Global Interactive Technologies, Inc 10-Q for FY2026 Q1
Global Interactive Technologies, Inc. (GITS)
About this 10-Q
Global Interactive Technologies, Inc filed this 10-Q on June 22, 2026, covering the quarter ended March 31, 2026 (FY2026 Q1).
Headline figures
Quarter ended March 31, 2026, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $96
- Net loss
- $496.99K
- compared with a net loss of $566.68K a year earlier
- Diluted EPS
- -$0.14
- compared with -$0.20 a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
For
the quarterly period ended
For the transition period from __________ to __________
Commission
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or other jurisdiction of incorporation or organization) |
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Employer Identification Number) |
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Registrant’s
telephone number, including area code:
Securities registered pursuant to Section 12(b) of the Act:
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The (Nasdaq Capital Market) |
Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
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has been subject to such filing requirements for the past 90 days.
Indicate
by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule
405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant
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Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
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| ☒ | Smaller reporting company | ||
| Emerging growth company |
If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying
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As of June 19, 2026, a total of shares of Class A Common Stock (par value $ per share) were issued and outstanding.
TABLE OF CONTENTS
| i |
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, that are based on our management’s beliefs and assumptions and on information currently available to management, and which statements involve substantial risk and uncertainties. All statements contained in this Quarterly Report on Form 10-Q other than statements of historical fact, including statements regarding our future operating results and financial position, our business strategy and plans, market growth and trends, and objectives for future operations are forward-looking statements. Forward- looking statements generally relate to future events or our future financial or operating performance. In some cases, you can identify forward- looking statements because they contain words such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “could,” “intends,” “target,” “projects,” “contemplates,” “believes,” “estimates,” “predicts,” “potential,” or “continue” or the negative of these words or other similar terms or expressions that concern our expectations, strategy, plans or intentions.
These risks and uncertainties include, among other things, the risk that we may not be able to successfully implement our growth strategy due to the following reasons;
| ● | our ability to continue as a going concern given that we have incurred recurring losses from operations, have a working capital deficiency, and our auditors have stated that substantial doubt exists about our ability to continue as a going concern; | |
| ● | our ability to obtain significant additional capital, which we may be unable to obtain and will require to continue as a going concern. | |
| ● | overall strength and stability of general economic conditions and of the social media platform and content creation industry in the United States and globally; | |
| ● | changes in consumer demand for, and acceptance of, our services, including our platform, as well as social media platforms in general; | |
| ● | changes in the competitive environment, including adoption of technologies, services and products that compete with our own; | |
| ● | our expectations regarding our future operating and financial performance; | |
| ● | our ability to effectively execute our business plan and continue to expand internationally; | |
| ● | our ability to recruit, retain, and motivate skilled personnel, including key members of senior management; | |
| ● | changes in the price of equipment, network infrastructure, hosting and maintenance; | |
| ● | uncertainties around the successful improvement and modification of our existing applications and development of new products and services, which may require significant expenditures and time; | |
| ● | changes in laws or regulations governing our business and operations; | |
| ● | our ability to maintain adequate liquidity and financing sources and an appropriate level of debt on terms favorable to us; | |
| ● | our ability to effectively market our services; | |
| ● | costs and risks associated with litigation brought against us; | |
| ● | our ability to obtain and protect our existing intellectual property protections, including trademarks and copyrights; | |
| ● | changes in accounting principles, or their application or interpretation, and our ability to make estimates and the assumptions underlying the estimates, which could have an effect on earnings; | |
| ● | our ability to maintain the listing of our shares on the Nasdaq Capital Market or our ability to list our shares on any other exchange and maintain such listing; and | |
| ● | other risks described from time to time in periodic and current reports that we file with the SEC. |
You should not rely upon forward-looking statements as predictions of future events. We have based the forward-looking statements contained in this Quarterly Report on Form 10-Q primarily on our current expectations and projections about future events and trends that we believe may affect our business, financial condition, results of operations, and prospects. The outcome of the events described in these forward-looking statements is subject to risks, uncertainties, and other factors described in the section titled “Risk Factors” and found on Form 10-K filed for the year ended December 31, 2025. We undertake no obligation to update any forward-looking statements after the date of this Quarterly Report on Form 10-Q or to conform such statements to actual results or revised expectations, except as required by law.
| ii |
PART I—FINANCIAL INFORMATION
Item 1. Financial Statements.
GLOBAL INTERACTIVE TECHNOLOGIES, INC. AND ITS SUBSIDIARIES
Condensed Consolidated Balance Sheets
As of March 31, 2026 and December 31, 2025
(Unaudited)
| March 31, | December 31, | |||||||
| 2026 | 2025 | |||||||
| Assets | ||||||||
| CURRENT ASSETS: | ||||||||
| Cash and Cash Equivalents | $ | $ | ||||||
| Accounts receivable, net of allowance | ||||||||
| Non-trade receivables | ||||||||
| Prepaid expenses and other receivables | ||||||||
| Total current assets | ||||||||
| PROPERTY AND EQUIPMENT, NET | ||||||||
| INTANGIBLE ASSETS, NET | ||||||||
| OPERATING LEASE RIGHT-OF-USE ASSETS | ||||||||
| OTHER ASSETS | ||||||||
| Total Assets | $ | $ | ||||||
| Liabilities and Stockholder’s Equity | ||||||||
| CURRENT LIABILITIES: | ||||||||
| Short-term borrowings | $ | $ | ||||||
| Short-term borrowings from related parties | ||||||||
| Short-term borrowings | ||||||||
| Non-trade accounts payable | ||||||||
| Accrued expenses and other current liabilities | ||||||||
| Total current liabilities | ||||||||
| Total Liabilities | ||||||||
| STOCKHOLDER’S DEFICIENCY: | ||||||||
| Common Stock, par value. Authorized | ||||||||
| Additional paid-in and other capital | ||||||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Accumulated other comprehensive income (loss) | ( | ) | ( | ) | ||||
| Total Stockholder’s Equity | ||||||||
| Total Liabilities and Stockholder’s Deficiency | $ | $ | ||||||
The accompanying footnotes are an integral part of these unaudited consolidated financial statements
| F-1 |
GLOBAL INTERACTIVE TECHNOLOGIES, INC. AND ITS SUBSIDIARIES
Condensed Consolidated Statements of Operations
For the Three Months Ended March 31, 2026 and 2025
(Unaudited)
| Three Months Ended March 31, 2026 | Three Months Ended March 31, 2025 | |||||||
| Revenue | $ | $ | ||||||
| Cost of Revenue | ||||||||
| Gross profit(Loss) | ||||||||
| OPERATING EXPENSES: | ||||||||
| Depreciation | ||||||||
| Amortization | ||||||||
| Lease expense | ||||||||
| Tax and Dues | ||||||||
| General and Administrative expense | ||||||||
| Operating cost and expenses | ||||||||
| OPERATING LOSS | ( | ) | ( | ) | ||||
| OTHER INCOME(EXPENSE): | ||||||||
| Interest income(expense), net | ( | ) | ( | ) | ||||
| Gain (Loss) on foreign currency transactions | ||||||||
| Other income(expense), net | ( | ) | ||||||
| Net other expense | ( | ) | ( | ) | ||||
| Net loss from continuing operations before taxes | ( | ) | ( | ) | ||||
| Income tax expense | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Basic and fully diluted loss per share | ) | ) | ||||||
| Weighted average number of shares outstanding: | ||||||||
| Basic and diluted | ||||||||
The accompanying footnotes are an integral part of these unaudited consolidated financial statements
| F-2 |
GLOBAL INTERACTIVE TECHNOLOGIES, INC. AND ITS SUBSIDIARIES
Condensed Consolidated Statements of Changes in Stockholders’ Equity
For the Three Months Ended March 31, 2026 and 2025
(Unaudited)
| Common shares | Additional Paid-in and | Other | Total | |||||||||||||||||||||
| Shares | Amount ($0.001 par) |
Other Capital | Accumulated Deficit | Comprehensive Gain (Loss) | Stockholder’s Equity | |||||||||||||||||||
| Balance at December 31, 2024 | $ | $ | $ | ( | ) | $ | ( | ) | $ | |||||||||||||||
| Issuance of common stock upon debt conversion | ||||||||||||||||||||||||
| Currency translation adjustment | - | |||||||||||||||||||||||
| Net loss | - | ( | ) | ( | ) | |||||||||||||||||||
| Balance at March 31, 2025 | $ | $ | $ | ( | ) | $ | ( | ) | $ | |||||||||||||||
| Common shares | Additional Paid-in and | Other | Total | |||||||||||||||||||||
| Shares | Amount ($0.001 par) | Other Capital | Accumulated Deficit | Comprehensive Gain (Loss) | Stockholder’s Equity | |||||||||||||||||||
| Balance at December 31, 2025 | $ | $ | $ | ( | ) | $ | ( | ) | $ | |||||||||||||||
| Currency translation adjustment | - | - | - | |||||||||||||||||||||
| Net loss | - | ( | ) | ( | ) | |||||||||||||||||||
| Balance at March 31, 2026 | $ | $ | $ | ( | ) | $ | ( | ) | $ | |||||||||||||||
The accompanying footnotes are an integral part of these unaudited consolidated financial statements
| F-3 |
GLOBAL INTERACTIVE TECHNOLOGIES, INC. AND ITS SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
For the Three Months Ended March 31, 2026 and 2025 (Unaudited)
| Three Months Ended March 31, 2026 | Three Months Ended March 31, 2025 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
| Net loss from continuing operations | ( | ) | $ | ( | ) | |||
| Adjustments to reconcile net loss to net cash provided by(used in) operating activities: | ||||||||
| Depreciation | ||||||||
| Amortization of intangible asset | ||||||||
| Amortization of right-of-use asset | ||||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | ||||||||
| Non-trade receivables | ( | ) | ||||||
| Prepaid expenses and other current assets | ( | ) | ||||||
| Other assets | ||||||||
| Accounts payable - nontrade | ( | ) | ||||||
| Accrued expenses and other current liabilities | ||||||||
| Net cash provided by(used in) operating activities | ( | ) | ( | ) | ||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
| Net cash used in investing activities | ||||||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
| Proceeds from short-term borrowings | ||||||||
| Proceeds from short-term borrowings from related parties | ||||||||
| Proceeds from short-term borrowings | ||||||||
| Repayment of short-term borrowings from related parties | ( | ) | ( | ) | ||||
| Net cash provided by financing activities | ||||||||
| Net change in cash | ( | ) | ||||||
| EFFECT OF EXCHANGE RATES ON CASH AND EQUIVALENTS | ( | ) | ( | ) | ||||
| CASH AND CASH EQUIVALENTS AT BEGINNING OF THE PERIOD | ||||||||
| CASH AND CASH EQUIVALENTS AT END OF THE PERIOD | $ | $ | ||||||
| SUPPLEMENTARY INFORMATION: | ||||||||
| Cash receipt (paid) for interest – | ( | ) | ( | ) | ||||
| Cash receipt (paid) during the period for interest | ( | ) | ( | ) | ||||
| Supplemental disclosure of non-cash investing and financing activities: | ||||||||
| Offsetting borrowings by converting short-term loans into shares of common stock. | ||||||||
| Total | ||||||||
The accompanying footnotes are an integral part of these unaudited consolidated financial statements
| F-4 |
GLOBAL INTERACTIVE TECHNOLOGIES, INC. AND ITS SUBSIDIARIES
Condensed Consolidated Statements of Comprehensive Income
For the Three Months Ended March 31, 2026 and 2025 (Unaudited)
| March 31, | March 31, | |||||||
| 2026 | 2025 | |||||||
| NET LOSS | $ | ( | ) | $ | ( | ) | ||
| Other comprehensive income (loss): | ||||||||
| Change in foreign currency translation adjustment | ||||||||
| COMPREHENSIVE LOSS | $ | ( | ) | $ | ( | ) | ||
The accompanying footnotes are an integral part of these unaudited consolidated financial statements
| F-5 |
GLOBAL INTERACTIVE TECHNOLOGIES, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
NOTE 1 — NATURE OF OPERATIONS AND BASIS OF PRESENTATION
Business
Global Interactive Technologies, Inc. (“GITS” or the “Company”), formerly known as Hanryu Holdings, Inc., is a Delaware corporation engaged in the development and operation of FANING, a global digital fan engagement platform focused on Korean entertainment and culture, including K-pop. The FANING platform is designed to enable users to consume, create, share, and engage with digital content and fan communities across mobile and web-based services.
