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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K/A

Amendment No. 1

☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2024

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _______ to _______

Commission File Number: 001-42206

GIFTIFY, INC.

(Exact name of registrant as specified in its charter)

Delaware		45-2482974
(State of incorporation)		(I.R.S. Employer Identification No.)

1100 Woodfield Road, Suite 510,

Schaumburg, IL

60173

(Address of principal executive offices)

(Zip Code)

(847) 506-9680

(Registrant’s telephone number, including area code)

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock		GIFT		Nasdaq

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.

Yes ☐ No ☒

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.

Yes ☐ No ☒

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes ☒ No ☐

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act

Large accelerated filer	☐	Accelerated filer	☐

Non-accelerated filer	☒	Smaller reporting company	☒

		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). ☐ Yes ☒ No

The aggregate market value of the voting and non-voting common equity held by non-affiliates (excluding voting shares held by officers and directors) as of June 30, 2024 was $62,527,895.

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date. There were 29,118,407 shares of Common Stock outstanding as of March 21, 2025.

TABLE OF CONTENTS

PART I	4

Item 1. Business	4

Item 1A. Risk Factors	13

Item 1B. Unresolved Staff Comments	31

Item 1C. Cybersecurity	31

Item 2. Properties	32

Item 3. Legal Proceedings	32

Item 4. Mine Safety Disclosures	32

PART II	33

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	33

Item 6. Selected Financial Data	34

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations	34

Item 7A. Quantitative and Qualitative Disclosures About Market Risk	46

Item 8. Financial Statements and Supplementary Data	47

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	48

Item 9A. Controls and Procedures	48

Item 9B. Other Information	48

Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections	48

PART III	49

Item 10. Directors, Executive Officers and Corporate Governance	49

Item 11. Executive Compensation	54

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	59

Item 13. Certain Relationships and Related Transactions, and Director Independence	60

Item 14. Principal Accountant Fees and Services	60

PART IV	61

Item 15. Exhibits, Financial Statement Schedules	61

Item 16. Form 10-K Summary	61

EXPLANATORY NOTE

This Amendment No. 1 to Form 10-K (“Amendment No. 1”) amends our Annual Report on Form 10-K for the fiscal year ended December 31, 2024, filed on March 31, 2025 (the “Original Filing”). We are filing this Amendment No. 1 to include the clawback policy related to recovery of erroneously awarded executive compensation required to be adopted by April 14, 2025, by Giftify, Inc. under Nasdaq Section 10D of the Securities Exchange Act of 1934, as amended, the SEC rules promulgated thereunder and Nasdaq Listing Rule 5608. No changes have been made to the Original Filing other than furnishing the clawback policy attached to this Amendment No, 1 as Exhibit 97.1. This Amendment No. 1 continues to speak as of the Original Filing date of the Form 10-K, does not reflect events that may have occurred subsequent to the Original Filing date, and does not modify or update in any way disclosures made in the Original Filing.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS AND INFORMATION

This Annual Report contains forward-looking statements that involve risks and uncertainties. These forward-looking statements are not historical facts but rather are plans and predictions based on current expectations, estimates, and projections about our industry, our beliefs, and assumptions.

We use words such as “may,” “will,” “could,” “should,” “anticipate,” “expect,” “intend,” “project,” “plan,” “believe,” “seek,” “assume,” and variations of these words and similar expressions to identify forward-looking statements. These statements are not guarantees of future performance and are subject to certain risks, uncertainties, and other factors, some of which are beyond our control, are difficult to predict and could cause actual results to differ materially from those expressed or forecasted in the forward-looking statements. These risks and uncertainties include those described in the section entitled “Risk Factors.” You should not place undue reliance on these forward-looking statements because the matters they describe are subject to certain risks, uncertainties, and assumptions that are difficult to predict. Our forward-looking statements are based on the information currently available to us and speak only as of the date on which they were made. Over time, our actual results, performance, or achievements may differ from those expressed or implied by our forward-looking statements, and such difference might be significant and materially adverse to our security holders. Except as required by law, we undertake no obligation to update publicly any forward-looking statements, whether as a result of new information, future events, or otherwise. We have identified some of the important factors that could cause future events to differ from our current expectations and they are described in this Annual Report on Form 10-K (“Annual Report”) under the captions “Risk Factors,” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” as well as in other documents that we may file with the Securities and Exchange Commission (“SEC”), all of which you should review carefully. Please consider our forward-looking statements in light of those risks as you read this Annual Report.

PART I

ITEM 1. BUSINESS

As used in this Annual Report, the terms “we,” “us,” “our,” and the “Company” refer to Giftify, Inc., a Delaware corporation, and its consolidated subsidiaries.

Giftify owns and operates Restaurant.com, a pioneer in the restaurant deal space and the nation’s largest restaurant-focused digital deals brand. Our profile fundamentally changed with the acquisition of CardCash Exchange, Inc. (“CardCash”) in December 2023. CardCash buys merchant gift cards from the general public and distributors at a discount and then resells them at a markup. CardCash’s core service offering includes the buying and selling of gift cards from over 1,100 retailers including Target, Home Depot, Starbucks and TJ Maxx, among others.

