SCHEDULE: Alset Inc. Chairman Converts $83 Million Note, Consolidating 90.8% Ownership

Alset Inc.'s Chairman and CEO, Heng Fai Ambrose Chan, converted an $83 million promissory note into 27,666,667 shares of common stock, increasing his beneficial ownership to 90.8% of the company.

Summary

• Heng Fai Ambrose Chan, Chairman and Chief Executive Officer of Alset Inc., converted an $83,000,000 promissory note into 27,666,667 restricted shares of Alset Inc. common stock on July 23, 2025.
• The conversion price for the shares was $3.00 per share.
• Mr. Chan's beneficial ownership now totals 35,665,409 shares, representing 90.8% of the 39,296,636 common shares outstanding as of July 23, 2025.
• This aggregate ownership includes 3,875,506 shares held by HFE Holdings Limited, over which Mr. Chan exercises sole voting and investment power.
• Additionally, on June 30, 2025, Mr. Chan acquired 280,000 shares of the Issuer's common stock at a weighted average purchase price of $1.20 per share, with individual trades ranging from $0.984 to $1.30.

Sentiment

Score: 6

Explanation: The sentiment is moderately positive due to the conversion of debt to equity and strong insider commitment, but tempered by potential concerns regarding reduced public float and the valuation discrepancy between the conversion price and recent open market purchases.

Positives

• Increased insider ownership by Chairman and CEO Heng Fai Ambrose Chan to 90.8% may signal strong confidence in the company's future prospects.
• The conversion of an $83,000,000 promissory note into equity strengthens the company's balance sheet by reducing debt obligations.

Negatives

• The significant increase in insider ownership to 90.8% could substantially reduce the public float and liquidity for other shareholders.
• The conversion price of $3.00 per share is notably higher than the weighted average purchase price of $1.20 per share for shares acquired by Mr. Chan just weeks prior on June 30, 2025, which may raise questions about valuation.

Risks

• High concentration of ownership (90.8%) by a single individual (Heng Fai Ambrose Chan) could lead to reduced corporate governance oversight from independent shareholders.
• A significantly reduced public float due to high insider ownership may negatively impact stock liquidity, trading volume, and potentially lead to delisting concerns if exchange requirements are not met.

Future Outlook

The Reporting Person states that all securities were acquired for investment purposes only and has no present plans or proposals that would result in any changes to the Issuer's business, management, capitalization, or corporate structure. The Reporting Person may, at any time, review or reconsider its positions with respect to the Issuer and formulate plans or proposals with respect to any of such matters, but has no present intention of doing so.

Management Comments

• "All of the Issuer's securities owned by the Reporting Person have been acquired for investment purposes only."
• "The Reporting Person has no present plans or proposals that relate to or would result in any of the actions required to be described in subsections (a) through (j) of Item 4 of Schedule 13D."
• "The Reporting Person may, at any time, review or reconsider its positions with respect to the Issuer and formulate plans or proposals with respect to any of such matters, but have no present intention of doing so."

Industry Context

This filing primarily concerns a significant change in a company's ownership structure and insider holdings, reflecting a substantial consolidation of control by the Chairman and CEO. It does not provide broader industry trends or competitive dynamics.

Related Party Transactions

• Alset Inc. purchased assets from Mr. Chan Heng Fai (Chairman and CEO) for an $83,000,000 promissory note.
• Mr. Chan subsequently converted this note into 27,666,667 shares of Alset Inc. common stock.

Stakeholder Impact

• Shareholders: Existing public shareholders will experience significant dilution due to the issuance of 27,666,667 new shares. The increased concentration of ownership (90.8%) by Mr. Chan may reduce the influence of minority shareholders and potentially impact stock liquidity.
• Creditors: The conversion of the $83,000,000 promissory note into equity reduces the company's debt obligations, which is generally positive for creditors as it improves the company's financial stability.

Key Dates

Recommendation

The significant increase in insider ownership by the Chairman and CEO to over 90% indicates strong commitment and belief in the company's future, which can be a positive signal. However, this level of concentration also drastically reduces the public float and liquidity, making the stock less attractive for new institutional investment and potentially leading to delisting concerns if the public float falls below exchange requirements. The conversion of debt to equity is positive for the balance sheet, but the high conversion price relative to recent open market purchases by the same insider warrants caution. Given the reduced liquidity and high insider control, a "hold" recommendation is appropriate for existing shareholders, while new investors might find better opportunities with more liquid and widely held companies.

Keywords

Alset Inc., Heng Fai Ambrose Chan, Schedule 13D, beneficial ownership, common stock, promissory note, equity conversion, insider ownership, corporate governance, public float