United States securities and exchange commission logo
January 13, 2023
Chang-Hyuk Kang
Chief Executive Officer
Hanryu Holdings, Inc.
160, Yeouiseo-ro
Yeongdeungpo-gu, Seoul
Republic of Korea 07231
Re: Hanryu Holdings,
Inc.
Amendment No. 5 to
Draft Registration Statement on Form S-1
Submitted December
28, 2022
CIK No. 001911545
Dear Chang-Hyuk Kang:
We have reviewed your amended draft registration statement and
have the following
comments. In some of our comments, we may ask you to provide us with
information so we
may better understand your disclosure.
Please respond to this letter by providing the requested
information and either submitting
an amended draft registration statement or publicly filing your
registration statement on
EDGAR. If you do not believe our comments apply to your facts and
circumstances or do not
believe an amendment is appropriate, please tell us why in your
response.
After reviewing the information you provide in response to these
comments and your
amended draft registration statement or filed registration statement, we
may have additional
comments. References to our prior comments refer to our letter dated
December 22, 2022.
Amendment No. 5 to Draft Registration Statement on Form S-1
Prospectus Summary
Financial, page 4
1. We note from your
revised disclosure in response to prior comment 4 that you have no
advertising
revenue as of September 30, 2022. Considering advertising is not your only
source of revenue, and
as you have recognized revenue to date in fiscal 2022, please
revise here to discuss
the type of revenue generated for the period presented.
Chang-Hyuk Kang
FirstName LastNameChang-Hyuk Kang
Hanryu Holdings, Inc.
Comapany
January 13,NameHanryu
2023 Holdings, Inc.
January
Page 2 13, 2023 Page 2
FirstName LastName
Management's Discussion and Analysis of Financial Condition and Results of
Operations
Key Performance Indicators ("KPIs"), page 59
2. Please explain and revise to clarify why ARPU, which is calculated
based on total
revenue, was zero in the first three quarters of fiscal 2022,
particularly considering you
generated revenue during the quarter ended September 30, 2022.
Components of Results of Operations, page 60
3. We note your revised disclosures where you state that you "intend" to
generate
revenue from retail and marketing services. Please revise to clarify
that you have
generated revenue from these revenue sources. Further, you refer to
Hanryu Times and
Hanryu Bank as "affiliated entities." Revise throughout the filing to
refer to these entities
as your subsidiaries. If "affiliated entities" refers to entities
other than your subsidiaries,
please identify each entity and describe your relationship to each.
Results of Operations
Revenue, page 62
4. We note your revised disclosures in response to prior comment 9.
Please further clarify, if
true, that the $788,084 generated from "advertising sales" in the nine
months ended
September 30, 2022 was from the marketing services provided to the
South Korean
company.
Liquidity and Going Concern, page 66
5. Please disclose the minimum period of time you will be able to conduct
your planned
operations using currently available resources without regard to the
proceeds you expect
to receive from this offering. Refer to Item 303(b) of Regulation S-K.
Condensed Consolidated Statements of Operations, page F-3
6. In response to prior comment 14, you state there was no recorded cost
of revenue related
to the marketing services, however, you disclose here that cost of
revenue includes all
direct labor, materials, telecommunications, printing, etc. As it
would appear these
type of costs were incurred to provide the marketing services, such as
the production of
marketing materials and video content and promotion of events, please
explain why such
costs are not reflected as cost of revenue, or revise.
Chang-Hyuk Kang
FirstName LastNameChang-Hyuk Kang
Hanryu Holdings, Inc.
Comapany
January 13,NameHanryu
2023 Holdings, Inc.
January
Page 3 13, 2023 Page 3
FirstName LastName
Notes to Condensed Consolidated Financial Statements
Note 2 - Significant Accounting Policies
Revenue Recognition, page F-11
7. We note your response to prior comment 15. As previously requested,
please revise here
to include a discussion of your revenue recognition policy related to
marketing services,
including the type of services provided and how you determine when the
related revenue
is recognized.
Notes to Consolidated Financial Statements
Note 9 - Investments, page F-61
8. We note your response to prior comment 19 and your disclosures on page
F-61,
which state that for the SMC right you applied ASU 2016-01 in
determining that it should
be recorded as a "long-term investment." Please provide us with a
detailed analysis that
specifies the specific section of the codification that was updated by
ASU 2016-01 and the
specific guidance in ASC 325, which you referenced in your October 28,
2022 response
letter, that you applied in determining that the SMC right should be
recognized as a "long-
term investment," or tell us any other accounting guidance considered
and how you
applied such guidance.
You may contact Melissa Kindelan, Senior Staff Accountant, at (202)
551-3564 or
Kathleen Collins, Accounting Branch Chief, at (202) 551-3499 if you have
questions regarding
comments on the financial statements and related matters. Please contact Edwin
Kim, Staff
Attorney, at (202) 551-3297or Larry Spirgel, Office Chief, at (202) 551-3815
with any other
questions.
Sincerely,
Division of
Corporation Finance
Office of
Technology
cc: Matthew Ogurick, Esq.