Global Interactive Technologies, Inc.

NOTE 1 — NATURE OF OPERATIONS AND BASIS OF PRESENTATION

Global Interactive Technologies, Inc. (“GITS”) is a corporation incorporated in the State of Delaware, and in 2024, we acquired 100% ownership of our subsidiary, Faning Korea, LLC. We aim to become a leading company in the global Korean entertainment market, also known as “Hanryu” or “K-Culture,” through our fan-participation-based social media platform, FANING. The FANING platform is an all-in-one global playground where fans around the world can consume, create, and get rewarded for content related to their interests, and connect with other like-minded fans.** **

Corporate History

Since the inception of Global Interactive Technologies, Inc in 2018, we have accomplished a number of key objectives, as follows:

NOTE 1 — NATURE OF OPERATIONS AND BASIS OF PRESENTATION (cont.)

NOTE 1 — NATURE OF OPERATIONS AND BASIS OF PRESENTATION (cont.)

Risks and Uncertainties

The Company is subject to a number of risks similar to other companies in its industries, including rapid technological change and transitions in Hanryu trends. The extent of the impact of the COVID-19 pandemic on the Company’s business continues to be highly uncertain and difficult to predict, as the responses that the Company, other businesses and governments are taking continue to evolve. Furthermore, capital markets and economies worldwide have also been negatively impacted by the COVID-19 pandemic, and it is possible that it could cause a lasting national and/or global economic recession. Policymakers around the globe have responded with fiscal policy actions to support the entertainment industry and economy as a whole.

To date, the Company has experienced significant changes in the business as a result of the COVID-19 pandemic. The impact has delayed the Company’s ability to generate revenue as result of the diversification of potential customer budgets towards the COVID-19 pandemic. The extent to which the COVID-19 pandemic may in the future materially impact the Company’s financial condition, liquidity or results of operations is uncertain.

Going Concern

The Company had an accumulated deficit of $37,901,301 and working capital of $(665,352) as of December 31, 2024. As of December 31, 2023, the accumulated deficit was $38,893,762 and working capital was $(2,927,886). Also, the Company has operating losses of $888,363 and $2,005,925 for the years ended December 31, 2024 and December 31, 2023, respectively. These uncertainties raise substantial doubt about the Company’s ability to continue as a going concern for after the issuance date of these financial statements. The accompanying financial statements have been prepared under the assumption that we will continue as a going concern. The financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the possible inability of us to continue as a going concern.

The Company is soon to launch the upgraded FANING2 version. The upgraded FANING2 version has been restructured with a user-centric approach and is designed to create a platform focused on ensuring profitability. Additionally, through its subsidiary, Faning Korea, LLC, the Company plans to pursue K-Food products and entertainment business ventures. Furthermore, to secure additional operating capital, the Company intends to proceed with a capital increase and borrowings. However, there can be no assurance as to the outcome of these factors or that future funding efforts will generate sufficient capital to maintain our operations.

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 Company’s consolidated financial statements include Global Interactive Technologies and its wholly owned subsidiary Faning Korea, LLC, which was acquired on December 4, 2024. The financial statements also include Hanryu Bank Co. Ltd, FNS Co. Ltd, and Marin Island Co. Ltd, which were classified as discontinued operations following the sale of their equity interests in 2024. Additionally, all significant intercompany transactions and balances have been eliminated in consolidation.

Changes in the consolidated group’s interest in a subsidiary that do not result in a loss of control are accounted for as equity transactions.

On November 5, 2024, Hanryu Bank Co. Ltd (“HBC”) sold all of its equity interests in FNS Co. Ltd and Marin Island Co. Ltd. Furthermore, on December 28, 2024, Global Interactive Technologies (“the Company”) sold all of its equity interest in Hanryu Bank Co. Ltd (“HBC”). As a result, these subsidiaries will be excluded from consolidation starting from the date of the equity sales.*** ***

Goodwill

Goodwill represents the excess of the purchase price over the fair value of the identifiable net assets acquired in a business combination. Goodwill is not amortized but is tested for impairment at least annually, or more frequently if events or changes in circumstances indicate that the carrying value may not be recoverable. The Company performs its annual impairment assessment on goodwill as of December 31 of each fiscal year. If the carrying value of the reporting unit exceeds its fair value, an impairment loss is recognized in an amount equal to the excess, not to exceed the total amount of goodwill allocated to the reporting unit.

Intangible Assets

Intangible assets acquired separately are recorded at cost, and those acquired in a business combination are recognized at fair value as of the acquisition date. The Company’s intangible assets primarily consist of trademarks, customer relationships, and software, which are amortized on a straight-line basis over their estimated useful life of 5 years. The Company reviews the recoverability of its intangible assets whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. If the carrying amount of an intangible asset is not recoverable, an impairment loss is recognized for the amount by which the carrying amount exceeds its fair value.

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 December 31, 2024 and December 31, 2023. During the year ended December 31, 2024, there was a fluctuation in the exchange rates ranging from KRW 1,289.40/USD $1 to KRW 1,470.00/USD $1. Also, cash flows are also translated at average translation rates for the periods, therefore, amounts reported on the statement of cash flows will not necessarily agree with changes in the corresponding balances on the consolidated balance sheets.

