HUMBL Swings to Profit on Asset Sale, Shifts Focus to Brazil & Minerals

TL;DR

**HUMBL's 'profit' is a mirage from asset sales; their core business is still bleeding cash, making it a speculative bet on new, unproven ventures.**

AI Summary

HUMBL, Inc. (RWAX) reported a net income of $9,253,587 for the six months ended June 30, 2025, a significant turnaround from a net loss of $2,904,664 in the same period of 2024. This was primarily driven by a substantial gain of $16,835,929 on the disposal of discontinued operations, specifically the sale of HUMBL.com assets to WSCG, Inc. on February 27, 2025. Despite this, continuing operations still posted a net loss of $7,618,686 for the six months, worsening from a $1,388,498 loss in 2024, with operating expenses increasing to $3,271,870 from $2,979,179. The company's total assets increased to $36,508,747 as of June 30, 2025, from $23,222,903 at December 31, 2024, largely due to a new $16,383,198 investment in WSCG HoldCo and $20,000,000 in minerals. Total liabilities decreased to $24,230,085 from $26,686,146. A key strategic shift includes the acquisition of 99% of FinCapital Credito Pagamentos e Servicos LTDA, a Brazilian company, and the former CEO Brian Foote selling his control shares to Ybyr Capital S.A., making Ybyr the controlling stockholder.

Why It Matters

This filing reveals a pivotal strategic pivot for HUMBL, Inc., moving away from its original HUMBL.com operations and into new ventures like FinCapital in Brazil and mineral investments. For investors, the one-time gain from the HUMBL.com sale masks ongoing losses in continuing operations, suggesting that the new business model is yet to prove profitable. The change in control to Ybyr Capital S.A. could signal a new direction and management philosophy, impacting employees and customers who were tied to the previous HUMBL.com ecosystem. The competitive landscape for fintech in Brazil is intense, and the success of FinCapital will be crucial for HUMBL's long-term viability.

Risk Assessment

Risk Level: high — The company reported a net loss from continuing operations of $7,618,686 for the six months ended June 30, 2025, indicating ongoing operational challenges despite the one-time gain. Furthermore, the significant increase in authorized common shares to 85,000,000,000 as of May 21, 2025, and 44,017,024,443 shares outstanding as of June 30, 2025, suggests substantial dilution risk for existing shareholders.

Analyst Insight

Investors should exercise extreme caution and conduct thorough due diligence. The one-time gain from asset sales should not be mistaken for sustainable profitability. Focus on the performance of the newly acquired FinCapital and the mineral investments in future filings, as these represent the company's new core strategy. Given the high dilution and ongoing operational losses, a 'wait and see' approach is prudent.

Financial Highlights

total Assets

$36.51M

net Income

$9.25M

Key Numbers

• $9.25M — Net Income (For six months ended June 30, 2025, a swing from a $2.9M loss in 2024, primarily due to asset sale.)
• $16.84M — Gain on Discontinued Operations (From the sale of HUMBL.com assets to WSCG, Inc., a one-time event.)
• $(7.62M) — Net Loss from Continuing Operations (For six months ended June 30, 2025, indicating ongoing operational challenges.)
• $36.51M — Total Assets (As of June 30, 2025, up from $23.22M at Dec 31, 2024, driven by WSCG HoldCo investment and minerals.)
• 44.02B — Common Shares Outstanding (As of June 30, 2025, reflecting significant dilution.)
• 85B — Authorized Common Shares (As of May 21, 2025, indicating potential for further dilution.)
• $16.38M — Investment - WSCG HoldCo (New current asset as of June 30, 2025, representing 48.6% equity in WSCG.)
• $20M — Minerals (Non-current asset, acquired December 2, 2024, signaling a new business direction.)

