10-K: Alset Inc. Reports Deepening Losses, Revenue Plunge in 2025

Alset Inc. announced a substantial net loss of $49.35 million in 2025, a significant increase from the prior year, driven by an 86% drop in real estate revenue and a major equity investment impairment.

Summary

• Alset Inc. is a diversified holding company with operations in real estate, financial services, digital transformation technologies, biohealth activities, and consumer products across the United States, Singapore, Hong Kong, Australia, Republic of Korea, Peoples Republic of China, and Taiwan.
• The company reported a net loss of $49,350,566 for the year ended December 31, 2025, a significant increase from a net loss of $4,165,816 in 2024.
• Total revenue decreased by 79% to $4,470,875 in 2025, down from $21,115,899 in 2024, primarily due to a sharp decline in property sales.
• Real estate segment revenue plummeted by 86% from $19,608,184 in 2024 to $2,829,270 in 2025.
• Revenue from home rentals slightly decreased from $2,891,807 in 2024 to $2,829,270 in 2025.
• Other business activities saw an increase in revenue to $1,641,433 in 2025 from $1,507,715 in 2024, mainly from Korean, Taiwanese, and Singaporean cafes and restaurants.
• Operating expenses decreased from $25,232,975 in 2024 to $19,621,458 in 2025, largely due to lower cost of sales in the real estate segment.
• Gross margin significantly declined from $8,333,275 in 2024 to $1,248,960 in 2025.
• Other expenses totaled $33,767,897 in 2025, a substantial shift from other income of $102,046 in 2024, primarily driven by realized and unrealized losses on securities investments and a $30,185,404 impairment of an equity method investment in New Energy Asia Pacific Company Limited.
• Cash and cash equivalents decreased from $27,243,787 as of December 31, 2024, to $25,184,990 as of December 31, 2025.
• Total assets increased to $136,587,114 as of December 31, 2025, from $96,761,977 as of December 31, 2024, primarily due to purchasing equity investments.
• A material weakness in internal controls was identified due to limited staff, hindering proper segregation of duties and timely evaluation of financial statement accuracy.
• The company repurchased 505,956 shares of its common stock for approximately $1,004,875 during 2025.
• Chairman and CEO Chan Heng Fai converted an $83,000,000 convertible note into 27,666,667 restricted shares of the company's common stock on July 23, 2025.
• The company sold its entire equity interest in Impact Biomedical Inc. for $4,184,575, resulting in a recognized loss of $2,439,264.
• The sale of HWH World Inc. (Korean biohealth subsidiary) to AES Group Inc. for new shares representing 19.9% of AES generated a $384,356 gain.
• Operations of Alset F&B (PLQ) Pte. Ltd. ceased in Q2 2024, and Hapi Cafe Korea Inc. ceased operations on September 13, 2025.

Sentiment

Score: 2

Explanation: StockSavvy.ai views this as a highly negative filing due to the substantial increase in net loss, significant revenue decline, and a large impairment charge on a key investment, indicating severe operational and strategic challenges despite some positive asset sales and capital raises.

Positives

• Generated a gain of $384,356 from the sale of HWH World Inc. to AES Group Inc.
• Revenue from other business activities increased to $1,641,433 in 2025 from $1,507,715 in 2024.
• Management believes available cash on hand, available debt, and equity financing are sufficient to fund operations for at least the next 12 months.
• Regained compliance with Nasdaq's minimum $1 bid price per share requirement as of July 17, 2025.

Negatives

• Net loss significantly increased to $49,350,566 in 2025 from $4,165,816 in 2024.
• Total revenue decreased by 79% to $4,470,875 in 2025 from $21,115,899 in 2024.
• Real estate segment revenue decreased by 86% in 2025.
• Gross margin decreased from $8,333,275 in 2024 to $1,248,960 in 2025.
• Recognized a $30,185,404 impairment of equity method investment in New Energy Asia Pacific Company Limited.
• Incurred a realized loss on securities investment of $3,208,972 in 2025.
• Reported an unrealized loss on securities investment of $2,451,237 in 2025.
• Cash and cash equivalents decreased by $2,058,797 in 2025.
• Net cash used in operating activities was $5,927,532 in 2025, a reversal from positive cash flow in 2024.
• Experienced a foreign exchange transaction loss of $1,930,505 in 2025.
• Ceased operations of Alset F&B (PLQ) Pte. Ltd. in Q2 2024 and Hapi Cafe Korea Inc. on September 13, 2025.
• Goodwill of $116,648 from the L.E.H. Insurance Group, LLC acquisition was immediately written off.

