Seoul, South Korea, June 07, 2024 (GLOBE NEWSWIRE) -- GRAVITY Co., Ltd. (NasdaqGM: GRVY) ("Gravity" or "Company"), a developer and publisher of online and mobile games, announced the launch of Ragnarok: Novice Hearts (Tentative English Title, "Novice Hearts") in Taiwan, Hong Kong, and Macau on June 6, 2024, at 10:00 AM in local time. It has ranked first in Taiwan and Macau and second in Hong Kong in the Top Grossing and Free Game Downloads on the Apple App Store. On Google Play, it has ranked first in Free ...

Core Viewpoint - GRAVITY Co., Ltd. has successfully launched its new mobile game "Ragnarok: Novice Hearts" in Taiwan, Hong Kong, and Macau, achieving top rankings in app stores shortly after release [1][2]. Group 1: Game Launch and Performance - "Ragnarok: Novice Hearts" was launched on June 6, 2024, at 10:00 AM local time in Taiwan, Hong Kong, and Macau [1]. - The game has achieved first place in Top Grossing and Free Game Downloads on the Apple App Store in Taiwan and Macau, and second place in Hong Kong [1]. - On Google Play, it ranked first in Free Game Downloads across all three regions [1]. Group 2: Game Features and Development - The game is a retro-concept MMORPG that recreates core elements of the original Ragnarok Online, including graphics, costumes, and user interface, specifically designed for mobile devices [3]. - New features include a real-time marketplace, MVP Boss Garden, large-scale PVP, guild systems, key field, and background music, enhancing player satisfaction [3]. Group 3: Company Background - GRAVITY Co., Ltd. is a developer and publisher of online and mobile games, with its principal product, Ragnarok Online, being popular in various markets, including Japan and Taiwan [4]. - The company currently offers its games commercially in 91 markets and countries [4].

Toronto, Ontario--(Newsfile Corp. - June 6, 2024) - Appia Rare Earths & Uranium Corp. (CSE: API) (OTCQX: APAAF) (FSE: A0I0) (MUN: A0I0) (BER: A0I0) (the "Company" or "Appia") is pleased to announce the upcoming Falcon Airborne Gravity Gradiometer (AGG) and Magnetic survey over its Alces Lake property in northern Saskatchewan. This survey, conducted by Xcalibur Multiphysics, aims to provide highresolution, low-noise subsurface imaging of the Alces Lake lithological units and structure. The data will guide Ap ...

Get ready to invest in the future of transportation! Only a few years ago, the idea of air taxis and flying cars sounded like something out of the Jetsons movie. But, this is slowly becoming a reality. By 2025, companies producing electric vertical take-off and landing (eVTOL) aircraft will start bringing air taxis to the market. Consequently, investors are starting to shop around for flying car stocks to buy. So, the best time to invest is before the market starts jumping in on eVTOLs. Today, I'll cover th ...

Seoul, Korea, May 09, 2024 (GLOBE NEWSWIRE) -- GRAVITY Co., Ltd. (NASDAQGM:GRVY) ("Gravity" or "Company"), a developer and publisher of online and mobile games based in South Korea, today announced its unaudited financial results for the first quarter ended March 31, 2024, prepared in accordance with International Financial Reporting Standards as issued by the International Accounting Standards Board and business updates. FIRST QUARTER 2024 HIGHLIGHTS Total revenues were KRW 119,779 million (US$ 88,917 thou ...