Key Players & Entities

• HUMBL, Inc. (company) — Registrant and subject of the 10-Q filing
• WSCG, Inc. (company) — Purchaser of HUMBL.com assets
• Ybyr Capital S.A. (company) — Controlling stockholder of HUMBL, Inc. after acquiring control shares
• FinCapital Credito Pagamentos e Servicos LTDA (company) — Brazilian company, 99% acquired by HUMBL, Inc.
• Brian Foote (person) — Former CEO and current director of HUMBL, Inc., sold control shares to Ybyr Capital S.A.
• $9,253,587 (dollar_amount) — Net income for the six months ended June 30, 2025
• $16,835,929 (dollar_amount) — Gain on disposal of discontinued operations (HUMBL.com assets)
• $7,618,686 (dollar_amount) — Net loss from continuing operations for the six months ended June 30, 2025
• 44,017,024,443 (dollar_amount) — Common shares outstanding as of June 30, 2025
• 85,000,000,000 (dollar_amount) — Authorized common shares as of May 21, 2025

FAQ

Risk Factors

• Dependence on New Ventures [high — operational]: The company's future success is heavily reliant on the performance of its newly acquired Brazilian subsidiary, FinCapital, and its investment in WSCG HoldCo. There is significant execution risk associated with integrating these new operations and achieving profitability, especially given the ongoing losses from continuing operations.
• Significant Dilution Potential [high — financial]: With 44.02 billion common shares outstanding as of June 30, 2025, and 85 billion authorized shares, the company has substantial capacity for further equity issuance. This poses a significant risk of dilution for existing shareholders, potentially impacting the value of their investment.
• Regulatory Compliance in New Markets [medium — regulatory]: The acquisition of FinCapital in Brazil introduces new regulatory environments and compliance requirements. Failure to navigate these regulations effectively could lead to penalties, operational disruptions, and reputational damage.
• Volatility in Investment Value [medium — market]: The company's substantial investment in WSCG HoldCo ($16.38M) represents a significant portion of its assets. The value of this investment is subject to market fluctuations and the performance of WSCG, posing a risk to HUMBL's financial stability.
• Transition to Minerals Business [medium — operational]: The acquisition of $20 million in minerals signals a strategic pivot. The company's lack of established expertise in this sector presents operational challenges and risks related to market demand, extraction, and profitability.

Industry Context

HUMBL, Inc. appears to be undergoing a significant strategic transformation, moving away from its previous digital platform (HUMBL.com) towards new ventures including financial services in Brazil and investments in other entities like WSCG. The broader fintech and digital asset space is characterized by rapid innovation, intense competition, and evolving regulatory landscapes. Companies in this sector often face challenges in scaling operations, achieving profitability, and navigating complex compliance requirements.

Regulatory Implications

The company's expansion into Brazil via FinCapital brings it under the purview of Brazilian financial regulations, which can be complex and subject to change. Furthermore, any involvement in digital assets or related services would necessitate strict adherence to evolving global and local regulatory frameworks, posing ongoing compliance risks.

What Investors Should Do

1. Monitor performance of continuing operations closely.
2. Evaluate the strategic rationale and execution of new ventures.
3. Assess the impact of potential share dilution.
4. Understand the long-term strategy beyond the one-time gain.

Key Dates

• 2025-02-27: Sale of HUMBL.com assets to WSCG, Inc. — This transaction generated a significant one-time gain of $16.84M, masking ongoing operational losses and contributing to the reported net income for the period.
• 2024-12-02: Acquisition of $20 million in minerals — Marks a strategic shift into the mining sector, adding a significant non-current asset and introducing new operational complexities and market risks.
• 2025-06-30: Acquisition of 99% of FinCapital Credito Pagamentos e Servicos LTDA — Expands HUMBL's operations into Brazil, diversifying its business but also introducing new regulatory and integration challenges.
• 2025-06-30: Ybyr Capital S.A. becomes controlling stockholder — Indicates a change in corporate control, with potential implications for strategic direction and management.

Glossary

Discontinued Operations

A component of a business that the reporting entity has disposed of or is committed to disposing of, and whose cash flows can be separately identified. (The significant gain from the sale of HUMBL.com assets is reported under discontinued operations, impacting the overall net income but not reflecting the performance of the ongoing business.)

Continuing Operations

The ongoing business activities of a company that are expected to continue into the future. (HUMBL, Inc. continues to incur net losses from its continuing operations, highlighting underlying challenges despite the gain from discontinued operations.)

WSCG HoldCo

A holding company in which HUMBL, Inc. has made a significant investment, representing 48.6% equity. (The $16.38M investment in WSCG HoldCo is a major new asset and a key component of HUMBL's current strategy, but its performance carries substantial risk.)

FinCapital Credito Pagamentos e Servicos LTDA

A Brazilian company acquired by HUMBL, Inc., representing a strategic expansion into the South American market. (This acquisition diversifies HUMBL's business geographically but introduces new operational and regulatory considerations.)

