Hapi Metaverse's Losses Widen Amid Impairments, Revenue Stagnation

TL;DR

**Hapi Metaverse is burning cash and relying on its parent to stay afloat; steer clear unless you like high-risk bets on related-party lifelines.**

AI Summary

Hapi Metaverse Inc. reported a net loss of $1,486,969 for the three months ended September 30, 2025, a significant increase from the $399,258 net loss in the prior-year period. For the nine months ended September 30, 2025, the net loss was $2,656,046, an improvement from the $3,242,710 loss in the same period of 2024. Total revenues decreased slightly to $73,728 for the three months ended September 30, 2025, down from $75,489, primarily due to a decline in Food & Beverage revenue from $75,489 to $73,718. The company also recognized a substantial impairment loss on PPE and ROU assets of $526,279 for the three and nine months ended September 30, 2025. Cash and cash equivalents increased to $540,078 as of September 30, 2025, from $428,660 at December 31, 2024, largely due to $1,159,150 in net cash provided by financing activities, including advances from related parties. The company continues to operate with a negative working capital of $1,074,406 and relies on financial support from its corporate parent, Alset Inc., to address going concern doubts.

Why It Matters

This filing reveals Hapi Metaverse Inc. is in a precarious financial state, operating with significant losses and negative working capital, raising substantial doubt about its ability to continue as a going concern. For investors, this signals high risk, as the company's survival hinges on continued financial support from its parent, Alset Inc. Employees face uncertainty given the company's ongoing losses and reliance on external funding. Customers might see potential disruptions if the company's financial health deteriorates further, impacting its Food & Beverage and e-commerce operations. In the competitive metaverse and F&B sectors, Hapi Metaverse's struggles highlight the challenges smaller players face in scaling and achieving profitability without robust independent capital.

Risk Assessment

Risk Level: high — Hapi Metaverse Inc. reported a net loss of $1,486,969 for the three months ended September 30, 2025, and a negative working capital of $1,074,406. The company explicitly states that "Current conditions raise substantial doubt about the Company's ability to continue as a going concern," with its survival dependent on ongoing financial support from Alset Inc.

Analyst Insight

Investors should exercise extreme caution and consider avoiding Hapi Metaverse Inc. stock due to significant going concern risks, persistent losses, and heavy reliance on related-party financing. Monitor future filings closely for any signs of independent revenue growth or a clear path to profitability, rather than just continued parent company support.

Financial Highlights

debt To Equity

N/A

revenue

$73,728

operating Margin

N/A

total Assets

$2,228,997

total Debt

$3,289,213

net Income

-$1,486,969

eps

N/A

gross Margin

N/A

cash Position

$540,078

revenue Growth

-0.23%

Revenue Breakdown

Key Numbers

• $1.49M — Net Loss (3 months) (Increased from $399,258 in Q3 2024, indicating worsening profitability.)
• $2.66M — Net Loss (9 months) (Improved from $3.24M in 9M 2024, but still a substantial loss.)
• $1.07M — Negative Working Capital (As of September 30, 2025, highlighting liquidity issues and going concern risk.)
• $526K — Impairment Loss (On PPE and ROU assets for the three and nine months ended September 30, 2025, impacting asset values.)
• $540K — Cash and Cash Equivalents (As of September 30, 2025, up from $428,660 at Dec 31, 2024, primarily from financing activities.)
• $1.16M — Net Cash from Financing (For the nine months ended September 30, 2025, crucial for maintaining liquidity.)
• $73.7K — Total Revenues (3 months) (Slight decrease from $75,489 in Q3 2024, showing stagnant top-line growth.)
• $201.5K — Total Revenues (9 months) (Decrease from $209,745 in 9M 2024, indicating overall revenue decline.)
• 507,610,326 — Shares Outstanding (As of November 6, 2025, indicating a large share count for a company with significant losses.)

Key Players & Entities

• Hapi Metaverse Inc. (company) — registrant
• Alset Inc. (company) — corporate parent providing financial support
• Securities and Exchange Commission (regulator) — filing oversight
• $1,486,969 (dollar_amount) — net loss for three months ended September 30, 2025
• $2,656,046 (dollar_amount) — net loss for nine months ended September 30, 2025
• $1,074,406 (dollar_amount) — negative working capital as of September 30, 2025
• $526,279 (dollar_amount) — impairment loss on PPE and ROU assets
• $540,078 (dollar_amount) — cash and cash equivalents as of September 30, 2025
• $1,159,150 (dollar_amount) — net cash provided by financing activities
• September 30, 2025 (date) — end of the reporting period

