DEF 14A: Sharing Services Global Corporation to Hold Annual Shareholder Meeting on October 22, 2024

Sharing Services Global Corporation announces its 2024 Annual Meeting of Shareholders to be held on October 22, 2024, to ratify the appointment of its independent registered public accounting firm and transact other business.

Summary

• Sharing Services Global Corporation will hold its 2024 Annual Meeting of Shareholders on October 22, 2024, at its corporate offices in Plano, Texas.
• The primary purpose of the meeting is to ratify the appointment of Grassi & Co., CPAs, P.C. as the company's independent registered public accounting firm for the fiscal years ended March 31, 2024, and ending March 31, 2025.
• Shareholders of record as of August 28, 2024, are entitled to vote at the meeting.
• The company has three classes of voting stock outstanding: Common Stock (376,328,885 shares), Series A Preferred Stock (3,100,000 shares), and Series C Preferred Stock (3,220,000 shares).
• Each share of Common Stock, Series A Preferred Stock, and Series C Preferred Stock entitles the holder to one vote on each matter.
• Shareholders can vote online, by e-mail, by fax, or by mail, with deadlines for electronic methods set for October 21, 2024.
• The Board of Directors recommends voting for the ratification of the appointment of Grassi & Co., CPAs, P.C.

Sentiment

Score: 6

Explanation: The document is a standard proxy statement, which is generally neutral in tone. The presence of related-party transactions introduces a slight negative element due to potential conflicts of interest, but the overall sentiment is balanced.

Positives

• The company is seeking shareholder ratification of its independent auditor, which is considered good corporate governance.
• Multiple voting methods are available to shareholders, including online, email, fax, and mail, providing flexibility and convenience.
• The Board of Directors is recommending a vote in favor of the auditor ratification, providing a clear signal to shareholders.

Negatives

• The company is a Smaller Reporting Company, which means it has conformed certain information required in this Proxy Statement to the applicable scaled disclosure rules.
• The company has related party transactions with Alset Inc. and HWH International Inc.
• The company has related party transactions with Decentralized Sharing Systems, Inc.

Risks

• If the appointment of Grassi is not ratified, the Board may reconsider the appointment, potentially leading to additional costs and uncertainty.
• The presence of multiple related-party transactions could raise concerns about potential conflicts of interest.
• The company's reliance on smaller reporting company status may limit the amount of information available to investors.

Future Outlook

The Board plans to re-appoint Grassi to serve as the Company's independent registered public accounting firm for the fiscal year ending March 31, 2025.

Management Comments

• John (JT) Thatch, President, Chief Executive Officer and Vice Chairman of the Board of Directors: 'We encourage you to vote in advance so that we will know that we have a quorum of shareholders for the meeting.'

Industry Context

The ratification of an independent accounting firm is a standard practice in corporate governance, ensuring financial transparency and accountability to shareholders. The company's engagement with multiple related parties is not uncommon for smaller companies, but it requires careful scrutiny to avoid conflicts of interest.

Comparison to Industry Standards

• The audit fee amounts appear to be within a reasonable range for a company of Sharing Services Global Corporation's size and complexity, based on a comparison with similar companies in the OTC market.
• The director compensation program, with a base fee per meeting and additional compensation for meetings exceeding a certain threshold, is a fairly standard approach to compensating independent directors.
• The related party transactions, particularly the loans and consulting agreements with entities connected to directors and major shareholders, are more extensive than typically seen in larger, more established companies, and warrant careful monitoring to ensure fairness and transparency.

Corporate Governance

Legal Proceedings

• In the fiscal year 2019, the Company filed suit against Research & Referral BZ and two other parties concerning breach of contract, fraud, and statutory fraud in a stock transaction, violations of state securities laws and alter ego relating to a stock exchange/transfer transaction, involving the Company's stock.
• In April 2020, the court issued a Final Default Judgment in favor of the Company finding Research and Referral, BZ liable for the Company's claims of fraud in the inducement and statutory fraud in a stock transaction.

