UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 14C INFORMATION
Information Statement Pursuant to Section 14(c) of
the Securities Exchange Act of 1934
Check the appropriate box:
[ ] | Preliminary Information Statement |
[ ] | Confidential, for Use of the Commission Only (as permitted by Rule 14c-5(d)(2)) |
[X] | Definitive Information Statement |
ALSET EHOME INTERNATIONAL INC.
(Name of Registrant as Specified in Its Charter)
Payment of Filing Fee (Check the appropriate box):
[X] | No fee required. | |
[ ] | Fee computed on table below per Exchange Act Rules 14c-5(g) and 0-11. | |
(1) | Title of each class of securities to which transaction applies: | |
(2) | Aggregate number of securities to which transaction applies: | |
(3) | Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined): | |
(4) | Proposed maximum aggregate value of transaction: | |
(5) | Total fee paid: | |
[ ] | Fee paid previously with preliminary materials. | |
[ ] | Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. | |
(1) | Amount Previously Paid: | |
(2) | Form, Schedule or Registration Statement No.: | |
(3) | Filing Party: | |
(4) | Date Filed: | |
ALSET EHOME INTERNATIONAL INC.
NOTICE OF ACTIONS BY WRITTEN CONSENT
TO THE STOCKHOLDERS OF ALSET EHOME INTERNATIONAL INC.:
This Notice and the accompanying Information Statement are being furnished to the stockholders of ALSET EHOME INTERNATIONAL INC., a Delaware corporation (the “Company,” “Alset,” “we,” or “us”), in connection with the actions taken by written consent of the holder of a majority of the issued and outstanding shares of common stock of the Company.
On May 3, 2021, the holder of a majority of the issued and outstanding shares of common stock of the Company, by written consent:
1. | approved the four transactions (the “Transactions”) contemplated by that certain securities purchase agreement (the “SPA”) dated March 12, 2021, by and among Chan Heng Fai (the “Seller”), LiquidValue Development Pte Ltd. (“LVD”), American Pacific Bancorp (“APB”), True Partners International Limited (“True Partners Holdco”) and Alset, or the Purchaser and the issuance of up to 11,434,728 shares of the Company’s common stock upon conversion of the four convertible promissory notes issued to the Seller pursuant to the SPA. | |
2. | approved and adopted an amendment to our Third Amended and Restated Certificate of Incorporation (the “Amendment”) to increase the number of authorized shares of the Company’s common stock, par value $0.001 per share (the “Common Stock”), to Two Hundred and Fifty Million (250,000,000) shares and to increase the number of authorized shares of the Company’s preferred stock, par value $0.001 per share (the “Preferred Stock”), to Twenty-Five Million (25,000,000) shares. |
As the matters set forth in this Information Statement have been duly authorized and approved by the written consent of the holder of more than a majority of our voting securities (the “Majority Shareholder”) on May 3, 2021, your vote or consent is not requested or required to approve the Transactions or the Increase. This Information Statement is being provided solely for your information, and also serves the purpose of informing stockholders of the matters described herein pursuant to Section 14(c) of the Securities Exchange Act of 1934, as amended, and the rules and regulations prescribed thereunder, including Regulation 14C, and serves as the notice required by Section 228 of the Delaware General Corporation Law of taking of a corporate action without a meeting by less than unanimous written consent of our stockholders. You do not need to do anything in response to this Notice and the Information Statement.
You are urged to read the Information Statement in its entirety.
WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND US A PROXY.
The Information Statement is being mailed on or about May 25, 2021 to stockholders of record as of MAy 3, 2021.
Sincerely, | ||
ALSET EHOME INTERNATIONAL INC. | ||
By: | /s/ Chan Heng Fai | |
Name: | Chan Heng Fai | |
Title: | Chief Executive Officer |
TABLE OF CONTENTS
i |
ALSET EHOME INTERNATIONAL INC.
4800 Montgomery Lane, Suite 210
Bethesda, Maryland 20814
INFORMATION STATEMENT
ALSET EHOME INTERNATIONAL INC., a Delaware corporation (the “Company,” “Alset,” “we,” or “us”), is distributing this information statement solely for purposes of informing our stockholders of record as of May 3, 2021 (the “Record Date”), in the manner required by Regulation 14(c) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the Delaware General Corporation Law (the “DGCL”), of the action taken by written consent by the holder of a majority of the issued and outstanding shares of common stock of the Company (1) to approve the four transactions (the “Transactions”) contemplated by that certain securities purchase agreement (the “SPA”) dated March 12, 2021, by and among Chan Heng Fai (the “Seller”), LiquidValue Development Pte Ltd. (“LVD”), American Pacific Bancorp (“APB”), True Partners International Limited, and Alset, or the Purchaser, and (2) to approve and adopt an amendment to our third amended and restated certificate of incorporation (the “Amendment”) to increase the number of authorized shares of the Company’s Common Stock, par value $0.001 per share, to Two Hundred Fifty Million (250,000,000) shares and the number of authorized shares of Preferred Stock, par value $0.001 per share, to Twenty-Five Million (25,000,000) shares.
What is the Purpose of the Information Statement?
This Information Statement is being furnished to you pursuant to Section 14 of the Exchange Act to notify our stockholders of the corporate actions taken by the Majority Stockholder pursuant to the Written Consent.
Summary of the Corporation Actions
The Transactions
For the reasons discussed in this Information Statement, our Board of Directors (the “Board”) has approved the Transactions under the SPA. The SPA and the issuance of up to 11,434,728 shares of the Company’s common stock (the “Stock Issuance”) upon conversion of the four convertible promissory notes (the “Convertible Notes”) pursuant to the SPA, which requires stockholder approval for such issuance, have been approved by written consent of the holder of a majority of our issued and outstanding voting securities.
The proposed terms of the SPA are attached as Annex A to this Information Statement and each of the Convertible Notes is attached herein as Annex B to Annex E.
The Amendment
For the reasons discussed in this Information Statement, the Board has approved the Amendment. The Amendment has been approved by written consent of the holder of a majority of our issued and outstanding voting securities.
