Alset Capital Inc.'s (TSXV:KSUM)(OTC:ALSCF)(FSE:1R60, WKN:A3ESVQ) investee company, Cedarcross International Technologies Inc. ("Cedarcross"), continues to score deals. Yesterday, ALSCF announced Cedercross signed an agreement with an arm's length counterparty, Big Energy Investments Inc., DBA Ceti AI to distribute three (3) Nvidia H100 HGX 8GPU servers, which is anticipated to generate $1.37 million in revenue for Cedarcross, with an option for the counterparty to acquire up to 200 H100 HGX 8GPU servers, which if exercised would generate $91.7 million in revenue.

Following Cedarcross' two previously announced distribution agreements announced on April 22, 2024 and May 16, 2024, this agreement marks an important advancement in Cedarcross' distribution business within the high-performance computing (HPC) server market. Cedarcross has now secured cumulative revenue year to date of approximately $29.7 million through its HPC server distribution business vertical alone. These distribution agreements underscore the significant demand and strategic market positioning of Cedarcross in the HPC landscape.

"This transaction represents another significant milestone for Cedarcross" said Morgan Good, CEO of Alset. "It highlights their strong partnerships, which provide access to high-performance computing Nvidia GPU servers for both in-house use and third parties. Additionally, this distribution vertical enhances their existing compute leasing business unit, fostering diversity in their offerings and deeper market penetration."

The estimated gross margin from the initial $1.37 million purchase order is approximately $176k, and the estimated gross margin assuming all 200 H100 HGX 8GPU servers are purchased is approximately $11,782,000.

As of the announcement, Alset has been informed that Cedarcross has received a 10% downpayment for the initial $1.37 million purchase. The payment schedule is as follows:

• $413,055 due within fourteen (14) days of June 4th, 2024

• $275,370 due when the servers are ready to ship

• $275,370 due upon receipt of the servers by Ceti AI

• $275,370 due seven (7) days after Ceti AI receives and accepts the servers

The sale of up to 200 servers to Ceti AI is subject to Ceti AI obtaining approval from the Original Equipment Manufacturer (OEM) compliance.* All amounts in Canadian Dollars unless otherwise specified. These figures are converted from US dollars at an exchange rate of 1.37 (USD to CAD).

The news on Thursday adds to a period of positive developments on other business fronts. Last month, Alset Capital (the "Company") provided a corporate update highlighting its portfolio companies making several significant operational advancements. Included in that update:

Artificial Intelligence Advisory Board

On May 23, 2024, the Company announced the formation of its Artificial Intelligence Advisory Board ("AI Advisory Board"), alongside the appointments of former Google and Panasonic AI Executive Willy Sun and Web 3.0 Pioneer Michael Gord. The AI Advisory Board will assist the Company's board of directors and executive officers to provide strategic guidance and insights on the Company's AI initiatives. Comprising diverse experts, the board will advise on AI strategy, identify emerging trends, ensure compliance with ethical standards, manage risks, evaluate AI performance, and foster innovation.

Financing

In March and May of 2024, the Company completed non-brokered private placements for total gross proceeds of approximately $7.6 million.

Stock Exchange Listings

On March 27, 2024, the Company announced the listing of its common shares (the "Common Shares") on the Frankfurt Stock Exchange (the "FSE") under the trading symbol "1R60", WKN: A3ESVQ, and ISIN: CA02115L2003.

On May 2, 2024, the Company announced that its Common Shares have commenced trading on the OTC Market under the symbol "ALSCF" effective April 26, 2024. Additionally, the Company has received Depository Trust Company (DTC) eligibility in the United States, facilitating easier and broader trading access for US investors.

The Common Shares are currently listed on the Toronto Stock Exchange Venture (the "TSXV") in Canada, the OTC in the U.S., and the FSE in Germany.

Operational Update

Cedarcross International Technologies Inc. ("Cedarcross")

The Company's investee company, Cedarcross, has made significant strides in its pursuit to become a major AI compute provider.

On April 2, 2024, the Company announced a $3.7 million secured loan (the "Loan") to Cedarcross to purchase 10 Nvidia H100 HGX 8GPU servers capable of 700,000 compute hours per annum. The Loan is secured against all present and after acquired property of Cedarcross, including specific asset security against five (5) Nvidia 8GPU HGX H100 Servers ("Nvidia H100 Servers"). The Loan is repayable in full on July 1, 2025, and will bear interest at a rate of 15% per annum.

