Global Interactive Technologies, Inc.

Current report

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Current report

June 30, 2026 Recoverability Assessment

Current report

During the six months ended June 30, 2026, management identified indicators of impairment related to the FANING platform, including continued minimal revenue generation, continuing operating losses, lower-than-expected commercialization activities, a revised commercialization timeline, and the need for additional financing to execute the Company’s business plan. As a result, management performed a recoverability assessment pursuant to ASC 360-10 for the Faning asset group, which consists primarily of the Faning software intangible asset and the related right-of-use asset utilized in its operations.

Current report

Under ASC 360, management first evaluated whether the carrying amount of the asset group was recoverable based on the estimated undiscounted future cash flows expected to result from the use and eventual disposition of the asset group. Based on management’s analysis, the aggregate undiscounted future cash flows exceeded the carrying amount of the asset group. Accordingly, the asset group passed the recoverability test and no impairment loss was recognized during the three and six months ended June 30, 2026.

Current report

The recoverability analysis was based on management’s updated operating forecast and included significant assumptions regarding future commercialization of the Faning platform, including projected user acquisition beginning in fiscal year 2027, estimated customer acquisition costs, monthly active user conversion rates, user retention, and monetization assumptions. Because the platform has generated minimal revenue since acquisition, these assumptions required significant management judgment and are inherently uncertain. The forecast also assumes the Company’s ability to obtain additional financing beyond the June 2026 private placement to execute its commercialization strategy.

Current report

Compared with the assumptions utilized in the Company’s December 31, 2025 impairment assessment, management revised its forecast to reflect an approximate twelve-month delay in commercialization and revenue generation. The delay reduced expected near-term cash flows and was a significant factor in management’s decision to perform an interim recoverability analysis.

Current report

Although management estimated the fair value of the Faning software intangible asset to be approximately $2.2 million as of June 30, 2026, compared with its carrying amount of approximately $2.7 million, no impairment charge was recognized. Under ASC 360, impairment is recognized only if the carrying amount of the asset group exceeds the sum of its estimated undiscounted future cash flows. Because the estimated undiscounted future cash flows exceeded the carrying amount of the asset group, the Company concluded the asset group was recoverable and did not proceed to the impairment measurement step.

Current report

Management’s recoverability conclusion is sensitive to assumptions regarding projected user acquisition, monthly active user conversion rates, user engagement, and monetization. A meaningful reduction in projected user growth or monetization relative to management’s forecast would cause estimated undiscounted future cash flows to no longer exceed the carrying amount of the asset group. Under such circumstances, management estimates that an impairment charge could range from approximately $1.2 million to $2.3 million, depending on the estimated fair value of the asset group at the time of testing.

Current report

Recent Developments

Current report

Hudson Global Ventures Equity Purchase Agreement. On March 26, 2026, the Company entered into an Equity Purchase Agreement with Hudson Global Ventures, LLC. Pursuant to the Agreement, the Company had the right, but not the obligation, to sell to the Hudson Global Ventures, LLC, from time to time, shares of its Common Stock having an aggregate purchase price of up to $18,000,000, subject to the terms and conditions set forth in the Equity Purchase Agreement. On July 29, 2026, the Company terminated the Equity Purchase Agreement. No shares of Common Stock were sold to Hudson Global Ventures, LLC pursuant to the Equity Purchase Agreement.

Current report

FirstFire Promissory Note. On April 22, 2026, the Company issued a promissory note to FirstFire Global Opportunities Fund, LLC with a principal amount of $550,000, an original issue discount of $44,000 and guaranteed first-year interest of $49,500, for net cash proceeds of $460,580. Pursuant to the terms of the promissory note, the Company became obligated to repay the note following the completion of the June 2026 financing transaction. In June 2026, the Company negotiated the settlement with FirstFire Global Opportunities Fund, LLC and repaid the obligation in full for $650,000. The repayment consisted of $550,000 of principal, $49,500 of contractual interest, and a $50,500 settlement premium. The repayment was funded with a portion of the proceeds received from the Company’s private placement completed in June 2026. The Company recognized interest expense of $49,500 and a loss on extinguishment of debt of $139,920, consisting of the write-off of the $89,420 unamortized discount and the $50,500 premium, for the three and six months ended June 30, 2026. See Note 7 “Short-Term Loan Payables” to the Condensed Consolidated Financial Statements.

