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ALSET INC.

Date Filed : May 04, 2021

S-11forms-1.htm

 

Asfiled with the Securities and Exchange Commission on May 4, 2021.

RegistrationNo. 333-

 

 

UNITEDSTATES

SECURITIESAND EXCHANGE COMMISSION

WASHINGTON,D.C. 20549

 

FORMS-1

REGISTRATIONSTATEMENT

UNDER

THESECURITIES ACT OF 1933

 

AlsetEHome International Inc.

(Exactname of registrant as specified in its charter)

 

Delaware   6799   83-1079861

(State or other jurisdiction of

incorporation or organization)

 

(Primary Standard Industrial

Classification Code Number)

 

(I.R.S. Employer

Identification Number)

 

AlsetEHome International Inc.

4800Montgomery Lane, Suite 210

Bethesda,Maryland 20814

(301)971-3940

(Address,including zip code, and telephone number, including area code, of registrant’s principal executive offices)

 

ChanHeng Fai

Chairmanand Chief Executive Officer

AlsetEHome International Inc.

4800Montgomery Lane, Suite 210

Bethesda,Maryland 20814

(301)971-3940

(Name,address, including zip code, and telephone number, including area code, of agent for service)

 

Copiesof all communications to:

 

Darrin M. Ocasio, Esq.   Anthony W. Basch, Esq.
Avital Perlman, Esq.   Kaufman & Canoles, P.C.
Sichenzia Ross Ference LLP   1021 E. Cary Street, Suite 1400
1185 Avenue of Americas, 37th Floor   Two James Center
New York, New York 10036   Richmond, VA 23219
Tel.: (212) 930-9700   Tel.: (804) 771-5700

 

Approximatedate of commencement of proposed sale to the public: As soon as practicable after the effective date of this registration statement.

 

Ifany of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 underthe Securities Act of 1933, check the following box. [X]

 

Ifthis Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check thefollowing box and list the Securities Act registration statement number of the earlier effective registration statement for thesame offering. [  ]

 

Ifthis Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and listthe Securities Act registration statement number of the earlier effective registration statement for the same offering. [  ]

 

Ifthis Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and listthe Securities Act registration statement number of the earlier effective registration statement for the same offering. [  ]

 

Indicateby check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smallerreporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smallerreporting company” in Rule 12b-2 of the Exchange Act.

 

Large Accelerated Filer [  ]   Accelerated Filer [  ]  

Non-Accelerated Filer [X]

 

 

Smaller Reporting Company [X]

Emerging Growth Company [X]

 

Ifan emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period forcomplying with any new or revised financial accounting standards provided pursuant to Section 7(a)(2)(B) of the Securities Act.[  ]

 

CALCULATIONOF REGISTRATION FEE

 

Title of each class of securities to be registered  

Proposed maximum aggregate

offering price(1)(2)

    Amount of registration fee  
Common Units (3)   $ 49,450,000 (4)    $ 5,395.00  
Common Stock, par value $0.001 per share (“Common Stock”), included in the Common Units     (5)        
Series A Warrants to purchase Common Stock, included in the Common Units       (5)      
Series B Warrants to purchase Common Stock, included in the Common Units       (5)        
Pre-funded Units (6)       (4)        
Pre-funded Warrants included in the Pre-funded Units       (7)        
Series A Warrants to purchase Common Stock, included in the Pre-funded Units       (7)        
Series B Warrants to purchase Common Stock, included in the Pre-funded Units       (7)        
Common Stock underlying the Pre-funded Warrants included in the Pre-funded Units                
Common Stock underlying Series A Warrants included in the Common Units and Pre-funded Units   $ 49,450,000     $ 5,395.00  
Common Stock underlying Series B Warrants included in the Common Units and Pre-funded Units   $ 32,142,500     $ 3,506.75  
Total   $ 131,042,500     $ 14,296.75  

 

(1) Estimated solely for the purpose of computing the amount of the registration fee pursuant to Rule 457(o) under the Securities Act of 1933, as amended.
   
(2) Includes shares the underwriter has the option to purchase to cover over-allotments, if any.
   
(3)

Each Common Unit consists of one share of Common Stock, one Series A Warrant and one Series B Warrant.

   
(3)

No fee pursuant to Rule 457(g) under the Securities Act.

   
(4)

The proposed maximum aggregate offering price of Common Units proposed to be sold in the offering will be reduced on a dollar-for-dollar basis based on the offering price of any Pre-funded Units offered and sold in the offering, and the proposed maximum aggregate offering price of the Pre-funded Units to be sold in the offering will be reduced on a dollar-for-dollar basis based on the offering price of any Common Units sold in the offering. Accordingly, the proposed maximum aggregate offering price of the Common Units and Pre-funded Units (including the Common Stock issuable upon exercise of the Pre-funded warrants included in the Pre-funded Units), if any, is $49,450,000.

   
(5)

Included in the price of the Common Units. No separate registration fee required pursuant to Rule 457(g) under the Securities Act of 1933, as amended.

   
(6)

Each Pre-funded Unit consists of one Pre-funded Warrant, one Series A Warrant and one Series B Warrant.

   
(7)

Included in the price of the Pre-funded Units. No separate registration fee required pursuant to Rule 457(g) under the Securities Act of 1933, as amended.

 

Theregistrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date untilthe registrant shall file a further amendment which specifically states that this registration statement shall hereafter becomeeffective in accordance with Section 8(a) of the Securities Act of 1933 or until the registration statement shall become effectiveon such date as the Commission, acting pursuant to said Section 8(a), may determine.

 

 

 

 
 

 

Theinformation in this preliminary prospectus is not complete and may be changed. We may not sell these securities until the registrationstatement filed with the SEC is effective. This preliminary prospectus is not an offer to sell nor does it seek an offer to buythese securities in any jurisdiction where the offer or sale is not permitted.

 

Subjectto Completion, dated May 4, 2021

 

PRELIMINARYPROSPECTUS

 

Upto 4,207,436 Common Units

Upto 4,207,436 Pre-funded Units

 

 

CommonUnits Consisting of
One Share of Common Stock and
One Series A Warrant to Purchase One Share of Common Stock and
One Series B Warrant to Purchase One-Half of a Share of Common Stock

 

Pre-fundedUnits Consisting of
One Pre-funded Warrant and
One Series A Warrant to Purchase One Share of Common Stock and
One Series B Warrant to Purchase One-Half of a Share of Common Stock

 

Weare offering up to common 4,207,436 units (the “Common Units”), assuming a public offering price of$10.22 per share, the last reported sale price of our common stock as reported on the Nasdaq Capital Market on April 29, 2021,with each Common Unit consisting of (a) one share of common stock, par value $0.001 per share (which we refer to as our commonstock), (b) one Series A warrant (the “Series A Warrant”) to purchase one share of common stock, and (c) one SeriesB warrant (the “Series B Warrant” and together with the Series A Warrants, the “Warrants”) to purchaseone-half of a share of common stock, pursuant to this prospectus. The actual publicoffering price per Common Unit will be determined between us and the underwriters at the time of pricing and may be ata discount to this assumed offering price. Therefore, the assumed public offering price used throughout this prospectus may notbe indicative of the final offering price.

 

Weare also offering to those purchasers, if any, whose purchase of Common Units in this 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 our outstanding common stock immediately following the consummation of this offering, the opportunity to purchase, ifthe purchaser so chooses, pre-funded units (each a “Pre-funded Unit”) in lieu of Common Units that would otherwiseresult in the purchaser’s beneficial ownership exceeding 4.99% (or, at the election of the purchaser, 9.99%) of our outstandingcommon stock. Each Pre-funded Unit will consist of a pre-funded warrant to purchase one share of common stock at an exercise priceof $0.01 per share (each a “Pre-funded Warrant”, one Series A Warrant and one Series B Warrant. The purchase priceof each Pre-funded Unit is equal to the price per Common Unit being sold to the public in this offering, minus $0.01. The Pre-fundedWarrants will be immediately exercisable and may be exercised at any time until all of the Pre-funded Warrants are exercised infull. We are offering the Pre-funded Units at an assumed public offering price of $10.21 per Pre-funded Unit.

 

Foreach Pre-funded Unit we sell, the number of Common Units we are offering will be decreased on a one-for-one basis. Common Unitsand Pre-funded Units will not be certificated. The common stock or Pre-funded Warrants, as the case may be, and the Warrants includedin the Common Units or the Pre-funded Units, can only be purchased together in this offering, but the securities contained inthe Common Units or Pre-funded Units are immediately separable and will be issued separately.

 

Theoffering also includes the shares of common stock issuable from time to time upon exercise of the Pre-Funded Warrants and Warrants.

 

The Warrants will be exercisableimmediately upon issuance and will expire on the fifth anniversary of the original issuance date. The Series A Warrants will have aninitial exercise price equal to $ per  whole share of common stock, equal to 100% of the public offering price of one Common Unit.The Series B Warrants will have an initial exercise price equal to $ per whole share of common stock, equal to 130% of the public offeringprice of one Common Unit.

 

Our common stock is listedon the Nasdaq Capital Market under the symbol “AEI.” We do not intend to apply for any listing of either of the Pre-fundedWarrants or the Warrants on the Nasdaq Capital Market or any other securities exchange or nationally recognized trading system, and wedo not expect a market to develop for the Pre-funded Warrants, the Series A Warrants or the Series B Warrants.

 

Investingin our securities involves a high degree of risk. See “Risk Factors” beginning on page 8.

 

   

Per Common

Unit

  Per Pre-funded Unit   Total  
Public offering price   $             $             $         
Underwriting discounts and commissions (6.50%) (1)   $   $     $    
Proceeds to us, before expenses   $   $     $    

 

 

(1) Does not include a non-accountable expense allowance equal to 1.5% of the gross proceeds of this offering payable to underwriters. Please see the section of this prospectus entitled “Underwriting” for additional information regarding underwriter compensation.

 

Wehave granted a 45-day option to the underwriters to purchase additional shares of common stock and/or Pre-funded Warrants, representingup to 15% of the common stock and Pre-funded Warrants sold in the offering and/or additional Warrants, representing up to 15%of the Warrants sold in the offering, solely to cover over-allotments, if any.

 

Neitherthe Securities and Exchange Commission nor any other regulatory body has approved or disapproved these securities or determinedif this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

 

Theunderwriters expect to deliver the Units to purchasers on or about        , 2021.

 

AegisCapital Corp.

 

Thedate of this prospectus is      , 2021

 

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TABLEOF CONTENTS

 

  Page
Prospectus Summary 1
Incorporation of Certain Information by Reference 7
Risk Factors 8
Cautionary Note Regarding Forward-Looking Statements 10
Use of Proceeds 11
Capitalization 12
Dilution 13
Description of Securities 14
Underwriting 22
Indemnification for Securities Act Liabilities 26
Legal Matters 26
Experts 26
Where You Can Find More Information 27

 

Youshould rely only on the information contained in this prospectus or contained in any free writing prospectus prepared by or onbehalf of us. We have not authorized anyone to provide any information or to make any representations other than those containedin this prospectus or in any free writing prospectuses prepared by or on behalf of us or to which we have referred you. We takeno responsibility for, and can provide no assurance as to the reliability of, any other information that others may give you.This prospectus is an offer to sell only the securities offered hereby, but only under circumstances and in jurisdictions whereit is lawful to do so. The information contained in this prospectus is accurate only as of its date regardless of the time ofdelivery of this prospectus or of any sale of securities.

 

Youshould also read and consider the information in the documents to which we have referred you under the captions “Incorporationof Certain Information by Reference” and “Where You Can Find More Information” in this prospectus.

 

Forinvestors outside the United States, we have not done anything that would permit this offering or possession or distribution ofthis prospectus in any jurisdiction where action for that purpose is required, other than in the U.S. Persons who come into possessionof this prospectus and any free writing prospectus related to this offering in jurisdictions outside the U.S. are required toinform themselves about and to observe any restrictions as to this offering and the distribution of this prospectus and any suchfree writing prospectus applicable to that jurisdiction.

 

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PROSPECTUSSUMMARY

 

Thissummary description about us and our business highlights selected information contained elsewhere in this prospectus, or incorporatedin this prospectus by reference. This summary does not contain all of the information you should consider before buying securitiesin this offering. You should carefully read this entire prospectus, including each of the documents incorporated herein or thereinby reference, before making an investment decision.

 

Unlessthe context requires otherwise, the words “we,” “us,” “our,” “our company,”“Alset”,“the Company” and “our business” refer to Alset EHome International Inc., a Delaware corporation, andits consolidated subsidiaries.

 

OurCompany

 

Weare a diversified holding company principally engaged through our subsidiaries in property development, digital transformationtechnology and biohealth activities with operations in the United States, Singapore, Hong Kong, Australia and South Korea. Wemanage our three principal businesses primarily through our 60.2% owned subsidiary, Alset International Limited, a public companytraded on the Singapore Stock Exchange. Through this subsidiary (and indirectly, through other public and private U.S. and Asiansubsidiaries), we are actively developing two significant real estate projects near Houston, Texas and in Frederick, Marylandin our property development segment. We have designed applications for enterprise messaging and e-commerce software platformsin the United States and Asia in our digital transformation technology business unit. Our recent foray into the biohealth segmentincludes research to treat neurological and immune-related diseases, nutritional chemistry to create a natural sugar alternative,research regarding innovative products to slow the spread of disease, and natural foods and supplements. We identify strategicglobal businesses for acquisition, incubation and corporate advisory services, primarily related to our operating business segments.We also have ownership interests outside of Alset International, including an indirect 16.8% equity interest in Holista CollTechLimited, a public Australian company that produces natural food ingredients, but this entity did not have a material asset valuerelative to our principal businesses. Under the guidance of Chan Heng Fai, our founder, Chairman and Chief Executive Officer,who is also our largest stockholder, we have positioned ourselves as a participant in these key markets through a series of strategictransactions. Our growth strategy is both to pursue acquisition opportunities that we can leverage on our global network usingour capital and management resources and to accelerate the expansion of our organic businesses.

 

Wegenerally acquire majority and/or control stakes in innovative and promising businesses that are expected to appreciate in valueover time. Our emphasis is on building businesses in industries where our management team has in-depth knowledge and experience,or where our management can provide value by advising on new markets and expansion. We have at times provided a range of globalcapital and management services to these companies in order to gain access to Asian markets. We have historically favored businessesthat improve an individual’s quality of life or that improve the efficiency of businesses through technology in variousindustries. We believe our capital and management services provide us with a competitive advantage in the selection of strategicacquisitions, which creates and adds value for our company and our stockholders.

 

Weintend at all times to operate our business in a manner as to not become inadvertently subject to the regulatory requirementsunder the Investment Company Act by, among other things, (i) in the event of acquisitions, purchasing all or substantially allof an acquisition target’s voting stock, and only in limited cases purchase less than 51% of the voting stock; (ii) monitoringour operations and our assets on an ongoing basis in order to ensure that we own no less than a majority, or other control, ofAlset International and that Alset International, in turn, owns no less than a majority, or other control, of LiquidValue DevelopmentPte Ltd. (“LVD”) and other such subsidiaries with significant assets and operations; and (iii) limiting additionalequity investments into affiliated companies including our majority-owned and/or controlled operating subsidiaries, except inspecial limited circumstances. Additionally, we will continue to hire in-house management personnel and employees with industrybackground and experience, rather than retaining traditional investment portfolio managers to oversee our group of companies.

