Form 4: SHRG Insider Reports $125K Convertible Note Issuance

A director and 10% owner of Sharing Services Global Corp reported the issuance of a $125,000 convertible promissory note to a related entity.

Summary

• Sharing Services Global Corp (SHRG) issued a $125,000 convertible promissory note to HWH International Inc. on February 4, 2026.
• The note is convertible into SHRG common stock at a price of $0.006 per share at HWH International Inc.'s option.
• The note matures three years from its issuance date, specifically on February 4, 2029.
• Mr. Chan Heng Fai Ambrose, a director and 10% owner of SHRG, is the Chairman, Chief Executive Officer, and majority stockholder of Alset Inc., which is the parent company of HWH International Inc.
• Mr. Chan has dispositive control over the securities of SHRG owned by HWH International Inc.

Sentiment

Score: 5

Explanation: StockSavvy.ai views this as a neutral event. While it provides capital, the low conversion price and related-party nature suggest potential underlying financial needs and future dilution, balancing the positive of securing funds.

Positives

• The company secured $125,000 in financing through a convertible promissory note.
• The financing comes from a related party, HWH International Inc., indicating continued support from a significant shareholder and director.

Negatives

• The issuance of a convertible note at a low conversion price ($0.006 per share) suggests potential dilution for existing shareholders if converted.
• The financing amount of $125,000 is relatively small, which might indicate specific short-term funding needs or limited access to larger capital.

Risks

• Dilution Risk: Conversion of the promissory note into common stock at $0.006 per share could dilute the ownership percentage of existing shareholders.
• Related Party Transaction Risk: Transactions with related parties (HWH International Inc. and Alset Inc., controlled by Mr. Chan) can raise questions about potential conflicts of interest and whether terms are at arm's length.
• Financial Health Implication: The need for a convertible note, especially from a related party, might suggest challenges in securing traditional financing or a need for quick capital.

Future Outlook

The filing indicates a future potential for conversion of the promissory note into common stock, which would increase the number of outstanding shares.

Management Comments

• "On February 4, 2026, the Issuer issued a convertible promissory note to HWH International Inc. ('HWH') in the amount of $125,000."
• "This note is convertible into the Issuer's common stock at $0.006 per share at HWH's option until the maturity of the convertible note three (3) years from the date thereof."
• "Mr. Chan is the Chairman, Chief Executive Officer and majority stockholder of Alset Inc. Mr. Chan is the Chairman and Chief Executive Officer of HWH International Inc., which is a majority-owned subsidiary of Alset Inc. Mr. Chan has dispositive control over the securities of the Issuer owned by HWH International Inc."

Industry Context

StockSavvy.ai notes that companies, particularly smaller or developing ones, often utilize convertible notes as a flexible financing tool, especially when traditional debt or equity financing might be more challenging or expensive. The involvement of a significant insider and related entities in providing this financing is common in such scenarios, reflecting a commitment from key stakeholders.

Comparison to Industry Standards

• The conversion price of $0.006 per share is very low, suggesting a valuation that might be below typical market rates for companies with stronger financial standing, or it could reflect the current trading price of SHRG.
• Compared to venture capital or private equity financing, which often involves higher valuations and more stringent terms, this related-party convertible note offers a more direct and potentially less dilutive (in the short term) capital injection, though the low conversion price implies significant future dilution.
• Similar transactions in the micro-cap space often involve related parties providing bridge financing, but the terms (e.g., conversion price relative to market price) vary widely based on the company's specific circumstances and perceived risk.

Related Party Transactions

• Sharing Services Global Corp issued a $125,000 convertible promissory note to HWH International Inc.
• Mr. Chan Heng Fai Ambrose, a director and 10% owner of SHRG, is the Chairman and CEO of HWH International Inc., which is a majority-owned subsidiary of Alset Inc., where Mr. Chan is also Chairman, CEO, and majority stockholder. This establishes a clear related-party transaction.

Stakeholder Impact

• Shareholders: Potential for dilution if the convertible note is exercised, increasing the number of outstanding shares.
• Creditors: The note represents a debt obligation for the company.
• Management/Insiders: Mr. Chan and his affiliated entities (HWH International Inc., Alset Inc.) maintain or increase their influence and potential ownership stake in SHRG.

Next Steps

• HWH International Inc. has the option to convert the promissory note into common stock at $0.006 per share until February 4, 2029.
• The company will need to repay the note or facilitate its conversion by the maturity date.

Key Dates

Recommendation

The issuance of a convertible note, even from a related party, provides capital to the company, which is generally positive. However, the low conversion price suggests potential future dilution for existing shareholders. Without more information on the company's overall financial health, strategic plans, or the market's reaction to this specific financing, a "hold" recommendation is appropriate, advising investors to monitor future developments and the company's performance.

Keywords

SHRG, Sharing Services Global Corp, Convertible Note, Promissory Note, Insider Transaction, Form 4, Beneficial Ownership, Dilution, Related Party Transaction, Chan Heng Fai Ambrose, HWH International Inc., Alset Inc.