The acquisition and integration of CardCash has changed our financial position, market profile and brand focus, and has also expanded our search for additional business opportunities in the short-term, both internal and external.

We believe the CardCash acquisition added valuable attributes, including (1) CardCash’s brand awareness and acceptance from the consumer; and (2) experienced management.

	●	Brand awareness – CardCash was initially formed approximately 15 years ago, and we believe this history, along with strong marketing push along multiple fronts have led to strong consumer awareness and acceptance.

	●	Experienced management – As part of the CardCash acquisition, members of the executive leadership team of CardCash have joined us. Elliot Bohm, President of CardCash prior to the merger with Giftify, remains as President of CardCash following the closing of the merger and has joined the Board of Directors of Giftify. Marc Ackerman, Chief Operating Officer of CardCash prior to the merger with Giftify, continues to serve as Chief Operating Officer of CardCash following the closing of the merger.

We are an “emerging growth company” (an “EGC”), as defined in the Jumpstart Our Business Startups Act of 2012. As an EGC, we are eligible for exemptions from various reporting requirements applicable to other public companies that are not emerging growth companies, including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002 and reduced disclosure obligations regarding executive compensation.

Merger with CardCash Exchange, Inc.

On December 29, 2023, Giftify, Inc. completed the acquisition of CardCash Exchange, Inc. (“CardCash”). The acquisition was made pursuant to a plan of merger agreement dated August 18, 2023, between Giftify, Inc., and Elliott Bohn, in his capacity as stockholder representative for CardCash’s stockholders. The Company acquired all of the issued and outstanding equity interests of CardCash from CardCash’s stockholders for $26,682,000, made up of 6,108,007 shares of Giftify’s common stock with a fair value of $24,432,000 or $4.00 per share, $750,000 in cash (including $250,000 advanced in October 2023), and the issuance of notes payable for $1,500,000.

Our Business

We have two principal divisions, B2C and B2B, for both CardCash and for Restaurant.com.

CardCash

CardCash operates as a leading gift card exchange platform, facilitating the purchase and sale of unused gift cards at discounted rates for both consumers and businesses. The Company’s mission is to provide a seamless marketplace for individuals looking to maximize the value of their gift cards while also offering businesses innovative solutions to leverage this market.

CardCash’s core service offering includes the buying and selling of gift cards from over 1,100 retailers, such as Target, Home Depot, Starbucks and TJ Maxx, among others. By connecting buyers and sellers, CardCash enables consumers to unlock value from unused gift cards and save significant amounts on their purchases.

CardCash purchases unused gift cards at a value lower than their face worth and subsequently retails them at a discounted rate to discerning shoppers nationwide. This avenue not only allows individuals to obtain cash for their unneeded gift cards but also enables them to make cost-effective purchases through discounted gift cards.

With advanced fraud prevention technology, known as FraudFix, CardCash ensures the security and integrity of all transactions conducted on its platform. This commitment to trust and reliability has contributed to its success in saving consumers over $100 million since its inception.

In addition to its consumer-focused operations, CardCash provides white-label solutions for brands, allowing them to integrate gift card exchange capabilities into their own platforms. Major retailers like Amazon, Best Buy, CVS and Dell have capitalized on these solutions to enhance their customer offerings and drive additional revenue streams through gift cards without compromising product value.

By fostering a mutually beneficial ecosystem, CardCash.com drives a scenario where consumers and businesses effortlessly trade unwanted gift cards while others access these cards at discounted rates, simultaneously benefiting merchants as unused gift cards are utilized to convert financial liabilities into revenue.

Furthermore, CardCash facilitates Business-to-Business (B2B) exchanges, enabling companies to efficiently manage surplus gift card inventory and procure gift cards in bulk for various business needs. This service not only benefits businesses but also contributes to a thriving gift card market projected to reach $400 billion by 2026.

Moreover, CardCash is committed to social responsibility through partnerships with charitable organizations. Initiatives like the collaboration with Charity On Top for fundraising efforts during natural disasters showcase CardCash’s dedication to giving back to the community. Partnerships with reputable institutions such as St. Jude’s Research Hospital demonstrate CardCash’s commitment to supporting critical causes and making a positive impact.

Among its offerings, CardCash Incentives provides new gift cards for over 300 brands at discounted rates, catering to businesses seeking employee engagement and customer loyalty through customized gift card solutions. The recent introduction of the CardCash uChoose platform further enhances the Company’s portfolio by offering businesses the option to provide gift card choices from a wide selection of brands to recipients.

Overall, CardCash’s multifaceted approach to the gift card market, coupled with its focus on innovation and social impact, positions the Company as a key player in the industry with a strategic vision for continued growth and success.

CardCash Growth Plans

CardCash intends to grow its current four business channels, bulk to bulk, bulk to retail, retail to bulk and retail to retail, to take advantage of the projected expansion by 2026 of the global market for gift cards to $400 billion (see “Business - Pending Acquisition – CardCash Exchange, Inc.”) as follows:

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Increase Access to Strategic Partnerships and Expanded Data. CardCash intends to transition from having its own online platform for both consumers and repeat high-volume sellers of gift cards to operating exchanges. CardCash currently operates approximately 25 branded exchanges. CardCash is focusing on three business growth concepts:

Branded Exchange for Retailer Partnerships

CardCash intends to increase the number of gift card exchanges on partner websites to send traffic to CardCash.com. CardCash launched its first branded exchange partnership with CVS Pharmacy in 2012 and experienced an increase in the amount of spending by both new and existing customers. In 2017, CardCash and Amazon launched a branded exchange which has grown to be CardCash’s most successful partnership to date. In 2023, Mastercard and Amazon led all CardCash branded exchanges with $1,800,000 and $1,900,000 in revenue, respectively.

