SEC Form 8-K filed
$HFEN
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 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 6,
2021
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HF ENTERPRISES INC.
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(Exact
name of registrant as specified in its charter)
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Delaware
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001-39732
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83-1079861
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(State
of incorporation or organization)
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(Commission
File
Number)
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(IRS
Employer Identification No.)
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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
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):
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☐
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Written
communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
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☐
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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☐
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17
CFR 240.14d-2(b))
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17
CFR 240.13e-4(c))
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Securities
registered pursuant to Section 12(b) of the Act:
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Title of Each Class
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Trading Symbol(s)
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Name of Each Exchange on Which Registered
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Common
Stock, $0.001 par value
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HFEN
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The
Nasdaq Stock Market LLC
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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.
Effective
as of January 6, 2021, HF Enterprises Inc. (the
“Company”) entered into a binding term sheet (the
“Term Sheet”) with Mr. Chan Heng Fai, the founder,
Chairman and Chief Executive Officer of the Company, for four
proposed transactions, consisting of (i) purchase of certain
warrants (the “Warrants”) to purchase 1,500,000,000
shares of Alset International Limited (SGX:40V) (“Alset
International”); (ii) purchase of all of the issued and
outstanding stock of LiquidValue Development Pte Ltd.
(“LVD”); (iii) purchase of 62,122,908 ordinary shares
in True Partners Capital Holding Limited (HKG: 8657) (“True
Partners”); and (iv) purchase of 4,775,523 shares of the
common stock of American Pacific Bancorp Inc.
(“APB”).
Alset International Limited
Incorporated
in September 2009 and listed on the Singapore Exchange in July
2010, Alset International operates as a global enterprise involved
in (i) property development and investments primarily in the United
States and Western Australia; (ii) development, research, testing,
manufacturing, licensing and distribution of biomedical products;
(iii) asset management with a primary focus in the U.S. medical and
housing REIT space; (iv) direct sales of a variety of health and
wellness products; and (v) information technology-related
businesses, including blockchain technology. The Company currently
owns approximately 57.1% of Alset International.
In
accordance with the Term Sheet, the Company will pay the lesser of
$28,363,966.42 or the appraised value of the warrants to purchase
1,500,000,000 shares of Alset International in the form of newly
issued shares of the Company’s common stock. The price of
such shares shall be equivalent to the average closing price of the
Company’s common stock over the five days prior to the
execution of the Term Sheet.
Mr.
Chan Heng Fai is both Chairman of the Board and the Chief Executive
Officer of the Company and the Chairman and Chief Executive Officer
of its subsidiary Alset International, as well as a significant
shareholder of both the Company and Alset International. Mr. Chan
owns 183,989,200 shares of Alset International (both directly and
through an entity, but not including any shares owned by the
Company), representing approximately 10.4% of the outstanding
shares of Alset International. In addition, Mr. Chan holds options
to purchase 1,061,333 shares of Document Security Systems, Inc., a
company that the Company has a significant ownership position in,
also owns 127,179,311 shares of Alset International, which
represents approximately 7.2% of the outstanding shares of Alset
International as of the date of the Term Sheet.
LiquidValue Development Pte Ltd.
LVD is
currently wholly owned by our Chairman and Chief Executive Officer,
Chan Heng Fai. LVD’s existing presence in the asset
management field will be leveraged to establish an actively managed
open-ended exchange-traded fund (ETF) in the United States focused
on exponential-growth potential investment opportunities with
disruptive innovations positioned for long-term growth. Upon
completion of this proposed transaction set forth in the Term
Sheet, LVD will be a wholly owned subsidiary of the
Company.
In
accordance with the Term Sheet, the Company will pay SGD
$229,245.36 (USD $173,394.87) to acquire all of the outstanding
capital stock of LVD in the form of newly issued shares of the
Company’s common stock. The price of such shares shall be
equivalent to the average closing price of the Company’s
common stock over the five days prior to the execution of the Term
Sheet.
True Partner Capital Holding Limited
True
Partners operates as a fund management company in the United States
and Hong Kong. True Partners manages funds and provides managed
accounts on a discretionary basis using a proprietary trading
platform, offering investment management and consultancy services.
True Partners also develops and supports its trading platform and
related proprietary software and provides management services for a
portfolio of securities or futures contracts. Its fund investors
and managed accounts are primarily professional investors,
including collective investment undertakings, family offices,
pension funds, high-net worth individuals, endowments/foundations,
and financial institutions. True Partners was founded in 2010 and
is headquartered in Tsim Sha Tsui, Hong Kong. True Partners is
currently listed on the Hong Kong Stock Exchange (HKSE), with over
USD $1.6 billion assets under management (AUM).