PART I [ITEM 3. KEY INFORMATION](index=7&type=section&id=ITEM%203.%20KEY%20INFORMATION) This section outlines the significant risks that could adversely affect Gravity's business, financial condition, and operations, categorized into business, structural, regulatory, market, and ADS-related risks [Risk Factors](index=7&type=section&id=ITEM%203.D.%20Risk%20Factors) The company faces substantial risks from its heavy reliance on the Ragnarok IP, intense industry competition, dependence on overseas licensees and mobile platforms, and potential network or regulatory challenges - The company is heavily dependent on its main game, Ragnarok Online, and games developed from its IP; in 2023, Ragnarok Online accounted for **10.7%** of total revenues, while games based on its content contributed **87.1%** of total revenues[33](index=33&type=chunk) - Mobile games are the primary revenue source, representing **86.8%** of total revenues in 2023, with Ragnarok Origin alone accounting for **62.3%** of total revenues[36](index=36&type=chunk)[154](index=154&type=chunk)[155](index=155&type=chunk) - A significant portion of revenue (**78.4%** in 2023) is generated through third-party mobile platforms like Apple's App Store and the Google Play Store, subjecting the company to their unilateral policy changes[54](index=54&type=chunk) - GungHo Online Entertainment is the majority shareholder, beneficially owning **59.3%** of common shares, which creates potential conflicts of interest and gives them significant control over corporate matters[102](index=102&type=chunk) - The company believes it was a **Passive Foreign Investment Company (PFIC)** for U.S. federal income tax purposes for taxable years 2022 and 2023, which could result in adverse tax consequences for U.S. investors[95](index=95&type=chunk) [ITEM 4. INFORMATION ON THE COMPANY](index=32&type=section&id=ITEM%204.%20INFORMATION%20ON%20THE%20COMPANY) This section provides a comprehensive overview of Gravity Co, Ltd, detailing its history, business operations, organizational structure, and physical properties [History and Development of the Company](index=32&type=section&id=ITEM%204.A.%20History%20and%20Development%20of%20the%20Company) Incorporated in 2000 and listed on NASDAQ in 2005, the company's recent growth has been significantly shaped by a 2015 agreement with Dream Square that produced successful Ragnarok-based mobile games - Incorporated on April 4, 2000, and listed its ADSs on the NASDAQ Global Market on February 8, 2005, under the symbol "GRVY"[149](index=149&type=chunk) - Entered a pivotal development agreement with Dream Square in 2015 to create mobile games based on Ragnarok Online, leading to the launch of highly successful titles like Ragnarok M: Eternal Love (2017), Ragnarok Origin (2020), and Ragnarok X: Next Generation (2020)[149](index=149&type=chunk) [Business Overview](index=32&type=section&id=ITEM%204.B.%20Business%20Overview) The company's business centers on developing and publishing online and mobile games, with a strong focus on its flagship Ragnarok intellectual property and global operations Revenue by Game Type (2023) | Game Type | Revenue (in millions of Won) | Percentage of Total | | :--- | :--- | :--- | | Mobile Games | ₩629,604 | 86.8% | | Online Games | ₩81,017 | 11.1% | | Other | ₩14,895 | 2.1% | Top Revenue-Generating Games (2023) | Game Title | Revenue (in millions of Won) | Percentage of Total | | :--- | :--- | :--- | | Ragnarok Origin | ₩451,887 | 62.3% | | Ragnarok X: Next Generation | ₩99,321 | 13.7% | | Ragnarok M: Eternal Love | ₩69,773 | 9.6% | | Ragnarok Online | ₩77,660 | 10.7% | Revenue by Geographic Area (2023) | Country | Revenue (in millions of Won) | Percentage of Total | | :--- | :--- | :--- | | Taiwan | ₩176,071 | 24.3% | | Thailand | ₩136,874 | 18.9% | | The Philippines | ₩102,595 | 14.1% | | Korea | ₩86,058 | 11.9% | | Indonesia | ₩58,763 | 8.1% | | Malaysia | ₩58,553 | 8.1% | | Other | ₩113,102 | 15.6% | - The company competes with major online game providers like NCSoft, Krafton, and Nexon, and mobile game publishers such as Tencent, NetEase, and Kakao Games[271](index=271&type=chunk)[275](index=275&type=chunk) [Organizational Structure](index=68&type=section&id=ITEM%204.C.