Subsequent to quarter, Company successfully closed IPO, raising total proceeds of $8.8 Million
SEOUL, REPUBLIC OF SOUTH KOREA / ACCESSWIRE / September 18, 2023 / Hanryu Holdings, Inc. (NASDAQ:HRYU) (the “Company” or “Hanryu”), a media-tech company and creator of FANTOO, an all-in-one social media experience connecting k-culture fans globally, today reported its financial and operating results for the three-month period ending June 30, 2023.
“Hanryu has made significant strides in positioning as a leading k-culture platform through our application FANTOO. Since closing our IPO in early August, we have accelerated the execution of our key strategic priorities to grow the business, leveraging our large userbase and following,” commented Chief Executive Officer of Hanryu Holdings, Kang Chang Hyeok. “We immediately invested the additional working capital from our IPO to significantly enhance the user experience and functionality of FANTOO, while also activating multiple initiatives to grow our brand presence, both in Korea and internationally. As a result of launching FANTOO 2.0, we were successful in increasing revenue year-over-year 2,004%. We expect that growth trend year-over-year to continue throughout the remainder of 2023 into 2024. Going forward, our collaboration with SALTLUX and AISUL to integrate AI virtual assistant features into FANTOO are just some of the innovations we are continually releasing for our users.”
“Through several strategic partnerships, such as our sponsorship of the Asia Model Festival and merchandise partnership with U.S. clothing brand Papaya, we are reaching new audiences and fostering associations with other strong brands that we believe will translate to diversified revenue stream model. We plan to continue to release innovative products and features in the coming quarters on FANTOO to further increase user numbers, engagement, retention, and ultimately translate to future revenue growth,” Kang Chang Hyeok concluded.
Operational Highlights to Date:
- Closed initial public offering for gross proceeds of approximately $8.8 million.
- Launched version 2.0 of FANTOO, enhancing the user experience and interface for its over 26 million users by analyzing user activities and their usage environment to deliver personalized, real-time customized content through open communities and interest settings.
- Partnered with SALTLUX to incorporate AI-powered conversational virtual assistant to enhance user engagement with Talkbot, an intelligent chatbot, technology into FANTOO.
- Announced an exclusive marketing partnership with the Asia Model Festival, which celebrated its 18th anniversary this year, providing users the opportunity to vote and watch through FANTOO.
- Launched FANTOO House, a professional studio rental service for a diverse range of creative activities to foster creativity and the discovery of promising new artists and to activate the development of more user-generated content on the FANTOO App.
- Enhanced chat functionality on FANTOO, with several additional technological features to be released in an upgrade including multi-lingual translation, open chat, club chat and voice call, will improve communication between users, supporting global fandom communication.
- Signed a strategic partnership agreement with owner of the popular women’s clothing line, Papaya, to distribute its FANTOO-branded merchandise throughout at least 45 Papaya stores in the United States.
- Partnered with AISUL to create and integrate three-dimensional, artificial intelligence generated digital human into FANTOO.
Financial Highlights for the Second Quarter Fiscal Year 2023:
Revenue for the three months ended June 30, 2023 totaled $630,004 as compared to $29,940 for the same three month period the prior year, an increase of 2,004%. The increase in year-over-year quarterly revenue is primarily attributable to increased product sales through K-Commerce, advertising and content sales through FANTOO, Hanryu Time and FNS.
Cost of revenue for the three months ended June 30, 2023 totaled $389,062 as compared to $28,354 for the same three month period the prior year. The increase in cost of revenue is primarily due to the increase in revenue year-over-year. Gross profit for the three months ended June 30, 2023 totaled $240,942 yielding a gross profit margin of 38.2%.
Marketing and advertising expense for the three months ended June 30, 2023 totaled $543,327 as compared to $86,237 for the same three month period the prior year. The increase in marketing and advertising is primarily due to the marketing of FANTOO to targeted users.
General and administrative expense for the three months ended June 30, 2023 totaled $2,285,562 as compared to $1,408,474 for the same three month period the prior year. The increase year-over-year is primarily due to an increase in commissions and consulting fees as well as travel expense attributable to the IPO and growth of FANTOO.
Net loss for the three months ended June 30, 2023 totaled $3 million or $0.07 per basic and diluted share as compared to a net loss of $1.5 million or $0.04 per basic and diluted share.
Cash and cash equivalents as of June 30, 2023 was $10 million. Subsequent to the quarter the Company closed on its initial public offering for net proceeds of $8.8 million.
As of September 15, 2023 there were 52,808,589 common shares outstanding.
About Hanryu Holdings
Hanryu Holdings, Inc., 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 we believe is unlike any other. For more information please visit www.hanryuholdings.com .
Cautionary Note Regarding Forward-Looking Statements
This press release may contain forward-looking statements within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements relate to future events or future performance and include, without limitation, statements concerning the Company’s business strategy, future revenues, market growth, capital requirements, product introductions, expansion plans and the adequacy of its funding, the proposed offering, and the plan to list on the The Nasdaq Capital Market. Other statements contained in this press release that are not historical facts are forward-looking statements. The Company has tried, wherever possible, to identify forward-looking statements by terminology such as “may,” “will,” “could,” “should,” “expects,” “anticipates,” “intends,” “plans,” “believes,” “seeks,” “estimates” and other comparable terminology.