In
2024, the Company acquired
Corporate History
Since the inception of Global Interactive Technologies, Inc in 2018, we have accomplished a number of key objectives, as follows:
| Date | Event/Milestone | |
| October 18, 2018 | HBC is incorporated under the laws of the ROK with the idea of creating an all-in-one product to capture the growing global momentum and popularity of K-Culture. | |
| October 29, 2020 | HBC establishes FNS,and begins the initial stages of designing and implementing a platform that can create a fandom networking system. | |
| March 11, 2021 | HBC establishes Hanryu Times. Hanryu Times begins operations as HBC’s media outlet, reporting on and providing up-to-date K-Culture news within the FANTOO platform, across a number of languages, including English, Japanese, Chinese (simplified/traditional), Indonesian, Spanish, Russian, and Portuguese. | |
| March 31, 2021 | HBC consummates an agreement and plan of merger (the “Merger Agreement”) with RnDeep, Co. Ltd, a Korean corporation (“RnDeep”), pursuant to which RnDeep merged with and into HBC, with HBC continuing as the surviving corporation (the “RnDeep Acquisition”). As consideration for the RnDeep Acquisition, HBC ratably issued a total HBC common shares, par value $ per share (“Common Shares”), to the former shareholders of RnDeep.
As a result of the RnDeep Acquisition, HBC acquired the underlying technologies that the Company plans on utilizing in the future development of new functions and integrations within the FANTOO platform. Once the FANTOO platform is ready to integrate the technology acquired, this technology will support new functions and integrations including, without limitation, the Company’s enterprise resource planning solution, and its artificial intelligence (“AI”), which the Company plans on using to power many of FANTOO’s upcoming features such as speech synthesis, curated content delivery, deepfake detection and blocking, and nudity detection and blocking. | |
| March 17, 2021 | The FANTOO platform was launched and made available to the public. | |
| June 30, 2021 | HBC
enters into an agreement to acquire all the issued and outstanding common shares of Marine Island (the “Marine Island Acquisition”),
which owns the right to use and occupy |
| F-6 |
GLOBAL INTERACTIVE TECHNOLOGIES, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
NOTE 1 — NATURE OF OPERATIONS AND BASIS OF PRESENTATION (cont.)
| Date | Event/Milestone | |
| August 30, 2021 | HBC establishes FANTOO Entertainment. FANTOO Entertainment provides a variety of content to the Company’s FANTOO platform, which contributes to the spread of the Korean Wave by promoting new entertainers and artists. | |
| October 3, 2021 |
HBC
consummates a strategic acquisition of % of the outstanding common shares of K-Commerce. In consideration for the shares of K-Commerce,
HBC forgave a short-term loan of $
HBC’s investment into K-Commerce was a strategic acquisition in order to integrate K-Commerce’s retail platform, “SelloveLive” into the FANTOO ecosystem as the FANTOO Fanshop. When launched as the FANTOO Fanshop, K-Commerce’s platform will offer combined services of shopping and live broadcasting, allowing users to easily live-stream travel and share local attractions, local festivals, cultures, and news from around the world.
Prior
to HBC’s acquisition of its shares in K-Commerce, K-Commerce was | |
| October 20, 2021 | Hanryu Holdings is incorporated in the State of Delaware. | |
| February 25, 2022 through May 10, 2022 | Hanryu
Holdings, HBC, and the shareholders of HBC (the “HBC Shareholders”) enter into a share exchange agreement (the “Share
Exchange Agreement”), pursuant to which the HBC Shareholders agreed to assign, transfer, and deliver, free and clear of all
liens, % of the issued and outstanding Common Shares, representing
Concurrently
with entering into the Share Exchange Agreement, the Company, HBC, and the holders (the “HBC Warrantholders”) of all
outstanding warrants to purchase Common Shares (“HBC Warrants”) enter into a warrant exchange agreement, pursuant to
which the HBC Warrantholders agreed to assign, transfer, and delivery, free and clear of any liens,
The
Warrants and Common Shares of HBC transferred to the Company in the Share Exchange and the Warrant Exchange constituted | |
| June 16, 2022 | Hanryu Holdings, HBC, the HBC Shareholders, and the HBC Warrantholders consummate the Share Exchange and Warrant Exchange concurrently, pursuant to which HBC became a wholly owned subsidiary of the Company, and the HBC Stockholders and HBC Warrantholders, collectively, acquired a controlling interest in the Company. | |
| August 1, 2023 | The shares of the Company are listed at NASDAQ exchange market. | |
| December 28, 2023 | HBC sold owned whole shares of Hanryu Times, Fantoo Entertainment, and K-Commerce, so the business from the three companies became the discontinued operations. | |
| November 5, 2024 | HBC
sold its | |
| December 4, 2024 | We
acquired | |
| December 28, 2024 | We
sold |
| F-7 |
GLOBAL INTERACTIVE TECHNOLOGIES, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
NOTE 1 — NATURE OF OPERATIONS AND BASIS OF PRESENTATION (cont.)
Going Concern
As
of March 31, 2026, the Company had an accumulated deficit of $
These conditions raise substantial doubt about the Company’s ability to continue as a going concern for twelve months after the issuance date of these consolidated financial statements. The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. These consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Management intends to address these conditions by continuing the launch and commercialization of the upgraded Faning 2.0 platform, pursuing K-food products and entertainment-related business ventures, seeking to increase user engagement and monetization, controlling operating costs, and pursuing additional capital through equity financings, borrowings, or other available financing arrangements. However, there can be no assurance that the Company will be successful in implementing these plans or that sufficient funding will be available on terms acceptable to the Company, if at all.
NOTE 2 — SIGNIFICANT ACCOUNTING POLICIES
A summary of the significant accounting policies followed by the Company in the preparation of the accompanying consolidated financial statements follows:
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.
| F-8 |
GLOBAL INTERACTIVE TECHNOLOGIES, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
NOTE 2 — SIGNIFICANT ACCOUNTING POLICIES (cont.)
Foreign Currency
The
Company’s functional currency for all operations is the KRW. The Company’s accounting records are maintained in KRW, and
translated into U.S. Dollars at year-end for the purposes of presentation. During the translation process, the year-end closing exchange
rate is used for the valuation of all assets and liabilities, historical exchange rate is used to value stockholder’s equity, and
the average exchange rate for the year is used for the calculation of the consolidated financial statements. The net impact of the translation
into the U.S. Dollar is included in the accumulated other comprehensive income (loss) of the Company’s consolidated balance sheet
as of March 31, 2026 and December 31, 2025. During the periods ended March 31, 2026, there was a fluctuation in the exchange rates ranging
from KRW
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:
| ● | Fair value measurements including the fair value of the Company’s common stock; | |
| ● | Stock-based compensation; | |
| ● | Recoverability, useful lives, and impairment assessments of long-lived and intangible assets; | |
| ● | Valuation allowance relating to the Company’s deferred tax assets; and | |
| ● | Assumptions related to projected future cash flows and commercialization timing. |
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.
