Alset AI Announces Strategic $3 Million Unsecured Term Loan Facility to Advance Flagship Cloud Compute Business Towards Positive Operating Income in 2026

Executive Summary

• Alset AI Ventures Inc. entered into an unsecured, non‑revolving term loan agreement for up to $3 million with insider lender Randy Gilling.
• The loan will be funded in four advances tied to growth milestones and carries a 6% annual interest rate, payable quarterly, with a three‑year maturity.
• In exchange for each advance, the company will issue non‑transferable common‑share purchase warrants at $0.15 per share (one warrant per $0.15 of advance), providing the lender additional upside while avoiding an immediate equity dilution.

Key Details

• Loan Structure: Up to $3 M principal; four scheduled advances:
• Advance 1 – $500,000 at execution (Effective Date)
• Advance 2 – $500,000 on or about 2025‑10‑31
• Advance 3 – $1,000,000 on or about 2025‑12‑31
• Advance 4 – $1,000,000 at management’s discretion (until maturity)
• Interest: Fixed 6% per annum, payable quarterly.
• Maturity: Three years from the Effective Date; early repayment of an advance may shorten the related warrant term to the later of one year from the advance date or 30 days after repayment.
• Warrant Issuance: For each dollar of advance, warrants equal to Advance Amount ÷ $0.15 will be issued (e.g., $500,000 advance → 3,333,333 warrants). Exercise price is $0.15 per common share; warrants are non‑transferable and expire at the loan’s maturity date.
• Use of Proceeds: Working capital and general corporate purposes to support growth of the flagship cloud‑compute platform Lyken.AI, with a target of achieving positive operating income by end‑2026.
• Related Party Considerations: Lender holds >10 % of Alset AI’s common shares; transaction qualifies as a related‑party transaction under MI 61‑101. The company relies on exemptions because the fair market value does not exceed 25 % of market capitalization.
• Board Observer Right: Upon closing, Mr. Gilling receives a right to observe Board meetings; this right terminates when all loan amounts are repaid.
• Regulatory Approval: Transaction subject to TSX Venture Exchange (TSXV) approval; a separate press release will be issued upon receipt of that approval.

Notable Quotes

“This strategic term loan facility significantly strengthens our growth path,” said Adam Ingrao, CEO. “With shareholder‑friendly terms including a very conservative interest rate, this financing allows us to strengthen our balance sheet without the need for a dilutive equity raise… positioning us to advance towards positive operating income exiting 2026.”

Materiality Assessment

Material – Positive: The financing provides substantial new capital, improves liquidity, and is tied to specific growth milestones that could materially affect Alset AI’s operational performance and shareholder value.