UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): January 26, 2022
ALSET EHOME INTERNATIONAL INC.
(Exact name of registrant as specified in its charter)
| Delaware | 001-39732 | 83-1079861 | ||
|
(State or other jurisdiction of incorporation) |
(Commission File Number) |
(IRS Employer Identification No.) |
|
4800 Montgomery Lane, Suite 210 Bethesda, Maryland |
20814 | |
| (Address of principal executive offices) | (Zip Code) |
Registrant’s telephone number, including area code: (301) 971-3940
Not Applicable
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
| ☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Ticker symbol(s) | Name of each exchange on which registered | ||
| Common Stock, $0.001 par value per share | AEI | The Nasdaq Stock Market LLC |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☒
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 1.01 Entry into a Material Definitive Agreement.
As previously disclosed in a Report on Form 8-K filed with the Securities and Exchange Commission on February 12, 2021, Alset EHome International Inc. (the “Company”) and the Company’s subsidiary Hengfai Business Development Pte Ltd. (the “Subsidiary”) entered into an Executive Employment Agreement (the “February 2021 Employment Agreement”) with the Company’s Chairman and Chief Executive Officer, Chan Heng Fai (the “Executive”) on February 8, 2021. As disclosed in a Report on Form 8-K filed with the Securities and Exchange Commission on December 17, 2021, the Company and the Subsidiary entered into a Supplement to the Executive Employment Agreement (the “Supplement” and, together with the February 2021 Employment Agreement, the “Employment Agreement”) with the Executive on December 13, 2021.
Pursuant to the Employment Agreement, the Executive’s compensation will include a fixed salary of $1 per month and two bonus payments each year consisting of: (i) one payment equal to Five Percent (5%) of the growth in market capitalization the Company experiences in any year; and (ii) one payment equal to Five Percent (5%) of the growth in net asset value the Company experiences in any year (the “NAV Bonus”). Pursuant to the Employment Agreement, the calculation of NAV Bonus was to be paid within seven (7) days after publication of the Company’s audited annual consolidated financial statements.
The Compensation Committee of the Company’s Board of Directors has recommended that the Executive be paid $4,800,000 of the NAV Bonus pursuant to the Employment Agreement at the present time. The Company, the Subsidiary and the Executive entered into an Amendment to the Employment Agreement, dated as of January 26, 2022 (the “Amendment”), and such bonus was paid. The Amendment provides that in the event that the net asset value of the Company is determined to be a greater or lesser amount than $4,800,000 upon the completion and filing of the Company’s audited financial statements, the Executive shall be entitled to the balance of such amount or shall reimburse the Company, as applicable. The Amendment further provides that the Company shall assume all obligations of the Subsidiary under the Employment Agreement.
The foregoing description of the Amendment, the Supplement and the February 2021 Employment Agreement does not purport to be complete and is qualified in its entirety by reference to the complete texts of the Amendment, the Supplement and the February 2021 Employment Agreement. A copy of the Amendment is filed as Exhibit 10.1 to this Current Report on Form 8-K. A copy of the February 2021 Employment Agreement was filed as Exhibit 10.1 to a Current Report on Form 8-K filed by the Company on February 12, 2021. A copy of the Supplement was filed as Exhibit 10.1 to a Current Report on Form 8-K filed by the Company on December 17, 2021.
Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
On January 26, 2022, the Company and Hengfai Business Development Pte Ltd. entered into an Amendment to the Executive Employment Agreement with the Company’s Chief Executive Officer, Chan Heng Fai. The description of the Amendment set forth in Item 1.01 above is incorporated herein by reference thereto.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits.
| Exhibit Number | Exhibit | |
| 10.1 | Amendment to Executive Employment Agreement, by and between Alset EHome International Inc., Hengfai Business Development Pte Ltd. and Chan Heng Fai, dated as of January 26, 2022. | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Form 8-K to be signed on its behalf by the undersigned hereunto duly authorized.
