Global Interactive Technologies, Inc.
For the period ended Mar 31, 2025. Filed May 20, 2025.
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.
Mar 31, 2025 · Filed May 20, 2025
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 2024-09-30; filed 2024-11-20.
0001213900-24-100296
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2025-03-31; filed 2025-05-20.
0001213900-25-045898
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 76 current paragraphs.
17 unchanged; 16 reworded; 43 added; 46 removed; 2 previous and 0 current paragraphs rearranged.
Tables are not compared: 8 previous and 11 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.
Added paragraphs (43)
Current report
Global Interactive Technologies, Inc. (together with its subsidiaries, collectively, the “Company”, “we”, “us”, or “our”), a Delaware corporation formerly known as Hanryu Holdings, Inc., is a technology-driven platform company connecting global fans of Korean culture through innovative digital experiences. The Company operates Faning, a comprehensive interactive platform designed to facilitate content discovery, monetization, user-generated content, and deep community engagement among global fandom communities. The Company focuses on leveraging technology to expand Korean culture (Hallyu) beyond traditional K-Pop, spanning digital media, entertainment, and interactive platform services.
Current report
The Company is a corporation that was incorporated in the state of Delaware on October 20, 2021, as Hanryu Holdings, Inc. On December 5, 2024, the Company formally changed its name from Hanryu Holdings, Inc. to Global Interactive Technologies, Inc. pursuant to an amendment to its Certificate of Incorporation filed with the Secretary of State of Delaware. In connection with the name change, the Company also changed its Nasdaq ticker symbol from HRYU to GITS.
Current report
Corporate Structure and Subsidiaries
Current report
As of March 31, 2025, the Company’s primary operating subsidiary is Faning Korea, LLC, a wholly-owned subsidiary based in Seoul, Republic of Korea (“Faning Korea”). Faning Korea oversees the development, maintenance, and operation of the Faning application and related web services.
Current report
Throughout 2024, the Company restructured its subsidiaries, including the divestiture of Hanryu Bank on December 28, 2024, and FNS and Marine Island on November 5, 2024. Faning Korea was acquired on December 4, 2024.
Current report
FANING has become a globally recognized platform for providing an amazing and active community among people that have an interest in K-POP and modern Korean culture. The multifaceted nature of the Company’s operations has solidified the business’ reputation as one of the preeminent platforms for fandom. FANING’s users are able to seamlessly interact with each other to discuss exciting K-POP topics.
Current report
FANING allows fans to interact within their fandoms and discuss these interests, create and share content, and interact through a number of channels, including (i) secure, direct messaging, (ii) open social pages, and (iii) virtual spaces (“FANING Clubs” or “Clubs”). FANING Clubs concentrate on a specific topic, allowing moderators to control the Club functions, and the Club members to aggregate their FP rewards. Integrated within each FANING Club is a “Club Vault,” a service provided by FANING that allows the individual members of a Club to donate their personal FP to an account held by the Club. The Club Vault allows the Club’s members to aggregate their FP and increase their purchasing power. This increase in purchasing power allows the Club’s individual users to more rapidly accumulate FP and pool their rewards with other users, in order to purchase services such as fan events or the ability to live stream a concert from their favorite band. Decisions regarding the use of the accumulated FP within the Club Vault are determined by a vote of the Club members.
Current report
Our users are the core of our business. We provide our users with customized experiences, including unique interactions within the FANING community. FANING algorithms curate individual user experiences, recommending content, clubs to join, users to connect with, and enabling users to subscribe to keywords and access automatic content geared toward their interests. Through these services, FANING provides the fandom community a way to stay connected and up to date with their fandom communities.
Current report
FANING further offers each user the ability to freely create, upload, and monetize their own content by earning in-platform rewards of FP. FANING removes language barriers, providing live chat ability between users worldwide, and global access to platform content, as the FANING platform supports automatic, real-time translation services for 17 languages. FANING also offers a fast, secure, and easy-to-use commerce and user-to-user transaction system. These unique features will allow FANING to generate user loyalty, maintain user interest in the platform, and attract new users.