Use of Estimates

The preparation of the Company’s consolidated financial statements and related disclosures in conformity with U.S. Generally Accepted Accounting Principles (“US GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosures of contingent liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Management evaluates its estimates on an ongoing basis. Although estimates are based on the Company’s historical experience, knowledge of current events and actions it may undertake in the future, actual results may materially differ 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, and the balance of deposit accounts of the Company exceed the federal insurance limit as of December 31, 2024.

Accounts Receivable

Accounts receivables are recorded at the invoiced amount and do not bear interest. Amounts collected on trade accounts receivable are included in net cash provided by operating activities in the consolidated statements of cash flows. The Company maintains an Allowance for credit losses for estimated losses inherent in its accounts receivable portfolio. In establishing the required allowance, management considers historical losses adjusted to take into account current market conditions and customers’ financial condition in dispute, and the current receivables aging and current payment patterns. The Company reviews its Allowance for credit losses quarterly. Past-due balances over 90 days and over a specified amount are reviewed individually for collectability. Account balances are written off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. The Company recorded the allowance of $0 on the accompanying consolidated balance sheets as of December 31, 2024 and December 31, 2023. The Company does not have any off-balance-sheet credit exposure related to its customers.

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 credit losses 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 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 has set an Allowance for credit losses of $16,179,823 in full as of December 31, 2024, related to the loan balance from the sale of subsidiaries, and had no Allowance for credit losses as of December 31, 2023. The Company does not have any off-balance-sheet credit exposure related to its customers.

Credit Losses

The Company maintains current receivable amounts with most of its customers and vendors. The Company regularly monitors and assesses its risk of not collecting amounts owed by them. This evaluation is based upon an analysis of current and past due amounts, along with relevant history and facts particular to the customer. The Company records its allowance for credit losses based on the results of this analysis. The analysis requires the Company to make significant estimates and as such, changes in facts and circumstances could result in material changes in the allowance for credit losses. The Company considers as past due any receivable balance not collected within its contractual terms.

The Company wrote off $16,179,823 of short-term loan receivables as of December 31, 2024.

Revenue Recognition

The Company anticipates generating revenues from (i) FANING platform through advertising, direct sales, and user to user commissions, and (ii) other businesses. Revenue billed or collected in advance will be recorded as deferred revenue until the event occurs or until applicable performance obligations are satisfied.

Revenue is recognized when the Company transfers promised goods or services to customers in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods and services. In this regard, revenue is recognized when: (i) the parties to the contract have approved the contract (in writing, orally, or in accordance with other customary business practices) and are committed to perform their respective obligations; (ii) the entity can identify each party’s rights regarding the goods or services to be transferred; (iii) the entity can identify the payment terms for the goods or services to be transferred; (iv) the contract has commercial substance (that is, the risk, timing, or amount of the entity’s future cash flows is expected to change as a result of the contract); and (v) it is probable that the entity will collect substantially all of the consideration to which it will be entitled in exchange for the goods or services that will be transferred to the customer.

Transaction prices are based on the amount of consideration to which we expect to be entitled in exchange for transferring promised goods or services to a customer, excluding amounts collected on behalf of third parties, if any. We consider the explicit terms of the revenue contract, which are typically written and executed by the parties, our customary business practices, the nature, timing, and the amount of consideration promised by a customer in connection with determining the transaction price for our revenue arrangements. Refunds and sales returns historically have not been material.

NOTE 2 — SIGNIFICANT ACCOUNTING POLICIES(cont.)

For the years ended December 31, 2024 and December 31, 2023, the Company recognized product sales revenue amounting to $0 and $0. Revenue is derived at the point in time when merchandise is sold and shipped or delivered to customers. Merchandise sales are fulfilled with inventory sourced from our owned inventory. Although the Company does not currently have any inventory as of the balance sheet date, the Company, from time to time, may hold products in inventory for an abbreviated amount of time before shipping such inventory and recognizing the corresponding revenue.

Revenue is recognized when control of the product passes to the customer, typically at the date of delivery of the merchandise to the customer, or the date a service is provided and is recognized in an amount that reflects the expected consideration to be received in exchange for such goods or services. As such, customer orders are recorded as unearned revenue prior to delivery of products or services ordered. If the Company ships high volumes of packages through multiple carriers, the Company will use estimates to determine which shipments are to be delivered and, therefore, recognized as revenue at the end of the period. Delivery date estimates are based on average shipping transit times, which are calculated using the following factors: (i) the type of shipping carrier (as carriers have different in-transit times); (ii) the fulfilment source; (iii) the delivery destination; and (iv) actual transit time experience, which shows that delivery date is typically one to eight business days from the date of shipment. The Company reviews and updates our estimates on a quarterly basis based on our actual transit time experience. However, actual shipping times may differ from our estimates.

