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Hanryu Holdings Reports Third Quarter and First Nine Month 2023 Financial Results

ACCESSWIRE 20-Nov-2023 8:01 AM

SEOUL, REPUBLIC OF SOUTH KOREA / ACCESSWIRE / November 20, 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 results for the third quarter and first nine months ended September 30, 2023. All amounts are expressed in U.S. dollars and are prepared under U.S. Generally Accepted Accounting Principles (GAAP), unless indicated otherwise.

"We were proud to successfully complete Hanryu's Initial Public Offering "IPO" during the third quarter, which enabled us to execute upon our strategic priorities to grow our leading K-culture fandom media platform," said Chief Executive Officer of Hanryu Holdings, Kang Chang Hyuk. "In a short period of time, we have already announced numerous exciting product innovations, strategic partnerships and marketing initiatives that are aimed at driving revenue generation and brand reach. In particular, Hanryu has partnered with several leaders in the Artificial Intelligent ("AI") space, to ensure FANTOO provides our users with the most in-demand and cutting-edge AI enhancements, such as for our AI Assistant, DeokGom, and Lusia, a 3-D, AI-generated digital singer in the FANTOO app. Hanryu has grown significantly from both an operational and financial perspective for the 2023 year to date, and we anticipate this trend to continue for the remainder of 2023 and into 2024."

"Hanryu is focused on releasing additional product innovations to our existing platforms, in particular to our popular app, FANTOO which has released version 2.0, including significant user interface and chat functionality upgrades. In addition, we are continuing to partner with leading brands to further drive our revenue generation opportunities through additional revenue streams," Kang Chang Hyuk added.

Recent Operational Highlights

  • Launched personalized AI Assistant, DeokGom, on FANTOO, will interact with users, provide customized services and various Hanryu info to users.
  • Partnered with SALTLUX, to incorporate AI-powered technology into FANTOO.
  • Announced a strategic partnership with AISUL, a company specializing in AI and the developer of the first digital female singer "Lusia" in Korea, to create and integrate a three-dimensional, AI generated, digital human into FANTOO.
  • Announced promotional partnership with leading Korean cosmetic company, Nature Republic drive revenue and brand reach through mutual promotion, planning, advertising and sales activities via FANTOO.
  • Announced collaboration with NON Corp. to sell its leading Dr. Clo branded products with the assistance of FANTOO digital characters on the application.
  • Announced a strategic partnership agreement with Ameridge Corp., 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.
  • Launched version 2.0 of FANTOO, which included enhanced user experience and interface, as well as releasing an upgrade to add significantly enhanced chat functionality.
  • Launched FANTOO House, a professional studio rental service for a diverse range of creative activities to foster K-culture creativity, content creation and generate revenue through rental fees.
  • Partnered with the Asia Model Festival for engagement events, including the "I love Hanryu" event, as well as exclusive marketing and voting through the FANTOO application, to grow brand reach and expand user base to fandom of Asia Model.
  • Announced it will host a real-life adaptation of Squid Play (Ojingeo Nori) on its FANTOO application, with a prize pool of up to USD$1 million.
  • Selected MZ Generation users with strong passion for K-Culture as 'Global Supporters', enhancing FANTOO's user personalization.
  • Successfully closed the Company's $8.8 million IPO.

Third Quarter and First Nine Month 2023 Financial Highlights

Revenue for the three months and first nine months ended September 30, 2023 totaled $713,763 and $1,347,975 million respectively. The increase in year-over-year quarterly revenue of 49% for the first nine months is primarily attributable due to advertising and content sales through FANTOO and FNS.

Cost of revenue for the three months and first nine months ended September 30, 2023 totaled $441,842 and $832,915. The increase in cost of revenue is primarily due to the increase in revenue year-over-year. Gross profit for the three months and first nine months ended September 30, 2023 totaled $271,921 and $515,060 respectively, yielding a gross profit margin of 38.2% for Q3 and 38.1% for the first nine months.

Net loss for the three months and first nine months ended September 30, 2023 totaled $3.1 million and $9.2 million respectively.

Cash and cash equivalents as of September 30, 2023 was $11.7 million.

As of September 30, 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

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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.