%20Organizational%20Structure) Gravity Co, Ltd operates through a network of subsidiaries located in key global markets, including the USA, Taiwan, Thailand, Japan, Singapore, Hong Kong, Korea, and Indonesia - The company's organizational chart shows Gravity Co, Ltd as the parent company with multiple subsidiaries across key regions including Korea, the U.S., Taiwan, Indonesia, Thailand, Japan, Singapore, and Hong Kong[368](index=368&type=chunk)[732](index=732&type=chunk) [Property, Plants and Equipment](index=68&type=section&id=ITEM%204.D.%20Property%2C%20Plants%20and%20Equipment) The company's property and equipment had a net book value of ₩10,151 million as of year-end 2023, with its principal executive offices and subsidiary offices being leased - The net book value of property and equipment was **₩10,151 million** (US$7,863 thousand) as of December 31, 2023[368](index=368&type=chunk) - The company leases its principal executive offices in Seoul, Korea, and also leases office spaces for its subsidiaries in the U.S., Taiwan, Japan, Indonesia, Thailand, Singapore, and Hong Kong[369](index=369&type=chunk)[370](index=370&type=chunk)[371](index=371&type=chunk) [ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS](index=70&type=section&id=ITEM%205.%20OPERATING%20AND%20FINANCIAL%20REVIEW%20AND%20PROSPECTS) This section provides a detailed analysis of the company's financial performance, liquidity, capital resources, cash flows, and research and development activities [Operating Results](index=70&type=section&id=ITEM%205.A.%20Operating%20Results) In 2023, total revenues surged by 56.5% driven by mobile games, though gross margin declined due to higher commission costs, while operating and net profit saw significant growth Financial Performance Summary (2023 vs. 2022) | Metric | 2023 (in millions of Won) | 2022 (in millions of Won) | % Change | | :--- | :--- | :--- | :--- | | Total Revenues | ₩725,516 | ₩463,618 | 56.5% | | Gross Profit | ₩240,558 | ₩196,253 | 22.6% | | Operating Profit | ₩160,367 | ₩104,708 | 53.2% | | Profit for the year | ₩131,982 | ₩83,058 | 58.9% | | Gross Profit Margin | 33.2% | 42.3% | - | | Operating Profit Margin | 22.1% | 22.6% | - | - The **56.5% increase in total revenues** in 2023 was primarily due to a **75.5% rise in mobile game revenues**, led by the successful launch of Ragnarok Origin in Southeast Asia in April 2023[381](index=381&type=chunk)[414](index=414&type=chunk) - Cost of revenues increased by **81.4%** in 2023, mainly due to a significant rise in commissions paid for mobile platform service fees, royalties, and outsourcing fees related to Ragnarok Origin[414](index=414&type=chunk) - Selling, general and administrative expenses decreased by **14.9%** in 2023, largely due to a **54.3% reduction in advertising expenses** compared to 2022[416](index=416&type=chunk) [Liquidity and Capital Resources](index=83&type=section&id=ITEM%205.B.%20Liquidity%20and%20Capital%20Resources) The company maintained a strong liquidity position with significant cash reserves and short-term financial instruments, primarily funded by increased cash flow from operating activities Cash and Liquidity Position (as of Dec 31, 2023) | Item | Amount (in millions of Won) | | :--- | :--- | | Cash and cash equivalents | ₩184,082 | | Short-term financial instruments | ₩277,215 | Summary of Cash Flows (2023) | Cash Flow Activity | Amount (in millions of Won) | | :--- | :--- | | Net cash inflow from operating activities | ₩132,430 | | Net cash outflow from investing activities | (₩116,579) | | Net cash outflow from financing activities | (₩4,083) | - The company's material cash requirements as of December 31, 2023, include **₩6.7 billion in lease obligations** and **₩4.9 billion in purchase obligations**[454](index=454&type=chunk) [Research and Development, Patents and Licenses, Etc.](index=85&type=section&id=ITEM%205.C.