Hanryu Holdings Inc
For the period ended Sep 30, 2024. Filed Nov 20, 2024.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2024 · Filed Nov 20, 2024
GITS$1.55+0.6%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-06-30; filed 2024-10-15.
0001213900-24-087506
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-09-30; filed 2024-11-20.
0001213900-24-100296
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 81 previous paragraphs and 81 current paragraphs.
63 unchanged; 18 reworded; 0 added; 0 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 8 previous and 8 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Reworded paragraphs (18)
Previous wording
We have experienced recurring losses from operations and have a stockholders’ equity and working capital of $10,566,638 and $8,199,643 as of June 30, 2024, respectively, and $13,068,465 and $10,140,579 as of December 31, 2023, respectively. Also, we have incurred operating losses of $1,738,599 and $5,592,847 for the six months ended June 30, 2024 and June 30, 2023, respectively. These uncertainties raise substantial doubt about our ability to continue as a going concern for twelve (12) months after the issuance date of our financial statements included in this Form 10-Q.
Current wording
We have experienced recurring losses from operations and have stockholders’ equity and working capital of $10,615,774 and $8,355,991 as of September 30, 2024, respectively, and $13,068,465 and $10,140,579 as of December 31, 2023, respectively. Also, we have incurred operating losses of $2,109,827 and $8,518,919 for the nine months ended September 30, 2024 and September 30, 2023, respectively. These uncertainties raise substantial doubt about our ability to continue as a going concern for twelve (12) months after the issuance date of our financial statements included in this Form 10-Q.
Previous wording
Our future operations are dependent upon multiple factors, including (i) the success of our FANTOO platform business; (ii) competition from existing and future services from other companies; and (iii) securing new sources of capital to fund operations and develop markets. We will maintain an ongoing effort to improve and innovate FANTOO platform business to generate funds for our operations. . For instance, we recently opened FANTOO House, in Seoul, a complex entertainment space for content video production, studio, music broadcasting, and rental (lease). At FANTOO platform, we plan to launch (i) Epic branded ecommerce platform expected to generate additional income, and (ii) dedicated video production operations designed to create short episodic content that focuses on K-POP fandom. In addition, we maintain an ongoing effort to raise funds for our operations from current investors and new sources of capital through the issuance of additional common stock and/or short-term notes. However, there can be no assurance as to the outcome of these factors or that future funding efforts will generate sufficient capital to maintain our operations. As a result, the Company has concluded that management’s plans do not alleviate substantial doubt about the Company’s ability to continue as a going concern.
Current wording
Our future operations are dependent upon multiple factors, including (i) the success of our FANTOO platform business; (ii) competition from existing and future services from other companies; and (iii) securing new sources of capital to fund operations and developing markets. We will maintain an ongoing effort to improve and innovate FANTOO platform business to generate funds for our operations. For instance, we recently opened FANTOO House, in Seoul, a complex entertainment space for content video production, studio, music broadcasting, and rental (lease). At FANTOO platform, we plan to launch (i) Epic branded ecommerce platform expected to generate additional income, and (ii) dedicated video production operations designed to create short episodic content that focuses on K-POP fandom. In addition, we maintain an ongoing effort to raise funds for our operations from current investors and new sources of capital through the issuance of additional common stock and/or short-term notes. However, there can be no assurance as to the outcome of these factors or that future funding efforts will generate sufficient capital to maintain our operations. As a result, the Company has concluded that management’s plans do not alleviate substantial doubt about the Company’s ability to continue as a going concern.
Previous wording
Revenue from News Agency. Revenue from news agency content sales, which provides news articles and original content to other third-party media outlets. Although we have generated a de minimis amount of revenue from such services in the past, we anticipate earning more steady revenue from this business model by the end of 2024.
Current wording
Revenue from News Agency. Revenue from news agency content sales, which provides news articles and original content to other third-party media outlets. Although we have not generated amount of revenue enough from such services in the past, we anticipate earning more steady revenue from this business model by the end of 2024.
Previous wording
Three and Six months Ended June 30, 2024 Compared to three and six months ended June 30, 2023
Current wording
Three and Nine months Ended September 30, 2024 Compared to three and nine months ended September 30, 2023
Previous wording
The following table sets forth a summary of our statements of operations for the six months ended June 30, 2024 and 2023:
Current wording
The following table sets forth a summary of our statements of operations for the nine months ended September 30, 2024 and 2023:
Previous wording
We have generated revenue from the FANTOO platform, and we have started to generate contents sales through FNS and other platforms, including third party news agencies and YouTube. While the FANTOO platform itself has not yet generated the meaningful revenue, we began implementing our business plan and commenced distributing content to build and raise brand awareness. Revenue for the six months ended June 30, 2024 was $198t, as compared to revenue of $265,546 for the six months ended June 30, 2023. This decrease of $265,533 was due to $193,717 in advertising and content sales through FANTOO platform and FNS and $71,816 in product sales thorough Hanryu Bank and FNS in the period ended June 30, 2023 compared to no such sales in the corresponding period in 2024. The substantial decrease in revenue is principally attributable by the restructuring of the FANTOO platform and the strategic decision of the management.