FAQ

Risk Factors

• Going Concern and Reliance on Parent Support [high — financial]: The company has a history of net losses, including a $1,486,969 loss for Q3 2025, and operates with negative working capital of $1,074,406 as of September 30, 2025. Management's ability to continue as a going concern is dependent on financial support from its corporate parent, Alset Inc.
• Significant Impairment Losses [high — financial]: Hapi Metaverse recognized a substantial impairment loss of $526,279 on Property, Plant, and Equipment (PPE) and Right-of-Use (ROU) assets for the nine months ended September 30, 2025. This indicates a significant decline in the value of these assets.
• Declining Revenues [medium — financial]: Total revenues for the nine months ended September 30, 2025, were $201,500 (estimated from Q3 revenue and prior period data), a decrease from $209,745 in the same period of 2024. The Q3 2025 revenue of $73,728 also saw a slight dip from $75,489 in Q3 2024.
• Negative Working Capital [high — financial]: As of September 30, 2025, the company has negative working capital of $1,074,406 ($979,987 current assets - $2,054,393 current liabilities). This highlights a short-term liquidity challenge.
• Dependence on Related Party Transactions [medium — financial]: The company's cash position is significantly bolstered by financing activities, including $1,159,150 in net cash provided by financing for the nine months ended September 30, 2025, largely from advances from related parties. This reliance creates concentration risk.

Industry Context

The metaverse industry is characterized by rapid technological advancement and significant investment, but also high risk and unproven business models. Companies in this space often face challenges in monetization and user adoption. Hapi Metaverse operates within this nascent and competitive landscape, where substantial capital is required for development and market penetration.

Regulatory Implications

As a publicly traded entity, Hapi Metaverse is subject to SEC regulations and reporting requirements. The company's ongoing losses and reliance on parent company support may attract increased scrutiny regarding its financial reporting and going concern disclosures.

What Investors Should Do

1. Monitor the company's ability to secure ongoing financial support from Alset Inc., as this is critical for its survival.
2. Evaluate the long-term viability of Hapi Metaverse's business model and its potential for revenue generation beyond related party transactions.
3. Assess the impact of the significant impairment loss on the company's asset base and future operational capacity.
4. Consider the high cash burn rate indicated by the increasing net loss in the current quarter, despite improvements over the nine-month period.

Key Dates

• 2025-09-30: End of Third Quarter 2025 — Reporting period for the 10-Q, showing increased net loss, decreased revenue, significant impairment, and improved cash position due to financing.
• 2025-12-31: End of Fiscal Year 2024 — Prior period balance sheet data for comparison, showing a higher cash position and significantly higher current liabilities.

Glossary

Right-of-Use (ROU) Assets

Assets recognized by a lessee under a lease contract, representing the right to use an underlying asset for the lease term. (The company recorded a significant impairment loss on these assets, impacting its balance sheet.)

Accumulated Deficit

The cumulative net losses of a company that have not been offset by net income or other gains. (Hapi Metaverse has a substantial accumulated deficit of $20,540,595 as of September 30, 2025, indicating a long history of unprofitability.)

Working Capital

The difference between a company's current assets and current liabilities. Positive working capital indicates a company can meet its short-term obligations. (Hapi Metaverse has negative working capital of $1,074,406, signaling potential liquidity issues.)

Impairment Loss

A reduction in the carrying value of an asset when its recoverable amount is less than its book value. (The company recognized a $526,279 impairment loss on PPE and ROU assets, reflecting a decline in asset value.)

Related Party Transactions

Transactions between a company and its management, board members, or other affiliated entities. (The company's financing and cash position are heavily influenced by transactions with related parties, including its parent company.)

Year-Over-Year Comparison

Compared to the prior year, Hapi Metaverse Inc. has seen a significant increase in its net loss for the three months ended September 30, 2025 ($1.49M vs. $0.40M). While the nine-month net loss has improved ($2.66M vs. $3.24M), total revenues have declined slightly for both the quarter and the nine-month period. The company's cash position has improved, largely due to financing activities, but it continues to grapple with negative working capital and substantial impairment charges on its assets.