%20Research%20and%20Development%2C%20Patents%20and%20Licenses%2C%20Etc.) The company continues to invest in research and development to remain competitive, with expenditures totaling ₩13.5 billion in 2023 Research and Development Expenditures | Year | Expenditure (in millions of Won) | | :--- | :--- | | 2023 | ₩13,486 | | 2022 | ₩13,797 | | 2021 | ₩16,570 | [ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES](index=86&type=section&id=ITEM%206.%20DIRECTORS%2C%20SENIOR%20MANAGEMENT%20AND%20EMPLOYEES) This section details the composition of the board and senior management, their compensation, board practices, and employee information [Directors and Senior Management](index=86&type=section&id=ITEM%206.A.%20Directors%20and%20Senior%20Management) The company's leadership includes the CEO, Chairman, and CFO, with a Board of eleven directors reflecting significant influence from majority shareholder GungHo - The Board of Directors consists of 11 members: Hyun Chul Park (CEO), Yoshinori Kitamura (Chairman & COO), Heung Gon Kim (CFO), Kazuki Morishita, Kazuya Sakai, Koji Yoshida, and five independent directors[463](index=463&type=chunk) [Compensation](index=89&type=section&id=ITEM%206.B.%20Compensation) Total compensation for all directors and executive officers was ₩1,734 million in 2023, with a shareholder-approved cap of ₩4 billion for the 2024 fiscal year - The aggregate compensation for all directors and executive officers in 2023 was **₩1,734 million** (US$1,343 thousand)[477](index=477&type=chunk) [Board Practices](index=89&type=section&id=ITEM%206.C.%20Board%20Practices) As a foreign private issuer and a "controlled company," Gravity is exempt from certain NASDAQ governance requirements, such as having a majority-independent board - As a foreign private issuer and a "controlled company," Gravity is exempt from certain NASDAQ corporate governance rules, such as having a majority of independent directors on its board[481](index=481&type=chunk)[484](index=484&type=chunk) - The Board of Directors has three committees: an audit committee composed of three independent directors, and director nomination and compensation committees, each with one independent and two non-independent directors[490](index=490&type=chunk)[491](index=491&type=chunk)[492](index=492&type=chunk)[493](index=493&type=chunk) [Employees](index=92&type=section&id=ITEM%206.D.%20Employees) As of year-end 2023, the company and its subsidiaries employed a total of 936 people, with the parent company headcount increasing to 437 Employee Headcount by Department (Parent Company) | Department | Dec 31, 2023 | Dec 31, 2022 | Dec 31, 2021 | | :--- | :--- | :--- | :--- | | Senior management | 12 | 11 | 11 | | Finance | 24 | 22 | 22 | | Marketing | 101 | 96 | 87 | | Game development and support | 300 | 271 | 257 | | **Total** | **437** | **400** | **377** | - As of December 31, 2023, the company's subsidiaries employed a total of **499 people**, with Gravity NeoCyon, Inc in Korea being the largest subsidiary employer with 188 employees[496](index=496&type=chunk) [ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS](index=94&type=section&id=ITEM%207.%20MAJOR%20SHAREHOLDERS%20AND%20RELATED%20PARTY%20TRANSACTIONS) This section identifies GungHo Online Entertainment, Inc as the controlling shareholder and details business agreements with them, primarily for game licensing in Japan [Major Shareholders](index=94&type=section&id=ITEM%207.A.%20Major%20Shareholders) GungHo Online Entertainment, Inc is the company's controlling shareholder, beneficially owning 59.3% of the total outstanding common shares - GungHo Online Entertainment, Inc is the majority shareholder, beneficially owning **59.3%** of the company's common shares as of April 26, 2024[507](index=507&type=chunk) [Related Party Transactions](index=95&type=section&id=ITEM%207.B.