Current wording
We have generated revenue from the FANTOO platform, and we have started to generate contents sales through FNS and other platforms, including third party news agencies and YouTube. While the FANTOO platform itself has not yet generated meaningful revenue, we began implementing our business plan and commenced distributing content to build and raise brand awareness. Revenue for the nine months ended September 30, 2024 was $198, as compared to revenue of $980,441 for the nine months ended September 30, 2023. This decrease of $980,243 was mostly due to $892,388 in advertising and content sales through FANTOO platform and FNS and $71,521 in product sales thorough Hanryu Bank and FNS in the period ended September 30, 2023 compared to no such sales in the corresponding period in 2024. The substantial decrease in revenue is principally attributable by the restructuring of the FANTOO platform and the strategic decision of the management to upgrade Famtoo App 3.0 version.
Previous wording
Cost of revenue for six months ended June 30, 2024 and 2023 was $0, and $69,145, respectively. The substantial decrease in cost of revenue is principally due to the substantial decrease in revenue reported during the six-month period ending June 30, 2024, compared to the corresponding period in 2023.
Current wording
Cost of revenue for the nine months ended September 30, 2024 and the months ended September 30, 2023 was $0, and $514,314, respectively. The substantial decrease in cost of revenue is principally due to the substantial decrease in revenue reported during the nine-month period ending September 30, 2024, compared to the corresponding period in 2023.
Previous wording
Marketing and advertising expense for the six months ended June 30, 2024 was $3,446, as compared to $832,755 for the six months ended June 30, 2023. The decrease is due to the restructuring of the FANTOO platform and the strategic decision of the management to improve FANTOO platform to efficiently reach the targeted users.
Current wording
Marketing and advertising expense for the nine months ended September 30, 2024 was $3,437, as compared to $1,076,592 for the nine months ended September 30, 2023. The decrease is due to the restructuring of the FANTOO platform and the strategic decision of the management to improve FANTOO platform by upgrading Fantoo App 3.0 to efficiently reach the targeted users.
Previous wording
Research and development expense for the six months ended June 30, 2024 was $0, as compared to $231,743 for the six months ended June 30, 2023. The decrease in research and development expense is primarily due to the restructuring of the FANTOO platform and the strategic decision of the management.
Current wording
Research and development expense for the nine months ended September 30, 2024 was $0, as compared to $45,768 for the nine months ended September 30, 2023. The decrease in research and development expense is primarily due to the restructuring of the FANTOO platform and the strategic decision of the management.
Previous wording
General and administrative expense for the six months ended June 30, 2024 was $1,735,311 as compared to $4,724,973 for the six months ended June 30, 2023. The decrease of $2,989,662 was primarily due to a decrease in commissions and consulting costs of $853,773, a decrease in labor related costs of $1,274,566, and a decrease in travel expense of $679,686. The substantial decrease in general and administrative expense is principally attributable to the decrease in consulting costs, labor related costs and travel expense by the restructuring of the FANTOO platform and the strategic decision of the management.
Current wording
General and administrative expense for the nine months ended September 30, 2024 was $2,106,588 as compared to $7,896,445 for the nine months ended September 30, 2023. The decrease of $5,789,857 was primarily due to a decrease in commissions and consulting costs of $1,418,990, a decrease in labor related costs of $2,791,480, and a decrease in travel expense of $897,338. The substantial decrease in general and administrative expense is principally attributable to the decrease in consulting costs, labor related costs and travel expense by the restructuring of the FANTOO platform and the strategic decision of the management by upgrading Fantoo App 3.0.
Previous wording
Other income (expense) for the six months ended June 30, 2024 was $129,588 an increase of $147,659 as compared to the six months ended June 30, 2023, which was primarily driven by $173,086 of the interest income.
Current wording
Other income (expense) for the nine months ended September 30, 2024 was $9,148 a decrease of $179,199 as compared to the nine months ended September 30, 2023, which was primarily driven by $189,992 of the bad debt expense.
Previous wording
We have a history of operating losses and negative cash flow in operating activities. We have incurred recurring net losses, including net losses from operations before income taxes of $1,608,971 and $6,059,252 for the six months ended June 30, 2024 and 2023, respectively. We used $490,256 and $13,683,164 of cash for operating activities for the six months ended June 30, 2024 and 2023, respectively.
Current wording
We have a history of operating losses and negative cash flow in operating activities. We have incurred recurring net losses, including net losses from operations before income taxes of $2,109,827 and $8,552,478 for the nine months ended September 30, 2024 and 2023, respectively. We used $660,632 and $10,803,751of cash for operating activities for the nine months ended September 30, 2024 and 2023, respectively.