In accordance with Rule 14c-2 under the Securities Exchange Act, the stockholder actions taken by written consent will become effective no earlier than 20 calendar days after the date on which this Information Statement is sent or given to our stockholders. This Information Statement is first being mailed on or about May 25, 2021 to the Company’s stockholders of record as of the Record Date.
NASDAQ Rules
NASDAQ Rule 5630(a) requires that a Company that is not a limited partnership shall conduct an appropriate review and oversight of all related party transactions for potential conflict of interest situations on an ongoing basis by the Company’s audit committee or another independent body of the board of directors
NASDAQ Rule 5635(a) requires stockholder approval prior to the issuance of securities in connection with the acquisition of another company if such securities are not issued in a public offering and (i) have, or will have upon issuance, voting power equal to or in excess of 20% of the voting power outstanding before the issuance of such securities (or securities convertible into or exercisable for common stock); or (ii) the number of shares of common stock to be issued is or will be equal to or in excess of 20% of the number of shares of common stock outstanding before the issuance of the stock or securities.
NASDAQ Rule 5635(b) requires stockholder approval prior to the issuance of securities when the issuance or potential issuance will result in a change of control of the registrant.
NASDAQ Rule 5635(d) requires stockholder approval prior to a transaction, other than a public offering, involving the sale, issuance or potential issuance by the company of common stock (or securities convertible into or exercisable for common stock), which equals 20% or more of the common stock or 20% or more of the voting power outstanding before the issuance at a price less than the “Minimum Price,” defined as the lower of the closing price immediately prior to the execution of the binding agreement or the average closing price of the common stock for the 5 trading days immediately preceding the execution of the binding agreement.
1 |
Voting and Vote Required
The Company is not seeking consents, authorizations or proxies from you. Under the DGCL, the SPA and Stock Issuance may be approved, without a meeting of stockholders, by a resolution of our Board of Directors, followed by the written consent of stockholders representing a majority of the voting power of our outstanding shares of common stock.
Dissenters’ Rights of Appraisal
Under the DGCL and the Company’s third amended and restated certificate of incorporation, Company stockholders are not entitled to appraisal rights with respect to the Transactions described in the SPA.
Notice Pursuant to the DGCL and the Company’s Bylaws
This Information Statement serves the purpose of informing stockholders of the matters described herein pursuant to Section 14(c) of the Securities Exchange Act and the rules and regulations prescribed thereunder, including Regulation 14C, and serves as the notice required by Section 228 of the Delaware General Corporation Law of the taking of a corporate action without a meeting by less than unanimous written consent of our stockholders.
PROPOSAL 1 THE FOUR TRANSACTIONS
Background
Alset International Limited (“AIL”) is a Singapore Exchange Catalist-listed Company that operates as a global enterprise involved in (i) property development and investments primarily in the United States and Western Australia; (ii) development, research, testing, manufacturing, licensing and distribution of biomedical products; (iii) asset management with a primary focus in the U.S. medical and housing REIT space; (iv) direct sales of a variety of health and wellness products; and (v) information technology-related business including blockchain technology.
As of the date of the SPA, Mr. Chan Heng Fai (directly and indirectly) owned 1,195,139,494 shares of AIL, which represented approximately 74.1% ownership in AIL calculated based on 1,769,909,946 total issued and outstanding shares of AIL. Mr. Chan Heng Fai also owned warrants (the “2017 Warrants”) to purchase 1,576,925,000 shares of AIL’s common stock at an exercise price of $0.048 per share.
LiquidValue Development Pts Ltd (“LVD”) is a Singapore company having its principal office at 7 Temasek Boulevard #29-01B Suntec Tower One, Singapore 038987. As of the date of the SPA, LVD was 100% owned by Mr. Chan Heng Fai.
True Partner Capital Holding Limited (“True Partners”) operates as a fund management company in the United States and Hong Kong. True Partners manages funds and provides managed accounts on a discretionary basis using a proprietary trading platform. It offers investment management and consultancy services. True Partners also develops and supports its trading platform and related proprietary software; and provides management services for a portfolio of securities or futures contracts. Its investors for funds and managed accounts are primarily professional investors, including collective investment undertakings, family offices, pension funds, high-net-worth individuals, endowments/foundations, and financial institutions.
As of the date of the SPA, Mr. Chan Heng Fai owned, directly and through a holding company, a total of 62,122,908 shares of True Partners, which represents approximately 15.53% ownership based on 400,000,000 total issued and outstanding shares of True Partners.
American Pacific Bancorp (“APB”) is a bank holding company, focused on acquiring equity positions of commercial banks in the United States. APB injects digital banking capabilities into such banks to provide global banking services to global clients, aiming to increase the banks’ profitability. APB is highly focused on the digital banking space and decentralized finance capabilities.
2 |
As of the date of the SPA, Mr. Chan Heng Fai owned 4,775,523 shares of APB, which represented approximately 86.44% of the total shares of APB issued and outstanding in the amount of 5,524,788 shares.
On May 3, 2021, Mr. Chan Heng Fai, the Majority Shareholder, approved the terms and conditions of the SPA and the Stock Issuance of the Company’s common stock issuable upon conversion of the four Convertible Notes in connection with the SPA.
Alset Purchase of 2017 Warrants
Pursuant to the SPA, Mr. Chan Heng Fai sold Alset the 2017 Warrants to purchase 1,500,000,000 shares of AIL’s common stock. The 2017 Warrants were issued to Mr. Chan Heng Fai on March 22, 2017 and shall expire on March 21, 2022. The 2017 Warrants have an exercise price of $0.048 SGD per share. Upon purchase of the 2017 Warrants, Alset has acquired all rights, dividends, entitlements and distributions with respect to the 2017 Warrants. The total purchase price for the 2017 Warrants (the “Warrant Purchase Price”) was the lower of i) the valuation of the 2017 Warrants appraised by a third party or ii) $28,363,966.42 USD, payable on the Closing Date (as defined in the SPA) by Alset, in the form of a convertible promissory note (“AIL CPN”) in the principal amount of $28,363,966.42.
