Global Interactive Technologies, Inc. SEC 10-K Report

Global Interactive Technologies, Inc., the operator of the FANING platform, has released its 2024 10-K report, detailing significant financial and operational changes. The company, which focuses on connecting global fans of Korean culture through digital experiences, has undergone substantial restructuring and strategic realignments to enhance its core operations and future growth prospects.

Financial Highlights

• Sales: $0, No revenue was generated during the year ended December 31, 2024, due to restructuring and divestiture of subsidiaries.
• Gross Profit: $0, Reflects the absence of revenue generation during the restructuring period.
• Loss from operations: $(888,363), Operating costs and expenses decreased by 56% due to workforce reductions and sale of subsidiaries.
• Net Loss: $(6,171,969), Includes significant impairment loss on intangible assets and bad-debt expense of other assets.
• Basic net loss per share: $(2.34), Reflects the impact of continued operating losses and restructuring activities.

Business Highlights

• Platform Overview: Global Interactive Technologies, Inc. operates FANING, a comprehensive interactive platform designed to connect global fans of Korean culture through digital experiences. The platform facilitates content discovery, monetization, user-generated content, and community engagement.
• User Engagement: As of December 31, 2024, FANING has attracted over 26.6 million users globally, with a significant portion of the user base aged between 20-39 years, which accounts for more than 80% of all users.
• FANING Ecosystem: The platform includes features such as secure messaging, social pages, virtual spaces (FANING Clubs), and a reward system using Faning Points (FP) to enhance user interaction and engagement.
• User-Generated Content: FANING allows users to create, upload, and monetize content, including fanart, web novels, and webtoons, with real-time translation services supporting 17 languages.
• FANING Fanshop: The e-commerce service within FANING enables users to purchase items like concert tickets and fandom goods using FP or cash, with a video commerce service planned to mimic traditional home shopping networks.
• Strategic Developments: In 2024, the company restructured its subsidiaries, divesting Hanryu Bank, FNS, and Marine Island, and acquired Faning Korea, LLC to focus on the FANING platform.
• Leadership Changes: The company appointed Taehoon Kim as Interim CEO in February 2024, following the termination of the previous CEO, Changhuyk Kang.
• Future Outlook: The company plans to launch an upgraded FANING platform in 2025, aiming to improve user engagement and monetization strategies, with a focus on expanding the user base and diversifying revenue streams.
• Technological Advancements: FANING is enhancing its platform with AI-driven content curation, speech synthesis, nudity detection, and deepfake detection to improve user experience and security.
• Partnerships: The company has strategic partnerships with organizations like FACO and the Metaverse Alliance to promote Korean culture and develop innovative technologies.

Strategic Initiatives

• Leadership and Governance: The company implemented significant leadership changes and board realignment to improve governance and execution. A new management team with deeper public company experience was appointed, and the workforce was streamlined by transitioning core functions to outsourced development and operational support.
• Capital Management: The company's liquidity remained constrained due to negative operating cash flow and continued investment in the FANING platform. As of December 31, 2024, the company had current assets of $2,987 and current liabilities of $668,339, resulting in a working capital deficit. To address this, management initiated actions to secure additional funding through equity issuances and potential debt financing. In early 2025, the company executed a 1-for-20 reverse stock split to maintain its Nasdaq listing and enhance its appeal to institutional investors.
• Future Outlook: The company plans to raise new capital through equity financing and borrowing, expecting revenue growth and cost efficiency to improve following the release of the upgraded FANING platform in 2025. Management believes that the launch of the upgraded FANING platform and recent operational realignments provide a foundation for improved performance. The company aims to secure long-term sustainability by expanding the user base, diversifying revenue streams, and maintaining tight cost controls.

Challenges and Risks

• Financial Challenges: The company faces significant financial challenges, having incurred substantial losses since inception, with a net loss of approximately $6.2 million for the year ended December 31, 2024. The accumulated deficit as of December 31, 2024, was approximately $37.9 million. The company's auditor has raised substantial doubt about its ability to continue as a going concern due to recurring losses, accumulated deficit, and negative working capital.
• Capital Dependency: The company is dependent on raising additional capital to sustain operations, which may not be available on favorable terms. Future equity financing could dilute existing stockholders, and the company may incur substantial costs in pursuing additional capital.
• Operational Risks: The company’s limited operating history and the rapid evolution of its business model may not achieve expected results. The company also faces significant competition in the social media platform and content creation industry, which may impact its ability to attract and retain users and generate revenue.
• Regulatory Risks: The company is subject to complex and evolving laws regarding privacy, data protection, and digital assets. Changes in these regulations could adversely affect the company's operations and financial results. The company also faces potential liabilities from legal claims based on the nature and content of materials it creates or distributes.
• Market Risks: The company is exposed to foreign currency exchange rate fluctuations, particularly between the Korean Won and the U.S. dollar, which may adversely affect its financial results. The company also faces risks related to geopolitical tensions in Korea, which could impact its business operations and financial condition.

SEC Filing: Global Interactive Technologies, Inc. [ HRYU ] - 10-K - Apr. 29, 2025