Current report
For growth, we intend to develop short content (two minutes) that will focus on interesting pop music and cultural topics. These videos will be distributed through FANING while concurrently being shown on third party social media platforms and video sharing websites. This new aspect of growth is important for a few reasons. First, it will further enhance the strength of the FANING community by fostering a greater degree of engagement. Second, it will allow for greater visibility for K-POP on a global basis. Management will continue to expand this aspect of operations through the life of the business.
Current report
To diversify the revenue streams within our primary income source, the FANING platform, we carried out updates over several months. As a result, the newly revamped FANING platform was launched in April 2025. Accordingly, we expect revenue to begin generating from May 2025. In addition, we anticipate that revenue from goods and K-Food products will also begin to be generated in the first half of the year.
Current report
During the fiscal year 2024, the Company underwent a restructuring process, which included replacing the management team that had been operating the Company ineffectively and divesting financially distressed subsidiaries. As a result, no revenue was generated during the fiscal quarter ended March 31, 2025. In addition, revenue for the comparative period ended March 31, 2024, was reclassified as discontinued operations following the divestiture of subsidiaries in 2024, and therefore, no revenue was recognized from continuing operations.
Current report
The operating loss for the first quarter of 2025 was $563,468, representing a 45% decrease compared to an operating loss of $1,023,569 in the first quarter of 2024 (which included (i) a loss from continuing operations of $164,563 and (ii) a loss from discontinued operations of $858,946). The primary reason for this decrease was the workforce reduction and the sale of subsidiaries in 2024.
Current report
Starting in the second quarter of 2025, the Company expects to generate revenue from the newly updated FANING platform, which was relaunched in April 2025. Additionally, revenue is expected from the sales of goods and K-Food products, gradually improving profitability. The cost-saving effects of the 2024 restructuring are also expected to contribute to improved financial stability.
Current report
Liquidity and Going Concern
Current report
As of March 31, 2025, the Company had an accumulated deficit of $38,467,982 and a working capital deficiency of $(719,575). As of December 31, 2024, the accumulated deficit was $37,901,301 and the working capital deficiency was $(665,352). In addition, the Company incurred operating losses of $566,681 and $1,047,071 for the periods ended March 31, 2025 and March 31, 2024, respectively. These uncertainties raise substantial doubt about the Company’s ability to continue as a going concern beyond the issuance date of these financial statements. The accompanying financial statements have been prepared assuming the Company will continue as a going concern. These financial statements do not include any adjustments that might result from the Company’s potential inability to continue as a going concern, including potential effects on the recoverability and classification of assets or the amounts and classification of liabilities.
Current report
The Company carried out updates to diversify revenue streams within its primary income source, the FANING platform, over several months and launched the newly revamped FANING platform in April 2025. The revamped FANING platform has been restructured with a user-centric approach and is designed to focus on achieving profitability. In addition, through its subsidiary, Faning Korea, LLC, the Company plans to pursue K-Food products and entertainment business ventures. Furthermore, to secure additional working capital, the Company intends to proceed with a capital increase and borrowings. However, there can be no assurance as to the outcome of these plans or that future financing efforts will generate sufficient capital to sustain the Company’s operations.
Current report
We have no contractual obligations as of March 31, 2025.
Current report
Off-Balance Sheet Arrangements
Current report
We have not entered into any off-balance sheet financial guarantees or other off-balance sheet commitments to guarantee the payment obligations of any third parties. We have not entered into any derivative contracts that are indexed to our shares and classified as stockholder’s equity or that are not reflected in our financial statements included elsewhere in this prospectus. Furthermore, we do not have any retained or contingent interest in assets transferred to an unconsolidated entity that serves as credit, liquidity or market risk support to such entity. We do not have any variable interest in any unconsolidated entity that provides financing, liquidity, market risk or credit support to us or engages in leasing, hedging or product development services with us.
Current report
Quantitative and Qualitative Disclosures about Market Risk
Current report
We are exposed to market risks in the ordinary course of our business. Market risk represents the risk of loss that may impact our financial position due to adverse changes in financial market prices and rates. Our market risk exposure is primarily the result of fluctuations in foreign currency and credit.