Mr. Chan Heng Fai, the Majority Shareholder, approved the terms and conditions of the AIL CPN, including the conversion provision entitling the noteholder to convert the outstanding principal and interest of the AIL CPN into the Company’s common shares at $5.59 per share (“Alset Stock Market Price”), equivalent to the average of the five closing per share prices of Alset Common Stock preceding January 4, 2021 as quoted by Bloomberg L.P.
Alset Purchase of LVD CPN
Pursuant to the SPA, Mr. Chan Heng Fai sold Alset 1,000,000 LVD shares of common stock (“LVD Shares”), constituting 100% of LVD’s outstanding equity securities, for the total purchase price in the value of $173,394.87 USD in the form of a convertible promissory note (the “LVD CPN”).
Mr. Chan Heng Fai, the Majority Shareholder, approved the terms and conditions of the LVD CPN, including the conversion provision entitling the noteholder to convert the outstanding principal and interest of LVD CPN into the Company’s common shares at Alset Stock Market Price.
Alset Purchase of True Partners CPN
Pursuant to the SPA, Mr. Chan sold Alset, directly and indirectly through True Partners Holdco, a wholly-owned subsidiary of Mr. Chan, an aggregate of 62,122,908 shares of True Partners’ common stock (“True Partners Common Stock”), representing approximately 15.53% of the total issued and outstanding True Partners Common Stock, for the total purchase price in the value of $6,700,000.00 USD in a convertible promissory note (the “True Partners CPN”).
Mr. Chan, the Majority Shareholder, approved the terms and conditions of the True Partners CPN, including the conversion provision entitling the noteholder to convert the outstanding principal and interest of the True Partners CPN into the Company’s common shares at Alset Stock Market Price.
Alset Purchase of APB CPN
Pursuant to the SPA, Mr. Chan sold Alset 4,775,523 shares of APB’s common stock, representing approximately 86.44% of the total issued and outstanding common stock of APB, for the total purchase price in the value equivalent to the lower of $28,653,138.00 USD or the valuation of the APB Shares made by a third party, payable in a convertible promissory note (the “APB CPN”).
3 |
Mr. Chan Heng Fai, the Majority Shareholder, approved the terms and conditions of the APB CPN, including the conversion provision entitling the noteholder to convert the outstanding principal and interest of the APB CPN into the Company’s common shares at Alset Stock Market Price.
PROPOSAL 2 THE AMENDMENT TO THE THIRD AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
Background
As of the date hereof, pursuant to our Certificate of Incorporation, as amended, we are authorized to issue up to Twenty Million (20,000,000) shares of Common Stock and Five Million (5,000,000) shares of Preferred Stock. We propose to increase the number of our authorized shares of Common Stock to Two Hundred Fifty Million (250,000,000) shares and the number of our authorized shares of Preferred Stock to Twenty-Five Million (25,000,000) shares.
On May 3, 2021, the holder of a majority of the issued and outstanding shares of common stock of the Company, by written consent, approved and adopted an amendment to our third amended and restated certificate of incorporation (the “Amendment”) increasing the number of authorized shares of the Company’s Common Stock to Two Hundred Fifty Million (250,000,000) shares and the number of authorized Preferred Stock to Twenty-Five Million (25,000,000) shares.
We plan to file the Amendment with the Delaware Secretary of State in order to increase the number of authorized shares of Common Stock to Two Hundred Fifty Million (250,000,000) shares of Common Stock and the number of authorized Preferred Stock to Twenty-Five Million (25,000,000) shares of Preferred Stock after twenty (20) calendar days from the date of the initial mailing of this Information Statement. A copy of the form of Amendment is attached hereto as Annex F.
The Amendment will not result in any changes to the issued and outstanding shares of Common Stock of the Company and will only affect the number of shares that may be issued by the Company in the future.
Effect of Increase in Authorized Common Stock on Current Shareholders
The additional shares of Common Stock will have the same rights as the presently authorized shares, including the right to cast one vote per share of Common Stock. Although the authorization of additional shares will not, in itself, have any effect on the rights of any holder of our Common Stock, the future issuance of additional shares of Common Stock (other than by way of a stock split or dividend) would have the effect of diluting the voting rights and could have the effect of diluting earnings per share and book value per share of existing shareholders.
The additional shares of Common Stock could be used in the future for various purposes without further shareholder approval, except as such approval may be required by applicable law. These purposes may include: raising capital, providing equity incentives to employees, officers or directors, establishing strategic relationships with other companies, expanding the company’s business or product lines through the acquisition of other businesses or products, and other purposes.
Purpose of Increase in Authorized Common Stock
The Board believes that the increase in authorized Common Stock will provide the Company greater flexibility with respect to the Company’s capital structure for various purposes including, but not limited to, additional equity financings, conversion of Preferred Stock and stock based acquisitions.
Possible Anti-Takeover Effects due to Increase in Authorized Common Stock
We could also use the additional shares of Common Stock that will become available for issuance to oppose a hostile takeover attempt or to delay or prevent changes in control or management of the Company. Although the Amendment has not been prompted by the threat of any hostile takeover attempt (nor is the Board currently aware of any such attempts directed at the Company), nevertheless, shareholders should be aware that this proposal could facilitate future efforts by us to deter or prevent changes in control of the Company, including transactions in which the Company’s shareholders might otherwise receive a premium for their shares over then current market prices.
4 |
Purpose of the Increase of Preferred Stock
The Board of Directors believes that the authorization of shares of Preferred Stock is desirable because it will provide the Company with increased flexibility of action to meet future working capital and capital expenditure requirements through equity financings without the delay and expense ordinarily attendant on obtaining further shareholder approvals. The Board of Directors believes that the authorization of blank check preferred stock will improve the Company’s ability to attract needed investment capital, as various series of the Preferred Stock may be customized to meet the needs of any particular transaction or market conditions.