 

 

1
 

 

 

Thefollowing chart illustrates the current corporate structure of our key operating entities:

 

 

SelectedRisks Associated with Our Business

 

Ourbusiness and prospects may be limited by a number of risks and uncertainties that we currently face, including the following:

 

  We operate in the intensely competitive property development, digital transformation technology and biohealth markets against a number of large, well-known companies in each of those markets.
     
  We and our majority-owned and/or controlled operating subsidiaries have a limited operating history and we cannot ensure the long-term successful operation of all of our businesses.
     
  We had net losses of $4,398,435 and $8,053,428 for the years ended December 31, 2020 and 2019, respectively. There can be no assurance we will have net income in future periods.
     
  We are a holding company and derive all of our operating income from, and hold substantially all of our assets through, our U.S. and foreign company ownership interests. The effect of this structure is that we will depend on the earnings of our subsidiaries, and the payment or other distributions to us of these earnings, to meet our obligations and make capital expenditures.

 

 

2
 

 

 

  There is no assurance that we will be able to identify appropriate acquisition targets, successfully acquire identified targets or successfully develop and integrate the businesses to realize their full benefits.
     
  Our business depends on the availability to us of Chan Heng Fai, our founder, Chairman and Chief Executive Officer, who has developed and implemented our business philosophy and who would be extremely difficult to replace, and our business would be materially and adversely affected if his services were to become unavailable to us.
     
  We are vulnerable to adverse changes in the economic environment in the United States, Singapore, Hong Kong, Australia and South Korea, particularly with respect to increases in wages for professionals, fluctuation in the value of foreign currencies and governmental trade policies between nations.

 

Inaddition, we face other risks and uncertainties that may materially affect our business prospects, financial condition and resultsof operations. You should consider the risks discussed in “Risk Factors” and elsewhere in this prospectus before investingin our common stock.

 

Implicationsof Our Being an “Emerging Growth Company”

 

Asa company with less than $1.07 billion in revenue during our last completed fiscal year, we qualify as an “emerging growthcompany” under the Jumpstart Our Business Startups Act of 2012, or the JOBS Act. An emerging growth company may take advantageof specified reduced reporting requirements that are otherwise generally applicable to public companies. In particular, as anemerging growth company, we:

 

  are not required to obtain an attestation and report from our auditors on our management’s assessment of our internal control over financial reporting pursuant to the Sarbanes-Oxley Act;
  are not required to provide a detailed narrative disclosure discussing our compensation principles, objectives and elements, and analyzing how those elements fit with our principles and objectives (commonly referred to as “compensation discussion and analysis”);
  are not required to obtain a non-binding advisory vote from our stockholders on executive compensation or golden parachute arrangements (commonly referred to as the “say-on-pay,” “say-on-frequency” and “say-on-golden-parachute” votes);
  are exempt from certain executive compensation disclosure provisions requiring a pay-for-performance graph and CEO pay ratio disclosure;
  may present only two years of audited financial statements; and
  are eligible to claim longer phase-in periods for the adoption of new or revised financial accounting standards under §107 of the JOBS Act.

 

Weintend to take advantage of all of these reduced reporting requirements and exemptions, including the longer phase-in periodsfor the adoption of new or revised financial accounting standards under §107 of the JOBS Act. Our election to use the phase-inperiods may make it difficult to compare our financial statements to those of non-emerging growth companies and other emerginggrowth companies that have opted out of the phase-in periods under §107 of the JOBS Act.

 

 

3
 

 

 

Certainof these reduced reporting requirements and exemptions were already available to us due to the fact that we also qualify as a“smaller reporting company” under SEC rules. For instance, smaller reporting companies are not required to obtainan auditor attestation and report regarding internal control over financial reporting, are not required to provide a compensationdiscussion and analysis, are not required to provide a pay-for-performance graph or CEO pay ratio disclosure, and may presentonly two years of audited financial statements and related MD&A disclosure.

 

Underthe JOBS Act, we may take advantage of the above-described reduced reporting requirements and exemptions for up to five yearsafter our initial sale of common equity pursuant to a registration statement declared effective under the Securities Act of 1933,or such earlier time that we no longer meet the definition of an emerging growth company. The JOBS Act provides that we wouldcease to be an “emerging growth company” if we have more than $1.07 billion in annual revenue, have more than $700million in market value of our common stock held by non-affiliates, or issue more than $1 billion in principal amount of non-convertibledebt over a three-year period. Further, under current SEC rules, we will continue to qualify as a “smaller reporting company”for so long as we have a public float (i.e., the market value of common equity held by non-affiliates) of less than $250 millionas of the last business day of our most recently completed second fiscal quarter.

 

Statusas a Controlled Company

 

Weare considered a “controlled company” within the meaning of the listing standards of Nasdaq. Under these rules, a“controlled company” may elect not to comply with certain corporate governance requirements, including the requirementto have a board that is composed of a majority of independent directors. We are taking advantage of these exemptions. These exemptionsdo not modify the independence requirements for our audit committee, and we intend to comply with the applicable requirementsof the Sarbanes-Oxley Act and rules with respect to our audit committee within the applicable time frame.

 

CorporateInformation

 

TheCompany was incorporated in the State of Delaware on March 7, 2018 as HF Enterprises Inc. Effective as of February 5, 2021, theCompany changed its name from “HF Enterprises Inc.” to “Alset EHome International Inc.” The Company effectedsuch name change pursuant to a merger entered into with a wholly owned subsidiary, Alset EHome International Inc. The Companyis the surviving entity following this merger and has adopted the name of its former subsidiary. In connection with our name change,our trading symbol on the Nasdaq Stock Market was changed from “HFEN” to “AEI.”

 

Ourprincipal executive offices are located at 4800 Montgomery Lane, Suite 210, Bethesda, Maryland 20814, telephone (301) 971-3940.We also maintain offices in Singapore, Magnolia, Texas, South Korea and Hong Kong. We maintain a corporate website at www.alsetehomeintl.com.Information on our website, and any downloadable files found there, are not part of this prospectus and should not be relied uponwith respect to this offering.

 

Anyinformation that we consider to be material to an evaluation of our company will be included in filings on the SEC website, http://www.sec.gov,and may also be disseminated using our investor relations website, www.alsetehomeintl.com, and press releases.

 

AvailableInformation

 

Wemake available, free of charge on our corporate website at www.alsetehomeintl.com, copies of our Annual Reports on Form 10-K,Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, Proxy Statements, and all amendments to these reports, as soon asreasonably practicable after such material is electronically filed with or furnished to the Securities and Exchange Commission,or the SEC, pursuant to Section 13(a) or 15(d) of the Securities Exchange Act. We also show detail about stock trading by corporateinsiders by providing access to SEC Forms 3, 4 and 5. The SEC maintains a website that contains reports, proxy and informationstatements, and other information regarding issuers that file electronically with the SEC. The address of that website is www.sec.gov.

 

 

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THEOFFERING

 

Thesummary below describes the principal terms of this offering. The “Description of Securities” section of this prospectuscontains a more detailed description of our common stock.

 

Securities being offered by us  

4,207,436 Common Units, assuming a public offering price of $10.22 per share, the last reported sale price of our common stock as reported on the Nasdaq Capital Market on April 29, 2021, with each Common Unit consisting of one share of common stock, one Series A Warrant to purchase one share of common stock and one Series B Warrant to purchase one-half of a share of common stock. The Common Units will not be certificated or issued as stand-alone securities. The shares of common stock and the Warrants composing such Common Units are immediately separable and will be issued separately but will be purchased together in this offering.

 

Weare also offering to those purchasers, if any, whose purchase of Common Units in this 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 our outstanding common stock immediately following the consummation of this offering, the opportunity to purchase, ifthe purchaser so chooses, pre-funded units (each a “Pre-funded Unit”) in lieu of Common Units that would otherwiseresult in the purchaser’s beneficial ownership exceeding 4.99% (or, at the election of the purchaser, 9.99%) of our outstandingcommon stock. Each Pre-funded Unit will consist of a pre-funded warrant to purchase one share of common stock at an exercise price of $0.01per share (each a “Pre-funded Warrant”), one Series A Warrant to purchase one share of common stock and one SeriesB Warrant to purchase one-half of a share of common stock. The purchase price of each Pre-funded Unit is equal to the price perCommon Unit being sold to the public in this offering, minus $0.01. The Pre-funded Warrants will be immediately exercisable andmay be exercised at any time until all of the Pre-funded Warrants are exercised in full. For each Pre-funded Unit we sell, thenumber of Common Units we are offering will be decreased on a one-for-one basis.

 

Weare offering Series A Warrants to purchase an aggregate of 4,207,436 shares of common stock and Series B warrants to purchasean aggregate of 2,103,718 shares of common stock. Because we will issue one Series A Warrant and one Series B Warrant as partof each Common Unit or Pre-funded Unit, the number of Warrants sold in this offering will not change as a result of a change inthe mix of the Common Units and Pre-funded Units sold.

 

Thisprospectus also relates to the offering of the shares of common stock issuable upon exercise of the Pre-funded Warrantsand the Warrants.

     

Overallotment option

 

We have granted the underwriters a 45-day option to purchase additional shares of common stock and/or Pre-Funded Warrants, representing up to 15% of the shares of common stock and Pre-Funded Warrants sold in the offering and/or additional Warrants, representing up to 15% of the Warrants sold in the offering.

     
Common stock to be outstanding immediately  after this offering   6,407,436 shares (or 7,038,551 shares, if the underwriters exercise their over-allotment option in full), assuming none of the Pre-funded Units are sold and none of the Warrants issued in this offering are exercised.
     
Description of Series A Warrants  

The Series A Warrants will be exercisable immediately upon issuance and will expire on the fifth anniversary of the original issuance date and have an initial exercise price equal to $    per share, or 100% of the price of each Common Unit sold in the offering, subject to appropriate adjustment in the event of recapitalization events, stock dividends, stock splits, stock combinations, reclassifications, reorganizations or similar events affecting our common stock. If at any time the closing price per share of the common stock shall exceed 200% of the exercise price then in effect for five consecutive trading days on each of which the daily dollar volume of the common stock equals or exceeds $5,000,000, the Company, at its option, may redeem the Series A Warrants, in whole or in part, at a price of $0.001 per share (subject to adjustment as provided therein).

 

See “Description of Securities—Series A Warrants” below for more information.

     
Description of Series B Warrants  

The Series B Warrants will be exercisable immediately upon issuance and will expire on the fifth anniversary of the original issuance date and have an initial exercise price equal to $ per share, or 130% of the price of each Common Unit sold in the offering, subject to appropriate adjustment in the event of recapitalization events, stock dividends, stock splits, stock combinations, reclassifications, reorganizations or similar events affecting our common stock. If at any time the closing price per share of the common stock shall exceed 200% of the exercise price then in effect for five consecutive trading days on each of which the daily dollar volume of the common stock equals or exceeds $5,000,000, the Company, at its option, may redeem the Series B Warrants, in whole or in part, at a price of $0.001 per share (subject to adjustment as provided therein). See “Description of Securities—Series B Warrants” below for more information.

 

 

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Use of proceeds
  We expect that the net proceeds from our sale of securities in this offering will be approximately $39,280,543 (or approximately $45,214,543 if the underwriters exercise their over-allotment option in full), based on a public offering price of $10.22 per Common Unit, after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us. We intend to use the net proceeds from this offering (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. See “Use of Proceeds.”
     
 Risk factors   See “Risk Factors” below and the other information included or incorporated by reference in this prospectus for a discussion of factors that you should consider carefully before deciding to invest in our securities.
     
Nasdaq symbol   Our common stock is listed on the Nasdaq Capital Market under the symbol “AEI.” We do not intend to apply for any listing of either of the Pre-funded Warrants or Warrants on the Nasdaq Capital Market or any other securities exchange or nationally recognized trading system, and we do not expect a market to develop for the Pre-funded Warrants, Series A Warrants or the Series B Warrants.

 

Thenumber of shares of common stock to be outstanding immediately after this offering is based upon 2,200,000 shares outstandingas of May 3, 2021, and excludes 6,380,000 shares of common stock issuable upon conversion of outstanding preferred stock.

 

  Unless otherwise indicated, this prospectus reflects and assumes the following:

 

  no sale of the Pre-funded Warrants in this offering, and no exercise of the Warrants or of the outstanding preferred stock described above; and
     
  no exercise by the underwriters of their over-allotment option.

 

 

6
 

 

 

INCORPORATIONOF CERTAIN INFORMATION BY REFERENCE

 

TheSEC allows us to “incorporate by reference” into this prospectus the information in other documents that we file withit. This means that we can disclose important information to you by referring you to those documents. The information incorporatedby reference is considered to be a part of this prospectus, and information in documents that we file later with the SEC willautomatically update and supersede information contained in documents filed earlier with the SEC or contained in this prospectus.We incorporate by reference in this prospectus the documents listed below and any future filings that we may make with the SECunder Sections 13(a), 13(c), 14, or 15(d) of the Exchange Act prior to the termination of the offering under this prospectus;provided, however, that we are not incorporating, in each case, any documents or information deemed to have been furnished andnot filed in accordance with SEC rules:

 

our Annual Report on Form 10-K for the year ended December 31, 2020, filed with the SEC on April 14, 2021;

   
our Current Reports on Form 8-K filed on January 7, 2021, January 12, 2021, January 15, 2021, February 4, 2021, February 11, 2021, February 12, 2021, March 5, 2021; March 18, 2021, May 4, 2021 and our Current Report on Form 8-K/A filed May 3, 2021;
   
the description of our common stock, which is contained in the Registration Statement on Form 8-A, as filed with the SEC on November 23, 2020, as updated by the description of our common stock contained in Exhibit 4.4 to our Annual Report on Form 10-K for the fiscal year ended December 31, 2020, filed with the SEC on April 14, 2021.

 

Additionally,all documents filed by us with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act (i) prior to effectivenessof this registration statement, and (ii) after the effective date of this registration statement and before the termination orcompletion of any offering hereunder, shall be deemed to be incorporated by reference into this prospectus from the respectivedates of filing of such documents, except that we do not incorporate any document or portion of a document that is “furnished”to the SEC, but not deemed “filed.”

 

Anystatement contained in this prospectus, or in a document incorporated or deemed to be incorporated by reference into this prospectuswill be deemed to be modified or superseded for purposes of this prospectus to the extent that a statement contained in this prospectusor any other subsequently filed document that is deemed to be incorporated by reference into this prospectus modifies or supersedesthe statement. Any statements so modified or superseded shall not be deemed, except as so modified or superseded, to constitutea part of this prospectus.

 

Wewill furnish without charge to you, on written or oral request, a copy of any or all of the documents incorporated by referencein this prospectus, including exhibits to these documents. You should direct any requests for documents to Alset EHome InternationalInc., Attention: Michael Gershon, Chief Legal Officer.

 

Youalso may access these filings on our website at www.alsetehomeintl.com. We do not incorporate the informationon our website into this prospectus and you should not consider any information on, or that can be accessed through, our websiteas part of this prospectus (other than those filings with the SEC that we specifically incorporate by reference into this prospectus).

