Hanryu (US:HRYU)2025-05-20 19:20Financial Performance - The Company generated no revenue during the fiscal quarter ended March 31, 2025, due to restructuring and divestiture of subsidiaries [176]. - The operating loss for Q1 2025 was $563,468, a 45% decrease from the operating loss of $1,023,569 in Q1 2024 [177]. - The accumulated deficit as of March 31, 2025, was $38,467,982, with a working capital deficiency of $(719,575) [179]. - General and administrative expenses increased by 242% to $563,468 in Q1 2025 compared to $164,563 in Q1 2024 [176]. Revenue Generation - The Company expects to begin generating revenue from the newly updated FANING platform starting in May 2025, following its relaunch in April 2025 [178]. - Revenue is anticipated from direct sales, user-to-user commissions, and marketing services starting in May 2025 [161][168]. - The Company plans to diversify revenue streams through K-Food products and entertainment business ventures via its subsidiary, Faning Korea, LLC [180]. - The revamped FANING platform focuses on user-centric design and aims to achieve profitability [180]. User Base and Market Position - As of March 31, 2025, FANING had over 26.6 million registered users globally, positioned to capitalize on the global rise in K-Culture fandom, now exceeding 229 million fans in 119 countries [195]. - The company generates the majority of its revenue from customers within Korea, impacting its financial condition due to fluctuations in the Korean Won (KRW) against foreign currencies [188]. Currency and Financial Risk - The functional and reporting currency is the U.S. Dollar (USD), with the local currency of the subsidiary, Faning Korea, LLC, being the Korean Won (KRW) [189]. - The company does not currently invest in derivatives or other financial instruments to hedge foreign currency risk but may consider such activities in the future [190]. - Cash and cash equivalents are placed with financial institutions of high credit quality, with management evaluating credit risk based on various factors [191]. Regulatory and Reporting Requirements - The company is subject to ongoing public reporting requirements that are less rigorous than those for non-emerging growth companies, potentially providing less information to stockholders [205]. - The company expects to remain an "emerging growth company" for up to five years unless the market value of its common stock held by non-affiliates exceeds $700 million [206]. - The company is not required to comply with auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act [207]. - The company can take advantage of extensions of time to comply with certain new or revised financial accounting standards [207]. - The company is permitted to comply with reduced disclosure obligations regarding executive compensation in periodic reports and proxy statements [207]. - The company is exempt from the requirement to hold a non-binding advisory vote on executive compensation [207]. - The company is also exempt from stockholder approval of any golden parachute payments not previously approved [207]. Accounting and Estimates - The preparation of financial statements requires management to make estimates and assumptions that could significantly impact reported amounts [193]. - Recent accounting updates from the FASB are expected to enhance transparency in income tax disclosures and expense disaggregation, effective for periods beginning after December 15, 2024 [199][200]. - The company has not entered into any off-balance sheet financial guarantees or derivative contracts that are not reflected in its financial statements [184]. - The company assesses contingencies related to legal proceedings and unasserted claims, which may result in material losses if deemed probable [203].