Global Interactive Technologies, Inc.: Form 10-K for the period ended Dec 31, 2025

Overview

Global Interactive Technologies, Inc. (“GITS” or the “Company”), a Delaware corporation formerly known as Hanryu Holdings, Inc., is a technology-focused platform company operating and developing Faning, a global digital fan engagement platform centered on Korean entertainment and culture, including K-pop.

Faning is designed to support online fan communities, content discovery and sharing, user interaction, multilingual communication, user-generated content, and digital engagement experiences across mobile and web-based services.

Corporate Structure and Subsidiaries

The Company is a corporation that was incorporated in the state of Delaware on October 20, 2021, as Hanryu Holdings, Inc. On December 5, 2024, the Company formally changed its name from Hanryu Holdings, Inc. to Global Interactive Technologies, Inc. pursuant to an amendment to its Certificate of Incorporation filed with the Secretary of State of Delaware. In connection with the name change, the Company also changed its Nasdaq ticker symbol from HRYU to GITS.

As of December 31, 2025, the Company conducted its core Faning business and platform strategy directly through Global Interactive Technologies, Inc., including platform development, management, commercialization strategy, and related digital services.

FANING KOREA, LLC, a wholly owned subsidiary based in Seoul, Republic of Korea, provides administrative support to the Company in South Korea.

Reverse Stock Split

On January 27, 2025, the Company effected a 1-for-20 reverse stock split of its issued and outstanding common stock.

Faning

Faning is the innovative successor to the ‘Fantoo’ platform, specifically engineered to serve as a global epicenter for enthusiasts of K-POP and contemporary Korean culture (“K-Culture”). Moving beyond traditional social networking, the Company has developed a multifaceted digital ecosystem designed to facilitate high-velocity user interaction, content creation, and deep community engagement. As of December 31, 2025, Faning has transitioned from a primary development phase into early-stage commercialization, focused on scaling a global audience.

Core Functionality & User Experience (UX)

The platform leverages proprietary algorithms to deliver a personalized user journey, designed to provide a seamless connection between fans, creators, and content.

• Faning Clubs: Users organize into topic-specific virtual communities (“Clubs”) centered on artists, movies, and lifestyle trends, utilizing messaging and discussion forums to maintain 24/7 connectivity.
• Global Interaction: Faning provides real-time, automatic translation functionality for 17 different languages, enabling a truly unified global fandom experience.
• Interactive Engagement Tools: The platform integrates participation-driven features, including voting mechanisms and engagement tools that empower users to influence content rankings and support their favorite creators.

Monetization Model

In 2025, the Company implemented a diversified revenue structure optimized for the digital fandom economy:

• Vote & Boost Sales: Central to the platform’s economy are participation-based features. Users purchase Vote Packages to participate in community activities and Boosts—paid enhancements that increase the visibility and impact of their support for specific content or artists.
• Premium Subscription Services: The Company offers tiered subscription plans, providing users with exclusive features and an enhanced interface.
• Scalable Advertising: The Company generates revenue through targeted display advertisements and sponsored content, a stream designed to scale with continued user growth and engagement.

Synergistic Content & Music Production

Complementing the platform business, the Company has secured strategic agreements for the production and release of music content featuring K-pop artists and animation projects.

• IP Monetization: Through digital streaming and distribution, the Company can capture diverse revenue streams that provide a higher-margin complement to platform operations.
• Short-Form Content Growth: Recognizing the market trend, the Company will produce 2-minute “short-form” cultural content. These videos are distributed will be Faning and third-party social media networks to maximize K-POP’s global visibility and help drive organic user acquisition.

Development Status & Future Outlook

Global Interactive Technologies continues to prioritize infrastructure scalability and the expansion of engagement features. Monetization is in its inaugural stages, and the ongoing execution of this strategy remains dependent on successful user adoption and continued access to capital.

Faning Ecosystem and Legacy Fantoo Platform

Faning evolved from the legacy Fantoo platform ecosystem, which historically accumulated approximately 27 million registered accounts globally.

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 and cannot currently predict the extent to which such historical users may become active users, retained users, or monetizable users within the Faning platform.

The Faning platform is designed to support a multilingual user community across multiple geographic regions. The platform includes community engagement tools, messaging functionality, club-based interaction features, and multilingual communication tools, including real-time translation functionality.

During 2025, the Company focused on maintaining and supporting the Faning platform, continuing development of platform functionality, and preparing for future commercialization initiatives. As of December 31, 2025, the Company remained in an early-stage commercialization phase, and revenue from the Faning platform remained limited.

Global Reach and Engagement

The Faning platform is designed to support a multilingual user community across multiple geographic regions, including users historically concentrated in markets such as the Philippines, Indonesia, Thailand, South America, and the Republic of Korea.

The platform includes community engagement tools, messaging functionality, club-based interaction features, and multilingual communication tools, including real-time translation functionality intended to facilitate communication among users across different regions.

Demographics and Target Audience

The Faning platform is primarily focused on users interested in Korean entertainment and culture, including K-pop and related digital fandom communities.

Historically, a significant portion of platform engagement for the legacy Fantoo platform ecosystem had been concentrated among users in the 20–39 age demographic. The Company believes this audience represents an active segment of the global digital entertainment and social media market.

The platform is intended for users aged 12 and older. The Company maintains policies and technical measures designed to restrict access by underage users and to support platform safety and compliance requirements.

The Company may continue evaluating future user growth opportunities across multiple geographic regions and demographic groups as the Faning platform develops and commercialization initiatives evolve.

User Reward System & Faning Points (FP)

The reward system is a foundational element of the Faning ecosystem, designed to incentivize higher-quality content creation and active community participation.

FP Generation and Distribution

Users accumulate Faning Points (FP) through multiple engagement channels:

• Activity-Based Rewards: FP is granted based on a user’s level of contribution and engagement within the Faning platform.
• Ad-Revenue Sharing: As part of our commitment to a user-centric economy, 50% of the daily net advertising profits generated within the platform are distributed as FP to users. Historically, this distribution has been allocated with approximately 30% designated for content creators and 20% for general participating users.
• Fixed Value: For the purposes of the platform economy, the value of FP is maintained at a fixed ratio of 1 FP to 100 Korean Won.

Utility and Redemption

FP serves as the primary internal currency for the Faning ecosystem. Users can redeem accrued FP for a wide array of products and services, including:

• Exclusive Content: Access to premium content from artists and other creators.
• K-Culture Merchandise: Purchase of physical and digital goods within the Faning Fanshop.
• Platform Engagement: Utilization of FP for platform-based activities, such as voting and boosting content, which are key components of our monetization strategy.

Storage, Security, and Governance

The Company prioritizes the integrity and security of the reward ecosystem through technical and administrative controls:

• Segmented Database Architecture: FP data is stored and managed in a dedicated database, isolated from other application data for confidentiality and greater security. Access is limited to authorized personnel via permitted IP bands.
• Disaster Recovery: The FP database utilizes cloud backup functions, which can enable rapid restoration within hours in the event of a system failure.
• Account Policy: FP does not expire and accumulates in the user’s account. However, upon account deactivation, any unredeemed FP is forfeited and moved to the Company’s reserve account for redistribution into the ecosystem. The Company does not intend to repurchase FP from users.

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User-to-User Interactions

We have engineered Faning to provide an expansive array of interactive opportunities, fostering a vibrant ecosystem where global users can engage deeply with the platform and each other. These interactions—comprising clubs, community forums, and chat functions—are strategically designed to solidify the Faning brand identity and cultivate long-term user loyalty

Faning Clubs & Communities: Integrated Engagement Ecosystem

The Faning platform is designed to provide a seamless, multi-layered engagement ecosystem to transition casual user interest into active community leadership and collective participation.

• Dynamic Community Creation: Faning communities function as open forums for user-generated content and social curation. New communities are established based on organic demand; once user requests for a specific topic reach a strategic threshold, the platform automatically activates a dedicated space for that interest group.
• Strategic Club Integration: From these broad communities, users can establish specialized “Clubs” to foster deeper, culture-specific interactions. Moderators have the autonomy to customize policies, allowing each Club to remain a space for dedicated fandoms.
• Collective Action & Support System: Every Club is equipped with a proprietary collaborative system that allows members to pool their Faning Points (FP) toward shared objectives. This collective power enables the community to secure premium rewards, such as future exclusive fan events or live-streamed concerts, that would be unattainable through individual effort.
• Democratic Governance: To ensure transparency and maintain user loyalty, decisions regarding the allocation of collective resources are determined by a formal voting process among the members.
• Monetization Engine: This integrated structure is a key driver for our revenue strategy. By funneling community discussions into Club-based actions, we can stimulate higher-volume participation in Vote and Boost features.

Faning Chats: Retention Social Architecture (2025 Update)

Faning’s integrated communication layer is a primary driver of user engagement, specifically engineered to maximize platform session duration and foster cross-border social ecosystems.

• Social Connectivity & Retention: Unlike generic messaging services, Faning empowers users to establish dedicated, real-time chat environments within Faning Clubs. By anchoring social interactions directly within these interest-based communities, the platform fosters deeper user loyalty and can increase can increase daily active usage (DAU).
• Global Interaction: Our proprietary real-time translation engine, currently supporting 17 languages, can eliminate language barriers and enable a truly unified global fandom regardless of geographic or linguistic origin.
• Enterprise-Grade Privacy: Communications are protected through end-to-end encryption (E2EE). This security infrastructure can help to mitigate data leakage risks and solidify user trust, a key component of our brand value
• Monetization Synergy: These high-engagement chat hubs serve as the strategic entry point for our monetization features. Continuous interaction within these spaces can directly stimulate participation in community-led Vote and Boost activities, which can convert social engagement into revenue.

Content and Intellectual Property Ecosystem

The Faning ecosystem utilizes a collaborative content model designed to bridge the gap between K-Culture creators and a global audience through structured localization and IP distribution.

1. Collaborative User-Generated Content (UGC) & Localization

At the core of our platform is a decentralized content model that empowers our users to produce and monetize culture-specific intellectual property.

• Creative Assets: Users can generate fandom content, including Fanart, Web Novels, and Webtoons, tailored to global K-Culture trends.
• Strategic Localization Ecosystem: To facilitate global reach, Faning operates a proprietary localization matching system that connects original content creators with skilled localizers for higher-quality, culturally nuanced translations.
• Revenue Management: The platform facilitates a structured revenue-sharing model based on pre-set agreements between creators and localizers. This system is designed to ensure that as content is localized and sold, profits are tracked and managed according to the agreed-upon terms, providing a scalable and transparent business environment.
• Engagement-Led Growth: This content ecosystem can drive higher-volume participation in our Vote and Boost features, as global fans utilize these tools to promote and elevate localized content within their regions.

2. Original IP & Premium Productions

The Company focuses on high-fidelity original content to anchor user loyalty and provide revenue streams.

• Faning TV Originals: Specialized content teams will produce exclusive shows and web series, leveraging K-pop and animation IPs to drive premium engagement.
• Concerts and Global Streaming: Faning may host and broadcast diverse musical events, with digital tickets and access sold through the Fanshop using FP or cash.
• Music & Animation Distribution: In 2025, the Company expanded its IP portfolio to include the distribution of music for K-pop artists and international animation projects, such as The Nut Job 3, diversifying revenue through streaming and royalties.

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Faning Fanshop: Integrated E-Commerce & Delivery

The Faning Fanshop is the central e-commerce destination within our ecosystem, enabling users to transition from content engagement to commercial transactions.

1. Direct Commerce & Product Offerings

The Fanshop serves as a premier marketplace where users purchase high-demand fandom items directly from the Company.

• Core Merchandise: Our inventory focuses on artist gifts, premium fandom goods, and exclusive K-Culture products.
• Ticketing & Events: Fanshop is an exclusive portal for purchasing tickets to both physical and live-streamed concerts, driving significant higher-margin revenue.

2. Payment & Revenue Model

We provide a flexible financial environment for transactions.

• Dual Payment Systems: Users can settle purchases using credit cards via third-party processors or through Faning Points (FP).
• Transaction Integrity: For any community-based transactions, the platform has been set up to release funds upon confirmed receipt of goods.

3. Global Fulfillment & Delivery Infrastructure

To support our international user base, the Company has established an efficient global logistics framework.

• Cross-Border Capabilities: Our delivery system is optimized for international shipping, enabling merchandise to reach fans across our key markets, including South Korea, Japan, Taiwan, and Southeast Asia.
• Seamless Logistics: By integrating established third-party logistics partners, we provide real-time shipment tracking and reliable last-mile delivery, enhancing the overall user experience.

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Market Opportunity

The Company believes that continued global interest in Korean entertainment and culture (“K-Culture” or “Hallyu”) may create future opportunities for digital fan engagement platforms and related online community services.

According to the Korea Foundation’s 2024 Global Hallyu Status Report, the number of global Hallyu fans surpassed 225 million as of December 2023 across 119 countries. The Korea Foundation reported that this figure represented significant growth compared to prior years.

The Company believes that increasing global consumption of K-pop, Korean television content, webtoons, digital media, virtual events, and mobile-based entertainment services may continue to support demand for multilingual fan engagement platforms and online fandom communities. The Ministry of Culture, Sports and Tourism and the Korean Foundation for International Cultural Exchange (“KOFICE”) also reported continued international growth in Korean Wave content consumption through the 2024 Overseas Hallyu Survey.

According to the ‘2025 Overseas Hallyu Status Survey’ released by the Ministry of Culture, Sports and Tourism and KOFICE in April 2025, the total export value of Hallyu-related sectors reached $15.18 billion in 2024, marking a 4.5% increase compared to the previous year.

The Company believes that mobile-first engagement, multilingual communication tools, online fan communities, and virtual participation features may continue to play an important role in the global digital entertainment ecosystem.

The Faning platform is designed to support these types of digital fan engagement activities through community interaction tools, multilingual communication functionality, and mobile and web-based accessibility. However, the Company remains in an early-stage commercialization phase and cannot assure that it will successfully expand its user base, achieve significant monetization, or establish a material market position within the global digital fandom industry.

Our Value

The Faning platform is designed to provide users with a centralized digital environment for Korean entertainment and culture-related fandom activities, including community interaction, content sharing, multilingual communication, and digital engagement.

The platform’s multilingual functionality is intended to reduce language barriers among users in different geographic regions. Faning also supports user-generated content and community-based participation tools that may provide a foundation for future monetization initiatives.

The Faning Point (“FP”) reward system is designed to encourage user participation within the platform. As of December 31, 2025, however, monetization features associated with the platform remained in early stages of commercialization, and revenue from the FANING platform remained limited.

OUR STRENGTHS

We believe Faning’S potential strengths include:

Focused Fandom Platform: Faning is designed specifically for users interested in Korean entertainment and culture, including K-pop.

Multilingual Engagement: Faning supports multilingual communication, including real-time translation functionality, to facilitate interaction among users in different regions.

Community-Based Features: Faning includes community forums, clubs, messaging, and user-generated content tools designed to support user participation and engagement.

Digital Engagement Tools: Faning includes Vote and Boost features designed to support user participation, community-driven engagement, and potential platform monetization.

FANING Point Reward System: The Faning Point (“FP”) system is designed to encourage user participation within the platform.

Mobile and Web Accessibility: Faning is accessible through mobile and web-based services, allowing users to engage with the platform across different devices.

OUR GROWTH STRATEGY

Our core strategy is to achieve global expansion by leveraging user acquisition models and maximizing the value of our growing fandom ecosystem.