Generally, the Company requires authorization from credit cards or other payment vendors whose services the Company offers to customers or verification of receipt of payment, before the Company ships products to purchasers. The Company generally receives payments from our customers before our payments to our suppliers are due. The Company does not recognize assets associated with costs to obtain or fulfill a contract with a customer.

Shipping and handling is considered a fulfillment activity, as it takes place prior to the customer obtaining control of the merchandise, and fees charged to customers are included in net revenue upon completion of our performance obligations. The Company presents revenue net of sales taxes, discounts, and expected refunds.

Merchandise sales contracts include terms that could cause variability in the transaction price for items such as discounts, credits, or sales returns. Accordingly, the transaction price for product sales includes estimates of variable consideration to the extent it is probable that a significant reversal of revenue recognized will not occur. At the time of sale, the Company estimates a sales return liability for the variable consideration based on historical experience, which is recorded within “Accrued Liabilities” in the consolidated balance sheet. The Company records an allowance for returns based on current period revenues and historical returns experience. The Company analyzes actual historical returns, current economic trends and changes in order volume, and acceptance of our products when evaluating the adequacy of the sales returns allowance in any accounting period.

The Company evaluates the criteria outlined in the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 606-10-55,Principal versus Agent Considerations, in determining whether it is appropriate to record the gross amount of merchandise sales and related costs or the net amount earned as commissions. When the Company is the principal in a transaction and controls the specific good or service before it is transferred to the customer, revenue is recorded gross; otherwise, revenue is recorded on a net basis. Currently, the Company records all advertising revenue as a net basis, and other revenues are recorded as a gross basis, and the revenues as a gross basis for the years ended December 31, 2024 and December 31, 2023 are $0 and $0. Through contractual terms with our partners, we have the ability to control the promised goods or services and as a result record the majority of the revenue on a gross basis.

The Company did not record revenue amounts as it classified the subsidiaries, from which past revenue was generated, as discontinued operations following their sale in 2024.

Cost of Revenue

Cost of revenue is recognized at the time the products or services are delivered to the customers. Cost of revenue includes all direct labor, material, shipping and handling cost and other direct costs such as travel, postage, telecommunication, vehicle charge, printing, and training, and allocated indirect costs related to revenue such as supplies, utilities, office equipment rental, and computers.

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:

Maintenance and repairs are charged to expense as incurred, while any additions or improvements are capitalized.

The Company evaluates property and equipment for impairment when facts and circumstances indicate that the carrying values of such assets may not be recoverable. When evaluating for impairment, the Company first compare the carrying value of the asset to the asset’s estimated future undiscounted cash flows. If the estimated undiscounted future cash flows are less than the carrying value of the asset, the Company determines if there is an impairment loss by comparing the carrying value of the asset to the asset’s estimated fair value and recognizes an impairment charge when the asset’s carrying value exceeds its estimated fair value. The fair value of the asset is estimated using a discounted cash flow model based on forecasted future revenues and operating costs, using internal projections. There were no significant property and equipment asset impairment charges recorded during the year ended December 31, 2024, and the year ended December 31, 2023.

Impairment of Long-Lived Assets

The Company assesses the recoverability of long-lived assets whenever events or changes in circumstances indicate that their carrying value may not be recoverable. If the cost basis of a long-lived asset is greater than the projected future undiscounted net cash flows from such asset, an impairment loss is recognized. Impairment losses are calculated as the difference between the cost basis of an asset and its estimated fair value. There were no significant long-lived assets impairment charges recorded during the year ended December 31, 2024 and the year ended December 31, 2023.

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. As of December 31, 2024 and December 31, 2023, there were no outstanding accounts receivable balances. The Company believes that the credit risk related to accounts receivable is manageable and controllable as of December 31, 2024 and December 31, 2023. Generally, the Company does not require collateral or other securities to support its accounts receivable and loans.

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.

A change to the level of an asset or liability within the fair value hierarchy is determined at the end of a reporting period.

Investments

The Company’s investments are carried at historical cost. As of December 31, 2024 and December 31, 2023, there is no balance of investments.

Earning (Loss) Per Share

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 years ended December 31, 2024 and 2023, 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.

Income Taxes

Deferred income tax assets and liabilities are determined based on differences between the financial statement reporting and tax basis of assets and liabilities and are measured using the enacted tax rates and laws in effect when the differences are expected to reverse. The measurement of deferred income tax assets is reduced, if necessary, by a valuation allowance for any tax benefits which are not expected to be realized. The effect on deferred income tax assets and liabilities of a change in tax rates is recognized in the period that such tax rate changes are enacted. We have determined that all of our deferred tax benefits are not likely to be realized due to our historical and expected future taxable losses. Accordingly, we have maintained a full valuation allowance.

The Company applies the provisions of FASB ASC Topic 740-10,Uncertainty in Income Taxes. The Company has evaluated our tax positions, and there are none as of December 31, 2024 and December 31, 2023.

Income taxes on the Company’s taxable income from operating activities are subject to various tax laws and determinations of the authority in the ROK. Regarding taxes payable in the ROK, if a certain portion of taxable income is not used for investments or for increases in wages or dividends, in accordance with the Tax System for Recirculation of Corporate Income, the Company is liable to pay additional income tax calculated based on Korean tax law.