CardCash Checkout

CardCash is developing the technology to allow retailers to accept any gift card, anywhere, at any time to reduce the combined interchange fee for businesses, result in new-found money for customers and increase the average amount purchased. CardCash profits by selling the card on the secondary market, the transaction is sourced from the point of checkout, and by not being on CardCash’s website, represents a perpetuating network.

CardCash Giving

The purpose of this concept is to allow consumers to pay for their retail purchases with gift cards and to have the charity of their choice receive a donation, thereby increasing the appeal of using CardCash at checkout. CardCash has developed this donation platform to allow customers to use the power of their shopping to support the charity of their choice. CardCash has an existing partnership with St. Jude Children’s Research Hospital that allows customers to spend gift cards anywhere they want while donating to cutting-edge medical research. The giving platform works by (i) CardCash negotiating 5% - 20% discounts on the gift cards, (ii) splitting that discount 70/30 with the charity and (iii) giving the retailer a tax write-off of 70%. Through CardCash’s platform, consumers can, for example, help families pay down student loan debt and contribute to research and awareness for childhood illnesses, improved heart health, etc.

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Increase Marketing Efforts. CardCash intends to increase its marketing to retailers and consumers to accelerate its sales of gift cards.

●

Increase Profit Margins. CardCash intends to shift its cost structure to allow it to process scalable volumes of 4-5X its current number of gift cards with a very slight increase in cost. CardCash believes that a more efficient use of machine learning transaction processing with richer data from a strategic subset can empower it to scale its model to meet the needs of the gift card market. CardCash is seeking a strategic investment and collaboration, in addition to what it receives by its merger with Giftify, to bring data synergy and higher margins from more reliable processing. While the bulk-to-bulk channel is expected to represent the largest contributor of CardCash’s sales in the years to come, the other three channels are projected to grow at a faster rate and account for an aggregate 50% of sales over the next two years. CardCash expects to drive top-line growth by adding new branded exchange partnerships that in turn are expected to generate more users and increase demand for other services. CardCash currently has a 13.0% gross margin for its four revenue streams combined. CardCash anticipates that its gross margins will increase approximately 8% in the next two years based on retail-sourced inventory and retail sales. CardCash’s focus is to maximize inventory sourced through checkout and branded exchange initiatives to drive significant volume on the secondary market and generate higher gross margins.

Restaurant.com Business to Customer Division

Our B2C division accounted for approximately 50% of gross revenue in our fiscal year ended December 31, 2024. To our database of 6.2 million customers, we sell:

● Discounted certificates for 10,000 restaurants. The certificates range from $5 to $100 and never expire.

● Discount Dining Passes, which provide discounts at 170,000 restaurants and other retailers. These passes provide multiple uses for six months.

● “Specials by Restaurant.com” which bundle Restaurant.com certificates with a variety of other entertainment options, including theatre, movies, wine and travel. Customers have favored these bundled offering (“Specials”), generating significantly greater revenue per customer when compared to purchasing our other products. The average order value for these Specials sales is nearly five times a certificate purchase. Specials generated over 5% of our past year’s B2C revenue from 60% of the B2C orders for the fiscal year ended December 31, 2023. We believe that our relationships with small businesses presents a significant revenue opportunity through such cross-promotions.

Restaurant.com Business to Business Division

Our B2B division accounted for approximately 50% of our gross revenue in our fiscal year ended December 31, 2024. We sell certificates and Discount Dining Passes to corporations and marketers, which use them to:

	●	generate new customers;

	●	increase sales at the point of sale;

	●	reward points/customer loyalty;

	●	convert to paperless billing and auto-bill payment.

	●	motivate specific customer behavior such as free home repair estimates and test drives for auto dealers;

	●	renew subscriptions and memberships; and

	●	address customer service issues.

Restaurant.com Other Business

We also generate revenue through third-party offers and display ad revenue. This comprises a de minimis portion of our gross revenue.

Restaurant.com Attractive Customer Demographics

We intend to grow and leverage our customer database of 6.2 million which we believe is of value to merchants for a variety of services and products.

Marketing

We primarily use marketing to acquire and retain high-quality merchants and customers and promote awareness of our marketplaces.

We use a variety of marketing channels to make customers aware of the offerings, including search engines, email and affiliate partnerships and social media.

Search engines. Customers can access our offerings indirectly through third-party search engines. We use search engine optimization and search engine marketing to increase the visibility of our offerings in web search results.

Email. We communicate offerings through email to our customers based on their locations and personal preferences. A customer who interacts with an email is directed to our website and mobile applications to learn more about the deal and to make a purchase.

Social. We publish offerings through various social networks and adapt our marketing to the particular format of each of these social networking platforms. Our website and mobile applications enable consumers to share our offerings with their personal social networks. We also promote our offerings using display advertising on websites.