Possible Anti-Takeover Effects due to Increase of Preferred Stock
The issuance of additional shares of Preferred Stock may have the effect of discouraging or thwarting persons seeking to take control of the Company through a tender offer, proxy fight or otherwise or seeking to bring about removal of incumbent management or a corporate transaction such as a merger. For example, the issuance of shares of Preferred Stock in a public or private sale, merger or in a similar transaction may, depending on the terms of the series of Preferred Stock dilute the interest of a party seeking to take over the Company. Further, the authorized Preferred Stock could be used by the Board of Directors for adoption of a shareholder rights plan or “poison pill.”.
The Amendment was not proposed in response to, or for the purpose of deterring, any effort to obtain control of the Company or as an anti-takeover measure. It should be noted that any action taken by the Company to discourage an attempt to acquire control of the Company might result in shareholders not being able to participate in any possible premiums which might be obtained in the absence of anti-takeover provisions. Any transaction which may be so discouraged or avoided could be a transaction that the Company’s shareholders might consider to be in their best interests. However, the Board of Directors has a fiduciary duty to act in the best interests of the Company’s shareholders at all times.
INTERESTS OF CERTAIN PERSONS IN MATTERS TO BE ACTED UPON
None of our officers and directors, nor any of their associates, has any interest in the actions approved by our stockholders and described in this Information Statement except in their capacity as holders of our Common Stock (which interest does not differ from that of the other holders of our Common Stock) and as disclosed below with respect to Chan Heng Fai and Wu Wai Leung William.
Mr. Chan Heng Fai, the Majority Shareholder, Chief Executive Officer and Chairman of the Board of Directors of the Company, is the seller in all of the four transactions under the SPA. He is also the sole owner of LVD and the majority owner of APB.
Wu Wai Leung William is a director of Alset as well as a director of APB.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS,
MANAGEMENT AND DIRECTORS
The table below sets forth information known to us regarding the beneficial ownership of our common stock as of the Record Date for:
● | each person we believe beneficially holds more than 5% of our outstanding common shares (based solely on our review of SEC filings); | |
● | each of our “named executive officers” and directors; and | |
● | all of our current directors and executive officers as a group. |
The number of shares beneficially owned by a person includes shares issuable under options, warrants and other securities convertible into common stock held by that person and that are currently exercisable or that become exercisable within 60 days of the Record Date. Percentage calculations assume, for each person and group, that all shares that may be acquired by such person or group pursuant to options, warrants and other convertible securities currently exercisable or that become exercisable within 60 days of the Record Date are outstanding. Nevertheless, shares of common stock that are issuable upon exercise of presently unexercised options, warrants and other convertible securities are not deemed to be outstanding for purposes of calculating the “Percentage of Shares Beneficially Owned” by any other person or any other group.
5 |
Except as otherwise indicated in the table or its footnotes, the persons in the table below have sole voting and investment power with respect to all shares of common stock shown as beneficially owned by them, subject to community property laws where applicable.
As of the Record Date, we had 8,580,000 shares of common stock issued and outstanding.
Name and Address of Beneficial Owners(1) | Shares Beneficially Owned | Percentage of Shares Beneficially Owned | ||||||
Directors and Named Executive Officers: | ||||||||
Chan Heng Fai (2) | 6,380,000 | 74.4 | % | |||||
Lui Wai Leung Alan | - | - | ||||||
Rongguo Wei | - | - | ||||||
Ang Hay Kim Aileen | - | - | ||||||
Wong Tat Keung | - | - | ||||||
Robert Trapp | - | - | ||||||
William Wu | - | - | ||||||
Charles MacKenzie | - | - | ||||||
All directors and executive officers, as a group (8 individuals) | 6,380,000 | 74.4 | % | |||||
Five Percent Stockholders: | ||||||||
Chan Heng Fai (2) | 6,380,000 | 74.4 | % |
* Less than 1%
(1) | Unless otherwise noted, the business address of each of the following entities or individuals is 4800 Montgomery Lane, Suite 210, Bethesda, Maryland 20814. Unless otherwise indicated, we believe that all persons named in the table have sole voting and investment power with respect to all shares of common stock beneficially owned by them. |
(2) | Represents shares of common stock owned of record by HFE Holdings Limited, of which Chan Heng Fai has sole voting and investment power with respect to such shares. |
6 |
SEC Periodic Reports and Additional Information
The Company is subject to the information and reporting requirements of the Exchange Act, and in accordance with the Exchange Act, the Company files reports, documents and other information with the SEC. These reports and other information filed with the SEC by the Company may be inspected and are available for copying at the public reference facilities maintained by the SEC at 100 F Street, N.E. Washington, D.C. 20549. Copies may be obtained at prescribed rates from the Public Reference Section of the SEC at its principal office in Washington, D.C. The SEC also maintains an internet website that contains periodic and other reports, proxy and information statements and other information regarding registrants, including the Company, that file electronically with the SEC. The address of the SEC’s website is http://www.sec.gov.
The Company’s Quarterly Reports on Form 10-Q can be accessed through the SEC’s website or are available from the Company, without charge, by first-class mail or other equally prompt means of delivery following receipt of a written or oral request directed to our Corporate Secretary, at ALSET EHOME INTERNATIONAL INC., 4800 Montgomery Lane, Suite 210, Bethesda, Maryland 20814, telephone: (301) 971-3940.
Householding of Materials
The SEC has adopted rules that permit companies and intermediaries (e.g., brokers) to satisfy the delivery requirements for proxy materials with respect to two or more stockholders sharing the same address by delivering a single set of proxy materials addressed to those stockholders. This process, which is commonly referred to as “householding,” potentially means extra convenience for stockholders and cost savings for companies.
Some banks, brokers and other nominee record holders may be participating in the practice of “householding” proxy statements and annual reports. This means that only one copy of our Information Statement may have been sent to multiple Company stockholders in each household unless otherwise instructed by such Company stockholders. We will deliver promptly a separate copy of the Information Statement to any Company stockholder upon written or oral request to our Corporate Secretary, at Alset EHome International Inc., 4800 Montgomery Lane, Suite 210, Bethesda, Maryland 20814, telephone: (301) 971-3940. Any Company stockholder wishing to receive separate copies of our proxy statement or annual report to Company stockholders in the future, or any Company stockholder who is receiving multiple copies and would like to receive only one copy per household, should contact the Company stockholder’s bank, broker, or other nominee record holder, or the Company stockholder may contact us at the above address and phone number.
