HTC has said in a statement it expects to book an investment loss of US$40 million on its stake in US-based on-demand games company OnLive.

OnLive is running out of cash and has not managed to raise new funds to meet its operational needs, HTC CFO Chang Chia-lin said in the statement. OnLive applied for asset restructuring over the weekend, Chang added.

HTC took up a portion of OnLive shares in February 2011. However, HTC did not disclose the stake size in OnLive.