NOTE 9 — 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 Condensed Consolidated balance sheet for short-term financial instruments, including cash and cash equivalents, short-term loans, accounts receivable, prepaid expenses, short-term borrowings, accrued expenses and other current liabilities approximate their fair values due to the short maturities of these instruments.

GLOBAL INTERACTIVE TECHNOLOGIES, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

NOTE 9 — FAIR VALUE MEASUREMENTS (cont.)

Financial Items Measured at Fair Value on a Nonrecurring Basis

There are no financial assets or liabilities measured at fair value on a nonrecurring basis as of June 30, 2026 and December 31, 2025, other than the measurement at issuance of the Pre-Funded Warrants and Common Stock Warrants issued on June 29, 2026, which was performed solely to allocate the proceeds of the private placement between the two equity-classified instruments and is described in Note 17.

Non-financial Items 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, which is included in other expense in the consolidated statements of operations.

The fair value measurements related to the software impairments were based on significant unobservable inputs and are classified as Level 3 measurements 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

GLOBAL INTERACTIVE TECHNOLOGIES, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

NOTE 9 — FAIR VALUE MEASUREMENTS (cont.)

Valuation Technique and Significant Unobservable Inputs (Level 3)

The fair value of the Faning software intangible asset used in the December 31, 2025 impairment measurement 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 forecast period through fiscal 2029, 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 measurement relied on significant unobservable inputs, including projected revenue, royalty rate, discount rate, conversion rates, and assumptions regarding future commercialization and monetization of the platform. The significant unobservable inputs included a royalty rate of 19.9%, a discount rate of 51.2%, a subscription conversion rate of 2.1% of monthly active users, and a monthly active user conversion rate of 55.0%.

The following table summarizes the significant unobservable inputs used in the Level 3 fair value measurements 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. Projected user acquisition, monthly active user conversion, monetization rates, and customer acquisition costs significantly affect expected revenue and cash flow forecasts. A decline in projected user engagement or monetization levels, delays in commercialization activities, or the inability to obtain additional financing required to execute the current business plan could result in materially lower fair value estimates and increase the likelihood of future impairment charges.

June 30, 2026 Recoverability Assessment

During the six months ended June 30, 2026, management identified additional impairment indicators and performed a recoverability assessment of the Faning asset group under ASC 360. The asset group consists primarily of the Faning software intangible asset and the related right-of-use asset utilized in its operations.

The estimated undiscounted future cash flows of the Faning asset group exceeded its carrying amount. Accordingly, the asset group was considered recoverable, the Company did not proceed to the impairment measurement step, and no impairment loss was recognized during the three and six months ended June 30, 2026.

As supplemental information in evaluating the asset, management estimated that the fair value of the software intangible asset was approximately $2.2 million as of June 30, 2026, compared with its carrying amount of approximately $2.7 million. This estimate did not result in an impairment charge because ASC 360 requires the asset group to first fail the undiscounted cash flow recoverability test before an impairment loss is measured.

The June 30, 2026 analysis reflected an approximately twelve-month delay in expected commercialization and revenue generation compared with the assumptions used at December 31, 2025. The analysis included significant assumptions regarding projected user acquisition beginning in fiscal year 2027, customer acquisition costs, monthly active-user conversion rates, user retention, and monetization. The analysis also assumes that the Company will obtain additional financing beyond the June 2026 private placement to execute its commercialization strategy. Because the Faning platform has generated minimal revenue since acquisition, these assumptions involve significant judgment and are subject to substantial uncertainty.

Additional information regarding the impairment indicators, recoverability assessment, significant assumptions, and sensitivity analysis is included in Note 5.

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 June 30, 2026 and December 31, 2025.

GLOBAL INTERACTIVE TECHNOLOGIES, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements

NOTE 9 — FAIR VALUE MEASUREMENTS (cont.)

Nonfinancial Items Measured at Fair Value on a Nonrecurring Basis

The fair value of long-lived assets is measured whenever the carrying value of a long-lived asset or asset group is not recoverable on an undiscounted cash flow basis. Except for the intangible asset impairments disclosed in Note 5 and above, no impairment was recognized for long-lived assets as of June 30, 2026 and December 31, 2025.