• Global User Acquisition: The Company prioritizes a data-driven growth model characterized by lower Customer Acquisition Costs (CAC). By optimizing performance marketing, we focus on capturing user growth across emerging markets.
• Expansion of Higher-Margin Monetization: We are deploying a diverse revenue mix, centering on our proprietary “Vote and Boost” mechanisms. These tools can create a scalable and recurring revenue base by transforming global fan engagement into measurable commercial transactions.
• Technological Leadership & Global Infrastructure: We continue to invest in innovative technologies, including our 17-language real-time translation engine and end-to-end encryption (E2EE). This enables an user experience that facilitates social interaction for our expanding global community.
• Cross-Cultural Diversification: While rooted in K-Culture, our strategy includes expanding into broader global fandoms, including cinema, gaming, and sports. This enables the Faning ecosystem to adapt to the continuous evolution of global cultural trends.
• Revenue Channels: The Company aims to generate consistent income through virtual events, live-streaming, and premium subscription services. These features are designed to foster long-term brand loyalty and establish a monthly recurring revenue (MRR) base.

OUR MARKETING STRATEGY

We focus on a data-driven, higher-efficiency marketing model designed to capture the global K-Culture fandom. Our strategy prioritizes scalable user growth through optimized performance marketing and strategic regional engagement.

• Higher-Efficiency Performance Marketing: Our primary strategy centers on leveraging data analytics to achieve lower Customer Acquisition Costs (CAC). By optimizing digital ad spend and targeting higher-growth emerging markets, we focus on acquiring an user base with minimal capital expenditure.
• Localized Ecosystem Development: To penetrate global markets, we implement region-specific marketing initiatives.
• Strategic Localization: We collaborate with local content creators and marketing experts to tailor our services for key regions, including the United States, Europe, and Southeast Asia.
• Operational Compliance: We maintain a strict policy of not operating or providing services in China (including Hong Kong and Macau) due to regulatory concerns and data privacy protections. This is designed to ensure the security of our global user base and compliance with international standards.
• Global Ambassador & Influencer Program: We engage with “Global Ambassadors” and local influencers who resonate with fandom communities in their respective regions. These partners create localized, theme-specific content to drive organic interest and migrate fans of K-Culture directly to the Faning platform.
• Community-Driven Organic Growth: We foster deep relationships with our users through various engagement channels to drive brand loyalty. By maintaining higher satisfaction levels, we can encourage voluntary peer-to-peer referrals, creating a flow of organic growth that can reduce long-term marketing costs.
• Interactive Event Integration: We may host themed virtual or physical fan engagement events, including K-pop related experiences, to increase user participation and platform engagement. Our Vote and Boost mechanisms are designed to encourage user interaction and community activity across the platform.

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Technology and Intellectual Property

The Company developed Faning as a technological evolution, focusing on higher scalability and a premium user experience. Our proprietary infrastructure is designed to handle global traffic while providing specialized tools for fandom engagement.

• Integrated Suite of Tools: Faning differentiates itself through live-streaming, real-time interaction, and diverse monetization mechanisms such as Vote and Boost.
• Multi-Platform Accessibility: The platform is optimized for both mobile and PC, featuring a minimalist and higher-end UI/UX designed to provide for accessibility for our global user base.
• AI-Powered Safety & Verification: We deploy AI protocols:
• Automated Content Filtering: AI-powered nudity detection systems that identify and block sensitive content.
• Deepfake & Identity Verification: AI-enabled detection tools that verify the authenticity of uploaded media.
• Global Linguistic Integration: Our AI-driven translation engine supports 17 languages in real-time, enabling seamless, borderless communication without the need for manual intervention.
• Personalized Content Curation: Algorithms analyze user engagement data to deliver personalized search results and content recommendations, designed to create platform stickiness and user retention.

Digital Properties and Websites

The Company maintains a streamlined portfolio of digital properties to support its global platform operations and corporate governance requirements.

• Faning Platform: The Company operates its core global fandom services through its primary domains, Faning.xyz and Faning.co.kr. These properties serve as the central hub for the platform’s engagement and monetization features.
• Corporate Website: The Company’s official corporate presence is maintained at www.gitechnologies.com (http://www.gitechnologies.com). This site hosts our corporate information, SEC filings, and investor relations for Global Interactive Technologies.

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Competition

The market for global fandom and digital engagement is highly competitive. We compete across several sectors, including:

• Global Social Media Platforms: Large-scale networks such as Facebook, Instagram, and X (formerly Twitter).
• Community & Discussion Platforms: Specialized community services like Reddit.
• Dedicated K-pop Fandom Platforms: Industry-specific services such as Weverse and Lysn.
• User-Generated Content (UGC) Platforms: Content creation hubs like Wattpad.

OUR COMPETITIVE ADVANTAGE

We believe we possesses the following strategic advantages.

• Marketing & Acquisition Efficiency: Our most significant advantage is a data-driven marketing model characterized by lower Customer Acquisition Costs (CAC). This can allow the Company to achieve user growth with lower marketing expenditures.
• Monetization Architecture: Faning is engineered for monetization through proprietary tools like Vote and Boost. This can transform organic fan engagement into digital transactions, providing a revenue model different than advertising-dependent networks.
• Global Inclusivity: Faning features a native, AI-driven 17-language real-time translation engine. This technology can enable a seamless, borderless experience for the global fandom, fostering a more integrated and loyal international community.
• Lean and Scalable Infrastructure: Our focus on minimalist UI/UX and security protocols (E2EE) can provide a premium user experience with lower operational overhead. This lean operational model allows the Company to remain agile and adapt more quickly to shifting global cultural trends.

Partnerships and Industry Participation

The Company has participated in certain industry organizations and collaborative initiatives related to Korean culture, digital platforms, and technology development.

Federation of Artistic & Cultural Organization of Korea (“FACO”): Since 2021, the Company has maintained a relationship with FACO, a non-profit organization focused on Korean art and cultural activities. FACO includes multiple member associations and international branches supporting cultural exchange and artistic activities.

Metaverse Alliance: The company has participated in the Metaverse Alliance, an initiative associated with South Korea’s Ministry of Science and ICT (“MSIT”) involving companies and organizations engaged in digital platform and technology-related initiatives.

The Company may continue to explore strategic relationships and industry collaborations that support the development of the FANING platform and related business activities.

Employees and Labor Relations

As of December 31, 2025, the Company maintained a lean organizational structure consisting of five personnel at Global Interactive Technologies, Inc. and seven personnel at FANING KOREA, LLC.

The Company also engages contractors and consultants from time to time to support technical development, platform maintenance, marketing, administrative functions, and other business needs.

None of the Company’s employees are represented by a labor union or covered by a collective bargaining agreement. The Company has not experienced any material labor disputes.

Seasonality

The Company does not currently experience significant seasonality that materially affects its operations or financial results.

As the Faning platform develops, user engagement and future revenue, if any, may fluctuate based on entertainment industry cycles, major K-Culture events, artist release schedules, holidays, and regional user activity patterns. The Company will continue to monitor these factors as its commercialization initiatives evolve.

Governmental Regulation

We are subject to a variety of national, regional, and local laws and regulations in both the United States and the Republic of Korea. These laws affect multiple aspects of our business, including user interaction, data management, and international commerce. Applicable areas of law include fair trade, competition, labor and employment, privacy and data protection, intellectual property, and consumer protection.

Many of these laws are continuing to evolve, especially those governing digital platforms, artificial intelligence (AI), and cross-border data transfer. Due to the extent of our operations, we are subject to several specific regulatory regimes, including:

• Copyright Act: Protects creative works, software, and databases. It enforces fair use and online service provider exemptions under the Korea–U.S. Free Trade Agreement.
• Youth Protection Act: Regulates media content accessible to minors, classifying harmful content and restricting distribution through administrative procedures.
• Content Industry Promotion Act: Governs the production and sale of digital content, requiring consumer protection provisions such as refunds and cancellation rights in our terms of service.
• Personal Information Protection Act (PIPA): Regulates the collection, use, and destruction of personal data in South Korea. It includes strict consent requirements, data subject rights, and breach notification obligations.
• Monopoly Regulation and Fair Trade Act: Overseen by the Korea Fair Trade Commission (KFTC), this act ensures fair competition and prevents unfair trade practices. The Company monitors compliance regarding related party transactions and corporate disclosures to enable transparency.
• Global Data Privacy & AI Ethics: As we expand globally, the Company monitors compliance with international standards, including the General Data Protection Regulation (GDPR) in Europe and evolving AI safety regulations.

Facilities

The Company’s primary operational and development activities are conducted from office premises located at 160 Yeouiseo-ro, Yeongdeungpo-gu, Seoul, Korea.

Legal Proceedings

From time to time, the Company may become involved in routine claims, inquiries, or proceedings arising in the ordinary course of business. As of the filing of this Annual Report on Form 10-K, the Company was not subject to any material pending legal proceedings that management believes would have a material adverse effect on the Company’s consolidated financial position or results of operations.

Available Information

Our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934 are available free of charge under the Investors Relations page on our website, www.gitechnologies.com (http://www.gitechnologies.com), as soon as reasonably practicable after such reports are electronically filed with, or furnished to, the Securities and Exchange Commission (“SEC”). Information on our website is not included as a part of, or incorporated by reference into, this report. The Securities and Exchange Commission maintains an internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the Securities and Exchange Commission. Our SEC filings are also available through the SEC’s website, www.sec.gov (http://www.sec.gov).

Risk Factor Summary

The following is a summary of the risks and uncertainties that could cause our business, financial condition or operating results to be harmed. We encourage you to carefully review the full risk factors contained in this report in their entirety for additional information regarding these risks and uncertainties.

• We have incurred significant losses since our inception, and we intend to continue to invest in our business. As a result, we may continue to experience losses in the future.
• Our auditor has included an explanatory paragraph in their opinion regarding our ability to continue as a going concern. If we are unable to continue as a going concern, our securities will have little or no value.
• To continue as a going concern, we will require significant additional capital, which we may be unable to obtain.
• We are a development stage company, and we may not be able to generate any or sustain our growth or implement our business strategies.
• We are subject to risks associated with operating in a rapidly developing industry and a relatively new market.
• Our success depends on our ability to develop products and services to address the rapidly evolving market for the content creation and social media platform industry, and, if we are not able to implement successful enhancements and new features for our products and services, our business could be materially and adversely affected.
• If our content streaming initiatives are unsuccessful, our business, financial condition or results of operations could be adversely affected.
• Substantial and increasingly intense competition in the social media platform and content creation industry may harm our business.
• Systems failures, interruptions, delays in service, catastrophic events, and resulting interruptions in the availability of our products or services could harm our business and our brand, and subject us to substantial
• We currently have ineffective internal control over financial reporting.
• Our business is subject to complex and evolving U.S. and foreign laws and regulations regarding privacy, data use and data protection, content, competition, consumer protection, and other matters. Many of these laws and regulations are subject to change and uncertain interpretation, and could result in claims, changes to our business practices, monetary penalties, increased cost of operations, or declines in user growth or engagement, or otherwise harm our business.
• Changes in tax laws or regulations that are applied adversely to us or our customers may have a material adverse effect on our business, cash flow, financial condition or results of operations.
• Tensions with North Korea could have an adverse effect on our business, financial condition, and results of operations, and the price per share of our common stock.
• There are special risks involved with investing in Korean companies, including the possibility of restrictions being imposed by the Korean government in emergency circumstances, accounting and corporate disclosure standards that differ from those in other jurisdictions, and the risk of direct or vicarious criminal liability for executive officers of our Korean affiliates.
• Our business may be adversely affected by developments that negatively impact the Korean economy and uncertainties in economic conditions that impact spending patterns of our customers in Korea.
• New legislative proposals may expose our business to additional risks from litigation, regulation, and government investigations.
• There may be losses or unauthorized access to or releases of confidential information, including personally identifiable information (“PII”), that could subject the Company to significant reputational, financial, legal and operational consequences.
• Security breaches, improper access to or disclosure of our data or user data, other hacking and phishing attacks on our systems, or other cyber incidents could harm our reputation and adversely affect our business.
• Regulatory changes or actions may restrict the use of digital assets in a manner that adversely affects our business, prospects or operations.
• We may not be able to prevent others from unauthorized use of our intellectual property, which could harm our business and competitive position.
• Our stock price may be volatile, and you could lose all or part of your investment.
• We are an emerging growth company, and any decision on our part to comply only with certain reduced reporting and disclosure requirements applicable to emerging growth companies could make our common stock less attractive to investors.

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RISKS RELATED TO OUR BUSINESS

We have incurred significant losses since our inception, and we intend to continue to invest in our business. As a result, we may continue to experience losses in the future.

We incurred a net loss of approximately $4.6 million and $6.2 million for the years ended December 31, 2025 and for the periods ended December 31, 2024, respectively. As of December 31, 2025, we had an accumulated deficit of approximately $42.5 million, and $37.9 million as of December 31, 2024. The audited report of our independent registered public accounting firm to the financial statements for the years ended December 31, 2025, and 2024, included elsewhere in the Report, contains an explanatory paragraph stating that our recurring losses from operations, accumulated deficit and negative working capital raise substantial doubt about our ability to continue as a going concern.

We expect to continue to invest heavily in our product development and operations, to focus on our Faning platform to increase our user base to support future growth, and to meet our expanded reporting and compliance obligations as a public company. We cannot assure you that we will be able to generate revenue sufficient to offset our expected cost increases and planned investments in our business and platform. As a result, we may incur significant losses for the foreseeable future, and may not be able to achieve or sustain profitability. If we fail to achieve or sustain profitability, then we may not be able to achieve our business plan, fund our business or continue as a going concern. The financial statements included in this Report do not contain any adjustments which might be necessary if we were unable to continue as a going concern.

Our auditor has included an explanatory paragraph in their opinion regarding our ability to continue as a going concern. If we are unable to continue as a going concern, our securities will have little or no value.

OneStop Assurance, PAC, our independent registered public accounting firm for the fiscal year ended December 31, 2025 and December 31, 2024, has included an explanatory paragraph in their opinion that accompanies our audited consolidated financial statements as of and for the year ended December 31, 2025 and December 31, 2024, indicating that our recurring losses from operations and a working capital deficiency raises substantial doubt about our ability to continue as a going concern. If we are unable to obtain profitability or improve our liquidity position, we may not be able to continue as a going concern.

We anticipate that we will continue to generate operating losses and use cash in operations through the foreseeable future. We will need significant additional capital, or we may be required to curtail or cease operations.

To continue as a going concern, we will require significant additional capital, which we may be unable to obtain.

The revenues generated from our operations are not presently sufficient to sustain our operations. Therefore, we will need to raise additional capital in the future to continue our operations. We currently believe that existing cash on hand is sufficient to support operations for approximately two months based on the current operating cash burn rate and estimate that we will require approximately $250,000 per month to support ongoing operations and execute our business plan. Accordingly, we estimate that approximately $3.0 million of additional capital will be required over the next 12 months

We anticipate that our principal sources of liquidity will not be sufficient to fund our activities to obtain long-term, sustainable profitability. To have sufficient cash to fund our operations to obtain long-term, sustainable profitability, we will need to raise additional equity or debt capital. There can be no assurance that additional funds will be available when needed from any source or, if available, will be available on terms that are acceptable to us. We will be required to pursue sources of additional capital through various means, including debt or equity financing. Future financing through equity investments will be dilutive to existing stockholders. The terms of securities we may issue in future capital transactions may be more favorable for new investors. Newly issued securities may include preferences, superior voting rights, the issuance of warrants or other derivative securities, and the issuances of incentive awards under equity employee incentive plans, all of which will have additional dilutive effects. Further, we may incur substantial costs in pursuing future capital and/or financing, including investment banking fees, legal fees, accounting fees, printing and distribution expenses and other costs. We may also be required to recognize non-cash expenses in connection with certain securities we may issue, such as convertible notes and warrants, which may adversely impact our financial condition. Our ability to obtain needed financing may be impaired by such factors as the capital markets and our history of losses, which could impact the availability and cost of future financing. If the amount of capital we can raise from financing activities, together with any revenues and profits from operations, is not sufficient to satisfy our capital needs, even to the extent that we reduce our operations accordingly, we may be required to curtail or cease operations.

