NOTE 6 — LEASE

The Company uses approximately 19,200 square feet of office space at the Seoul Marina free of charge. Although there is no formal lease agreement, the Company determined that the ASC 842 accounting standard applies and recognized the fair value of the rent-free use of the property through May 2031 as a right-of-use (ROU) asset, with corresponding lease expense recognized in the statement of operations.

At the time of initial acquisition from Seoul Marina Co., Ltd. “SMC” in July 2021, the Company used the following assumptions:

Based on the assumptions outlined, the Company calculated the present value of 10 years of free rent to be $2,775,512 and recognized it as a long-term right-of-use (ROU) asset as of September 30, 2021. Since the space was provided free of charge, no lease liability was recognized. The ROU asset was amortized at approximately $23,000 per month over the 10-year lease term.

As the Company initially allocated $2,935,658 to the SMC receivable and leasehold rights, an impairment loss of $158,278 was recognized on the ROU asset as of December 31, 2021.

In December 2024, the Company sold its entire equity interest in Hanryu Bank Co., Ltd. (“HBC”), a subsidiary that held the rent-free rights to the Seoul Marina building. However, through an asset transfer agreement between the Company and HBC, the Company acquired the rent-free rights to the Seoul Marina building. The transfer amount was based on the net book value of the ROU asset as of the contract date and was offset against the Company’s outstanding loan receivable. As of June 30, 2026 and December 31, 2025, the carrying amounts of the ROU asset were $1,067,348 and $1,264,546, respectively. Lease expense related to the ROU asset was $54,945 and $111,273 for the three and six months ended June 30, 2026, respectively, and $58,742 and $115,519 for the three and six months ended June 30, 2025, respectively.

GLOBAL INTERACTIVE TECHNOLOGIES, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

NOTE 6 — LEASE (cont.)

The carrying amount of the ROU asset consisted of the following:

 SCHEDULE OF AMOUNT OF OPERATING LEASE RIGHT TO USE OF ASSET

The ROU asset is a KRW-denominated asset of the Company’s Korean subsidiary. It is translated into U.S. dollars at the exchange rate in effect at each balance sheet date, lease expense is translated at the average exchange rates in effect during the period, and the resulting translation adjustment is included in accumulated other comprehensive income (loss). The carrying amount reflects the change in the exchange rate from KRW 1,434.90 per U.S. dollar at December 31, 2025 to KRW 1,545.46 per U.S. dollar at June 30, 2026.

During the three months ended June 30, 2026, the Company determined that the ROU asset as of March 31, 2026 had been translated at an exchange rate that did not reflect the March 31, 2026 closing rate, which overstated the ROU asset and accumulated other comprehensive income (loss) by $58,361. The correction was recorded within the currency translation adjustment for the three months ended June 30, 2026 as an out-of-period adjustment. It had no effect on net loss, loss per share or cash flows for any period, and management concluded that the misstatement was not material to any previously issued financial statements.

As of June 30, 2026, the remaining term of the arrangement was approximately 4.9 years, ending in May 2031. Because the Company is not required to make lease payments under the arrangement, no lease liability was recognized as of June 30, 2026 or December 31, 2025.