The Company assesses uncertainty over a tax treatment. When the Company concludes it is not probable that the taxation authority will accept an uncertain tax treatment, the Company will reflect the effect of uncertainty for each uncertain tax treatment by using either of the following methods, depending on which method the Company expects to better predict the resolution of the uncertainty;

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 7 for additional disclosures required as a result of the adoption of this new standard.

Recently Issued Accounting Standards

In August 2020, the FASB issued ASU No. 2020-06,Debt — Debt with Conversion and Other Options (Subtopic 470-20) andDerivatives and Hedging — Contracts in Entity’s Own Equity (Subtopic 815-40). ASU 2020-06 simplifies the accounting for convertible instruments by removing certain separation models and revises the guidance on diluted earnings per share. This update is effective for fiscal years beginning after December 15, 2023.

In November 2019, the FASB issued ASU 2019-10, which amended the effective dates for various standards including credit losses, hedging, and leases. For smaller reporting companies like the Company, ASU 2016-13 (Credit Losses – Topic 326) is effective for fiscal years beginning after December 15, 2022. The Company adopted this standard in the quarter ended September 30, 2023.

In June 2016, the FASB issued ASU 2016-13,Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments, which requires the use of a current expected credit loss (CECL) model. Several amendments have since been issued to clarify implementation.

In December 2023, the FASB issued ASU 2023-09,Income Taxes (Topic 740): Improvements to Income Tax Disclosures. This update enhances the transparency of income tax disclosures by requiring detailed information on the effective tax rate reconciliation and income taxes paid by jurisdiction. The amendments are effective for annual periods beginning after December 15, 2024, with early adoption permitted.

In March 2024, the FASB issued ASU 2024-03,Income Statement—Reporting Comprehensive Income (Subtopic 220-40): Expense Disaggregation Disclosures. This update requires entities to disclose more detailed information about the nature of the expenses within certain income statement captions (such as cost of sales, SG&A, etc.). The standard is effective for fiscal years beginning after December 15, 2024, and interim periods within fiscal years beginning after December 15, 2025. Early adoption is permitted.

The Company is currently evaluating the impact of these new standards and does not expect them to have a material effect on its financial statements upon adoption.

NOTE 3 — SHORT-TERM LOAN RECEIVABLES

The following table summarizes information with regard to short-term loan receivables outstanding as of December 31, 2024 and December 31, 2023, and the interest income from short-term loan receivables is $0 and $0 for the year ended December 31, 2024 and December 31, 2023.

As of December 31, 2023, the balance of short-term loans changed from $127,000 as of December 31, 2022, to $131,080 due to the application of the year-end exchange rate, reflecting an increase in the exchange rate. This change is due to exchange rate fluctuations and is not related to any actual change in the loan amount or additional allowance for credit losses.

NOTE 4 — PREPAID EXPENSES AND OTHER RECEIVABLES

The following table summarizes information with regard to prepaid expenses and other receivables as of December 31, 2024 and December 31, 2023.

As of December 31, 2024, and December 31, 2023, prepaid expenses and other receivables were$0 and $748, respectively.

NOTE 5 — PROPERTY PLANT AND EQUIPMENT

Property plant and equipment consist of the following:

The total depreciation expense for the years ended December 31, 2024, and December 31, 2023, was $6,352 and $9,183, respectively. Depreciation expense is reflected in operating costs and expenses in the consolidated statements of operations. In 2024, the Company sold its vehicle and recorded depreciation expense up to the date of sale. The loss on disposal of the vehicle was $23,937. Due to the disposal of subsidiaries in 2024, the Company classified property, plant, and equipment, as well as related depreciation expense, as discontinued operations for both 2024 and 2023, and excluded them from the presentation in the financial statements.

NOTE 6 — SOFTWARE

The Company acquired the software through two transactions: (1) an asset transfer agreement with its former subsidiary, Hanryu Bank Co., Ltd., from which all equity interest was sold in December 2024, and (2) the transfer of the Faning application. The acquisition cost of $4,940,000 was determined based on an independent appraisal. The software is classified as an intangible asset in accordance with ASC 350 – Intangibles—Goodwill and Other, and is being amortized on a straight-line basis over its estimated useful life offive years. Beginning in 2025, the related amortization expense will be recognized as a non-operating expense in the consolidated statements of operations.

The Company regularly evaluates the recoverability of its software assets and determined that no impairment was necessary as of December 31, 2024.

NOTE 7 – Goodwill and Impairment Loss

On December 4, 2024, the Company acquired 100% of the equity interests in Faning Korea, LLC and recognized goodwill in the amount of $94,264. This amount represents the excess of the purchase consideration over the fair value of the identifiable net assets acquired.

Impairment Testing and Recognition of Impairment Loss

In accordance with ASC 350, the Company performs an annual impairment test on goodwill, and interim assessments are made when there are indicators of impairment. As of December 31, 2024, the Company determined that the goodwill had no recoverable value and concluded that the carrying amount of the goodwill exceeded its recoverable amount.