We are a development stage company, and we may not be able to generate or sustain our growth or implement our business strategies.

We have a limited operating history. As our application offerings continue to develop, we may adjust our strategy and business model to adapt. These adjustments may not achieve expected results and may have a material and adverse impact on our financial condition and results of operations.

In addition, any growth or expansion of our business may significant strain on our management and resources. We believe that any growth of our business will depend on many factors, including our ability to develop new sources of revenues, diversify monetization methods including advertising revenue, attract and retain users, increase engagement on our Faning platform, continue developing innovative technologies and application uses in response to shifting demand in the market, increase brand awareness, and expand into new markets. We cannot assure you that we will achieve any of the above, and our failure to do so may materially and adversely affect our business and results of operations.

We are subject to risks associated with operating in a rapidly developing industry and a relatively new market.

Many elements of our business are unique, evolving and relatively unproven. Our business and prospects depend on the continuing development of the social media market, which is relatively new, rapidly developing and subject to significant challenges. Our business relies upon our ability to cultivate and grow an active online community, and our ability to successfully monetize such community through methods that include, without limitation, advertising revenue. In addition, our continued growth depends, in part, on our ability to respond to constant changes in the industry, including rapid technological evolution and continued shifts in user trends. Developing and integrating new content, products, services or infrastructure could be expensive and time-consuming, and these efforts may not yield the benefits we expect to achieve at all. We cannot assure you that we will succeed in any of these aspects or that the industry will continue to grow as rapidly as it has in the past.

Our success depends on our ability to develop products and services to address the rapidly evolving market for the content creation and social media platform industry, and, if we are not able to implement successful enhancements and new features for our products and services, our business could be materially and adversely affected.

We expect that new services and technologies applicable to the content creation and social media platform industry in which we operate will continue to emerge and evolve. Rapid and significant technological changes continue to confront the industries in which we operate, including developments in the social media platform and content creation industry. Incorporating new technologies into our products and services may require substantial expenditures and take considerable time, and we may not be successful in realizing a return on these development efforts in a timely manner or at all. There can be no assurance that any new products or services we develop and offer to our customers will achieve commercial acceptance. Our ability to develop new products and services may be inhibited by industry-wide standards, laws and regulations, resistance to change from buyers or sellers, or third parties’ intellectual property rights. Our success will depend on our ability to develop new technologies and to adapt to technological changes and evolving industry standards. If we are unable to provide enhancements and new features for our products and services or to develop new products and services that achieve market acceptance or that keep pace with rapid technological developments and evolving industry standards, our business would be materially and adversely affected.

The success of enhancements, new features, and products and services depends on several factors, including the timely completion, introduction, and market acceptance of the enhancements or new features or services. We often rely not only on our own initiatives and innovations, but also on third parties, including some of our competitors, for the development of and access to new technologies.

In addition, because our products and services are designed to operate with a variety of systems, infrastructures, and devices, we need to continuously modify and enhance our products and services to keep pace with changes in mobile, software, communication, and database technologies. We may not be successful in either developing these modifications and enhancements or in bringing them to market in a timely and cost-effective manner. Any failure of our products and services to continue to operate effectively with third-party infrastructures and technologies could reduce the demand for our products and services, result in dissatisfaction of our sellers or their customers, and materially and adversely affect our business.

As a creator and a distributor of digital media content, we face liability and expenses for legal claims based on the nature and content of the materials that we create or distribute, including materials provided by third parties. If we are required to pay damages or expenses in connection with these legal claims, our business and results of operations may be harmed.

We display original content and third-party content on our websites and in our marketing messages. As a result, we have faced and will continue to face potential liability based on a variety of theories, including deceptive advertising and copyright or trademark infringement. We generally rely on the “fair use” exception for our use of third-party brand names and marks, but these third parties may disagree, and the laws governing the fair use of these third-party materials are imprecise and adjudicated on a case-by-case basis. We also create content we believe to be original for our websites. While we do not believe that this content infringes on any third-party copyrights or other intellectual property rights, owners of competitive websites that present similar content have taken and may take the position that our content infringes on their intellectual property rights. We are also exposed to risk that content provided by third parties is inaccurate or misleading, and for material posted to our websites by users and other third parties. These claims could divert management time and attention away from our business and result in significant costs to investigate and defend, regardless of the merit of these claims. The general liability insurance we maintain may not cover potential claims of this type or may not be adequate to indemnify us for all liability that may be imposed. Any imposition of liability that is not covered by insurance, or is in excess of insurance coverage, could materially adversely affect our business, financial condition and results of operations.

Our dependence on third-party relationships with content producers and distribution channels to develop and distribute entertainment content is critical to the success of the Faning Platform.

We rely on third party relationships with content producers and distribution channels to develop and distribute entertainment content. Our financial performance may be adversely affected by our relationships with content producers and distribution channels. Some of our content producers may have their own or other distribution capabilities in the markets in which we operate. These third-party content producers and distribution channels may decide, or be required by their respective parent companies, to use their intracompany distribution or content production capabilities rather than posting such content with us. Our business may be harmed if the content producers and distribution channels with which we work stop or reduce the amount of content they produce for us, or otherwise demand less favorable terms to us.

Our decision not to provide products and services and to restrict user access in China (including Hong Kong and Macau) will limit our total addressable market and may limit our ability to grow our business.

China and Hong Kong could represent a large market opportunity for our business. However, and although we believe that such a decision may benefit the Company in the long run, by choosing not to provide products and services, and restricting user access in China (including Hong Kong and Macau), we are sacrificing potential business opportunities that may negatively impact the Company. As a result, the Company’s total addressable market and potential growth may be limited and, as a result, the market price of our common stock may significantly decrease or become worthless.

If our content streaming initiatives are unsuccessful, our business, financial condition or results of operations could be adversely affected.

Content streaming is intensely competitive and cash intensive and there can be no assurance that our content creation initiatives will be profitable or otherwise successful. Our ability to attract, engage and retain users within the Faning platform, as well as the corresponding advertising revenues they generate, will depend on our ability to consistently provide appealing and differentiated content globally, effectively market our content and services and provide a quality experience for selecting and viewing that content. Our success will require significant investments to produce original content and acquire the rights to third-party content, as well as the establishment and maintenance of key content and distribution partnerships.

We must continually add new users and meaningfully engage with existing users to manage turnover, or “churn,” to grow our business. If we are unable to successfully compete with competitors in attracting, engaging with and retaining users as well as creative talent, our business, financial condition or results of operations could be adversely affected. The relative service levels, content offerings, promotions and pricing and related features of our competitors’ services may adversely impact our ability to attract, engage and retain users. If consumers do not consider our platform to be of value compared to our competitors’ platforms, including because we fail to introduce attractive new content and features, do not maintain competitive pricing, terminate or modify promotional or trial period offerings, experience technical issues, or change the mix of content in a manner that is unfavorably received, we may not be able to attract, engage and retain users. If we are not able to attract new users, or our existing users decide to not continue using our services for any reason, including a perception that they do not use our platform sufficiently, the need to cut household expenses, unsatisfactory content, promotions or offers expire or are modified, competitive platforms provide a better value or experience or customer service or technical issues are not satisfactorily resolved, our business, financial condition or results of operations could be adversely affected.

We are dependent on the continued services and on the performance of key third party content contributors, the loss of which could adversely affect our business.

We rely on content contributed by third party providers, which has in turn attracted users that drive advertising revenue. The loss of the services of any of such key contributors could have a material adverse effect on our business, operating results, and financial condition. We also depend on our ability to identify, attract, and retain other highly skilled third-party content contributors. Competition for such contributors is intense, and there can be no assurance that we will be able to successfully attract, assimilate or retain them. The loss or limitation of the services of any of our key third party contributors, or the inability to attract and retain additional qualified key contributors, could have a material adverse effect on our business, financial condition or results of operations.

Substantial and increasingly intense competition in the social media platform and content creation industry may harm our business.

We compete in markets characterized by vigorous competition, changing technology, evolving industry standards, and frequent introductions of new products and services. We expect competition to intensify in the future as existing and new competitors introduce new services or enhance existing services. We compete against many companies to attract customers, and some of these companies have greater financial resources and substantially larger bases of customers than we do, which may provide them with significant competitive advantages. These companies may devote greater resources to the development, promotion, and sale of products and services, and they may introduce their own innovative products and services that adversely impact our growth. Mergers and acquisitions by these companies may lead to even larger competitors with more resources. We also expect new entrants to offer competitive products and services. If we are unable to differentiate ourselves from and successfully compete with our competitors, our business will be materially and adversely affected.

We may also face pressures from competitors for user engagement and, in the future, advertising revenues. Some potential competitors are able to offer greater returns on content sales to content creators for similar services by cross-subsidizing their payments services through other services they offer. Such competition may result in the need for us to alter the amount we charge creators in content-sales transactions, and could reduce revenue. In addition, as we grow, influential creators may demand more customized and favorable pricing from us, and competitive pressures may require us to agree to such pricing, further reducing our gross profit.

Systems failures, interruptions, delays in service, catastrophic events, and resulting interruptions in the availability of our products or services could harm our business and our brand, and subject us to substantial liability.

Our systems and those of our third-party data center facilities may experience service interruptions, denial-of-service and other cyber-attacks, human error, earthquakes, hurricanes, floods, fires, natural disasters, power losses, disruptions in telecommunications services, fraud, military or political conflicts, terrorist attacks and other geopolitical unrest, computer viruses, or other events. Our systems are also subject to break-ins, sabotage, and acts of vandalism. Some of our systems are not fully redundant, and our disaster-recovery planning is not sufficient for all eventualities. In addition, as a provider of payments solutions, we are subject to increased scrutiny by regulators that may require specific business continuity and disaster recovery plans and more rigorous testing of such plans. This increased scrutiny may be costly and time-consuming and may divert our resources from other business priorities.

We may, and are likely to, experience denial-of-service attacks, system failures, and other events or conditions that interrupt the availability or reduce the speed or functionality of our products and services. These events, should they occur, would likely result in loss of revenue. In addition, they could result in significant expense to repair or replace damaged equipment and remedy resultant data loss or corruption. A prolonged interruption in the availability or reduction in the speed or other functionality of our products or services could materially harm our reputation and business. Frequent or persistent interruptions in our products and services could cause users to believe that our products and services are unreliable, leading them to switch to our competitors or to avoid our products and services, and could permanently harm our reputation and business. Moreover, to the extent that any system failure or similar event results in damages to customers or their businesses, these customers could seek compensation from us for their losses, and those claims, even if unsuccessful, would likely be time-consuming and costly for us to address.

Our success depends largely on the continued service and availability of key personnel.

Much of the Company’s future success depends on the continued availability and service of key personnel, including its Chief Executive Officer. Since the technology industry is characterized by high demand and intense competition for talents, we cannot assure you that we will be able to attract or retain qualified staff or other highly skilled employees. In addition, as the Company is relatively young, our ability to train and integrate new employees into our operations may not meet the growing demands of our business which may materially and adversely affect our ability to grow our business and hence our results of operations.

From time to time, we may become involved in legal proceedings.

From time to time, we may become subject to legal proceedings, claims, litigation and government investigations or inquiries, which could be expensive, lengthy, disruptive to normal business operations and occupy a significant amount of our employees’ time and attention. In addition, the outcome of any legal proceedings, claims, litigation, investigations, or inquiries may be difficult to predict and could have a material adverse effect on our business, operating results, or financial condition.

The preparation of our financial statements involves the use of good faith estimates, judgments and assumptions, and our financial statements may be materially affected if such good faith estimates, judgments or good faith assumptions prove to be inaccurate.

Financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) typically require the use of good faith estimates, judgments and assumptions that affect the reported amounts. Often, different estimates, judgments and assumptions could reasonably be used that would have a material effect on such financial statements, and changes in these estimates, judgments and assumptions may occur from period to period over time. Significant areas of accounting requiring the application of management’s judgment include, but are not limited to, determining the fair value of assets, share-based compensation and the timing and amount of cash flows from assets. These estimates, judgments and assumptions are inherently uncertain and, if our estimates were to prove to be wrong, we would face the risk that charges to income or other financial statement changes or adjustments would be required. Any such charges or changes would require a restatement of our financial statements and could harm our business, including our financial condition and results of operations and the price of our securities. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations” for a discussion of the accounting estimates, judgments and assumptions that we believe are the most critical to an understanding of our financial statements and our business.

We currently have ineffective internal control over financial reporting.

We currently have ineffective internal control over financial reporting. We have historically outsourced our accounting to small firms and also replaced our accounting firm with another small firm, the transition of which has caused a lack of continuity and loss of efficiency in the preparation of our financial statements. While we intend to remediate this weakness by hiring more permanent, qualified and experienced accounting personnel at the Company and/or to hire a larger accounting firm with more resources and expertise, we may not be able to remediate this weakness.

RISKS RELATED TO GOVERNMENT REGULATION

Our business is subject to regulation, and changes in applicable regulations may negatively impact our business.

We are subject to a number of foreign and domestic laws and regulations relating to user privacy, data collection, retention, electronic commerce, virtual items and currency, consumer protection, content, advertising, localization, and information security which have been adopted or are being considered for adoption by many jurisdictions and countries throughout the world. These laws could harm our business by limiting the products and services we can offer consumers or the manner in which we offer them. The costs of compliance with these laws may increase in the future as a result of changes in interpretation. Furthermore, any failure on our part to comply with these laws or the application of these laws in an unanticipated manner may harm our business and result in penalties or significant legal liability.

Actions by governments that restrict access to Faning in their countries, or that otherwise impair our ability to sell advertising in their countries, could substantially harm our business and financial results.

Governments from time to time seek to censor content available on social media platforms, or restrict access to social media platforms from their country entirely, or impose other restrictions that may affect the accessibility of our products in their country for an extended period of time or indefinitely. For example, user access to certain other company social media platforms has been or is currently restricted in whole or in part in China, Iran, and North Korea. In addition, government authorities in other countries may seek to restrict user access to our products if they consider us to be in violation of their laws or a threat to public safety or for other reasons. If access to our products or services is restricted in one or more countries, our ability to attract users, increase user engagement, or generate advertising revenue in those markets may be adversely affected.. It is also possible that government authorities could take action that impairs our ability to sell advertising, including in countries where access to our consumer-facing products may be blocked or restricted. In the event that content shown on Faning is subject to censorship, access to our products is restricted, in whole or in part, in one or more countries, we are required to or elect to make changes to our operations, or other restrictions are imposed on our products, or our competitors are able to successfully penetrate new geographic markets or capture a greater share of existing geographic markets that we cannot access or where we face other restrictions, our ability to retain or increase our user base, user engagement, or the level of advertising by marketers may be adversely affected, we may not be able to maintain or grow our revenue as anticipated, and our financial results could be adversely affected.

Our business is subject to complex and evolving U.S. and foreign laws and regulations regarding privacy, data use and data protection, content, competition, consumer protection, and other matters. Many of these laws and regulations are subject to change and uncertain interpretation, and could result in claims, changes to our business practices, monetary penalties, increased cost of operations, or declines in user growth or engagement, or otherwise harm our business.

