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Alset Capital Acquisition Corp. *

Alset Capital Acquisition Corp. *

Jan 13, 2022 by Anthony Sozzi

PROPOSED BUSINESS COMBINATION: HWH International Inc.

ENTERPRISE VALUE: tbd
ANTICIPATED SYMBOL: tbd

Alset Capital Acquisition Corp. proposes to combine with HWH International Inc., a purpose-driven lifestyle company.

  • HWH operates a purpose-driven business model that helps individuals develop new pathways in their pursuit of Health, Wealth, and Happiness.
  • HWH operates a membership model where individuals pay an upfront membership fee to become members and receive discounted access to products and services offered by its affiliates, namely HWH Marketplace, Hapi Travel Destinations, Hapi Café and Hapi Wealth Builder.

EXTENSION – 11/3/23 – LINK

  • The SPAC approved the extension from November 3, 2023, to February 3, 2024.
    • The number of shares redeemed was not mentioned
    • No contribution will be made into the trust account.

SUBSEQUENT EVENT – 7/31/23 – LINK

Forward Purchase Agreement

  • On July 30, 2023, ACAX entered a Forward Purchase Agreement with Meteora funds for OTC Equity Prepaid Forward Transactions.
    • The Seller can buy up to 9.9% of ACAX Common Stock after the Business Combination.
      • They can also buy Recycled Shares from third parties.
      • The Seller doesn’t have to exceed 9.9% ownership unless they choose to.
      • The Number of Shares in the Forward Purchase Agreement can be reduced if terminated early as described in the Forward Purchase Agreements.
    • The Forward Purchase Agreement allows the Seller to pay 1.0% of the Prepayment Shortfall to the Counterparty.
      • The Seller can sell Shares at any time without paying any Early Termination Obligation until the proceeds cover the Prepayment Shortfall.
      • The sale of Shares is considered a “Shortfall Sale” when a notice is delivered under the Forward Purchase Agreement.
      • If an OET Notice is delivered, it’s an Optional Early Termination.
    • The Forward Purchase Agreement pays the Seller an aggregate cash amount equal to the Number of Shares multiplied by the redemption price per share (the “Prepayment Amount”), minus the Prepayment Shortfall.
    • After the Closing, the Reset Price will initially be the Initial Price.
      • The Reset Price will reset bi-weekly starting the first week after thirty days from the Business Combination’s closing.
      • It will be the lowest of
        • (a) the current Reset Price
        • (b) the Initial Price
        • (c) the VWAP Price of the Shares for the prior two weeks.
      • The Reset Price will also decrease upon a Dilutive Offering Reset when such Dilutive Offering happens.
    • The Seller can terminate the Forward Purchase Agreement, in whole or in part, at its discretion by providing a written OET Notice to the Counterparty.
      • The notice must be given by the next Payment Date after the OET Date and specify the quantity of Terminated Shares.
      • The Counterparty will receive payment from the Seller for the Terminated Shares, calculated based on the number of shares and the Reset Price on the related OET Date.
      • The payment date can be mutually agreed upon within a quarter.
    • The valuation date will be the earliest of:
      • (a) three years after the Closing Date of the Business Combination
      • (b) the date specified by the Seller in a written notice after certain events, or
      • (c) the date specified by the Seller in a written notice at their sole discretion.
        • The Valuation Date notice becomes effective immediately upon delivery to the Counterparty.
        • If determined under clause (c), the Settlement Amount Adjustment won’t apply in calculating the Settlement Amount.
    • In other cases, the Seller pays the Counterparty a cash amount, which is calculated as follows:
      • (1) (A) Number of Shares as of Valuation Date minus Unregistered Shares, multiplied by (B) volume-weighted daily VWAP Price over Valuation Period, minus (2) Settlement Amount Adjustment.
        • Settlement Amount Adjustment equals
          • (1) Number of Shares as of Valuation Date multiplied by
          • (2) $3.50 per share and is netted from Settlement Amount.
      • If estimated Adjustment exceeds Settlement Amount, Counterparty pays it in shares or cash, depending on previous election.
      • If Settlement Amount exceeds Adjustment, no payment liability between parties.
    • The seller agreed to waive their redemption rights with respect to the Recycled Shares

FPA Funding Amount PIPE Subscription Agreements

  • Seller agreed to subscribe for and purchase, and ACAX agreed to issue and sell to Seller, on the Closing Date, an aggregate of up to 1,800,000 shares of ACAX Common Stock, less the Recycled Shares in connection with the Forward Purchase Agreements.

EXTENSION – 5/2/23 – LINK

  • The SPAC approved the extension from May 3, 2023 to November 3, 2023.
    • 6,648,964 shares were redeemed for approximately $10.28
    • 1/3 of 1% of the funds remaining per month (x12) will be deposited into the trust account.