Accordingly, the Company recognized an impairment loss on intangible assets of $94,264, which has been reflected in the consolidated statement of operations for the year ended December 31, 2024. As a result, the carrying amount of goodwill related to Faning Korea, LLC has been fully written off, and the remaining balance is $0.

NOTE 8 — LEASE

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

At the time of initial acquisition from SMC in July 2021, the Company used the following assumptions:

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

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

In December 2024, the Company sold its entire equity interest in Hanryu Bank Co., Ltd. (“HBC”), a subsidiary that held the rent-free rights to the Seoul Marina building. However, through an asset transfer agreement between the Company and HBC, the Company acquired the rent-free rights to the Seoul Marina building. The transfer amount was based on the net book value of the ROU asset as of the contract date and was offset against the Company’s outstanding loan receivable. As of December 31, 2024, the carrying amount of the ROU asset was $1,458,780.

Following the sale of the subsidiary in December 2024, the lease expense has been reclassified to discontinued operations and is not presented in the statements of operations for the years ended December 31, 2024 and 2023.

NOTE 9 — SHORT-TERM LOAN PAYABLES

The following table summarizes information with regard to short-term loan payables outstanding as of December 31, 2024 and December 31, 2023.

The Company recognized interest expense of $5,962 and $0 for the years ended December 31, 2024 and 2023, respectively.

As of December 31, 2024, the balance of short-term borrowings includes amounts borrowed in Korean Won, which have been converted into U.S. dollars using the exchange rate as of December 31, 2024 (e.g.,1 USD =1,470.00 KRW). This may result in differences due to fluctuations in the exchange rate.

NOTE 10 — SHORT-TERM LOAN PAYABLES FROM RELATED PARTIES

The following table summarizes information regarding short-term loan payables from related parties as of December 31, 2024 and December 31, 2023. Jaman Lee was appointed as the Company’s President in 2024, and Hangmuk Shin is the largest shareholder of Global Interactive Technologies, Inc.

As of December 31, 2024, the interest rate on the loan payables is 4.6% per annum, and the total interest accrued amounts to $5,962. There are no other financial covenants.

NOTE 11 — 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 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 December 31, 2024 and December 31, 2023 are summarized in the table below.

NOTE 11 — FAIR VALUE MEASUREMENTS(cont.)

Financial Items Measured at Fair Value on a Nonrecurring Basis

There are no financial assets or liabilities measured at fair value on a nonrecurring basis as of December 31, 2024 and December 31, 2023.

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 December 31, 2024 and December 31, 2023.

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. No impairment is recognized for long-lived assets as of as of December 31, 2024 and December 31, 2023.

NOTE 12 — SIGNIFICANT NON-CASH TRANSACTION

The company reclassified its operations into continuing and discontinued operations due to the sale of its subsidiary in 2024. There were no significant non-cash transactions related to continuing operations for the years ended December 31, 2024, and December 31, 2023.

NOTE 13 — OTHER EXPENSE/INCOME

Other expense for the fiscal year ended December 31, 2024 was $(3,895,288), a decrease of $4,049,881, compared to the other income for the fiscal year ended December 31, 2023. This decrease was primarily due to the recognition of a gain on the disposal of subsidiaries amounting to $12,400,373 and a bad debt expense of $16,179,823 related to the short-term loan

NOTE 14 — OTHER

The Company believes that KDC meets the definition of indefinite-lived intangible assets under ASC 350, as it is nonfinancial asset that lacks physical substance. Therefore, KDC was recognized and measured at historical cost. In addition, the Company determined that KDC has an indefinite life since there is no legal, regulatory, contractual, competitive, economic, or other factors that limit the useful life of KDC, in accordance with ASC 350-30-35-4.

NOTE 14 — OTHER (cont.)

The Company initially created KDC, a public digital cryptocurrency separate and apart from the FANING platform, as a method of onboarding and offboarding FP to and from the FANING platform through the Kingdom Wallet. However, on June 22, 2022, the Company entered into a Business Transfer Agreement (the “KDC Agreement”) with Kingdom Coin Holdings, a corporation incorporated in the Cayman Islands (the “KDC Foundation”), pursuant to which the Company transferred all of its KDC to the KDC Foundation, and no longer conducts or controls the operations, issuance, or sales of KDC in order to substantially reduce our involvement with blockchain technologies. This shift in our business plan was undertaken both to protect our users from potential risks associated with speculation in KDC, and because of the recent market and regulatory conditions surrounding cryptocurrency in general. As such, the Company no longer supports or operates Kingdom Wallet, and no longer allows the conversion of FP into KDC (and vice-versa). Neither Hanryu Holdings, nor any of its subsidiaries, have any affiliation with the KDC Foundation.

Additionally, and for the avoidance of doubt, the control person of Plus Meta PTE Ltd., KDC Foundation’s management company, is not an affiliate, and is not in any way related to, any officer, director, or shareholder of the Company. The KDC Foundation does not, has not, and will not coordinate any of its activities with the Company or the Company’s operation of FANING. Further, KDC will not be marketed to FANTOO users.