Current report
Foreign Currency Risk
Current report
We have accounts on our foreign subsidiaries’ ledgers, which are maintained in the respective subsidiary’s local currency and translated into USD for reporting of our condensed consolidated financial statements. As a result, we are exposed to fluctuations in the exchange rates of various currencies against the USD and other currencies, including KRW.
Current report
Transactional
Current report
We generate the majority of our revenue from customers within Korea. Typically, we aim to align costs with revenue denominated in the same currency, but we are not always able to do so. As a result of the geographic spread of our operations and due to our reliance on certain products and services priced in currencies other than KRW, our business, results of operations, and financial condition have been and will continue to be impacted by the volatility of the KRW against foreign currencies.
Current report
Translational
Current report
Our functional and reporting currency is the U.S. Dollar (USD). The local and functional currency of our subsidiary, Faning Korea, LLC, is the Korean Won (KRW). The subsidiary’s assets and liabilities are translated into USD at the exchange rate in effect at the end of the reporting period, and its revenues and expenses are translated using the average exchange rate in effect during the period. The assets and liabilities of the subsidiary are translated into USD at the exchange rate in effect at the end of each period, and revenues and expenses are translated using average rates that approximate those in effect during the respective period. As a result, the value of these items in the condensed consolidated financial statements related to non-USD-denominated operations is affected by changes in the value of the USD, even if their value has not changed in the original currency. For example, a stronger USD will reduce the reported operating results of non-USD-denominated operations, while a weaker USD will increase the reported operating results of non-USD-denominated operations.
Current report
At this time, we do not invest in derivatives or other financial instruments to hedge foreign currency risk. However, we may consider such hedging activities in the future. It is difficult to predict the impact that such hedging activities would have on our results of operations.
Current report
Credit Risk
Current report
Our cash and cash equivalents, deposits, and loans with banks and financial institutions are potentially subject to concentration of credit risk. We place cash and cash equivalents with financial institutions that management believes are of high credit quality. The degree of credit risk will vary based on many factors including the duration of the transaction and the contractual terms of the agreement. As appropriate, management evaluates and approves credit standards and oversees the credit risk management function related to investments.
Current report
The preparation of financial statements in conformity with U.S. generally accepted accounting principles (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses, as well as related disclosures.
Current report
Significant accounting estimates and judgments include:
Current report
Management regularly reviews its estimates and assumptions, which are based on historical experience and other relevant factors, including the current economic environment. Actual results may differ materially from these estimates. Any material changes in assumptions could have a significant impact on our financial statements.
Current report
FANING is a fandom-centered platform designed to deliver an all-in-one ecosystem that enriches the fan experience through content, community, commerce, and creativity. The platform is available in 17 languages and supports real-time multilingual translation, enabling global fan engagement. Users can consume K-culture content, interact socially, and monetize creative work, including fan art, webtoons, and merchandise.
Current report
The platform’s monetization strategy includes:
Current report
As of March 31, 2025, FANING had over 26.6 million registered users globally. The platform is positioned to capitalize on the global rise in K-Culture fandom, now exceeding 229 million fans in 119 countries.
Current report
In December 2023, the FASB issued ASU 2023-09,Income Taxes (Topic 740): Improvements to Income Tax Disclosures. This update enhances the transparency of income tax disclosures by requiring detailed information on the effective tax rate reconciliation and income taxes paid by jurisdiction. The amendments are effective for annual periods beginning after December 15, 2024, with early adoption permitted.
Current report
In March 2024, the FASB issued ASU 2024-03,Income Statement—Reporting Comprehensive Income (Subtopic 220-40): Expense Disaggregation Disclosures. This update requires entities to disclose more detailed information about the nature of the expenses within certain income statement captions (such as cost of sales, SG&A, etc.). The standard is effective for fiscal years beginning after December 15, 2024, and interim periods within fiscal years beginning after December 15, 2025. Early adoption is permitted.
Current report
The Company is currently evaluating the impact of these new standards and does not expect them to have a material effect on its financial statements upon adoption.
Showing the first 40 of 43 passages. Open the source sections for the rest.
