DEF: HWH International Sets 2025 Annual Meeting Agenda

HWH International Inc. announces its 2025 Annual Meeting of Stockholders to elect directors and ratify its independent accounting firm, HTL International, LLC, while detailing significant related party transactions and corporate governance updates.

Summary

• The 2025 Annual Meeting of Stockholders will be held virtually on November 20, 2025, at 9:00 A.M. Eastern Standard Time.
• Stockholders will vote on the election of five directors and the ratification of HTL International, LLC as the independent registered public accounting firm for the fiscal year ending December 31, 2025.
• The record date for determining stockholders entitled to vote is September 22, 2025, with 6,476,400 shares of common stock outstanding.
• Chan Heng Fai, Chairman and CEO, beneficially owns 5,067,334 shares, representing 78.2% of outstanding common stock.
• The company dismissed its previous auditor, Grassi & Co., CPAs, P.C., on July 2, 2025, with no disagreements or reportable events, and appointed HTL International, LLC.
• Audit fees increased from $193,170 in 2023 to $283,563 in 2024, and total fees increased from $244,031 to $398,157 over the same period.
• Significant related party transactions include debt conversions with Alset Inc. ($300,000 converted into 476,190 shares) and Alset International Limited ($3,501,759 converted into 5,558,347 shares) at $0.63 per share on September 24, 2024.
• The company acquired a controlling 60% interest in L.E.H. Insurance Group, LLC for $75,000 on February 27, 2025, and later the remaining 40% for $40,000, but recorded an immediate goodwill write-off of $77,480.
• A joint venture, HapiTravel Holding Pte. Ltd., was formed to build the travel business in Asia, with the company holding a 19% stake.
• The company sold 70% of its subsidiary, Alset F&B One Pte. Ltd., to Alset International Limited for approximately $170,754 USD on September 10, 2025.

Sentiment

Score: 4

Explanation: The filing presents a mixed picture. While the company is active in strategic initiatives like acquisitions and joint ventures, significant concerns arise from the immediate write-off of goodwill for a non-profitable acquisition, substantial increases in audit fees, and extensive related party transactions. These factors suggest underlying operational or financial challenges and potential governance risks, outweighing the positive aspects of strategic expansion and governance compliance.

Positives

• The company's Board of Directors has established an Audit Committee and a Compensation Committee, both compliant with Nasdaq listing requirements, indicating adherence to corporate governance standards.
• The Audit Committee includes an audit committee financial expert (Wong Tat Keung), enhancing financial oversight capabilities.
• An insider trading policy was adopted on March 18, 2025, promoting compliance with securities laws and regulations.
• The acquisition of L.E.H. Insurance Group, LLC and the formation of HapiTravel Holding Pte. Ltd. indicate strategic efforts to diversify and expand business operations into insurance and travel sectors.
• The dismissal of the previous auditor, Grassi & Co., CPAs, P.C., occurred without any reported disagreements or reportable events, suggesting a smooth transition.

Negatives

• L.E.H. Insurance Group, LLC, a recently acquired entity, is in its early stages, has no employees, and has yet to turn a profit, with the goodwill from its acquisition immediately written off, indicating potential operational and financial challenges.
• Audit fees increased significantly by 46.8% from $193,170 in 2023 to $283,563 in 2024, which is substantial, especially as the company is considering actions to reduce operating expenses.
• Executive officers have not received any cash compensation for services rendered to the company, which could impact motivation and retention.
• The company has not yet adopted a Stock Awards Plan, though it intends to do so in the future, potentially limiting equity-based incentives for employees and directors.

Risks

• The company has extensive related party transactions, including significant debt conversions and working capital advances with Alset Inc. and Alset International Limited, which are also major shareholders, raising potential conflicts of interest and governance concerns.
• The immediate write-off of $77,480 in goodwill from the L.E.H. Insurance Group, LLC acquisition suggests that the acquired asset may be overvalued or its future prospects are uncertain, posing a risk to investment returns.
• L.E.H. Insurance Group, LLC is described as being in its early stages, having no employees, and not yet profitable, indicating significant operational and financial risks associated with this new venture.
• The company is considering various actions to reduce operating expenses, which could signal underlying financial pressures or challenges.
• The high concentration of beneficial ownership (78.2%) by Chan Heng Fai through affiliated entities could limit the influence of minority shareholders on corporate decisions.

