SIGNIFICANT ACCOUNTING POLICIES (Policies) |
6 Months Ended | |||||||||||||||||||||||||||
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Jun. 30, 2026 | ||||||||||||||||||||||||||||
| Accounting Policies [Abstract] | ||||||||||||||||||||||||||||
| Principles of Consolidation | Principles of Consolidation
The consolidated financial statements include the accounts of Global Interactive Technologies, Inc. and its wholly owned subsidiary, FANING KOREA, LLC. All significant intercompany transactions and balances have been eliminated in consolidation.
Changes in the Company’s ownership interest in a subsidiary that do not result in a loss of control are accounted for as equity transactions.
GLOBAL INTERACTIVE TECHNOLOGIES, INC. AND SUBSIDIARIES Notes to Condensed Consolidated Financial Statements
NOTE 2 — SIGNIFICANT ACCOUNTING POLICIES (cont.)
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| Foreign Currency | Foreign Currency
The functional currency of the Company’s Korean subsidiary is the KRW, and the Company’s reporting currency is the U.S. dollar. Assets and liabilities are translated into U.S. dollars at the exchange rate in effect at each balance sheet date, stockholders’ equity is translated at historical exchange rates, and revenues and expenses are translated at the average exchange rates for the period. The resulting translation adjustments are included in accumulated other comprehensive income (loss) in the consolidated balance sheets as of June 30, 2026 and December 31, 2025. The exchange rate was KRW 1,545.46 per U.S. dollar at June 30, 2026 and KRW 1,434.90 per U.S. dollar at December 31, 2025, and the average exchange rates for the three and six months ended June 30, 2026 were KRW 1,501.56 and KRW 1,483.05 per U.S. dollar, respectively. Cash flows are also translated at average exchange rates for the period; therefore, amounts reported on the statement of cash flows will not necessarily agree with changes in the corresponding balances on the consolidated balance sheets.
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| Use of Estimates | Use of Estimates
The preparation of the Company’s consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosures of contingent assets and liabilities at the date of the financial statements, as well as the reported amounts of revenues and expenses during the reporting period.
Significant estimates and assumptions include:
Management evaluates these estimates on an ongoing basis using historical experience and various other assumptions believed to be reasonable under the circumstances. Actual results may differ materially from these estimates and assumptions.
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| Cash and Cash Equivalents | Cash and Cash Equivalents
The Company considers all highly liquid investments with maturities of three months or less at the date of purchase to be cash equivalents. The Company maintains its cash in bank deposit accounts which, at times, may exceed the federal insurance limit.
GLOBAL INTERACTIVE TECHNOLOGIES, INC. AND SUBSIDIARIES Notes to Condensed Consolidated Financial Statements
NOTE 2 — SIGNIFICANT ACCOUNTING POLICIES (cont.)
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| Accounts Receivable | Accounts Receivable
Accounts receivables are recorded at the invoiced amount and do not bear interest. Amounts collected on trade accounts receivable are included in net cash provided by operating activities in the consolidated statements of cash flows. The Company maintains an allowance for credit losses for estimated losses inherent in its accounts receivable portfolio. In establishing the required allowance, management considers historical losses adjusted to take into account current market conditions and customers’ financial condition in dispute, and the current receivables aging and current payment patterns. The Company reviews its allowance for credit losses quarterly. Past-due balances over 90 days and over a specified amount are reviewed individually for collectability. Account balances are written off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. The Company recorded the allowance of $0 on the accompanying consolidated balance sheets as of June 30, 2026 and December 31, 2025. The Company does not have any off-balance-sheet credit exposure related to its customers.
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| Non-Trade Receivables | Non-Trade Receivables
Non-trade receivables are recorded at the invoiced amount and do not bear interest. Amounts collected on non-trade receivables are included in net cash provided by operating activities in the consolidated statements of cash flows. The Company maintains an allowance for doubtful accounts for estimated losses inherent in its non-trade receivables portfolio. In establishing the required allowance, management considers historical losses adjusted to take into account current market conditions and customers’ financial condition in dispute, and the current receivables aging and current payment patterns. The Company reviews its allowance for doubtful accounts quarterly. Past-due balances over 90 days and over a specified amount are reviewed individually for collectability. Account balances are written off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. The Company recorded the allowance of $0 on the accompanying consolidated balance sheets as of June 30, 2026 and December 31, 2025. The Company does not have any off-balance-sheet credit exposure related to its customers.
