HMBL.Humbl, INC
10-K: HUMBL Inc. Announces Asset Sale, Acquisition, and Shift to Holding Company Model in Annual Report
Sentiment:
Annual Results
HUMBL Inc. divests assets, acquires FinCapital, and transitions to a holding company structure with a focus on Brazilian and Latin American markets.
Capital raiseHUMBL will contribute 15% of any funds it raises in any Regulation A+ offering (up to $3,000,000) to fund development of Multicortexs suite of products.The remaining $16,000,000 in common shares will be issued following a recapitalization event that provides sufficient authorized shares to make the issuance.
Worse than expectedThe company's net loss increased significantly from 2023 to 2024.The company's working capital deficit worsened considerably.The company's auditor has raised substantial doubt about the company's ability to continue as a going concern.
Summary
- HUMBL Inc. sold all of its assets to WSCG, Inc. for $3,025,000, shares of WSCG Class B Common Stock, and membership units of HoldCo.
- The remaining $2,000,000 of the cash purchase price was paid by WSCG on April 1, 2025.
- HUMBL purchased 99% of FinCapital Credito Pagamentos e Servicos LTDA, a Brazilian company, from Ybyr Capital S.A.
- FinCapital owns 41,500 tons of magnesium silicate, a raw material used in various industrial sectors, valued at $20,000,000.
- HUMBL will issue $20,000,000 in common shares to Ybyr for the FinCapital equity interest, with $4,000,000 to be paid immediately and the remaining $16,000,000 following a recapitalization event.
- HUMBL is shifting its business model from Web 3 technologies to a holding company structure focused on Brazil and Latin America.
- HUMBL acquired a 51% interest in Multicortex, LLC, an AI and high-performance computing company, and will contribute 15% of funds raised in a Regulation A+ offering (up to $3,000,000).
- The company had a net loss of $14,446,392 for the year ended December 31, 2024, and $4,310,995 for the year ended December 31, 2023 (restated).
Sentiment
Score: 4
Explanation: The document presents a mixed picture. While there are strategic shifts and asset acquisitions that could be positive, the significant net losses, working capital deficit, and going concern warning from the auditor raise serious concerns about the company's financial health and future prospects.
Positives
- The sale of assets to WSCG provides HUMBL with $3,025,000 in cash and equity in WSCG.
- The acquisition of FinCapital provides HUMBL with a tangible asset in the form of magnesium silicate.
- The shift to a holding company model allows HUMBL to diversify its business interests.
- The investment in Multicortex provides HUMBL with exposure to the growing AI market.
- The company has a patent for System and Method for Transferring Currency Using Blockchain.
Negatives
- The company had a net loss of $14,446,392 for the year ended December 31, 2024, and $4,310,995 for the year ended December 31, 2023 (restated).
- The company has a working capital deficit of $23,693,753 as of December 31, 2024.
- The company's auditor has raised substantial doubt about the company's ability to continue as a going concern.
- The company has a large accumulated deficit of $(117,976,134) as of December 31, 2024.
Risks
- The company's ability to continue as a going concern is uncertain due to operating losses and a working capital deficit.
- The company may not be able to successfully execute its strategy to operate as a holding company.
- The company is dependent on the operations and performance of its subsidiaries.
- The company may have limited control over certain subsidiaries or minority interests.
- The company's rights to own and control magnesium silicate resources are subject to legal and regulatory frameworks that may change over time.
- The company's magnesium silicate holdings depend on market demand in industrial sectors such as fertilizer, construction, ceramics, and fireproofing.
Future Outlook
For the 2025 fiscal year, HUMBL will no longer be pursuing Web 3 and related technologies, instead, the Company will adopt a holding a company model with a particular focus in Brazil and Latin America.
Management Comments
- Our plan is to find and acquire undervalued assets and business in North and South America, with a particular emphasis in Brazil, and then operate those businesses as subsidiaries under our corporate umbrella.
Industry Context
The shift to a holding company model and focus on Latin America reflects a strategic pivot, potentially capitalizing on undervalued assets and emerging markets. The acquisition of FinCapital and the joint venture with Multicortex suggest a move towards more traditional industries and AI, diverging from the previous Web 3 focus.
Comparison to Industry Standards
- It is difficult to compare HUMBL's current financial state and strategic shift to industry standards due to its unique combination of asset sales, acquisitions, and change in business model.
- Comparable companies in the mining sector, such as Vale S.A. or BHP Group, have significantly larger market capitalizations and established operations, making direct comparisons challenging.
- Similarly, AI-focused companies like C3.ai or Palantir Technologies operate at a different scale and with different business models than HUMBL's planned investment in Multicortex.
- The success of HUMBL's new strategy will depend on its ability to effectively manage its subsidiaries, identify and acquire undervalued assets, and navigate the complexities of the Brazilian and Latin American markets.
Management Changes
| Role | Previous Person | New Person | Effective Date | Reason |
|---|---|---|---|---|
| Chief Executive Officer | Brian Foote | Thiago Moura | 2024-12-24 | Not specified |
Legal Proceedings
- The court granted our motion and dismissed the case without prejudice.
- On April 10, 2025, the plaintiffs filed an amended complaint.
- On July 20, 2024, Pacific Lion entered into a settlement agreement pursuant to which the Company dismissed its lawsuit against Pacific Lion and Pacific Lion released its two lawsuits against the Company.
- On July 2, 2024, the Company and Mr. Hymers entered into a settlement agreement pursuant to which the Company issued Mr. Hymers 700,000,000 shares for work performed under the consulting agreement and Mr. Hymers agreed to dismiss his lawsuit against the Company.