 

 

7
 

 

RISKFACTORS

 

Investingin our securities involves a high degree of risk. You should carefully consider the risk factors set forth below and under thecaption “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2020, which are incorporatedby reference in this prospectus. See “Incorporation of Certain Information by Reference” and “Where You CanFind More Information.” Before making any investment decision, you should carefully consider these risks as well as otherinformation we include or incorporate by reference in this prospectus. The risks and uncertainties we describe are not the onlyones facing us. Additional risks and uncertainties that we are unaware of or that we believe are not material at the time couldalso materially adversely affect our business, financial condition or results of operations. In any case, the value of our commonstock could decline, and you could lose all or part of your investment. Please also see the section entitled “CautionaryNote Regarding Forward-Looking Statements.”

 

RisksRelated to this Offering

 

Wehave broad discretion in the use of the net proceeds from this offering and may not use them effectively.

 

Ourmanagement will have broad discretion in the application of the net proceeds from this offering and could spend the proceeds inways with which you may not agree. Accordingly, you will be relying on the judgment of our management with regard to the use ofthese net proceeds, and you will not have the opportunity, as part of your investment decision, to assess whether the proceedsare being used appropriately. It is possible that the proceeds will be invested or otherwise used in a way that does not yielda favorable, or any, return for our company. See the section entitled “Use of Proceeds” in this prospectus for a moredetailed discussion of our expected use of the net proceeds from this offering.

 

Wedo not intend to apply for any listing of the Pre-funded Warrants or Warrants on any exchange or nationally recognizedtrading system, and we do not expect a market to develop for the Pre-funded Warrants or Warrants.

 

Wedo not intend to apply for any listing of either of the Pre-funded Warrants or Warrants on the Nasdaq Capital Market or any othersecurities exchange or nationally recognized trading system, and we do not expect a market to develop for the Pre-funded Warrants,the Series A Warrants or the Series B Warrants. Without an active market, the liquidity of the Pre-funded Warrants and Warrantswill be limited. Further, the existence of the Pre-funded Warrants and Warrants may act to reduce both the trading volume andthe trading price of our common stock.

 

ThePre-funded Warrants and the Warrants are speculativein nature.

 

ThePre-funded Warrants and the Warrants offered in this offering do not confer any rights of common stock ownership on their holders, suchas voting rights or the right to receive dividends, but rather merely represent the right to acquire shares of our common stock at afixed price, and in the case of the Warrants, for a limited period of time. Specifically, a holder of a Series A Warrant or two SeriesB Warrants may exercise the right to acquire a share of common stock and pay an exercise price equal to 100% of the offering price perCommon Unit and 130% of the offering price per Common Unit, respectively, prior to the fifth anniversary of the original issuance date,upon which date any unexercised Warrants will expire and have no further value. A holder of a Pre-funded Warrant may exercise the rightto acquire a share of common stock and pay a nominal exercise price of $0.01 at any time. Upon exercise of the Pre-funded Warrants andthe Warrants, the holders thereof will be entitled to exercise the rights of a holder of common stock only as to matters for which therecord date occurs after the exercise date. If at any time the closing price per share of the common stock shall exceed 200% of the exerciseprice then in effect for five consecutive trading days on each of which the daily dollar volume of the common stock equals or exceeds$5,000,000, the Company, at its option, may redeem the Series A Warrants and Series B Warrants, in whole or in part, at a price of $0.001per share (subject to adjustment as provided therein).

 

Moreover,following this offering, the market value of the Pre-funded Warrants and the Warrants is uncertain. There can be no assurance that themarket price of our common stock will ever equal or exceed the exercise price of the Warrants or the price of the Pre-funded Units, and,consequently, whether it will ever be profitable for investors to exercise their Warrants or to the Pre-funded Warrants.

 

8
 

 

Ifyou purchase Common Units or Pre-funded Units in this offering, you will experience immediate dilution in the commonstock included in the Common Units or Pre-funded Units you purchase. You will experience further dilution if we issue additionalequity securities in future financing transactions.

 

Purchasersof Common Units or Pre-funded Units in this offering will pay a price per share of common stock included in the Common Unitsor Pre-funded Units you purchase that exceeds the net tangible book value per share of our common stock. Investors participatingin this offering will incur immediate and substantial dilution. Assuming no sale of Pre-funded Units and giving effect to ourreceipt of approximately $39 million of estimated net proceeds, after deducting underwriting discounts and commissions and estimatedoffering expenses payable by us from our sale of Common Units in this offering at an assumed public offering price of $10.22 perUnit, the last reported sale price of our common stock as reported on the Nasdaq Capital Market on April 29, 2021, our pro forma as adjustednet tangible book value as of December 31, 2020, would have been $96,381,880, or $7.54 per share (not including othertransactions after December 31, 2020, except this offering). This amount represents an immediate increase in net tangible book valueof $0.88 per share of our common stock to existing stockholders and an immediate dilution in net tangible book value of $2.68per share of our common stock to new investors purchasing in this offering. In addition, you could experience further dilution ifthe Warrants issued in this offering are exercised. See the section entitled “Dilution” below for a more detailed illustrationof the dilution you would incur if you purchase Common Units in this offering.

 

Ifwe issue additional common stock, or securities convertible into or exchangeable or exercisable for common stock, our stockholders,including investors who purchase shares of common stock in this offering, may experience additional dilution, and any such issuancesmay result in downward pressure on the price of our common stock. We also cannot assure you that we will be able to sell sharesor other securities in any future offering at a price per share that is equal to or greater than the price per share paid by investorsin this offering, and investors purchasing shares or other securities in the future could have rights superior to existing stockholders.

 

Youmay experience future dilution as a result of future equity offerings.

 

Tothe extent that we raise additional funds through the sale of equity or convertible debt securities, the issuance of such securitieswill result in dilution to our stockholders. We may sell shares or other securities in any other offering at a price per sharethat is less than the price per share paid by investors in this offering, and investors purchasing shares or other securitiesin the future could have rights superior to existing stockholders. The price per share at which we sell additional shares of ourcommon stock, or securities convertible or exchangeable into common stock, in future transactions may be higher or lower thanthe price per share paid by investors in this offering.

 

Futuresales, or the perception of future sales, of a substantial amount of our shares of common stock could depress the trading priceof our common stock.

 

Ifwe or our stockholders sell substantial amounts of our shares of common stock in the public market or if the market perceivesthat these sales could occur, the market price of shares of our common stock could decline. These sales may make it more difficultfor us to sell equity or equity-related securities in the future at a time and price that we deem appropriate, or to use equityas consideration for future acquisitions.

 

Asof May 3, 2021, we have 20,000,000 shares of common stock authorized and 2,200,000 shares of common stock outstanding. Of theseshares, 2,160,000 shares are freely tradable. We, our executive officers and directors, and our majority stockholder have enteredinto agreements with the underwriters not to sell or otherwise dispose of shares of our common stock for a period of six months commencingon the date of this offering, with certain exceptions. Immediately upon the expiration of this lock-up period, 8,540,000shares, assuming conversion of our outstanding shares of Series A Preferred Stock into 6,380,000 shares of common stock, willbe eligible for resale pursuant to Rule 144 under the Securities Act, subject to the volume, manner of sale, holding period and otherlimitations of Rule 144.

 

Concentrationof ownership of our common stock by our principal stockholder will limit new investors from influencing significant corporatedecisions.

 

Asof May 3, 2021, our Chief Executive Officer, Chan Heng Fai has the power to vote approximately 74.4% of our outstanding sharesof common stock through his ownership of our Series A Preferred Stock. He will be able to make decisions such as (i) making amendmentsto our certificate of incorporation and bylaws, (ii) whether to issue additional shares of common stock and preferred stock, includingto himself, (iii) employment decisions, including compensation arrangements, (iv) whether to enter into material transactionswith related parties, (v) election and removal of directors and (vi) any merger or other significant corporate transactions. Theinterests of Chan Heng Fai may not coincide with our interests or the interests of other stockholders.

 

Anincrease in our net asset value or market capitalization following this Offering could result in bonus payments to our Chief ExecutiveOfficer.

On February 8, 2021, we entered into an Executive Employment Agreement (the “Employment Agreement”) with our ChiefExecutive Officer. Under the Employment Agreement, Mr. Chan’s compensation will include a fixed salary of $1 per monthand two bonus payments each year consisting of: (i) one payment equal to Five Percent (5%) of the growth in market capitalizationthe Company experiences in any year; and (ii) one payment equal to Five Percent (5%) of the growth in net asset value the Companyexperiences in any year. To the extent this Offering contributes to an increase in our market capitalization and/or net assetvalue at December 31, 2021 as compared to December 31, 2020, we would be obligated to pay such bonus in cash or stock, at Mr.Chan’s election.

 

9
 

 

CAUTIONARYNOTE REGARDING FORWARD-LOOKING STATEMENTS

 

Thisprospectus and any free writing prospectus that we have authorized for use in connection with this offering, including the documentsthat we incorporate by reference, contain forward-looking statements concerning our business, operations and financial performanceand condition, as well as our plans, objectives and expectations for our business, operations and financial performance and condition.Any statements contained herein that are not statements of historical facts may be deemed to be forward-looking statements. Insome cases, you can identify forward-looking statements by terminology such as “anticipate,” “assume,”“believe,” “contemplate,” “continue,” “could,” “due,” “estimate,”“expect,” “goal,” “intend,” “may,” “objective,” “plan,”“predict,” “potential,” “positioned,” “seek,” “should,” “target,”“will,” “would” and other similar expressions that are predictions of or indicate future events and futuretrends, or the negative of these terms or other comparable terminology. These forward-looking statements include, but are notlimited to, statements about our future financial performance, including our revenue, costs of revenue, operating expenses andprofitability;

 

  statements about our future financial performance, including our revenue, costs of revenue, operating expenses and profitability;
     
  the sufficiency of our cash and cash equivalents to meet our liquidity needs;
     
  our predictions about the property development, digital transformation technology and biohealth businesses and their respective market trends;
     
  our ability to attract and retain customers in all our business segments to purchase our products and services;
     
  the availability of financing for smaller publicly-traded companies like us;
     
  our ability to successfully expand in our three principal business markets and into new markets and industry verticals;
     
  our ability to effectively manage our growth and future expenses; and
     
  our ability to respond to the potential risks resulting from the spread of the COVID-19 pandemic, and its potential impact on our operations.

 

Webelieve that it is important to communicate our future expectations to our investors. However, there may be events in the futurethat we are not able to accurately predict or control and that may cause our actual results to differ materially from the expectationswe describe in our forward-looking statements. These forward-looking statements are based on management’s current expectations,estimates, forecasts and projections about our business and the industry in which we operate and management’s beliefs andassumptions and are not guarantees of future performance or development and involve known and unknown risks, uncertainties andother factors that are in some cases beyond our control. As a result, any or all of our forward-looking statements in this prospectusmay turn out to be inaccurate. Factors that may cause actual results to differ materially from current expectations include, amongother things, those listed under “Risk Factors” and elsewhere in this prospectus. Potential investors are urged toconsider these factors carefully in evaluating the forward-looking statements. These forward-looking statements speak only asof the date of this prospectus. We assume no obligation to update or revise these forward-looking statements for any reason, evenif new information becomes available in the future.

 

Youshould not rely upon forward-looking statements as predictions of future events. Although we believe that the expectations reflectedin the forward- looking statements are reasonable, we cannot guarantee that the future results, levels of activity, performanceor events and circumstances reflected in the forward-looking statements will be achieved or occur. We undertake no obligationto update publicly any forward-looking statements for any reason after the date of this prospectus to conform these statementsto actual results or to changes in our expectations.

 

Youshould read this prospectus and any free writing prospectus that we have authorized for use in connection with this offering withthe understanding that our actual future results, levels of activity, performance and events and circumstances may be materiallydifferent from what we expect.

 

10
 

 

USEOF PROCEEDS

 

Weestimate that the net proceeds from this offering, assuming we sell only Common Units, will be approximately $39,280,543(or approximately $45,214,543 if the underwriter exercises its option in full to purchase additional shares of ourcommon stock), based upon an assumed public offering price of $10.22 per Common Unit, which is the last reported sale priceof our common stock as reported on the Nasdaq Capital Market on April 29, 2021, after deducting estimated underwriting discountsand commissions and estimated offering expenses payable by us. These amounts do not include the proceeds which we may receivein connection with the exercise of the Warrants offered hereby. We cannot predict when or if the Warrants will be exercised, andit is possible that the Warrants may expire and never be exercised.

 

Weintend to use the net proceeds (i) to fund possible acquisitions of new companies and additional properties, (ii) to fund thefurther 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 generalcorporate purposes.

 

Asignificant portion of the net proceeds of this offering may be used to fund possible acquisitions of new companies in the marketsin which we operate, or may operate in the future, and to acquire additional real estate development properties. We intend toacquire all or substantially all of an acquisition target’s voting stock and only in limited cases acquire less than 51%of the voting stock. We have no such acquisition agreements or commitments in place at this time.

 

Workingcapital and general corporate purposes may include amounts required to pay officers’ salaries, professional fees, ongoing publicreporting costs, office-related expenses and other corporate expenses, including interest and overhead. Working capital may also includefunds used for our sales and marketing and/or product enhancement efforts

 

Theexpected use of net proceeds from this offering represents our intention based upon our present plans and business conditions.We cannot predict with certainty all of the particular uses for the proceeds of this offering or the amounts that we will actuallyspend on the uses set forth above. Accordingly, our management will have significant flexibility in applying the net proceedsof this offering. The timing and amount of our actual expenditures will be based on many factors, including cash flows from operationsand the anticipated growth of our business. Pending their use, we intend to invest the net proceeds of this offering in a varietyof capital-preservation investments, including short- and intermediate-term, interest-bearing, investment-grade securities.

 

11
 

 

CAPITALIZATION

 

Thefollowing table sets forth our cash and cash equivalents and total capitalization as of December 31, 2020:

 

on an actual basis; and
   

on an adjusted basis to give effect to (i) our acquisition of 4,775,523 shares of American Pacific Bancorp, Inc.’s (“APB”) Class B common stock, representing 86.44% of the total issued and outstanding common stock of APB on March 12, 2021, (ii) the exchange of 6,380,000 shares of common stock into 6,380 shares of Series A Preferred Stock on May 3, 2021, and (iii) the sale and issuance of 4,207,436 shares of common stock being sold as part of the Common Units in this offering at an assumed public offering price of $10.22 per Common Unit, the last reported sale price of our common stock as reported on the Nasdaq Capital Market on April 29, 2021, assuming no exercise of the underwriters’ option, after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us

 

Thefollowing information is illustrative only of our cash and cash equivalents and capitalization following the completion of thisoffering and will change based on the actual initial public offering price and other terms of this offering determined at pricing.You should read this table together with “Management’s Discussion and Analysis of Financial Condition and Resultsof Operations” and our consolidated financial statements and the related notes included in our Annual Report on Form 10-Kfor the fiscal year ended December 31, 2020, which is incorporated by reference in this prospectus, and the consolidated financialstatements of APB, which is incorporated by reference in this prospectus.