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.
| F-9 |
GLOBAL INTERACTIVE TECHNOLOGIES, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
NOTE 2 — SIGNIFICANT ACCOUNTING POLICIES (cont.)
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 $
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 does not have any off-balance-sheet credit exposure related to its customers.
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 period ended March 31, 2026 and 2025, the Company recognized revenue of $
| F-10 |
GLOBAL INTERACTIVE TECHNOLOGIES, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
NOTE 2 — SIGNIFICANT ACCOUNTING POLICIES (cont.)
Cost of Revenue
Cost of revenue consists primarily of costs directly related to the Company’s revenue-generating activities, including platform service costs, third-party service fees, payment processing fees, hosting and infrastructure expenses, content-related costs, direct labor, telecommunication costs, travel, postage, vehicle charges, printing, training, and other direct costs associated with providing goods or services to customers. Amortization of capitalized software used in the Company’s platform is included in operating expenses and is not included in cost of revenue unless the related software amortization is directly attributable to revenue-generating activities. Cost of revenue also includes allocated indirect costs related to revenue-generating activities, such as supplies, utilities, office equipment rental, software, computers, and other office-related costs.
Cost of revenue is recognized as the related goods or services are delivered or provided to customers.
Capitalized Software
The Company capitalizes certain costs incurred to develop internal-use software when the preliminary project stage is completed, management has authorized and committed to funding the project, and it is probable that the project will be completed and used to perform the function intended. Capitalized software costs are amortized on a straight-line basis over their estimated useful lives once the software is ready for its intended use.
Amortization expense related to capitalized software is included in operating expenses in the consolidated statements of operations. For the period ended March 31, 2026 and 2025, amortization expense related to capitalized software was included in operating expenses.
Property Plant and Equipment
Property plant and equipment are carried at cost (see Note 5). 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:
SCHEDULE OF ESTIMATED USEFUL LIVES
| Classification | Estimated Useful Life in Years | |
| Fixtures | ||
| Equipment |
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.
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.
| F-11 |
GLOBAL INTERACTIVE TECHNOLOGIES, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
NOTE 2 — SIGNIFICANT ACCOUNTING POLICIES (cont.)
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 companies
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 watch if any significant credit risks exist, and they will make
actions to remove or mitigate such risks if there are any. The Company had accounts receivable balances of $
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.
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.
| Level 1 | Inputs to the valuation methodology utilize unadjusted quoted market prices in active markets for identical assets and liabilities. | |
| Level 2 | Inputs to the valuation methodology are other observable inputs, including quoted market prices for similar assets and liabilities, quoted prices for identical and similar assets and liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data. | |
| Level 3 | Inputs to the valuation methodology are unobservable inputs based on management’s best estimate of the inputs that market participants would use in pricing the asset or liability at the measurement date, including assumptions about risk. |
A change to the level of an asset or liability within the fair value hierarchy is determined at the end of a reporting period.
Basic earning (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 earning (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. For purposes of computing both basic and diluted earning (loss) per share, income or loss shall exclude the income or loss attributable to the non-controlling interest. The Company calculates net loss per share in accordance with FASB ASC Topic 260, Earnings Per Share. Basic net loss per share amounts have been computed by dividing net loss excluded loss attributable to the non-controlling interest by the weighted-average number of common shares outstanding during the period. For the three months ended March 31, 2026 and 2025, the Company reported net losses and, accordingly, potential common shares were not included since such inclusion would have been anti-dilutive. 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.
| F-12 |
GLOBAL INTERACTIVE TECHNOLOGIES, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
NOTE 2 — SIGNIFICANT ACCOUNTING POLICIES (cont.)
Lease
Under ASC 842, the determination of whether an arrangement is a lease is made at the lease’s inception and a contract is (or contains) a lease if it conveys the right to control the use of an identified asset for a period of time in exchange for consideration. Control is defined under the standard as having both the right to obtain substantially all of the economic benefits from use of the asset and the right to direct the use of the asset. Management only reassesses its determination if the terms and conditions of the contract are changed. Operating leases are included in operating lease right-of-use (“ROU”) assets, other current liabilities, and operating lease liabilities in our balance sheets. Finance leases are included in property and equipment, other current liabilities, and other long-term liabilities in our balance sheets.
ROU assets represent our right to use an underlying asset for the lease term, and lease liabilities represent our obligation to make lease payments. Operating lease ROU assets and liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. The Company uses the implicit rate when it is readily determinable. Since most of the Company’s leases do not provide an implicit rate, to determine the present value of lease payments, management uses the Company’s incremental borrowing rate based on the information available at lease commencement. Operating lease ROU assets also includes any lease payments made and excludes any lease incentives. Lease expense for lease payments is recognized on a straight-line basis over the lease term. Leases with an initial term of 12 months or less are not recorded on the balance sheet.
The Company has lease agreements with lease and non-lease components, which are generally accounted for separately with amounts allocated to the lease and non-lease components based on stand-alone prices or for which it has made an accounting policy election to account for these as a single lease component. For certain equipment leases, like vehicles, the Company accounts for the lease and non-lease components as a single lease. Refer to Note 8 for additional disclosures required as a result of the adoption of this new standard.
| F-13 |
GLOBAL INTERACTIVE TECHNOLOGIES, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
NOTE 2 — SIGNIFICANT ACCOUNTING POLICIES (cont.)
Recently Issued Accounting Standards
In December 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. This update requires public business entities to provide enhanced annual disclosures primarily focused on the rate reconciliation table and expanded disclosures for income taxes paid, disaggregated by federal, state, and foreign jurisdictions. For public business entities, the amendments are effective for annual periods beginning after December 15, 2024. The Company has evaluated this standard and determined that its adoption does not have a material impact on its consolidated financial statements and related disclosures, given the full valuation allowance recorded against its deferred tax assets.
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.
NOTE 3 — SHORT-TERM LOAN RECEIVABLES
The
following table summarizes information with regard to short-term loan receivables outstanding as of March 31, 2026 and December 31, 2025,
and the interest income from short-term loan receivables is $
SCHEDULE OF SHORT TERM LOAN RECEIVABLES
Interest Rate | March 31, 2026 | December 31, 2025 | ||||||||||
| LA PRIMERA CAPITAL INVESTMENTS | % | $ | $ | |||||||||
| AMERIDGE CORPORATION | % | |||||||||||
| HANRYU BANK CO.LTD | % | |||||||||||
| FNS CO.LTD | % | |||||||||||
| (-) Allowances for credit losses | ( | ) | ||||||||||
| Total short-term loan | - | |||||||||||
| F-14 |
GLOBAL INTERACTIVE TECHNOLOGIES, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
NOTE 4 — PROPERTY PLANT AND EQUIPMENT
Property plant and equipment consist of the following:
SCHEDULE OF PROPERTY PLANT AND EQUIPMENT
March 31, 2026 | December 31, 2025 | |||||||
| Fixtures | $ | $ | ||||||
| Less accumulated depreciation | ( | ) | ( | ) | ||||
| Property plant and equipment, net | $ | $ | ||||||
Total
depreciation expense for the three months ended March 31, 2026 and 2025 are $
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 $
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
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 $
The carrying value of software consisted of the following:
SCHEDULE OF SOFTWARE ASSETS AND DETERMINED
March 31, 2026 | December 31, 2025 | |||||||
| Acquisition cost | $ | $ | ||||||
| Less Accumulated amortization | ( | ) | ( | ) | ||||
| Add Foreign currency translation | ||||||||
| Accumulated impairment loss on intangible assets | ( | ) | ( | ) | ||||
| Net book value | $ | $ | ||||||
Amortization
expense related to software was $
| F-15 |
GLOBAL INTERACTIVE TECHNOLOGIES, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
NOTE 6 — LEASE
The
Company uses approximately
At the time of initial acquisition from Seoul Marina Co., Ltd. “SMC” in July 2021, the Company used the following assumptions:
| ● | Annual
lease cost: | |
| ● | ||
| ● | Assumed
annual rent increase: - | |
| ● | Interest
rate: | |
| ● | 10-year
Korean government bond yield: | |
| ● | Exchange
rate: |
Based
on the assumptions outlined, the Company calculated the present value of
As
the Company initially allocated $
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 March 31, 2026 and December 31, 2025, the carrying
amounts of the ROU asset were $
| F-16 |
GLOBAL INTERACTIVE TECHNOLOGIES, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
NOTE 7 — SHORT-TERM LOAN PAYABLES
The following table summarizes information with regard to short-term loan payables outstanding as of March 31, 2026 and December 31, 2025.
SCHEDULE OF SHORT TERM LOAN PAYABLES OUTSTANDING
| Interest Rate | March 31, 2026 ($) | December 31, 2025 ($) | ||||||||||
| Mijung Oh | % | |||||||||||
| Changhyuk Kang(1) | % | |||||||||||
| Levenston Korea LLC | % | |||||||||||
| Jeyoun Baeg | % | |||||||||||
| Yoonseok Choi | % | |||||||||||
Corner Piece Capital Partners Pte Ltd (2) | % | |||||||||||
| Total | ||||||||||||
| (1) | |
(2) |
NOTE 8 — SHORT-TERM LOAN PAYABLES FROM RELATED PARTIES
The following table summarizes information regarding short-term loan payables from related parties as of March 31, 2026 and December 31, 2025. Jaeman Lee is a family of an independent director of the Company and Hangmuk Shin is the largest shareholder of Global Interactive Technologies, Inc.