Year-Over-Year Comparison

HUMBL, Inc. has reported a significant turnaround in net income to $9.25M for the six months ended June 30, 2025, a stark contrast to a $2.9M loss in the prior year. This improvement is almost entirely attributable to a $16.84M gain from the sale of discontinued operations (HUMBL.com assets). However, continuing operations have worsened, with net losses increasing from $1.39M to $7.62M, and operating expenses rising. Total assets have grown substantially due to new investments, while liabilities have decreased, indicating a shift in the balance sheet structure.

Key Financial Figures

• $0.00001 — ch registered Common Stock, par value $0.00001 per share HMBL OTC Pink Indicate

Filing Documents

• form10-q.htm (10-Q) — 1921KB
• ex31-1.htm (EX-31.1) — 18KB
• ex31-2.htm (EX-31.2) — 18KB
• ex32-1.htm (EX-32.1) — 11KB
• 0001641172-25-023774.txt ( ) — 9130KB
• hmbl-20250630.xsd (EX-101.SCH) — 67KB
• hmbl-20250630_cal.xml (EX-101.CAL) — 60KB
• hmbl-20250630_def.xml (EX-101.DEF) — 386KB
• hmbl-20250630_lab.xml (EX-101.LAB) — 520KB
• hmbl-20250630_pre.xml (EX-101.PRE) — 474KB
• form10-q_htm.xml (XML) — 1291KB

Financial Information

Part I. Financial Information 1 Item 1. Condensed Consolidated Financial Statements (Unaudited) 1 Condensed Consolidated Balance Sheets (Unaudited) 2 Condensed Consolidated Statements of Operations (Unaudited) 3 Condensed Consolidated Statements of Changes in Stockholders' Equity (Deficit) (Unaudited) 4 Condensed Consolidated Statements of Cash Flows (Unaudited) 5 Notes to Condensed Consolidated Financial Statements (Unaudited) 6 Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 30 Item 3.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 35 Item 4.

Controls and Procedures

Controls and Procedures 35

Other Information

Part II. Other Information 36 Item 1.

Legal Proceedings

Legal Proceedings 36 Item 1A.

Risk Factors

Risk Factors 36 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 36 Item 3. Default Upon Senior Securities 36 Item 4. Mine Safety Disclosures 36 Item 5. Other Information 36 Item 6. Exhibits 37

Signatures

Signatures 38 i PART I — FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) JUNE 30, 2025 Table of Contents Condensed Consolidated Balance Sheets 2 Condensed Consolidated Statements of Operations 3 Condensed Consolidated Statements of Changes in Stockholders' Equity (Deficit) 4 Condensed Consolidated Statements of Cash Flows 5 Notes to Condensed Consolidated Financial Statements 6 1 HUMBL, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (IN US$) JUNE 30, 2025 (UNAUDITED) AND DECEMBER 31, 2024 JUNE 30, 2025 DECEMBER 31, 2024 (UNAUDITED) ASSETS Current Assets: Cash $ 125,549 $ 20,487 Investment - WSCG HoldCo 16,383,198 - Current assets of discontinued operations - 2,971,906 Total Current Assets 16,508,747 2,992,393 Non-Current Assets: Minerals 20,000,000 20,000,000 Non-current assets of discontinued operations - 230,510 Total Non-Current Assets 20,000,000 20,230,510 TOTAL ASSETS $ 36,508,747 $ 23,222,903 LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) LIABILITIES Current Liabilities: Accounts payable and accrued expenses $ 693,446 $ 2,671,043 Accounts payable - related party 24,549 - Accounts payable 24,549 - Derivative liabilities 1,277,291 338,986 Liability for stock to be issued - acquisition of FinCapital 20,000,000 20,000,000 Advances on purchase of assets by WSCG - 1,037,500 Current portion of notes payable - 750,000 Current portion of notes payable - related parties - 385,500 Current portion of notes payable - 385,500 Convertible notes payable - related parties, net of discount 421,830 421,830 Current portion of convertible notes payable, net of discount 1,812,969 1,080,673 Current liabilities of discontinued operations - 614 Total Current Liabilities 24,230,085 26,686,146 Total Liabilities 24,230,085 26,686,146 Commitments and contingency - - STOCKHOLDERS' EQUITY (DE

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View this 10-Q filing on SEC EDGAR