Hapi Metaverse Posts Wider Losses
Despite steep unrealized investment losses and impairments, the company eyes AI-powered retail transformation.
November 07, 2025
Hapi Metaverse Reports Larger Losses, Seeks Stability Through Parent Support and Strategic Shift
Hapi Metaverse’s latest earnings show a company still working through operational and financial challenges. The third quarter brought deeper losses, a heavier impairment load, and ongoing investment volatility—but also a clearer picture of where leadership is taking the business next.
The company reported a Q3 net loss of $1.49 million, nearly four times higher than the year-ago period. Nine-month losses reached $2.66 million. Revenue came in at $73,728 for the quarter and $201,558 year-to-date, both slightly down from 2024. That drop tracks with the shuttering of a Hong Kong café under the MOC brand in late 2024, which impacted food and beverage sales—the company’s main revenue source.
Operating expenses jumped to $830,000 for the quarter. Most of that was tied to impairments on property, equipment, and leased assets in Taiwan and mainland China, as management reevaluated performance expectations at specific F&B locations. These non-cash items weighed heavily on margins, even as core operating costs like rent and salaries held relatively steady.
The company also saw continued fair value losses tied to its investment in Value Exchange International (VEII), a related party. Unrealized losses totaled $596,000 in Q3 alone and $1.51 million year-to-date, following a revaluation of common stock and warrants. Hapi Metaverse now holds 21 million VEII shares and warrants for over 36 million more, representing a sizable exposure, but not enough for consolidation under GAAP rules.
Despite the losses, liquidity improved modestly. The company closed the quarter with $540,000 in cash, up from $429,000 at the end of 2024. A large portion of that came from financing—$1.16 million in related-party advances—highlighting the central role of parent company Alset Inc. Alset has committed to providing ongoing support and has waived any repayment requirements for at least the next 12 months. That financial backstop is key, as Hapi continues to carry over $3 million in liabilities and a negative working capital position.
Strategic Direction: Technology and Partnerships
Looking ahead, the business is positioning itself around digital transformation opportunities, particularly in AI and robotics for retail and food service. Leadership laid out a plan that includes:
- Building out its tech stack for direct-to-consumer commerce
- Partnering on robotics implementation and services
- Expanding e-commerce and IT service offerings
The goal is to shift from physical footprint to software-enabled growth, with VEII continuing to serve as a key partner in that roadmap.
Operational Gaps and Oversight
At the same time, internal controls remain a work in progress. Management disclosed material weaknesses in financial reporting, pointing to limited staff capacity and outdated close procedures. While the issues didn’t trigger restatements, they raise questions about oversight that will need attention as the business model evolves.
For now, Hapi Metaverse is leaning on operational resets, tech-forward partnerships, and parent company backing to regain its footing. The next few quarters will be critical as it works to stabilize the core business and prove out its strategy shift.
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