes to Condensed Consolidated Financial Statements	F-5 – F-36

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

Item 3. Quantitative and Qualitative Disclosure About Market Risk	12

Item 4. Controls and Procedures	12

PART II OTHER INFORMATION	12

Item 1. Legal Proceedings	12

Item 1A. Risk Factors	12

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	12

Item 3. Defaults Upon Senior Securities	12

Item 4. Mine Safety Disclosures	12

Item 5. Other Information	13

Item 6. Exhibits	13

SIGNATURES	14

Part I. Financial Information

Item 1. Financial Statements.

Alset Inc. and Subsidiaries

Consolidated Balance Sheets

	June 30, 2023			December 31, 2022
Assets:
Current Assets:
Cash	$	28,827,961		$	17,827,383
Restricted Cash		664,174			694,520
Account Receivables, Net		63,778			46,522
Other Receivables		7,951,914			446,798
Note Receivables - Related Parties		2,857,383			3,617,176
Prepaid Expense		237,772			188,070
Inventory		38,015			35,020
Investment in Securities at Fair Value		6,695,823			6,288,236
Investment in Securities at Fair Value - Related Party		24,804,737			13,193,089
Investment in Securities at Cost		99,802			98,129
Investment in Securities at Equity Method		32,202,734			52,987,224
Total Current Assets		104,444,093			95,422,167

Real Estate
Rental Properties		31,388,691			31,169,031
Properties under Development		8,056,513			23,449,698
Operating Lease Right-Of-Use Assets, net		1,805,482			1,614,159
Deposits		422,313			536,947
Cash and Marketable Securities Held in Trust Account		20,831,983			-
Goodwill		274,234			-
Property and Equipment, Net		1,218,502			1,298,334
Total Assets	$	168,441,811		$	153,490,336

Liabilities and Stockholders’ Equity:
Current Liabilities:
Accounts Payable and Accrued Expenses	$	6,131,700		$	2,983,470
Deferred Revenue		2,100			21,198
Operating Lease Liabilities - current		186,380			45,556
Notes Payable		167,898			181,846
Notes Payable - Related Parties		16,481			12,668
Total Current Liabilities		6,504,559			3,244,738

Long-Term Liabilities:
Operating Lease Liabilities - noncurrent		1,647,909			1,582,483
Total Liabilities		8,152,468			4,827,221

Temporary Equity
Class A Common Stock of Alset Capital Acquisition Corp subject to possible redemption; 1,976,036 shares at approximately $10.16 per share as of June 30, 2023		19,416,835			-

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 7,422,846 shares issued and outstanding on June 30, 2023 and December 31, 2022, respectively*		9,235			7,423
Additional Paid in Capital		325,967,000			322,534,891
Accumulated Deficit		(198,390,147	)		(188,724,411	)
Accumulated Other Comprehensive Income		2,923,279			3,836,063
Total Alset Inc. Stockholders’ Equity		130,509,367			137,653,966
Non-controlling Interests		10,363,141			11,009,149
Total Stockholders’ Equity		140,872,508			148,663,115

Total Liabilities and Stockholders’ Equity	$	168,441,811		$	153,490,336

*	The numbers of outstanding common stock were adjusted retrospectively to reflect 20-for-1 reverse stock split on December 28, 2022

See accompanying notes to condensed consolidated financial statements.

F-1

Alset Inc. and Subsidiaries

Consolidated Statements of Operations and Other Comprehensive Income

For the Three and Six Months Ended June 30, 2023 and 2022

	2023			2022			2023			2022
	Three- Months Ended June 30,						Six- Months Ended June 30,
	2023			2022			2023			2022

Revenue
Rental	$	690,967		$	403,900		$	1,324,778		$	636,482
Property		18,190,950			246,910			18,190,950			1,288,434
Biohealth		-			132,222			12,786			749,693
Digital Transformation Technology – related party		14,034			7,701			28,074			7,701
Other		257,897			135607			524,196			196,267
Total Revenue		19,153,848			926,340			20,080,784			2,878,577
Operating Expenses
Cost of Sales		11,738,493			550,677			12,427,774			1,665,227
General and Administrative		2,305,859			2,029,925			4,633,244			4,521,153
Total Operating Expenses		14,044,352			2,580,602			17,061,018			6,186,380

Income (Loss) from Operations		5,109,496			(1,654,262	)		3,019,766			(3,307,803	)

Other Income (Expense)
Interest Income		92,388			196,639			131,666			369,039
Foreign Exchange Transaction Gain		1,150,830			2,077,709			362,528			2,485,804
Unrealized Gain (Loss) on Securities Investment		9,027,846			(407,407	)		6,543,729			(1,230,648	)
Unrealized Gain (Loss) on Securities Investment - Related Party		9,812,880			(6,459,968	)		11,109,151			(9,535,742	)
Realized Loss on Securities Investment		(10,557,229	)		(2,918,668	)		(10,688,542	)		(6,355,451	)
Gain (Loss) on Investment on Security by Equity Method		219,888			(79,670	)		(48,388	)		(216,050	)
Loss on Consolidation of Alset Capital Acquisition Corp.		(21,657,036	)		-			(21,657,036	)		-
Finance Costs		-			(2,879	)		-			(450,887	)
Other Income (Expense)		987,531			(734,355	)		1,090,538			550,538
Total Other Expense, Net		(10,922,902	)		(8,328,599	)		(13,156,354	)		(14,383,397	)

