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Subsequent Events

3 Months Ended

Mar. 31, 2021

Subsequent Events [Abstract]

Subsequent Events

15.

SUBSEQUENT EVENTS

Purchase of Shares of Value Exchange International, Inc.

The Company has entered into a securities purchase agreement dated April 5, 2021 with Value Exchange International, Inc. (“Value Exchange International”) in connection with the purchase of 6,500,000 shares of Value Exchange International’s common stock for an aggregate subscription price of $650,000. The acquisition of 6,500,000 shares of Value Exchange International’s common stock was completed on April 12, 2021.

Ownership of Alset International

On April 8, 2021, the Company exercised its warrants to purchase 139,834,471 shares of Alset International at an exercise price of Singapore $0.04. On May 12, 2021, Chan Heng Fai exercised warrants to purchase 76,925,000 shares of Alset International at an exercise price of Singapore $0.048. On May 14 and 17, 2021, the Company exercised its warrants to purchase 943,531,983 shares of Alset International at an exercise price of Singapore $0.048. Total outstanding shares of Alset International were 2,931,951,400 after these issuances. The Company holds 2,094,516,748 shares of Alset International, approximately 71.4% ownership.

Acquisition of HengFeng Finance Limited

On October 15, 2020, the Company’s subsidiary, American Pacific Bancorp (“APB”), entered into an acquisition agreement to acquire 3,500,001 common shares of Hengfeng Finance Limited (“HFL”), representing 100% of the common shares of HFL, in consideration for 250,000 shares of APB’s Class A Common Stock. HFL is incorporated in Hong Kong with limited liability. This transaction closed on April 21, 2021.

Joint Venture with Novum

On April 20, 2021 on of Company’s indirect subsidiaries, SeD Capital Pte. Ltd. (“SeD Capital”), entered into joint venture agreement with digital asset management firm Novum Alpha Pte Ltd (“Novum”). Pursuant to this agreement, SeD Capital will own 50% of the issued and paid-up capital in the joint venture company, Credas Capital Pte Ltd (“Credas”) with the remaining 50% shareholding stake held by Novum. Credas intends to develop and launch its maiden digital assets-based Exchange-Traded Product in the fourth quarter of 2021 on the SIX Swiss Exchange, Switzerland’s principal stock exchange and one of Europe’s largest stock exchanges.

Distribution to Minority Shareholders

On April 30, 2021, the Board of Managers of SeD Maryland Development LLC (the 83.55% owned subsidiary of the Company which owns the Company’s Ballenger Project) authorized the payment of distributions to its members in the amount of $3,000,000. Accordingly, the minority member of SeD Maryland Development LLC received a distribution in the amount of $493,500, with the remainder being distributed to a subsidiary of the Company, which is eliminated upon consolidation.

Amendment to Authorized Shares and Designation of Preferred Shares

On May 3, 2021, the holder of a majority of the issued and outstanding shares of common stock of the Company, by written consent, approved and adopted an amendment to our Third Amended and Restated Certificate of Incorporation (the “Amendment”) to increase the number of authorized shares of the Company’s common stock from Twenty Million (20,000,000) common shares to Two Hundred and Fifty Million (250,000,000) common shares and its preferred shares from Five Million (5,000,000) to Twenty Five Million (25,000,000). As of filing date, the amendment is still pending approval from State of Delaware.

On May 3, 2021, the Company filed an amendment to its Articles of Incorporation which sets forth the rights and preferences of the Series A Convertible Preferred Stock. Pursuant to the Series A Designation, 6,380 shares of the Company’s preferred stock was designated Series A Preferred Stock. Holders of the Series A Preferred Stock shall be entitled to receive dividends equal, on an as-if-converted basis, to and in the same form as dividends actually paid on shares of the Company’s common stock par value $0.001 per share (“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 into which each share of the Series A Preferred Stock is convertible. Holders of Series A Preferred Stock are entitled, upon liquidation of the Company, to receive the same amount that a holder of Series A Preferred Stock would receive if the Series A Preferred Stock were fully converted into Common Stock.