Risks

• Management identified a material weakness in the design and effectiveness of internal controls due to limited staff, which could affect the accuracy and timeliness of financial reporting and result in misstatements.
• The company has a history of annual net losses which may continue, negatively impacting its ability to achieve business objectives.
• Failure to increase revenues or improve gross margins will harm the business.
• Prices for properties, products, and services may decrease, reducing revenues.
• The company's growth strategy may be unsuccessful, and it may be unable to address risks in a cost-effective manner.
• As a holding company, the company depends on distributions from its majority-owned and/or controlled operating subsidiaries, which may be limited by contractual or legal restrictions.
• Significant ownership interests in public companies listed on limited public trading markets subject the company to risks relating to the sale of their shares and fluctuations in their stock prices.
• General political, social, and economic conditions, including disruptions in financial markets and uncertain economic conditions, can adversely affect the value of real estate investments.
• Acquisitions, a primary component of the growth strategy, involve risks such as inability to identify suitable candidates, international acquisition risks, competition, financing challenges, and integration difficulties.
• Inability to successfully integrate acquisitions may adversely impact operations, divert management attention, and expose the company to unanticipated problems or legal liabilities.
• Acquisitions may cause stock dilution, substantial use of cash resources, increased debt, assumption of liabilities, goodwill impairment, earnings volatility, amortization expenses, loss of contracts, adverse tax consequences, or litigation.
• Resources may be insufficient to manage expected growth, straining administrative, financial, and operational systems.
• Officers allocating time to other business ventures, including subsidiaries, could limit time devoted to the company's affairs, negatively impacting operations.
• International operations are subject to increased risks, including trade barriers, varied local laws, longer payment cycles, profit repatriation restrictions, political unrest, and compliance with anti-corruption laws.
• Inability to retain the services of key personnel like Chan Heng Fai or successfully recruit qualified personnel could harm the business.
• Failure to successfully develop new products and services may harm the business.
• The company may be required to register as an investment company under the Investment Company Act, which would necessitate modifying its business philosophy and/or asset composition.
• Inadequate protection of intellectual property rights may result in a loss of revenue and materially harm operations.
• New legislation, regulations, or rules related to obtaining or enforcing patents could significantly increase operating costs and decrease revenue.
• The market for real estate is subject to fluctuations that may impact the value of land or housing inventory.
• Zoning and land use regulations impacting land development and homebuilding industries may limit activities and increase expenses.
• Health and safety incidents in potential homebuilding business could be costly with uninsured losses.
• Adverse weather conditions, natural disasters, and man-made disasters may delay real estate development projects or cause additional expenses.
• The company may face liability for information displayed on or accessible via its website, and for other content and commerce-related activities.
• Any failure of the company's network could lead to significant disruptions, damaging reputation or reducing revenues.
• Public scrutiny of Internet privacy and security issues may result in increased regulation and different industry standards, harming the digital transformation technology business.
• Product reliability, safety, and effectiveness concerns in the biohealth business can negatively impact sales, lead to litigation, and cause reputational damage.
• Significant challenges or delays in innovation and development of new products, technologies, and indications could adversely impact long-term success.
• Competitors may have greater financial and other resources, making it difficult to compete effectively.
• Enforcing U.S. judgments for claims against non-U.S. resident directors or assets located outside the United States may be difficult.
• The company may be required to record a significant charge to earnings if real estate properties become impaired.
• Fluctuations in foreign currency exchange rates affect operating results, particularly intercompany loans.
• Increased costs and management time are incurred as a U.S. public company due to compliance programs (Sarbanes-Oxley Act, Dodd-Frank, Nasdaq).
• The stock price may be volatile due to various factors, including operating results, analyst expectations, and general market conditions.
• Investors purchasing common stock may be diluted by the issuance of stock options.
• Future sales, or the perception of future sales, of a substantial amount of common stock could depress the trading price.
• If securities or industry analysts cease publishing research or change recommendations adversely, the stock price and trading volume could decline.
• Anti-takeover provisions in charter documents could discourage, delay, or prevent a change in control.
• Concentration of ownership by the principal stockholder limits new investors from influencing significant corporate decisions.
• The company does not expect to pay any dividends on its common stock for the foreseeable future.
• The board has the ability to designate the rights and preferences of 25,000,000 authorized unissued shares of preferred stock without stockholder vote.

Future Outlook

The company expects revenue from its rental business to continue to increase as it acquires and successfully rents more homes. It anticipates that revenue from property development will decline as a percentage of total revenue, with greater contributions expected from its rental, digital transformation technology, biohealth, food and beverage businesses, and future acquisitions. The company intends to complete contract-build agreements for single-family, for-rent homes at Lakes at Black Oak within the next twelve months and will continue to focus on off-market deals and raising financing for attractive residential development opportunities in the U.S. Management believes that current cash on hand, available debt, and equity financing are sufficient to fund operations for at least the next 12 months. Foreign exchange rate fluctuations are expected to significantly impact results in 2026 due to stable intercompany loan balances.