Distribution of the Information Statement
We will make arrangements with brokerage firms and other custodians, nominees and fiduciaries who are record holders of our common stock for the forwarding of this Information Statement to the beneficial owners of our common stock. We will reimburse these brokers, custodians, nominees and fiduciaries for the reasonable out-of-pocket expenses they incur in connection with the forwarding of the Information Statement.
Unaudited Pro Forma Combined Financial Information
The accompanying unaudited pro forma combined financial information have been prepared to present the balance sheets and statements of operations of the Company to indicate how the consolidated financial statements of the Company might have looked like if the acquisition of the control interest in APB and the transaction related thereto had occurred as of the beginning of the period presented.
The unaudited pro forma condensed combined balance sheet as of December 31, 2020 and statements of operations, for the twelve months ended December 31, 2020 and 2019 are presented as if the acquisition of the control interest in APB had occurred on December 31, 2020. The unaudited combined pro forma financial statements of the Company for the years ended December 31, 2020 and 2019 are included herein as Annex G.
These pro forma condensed financial statements are presented for illustrative purposes only and are not intended to be indicative of actual consolidated financial position and consolidated results of operations had the acquisition been in effect during the periods presented, or of consolidated financial condition or consolidated results of operations that may be reported in the future.
7 |
Audited Combined Financial Statements of APB
The accompanying audited combined financial statements of APB have been prepared to present APB’s balance sheets as of December 31, 2020 and 2019 and statements of operations for the twelve months ended December 31, 2020 and 2019, respectively. The audited financial statements of APB are included herein as Annex H.
DISCLOSURE REGARDING FORWARD LOOKING STATEMENTS
This Information Statement and the documents incorporated by reference into this Information Statement contain forward-looking statements that are subject to risks and uncertainties. All statements other than statements of historical fact contained in this Information Statement and the materials accompanying this Information Statement are forward-looking statements.
Frequently, but not always, forward-looking statements are identified by the use of the future tense and by words such as ‘believes,” “expects,” “anticipates,” “intends,” “will,” “may,” “could,” “would,” “projects,” “continues,” “estimates,” or similar expressions. Forward-looking statements are not guarantees of future performance and actual results could differ materially from those indicated by the forward-looking statements. Forward-looking statements involve known and unknown risks, uncertainties, and other factors that may cause our company or its industry’s actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied by the forward-looking statements.
The forward-looking statements contained or incorporated by reference in this Information Statement are forward-looking statements and are subject to the safe harbor created by the Private Securities Litigation Reform Act of 1995. These statements include declarations regarding our plans, intentions, beliefs or current expectations.
The forward-looking statements included in this Information Statement are made only as of the date of this Information Statement. The forward-looking statements are based on the beliefs of management, as well as assumptions made by and information currently available to management and are subject to certain risks and uncertainties that could cause actual results to differ materially from historical results of those anticipated. These uncertainties and other risk factors include, but are not limited to: the possibility that we may fail to preserve our expertise in medical therapy and product research and development; that existing and potential partners may opt to work with, or favor the products of, competitors if our competitors offer more favorable products or pricing terms; that we may be unable to maintain or grow sources of revenue; that we may be unable to attain and maintain profitability; that we may be unable to attract and retain key personnel; that we may not be able to effectively manage, or to increase, our relationships with customers; that we may have unexpected increases in costs and expenses; and what effect the current COVID-19 pandemic may have on the Company. There is no guarantee that the Company will consummate the SPA on the desired terms as set forth in the Proposal, in a timely manner or at all.
We further caution investors that other factors might, in the future, prove to be important in affecting our results of operations. New factors emerge from time to time and it is not possible for management to predict all such factors, nor can it assess the impact of each such factor on the business or the extent to which any factor, or a combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements.
Forward-looking statements are expressly qualified in their entirety by this cautionary statement. The forward-looking statements included in this document are made as of the date of this document and we do not undertake any obligation to update forward-looking statements to reflect new information, subsequent events or otherwise, except as required by law.
8 |
THE ACTIONS HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SEC OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SEC OR ANY STATE SECURITIES COMMISSION PASSED UPON THE FAIRNESS OR MERITS OF THE ACTIONS NOR UPON THE ACCURACY OR ADEQUACY OF THE INFORMATION CONTAINED IN THIS INFORMATION STATEMENT. ANY REPRESENTATION TO THE CONTRARY IS UNLAWFUL.
PLEASE NOTE THAT THIS IS NEITHER A REQUEST FOR YOUR VOTE NOR A PROXY STATEMENT, BUT RATHER AN INFORMATION STATEMENT DESIGNED TO INFORM YOU OF THE ACTIONS THAT HAS BEEN APPROVED AND TO PROVIDE YOU WITH INFORMATION ABOUT THE ACTIONS AND OTHER RELEVANT BACKGROUND INFORMATION.