We are subject to a variety of laws and regulations that involve matters central to our business, including privacy, data use, data protection and personal information, rights of publicity, content, intellectual property, advertising, marketing, distribution, data security, data retention and deletion, data localization and storage, data disclosure, artificial intelligence, electronic contracts and other communications, competition, protection of minors, consumer protection, telecommunications, product liability, e-commerce, taxation, economic or other trade prohibitions or sanctions, anti-corruption and political law compliance, securities law compliance, and online payment services. The introduction of new products, expansion of our activities in certain jurisdictions, or other actions that we may take may subject us to additional laws, regulations, or other government scrutiny. In addition, foreign data protection, privacy, content, competition, and other laws and regulations can impose different obligations or be more restrictive than those in the United States.

Since our operations are based in Korea, where most of our users are domiciled, we are subject to, among others, the Personal Information Protection Act and related legislation, regulations and orders (the “PIPA”), the Act on the Promotion of Information and Communications Network Utilization and Protection of Information Act (Korea), and the Credit Information Act in Korea that specifically regulates certain sensitive personal information. PIPA requires consent by the consumer with respect to the use of his or her data and requires the persons responsible for management of personal data to take the necessary technological and managerial measures to prevent data breaches and, among other duties, to notify the Personal Information Protection Commission of any data breach incidents within 24 hours. Failure to comply with PIPA in any manner may subject these persons responsible to personal liability for not obtaining such consent in an appropriate manner or for such breaches, including even negligent breaches, and violators face varying penalties ranging from monetary penalties to imprisonment. We strive to take the necessary technological and managerial measures to comply with PIPA, including the implementation of privacy policies concerning the collection, use, and disclosure of subscriber data on our apps and websites, and we regularly review and update our policies and practices. Despite these efforts to comply with PIPA, these rules are complex and evolving, subject to interpretation by government regulators which may change over time and therefore we are subject to the risk of claims by regulators of failure to comply with PIPA. Any failure, or perceived failure, by us to comply with such policies, laws, regulations, and other legal obligations and regulatory guidance could adversely affect our reputation, brand, and business, and may result in claims, proceedings, or actions, including criminal proceedings, against us and certain of our executive officers by governmental entities or others or other liabilities. Any such claim, proceeding, or action, could hurt our reputation, brand, and business, force us to incur significant expenses in defense of such proceedings, distract our management, increase our costs of doing business, result in a loss of customers and merchants, and could have an adverse effect on our business, financial condition, and results of operations.

These U.S. federal and state and foreign laws and regulations, which in some cases can be enforced by private parties in addition to government entities, are constantly evolving and can be subject to significant change. As a result, the application, interpretation, and enforcement of these laws and regulations are often uncertain, particularly in the new and rapidly evolving industry in which we operate, and may be interpreted and applied inconsistently from country to country and inconsistently with our current policies and practices. For example, regulatory or legislative actions affecting the manner in which we display content to our users or obtain consent to various practices could adversely affect user growth and engagement. Such actions could affect the manner in which we provide our services or adversely affect our financial results.

We are also subject to evolving laws and regulations that dictate whether, how, and under what circumstances we can transfer, process and/or receive certain data that is critical to our operations, including data shared between countries or regions in which we operate and data shared among our products and services. If we are unable to transfer data between and among countries and regions in which we operate, or if we are restricted from sharing data among our products and services, it could affect our ability to provide our services, the manner in which we provide our services or our ability to target ads, which could adversely affect our financial results.

Proposed or new legislation and regulations could also significantly affect our business. Laws and regulations are evolving and subject to interpretation, and resulting limitations on our advertising services, or reductions of advertising by marketers, have to some extent adversely affected, and will continue to adversely affect, our advertising business. Changes to our products or business practices as a result of these developments may adversely affect our advertising business. Similarly, there are a number of legislative proposals in the European Union, the United States, at both the federal and state level, as well as other jurisdictions that could impose new obligations or limitations in areas affecting our business. In addition, some countries are considering or have passed legislation implementing data protection requirements or requiring local storage and processing of data or similar requirements that could increase the cost and complexity of delivering our services.

For example, the European Union traditionally has imposed stricter obligations under its laws and regulations relating to privacy, data protection and consumer protection than the United States. In May 2018, the European Union’s new regulation governing data practices and privacy called the General Data Protection Regulation, or GDPR, became effective and substantially replaced the data protection laws of the individual European Union member states. The law requires companies to meet more stringent requirements regarding the handling of personal data of individuals in the EU than were required under predecessor EU requirements. In the United Kingdom, a Data Protection Bill that substantially implements the GDPR also became law in May 2018. The law also increases the penalties for non-compliance, which may result in monetary penalties of up to €20.0 million or 4% of a company’s worldwide turnover, whichever is higher. The GDPR and other similar regulations require companies to give specific types of notice and in some cases seek consent from consumers and other data subjects before collecting or using their data for certain purposes, including some marketing activities. Outside of the European Union, many countries have laws, regulations, or other requirements relating to privacy, data protection, information security, and consumer protection, and new countries are adopting such legislation or other obligations with increasing frequency. Many of these laws may require consent from consumers for the use of data for various purposes, including marketing, which may reduce our ability to market our products. There is no harmonized approach to these laws and regulations globally. Consequently, we increase our risk of non-compliance with applicable foreign data protection laws by operating internationally. We may need to change and limit the way we use personal information in operating our business and may have difficulty maintaining a single operating model that is compliant. In addition, various federal, state and foreign legislative and regulatory bodies, or self-regulatory organizations, may expand current laws or regulations, enact new laws or regulations or issue revised rules or guidance regarding privacy, data protection, information security and consumer protection. For example, California recently adopted the California Consumer Privacy Act of 2018 (“CCPA”), which provides new data privacy rights for consumers and new operational requirements for businesses. The CCPA includes a statutory damages framework and private rights of action against businesses that fail to comply with certain CCPA terms or implement reasonable security procedures and practices to prevent data breaches. The CCPA became effective in January 2020. While the Company has not experienced any material adverse impact from the CCPA to date, compliance with evolving privacy laws and regulations may require ongoing adjustments to our data processing practices and may result in additional compliance costs in the future.

These laws and regulations, as well as any associated claims, inquiries, or investigations or any other government actions, have in the past led to, and may in the future lead to, unfavorable outcomes including increased compliance costs, delays or impediments in the development of new products, negative publicity and reputational harm, increased operating costs, diversion of management time and attention, and remedies that harm our business, including fines or demands or orders that we modify or cease existing business practices.

Payment transactions may subject us to additional regulatory requirements and other risks that could be costly and difficult to comply with or that could harm our business.

Our users can purchase virtual and digital goods from creators and developers within our platform and infrastructure on Faning. In addition, certain of our users can use our Faning infrastructure, including within Clubs and communities, for other activities, such as sending money to other users or purchasing goods and/or services from other users. We are subject to a variety of laws and regulations in the United States, Europe, and elsewhere, including those governing anti-money laundering and counter-terrorist financing, money transmission, gift cards and other prepaid access instruments, electronic funds transfer, charitable fundraising, and import and export restrictions. Depending on how our payments product evolves, we may also be subject to other laws and regulations including those governing gambling, banking, and lending. In some jurisdictions, the application or interpretation of these laws and regulations is not clear. Our efforts to comply with these laws and regulations could be costly and result in diversion of management time and effort and may still not guarantee compliance. In the event that we are found to be in violation of any such legal or regulatory requirements, we may be subject to monetary fines or other penalties such as a cease and desist order, or we may be required to make product changes, any of which could have an adverse effect on our business and financial results.

In addition, we are subject to a variety of additional risks as a result of payments transactions, including: increased costs and diversion of management time and effort and other resources to deal with bad transactions or customer disputes; potential fraudulent or otherwise illegal activity by users, developers, employees, or third parties; restrictions on the investment of consumer funds used to transact payments; and additional disclosure and reporting requirements. We have also launched/have announced plans to develop digital payments products and services, which may subject us to many of the foregoing risks and additional licensing requirements.

Changes in tax laws or regulations that are applied adversely to us or our customers may have a material adverse effect on our business, cash flow, financial condition or results of operations.

New income, sales, use or other tax laws, statutes, rules, regulations or ordinances could be enacted at any time, which could affect the tax treatment of our earnings and adversely affect our operations, and our business and financial performance. Further, existing tax laws, statutes, rules, regulations or ordinances could be interpreted, changed, modified or applied adversely to us. There may be material adverse effects resulting from the legislation that we have not yet identified. No estimated tax provision has been recorded in the financial statements included herein for tax attributes that are incomplete or subject to change.

The foregoing items could have a material adverse effect on our business, cash flow, financial condition or results of operations. In addition, it is unclear how these U.S. federal income tax changes will affect state and local taxation, which often uses federal taxable income as a starting point for computing state and local tax liabilities. The impact of this tax legislation on holders of our common stock is also uncertain and could be adverse. We urge our stockholders and investors to consult with our legal and tax advisors with respect to this legislation and the potential tax consequences of investing in or holding our common stock.

Failure to comply with the U.S. Foreign Corrupt Practices Act could result in fines, criminal penalties and an adverse effect on our business.

We may operate in a number of countries throughout the world, including countries known to have a reputation for corruption. We are committed to doing business in accordance with applicable anti-corruption laws and have adopted a code of business conduct and ethics which is consistent and in full compliance with the U.S. Foreign Corrupt Practices Act of 1977, or the FCPA. We are subject, however, to the risk that we, our affiliated entities or our or their respective officers, directors, employees and agents may take actions determined to be in violation of such anti- corruption laws, including the FCPA. Any such violation could result in substantial fines, sanctions, civil and/or criminal penalties, curtailment of operations in certain jurisdictions, and might adversely affect our business, results of operations or financial condition. In addition, actual or alleged violations could damage our reputation and ability to do business. Furthermore, detecting, investigating, and resolving actual or alleged violations is expensive and can consume significant time and attention of our senior management.

RISKS RELATED TO DOING BUSINESS IN KOREA

Fluctuations in exchange rates could result in foreign currency exchange losses to us.

The value of the Korean Won and other currencies against the U.S. dollar has fluctuated, and may continue to fluctuate and is affected by, among other things, changes in political and economic conditions. It is difficult to predict how market forces or Korean or U.S. government policy, including any interest rate increases by the Federal Reserve, may impact the exchange rate between the Korean Won and the U.S. dollar in the future.

A substantial percentage of our revenue and costs are denominated in Korean Won, and a significant portion of our financial assets are also denominated in Korean Won, while we anticipate that a substantial portion of any debt incurred will be denominated in U.S. dollars. We may receive dividends, loans and other distributions on equity paid by our operating subsidiary in Korea. Any significant fluctuations in the value of the Korean Won may materially and adversely affect our liquidity and cash flows. For example, the depreciation of the Korean Won and other foreign currencies against the U.S. dollar typically results in a material increase in the cost of hosting services and equipment purchased from outside of Korea and the cost of servicing debt denominated in currencies other than the Korean Won. As a result, any significant depreciation of the Korean Won or other major foreign currencies against the U.S. dollar may have a material adverse effect on our results of operations. If we decide to convert our Korean Won into U.S. dollars for the purpose of repaying principal or interest expense on any future U.S. dollar-denominated debt, making payments for dividends on our common stock, or other business purposes, depreciation of the Korean Won or other foreign currencies against the U.S. dollar would have a negative effect on the U.S. dollar amount we would receive. Conversely, to the extent that we need to convert U.S. dollars into Korean Won for our operations, appreciation of the Korean Won against the U.S. dollar would have an adverse effect on the Korean Won amount we would receive.

Tensions with North Korea could have an adverse effect on our business, financial condition, results of operations, and the price per share of our common stock.

Relations between Korea and North Korea have fluctuated over the years. Tension between Korea and North Korea may increase or change abruptly as a result of current and future events. In particular, there have been heightened security concerns in recent years stemming from North Korea’s nuclear weapon and ballistic missile programs as well as its hostile military actions against Korea.

North Korea’s economy also faces severe challenges, which may further aggravate social and political pressures within North Korea. Geopolitical tensions involving North Korea and the surrounding region remain elevated and unpredictable. Changes in political, economic, or military conditions in the Korean peninsula could adversely affect regional stability, financial markets, and business operations in South Korea and surrounding markets.

Further tensions in North Korean relations could develop due to a leadership crisis, breakdown in high-level inter-Korea contacts or military hostilities. Alternatively, tensions may be resolved through reconciliatory efforts, which may include peace talks, alleviation of sanctions or reunification. We cannot assure you that future negotiations will result in a final agreement on North Korea’s nuclear program, including critical details such as implementation and timing, or that the level of tensions between Korea and North Korea will not escalate. Any increase in the level of tension between Korea and North Korea, an outbreak in military hostilities or other actions or occurrences, could adversely affect our business, prospects, financial condition, and results of operations and could lead to a decline in the price per share of our common stock.

There are special risks involved with investing in Korean companies, including the possibility of restrictions being imposed by the Korean government in emergency circumstances, accounting and corporate disclosure standards that differ from those in other jurisdictions, and the risk of direct or vicarious criminal liability for executive officers of our Korean affiliates.

Our wholly owned subsidiary, FANING KOREA, LLC, is our Korean subsidiary and operates in a business and cultural environment that is different from that of other countries. For example, under the Foreign Exchange Transaction Act of Korea, if the Korean government determines that in certain emergency circumstances, including sudden fluctuations in interest rates or exchange rates, extreme difficulty in stabilizing the balance of payments or substantial disturbance in the Korean financial and capital markets are likely to occur, it may impose any necessary restriction such as requiring Korean or foreign investors to obtain prior approval from the Minister of Economy and Finance of Korea prior to entering into a capital markets transaction, repatriating interest, dividends or sales proceeds arising from Korean securities or from the disposition of such securities or other transactions involving foreign exchange. Although investors will hold shares of our common stock, FANING KOREA, LLC may experience adverse risks and in turn could adversely impact our business, prospects, financial condition, and results of operations and could lead to a decline in the price per share of our common stock.

In addition, under Korean law, there are circumstances in which certain executive officers of a company may be investigated or held criminally liable either directly or vicariously for the actions of the company and its executives and employees. For example, complaints alleging infringement of intellectual property rights, breaches of certain Korean laws (e.g., labor standards laws and fair trade laws), and product-related claims may be investigated and prosecuted as criminal offenses with both the company and the company’s executive officers being named as defendants in such proceedings. These risks change over time.

As a result of these current and changing risks, FANING KOREA, LLC’s executive officers may be named in the future in criminal investigations or proceedings stemming from our operations. In Korea, company executive officers being named in such investigations or proceedings is a common occurrence, even though in practice many such cases result in no liability to the individual. If FANING KOREA, LLC’s executive officers were to be named in such criminal proceedings or held either directly or vicariously criminally liable for the actions of the company and its executives and employees, our business, financial condition, and results of operations may be harmed.

Our Korean subsidiary, FANING KOREA, LLC, may be designated as an affiliated group under Korean law, in which case the group of companies would be required to make certain disclosures and implement additional corporate governance requirements.

Our Korean subsidiary, FANING KOREA, LLC is likely to be designated as a business group subject to disclosure under the Korean Monopoly Regulation and Fair Trade Act. As described in greater detail in the section titled “Government Regulation-The Monopoly Regulation and Fair Trade Act”, such a designation would impose additional corporate governance and public disclosure requirements on this group of affiliated companies. These requirements would create additional costs of compliance and could subject this group of affiliated companies to greater regulatory scrutiny and risk of penalties for any failure to comply with the additional obligations imposed.

FANING KOREA, LLC is subject to certain requirements and restrictions under Korean law that may, in certain circumstances, require it to act in a manner that may not be in our or our stockholders’ best interest.