Company Contact:
Hanryu Holdings, Inc.
SunYoung Jang

Investor Contact:
KCSA Strategic Communications
Valter Pinto, Managing Director
PH: (212) 896-1254

Condensed Consolidated Balance Sheets
September 30, 2023 and December 31, 2022

September 30,
December 31,
Cash and Cash Equivalents
$11,712,306 $118,957
Short-term loan receivables
482,462 631,718
Accounts receivable, net of allowance
372,093 128
Non-trade receivables
71,724 1,861,731
Prepaid expenses
4,551,471 362,311
Total current assets
17,190,056 2,974,845
803,082 388,222
1,961,589 2,212,754
475,269 502,478
Total Assets
$20,429,996 $6,078,299
Short-term loan payables
$840,272 $723,520
Short-term payables from related parties
39,993 323,537
Account Payable
570,643 371,183
Non-trade accounts payable
1,740,825 2,374,068
Bonds with warrants, net
3,346,222 -
Short-term lease liabilities
28,525 -
Accrued expenses and other current liabilities
25,258 75,652
Total current liabilities
6,591,738 3,867,960
Bonds with warrants, net
- 3,550,856
Long-term loan payables
743,604 -
Long-term lease liabilities
31,820 -
Total Liabilities
7,367,162 7,418,816
Common Stock, $0.001 par value.
Authorized 110,000,000(common:100,000,000, preferred:10,000,000) shares; Issued and outstanding 52,808,589 common shares and 45,416,942 common shares as of September 30, 2023 and December 31, 2022
52,809 45,417
Additional paid-in and other capital
51,671,647 27,555,936
Accumulated deficit
(38,738,715) (29,607,852)
Accumulated other comprehensive income
395,924 910,220
Equity/(Deficit) attributable to owners of the Company
13,381,665 (1,096,279)
Non-controlling interests
(318,831) (244,238)
Total Stockholders' Equity
13,062,834 (1,340,517)
Total Liabilities and Stockholders' Equity/(Deficit)
$20,429,996 $6,078,299

The accompanying footnotes are an integral part of these unaudited consolidated financial statements

Condensed Consolidated Statements of Operations
For the Three and Nine Months Ended September 30, 2023 and 2022

Nine Months Ended Three Months Ended
September 30, September 30,
2023 2022 2023 2022
1,347,975 904,040 713,763 748,661
Cost of Revenue
832,915 463,586 441,842 393,355
Gross profit
515,060 440,454 271,921 355,306
Operating cost and expenses
(9,855,792) (5,718,111) (3,570,976) (1,802,753)
(9,340,732) (5,277,657) (3,299,055) (1,447,447)
Gain on exemption of debt
- 236,425 - -
Interest income
47,701 80 47,269 3
Interest expense
(3,089) - (481) -
Gain and Loss on foreign currency transaction
139,989 695 140,172 (27)
Other expense, net
(7,695) 1,639 7,521 26,343
Net other expense
176,906 238,839 194,481 26,319
Loss before Income Tax
(9,163,826) (5,038,818) (3,104,574) (1,421,128)
Income Tax
- - - -
(9,163,826) (5,038,818) (3,104,574) (1,421,128)
Net Loss attributable to:
The common stockholders of the Company
(9,130,935) (4,899,144) (3,062,422) (1,392,504)
Non-controlling interests
(32,891) (139,674) (42,152) (28,624)
Net Loss per share:
Basic and Diluted
(0.18) (0.13) (0.06) (0.03)
Weighted average number of shares outstanding:
Basic and Diluted
49,734,629 36,565,243 52,493,895 42,847,839

The accompanying footnotes are an integral part of these unaudited consolidated financial statements

Condensed Consolidated Statements of Cash Flows
For the Nine Months Ended September 30, 2023 and 2022

September 30,
September 30,
Net loss
(9,163,826) (5,038,818)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization
270,526 163,917
Gain on exemption of debt
- (236,425)
Amortization of right-of-use assets
190,285 194,997
Changes in operating assets and liabilities:
Accounts receivable
(384,695) (456,089)
Non-trade receivables
708,593 144,618
Prepaid expenses and other current assets
(3,312,042) 311,024
Other assets
(22,987) 39,404
Accounts payable
343,762 970,464
Non-trade payable
(26,961) 457,811
Accrued expenses and other current liabilities
(47,608) 27,972
Net cash used in operating activities
(11,444,953) (3,421,125)
Receipt from collection of short-term loan receivables
5,141,575 763,518
Receipt from collection of long-term loan receivables
- 1,176,185
Sales of investments
- 729,963
Payment for short-term loan receivables
(5,700,469) (1,216,268)
Purchase of property, plant and equipment
(722,209) (7,657)
Net cash used in/provided by investing activities
(1,281,103) 1,445,741
Proceeds from short-term loan payables
909,958 219,980
Proceeds from short-term loan payables from related parties
1,448,251 777,918
Proceeds from exercising warrants
6,054,390 1,409,489
Proceeds from issuance of common stock
18,645,572 -
- Repayment of short-term loan payables
(332,853) (14,974)
Repayment of short-term loan payables from related parties
(2,438,828) (676,852)
Net cash provided by financing activities
24,286,490 1,715,561
11,593,348 (259,823)
32,913 (62,453)
118,957 330,448
11,712,306 8,172
Cash receipt during the period for interest
61 80
Cash paid during the period for interest
2,616 -
(2,555) 80
Offsetting short-term loan payables by exercising warrant

The accompanying footnotes are an integral part of these unaudited consolidated financial statements

SOURCE: Hanryu Holdings Inc.

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