Pursuant to the KDC Agreement, in exchange for the Company transferring (a) its then-existing outstanding KDC balance of 299,651,320,620, (b) blockchain mainnet known as the Fandomchain, and (c) the Kingdom Wallet to the KDC Foundation, the KDC Foundation will (y) assume all obligations and liabilities with respect to KDC and Kingdom Wallet, and (z) pay to the Company the following contingent amounts, if, at December 31, 2024:

For the avoidance of doubt, sales generated from the transferred assets do not include any post-transfer newly created KDC. KDC Foundation planned to generate revenue by integrating KDC, FandomChain, and the Kingdom Wallet into mobile games, and monetizing such games. Due to current cryptocurrency-related market conditions, the Company does not expect to receive any payments from KDC Foundation through December 31, 2024 in accordance with the terms of the Business Transfer Agreement.

The KDC agreement included contingent earn-out consideration, the fair value of which was estimated on June 22, 2022, as the present value of the expected future contingent receivables which the Company determined using a probability-weighted discounted cash flow model for probabilities of possible future receivables. The Company determined the fair value of contingent consideration as zero on June 22, 2022. Contingent consideration is remeasured to fair value at each reporting date until the contingency is resolved, with changes in fair value recognized in profit or loss in most circumstances. The Company recorded zero value of the contingent consideration on the accompanying consolidated balance sheets as of December 31, 2024.

The Company believes that the transfer of KDC meets the definition of a “Component of an Entity” under FASB ASC Topic 205-20,Discontinued Operations, and as such can be disposed of by a means other than sale. The divestiture of KDC and its associated operations does not represent a strategic shift, nor has (and will not have), a major effect on the Company’s operations and financial results because the blockchain/KDC operations did not represent:

The Company did not present the divestiture of its holdings of KDC and KDC-related activity as discontinued operations because there was no revenue, asset value, or net income from the divestiture of KDC and the related operations.

**GLOBAL INTERACTIVE TECHNOLOGIES, INC AND SUBSIDIARIES

NOTE 15 — SHARE CAPITAL

As of December 31, 2024, and December 31, 2023, Global Interactive Technologies’ total authorized capital stock is 110,000,000 shares, consisting of 100,000,000 shares of Common Stock, par value $0.001 per share, and 10,000,000 shares of undesignated preferred stock, par value $0.001 per share.

On January 4, 2023, through March 8, 2023, warrants of $1,813,120 were exercised with an exercise price of $1.27 to purchase 1,427,653 shares of Common Stock by cash of $1,420,144 and debt conversion of $392,776.

In February and March of 2023, the Company closed two private placements solely to accredited investors (as defined by Rule 501(a) of Regulation D of the Securities Act) pursuant to which the Company sold an aggregate amount of 240,000 shares of common stock for $10.00 per share, resulting in gross proceeds of $2,400,000. The purchase price of the common stock purchased in the private placements is subject to adjustment to the price of the common stock sold in the Company’s IPO, such that additional common stock shall be issued to the purchasers if the price of common stock sold in the IPO is less than $10.00 per share, or the purchasers shall return common stock to the Company if the price of the common stock sold in the IPO is greater than $10.00 per share, in each case resulting in the purchasers purchasing an aggregate amount of $2,400,000 of Company common stock at the IPO price. The offerings were exempt from registration under Section 4(a)(2) of the Securities Act. The subscription agreements pursuant to which the common stock was sold to accredited investors contain customary representations and warranties of the Company and the investors and customary indemnification rights and obligations of the parties.

On March 24, 2023, warrants of $8,400 were exercised with an exercise price of $0.42 to purchase 20,000 shares of Common Stock by cash.

On April 13, 2023, warrants of $420,000 were exercised with an exercise price of $0.42 to purchase 1,000,000 shares of Common stock by cash.

On May 4, 2023, thorough May 8, 2023, warrants of $3,894,666 were exercised with an exercise price of $1.27 to purchase 3,066,666 shares of Common stock by cash.

On May 31, 2023, the Company completed a private placement to solely to an accredited investor (as defined by Rule 501(a) of Regulation D of the Securities Act) pursuant to which the Company sold an aggregate amount of 760,000 shares of common stock for $10.00 per share, resulting in gross proceeds of $7,600,000.

On July 31 2023, the Company consummated its initial public offering (the “IPO”) of 877,328 shares of Comon stock at a public offering price of $10.00 per share, generating gross proceeds of $8,773,280. Net proceeds from the IPO was approximately $7.7 million after deducting underwriting discounts and commissions and other offering expenses of approximately $1.1 million.

The Company also granted the underwriters a 45-day option to purchase up to 131,599 additional shares (equal to 15% of the shares of Common stock sold in the IPO) to cover over-allotments, if any, which the underwriters did not exercise. In addition, the Company issued to the representative of the underwriters warrants to purchase a number of shares of Common stock equal to 5.0% of the aggregate number of Common stocks sold in the IPO (including shares of Common stock sold upon exercise of the over-allotment option). The representative’s warrants will be exercisable at any time and from time to time, in whole or in part, during the four-and-½-year period commencing six months from the date of commencement of the sales of the shares of Common stock in connection with the IPO, at an initial exercise price per share of $10.00 (equal to 125% of the initial public offering price per share of class A common stock). No representative’s warrants have been exercised.

