Item
1.01. Entry into a Material Definitive Agreement.
Public
Offering
On
December 5, 2021, Alset EHome International Inc. (the “Company”) entered into an underwriting agreement (the “Underwriting
Agreement”) with Aegis Capital Corp., as the sole book-running manager and representative of the underwriters named therein (the
“Underwriters”), relating to an underwritten public offering (the “Offering”) of (i) 18,076,666 shares of common
stock, par value $0.001 per share (the “Common Stock”), at a price to the public of $0.60 per share of Common Stock and (ii)
31,076,666 pre-funded warrants (the “Pre-funded Warrants”) to purchase 31,076,666 shares of Common Stock, at a price to the
public of $0.599 per Pre-funded Warrant,. The Offering is expected to close on December 8, 2021. Mr. Chan Heng Fai, the Chairman of the
Company’s Board of Directors and Chief Executive Officer, purchased $4.4 million of shares of Common Stock in the Offering on the
same terms as the shares were offered.
The
Company granted the Underwriters a 45-day over-allotment option to purchase up to 7,500,000 additional shares of Common Stock. The Company
also paid the Underwriters an underwriting discount equal to 7% of the gross proceeds of the Offering and a non-accountable expense fee
equal to 1% of the gross proceeds of the Offering.
The
Company also agreed, for a period of two hundred and seventy (270) days after the date of the closing of the offering, subject to certain
limited exceptions, not to, directly or indirectly, without the prior written consent of the Underwriters, (a) offer, sell, issue or
otherwise transfer or dispose of, directly or indirectly, any shares of capital stock of the Company or any securities convertible into
or exercisable or exchangeable for shares of capital stock of the Company; (b) file or cause to be filed any registration statement with
the Securities and Exchange Commission (the “SEC:”) relating to the offering of any shares of capital stock of the Company
or any securities convertible into or exercisable or exchangeable for shares of capital stock of the Company; or (c) enter into any agreement
or announce the intention to effect any of the actions described in subsections (a) or (b) hereof.
The
Pre-funded Warrants were offered and sold to purchasers whose purchase of Common Stock in the Offering would otherwise result in the
purchaser, together with its affiliates and certain related parties, beneficially owning more than 4.99% (or, at the election of the
purchaser, 9.99%) of the Company’s outstanding Common Stock immediately following the consummation of the Offering. Each Pre-funded
Warrant is exercisable for one share of Common Stock at an exercise price of $0.001 per share. The Pre-funded Warrants are immediately
exercisable and may be exercised at any time until all of the Pre-funded Warrants are exercised in full.
The
Underwriting Agreement contains customary representations and warranties, agreements and obligations, conditions to closing and termination
provisions. The Underwriting Agreement provides for indemnification by the Underwriters of the Company, its directors and certain of
its executive officers, and by the Company of the Underwriters, for certain liabilities, including liabilities arising under the Securities
Act of 1933, as amended, and affords certain rights of contribution with respect thereto.
The
net proceeds to the Company from the Offering was approximately $27.3 million, after deducting underwriting discounts and commissions
and the payment of other estimated offering expenses associated with the Offering that are payable by the Company. The Company intends
to use the net proceeds of the Offering for the following purposes: (i) to fund possible acquisitions of new companies and additional
properties, (ii) to fund the further development of properties, including services and infrastructure; (iii) to develop rental opportunities
at properties; (iv) to exercise warrants of our subsidiaries to accomplish the items in (i) – (iii) and (v) for working capital
and general corporate purposes.
A
registration statement on Form S-1 relating to the Offering (File No. 333-261446) was declared effective by the SEC on December 3, 2021.
The Offering was made only by means of a prospectus and a prospectus supplement forming a part of the effective registration statement.
Pre-
funded Warrants
The
Pre-funded Warrants were issued in registered form under a warrant agent agreement (the “Warrant Agent Agreement”) between
the Company and Direct Transfer, LLC as the warrant agent.
The
Pre-Funded Warrant entitles the holder thereof to purchase one share of Common Stock at an exercise price of $0.001 per share, at any
time that the Pre-funded Warrant is outstanding. There is no expiration date for the Pre-funded Warrants. No fractional warrants will
be issued and only whole warrants are exercisable. The exercise price and number of shares of Common Stock issuable upon exercise of
the Pre-funded Warrants may be adjusted in certain circumstances, including in the event of a stock dividend, extraordinary dividend
on or recapitalization, reorganization, merger or consolidation. The Pre-funded Warrants may be exercised for cash or, at the holder’s
option, may be exercised on a “cashless” basis pursuant to a formula set forth in the terms of the Pre-funded Warrants.
Pre-funded
Warrant holders, subject to limited exceptions, cannot exercise their warrants to the extent that, after giving effect to such exercise,
the holder (together with its affiliates) would beneficially own in excess of 4.99% (or, at the election of the purchaser, 9.99%; subject
to increase at the option of the holder to 9.99% upon 61 days’ prior written notice) of the Company’s Common Stock outstanding
immediately after giving effect to the exercise.
The
foregoing summary of the terms of the Underwriting Agreement, the Warrant Agent Agreement and the Pre-funded Warrants are subject to,
and qualified in their entirety by reference to, copies of the Underwriting Agreement, Warrant Agent Agreement, and form of the Pre-funded
Warrants that are filed as exhibits to this Current Report on Form 8-K and are incorporated herein by reference. The representations,
warranties and covenants contained in the Underwriting Agreement were made only for purposes of such agreement and, as of specific dates,
were solely for the benefit of the parties to the Underwriting Agreement, and may be subject to limitations agreed upon by the contracting
parties. Accordingly, the Underwriting Agreement is incorporated herein by reference only to provide investors with information regarding
the terms of the Underwriting Agreement, and not to provide investors with any other factual information regarding the Company or its
business, and should be read in conjunction with the disclosures in the Company’s periodic reports and other filings with the SEC.