SCHEDULE OF SHORT TERM LOAN PAYABLES AND RELATED PARTY OUTSTANDING
| Interest Rate | March 31, 2026 ($) | December 31, 2025 ($) | ||||||||||
| Taehoon Kim | % | |||||||||||
| Jaeman Lee | %(1) | |||||||||||
| Hangmuk Shin | %(2) | |||||||||||
| PixelArc LLC | % | |||||||||||
| Total | ||||||||||||
| (1) | |
(2) |
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 expense and other current liabilities due to the short maturities of these instruments.
Assets and liabilities measured at fair value on a recurring basis as of March 31, 2026 and December 31, 2025 are summarized in the table below.
SCHEDULE OF FAIR VALUE OF ASSETS AND LIABILITIES MEASURED AT FAIR VALUE ON RECURRING BASIS
| Level 1 | Level 2 | Level 3 | Total | |||||||||||||
| March 31, 2026 | ||||||||||||||||
| Level 1 | Level 2 | Level 3 | Total | |||||||||||||
| Assets | ||||||||||||||||
| Investments | $ | $ | $ | $ | ||||||||||||
| Liabilities | ||||||||||||||||
| Bonds with warrants | $ | $ | $ | $ | ||||||||||||
| F-17 |
GLOBAL INTERACTIVE TECHNOLOGIES, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
NOTE 9 — FAIR VALUE MEASUREMENTS (cont.)
| Level 1 | Level 2 | Level 3 | Total | |||||||||||||
| December 31, 2025 | ||||||||||||||||
| Level 1 | Level 2 | Level 3 | Total | |||||||||||||
| Assets | ||||||||||||||||
| Investments | $ | $ | $ | $ | ||||||||||||
| Liabilities | ||||||||||||||||
| Bonds with warrants | $ | $ | $ | $ | ||||||||||||
Financial Items Measured at Fair Value on a Nonrecurring Basis
There
are
Non-financial Items Measured at Fair Value on a Recurring 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 $
The fair value measurement related to the software impairment was based on significant unobservable inputs and is classified as a Level 3 measurement 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
| Description | Level 1 | Level 2 | Level 3 | Total | ||||||||||||
| Software (Intangible Asset) — period ended March 31, 2026 | $ | $ | ||||||||||||||
| Software (Intangible Asset) — year ended December 31, 2025 | $ | $ | ||||||||||||||
| F-18 |
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 as of December 31, 2025 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 four-year forecast period (FY2026 through FY2029), 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 forecast was prepared by management based on the early-stage nature of the platform, observed user-acquisition economics, and expected pricing and conversion characteristics of comparable consumer social platforms.
The following table summarizes the significant unobservable inputs used in the Level 3 fair value measurement of the Faning software intangible asset as of December 31, 2025.
SCHEDULE OF UNOBSERVABLE INPUTS IN LEVEL 3 FAIR VALUE MEASUREMENT
| Significant Unobservable Input | Value as of December 31, 2025 | ||
| Valuation technique | Relief-from-Royalty method (Income Approach) | ||
| Royalty rate | % | ||
| Discount rate (WACC) | % | ||
| Remaining useful life | |||
| Subscription conversion rate | |||
| MAU conversion rate | % |
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. Increases in projected revenues, royalty rate, subscription conversion rate, or MAU conversion rate would increase the estimated fair value, while increases in the discount rate or effective tax rate would decrease the estimated fair value.
Reconciliation to Impairment Loss
Application
of the Relief-from-Royalty method resulted in an estimated fair value for the Faning software intangible asset of $
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 March 31, 2026 and December 31, 2025.
Nonfinancial Items Measured at Fair Value on a Nonrecurring Basis
The fair value of long-lived assets is measured whenever the carrying value of long-lived asset or asset group is not recoverable on an undiscounted cash flow basis. Except for the intangible asset impairment disclosed in Note 9, no impairment is recognized for long-lived assets as of as of March 31, 2026 and December 31, 2025.
| F-19 |
GLOBAL INTERACTIVE TECHNOLOGIES, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
NOTE 10 — SIGNIFICANT NON-CASH TRANSACTION
On
March 19, 2025, the Company issued shares of Common Stock at a conversion price of $
On
May 7, 2025, the Company issued shares of Common Stock at a conversion price of $
On
May 7, 2025, the Company issued shares of Common Stock at a conversion price of $
On
May 7, 2025, the Company issued shares of Common Stock at a conversion price of $
On
May 20, 2025, the Company issued shares of Common Stock at a conversion price of $
On
August 19, 2025, warrants held by Jungok You were exercised at an exercise price of $
NOTE 11 — SHARE CAPITAL
As
of March 31, 2026 and December 31, 2025, Global Interactive Technologies’ total authorized capital stock is
On
January 27, 2025, the Company effected a
On
March 19, 2025, the Company issued shares of Common Stock at a price of $ per share in connection with the conversion of $
On
May 7, 2025, the Company issued shares of Common Stock at a price of $
On
May 7, 2025, the Company issued shares of Common Stock at a price of $
On
May 7, 2025, the Company issued shares of Common Stock at a price of $ per share, plus warrants to purchase
On
May 20, 2025, the Company issued shares of Common Stock at a price of $
| F-20 |
GLOBAL INTERACTIVE TECHNOLOGIES, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
NOTE 12 — COMMITMENTS AND CONTINGENCIES
Legal Matters
As of March 31, 2026, the Company is currently seeking the cancellation of the administrative surcharge imposed by the Securities and Futures Commission of Korea through administrative court proceedings, and the matter remains pending.
NOTE 13 — RELATED PARTY TRANSACTIONS
The company conducts transactions with related parties under standard commercial terms and follows appropriate procedures to protect the company’s interests. Below are the related party transaction details as of March 31, 2026, and December 31, 2025.
Short-Term Loan Payables
SCHEDULE OF RELATED PARTY TRANSACTION
March 31, 2026 ($) | December 31, 2025 ($) | |||||||
| Taehoon Kim | ||||||||
| Jaeman Lee | ||||||||
| Hangmuk Shin | ||||||||
| PixelArc LLC | ||||||||
| Total | ||||||||
| Short term loan | ||||||||
Non-Trade Payables
The
Company has non-trade payables due to Hangmuk Shin in the amount of KRW
Taehoon Kim (CEO)
-
On January 8, 2025, the Company entered into a short-term loan agreement with Taehoon Kim with a principal amount of $
| F-21 |
GLOBAL
INTERACTIVE TECHNOLOGIES, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
NOTE 13 — RELATED PARTY TRANSACTIONS (cont.)
Jaeman lee (Family of an independent director)
-
The Company entered into a short-term loan agreement with Jaeman Lee for the period from July 1, 2024, to December 31, 2024, and the
outstanding loan balance as of December 31, 2024, was $
(The loan was partially deposited in KRW, which may result in a slight difference in the loan amount when converted to USD due to exchange rate fluctuations.)
-
On February 4, 2025, the Company entered into a short-term loan agreement with Jaeman Lee at an annual interest rate of
-
On February 7, 2025, the Company entered into a short-term loan agreement with Jaeman Lee at an annual interest rate of
-
On April 7, 2025, the Company entered into a short-term loan agreement with Jaeman Lee at an annual interest rate of
-
On February 17, 2025, Jaeman Lee, with the Company’s consent, transferred the Company’s loan of $
-
On April 11, 2025, the Company entered into a short-term loan agreement with Jaeman Lee at an annual interest rate of
-
On May 5, 2025, the Company entered into a short-term loan agreement with Jaeman Lee at an annual interest rate of
-
On July 2, 2025, the Company entered into a short-term loan agreement with Jaeman Lee at an annual interest rate of
-
On July 24, 2025, the Company entered into a short-term loan agreement with Jaeman Lee at an annual interest rate of
-
On August 5, 2025, the Company entered into a short-term loan agreement with Jaeman Lee at an annual interest rate of
-
On December 3, 2025, the Company entered into a short-term loan agreement with Jaeman Lee at an annual interest rate of
| F-22 |
GLOBAL
INTERACTIVE TECHNOLOGIES, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
NOTE 13 — RELATED PARTY TRANSACTIONS (cont.)
Hangmuk Shin (Greater than 10% shareholder)
-
The Company entered into a short-term loan agreement with Hangmuk Shin for the period from July 1, 2024, to December 31, 2024, and
the outstanding loan balance as of December 31, 2024, was $
-
On January 14, 2025, the Company entered into a short-term borrowing agreement with Hangmuk Shin at an interest rate of
-
On March 6, 2025, the Company entered into a short-term borrowing agreement with Hangmuk Shin at an interest rate of
-
On March 24, 2025, the Company entered into a short-term borrowing agreement with Hangmuk Shin at an interest rate of
- On March 26, 2025, the Company entered into a short-term
borrowing agreement with Hangmuk Shin at an interest rate of
- On May 7, 2025, the Company issued shares of Common Stock at a conversion price of $
-
On December 31, 2025, the Company entered into a short-term borrowing agreement with Hangmuk Shin at an interest rate of
-
On January 2, 2026, the Company repaid KRW
-
On January 16, 2026, the Company entered into a short-term borrowing agreement with Hangmuk Shin at an interest rate of
-
On January 23, 2026, the Company entered into a short-term borrowing agreement with Hangmuk Shin at an interest rate of
-
On February 3, 2026, the Company entered into a short-term borrowing agreement with Hangmuk Shin at an interest rate of
PixelArc, LLC
-
On February 18, 2025, the Company entered into a short term borrowing agreement with PixelArc, LLC at an interest rate of
-
On April 18, 2025, the Company entered into a short term borrowing agreement with PixelArc, LLC at an interest rate of
-
On May 20, 2025, the Company accepted PixelArc’s proposal, the total loan principle balance of USD $
-
On August 18, 2025, the Company entered into an interest free short term borrowing agreement with PixelArc, LLC, the principle amount
was USD $
- On February 24, 2026, the Company entered into an interest free short term borrowing agreement with PixelArc LLC,
the principle amount was $
NOTE 14 — NON-TRADE PAYABLE
Non-trade
payable for the period ended March 31, 2026 was $
| F-23 |
GLOBAL
INTERACTIVE TECHNOLOGIES, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
NOTE 14 — NON-TRADE PAYABLE (cont.)
