ALSET Capital Inc. (KSUM.V) is an investment issuer that is focused on investment in diversified industries such as technology, healthcare, industrial, special situations, operating businesses through both debt and equity using cash resources or shares in its capital. ALSET Capital is uniquely positioned in the burgeoning AI industry through its 49.0% stake in Cedarcross International Technologies Inc., a company harnessing the power of NVIDIA’s cutting-edge H100 GPUs. This investment places ALSET at the forefront of the AI cloud computing hardware sector, offering significant growth potential in a market driven by insatiable demand for advanced computational capabilities.
Today, the Company announced that its investee company, Cedarcross International Technologies Inc., has signed an agreement with an arm’s length counterparty, Big Energy Investments Inc., DBA Ceti AI to distribute three 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 this announcement, the Company 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 stock has been ranging within a flag pattern bouncing between the trendlines. The stock has unfortunately broken below the lower portion of the flag pattern and today’s price action is seeing a successful retest. The recent lows are likely going to be taken out and the stock could see a move down to the $0.08 support level.