Item 1.01. Entry into a Material Definitive Agreement.
Registration Rights Agreements. On November 19, 2021, Value Exchange
International, Inc. (“Company”) signed the following three separate registration rights agreements with Mr. Heng Fai Chan:
(1) a registration rights agreement for 953,595 shares of Company Common
Stock, $0.00001 par value, (“Common Stock”) to be acquired by Mr. Heng Fai Chan under an agreement with a holder of those
shares of Common Stock; and
(2) a registration rights agreement for 310,391 shares of Common Stock
to be acquired by Mr. Heng Fai Chan under an agreement with a holder of those shares of Common Stock; and
(3) a registration rights agreement for 712,977 shares of Common Stock
to be acquired by Mr. Heng Fai Chan under an agreement with a holder of those shares of Common Stock.
The Company is not a party to the stock
purchase agreements referenced above.
As used below, “Shares”
means the shares of Common Stock covered by the above referenced registration rights agreements.
The sellers of the Shares referenced
above are not directors or senior officers of the Company and are not, to the knowledge of the Company, beneficial owners of more than
10% of the issued and outstanding shares of Common Stock. One of the sellers of Shares is a research and development director of a subsidiary
of the Company, who is not deemed to be an “officer” under Rule 16a-1(f) under the Securities Exchange Act of 1934.
Based on public filings by Mr. Chan, the Company
understands that he is the beneficial owner of 11,857,680 shares of Common Stock (excluding the Shares referenced above), which is approximately
32.8% of the issued and outstanding shares of Common Stock.
The three registration rights agreement have the same basic terms and
conditions, which in summary are:
(a) Piggyback
Registration Rights. The Company shall include the Shares on any registration statement the Company files with Securities and Exchange
Commission (“SEC”) under the Securities Act of 1933, as amended, (“Securities Act”) (but excluding any Form S-8
registration statement), which obligation is subject to: (i) any restrictions imposed by any managing underwriter on number of shares
that will be included in the registration statement in an offering that is underwritten and (ii) any restrictions imposed on number of
shares that can be included in the registration statement under SEC rules or imposed by SEC guidance in comment letters for the registration
statement. The Company shall attempt to include the Shares in a registration statement subject to the registration rights, including a
reduction of other shares covered by the registration statement. Buyer must timely supply information required for a registration statement
in order to exercise the registration rights.
(b) Expenses.
Company will pay following expenses for registration of the Shares: (i) all registration and filing fees; (ii) fees and expenses of compliance
with U.S. securities or blue sky laws (including reasonable fees and disbursements of outside counsel for any underwriters in connection
with blue sky qualifications of registrable securities); (iii) printing, messenger, telephone and delivery expenses; (iv) reasonable fees
and disbursements of legal counsel for the Company; (v) reasonable fees and disbursements of all independent registered public accountants
of the Company incurred specifically in connection with the registration statement; and (vi) other expenses required to be listed in Part
II of the registration statement.
(c) Maintenance
of Effectiveness of registration statement. Company shall use its commercially reasonable efforts to keep any registration statement continuously
effective under the Securities Act until the first to occur of: (i) the date that is one (1) year from the date the registration statement
is declared effective by the SEC or (ii) the date that all Shares covered by the registration statement have been sold, thereunder or
pursuant to Rule 144 under the Securities Act (“Rule 144”).
(d) No
Obligation to File. Company will not be obligated to file a registration statement for Shares if the Company has reasonable basis for
believing that the filing of the registration statement would violate applicable federal or state securities laws and its outside securities
counsel concurs with that conclusion. There is no penalty provision for the inability to obtain effectiveness of the registration and
no requirement to file a registration statement for the Shares by a certain date.
(e) Governing
Law. Registration rights agreements are subject to the laws of the State of Nevada.
The registration rights agreements
have other usual and customary provisions for a piggyback registration rights agreement. The above summary of basic terms and conditions
of the three registration rights agreements is qualified in its entirety by reference to the actual three registration rights agreement,
which are filed as Exhibits 10.1, 10.2 and 10.3 to this Current Report of Form 8-K.
As previously reported by a Current Report on
Form 8-K, dated November 8, 2021 and filed by the Company with the Commission on November 9, 2021, the Company entered into 3 separate
piggyback registration rights agreements with Mr. Chan for three blocks of 500,000, 2,024,400 and 674,800 shares of Common Stock.
Mr. Heng Fai Chan. Based on
available information, Company understands that:
Mr.
Heng Fai (Ambrose) Chan (also known as Chan Heng Fai) is a Singapore citizen and entrepreneur focused on financial
restructuring and corporate transformations and is a beneficial owner of 8,658,480 shares of Company Common Stock (excluding Shares
to be acquired under the above referenced stock purchase agreements), which ownership is approximately 23.9% of the issued and outstanding
shares of Common Stock as of October 31, 2021. His ownership consists of 2,100,000 shares of Common Stock personally held by Heng
Fai Chan; 6,500,000 shares of Common Stock held by GigWorld, Inc., a Delaware corporation subject to the reporting requirements of the
Securities Exchange Act of 1934; 39,968 held by BMI Capital Partners International Limited; and 18,512 held by LiquidValue Development
Pte Ltd. LiquidValue Development Pte Ltd. is a subsidiary of Alset EHome International. Heng Fai Ambrose Chan is the Chief Executive Officer
and Chairman of Alset EHome International Inc., and is personally and through an entity, the largest shareholder of Alset EHome International
Inc. Mr. Chan is also the Executive Chairman of GigWorld, Inc. GigWorld, Inc.’s majority shareholder
is Alset International Limited. Alset International Limited’s majority shareholder is Alset EHome International Inc. Mr. Chan is,
personally and through an entity he controls, the largest shareholder of Alset EHome International Inc. Mr. Chan is the Chief Executive
Officer and Chairman of each of Alset International Limited and Alset EHome International Inc. Mr.
Chan serves or has served as a director and senior executive officer for several companies, including current service as Chairman of the
Board of Directors of Document Security Systems, Inc., an New York Stock Exchange listed company, a non-executive director of Holista
CollTech Ltd., an Australian Securities Exchange listed company, and Chairman of the Board and Chief Executive Officer of Alset EHome
International Inc.
Item 9.01 Exhibits.