Alset Inc. Announces $1.5 Million Registered Direct Offering Priced at the Market Under Nasdaq Rules

Rhea-AI Summary

Alset (NASDAQ: AEI) has announced a $1.5 million registered direct offering with institutional investors, priced at $1.00 per share under Nasdaq rules. The offering includes 1,500,000 shares of common stock or pre-funded warrants. The pre-funded warrants are priced at $0.999 with a $0.001 exercise price and will be immediately exercisable.

The transaction is expected to close around January 3, 2025. Aegis Capital Corp. is serving as the exclusive placement agent, with proceeds intended for general corporate purposes and working capital. The offering is being conducted through an effective shelf registration statement previously filed with the SEC.

Positive

• Immediate access to $1.5 million in additional capital
• At-market pricing indicates fair valuation
• Pre-funded warrants provide flexible funding structure

Negative

• Potential dilution for existing shareholders
• Share price fixed at $1.00 indicates low valuation
• Additional shares may pressure stock price

Insights

Financial Analyst

This $1.5 million registered direct offering represents a significant dilutive event for Alset Inc., particularly concerning given their micro-cap status with a market cap of just $10.1 million. The pricing at $1.00 per share and the inclusion of pre-funded warrants with a negligible exercise price of $0.001 indicates potential downward pressure on the stock. The structure, utilizing pre-funded warrants alongside common stock, suggests institutional investors are seeking downside protection. For a company operating across multiple sectors including real estate, financial services and biohealth, the small size of this capital raise may only provide minimal operational runway. The immediate exercisability of the warrants could lead to increased selling pressure in the near term.

In simpler terms: The company is selling new shares to raise cash, but the amount is small compared to their size and the way it's structured could push the stock price down. Think of it like selling more slices of a pizza - each existing slice (share) becomes worth less as more are created.

Legal Expert

The offering's compliance with Nasdaq rules and execution through an effective shelf registration statement (S-3) demonstrates proper regulatory adherence. The engagement of multiple legal firms (Sichenzia Ross Ference Carmel LLP and Kaufman & Canoles, P.C.) and Aegis Capital as placement agent provides institutional credibility. However, the use of pre-funded warrants alongside common stock adds complexity to the capital structure. The prospectus requirements and SEC filing obligations are being properly addressed, though investors should note the broad "general corporate purposes and working capital" use of proceeds offers transparency.

For the average person: The company is following all the proper legal steps to raise money, but they're not being very specific about exactly how they'll use it. It's like getting a loan from the bank but only saying you'll use it for "general expenses" rather than specifying what you're buying.

BETHESDA, MD, Jan. 02, 2025 (GLOBE NEWSWIRE) -- Alset Inc. (NASDAQ: AEI) (the “Company”), a diversified company engaged through its subsidiaries in the development of EHome communities and other real estate, financial services, digital transformation technologies, biohealth activities and consumer products with operations in the United States, Singapore, Hong Kong and South Korea, today announced that it has entered into definitive agreements in a registered direct offering with institutional investors for the purchase and sale of approximately $1.5 million of shares of common stock and pre-funded warrants at a price of $1.00 per share of common stock. The entire transaction has been priced at the market under Nasdaq rules.

The offering consists of the sale of 1,500,000 shares of common stock (or pre-funded warrants). The public offering price per share of common stock is $1.00 (or $0.999 for each pre-funded warrant, which is equal to the public offering price per share of common stock to be sold in the offering minus an exercise price of $0.001 per pre-funded warrant). The pre-funded warrants will be immediately exercisable and may be exercised at any time until exercised in full. For each pre-funded warrant sold in the offering, the number of shares of common stock in the offering will be decreased on a one-for-one basis.

Aggregate gross proceeds to the Company are expected to be approximately $1.5 million. The transaction is expected to close on or about January 3, 2025, subject to the satisfaction of customary closing conditions. The Company expects to use the net proceeds from the offering, together with its existing cash, for general corporate purposes and working capital.

Aegis Capital Corp. is acting as exclusive placement agent for the offering. Sichenzia Ross Ference Carmel LLP is acting as U.S. counsel to the Company. Kaufman & Canoles, P.C. is acting as U.S. counsel to Aegis Capital Corp.

The registered direct offering is being made pursuant to an effective shelf registration statement on Form S-3 (No. 333-264234) previously filed with the U.S. Securities and Exchange Commission (SEC) and declared effective by the SEC on May 5, 2022. A final prospectus supplement and accompanying prospectus describing the terms of the proposed offering will be filed with the SEC and will be available on the SEC’s website located at www.sec.gov. Electronic copies of the final prospectus supplement and the accompanying prospectus may be obtained, when available, by contacting Aegis Capital Corp., Attention: Syndicate Department, 1345 Avenue of the Americas, 27th floor, New York, NY 10105, by email at syndicate@aegiscap.com, or by telephone at +1 (212) 813-1010.

Interested parties should read in their entirety the prospectus supplement and the accompanying prospectus and the other documents that the Company has filed with the SEC that are incorporated by reference in such prospectus supplement and the accompanying prospectus, which provide more information about the Company and such offering.

This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

About Alset Inc.

Alset Inc. is a diversified company executing on its vision to accelerate sustainable healthy living with a focus on the development of EHome communities and other property development, financial services, digital transformation technologies, biohealth activities and consumer products. Through its operating subsidiaries, Alset's mission is to provide a healthy living ecosystem that drives long-term exponential growth, building liquidity and value for shareholders. For more information, please visit: www.alsetinc.com.

Forward-Looking Statements

The foregoing material may contain “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, each as amended. Forward-looking statements include all statements that do not relate solely to historical or current facts, including without limitation statements relating to the completion of the offering, the satisfaction of customary closing conditions and the use of proceeds from the offering, and can be identified by the use of words such as “may,” “will,” “expect,” “project,” “estimate,” “anticipate,” “plan,” “believe,” “potential,” “should,” “continue” or the negative versions of those words or other comparable words. Forward-looking statements are not guarantees of future actions or performance.  These forward-looking statements are based on information currently available to the Company and its current plans or expectations and are subject to a number of risks and uncertainties that could significantly affect current plans. Should one or more of these risks or uncertainties materialize, or the underlying assumptions prove incorrect, actual results may differ significantly from those anticipated, believed, estimated, expected, intended, or planned. Although the Company believes that the expectations reflected in the forward-looking statements are reasonable, the Company cannot guarantee future results, performance, or achievements. Except as required by applicable law, including the security laws of the United States, the Company does not intend to update any of the forward-looking statements to conform these statements to actual results.

Investor Contact: Alset Inc., 4800 Montgomery Lane, Suite 210, Bethesda, MD 20814 Email: contact@alsetinc.com

FAQ

What is the size and price of Alset's (AEI) January 2025 registered direct offering?

Alset's registered direct offering is for $1.5 million, priced at $1.00 per share of common stock or $0.999 for pre-funded warrants.

When will Alset's (AEI) $1.5M registered direct offering close?

The offering is expected to close on or about January 3, 2025, subject to customary closing conditions.

How will Alset (AEI) use the proceeds from the January 2025 offering?

Alset plans to use the net proceeds from the offering for general corporate purposes and working capital.

What are the terms of AEI's pre-funded warrants in the January 2025 offering?

The pre-funded warrants are priced at $0.999 with an exercise price of $0.001, and can be exercised immediately until fully exercised.

Who is the placement agent for Alset's (AEI) January 2025 offering?

Aegis Capital Corp. is acting as the exclusive placement agent for the offering.