 

   As of December 31, 2020 
   Actual   Pro Forma   As Adjusted 
   (Audited)   (Unaudited)   (Unaudited) 
Cash and restricted cash  $28,894,024   $31,235,456   $70,515,999 
Debt, net of debt discount   2,335,276    67,079,228    67,079,228 
Long-term debt, net of current portion and debt discount   636,362    636,362    636,362 
Stockholders’ equity:               
                
Preferred stock, $0.001 par value   -    -*   - 
Common stock, $0.001 par value   8,570    8,570*   12,777 
Additional paid-in capital   97,950,440    47,035,389    86,311,725 
Accumulated deficit   (43,010,991)   (46,758,719)   (46,758,719)
Accumulated Other Comprehensive Income   2,153,318    2,143,338    2,143,338 
Alset EHome International stockholders’ equity   57,101,337    2,428,578    41,709,121 
Non-controlling interests   37,622,517    37,980,325    37,980,325 
Total stockholders’ equity  $94,723,854   $40,408,903   $

79,689,446

 
Total capitalization**  $95,360,216   $41,045,265   $

80,325,808

 

 

*Notincluding the exchange of Chan Heng Fai’s common stock to preferred stock. The management expects that he will convert thepreferred stock back to common stock in a short period.

 

**Total capitalization = Long-term debt + Total stockholders’ equity

 

12
 

 

DILUTION

 

Ifyou invest in our Common Units in this offering, your ownership interest will be immediately diluted to the extent of thedifference between the public offering price per Common Unit paid by the purchasers of the Common Units consistingof shares of common stock and Warrants to purchase shares of common stock in this offering and the pro forma net tangible bookvalue per share of our common stock immediately after the closing of this offering.

 

Ournet tangible book value is the amount of our total tangible assets less our total liabilities. Net tangible book value per shareis our net tangible book value divided by the number of shares of common stock outstanding as of December 31, 2020. Our net tangiblebook value as of December 31, 2020 was $57,101,337, or $6.66 per share, based on 8,570,000 shares of our common stock outstandingas of December 31, 2020.

 

After giving effect to thesale and issuance by us of all of the Common Units (and shares of common stock included therein) in this offering at an assumed publicoffering price of $10.22 per Common Unit, the last reported sale price of our common stock as reported on the Nasdaq Capital Market onApril 29, 2021, and the receipt and application of the net proceeds, after deducting estimated underwriting discounts and commissionsand estimated offering expenses payable by us, assuming sale of Pre-funded Units in the offering and assuming that the underwriters donot exercise in full their option to purchase additional Common Units, our adjusted pro forma net tangible book value as of December31, 2020 (not including other transactions after December 31, 2020, except this offering) would have been approximately $96,381,880,or $7.54 per share of common stock. This represents an immediate increase in pro forma net tangible book value of $0.88 per share toour existing stockholders and an immediate dilution of $2.68 per share to investors purchasing in this offering.

 

    Amount 
Assumed public offering price per Common Unit   $10.22
Pro forma net tangible book value before offering   $6.66 
Increase in pro forma net tangible book value attributable to new investors   $0.88 
Pro forma as adjusted net tangible book value after offering   $7.54 
Dilution in pro forma net tangible book value to new investors   $2.68 

 

Thetables and calculations above are based on 8,570,000 shares of common stock outstanding as of December 31, 2020, which excludes:

 

shares of common stock underlying the Warrants to be issued in connection with this offering; and

   

shares of common stock and shares underlying Warrants issuable upon exercise of the underwriters’ overallotment option.

 

13
 

 

DESCRIPTIONOF SECURITIES

 

Thefollowing description summarizes important terms of our securities. For a complete description, you should refer to our certificateof incorporation and bylaws, forms of which are incorporated by reference to the exhibits to the registration statement of whichthis prospectus is a part, as well as the relevant portions of the Delaware law. References to our certificate of incorporationand bylaws are to our certificate of incorporation and our bylaws, respectively, each of which will become effective upon completionof this offering.

 

General

 

Ourauthorized capital stock consists of 20,000,000 shares of common stock with a $0.001 par value per share, and 5,000,000 sharesof preferred stock with a $0.001 par value per share, all of which shares of preferred stock will be undesignated. Our board ofdirectors may establish the rights and preferences of the preferred stock from time to time. As of May 3, 2021, there were 2,200,000shares of common stock issued and outstanding, and 6,380 shares of preferred stock were issued or outstanding.

 

CommonUnits

 

Each Common Unit being offeredin this offering consists of (a) one share of our common stock, (b) one Series A Warrant entitling the holder thereof to purchase oneshare of our common stock at an initial exercise of $     per whole share, 100% of the public offering price of aCommon Unit, exercisable until the fifth anniversary of the issuance date, and (c) one Series B Warrant entitling the holder thereofto purchase one-half of a share of our common stock at an initial exercise price of $     per whole share, 130% ofthe public offering price of a Common Unit, exercisable until the fifth anniversary of their issuance date. The common stock and Warrantsthat are part of the Common Units are immediately separable and will be issued separately in this offering, although they will have beenpurchased together in this offering.

 

Pre-fundedUnits

 

Each Pre-funded Unit beingoffered in this offering consists of (a) one Pre-funded Warrant, (b) one Series A Warrant entitling the holder thereof to purchase oneshare of our common stock at an initial exercise of $     per whole share, 100% of the public offering price of aCommon Unit, exercisable until the fifth anniversary of the issuance date, and (c) one Series B Warrant entitling the holder thereofto purchase one-half of a share of our common stock at an initial exercise price of $     per whole share, 130% ofthe public offering price of a Common Unit, exercisable until the fifth anniversary of their issuance date. The Pre-funded Warrants andWarrants that are part of the Pre-funded Units are immediately separable and will be issued separately in this offering, although theywill have been purchased together in this offering.

 

CommonStock

 

Eachholder of our common stock is entitled to one vote for each share on all matters to be voted upon by the stockholders and thereare no cumulative rights. Subject to any preferential rights of any outstanding preferred stock, holders of our common stock areentitled to receive ratably the dividends, if any, as may be declared from time to time by the board of directors out of legallyavailable funds. If there is a liquidation, dissolution or winding up of our company, holders of our common stock would be entitledto share in our assets remaining after the payment of liabilities and any preferential rights of any outstanding preferred stock.

 

Holdersof our common stock have no preemptive or conversion rights or other subscription rights, and there are no redemption or sinkingfund provisions applicable to the common stock. All outstanding shares of our common stock will be fully paid and non-assessable.The rights, preferences and privileges of the holders of our common stock are subject to, and may be adversely affected by, therights of the holders of shares of any series of preferred stock which we may designate and issue in the future.

 

PreferredStock

 

Underthe terms of our certificate of incorporation, our board of directors is authorized to issue shares of preferred stock in oneor more series without stockholder approval. Our board of directors has the discretion to determine the rights, preferences, privilegesand restrictions, including voting rights, dividend rights, conversion rights, redemption privileges and liquidation preferences,of each series of preferred stock.

 

14
 

 

Thepurpose of authorizing our board of directors to issue preferred stock and determine its rights and preferences is to eliminatedelays associated with a stockholder vote on specific issuances. The issuance of preferred stock, while providing flexibilityin connection with possible future acquisitions and other corporate purposes, will affect, and may adversely affect, the rightsof holders of common stock. It is not possible to state the actual effect of the issuance of any shares of preferred stock onthe rights of holders of common stock until the board of directors determines the specific rights attached to that preferred stock.The effects of issuing preferred stock could include one or more of the following:

 

  restricting dividends on the common stock;
     
  diluting the voting power of the common stock;
     
  impairing the liquidation rights of the common stock; or
     
  delaying or preventing changes in control or management of our company.

 

Wehave no present plans to issue any shares of preferred stock.

 

SeriesA Preferred Stock

 

OnMay 3, 2021, the Board of Directors of the Company approved the creation of a class of Series A Convertible Preferred Stock (the“Series A Preferred Stock”). An amendment to the Company’s Amended and Restated Certificate of Incorporation(the “Certificate of Incorporation”), which sets forth the rights and preferences of the Series A Preferred Stock,was filed with the Delaware Secretary of State on May 3, 2021 (the “Series A Designation”).

 

Pursuantto the Series A Designation, 6,380 shares of the Company’s preferred stock were designated Series A Preferred Stock. Holdersof the Series A Preferred Stock shall be entitled to receive dividends equal, on an as-if-converted basis, to and in the sameform as dividends actually paid on shares of the Company’s common stock when, as and if paid on shares of common stock.Each holder of outstanding Series A Preferred Stock is entitled to vote equal to the number of whole shares of common stock intowhich each share of the Series A Preferred Stock is convertible. Holders of Series A Preferred Stock are entitled, upon liquidationof the Company, to receive the same amount that a holder of Series A Preferred Stock would receive if the Series A Preferred Stockwere fully converted into common stock.

 

Onthe date on which an amendment to the Company’s Certificate of Incorporation to increase the Corporation’s authorizedshares of Common Stock has been filed with the Secretary of State of the State of Delaware, each share of Series A Preferred Stockshall convert automatically into 1,000 shares of the Company’s common stock.

 

Warrants

 

Pre-fundedWarrants Included in the Pre-funded Units

 

Theterm “pre-funded” refers to the fact that the purchase price of our common stock in this offering includes almostthe entire exercise price that will be paid under the Pre-funded Warrants, except for a nominal remaining exercise price of $0.01.The purpose of the Pre-funded Warrants is to enable investors that may have restrictions on their ability to beneficially ownmore than 4.99% (or, upon election of the holder, 9.99%) of our outstanding common stock following the consummation of this offeringthe opportunity to make an investment in the Company without triggering their ownership restrictions, by receiving Pre-fundedWarrants in lieu of our common stock which would result in such ownership of more than 4.99% (or 9.99%), and receive the abilityto exercise their option to purchase the shares underlying the Pre-funded Warrants at such nominal price at a later date.

 

Exerciseof Warrants. Each Pre-funded Warrant is exercisable for one share of our common stock, with an exercise price equal to $0.01 pershare, at any time that the Pre-funded Warrant is outstanding. There is no expiration date for the Pre-funded Warrants. The holderof a Pre-funded Warrant will not be deemed a holder of our underlying common stock until the Pre-funded Warrant is exercised.

 

Subjectto limited exceptions, a holder of Pre-funded Warrants will not have the right to exercise any portion of its Pre-funded Warrantsif the holder (together with such holder’s affiliates, and any persons acting as a group together with such holder or anyof such holder’s affiliates) would beneficially own a number of shares of common stock in excess of 4.99% (or, at the electionof the purchaser prior to the date of issuance, 9.99%) of the shares of our common stock then outstanding after giving effectto such exercise.

 

Theexercise price and the number of shares issuable upon exercise of the Pre-funded Warrants is subject to appropriate adjustmentin the event of recapitalization events, stock dividends, stock splits, stock combinations, reclassifications, reorganizationsor similar events affecting our common stock. The Pre-funded Warrant holders must pay the exercise price in cash upon exerciseof the Pre-funded Warrants, unless such Pre-funded Warrant holders are utilizing the cashless exercise provision of the Pre-fundedWarrants.

 

Uponthe holder’s exercise of a Pre-funded Warrant, we will issue the shares of common stock issuable upon exercise of the Pre-fundedWarrant within two trading days following our receipt of a notice of exercise, provided that payment of the exercise price hasbeen made (unless exercised to the extent permitted via the “cashless” exercise provision). Prior to the exerciseof any Pre-funded Warrants to purchase common stock, holders of the Pre-funded Warrants will not have any of the rights of holdersof the common stock purchasable upon exercise, including the right to vote, except as set forth therein.

 

Warrantholders may exercise Pre-funded Warrants only if the issuance of the shares of common stock upon exercise of the Pre-funded Warrantsis covered by an effective registration statement, or an exemption from registration is available under the Securities Act andthe securities laws of the state in which the holder resides. We intend to use commercially reasonable efforts to have the registrationstatement, of which this prospectus forms a part, effective when the Pre-funded Warrants are exercised. The Pre-funded Warrantholders must pay the exercise price in cash upon exercise of the Pre-funded Warrants unless there is not an effective registrationstatement or, if required, there is not an effective state law registration or exemption covering the issuance of the shares underlyingthe Pre-funded Warrants (in which case, the Pre-funded Warrants may only be exercised via a “cashless” exercise provision).

  

FundamentalTransaction. In the event we consummate a merger or consolidation with or into another person or other reorganization eventin which our common stock are converted or exchanged for securities, cash or other property, or we sell, lease, license, assign,transfer, convey or otherwise dispose of all or substantially all of our assets or we or another person acquire 50% or more ofour outstanding shares of common stock, then following such event, the holders of the Pre-funded Warrants will be entitled toreceive upon exercise of such Pre-funded Warrants the same kind and amount of securities, cash or property which the holders wouldhave received had they exercised their Pre-funded Warrants immediately prior to such fundamental transaction. Any successor tous or surviving entity shall assume the obligations under the Pre-funded Warrants.

 

ExchangeListing. We do not intend to apply for listing of the Pre-funded Warrants on any securities exchange or other trading system.

 

SeriesA Warrants Included in the Common Units and Pre-funded Units

 

Exerciseof Warrants. Each Series A Warrant is exercisable for one share of our common stock, with an exercise price equal to $     pershare at any time for up to five (5) years after the date of the closing of this offering. The Series A Warrants issued in thisoffering will be governed by the terms of a global Series A Warrant held in book-entry form. The holder of a Series A Warrantwill not be deemed a holder of our underlying common stock until the Series A Warrant is exercised.

 

Subjectto certain limitations as described below, the Series A Warrants are immediately exercisable upon issuance on the closing dateand expire on the five (5) year anniversary of the closing date. Subject to limited exceptions, a holder of Series A Warrantswill not have the right to exercise any portion of its Series A Warrants if the holder (together with such holder’s affiliates,and any persons acting as a group together with such holder or any of such holder’s affiliates) would beneficially own anumber of shares of common stock in excess of 4.99% (or, at the election of the purchaser prior to the date of issuance, 9.99%)of the shares of our common stock then outstanding after giving effect to such exercise.

 

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Theexercise price and the number of shares issuable upon exercise of the Series A Warrants is subject to appropriate adjustment inthe event of recapitalization events, stock dividends, stock splits, stock combinations, reclassifications, reorganizations orsimilar events affecting our common stock. The Series A Warrant holders must pay the exercise price in cash upon exercise of theSeries A Warrants, unless such Series A Warrant holders are utilizing the cashless exercise provision of the Series A Warrants.

 

Uponthe holder’s exercise of a Series A Warrant, we will issue the shares of common stock issuable upon exercise of the SeriesA Warrant within two trading days following our receipt of a notice of exercise, provided that payment of the exercise price hasbeen made (unless exercised to the extent permitted via the “cashless” exercise provision). Prior to the exerciseof any Series A Warrants to purchase common stock, holders of the Series A Warrants will not have any of the rights of holdersof the common stock purchasable upon exercise, including the right to vote, except as set forth therein.

