Hanryu (US:HRYU)2025-08-15 20:16Financial Performance - For the six months ended June 30, 2025, revenue was $29, generated from the operation of the FANING platform, which was updated and relaunched in April 2025 [172]. - The net loss for the six months ended June 30, 2025, was $1,244,730, a decrease of approximately 23% compared to the net loss of $1,608,971 for the same period in 2024 [174]. - For the three months ended June 30, 2025, the net loss was $678,049, a 21% increase from the net loss of $561,900 for the same period in 2024 [177]. - The company reported an accumulated deficit of $39,146,031 as of June 30, 2025, compared to $37,901,301 as of December 31, 2024 [180]. Revenue Generation Strategies - The Company plans to generate revenue from new sources, including merchandise sales, K-Food sales, and entertainment-related business starting in the third quarter of 2025 [172]. - The Company expects to begin generating revenue from its entertainment agency business starting in the third quarter of 2025 [165]. - Revenue from user-to-user transactions is anticipated as users sell their own products and services on the FANING platform [160]. - The platform's monetization strategy includes direct revenue from advertising, digital content, and user-to-user transaction commissions [203]. - The platform's monetization strategy includes direct revenue from advertising, digital content, and commerce, as well as commissions on user-to-user transactions [203]. Operational Developments - The Company is in the process of raising operating capital through a public offering in August 2025 to increase revenue and generate revenue from new business lines [175]. - The newly revamped FANING platform was launched in April 2025, with revenue generation starting in May 2025 [157]. - Management anticipates that the launch of the restructured FANING platform will begin to reflect improved financial performance starting from Q3 2025 [182]. - The company is in the process of raising additional operating capital to support its ongoing capital-raising efforts and platform monetization strategies [182]. User Engagement and Growth - As of June 30, 2025, FANING had over 26.6 million registered users globally, capitalizing on the rise of K-Culture fandom, which exceeds 229 million fans in 119 countries [201]. - The platform supports real-time multilingual translation and is available in 17 languages, enhancing global fan engagement [200]. Cost Management - General and administrative expenses for the six months ended June 30, 2025, increased by 148% to $1,240,428 compared to $499,680 for the same period in 2024 [172]. - The company has implemented cost-saving measures, including divesting underperforming subsidiaries and reducing headcount, to improve its financial position [180]. Financial Position - As of June 30, 2025, cash and cash equivalents increased to $10,883 from $2,352 as of December 31, 2024, while total current assets rose to $25,796 from $2,987 [180]. - Total current liabilities decreased to $515,682 from $668,339, representing a reduction of $152,687, primarily due to the conversion of existing debt into equity [181]. Accounting and Risk Management - The company is currently evaluating the impact of new accounting standards but does not expect them to materially affect its financial statements upon adoption [207]. - Management regularly reviews significant accounting estimates and judgments, which are based on historical experience and current economic conditions [199]. - The company assesses contingencies related to potential legal proceedings and may accrue estimated liabilities if a material loss is probable [209]. - 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 [195]. - FANING's functional and reporting currency is the U.S. Dollar (USD), and the value of non-USD-denominated operations is affected by changes in the USD exchange rate [194]. - The company places cash and cash equivalents with financial institutions of high credit quality to manage credit risk [196]. - The company is classified as an "emerging growth company," allowing it to take advantage of certain reporting exemptions until it no longer qualifies [212].