10-Q: HWH International Q1 2026 Financial Results

HWH International reports a net loss of $626,773 for Q1 2026 as it pivots its business model and seeks new capital.

Summary

• Reported revenue of $64,200 for the three months ended March 31, 2026, compared to $295,197 in the same period of 2025.
• Net loss for the quarter was $626,773, an increase from the $574,103 loss reported in Q1 2025.
• Cash position decreased to $1,459,799 as of March 31, 2026, from $2,085,918 at year-end 2025.
• The company is currently operating only one cafe in Singapore following the closure of other locations in 2024 and 2025.
• Management has identified substantial doubt regarding the company's ability to continue as a going concern.

Sentiment

Score: 3

Explanation: StockSavvy.ai views this as a high-risk situation due to the going concern warning, declining revenue, and heavy reliance on related-party funding, despite the potential for a new capital injection.

Positives

• Successfully negotiated a settlement with D. Boral Capital, LLC for $500,000, resolving outstanding debt obligations.
• Secured a term sheet for a $10,000,000 capital raise with Smart Dynamics Technology Limited.
• Maintains access to financial support from majority stockholder Alset Inc.

Negatives

• Significant decline in revenue due to the cessation of cafe operations in South Korea and Singapore.
• Reported a net loss of $626,773 for the quarter.
• Disclosure controls and procedures were deemed ineffective as of March 31, 2026.
• High concentration risk with five suppliers accounting for over 59% of total cost of revenue.

Risks

• Substantial doubt regarding the ability to continue as a going concern.
• Dependence on related party financing and support.
• Execution risk regarding the planned expansion of Hapi Marketplace and Hapi Wealth Builder.
• Volatility in foreign exchange rates impacting intercompany loan balances.
• Potential dilution of existing shareholders from the proposed $10 million capital raise.

Future Outlook

The company plans to expand its Hapi Marketplace and Hapi Wealth Builder platforms in Asia and the U.S. while seeking to open additional Hapi Cafe locations. It is also pursuing a $10 million capital raise to support these initiatives.

Management Comments

• Management acknowledges the need for additional funding and has secured letters of support from Alset Inc.
• The company is focused on transitioning its business model toward digital platforms like Hapi Marketplace and Hapi Wealth Builder.

Industry Context

StockSavvy.ai notes that the company is struggling to transition from a traditional brick-and-mortar food and beverage model to a digital-first platform, a common challenge for small-cap firms attempting to pivot in competitive Asian markets.

Comparison to Industry Standards

• The company's revenue decline is significantly worse than industry peers in the food and beverage sector who have maintained stable growth.
• The reliance on related-party financing is higher than typical for publicly traded companies of this size.

Corporate Governance

Legal Proceedings

• None reported.

Related Party Transactions

• Significant intercompany loans and advances with Alset Inc. and its subsidiaries.
• Ongoing convertible note receivables from Sharing Services Global Corporation (SHRG).

Stakeholder Impact

• Shareholders face potential dilution from the proposed $10 million capital raise.
• Creditors are impacted by the company's ongoing liquidity challenges and reliance on related-party support.

Next Steps

• Finalize the $10 million capital raise with Smart Dynamics Technology Limited.
• Seek stockholder approval for the amendment to the 2025 Incentive Compensation Plan.
• Continue development and phased rollout of Hapi Marketplace and Hapi Wealth Builder.

Key Dates

Recommendation

The combination of a going concern warning, declining core business revenue, and ineffective internal controls makes this a high-risk investment that does not meet standard institutional quality benchmarks.

Keywords

HWH International, Hapi Marketplace, Hapi Wealth Builder, Food and Beverage, Nasdaq, Capital Raise