Management Comments

• "Our growth strategy is both to pursue acquisition opportunities that we can leverage on our global network using our capital and management resources and to accelerate the expansion of our organic businesses."
• "We generally acquire majority and/or control stakes in innovative and promising businesses that are expected to appreciate in value over time."
• "We believe our capital and management services provide us with a competitive advantage in the selection of strategic acquisitions, which creates and adds value for our Company and our stockholders."
• "We intend at all times to operate our business in a manner as to not become inadvertently subject to the regulatory requirements under the Investment Company Act."
• "The impairment primarily reflects delays in execution and cash flow realization, rather than a fundamental change in business outlook." (Regarding New Energy Asia Pacific investment impairment)
• "We believe that the available cash on hand, available debt and equity financing are sufficient to fund our operations for at least the next 12 months."
• "To remediate such weaknesses [in internal controls], we plan to appoint additional qualified personnel with financial accounting, GAAP and SEC experience."

Industry Context

StockSavvy.ai notes that the company's diversified holding structure across real estate, technology, and biohealth positions it to potentially capitalize on growth in multiple sectors, but also exposes it to varied industry-specific risks and competitive pressures. The shift in real estate revenue from property sales to rentals aligns with broader market trends towards build-to-rent models in certain U.S. regions. The significant impairment in the New Energy Asia Pacific investment highlights the inherent volatility and execution risks in emerging technology sectors like electric vehicles and distributed energy, which often face longer development cycles and market uncertainties. The company's strategy of acquiring majority/control stakes in innovative businesses is a common approach for holding companies seeking to leverage management expertise and capital for value appreciation.

Comparison to Industry Standards

• The company's expansion into single-family rental homes with smart home technologies (Tesla PV solar panels and Powerwalls) aligns with a growing trend in the U.S. residential market, where large players like Invitation Homes and American Homes 4 Rent have established significant portfolios. However, the filing does not provide specific metrics (e.g., occupancy rates, rental yields) for a direct performance comparison against these industry leaders.
• The digital transformation technology segment, focusing on B2B e-commerce, blockchain, and AI customer service, operates in a highly competitive landscape with established players such as Salesforce (CRM) and Shopify (SHOP), as well as numerous specialized AI solution providers. The filing lacks specific market share or growth metrics for direct comparison to these industry benchmarks.
• The biohealth segment, utilizing a direct sales model for dietary supplements, competes within a fragmented market that includes major direct selling companies like Amway and Herbalife (HLF). The strategic divestitures of HWH World Inc. and the equity interest in Impact BioMedical Inc. indicate active portfolio management, but without specific product performance data, a direct comparison of market penetration or efficacy is not feasible.
• The impairment of the New Energy Asia Pacific investment, attributed to 'delays in the execution and commercialization of New Energy's taxi delivery projects' and 'slower ramp-up and longer implementation timelines,' reflects common challenges in capital-intensive, long-cycle projects within the electric vehicle and distributed energy sectors. Companies like Tesla (TSLA) or ChargePoint (CHPT) have faced similar, albeit on a larger scale, execution hurdles in these emerging markets.

