NOTE 2 — SIGNIFICANT ACCOUNTING POLICIES

A summary of the significant accounting policies followed by the Company in the preparation of the accompanying consolidated financial statements follows:

Warrant Accounting Policy

The Company accounts for warrants in accordance with ASC 815, Derivatives and Hedging. Warrants are evaluated at issuance to determine whether they should be classified as equity or liabilities based on the applicable accounting criteria. Warrants that meet equity classification requirements are recorded in additional paid-in capital within stockholders’ equity and are not subsequently remeasured. Warrants that do not meet equity classification criteria are recorded as derivative liabilities at fair value and are remeasured at each reporting date, with changes in fair value recognized in earnings.

The fair value of warrant liabilities is estimated using an appropriate option-pricing model, such as the Black-Scholes option-pricing model, which considers assumptions including expected volatility, risk-free interest rate, expected term, and dividend yield of the Company’s common stock.

Debt Modifications and Extinguishments

The Company accounts for debt modifications and extinguishments in accordance with ASC 470-50, Debt—Modifications and Extinguishments. The Company evaluates whether a modification of debt terms represents a substantial modification or an extinguishment of the original debt instrument. A modification is accounted for as a continuation of the original debt when the change in the present value of cash flows is less than 10 percent, or when qualitative factors indicate that the original debt has not been substantially modified.

When a debt modification is determined to be an extinguishment, the Company derecognizes the existing debt liability and recognizes the new liability or equity consideration transferred at fair value. The difference between the carrying amount of the extinguished debt and the fair value of consideration transferred is recognized as a gain or loss on debt extinguishment in the consolidated statements of operations.

Consideration transferred may include cash, common shares, or warrants. When equity instruments are issued in settlement of debt, the fair value of such instruments is measured based on the quoted market price of the Company’s common stock at the date of settlement, or other appropriate valuation techniques (such as option pricing models for warrants) if a quoted price is not readily available.

During the year ended December 31, 2025, the Company recognized debt extinguishment losses of $1,168,228 in connection with the settlement of certain outstanding indebtedness through the issuance of common stock and warrants. The Company determined that these transactions represented debt extinguishments as the terms of the modified agreements resulted in a substantial change (exceeding the 10 percent cash flow threshold) to the original debt instruments.

Principles of Consolidation

The consolidated financial statements include the accounts of Global Interactive Technologies, Inc. and its wholly owned subsidiary, FANING KOREA, LLC. All significant intercompany transactions and balances have been eliminated in consolidation.

Changes in the Company’s ownership interest in a subsidiary that do not result in a loss of control are accounted for as equity transactions.

Foreign Currency

The Company’s functional currency is KRW and the reporting currency is USD. The Company’s some accounting records are maintained in KRW, and translated into USD at year-end for the purposes of presentation. During the translation process, the year-end closing exchange rate is used for the valuation of all assets and liabilities, historical exchange rate is used to value stockholder’s equity, and the average exchange rate for the year is used for the calculation of the consolidated financial statements. The net impact of the translation into USD is included in the accumulated other comprehensive income (loss) of the Company’s consolidated balance sheet as of December 31, 2025 and December 31, 2024. During the year ended December 31, 2025, there was a fluctuation in the exchange rates ranging from KRW 1,289.40/USD $1 to KRW 1,470.00/USD $1. Also, cash flows are also translated at average translation rates for the periods, therefore, amounts reported on the statement of cash flows will not necessarily agree with changes in the corresponding balances on the consolidated balance sheets.

Use of Estimates

The preparation of the Company’s consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosures of contingent assets and liabilities at the date of the financial statements, as well as the reported amounts of revenues and expenses during the reporting period.

Significant estimates and assumptions include:

Management evaluates these estimates on an ongoing basis using historical experience and various other assumptions believed to be reasonable under the circumstances. Actual results may differ materially from these estimates and assumptions.

Cash and Cash Equivalents

The Company considers all highly liquid investments with maturities of three months or less at the date of purchase to be cash equivalents. As of December 31, 2025 and 2024, the Company had cash and cash equivalents of $6,990 and $2,352, respectively. The Company maintains its cash in bank deposit accounts which, at times, may exceed the federal insurance limit, and the balance of deposit accounts of the Company exceed the federal insurance limit as of December 31, 2024.

GLOBAL INTERACTIVE TECHNOLOGIES, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements

NOTE 2 — SIGNIFICANT ACCOUNTING POLICIES (cont.)