Under applicable Korean law, directors of a Korean company, such as FANING KOREA, LLC , owe a fiduciary duty to the company itself rather than to its stockholders. This fiduciary duty obligates directors of a Korean company to perform their duties faithfully for the good of the company as a whole. As a result, if circumstances arise in which the good of FANING KOREA, LLC conflicts with the good of Global Interactive Technologies, Inc. or stockholders, FANING KOREA, LLC may not be permitted under applicable Korean law to act in a manner that is in the best interest of Global Interactive Technologies, Inc. as its parent, or our stockholders. For example, providing guarantees or collateral by FANING KOREA, LLC in favor of Global Interactive Technologies, Inc. as its parent, without a justifiable cause and on other than arm’s length terms may cause breach of a fiduciary duty of directors to FANING KOREA, LLC.

Approval by the board of directors of a Korean company is required for, among other things, all transactions between a director or major stockholder (including a 10% or more stockholder) and the company for the director’s or the major stockholder’s account. As a result, intercompany transactions between us and FANING KOREA, LLC (or any other Korean subsidiary we may own, from time to time), could arise in the future in which the directors of the Korean subsidiary are not able to act in ours or our stockholders’ best interest as a result of competing interests of the subsidiary. Since substantially all of our operations are conducted by FANING KOREA, LLC, any such occurrence with respect to FANING KOREA, LLC could adversely affect our business, financial condition, and results of operations.

FANING KOREA, LLC’s transactions with related parties are subject to close scrutiny by the Korean tax authorities, which may result in adverse tax consequences.

Under Korean tax law, there is an inherent risk that FANING KOREA, LLC’s transactions with its subsidiaries (if any), affiliates or any other person or company that is related to us may be challenged by the Korean tax authorities if such transactions are viewed as having been made on terms that were not on an arm’s-length basis. If the Korean tax authorities determine that any of its transactions with related parties were on other than arm’s-length terms, it may not be permitted to deduct as expenses, or may be required to include as taxable income, any amount which is found to be undue financial support between related parties in such transaction, which may have adverse tax consequences for us and, in turn, may adversely affect our business, financial condition, and results of operations.

If we are deemed to have a “place of effective management” in Korea, we will be treated as a Korean company for the purpose of Korean corporate income tax with regards to our worldwide income.

Under the Corporate Tax Act (“CTA”), as amended on August 17, 2021, a corporation having a “place of effective management” in Korea will be treated as a Korean company for the purposes of Korean corporate income tax. However, the CTA does not clearly define what constitutes “place of effective management” and, to date, there has not been any court precedent. If we are deemed to have a “place of effective management” in Korea, we will be required to file annual corporate income tax returns with the Korean tax authorities and be subject to Korean corporate income tax. Currently, the applicable rates are 9.9% (inclusive of local corporate taxes) for taxable income up to KRW 200 million, 20.9% (inclusive of local corporate taxes) for taxable income exceeding KRW 200 million and less than KRW 20 billion, 23.1% (inclusive of local corporate taxes) for taxable income exceeding KRW 20 billion and less than KRW 300 billion, and 26.4% (inclusive of local corporate taxes) for taxable income exceeding KRW 300 billion. Taxable income would include any worldwide income, such as dividends we receive from our Korean operating company and any interest income earned outside of Korea. If we are required to pay Korean corporate income tax, it may reduce our cash flow and negatively impact the returns to investors.

If we are deemed to have a “permanent establishment” in Korea, we will be subject to Korean corporate income tax with regards to any Korean source income attributable to or effectively connected with such permanent establishment.

If we are deemed to have a “permanent establishment” as defined under Korean tax law, we would be required to file annual corporate income tax returns with the Korean tax office and be subject to Korean corporate income tax. The applicable rates are 9.9% (inclusive of local corporate taxes) for taxable income up to KRW 200 million, 20.9% (inclusive of local corporate taxes) for taxable income exceeding KRW 200 million and less than KRW 20 billion, 23.1% (inclusive of local corporate taxes) for taxable income exceeding KRW 20 billion and less than KRW 300 billion, and 26.4% (inclusive of local corporate taxes) for taxable income exceeding KRW 300 billion. Taxable income includes any Korean source income attributable to or effectively connected with such permanent establishment, such as dividends we receive from our Korean operating company. If we are required to pay Korean corporate income tax, it may reduce our cash flow and negatively impact the returns to investors.

A focus on regulating copyright and patent infringement by the Korean government subjects us to extra scrutiny in our operations and could subject us to sanctions, fines, or other penalties, which could adversely affect our business and operations in Korea.

The Korean government has recently focused on addressing copyright and patent infringement in Korea, particularly with respect to luxury and brand name merchandise. Despite measures we have taken to address copyright and patent infringement, the Korean government may subject us to sanctions, fines, or other penalties, which could adversely affect our business and operations in Korea.

Our business may be adversely affected by developments that negatively impact the Korean economy and uncertainties in economic conditions that impact spending patterns of our customers in Korea.

We have historically generated a substantial majority of our revenue from sales in Korea. Our future performance will depend in large part on Korea’s future economic growth. Adverse developments in Korea’s economy as a result of various factors, including economic, political, legal, regulatory, and social conditions in Korea may have an adverse effect on customer spending, which may not allow us to achieve our desired revenue growth. The economic indicators in Korea in recent years have shown mixed signs of growth and uncertainty. As a result, future growth of the Korean economy is subject to many factors beyond our control, including developments in the global economy.

The Korean economy is closely tied to, and is affected by developments in, the global economy. In recent years, adverse conditions and volatility in the worldwide financial markets and fluctuations in oil and commodity prices have contributed to the uncertainty of global economic prospects in general and have adversely affected, and may continue to adversely affect, the Korean economy. Due to liquidity and credit concerns and volatility in the global financial markets, the value of the Korean Won relative to the U.S. dollar and other foreign currencies and the stock prices of Korean companies have fluctuated significantly in recent years. Further declines in the Korea Composite Stock Price Index, and large amounts of sales of Korean securities by foreign investors and subsequent repatriation of the proceeds of such sales may adversely affect the value of the Won, the foreign currency reserves held by financial institutions in Korea, and the ability of Korean companies to raise capital. Any future deterioration of the Korean economy or the global economy could adversely affect our business, financial condition, and results of operations.

New legislative proposals may expose our business to additional risks from litigation, regulation, and government investigations.

We are subject to changing laws and regulations everywhere we do business, including in Korea.

Previously, punitive or exemplary damages have been available in Korea only in specific business fields. The proposed legislation would broaden the potential availability of such damages. Similarly, the proposal relating to class actions would make such litigation applicable to a broader scope of cases, would allow for a Korean style discovery process, jury trials in many cases, and would apply to claims whose cause arose before the bill’s enactment.

South Korea continues to strengthen regulations relating to online platform operators, digital commerce, consumer protection, and fair trade practices. Changes in applicable laws and regulations may increase compliance obligations and operational costs for online platform businesses, including social media and digital community platforms such as ours.

Also, on January 8, 2021, the main session of the Korean National Assembly passed a draft Bill on Punishment for Serious Accidents, etc. (the “Serious Accidents Act”), which came into effect January 27, 2022. The Serious Accidents Act imposes enhanced liability (including criminal liability) on businesses, managers, and individuals who are responsible for causing loss of life by failing to fulfill duties relating to workplace safety and health or risk prevention. The Serious Accidents Act provides the potential for criminal punishment, public disclosure of punishment, and monetary damages, including punitive damages up to five times the actual damages suffered. The Serious Accidents Act extends potential liability to a wider group of persons than under existing law, including those who oversee safety and health matters for the business concerned and also general managers of the business.

These are just some examples of how our business could be affected by changing regulations. If these proposals are enacted and implemented, our Korean subsidiary, FANING KOREA, LLC could face substantial costs and management could be required to spend significant time and attention on these matters, which would divert our focus from our core business. This could adversely affect our business, financial condition, and results of operations.

As FANING KOREA, LLC is incorporated in Korea, it may be more difficult to enforce judgments obtained in courts outside Korea.

Our operations are primarily conducted outside of the United States. In addition, all of our directors and officers are non-residents of the United States, and all or a substantial portion of the assets of these non-residents are located outside the United States. As a result, it may be difficult or impossible for U.S. investors to serve process within the United States upon us, our subsidiaries or our directors and officers or to enforce a judgment against us for civil liabilities in U.S. courts. In addition, you should not assume that courts in the countries in which we or our subsidiaries are incorporated or where our or the assets of our subsidiaries are located (1) would enforce judgments of U.S. courts obtained in actions against us or our subsidiaries based upon the civil liability provisions of applicable U.S. federal and state securities laws or (2) would enforce, in original actions, liabilities against us or our subsidiaries based on those laws.

RISKS RELATED TO OUR TECHNOLOGY

Technology changes rapidly in our business and if we fail to anticipate or successfully implement new technologies or adopt new business strategies, technologies or methods, the quality and competitiveness of our service offerings may suffer.

Technology changes rapidly in the social media market which requires us to anticipate which technologies we must develop, implement and take advantage of in order to remain competitive. We have invested, and in the future may invest, in new business strategies including technologies and products. Such endeavors may involve significant risks and uncertainties, and no assurance can be given that the technology we choose to adopt and the features that we pursue will be successful. If we do not successfully implement these new technologies, our reputation may be materially adversely affected and our financial condition and operating results may be impacted. We also may miss opportunities to adopt technology, or develop new technologies, which could adversely affect our financial results. It may take significant time and resources to shift our focus to new technologies, putting us at a competitive disadvantage.

There may be losses or unauthorized access to or releases of confidential information, including personally identifiable information (“PII”), that could subject the Company to significant reputational, financial, legal and operational consequences.

The Company’s business requires it to use and store confidential information including, among other things, PII, with respect to the Company’s customers and employees. The Company devotes significant resources to network and data security, including through the use of encryption and other security measures intended to protect its systems and data. However, these measures cannot provide absolute security, and losses or unauthorized access to or releases of confidential information occur and could materially adversely affect the Company’s reputation, financial condition and operating results.

The Company’s business also requires it to share confidential information with suppliers and other third parties. Although the Company takes steps to secure confidential information that is provided to third parties, such measures are not always effective and losses or unauthorized access to or releases of confidential information occur and could materially adversely affect the Company’s reputation, financial condition and operating results.

For example, the Company may experience a security breach impacting the Company’s information technology systems, which, for the avoidance of doubt, includes the Company’s separate FP database, that compromises the confidentiality, integrity or availability of confidential information. Such an incident could, among other things, impair the Company’s ability to attract and retain customers for its products and services, impact the Company’s stock price, materially damage supplier relationships, and expose the Company to litigation or government investigations, which could result in penalties, fines or judgments against the Company.

The Company has implemented systems and processes intended to secure its information technology systems and prevent unauthorized access to or loss of sensitive data, including through the use of encryption and authentication technologies. As with all companies, these security measures may not be sufficient for all eventualities and may be vulnerable to hacking, employee error, malfeasance, system error, faulty password management or other irregularities.

In addition to the risks relating to general confidential information described above, the Company is also subject to specific obligations relating to payment card data. Under payment card rules and obligations, if cardholder information is potentially compromised, the Company could be liable for associated investigatory expenses and could also incur significant fees or fines if the Company fails to follow payment card industry data security standards. The Company could also experience a significant increase in payment card transaction costs or lose the ability to process payment cards if it fails to follow payment card industry data security standards, which would materially adversely affect the Company’s reputation, financial condition and operating results.

While the Company maintains insurance coverage that is intended to address certain aspects of data security risks, such insurance coverage may be insufficient to cover all losses or all types of claims that may arise.

We use third-party services and technologies in connection with our business, and any disruption to the provision of these services and technologies to us could result in negative publicity and a slowdown in the growth of our users, which could materially and adversely affect our business, financial condition and results of operations.

Our business partially depends on services provided by, and relationships with, various third parties, including cloud hosting and broadband providers, among others. To this end, when our cloud hosting and broadband vendors experience outages, our services offered through Faning and related applications will be negatively impacted and alternative resources will not be immediately available. We exercise no control over the third-party vendors that we rely upon for cloud hosting, broadband and software service. If such third parties increase their prices, fail to provide their services effectively, terminate their service or agreements or discontinue their relationships with us, we could suffer service interruptions, reduced revenues or increased costs, any of which may have a material adverse effect on our business, financial condition and results of operations.

Growth of our client base depends upon effective interoperability with mobile operating systems, networks, mobile devices and standards that we do not control.

We are dependent on the interoperability of our services with popular mobile devices and mobile operating systems that we do not control, such as Android and iOS. Any changes in such mobile operating systems or devices that degrade the functionality of our services or give preferential treatment to competitive services could adversely affect usage of our services. In order to deliver high quality services, it is important that our services work well across a range of mobile operating systems, networks, mobile devices and standards that we do not control. We may not be successful in developing relationships with key participants in the mobile industry or in developing services that operate effectively with these operating systems, networks, devices and standards. In the event that it is difficult for our users to access and use our services, particularly on their mobile devices, our user growth and user engagement could be harmed, and our business and operating results could be adversely affected.

Security breaches, improper access to or disclosure of our data or user data, other hacking and phishing attacks on our systems, or other cyber incidents could harm our reputation and adversely affect our business.

Our industry is prone to cyber-attacks by third parties seeking unauthorized access to our data or users’ data or to disrupt our ability to provide service. Our products and services involve the collection, storage, processing, and transmission of a large amount of data, including FP stored in the Company’s separate FP database. Any failure to prevent or mitigate security breaches and improper access to or disclosure of our data or user data, including personal information, content, or payment information from users, or information from marketers, could result in the loss, modification, disclosure, destruction, or other misuse of such data, including FP stored in the Company’s separate FP database, which could harm our business and reputation and diminish our competitive position. In addition, computer malware, viruses, social engineering (predominantly spear phishing attacks), scraping, and general hacking have become more prevalent in our industry, have occurred on our systems in the past, and will occur on our systems in the future. Our efforts to protect our company data or the information we receive, and to disable undesirable activities on our platform, may also be unsuccessful due to software bugs or other technical malfunctions; employee, contractor, or vendor error or malfeasance, including defects or vulnerabilities in our vendors’ information technology systems or offerings; government surveillance; breaches of physical security of our facilities or technical infrastructure; or other threats that evolve. In addition, third parties may attempt to fraudulently induce employees or users to disclose information in order to gain access to our data or our users’ data. Cyber-attacks continue to evolve in sophistication and volume, and inherently may be difficult to detect for long periods of time. Although we have developed systems and processes that are designed to protect our data and user data, to prevent data loss, to disable undesirable accounts and activities on our platform, and to prevent or detect security breaches, we cannot assure you that such measures will provide absolute security, that we will be able to react in a timely manner, or that our remediation efforts will be successful.

We may experience such cyber-attacks and other security incidents of varying degrees from time to time, and we may incur significant costs in protecting against or remediating such incidents. In addition, we are subject to a variety of laws and regulations in the United States and abroad relating to cybersecurity and data protection. As a result, affected users or government authorities could initiate legal or regulatory actions against us in connection with any actual or perceived security breaches or improper access to or disclosure of data, which could cause us to incur significant expense and liability or result in orders or consent decrees forcing us to modify our business practices. Such incidents or our efforts to remediate such incidents may also result in a decline in our active users base or engagement levels. Any of these events could have a material and adverse effect on our business, reputation, or financial results.

We anticipate that our ongoing efforts related to privacy, safety, security, and content review will identify instances of misuse of user data or other undesirable activity by third parties on our platform.