 

Warrantholders may exercise Series A Warrants only if the issuance of the shares of common stock upon exercise of the Series A Warrantsis covered by an effective registration statement, or an exemption from registration is available under the Securities Act andthe securities laws of the state in which the holder resides. We intend to use commercially reasonable efforts to have the registrationstatement, of which this prospectus forms a part, effective when the Series A Warrants are exercised. The Series A Warrant holdersmust pay the exercise price in cash upon exercise of the Series A Warrants unless there is not an effective registration statementor, if required, there is not an effective state law registration or exemption covering the issuance of the shares underlyingthe Series A Warrants (in which case, the Series A Warrants may only be exercised via a “cashless” exercise provision).

  

ForcedRedemption. If at any time the closing price per share of the common stock shall exceed 200% of the exercise price then ineffect for five consecutive trading days on each of which the daily dollar volume of the common stock equals or exceeds $5,000,000,the Company, at its option, may redeem the Series A Warrants, in whole or in part, at a price of $0.001 per share (subject toadjustment as provided therein, the “Redemption Price”). The Company may exercise its redemption right by giving aredemption notice to the holder no more than 30 and no less than 10 calendar days before the date fixed specified in the redemptionnotice for redemption. On and after 5:00 p.m. (New York City time) on the date fixed for redemption, a holder shall have no rightswith respect to its Series A Warrant except to receive the Redemption Price.

 

FundamentalTransaction. In the event we consummate a merger or consolidation with or into another person or other reorganization eventin which our common stock are converted or exchanged for securities, cash or other property, or we sell, lease, license, assign,transfer, convey or otherwise dispose of all or substantially all of our assets or we or another person acquire 50% or more ofour outstanding shares of common stock, then following such event, the holders of the Series A Warrants will be entitled to receiveupon exercise of such Series A Warrants the same kind and amount of securities, cash or property which the holders would havereceived had they exercised their Series A Warrants immediately prior to such fundamental transaction. Any successor to us orsurviving entity shall assume the obligations under the Series A Warrants.

 

ExchangeListing. We do not intend to apply for listing of the Series A Warrants on any securities exchange or other trading system.

 

SeriesB Warrants Included in the Common Units and Pre-funded Units

 

Exerciseof Warrants. Each Series B Warrant is exercisable for one-half of a share of our common stock, with an exercise price equalto $           per share at any time up to five (5) years after the date ofthe closing of this offering. The Series B Warrants issued in this offering will be governed by the terms of a global Series BWarrant held in book-entry form. The holder of a Series B Warrant will not be deemed a holder of our underlying common stock untilthe Series B Warrant is exercised.

 

Subjectto certain limitations as described below the Series B Warrants are immediately exercisable upon issuance on the closing dateand expire on the five (5) year anniversary of the closing date. Subject to limited exceptions, a holder of Series B Warrantswill not have the right to exercise any portion of its Series B Warrants if the holder (together with such holder’s affiliates,and any persons acting as a group together with such holder or any of such holder’s affiliates) would beneficially own anumber of shares of common stock in excess of 4.99% (or, at the election of the purchaser prior to the date of issuance, 9.99%)of the shares of our common stock then outstanding after giving effect to such exercise.

 

Theexercise price and the number of shares issuable upon exercise of the Series B Warrants is subject to appropriate adjustment inthe event of recapitalization events, stock dividends, stock splits, stock combinations, reclassifications, reorganizations orsimilar events affecting our common stock. The Series B Warrant holders must pay the exercise price in cash upon exercise of theSeries B Warrants, unless such Series B Warrant holders are utilizing the cashless exercise provision of the Series B Warrants.

 

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Uponthe holder’s exercise of a Series B Warrant, we will issue the shares of common stock issuable upon exercise of the SeriesB Warrant within two trading days following our receipt of a notice of exercise, provided that payment of the exercise price hasbeen made (unless exercised to the extent permitted via the “cashless” exercise provision). Prior to the exerciseof any Series B Warrants to purchase common stock, holders of the Series B Warrants will not have any of the rights of holdersof the common stock purchasable upon exercise, including the right to vote, except as set forth therein.

 

Warrantholders may exercise Series B Warrants only if the issuance of the shares of common stock upon exercise of the Series B Warrantsare covered by an effective registration statement, or an exemption from registration is available under the Securities Act andthe securities laws of the state in which the holder resides. We intend to use commercially reasonable efforts to have the registrationstatement, of which this prospectus forms a part, effective when the Series B Warrants are exercised. The Series B Warrant holdersmust pay the exercise price in cash upon exercise of the Series B Warrants unless there is not an effective registration statementor, if required, there is not an effective state law registration or exemption covering the issuance of the shares underlyingthe Series B Warrants (in which case, the Series B Warrants may only be exercised via a “cashless” exercise provision).

 

ForcedRedemption. If at any time the closing price per share of the common stock shall exceed 200% of the exercise price then ineffect for five consecutive trading days on each of which the daily dollar volume of the common stock equals or exceeds $5,000,000,the Company, at its option, may redeem the Series B Warrants, in whole or in part, at a price of $0.001 per share (subject toadjustment as provided therein, the “Redemption Price”). The Company may exercise its redemption right by giving aredemption notice to the holder no more than 30 and no less than 10 calendar days before the date fixed specified in the redemptionnotice for redemption. On and after 5:00 p.m. (New York City time) on the date fixed for redemption, a holder shall have no rightswith respect to its Series B Warrant except to receive the Redemption Price.

 

FundamentalTransaction. In the event we consummate a merger or consolidation with or into another person or other reorganization eventin which our common stock are converted or exchanged for securities, cash or other property, or we sell, lease, license, assign,transfer, convey or otherwise dispose of all or substantially all of our assets or we or another person acquire 50% or more ofour outstanding shares of common stock, then following such event, the holders of the Series B Warrants will be entitled to receiveupon exercise of such Series B Warrants the same kind and amount of securities, cash or property which the holders would havereceived had they exercised their Series B Warrants immediately prior to such fundamental transaction. Any successor to us orsurviving entity shall assume the obligations under the Series B Warrants.

 

ExchangeListing. We do not intend to apply for listing of the Series B Warrants on any securities exchange or other trading system.

 

WarrantsGenerally

 

Book-EntryForm

 

TheWarrants will be registered securities and will be evidenced by a global certificate, which will be deposited on behalf of theCompany with a custodian for The Depository Trust Company (“DTC”) and registered in the name of Cede & Co., anominee of DTC. If DTC subsequently ceases to make its book-entry settlement system available for the Warrants, the Company mayinstruct the Warrant Agent regarding making other arrangements for book-entry settlement. In the event that any Warrants are noteligible for, or it is no longer necessary to have the Warrants available in, book-entry form, then the Company may instruct theWarrant Agent to provide written instructions to DTC to deliver to the Warrant Agent for cancellation the global certificate,and the Company will instruct the Warrant Agent to deliver to DTC separate Warrant certificates as requested through the DTC system.

 

Priorto due presentment for registration of transfer of any Warrant, the Company and the Warrant Agent may deem and treat the personin whose name that Warrant will be registered on the Warrant register (the “holder”) as the absolute owner of suchWarrant for purposes of any exercise thereof, and for all other purposes, and neither the Company nor the Warrant Agent will beaffected by any notice to the contrary. Notwithstanding the foregoing, nothing herein will prevent the Company, the Warrant Agentor any agent of the Company or the Warrant Agent from giving effect to any written certification, proxy or other authorizationfurnished by DTC governing the exercise of the rights of a holder of a beneficial interest in any Warrant. The rights of beneficialowners in a Warrant evidenced by the global certificate will be exercised by the holder or a participant through the DTC system,except to the extent set forth herein or in the global certificate.

 

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Aholder whose interest in a global Warrant is a beneficial interest in a global Warrant held in book-entry form through DTC (oranother established clearing corporation performing similar functions), will effect exercises by delivering to DTC (or such otherclearing corporation, as applicable) the appropriate instruction form for exercise, complying with the procedures to effect exercisethat are required by DTC (or such other clearing corporation, as applicable).

 

BeneficialOwnership Exercise Limitation

 

Eachholder of the Warrants will be subject to a requirement that they will not have the right to exercise the Warrants to the extentthat, after giving effect to such exercise, such holder (together with its affiliates) would beneficially own in excess of 4.99%(subject to increase at the option of the holder to 9.99% upon 61 days’ prior written notice) of the shares of our commonstock outstanding immediately after giving effect to such exercise.

 

WarrantAgent

 

TheSeries A Warrants and Series B Warrants will be issued in registered form under separate warrant agent agreements (each a “WarrantAgent Agreement”) between us and our warrant agent, Direct Transfer, LLC (the “Warrant Agent”). The materialprovisions of the Warrants are set forth herein, and a copy of each of the Warrant Agent Agreements are filed with the SEC asan exhibit to the registration statement of which this prospectus forms a part.

 

Effectof Certain Provisions of our Charter and Bylaws and the Delaware Anti-Takeover Statute

 

Certainprovisions of Delaware law, our certificate of incorporation and our bylaws contain provisions that could have the effect of delaying,deferring or discouraging another party from acquiring control of us. These provisions, which are summarized below, may have theeffect of discouraging coercive takeover practices and inadequate takeover bids. These provisions are also designed, in part,to encourage persons seeking to acquire control of us to first negotiate with our board of directors. We believe that the benefitsof increased protection of our potential ability to negotiate with an unfriendly or unsolicited acquirer outweigh the disadvantagesof discouraging a proposal to acquire us because negotiation of these proposals could result in an improvement of their terms.

 

Nocumulative voting

 

TheDelaware General Corporation Law provides that stockholders are not entitled to the right to cumulate votes in the election ofdirectors unless our certificate of incorporation provides otherwise. Our certificate of incorporation and bylaws prohibit cumulativevoting in the election of directors.

 

Undesignatedpreferred stock

 

Theability to authorize undesignated preferred stock makes it possible for our board of directors to issue one or more series ofpreferred stock with voting or other rights or preferences that could impede the success of any attempt to change control. Theseand other provisions may have the effect of deferring hostile takeovers or delaying changes in control or management of our company.

 

Callingof special meetings of stockholders

 

Ourcharter documents provide that a special meeting of stockholders may be called only by resolution adopted by our board of directors,chairman of the board of directors or chief executive officer or upon the written request of stockholders owning at least 33.3%of the outstanding common stock. Stockholders owning less than such required amount may not call a special meeting, which maydelay the ability of our stockholders to force consideration of a proposal or for holders controlling a majority of our capitalstock to take any action, including the removal of directors.

 

Requirementsfor advance notification of stockholder nominations and proposals

 

Ourbylaws establish advance notice procedures with respect to stockholder proposals and the nomination of candidates for electionas directors, other than nominations made by or at the direction of the board of directors or a committee of the board of directors.However, our bylaws may have the effect of precluding the conduct of certain business at a meeting if the proper procedures arenot followed. These provisions may also discourage or deter a potential acquirer from conducting a solicitation of proxies toelect the acquirer’s own slate of directors or otherwise attempting to obtain control of our company.

 

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Section203 of the Delaware General Corporation Law

 

Uponcompletion of this offering, we will be subject to the provisions of Section 203 of the Delaware General Corporation Law. In general,Section 203 prohibits a publicly held Delaware corporation from engaging in a “business combination” with an “interestedstockholder” for a three-year period following the time that this stockholder becomes an interested stockholder, unlessthe business combination is approved in a prescribed manner. Under Section 203, a business combination between a corporation andan interested stockholder is prohibited unless it satisfies one of the following conditions:

 

  before the stockholder became interested, our board of directors approved either the business combination or the transaction which resulted in the stockholder becoming an interested stockholder;
     
  upon consummation of the transaction which resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced, excluding for purposes of determining the voting stock outstanding, shares owned by persons who are directors and also officers, and employee stock plans, in some instances, but not the outstanding voting stock owned by the interested stockholder; or
     
  at or after the time the stockholder became interested, the business combination was approved by our board of directors and authorized at an annual or special meeting of the stockholders by the affirmative vote of at least two-thirds of the outstanding voting stock which is not owned by the interested stockholder.

 

Section203 defines a business combination to include:

 

  any merger or consolidation involving the corporation and the interested stockholder;
     
  any sale, transfer, lease, pledge or other disposition involving the interested stockholder of 10% or more of the assets of the corporation;
     
  subject to exceptions, any transaction that results in the issuance or transfer by the corporation of any stock of the corporation to the interested stockholder;
     
  subject to exceptions, any transaction involving the corporation that has the effect of increasing the proportionate share of the stock of any class or series of the corporation beneficially owned by the interested stockholder; and
     
  the receipt by the interested stockholder of the benefit of any loans, advances, guarantees, pledges or other financial benefits provided by or through the corporation.

 

Ingeneral, Section 203 defines an interested stockholder as any entity or person beneficially owning 15% or more of the outstandingvoting stock of the corporation and any entity or person affiliated with or controlling or controlled by the entity or person.

 

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Choiceof Forum

 

Ourcertificate of incorporation provides that, unless we consent in writing to the selection of an alternative forum, the Court ofChancery of the State of Delaware will be the sole and exclusive forum for (i) any derivative action or proceeding brought onour behalf, (ii) any action asserting a claim of breach of a fiduciary duty owed by our directors, officers or other employeesto us or to our stockholders, (iii) any action asserting a claim against us or any director, officer or other employee arisingpursuant to any provision of the Delaware General Corporation Law, our certificate of incorporation or bylaws or (iv) any actionasserting a claim governed by the internal affairs doctrine, in all cases to the fullest extent permitted by law and subject tothe court having personal jurisdiction over the indispensable parties named as defendants; provided that these provisions of ourcertificate of incorporation will not apply to suits brought to enforce a duty or liability created by the Exchange Act, or anyother claim for which the federal courts have exclusive jurisdiction. Our certificate of incorporation further provides that thefederal district courts of the United States of America will be the exclusive forum for resolving any complaint asserting a causeof action arising under the Securities Act, unless we consent in writing to the selection of an alternative forum.

 

Limitationsof Liability and Indemnification

 

Section145 of the Delaware General Corporation Law (the “DGCL”) provides for, under certain circumstances, the indemnificationof our officers, directors, employees and agents against liabilities that they may incur in such capacities. A summary of thecircumstances in which such indemnification provided for is contained herein.

 

Ingeneral, the statute provides that any director, officer, employee or agent of a corporation may be indemnified against expenses(including attorneys’ fees), judgments, fines and amounts paid in settlement, actually and reasonably incurred in a proceeding(including any civil, criminal, administrative or investigative proceeding) to which the individual was a party by reason of suchstatus. Such indemnity may be provided if the indemnified person’s actions resulting in the liabilities: (i) were takenin good faith; (ii) were reasonably believed to have been in or not opposed to our best interest; and (iii) with respect to anycriminal action, such person had no reasonable cause to believe the actions were unlawful. Unless ordered by a court, indemnificationgenerally may be awarded only after a determination of independent members of the Board of Directors or a committee thereof, byindependent legal counsel or by vote of the stockholders that the applicable standard of conduct was met by the individual tobe indemnified.

 

Thestatutory provisions further provide that to the extent a director, officer, employee or agent is wholly successful on the meritsor otherwise in defense of any proceeding to which he was a party, he is entitled to receive indemnification against expenses,including attorneys’ fees, actually and reasonably incurred in connection with the proceeding.