Offline. We use offline marketing such as print to help build awareness of brand.

Distribution

We distribute our deals directly through several platforms: email, our websites, our mobile applications and social networks. We also utilize various affiliate partnerships to display and promote our deals on their websites, such as with AMAC, Groupon, MemberHub and others.

We also use various customer loyalty and reward programs to build brand loyalty, generate traffic to the website and provide business clients with the opportunity to offer incentives to their customers to receive discounts and Discount Dining Passes. When customers perform qualifying acts, such as providing a referral to a new subscriber or participating in promotional offers, we grant the customer credits that can be redeemed for awards such as free or discounted services or goods in the future.

Email. The emails for discount certificates for restaurants contain one headline deal with a full description of the deal and a sampling of dining deals which are available within a customer’s market. The emails for Specials by Restaurant.com include featured travel, entertainment and wine deals in addition to various other product deals.

Websites. Visitors are prompted to register as a customer when they first purchase on our websites and thereafter use the website as a portal for discount certificates for restaurants, complementary entertainment and travel offerings and consumer products.

Mobile Applications. Consumers also access our deals through our mobile applications, which are available at no additional cost on the iPhone and Android, mobile operating systems. We launched our first mobile application in 2012 and our applications have been downloaded over 6.0 million times since then. These applications enable consumers to browse, purchase, manage and redeem deals on their mobile devices.

Social Networks. We publish our daily deals through various social networks adapt and our marketing to the particular format of each of these social networking platforms. Our website and mobile application interfaces enable our consumers to share our offerings to their personal social networks.

Operations

Our business operations are divided into the following core functions to address the needs of our merchants and customers.

Marketing. Our marketing department is responsible for managing the Restaurant.com brand, the B2C discount certificate and Specials offerings, creating the promotional calendar, all creative assets used in our marketing channels such as the website, email, and affiliate partnerships, including imagery and editorial content, negotiation with affiliate and merchant partners, revenue management, company analytics and B2B marketing and brand assets. We have an agreement with Commission Junction for a monthly payment of $1,500 to $3,500 that generates potential leads with companies that earn a commission by promoting our discount deals on their websites for which they receive between 3% to 15% of the revenue we receive from a customer’s purchase of a discount certificate.

Customer Service Representatives. Our customer service representatives can be reached via email 24 hours a day, seven days a week. The customer service team also works with our information technology team to improve the customer experience on the website and mobile applications based on customer feedback.

Technology. We employ technology to improve the experience we offer to customers and merchants, increase the rate at which our customers purchase and enhance the efficiency of our business operations. A component of our strategy is to continue developing and refining our technology. We devote a substantial portion of our resources to developing new technologies and features and improving our core technologies. Our information technology team is focused on the design and development of new features and products, maintenance of our websites and development and maintenance of our internal operations systems.

Competition

CardCash

CardCash faces competition from a number of competitors but believes that it has key attributes that provide it with a competitive advantage in the market for unused gift cards. The following chart summarizes the principal differences between CardCash and its competitors:

			*Other Players*
Ability to dictate pricing
Immediate transaction
No-fee transactions
Bulk seller/buyer services
Branded exchange partnerships
Industry Leading Fraud prevention technology
Business model	Principal-based	Marketplace	Various

Although CardCash believes it compete favorably on the factors described above, it anticipates that larger, more established companies may directly compete with it on a principal-based model and such a competitor could have greater financial, technical, marketing and other resources than it does. These competitors may engage in more extensive research and development efforts, undertake more far-reaching marketing campaigns and adopt more aggressive pricing policies, which may allow them to reduce the number of potential consumers and retailers that form the basis of CardCash’s revenue base.

Restaurant.com

We have a substantial number of competing groups buying sites. These competitors offer substantially the same or similar product offerings as us. Among the companies that focus on the dining and savings category and certain of the subcategories in which we participate are the following:

	●	discount (e.g., Groupon.com, Entertainment.com);

	●	ratings and reviews communities (Zagat.com, TripAdvisor);

	●	restaurant listings (Yelp, Zomato and OpenTable);

	●	food content (Food Network, Food.com and Epicurious);

	●	eCommerce (Groupon, TravelZoo and Woot); and

	●	takeout and delivery (DoorDash.com, GrubHub.com UberEats.com and Delivery.com).

	We believe the principal competitive factors in our market include the following:

	●	breadth of customer base and number of restaurants featured;

	●	ability to deliver a high volume of relevant deals to consumers;

	●	ability to produce high purchase rates for deals among customers;

	●	ability to generate positive return on investment for merchants; and

	●	strength and recognition of our brand.

We believe we compete favorably on several of the factors described above and plan to increase our standing in each of these categories. As of December 31, 2024, our customer base was 5.4 million and during 2024 we featured deals at over 184,000 restaurants and merchants.