Sincerely, | ||
ALSET EHOME INTERNATIONAL INC. | ||
Dated: May 24, 2021 | By: | /s/ Chan Heng Fai |
Name: | Chan Heng Fai | |
Title: | Chief Executive Officer |
9 |
SECURITIES PURCHASE AGREEMENT
A-1 |
Purchaser: | Alset EHome International Inc. Attention: Rongguo Wei Address: 4800 Montgomery Lane, Suite 210 Bethesda, Maryland 20814 Email: ronald@alsetinternational.com | |
Seller and TP Holdco: | Heng Fai Ambrose Chan Address: 7 Temasek Blvd., # 29-01B, Suntec Tower One, Singapore 038987 Email: fai@alsetinternational.com | |
LVD: | LiquidValue Development Pte Ltd. Attn: Danny Lim Address: 7 Temasek Blvd., #29-01B, Suntec Tower One, Singapore 038987 Email: danny@alsetinternational.com | |
APB: | American Pacific Bancorp, Inc. Attention: Rongguo Wei Address: 4800 Montgomery Lane, Suite 210 Bethesda, Maryland 20814 Email: ronald@alsetinternational.com |
Alset EHome International Inc. (fka, HF Enterprises Inc.) |
By: /s/ Ang Hay Kim Name: Ang Hay Kim Title: Director |
THE SELLER |
Heng Fai Ambrose Chan |
By: /s/ Heng Fai Ambrose Chan Name: Heng Fai Ambrose Chan Title: Individual |
True Partners International Limited |
By: /s/ Heng Fai Ambrose Chan Name: Heng Fai Ambrose Chan Title: Sole Shareholder |
LiquidValue Development Pte Ltd. |
By: /s/ Heng Fai Ambrose Chan Name: Heng Fai Ambrose Chan Title: Director |
American Pacific Bancorp, Inc. |
By: /s/ Heng Fai Ambrose Chan Name: Heng Fai Ambrose Chan Title: Chairman of the Board |
Convertible Promissory Note for Purchase of 2017 Warrants
B-1 |
Principal Amount: $28,363,966.42 U.S. Dollars | Issuance Date: March 12, 2021 | |
COMPANY: Alset EHome International Inc. a Delaware corporation |
By: /s/ Ang Hay Kim Name: Ang Hay Kim Title: Director |
Convertible Promissory Note for Purchase of LVD Shares
C-1 |
Principal Amount: $173,394.87 U.S. Dollars | Issuance Date: March 12, 2021 | |
COMPANY: Alset EHome International Inc. a Delaware corporation |
By: /s/ Ang Hay Kim Name: Ang Hay Kim Title: Director |
Convertible Promissory Note for Purchase of True Partners Shares
D-1 |
Principal Amount: $6,729,629.29 U.S. Dollars | Issuance Date: March 12, 2021 | |
COMPANY: Alset EHome International Inc. a Delaware corporation |
By: /s/ Ang Hay Kim Name: Ang Hay Kim Title: Director |
Convertible Promissory Note for Purchase of APB Shares
E-1 |
Principal Amount: $28,653,138.00 U.S. Dollars | Issuance Date: March 12, 2021 | |
COMPANY: Alset EHome International Inc. a Delaware corporation |
By: /s/ Ang Hay Kim Name: Ang Hay Kim Title: Director |
Amendment to the Third Amended and Restated Certificate of Incorporation
CERTIFICATE OF AMENDMENT TO THE THIRD AMENDED AND RESTATED CERTIFICATE OF INCORPORATION OF ALSET EHOME INTERNATIONAL INC.
Alset EHome International Inc. (the “Corporation”), a corporation organized and existing under the General Corporation Law of the State of Delaware, hereby certifies as follows:
1. This Certificate of Amendment (the “Certificate of Amendment”) amends the provisions of the Corporation’s Third Amended and Restated Certificate of Incorporation originally filed with the Secretary of State on July 7, 2020 (the “Amended and Restated Certificate of Incorporation”).
2. Article IV, Section 4.1 of the Amended and Restated Certificate of Incorporation is hereby amended and restated in its entirety as follows:
4.1 Authorized Capital Stock. The aggregate number of shares of capital stock that the Corporation is authorized to issue is Two Hundred and Seventy-Five Million (275,000,000), of which Two Hundred and Fifty Million (250,000,000) shares are common stock having a par value of $0.001 per share (the “Common Stock”), and Twenty-Five Million (25,000,000) shares are preferred stock having a par value of $0.001 per share (the “Preferred Stock”).
3. This amendment was duly adopted in accordance with the provisions of Sections 228 and 242 of the General Corporation Law of the State of Delaware.
4. All other provisions of the Amended and Restated Certificate of Incorporation shall remain in full force and effect.
IN WITNESS WHEREOF, the Corporation has caused this Certificate of Amendment to be signed by the undersigned on this [*] day of [*], 2021.
By | ||
Chan Heng Fai Chief Executive Officer and Chairman of the Board |
F-1 |
Unaudited Pro Forma Combined Financial Statements of Alset EHome International Inc. for the years ended December 31, 2020 and December 31 2019
G-1 |
Alset EHome International 2020 |
Alset EHome International as Reported December 31, 2020 | American Pacific Bancorp as Reported December 31, 2020 (1) | Pro Forma Adjustments * | Pro Forma December 31, 2020 | Alset EHome International as Reported December 31, 2019 | American Pacific Bancorp as Reported December 31, 2019 (1) | Pro Forma Adjustments * | Pro Forma December 31, 2019 | |
Assets: | (Audited) | (Audited) | (Unaudited) | (Unaudited) | (Audited) | (Audited) | (Unaudited) | (Unaudited) |
Current Assets: | ||||||||
Cash | $22,124,491 | $1,848,455 | $492,977 | $24,465,923 | $2,774,587 | $449,115 | $257,437 | $3,481,139 |
Restricted Cash | 6,769,533 | - | 6,769,533 | 4,447,678 | - | 4,447,678 | ||
Account Receivables, Net | 1,366,194 | - | 1,366,194 | 170,442 | - | 170,442 | ||