In addition to our efforts to mitigate cybersecurity risks, we are making significant investments in privacy, safety, security, and content review efforts to combat misuse of our services and user data by third parties, including investigations and audits of platform applications. As a result of these efforts, we anticipate that we may discover incidents of misuse of user data or other undesirable activity by third parties. We may not discover all such incidents or activity, whether as a result of our data or technical limitations, including our lack of visibility over our encrypted services, the scale of activity on our platform, the allocation of resources to other projects, or other factors, and we may be notified of such incidents or activity by the media or other third parties. Such incidents and activities may, in the future, include the use of user data or our systems in a manner inconsistent with our terms, contracts or policies, the existence of false or undesirable user accounts, improper advertising practices, activities that threaten people’s safety on- or offline, or instances of spamming, scraping, data harvesting, unsecured datasets, or spreading misinformation. We may also be unsuccessful in our efforts to enforce our policies or otherwise remediate any such incidents. Any of the foregoing developments may negatively affect user trust and engagement, harm our reputation and brands, require us to change our business practices in a manner adverse to our business, and adversely affect our business and financial results. Any such developments may also subject us to litigation and regulatory inquiries, which could subject us to monetary penalties and damages, divert management’s time and attention, and lead to enhanced regulatory oversight.

Our products and internal systems rely on software and hardware that is highly technical, and any errors, bugs, or vulnerabilities in these systems, or failures to address or mitigate technical limitations in our systems, could adversely affect our business.

Our products and internal systems rely on software and hardware, including software and hardware developed or maintained internally and/or by third parties, that is highly technical and complex. In addition, our products and internal systems depend on the ability of such software and hardware to store, retrieve, process, and manage immense amounts of data. The software and hardware on which we rely may contain, and will in the future may further contain, errors, bugs, or vulnerabilities, and our systems are subject to certain technical limitations that may compromise our ability to meet our objectives. Some errors, bugs, or vulnerabilities inherently may be difficult to detect and may only be discovered after the code has been released for external or internal use. Errors, bugs, vulnerabilities, design defects, or technical limitations within the software and hardware on which we rely have in the past led to, and may in the future lead to, outcomes including a negative experience for users and marketers who use our products, compromised ability of our products to perform in a manner consistent with our terms, contracts, or policies, delayed product introductions or enhancements, targeting, measurement, or billing errors, compromised ability to protect the data of our users and/or our intellectual property or other data, or reductions in our ability to provide some or all of our services. For example, we make commitments to our users as to how their data will be used within and across our products, and our systems are subject to errors, bugs and technical limitations that may prevent us from fulfilling these commitments reliably. In addition, any errors, bugs, vulnerabilities, or defects in our systems or the software and hardware on which we rely, failures to properly address or mitigate the technical limitations in our systems, or associated degradations or interruptions of service or failures to fulfil our commitments to our users may in the future lead to outcomes including damage to our reputation, loss of users, loss of marketers, loss of revenue, regulatory inquiries, litigation, or liability for fines, damages, or other remedies, any of which could adversely affect our business and financial results.

RISKS RELATED TO DIGITAL ASSETS

Regulatory changes or actions may restrict the use of digital assets in a manner that adversely affects our business, prospects or operations.

FP may be considered a digital asset. Although FP is not offered on a public blockchain and its value is derived primarily from its utility exclusively within its closed network community, it may also be subject to increasingly restrictive, complex and evolving U.S. and foreign laws and regulations regarding digital assets, including commodities and securities, anti-money laundering and counter-terrorist financing, money transmission, consumer protection, taxation, intellectual property, property rights and other matters (for the purposes of this section, the “Digital Asset Laws”). Many of these laws and regulations are subject to change and uncertain interpretation, and could result in outright bans in certain jurisdictions, sanctions, monetary penalties, claims, increased compliance costs, or declines in adoption that could impede user growth or engagement, or otherwise harm our business.

For example, in the United States, the SEC has been particularly active in pursuing digital asset issuers for unregistered security offerings to U.S. residents. In Korea, the Financial Services Commission has banned initial coin offerings within Korea. We have not offered KDC in jurisdictions where it was be prohibited or in a manner that is prohibited. The initial public offering of KDC was conducted on centralized digital asset exchanges that excluded subscribers from prohibited jurisdictions. Further, we conducted no public solicitation for the offering of KDC in the United States or South Korea. Nonetheless, because KDC is available on the public blockchain it may be possible for residents in such jurisdictions to acquire KDC in peer-to-peer transactions, as most jurisdictions, including the United States and South Korea, do not prohibit private parties from engaging in peer-to-peer digital asset transactions. With respect to resales or secondary digital asset transactions, jurisdictions generally regulate intermediaries for such transactions dependent on the extent and nature of an intermediary’s role in a transaction. Decentralized finance (“defi”) applications that are connected to the public blockchain have substantially minimized the role of the intermediary. Given the emerging nature of such defi applications, the regulatory landscape pertaining to such applications is still evolving and consequently, numerous defi applications are available to transaction parties, often irrespective of the physical location of a party and irrespective of the actions or inactions of the issuers of such digital assets. To date, we do not monitor for such defi transactions, nor do we have any prospective plans to do so. Furthermore, given that we would never have access to the personal information of the parties to such transactions, even if we had the ability to restrict private defi transactions we would not have the ability to identify whether any particular transaction should be restricted under the Digital Asset Laws of any given jurisdiction or whether we would be under any obligation to endeavor to enforce such restrictions, to the extent possible. To the extent government enforcement authorities or regulators seek to enforce current or future Digital Asset Laws against us for these transactions, we may be subject to investigation, administrative or court proceedings, and civil or criminal monetary fines and penalties, all of which could harm our reputation and negatively impact our business operations.

Regulation of digital assets and digital asset exchanges is currently undeveloped and likely to evolve rapidly, vary significantly among international regulatory agencies, and is subject to significant uncertainty. A failure by the Company to comply with any laws, rules and regulations, some of which may not exist yet or are subject to interpretation and may be subject to change, could result in a variety of adverse consequences, including civil penalties and fines imposed by governmental authorities. Under certain circumstances, such failure to comply by the Company could also result in criminal sanctions

As blockchain networks and digital assets have grown in popularity and in market size, governments and regulatory agencies have begun to take interest in, and in some cases regulate, their use and operation. To the extent that a government or quasi-governmental agency exerts regulatory authority over a blockchain network or asset upon which our business relies, our business could be adversely affected. Blockchain networks currently face an uncertain regulatory landscape in many jurisdictions. The effect of any future legal or regulatory change is impossible to predict, but such laws, regulations or directives may directly and negatively impact our business.

Governments may in the future curtail or outlaw the acquisition, use or redemption of digital assets. Ownership of, holding or trading in digital assets may then be considered illegal and subject to sanction. Governments may also take regulatory action that may increase the cost and/or subject digital asset companies to additional regulation. Judicial determinations may also have an adverse impact on the trading of digital assets.

Users of Faning are issued FP for engaging and transacting within the Company’s ecosystem. FP may be subject to various regulations in South Korea that restrict or limit the use of FP on Faning.

In addition to the application of the Digital Asset Laws arising as a result of the use of FP in various jurisdictions, our operation of the Faning platform within South Korea and the issuance of FP to users engaging with the Faning platform may subject us to various regulations in South Korea, including the Financial Investment Services and Capital Markets Act (“FISCM”) and the Act on Reporting and Using Specified Financial Transaction Information (“RSFTI”). The FISCM was enacted to advance the Korean financial market by improving the competitive edge of the nation’s capital market and financial investment industry, and the RSFTI provides for the regulation of matters concerning reporting on and use of specified financial transaction information necessary to regulate money laundering and financing of terrorism through financial transactions, such as foreign exchange transactions, thereby contributing to preventing crimes and further establishing a sound and transparent financial system. Although FP is not currently classified as a financial investment instrument as such term is defined in the FISCM, or a virtual asset, as such term is defined by the RSFTI, any amendments to or interpretations of the FISCM, RSFTI or FP in the future may subject the Company to regulation, including among other requirements, providing financial transaction information in order to, among others, prevent money laundering and financing of terrorism.

We may have security laws exposure relating to the previous issuances of Kingdom Coin.

While we no longer hold or otherwise possess Kingdom Coin (“KDC”), we are subject to compliance with securities laws, which could expose us to potential liabilities, including potential rescission rights. In August of 2021, we issued to certain creditors of HBC an aggregate total of 348,679,380 KDC in exchange for the cancellation of an aggregate value of $9,428,664 in HBC debt (the “KDC Exchange”). KDC was further listed on LBank.com in August, 2021, and XT.com in September 2021 (LBank.com and XT.com are collectively, the “Listing Platforms”). The current market price of KDC ($0.00011) is significantly lower than the valuation of KDC used to extinguish the HBC debt.

At the time of the KDC Exchange, and subsequently at the time of listing of KDC on the Listing Platforms, HBC was operated solely under the jurisdiction of the Republic of Korea (“ROK”). During the KDC Exchange, and subsequently upon the listing of KDC on the Listing Platforms, the Company did not direct any sales efforts in the United States or to U.S. Persons. Further, pursuant to the terms and conditions of each Listing Platform, neither Listing Platform permits U.S. Persons as customers. While the Company therefore believes there were no sales of KDC to or by a U.S. person, or efforts to sell KDC to U.S. persons that would be subject to U.S. federal securities laws, we relied on each of the Listing Platforms to prevent offers and sales in the United States and to U.S. persons. As such, the Company may be subject to the risks below in the event that the policies and procedures of the Listing Platforms are not effective and/or sufficient to prevent such offers and sales or that persons may have been able to circumvent such policies and procedures.

While we do not believe that we were subject to U.S. federal securities laws at the time of the KDC Exchange and the listing of KDC on the Listing Platforms, and therefore did not need to conduct the offerings pursuant to an available exemption under the U.S. federal securities laws, the analysis of such jurisdictional question is factual. The applicability of jurisdiction under the Securities Act, and the availability of any exemptions thereunder, depends upon our conduct and that of those persons contacting potential investors and making the offering. We further relied on the terms and conditions of the Listing Platforms to ensure that no offers or sales were made in the United States or to U.S. persons. As such, if the KDC Exchange, the listing of KDC on the Listing Platforms, or any other such offering of securities by the Company is determined by either judicial decision or by the SEC to fall under the jurisdiction of U.S. federal securities laws, and does not qualify for an exemption from registration under the Securities Act, an investor would have the right to rescind its purchase of the securities if it so desired. It is possible that if an investor should seek rescission, such investor would succeed. If investors were successful in seeking rescission, we would face severe financial demands that could adversely affect our business and operations. Additionally, if we did in fact fall under the jurisdiction of U.S. federal securities laws, or alternatively, if such offerings do not qualify for an exemption thereunder, we may become subject to significant fines and penalties imposed by the SEC and state securities agencies.

RISKS RELATED TO INTELLECTUAL PROPERTY

We may be subject to claims of infringement of third-party intellectual property rights.

From time to time, third parties may claim that we have infringed their intellectual property rights. For example, patent holding companies may assert patent claims against us in which they seek to monetize patents they have purchased or otherwise obtained. Although we take steps to avoid knowingly violating the intellectual property rights of others, it is possible that third parties still may claim infringement. Existing or future infringement claims against us, whether valid or not, may be expensive to defend and divert the attention of our employees from business operations. Such claims or litigation could require us to pay damages, royalties, legal fees and other costs. We also could be required to stop offering, distributing or supporting the Faning application, or other features or services which incorporate the affected intellectual property rights, redesign products, features or services to avoid infringement, or obtain a license, all of which could be costly and harm our business.

Our technology, content and brands are subject to the threat of piracy, unauthorized copying and other forms of intellectual property infringement.

We regard our technology, content and brands as proprietary and take measures to protect our technology, content and brands and other confidential information from infringement. Piracy and other forms of unauthorized copying and use of our technology, content and brands may become persistent, and policing is difficult. Further, the laws of some countries in which our products are or may be distributed either do not protect our intellectual property rights to the same extent as the laws of the United States, or are poorly enforced. Legal protection of our rights may be ineffective in such countries. In addition, although we take steps to enforce and police our rights, factors such as the proliferation of technology designed to circumvent the protection measures used by our business partners or by us, the availability of broadband access to the Internet, the refusal of Internet service providers or platform holders to remove infringing content in certain instances, and the proliferation of online channels through which infringing product is distributed all have contributed to a general expansion in unauthorized copying of technology, content and brands.

We may not be able to prevent others from unauthorized use of our intellectual property, which could harm our business and competitive position.

We regard our registered trademark(s) and pending trademarks, service marks, domain names, trade secrets, proprietary technologies and similar intellectual property as critical to our success. We rely on trademark law, trade secret protection and confidentiality and license agreements with our employees and others to protect our proprietary rights.

We have invested significant resources to develop our own intellectual property and acquire licenses to use and distribute the intellectual property of others in the operation of the Faning platform. Failure to maintain or protect these rights could harm our business. In addition, any unauthorized use of our intellectual property by third parties may adversely affect our current and future revenues and our reputation.

Policing unauthorized use of proprietary technology is difficult and expensive. We rely on a combination of copyright, trademark and trade secret laws and restrictions on disclosure to protect our intellectual property rights. Further, we require every employee and consultant to execute proprietary information and invention agreements prior to commencing work. Despite our efforts to protect our proprietary rights, third parties may attempt to copy or otherwise obtain and use our intellectual property or seek court declarations that they do not infringe upon our intellectual property rights. Monitoring unauthorized use of our intellectual property is difficult and costly, and we cannot assure you that the steps we have taken will prevent misappropriation of our intellectual property. From time to time, we may have to resort to litigation to enforce our intellectual property rights, which could result in substantial costs and diversion of our resources.

GOVERNANCE RISKS AND RISKS RELATED TO OUR COMMON STOCK

We received a notice from Nasdaq that our common stock may be delisted from trading on the Nasdaq Capital Market if we fail to comply with the continued listing requirements, including the timely filing requirements of all required periodic reports with the SEC. A delisting of our common stock is likely to reduce the liquidity of our common stock and may inhibit or preclude our ability to raise additional financing.

We are required to comply with certain Nasdaq continued listing requirements, including a minimum bid price for our common stock and timely filing requirements of all required periodic reports with the SEC. If we fail to maintain compliance with any of those requirements, our common shares could be delisted from Nasdaq.

On April 24, 2025, we received written notice from the Listing Qualifications Department of Nasdaq notifying the Company that it did not timely file its Annual Report on Form 10-K for the year ended December 31, 2024, as required for continued listing on the Nasdaq Stock Market pursuant to Nasdaq Listing Rule 5250(c)(1). Subsequently, the Company filed its Annual Report on Form 10-K for the fiscal year ended 2024, thereby resolving the basis for delisting.

On April 16, 2026, we received written notice from the Listing Qualifications Department of Nasdaq notifying the Company that it did not timely file its Annual Report on Form 10-K for the year ended December 31, 2025, as required for continued listing on The Nasdaq Stock Market pursuant to Nasdaq Listing Rule 5250(c)(1). Under Nasdaq rules, the Company has 60 calendar days from the date of notification letter from Nasdaq to submit to Nasdaq a plan to regain compliance with Nasdaq Listing Rule 5250(c)(1). On April 30, 2026, the Company submitted its plan to regain compliance to Nasdaq.