Although we believe we compete favorably on the factors described above, we anticipate that larger, more established companies may directly compete with us as we continue to demonstrate the viability of a local e-commerce business model. Many of our current and potential competitors have longer operating histories, significantly greater financial, technical, marketing and other resources and larger customer bases than we do. These factors may allow our competitors to benefit from their existing customer or subscriber base with lower acquisition costs or to respond more quickly than we can to new or emerging technologies and changes in customer requirements. These competitors may engage in more extensive research and development efforts, undertake more far-reaching marketing campaigns and adopt more aggressive pricing policies, which may allow them to build a larger subscriber base or to monetize that subscriber base more effectively than us. Our competitors may develop products or services that are similar to our products and services or that achieve greater market acceptance than our products and services. In addition, although we do not believe that merchant payment terms are a principal competitive factor in our market, they may become such a factor and we may be unable to compete fairly on such terms.

Regulation

We are subject to a number of foreign and domestic laws and regulations that affect companies conducting business on the internet, many of which are still evolving and could be interpreted in ways that could harm our business. In the United States and abroad, laws relating to the liability of providers of online services for activities of their users and other third parties are currently being tested by a number of claims. These regulations and laws may involve taxation, tariffs, subscriber privacy, data protection, content, copyrights, distribution, electronic contracts and other communications, consumer protection, the provision of online payment services and the characteristics and quality of services. It is not clear how existing laws governing issues such as property ownership, sales and other taxes, libel and personal privacy apply to the internet as the vast majority of these laws were adopted prior to the advent of the internet and do not contemplate or address the unique issues raised by the internet or e-commerce. In addition, it is possible that governments of one or more countries may seek to censor content available on our websites or may even attempt to completely block access to our websites. Accordingly, adverse legal or regulatory developments could substantially harm our business.

The CARD Act, as well as the laws of most states, contain provisions governing product terms and conditions of gift cards, gift certificates, stored value or pre-paid cards or coupons (“gift cards”), such as provisions prohibiting or limiting the use of expiration dates on gift cards or the amount of fees charged in connection with gift cards or requiring specific disclosures on or in connection with gift cards. Discount certificates and Discount Dining Passes generally are included within the definition of “gift cards” in many of these laws. In addition, certain foreign jurisdictions have laws that govern disclosure and certain product terms and conditions, including restrictions on expiration dates and fees that may apply to discount certificates and Discount Dining Passes. However, the CARD Act as well as a number of states and certain foreign jurisdictions also have exemptions from the operation of these provisions or otherwise modify the application part of a promotion or promotional program. If discount certificates and Discount Dining Passes are subject to the CARD Act, and are not included in the exemption for promotional programs, it is possible that the purchase value, which is the amount equal to the price paid for the discount certificates and Discount Dining Passes, or the promotional value, which is the add-on value of the discount certificate and Discount Pass in excess of the price paid, or both, may not expire before the later of (i) five years after the date on which the discount certificate or Discount Pass was issued; (ii) their stated expiration date (if any), unless discount certificates and Discount Dining Passes come within an exemption in the CARD Act for promotional programs; or (iii) a later date provided by applicable state law. In addition, regardless of whether an exemption for discount certificates and Discount Dining Passes applies under the CARD Act, in those states that prohibit or otherwise restrict expiration dates on gift cards that are defined to include discount certificates and Discount Dining Passes and that do not have exemptions that apply to the purchase value or the promotional value, or both, of discount certificates and Discount Dining Passes, the discount certificates and Discount Dining Passes may be required to be honored for the full offer value (the total of purchase value and promotional value) until redeemed. Our terms of use and agreements with our merchants require merchants to continue to honor unredeemed discount certificates and Discount Dining Passes that are past the stated expiration date of the promotional value of the discount Certificate and Discount Pass to the extent required under the applicable law. While we are attempting to comply with exemptions for promotional programs available under these laws so that our discount certificates’ and Discount Dining Passes’ promotional value can expire on the date stated on the certificate and Discount Pass, we continue to require that merchants with whom we partner honor discount certificates and Discount Dining Passes under the provisions of all laws applicable to discount certificates and Discount Dining Passes, including laws that prohibit expiration.

In addition, some states also include gift cards under their unclaimed and abandoned property laws which require companies to remit to the government the value of the unredeemed balance on the gift cards after a specified period of time (generally between one and five years) and impose certain reporting and recordkeeping obligations. We do not remit any amounts relating to unredeemed discount certificates and Discount Dining Passes based upon our assessment of applicable laws. The analysis of the potential application of the unclaimed and abandoned property laws to discount certificates and Discount Dining Passes is complex, involving an analysis of constitutional and statutory provisions and factual issues, including our relationship with customers and merchants and our role as it relates to the issuance and delivery of our discount certificates and Discount Pass.

Many states have passed laws requiring notification to customers when there is a security breach of personal data. There are also a number of legislative proposals pending before the U.S. Congress, various state legislative bodies and foreign governments concerning data protection. In addition, data protection laws in Europe and other jurisdictions outside the United States may be more restrictive, and the interpretation and application of these laws are still uncertain and in flux. It is possible that these laws may be interpreted and applied in a manner that is inconsistent with our data practices. If so, in addition to the possibility of fines, this could result in an order requiring that we change our data practices, which could have an adverse effect on our business. Furthermore, the Digital Millennium Copyright Act has provisions that limit, but do not necessarily eliminate, our liability for linking to third-party websites that include materials that infringe copyrights or other rights, so long as we comply with the statutory requirements of this act. Complying with these various laws could cause us to incur substantial costs or require us to change our business practices in a manner adverse to our business.