 

Indemnificationin connection with a proceeding by us or in our right in which the director, officer, employee or agent is successful is permittedonly with respect to expenses, including attorneys’ fees actually and reasonably incurred in connection with the defense.In such actions, the person to be indemnified must have acted in good faith, in a manner believed to have been in our best interestand must not have been adjudged liable to us unless and only to the extent that the Court of Chancery or the court in which suchaction or suit was brought shall determine upon application that, despite the adjudication of liability, in view of all the circumstancesof the case, such person is fairly and reasonably entitled to indemnity for such expense which the Court of Chancery or such othercourt shall deem proper. Indemnification is otherwise prohibited in connection with a proceeding brought on our behalf in whicha director is adjudged liable to us, or in connection with any proceeding charging improper personal benefit to the director inwhich the director is adjudged liable for receipt of an improper personal benefit.

 

Delawarelaw authorizes us to reimburse or pay reasonable expenses incurred by a director, officer, employee or agent in connection witha proceeding in advance of a final disposition of the matter. Such advances of expenses are permitted if the person furnishesto us a written agreement to repay such advances if it is determined that he is not entitled to be indemnified by us.

 

Thestatutory section cited above further specifies that any provisions for indemnification of or advances for expenses does not excludeother rights under our certificate of incorporation, bylaws, resolutions of our stockholders or disinterested directors, or otherwise.These indemnification provisions continue for a person who has ceased to be a director, officer, employee or agent of the corporationand inure to the benefit of the heirs, executors and administrators of such persons.

 

Thestatutory provision cited above also grants us the power to purchase and maintain insurance policies that protect any director,officer, employee or agent against any liability asserted against or incurred by him in such capacity arising out of his statusas such. Such policies may provide for indemnification whether or not the corporation would otherwise have the power to providefor it.

 

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OurCertificate of Incorporation provides that to the fullest extent permitted by the DGCL, as the same exists or may hereafter beamended, a director of our company shall not be personally liable to our company or its stockholders for monetary damages forbreach of fiduciary duty as a director.

 

Ourbylaws provide that each person who was or is made a party to, or is threatened to be made a party to, or is involved in any action,suit, or proceeding, whether civil, criminal, administrative, or investigative, by reason of the fact that he or she is or wasa director or officer of our company or is or was serving at the request of our company as a director, officer, employee, or agentof another corporation or of a partnership, joint venture, trust, or other enterprise, including service with respect to employeebenefit plans, whether the basis of such proceeding is alleged action in an official capacity as such director, officer, employee,or agent, or in any other capacity while serving as such director, officer, employee, or agent, shall be indemnified and heldharmless by our company to the fullest extent permitted by the DGCL, as the same exists or may hereafter be amended, against allexpense, liability, and loss (including attorneys’ fees, judgments, fines, other expenses and losses, amounts paid or tobe paid in settlement, and excise taxes or penalties arising under the Employee Retirement Income Security Act of 1974) reasonablyincurred or suffered by such person in connection therewith, and such indemnification shall continue as to a person who has ceasedto be a director, officer, employee, or agent, and shall inure to the benefit of his or her heirs, executors, and administrators.

 

Insofaras indemnification for liabilities arising under the Securities Act may be permitted to directors, officers or persons controllingus pursuant to the foregoing provisions, or otherwise, we have been advised that in the opinion of the SEC, such indemnificationis against public policy as expressed in the Act and is, therefore, unenforceable.

 

ExchangeListing

 

Ourcommon stock is listed for trading on the Nasdaq Capital Market under the symbol “AEI.”

 

TransferAgent and Registrar

 

Thetransfer agent and registrar for our common stock is Direct Transfer, LLC, Raleigh, North Carolina.

 

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UNDERWRITING

 

AegisCapital Corp. (“Aegis”) is acting as the representative of the underwriters and the book-running manager of this offering.Under the terms of an underwriting agreement, which is filed as an exhibit to the registration statement, each of the underwritersnamed below has severally agreed to purchase from us the respective number of Common Units and Pre-funded Units shown oppositeits name below:

 

Underwriter  Number of Common Units   Number of Pre-funded Units 
Aegis Capital Corp.                      

 

Theunderwriting agreement provides that the underwriters’ obligation to purchase units depends on the satisfaction ofthe conditions contained in the underwriting agreement including:

 

the representations and warranties made by us to the underwriters are true;
   
there is no material change in our business or the financial markets; and
   
we deliver customary closing documents to the underwriters.

 

UnderwritingCommissions and Discounts and Expenses

 

Thefollowing table shows the per unit and total underwriting discounts and commissions we will pay to Aegis. These amountsare shown assuming both no exercise and full exercise of the underwriters’ option to purchase additional securities.

 

           Total 
   Per Common Unit  

Per Pre-funded

Unit

  

No

Exercise

  

Full

Exercise

 
Public offering price           $            $          $        
Underwriting discounts and commissions to be paid by us (6.50%):       $   $   $ 
Non-accountable expense allowance (1.5%) (1)       $   $   $ 
Proceeds, before expenses, to us       $   $   $ 

 

(1) We have agreed to pay a non-accountable expense allowance to the representative equal to 1.5% of the gross proceeds received in this offering.

 

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We estimate that the total expenses of the offering payable by us, excluding underwriting discounts and commissions, will be approximately $ , including a 1.5% non-accountable expense allowance. We have also agreed to reimburse the underwriters for certain of their expenses, including “roadshow”, diligence, and reasonable legal fees and disbursements, in an amount not to exceed $150,000 in the aggregate.

 

Over-AllotmentOption

 

Wehave granted the underwriters an over-allotment option. This option, which is exercisable for up to 45 days after the date of thisprospectus, permits the underwriters to purchase additional shares of common stock and/or Pre-Funded Warrants, representing 15% ofthe common stock and Pre-Funded Warrants sold in the offering and/or additional Warrants, representing 15% of the Warrants sold inthe offering. The purchase price to be paid by the underwriters per additional share of common stock shall be equal to the publicoffering price of one Common Unit, less the underwriting discount, the purchase price to be paid per Pre-funded Warrant shall beequal to the public offering price of one Pre-funded Unit, and the purchase price to be paid per additional Warrant shall be $0.01.If this option is exercised in full, the total price to the public will be $        and thetotal net proceeds, before expenses, to us will be $      .

 

Stabilization

 

Inaccordance with Regulation M under the Exchange Act, the underwriters may engage in activities that stabilize, maintain or otherwiseaffect the price of our common stock, including short sales and purchases to cover positions created by short positions, stabilizingtransactions, syndicate covering transactions, penalty bids and passive market making.

 

  Short positions involve sales by the underwriters of shares in excess of the number of shares the underwriters are obligated to purchase, which creates a syndicate short position. The short position may be either a covered short position or a naked short position. In a covered short position, the number of shares involved in the sales made by the underwriters in excess of the number of shares they are obligated to purchase is not greater than the number of shares that they may purchase by exercising their option to purchase additional shares. In a naked short position, the number of shares involved is greater than the number of shares in their option to purchase additional shares. The underwriters may close out any short position by either exercising their option to purchase additional shares or purchasing shares in the open market.

 

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  Stabilizing transactions permit bids to purchase the underlying security as long as the stabilizing bids do not exceed a specific maximum price.
     
  Syndicate covering transactions involve purchases of our common stock in the open market after the distribution has been completed to cover syndicate short positions. In determining the source of shares to close out the short position, the underwriters will consider, among other things, the price of shares available for purchase in the open market as compared to the price at which they may purchase shares through the underwriters’ option to purchase additional shares. If the underwriters sell more shares than could be covered by the underwriters’ option to purchase additional shares, thereby creating a naked short position, the position can only be closed out by buying shares in the open market. A naked short position is more likely to be created if the underwriters are concerned that there could be downward pressure on the price of the shares in the open market after pricing that could adversely affect investors who purchase in the offering.
     
  Penalty bids permit the representative to reclaim a selling concession from a syndicate member when the common stock originally sold by the syndicate member is purchased in a stabilizing or syndicate covering transaction to cover syndicate short positions.
     
  In passive market making, market makers in our common stock who are underwriters or prospective underwriters may, subject to limitations, make bids for or purchase shares of our common stock until the time, if any, at which a stabilizing bid is made.

 

Theseactivities may have the effect of raising or maintaining the market price of our common stock or preventing or retarding a declinein the market price of our common stock. As a result of these activities, the price of our common stock may be higher than theprice that might otherwise exist in the open market. These transactions may be effected on Nasdaq or otherwise and, if commenced,may be discontinued at any time.

 

Neitherwe nor any of the underwriters make any representation or prediction as to the direction or magnitude of any effect that the transactionsdescribed above may have on the price of our common stock. In addition, neither we nor any of the underwriters make any representationthat the Representative will engage in these stabilizing transactions or that any transaction, once commenced, will not be discontinuedwithout notice.

 

OfferingPrice Determination

 

Thepublic offering price was negotiated between the representative and us. In determining the public offering price of our Units,the representative considered:

 

the history and prospects for the industry in which we compete;
   
our financial information;
   
the ability of our management and our business potential and earning prospects;
   
the prevailing securities markets at the time of this offering; and
   
the recent market prices of, and the demand for, publicly traded shares of generally comparable companies, as well as the recent market price of our Company’s common stock.

 

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Indemnification

 

Wehave agreed to indemnify Aegis, its affiliates an each person controlling Aegis against any losses, claims, damages, judgments,assessments, costs, and other liabilities, as the same are incurred (including the reasonable fees and expenses of counsel), relatingto or arising out of the offering, undertaken in good faith.

 

DiscretionaryAccounts

 

Theunderwriters have informed us that they do not expect to make sales to accounts over which they exercise discretionary authorityin excess of 5% of the shares of our common stock being offered in this offering.

 

Lock-UpAgreements

 

Allof our directors and executive officers have agreed that, for a period of ninety (90) days, after the date of the offering, subjectto certain limited exceptions, they will not directly or indirectly, without the prior written consent of Aegis, (a) offer, sell,or otherwise transfer or dispose of, directly or indirectly, any shares of capital stock of the Company or any securities convertibleinto or exercisable or exchangeable for shares of capital stock of the Company; or (b) file or caused to be filed any registrationstatement with the Commission relating to the offering of any shares of capital stock of the Company or any securities convertibleinto or exercisable or exchangeable for shares of capital stock of the Company. 

Theprior sentence will not apply to (i) the shares to be sold pursuant to the Underwriting Agreement, (ii) any shares of common stockissued upon the exercise of an option or other security outstanding on the date of the Offering, (iii) such issuances of optionsor grants of restricted stock or other equity-based awards under the Company’s 2018 Incentive Compensation Plan and theissuance of shares issuable upon exercise of any such equity-based awards, (iv) the filing of registration statements on FormS-8, (v) the issuance of securities to affiliates and subsidiaries of the Company, and, (vi) the issuance of securities in connectionwith mergers, acquisitions, joint ventures, licensing arrangements or any other similar non-capital raising transactions.

 

Aegis,in its sole discretion, may release the common stock and other securities subject to the lock-up agreements described above inwhole or in part at any time. When determining whether or not to release common stock and other securities from lock-up agreements,Aegis will consider, among other factors, the holder’s reasons for requesting the release, the number of shares of commonstock and other securities for which the release is being requested and market conditions at the time.

 

We have agreed that,for a period of one hundred and twenty (120) days following the Closing Date, the Company shall not, without prior written consentof Aegis, (i) issue, enter into any agreement to issue, offer, pledge, sell, contract to sell, sell any option or contract topurchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, lend or otherwise transferor dispose of any shares of Common Stock, other capital stock of the Company or Common Stock Equivalents, including any at-the-marketoffering or Variable Rate Transaction, (ii) enter into any swap or other agreement, arrangement, hedge or transaction that transfersto another, in whole or in part, directly or indirectly, any of the economic consequences of ownership of Common Stock, othercapital stock of the Company or Common Stock Equivalents, whether any transaction is to be settled by delivery of Common Stockor other capital stock of the Company, other securities, in cash or otherwise, (iii) file or cause the filing of any registrationstatement under the Securities Act with respect to any shares of Common Stock or other capital stock of the Company or CommonStock Equivalents, other than a Registration Statement on Form S-8, or (iv) publicly announce an intention to do any of the foregoing.

 

The prior sentencewill not apply in respect of (i) an Exempt Issuance (except that no Variable Rate Transaction shall be an Exempt Issuance), (ii)an “at-the-market” facility after the first ninety (90) days following the closing date, or (iii) issuances by affiliatesor subsidiaries. “Exempt Issuance” means the issuance of (a) Common Stock or options to employees, service providers,officers or directors of the Company pursuant to any stock or option plan duly adopted for such purpose by the Board of Directorsor a committee of non-employee directors established for such purpose for services rendered to the Company, (b) securities issuedor issuable upon the exercise or exchange of or conversion of any securities exercisable or exchangeable for or convertible intoCommon Stock issued and outstanding on the date of the underwriting agreement, provided that such securities have not been amendedsince the date of the underwriting agreement to increase the number of such securities or to decrease the exercise price, exchangeprice or conversion price of such securities, (c) securities issued pursuant to acquisitions or strategic transactions approvedby a majority of the disinterested directors of the Company, provided that such securities are issued as “restricted securities”(as defined in Rule 144) and carry no registration rights that require or permit the filing of any registration statement in connectiontherewith within ninety (90) days following the closing date, but shall not include a transaction in which the Company is issuingsecurities primarily for the purpose of raising capital or to an entity whose primary business is investing in securities and(d) the issuance of Common Stock and securities exercisable or exchangeable for or convertible into Common Stock to affiliatesand subsidiaries of the Company, however, that any sales by parties to the lock-ups shall be subject to the lock-up agreements.

 

OtherRelationships

 

Aegismay in the future provide us and our affiliates with investment banking and financial advisory services for which Aegis may inthe future receive customary fees. Aegis may release, or authorize us to release, as the case may be, the common stock and othersecurities subject to the lock-up agreements described above in whole or in part at any time with or without notice.

 

Inconnection with our initial public offering, on November 23, 2020, we entered into an underwriting agreement with Aegis pursuantto which we paid Aegis an aggregate of $1,360,800 in commissions and non-accountable expenses. In addition, we issued Aegis warrantsto purchase 108,000 shares of our common stock at an exercise price of $9.80 per share.

 

Offerrestrictions outside the United States

 

Otherthan in the United States, no action has been taken by us or the underwriter that would permit a public offering of the securitiesoffered by this prospectus in any jurisdiction where action for that purpose is required. The securities offered by this prospectusmay not be offered or sold, directly or indirectly, nor may this prospectus or any other offering material or advertisements inconnection with the offer and sale of any such securities be distributed or published in any jurisdiction, except under circumstancesthat will result in compliance with the applicable rules and regulations of that jurisdiction. Persons who come into possessionof this prospectus are advised to inform themselves about and to observe any restrictions relating to the offering and the distributionof this prospectus. This prospectus does not constitute an offer to sell or a solicitation of an offer to buy any securities offeredby this prospectus in any jurisdiction in which such an offer or a solicitation is unlawful.

