DEF 14A: HWH International Inc. Announces Annual Meeting of Stockholders and Key Proposals

HWH International Inc. will hold its 2024 Annual Meeting of Stockholders virtually on December 12, 2024, to vote on the election of directors, ratification of the independent auditor, and an amendment to allow shareholder action by written consent.

Summary

• HWH International Inc. is holding its 2024 Annual Meeting of Stockholders on December 12, 2024, virtually.
• Stockholders will vote on three proposals: electing four directors, ratifying the appointment of Grassi & Co., CPAs, P.C. as the independent auditor for the year ending December 31, 2024, and approving an amendment to the company's certificate of incorporation to allow shareholders to take action by written consent.
• The record date for determining stockholders eligible to vote is October 15, 2024.
• The Board of Directors recommends voting FOR all director nominees, FOR the ratification of the auditor, and FOR the written consent proposal.
• As of the record date, there were 22,257,838 shares of common stock outstanding and entitled to vote.

Sentiment

Score: 5

Explanation: The document presents a mix of positive and negative aspects. While the company is taking steps to improve accessibility and reduce costs, there are concerns about related-party transactions and potential dilution. The sentiment is neutral overall.

Positives

• The company is providing stockholders with the opportunity to participate in the Annual Meeting virtually, potentially increasing attendance and participation.
• The Board of Directors is recommending a vote FOR all proposals, indicating their belief that these actions are in the best interest of the company and its stockholders.
• The proposed amendment to allow shareholder action by written consent could reduce costs associated with special meetings.
• The company has obtained letters of financial support from Alset International Limited and Alset Inc.

Negatives

• The company dismissed MaloneBailey, LLP as its independent registered accountant on April 23, 2024, and engaged Grassi & Co., CPAs, P.C.
• The company has significant amounts due to related parties, including $503,659 due to Alset Inc. and $3,501,759 due to Alset International Ltd. as of June 30, 2024.
• The company entered into debt conversion agreements with Alset Inc. and Alset International Limited, resulting in the issuance of 6,034,537 new shares of common stock, representing a 37.2% increase in outstanding shares.

Risks

• The company's reliance on related-party loans for working capital could pose a risk if these loans are not available in the future.
• The significant increase in outstanding shares due to debt conversion could dilute existing stockholders' ownership.
• The Audit Committee may reconsider its selection of Grassi & Co., CPAs, P.C. as part of expense reduction efforts.
• The company's ability to continue as a going concern is dependent on the financial support from Alset International Limited and Alset Inc.

Future Outlook

The company is considering various actions to reduce operating expenses and is building its travel business in Asia.

Management Comments

• We believe that hosting a virtual meeting will enable greater stockholder attendance and participation from any location around the world.
• The Board believes that creating an opportunity to reduce the number of possible future special meetings would be beneficial to the Company.

Industry Context

The move to a virtual annual meeting reflects a broader trend in corporate governance to increase accessibility and reduce costs. The company's focus on building its travel business in Asia aligns with the growing demand for travel in the region.

Comparison to Industry Standards

• The company's related-party transactions are significant and warrant close scrutiny, especially when compared to companies with more independent governance structures.
• The level of debt owed to related parties is high compared to industry standards for companies of similar size and stage of development.
• The increase in outstanding shares due to debt conversion is substantial and could have a significant impact on the stock price and shareholder value, similar to other companies that have undergone significant dilution.

Corporate Governance

Related Party Transactions

• The Company has received loans from Alset Inc (AEI).
• The amount due to AEI represents short-term working capital advances to the Company for its daily operations.
• Alset International Ltd. (AIL) is incorporated in Singapore and is a fellow subsidiary of the common parent company, Alset Inc.
• The amount due to AIL represents short-term working capital advances to the Company for its daily operations.
• Alset Business Development Pte. Ltd. (ABD) is incorporated in Singapore and is a fellow subsidiary of the common parent company, Alset Inc.
• The amount due to ABD represents amount loaned by ABD to Hapi Cafe Inc. (HCI) for the investment in Ketomei Pte. Ltd in March 2022.
• BMI Capital Partners International Ltd. (BMI) is incorporated in Hong Kong and is a fellow subsidiary of the common parent company, Alset Inc.
• The amount due to BMI represents short-term working capital advances to the Company for its daily operation.
• On April 24, 2024, the Company entered into a Credit Facility Agreement (the Agreement) with Alset Inc., pursuant to which Alset Inc. has provided the Company a line of credit facility (the Credit Facility) which provides a maximum, aggregate credit line of up to $1,000,000.
• The Company has obtained a letter of financial support from Alset International Limited and Alset Inc., a direct and indirect owner of the Company, respectively.
• On March 20, 2024, the Company entered into a Securities Purchase Agreement (the Securities Purchase Agreement) with Sharing Services Global Corporation (SHRG), pursuant to which the Company purchased from SHRG a (i) Convertible Promissory Note (the Convertible Note) in the amount of $250,000, convertible into 208,333,333 shares of SHRGs common stock at the option of the Company, and (ii) certain warrants exercisable into 208,333,333 shares of SHRGs common stock at an exercise price of $0.0012 per share, the exercise period of the warrant being five (5) years from the date of the Securities Purchase Agreement, for an aggregate purchase price of $250,000.
• On May 9, 2024, the Company entered into a Securities Purchase Agreement (the Securities Purchase Agreement) with Sharing Services Global Corporation (SHRG), pursuant to which the Company purchased from SHRG a Convertible Promissory Note (the Convertible Note) in the amount of $250,000, convertible into 125,000,000 shares of SHRGs common stock at the option of the Company for an aggregate purchase price of $250,000.
• On April 25, 2024, the Company entered into a binding term sheet (the Term Sheet) through its subsidiary Health Wealth Happiness Pte Ltd. (HWHPL) outlining a joint venture with Chen Ziping, an experienced entrepreneur in the travel industry, and Heng Fai Ambrose Chan, HWHs Executive Chairman, as a part of HWHs strategy of building its travel business in Asia.
• On September 24, 2024, HWH International Inc. (the Company) entered into two (2) debt conversion agreements with creditors (each an Agreement, or collectively, the Agreements): (i) Alset International Limited (the Companys majority stockholder); and (ii) Alset Inc. (which is Alset International Limiteds majority stockholder).

Stakeholder Impact

• Stockholders will have the opportunity to vote on key proposals that could impact the company's governance and financial performance.
• Employees may be affected by potential cost reduction measures.
• The company's relationships with its related parties could impact its financial stability and access to capital.

Next Steps

• Stockholders should review the proxy statement and vote on the proposals.
• The company will hold its Annual Meeting on December 12, 2024.
• The company will continue to implement its strategy of building its travel business in Asia.

Key Dates

Keywords

Annual Meeting, Proxy Statement, Stockholders, Directors, Auditor, Written Consent, Related Party Transactions, Debt Conversion, HWH International Inc., Corporate Governance