As a result, the total number of issued and outstanding shares of Common Stock issued increased from 45,416,942 to 52,808,589. Each holder of Common Stock is entitled to one vote per share at all meetings of stockholders.

On January 27, 2025, the Company effected a 1-for-20 reverse stock split of its issued and outstanding Common Stock. As a result, every 20 shares of Common Stock were combined into one share, reducing the total number of issued and outstanding shares from 52,808,589 to 2,640,429. The par value per share was changed from $0.001 to $0.02.

All share and per-share amounts in the accompanying consolidated financial statements and related notes have been retroactively adjusted to reflect the reverse stock split for all periods presented.

NOTE 16 — COMMITMENTS AND CONTINGENCIES

Legal Matters

As of December 31, 2024, the Company is not subject to any material pending legal proceedings or claims. Previously disclosed legal matters were related to subsidiaries that have since been divested and no longer impact the Company’s operations or financial position.

NOTE 17 — 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 December 31, 2024, and December 31, 2023.* *

(President)

• On July 1, 2024, the Company entered into a short-term loan agreement with President Jaman Lee at an annual interest rate of 4.6%. The principal amount of the loan was KRW 100,000,000 (USD 68,027), and the maturity date is June 30, 2025. The principal and interest will be repaid at maturity.

• On July 8, 2024, the Company entered into a short-term loan agreement with President Jaman Lee at an annual interest rate of 4.6%. The principal amount of the loan was KRW 50,000,000 (USD 34,014), and the maturity date is July 7, 2025. The principal and interest will be repaid at maturity.

• On September 23, 2024, the Company entered into a short-term loan agreement with President Jaman Lee at an annual interest rate of 4.6%. The principal amount of the loan was KRW 1,015,000 (USD 691), and the maturity date is September 22, 2025. The principal and interest will be repaid at maturity.

• On September 27, 2024, the Company entered into a short-term loan agreement with President Jaman Lee at an annual interest rate of 4.6%. The principal amount of the loan was KRW 100,000,000 (USD 68,027), and the maturity date is September 26, 2025. The principal and interest will be repaid at maturity.

• On October 14, 2024, the Company entered into a short-term loan agreement with President Jaman Lee at an annual interest rate of 4.6%. The principal amount of the loan was KRW 50,000,000 (USD 34,014), and the maturity date is October 13, 2025. The principal and interest will be repaid at maturity.

• On October 25, 2024, the Company entered into a short-term loan agreement with President Jaman Lee at an annual interest rate of 4.6%. The principal amount of the loan was KRW 4,026,400 (USD 2,739), and the maturity date is October 24, 2025. The principal and interest will be repaid at maturity.

• On October 29, 2024, the Company entered into a short-term loan agreement with President Jaman Lee at an annual interest rate of 4.6%. The principal amount of the loan was KRW 5,500,000 (USD 3,742), and the maturity date is October 28, 2025. The principal and interest will be repaid at maturity.

• On November 13, 2024, the Company entered into a short-term loan agreement with President Jaman Lee at a 0% annual interest rate. The principal amount of the loan was KRW 19,655,025 (USD 13,371), and the maturity date is November 12, 2025. The principal will be repaid at maturity.

• On November 20, 2024, the Company entered into a short-term loan agreement with President Jaman Lee at an annual interest rate of 4.6%. The principal amount of the loan was KRW 5,000,000 (USD 3,401), and the maturity date is November 19, 2025. The principal and interest will be repaid at maturity.

NOTE 17 — RELATED PARTY TRANSACTIONS (Cont.)

• On November 26, 2024, the Company entered into a short-term loan agreement with President Jaman Lee at an annual interest rate of 4.6%. The principal amount of the loan was KRW 73,800 (USD 50), and the maturity date is November 25, 2025. The principal and interest will be repaid at maturity.

• On December 4, 2024, the Company entered into a short-term loan agreement with President Jaman Lee at a 0% annual interest rate. The principal amount of the loan was KRW 1,000,000 (USD 680), and the maturity date is December 3, 2025. The principal will be repaid at maturity.

• On December 20, 2024, the Company entered into a short-term loan agreement with President Jaman Lee at an annual interest rate of 4.6%. The principal amount of the loan was KRW 19,000,000 (USD 12,925), and the maturity date is December 19, 2025. The principal and interest will be repaid at maturity.

• On December 23, 2024, the Company entered into a short-term loan agreement with President Jaman Lee at an annual interest rate of 4.6%. The principal amount of the loan was KRW 20,000,000 (USD 13,605), and the maturity date is December 22, 2025. The principal and interest will be repaid at maturity.