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| Revenue Recognition | Revenue Recognition
The Company recognizes revenue in accordance with ASC 606, Revenue from Contracts with Customers. Revenue is recognized when control of promised goods or services is transferred to customers in an amount that reflects the consideration the Company expects to receive in exchange for those goods or services.
The Company’s current and anticipated revenue sources primarily relate to the FANING platform and related digital services, including subscriptions, in-app purchases, advertising services, digital platform services, user engagement services, content-related services, commissions, and other platform-based monetization activities.
Revenue is recognized when the applicable performance obligations are satisfied. For subscription-based services, revenue is recognized over the subscription period. Revenue from in-app purchases, digital engagement services, advertising, platform services, and content-related services is generally recognized at the point in time or over the period in which the applicable services are provided. Amounts billed or collected in advance of satisfying performance obligations are recorded as deferred revenue.
The Company evaluates whether it acts as principal or agent in revenue transactions in accordance with ASC 606-10-55, Principal versus Agent Considerations. Revenue is reported on a gross basis when the Company controls the promised goods or services prior to transfer to the customer and on a net basis when the Company acts as an agent arranging for goods or services to be provided by another party.
For the three and six months ended June 30, 2026, the Company recognized revenue of $126 and $222, respectively, compared to $29 for each of the three and six months ended June 30, 2025, primarily related to subscription and in-app purchase activity on the FANING platform.
GLOBAL INTERACTIVE TECHNOLOGIES, INC. AND SUBSIDIARIES Notes to Condensed Consolidated Financial Statements
NOTE 2 — SIGNIFICANT ACCOUNTING POLICIES (cont.)
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| Cost of Revenue | Cost of Revenue
Cost of revenue consists of costs directly attributable to revenue-generating activities. For the periods presented, the Company did not incur any costs that were directly attributable to revenue-generating activities and, accordingly, no cost of revenue was recorded. Costs associated with the maintenance and operation of the Company’s platform, including hosting and infrastructure costs, are recorded within general and administrative expenses as incurred. The Company will classify costs directly attributable to revenue-generating activities as cost of revenue when such costs are incurred.
Cost of revenue is recognized as the related goods or services are delivered or provided to customers.
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| Capitalized Software | Capitalized Software
The Company records software acquired through asset acquisitions at cost. Acquired software is accounted for as a finite-lived intangible asset and is amortized on a straight-line basis over its estimated useful life. The Company evaluates software assets for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable.
Amortization expense related to capitalized software is included in operating expenses in the consolidated statements of operations for the three and six months ended June 30, 2026 and 2025.
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| Property, Plant and Equipment | Property, Plant and Equipment
Property, plant and equipment are carried at cost (see Note 4). Depreciation expense is provided over the estimated useful lives of the assets using the straight line method for vehicles and the declining balance method for fixtures and equipment. A summary of the estimated useful lives is as follows:
Maintenance and repairs are charged to expense as incurred, while any additions or improvements are capitalized.
The Company reviews property and equipment for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.
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| Impairment of Long-Lived Assets | Impairment of Long-Lived Assets
The Company reviews operating lease right-of-use assets and finite-lived intangible assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Recoverability is measured by comparing the carrying amount of the asset to the estimated undiscounted future cash flows expected to result from the use and eventual disposition of the asset. If the carrying amount is not recoverable, an impairment loss is recognized for the amount by which the carrying amount exceeds the asset’s estimated fair value. Impairment losses on long-lived assets held and used are presented within other expenses in the consolidated statements of operations.
GLOBAL INTERACTIVE TECHNOLOGIES, INC. AND SUBSIDIARIES Notes to Condensed Consolidated Financial Statements
NOTE 2 — SIGNIFICANT ACCOUNTING POLICIES (cont.)
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| Concentrations of Credit Risk | Concentrations of Credit Risk
Cash and cash equivalents are financial instruments that potentially subject the Company to concentrations of credit risk. The Company may maintain deposits in financial institutions in excess of government insured limits. The Company believes that it is not exposed to significant credit risk as its deposits are held at financial institutions that management believes to be of high credit quality and the Company has not experienced any losses on these deposits. The Company is also potentially subject to concentrations of credit risk in its accounts receivable and loans. Credit risk with respect to receivables is limited due to the number of individuals comprising the Company’s customer base. Credit risk with respect to loans is limited since they are made principally related to the collaborative activities between the Company and loan holders. Since the Company is directly affected by the financial condition of its customers and loan holders, management carefully watches if any significant credit risks exist, and they will take actions to remove or mitigate such risks if there are any. The Company had accounts receivable balances of $18 and $46 as of June 30, 2026 and December 31, 2025, respectively. The Company believes that the credit risk related to accounts receivable is manageable and controllable as of June 30, 2026 and December 31, 2025. Generally, the Company does not require collateral or other securities to support its accounts receivable and loans.