 

25
 

 

ElectronicDistribution

 

Aprospectus in electronic format may be made available on the websites maintained by one or more of the underwriters or sellinggroup members, if any, participating in the offering. The Representative may allocate a number of shares to the underwriters andselling group members, if any, for sale to their online brokerage account holders. Any such allocations for online distributionswill be made by the representative on the same basis as other allocations.

 

Listing

 

Ourcommon stock listed on the Nasdaq Capital Market under the symbol “AEI.”

 

TransferAgent and Registrar

 

Thetransfer agent and registrar for our common stock is Direct Transfer, LLC, Raleigh, North Carolina.

 

INDEMNIFICATIONFOR SECURITIES ACT LIABILITIES

 

Section145 of the Delaware General Corporation Law, as amended, authorizes us to indemnify any director or officer under certain prescribedcircumstances and subject to certain limitations against certain costs and expenses, including attorney’s fees actuallyand reasonably incurred in connection with any action, suit or proceeding, whether civil, criminal, administrative or investigative,to which a person is a party by reason of being one of our directors or officers if it is determined that such person acted inaccordance with the applicable standard of conduct set forth in such statutory provisions. Our certificate of incorporation containsprovisions relating to the indemnification of director and officers and our bylaws extend such indemnities to the full extentpermitted by Delaware law. We may also purchase and maintain insurance for the benefit of any director or officer, which may coverclaims for which we could not indemnify such persons.

 

Insofaras indemnification for liabilities arising under the Securities Act may be permitted to directors, officers or persons controllingus pursuant to the foregoing provisions, or otherwise, we have been advised that in the opinion of the SEC, such indemnificationis against public policy as expressed in the Act and is, therefore, unenforceable.

 

LEGALMATTERS

 

SichenziaRoss Ference LLP, New York, New York, as our counsel, will pass upon the validity of the issuance of the shares of our commonstock being offered by this prospectus. The firm owns 10,000 shares of our common stock. Kaufman & Canoles, P.C., Richmond,Virginia, is acting as counsel for the underwriter in connection with this offering.

 

EXPERTS

 

Theconsolidated financial statements of the Company as of December 31, 2020 incorporated by reference in this registration statementhave been so included in reliance on the report of Briggs & Veselka Co., an independent registered public accounting firm,appearing elsewhere herein and in this registration statement, given on the authority of said firm as experts in auditing andaccounting.

 

Theconsolidated financial statements of the Company as of December 31, 2019 incorporated by reference in this registration statementhave been so included in reliance on the report of Rosenberg Rich Baker Berman, P.A., an independent registered public accountingfirm, appearing elsewhere herein and in this registration statement, given on the authority of said firm as experts in auditingand accounting.

 

Theconsolidated financial statements American Pacific Bancorp, Inc. as of December 31, 2020 incorporated by reference in this registrationstatement have been so included in reliance on the report of Lo and Kwong C.P.A. & Co, an independent registered public accountingfirm, appearing elsewhere herein and in this registration statement, given on the authority of said firm as experts in auditingand accounting.

 

26
 

 

WHEREYOU CAN FIND MORE INFORMATION

 

Wehave filed with the SEC a registration statement on Form S-1 (including the exhibits, schedules and amendments to the registrationstatement) under the Securities Act with respect to the shares of our common stock offered by this prospectus. This prospectusdoes not contain all the information set forth in the registration statement. For further information with respect to us and theshares of our common stock to be sold in this offering, we refer you to the registration statement. Statements contained in thisprospectus as to the contents of any contract, agreement or other documents to which we make reference are not necessarily complete.In each instance, we refer you to the copy of such contract, agreement or other document filed as an exhibit to the registrationstatement.

 

Weare subject to the reporting and information requirements of the Exchange Act and, as a result, we file annual, quarterly andcurrent reports, and other information with the SEC. You may read and copy this information at the Public Reference Room of theSEC located at 100 F Street, N.E., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information on theoperation of the Public Reference Room. Copies of all or any part of the registration statement may be obtained from the SEC’soffices upon payment of fees prescribed by the SEC. The SEC maintains an internet site that contains periodic and current reports,information statements and other information regarding issuers that file electronically with the SEC. The address of the SEC’swebsite is http://www.sec.gov.

 

Wewill provide a copy of our annual report to stockholders, including our audited consolidated financial statements, at no chargeupon written request sent to Alset EHome International Inc., 4800 Montgomery Lane, Suite 210, Bethesda, Maryland 20814. Our corporatewebsite is located at www.alsetehomeintl.com. The information on, or that can be accessed through, our website is not incorporatedby reference into this prospectus and should not be considered to be a part of this prospectus. 

 

27
 

 

Upto 4,207,436 Common Units

Upto 4,207,436 Pre-funded Units

 

 

 

 

 

CommonUnits Consisting of
One Share of Common Stock and
One Series A Warrant to Purchase One Share of Common Stock and
One Series B Warrant to Purchase One-Half of a Share of Common Stock

 

Pre-fundedUnits Consisting of
One Pre-funded Warrant and
One Series A Warrant to Purchase One Share of Common Stock and
One Series B Warrant to Purchase One-Half of a Share of Common Stock

 

PROSPECTUS

 

                    ,2021

 

AegisCapital Corp.

 

Until        , 2021 (25 days after the date of this prospectus), all dealers that buy, sell or trade shares of our common stock, whether ornot participating in this offering, may be required to deliver a prospectus. This delivery requirement is in addition to the obligationof dealers to deliver a prospectus when acting as underwriters and with respect to their unsold allotments or subscriptions.

 

 
 

 

PARTII

 

INFORMATIONNOT REQUIRED IN PROSPECTUS

 

Item13. Other Expenses of Issuance and Distribution

 

Thefollowing table sets forth the costs and expenses, other than underwriting commissions and the underwriter’s unaccountableexpense allowance, to be paid in connection with the sale of the shares of common stock being registered, all of which we willpay. All amounts, other than the SEC registration fee, and the FINRA filing fee are estimates.

 

SEC registration fee   $14,297 
Printing/EDGAR expenses   $5,000 
FINRA filing fee   $20,156 
Legal fees and expenses   $175,000 
Accounting fees and expenses   $50,000 
Transfer agent and warrant agent fees   $5,000 
Miscellaneous   $10,000 
Total   $279,453 

 

Item14. Indemnification of Directors and Officers

 

Section145 of the Delaware General Corporation Law (the “DGCL”) provides for, under certain circumstances, the indemnificationof our officers, directors, employees and agents against liabilities that they may incur in such capacities. A summary of thecircumstances in which such indemnification provided for is contained herein.

 

Ingeneral, the statute provides that any director, officer, employee or agent of a corporation may be indemnified against expenses(including attorneys’ fees), judgments, fines and amounts paid in settlement, actually and reasonably incurred in a proceeding(including any civil, criminal, administrative or investigative proceeding) to which the individual was a party by reason of suchstatus. Such indemnity may be provided if the indemnified person’s actions resulting in the liabilities: (i) were takenin good faith; (ii) were reasonably believed to have been in or not opposed to our best interest; and (iii) with respect to anycriminal action, such person had no reasonable cause to believe the actions were unlawful. Unless ordered by a court, indemnificationgenerally may be awarded only after a determination of independent members of the Board of Directors or a committee thereof, byindependent legal counsel or by vote of the stockholders that the applicable standard of conduct was met by the individual tobe indemnified.

 

Thestatutory provisions further provide that to the extent a director, officer, employee or agent is wholly successful on the meritsor otherwise in defense of any proceeding to which he was a party, he is entitled to receive indemnification against expenses,including attorneys’ fees, actually and reasonably incurred in connection with the proceeding.

 

Indemnificationin connection with a proceeding by us or in our right in which the director, officer, employee or agent is successful is permittedonly with respect to expenses, including attorneys’ fees actually and reasonably incurred in connection with the defense.In such actions, the person to be indemnified must have acted in good faith, in a manner believed to have been in our best interestand must not have been adjudged liable to us unless and only to the extent that the Court of Chancery or the court in which suchaction or suit was brought shall determine upon application that, despite the adjudication of liability, in view of all the circumstancesof the case, such person is fairly and reasonably entitled to indemnity for such expense which the Court of Chancery or such othercourt shall deem proper. Indemnification is otherwise prohibited in connection with a proceeding brought on our behalf in whicha director is adjudged liable to us, or in connection with any proceeding charging improper personal benefit to the director inwhich the director is adjudged liable for receipt of an improper personal benefit.

 

II-1
 

 

Delawarelaw authorizes us to reimburse or pay reasonable expenses incurred by a director, officer, employee or agent in connection witha proceeding in advance of a final disposition of the matter. Such advances of expenses are permitted if the person furnishesto us a written agreement to repay such advances if it is determined that he is not entitled to be indemnified by us.

 

Thestatutory section cited above further specifies that any provisions for indemnification of or advances for expenses does not excludeother rights under our certificate of incorporation, bylaws, resolutions of our stockholders or disinterested directors, or otherwise.These indemnification provisions continue for a person who has ceased to be a director, officer, employee or agent of the corporationand inure to the benefit of the heirs, executors and administrators of such persons.

 

Thestatutory provision cited above also grants us the power to purchase and maintain insurance policies that protect any director,officer, employee or agent against any liability asserted against or incurred by him in such capacity arising out of his statusas such. Such policies may provide for indemnification whether or not the corporation would otherwise have the power to providefor it.

 

OurCertificate of Incorporation provides that to the fullest extent permitted by the DGCL, as the same exists or may hereafter beamended, a director of our company shall not be personally liable to our company or its stockholders for monetary damages forbreach of fiduciary duty as a director.

 

Ourbylaws provide that each person who was or is made a party to, or is threatened to be made a party to, or is involved in any action,suit, or proceeding, whether civil, criminal, administrative, or investigative, by reason of the fact that he or she is or wasa director or officer of our company or is or was serving at the request of our company as a director, officer, employee, or agentof another corporation or of a partnership, joint venture, trust, or other enterprise, including service with respect to employeebenefit plans, whether the basis of such proceeding is alleged action in an official capacity as such director, officer, employee,or agent, or in any other capacity while serving as such director, officer, employee, or agent, shall be indemnified and heldharmless by our company to the fullest extent permitted by the DGCL, as the same exists or may hereafter be amended, against allexpense, liability, and loss (including attorneys’ fees, judgments, fines, other expenses and losses, amounts paid or tobe paid in settlement, and excise taxes or penalties arising under the Employee Retirement Income Security Act of 1974) reasonablyincurred or suffered by such person in connection therewith, and such indemnification shall continue as to a person who has ceasedto be a director, officer, employee, or agent, and shall inure to the benefit of his or her heirs, executors, and administrators.

 

Atpresent, we do not maintain directors’ and officers’ liability insurance in order to limit the exposure to liabilityfor indemnification of directors and officers, including liabilities under the Securities Act of 1933; however, we are in theprocess of obtaining such insurance.

 

Item15. Recent Sales of Unregistered Securities

 

OnOctober 1, 2018, we issued a total of 10,000,000 shares of our common stock as follows:

 

  100% of the ownership interest in Hengfai International Pte. Ltd. was transferred from Chan Heng Fai (an officer and director of our company) to HF Enterprises Inc. in exchange for 8,500,000 shares of our common stock to be held by HFE Holdings Limited. Hengfai International Pte. Ltd., a Singapore limited company, is the sole stockholder of Hengfai Business Development Pte. Ltd., which is the owner of 761,150,294 ordinary shares of Alset International Limited and warrants to purchase 359,834,471 ordinary shares of Alset International Limited.
     
  100% of the ownership interest in Global eHealth Limited was transferred from Chan Heng Fai to HF Enterprises Inc. in exchange for 1,000,000 shares of our common stock to be held by HFE Holdings Limited. Global eHealth Limited, a Hong Kong company, is the owner of 46,226,673 ordinary shares of Holista CollTech Limited.
     
  100% of the ownership interest in Heng Fai Enterprises Pte. Ltd. was transferred from Chan Heng Fai to HF Enterprises Inc. in exchange for 500,000 shares of our common stock to be held by HFE Holdings Limited. Heng Fai Enterprises Pte. Ltd., a Singapore limited company, owns 2,480,000 shares of the common stock of Vivacitas Oncology Inc.

 

II-2
 

 

OnNovember 27, 2020, the Company issued 10,000 shares of its common stock for legal services rendered.

 

OnJanuary 19, 2021, the Company issued 10,000 shares of its common stock for public relations services.

 

Effectiveas of March 12, 2021, the Company into a Securities Purchase Agreement (the “Securities Purchase Agreement”) withMr. Chan Heng Fai, the founder, Chairman and Chief Executive Officer of the Company, True Partners International Limited, LVDand APB, pursuant to which the Company purchased from Chan Heng Fai (i) warrants (the “Warrants”) to purchase 1,500,000,000shares of Alset International Limited (“Alset International”); (ii) 1,000,000 shares of LVD’s common stock,constituting all of the issued and outstanding stock of LVD; (iii) 62,122,908 ordinary shares in True Partners Capital HoldingLimited (“True Partner”); and (iv) 4,775,523 shares of APB’s Class B common stock, representing 86.44% of thetotal issued and outstanding common stock of APB. The four acquisitions set forth in the Securities Purchase Agreement closedon March 12, 2021. The Company has issued four convertible notes to Chan Heng Fai as follows: (i) a convertible note in the amountof $28,363,966 for warrants to purchase 1,500,000,000 shares of Alset International; (ii) a convertible note in the amount of$173,394.87 to acquire all of the outstanding capital stock of LVD; (iii) a convertible note in the amount of $6,729,629.29 toacquire 62,122,908 ordinary shares of True Partners; and (iv) a convertible note in the amount of $28,653,138 for 4,775,523 ClassB shares of APB. Such four notes will only become convertible into shares of the Company’s common stock following the approvalof the Company’s shareholders. Subject to such shareholder approval, each note shall be convertible into shares of the Company’scommon stock at a conversion price equal to $5.59 per share (equivalent to the average five closing per share prices of the Company’scommon stock preceding January 4, 2021). Each convertible note matures in three years, has an interest rate of 2% per annum andthe principal amount and accrued but unpaid interest shall be payable on the maturity date, subject to the conversion of eachconvertible note.

 

Theshares of our common stock issued in each of the foregoing transactions were not registered under the Securities Act of 1933 inreliance upon the exemption from registration provided by Section 4(a)(2) thereof, which exempts transactions by an issuer notinvolving any public offering.

 

Item16. Exhibits and Financial Statement Schedules

 

(a)Exhibits

 

Theexhibits listed in the following Exhibit Index are filed as part of this Registration Statement.