The Company cautions you that any forward-looking statements presented in this press release are based on the beliefs of, assumptions made by, and information currently available to us. Such statements are based on assumptions, and the actual outcome will be affected by known and unknown risks, trends, uncertainties, and factors that are beyond the Company’s control or ability to predict. Although the Company believes that its assumptions are reasonable, it is not guaranteeing of future performance, and some will inevitably prove to be incorrect. As a result, the Company’s actual future results can be expected to differ from its expectations, and those differences may be material. Accordingly, you should use caution in relying on forward-looking statements, which are based only on known results and trends at the time they are made, to anticipate future results or trends. Certain risks are discussed from time to time in the Company’s filings with the SEC.
You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. Except as required by law, the Company is not obligated to publicly release any revisions to these forward-looking statements to reflect the events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.
KCSA Strategic Communications
Valter Pinto, Managing Director
PH: (212) 896-1254
Condensed Consolidated Balance Sheets
June 30, 2023 and December 31, 2022
|Cash and Cash Equivalents||$||9,996,138||$||118,957|
|Short-term loan receivables||266,606||631,718|
|Accounts receivable, net of allowance||397,204||128|
|Total current assets||12,174,822||2,974,845|
|PROPERTY PLANT AND EQUIPMENT, NET||758,241||388,222|
|OPERATING LEASE RIGHT-OF-USE ASSETS||2,010,412||2,212,754|
|LIABILITIES AND STOCKHOLDER’S DEFICIT|
|Short-term loan payables||$||479,891||$||723,520|
|Short-term loan payables – related parties||117,709||323,537|
|Non-trade accounts payable||1,916,257||2,374,068|
|Accrued expenses and other current liabilities||23,273||75,652|
|Total current liabilities||3,121,683||3,867,960|
|BONDS WITH WARRANTS, NET||3,427,788||3,550,856|
|Common Stock, $0.001 par value|
|Authorized 110,000,000 (common:100,000,000, preferred:10,000,000) shares; Issued and outstanding 51,931,261 common shares and 45,416,942 common shares as of June 30, 2023 and December 31, 2022||51,931||45,417|
|Additional paid-in and other capital||43,685,607||27,555,936|
|Accumulated other comprehensive income||1,063,040||910,220|
|Equity/(Deficit) attributable to owners of the Company||9,124,285||(1,096,279||)|
|Total Stockholders’ Equity/(Deficit)||8,889,236||(1,340,517||)|
|Total Liabilities and Stockholders’ Equity/(Deficit)||$||15,438,707||$||6,078,299|
Condensed Consolidated Statements of Operations
For the Three and Six Months Ended June 30, 2023 and 2022
|Six Months Ended||Three Months Ended|
|June 30,||June 30,|
|Cost of Revenue||389,062||50,239||389,062||28,354|
|Operating cost and expenses||(6,281,464||)||(3,928,551||)||(3,230,830||)||(1,496,184||)|
|Gain (Loss) on exemption of debt||–||243,321||–||(5,652||)|
|Gain and Loss on foreign currency transaction||(1,789||)||744||(1,642||)||744|
|Other expense, net||(15,340||)||(1,007||)||(448||)||142|
|Net other expense||(19,699||)||243,137||(2,033||)||(4,742||)|
|Loss before Income Tax||(6,059,252||)||(3,617,689||)||(2,991,921||)||(1,499,340||)|
|Net Loss attributable to:|
|The common stockholders of the Company||(6,068,441||)||(3,506,639||)||(3,006,886||)||(1,433,759||)|
|Net Loss per share:|
|Basic and Diluted||(0.13||)||(0.08||)||(0.07||)||(0.03||)|
|Weighted average number of shares outstanding:|
|Basic and Diluted||48,319,993||41,981,366||50,719,312||42,565,786|
Condensed Consolidated Statements of Cash Flows
For the Six Months Ended June 30, 2023 and 2022
|CASH FLOWS FROM OPERATING ACTIVITIES:|
|Adjustments to reconcile net loss to net cash provided by (used in) operating activities:|
|Depreciation and amortization||168,258||112,293|
|Gain on exemption of debts||–||(243,321||)|
|Changes in operating assets and liabilities:|
|Prepaid expenses and other current assets||(887,371||)||139,195|
|Accrued expenses and other current liabilities||(50,442||)||(15,690||)|
|Net cash used in operating activities||(5,618,525||)||(1,978,444||)|
|CASH FLOWS FROM INVESTING ACTIVITIES:|
|Receipt from collection of short-term loan receivables||772,742||166,616|
|Receipt from collection of long-term loan receivables||–||1,210,490|
|Sales of investments||–||729,963|
|Payment for short-term loan receivables||(540,631||)||(1,265,839||)|
|Purchase of property, plant and equipment||(554,169||)||(6,484||)|
|Net cash used in/provided by investing activities||(322,058||)||834,746|
|CASH FLOWS FROM FINANCING ACTIVITIES:|
|Proceeds from short-term loan payables||509,665||444,466|
|Proceeds from short-term loan payables from related parties||748,166||752,672|
|Proceeds from exercising warrants||5,743,209||332,538|
|Proceeds from issuance of common stock||10,000,000||–|
|Repayment of short-term loan payables||(409,924||)||(14,599||)|
|Repayment of short-term loan payables from related parties||(794,131||)||(677,000||)|
|Net cash provided by financing activities||15,796,985||838,077|
|NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS||9,856,402||(305,621||)|
|EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS||20,779||(13,071||)|
|CASH AND CASH EQUIVALENTS AT BEGINNING OF THE PERIOD||118,957||330,448|
|CASH AND CASH EQUIVALENTS AT END OF THE PERIOD||$||9,990,138||$||11,756|
|SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:|
|Cash receipt (paid) during the period for interest||$||(2,555||)||$||79|
SOURCE: Hanryu Holdings Inc.