Business Context and Reporting Period
Company: Global Interactive Technologies, Inc. (GITS), formerly Hanryu Holdings, Inc.
Reporting Period: Fiscal Year Ended December 31, 2025 (Form 10-K)
Business Overview: GITS operates "Faning," a global digital fan engagement platform focused on Korean entertainment (K-pop) and culture. The platform facilitates community interaction, content sharing, and multilingual communication. As of December 31, 2025, the company remains in an early-stage commercialization phase, having transitioned from a primary development stage. The company is a Delaware corporation with its principal executive offices in Seoul, Republic of Korea.
Key Financial Metrics
| Metric | FY 2025 | FY 2024 |
|---|---|---|
| Revenue | $1,932 | $0 |
| Operating Expenses | $2,440,752 | $888,363 |
| Net Loss | $(4,632,893) | $(6,171,969) |
| Cash and Cash Equivalents (End of Period) | $6,990 | $2,352 |
| Stockholders' Equity | $3,442,705 | $5,736,084 |
| Accumulated Deficit | $(42,534,194) | $(37,901,301) |
| Working Capital | Deficit of $891,113 | Deficit of $665,352 |
Key Non-GAAP/Other Items:
- Impairment Loss: $1,019,611 recorded on intangible assets (software) in 2025, compared to $94,264 in 2024.
- Debt Extinguishment Loss: $1,168,228 recognized in 2025 due to debt-to-equity conversions.
- Reverse Stock Split: A 1-for-20 reverse stock split was effected on January 27, 2025.
Material Changes vs. Prior Period
- Revenue Generation: The company generated nominal revenue of $1,932 in 2025, marking a shift from zero revenue in 2024, though this remains immaterial relative to operations.
- Expense Increase: Operating expenses increased by approximately $1.55 million (175%) year-over-year. This increase is primarily attributed to public company compliance costs (legal, audit, investor relations) and financing activities rather than revenue-generating operations.
- Net Loss Reduction: Net loss decreased by approximately $1.54 million compared to 2024. This reduction was largely driven by a $12.4 million gain on the disposal of subsidiaries recognized in 2024, which did not recur in 2025.
- Asset Impairment: Significant impairment charges were taken on intangible assets in 2025 due to revised commercialization timelines and limited revenue generation.
- Capital Structure: The company converted significant portions of related-party and third-party debt into equity during 2025, resulting in substantial debt extinguishment losses.
Guidance, Outlook, Risks, and Contingencies
Going Concern Warning
The independent auditors (One Stop Assurance PAC) have issued an opinion with an explanatory paragraph stating that substantial doubt exists regarding the Company's ability to continue as a going concern. This is due to recurring losses, an accumulated deficit of over $42.5 million, and a working capital deficiency.
Liquidity and Capital Needs
- Cash Runway: Management estimates existing cash ($6,990) is sufficient for approximately two months of operations.
- Capital Requirement: The company estimates a need for approximately $3.0 million of additional capital over the next 12 months, with a monthly burn rate of roughly $250,000.
- Financing Plans: The company entered into a non-binding term sheet with Hudson Global Ventures for an equity line of credit up to $18 million and secured a $506,000 promissory note from FirstFire Global Opportunities Fund in April 2026.
- Nasdaq Delisting Risk: The company received notices from Nasdaq regarding late filings of its 2025 10-K and Q1 2026 10-Q. While a compliance plan was submitted, delisting remains a risk if compliance is not regained.
- Internal Controls: The company disclosed ineffective internal controls over financial reporting due to material weaknesses, including lack of segregation of duties and deficiencies in related party transaction identification.
- Regulatory & Geopolitical: Risks include operating in South Korea (regulatory changes, North Korea tensions), data privacy laws (GDPR, PIPA), and potential classification of "Faning Points" (FP) as digital assets or securities.
- Competition: Intense competition from global social media platforms (Facebook, X) and dedicated K-pop platforms (Weverse, Lysn).
- Capital Raise Status: Verify if the $3.0 million funding requirement has been secured, specifically the status of the Hudson Global Ventures equity line and FirstFire note.
- Nasdaq Compliance: Confirm the company's current listing status on Nasdaq and whether the delisting notices have been resolved.
- Revenue Validation: Scrutinize the source and sustainability of the $1,932 revenue reported, given the "early-stage commercialization" status.
- Related Party Transactions: Review the extensive short-term loans from related parties (e.g., Jaeman Lee, Hangmuk Shin) and the terms of debt-to-equity conversions.
- Internal Control Remediation: Assess the timeline and progress for remedying the material weaknesses in internal controls over financial reporting.
- Asset Valuation: Evaluate the remaining carrying value of intangible assets ($3.0 million) post-impairment and the assumptions used for future amortization.
Management Commentary & Strategy
Management plans to address liquidity by commercializing the "Faning 2.0" platform, pursuing K-food and entertainment ventures, and seeking additional equity or debt financing. The company is focusing on user acquisition, monetization tools (Vote & Boost, subscriptions), and strategic partnerships.