Various federal laws, such as the Bank Secrecy Act and the USA PATRIOT Act, impose certain anti-money laundering requirements on companies that are financial institutions or that provide financial products and services. For these purposes, financial institutions are broadly defined to include money services businesses such as money transmitters, check cashers and sellers or issuers of stored value. Examples of anti-money laundering requirements imposed on financial institutions include customer identification and verification programs, record retention policies and procedures and transaction reporting. We do not believe that we are a financial institution subject to these laws and regulations based, in part, on the characteristics of the discount certificates and Discount Dining Passes and our role with respect to the distribution of the discount certificates and Discount Dining Passes to customers. However, the Financial Crimes Enforcement Network, a division of the U.S. Treasury Department tasked with implementing the requirements of the Bank Secrecy Act, recently proposed amendments to the scope and requirements for parties involved in stored value or prepaid access, including a proposed expansion of the definition of financial institution to include sellers or issuers of prepaid access. In the event that this proposal is adopted as proposed, it is possible that a discount certificate and Discount Pass could be considered a financial product and that we could be a financial institution. Although we do not believe we are a financial institution or otherwise subject to these laws and regulations, it is possible that the Company could be considered a financial institution or provider of financial products.

Intellectual Property

We protect our intellectual property rights by relying on federal, state and common law rights, as well as contractual restrictions. We control access to our proprietary technology by entering into confidentiality and invention assignment agreements with our employees and contractors, and confidentiality agreements with third parties.

CardCash purchased a patent (US 8,751,294 B2) from e2interactive relating to the processing of valuable-ascertainable items, such as gift cards, by retailers. The patent was issued on June 10, 2014, and is expected to expire December 4, 2029.

CardCash has a registered trademark for “CardCash” that was first issued on June 12, 2012, and is renewable every ten years. CardCash renewed the trademark in 2022 for an additional ten-year term.

In addition to these contractual arrangements, we also rely on a combination of trade secrets, copyrights, trademarks, service marks, trade dress, domain names and patents to protect our intellectual property. We pursue the registration of our copyrights, trademarks, service marks and domain names in the United States and in certain locations outside the United States. Our registration efforts have focused on gaining protection of the following trademarks (among others): The Company owns the registered marks “RESTAURANT.COM,” “DINING DOUGH,” and has submitted applications for several others. These marks are material to our business as they enable others to easily identify us as the source of the services offered under these marks and are essential to our brand identity.

Circumstances outside our control could pose a threat to our intellectual property rights. For example, effective intellectual property protection may not be available in the United States. Also, the efforts we have taken to protect our proprietary rights may not be sufficient or effective. Any significant impairment of our intellectual property rights could harm our business or our ability to compete. Also, protecting our intellectual property rights is costly and time-consuming. Any unauthorized disclosure or use of our intellectual property could make it more expensive to do business and harm our operating results.

Companies on the internet, social media technology and other industries may own large numbers of patents, copyrights and trademarks and may frequently request license agreements, threaten litigation or file suit against us based on allegations of infringement or other violations of intellectual property rights. We are currently subject to, and expect to face in the future, allegations that we have infringed the trademarks, copyrights, patents and other intellectual property rights of third parties, including our competitors and non-practicing entities. As we face increasing competition and as our business grows, we will likely face more claims of infringement.

Customer Service and Support

Our ability to establish and maintain long term relationships with our customers and encourage repeat visits and purchases is dependent, in part, on the strength of our customer support and service operations. We have established multiple channels for communicating with our customers before and after the sale, including phone, e-mail and online support.

We currently employ a staff of in-house customer support personnel responsible for handling customer inquiries, tracking shipments, investigating and resolving problems with merchandise and travel. Customer care representatives are available for support from 8:30 a.m. to 5 p.m., Central Time, Monday through Friday. In addition, our customer service representatives are trained to cross-sell complementary and ancillary products and services.

Employees

As of December 31, 2024, we had 42 full time employees. None of our employees or personnel is represented by a labor union, and we consider our employee/personnel relations to be good. Competition for qualified personnel in our industry is intense, particularly for software development and other technical staff. We believe that our future success will depend in part on our ability to attract, hire and retain qualified personnel.

Smaller Reporting Company

We are currently a “smaller reporting company”, meaning that we are not an investment company, an asset-backed issuer, or a majority-owned subsidiary of a parent company that is not a smaller reporting company and have a public float of less than $250 million during the most recently completed fiscal year. As a “smaller reporting company”, we are able to provide simplified executive compensation disclosures in our SEC filings; are exempt from the provisions of Section 404(b) of the Sarbanes-Oxley Act (“SOX”) requiring that independent registered public accounting firms provide an attestation report on the effectiveness of internal control over financial reporting; and have certain other decreased disclosure obligations in their SEC filings, including, among other things, only being required to provide two years of audited financial statements in annual reports. In addition, as a smaller reporting company with a public float of less than $75 million we qualify as a non-accelerated filer. A non-accelerated filer is not required to provide an auditor attestation of management’s assessment of internal control over financial reporting, which is generally required for SEC reporting companies under Sarbanes-Oxley Act Section 404(b), and, in contrast to other reporting companies, has more time to file its periodic reports.

