NOTE 5 — SOFTWARE

The Company acquired the software through an asset transfer agreement with its former subsidiary, Hanryu Bank Co., Ltd., from which it sold all equity interest in December 2024, and through the transfer of the Faning application. The Company recognized the acquisition cost of $4,940,000 based on the appraised value determined by an independent valuation firm.

This software has been accounted for as an intangible asset in accordance with ASC 350 – Intangibles—Goodwill and Other.

The software is being amortized on a straight-line basis over its estimated useful life of 5 years. Amortization expense related to the software is recognized in operating expenses in the consolidated statements of operations.

The Company reviews the software for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. During the year ended December 31, 2025, management identified impairment indicators, including the Company’s limited revenue generation from the Faning platform, continuing operating losses, and early-stage commercialization status. As a result, the Company evaluated the recoverability of the software and recognized an impairment loss of $1,019,611 for the year ended December 31, 2025. The impairment loss is included in other expense in the consolidated statements of operations.

During the six months ended June 30, 2026, management identified indicators of impairment related to the FANING platform, including continued minimal revenue generation, continuing operating losses, lower-than-expected commercialization activities, a revised commercialization timeline, and the need for additional financing to execute the Company’s business plan. As a result, management performed a recoverability assessment pursuant to ASC 360-10 for the Faning asset group, which consists primarily of the Faning software intangible asset and the related right-of-use asset utilized in its operations.

Under ASC 360, management first evaluated whether the carrying amount of the asset group was recoverable based on the estimated undiscounted future cash flows expected to result from the use and eventual disposition of the asset group. Based on management’s analysis, the aggregate undiscounted future cash flows exceeded the carrying amount of the asset group. Accordingly, the asset group passed the recoverability test and no impairment loss was recognized during the three and six months ended June 30, 2026.

The recoverability analysis was based on management’s updated operating forecast and included significant assumptions regarding future commercialization of the Faning platform, including projected user acquisition beginning in fiscal year 2027, estimated customer acquisition costs, monthly active user conversion rates, user retention, and monetization assumptions. Because the platform has generated minimal revenue since acquisition, these assumptions required significant management judgment and are inherently uncertain. The forecast also assumes the Company’s ability to obtain additional financing beyond the June 2026 private placement to execute its commercialization strategy.

Compared with the assumptions utilized in the Company’s December 31, 2025 impairment assessment, management revised its forecast to reflect an approximate twelve-month delay in commercialization and revenue generation. The delay reduced expected near-term cash flows and was a significant factor in management’s decision to perform an interim recoverability analysis.

Although management estimated the fair value of the Faning software intangible asset to be approximately $2.2 million as of June 30, 2026, compared with its carrying amount of approximately $2.7 million, no impairment charge was recognized. Under ASC 360, impairment is recognized only if the carrying amount of the asset group exceeds the sum of its estimated undiscounted future cash flows. Because the estimated undiscounted future cash flows exceeded the carrying amount of the asset group, the Company concluded the asset group was recoverable and did not proceed to the impairment measurement step.

Management’s recoverability conclusion is sensitive to assumptions regarding projected user acquisition, monthly active user conversion rates, user engagement, and monetization. A meaningful reduction in projected user growth or monetization relative to management’s forecast would cause estimated undiscounted future cash flows to no longer exceed the carrying amount of the asset group. Under such circumstances, management estimates that an impairment charge could range from approximately $1.2 million to $2.3 million, depending on the estimated fair value of the asset group at the time of testing.

GLOBAL INTERACTIVE TECHNOLOGIES, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

NOTE 5 — SOFTWARE (cont.)

The carrying value of software consisted of the following:

SCHEDULE OF SOFTWARE ASSETS AND DETERMINED

Amortization expense related to the software was $189,316 and $378,632 for the three and six months ended June 30, 2026, respectively, compared to $258,603 and $508,551 for the three and six months ended June 30, 2025, respectively, and $1,021,192 for the year ended December 31, 2025. The Company did not recognize an impairment loss during the three and six months ended June 30, 2026, compared to $1,019,611 for the year ended December 31, 2025. Following recognition of the impairment loss, the remaining carrying value of the software intangible asset will be amortized on a straight-line basis over its remaining estimated useful life. The Company will continue to evaluate the software asset for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.

As of June 30, 2026, the software had a remaining useful life of approximately 3.5 years. Future estimated amortization expense related to the software intangible asset is expected to be as follows:

 SCHEDULE OF AMORTIZATION EXPENSE