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Hanryu Holdings Reports Fiscal Second Quarter 2023 Financial Results

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 .

Follow us on: Twitter , LinkedIn and Facebook

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
jsy@fns.ai
contact@hanryuholdings.com

Investor Contact:

KCSA Strategic Communications
Valter Pinto, Managing Director
PH: (212) 896-1254
Hanryu@KCSA.com

Condensed Consolidated Balance Sheets
June 30, 2023 and December 31, 2022
(Unaudited)


June 30,
2023
December 31,
2022
ASSETS


CURRENT ASSETS:


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
Non-trade receivables
289,801 1,861,731
Prepaid expenses
1,225,073 362,311
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
OTHER ASSETS
495,232 502,478
Total Assets
$ 15,438,707 $ 6,078,299

LIABILITIES AND STOCKHOLDER'S DEFICIT
CURRENT LIABILITIES:
Short-term loan payables
$ 479,891 $ 723,520
Short-term loan payables - related parties
117,709 323,537
Account Payable
584,553 371,183
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
Total Liabilities
6,549,471 7,418,816

STOCKHOLDER'S EQUITY/(DEFICIT):
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 deficit
(35,676,293 ) (29,607,852 )
Accumulated other comprehensive income
1,063,040 910,220
Equity/(Deficit) attributable to owners of the Company
9,124,285 (1,096,279 )
Non-controlling interests
(235,049 ) (244,238 )
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
(Unaudited)

Six Months Ended Three Months Ended
June 30, June 30,
2023 2022 2023 2022
SALES
630,973 117,964 630,004 29,940
Cost of Revenue
389,062 50,239 389,062 28,354
Gross profit
241,911 67,725 240,942 1,586
Operating cost and expenses
(6,281,464 ) (3,928,551 ) (3,230,830 ) (1,496,184 )
OPERATING LOSS
(6,039,553 ) (3,860,826 ) (2,989,888 ) (1,494,598 )
OTHER INCOME(EXPENSE):
Gain (Loss) on exemption of debt
- 243,321 - (5,652 )
Interest income
46 79 17 24
Interest expense
(2,616 ) - 39 -
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 )
Income Tax
- - - -
NET LOSS
(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 )
Non-controlling interests
9,189 (111,050 ) 14,965 (65,581 )
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
(Unaudited)


June 30,
2023
June 30,
2022
CASH FLOWS FROM OPERATING ACTIVITIES:


Net loss
$ (6,059,252 ) $ (3,617,689 )
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 )
Lease expense
127,381 133,789

Changes in operating assets and liabilities:
Accounts receivable
(1,472,843 ) 330,656
Non-trade receivable
1,556,733 229,997
Prepaid expenses and other current assets
(887,371 ) 139,195
Other assets
(10,309 ) 40,553
Accounts payable
345,182 917,640
Non-trade payable
664,138 (5,867 )
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.



View source version on accesswire.com:
https://www.accesswire.com/784873/hanryu-holdings-reports-fiscal-second-quarter-2023-financial-results

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