Accounts Receivable

Accounts receivables are recorded at the invoiced amount and do not bear interest. Amounts collected on trade accounts receivable are included in net cash provided by operating activities in the consolidated statements of cash flows. The Company maintains an allowance for doubtful accounts for estimated losses inherent in its accounts receivable portfolio. In establishing the required allowance, management considers historical losses adjusted to take into account current market conditions and customers’ financial condition in dispute, and the current receivables aging and current payment patterns. The Company reviews its allowance for doubtful accounts quarterly. Past-due balances over 90 days and over a specified amount are reviewed individually for collectability. Account balances are written off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. The Company recorded the allowance of $0 on the accompanying consolidated balance sheets as of December 31, 2025 and December 31, 2024. The Company does not have any off-balance-sheet credit exposure related to its customers.

Non-Trade Receivables

Non-trade receivables are recorded at the invoiced amount and do not bear interest. Amounts collected on non-trade receivables are included in net cash provided by operating activities in the consolidated statements of cash flows. The Company maintains an allowance for doubtful accounts for estimated losses inherent in its non-trade receivables portfolio. In establishing the required allowance, management considers historical losses adjusted to take into account current market conditions and customers’ financial condition in dispute, and the current receivables aging and current payment patterns. The Company reviews its allowance for doubtful accounts quarterly. Past-due balances over 90 days and over a specified amount are reviewed individually for collectability. Account balances are written off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. The Company does not have any off-balance-sheet credit exposure related to its customers.

Revenue Recognition

The Company recognizes revenue in accordance with ASC 606, Revenue from Contracts with Customers. Revenue is recognized when control of promised goods or services is transferred to customers in an amount that reflects the consideration the Company expects to receive in exchange for those goods or services.

The Company’s current and anticipated revenue sources primarily relate to the FANING platform and related digital services, including subscriptions, in-app purchases, advertising services, digital platform services, user engagement services, content-related services, commissions, and other platform-based monetization activities.

Revenue is recognized when the applicable performance obligations are satisfied. For subscription-based services, revenue is recognized over the subscription period. Revenue from in-app purchases, digital engagement services, advertising, platform services, and content-related services is generally recognized at the point in time or over the period in which the applicable services are provided. Amounts billed or collected in advance of satisfying performance obligations are recorded as deferred revenue.

The Company evaluates whether it acts as principal or agent in revenue transactions in accordance with ASC 606-10-55, Principal versus Agent Considerations. Revenue is reported on a gross basis when the Company controls the promised goods or services prior to transfer to the customer and on a net basis when the Company acts as an agent arranging for goods or services to be provided by another party.

For the years ended December 31, 2025 and 2024, the Company recognized revenue of $1,932 and $0, respectively, primarily related to service-based activities.

The Company presents revenue net of sales taxes, discounts, refunds, and other amounts collected on behalf of third parties. Historically, refunds and sales returns have not been material.

GLOBAL INTERACTIVE TECHNOLOGIES, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements

NOTE 2 — SIGNIFICANT ACCOUNTING POLICIES (cont.)

Cost of Revenue

Cost of revenue consists primarily of costs directly related to the Company’s revenue-generating activities, including platform service costs, third-party service fees, payment processing fees, hosting and infrastructure expenses, content-related costs, direct labor, telecommunication costs, travel, postage, vehicle charges, printing, training, and other direct costs associated with providing goods or services to customers. Amortization of capitalized software used in the Company’s platform is included in operating expenses and is not included in cost of revenue unless the related software amortization is directly attributable to revenue-generating activities. Cost of revenue also includes allocated indirect costs related to revenue-generating activities, such as supplies, utilities, office equipment rental, software, computers, and other office-related costs.

Cost of revenue is recognized as the related goods or services are delivered or provided to customers.

Capitalized Software

The Company capitalizes certain costs incurred to develop internal-use software when the preliminary project stage is completed, management has authorized and committed to funding the project, and it is probable that the project will be completed and used to perform the function intended. Capitalized software costs are amortized on a straight-line basis over their estimated useful lives once the software is ready for its intended use.

Amortization expense related to capitalized software is included in operating expenses in the consolidated statements of operations. For the years ended December 31, 2025 and 2024, amortization expense related to capitalized software was included in operating expenses.

Property Plant and Equipment

Property and equipment are stated at cost(see Note 5), less accumulated depreciation. Depreciation is computed using the declining balance method over the estimated useful lives of the related assets. A summary of the estimated useful lives is as follows:

 SCHEDULE OF ESTIMATED USEFUL LIVES

Maintenance and repairs are charged to expense as incurred, while additions and improvements that extend the useful lives of assets are capitalized.