%20Related%20Party%20Transactions) The company engages in significant related party transactions with its majority shareholder, GungHo, including multiple service and distribution agreements for its key games in Japan - The company has multiple license and distribution agreements with its majority shareholder, GungHo, for servicing its key Ragnarok titles in Japan[509](index=509&type=chunk)[510](index=510&type=chunk)[511](index=511&type=chunk)[512](index=512&type=chunk) - Several of Gravity's executive directors, including the CEO, Chairman, and others, also serve in executive or director roles at GungHo, indicating a strong overlap in management[513](index=513&type=chunk) [ITEM 8. FINANCIAL INFORMATION](index=95&type=section&id=ITEM%208.%20FINANCIAL%20INFORMATION) This section confirms the inclusion of financial statements, states there are no material legal proceedings, and outlines the dividend policy - The company has not declared or paid any dividends since its inception and has no intention to pay dividends in the near future, prioritizing cash for capital expenditures and investments[517](index=517&type=chunk) - As of the report date, the company is not involved in any legal proceedings expected to have a material adverse effect on its business[516](index=516&type=chunk) [ITEM 9. THE OFFER AND LISTING](index=96&type=section&id=ITEM%209.%20THE%20OFFER%20AND%20LISTING) This section provides details about the trading of the company's American Depositary Shares (ADSs) on the NASDAQ Global Market under the symbol "GRVY" - The company's American Depositary Shares (ADSs) are traded on the NASDAQ Global Market under the symbol "GRVY"[520](index=520&type=chunk) - As of December 31, 2023, there were **3,304,151 ADSs outstanding**, each representing one share of common stock[522](index=522&type=chunk) [ITEM 10. ADDITIONAL INFORMATION](index=97&type=section&id=ITEM%2010.%20ADDITIONAL%20INFORMATION) This section provides supplementary details on corporate governance, Korean exchange controls, and material Korean and U.S. federal income tax considerations [Memorandum and Articles of Incorporation](index=97&type=section&id=ITEM%2010.B.%20Memorandum%20and%20Articles%20of%20Incorporation) This subsection summarizes key provisions of the company's articles of incorporation, covering business purposes, director appointments, dividend policies, and shareholder rights - The company's purpose includes software development, online game services, character merchandising, and blockchain-based digital content businesses[530](index=530&type=chunk) - Directors are elected for one-year terms at shareholder meetings, and the board must consist of at least three directors[485](index=485&type=chunk)[532](index=532&type=chunk) - The company may issue new shares to persons other than existing shareholders through methods such as a general public offering (up to 50% of total shares) or to raise funds on an emergency basis, which bypasses preemptive rights[543](index=543&type=chunk) [Exchange Controls](index=103&type=section&id=ITEM%2010.D.%20Exchange%20Controls) This subsection outlines Korea's Foreign Exchange Transaction Laws, which regulate foreign investment and grant the government authority to impose restrictions in emergencies - Korea's Foreign Exchange Transaction Laws regulate investment by non-residents, and the government can suspend payments or transactions in emergency situations[571](index=571&type=chunk)[572](index=572&type=chunk) - To issue ADSs, the company must file a report with Korea's Ministry of Economy and Finance, and the depositary requires company consent to increase the number of underlying common shares beyond a pre-set limit[573](index=573&type=chunk)[574](index=574&type=chunk) [Taxation](index=105&type=section&id=ITEM%2010.E.