Removed paragraphs (46)
Previous report
Hanryu Holdings, Inc., a Delaware corporation (“Hanryu Holdings”), along with our wholly owned operating subsidiaries, Hanryu Bank Co., Ltd. (“HBC”), FNS Co., Ltd. (“FNS”), and Marine Island Co., Ltd. (“Marine Island”), all incorporated under the laws of the Republic of Korea (collectively, the “Company”, “we”, “us”, or “our”), is the creator of the engaging and innovative social media platform, “FANTOO”. FANTOO connects users around the world that share similar interests by providing distinctive service offerings, technologies, applications, and websites. Through FANTOO, we provide a global multi-media platform for our users to interact with other like-minded users, to share their appreciation of various types of entertainment and cultures, create their own content, enjoy other users’ content, engage in commerce, and experience a “fandom” community unlike any other.
Previous report
Although we anticipate expanding into additional entertainment genres, currently, the majority of FANTOO’s users are enthusiasts of Korean culture (“K-Culture”), also known as the “Korean Wave.” The growing popularity of the Korean Wave has historically been driven by social networking services and online video sharing platforms. Through these channels, the dispersion and exportation of Korean arts, music and entertainment has grown rapidly from a regional influence into a global appreciation of South Korean culture. The expansion of the Korean Wave into a global phenomenon provides a significant opportunity to unite fans across the globe within the FANTOO platform. We aim to become a leading global platform for fans who are passionate about the Korean Wave, eventually expanding into other areas of fandom. Since the FANTOO platform launch in May 2021, its user base has exceeded 27 million users.
Previous report
We differentiate ourselves from potential competition through the power of a fully-integrated platform, and established partnerships with leaders in the K-Culture entertainment industry within South Korea. Our core strategy is to pursue initiatives that promote the viral growth of our user base, and in doing so, drive advertising revenue, user-generated revenue, and create other new revenue streams.
Previous report
Going Concern
Previous report
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 report
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 report
We focus on providing user-centric services to provide a single platform that can address and satisfy all the needs of fans within that platform. FANTOO will enrich users’ fandom experience by providing an all-in-one platform for fandom content, including news, popular culture, discussions, live shows, fan creativity. FANTOO is currently available in 17 languages, with real-time translation services. These real time translation services enable our users to communicate with each other across the globe without language barriers. For languages that are not available for real-time translation, the FANTOO platform provides a solution through the use of translation matching services among users. Through the translation matching services, the FANTOO platform ensures that content is accurately translated and available to a greater number of global fans in their own languages The FANTOO platform further allows users to freely create and monetize their own content and enables fast and secure user-to-user sales on the FANTOO platform.
Previous report
We intend to create value for our shareholders through developing multiple revenue streams, including (1) direct sales revenue, driven by advertisement, content and commerce sales; and (2) revenue derived from collecting a percentage of user-to-user sales of emojis, online stickers, web novels, webtoons, translation matching, and other user-to-user transactions.
Previous report
In the long term, we expect the majority of our revenue will be generated from commissions from user-to-user transactions. Deriving revenue from user-to-user transactions gives our platform an advantage over other existing platforms that primarily rely on advertisement sales. We recognize both the creative power and purchasing power of our users and fans in general, and as such, we designed our platform to maximize the economic effects of FANTOO users. Since May 2022, we have experienced a significant growth in the number of FANTOO users.
Previous report
Due to the surge in popularity ofK-Culture, we believe that we have great potential to continue growing our user base, while maintaining a high percentage of Monthly Active Users (“MAUs”). According to the Korea Foundation and Korean Ministry of Foreign Affairs, in 2021, Korean culture had 156.6 million fans in 116 countries, and generated approximately $21.5 billion in global revenue in 2019. Furthermore, K-Culture was ranked as the seventh most influential global culture in 2021, and contributed over $10 billion in exports in 2020, as reported by the Korean Foundation for International Cultural Exchange. The global purchasing power of K-Culure was at $124.3 billion in 2020, based on the 2021 report by the Organization for Economic Co-operation and Development.