ITEM 1A. RISK FACTORS

Risks Related to Our Company and Our Business

There is substantial doubt about our ability to continue as a going concern. We have a history of annual net losses which may continue, and which may negatively impact our ability to achieve our business objectives, and we received a going concern qualification in our 2024 audit.

For the year ended December 31, 2024, we recorded a net loss of $18,832,080 and used cash in operating activities of $2,551,870. At December 31, 2024, our cash and cash equivalents balance was $3,574,876. At December 31, 2024, the outstanding balance on our line of credit facility was $3,805,080, we had $4,392,906 outstanding in promissory notes, and $43,137 of convertible notes payable, including interest. Our independent registered public accounting firm, in their report to our December 31, 2024, financial statements, expressed substantial doubt about our ability to continue as a going concern due to our recurring losses from operations. There can be no assurance that our future operations will result in net income. Our failure to increase our revenues or improve our gross margins will harm our business. We may not be able to generate profitability on a quarterly or annual basis in the future. If our revenues grow more slowly than we anticipate, our gross margins fail to improve or our operating expenses exceed our expectations, our operating results will suffer.

If CardCash is not able to achieve profitability within the next few years, our shareholders will have experienced unnecessary dilution, and our ability to achieve our business plan could be significantly delayed or threatened.

CardCash has had a history of net operating losses since its inception. For the years ended December 31, 2023 and 2022, CardCash had operating losses of $3,080,406 and $5,600,348, respectively. Our business plan contemplates our growth in gross and net revenues to increase our share price and to facilitate accretive acquisitions of ecommerce companies so the inability of CardCash to be profitable could delay or thwart our efforts to achieve our business goals. The principal risks to CardCash achieving profitability are (i) feasibility of the Company’s expense management activities, (ii) government regulations, including the Card Act, privacy concerns and oversight of financial institutions and money transmitters as set forth in the risk factors below, (iii) new competitors, (iv) liability for claims relating to service offerings and branded exchanges, (v) maintaining its network infrastructure as set forth below, (vi) preventing security breaches as set forth below, (vii) limiting fraudulent transactions and chargebacks on gift cards, (viii) payment related risks as set forth below, (ix) overcoming the limited experience of principals in operating a public company, (x) the potential loss of key executives as set forth below, and (xi) future pandemics.

If our restaurants and other merchants do not meet the needs and expectations of our customers, our business could suffer.

Our business depends on our reputation for providing high-quality discounts, and our brand and reputation may be harmed by actions taken by restaurants and other merchants that are outside our control. Any shortcomings of one or more of our restaurants and other merchants, particularly with respect to an issue affecting the quality of the meals offered or the products or services sold, may be attributed by our customers to us, thus damaging our reputation, brand value and potentially affecting our results of operations. In addition, negative publicity and subscriber sentiment generated as a result of fraudulent or deceptive conduct by our restaurants and other merchants could damage our reputation, reduce our ability to attract new customers or retain our current customers, and diminish the value of our brand.

We may be subject to additional unexpected regulation which could increase our costs or otherwise harm our business.

The application of certain laws and regulations to our discount certificates and dining cards is uncertain. These include laws and regulations such as the Credit Card Accountability Responsibility and Disclosure Act of 2009, or the CARD Act, and unclaimed and abandoned property laws. The application of the CARD Act will only become less uncertain if current legislation at the federal and state levels is changed to specify that their terms apply to our discount certificates and Discount Dining Passes or from court rulings by federal or state courts that interpret the current legislation to be clearly applicable to our discount program.

From time to time, we also may be notified of additional laws and regulations which governmental organizations or others may claim should be applicable to our business. If we are required to alter our business practices as a result of any laws and regulations, our revenue could decrease, our costs could increase and our business could otherwise be harmed. Further, the costs and expenses associated with defending any actions related to such additional laws and regulations and any payments of related penalties, judgments or settlements could adversely impact our profitability.

The implementation of the CARD Act and similar state laws may harm our business and results of operations.

Our discount certificates and Discount Dining Passes may be considered gift cards, gift certificates, stored value cards or prepaid cards and therefore governed by, among other laws, the CARD Act, and state laws governing gift cards, stored value cards and coupons. Many of these laws contain provisions governing the use of gift cards, gift certificates, stored value cards or prepaid cards, including specific disclosure requirements and prohibitions or limitations on the use of expiration dates and the imposition of certain fees. For example, if our discount certificates and Discount Dining Passes are subject to the CARD Act and are not included in the exemption for promotional programs, it is possible that the purchase value, which is the amount equal to the price paid for our certificates and Discount Dining Passes, or the promotional value, which is the add-on value of these items in excess of the price paid, or both, may not expire before the later of (i) five years after the date on which these items were issued; (i) the certificate’s stated expiration date (if any); or (iii) a later date provided by applicable state law. In the event that it is determined that our discount certificates and Discount Dining Passes are subject to the CARD Act or any similar state regulation, and are not within various exemptions that may be available under the CARD Act or under some of the various state jurisdictions, our liabilities with respect to unredeemed certificates and Discount Dining Passes may be materially higher than the amounts shown in our financial statements and we may be subject to additional fines and penalties. In addition, if federal or state laws require that the face value of our discount certificates and Discount Dining Passes have a minimum expiration period beyond the period desired by a merchant for its promotional program, or no expiration period, this may affect the willingness of merchants to issue discount certificates in jurisdictions where these laws apply. If we are required to materially increase the estimated liability recorded in our financial statements with respect to unredeemed discount certificates and Discount Dining Passes, our net income could be materially and adversely affected.

