NOTE 11 — FAIR VALUE MEASUREMENTS

Fair value has been determined on a basis consistent with the requirements of FASB ASC Topic 825, Financial Instruments, and the Company adopted on a prospective basis required provisions of FASB ASC Topic 820, Fair Value Measurement.

Financial Items Measured at Fair Value on a Recurring Basis

The carrying amounts reported in the consolidated balance sheet for short-term financial instruments, including cash and cash equivalents, short-term loans, accounts receivable, prepaid expenses, short-term borrowings, accrued expense and other current liabilities due to the short maturities of these instruments.

Assets and liabilities measured at fair value on a recurring basis as of December 31, 2025 and December 31, 2024 are summarized in the table below.

 SCHEDULE OF FAIR VALUE OF ASSETS AND LIABILITIES MEASURED AT FAIR VALUE ON RECURRING BASIS

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

NOTE 11 — FAIR VALUE MEASUREMENTS (cont.) 

Financial instruments measured at fair value on a nonrecurring basis

The Company had no financial assets or financial liabilities measured at fair value on a nonrecurring basis as of December 31, 2025 or December 31, 2024.

Non-financial assets measured at fair value on a nonrecurring basis

The Company’s long-lived assets, including capitalized software, operating lease right-of-use assets, and other finite-lived assets, are measured at fair value on a nonrecurring basis when events or changes in circumstances indicate that the carrying amount may not be recoverable.

During the year ended December 31, 2025, the Company identified impairment indicators related to its capitalized software asset, including limited current revenue generation, continuing operating losses, and revised expectations regarding the timing of commercialization of the Faning platform. As a result, the Company evaluated the recoverability of the asset and recognized an impairment loss of $1,019,611 during the year ended December 31, 2025. The impairment loss is included in other expense in the consolidated statements of operations.

The fair value measurement related to the software impairment was based on significant unobservable inputs and is classified as a Level 3 measurement within the fair value hierarchy.

The following table summarizes nonfinancial assets measured at fair value on a nonrecurring basis:

SCHEDULE OF FAIR VALUE OF ASSETS AND LIABILITIES MEASURED AT FAIR VALUE ON NON-RECURRING BASIS

There were no transfers between Level 1, Level 2, and Level 3 during the years ended December 31, 2025 and 2024.

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

NOTE 12 — FAIR VALUE MEASUREMENTS

Valuation Technique and Significant Unobservable Inputs (Level 3)

The fair value of the Faning software intangible asset as of December 31, 2025 was estimated using the Relief-from-Royalty (RfR) method, an income approach. Under the Relief-from-Royalty method, fair value is measured as the present value of the after-tax royalty payments that the Company would hypothetically be required to pay to license the Asset from a third party, assuming the Company did not own it. The hypothetical royalty payments were projected over a discrete four-year forecast period (FY2026 through FY2029), tax-effected at an assumed statutory rate, and discounted to present value using a risk-adjusted discount rate. A mid-year discounting convention was applied to reflect the assumption that cash flows are received evenly throughout each year.

The fair value measurement is categorized within Level 3 of the fair value hierarchy because it relies on significant unobservable inputs, including projected revenues, royalty rate, discount rate, effective tax rate, and management assumptions regarding future monetization of the platform. The forecast was prepared by management based on the early-stage nature of the platform, observed user-acquisition economics, and expected pricing and conversion characteristics of comparable consumer social platforms.

The following table summarizes the significant unobservable inputs used in the Level 3 fair value measurement of the Faning software intangible asset as of December 31, 2025:

SCHEDULE OF UNOBSERVABLE INPUTS IN LEVEL 3 FAIR VALUE MEASUREMENT

The projected revenue assumptions incorporate management’s estimates of user growth, user retention, conversion rates, subscription pricing, in-app purchase activity, advertising monetization, and customer acquisition trends.

The fair value measurement is sensitive to changes in significant unobservable inputs. Increases in projected revenues, royalty rate, subscription conversion rate, or MAU conversion rate would increase the estimated fair value, while increases in the discount rate or effective tax rate would decrease the estimated fair value.

Reconciliation to Impairment Loss

Application of the Relief-from-Royalty method resulted in an estimated fair value for the Faning software intangible asset of $3,029,061 as of December 31, 2025. Because the indicated fair value was below the Asset’s pre-impairment carrying amount, the Company recognized a non-cash impairment loss of $1,019,611 during the year ended December 31, 2025 in accordance with ASC 350-30-35. There were no impairment losses recognized on the Asset during the year ended December 31, 2024.

Nonfinancial Items Measured at Fair Value on a Recurring Basis

There are no nonfinancial assets measured at fair value on a recurring basis as of December 31, 2025 and December 31, 2024.

Nonfinancial Items Measured at Fair Value on a Nonrecurring Basis

The fair value of long-lived assets is measured whenever the carrying value of long-lived asset or asset group is not recoverable on an undiscounted cash flow basis. Except for the intangible asset impairment disclosed in Note 11, no impairment is recognized for long-lived assets as of as of December 31, 2025 and December 31, 2024.