Management Changes

Corporate Governance

Related Party Transactions

• Chan Heng Fai (Chairman & CEO, largest stockholder) provided interest-free, due-on-demand advances to SeD Perth Pty. Ltd. ($12,500 outstanding as of Dec 31, 2025) and Hapi Metaverse Inc. ($4,168 outstanding as of Dec 31, 2025).
• Chan Heng Fai provided interest-free, due-on-demand advances to HWH International Inc. ($4,263 outstanding as of Dec 31, 2025).
• MacKenzie Equity Partners, LLC (owned by Charles MacKenzie, Chief Development Officer) received $495,000 in consulting fees in 2025 ($360,000 in 2024) and bonuses of $75,000 in May 2025 and $120,000 in December 2025. The company owed this related party $39,529 as of Dec 31, 2025.
• Liquid Value Asset Management Limited (LVAML), a subsidiary of DSS, owed the company $33,036 as of Dec 31, 2025 ($463,995 as of Dec 31, 2024) under a loan agreement.
• A loan agreement with Value Exchange International Inc. (VEII) for $500,000 (from Alset International Limited) was written off by the company at March 31, 2025, due to being past due and deteriorated operating performance.
• Multiple loan agreements with HapiTravel Holding Pte. Ltd. (HTHPL), including a $137,658 loan (Nov 6, 2024) and an additional $19,053 in Q1 2025, with $139,514 impaired at Dec 31, 2025. HTHPL owed $25,789 as of Dec 31, 2025. Another promissory note for $82,635 (Dec 17, 2024) had $70,043 outstanding as of Dec 31, 2025. A $279,027 loan (July 18, 2025) had $286,555 outstanding as of Dec 31, 2025.
• A loan agreement with New Energy Asia Pacific Company Limited for $69,326 (Jan 23, 2025) had $74,614 outstanding as of Dec 31, 2025.
• A securities purchase agreement with DSS resulted in the company purchasing a $500,000 Convertible Promissory Note from DSS (Aug 20, 2025), with $512,579 owed by DSS as of Dec 31, 2025.
• Loans to Value Exchange International (Hong Kong) Limited (VEIHK) included a $34,190 interest-free loan (Aug 22, 2025) and an $84,820 loan (Sep 5, 2025), with VEIHK owing $87,009 as of Dec 31, 2025.
• A $7,500 loan to Value Exchange International Inc. (Oct 1, 2025) had $7,650 outstanding as of Dec 31, 2025.
• Acquisition of New Energy Asia Pacific Inc. from Chan Heng Fai for $83,000,000 via a convertible promissory note, which was converted into 27,666,667 restricted shares of common stock on July 23, 2025.
• Multiple Convertible Promissory Notes were issued by Sharing Services Global Corp. (SHRG) to the company or its subsidiary HWH International Inc. throughout 2024 and 2025, totaling significant amounts, with various interest rates and conversion terms.
• HWH acquired a controlling 60% interest in L.E.H. Insurance Group, LLC for $75,000 (Feb 27, 2025) and the remaining 40% for $40,000 (Aug 27, 2025) from SHRG.
• The company provided HWH International Inc. a line of credit facility up to $1,000,000, extended to April 14, 2026.
• The company and its subsidiaries sold their entire equity interest in Impact Biomedical Inc. for $4,184,575, resulting in a $2,439,264 loss.
• Bonus payments of $950,000 were paid to Chan Heng Fai and Chan Tung Moe from subsidiaries in December 2025/January 2026.
• Chan Heng Fai's employment agreement includes bonuses based on market capitalization and net asset value growth, extended to December 31, 2030.
• Alset International Limited (majority-owned subsidiary) entered into a securities purchase agreement with DSS, Inc. to loan $2,450,000 in exchange for a convertible promissory note and warrants (March 26, 2026).

Stakeholder Impact

• Shareholders face significant negative impact on value due to the substantial net loss and large impairment charges. There is also a risk of dilution from future stock option issuance and potential sales of common stock. The high concentration of ownership by the principal stockholder limits the influence of other investors, and no dividends are expected in the foreseeable future.
• Employees may experience increased workload or stress due to the identified material weakness in internal controls stemming from limited staff. Future success is dependent on the company's ability to attract and retain qualified personnel.
• Customers could be impacted by changes in product/service offerings, pricing, or competitive developments, particularly within the digital transformation technology and biohealth segments.
• Creditors may have concerns regarding repayment capacity given the significant losses and impairment of investments. The extensive use of intercompany loans and convertible notes with related parties adds complexity to the financial structure.
• Management is dedicating significant time to public company compliance programs and the integration of acquisitions. Executive compensation includes bonuses and stock awards, which may be scrutinized in light of the company's financial performance.

Next Steps

• Complete contract-build agreements with local, regional, or national builders to construct single-family, for-rent homes at Lakes at Black Oak within the next twelve months.
• Market the retained model homes at Lakes at Black Oak for rent 15-30 days prior to the projected completion of sales office conversion back to garages (by April 30, 2026).
• Continue to focus on off-market deals and raise appropriate financing for attractive residential development opportunities in diverse regions across the United States.
• Remediate the identified material weakness in internal controls by appointing additional qualified personnel with financial accounting, GAAP, and SEC experience.
• Monitor foreign exchange rate fluctuations, which are expected to significantly impact results in 2026 due to stable intercompany loan balances.
• The planned merger of Winning Catering Group, Inc. with Winning Group is pending closure.
• The loan to DSS, Inc. by Alset International Limited (convertible note and warrants) is contingent upon DSS stockholder approval.

Key Dates

Recommendation

The company reported a substantial increase in net loss for 2025, driven by a significant decline in revenue, particularly from real estate sales, and a large impairment charge on a key investment. Negative cash flow from operations and ongoing material weaknesses in internal controls indicate fundamental operational and financial challenges. While the company is diversified, the performance across segments is weak, and heavy reliance on related party transactions and convertible debt raises concerns about financial transparency and long-term stability. These factors suggest a high-risk investment with significant downside potential.

Keywords

Diversified Holding Company, Real Estate Development, EHome Communities, Digital Transformation Technology, Biohealth, Financial Services, Consumer Products, SEC Filing, 10-K, Net Loss, Revenue Decline, Equity Investments, Internal Controls, Nasdaq Compliance, Stock Repurchase, Convertible Notes, Related Party Transactions, Corporate Governance, Risk Management, Global Operations