%20Taxation) This subsection details the Korean and U.S. tax implications for non-resident holders of the company's securities, highlighting the company's status as a PFIC for U.S. tax purposes - Under Korean law, dividends paid to non-resident holders are subject to a **22% withholding tax**, which may be reduced under an applicable tax treaty[585](index=585&type=chunk) - Capital gains from the transfer of ADSs or common shares are generally subject to Korean withholding tax, but exemptions are available under most tax treaties, including the one with the U.S[589](index=589&type=chunk) - For U.S. federal income tax purposes, the company believes it was a **Passive Foreign Investment Company (PFIC)** for the 2023 taxable year, subjecting U.S. Holders to adverse tax rules[612](index=612&type=chunk)[616](index=616&type=chunk)[617](index=617&type=chunk) [ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK](index=115&type=section&id=ITEM%2011.%20QUANTITATIVE%20AND%20QUALITATIVE%20DISCLOSURES%20ABOUT%20MARKET%20RISK) The company is exposed to market risks, primarily from foreign currency fluctuations, interest rate changes, and credit risk associated with its cash holdings and receivables - The company has significant exposure to foreign currency risk, as **88.1%** of its revenues in 2023 were denominated in currencies other than the Korean Won[403](index=403&type=chunk)[642](index=642&type=chunk) - A hypothetical **10% depreciation** in the exchange rates of relevant foreign currencies against the Won in 2023 would have decreased revenue by **₩59,721 million**[645](index=645&type=chunk) - Credit risk exists from concentrating cash and short-term financial instruments in a few financial institutions, with four institutions holding approximately **46.2%** of these assets as of December 31, 2023[649](index=649&type=chunk) [ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES](index=116&type=section&id=ITEM%2012.%20DESCRIPTION%20OF%20SECURITIES%20OTHER%20THAN%20EQUITY%20SECURITIES) This section details the fees and charges applicable to the company's American Depositary Shares (ADSs), which are paid by ADS holders to the depositary, Citibank, N.A ADS Holder Fees | Service | Fee | | :--- | :--- | | Issuance of ADSs | Up to $5.00 per 100 ADSs | | Cancellation of ADSs | Up to $5.00 per 100 ADSs | | Cash distributions | Up to $5.00 per 100 ADSs | | Stock distributions | Up to $5.00 per 100 ADSs | PART II [ITEM 15. CONTROLS AND PROCEDURES](index=118&type=section&id=ITEM%2015.%20CONTROLS%20AND%20PROCEDURES) Management concluded that the company's disclosure controls and procedures, as well as its internal control over financial reporting, were effective as of December 31, 2023 - Management concluded that the company's disclosure controls and procedures were effective as of December 31, 2023[660](index=660&type=chunk) - Management assessed the internal control over financial reporting and concluded that it was effective as of December 31, 2023; this assessment was audited and confirmed by the independent registered public accounting firm[664](index=664&type=chunk)[665](index=665&type=chunk) [ITEM 16. RESERVED](index=119&type=section&id=ITEM%2016.%20RESERVED) This section covers governance topics, including the identification of an audit committee financial expert, adoption of a Code of Ethics, accountant fees, and an overview of the cybersecurity risk management strategy [Audit Committee Financial Expert](index=119&type=section&id=ITEM%2016.A.%20Audit%20Committee%20Financial%20Expert) The Board of Directors has determined that Mr Yong Seon Kwon, an independent director, qualifies as an "audit committee financial expert" - The Board of Directors has identified Mr Yong Seon Kwon as the "audit committee financial expert"[668](index=668&type=chunk) [Code of Ethics](index=119&type=section&id=ITEM%2016.B.%20Code%20of%20Ethics) The company has adopted a Code of Ethics applicable to all directors, officers, and employees, which is available on its website - A Code of Ethics has been adopted for all directors, officers, and employees and is publicly available on the company's website[669](index=669&type=chunk) [Principal Accountant Fees and Services](index=119&type=section&id=ITEM%2016.C.