Global Interactive Technologies, Inc.

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.

 

 

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.

 

 

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.