 

Exhibit

Number

  Description
1.1   Form of Underwriting Agreement.
2.1   Certificate of Merger. Certificate of Merger, incorporated herein by reference to Exhibit 3.5 to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission on February 11, 2021.
3.1   Certificate of Incorporation of HF Enterprises Inc., incorporated by reference, filed with the SEC on Form S-1 on December 23, 2019.
3.2   Bylaws of HF Enterprises Inc., incorporated by reference, filed with the SEC on Form S-1 on December 23, 2019.
3.3   Second Amended and Restated Certificate of Incorporation of HF Enterprises Inc., incorporated by reference, filed with the SEC on Form S-1 on December 23, 2019.
3.4   Third Amended and Restated Certificate of Incorporation of HF Enterprises Inc., incorporated by reference, filed with the SEC on Form S-1 on July 30, 2020.
3.5   Certificate of Amendment, incorporated by reference to Exhibit 3.1 on Form 8-K filed with the SEC on May 4, 2021.
4.1   Form of Representative’s Warrant, incorporated herein by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed with the SEC on November 27, 2020
4.2   Description of Registrant’s Securities, incorporated by reference to Exhibit 4.4 to the Company’s Annual Report on Form 10-K filed with the SEC on April 14, 2021

 

II-3
 

 

4.3   Form of Pre--funded Warrant
4.4   Description of Capital Stock, incorporated by reference and filed with the SEC on Form 10-K on April 14, 2021
4.5   Form of Series A Warrant
4.6   Form of Series B Warrant
5.1   Opinion of Sichenzia Ross Ference LLP
10.1   HF Enterprises Inc. 2018 Incentive Compensation Plan, incorporated herein by reference to Exhibit 10.1 to the Company’s Registration Statement on Form S-1, filed with the SEC on December 23, 2019.
10.2   Form of Lot Purchase Agreement for Ballenger Run, by and between SeD Maryland Development, LLC and NVR, Inc. d/b/a Ryan Homes, incorporated herein by reference to Exhibit 10.7 to the Company’s Registration Statement on Form S-1, filed with the SEC on December 23, 2019.
10.3   Management Agreement, entered into as of July 15, 2015, by and between SeD MarylandDevelopment, LLC and SeD Development Management, LLC, incorporated herein by reference to Exhibit 10.8 to the Company’s Registration Statement on Form S-1, filed with the SEC on December 23, 2019.
10.4   Amended and Restated Limited Liability Company Agreement of SeD Maryland Development, LLC, dated as of September 16, 2015, by and between SeD Ballenger, LLC and CNQC Maryland Development LLC, incorporated herein by reference to Exhibit 10.9 to the Company’s Registration Statement on Form S-1, filed with the SEC on Form S-1 on December 23, 2019.
10.5   Consulting Services Agreement, dated as of May 1, 2017, by and between SeD Development Management LLC and MacKenzie Equity Partners LLC, incorporated herein by reference to Exhibit 10.10 to the Company’s Registration Statement on Form S-1, filed with the SEC on Form S-1 on December 23, 2019.
10.6   Project Development and Management Agreement, dated as of February 25, 2015, by and among MacKenzie Development Company, LLC, Cavalier Development Group, LLC and SeD Maryland Development, LLC, incorporated herein by reference to Exhibit 10.11 to the Company’s Registration Statement on Form S-1, filed with the SEC on Form S-1 on December 23, 2019.
10.7   Assignment and Assumption Agreement, dated as of September 15, 2017, by and between MacKenzie Development Company, LLC and Adams-Aumiller Properties, LLC, incorporated herein by reference to Exhibit 10.12 to the Company’s Registration Statement on Form S-1, filed with the SEC on Form S-1 on December 23, 2019.
10.8
  Construction Loan Agreement, dated as of November 23, 2015, by and between SeD Maryland Development, LLC and The Bank of Hampton Roads, incorporated herein by reference to Exhibit 10.24 to the Company’s Registration Statement on Form S-1, filed with the SEC on Form S-1 on December 23, 2019.
10.9   Loan Modification Commitment Letter, dated as of July 27, 2017, from Xenith Bank, f/k/a The Bank of Hampton Roads to SeD Maryland Development, LLC, incorporated herein by reference to Exhibit 10.25 to the Company’s Registration Statement on Form S-1, filed with the SEC on Form S-1 on December 23, 2019.
10.10   Loan Modification Commitment Letter, dated as of August 30, 2017, from Xenith Bank, f/k/a The Bank of Hampton Roads to SeD Maryland Development, LLC, incorporated herein by reference to Exhibit 10.26 to the Company’s Registration Statement on Form S-1, filed with the SEC on Form S-1 on December 23, 2019.
10.11   Third Loan Modification Agreement, dated as of September 18, 2017, by and among SeD Maryland Development, LLC, SeD Ballenger, LLC, and Xenith Bank, f/k/a The Bank of Hampton Roads, incorporated herein by reference to Exhibit 10.27 to the Company’s Registration Statement on Form S-1, filed with the SEC on Form S-1 on December 23, 2019.
10.12   Stock Purchase Agreement, dated as of October 1, 2018, by and between HF Enterprises Inc. and Heng Fai Chan as the sole shareholder of Hengfai International Pte. Ltd, incorporated herein by reference to Exhibit 10.28 to the Company’s Registration Statement on Form S-1, filed with the SEC on Form S-1 on December 23, 2019.
10.13   Stock Purchase Agreement, dated as of October 1, 2018, by and between HF Enterprises Inc. and Heng Fai Chan as the sole shareholder of Global eHealth Limited, incorporated herein by reference to Exhibit 10.29 to the Company’s Registration Statement on Form S-1, filed with the SEC on Form S-1 on December 23, 2019.

 

II-4
 

 

10.14   Stock Purchase Agreement, dated as of October 1, 2018, by and between HF Enterprises Inc. and Heng Fai Chan as the sole shareholder of Heng Fai Enterprises Pte. Ltd., incorporated herein by reference to Exhibit 10.30 to the Company’s Registration Statement on Form S-1, filed with the SEC on Form S-1 on December 23, 2019.
10.15   Purchase and Sale Agreement, by and among 150 CCM Black Oak, Ltd. and Houston LD, LLC, dated as of July 3, 2018, incorporated herein by reference to Exhibit 10.31 to the Company’s Registration Statement on Form S-1, filed with the SEC on Form S-1 on December 23, 2019.
10.16   Amended and Restated Purchase and Sale Agreement, by and among 150 CCM Black Oak, Ltd. and Houston LD, LLC, dated as of October 12, 2018, incorporated herein by reference to Exhibit 10.32 to the Company’s Registration Statement on Form S-1, filed with the SEC on Form S-1 on December 23, 2019.
10.17   Amendment to Project Development and Management Agreement for Ballenger Run PUD, dated as of October 16, 2019 by and between Adams-Aumiller Properties, LLC and Cavalier Development Group, LLC, incorporated herein by reference to Exhibit 10.33 to the Company’s Registration Statement on Form S-1, filed with the SEC on Form S-1 on December 23, 2019.
10.18   Development Loan Agreement, dated as of April 17, 2019, by and between SeD Maryland Development, LLC and Manufacturers and Traders Trust Company, incorporated herein by reference to Exhibit 10.34 to the Company’s Registration Statement on Form S-1, filed with the SEC on Form S-1 on December 23, 2019.
10.19   Term Sheet, dated as of March 3, 2020, by and among DSS Securities, Inc., LiquidValue Asset Management Pte Ltd., AMRE Asset Management Inc. and American Medical REIT Inc., incorporated herein by reference to Exhibit 10.35 to the Company’s Registration Statement on Form S-1, filed with the SEC on Form S-1 on July 30, 2020.
10.20   Stockholders’ Agreement, dated as of March 3, 2020, by and among AMRE Asset Management Inc., AMRE Tennessee, LLC, LiquidValue Asset Management Pte Ltd., and DSS Securities, Inc., incorporated herein by reference to Exhibit 10.36 to the Company’s Registration Statement on Form S-1, filed with the SEC on Form S-1 on July 30, 2020.
10.21   Term Sheet, dated as of March 12, 2020, by and between Document Security Systems, Inc., DSS BioHealth Security Inc., Global BioMedical Pte Ltd and Impact BioMedical Inc., incorporated herein by reference to Exhibit 10.37 to the Company’s Registration Statement on Form S-1, filed with the SEC on Form S-1 on July 30, 2020.
10.22   Share Exchange Agreement among Singapore eDevelopment Limited, Global BioMedical Pte Ltd., Document Security Systems, Inc. and DSS BioHealth Security Inc. dated as of April 27, 2020, incorporated herein by reference to Exhibit 10.38 to the Company’s Registration Statement on Form S-1, filed with the SEC on Form S-1 on July 30, 2020.
10.23   Loan Agreement, dated as of June 18, 2020, by and between SeD Home & REITs Inc. and Manufacturers and Traders Trust Company, incorporated herein by reference to Exhibit 10.39 to the Company’s Registration Statement on Form S-1, filed with the SEC on Form S-1 on July 30, 2020.
10.24   Promissory Note from HF Enterprises Inc. to Chan Heng Fai, dated as of August 20, 2020, incorporated herein by reference to Exhibit 10.40 to the Company’s Registration Statement on Form S-1, filed with the SEC on Form S-1 on September 23, 2020.
10.25   Binding Term Sheet on Share Exchange Transaction Among HF Enterprises Inc. and Mr. Chan Heng Fai Ambrose, dated January 4, 2021, incorporated herein by reference to Exhibit 10.1 to the Company’s Form 8-K, filed with the SEC on January 12, 2021.
10.26   Executive Employment Agreement, by and between Alset EHome International Inc., Hengfai Business Development Pte Ltd. and Chan Heng Fai, dated as of February 8, 2021, incorporated herein by reference to Exhibit 10.1 to the Company’s Form 8-K, filed with the SEC on February 11, 2021.
10.27   Securities Purchase Agreement By and Among Alset EHome International Inc., Chan Heng Fai Ambrose, True Partners International Limited, LiquidValue Development Pte Ltd. and American Pacific Bancorp, Inc. dated March 12, 2021, incorporated herein by reference to Exhibit 10.1 to the Company’s Form 8-K filed with the SEC on March 18, 2021.
10.28   2% Conditional Convertible Promissory Note dated March 12, 2021, in the principal amount of $28,363,966.42, incorporated herein by reference to Exhibit 10.2 to the Company’s Form 8-K filed with the SEC on March 18, 2021.
10.29   2% Conditional Convertible Promissory Note dated March 12, 2021, in the principal amount of $173,394.87, incorporated herein by reference to Exhibit 10.3 to the Company’s Form 8-K filed with the SEC on March 18, 2021.

 

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10.30   2% Conditional Convertible Promissory Note dated March 12, 2021, in the principal amount of $6,729,629.29, incorporated herein by reference to Exhibit 10.4 to the Company’s Form 8-K filed with the SEC on March 18, 2021.
10.31   2% Conditional Convertible Promissory Note dated March 12, 2021, in the principal amount of $28,653,138.00, incorporated herein by reference to Exhibit 10.5 to the Company’s Form 8-K filed with the SEC on March 18, 2021.
10.32   Loan and Exchange Agreement, incorporated by reference to Exhibit 10.1 on Form 8-K filed with the SEC on May 4, 2021.
10.33   Form of Series A Warrant Agent Agreement
10.34   Form of Series B Warrant Agent Agreement
14.1   Code of Conduct, incorporated herein by reference to Exhibit 14.1 to the Company’s Registration Statement on Form S-1, filed with the SEC on Form S-1 on December 23, 2019.
14.2   Code of Ethics for the CEO and Senior Financial Officers, incorporated herein by reference to Exhibit 14.2 to the Company’s Registration Statement on Form S-1, filed with the SEC on Form S-1 on December 23, 2019.
21.1   Subsidiaries of the Company, incorporated by reference to Exhibit 21.1 to the Company’s Form 10-K filed April 14, 2021.
23.1   Consent of Rosenberg Rich Baker Berman, P.A.
23.2   Consent of Briggs & Veselka Co.
23.3   Consent of Lo and Kwong C.P.A. & Co.
23.4   Consent of Sichenzia Ross Ference LLP (included in the opinion filed as Exhibit 5.1).
24.1   Power of Attorney (contained on signature page).

 

Unlessotherwise indicated, each exhibit set forth above has been filed.

 

(b)Financial Statement Schedules

 

None.

 

Item17. Undertakings

 

TheRegistrant hereby undertakes:

 

(a)That, for purposes of determining any liability under the Act, the information omitted from the form of prospectus filed as partof this Registration Statement in reliance upon Rule 430A and contained in a form of prospectus filed by the Registrant pursuantto Rule 424(b)(1) or (4) or 497(h) under the Act shall be deemed to be part of this Registration Statement as of the time it wasdeclared effective;

 

(b)That, for the purpose of determining any liability under the Act, each post-effective amendment that contains a form of prospectusshall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securitiesat that time shall be deemed to be the initial bona fide offering thereof; and

 

(c)Insofar as indemnification for liabilities arising under the Act may be permitted to directors, officers and controlling personsof the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of theCommission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the eventthat a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paidby a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) isasserted by such director, officer or controlling person in connection with the securities being registered, the registrant will,unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdictionthe question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the finaladjudication of such issue.

 

(d)That, for purposes of determining any liability under the Securities Act of 1933, each filing of the Registrant’s annualreport pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employeebenefit plan’s annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is incorporated by referencein this Registration Statement shall be deemed to be a new registration statement relating to the securities offered therein,and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

 

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SIGNATURES

 

Pursuantto the requirements of the Securities Act of 1933, as amended, the registrant has duly caused this registration statement to besigned on its behalf by the undersigned, thereunto duly authorized, in the City of Bethesda, State of Maryland, on May 4, 2021.

 

  ALSET EHOME INTERNATIONAL INC.
                            
  By: /s/ Chan Heng Fai
    Chan Heng Fai
    Chairman of the Board and Chief Executive Officer

 

POWERSOF ATTORNEY

 

Eachof the undersigned officers and directors of Alset EHome International, Inc., a Delaware corporation, hereby constitutes and appointsChan Heng Fai , Lui Wai Leung Alan and Rongguo Wei and each of them, severally, as his or her attorney-in-fact and agent, withfull power of substitution and resubstitution, in his or her name and on his or her behalf, to sign in any and all capacitiesthis registration statement and any and all amendments (including post-effective amendments) and exhibits to this registrationstatement and any and all applications and other documents relating thereto, with the Securities and Exchange Commission, withfull power and authority to perform and do any and all acts and things whatsoever which any such attorney or substitute may deemnecessary or advisable to be performed or done in connection with any or all of the above described matters, as fully as eachof the undersigned could do if personally present and acting, hereby ratifying and approving all acts of any such attorney orsubstitute.

 

Pursuantto the requirements of the Securities Act of 1933, as amended, this registration statement has been signed by the following personsin the capacities and on the dates indicated.

 

Signature   Title   Date
         
/s/ Chan Heng Fai   Chairman of the Board and   May 4, 2021
Chan Heng Fai  

Chief Executive Officer (principal executive officer)

   
         
/s/ Lui Wai Leung Alan   Co-Chief Financial Officer   May 4, 2021
Lui Wai Leung Alan   (co-principal financial and accounting officer)    
         
/s/ Rongguo Wei   Co-Chief Financial Officer   May 4, 2021
Rongguo Wei   (co-principal financial and accounting officer)    
         
/s/ Ang Hay Kim Aileen   Director   May 4, 2021
Ang Hay Kim Aileen        
         
/s/ Wong Tat Keung   Director   May 4, 2021
Wong Tat Keung        
         
/s/ Robert Trapp   Director   May 4, 2021
Robert Trapp        
         
/s/ William Wu   Director   May 4, 2021
William Wu        

 

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