Related Party Transactions

• On January 17, 2024, the Company executed a convertible promissory note for $250,000 with Alset Inc, a Texas corporation (Alset) and a shareholder of the Company.
• On March 18, 2024, the Company entered into a securities purchase agreement with HWH International Inc., a Delaware corporation (HWH) whereby the Company issued to HWH (i) a convertible promissory note in an aggregate principal amount of $250,000.00 which shall be convertible into 208,333,333 shares of the Companys common stock at the option of HWH and (ii) a common stock purchase warrant agreement which shall be exercisable into up to 208,333,333 shares of the Companys common stock for an aggregate purchase price of $250,000.
• On May 9, 2024, the Company entered into a securities purchase agreement (the May HWH SPA) with HWH whereby the Company issued to HWH a convertible promissory note (the May HWH Note) in an aggregate principal amount of $250,000, for a purchase price of $250,000.
• On June 6, 2024, the Company entered into a securities purchase agreement (the June HWH SPA) with HWH whereby the Company issued to HWH a convertible promissory note (the June HWH Note) in an aggregate principal amount of $250,000, for a purchase price of $250,000.
• On August 13, 2024, Sharing Services Global Corporation (the Company) entered into a securities purchase agreement with HWH International Inc., a Delaware corporation (HWH) pursuant to which it issued and sold to HWH a convertible promissory note for an aggregate principal amount of $100,000 (the HWH August Note) convertible into 50,000,000 shares of Company Common Stock.
• In April 2021, the Company and DSSI entered into a Securities Purchase Agreement, pursuant to which DSSI granted a $30.0 million loan to the Company in exchange for: (a) a Convertible Promissory Note in the principal amount of $30.0 million (the Note) in favor of DSSI, and (b) a detachable Stock Warrant to purchase up to 150,000,000 shares of the Companys Class A Common Stock, at $0.22 per share.
• In January 2022, the Company and DSS who, together with its subsidiaries, entered into a one-year Business Consulting Agreement (the Consulting Agreement) pursuant to which the DSS will provide to the Company certain consulting services, as defined in the Consulting Agreement.
• On June 15, 2022, the Company and DSSI entered into a Securities Purchase Agreement (the SPA), pursuant to which the Company issued: (a) a Convertible Promissory Note in the principal amount of $27.0 million (the 2022 Note) in favor of DSSI and (b) a detachable Warrant to purchase up to 818,181,819 shares of the Companys Class A Common Stock (the Warrant), at $0.033 per share, in exchange for the $27.0 million.
• In November 2021, Sharing Services and Hapi Caf, Inc, a company affiliated with Heng Fai Ambrose Chan, a Director of the Company, entered into a Master Franchise Agreement pursuant to which Sharing Services acquired the exclusive franchise rights in North America to the brand Hapi Caf.
• On June 15, 2022, Sharing Services, through one of its subsidiaries, entered into a secured real estate promissory note with American Pacific Bancorp, Inc. (APB), and the Company entered into a Loan Agreement pursuant to which APB loaned the Company approximately $5.7 million.
• A subsidiary of the Company operating in the Republic of Korea subleases office space, on a month-to-month basis, from HWH World, Inc. (HWH World), until September 30, 2023, a subsidiary of DSS and a company affiliated with Heng Fai Ambrose Chan, a Director of the Company.
• In the fiscal years ended March 31, 2024 and 2023, a wholly owned subsidiary of the Company issued purchase orders to Premier Packaging Corporation, a subsidiary of DSS, to acquire printed packaging materials for approximately $0 and $108,000, respectively.
• In July 2021, the Company and American Premium Water Corporation (American Premium) entered into a business consulting agreement pursuant to which the Company provides consulting services to American Premium in exchange for a monthly fee of $4,166.

Stakeholder Impact

• Shareholders are asked to vote on the ratification of the company's independent auditor.
• Executive officers and directors are subject to the company's Code of Business Conduct and Ethics, Conflicts of Interest Policy, and Whistleblower Policy.
• The company's financial performance and governance practices impact its stakeholders, including shareholders, employees, and creditors.

Key Dates

Keywords

Annual Meeting, Shareholders, Proxy Statement, Grassi & Co., Auditor Ratification, Voting Rights, Board of Directors, Common Stock, Preferred Stock, Related Party Transactions