NOTE 12 — COMMITMENTS AND CONTINGENCIES

Legal Matters

Former Chief Financial Officer Employment Matter

The Company’s former Chief Financial Officer, who resigned on December 22, 2025, filed a complaint with the Seoul Eastern District Office of the Korean Ministry of Employment and Labor asserting claims for unpaid wages and severance pay. The named respondent in the complaint is an individual rather than the Company. At the request of the labor inspector, the Company’s Korean counsel has submitted a written legal opinion, and the matter is awaiting the inspector’s determination. Based on the advice of counsel, including Korean Supreme Court precedent under which the Labor Standards Act does not apply to executives in comparable positions, the Company believes that the alleged violations will not be substantiated. The Company has not recorded an accrual for this matter and does not expect its resolution to have a material effect on the Company’s financial position or results of operations.

Korean Securities and Futures Commission Matter

On November 6, 2024, the Securities and Futures Commission of the Republic of Korea (the “SFC”) imposed an administrative fine of KRW 142.1 million (approximately $0.1 million) on the Company, then named Hanryu Holdings, Inc., in connection with a failure to submit a securities registration statement for share issuances made to Korean investors between April and July 2023. The Company filed an objection with the SFC, which was dismissed on March 27, 2025, and is now seeking cancellation of the fine before the Seoul Administrative Court. The next hearing is scheduled for October 16, 2026, and a first-instance judgment is expected in the first half of 2027. The fine has not been paid pending the outcome of the proceedings. The Company believes that cancellation of the fine is probable and, accordingly, has not recorded an accrual for this matter as of June 30, 2026. If the cancellation action is ultimately unsuccessful, the Company would recognize a charge for the full amount of the fine, which represents the Company’s estimate of the reasonably possible loss for this matter.

Indemnification Agreements

The Company has entered into certain indemnification arrangements. As of June 30, 2026, no claims had been asserted, and no liability had been recognized related to these arrangements. Because any potential obligation is contingent upon future events, the Company is unable to estimate the maximum potential amount of future payments, if any, that may be required.

GLOBAL INTERACTIVE TECHNOLOGIES, INC. AND SUBSIDIARIES

Notes to Condensed Consolidated Financial Statements