%20Principal%20Accountant%20Fees%20and%20Services) Aggregate fees billed by the principal accountant, Samil PricewaterhouseCoopers, totaled ₩1,540 million for the 2023 fiscal year Accountant Fees (2023 vs. 2022) | Type of Service | 2023 (in millions of Won) | 2022 (in millions of Won) | | :--- | :--- | :--- | | Audit Fees | ₩1,501 | ₩1,224 | | Tax Fees | ₩39 | ₩24 | | **Total** | **₩1,540** | **₩1,248** | [Cybersecurity](index=120&type=section&id=ITEM%2016.K.%20Cybersecurity) The company has integrated cybersecurity into its overall risk management framework, overseen by the Board and managed by a Chief Information Security Officer, with no material incidents in the last three years - The company's cybersecurity risk management is integrated into its overall risk management system, with oversight from the Board of Directors and day-to-day management led by a Chief Information Security Officer (CISO)[680](index=680&type=chunk)[684](index=684&type=chunk)[685](index=685&type=chunk) - A layered governance structure is in place, including a Security Forum, a Crisis Incident Management Team, and an Information Security Operation Committee to manage cybersecurity risks and incidents[685](index=685&type=chunk)[688](index=688&type=chunk) - The company has not experienced any material cybersecurity incidents during the fiscal years 2021, 2022, and 2023[681](index=681&type=chunk) PART III [ITEM 18. FINANCIAL STATEMENTS](index=122&type=section&id=ITEM%2018.%20FINANCIAL%20STATEMENTS) This section contains the audited consolidated financial statements of Gravity Co, Ltd and its subsidiaries for the fiscal years ended December 31, 2023, 2022, and 2021 Consolidated Statement of Financial Position (Assets) | Assets | Dec 31, 2023 (in millions of Won) | Dec 31, 2022 (in millions of Won) | | :--- | :--- | :--- | | Total current assets | ₩546,899 | ₩421,767 | | Total non-current assets | ₩31,282 | ₩22,327 | | **Total assets** | **₩578,181** | **₩444,094** | Consolidated Statement of Financial Position (Liabilities and Equity) | Liabilities and Equity | Dec 31, 2023 (in millions of Won) | Dec 31, 2022 (in millions of Won) | | :--- | :--- | :--- | | Total liabilities | ₩114,453 | ₩113,914 | | Total equity | ₩463,728 | ₩330,180 | | **Total liabilities and equity** | **₩578,181** | **₩444,094** | Consolidated Statement of Comprehensive Income | Item | 2023 (in millions of Won) | 2022 (in millions of Won) | 2021 (in millions of Won) | | :--- | :--- | :--- | :--- | | Total Revenues | ₩725,516 | ₩463,618 | ₩413,938 | | Gross profit | ₩240,558 | ₩196,253 | ₩189,765 | | Operating profit | ₩160,367 | ₩104,708 | ₩96,719 | | Profit for the year | ₩131,982 | ₩83,058 | ₩65,880 | | Basic earnings per share (in Won) | ₩18,999 | ₩11,968 | ₩9,490 | Consolidated Statement of Cash Flows | Item | 2023 (in millions of Won) | 2022 (in millions of Won) | 2021 (in millions of Won) | | :--- | :--- | :--- | :--- | | Net cash inflow from operating activities | ₩132,430 | ₩98,278 | ₩74,183 | | Net cash outflow in investing activities | (₩116,579) | (₩22,340) | (₩82,471) | | Net cash outflow in financing activities | (₩4,083) | (₩3,918) | (₩3,306) | | Net increase (decrease) in cash | ₩14,205 | ₩70,772 | (₩11,527) |

Seoul, South Korea, April 26, 2024 (GLOBE NEWSWIRE) -- GRAVITY Co., Ltd. (NASDAQGM:GRVY) ("Gravity" or the "Company") today announced that the Company filed its annual report on Form 20-F for the fiscal year ended December 31, 2023 with the Securities and Exchange Commission on April 26, 2024. The annual report can be accessed on the Company's investor relations Web site at https://www.gravity.co.kr/en/ir/notice The shareholders and ADS holders of Gravity may receive a hard copy of the annual report, which ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 _________________________________________________________________________ Form 20-F (Mark One) ☐ REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934 or ☑ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2022 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 or ...

