HWH International Inc. 8-K

What Happened

• HWH International Inc. filed an 8-K reporting a term sheet dated May 5, 2026 with Smart Dynamics Technology Limited for a $10,000,000 offshore financing. The deal contemplates 20,000,000 newly issued common shares plus warrants to buy 160,000,000 shares at $0.63 per share (exerciseable immediately; expire four years after issuance). The parties expect to enter definitive agreements and the term sheet expires three months from its date.
• Separately, HWH and its majority stockholder Alset Inc. agreed to terminate the previously announced acquisition of Hapi Metaverse Inc.; the May 6, 2026 Termination Agreement cancels the Feb 5, 2026 Stock Purchase Agreement and its related convertible note obligations.

Key Details

• Financing: $10,000,000 purchase price for 20,000,000 unregistered common shares and warrants to purchase 160,000,000 common shares at $0.63; warrants expire in 4 years.
• Investor rights: anti‑dilution protections for two years (with exceptions), and the investor would have the right to appoint three directors upon closing (as described in the term sheet).
• Registration & offering mechanics: Company must file a registration statement for the shares and warrant shares within 60 days of closing; offering is to non‑U.S. persons under Regulation S. Closing is subject to standard conditions, including approval by holders of a majority of HWH common stock.
• Hapi Metaverse termination: Alset had agreed to sell 505,341,376 Hapi Metaverse shares to HWH for $19,910,603 via a convertible note (1% simple interest, convertible at $1.85/share after up to 5 years); that transaction will not close and both parties have no further rights or obligations under the original Stock Purchase Agreement.
• Compensation plan change: Board approved amending the 2025 Incentive Compensation Plan to add up to 2,000,000 shares for service-based awards; any material amendment will require shareholder approval under Nasdaq rules. Shares granted under the Term Sheet will have a 12‑month lockup.

Why It Matters

• The proposed $10M financing is the most material near-term development: proceeds are intended for general working capital and expansion, which may help operations but will dilute existing shareholders if completed and when warrants are exercised.
• The investor’s anti-dilution provisions and board appointment rights could materially affect corporate governance and future fundraising flexibility over the next two years if the transaction closes.
• Termination of the Hapi Metaverse acquisition removes the previously planned asset purchase and the related convertible note obligation, eliminating that potential future dilution/conversion scenario but also foregoing whatever strategic benefit that acquisition might have provided.
• Shareholder approval will be required for certain aspects (closing of the financing and any material amendment to the incentive plan), so outcomes depend on upcoming votes and execution of definitive agreements.