Previous report
Financial Overview
Previous report
Revenues
Previous report
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 report
Cost of Revenues
Previous report
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 report
Operating Expense
Previous report
Marketing and Advertising
Previous report
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 report
Research and Development
Previous report
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 report
General and Administrative
Previous report
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 report
Other income (expense)
Previous report
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 report
Liquidity and Capital Resources
Previous report
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 report
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 report
We expect to continue to incur substantial expenditures in the foreseeable future for the development of our technologies and platform infrastructure. We will require additional financing to further develop and market our platform business, and otherwise execute our business plan. Our current financial condition raises substantial doubt about our ability to continue as a going concern. Our failure to raise capital as and when needed would have a material adverse impact on our financial condition, our ability to meet our obligations, and our ability to pursue our business strategies.
Previous report
In July 2023, we consummated our IPO of 877,328 shares of its common stock at a public offering price of $10.00 pper share, generating gross proceeds of $8,773,280. Net proceeds from the IPO were approximately $7.7 million after deducting underwriting discounts and commissions and other offering expenses of approximately $1.1 million.
Previous report
To support our existing and planned business model, we need to raise additional capital to fund our future operations. We have not experienced any difficulty in raising funds through loans and have not experienced any liquidity problems in settling payables in the normal course of business and repaying loans when they fall due. Successful renewal of our loans, however, is subject to numerous risks and uncertainties. In addition, the increasingly competitive industry conditions under which we operate may negatively impact our results of operations and cash flows. Additional debt financing is anticipated to fund our operations in the near future. However, there are no current agreements or understandings with regard to the form, time or amount of such financing and there is no assurance that any of this financing can be obtained if at all. 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 report
We may seek to raise capital through equity offerings or debt financings, which may include collaboration agreements, or other arrangements with other companies, or through other sources of financing. Adequate additional funding may not be available to us on acceptable terms or at all. Our failure to raise capital as and when needed could have a negative impact on our consolidated financial condition and our ability to pursue our business strategies.
Previous report
Summary of Cash Flows
Previous report
The following table summarizes changes in cash for the nine months ended September 30, 2024 and 2023:
Previous report
Cash Flows from Operating Activities.
Previous report
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 report
Cash Flows from Investing Activities.
Previous report
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 report
Cash Flows from Financing Activities.
Previous report
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 report
Convertible Debt.
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Reworded paragraphs (16)
Previous wording
You should read the following discussion and analysis of our financial condition and results of operations together with our unaudited condensed consolidated financial statements and the related notes and other financial information included elsewhere in this Quarterly Report on Form 10-Q and with our audited consolidated financial statements included in our Annual Report on Form 10-K for the year ending December 31, 2023. As discussed in the section titled “Note Regarding Forward-Looking Statements,” the following discussion and analysis contains forward-looking statements that involve risks and uncertainties, as well as assumptions that, if they never materialize or prove incorrect, could cause our results to differ materially from those expressed or implied by such forward-looking statements. Factors that could cause or contribute to these differences include, but are not limited to, those identified below and those discussed in the section titled “Risk Factors” in our Annual Report on Form 10-K for the year ending December 31, 2023.
Current wording
You should read the following discussion and analysis of our financial condition and results of operations together with our unaudited condensed consolidated financial statements and the related notes and other financial information included elsewhere in this Quarterly Report on Form 10-Q and with our audited consolidated financial statements included on in our Annual Report on Form 10-K for the year ending December 31, 2024. As discussed in the section titled “Note Regarding Forward-Looking Statements,” the following discussion and analysis contains forward-looking statements that involve risks and uncertainties, as well as assumptions that, if they never materialize or prove incorrect, could cause our results to differ materially from those expressed or implied by such forward-looking statements. Factors that could cause or contribute to these differences include, but are not limited to, those identified those discussed in the section titled “Risk Factors” in our Annual Report on Form 10-K for the year ending December 31, 2024.
Previous wording
We anticipate that our primary source of revenue will be generated from FANTOO platform operations. Additionally, we have generated limited revenue from the Company’s other subsidiaries’ operations, such as revenue from marketing services, retail sales, and content sales. We started generating revenue from FANTOO business, and we anticipate earning more steady revenue from the Company’s other businesses by the end of 2024.
Current wording
We anticipate that our primary source of revenue will be generated from FANING platform operations.
Previous wording
Revenue from FANTOO business. We expect that our primary sources of revenue on the FANTOO platform will be derived from (i) direct sales and (ii) commissions from user-to-user sales. We started generating revenue from FANTOO platform.