Financial Performance - Total revenue for 2022 was W 232,717,405 thousand, a decrease of 19.3% from W 288,258,376 thousand in 2021[16] - Operating profit for 2022 was W 62,144,800 thousand, down 20.5% from W 78,174,467 thousand in 2021[16] - Profit for the year decreased to W 54,914,724 thousand in 2022, a decline of 15.2% compared to W 64,732,833 thousand in 2021[16] - The company reported a gross profit of W 120,204,998 thousand in 2022, down 17.9% from W 146,443,113 thousand in 2021[16] - Total expenses for 2022 were W 170,572,605 thousand, down 18.8% from W 210,083,909 thousand in 2021[153] - Research and development expenses decreased to W 12,160,829 thousand in 2022 from W 18,101,978 thousand in 2021, a reduction of 32.8%[156] - Micro transaction and subscription revenue decreased to W 80,679,602 thousand in 2022 from W 92,578,768 thousand in 2021, representing a decline of 12.9%[149] - Revenue from mobile games dropped to W 74,830,047 thousand in 2022, down 15.0% from W 88,114,690 thousand in 2021[149] Cash Flow and Liquidity - Cash and cash equivalents increased to W 42,985,625 thousand in 2022 from W 26,602,122 thousand in 2021, representing a growth of 61.5%[13] - Net cash provided by operating activities was W 45,514,786 in 2022, down from W 70,320,586 in 2021, indicating a decrease of about 35%[20] - Net cash used in investing activities significantly reduced to W 26,443,349 in 2022 from W 88,153,976 in 2021, a decrease of approximately 70%[20] - The company recognized a total cash outflow of W 2,118,456 thousand for leases in 2022, compared to W 1,963,708 thousand in 2021[169] - The company’s cash generated from operations was W 12,550,795 thousand in 2021, a decrease from W 18,716,916 thousand in 2020[162] Assets and Liabilities - Total assets rose to W 292,309,340 thousand in 2022, up 13.0% from W 258,665,573 thousand in 2021[13] - Total liabilities decreased significantly to W 31,717,523 thousand in 2022, down 40.1% from W 52,988,480 thousand in 2021[15] - Total financial liabilities at amortized cost decreased to W 18,078,201 thousand in 2022 from W 32,483,876 thousand in 2021, representing a reduction of about 44.0%[115] - The company's total liabilities decreased significantly to W 31,717,523 thousand in 2022 from W 52,988,480 thousand in 2021, resulting in a debt ratio reduction from 26% to 12%[173] - The total carrying amount of property and equipment is W 3,520,385 thousand, a decrease from W 5,608,320 thousand in 2021, reflecting a depreciation expense of W 2,382,370 thousand for 2022[137] Shareholder and Equity Information - Major shareholder GungHo Online Entertainment, Inc. holds 59.31% of the company's shares as of December 31, 2021[22] - The company’s total equity increased to W 260,591,817 thousand in 2022 from W 205,677,093 thousand in 2021, representing a growth of approximately 26.7%[173] - The number of shares issued remains constant at 6,948,900, with a total common share value of W 3,474,450,000 as of December 31, 2022[146] Revenue Recognition and Accounting Policies - The company estimates game user life cycles to recognize revenue from micro-transactions, reflecting a strategic approach to revenue recognition[27] - The company recognizes revenue for license fees through the straight-line method during the contract period, ensuring consistent revenue recognition over time[101] - The company deferred revenue for remaining virtual currency possessed by active paying users at the end of the reporting period, indicating a focus on revenue recognition based on user engagement[99] - The company has no refund obligation after game users purchase virtual currency, which supports revenue stability from micro-transactions[98] Investments and Subsidiaries - Total investment in subsidiaries increased to W 26,732,334 thousand in 2022, up from W 21,679,845 thousand in 2021, representing a growth of 23.3%[130] - Gravity Game Vision Limited was established in 2022, contributing to the increase in total investments in subsidiaries[129] - The total assets of Gravity Game Vision Limited reached W 63,608,043 thousand in 2022, with a profit of W 17,090,044 thousand, indicating a successful market entry[134] - Gravity Game Hub PTE., Ltd. reported a loss of W 3,081,397 thousand in 2022, highlighting challenges in its operations[134] Financial Instruments and Risk Management - The company recognized a total net income from financial instruments of 4,922,787 thousand won in 2022, up from 3,887,952 thousand won in 2021, which is an increase of approximately 26.5%[116] - The company measures foreign exchange risk at a rate of 10% for each foreign currency, reflecting management's assessment of potential fluctuations[175] - The sensitivity analysis indicates that a 10% increase in USD exchange rate would increase profit before tax by W 3,456,381 in 2022[175] Internal Control and Compliance - The management's report on the effectiveness of Internal Control over Financial Reporting (ICFR) states that the ICFR is designed and operating effectively as of December 31, 2022[193] - The review of ICFR was conducted in accordance with standards established by the Korean Institute of Certified Public Accountants, focusing on the company's compliance with the relevant guidelines[194] - The CEO and ICFR Officer assessed the design and operation of the company's ICFR for the year ending December 31, 2022, ensuring reliable financial information[199]