Pursuant
to the Term Sheet, the Company will pay USD $6,729,629.29 for the
62,122,908 shares of True Partners in the form of newly issued
shares of the Company’s common stock. The price of such
shares shall be equivalent to the average closing price of the
Company’s common stock over the five days prior to the
execution of the Term Sheet.
American Pacific Bancorp Inc.
APB is
a bank holding company, focused on acquiring controlling equity
positions in commercial bank(s) in the United States. APB will
inject digital banking capabilities into its portfolio banks to
provide global banking services to clients worldwide, with the goal
of increasing profitability of its portfolio commercial banks. APB
concentrates on the digital banking space and decentralized finance
(blockchain-based FinTech) capabilities. Pursuant to the Term
Sheet, the Company will be acquiring approximately 86.4% of the
total equity of APB for a price of the lesser of $28,653,138 or the
appraised value of 4,775,523 shares of APB, in the form of newly
issued shares of the Company’s common stock. The price of
such shares shall be equivalent to the average closing price of the
Company’s common stock over the five days prior to the
execution of the Term Sheet.
The
transactions described above shall be subject to the terms and
conditions of the definitive agreements, financial and legal due
diligence by all relevant parties, and the approval of the
shareholders of the Company. Mr. Chan recused himself from any
deliberation or vote regarding any of the four transactions
described herein. The Audit Committee of the Company’s Board
of Directors reviewed, approved and determined that it is advisable
and in the best interests of the Company to complete the four
proposed transactions described above. The Company’s Board of
Directors approved the Term Sheet on January 6,
2021.
The
foregoing description of the Term Sheet does not purport to be
complete and is qualified in its entirety by reference to the
complete text of the Term Sheet, a copy of which is filed as
Exhibit 10.1 to this Current Report on Form 8-K.
Item
7.01
Regulation
FD Disclosure.
On
January 12, 2021, the Company issued a press release (the
“Press Release”) announcing its proposed four
investment transactions pursuant to the Term Sheet.
A copy
of the Press Release is being furnished as Exhibit 99.1 to this
current report on Form 8-K. The information contained under Item
7.01 in this Current Report on Form 8-K shall not be deemed
“filed” for purposes of Section 18 of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”),
or incorporated by reference in any filing under the Securities Act
of 1933, as amended (the “Securities Act”) or the
Exchange Act, except as shall be expressly set forth by specific
reference in such a filing. The furnishing of the information under
Item 7.01 in this Current Report on Form 8-K is not intended to,
and does not, constitute a representation that such furnishing is
required by Regulation FD or that the information contained in this
Current Report on Form 8-K constitutes material investor
information that is not otherwise publicly available.
This
Current Report on Form 8-K and exhibits may contain these types of
statements, which are “forward-looking statements”
within the meaning of the Private Securities Litigation Reform Act
of 1995, and which involve risks, uncertainties and reflect the
Registrant’s judgment as of the date of this Current Report
on Form 8-K. Forward-looking statements may relate to, among other
things, operating results and are indicated by words or phrases
such as “expects,” “should,”
“will,” and similar words or phrases. These statements
are subject to inherent uncertainties and risks that could cause
actual results to differ materially from those anticipated at the
date of this Current Report on Form 8-K. The Company disclaims any
obligation to, and will not, update any forward-looking statements
to reflect events or circumstances after the date hereof. Investors
are cautioned not to rely unduly on forward-looking statements when
evaluating the information presented within.
Item
9.01
Financial
Statements and Exhibits.
(d)
Exhibits.
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Exhibit
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Number
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Exhibit
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Binding
Term Sheet on Share Exchange Transaction Among HF Enterprises Inc.
and Mr. Chan Heng Fai Ambrose, dated January 4, 2021.
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Press
Release dated January 12, 2021.
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SIGNATURE
Pursuant to the
requirements of Section 12 of the Securities Exchange Act of 1934,
the Registrant has duly caused this Registration Statement to be
signed on its behalf by the undersigned, thereto duly
authorized.
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HF ENTERPRISES INC.
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Date:
January 12, 2021
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By:
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/s/ Rongguo
Wei
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Name:
Rongguo Wei
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Title:
Co-Chief Financial Officer
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