Previous wording
As of June 30, 2024, we had cash and cash equivalents of approximately $946. Based on our available cash resources and current operating plan, there is substantial doubt regarding the Company’s ability to continue as a going concern for a period of one year after the date that its financial statements for the six months ended June 30, 2024 are issued. The Company’s existing capital resources, including the net proceeds from its IPO will not be sufficient to enable it to continue its operation as planned. The Company will need to raise substantial additional funds in the future in order to continue its operations. Our cash needs will depend on numerous factors, including our revenues, completion of our product development activities, customer and market acceptance of our platform, and our ability to reduce and control costs.
Current wording
As of September 30, 2024, we had cash and cash equivalents of approximately $6,975. Based on our available cash resources and current operating plan, there is substantial doubt regarding the Company’s ability to continue as a going concern for a period of one year after the date that its financial statements for the nine months ended September 30, 2024 are issued. The Company’s existing capital resources, including the net proceeds from its IPO will not be sufficient to enable it to continue its operation as planned. The Company will need to raise substantial additional funds in the future in order to continue its operations. Our cash needs will depend on numerous factors, including our revenues, completion of our product development activities, customer and market acceptance of our platform, and our ability to reduce and control costs.
Previous wording
The following table summarizes changes in cash for the six months ended June 30, 2024 and 2023:
Current wording
The following table summarizes changes in cash for the nine months ended September 30, 2024 and 2023:
Previous wording
Net cash used in operating activities for the six months ended June 30, 2024 was $490,256, which primarily reflected our net loss of $1,608,971, net of adjustments to reconcile net loss to net cash provided by operating activities of $1,118,715 which included a depreciation charge of $113,334. Changes in working capital primarily reflected increases in receivables and the settlement of payables in the ordinary course. Net cash used in operating activities for the six months ended June 30, 2023 was $5,899,791 which primarily reflected our net loss of $5,610,918, net of adjustments to reconcile net loss to net cash provided by operating activities of $288,873, which included a depreciation charge of $146,763. Changes in working capital primarily reflected increases in receivables and the settlement of payables in the ordinary course.
Current wording
Net cash used in operating activities for the nine months ended September 30, 2024 was $660,632, which primarily reflected our net loss of $2,100,679, net of adjustments to reconcile net loss to net cash provided by operating activities of $1,443,401 which included a depreciation charge of $167,564. Changes in working capital primarily reflected increases in receivables and the settlement of payables in the ordinary course. Net cash used in operating activities for the nine months ended September 30, 2023 was $10,803,751 which primarily reflected our net loss of $8,373,279, net of adjustments to reconcile net loss to net cash provided by operating activities of $2,430,472, which included a depreciation charge of $235,579. Changes in working capital primarily reflected increases in receivables and the settlement of payables in the ordinary course.
Previous wording
Our net cash used in by investing activities was $5,120,370 for the six months ended June 30, 2024, representing a decrease of $5,495,573, as compared to $375,203 of cash provided by investing activities for the six months ended June 30, 2023. This decrease was driven by a $5,345,684 decrease in payment for the short term loan receivables.
Current wording
Our net cash used in investing activities was $5,107,477 for the nine months ended September 30, 2024, representing a decrease of $3,844,881, as compared to $1,262,596 of cash provided by investing activities for the nine months ended September 30, 2023. This decrease was driven by a $5,332,446 decrease in payment for the short term loan receivables.
Previous wording
Our net cash provided by financing activities was $426,684 for the six months ended June 30, 2024, consisting of a $440,904 net increase of proceeds from short-term loan payables. Our net cash provided by financing activities was $15,827,546 for the six months ended June 30, 2023, consisting of a $763,505 net decrease in cash payment of short-term loan receivables from related parties, a $5,743,209 increase in cash proceeds from exercising warrants, a $10,000,000 increase in cash proceeds from issuance of common stock.
Current wording
Our net cash provided by financing activities was $599,508 for the nine months ended September 30, 2024, consisting of a $614,292 net increase of proceeds from short-term loan payables. Our net cash provided by financing activities was $24,605,548 for the nine months ended September 30, 2023, consisting of a $2,315,781 net decrease in cash payment of short-term loan receivables from related parties, a $6,054,390 increase in cash proceeds from exercising warrants, a $10,000,000 increase in cash proceeds from issuance of common stock.
Previous wording
As of June 30, 2024, the remaining outstanding principal amount of bonds with warrants was approximately $3,239,274. There was no issuance of bonds with warrants for the six months ended June 30, 2024. A $250,721 decrease in bonds with warrants compared to the balance of $3,489,995 as of December 31, 2023 was due to currency translation adjustment.
Current wording
As of September 30, 2024, the remaining outstanding principal amount of bonds with warrants was approximately $3,410,124. There was no issuance of bonds with warrants for the nine months ended September 30, 2024. A $79,871 decrease in bonds with warrants compared to the balance of $3,489,995 as of December 31, 2023 was due to currency translation adjustment.