Current wording
We expect that our primary sources of revenue on the FANING platform will be derived from (i) direct sales and (ii) commissions from user-to-user sales. We started generating revenue from FANING platform.
Previous wording
(i) Direct Sales. From 2023, we began generating direct sales revenue through: (i) original content sales, such as FANTOO produced web series that can be purchased by users on our platform or licensed to distributors; (ii) e-commerce goods through FANTOO’s Fanshop, which sells items such as the latest fandom goods and upcoming concert tickets; and (iii) advertising sales, including banner placements, splash advertising, pop-up advertisements within the platform, in-platform promotions, and branded content productions. For advertising sales, we act as an agent in arranging third-party promotions to our users. Our business model provides for the distribution of a percentage of our advertising revenue to FANTOO users in the form of FP as incentives for certain activities within the FANTOO platform. Users can then spend FP within the FANTOO platform to purchase goods and/or services, either directly from us or from other users.
Current wording
(i) Direct Sales We started generating direct sales revenue through: (i) original content sales, such as FANING produced web series that can be purchased by users on our platform or licensed to distributors; (ii) e-commerce goods through FANING’s Fanshop, which sells items such as the latest fandom goods and upcoming concert tickets; and (iii) advertising sales, including banner placements, splash advertising, pop-up advertisements within the platform, in-platform promotions, and branded content productions. For advertising sales, we act as an agent in arranging third-party promotions to our users. Our business model provides for the distribution of a percentage of our advertising revenue to FANING users in the form of FP as incentives for certain activities within the FANING platform. Users can then spend FP within the FANING platform to purchase goods and/or services, either directly from us or from other users.
Previous wording
(ii) User-to-User Commissions We intend to generate commissions on user-to-user transactions when FANTOO users sell their own products, content, and services to other users. Users can sell: (i) items they have created or produced such as emojis, online stickers, web novels, and webtoons; and (ii) tangible goods or other non-FANTOO platform based fandom items, such as concert tickets. For each sale by a user of content and non-tangible goods, we intend to collect a percentage of the gross purchase price. For sales of tangible goods and non-FANTOO platform based fandom goods, transactions are processed through a secure escrow account, for which we will receive a commission based upon the aggregate purchase price of the transaction.
Current wording
(ii) User-to-User Commissions We intend to generate commissions on user-to-user transactions when FANING users sell their own products, content, and services to other users. Users can sell: (i) items they have created or produced such as emojis, online stickers, web novels, and webtoons; and (ii) tangible goods or other non-FANING platform based fandom items, such as concert tickets. For each sale by a user of content and non-tangible goods, we intend to collect a percentage of the gross purchase price. For sales of tangible goods and non-FANING platform based fandom goods, transactions are processed through a secure escrow account, for which we will receive a commission based upon the aggregate purchase price of the transaction.
Previous wording
Revenue from Retail Sales. Revenue from retail sales include a wide variety of products for purchase. Although we have generated limited revenue from such services in the past, we anticipate earning more steady revenue from this business model in 2024.
Current wording
Revenue from retail sales is generated through services offering a wide variety of products for purchase. Although we have generated limited revenue from such services in the past, we expect to earn more steady revenue from this business model starting in May 2025.
Previous wording
Revenue from Marketing Services. Revenue from marketing services provided by the Company’s other subsidiaries such as Hanryu Bank, which will include activities such as creating and distributing flyers, hosting events and giveaways, producing advertisement videos, and more. Although we have generated limited 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 marketing services is generated by other subsidiaries of the Company, such as Faning Korea, and includes various activities such as creating and distributing flyers, hosting events and giveaways, producing advertisement videos, and more. Although we have generated limited revenue from such services in the past, we expect to earn more steady revenue from this business model starting in May 2025.
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 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.
Current wording
Revenue from news agency content sales is generated by providing 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 expect to earn more steady revenue from this business model starting in May 2025.
Previous wording
Revenue from Entertainment Agency. Our entertainment agency business is expected to assist influencers in growing their influence base both within and outside of the FANTOO platform. As each influencer’s status grows, we expect to monetize their influencer status through entering into advertisement agreements or performance-based contracts. We anticipate earning revenue from this business model by the end of 2024.