The following table summarizes the components of non-trade payables by nature as of March 31, 2026 and December 31, 2025:
SCHEDULE OF COMPONENTS OF NON-TRADE PAYABLES BY NATURE
| Components (by Nature) | March 31, 2026 ($) | December 31, 2025 ($) | ||||||
| Professional & Service Fees | ||||||||
| Social Security & Tax Payable | ||||||||
| Operating Expenses | ||||||||
| Total | ||||||||
The Company maintains the 2022 Omnibus Equity Incentive Plan, which provides for the grant of stock options and other equity-based awards. As of March 31, 2026, there were shares remaining available for future issuance under the plan.
| ● | Accounting Policy: The Company measures and recognizes compensation expense for all stock-based payment awards based on their estimated fair values on the grant date. |
| ● | Expense Recognition: Stock-based compensation expense is recognized on a straight-line basis over the requisite service period (usually the vesting period). |
NOTE 16 — SEGMENT INFORMATION
The Company operates its business through its core Faning platform and strategy. As of March 31, 2026, the Company has determined that it operates in a single reportable segment focused on digital fan engagement services.
While the Company’s operations are primarily supported by its subsidiary, FANING KOREA, LLC, located in Seoul, Republic of Korea, the majority of its long-lived assets and revenues are managed as a single global ecosystem.
NOTE 17 — WARRANTS
In connection with the debt-to-equity conversion transactions completed during fiscal year 2025, the Company issued detached warrants to certain debt holders.
-
On May 7, 2025, the Company issued shares of Common Stock at a conversion price of $
-
On May 7, 2025, the Company issued shares of Common Stock at a conversion price of $
-
On May 7, 2025, the Company issued shares of Common Stock at a conversion price of $
All
warrants issued above have a contractual term of five years and expire on the fifth anniversary of the issuance date (May 7, 2030). Subsequently,
on August 19, 2025, warrants held by Jungok You were exercised in full at an exercise price of $
| F-24 |
GLOBAL
INTERACTIVE TECHNOLOGIES, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
NOTE 17 — WARRANTS (cont.)
The following table summarizes the Company’s warrant activity for the period ended March 31, 2026:
SUMMARY OF WARRANT ACTIVITIES
| Warrant Activity | Number of Warrants | Weighted-Average Exercise Price ($) | Weighted-Average Remaining Contractual Term (Yrs) | |||||||||
| Outstanding at December 31, 2024 | - | |||||||||||
| Granted (May 7, 2025) | ||||||||||||
| Exercised (August 19, 2025) | ) | - | ||||||||||
| Expired / Forfeited | - | |||||||||||
| Outstanding at December 31, 2025 | ||||||||||||
| Exercisable at December 31, 2025 | ||||||||||||
| Granted | - | |||||||||||
Exercised | - | |||||||||||
Expired / Forfeited | - | |||||||||||
Outstanding at March 31, 2026 | ||||||||||||
Exercisable at March 31, 2026 | ||||||||||||
In accordance with ASC 470-50, the Company measured the fair value of the warrants issued as part of the debt extinguishment consideration using the Black-Scholes Option Pricing Model (BSM) pursuant to the fair value guidance under ASC 820.
The valuation was performed using the following assumptions as of the grant date (May 7, 2025):
SCHEDULE OF VALUATION PERFORMED USING ASSUMPTIONS AS OF GRANT DATE
| Assumption | Input | |||
| Stock price at grant date | $ | |||
| Risk-free interest rate | % | |||
| Expected volatility | % | |||
| Expected term | ||||
| Expected dividend yield | % | |||
Based on the assumptions above, the specific valuation components by each warrant holder tranche are summarized as follows:
SCHEDULE OF VALUATION ASSUMPTIONS COMPONENTS BY EACH WARRANT HOLDER TRANCHE
| Holder | Warrants Issued | Exercise Price | FV/Warrant ($) | Total Warrant FV ($) | ||||||||||||
| Hangmuk Shin | $ | |||||||||||||||
| Jeyoun Baeg | $ | |||||||||||||||
| Jungok You | $ | |||||||||||||||
| Total | ||||||||||||||||
The
aggregate fair value of the
| F-25 |
GLOBAL
INTERACTIVE TECHNOLOGIES, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
NOTE 18 — INCOME TAXES
The Company’s tax rate is generally a function of the tax rates in the jurisdictions in which the Company operates, the relative amount of income earned by jurisdiction, and the relative amount of losses or income for which no tax benefit or expense is recognized due to a valuation allowance.
The components of “Loss before income taxes” in the Consolidated Statements of Operations are as follows:
SCHEDULE OF COMPONENTS OF LOSS BEFORE INCOME TAXES
| March 31, 2026 | December 31, 2025 | |||||||
| United States | $ | ( | ) | $ | ( | ) | ||
| Foreign (Korea) | ( | ) | ( | ) | ||||
| Total loss before income taxes | $ | ( | ) | $ | ( | ) | ||
The effective tax rate reconciliation is as follows:
SCHEDULE OF EFFECTIVE TAX RATE RECONCILIATION
| March 31, 2026 | March 31, 2026 | December 31, 2025 | December 31, 2025 | |||||||||||||
| Loss before income taxes | $ | ( | ) | $ | ( | ) | ||||||||||
| U.S. federal statutory tax benefit | ( | ) | ( | )% | ( | ) | ( | )% | ||||||||
| State and local income taxes, net of federal benefit | % | % | ||||||||||||||
| Foreign (Korea) tax rate differential | % | % | ||||||||||||||
| Tax credits (Korean R&D) | % | % | ||||||||||||||
| Effect of changes in tax laws or rate | % | % | ||||||||||||||
| Cross-border tax effects | % | % | ||||||||||||||
| Permanent differences, goodwill impairment loss including nondeductible expenses | % | % | ||||||||||||||
| Permanent differences, debt extinguishment loss including nondeductible expenses | % | % | ||||||||||||||
| Permanent differences, gain on disposal of subsidiary including nondeductible expenses | % | % | ||||||||||||||
| Change in valuation allowance | % | % | ||||||||||||||
| Income tax expense (benefit) | $ | % | $ | % | ||||||||||||
| Effective Tax Rate | - | % | - | % | ||||||||||||
Application
of ASU 2023-09 5% disaggregation threshold. The five percent disaggregation threshold for the period ended March 31, 2026 and the
year ended December 31, 2025 was $
The deferred tax asset breakdown is as follows:
SCHEDULE OF DEFERRED TAX ASSET
| Deferred Tax Assets | March 31, 2026 | December 31, 2025 | ||||||
| Net operating loss carryforwards – US Federal | $ | $ | ||||||
| Net operating loss carryforwards – Republic of Korea | ||||||||
| Amortization differences | ||||||||
| IA Impairment differences | ||||||||
| Depreciation differences | ||||||||
| Lease liabilities and other temporary differences | ||||||||
| Bad debt | ||||||||
| Forex Translation Adjustment | ( | ) | ( | ) | ||||
| Total deferred tax assets | ||||||||
| Valuation allowance | ( | ) | ( | ) | ||||
| Net deferred tax asset | ||||||||
| Deferred Tax Liabilities | ||||||||
| Fixed asset basis differences | ||||||||
| Total Deferred Tax Liabilities | ||||||||
| Net Deferred Tax Asset (Liability) | $ | - | $ | |||||
| F-26 |
GLOBAL
INTERACTIVE TECHNOLOGIES, INC. AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
NOTE 18 — INCOME TAXES (cont.)
The Company’s wholly-owned Korean subsidiary, Faning Korea, LLC was acquired in December 2024. Net operating losses generated under the Korean Corporate Tax Act may be carried forward for up to 15 years. Based on management’s evaluation of available evidence, no separate deferred tax asset has been recognized for the Korean tax loss carryforwards, as the related amounts are not material to the consolidated financial statements and any deferred tax asset recognized would be fully offset by a valuation allowance.
The
parent company, Global Interactive Technologies, Inc. generated approximately $
Movements in the valuation allowance for the period ended March 31, 2026 and the year ended 2025 were as follows:
SCHEDULE OF MOVEMENTS IN THE VALUATION ALLOWANCE
| Valuation Allowance | March 31, 2026 | December 31, 2025 | ||||||
| Beginning Balance | $ | $ | ||||||
| Additions Charged to Income Tax Expense | ( | ) | ||||||
| Reductions / Reversals Credited to Income Tax Expense | ||||||||
| Ending Balance | $ | $ | ||||||
The Company recorded a full valuation allowance against its gross deferred tax assets as of March 31, 2026 and December 31, 2025. In assessing the realizability of deferred tax assets, the Company considered all available positive and negative evidence, especially the history of cumulative operating losses incurred at both the U.S. parent and Korean subsidiary levels, management concluded that it is more likely than not that the deferred tax assets will not be realized.
The cash income taxes paid information is as follows:
SCHEDULE OF CASH INCOME TAXES PAID
| Cash Income Taxes Paid (Refunded), Net | March 31, 2026 | December 31, 2025 | ||||||
| U.S. — Federal | $ |
| $ | |||||
| U.S. — State and Local | ||||||||
| Republic of Korea | ||||||||
| Total Cash Income Taxes Paid, Net | $ | $ | ||||||
As of March 31, 2026 and December 31,2025, the Company had no material unrecognized tax benefits, and no material amounts have been accrued for interest or penalties associated with uncertain tax positions. The Company does not anticipate any significant changes to its unrecognized tax benefits within the nine months following March 31, 2026. A reconciliation of the beginning and ending balances of unrecognized tax benefits would result in zero activity for each period presented and is therefore not separately tabulated.