Hangmuk Shin(Global Interactive Technologies’s Largest Shareholder)

• On July 1, 2024, the Company entered into a short-term borrowing agreement with its largest shareholder, Hangmuk Shin, at an interest rate of 4.6%. The principal amount of the loan was KRW 110,000,000 (USD $74,830), and the maturity date is June 30, 2025. The principal and interest will be repaid at maturity.

• On July 2, 2024, the Company repaid KRW 1,000,000 (USD $680) of the loan to Hangmuk Shin.

• On July 5, 2024, the Company entered into another short-term borrowing agreement with Hangmuk Shin at an interest rate of 4.6%. The principal amount was KRW 300,000 (USD $204), and the maturity date is July 4, 2025. The principal and interest will be repaid at maturity.

• On September 13, 2024, the Company entered into a short-term borrowing agreement with Hangmuk Shin at an interest rate of 4.6%. The principal amount was KRW 10,000 (USD $7), and the maturity date is September 12, 2025. The principal and interest will be repaid at maturity.

• On October 14, 2024, the Company entered into a short-term borrowing agreement with Hangmuk Shin at an interest rate of 4.6%. The principal amount was KRW 30,000,000 (USD $20,408), and the maturity date is October 13, 2025. The principal and interest will be repaid at maturity.

• On October 29, 2024, the Company repaid KRW 3,000,000 (USD $2,041) of the loan to Hangmuk Shin.

• On October 31, 2024, the Company entered into a short-term borrowing agreement with Hangmuk Shin at an interest rate of 4.6%. The principal amount was KRW 1,000,000 (USD $680), and the maturity date is October 30, 2025. The principal and interest will be repaid at maturity.

• On November 2, 2024, the Company entered into a short-term borrowing agreement with Hangmuk Shin at an interest rate of 4.6%. The principal amount was KRW 50,000 (USD $34), and the maturity date is November 1, 2025. The principal and interest will be repaid at maturity.

• On November 22, 2024, the Company entered into a short-term borrowing agreement with Hangmuk Shin at an interest rate of 4.6%. The principal amount was KRW 150,000 (USD $102), and the maturity date is November 21, 2025. The principal and interest will be repaid at maturity.

• On December 13, 2024, the Company entered into a short-term borrowing agreement with Hangmuk Shin at an interest rate of 4.6%. The principal amount was KRW 500,500 (USD $340), and the maturity date is December 12, 2025. The principal and interest will be repaid at maturity.

• On December 17, 2024, the Company entered into a short-term borrowing agreement with Hangmuk Shin at an interest rate of 4.6%. The principal amount was KRW 658,000 (USD $448), and the maturity date is December 16, 2025. The principal and interest will be repaid at maturity.

• On December 23, 2024, the Company repaid KRW 16,763 (USD $11) of the loan to Hangmuk Shin.

Aram Ahn(Director)

On June 26, 2024, the Company entered into a short-term borrowing agreement with outside director Aram Ahn at an interest rate of 0%, and the loan amount of $400 was repaid on September 27, 2024.

NOTE 18 — DISPOSAL OF SUBSIDIARIES AND DISCONTINUED OPERATIONS

Hanryu Bank Co. Ltd (“HBC”) sold 100% of its shares in FNS Co. Ltd for $733 and Marin Island Co. Ltd for $367 on November 5, 2024, to improve its financial structure. Additionally, Global Interactive Technologies, Inc. (“the Company”) sold 100% of its shares in Hanryu Bank Co. Ltd (“HBC”) for $2,200 on December 28, 2024. From the date of these sales, the three subsidiaries are no longer included in the consolidated financial statements and are classified as discontinued operations. A gain of $18,832,006 was recognized from the disposal of the shares in these three subsidiaries.

The following table outlines the calculation of the gain on disposal related to the sale of the subsidiaries on November 5, 2024, and December 28, 2024.

1. In connection with the deconsolidation of Hanryu Bank Co.Ltd in 2024, the Company reclassified $7,164,430 of Additional Paid-in Capital to Accumulated Deficit, in accordance with ASC 810-10-40. This amount was arouse from group restructuring of the same subsidiary’s equity at the consolidated level, resulting from differences between the subsidiary’s equity structure and the consolidated equity accounts. The reclassification is reflected in the Consolidated Statement of Stockholders’ Equity for the year ended December 31, 2024.

2. The gain or loss on the disposal of investments in subsidiaries was calculated based on the difference between the consideration received and the net assets of the subsidiaries. In this process, the net assets of the subsidiaries were translated using the exchange rate as of December 31, 2024, while the gain or loss on disposal was calculated using the average exchange rate for the year 2024. As a result, a foreign exchange difference arose due to the use of different exchange rates. This difference was not recognized separately as a foreign exchange gain or loss, but was included in the gain or loss on disposal.

The financials of the three companies for the years ended December 31, 2024 and December 31, 2023 are as follows.

NOTE 19 — SUBSEQUENT EVENTS

The Company has evaluated subsequent events through the date of this filing and determined that the following events occurred after December 31, 2024 and prior to the issuance of these financial statements:

EXHIBIT INDEX

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Act of 1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.

Pursuant to the requirements of the Securities Exchange Act of 1934, this Report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.