Current report

Private Placement. On June 25, 2026, the Company entered into a Securities Purchase Agreement (the “Securities Purchase Agreement”) with an institutional investor (the “PIPE Investor”) pursuant to which the Company agreed to issue and sell to the PIPE Investor in a private placement (the “Private Placement”) (i) pre-funded warrants to purchase up to 1,092,896 shares of Common Stock (the “Pre-Funded Warrants”), and (ii) Common Stock purchase warrants (the “Common Stock Warrants”) to purchase up to 1,092,896 shares of Common Stock, at a purchase price of $1.829 per Pre-Funded Warrant and accompanying Common Stock Warrant. The Private Placement closed on June 29, 2026 for gross proceeds of $1,998,907 and net proceeds of $1,808,907 after placement agent fees and expenses of $189,999. No shares of Common Stock were issued at the closing. The Pre-Funded Warrants have an exercise price of $0.001 per share and are immediately exercisable. The Common Stock Warrants have an exercise price of $1.83 per share, subject to adjustment, become exercisable on December 25, 2026 and expire on December 25, 2031. The Company used a portion of the net proceeds to repay the FirstFire note and, subsequent to quarter end, its loans from related parties, and intends to use the remainder for working capital and general corporate purposes. On July 29, 2026, the Company filed a registration statement on Form S-1 registering the resale of the 2,185,792 shares of Common Stock issuable upon exercise of the Pre-Funded Warrants and Common Stock Warrants. On August 13, 2026, 528,896 Pre-Funded Warrants were exercised for 528,896 shares of Common Stock, and the placement agent remitted the related prepaid nominal exercise proceeds to the Company. No Common Stock Warrants had been exercised as of the date of this report. See Note 11 “Share Capital” and Note 17 “Warrants” to the Condensed Consolidated Financial Statements.

Current report

On July 2, 2026 and July 8, 2026, the Company repaid in full the outstanding principal and accrued interest on its loans from Taehoon Kim, PixelArc LLC and Jaeman Lee, totaling approximately $81,700 of principal. See Note 8 “Short-Term Loan Payables From Related Parties” and Note 13 “Related Party Transactions” to the Condensed Consolidated Financial Statements.

Current report

On August 20, 2026, the Company received a notice from the Listing Qualifications Department of The Nasdaq Stock Market LLC stating that, because the Company had not timely filed this Quarterly Report on Form 10-Q, the Company was not in compliance with Nasdaq Listing Rule 5250(c)(1). The notice has no immediate effect on the listing of the Company’s Common Stock. Under Nasdaq rules, the Company has 60 calendar days from the date of the notice to submit a plan to regain compliance, and the Company expects the filing of this report to cure the deficiency.

Current report

On September 1, 2026, the Company entered into a Share Purchase Agreement to acquire 100% of the issued and outstanding shares of AST Co., Ltd. for a purchase price of KRW 10,000,000. The agreement also contemplates potential shareholder loan financing of up to KRW 1,140,000,000 to support repayment of certain existing liabilities of AST Co., Ltd., as well as the issuance of warrants to certain parties, subject to board approvals, regulatory requirements, completion of due diligence, and other closing conditions. Because the transaction had not closed as of the issuance date of these financial statements, no assets or liabilities related to the acquisition have been recognized.

Current report

Revenue for the three months ended June 30, 2026 was $126, compared to $29 for the three months ended June 30, 2025, and revenue for the six months ended June 30, 2026 was $222, compared to $29 for the six months ended June 30, 2025. Revenue in both periods was generated by the Faning platform and relates primarily to subscriptions and in-app purchases. The upgraded platform was relaunched in April 2025 and began generating revenue in May 2025, so the prior-year periods reflect only the initial weeks of monetization. Revenue remains limited because the platform is in an early stage of commercialization, and revenue for the first half of 2026 was below the level recognized in the second half of 2025.

Current report

Cost of sales was $0 for each of the three and six months ended June 30, 2026 and 2025.

Current report

Operating expenses for the three months ended June 30, 2026 were $716,053, compared to $676,960 for the three months ended June 30, 2025, an increase of $39,093, or 5.8%. The increase was primarily attributable to higher general and administrative expense of $112,327, including legal and accounting expenses associated with the Company’s commercialization efforts, regulatory filings, Nasdaq compliance matters, and the June 2026 private placement, and is partially offset by a decrease in amortization of $69,287. Lease expense associated with the rent-free Seoul Marina right-of-use asset was $54,945 for the three months ended June 30, 2026 and was non-cash.

Current report

Operating expenses for the six months ended June 30, 2026 were $1,212,500, compared to $1,240,428 for the six months ended June 30, 2025, a decrease of $27,928, or 2.3%. The decrease was primarily attributable to a decrease in amortization expense of $129,919 associated with the Faning software intangible asset, partially offset by an increase in general and administrative expense of $106,523 primarily due to commercialization activities, regulatory and compliance matters, legal and accounting support for the June 2026 private placement. Operating expenses for the six months ended June 30, 2026 primarily consisted of amortization expense of $378,632, lease expense of $111,273, legal and professional fees of approximately $337,000, marketing expense of $165,000, directors’ fees of $72,000, salary expense of $68,300, annual fee expense of $56,000, and other general and administrative expenses.