Net Loss Before Income Taxes		(5,813,406	)		(9,982,861	)		(10,136,588	)		(17,691,200	)

Income Tax Expense		-			-			-			(222,114	)

Net Loss		(5,813,406	)		(9,982,861	)		(10,136,588	)		(17,913,314	)

Net Loss Attributable to Non-Controlling Interest		(5,556	)		(995,502	)		(470,852	)		(2,458,669	)

Net Loss Attributable to Common Stockholders	$	(5,807,850	)	$	(8,987,359	)	$	(9,665,736	)	$	(15,454,645	)

Other Comprehensive Loss, Net
Unrealized Loss on Securities Investment		-			(591	)		-			(9,714	)
Foreign Currency Translation Adjustment		(2,183,883	)		(3,514,595	)		(1,087,940	)		(4,163,735	)
Comprehensive Loss		(7,997,289	)		(13,498,047	)		(11,224,528	)		(22,086,763	)

Comprehensive Loss Attributable to Non-controlling Interests		(320,903	)		(2,286,174	)		(626,520	)		(3,371,569	)

Comprehensive Loss Attributable to Common Stockholders	$	(7,676,386	)	$	(11,211,873	)	$	(10,598,008	)	$	(18,715,194	)

Net Loss Per Share - Basic and Diluted	$	(0.63	)	$	(1.46	)	$	(1.09	)	$	(2.77	)
Net Loss Per Share - Basic	$	(0.63	)	$	(1.46	)	$	(1.09	)	$	(2.77	)

Weighted Average Common Shares Outstanding - Basic and Diluted		9,235,119			6,144,550	*		8,845,250			5,586,433	*
Weighted Average Common Shares Outstanding - Basic		9,235,119			6,144,550	*		8,845,250			5,586,433	*

*	The numbers of weighted average outstanding common stock - basic and diluted were adjusted retrospectively to reflect 20-for-1 reverse stock split on December 28, 2022

See accompanying notes to condensed consolidated financial statements.

F-2

Alset Inc. and Subsidiaries

Consolidated Statements of Stockholders’ Equity

For the Six Months Ended June 30, 2023


	Series A Preferred Stock				Series B Preferred Stock				Common Stock				Additional		Accumulated Other						Total Alset			Non-			Total
	Shares		Par Value $0.001		Shares		Par Value $0.001		Shares		Par Value $0.001		Paid in Capital		Comprehensive Income			Accumulated Deficit			Stockholders’ Equity			Controlling Interests			Stockholders’ Equity
Balance at January 1, 2023		-	$	-		-	$	-		7,422,846	$	7,423	$	322,534,891	$	3,836,063		$	(188,724,411	)	$	137,653,966		$	11,009,149		$	148,663,115

Issuance of Common Stock										1,812,273		1,812		3,432,109		-			-			3,433,921			-			3,433,921

Foreign Currency Translations										-		-		-		936,265			-			936,265			159,678			1,095,943

Net Loss				-				-		-		-		-		-			(3,857,886	)		(3,857,886	)		(465,296	)		(4,323,182	)

Balance at March 31, 2023		-	$	-		-	$	-		9,235,119	$	9,235	$	325,967,000	$	4,772,328		$	(192,582,297	)	$	138,166,266		$	10,703,531		$	148,869,797

Foreign Currency Translations										-	$	-	$	-		(1,849,049	)		-			(1,849,049	)		(334,834	)		(2,183,883	)

Net Loss				-				-		-	$	-	$	-		-			(5,807,850	)		(5,807,850	)		(5,556	)		(5,813,406	)

Balance at June 30, 2023		-	$	-		-	$	-		9,235,119		9,235		325,967,000		2,923,279			(198,390,147	)		130,509,367			10,363,141		$	140,872,508

Alset Inc. and Subsidiaries

Consolidated Statements of Stockholders’ Equity

For the Six Months Ended June 30, 2022


	Series A Preferred Stock				Series B Preferred Stock				Common Stock				Additional			Accumulated Other					Total Alset		Non-		Total
	Shares		Par Value $0.001		Shares		Par Value $0.001		Shares		Par Value $0.001		Paid in Capital			Comprehensive Income		Accumulated Deficit			Stockholders’ Equity		Controlling Interests		Stockholders’ Equity
Balance at January 1, 2022		-	$	-		-	$	-		87,368,446	$	87,368	$	296,181,977		$	341,646	$	(148,233,473	)	$	148,377,518	$	21,912,268	$	170,289,786

Issuance of Stock by Exercising Warrants				-				-		15,819,452		15,820		(11,925	)		-		-			3,895		-		3,895

Convert Related Party Note to Common Stock										10,000,000		10,000		6,203,000			-		-			6,213,000		-		6,213,000

Deconsolidate Alset Capital Acquisition										-		-		17,160,800			-		-			17,160,800		2,227,744		19,388,544

Gain from Purchase Stock DSS										-		-		737,572			-		-			737,572		-

Alset Inc. [AEI] Filings
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]