HWH International Inc. (NASDAQ:HWH), a wholesale pharmaceuticals company, has entered into agreements to convert a total of $3,801,759 in debt into equity. The agreements, dated September 24, 2024, involve the issuance of 6,034,537 new shares of common stock to the company's majority stockholder, Alset International Limited, and its majority stockholder, Alset Inc.
The conversion will see Alset Inc. exchange $300,000 of the company's debt for 476,190 shares, while Alset International Limited will convert $3,501,759 of debt into 5,558,347 shares. The conversion price is set at $0.63 per share. The new shares will represent a 37.2% increase in the total outstanding shares of HWH International.
The shares to be issued are restricted securities under the Securities Act of 1933 and are being issued in reliance upon the safe harbor provided by Rule 506 of Regulation D. The company's Chairman, Chan Heng Fai, serves as the Chairman and CEO of both Alset entities and holds a majority stake in Alset Inc. The independent directors of HWH International also serve on the boards of the Alset entities.
This strategic move is designed to strengthen the company's balance sheet by reducing its debt burden. The transaction is expected to close upon the satisfaction of customary closing conditions. This information is based on a press release statement from HWH International Inc. and does not include any speculative content regarding future performance or broader market implications.
In other recent news, HWH International, a wholesale drug distributor, faces potential delisting from the Nasdaq Global Market due to failing to meet the minimum market value and bid price requirements. The company was notified of these shortfalls in separate instances, with the market value of publicly held shares falling below the required threshold and the stock price remaining under $1 for 30 consecutive business days.
HWH International has been offered a 180-day grace period to regain compliance for both issues. The company must achieve a closing bid price of at least $1 for a minimum of ten consecutive business days and meet a minimum market value of $50,000,000.
Despite efforts to address these deficiencies, HWH International has not regained compliance within the given timeframe, initiating the delisting process. However, the company plans to appeal these decisions. During both appeal processes, HWH International's securities are expected to continue being traded.
These developments present significant challenges for HWH International, as confirmed by its Chief Financial Officer, Rongguo Wei, in recent reports to the Securities and Exchange Commission.
InvestingPro Insights
As HWH International Inc. (NASDAQ:HWH) navigates its debt conversion strategy, real-time data from InvestingPro provides a snapshot of the company's financial health and market performance. With a market capitalization of $10.74 million, HWH International showcases a significant return over the last week with a 22.2% increase in its stock price. Despite this recent surge, the company's stock has experienced a substantial decline over the past year, with a 94.18% drop in total return.
InvestingPro Tips highlight that HWH International operates with a moderate level of debt and does not pay a dividend to shareholders. These factors, along with the company's decision to convert debt into equity, could influence investor sentiment and stock volatility. Additionally, the company's stock price often moves in the opposite direction of the market, which is a critical consideration for investors looking for portfolio diversification.
Investors seeking a more comprehensive analysis can find additional InvestingPro Tips for HWH International Inc. at https://www.investing.com/pro/HWH, where more insights into the company's performance and potential investment opportunities are available.
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