| ALSET EHOME INTERNATIONAL INC. | ||
| Dated: February 1, 2022 | By: | /s/ Rongguo Wei |
| Name: | Rongguo Wei | |
| Title: | Co-Chief Financial Officer | |
Exhibit 10.1
AmENDMENT TO
EXECUTIVE EMPLOYMENT AGREEMENT
THIS AMENDMENT (this “Amendment”), dated as of this 26th day of January, 2022, amending that certain Employment Agreement, dated February 8, 2021 (the “Employment Agreement”), is entered into by and among Alset EHome International Inc. (“AEI”), Hengfai Business Development Pte. Ltd. (the “Hengfai Business Development”) and Chan Heng Fai (the “Executive”).
WHEREAS, the parties hereto wish to amend or supplement certain sections of the Employment Agreement;
NOW, THEREFORE, on the basis of the mutual covenants and agreements made herein, which are expressly deemed to constitute adequate and sufficient consideration in all respects, the parties hereto hereby agree as follows:
| 1. | Compensation. The parties hereto hereby agree that for purposes of the calculation of the NAV Bonus, as defined in Section 3.3 of the Employment Agreement, the initial NAV Bonus shall be paid as of the date hereof, based on the current calculation of the Net Asset Value Change. The parties hereto agree that the NAV Bonus to be paid as of the date hereof shall be deemed to be equal to $4,800,000. In the event that the Net Asset Value Change shall be determined to be a greater or lesser amount upon the completion and filing of AEI’s audited financial statements for the fiscal year ended December 31, 2021, the Executive shall reimburse AEI for any difference between the amount paid as of the date hereof and the NAV Bonus calculated at such time, or, as appropriate, the Executive shall be due the balance of such amount of the initial NAV Bonus they would otherwise be entitled to. Such modification to the NAV Bonus shall only be applicable for the NAV Bonus due in connection with the increase in Net Asset Value for the period ended December 31, 2021. No other bonus amounts, or the timing of the payment thereof, shall be modified hereby. |
| 2. | Hengfai Business Development Pte. Ltd. The parties hereto hereby agree that AEI shall assume any and all obligations of its subsidiary Hengfai Business Development pursuant to the Employment Agreement. In addition, all obligations of the Executive pursuant to the Employment Agreement shall be due and owned solely to AEI instead of Hengfai Business Development. |
| 3. | No Other Modifications. Except as specifically set forth herein, all terms and conditions of the Employment Agreement, as amended, shall remain unchanged and in full force and effect. |
| 4. | Successors and Assigns. This Amendment shall be binding upon and shall inure to the benefit of the parties hereto and their respective heirs, executors, administrators, personal representatives, successors and assigns. |
| 5. | No Strict Construction. The parties hereto jointly participated in the negotiation and drafting of this Amendment. The language used in this Amendment shall be deemed to be the language chosen by the parties hereto to express their collective mutual intent, this Amendment shall be construed as if drafted jointly by the parties hereto, and no rule of strict construction shall be applied against any party hereto. |
| 6. | Counterparts. This Amendment may be executed in any number of counterparts (including by fax or any other means of electronic transmission each of which shall be an original for all purposes), and all of which taken together shall constitute one and the same instrument. |
[Signature Pages Follow]
AMENDMENT TO EXECUTIVE EMPLOYMENT AGREEMENT
IN WITNESS WHEREOF, the parties hereto have executed this Amendment to the Employment Agreement as of the date first set forth above.
| ALSET EHOME INTERNATIONAL INC. | ||
| By: | William Wu | |
| Name: | William Wu | |
| Title: | Director | |
| HENGFAI BUSINESS DEVELOPMENT PTE. LTD. | ||
| By: | Chan Heng Fai | |
| Name: | Chan Heng Fai | |
| Title: | Director | |
| CHAN HENG FAI | ||
| Chan Heng Fai | ||
| Name: | Chan Heng Fai | |
| 2 |