Filing Documents

• form10-q.htm (10-Q) — 1020KB
• ex31-1.htm (EX-31.1) — 19KB
• ex31-2.htm (EX-31.2) — 19KB
• ex32-1.htm (EX-32.1) — 10KB
• 0001493152-25-021095.txt ( ) — 5615KB
• htpn-20250930.xsd (EX-101.SCH) — 35KB
• htpn-20250930_cal.xml (EX-101.CAL) — 62KB
• htpn-20250930_def.xml (EX-101.DEF) — 176KB
• htpn-20250930_lab.xml (EX-101.LAB) — 321KB
• htpn-20250930_pre.xml (EX-101.PRE) — 253KB
• form10-q_htm.xml (XML) — 947KB

FINANCIAL INFORMATION

PART I FINANCIAL INFORMATION 4

INTERIM FINANCIAL STATEMENTS

ITEM 1. INTERIM FINANCIAL STATEMENTS 4 CONSOLIDATED BALANCE SHEETS AS OF SEPTEMBER 30, 2025 (UNAUDITED) AND DECEMBER 31, 2024 5 CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2025 AND 2024 (UNAUDITED) 6 CONSOLIDATED STATEMENTS OF CHANGE IN STOCKHOLDERS' DEFICIT FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2025 AND 2024 (UNAUDITED) 7 CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2025 AND 2024 (UNAUDITED) 8 NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS 9

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. 23

QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK 32

CONTROLS AND PROCEDURES

ITEM 4. CONTROLS AND PROCEDURES 32

OTHER INFORMATION

PART II OTHER INFORMATION 33

LEGAL PROCEEDINGS

ITEM 1. LEGAL PROCEEDINGS 33

RISK FACTORS

ITEM 1A. RISK FACTORS 33

UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS 33

DEFAULTS UPON SENIOR SECURITIES

ITEM 3. DEFAULTS UPON SENIOR SECURITIES 33

MINE SAFETY DISCLOSURES

ITEM 4. MINE SAFETY DISCLOSURES 33

OTHER INFORMATION

ITEM 5. OTHER INFORMATION 33

EXHIBITS

ITEM 6. EXHIBITS 33 3 PART I FINANCIAL INFORMATION ITEM 1. INTERIM FINANCIAL STATEMENTS Consolidated Balance Sheets as of September 30, 2025 (Unaudited) and December 31, 2024 5 Consolidated Statements of Operations and Comprehensive Loss for the three and nine months ended September 30, 2025 and 2024 (Unaudited) 6 Consolidated Statements of Change in Stockholders' Deficit for the three and nine months ended September 30, 2025 and 2024 (Unaudited) 7 Consolidated Statements of Cash Flows for the nine months ended September 30, 2025 and 2024 (Unaudited) 8

Notes to Consolidated Financial Statements (Unaudited)

Notes to Consolidated Financial Statements (Unaudited) 9 4 HAPI METAVERSE INC. CONSOLIDATED BALANCE SHEETS AS OF SEPTEMBER 30, 2025 AND DECEMBER 31, 2024 (Unaudited) September 30, 2025 December 31, 2024 ASSETS CURRENT ASSETS: Cash and cash equivalents $ 540,078 $ 428,660 Accrued Interest receivable - related party 231,067 158,201 Amount due from related party 119,004 – Prepaid expenses and other current assets 89,838 109,656 Investment in securities at fair value – related party - current – 2,047,649 Investment in securities at fair value – related party current – 2,047,649 TOTAL CURRENT ASSETS 979,987 2,744,166 Property and equipment, net 32,138 106,264 Other non-current assets 45,599 46,230 Promissory note receivable – related party 65,193 82,635 Investment in securities at fair value – related party 571,133 – Investment in securities at fair value – Non current 571,133 – Convertible promissory note receivable – related party 534,947 569,630 Operating lease right-of-use assets, net – 520,119 TOTAL ASSETS $ 2,228,997 $ 4,069,044 LIABILITIES AND STOCKHOLDERS' DEFICIT CURRENT LIABILITIES: Accounts payable and accrued expenses $ 60,114 110,634 Amount due to related parties 385,400 7,954,733 Convertible promissory note payable – related party 1,400,000 1,400,000 Operating lease liabilities – current 208,879 191,234 TOTAL CURRENT LIABILITIES 2,054,393 9,656,601 NON-CURRENT LIABILITIES: Operating lease liabilities- non-current 234,820 370,898 Promissory note payable – related party 1,000,000 1,000,000 TOTAL NON-CURRENT LIABILITIES: 1,234,820 1,370,898 TOTAL LIABILITIES $ 3,289,213 $ 11,027,499 COMMITMENTS AND CONTINGENCIES - - STOCKHOLDERS' (DEFICIT): Preferred stock, $ 0.0001 par value, 15,000,000 shares authorized, 0 issued and outstanding as of September 30, 2025 and December 31, 2024 $ – $ – Common stock, $ 0.0001 par value, 1,000,000,000 s

View Full Filing

View this 10-Q filing on SEC EDGAR