BETHESDA, MD - HWH International Inc. (NASDAQ:HWH), a wholesale drug and sundries company, has received a notice from Nasdaq regarding a potential delisting due to its failure to meet the minimum market value required for continued listing. As of September 9, 2024, the company has not complied with the Nasdaq Listing Rule 5450(b)(2)(A), which mandates a minimum market value of listed securities of $50,000,000.
The upcoming appeal with the Nasdaq Hearings Panel, which the company previously reported in an August 29, 2024, filing, will include a review of the market value of listed securities (MVLS) deficiency. HWH International anticipates that its securities will not be delisted while the appeal process is underway.
This situation arises amid broader market challenges for companies in the wholesale drug sector. HWH International, which underwent a name change from Alset Capital Acquisition Corp. on December 3, 2021, is headquartered in Bethesda, Maryland, and operates under the organization name 07 Trade & Services.
The company's stock, trading under the symbol HWH, is listed on The Nasdaq Global Market. HWH International's Chief Financial Officer, Rongguo Wei, signed off on the filing dated September 11, 2024, which reported the latest developments to the Securities and Exchange Commission (SEC).
In other recent news, HWH International Inc., a wholesale pharmaceuticals distributor, faces potential delisting from the Nasdaq Global Market due to two separate issues. The company has received notices regarding its stock price not meeting the minimum bid price requirement and its market value falling short of the required threshold.
In response to the stock price issue, Nasdaq has provided HWH International with a 180-day grace period to regain compliance. The company must reach a closing bid price of at least $1 for a minimum of ten consecutive business days to avoid delisting.
In terms of the market value shortfall, despite efforts to address the deficiency, the company has not regained compliance within the given timeframe, prompting the initiation of the delisting process. HWH International, however, plans to appeal this decision before the early September deadline.
During both appeal processes, HWH International's securities are expected to continue being traded. These developments present significant challenges for the company, as confirmed by its Chief Financial Officer, Rongguo Wei, in recent reports to the Securities and Exchange Commission.
InvestingPro Insights
As HWH International Inc. confronts the possibility of Nasdaq delisting, recent data from InvestingPro provides a snapshot of the company's financial health. The firm's market capitalization stands at a modest $8.62 million, reflecting the challenges it faces in meeting Nasdaq's minimum market value requirement. A key InvestingPro Tip highlights that HWH International's stock has experienced a significant return over the last week, with a 1-week price total return of 8.83%. Additionally, the company has seen a strong return over the last month, with a 1-month price total return of 25.85%.
However, the broader picture shows a stock that has been under considerable pressure, trading at only 3.79% of its 52-week high, and a year-to-date price total return of -94.84%, which aligns with an InvestingPro Tip pointing out that the price has fallen significantly over the last year. The company's revenue growth has been robust in the last quarter, with a quarterly increase of 71.56%, yet it operates with a negative operating income margin of -166.16%, indicating substantial losses relative to its revenue.
For investors considering the long-term prospects of HWH International, it's worth noting that the company operates with a moderate level of debt and has not been profitable over the last twelve months. These factors, coupled with a valuation that implies a poor free cash flow yield, suggest that careful scrutiny is warranted. For more detailed analysis and additional InvestingPro Tips, investors can explore https://www.investing.com/pro/HWH, where 14 tips are available that delve deeper into the company's financial metrics and stock performance.
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