NOTE 19— SUBSEQUENT EVENTS
-
On April 22, 2026, the Company entered into a Promissory Note agreement with FirstFire Global Opportunities Fund, LLC for a principal
amount of $
The Company evaluated subsequent events in accordance with ASC 855, Subsequent Events. Management has assessed whether subsequent events require adjustment or disclosure in the consolidated financial statements.
| F-27 |
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Overview
Global Interactive Technologies, Inc. (“Global Interactive Technologies” or the “Company”) is a Delaware corporation operating and developing Faning, a global digital fan engagement platform focused on Korean entertainment and culture, including K-pop.
Faning is designed to support online fan communities, user interaction, multilingual communication, and digital engagement experiences across mobile and web-based services. The platform evolved from the legacy Fantoo platform ecosystem.
The Company’s primary operational focus has been the continued development, maintenance, and support of the Faning platform, along with preparation for future commercialization initiatives. The Company also focused on public company compliance activities, operational restructuring, and financing initiatives.
Although the Company continued developing monetization-related functionality including digital engagement features, subscription-related functionality, and advertising infrastructure, the Faning platform remained in an early-stage commercialization phase as of March 31, 2026. Revenue generated from the platform during the fiscal year ended December 31, 2025 and the three months of March 31, 2026 remained limited.
The Company believes that continued global interest in Korean entertainment and culture may create future opportunities for user engagement and platform growth; however, the Company’s future growth and commercialization efforts remain subject to substantial uncertainty, including user adoption, successful execution of monetization initiatives, availability of capital resources, and overall market conditions.
Faning Platform
The Faning platform includes community engagement tools, messaging and communication features, multilingual support functionality, user-generated content capabilities, and digital participation systems intended to facilitate interaction among users with shared entertainment and cultural interests.
The Company has also explored and developed various monetization initiatives associated with the platform, including digital engagement tools, subscription-related functionality, advertising infrastructure, and other fandom-related digital services. As of March 31, 2026, these monetization initiatives remained in early stages of commercialization.
Key Performance Indicators
Management monitors certain operational metrics and key performance indicators (“KPIs”) to evaluate platform activity and future business opportunities. These metrics include registered users, monthly active users (“MAUs”), average revenue per user (“ARPU”), and user acquisition cost (“UAC”).
The legacy Fantoo platform historically accumulated approximately 26.6 million registered accounts as of December 31, 2024. The Company views this historical registered account base as a potential long-term strategic asset; however, the Company did not complete a migration or reactivation of this historical user base during 2025 or the first three months of March 31, 2026 and cannot currently predict the extent to which such historical users may become active users, retained users, or monetizable users within the Faning platform.
ARPU remained limited during 2025 and the first three months of March 31, 2026 as the Company continued operating in an early-stage commercialization phase. Management expects that future operational performance, if commercialization initiatives are successfully implemented, may depend on user engagement, monetization adoption, marketing efficiency, and broader platform growth initiatives.
Results of Operations
Comparison of Results of Operations for the Three Months Ended March 31, 2026 and 2025
Revenues and Cost of Sales
Revenue for the three months ended March 31, 2026 was $96 compared to sales of $-0- for the three months ended March 31, 2025. The revenue sources primarily relate to subscriptions and in-app purchase in the FANING platform.
Cost of sales were $0 for the three months ended March 31, 2026 and March 31, 2025, respectively.
Operating expenses
| Line Item | March 31, 2026 | March 31, 2025 | Change | |||||||||||||
| Revenue | 96 | - | 96 | N/A | ||||||||||||
| Operating Expenses | 496,447 | 563,468 | (67,021 | ) | (11.9 | )% | ||||||||||
| Other Expenses | 642 | 3,213 | (2,571 | ) | (80.0 | )% | ||||||||||
| Net Loss | 496,993 | 566,681 | (69,688 | ) | (12.3 | )% | ||||||||||
| Cash and Cash Equivalents | 360 | 253 | 107 | 42.3 | % | |||||||||||
| Stockholders’ Equity | 2,951,415 | 5,393,008 | (2,441,593 | ) | (45.3 | )% | ||||||||||
Operating expenses for the three months ended March 31, 2026 were $496,447 compared to $563,468 during the same three months ended March 31, 2025. The material decrease in expenses is attributable to a decrease in our amortization expenses of intangible asset.
Operating expenses for the three months ended March 31, 2026 were primarily composed of: Amortization expense of $189,316, lease expense of $56,328, annual fee expense of $56,000, legal and professional fees expense of $101,912, salary expense of $53,650, directors’ fee expense of $36,000, and other general and administrative expenses.
Other income and (expense)
Other income (expense) is comprised solely of interest expense and a gain or loss on foreign currency transactions. Other expense was $642 for the three months ended March 31, 2026, compared to $3,213 in other expense during the three months ended March 31, 2025.
Net loss
As a result of the foregoing, we recorded a net loss of $496,993 or $(0.14) per share for the three months ended March 31, 2026, compared to a loss of $566,681 or $(0.20) per share for the three months ended March 31, 2025.
| 1 |
Liquidity and Capital Resources
As of March 31, 2026, the Company had $360 cash on hand.
| March 31, 2026 ($) | March 31, 2025 ($) | Change ($) | ||||||||||
| Not cash used in operating activities | (51,737 | ) | (96,330 | ) | 44,593 | |||||||
| Net cash provided by investing activities | - | - | - | |||||||||
| Net cash provided by financing activities | 49,911 | 114,660 | (64,749 | ) | ||||||||
| Total Net Change in Cash – Continued Operations | (1,826 | ) | 18,330 | (20,156 | ) | |||||||
| Effect of Exchange Rates on Cash and Equivalents | (4,804 | ) | (20,429 | ) | 15,625 | |||||||
| Cash beginning of period – continued operations | 6,990 | 2,352 | 4,638 | |||||||||
| Cash end of period – continued operations | 360 | 253 | 107 | |||||||||
During the three months ended March 31, 2026, the Company had a net loss of $496,993.
Cash flows used in operating activities were $51,737 for the three months ended March 31, 2026, compared to cash flows used in operating activities $96,330 for the three months ended March 31, 2025. The decrease in cash flows used in operating activities for the three months ended March 31, 2026, compared to the same three-month period in 2025, is primarily attributable to decreases in amortization of intangible asset and accounts payable – nontrade offset by an increase in accrued expenses and other current liabilities.
Cash flows used in investing activities were $0 for the three months ended March 31, 2026 and March 31, 2025, respectively
Cash flows provided by financing activities were $49,911 for the three months ended March 31, 2026, compared to $114,660 in cash flows provided by financing activities for the three months ended March 31, 2025. The decrease in cash flows provided by financing activities in the three months ended March 31, 2026, is primarily attributable to a decrease in proceeds from short-term borrowings and proceeds from short-term borrowing from related parties offset by repayment of short-term borrowing from related parties.
Going Concern
As of March 31, 2026, the Company had an accumulated deficit of $43,031,188 and a working capital deficiency of $1,130,771. In addition, the Company incurred an net loss of $496,993 for the period ended March 31, 2026.
These conditions raise substantial doubt about the Company’s ability to continue as a going concern for twelve months after the issuance date of these consolidated financial statements. The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. These consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Management intends to address these conditions by continuing the launch and commercialization of the upgraded Faning 2.0 platform, pursuing K-food products and entertainment-related business ventures, seeking to increase user engagement and monetization, controlling operating costs, and pursuing additional capital through equity financings, borrowings, or other available financing arrangements. However, there can be no assurance that the Company will be successful in implementing these plans or that sufficient funding will be available on terms acceptable to the Company, if at all.
Off-Balance Sheet Arrangements
As of March 31, 2026, the Company did not have any off-balance sheet arrangements, as defined under applicable SEC rules, that have or are reasonably likely to have a material current or future effect on the Company’s financial condition, results of operations, liquidity, capital expenditures, or capital resources.
Critical Accounting Policies and 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:
| ● | Fair value measurements (including the fair value of the Company’s common stock); | |
| ● | Stock-based compensation; | |
| ● | Recoverability, useful lives, and impairment assessments of long-lived and intangible assets; | |
| ● | Valuation allowance relating to the Company’s deferred tax assets; and | |
| ● | Assumptions related to projected future cash flows and commercialization timing. |
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.
| 2 |
Contractual Obligations
As of March 31, 2026, the Company did not have any material long-term contractual obligations, other than obligations incurred in the ordinary course of business, including accrued professional fees and other accounts payable reflected in the Company’s consolidated financial statements.
Recent Accounting Pronouncements
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.
We have determined that all other issued, but not yet effective accounting pronouncements are inapplicable or insignificant to us and once adopted are not expected to have a material impact on our financial position.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
We are exposed to market risks in the ordinary course of our business. Market risk represents the risk of loss that may impact our financial position due to adverse changes in financial market prices and rates. Our market risk exposure is primarily the result of fluctuations in foreign currency and credit.
Foreign Currency Risk
The Company’s functional currency is KRW and reporting currency is USD. FANING KOREA, LLC, the Company’s wholly owned Korean subsidiary, maintains certain local accounts and records in KRW in connection with administrative support activities in South Korea.
As a result, the Company may be exposed to foreign currency risk from fluctuations in exchange rates between KRW and USD with respect to KRW-denominated assets, liabilities, expenses, and cash flows associated with FANING KOREA, LLC’s administrative activities.
The Company does not currently enter into derivative instruments or other hedging transactions to manage foreign currency risk.