Related Party Transactions
- On October 24, 2023, the Company exchanged $6,150,000 in related party notes payable and $355,402 in accrued interest into 8,775 shares of Series C preferred stock.
- On July 16, 2024, the Company issued 100,000 shares of Series D Preferred Stock to their CEO for compensation.
- Since February 2, 2022, we have entered into five loan transactions with Sartorii, LLC, an entity owned by our former CEO Brian Footes parents.
- We have a new loan with Sartorii, LLC in the amount of $353,000 that is still outstanding as of December 31, 2024.
Stakeholder Impact
- Shareholders face uncertainty due to the company's financial difficulties and strategic shift.
- Employees may experience changes in roles and responsibilities due to the new holding company structure.
- Customers may see changes in product offerings and services as the company focuses on new markets.
- Suppliers and creditors may be affected by the company's financial situation and ability to meet its obligations.
Next Steps
- FinCapital is currently looking to sell the magnesium silicate and acquire other raw materials or other mining interests.
- HUMBL will contribute 15% of any funds it raises in any Regulation A+ offering (up to $3,000,000) to fund development of Multicortexs suite of products.
- The remaining $16,000,000 in common shares will be issued following a recapitalization event that provides sufficient authorized shares to make the issuance.
- The Company intends to keep a portion of the HoldCo Units to maintain exposure to WSCGs performance and the Company assets purchased by WSCG.
- The Company will also offer to exchange some of the HoldCo Units to its debtholders and holders of Series C Preferred Stock as a way to eliminate debt and reduce potential future dilution to common stockholders.
Key Dates
| Date | Description |
|---|---|
| 2000-05-03 | Ponca Acquisition Corporation formed in Nevada. |
| 2009-03-12 | Redomiciled to Oklahoma. |
| 2009-11-12 | Tesoro Enterprises, Inc. incorporated as a subsidiary. |
| 2010-03-11 | Changed name to Tesoro Enterprises, Inc. |
| 2020-11-04 | Henry J. Boucher sold his controlling interest to Brian Foote. |
| 2020-11-30 | Changed domicile to Delaware. |
| 2020-12-03 | Merged with HUMBL LLC through a reverse merger. |
| 2020-12-23 | Filed a Certificate of Amendment to effect a 1:4 reverse split and change name to HUMBL, Inc. |
| 2021-02-26 | FINRA announced the change of name and trading symbol. |
| 2021-03-26 | Name and trading symbol change became effective. |
| 2021-06-03 | Acquired Tickeri, Inc. |
| 2021-06-30 | Acquired Monster Creative, LLC. |
| 2021-07-21 | Established the HUMBL, Inc. 2021 Stock Incentive Plan. |
| 2022-02-12 | Entered into an asset purchase agreement with BizSecure, Inc. |
| 2022-03-03 | Acquired Ixaya Business SA de CV. |
| 2022-05-19 | Named as a defendant in a putative shareholder derivative class action lawsuit. |
| 2022-07-14 | Named as a defendant in a shareholder derivative class action lawsuit. |
| 2022-11-02 | Acquired BM Authentics. |
| 2022-11-15 | Entered into a Settlement Agreement and Mutual Release of Claims with Forwardly, Inc. |
| 2022-12-30 | Rescinded 13,200,000 shares of common stock and 10,050,000 RSUs from BizSecure. |
| 2023-01-31 | Sold Tickeri back to the former owners. |
| 2023-06-01 | Amended Certificate of Incorporation to amend the conversion terms of their Series B Preferred Stock. |
| 2023-06-30 | Entered into a Securities Purchase Agreement with Phantom Power, LLC to sell back the membership interest in Monster. |
| 2023-07-19 | Entered into a Settlement Agreement with BizSecure, Inc. |
| 2023-08-01 | Entered into a Master Consulting Agreement and Promissory Note with BRU, LLC. |
| 2023-10-24 | Filed a Certificate of Designation with the State of Delaware to designate 20,000 shares to be authorized for Series C Preferred Stock. |
| 2024-01-26 | Increased authorized common stock to 22,500,000,000 shares. |
| 2024-02-23 | Entered into an Asset Purchase Agreement with Avrio Worldwide, PBC. |
| 2024-04-01 | Terminated the Ixaya SPA and deconsolidated from the Company. |
| 2024-07-16 | Designated a new Series D Preferred Stock and authorized the issuance of up to 250,000 shares. |
| 2024-10-01 | Increased authorized common shares to 50,000,000,000 shares. |
| 2024-12-02 | Entered into a Stock Purchase Agreement with Ybyr Capital S.A. and Brian Foote. |
| 2024-12-02 | Entered into an Asset Purchase Agreement with WSCG, Inc. |
| 2024-12-17 | Amended agreement with BRU, LLC. |
| 2024-12-24 | Thiago Moura became President and Chief Executive Officer. |
| 2025-02-27 | Transfer of the Company assets to WSCG took place. |
| 2025-03-27 | The court granted our motion and dismissed the case without prejudice. |
| 2025-04-01 | The remaining $2,000,000 of the cash purchase price was paid by WSCG. |
| 2025-04-03 | HUMBL entered into a Joint Venture Agreement with Multicortex, LLC. |
| 2025-05-09 | As of this date, there were 39,791,299,186 shares of the registrants Common Stock outstanding. |
Keywords
FinCapital, magnesium silicate, holding company, WSCG, acquisition, asset sale, HUMBL, Brazil, Ybyr, AI
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