On May 21, 2026, we received written notice from the Listing Qualifications Department of Nasdaq notifying the Company that it did not timely file its Quarterly Report on Form 10-Q for the quarter ended March 31, 2026, as required for continued listing on The Nasdaq Stock Market pursuant to Nasdaq Listing Rule 5250(c)(1). Because we had not yet filed this Annual Report on Form 10-K for the year ended December 31, 2025, any additional exception to allow us to regain compliance with the delinquent filings is limited to a maximum of 180 calendar days from the due date of the Annual Report on Form 10-K for the year ended December 31, 2025, or October 12, 2026. Additionally, we must submit an update by no later than June 22, 2026 to our original plan of compliance with respect to the filing requirement. While we expect the filing of this Annual Report on Form 10-K for the year ended December 31, 2025 and the Quarterly Report on Form 10-Q for the quarter ended March 31, 2026 to cause us to regain compliance with Nasdaq Listing Rule 5250(c)(1), there can be no guarantee that the Company will be able to do so.

If, for any reason, Nasdaq should delist our common stock from trading on its exchange and we are unable to obtain listing on another national securities exchange or take action to restore our compliance with the Nasdaq continued listing requirements, a reduction in some or all of the following may occur, each of which could have a material adverse effect on our stockholders:

• the liquidity of our common stock;
• the market price of our common stock;
• becoming a “penny stock”, which may make trading of our common stock much more difficult;
• our ability to obtain financing for the continuation of our operations;
• the number of institutional and general investors that will consider investing in our common stock;
• the number of investors in general that will consider investing in our common stock;
• the number of market makers in our common stock;
• the availability of information concerning the trading prices and volume of our common stock; and
• the number of broker-dealers willing to execute trades in shares of our common stock.

Our stock price may be volatile, and you could lose all or part of your investment.

The trading price of our common stock may fluctuate substantially depending on several factors, including those described in this “Risk Factors” section, many of which are beyond our control and may not be related to our operating performance. These fluctuations could cause you to lose all or part of your investment in our common stock since you might be unable to sell your shares at or above the price you paid in the offering.

In addition, the stock market in general, and the market for technology companies in particular, have experienced extreme price and volume fluctuations that have often been unrelated or disproportionate to the operating performance of those companies. Broad market and industry factors, as well as general economic, political and market conditions such as recessions or interest rate changes, may seriously affect the market price of our common stock, regardless of our actual operating performance.

In addition, in the past, following periods of volatility in the overall market and the market prices of particular companies’ securities, securities class action litigations have often been instituted against these companies. Litigation of this type, if instituted against us, could result in substantial costs and a diversion of our management’s attention and resources. Any adverse determination in any such litigation or any amounts paid to settle any such actual or threatened litigation could require that we make significant payments.

If securities industry analysts do not publish research reports on us, or publish unfavorable reports on us, then the market price and market trading volume of our common stock could be negatively affected.

Any trading market for our common stock will be influenced in part by any research reports that securities industry analysts publish about us. We may not obtain any future research coverage by securities industry analysts. In the event we are covered by research analysts, and one or more of such analysts downgrade our securities, or otherwise reports on us unfavorably, or discontinues coverage of us, the market price and market trading volume of our common stock could be negatively affected.

You will experience dilution as a result of future equity offerings.

We may in the future offer additional shares of our common stock or other securities convertible into or exchangeable for our common stock. Although no assurances can be given that we will consummate a future financing, in the event we do, or in the event we sell shares of common stock or other securities convertible into shares of our common stock in the future, additional and potentially substantial dilution will occur. In addition, investors purchasing shares or other securities in the future could have rights superior to future investors.

We have not paid cash dividends in the past and do not expect to pay dividends in the future. Any return on investment will likely be limited to the value of our common stock.

We have never paid cash dividends on our common stock and do not anticipate doing so in the foreseeable future. The payment of dividends on our common stock will depend on earnings, financial condition and other business and economic factors affecting us at such time as our board of directors may consider relevant.

We currently intend to retain all of our future earnings, if any, to finance the growth and development of our business. In addition, the terms of any future debt agreements may preclude us from paying dividends. Accordingly, the return on your investment in our common stock will likely depend entirely upon any future price appreciation of our common stock. There is no guarantee that our common stock will appreciate in value or even maintain the price at which you purchase the common stock. You may not realize a return on your investment in our common stock and you may even lose your entire investment in our common stock.

Future issuances of debt securities, which would rank senior to our common stock upon our bankruptcy or liquidation, and future issuances of preferred stock, which would rank senior to our common stock for the purposes of dividends and liquidating distributions, may adversely affect the level of return you may be able to achieve from an investment in our common stock.

In the future, we may attempt to increase our capital resources by offering debt securities. In the event of a bankruptcy or liquidation, holders of our debt securities, and lenders with respect to other borrowings we may make, would receive distributions of our available assets prior to any distributions being made to holders of our common stock. Moreover, if we issue preferred stock in the future, the holders of such preferred stock could be entitled to preferences over holders of common stock in respect of the payment of dividends and the payment of liquidating distributions. Because our decision to issue debt or preferred securities in any future offering, or borrow money from lenders, will depend in part on market conditions and other factors beyond our control, we cannot predict or estimate the amount, timing or nature of any such future offerings or borrowings. Holders of our common stock must bear the risk that any such future offerings we conduct or borrowings we make may adversely affect the level of return they may be able to achieve from an investment in our common stock.

We may need to implement additional finance and accounting systems, procedures and controls as we grow our business and organization and to satisfy new reporting requirements.

We are subject to reporting requirements of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), we will be required to comply with a variety of extensive reporting, accounting, and other rules and regulations. Compliance with each of these requirements is expensive, time consuming and intricate. Further requirements may increase our costs and require additional management time and resources. We may need to implement additional finance and accounting systems, procedures and controls to satisfy our reporting requirements. We intend to remediate this weakness by adding additional, qualified and experienced accounting personnel but there is no guarantee that we will be able to add additional qualified and experienced accounting personnel or remediate this weakness.

If our internal controls over financial reporting remain ineffective, such failure could cause investors to lose confidence in our reported financial information, negatively affect the market price of our common stock, subject us to regulatory investigations and penalties, cause us to have to restate our financial statements, and adversely impact our business and financial condition.

We are an emerging growth company, and any decision on our part to comply only with certain reduced reporting and disclosure requirements applicable to emerging growth companies could make our common stock less attractive to investors.

We are an emerging growth company, and, for as long as we continue to be an emerging growth company, we may choose to take advantage of exemptions from various reporting requirements applicable to other public companies that are not “emerging growth companies,” including:

• not being required to have our independent registered public accounting firm audit our internal control over financial reporting under Section 404 of the Sarbanes-Oxley Act;
• reduced disclosure obligations regarding executive compensation in our periodic reports and annual report on Form 10-K; and
• exemptions from the requirements of holding a non-binding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.

We could be an emerging growth company for up to five years following the listing of our common stock on the Nasdaq Market. Our status as an emerging growth company will end as soon as any of the following takes place:

• the last day of the fiscal year in which we have more than $1.235 billion in annual revenue;
• the date we qualify as a “large accelerated filer,” with at least $700 million of equity securities held by non-affiliates as of the prior June 30;
• the date on which we have issued, in any three-year period, more than $1.0 billion in non-convertible debt securities; or
• the last day of the fiscal year ending after the fifth anniversary of the listing of our common stock on the Nasdaq Market.

We cannot predict if investors will find our common stock less attractive if we choose to rely on the exemptions afforded emerging growth companies. If some investors find our common stock less attractive because we rely on any of these exemptions, there may be a less active trading market for our common stock and the market price of our common stock may be more volatile.

Under the JOBS Act, emerging growth companies can also delay adopting new or revised accounting standards until such time as those standards apply to private companies. We have elected to use this extended transition period for complying with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date we (i) are no longer an emerging growth company or (ii) affirmatively and irrevocably opt out of the extended transition period provided in the JOBS Act. As a result, our financial statements may not be comparable to companies that comply with new or revised accounting pronouncements as of public company effective dates.

We will incur increased costs as a result of being a public company, particularly after we cease to qualify as an “emerging growth company.”

As a public company, we expect to incur significant legal, accounting and other expenses that we did not incur as a private company, particularly after we are no longer an “emerging growth company” as defined under the JOBS Act. In addition, new and changing laws, regulations and standards relating to corporate governance and public disclosure, including the Dodd-Frank Act and the rules and regulations promulgated and to be promulgated thereunder, as well as under the Sarbanes-Oxley Act and the JOBS Act, have created uncertainty for public companies and increased costs and time that boards of directors and management must devote to complying with these rules and regulations. The Sarbanes-Oxley Act and related rules of the SEC and the Nasdaq Stock Market regulate corporate governance practices of public companies. We expect compliance with these rules and regulations to increase our legal and financial compliance costs and lead to a diversion of management time and attention from sales-generating activities. In addition, we will incur additional expenses associated with our SEC reporting requirements and increased compensation for our management team. We cannot predict or estimate the amount of additional costs we will incur as a public company or the specific timing of such costs.

Because of our status as an emerging growth company, you will not be able to depend on any attestation from our independent registered public accounting firm as to our internal control over financial reporting for the foreseeable future.

Our independent registered public accounting firm will not be required to attest to the effectiveness of our internal control over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act until the later of the year following our first annual report required to be filed with the SEC or the date we are no longer an “emerging growth company” as defined in the JOBS Act. Accordingly, you will not be able to depend on any attestation concerning our internal control over financial reporting from our independent registered public accounting firm for the foreseeable future. Subsequent to the time frame above, our independent registered public accounting firm will not be required to attest to the effectiveness of our internal control over financial reporting pursuant to the Sarbanes-Oxley Act until such time that the Company becomes an “accelerated filer,” as defined by the SEC.

Our common stock is subject to the “penny stock” rules of the SEC, which makes transactions in our stock cumbersome and may reduce the value of an investment in our stock.

The SEC has adopted regulations which generally define a “penny stock” as an equity security that has a market price of less than $5.00 per share, subject to specific exemptions. The SEC’s penny stock rules require a broker-dealer, before a transaction in a penny stock not otherwise exempt from the rules, to deliver a standardized risk disclosure document that provides information about penny stocks and the risks in the penny stock market. The broker-dealer must also provide the customer with current bid and offer quotations for the penny stock, the compensation of the broker-dealer and the salesperson in the transaction, and monthly account statements showing the market value of each penny stock held in the customer’s account. In addition, the penny stock rules generally require that before a transaction in a penny stock occurs, the broker-dealer must make a special written determination that the penny stock is a suitable investment for the purchaser and receive the purchaser’s agreement to the transaction. If applicable in the future, these rules may restrict the ability of brokers-dealers to sell our common stock and may affect the ability of investors to sell their shares, until our common stock no longer is considered a penny stock.

FINRA sales practice requirements may limit a stockholder’s ability to buy and sell our stock.

In addition to the “penny stock” rules described above, the Financial Industry Regulatory Authority, Inc. (“FINRA”), has adopted rules that require that in recommending an investment to a customer, a broker-dealer must have reasonable grounds for believing that the investment is suitable for that customer. Prior to recommending speculative, low-priced securities to their non-institutional customers, broker-dealers must make reasonable efforts to obtain information about the customer’s financial status, tax status, investment objectives and other information. The FINRA requirements may make it more difficult for broker-dealers to recommend that their customers buy our common stock, which may have the effect of reducing the level of trading activity in our common stock. As a result, fewer broker-dealers may be willing to make a market in our common stock, reducing a stockholder’s ability to resell shares, as well as overall liquidity, of our common stock.

We are a smaller reporting company and will be exempt from certain disclosure requirements, which could make our common stock less attractive to potential investors.

We are also a smaller reporting company as defined in the Exchange Act. We may continue to be a smaller reporting company even after we are no longer an emerging growth company. We may take advantage of certain of the scaled disclosures available to smaller reporting companies and will be able to take advantage of these scaled disclosures for so long as (i) the market value of our voting and non-voting common stock held by non-affiliates is less than $250 million measured on the last business day of our second fiscal quarter or (ii) our annual revenue is less than $100 million during the most recently completed fiscal year and the market value of our voting and non-voting common stock held by non-affiliates is less than $700 million measured on the last business day of our second fiscal quarter. Specifically, as a smaller reporting company, we may choose to present only the two most recent fiscal years of audited financial statements in our Annual Report on Form 10-K and have reduced disclosure obligations regarding executive compensation, and, similar to emerging growth companies, if we are a smaller reporting company with less than $100 million in annual revenue, we would not be required to obtain an attestation report on internal control over financial reporting issued by our independent registered public accounting firm.

If we fail to remediate our internal control weaknesses and maintain an effective system of internal controls over financial reporting, we may be unable to accurately report our results of operations, meet our reporting obligations or prevent fraud, and investor confidence and the market price of our common stock may be materially and adversely affected.

As a public company, our reporting obligations place a significant strain on our management, operational and financial resources and systems for the foreseeable future and we may be unable to timely complete our evaluation testing and any required remediation.

If we fail to remediate the weaknesses and maintain the adequacy of our internal control over financial reporting, as these standards are modified, supplemented, or amended from time to time, we will not be able to conclude on an ongoing basis that we have effective internal control over financial reporting. Generally, if we continue to fail to achieve and maintain an effective internal control environment, we could suffer material misstatements in our financial statements and fail to meet our reporting obligations, which would likely cause investors to lose confidence in our reported financial information. This could in turn limit our access to capital markets, harm our results of operations, and lead to a decline in the trading price of our common stock. Additionally, ineffective internal control over financial reporting could expose us to increased risk of fraud or misuse of corporate assets and subject us to potential delisting from the stock exchange on which we list, regulatory investigations and civil or criminal sanctions.

We may need additional capital, and we may be unable to obtain such capital in a timely manner or on acceptable terms, or at all. Furthermore, our future capital needs may require us to sell additional equity or debt securities that may dilute our stockholders or introduce covenants that may restrict our operations or our ability to pay dividends.

To continue as a going concern, grow our business and remain competitive, we may require additional capital from time to time for our daily operation. Our ability to obtain additional capital is subject to a variety of uncertainties, including:

• our market position and competitiveness in the content creation and social media platform market;
• our future profitability, overall financial condition, results of operations and cash flows; and
• economic, political and other conditions in the U.S. and internationally.

We may be unable to obtain additional capital in a timely manner or on acceptable terms or at all. In addition, our future capital needs and other business reasons could require us to sell additional equity or debt securities or obtain a credit facility. The sale of additional equity or equity-linked securities could dilute our stockholders. The incurrence of indebtedness would result in increased debt service obligations and could result in operating and financing covenants that would restrict our operations or our ability to pay dividends to our stockholders.

Substantial future sales or perceived potential sales of our common stock in the public market could cause the price of our common stock to decline.

On January 27, 2025, we implemented a 1-for-20 reverse stock split of our issued and outstanding shares of common stock. As a result of the reverse stock split, every 20 shares of existing common stock were consolidated into one share, reducing the total number of issued shares from 52,808,589 to 2,640,429. All registered shares of common stock are freely transferable without restriction or additional registration under the Securities Act. Sales of common stock in the market by registered stockholders, or even the perception that such sales may occur, could cause a decline in the market price of our common stock and could have a material adverse effect on our business, financial condition, and results of operations.

Our certificate of incorporation designates a state or federal court located within the State of Delaware as the exclusive forum for certain litigation that may be initiated by our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us.

Pursuant to our certificate of incorporation and our bylaws, unless we consent in writing to the selection of an alternative forum, the sole and exclusive forum for (i) any derivative action or proceeding brought on our behalf, (ii) any action asserting a claim of breach of a fiduciary duty owed by any of our directors, officers or other employees to us or our stockholders, (iii) any action asserting a claim against us arising pursuant to any provision of the Delaware General Corporation Law, (iv) any action asserting a claim against the Corporation governed by the internal affairs doctrine, in each case subject to the Court of Chancery of the State of Delaware having jurisdiction over the subject matter and personal jurisdiction over the indispensable parties name as defendants therein, or (v) any action asserting an “internal corporate claim” as that term is defined in Section 115 of the DGCL. Any person or entity purchasing or otherwise acquiring any interest in shares of our capital stock shall be deemed to have notice of and consented to this provision. The forum selection clause in our bylaws may have the effect of discouraging lawsuits against us or our directors and officers and may limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us. These choice of forum provisions will not apply to suits brought to enforce a duty or liability created by the Securities Act, the Exchange Act, or any other claim for which federal courts have exclusive jurisdiction.