TRANSACTION

  • The transaction has been approved by the Board of Directors of both ACAX and HWH and is expected to be consummated in the fourth quarter of 2022, subject to regulatory and stockholder approval by the stockholders of ACAX and the stockholder of HWH and the satisfaction of certain other customary closing conditions.
  • Upon the closing of the Business Combination, the combined company is expected to operate under the name HWH International Inc. and remain a NASDAQ-listed public company trading under a new ticker symbol.
  • HWH’s executive management team will continue to lead the combined company.

PIPE

  • There is no PIPE for this Transaction.

LOCK-UP

Company & Sponsor Lock-Up:

  • The shares held by the Company and the Sponsor are subject to a lock-up of 12 months or until the VWAP is $12.00 for 20 out of the 30 consecutive trading days.

NOTABLE CONDITIONS TO CLOSING

  • The consummation of the Merger is conditioned upon the aggregate cash available to ACAX at the Closing (after giving effect to any redemptions by ACAX’s stockholders and the payment of all authorized transaction expenses) being at least $30,000,000.

NOTABLE CONDITIONS TO TERMINATION

  • The Merger Agreement may be terminated by either ACAX or HWH if the Merger shall not have been consummated prior to May 1, 2023 (the “Outside Date”).
  • If any applicable law or order that makes the transactions contemplated by the Merger Agreement illegal or otherwise prohibits the consummation of such transactions shall have become final and non-appealable.

ADVISORS

  • EF Hutton is serving as capital markets advisor to ACAX.
  • Sichenzia Ross Ference LLP is serving as legal advisor to ACAX.

MANAGEMENT & BOARD

Executive Officers

Heng Fai Ambrose Chan, 76
Chairman of the Board and Chief Executive Officer

Mr. Chan is the founder of Alset EHome International Inc. and has served as its Chairman of the Board and Chief Executive Officer since inception in March 2018. Mr. Chan is an expert in banking and finance. He has restructured numerous companies in various industries and countries during the past 40 years. Mr. Chan has served as the Chief Executive Officer of Alset International Limited since April 2014. Mr. Chan joined the Board of Directors of Alset International Limited in May 2013. From 1995 to 2015, Mr. Chan served as Managing Chairman of Hong Kong-listed Zensun Enterprises Limited (formerly Heng Fai Enterprises Limited), an investment holding company. Mr. Chan had previously served as a member of the Board of Zensun Enterprises Limited since September 1992. Mr. Chan was formerly the Managing Director of SingHaiyi Group Ltd., a public Singapore property development, investment and management company (“SingHaiyi”), from March 2003 to September 2013, and the Executive Chairman of China Gas Holdings Limited, an investor and operator of the city gas pipeline infrastructure in China from 1997 to 2002. Mr. Chan has served as a non-executive director of DSS, Inc. (formerly known as Document Security Systems, Inc.) since January 2017 and as Chairman of the Board since March 2019. Mr. Chan has served as a member of the Board of Directors of OptimumBank Holdings, Inc. since June 2018. He has also served as a non-executive director of our indirect subsidiary LiquidValue Development Inc. since January 2017. Mr. Chan has also served as a non-executive director of Holista CollTech Ltd., since July 2013. Mr. Chan has served as a director of Alset International’s 99.98%-owned subsidiary GigWorld Inc. since October 2014. Mr. Chan has served as a member of the Board of Directors of Sharing Services Global Corporation since April of 2020. Mr. Chan was formerly a director of Global Medical REIT Inc., a healthcare facility real estate company, from December 2013 to July 2015. He also served as a director of Skywest Ltd., a public Australian airline company from 2005 to 2006. Additionally, from November 2003 to September 2013, he was a Director of SingHaiyi. Mr. Chan served as a member of the Board of Directors of RSI International Systems, Inc., the developer of RoomKeyPMS, a web-based property management system, from June 2014 to February 2019. Mr. Chan has committed that the majority of his time will be devoted to managing the affairs of our company; however, Mr. Chan may engage in other business ventures, including other technology-related businesses. Mr. Chan is a citizen of Singapore and has no business in China. Mr. Chan and is the Chairman and Chief Executive Officer of Alset EHome International Inc., Alset International Limited., and Alset Investment Pte Ltd., the owners of our sponsor.

Rongguo Wei, 50
Chief Financial Officer

As the Co-Chief Financial Officer of Alset EHome International Inc. and Chief Financial Officer of SeD Development Management LLC, Mr. Wei is responsible for oversight of all finance, accounting, reporting and taxation activities for those companies. Prior to joining SeD Development Management LLC in August 2016, Mr. Wei worked for several different U.S. multinational and private companies including serving as Controller at American Silk Mill, LLC, a textile manufacturing and distribution company, from August 2014 to July 2016, serving as a Senior Financial Analyst at Air Products & Chemicals, Inc., a manufacturing company, from January 2013 to June 2014, and serving as a Financial/Accounting Analyst at First Quality Enterprise, Inc., a personal products company, from 2011 to 2012. Mr. Wei served as a member of the Board Directors of Amarantus Bioscience Holdings, Inc., a biotech company, from February to May 2017, and has served as Chief Financial Officer of that company from February 2017 until November 2017. Before Mr. Wei came to the United States, he worked as an equity analyst at Hong Yuan Securities, an investment bank in Beijing, China, concentrating on industrial and public company research and analysis. Mr. Wei is a certified public accountant and received his Master of Business Administration from the University of Maryland and a Master of Business Taxation from the University of Minnesota. Mr. Wei also holds a Master in Business degree from Tsinghua University and a Bachelor’s degree from Beihang University.