Other Receivables | 270,222 | 279,177 | 95,177 | 644,576 | 681,677 | 256,140 | 937,817 | |
Note Receivables - Related Parties | 624,986 | 24,583 | 649,569 | - | - | - | ||
Prepaid Expenses | 1,470,680 | - | 1,470,680 | 145,186 | - | 145,186 | ||
Inventory | 90,068 | - | 90,068 | 116,698 | - | 116,698 | ||
Investment in Securities at Fair Value | 48,857,483 | 313,343 | 6,652,477 | 55,823,303 | 3,015,698 | 257,555 | 10,803,192 | 14,076,445 |
Investment in Securities at Cost | 280,516 | - | 280,516 | 200,128 | - | 200,128 | ||
Deposits | 47,019 | - | 47,019 | 70,208 | - | 70,208 | ||
Current Assets from Discontinued Operations | - | - | - | 139,431 | - | 139,431 | ||
Total Current Assets | 81,901,192 | 2,465,558 | 91,607,381 | 11,761,733 | 962,810 | 23,785,172 | ||
Real Estate | ||||||||
Properties under Development | 20,505,591 | - | 20,505,591 | 23,884,704 | - | 23,884,704 | ||
Operating Lease Right-Of-Use Asset | 574,754 | - | 574,754 | 146,058 | - | 146,058 | ||
Deposit | 249,676 | - | 249,676 | - | - | - | ||
Loan Receivable | - | 840,000 | 840,000 | - | - | - | ||
Property and Equipment, Net | 85,365 | - | 85,365 | 80,285 | - | 80,285 | ||
Total Assets | $103,316,578 | $3,305,558 | $113,862,767 | $35,872,780 | $962,810 | $47,896,219 | ||
Liabilities and Stockholders' Equity: | ||||||||
Current Liabilities: | ||||||||
Accounts Payable and Accrued Expenses | $1,553,132 | $117,188 | $1,670,320 | $3,995,001 | $49,397 | $2,972 | $4,047,370 | |
Accrued Interest - Related Parties | - | - | - | 834,536 | - | 834,536 | ||
Deferred Revenue | 2,867,226 | - | 2,867,226 | 258,594 | - | 258,594 | ||
Builder Deposits | 1,262,336 | - | 1,262,336 | 890,069 | - | 890,069 | ||
Operating Lease Liability | 381,412 | - | 381,412 | 58,865 | - | 58,865 | ||
Notes Payable | 172,706 | - | 172,706 | 157,105 | - | 157,105 | ||
Notes Payable - Related Parties | 1,526,208 | - | 64,743,952 | 66,270,160 | 410,000 | - | 66,185,213 | 66,595,213 |
Income Tax Payable | - | - | - | 420,327 | - | 420,327 | ||
Current Liabilities from Discontinued Operations | - | - | - | 7,021 | - | 7,021 | ||
Total Current Liabilities | 7,763,020 | 117,188 | 72,624,160 | 7,031,518 | 49,397 | 73,269,100 | ||
Long-Term Liabilities: | ||||||||
Builder Deposits | - | - | - | 1,555,200 | - | 1,555,200 | ||
Operating Lease Liability | 193,342 | - | 193,342 | 91,330 | - | 91,330 | ||
Note Payable, Net of Discount | 636,362 | - | 636,362 | - | - | - | ||
Notes Payable - Related Parties | - | - | - | 4,971,401 | - | 4,971,401 | ||
Total Liabilities | 8,592,724 | 117,188 | 73,453,864 | 13,649,449 | 49,397 | 79,887,031 | ||
Stockholders' Equity: | ||||||||
Preferred Stock | - | 4,917 | (4,917) | -** | - | - | ||
Common Stock | 8,570 | 55,248 | (55,248) | 8,570** | 10,001 | 50,331 | (50,331) | 10,001 |
Additional Paid In Capital | 97,950,440 | 4,142,448 | (55,057,499) | 47,035,389 | 54,263,717 | 1,541,791 | (54,726,709) | 1,078,799 |
Accumulated Deficit | (43,010,991) | (1,014,243) | (2,733,485) | (46,758,719) | (40,494,115) | (678,709) | (469,780) | (41,642,604) |
Accumulated Other Comprehensive Income | 2,153,318 | - | (9,980) | 2,143,338 | 1,468,269 | - | (4,593) | 1,463,676 |
Equity Attributable to Stockholders of the Company | 57,101,337 | 3,188,370 | 2,428,578 | 15,247,872 | 913,413 | (39,090,128) | ||
Non-controlling Interests | 37,622,517 | - | 357,808 | 37,980,325 | 6,975,459 | - | 123,857 | 7,099,316 |
Total Stockholders' Equity | 94,723,854 | 3,188,370 | 40,408,903 | 22,223,331 | 913,413 | (31,990,812) | ||
Total Liabilities and Stockholders' Equity | $103,316,578 | $3,305,558 | $113,862,767 | $35,872,780 | $962,810 | $47,896,219 |
Audited Financial Statements of American Pacific Bancorp, Inc. for the years ended December 31, 2020 and December 31, 2019
H-1 |
Pages | |
Independent Auditor’s Report | 1 |
Balance Sheets | 2 |
Statements of Operations | 3 |
Statements of Changes in Shareholders’ Equity | 4 |
Statements of Cash Flows | 5 |
Notes to the Financial Statements | 6-14 |
Expressed in US dollars (“$”) |
December 31, 2020 | December 31, 2019 | |
$ | $ | |
ASSETS | ||
Non-Current Assets | ||
Loan receivables | 840,000 | - |
Total Non-Current Assets | 840,000 | - |
Current Assets | ||
Cash and cash equivalents | 1,848,455 | 449,115 |
Loan receivables | 269,610 | 249,540 |
Loan interest receivables | 9,567 | 6,600 |
Due from a related party | 24,583 | - |
Investment securities - fair value | 313,343 | 257,555 |
Total Current Assets | 2,465,558 | 962,810 |
TOTAL ASSETS | 3,305,558 | 962,810 |
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||
Current Liabilities | ||
Accounts payable and accrued expenses | 117,188 | 49,397 |
Total Current Liabilities | 117,188 | 49,397 |
Shareholders’ Equity | ||
Common stock, $0.01 par value; 200,000,000 and 100,000,000 shares authorized respectively, none of the shares and 5,033,123 shares issued and outstanding at December 31, 2020 and 2019, respectively | - | 50,331 |
Class A Common Stock, $0.01 par value, 100,000,000 shares and nil authorized respectively, 491,665 shares and nil outstanding at December 31, 2020 and 2019, respectively | 4,917 | - |
Class B Common Stock, $0.01 par value, 100,000,000 shares and nil authorized respectively, 5,033,123 shares and nil outstanding at December 31, 2020 and 2019, respectively | 50,331 | - |