Future Outlook

The company intends to adopt a Stock Awards Plan in the future to provide equity-based incentives. It is actively considering various actions to reduce operating expenses, indicating a focus on cost management. Furthermore, the company is strategically building its travel business in Asia through the HapiTravel Holding Pte. Ltd. joint venture.

Management Comments

• "We believe that hosting a virtual meeting will enable greater stockholder attendance and participation from any location around the world."
• "Your vote is very important, regardless of the number of shares you hold."
• "We believe that the proposal to ratify the selection of our independent registered public accounting firm is deemed to be a routine matter."
• "Our Board of Directors believe that the backgrounds and qualifications of its directors, considered as a group, should provide a composite mix of experience, knowledge and abilities that will allow it to fulfill its responsibilities."

Industry Context

The company is demonstrating a strategic pivot or diversification by entering the insurance sector through the acquisition of L.E.H. Insurance Group, LLC and expanding into the Asian travel market via the HapiTravel Holding Pte. Ltd. joint venture. Concurrently, the divestiture of a majority stake in a cafe business (Alset F&B One Pte. Ltd.) suggests a streamlining of its portfolio, potentially moving away from non-core or underperforming assets. The extensive network of related party transactions, particularly with Alset Inc. and Alset International Limited, highlights a complex corporate ecosystem where inter-company financing and asset transfers are prevalent, which is common in certain conglomerate structures but can raise questions about transparency and arm's-length dealings compared to industry best practices.

Comparison to Industry Standards

• The immediate write-off of $77,480 in goodwill from the L.E.H. Insurance Group, LLC acquisition, coupled with the disclosure that LEH has no employees and has yet to turn a profit, is atypical for a strategic acquisition in the insurance industry, where companies usually seek established operations or clear growth potential. This contrasts with acquisitions by industry leaders like Berkshire Hathaway's insurance subsidiaries, which typically target profitable, well-managed entities.
• The significant increase in audit fees by 46.8% from $193,170 in 2023 to $283,563 in 2024 is considerably higher than average industry increases, which typically range from 3-7% annually. This substantial jump, especially when the company is considering expense reductions, warrants further investigation compared to peers like Aflac or Progressive, where audit fee increases are usually more modest and tied to growth or regulatory changes.
• The high concentration of beneficial ownership (78.2%) by Chairman and CEO Chan Heng Fai through affiliated entities (Alset Inc. and Alset International Limited) is higher than the average for many publicly traded companies, particularly those listed on major U.S. exchanges. This level of control can impact corporate governance and minority shareholder rights, differing from the more dispersed ownership structures often seen in large-cap companies.
• The company's reliance on related party loans and credit facilities for working capital, such as the $1,000,000 credit facility from Alset Inc. and significant advances from Alset International Limited, is a common practice in closely-held or conglomerate structures but less common for independent public companies, which typically seek diversified financing sources from unrelated third parties at market rates.
• The virtual format for the annual meeting aligns with modern corporate governance trends, offering greater accessibility for shareholders globally, a practice increasingly adopted by companies across various industries, including tech giants and financial institutions.