Credit Risk
The Company’s cash and cash equivalents, deposits, and other balances held with banks and financial institutions may be subject to concentration of credit risk. The Company seeks to place its cash and cash equivalents with financial institutions that management believes are of acceptable credit quality.
Item 4. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures Our management has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under “Exchange Act”), as of March 31, 2026. Based on such evaluation, our Chief Executive Officer has concluded that as of March 31, 2026, our disclosure controls and procedures were not effective to provide reasonable assurance that information required to be disclosed by us in the reports that we file or submit under the Exchange Act (a) is recorded, processed, summarized and reported within the time periods specified by Securities and Exchange Commission (“SEC”) rules and forms and (b) is accumulated and communicated to our management, including our Chief Executive Officer, as appropriate, to allow timely decisions regarding any required disclosure.
| 3 |
Management acknowledges the observation and understands the importance of establishing formal risk assessment procedures and strengthening segregation of duties. Due to the Company’s current size and limited resources, certain functions remain concentrated. However, management plans to gradually enhance internal control procedures, including periodic risk assessments and improved review processes, as the Company continues to grow.
Management acknowledges the need to further strengthen the accounting team’s technical knowledge of U.S. GAAP. The Company intends to continue working with external consultants and advisors and will provide additional training and supervision to improve the accuracy and consistency of financial reporting.
Management recognizes the importance of specialized U.S. GAAP expertise. The Company will continue to engage external accounting professionals and technical consultants when necessary and intends to strengthen internal capabilities over time through additional training and recruitment efforts, subject to available resources.
Management acknowledges the deficiency related to the identification and disclosure assessment of related parties. The Company has corrected the public filing through an amended filing and plans to implement enhanced procedures for identifying, documenting, and reviewing related-party relationships and transactions prior to future SEC filings.
These material weaknesses could result in a misstatement of account balances or disclosures such that a material misstatement of the Company’s annual or interim financial statements may not be prevented or detected on a timely basis. Notwithstanding the identified material weaknesses, management performed additional analyses and other procedures and concluded that the consolidated financial statements included in this Quarterly Report on Form 10-Q fairly present, in all material respects, the Company’s financial position, results of operations, and cash flows for the periods presented in conformity with U.S. GAAP.
Changes in Internal Control Over Financial Reporting
On December 22, 2025, during the quarter ended December 31, 2025, the Company’s Chief Financial Officer, Juhyon Shin, submitted his resignation, which was accepted by the company in March 2026 and was disclosed in the Company’s Current Report on Form 8-K filed on March 19, 2026.
During the transition, the Company relied on management oversight and outside accounting and professional advisors to support its financial reporting process. And the Company is currently offering a position for CFO and is seeking to hire a new CFO.
Except as described above, there were no changes in the Company’s internal control over financial reporting during the quarter ended March 31, 2026 that materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
| 4 |
PART II—OTHER INFORMATION
Item 1. Legal Proceedings.
On November 6, 2024, the Financial Services Commission of Korea notified the Company that it intends to impose an administrative fine of KRW 142,100,000 on Hanryu Holdings, Inc. (the former name of the Company), alleging that the Company failed to submit a securities registration statement in Korea in connection with the portion of the IPO funds raised from Korean investors in 2023.
In response, the Company contested the notice, asserting that it only held an information session without soliciting subscriptions, and that Hanryu Holdings, Inc. is a U.S. corporation not subject to Korean regulations and therefore not obligated to file a securities registration statement in Korea. However, on March 27, 2025, the Financial Services Commission rejected the Company’s objection.
As a result, on June 24, 2025, the Company filed an administrative appeal with the Korea Central Administrative Appeals Commission seeking cancellation of the administrative fine. An administrative appeal to the Administrative Appeals Commission is a non-judicial procedure that can be filed prior to an administrative lawsuit, and based on the outcome of the appeal, the Company may file an administrative lawsuit with the court.
Regarding the administrative appeal filed against the imposition of a fine of KRW 142,100,000 by the Financial Services Commission, the Korean Central Administrative Appeals Commission scheduled a hearing for October 14, 2025. As a result of the hearing, the Commission dismissed the Company’s appeal to cancel the fine of KRW 142,100,000.
The Company received the written decision of the administrative appeal from the Central Administrative Appeals Commission by mail on November 6, 2025. The Company is currently seeking the cancellation of the administrative surcharge imposed by the Securities and Futures Commission of Korea through administrative court proceedings, and the matter remains pending.
Item 1A. Risk Factors.
As a “smaller reporting company” as defined by Rule 12b-2 of the Exchange Act, we are not required to provide information required by this item.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
Not applicable.
Item 3. Defaults Upon Senior Securities
Not applicable.
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information
During
the three months ended March 31, 2026, none of our directors or officers (as defined in Rule 16a-1(f) of the Exchange Act)
| 5 |
Item 6. Exhibits.
The following exhibits are included herein or incorporated herein by reference:
| 3.1 | Amended and Restated Certificate of Incorporation of the Company | Incorporated herein by reference to Exhibit 3.1 to the Company’s Annual Report on Form 10-K (File No. 001-41763) as filed with the SEC on May 26, 2026 | |
| 3.2 | Bylaws of the Company | Incorporated herein by reference to Exhibit 3.2 to the Company’s Annual Report on Form 10-K (File No. 001-41763) as filed with the SEC on May 26, 2026 | |
| 10.1 | Equity Purchase Agreement, dated March 26, 2026, by and between the Company and Hudson Global Ventures LLC | Incorporated herein by reference to Exhibit 1 to the Company’s Current Report on Form 8-K (File No. 001-41763) as filed with the SEC on March 30, 2026 | |
| 10.2 | Securities Purchase Agreement, dated April 22, 2026, by and between the Company and FirstFire Global Opportunities Fund, LLC | Incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K (File No. 001-41763) as filed with the SEC on April 28, 2026 | |
| 10.3 | Convertible Promissory Note, dated April 22, 2026, by and between the Company and FirstFire Global Opportunities Fund, LLC | Incorporated herein by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K (File No. 001-41763) as filed with the SEC on April 28, 2026 | |
| 10.4 | Master Recording and Transfer Agreement between the Company and Moon Seok Hwan dated January 19, 2026 | Filed herewith; asterisks located within the exhibit denote information which has been redacted pursuant to Item 601(b)(10)(iv) of Regulation S-K because it is both not material and would likely cause competitive harm to us if publicly disclosed. | |
| 10.5 | Master Recording and Performance Rights Agreement between the Company and Pandora Co., Ltd. dated January 19, 2026 | Filed herewith; asterisks located within the exhibit denote information which has been redacted pursuant to Item 601(b)(10)(iv) of Regulation S-K because it is both not material and would likely cause competitive harm to us if publicly disclosed. | |
| 31.1 | Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 of the Principal Executive Officer and Principal Financial Officer | Filed herewith | |
| 32.1 | Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 of the Principal Executive Officer and Principal Financial Officer | Furnished herewith | |
| 101.INS | Inline XBRL Instance Document | Filed herewith | |
| 101.SCH | Inline XBRL Taxonomy Extension Schema Document | Filed herewith | |
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document | Filed herewith | |
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document | Filed herewith | |
| 101.LAB | Inline XBRL Extension Label Linkbase Document | Filed herewith | |
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document | Filed herewith | |
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) | Filed herewith |
| 6 |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| Global Interactive Technologies, Inc |
| Signature | Title | Date | ||
| /s/ Taehoon Kim | Chief Executive Officer | June 22, 2026 | ||
| Taehoon Kim | (Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer) |
| 7 |
Exhibit 10.4
Portions of this exhibit marked as “[****]” have been excluded because they are both not material and would likely cause competitive harm to the registrant if publicly disclosed.
English Translation –
Master Recording and Performance Rights Agreement
Animation ‘The Legend of Mega Race’ OST
Master Recording and Performance Rights Agreement
This Agreement is entered into by and between:
| ● | Global Interactive Technologies, Inc. (hereinafter referred to as the “Party A”); and | |
| ● | Pandora Co., Ltd. (hereinafter referred to as the “Party B”). |
With respect to the transfer of rights relating to the content associated with ‘The Legend of Mega Race’ OST performed by ATEEZ (members: Hongjoong, Seonghwa, Yunho, Yeosang, San, Mingi, Wooyoung, and Jongho), artists affiliated with KQ Entertainment Co., Ltd. (hereinafter referred to as “ATEEZ”), the parties hereby agree as follows:
Article 1 (Representations and Purpose)
| 1. | Party B represents and warrants that, as of the execution date of this Agreement, it lawfully holds the rights relating to the content subject to this Agreement within the scope of the rights acquired pursuant to the “Animation ‘The Legend of Mega Race’ OST Sound Source and OST Album Performance Agreement” entered into with KQ Entertainment Co., Ltd. on January 15, 2026 (the “Prior Agreement”). |
| 2. | Through this Agreement, Party B transfers such rights to Party A within the scope of the usage and disposition rights acquired under the Prior Agreement. |
| 3. | Party A may use, distribute, and otherwise exploit the content within the scope of the rights transferred under this Agreement, and Party B shall cooperate within a reasonable scope. |
Article 2 (Overview of the Content)
| 1. | A completed master recording including lyrics, composition, session work, recording, mixing, and mastering. |
| 2. | One promotional video produced upon Party A’s request. |
| 3. | Participation of at least four (4) ATEEZ members in the vocal recording. |
| 4. | Number of songs: one (1). |
Article 3 (Transfer Fee)
| 1. | Party A shall pay Party B KRW [****] (VAT excluded) as consideration for the transfer of the content under this Agreement. Such amount includes all costs necessary for Article 2 above (excluding promotional video filming and editing expenses). Any additional production, revisions, re-shooting, or additional promotional material requests not specified in this Agreement shall be separately discussed and agreed upon by the parties. |
| 2. | Party B warrants that no additional costs, including royalties, minimum guarantees (MG), or revenue sharing obligations, shall arise other than the amount stated above. |
| 3. | Payment shall be made as follows: |
| ○ | KRW [****] (VAT excluded) upon completion of recording; and | |
| ○ | KRW [****] (VAT excluded) on the date of delivery of the master recording. |
Payment shall be made by wire transfer to the bank account designated by Party B.
| ○ | Account Name: Pandora Co., Ltd. | |
| ○ | Bank: Woori Bank | |
| ○ | Account Number: [****] |
Article 4 (Territory)
The territory for use of the content under this Agreement shall be worldwide, including the Republic of Korea.