AI Computing Leasing

On April 25, 2024, Cedarcross entered into a two-year AI computing leasing agreement expected to generate approximately $5.5 million in total revenue, with aggregate gross margin of approximately $4.4 million over the contract's duration. Cedarcross will provide approximately 700,000 compute hours annually, totaling 1.4 million AI compute hours over the contract's duration. This agreement underscores Cedarcross' growing influence and capabilities in the realm of AI infrastructure.

As highlighted in a recent interview with Sam Altman, CEO of OpenAI, Altman emphasized the critical role of computing power, suggesting that "compute" will be the "currency of the future."1 Cedarcross, aligned with this vision, is strategically positioned to address this escalating demand by providing access to the world's fastest AI servers, leveraging Nvidia's H100 HGX GPUs.

Cedarcross has established an AI computing hub, powered by Nvidia H100 Servers. Currently, five (5) Nvidia H100 Servers are fully installed and interconnected using Infiniti brand network components. Each server is linked to eight 400GB optical modules, ensuring optimal efficiency. Cedarcross sold five (5) of its previously purchased Nvidia H100 Servers to Big Energy Investments Inc., DBA Ceti AI ("Ceti AI"), (as described in HPC Computing Server Distribution section). The proceeds from this sale funded a purchase order made through CoinDigger DBA Earthmade Computer Corp. ("Earthmade") for five (5) additional Nvidia H100 Servers from Super Micro Computer, Inc. (NASDAQ: SMCI), solidifying Cedarcross' relationships with both Earthmade and Super Micro Computer, Inc.

Cedarcross has begun accruing revenue from its initial five (5) Nvidia H100 Servers and anticipates incremental revenue from its additional five (5) Nvidia H100 Servers to start accruing soon after the delivery and installation of the additional servers sourced from Earthmade and Super Micro Computer, Inc. (NASDAQ: SMCI).

HPC Computing Server Distribution

On April 22, 2024, Cedarcross entered into a Distribution Agreement incremental to its previously announced Supply Agreement with Earthmade. The Distribution Agreement enables Cedarcross to distribute Nvidia GPU High-Performance Computing (HPC) servers and receive assistance from Earthmade in obtaining hardware allocation from Super Micro Computer, Inc. (NASDAQ:SMCI).

Additionally, Cedarcross entered into an HPC server purchase agreement with Ceti AI for the sale of five (5) Nvidia H100 HGX 8GPU servers, generating approximately C$2.3 million in gross revenue. The aggregate return for Cedarcross is expected to be up to $240K, subject to ordinary course chargebacks and associated expenses.

On May 16, 2024, Cedarcross signed an agreement with an arm's length counterparty to distribute 64 Nvidia H100 Servers, generating $26 million in revenue for Cedarcross. The estimated gross margin from this agreement will be approximately $2.3 million.

Cedarcross has now secured cumulative revenue year-to-date of approximately $28 million through its HPC server distribution business vertical alone. These agreements underscore the robust demand and strategic market positioning of Cedarcross in the HPC landscape.

Vertex AI Ventures Inc. ("Vertex")

On May 21, 2024, Vertex announced a strategic partnership with Nom Nom AI Inc., formalized through a Master Services Agreement. This collaboration focuses on AI data engineering and automation to enhance business intelligence and innovation. Vertex aims to offer advanced data management tools, while Nom Nom specializes in data engineering, security, and automation, providing solutions to streamline operations, reduce expenses, and maintain competitive edges. This partnership will benefit future clients by improving data observability, providing real-time analytics, and optimizing machine performance.

Outlook

Cedarcross aims to secure additional HPC Server Distribution contracts, service its computing leasing client, and leverage expected and future cash flows to acquire additional servers to grow its computing leasing business. Cedarcross is also exploring compute-for-equity structured transactions in the event of excess compute capacity with future HPC servers, potentially lending significant upside to Cedarcross.

Vertex plans to leverage its partnership with Nom Nom to drive innovation in managed data services and AI, enhancing data quality, security, and infrastructure performance. This collaboration is expected to bring forth numerous benefits for future clients, including enhanced data observability, insights, optimization of machine performance, and real-time analytics, particularly for those utilizing Alset's portfolio companies' AI computing infrastructure.

The Company is also actively seeking potential accretive investments, acquisitions, and/or business alliances in other AI-focused sectors, including data centres, power infrastructure, HPC server cooling systems, and energy usage reduction software.

Alset Capital common stock trades on the following markets: (TSXV:KSUM)(OTC:ALSCF)(FSE:1R60, WKN:A3ESVQ). Find out more about at Alset capital, Inc. at alsetai.com.

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