Current wording
As we continue to diversify our product and service offerings, we anticipate additional revenue streams, including Our entertainment agency business supports influencers in expanding their influence both inside and outside the FANING platform. As each influencer’s influence grows, we expect to monetize their status through advertising agreements or performance-based contracts. We anticipate generating revenue from this business model starting in May 2025.
Previous wording
While we anticipate generating revenue from sales of our entertainment agency business by the end of 2024, no assurances can be given that we will successfully launch such affiliated businesses, and if so, whether such businesses will be successful.
Current wording
We expect to begin generating revenue from our entertainment agency business starting in May 2025. However, there can be no assurance that we will be able to successfully launch such affiliated businesses, or that they will be successful even if launched.
Previous wording
Cost of revenue consists primarily of service costs, hosting costs, and production costs such as advertising costs, down payments, and royalty payments to artists under entertainment contracts for original FANTOO platform content, such as web series and concerts. We expect that cost of revenue will increase proportionately with the growth of the user base for the FANTOO platform.
Current wording
Cost of revenue consists primarily of service costs, hosting costs, and production costs such as advertising costs, down payments, and royalty payments to artists under entertainment contracts for original FANING platform content, such as web series and concerts. We expect that cost of revenue will increase proportionately with the growth of the user base for the FANING platform.
Previous wording
Research and development expense includes costs to maintain and develop the FANTOO platform. Costs incurred for research and product development are expensed as incurred and include salaries, taxes and benefits, contracting, and travel expense related to research and development.
Current wording
Research and development expense includes costs to maintain and develop the FANING platform. Costs incurred for research and product development are expensed as incurred and include salaries, taxes and benefits, contracting, and travel expense related to research and development.
Previous wording
Three and Nine months Ended September 30, 2024 Compared to three and nine months ended September 30, 2023
Current wording
Three months Ended March 31, 2025 Compared to three months ended March 31, 2024
Previous wording
The following table sets forth a summary of our statements of operations for the nine months ended September 30, 2024 and 2023:
Current wording
The following table sets forth a summary of our statements of operations for the three months ended March 31,2025 and 2024:
Previous wording
We are an “emerging growth company” (as defined in the JOBS Act) under the reporting rules set forth under the Exchange Act. For so long as we remain an “emerging growth company,” we may take advantage of certain exemptions from various reporting requirements that are applicable to other Exchange Act reporting companies that are not “emerging growth companies,” including but not limited to:
Current wording
We an “emerging growth company” (as defined in the JOBS Act) under the reporting rules set forth under the Exchange Act. For so long as we remain an “emerging growth company,” we may take advantage of certain exemptions from various reporting requirements that are applicable to other Exchange Act reporting companies that are not “emerging growth companies,” including but not limited to:
Previous wording
We expect to take advantage of these reporting exemptions until we are no longer an emerging growth company. We will remain an emerging growth company until the earliest of (1) December 31, 2028 (the last day of the fiscal year following the fifth anniversary of the closing of our IPO), (2) the last day of the fiscal year in which we have total annual gross revenue of at least $1.235 billion, (3) the last day of the fiscal year in which we are deemed to be a “large accelerated filer” as defined in Rule 12b-2 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), which would occur if the market value of our common stock held by non-affiliates exceeded $700.0 million as of the last business day of the second fiscal quarter of such year or (4) the date on which we have issued more than $1.0 billion in non-convertible debt securities during the prior three-year period.
Current wording
We expect to take advantage of these reporting exemptions until we are no longer an emerging growth company. We would remain an “emerging growth company” for up to five years, although if the market value of our common stock that is held by non-affiliates exceeds $700 million as of any June 30 before that time, we would cease to be an “emerging growth company” as of the following December 31.
Rearranged previous paragraphs (2)
Previous report — wording carried elsewhere
We expect that our primary sources of revenue on the FANTOO platform will be derived from (i) direct sales and (ii) commissions from user-to-user sales.
Previous report — wording carried elsewhere
As we continue to diversify our product and service offerings, we anticipate additional revenue streams, including the following: