Alset Capital Acquisition Corp. (ACAX) Adds FPA to HWH International Deal
Alset Capital Acquisition Corp. (NASDAQ:ACAX) announced in an 8-K this morning that it has added a forward purchase agreement (FPA) to its combination with lifestyle company HWH International ahead of tomorrow’s completion vote.
Pursuant to the terms of the FPA, Meteora Special Opportunity Fund I, Meteora Capital Partners, Meteora Select Trading Opportunities Master, and Meteora Strategic Capital are obligated to purchase up to 9.9% of the total shares of Class A common stock, which will be in the form of OTC Equity Prepaid Forward Transactions. This will be pursuant to Meteora’s FPA funding amount PIPE subscription agreement, in which it agreed to purchase an aggregate of up to 1,800,000 shares, less the number of shares of ACAX Common Stock purchased by them separately from third parties through a broker in the open market.
Additionally, Meteora is not obligated to acquire shares of ACAX Common Stock in a quantity that would result in its ownership exceeding 9.9% of the total outstanding shares of ACAX Common Stock after the completion of the purchase, unless they choose to waive the 9.9% ownership limitation.
The FPA states that the prepayment shortfall, equal to 1.0% of the number of shares multiplied by the Initial Price, will be paid by Meteora. Half of the prepayment shortfall will be paid to ACAX on the prepayment date, and the other half can be requested by ACAX on the registration statement effective date or the optional early termination date. Meteora can sell shares at any time without an early termination obligation until the proceeds from such sales equal 100% of the prepayment shortfall.
Furthermore, Meteora will receive the prepayment amount, calculated by multiplying the number of shares stated in each pricing date notice by the redemption price per share, and then deducting the prepayment shortfall.
From time to time and on any date following the business combination, Meteora may terminate the FPA by providing written notice to ACAX, but it must be given by the next payment date and specify the quantity of terminated shares.
The valuation date will be the earliest of three years after closing the business combination, the date specified by Meteora in a written notice after certain events, or at their sole discretion.
In other cases, Meteora will pay ACAX a cash amount, which is calculated by the number of shares as of valuation date minus unregistered shares, multiplied by volume-weighted daily VWAP Price over Valuation Period, minus the Settlement Amount Adjustment.
Alset Capital inked its business combination with HWH International in September 2022 and expects to hold its completion vote tomorrow, August 1. Bethesda, Maryland-based HWH offers a range of perks via a membership program aimed at wellness, travel and VR experiences.