Preferred stock, $0.01 par value, 100,000,000 and 100,000,000 shares authorized respectively, 491,665 shares and nil outstanding at December 31, 2020 and 2019, respectively | 4,917 | - |
Additional paid-in capital | 4,142,448 | 1,541,791 |
Accumulated deficit | (1,014,243) | (678,709) |
Total Shareholders' Equity | 3,188,370 | 913,413 |
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | 3,305,558 | 962,810 |
Year ended December 31, 2020 | Year ended December 31, 2019 | |
$ | $ | |
Interest income: | ||
Interest on loan | 44,914 | 38,816 |
Bank interest | 4,106 | 9,766 |
Total interest income | 49,020 | 48,582 |
Unrealized gain (loss) on investment securities | 55,788 | (123,663) |
Other income | 2,581 | 1,490 |
Operating expenses: | ||
General and administrative expenses | (9,175) | (197) |
Professional fees | (360,707) | (347,292) |
Total operating expenses | (369,882) | (347,489) |
Finance cost | (73,041) | - |
Loss before provision for income taxes | (335,534) | (421,080) |
Provision for income taxes | - | - |
Net loss | (335,534) | (421,080) |
Net loss per common share - basic and diluted | (0.06) | (0.13) |
Shares | Shares | |
Weighted average number of common stocks outstanding - basic and diluted | 5,402,377 | 3,185,774 |
Preferred stock | Common stock | Class A Common Stock | Class B Common Stock | ||||||||
Shares | Amount ($0.01 Par) | Shares | Amount ($0.01 Par) | Shares | Amount ($0.01 Par) | Shares | Amount ($0.01 Par) | Additional paid-in capital | Accumulated deficit | Total shareholders’ (deficit) equity | |
$ | $ | $ | $ | ||||||||
Balances at December 31, 2018 | - | - | 100,000 | 1,000 | - | - | - | - | - | (257,629) | (256,629) |
Net loss for the year | - | - | - | - | - | - | - | - | (421,080) | (421,080) | |
Issuance of shares for the acquisition of investment securities | - | - | 1,906,090 | 19,061 | - | - | - | - | 362,157 | - | 381,218 |
Issuance of shares for conversion of debt with related parties | - | - | 3,027,033 | 30,270 | - | - | - | - | 1,179,634 | - | 1,209,904 |
Balances at December 31, 2019 | - | - | 5,033,123 | 50,331 | - | - | - | - | 1,541,791 | (678,709) | 913,413 |
Net loss for the year | - | - | - | - | - | - | - | - | - | (335,534) | (335,534) |
Conversion of common stock to Class B Common Stock | - | - | (5,033,123) | (50,331) | - | - | 5,033,123 | 50,331 | - | - | - |
Issuance of Class A Common Stock and preferred stocks | 491,665 | 4,917 | - | - | 491,665 | 4,917 | - | - | 2,600,657 | - | 2,610,491 |
Balances at December 31, 2020 | 491,665 | 4,917 | - | - | 491,665 | 4,917 | 5,033,123 | 50,331 | 4,142,448 | (1,014,243) | 3,188,370 |
Year ended December 31, 2020 | Year ended December 31, 2019 | |
$ | $ | |
Cash flows from operating activities: | ||
Net loss | (335,534) | (421,080) |
Adjustments to reconcile net loss to net cash (used in) provided by operating activities: | ||
Unrealized (gain) loss on investments securities | (55,788) | 123,663 |
Dividend on preferred stocks | 73,041 | - |
Changes in operating assets and liabilities: | ||
Loan originations and payments, net | (860,070) | (389) |
Loan interest receivables | (2,967) | (6,600) |
Amount due from related party | (24,583) | - |
Other receivables | - | 15,319 |
Accounts payable and accrued expenses | 67,791 | 151,021 |
Net cash used in operating activities | (1,138,110) | (138,066) |
Cash flows from financing activities: | ||
Issuance of shares | 2,610,491 | - |
Dividend paid on preferred stocks | (73,041) | - |
Net cash provided by financing activities | 2,537,450 | - |
Net increase (decrease) in cash and cash equivalents | 1,399,340 | (138,066) |
Cash and cash equivalents at beginning of period | 449,115 | 587,181 |
Cash and cash equivalents at end of period | 1,848,455 | 449,115 |
Supplemental disclosure of cash flow information: | ||
Cash paid for: | ||
Interest | - | - |
Income taxes | - | - |
Fair Value Measurement using | |||||
Amount at cost | Level 1 | Level 2 | Level 3 | Amount at fair value | |
December 31, 2020 | $ | $ | $ | $ | $ |
Investment securities - trading | 381,218 | 313,343 | - | - | 313,343 |
Fair Value Measurement using | |||||
Amount at cost | Level 1 | Level 2 | Level 3 | Amount at fair value | |
December 31, 2019 | $ | $ | $ | $ | $ |
Investment securities - trading | 381,218 | 257,555 | - | - | 257,555 |
Share price December 31, 2020 | Shares | Market Value December 31, 2020 | Valuation | |
$ | $ | |||
OptimumBank Holdings, Inc. (Related party) | 3.37 | 92,980 | 313,343 | Investment in securities at fair value |
Share price December 31, 2019 | Shares | Market Value December 31, 2019 | Valuation | |
$ | $ | |||
OptimumBank Holdings, Inc. (Related party) | 2.77 | 92,980 | 257,555 | Investment in securities at fair value |
Year ended December 31, 2020 | Year ended December 31, 2019 | |
$ | $ | |
Income tax at statutory rate | (55,124) | (65,327) |
Less: change in valuation allowance | 55,124 | 65,327 |
- | - |
December 31, 2020 | December 31, 2019 | |
$ | $ | |
Deferred income tax assets | ||
Investments | 14,254 | 25,969 |
Net operating loss carryforward | 160,299 | 93,460 |
Less: valuation allowance | (174,553) | (119,429) |
Net deferred tax asset | - | - |