The Company reviews property and equipment for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.

Impairment of Long-Lived Assets

The Company reviews operating lease right-of-use assets and finite-lived intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability is measured by comparing the carrying amount of the asset to the estimated undiscounted future cash flows expected to result from the use and eventual disposition of the asset. If the carrying amount is not recoverable, an impairment loss is recognized for the amount by which the carrying amount exceeds the asset’s estimated fair value.

Impairment of Capitalized Software

The Company reviews capitalized software and other long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of such assets may not be recoverable. If such indicators exist, the Company compares the carrying amount of the asset group to the undiscounted cash flows expected to be generated by the asset group. If the carrying amount is not recoverable, an impairment loss is recognized for the amount by which the carrying amount exceeds fair value.

Intangible assets consist of acquired software with a gross carrying amount of $4,917,543. The fair value of the software was initially determined using the income approach, specifically the discounted cash flow (“DCF”) method, based on projected earnings over a five-year period.

During 2025, the Company reassessed the software’s expected economic benefits based on current market conditions and actual operating performance, resulting in a revision of the remaining useful life from five years to four years. Accordingly, the Company recognized amortization expense of $1,021,192 for the year ended December 31, 2025, using the straight-line method. No amortization expense was recognized for the year ended December 31, 2024, as the software was acquired in December 2024.

In addition, the Company recognized an impairment loss of $1,019,611 for the year ended December 31, 2025, compared to $94,264 for the year ended December 31, 2024.

GLOBAL INTERACTIVE TECHNOLOGIES, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements

NOTE 2 — SIGNIFICANT ACCOUNTING POLICIES (cont.)

Concentrations of Credit Risk

Cash and cash equivalents are financial instruments that potentially subject the Company to concentrations of credit risk. The Company may maintain deposits in financial institutions in excess of government insured limits. The Company believes that it is not exposed to significant credit risk as its deposits are held at financial institutions that management believes to be of high credit quality and the Company has not experienced any losses on these deposits. The Company is also potentially subject to concentrations of credit risk in its accounts receivable and loans. Credit risk with respect to receivables is limited due to the number of companies comprising the Company’s customer base. Credit risk with respect to loans is limited since they are made principally related to the collaborative activities between the Company and loan holders. Since the Company is directly affected by the financial condition of its customers and loan holders, management carefully watch if any significant credit risks exist, and they will make actions to remove or mitigate such risks if there are any. As of December 31, 2025 and December 31, 2024, there were no outstanding accounts receivable balances. The Company believes that the credit risk related to accounts receivable is manageable and controllable as of December 31, 2025 and December 31, 2024. Generally, the Company does not require collateral or other securities to support its accounts receivable and loans.

Fair Value of Financial Instruments

The fair value of Company’s financial instruments, consisting of cash and cash equivalents, accounts receivable, accounts payable, accrued liabilities, debt receivables, debt payables approximate their recorded amounts due to their relatively short settlement terms.

Fair Value Measurements

The Company applies a three-level valuation hierarchy for fair value measurements. The categorization of assets and liabilities within the valuation hierarchy is based on the lowest level of input that is significant to the measurement of fair value.

The carrying amounts of the Company’s financial instruments, including cash and cash equivalents, accounts payable, accrued expenses, short-term borrowings, related-party borrowings, and other current assets and liabilities, approximate fair value due to the short-term nature of these instruments.

A change to the level of an asset or liability within the fair value hierarchy is determined at the end of a reporting period.

Earning (Loss) Per Share

Basic earning (loss) per share is computed by dividing the income or loss by the weighted-average number of outstanding shares of Common Stock for the applicable period. Diluted earning (loss) per share is computed by dividing the income or loss by the weighted-average number of outstanding shares of Common Stock for the applicable period, including the dilutive effect of Common Stock equivalents. Potentially dilutive Common Stock equivalents primarily consist of warrants issued in connection with financings. For purposes of computing both basic and diluted earning (loss) per share, income or loss shall exclude the income or loss attributable to the non-controlling interest. The Company calculates net loss per share in accordance with FASB ASC Topic 260, Earnings Per Share. Basic net loss per share amounts have been computed by dividing net loss excluded loss attributable to the non-controlling interest by the weighted-average number of common shares outstanding during the period. For the years ended December 31, 2025 and 2024, the Company reported net losses and, accordingly, potential common shares were not included since such inclusion would have been anti-dilutive. As a result, our basic and diluted net loss per share are the same because the Company generated a net loss in all periods presented.