On May 12, 2021 the Company filed a Certificate of Designation which sets forth the rights and preferences of the Series B Preferred Stock. Pursuant to the Series B Designation, 2,132 shares of the Company’s preferred stock was designated Series B Preferred Stock. Holders of the Series B Preferred Stock shall be entitled to receive dividends equal, on an as-if-converted basis, to and in the same form as dividends actually paid on shares of the Company’s common stock par value $0.001 per share (“Common Stock”) when, as and if paid on shares of Common Stock. Each holder of outstanding Series B Preferred Stock is entitled to vote equal to the number of whole shares of Common Stock into which each share of the Series B Preferred Stock is convertible. Holders of Series B Preferred Stock are entitled, upon liquidation of the Company, to receive the same amount that a holder of Series B Preferred Stock would receive if the Series B Preferred Stock were fully converted into Common Stock.

Loan and Exchange Agreement with the CEO, Chan Heng Fai

On May 3, 2021, the Company entered into a Loan and Exchange Agreement with its Chief Executive Officer, Chan Heng Fai pursuant to which Chan Heng Fai loaned the Company his shares of Common Stock of the Company by exchanging 6,380,000 shares of common stock which he owned for an aggregate of 6,380 shares of the Company’s newly designated Series A Convertible Preferred Stock.

On May 12, 2021, Company entered into an Exchange Agreement with Chan Heng Fai, effective May 13, 2021, pursuant to which he exchanged $13,000,000 in principal amount under a $28,363,966 convertible promissory note (the “Note”) in exchange for 2,132 shares of the Company’s newly designated Series B Preferred Stock.

Public Offering

On May 10, 2021, 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) 4,700,637 common units (the “Common Units”), at a price to the public of $5.07 per Common Unit, with each Common Unit consisting of (a) one share of common stock, par value $0.001 per share (the “Common Stock”), (b) one Series A warrant (the “Series A Warrant” and collectively, the “Series A Warrants”) to purchase one share of Common Stock with an initial exercise price of $5.07 per whole share, exercisable until the fifth anniversary of the issuance date, and (c) one Series B warrant (the “Series B Warrant” and collectively, the “Series B Warrants” and together with the Series A Warrants, the “Warrants”) to purchase one-half share of Common Stock with an initial exercise price of $6.59 per whole share, exercisable until the fifth anniversary of the issuance date and (ii) 1,611,000 pre-funded units (the “Pre-funded Units”), at a price to the public of $5.06 per Pre-funded Unit, with each Pre-funded Unit consisting of (a) one pre-funded warrant (the “Pre-funded Warrant” and collectively, the “Pre-funded Warrants”) to purchase one share of Common Stock, (b) one Series A Warrant and (c) one Series B Warrant. The shares of Common Stock, the Pre-funded Warrants, and the Warrants were offered together, but the securities contained in the Common Units and the Pre-funded Units were issued separately.

The Company also granted the Underwriters a 45-day over-allotment option to purchase up to 808,363 additional shares of Common Stock and/or up to 808,363 additional Series A Warrants to purchase 808,363 shares of Common Stock, and/or up to 808,363 additional Series B warrants to purchase 404,181 shares of Common Stock. The Offering, including the partial exercise of the Underwriters’ over-allotment option to purchase 808,363 Series A Warrants and 808,363 Series B Warrants, closed on May 13, 2021.

The Company paid the Underwriters an underwriting discount equal to 6.5% of the gross proceeds of the Offering and a non-accountable expense fee equal to 1.25% of the gross proceeds of the Offering. The Company also reimbursed the Underwriters for certain of their expenses, including “roadshow”, diligence, and reasonable legal fees and disbursements, in an amount of $150,000 in the aggregate. The Company has also agreed that it will not issue or announce the issuance or proposed issuance of any Common Stock or Common Stock equivalents for a period of 120 days following the closing date, other than certain exempt issuances.

The net proceeds to the Company from the Offering were approximately $29.2 million, excluding the proceeds, if any, from the exercise of the Warrants and the Pre-funded Warrants sold in the Offering, and after deducting underwriting discounts and commissions and the payment of other estimated offering expenses associated with the Offering that are payable by the Company.

Note Payable Related Party

On May 14, 2021, Alset EHome International Inc., a Delaware corporation (the “Company”), borrowed S$7,395,472 Singapore Dollars (equal to approximately $5,557,371 U.S. Dollars) from the Company’s Chairman, Chief Executive Officer and major stockholder, Chan Heng Fai. The unpaid principal amount of the Loan shall be due and payable on May 14, 2022 and the Loan shall have no interest.