Article 5 (Scope of Use)
Within the scope of the rights transferred under this Agreement, Party A may use the content in the following manners:
| 1. | As background music for the animation. |
| 2. | In Original Sound Track albums and other physical media. |
| 3. | In audiovisual works related to the animation and other physical media. |
| 4. | Through wired and wireless online services for the sound recording and related works. |
| 5. | Through wired and wireless online and offline services directly related to the animation and its derivative content. |
Article 6 (Intellectual Property Rights)
Copyright to the content shall belong to the original copyright holder, and Party A shall hold the intellectual property rights and neighboring rights within the scope transferred under this Agreement.
Article 7 (Rights and Obligations)
| 1. | Party A and Party B shall cooperate with each other in the production and exploitation of the content. |
| 2. | Within the scope previously discussed and agreed upon with KQ Entertainment Co., Ltd., ATEEZ agrees that the content may be exposed through the animation and promotional audiovisual materials solely within the scope of this Agreement and the Prior Agreement. |
| 3. | Any promotional video production relating to the content may proceed only within the scope previously agreed upon with KQ Entertainment Co., Ltd. Consultation regarding the scope, details, method, and schedule of filming must be completed at least seven (7) days prior to filming. (Limited to one making-film production.) |
| 4. | Recording shall be completed by February 28, 2026, unless otherwise changed upon mutual agreement. |
Article 8 (Termination and Liability)
| 1. | If Party B breaches its obligations under this Agreement without justifiable cause, Party A may terminate this Agreement and request the return of any amounts already paid. |
| 2. | If use of the content becomes substantially impossible due to a criminal matter involving ATEEZ, the parties shall mutually discuss and determine whether to maintain or terminate the Agreement. |
| 3. | Party B shall not bear additional liability for damages under this Agreement arising from issues relating to the Prior Agreement that are not attributable to Party B. |
| 4. | If the project is discontinued due to reasons attributable to Party A, amounts already paid shall not be refunded. |
Article 9 (Miscellaneous)
| 1. | Matters not specified in this Agreement shall be determined through mutual consultation in good faith. |
| 2. | Any disputes relating to this Agreement shall be subject to the exclusive jurisdiction of the Seoul Central District Court. |
January 19, 2026
Party A
Global Interactive Technologies, Inc.
Representative: Taehoon Kim
Party B
Pandora Co., Ltd.
Representative: Junho Chu
Exhibit 10.5
Portions of this exhibit marked as “[****]” have been excluded because they are both not material and would likely cause competitive harm to the registrant if publicly disclosed.
English Translation –
Master Recording and Transfer Agreement
Animation ‘The Legend of Mega Race’ OST
“Party A”: Global Interactive Technologies, Inc.
“Party B”: Moon Seok Hwan
Global Interactive Technologies, Inc. (hereinafter referred to as “Party A”) and Moon Seok Hwan (hereinafter referred to as “Party B”) enter into this Agreement to define the rights and obligations necessary for Party B to produce and complete all works related to ‘The Legend of Mega Race’ OST, including sound recordings and promotional videos performed by three artist teams — Kang Daniel, KiiiKiii (members: Kya, Isol, Jiyu, Haum, Sui), and KIRAS (members: RingRing, Kurumi, Harin, Kylie, Doyeon, Roa) (hereinafter collectively referred to as the “Artists”) — and to assign such works (hereinafter referred to as the “Content”) to Party A.
Article 1 (Representations and Purpose)
| 1. | Party B represents and warrants that, at the time of execution of this Agreement, Party B fully owns and controls all rights from the Artists necessary for this Agreement through valid contracts. |
| 2. | Through this Agreement, Party B assigns to Party A all Content related to the ‘The Legend of Mega Race’ OST, including OST sound sources, OST album recordings, promotional videos, and all related materials involving the Artists. |
| 3. | Party A shall permanently obtain all rights to enter into and dispose of various agreements with third parties as the rights holder, distributor, and producer of the Content, and Party B shall actively cooperate therewith. |
Article 2 (Overview of the Content)
| ● | Artists: Kang Daniel, KiiiKiii (members: Kya, Isol, Jiyu, Haum, Sui), and KIRAS (members: RingRing, Kurumi, Harin, Kylie, Doyeon, Roa) |
| ● | Fully paid master recordings and all multi-track files including all expenses related to vocals, lyrics, composition, session services, recording, mixing, and mastering for all of the above Artists |
| ● | All promotional video productions requested by Party A from Party B for promotional purposes |
| ● | Number of songs: One vocal track per each of the above three teams, for a total of three songs |
| ● | One promotional video per Artist/team |
| ● | Promotional and media marketing support for the commercial success of the film ‘The Legend of Mega Race’ |
Article 3 (Assignment Fee for the Content)
| 1. | Party A shall pay Party B KRW [****] (VAT excluded) as consideration for the above Content, and such amount includes all costs necessary under Article 2. |
| 2. | Party
B guarantees that there shall be no additional costs payable to Party B beyond the above
amount, including royalties, minimum guarantees (MG), or profit-sharing payments. (Royalties, MGs, and profit-sharing arrangements already contracted with the Artists shall subsequently be distributed directly by Party A to the Artists.) |
| 3. | Payment shall be made on the same day the master recordings are delivered, by wire transfer to the bank account designated by Party B. |
Article 4 (Territory)
The territory for use of the work under this Agreement shall be worldwide, including the Republic of Korea.
Article 5 (Scope of Use)
Party A may use the work under this Agreement as follows, and Party B and the Artists under Article 2 hereby guarantee and agree thereto:
| 1. | As background music for the animation |
| 2. | In Original Sound Track albums and other physical media related to the animation |
| 3. | In audiovisual works related to the animation and other physical media |
| 4. | Through wired and wireless online services for the sound recordings and the work |
| 5. | In all other audiovisual works, online and offline services, and albums planned and produced by Party A and its affiliates |
Article 6 (Intellectual Property Rights)
Party A shall own the intellectual property rights and neighboring rights related to the work under this Agreement. However, the original copyright holders shall retain their copyrights.
Article 7 (Rights and Obligations)
| 1. | Party A and Party B shall use their best efforts for the production and promotion of the work. |
| 2. | Party B shall ensure that the Artists cooperate with appearances in videos, advertisements, teasers, wired/wireless services, and other materials related to the Content, and Party B shall take responsibility for arranging and conducting the filming. |
| 3. | Party B shall complete recording by February 28, 2026; provided, however, that the schedule may be changed upon mutual agreement. |
Article 8 (Termination and Penalties)
| 1. | If Party B or the Artists fail to comply with the recording schedule without justifiable reason or breach their contractual obligations, Party A may terminate this Agreement and demand return of any amounts already paid as well as compensation for damages. |
| 2. | If any Artist causes social controversy, including being criminally indicted or convicted, thereby causing significant damage to the image, reputation, or credibility of the OST or the related audiovisual work, Party A may immediately terminate this Agreement. |
| 3. | If this Agreement is terminated for the reasons set forth in Paragraph 2 above, Party B shall return the full amount already received, and Party A may claim compensation for all resulting damages, including promotional expenses, production costs, distribution costs, and other related losses. |
| 4. | If the project is suspended due to reasons attributable to Party A, any amounts already paid shall not be refunded. |
Article 9 (Good Faith and Miscellaneous)
| 1. | Any matters not specified in this Agreement shall be resolved in accordance with general commercial practices based on the principles of good faith and sincerity between Party A and Party B. |
| 2. | Any disputes arising in connection with this Agreement shall be subject to the exclusive jurisdiction of the Seoul Central District Court. |
January 19, 2026
Party A
Global Interactive Technologies, Inc.
Representative: Taehoon Kim
Party B
Moon Seok Hwan
Exhibit 31.1
CERTIFICATION
PURSUANT TO RULE 13a-14 AND 15d-14
UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED
I, Taehoon Kim, certify that:
| 1. | I have reviewed this Quarterly Report on Form 10-Q (this “Report”) for the quarterly period ended March 31, 2026 of Global Interactive Technologies, Inc.; |
| 2. | Based on my knowledge, this Report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this Report; |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this Report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this Report; |
| 4. | I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have: |
| a. | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to me by others within those entities, particularly during the period in which this Report is being prepared; |
| b. | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under my supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
| c. | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this Report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this Report based on such evaluation; and |
| d. | Disclosed in this Report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
| 5. | I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
| a. | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
| b. | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
| Date: June 22, 2026 | By: | /s/ Taehoon Kim |
| Taehoon Kim | ||
| Chief Executive Officer | ||
(Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer) |
Exhibit 32.1
CERTIFICATION
PURSUANT TO 18 U.S.C. 1350
(SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002)
In connection with the Quarterly Report of Global Interactive Technologies, Inc. (the “Company”) on Form 10-Q for the quarterly period ended March 31, 2026, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Taehoon Kim, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of my knowledge:
| (1) | the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
| (2) | the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
| Date: June 22, 2026 | By: | /s/ Taehoon Kim |
| Taehoon Kim | ||
Chief
Executive Officer Principal Financial Officer and Principal Accounting Officer) |