GLOBAL INTERACTIVE TECHNOLOGIES, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements

NOTE 2 — SIGNIFICANT ACCOUNTING POLICIES (cont.)

Income Taxes

Deferred income tax assets and liabilities are determined based on differences between the financial statement carrying amounts and the tax bases of assets and liabilities and are measured using enacted tax rates and laws that will be in effect when the temporary differences are expected to reverse. The measurement of deferred tax assets is reduced, if necessary, by a valuation allowance for deferred tax assets that are not expected to be realized.

The Company accounts for income taxes in accordance with FASB ASC Topic 740, Income Taxes. A valuation allowance is provided when it is more likely than not that some or all of the deferred tax assets will not be realized.

As of December 31, 2025 and 2024, the Company had deferred tax assets primarily related to net operating loss carry forwards and other temporary differences. Due to the Company’s historical operating losses and uncertainty regarding future taxable income, management determined that it was more likely than not that the deferred tax assets would not be realized. Accordingly, the Company recorded a full valuation allowance against its deferred tax assets as of December 31, 2025 and 2024.

See Note 22 for more information.

The Company evaluates uncertain tax positions in accordance with ASC 740-10. The Company recognizes interest and penalties related to uncertain tax positions in income tax expense. As of December 31, 2025 and 2024, the Company had no uncertain tax positions requiring recognition or disclosure.

Lease

Under ASC 842, the determination of whether an arrangement is a lease is made at the lease’s inception and a contract is (or contains) a lease if it conveys the right to control the use of an identified asset for a period of time in exchange for consideration. Control is defined under the standard as having both the right to obtain substantially all of the economic benefits from use of the asset and the right to direct the use of the asset. Management only reassesses its determination if the terms and conditions of the contract are changed. Operating leases are included in operating lease right-of-use (“ROU”) assets, other current liabilities, and operating lease liabilities in our balance sheets. Finance leases are included in property and equipment, other current liabilities, and other long-term liabilities in our balance sheets.

ROU assets represent our right to use an underlying asset for the lease term, and lease liabilities represent our obligation to make lease payments. Operating lease ROU assets and liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. The Company uses the implicit rate when it is readily determinable. Since most of the Company’s leases do not provide an implicit rate, to determine the present value of lease payments, management uses the Company’s incremental borrowing rate based on the information available at lease commencement. Operating lease ROU assets also includes any lease payments made and excludes any lease incentives. Lease expense for lease payments is recognized on a straight-line basis over the lease term. Leases with an initial term of 12 months or less are not recorded on the balance sheet.

GLOBAL INTERACTIVE TECHNOLOGIES, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements

NOTE 2 — SIGNIFICANT ACCOUNTING POLICIES (cont.)

The Company has lease agreements with lease and non-lease components, which are generally accounted for separately with amounts allocated to the lease and non-lease components based on stand-alone prices or for which it has made an accounting policy election to account for these as a single lease component. For certain equipment leases, like vehicles, the Company accounts for the lease and non-lease components as a single lease. Refer to Note 8 for additional disclosures required as a result of the adoption of this new standard.

Recently Issued Accounting Standards

In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. This update requires public business entities to provide enhanced annual disclosures primarily focused on the rate reconciliation table and expanded disclosures for income taxes paid, disaggregated by federal, state, and foreign jurisdictions. For public business entities, the amendments are effective for annual periods beginning after December 15, 2024. The Company has evaluated this standard and determined that its adoption does not have a material impact on its consolidated financial statements and related disclosures, given the full valuation allowance recorded against its deferred tax assets.

In November 2024, the FASB issued ASU 2024-03 (as clarified by ASU 2025-01 in January 2025), Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40). This standard requires public business entities to disclose disaggregated information about specific categories underlying certain income statement expense line items (such as employee compensation, depreciation, and amortization) in the notes to the financial statements. The amendments are effective for annual reporting periods beginning after December 15, 2026. The Company is currently evaluating the potential impact of adopting this standard on its financial statement disclosures.

The Company has evaluated, or is in the process of evaluating, the potential impact of these new accounting standards on its consolidated financial statements and related disclosures. Based on its current assessment, management does not expect the adoption of these standards to have a material impact on the Company’s financial position, results of operations, or cash flows. The Company will continue to monitor developments and evaluate the impact of these standards, including any additional interpretive guidance that may be issued prior to adoption.