Management Changes

Corporate Governance

Related Party Transactions

• The Sponsor received 2,156,250 shares of Class B common stock (Founder Shares) for $25,000 on November 8, 2021.
• The Sponsor paid $33,475 in operating costs on behalf of the company in 2023, which was subsequently repaid.
• The company paid Alset Management Group Inc. $10,000 per month for office space, utilities, and administrative support, recording a charge of $120,000 in 2023.
• The Sponsor funded extension payments totaling $205,305 in 2023, which were repaid by December 31, 2024.
• Short-term, non-interest bearing working capital advances due to Alset Inc. amounted to $209,614 at December 31, 2024, and $202,645 at December 31, 2023.
• A Credit Facility Agreement with Alset Inc. provides a line of credit up to $1,000,000 at 3% interest, with $300,000 drawn on September 24, 2024.
• A $300,000 debt due to Alset Inc. was converted into 476,190 shares of common stock at $0.63 per share on September 24, 2024.
• Short-term, non-interest bearing working capital advances due to Alset International Limited amounted to $5,096,047 at December 31, 2024, and $1,729,901 at December 31, 2023.
• A $3,501,759 debt due to Alset International Limited was converted into 5,558,347 shares of common stock at $0.63 per share on September 24, 2024.
• An amount of $4,113,701 was due from Alset Business Development Pte. Limited at December 31, 2024, while $184,507 was due to them at December 31, 2023.
• Hapi Cafe Inc. provided convertible and non-convertible loans to Ketomei Pte. Ltd. in 2023, which were written off upon the acquisition of Ketomei in February 2024.
• The company invested an additional $312,064 in Ketomei Pte. Ltd. by converting a loan, increasing its ownership to 55.65% on February 20, 2024.
• The company purchased multiple Convertible Promissory Notes (CN1-CN9) and warrants from Sharing Services Global Corporation (SHRG) totaling $1,430,000 in principal, plus commitment fees and interest, between March 2024 and October 2025. SHRG is a related party due to common significant stockholders and former CEO.
• The company provided loans to SHRG totaling $280,000 in April 2025.
• The company acquired a 60% interest in L.E.H. Insurance Group, LLC from SHRG for $75,000 on February 27, 2025, and later the remaining 40% from SHRG for $40,000.
• A joint venture, HapiTravel Holding Pte. Ltd., was formed with Chan Heng Fai (HWH's Executive Chairman) as a partner, with HWHPL holding 19% and Mr. Chan 11%. The company also loaned HTHPL $137,658.
• The company sold Hapi Travel Pte. Ltd. (HTPL) to HapiTravel Holding Pte. Ltd. (HTHPL) for $834 on December 18, 2024.
• Alset F&B Holdings Pte. Ltd. (a subsidiary) sold 70% of Alset F&B One Pte. Ltd. to Alset International Limited (a significant stockholder and common Chairman/CEO) for approximately $170,754 USD on September 10, 2025.

Stakeholder Impact

• Shareholders will participate in key governance decisions, including director elections and auditor ratification, but the high concentration of beneficial ownership by the Chairman and related entities may limit the influence of minority shareholders.
• The significant related party transactions, including debt conversions at a fixed price, could impact shareholder value through potential dilution or questions regarding fair valuation.
• The immediate write-off of goodwill from the L.E.H. Insurance Group, LLC acquisition could negatively affect the company's reported asset values and potentially shareholder equity.
• The company's strategic expansion into insurance and travel could offer new growth avenues, potentially benefiting customers with new service offerings.
• Creditors, particularly related parties like Alset Inc. and Alset International Limited, are significant providers of financing, indicating a reliance on intra-group funding.
• Management and directors are subject to new insider trading policies, enhancing compliance, but executive officers currently receive no cash compensation, which could affect retention and motivation.

Next Steps

• Hold the 2025 Annual Meeting of Stockholders on November 20, 2025, to vote on director elections and auditor ratification.
• Elect five directors to serve until the 2026 Annual Meeting of Stockholders.
• Ratify HTL International, LLC as the independent registered public accounting firm for the fiscal year ending December 31, 2025.
• Potentially adopt a Stock Awards Plan in the future to enhance employee and director compensation incentives.
• Continue to develop and expand the travel business in Asia through the HapiTravel Holding Pte. Ltd. joint venture.
• Implement actions to reduce operating expenses, as the company is currently considering such measures.

Key Dates

Recommendation

The filing presents a complex scenario with both strategic expansion efforts and notable financial and governance concerns. While the company is actively pursuing growth in new sectors like insurance and travel, the immediate write-off of goodwill from the L.E.H. Insurance Group acquisition, coupled with its non-profitable and no-employee status, raises questions about asset quality and execution. The substantial increase in audit fees and the pervasive nature of related party transactions, including significant debt conversions and financing from entities controlled by the Chairman, introduce considerable governance and transparency risks. Given these mixed signals—strategic activity alongside significant red flags—a seasoned investor would likely adopt a 'hold' position, awaiting clearer financial performance from new ventures and more transparent, arm's-length dealings before making a more definitive investment decision.

Keywords

SEC filing, Proxy Statement, HWH International, Corporate Governance, Director Election, Auditor Ratification, Related Party Transactions, Financial Reporting, Shareholder Meeting, Alset Inc., Alset International, Sharing Services Global, L.E.H. Insurance Group, Ketomei, HapiTravel