These exclusive forum provisions may limit the ability of our stockholders to bring a claim in a judicial forum that such stockholders find favorable for disputes with us or our directors, officers, or employees, if any, which may discourage such lawsuits against us and our directors, officers, and employees, if any. Alternatively, if a court were to find the choice of forum provisions contained in our certificate of incorporation to be inapplicable or unenforceable in an action, we may incur additional costs associated with resolving such action in other jurisdictions, which could materially adversely affect our business, financial condition, and operating results. For example, under the Securities Act, federal courts have concurrent jurisdiction over all suits brought to enforce any duty or liability created by the Securities Act, and investors cannot waive compliance with the federal securities laws and the rules and regulations thereunder. In addition, the exclusive forum provisions described above do not apply to any actions brought under the Exchange Act.

Risk Management and Strategy

We have an information security program designed to identify, protect, detect and respond to, and manage reasonably foreseeable cybersecurity risks and threats. These processes are integrated into our overall enterprise risk management framework. To protect our information systems from cybersecurity threats, we utilize various security tools and methodologies, including regular vulnerability assessments, that help prevent, identify, escalate, investigate, resolve, and recover from identified vulnerabilities and security incidents in a reasonably timely manner. These include, but are not limited to, internal reporting and tools for monitoring and detecting cybersecurity threats, as well as processes to assess and manage cybersecurity risks associated with our third-party service providers.

We evaluate the risks associated with technology and cybersecurity threats and monitor our information systems for potential weaknesses. We periodically review and test our information technology system on a regular basis and also utilize internal team personnel to evaluate and assess the efficacy of our information technology system and enhance our controls and procedures. The results of these assessments are reported to our Audit Committee and, from time to time, our Board of Directors.

There can be no assurances that our cybersecurity risk management program and processes, including our policies, controls, or procedures, will be fully implemented, complied with or are effective in protecting our systems and information.

As of the date of this report, we are not aware of any cybersecurity incidents, that have had a materially adverse effect on our operations, business, results of operations, or financial condition.

Governance

Our Board of Directors considers cybersecurity risk as part of its risk oversight function. It has delegated oversight of cybersecurity and other information technology risks to the Audit Committee of the Board of Directors. The Audit Committee oversees the implementation of the cybersecurity risk management program.

The Audit Committee receives periodic reports from management on potential cybersecurity risks and threats. The Audit Committee reports to the full Board of Directors regarding its activities, including those related to cybersecurity. The full Board of Directors also receives briefings from management on the cybersecurity risk management program as needed.

Management, including the Chief Executive Officer is responsible for assessing and managing the Company’s material risks from cybersecurity threats. The Chief Executive Officer, who has over 25 years of experience in information technology, network infrastructure, and cybersecurity management, oversees the Company’s cybersecurity risk management program, including supervision of internal cybersecurity personnel and external cybersecurity consultants. Management regularly evaluates cybersecurity risks, monitors prevention and detection measures, and reports material cybersecurity matters to the Board of Directors.

The management team supervises efforts to prevent, detect, mitigate, and remediate cybersecurity risks and incidents through various means, which may include briefings from internal security personnel, threat intelligence and other information obtained from governmental, public or private sources, including external consultants; and alerts and reports produced by security tools deployed in the IT environment. Our cybersecurity incident response plan governs our assessment and response upon the occurrence of a material cybersecurity incident, including the process for informing senior management and our Board of Directors.

Our executive offices are located at 160, Yeouiseo-ro, Yeongdeungpo-gu, Seoul, Republic of Korea 07231, and our telephone number is +82-2-564-8588 . We consider our current office space adequate for our current operations.

As of the filing of this Annual Report on Form 10-K, 2026, the Company is not subject to any material pending legal proceedings or claims. Previously disclosed legal matters were associated with subsidiaries that have since been divested and no longer affect the Company’s operations or financial position.

You should read this discussion and analysis together with our audited financial statements, the notes to such statements and the other financial information included in this Form 10-K. This discussion contains forward-looking statements that involve risks and uncertainties. As a result of many factors, such as those set forth under the section entitled “Risk Factors” and elsewhere in this Form 10-K, our actual results may differ materially from those anticipated in these forward-looking statements. See “Special Note Regarding Forward-Looking Statements” for a discussion of the uncertainties, risks and assumptions associated with these statements.

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.

During 2025, the Company’s primary operational focus was 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 during 2025, including digital engagement features, subscription-related functionality, and advertising infrastructure, the Faning platform remained in an early-stage commercialization phase as of December 31, 2025. Revenue generated from the platform during the year 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 December 31, 2025, 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 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 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.

Components of Results of Operations

Functional Currency

The functional currency of the Company’s operations is the Korean Won (“KRW”). The Company’s some accounting records are maintained in KRW and translated into the U.S. Dollar(“USD”) for financial reporting purposes. Exchange rate fluctuations between KRW and USD may affect the Company’s reported financial results.

Revenue

The Company’s revenue is currently derived primarily from limited early-stage Faning platform-related activities and certain legacy business activities. Revenue during 2025 remained limited as the Company continued operating in an early-stage commercialization phase.

The Company has been developing monetization initiatives associated with the Faning platform, including digital engagement features, subscription-related functionality, advertising-related infrastructure, and other platform-based services. However, these monetization initiatives remained in early stages during 2025 and did not generate material revenue during the fiscal year.

Cost of Revenue

Cost of revenue consists primarily of platform-related service costs, hosting and infrastructure expenses, and other costs directly associated with revenue-generating activities.

Sales and Marketing Expense

Sales and marketing expenses consist primarily of advertising, promotional activities, user acquisition initiatives, consulting expenses, travel, and other marketing-related costs. Advertising costs are expensed as incurred.

Sales and marketing expenses may fluctuate depending on the timing and scale of future marketing initiatives and commercialization activities.

Research and Development Expense

Research and development expense consists primarily of costs associated with maintaining, supporting, and developing the Faning platform, including software development, contractors, technology infrastructure, and related personnel costs.

General and Administrative Expense

General and administrative expenses consist primarily of personnel-related costs, professional fees, public company compliance expenses, legal and accounting costs, investor relations expenses, consulting fees, office expenses, and other corporate administrative costs.

During 2025, a substantial portion of the Company’s operating expenses related to public company compliance activities, financing initiatives, legal and professional fees, and corporate administrative matters.

Results of Operations

Year Ended December 31, 2025 Compared to Year Ended December 31, 2024

Revenue

Revenue for the year ended December 31, 2025 was approximately $1,932, compared to no material revenue during the year ended December 31, 2024.

Revenue during 2025 primarily reflected limited early-stage commercialization activities associated with the Faning platform. The Company remained in the development and user integration phase throughout most of 2025, and monetization initiatives had not yet achieved material scale.

Operating Expenses

Operating expenses for the year ended December 31, 2025 were approximately $2.44 million, compared to approximately $0.89 million for the year ended December 31, 2024.

The increase in operating expenses was primarily attributable to public company operating costs, including legal, accounting, audit, investor relations, Nasdaq compliance, and other professional expenses associated with operating as a publicly listed company, as well as expenses related to attempted financing and capital markets activities during 2025. The increase was not primarily driven by material revenue-generating operations.

The Company also incurred additional expenses related to corporate governance, SEC reporting obligations, financing initiatives, and administrative infrastructure associated with maintaining and supporting its public company operations. During 2025 and 2024, Research and Development expenses and Sales and Marketing expenses remained minimal, as the Company primarily focused its resources and liquidity on establishing its public company infrastructure and corporate governance. However, the Company expects these expenses to increase significantly in future periods as it shifts focus toward platform development and user growth.

The Company expects operating expenses to remain elevated as it continues investing in platform functionality, infrastructure scalability, and user acquisition initiatives, while also continuing to incur significant public company compliance and professional service costs.

Impairment Loss on Intangible Assets

The Company recorded an impairment loss on intangible assets of approximately $1.02 million during the year ended December 31, 2025, compared to approximately $94,000 during the year ended December 31, 2024.

The impairment charge primarily reflected management’s reassessment of projected future cash flows and commercialization timelines associated with certain intangible assets, taking into account the Company’s limited current revenues, ongoing operating losses, and revised near-term market assumptions.

Net Loss

Net loss for the year ended December 31, 2025 was approximately $ 4.63 million, compared to approximately $6.17 million during the year ended December 31, 2024.

The decrease in net loss was primarily attributable to the gain on disposal of subsidiaries recognized during 2024, partially offset by increased operating expenses and higher impairment charges during 2025.

Liquidity and Capital Resources

As of December 31, 2025, the Company had cash and cash equivalents of approximately $6,990, compared to approximately $2,352 as of December 31, 2024.

The following table summarizes our cash flows from continuing operations for the periods presented:

Operating Activities

Net cash used in operating activities from continuing operations was $751,197 for the year ended December 31, 2025, compared to $456,431 for the year ended December 31, 2024. Although our net loss decreased slightly from $4,783,651 in 2024 to $4,632,893 in 2025, the cash outflow from operations increased by $294,766. This increased cash usage was primarily driven by cash paid for public company operating costs and compliance activities, partially offset by significant non-cash adjustments in 2025, including $1,021,192 in amortization, $1,168,228 in debt extinguishment loss, and $1,019,611 in impairment loss on intangible assets, as well as a $459,096 increase in non-trade accounts payable.

Investing Activities

Net cash provided by investing activities from continuing operations was $0 for the year ended December 31, 2025, compared to $154,148 for the year ended December 31, 2024. The cash inflow in 2024 was primarily attributable to $84,154 from the collection of short-term loan receivables and $84,097 from the disposal of property and equipment, whereas there were no such investing activities or asset disposals during 2025.

Financing Activities and Capital Resources

The Company has historically financed operations through equity issuances, debt financing, and related-party support. Net cash provided by financing activities from continuing operations was $757,344 for the year ended December 31, 2025, compared to $368,152 for the year ended December 31, 2024. The $389,192 increase in financing cash inflow was primarily driven by capital raising and liquidity management initiatives in 2025, which included $358,573 in proceeds from short-term loan payable, $220,727 in proceeds from short-term loan payable from related parties, and $178,044 in proceeds from the exercising of warrants. These inflows were utilized to fund our working capital requirements and support ongoing public company compliance operations.

Stockholders’ equity decreased from approximately $5.7 million as of December 31, 2024 to approximately $3.4 million as of December 31, 2025. The decrease was primarily driven by the Company’s net loss for 2025, debt conversions and warrant exercise and the impairment charge on intangible assets. The Company also effected a 1-for-20 reverse stock split in January 2025, which reduced the number of outstanding shares but did not materially affect total stockholders’ equity.

Going Concern

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern.

As of December 31, 2025, we had cash and cash equivalents of $6,990. For the year ended December 31, 2025, we incurred a net loss of $4,632,893 and used cash in operating activities of $751,197. These conditions raise substantial doubt regarding the Company’s ability to continue as a going concern.

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.

The Company currently believes that its existing cash on hand is sufficient to support operations for approximately two months based on the current operating cash burn rate.

Management estimates that the Company will require approximately $250,000 per month to support ongoing operations and execute its business plan. Accordingly, the Company estimates that approximately $3.0 million of additional capital will be required over the next 12 months.

To address its liquidity needs and support future operations, the Company entered into an Equity Purchase Agreement with Hudson Global Ventures providing access to up to $18 million in equity financing through an equity line facility, subject to the terms and conditions of the agreement. Management believes this financing arrangement provides the Company with access to sufficient capital resources to support its planned operations and growth initiatives.

There can be no assurance that the Company will be successful in obtaining additional financing or achieving profitable operations.

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.

Recent Developments and Outlook

During 2025, the Company continued transitioning the Faning platform from a development-focused stage toward early-stage commercialization. Management expects future operational focus to include:

• migration and re-engagement of legacy Fantoo users;
• enhancement of monetization tools and subscription functionality;
• targeted user acquisition in selected international markets;
• strategic partnerships involving entertainment and digital content; and
• expansion of platform engagement features.

The Company’s future growth remains dependent on successful user adoption, execution of its commercialization strategy, and access to external financing.

Convertible Debt

On March 19, 2025, the Company issued 300,000 shares of Common Stock at a conversion price of $0.70 per share in connection with the conversion of $210,000 of indebtedness payable to Evan Trust. Debt conversion loss was $300,030.

On May 7, 2025, the Company issued 90,123 shares of Common Stock at a conversion price of $1.19 per share, together with warrants to purchase 81,739 shares of Common Stock at an exercise price of $1.29 per share and expiring on the fifth anniversary of the issuance date, in connection with the conversion of $105,444 of indebtedness payable to Hangmuk Shin. Debt conversion loss was $178,748.

On May 7, 2025, the Company issued 135,817 shares of Common Stock at a conversion price of $1.27 per share, together with warrants to purchase 125,383 shares of Common Stock at an exercise price of $1.42 per share and expiring on the fifth anniversary of the issuance date, in connection with the conversion of $175,205 of indebtedness payable to Jeyoun Baeg. Debt conversion loss was $257,054.

On May 7, 2025, the Company issued 135,817 shares of Common Stock at a conversion price of $1.27 per share, together with warrants to purchase 125,383 shares of Common Stock at an exercise price of $1.42 per share and expiring on the fifth anniversary of the issuance date, in connection with the conversion of $175,205 of indebtedness payable to Jungok You. Debt conversion loss was $257,054.

On May 20, 2025, the Company issued 246,666 shares of Common Stock at a conversion price of $0.70 per share in connection with the conversion of $172,666 of indebtedness payable to PixelArc LLC. Debt conversion loss was $175,343.

On August 19, 2025, warrants held by Jungok You were exercised at an exercise price of $1.42 per share, resulting in the issuance of 125,383 shares of Common Stock for aggregate cash proceeds of approximately $ 178,044.

During the year ended December 31, 2025, the company recorded loss on extinguishment of debt of $1,168,228.

Contractual Obligations

As of December 31, 2025, 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.

Off-Balance Sheet Arrangements

As of December 31, 2025, 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.

Recent Accounting Pronouncements

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.

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.

Evaluation of Disclosure Controls and Procedures

Our management evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of December 31, 2025. Based on such evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of December 31, 2025, our disclosure controls and procedures were not effective to provide reasonable assurance that information required to be disclosed in the reports we file or submit under the Exchange Act (a) is recorded, processed, summarized, and reported within the time periods specified by SEC rules and forms, and (b) is accumulated and communicated to management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

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 Annual Report on Form 10-K 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.

Management’s Annual Report on Internal Control over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we conducted an evaluation of the effectiveness, as of December 31, 2025, of our internal control over financial reporting based on the framework in 2013 Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on our evaluation under this framework, our management concluded that our internal control over financial reporting was not effective as of December 31, 2025 due to material weaknesses in our internal control over financial reporting described above.

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.

Except as described above, there were no changes in the Company’s internal control over financial reporting during the quarter ended December 31, 2025 that materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

Limitations on Effectiveness of Controls and Procedures

In designing and evaluating disclosure controls and procedures and internal control over financial reporting, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives.

In addition, the design of disclosure controls and procedures and internal control over financial reporting must reflect resource constraints, and management is required to apply judgment in evaluating the benefits of possible controls and procedures relative to their costs.