Current report

Net other expense for the three and six months ended June 30, 2026 was $192,503 and $193,145, compared to $1,118 and $4,331 for the prior-year periods. The 2026 amounts primarily consist of the $139,920 loss on extinguishment of the FirstFire note, $1,943 foreign currency transaction loss, and interest expense of $50,640 and $51,282, respectively, principally the $49,500 of guaranteed interest on that note and interest on the Company’s other short-term borrowings.

Current report

Known Trends and Uncertainties

Current report

The Company remains in an early stage of commercialization. Revenue is minimal, was below the level recognized in the second half of 2025, and does not cover the Company’s operating costs; whether the marketing investment made in the second quarter of 2026 converts into revenue is not yet determinable. The Company expects legal and professional fees to remain elevated while the matters described in Note 12 “Commitments and Contingencies” to the Condensed Consolidated Financial Statements are pending, and its ability to fund operations, marketing and platform development depends on obtaining additional capital, as described under Liquidity and Capital Resources and in Note 1, which discusses substantial doubt about the Company’s ability to continue as a going concern.

Current report

As of June 30, 2026, the Company had $1,162,141 of cash on hand, compared to $6,990 at December 31, 2025. The increase reflects the net proceeds of $1,808,907 from the June 2026 private placement, partially offset by the repayment of the FirstFire note and other short-term borrowings and by cash used in operations.

Current report

Cash used in operating activities was $558,921 for the six months ended June 30, 2026, compared to $529,645 for the six months ended June 30, 2025. The 2026 amount included the net loss as of June 30, 2026 of $1,405,423 adjusted for non-cash charges of $378,632 of amortization of the Faning software, $111,273 of non-cash lease expense, the $139,920 loss on extinguishment of the FirstFire note, and the Company deferred payment of $261,046 of accrued expenses, primarily directors’ compensation and legal and professional fees, partially offset by a $62,745 reduction in non-trade accounts payable.

Current report

Cash provided by financing activities was $1,703,371 for the six months ended June 30, 2026, compared to $558,071 for the six months ended June 30, 2025. During the six months ended June 30, 2026, the Company received net proceeds of $1,808,907 from the June 2026 private placement, net proceeds of $460,580 from the FirstFire note and $66,057 of cash advances from GIT Korea, $14,417 from Levanston, Corner Piece Capital $46,200 and Faning Korea $1,562, and repaid $696,501 of short-term borrowings, including $600,500 to FirstFire (principal of $550,000 and the $50,500 premium), $68,000 to GIT Korea, $46,200 to Corner Piece Capital Partners, and $18,000, net to Levanston. The six months ended June 30, 2025 consisted primarily of $528,015 of proceeds from short-term borrowings.

Current report

In June 2026, the Company completed a private placement of Pre-Funded Warrants and Common Stock Warrants for net proceeds of approximately $1.8 million, which the Company used to repay the FirstFire note and, subsequent to quarter end, its loans from related parties, and intends to use for working capital and general corporate purposes. The private placement did not result in the issuance of common shares at closing; up to 2,185,792 shares are issuable upon exercise of the warrants, of which the Common Stock Warrants would provide up to approximately $2.0 million of additional proceeds if exercised in full for cash at $1.83 per share. During the six months ended June 30, 2026, the Company also funded a portion of its operating costs through non-interest-bearing advances from Levanston, which paid $14,417 of expenses on the Company’s behalf during the period ($60,199 during fiscal 2025); the Company repaid $42,000 of these advances on April 24, 2026, and $34,703 remained outstanding at June 30, 2026. These proceeds do not alleviate the conditions that raise substantial doubt about the Company’s ability to continue as a going concern, and the Company will require additional financing to fund its operations, marketing and platform development.

Current report

As of June 30, 2026, the Company had an accumulated deficit of $43,939,617 and working capital of $32,014, and it incurred a net loss of $1,405,423 and used $558,921 of cash in operating activities for the six months ended June 30, 2026. The Company’s working capital at June 30, 2026 reflects the net proceeds of $1,808,907 from the private placement of Pre-Funded Warrants and Common Stock Warrants completed on June 29, 2026 (Note 17 “Warrants” to the Condensed Consolidated Financial Statements); revenue from the Faning platform remains minimal and does not cover the Company’s operating costs.

Previous report

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.

Previous report

Cost of sales were $0 for the three months ended March 31, 2026 and March 31, 2025, respectively.

Previous report

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.

Previous report

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.

Previous report

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.

Previous report

As of March 31, 2026, the Company had $360 cash on hand.

Previous report

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.

Previous report

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.

Previous report

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.