 

Board of Directors

William Wu, 55
Director

Mr. Wu previously served as the Executive Director and Chief Executive Officer of Power Financial Group Limited from November 2017 to January 2019. Mr. Wu has served on the Board of Directors of Alset EHome International Inc. since November of 2020. Mr. Wu has served as an independent non-executive director of JY Grandmark Holdings Limited since November 2019. Mr. Wu has served as a member of the Board of Directors of DSS, Inc. since October of 2019. Mr. Wu has served as a Director of Asia Allied Infrastructure Holdings Limited since February 2015. Mr. Wu previously served as a Director and Chief Executive Officer of RHB Hong Kong Limited from April 2011 to October 2017. Mr. Wu served as the Chief Executive Officer of SW Kingsway Capital Holdings Limited (now known as Sunwah Kingsway Capital Holdings Limited) from April 2006 to September 2010. Mr. Wu holds a Bachelor of Business Administration degree and a Master of Business Administration degree of Simon Fraser University in Canada. He was qualified as a Chartered Financial Analyst of The Institute of Chartered Financial Analysts in 1996. Mr. Wu previously worked for a number of international investment banks and possesses over 27 years of experience in the investment banking, capital markets, institutional broking and direct investment businesses. He is a registered license holder to carry out Type 6 (advising on corporate finance) and Type 9 (asset management) regulated activities under the Securities and Futures Ordinance (Chapter 571 of the Laws of Hong Kong). We believe that Mr. Wu’s knowledge of complex, cross-border financial matters is highly relevant to our business and qualifies him to serve as an independent member of the board.

Wong Shui Yeung (Frankie), 51
Director

He holds a bachelor’s degree in business administration. He has over 20 years’ experience in accounting, auditing, corporate finance, corporate investment and development, and company secretarial practice. Mr. Wong was an Independent Non-Executive Director of SMI Holdings Group Limited from April 2017 to December 2020 and SMI Culture & Travel Group Holdings Limited from December 2019 to November 2020, the shares of which are listed on the Main Board of The Stock Exchange of Hong Kong Limited since 13 April 2017. Mr. Wong has served as a director of Alset EHome International Inc. since November 2021, the shares of which are listed on NASDAQ. He has served as an independent non-executive director, and as chairman of the audit & risk management committee and the remuneration committee of Alset International Limited since June 2017. The shares of Alset International Limited are listed on the Catalist Board of the Singapore Stock Exchange. We believe that Mr. Wong’s knowledge of complex, cross-border financial, accounting and tax matters highly relevant to our business, as well as working experience in internal corporate controls, qualify him to serve as an independent member of the board.

Wong Tat Keung (Aston), 50
Director

Mr. Wong has served as a director of Alset EHome International Inc. since November 2020. Since 2010, Mr. Wong has served as the director of Aston Wong CPA Limited. He has been an independent non-executive director of Alset International since January 2017. Mr. Wong has been an independent non-executive director of Roma Group Limited, a valuation and technical advisory firm, since March 2016, and has served as an independent non-executive director of Lerthai Group Limited, a property, investment, management and development company, since December 2018. Previously, he served as the director and sole proprietor of Aston Wong & Co., a registered certified public accounting firm, from January 2006 to February 2010. From January 2005 to December 2005, he was a Partner at Aston Wong, Chan & Co., Certified Public Accountants. From April 2003 to December 2004, he served at Gary Cheng & Co., Certified Public Accountants as Audit Senior. He served as an Audit Junior to Supervisor of Hui Sik Wing & Co., certified public accountants from April 1993 to December 1999. He served as an independent non-executive director of SingHaiyi from July 2009 to July 2013 and ZH Holdings from December 2009 to July 2015. Mr. Wong is a Certified Public Accountant admitted to practice in Hong Kong. He is a Fellow Member of Association of Chartered Certified Accountants and an Associate Member of the Hong Kong Institute of Certified Public Accountants. He holds a Master in Business Administration degree (financial services) from the University of Greenwich, London, England. We believe that Mr. Wong’s knowledge of complex, cross-border financial, accounting and tax matters is highly relevant to our business, as is his working experience in internal corporate controls, and qualify him to serve as an independent member of the board.

ByAnthony Sozzi