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| Fair Value of Financial Instruments | Fair Value of Financial Instruments
The fair value of Company’s financial instruments, consisting of cash and cash equivalents, accounts receivable, accounts payable, accrued liabilities, debt receivables, debt payables approximate their recorded amounts due to their relatively short settlement terms.
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| Fair Value Measurements | Fair Value Measurements
The Company applies a three-level valuation hierarchy for fair value measurements. The categorization of assets and liabilities within the valuation hierarchy is based on the lowest level of input that is significant to the measurement of fair value.
A change to the level of an asset or liability within the fair value hierarchy is determined at the end of a reporting period.
GLOBAL INTERACTIVE TECHNOLOGIES, INC. AND SUBSIDIARIES Notes to Condensed Consolidated Financial Statements
NOTE 2 — SIGNIFICANT ACCOUNTING POLICIES (cont.)
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| Earnings (Loss) Per Share |
Basic earnings (loss) per share is computed by dividing the income or loss by the weighted-average number of outstanding shares of Common Stock for the applicable period. Diluted earnings (loss) per share is computed by dividing the income or loss by the weighted-average number of outstanding shares of Common Stock for the applicable period, including the dilutive effect of Common Stock equivalents. Potentially dilutive Common Stock equivalents primarily consist of warrants issued in connection with financings. The Company calculates net loss per share in accordance with FASB ASC Topic 260, Earnings Per Share. Shares issuable upon the exercise of pre-funded warrants for nominal consideration ($0.001 per share) are included in the weighted-average number of common shares outstanding used to compute basic net loss per share from the date of their issuance; the 1,092,896 shares underlying the Pre-Funded Warrants issued on June 29, 2026 (Note 17) added and weighted-average shares for the three and six months ended June 30, 2026, respectively. For the three and six months ended June 30, 2026 and 2025, the Company reported net losses and, accordingly, potential common shares were not included since such inclusion would have been anti-dilutive. Warrants to purchase and shares of Common Stock were excluded from the computation of diluted net loss per share at June 30, 2026 and 2025, respectively. As a result, our basic and diluted net loss per share are the same because the Company generated a net loss in all periods presented.
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| Lease | Lease
The Company evaluates contracts at inception to determine whether an arrangement contains a lease in accordance with ASC 842, Leases. Right-of-use (“ROU”) assets represent the Company’s right to use an underlying asset over the lease term and are recognized at commencement based on the terms of the arrangement.
The Company’s lease arrangement is classified as an operating lease. Because the arrangement does not require future lease payments, no lease liability has been recognized. Lease expense is recognized on a straight-line basis over the lease term.
The Company’s operating lease ROU asset is held by its Korean subsidiary, whose functional currency is the Korean won. The ROU asset is translated into U.S. dollars at exchange rates in effect at each balance sheet date, while lease expense is translated at average exchange rates for the applicable period. Resulting translation adjustments are recorded in accumulated other comprehensive income (loss) in accordance with ASC 830. ROU assets are evaluated for impairment under the long-lived asset guidance of ASC 360.
Refer to Note 6 for additional disclosures related to the Company’s lease.
GLOBAL INTERACTIVE TECHNOLOGIES, INC. AND SUBSIDIARIES Notes to Condensed Consolidated Financial Statements
NOTE 2 — SIGNIFICANT ACCOUNTING POLICIES (cont.)
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| Recently Issued Accounting Standards | Recently Issued Accounting Standards
In November 2024, the FASB issued ASU 2024-03 (as clarified by ASU 2025-01 in January 2025), Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40). This standard requires public business entities to disclose disaggregated information about specific categories underlying certain income statement expense line items (such as employee compensation, depreciation, and amortization) in the notes to the financial statements. The amendments are effective for annual reporting periods beginning after December 15, 2026. The Company is currently evaluating the potential impact of adopting this standard on its financial statement disclosures.
The Company has evaluated, or is in the process of evaluating, the potential impact of these new accounting standards on its consolidated financial statements and related disclosures. Based on its current assessment, management does not expect the adoption of these standards to have a material impact on the Company’s financial position, results of operations, or cash flows. The Company will continue to monitor developments and evaluate the impact of these standards, including any additional interpretive guidance that may be issued prior to adoption. |
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