Item
1.01. Entry into a Material Definitive Agreement.
Public
Offering
On
July 27, 2021, Alset EHome International Inc. (the “Company”) entered into an underwriting agreement (the “Underwriting
Agreement”) with Aegis Capital Corp., as the sole book-running manager and representative of the underwriters named therein (the
“Underwriters”), relating to an underwritten public offering (the “Offering”) of (i) 5,324,139 shares of common
stock, par value $0.001 per share (the “Common Stock”), at a price to the public of $2.12 per share of Common Stock and (ii)
9,770,200 pre-funded warrants (the “Pre-funded Warrants”) to purchase 9,770,200 shares of Common Stock, at a price to the
public of $2.11 per Pre-funded Warrant. The Offering closed on July 30, 2021.
The
Company granted the Underwriters a 45-day over-allotment option to purchase up to 2,264,150 additional shares of Common Stock. The Company
also paid the Underwriters an underwriting discount equal to 7.0% of the gross proceeds of the Offering and a non-accountable expense
fee equal to 1.5% of the gross proceeds of the Offering. In addition, the Company agreed to issue to the representative warrants (the
“Representative’s Warrants”) to purchase a number of shares equal to 3.0% of the aggregate number of shares (including
shares underlying the Pre-funded Warrants) sold under in the Offering, or warrants to purchase up to an aggregate of 520,754 shares,
assuming the Underwriters exercise their over-allotment option in full. The Representative’s Warrants have an exercise price equal
to 125% of the public offering price, or $2.65 per share, with an exercise period of 24 months from issuance.
The
Company and its directors and executive officers also agreed that, for a period of one (1) year and ninety (90) days, respectively,
after the date of the offering, subject to certain limited exceptions, not to directly or indirectly, without the prior written
consent of the Underwriters, (a) offer, sell, or otherwise transfer or dispose of, directly or indirectly, any shares of capital
stock of the Company or any securities convertible into or exercisable or exchangeable for shares of capital stock of the Company;
or (b) file or caused to be filed any registration statement with the Securities and Exchange Commission (the “SEC”)
relating to the offering of any shares of capital stock of the Company or any securities convertible into or exercisable or
exchangeable for shares of capital stock of the Company.
The
Pre-funded Warrants were offered and sold to purchasers whose purchase of Common Stock in the Offering would otherwise result in the
purchaser, together with its affiliates and certain related parties, beneficially owning more than 4.99% (or, at the election of the
purchaser, 9.99%) of the Company’s outstanding Common Stock immediately following the consummation of the Offering in lieu of Common
Stock that would otherwise result in the purchaser’s beneficial ownership exceeding 4.99% of the Company’s outstanding Common
Stock (or, at the election of the purchaser, 9.99%). Each Pre-funded Warrant is exercisable for one share of Common Stock at an exercise
price of $0.01 per share. The Pre-funded Warrants are immediately exercisable and may be exercised at any time until all of the Pre-funded
Warrants are exercised in full.
The
Underwriting Agreement contains customary representations and warranties, agreements and obligations, conditions to closing and termination
provisions. The Underwriting Agreement provides for indemnification by the Underwriters of the Company, its directors and certain of
its executive officers, and by the Company of the Underwriters, for certain liabilities, including liabilities arising under the Securities
Act of 1933, as amended, and affords certain rights of contribution with respect thereto.
The
net proceeds to the Company from the Offering was approximately $28.8 million, after deducting underwriting discounts and commissions
and the payment of other estimated offering expenses associated with the Offering that are payable by the Company. The Company intends
to use the net proceeds of the Offering for the following purposes: (i) to fund possible acquisitions of new companies and additional
properties, (ii) to fund the further development of properties, including services and infrastructure; (iii) to develop rental opportunities
at properties; (iv) to exercise warrants of our subsidiaries to accomplish the items in (i) – (iii) and (v) for working capital
and general corporate purposes.
A
registration statement on Form S-1 relating to the Offering (File No. 333-258139) was declared effective by the SEC on July 27, 2021.
The Offering was made only by means of a prospectus and a prospectus supplement forming a part of the effective registration statement.
Pre-
funded Warrants
The
Pre-funded Warrants were issued in registered form under a warrant agent agreement (the “Warrant Agent Agreement”) between
the Company and Direct Transfer, LLC as the warrant agent.
The
Pre-Funded Warrant entitles the holder thereof to purchase one share of Common Stock at an exercise price of $0.01 per share, at any
time that the Pre-funded Warrant is outstanding. There is no expiration date for the Pre-funded Warrants. No fractional warrants will
be issued and only whole warrants are exercisable. The exercise price and number of shares of Common Stock issuable upon exercise of
the Pre-funded Warrants may be adjusted in certain circumstances, including in the event of a stock dividend, extraordinary dividend
on or recapitalization, reorganization, merger or consolidation. If the Company fails to maintain a current prospectus or prospectus
relating to the Common Stock issuable upon the exercise of the Pre-funded Warrants, holders may exercise their Pre-funded Warrants on
a “cashless” basis pursuant to a formula set forth in the terms of the Pre-funded Warrants.
Pre-funded
Warrant holders, subject to limited exceptions, cannot exercise their warrants to the extent that, after giving effect to such exercise,
the holder (together with its affiliates) would beneficially own in excess of 4.99% (or, at the election of the purchaser, 9.99%; subject
to increase at the option of the holder to 9.99% upon 61 days’ prior written notice) of the Company’s Common Stock outstanding
immediately after giving effect to the exercise.
The
foregoing summary of the terms of the Underwriting Agreement and the Warrant Agent Agreement (including the Pre-funded Warrants
and the Representative’s Warrants) are subject to, and qualified in their entirety by reference to, copies of the Underwriting
Agreement, the Warrant Agent Agreement (including the Pre-funded Warrants) and the Representative’s Warrants that are filed as
exhibits to this Current Report on Form 8-K and are incorporated herein by reference. The representations, warranties and covenants contained
in the Underwriting Agreement were made only for purposes of such agreement and, as of specific dates, were solely for the benefit of
the parties to the Underwriting Agreement, and may be subject to limitations agreed upon by the contracting parties. Accordingly, the
Underwriting Agreement is incorporated herein by reference only to provide investors with information regarding the terms of the Underwriting
Agreement, and not to provide investors with any other factual information regarding the Company or its business, and should be read
in conjunction with the disclosures in the Company’s periodic reports and other filings with the SEC.