If we are required to materially increase the estimated liability recorded in our financial statements with respect to unredeemed discounts and Discount Dining Passes, our net income could be materially and adversely affected.

In certain states, our discount certificates and Discount Dining Passes may be considered a gift card. Some of these states include gift cards under their unclaimed and abandoned property laws which require companies to remit to the government the value of the unredeemed balance on the gift cards after a specified period of time (generally between one and five years) and impose certain reporting and recordkeeping obligations. We do not remit any amounts relating to unredeemed discount certificates and Discount Dining Passes based on our assessment of applicable laws. The analysis of the potential application of the unclaimed and abandoned property laws to discount certificates and Discount Dining Passes is complex, involving an analysis of constitutional and statutory provisions and factual issues, including our relationship with customers and merchants and our role as it relates to the issuance and delivery of such certificates and Discount Dining Passes. In the event that one or more states successfully challenges our position on the application of its unclaimed and abandoned property laws to discount certificates and Discount Dining Passes, or if the estimates that we use in projecting the likelihood of discount certificates and Discount Dining Passes being redeemed prove to be inaccurate, our liabilities with respect to unredeemed discount certificates and Discount Dining Passes may be materially higher than the amounts shown in our financial statements. If we are required to materially increase the estimated liability recorded in our financial statements with respect to unredeemed gift cards, our net income could be materially and adversely affected. Moreover, a successful challenge to our position could subject us to penalties or interest on unreported and unremitted sums, and any such penalties or interest would have a further material adverse impact on our net income.

Government regulation of the internet and e-commerce is evolving, and unfavorable changes or failure by us to comply with these regulations could substantially harm our business and results of operations.

We are subject to general business regulations and laws as well as regulations and laws specifically governing the internet and e-commerce, including the California Consumer Protection Act, the General Data Protection Regulation, the CAN-SPAM Act, Digital Millennium Copyright Act, the Electronic Signatures in Global and National Commerce Act and the Uniform Electronic Transactions Act. Existing and future regulations and laws could impede the growth of the internet or other online services. These regulations and laws may involve taxation, tariffs, subscriber privacy, anti-spam, data protection, content, copyrights, distribution, electronic contracts and other communications, consumer protection, the provision of online payment services and the characteristics and quality of services. It is not clear how existing laws governing issues such as property ownership, sales and other taxes, libel and personal privacy apply to the internet as the vast majority of these laws were adopted prior to the advent of the internet and do not contemplate or address the unique issues raised by the internet or e-commerce. In addition, it is possible that governments of one or more countries may seek to censor content available on our websites and applications or may even attempt to completely block access to our websites. Adverse legal or regulatory developments could substantially harm our business. In particular, in the event that we are restricted, in whole or in part, from operating in one or more countries, our ability to retain or increase our subscriber base may be adversely affected and we may not be able to maintain or grow our revenue as anticipated.

Failure to comply with federal and state privacy laws and regulations, or the expansion of current or the enactment of new privacy laws or regulations, could adversely affect our business.

A variety of federal and state laws and regulations govern the collection, use, retention, sharing and security of consumer data. The existing privacy-related laws and regulations are evolving and subject to potentially differing interpretations. In addition, various federal, state and foreign legislative and regulatory bodies may expand current or enact new laws regarding privacy matters. For example, recently there have been Congressional hearings and increased attention to the capture and use of location-based information relating to users of smartphones and other mobile devices. We have posted privacy policies and practices concerning the collection, use and disclosure of subscriber data on our websites and applications. Several internet companies have incurred penalties for failing to abide by the representations made in their privacy policies and practices. In addition, several states have adopted legislation that requires businesses to implement and maintain reasonable security procedures and practices to protect sensitive personal information and to provide notice to consumers in the event of a security breach. Any failure, or perceived failure, by us to comply with our posted privacy policies or with any data-related consent orders, Federal Trade Commission requirements or orders or other federal, state or international privacy or consumer protection-related laws, regulations or industry self-regulatory principles could result in claims, proceedings or actions against us by governmental entities or others or other liabilities, which could adversely affect our business. In addition, a failure or perceived failure to comply with industry standards or with our own privacy policies and practices could result in a loss of customers or merchants and adversely affect our business. Federal, state and international governmental authorities continue to evaluate the privacy implications inherent in the use of third-party web “cookies” for behavioral advertising. The regulation of these cookies and other current online advertising practices could adversely affect our business.

We may suffer liability as a result of information retrieved from or transmitted over the internet and claims related to our service offerings.

We may be sued for defamation, civil rights infringement, negligence, patent, copyright or trademark infringement, invasion of privacy, personal injury, product liability, breach of contract, unfair competition, discrimination, antitrust or other legal claims relating to information that is published or made available on our websites or service offerings we make available (including provision of an application programming interface platform for third parties to access our website, mobile device services and geolocation applications). This risk is enhanced in certain jurisdictions outside the United States, where our liability for such third-party actions may be less clear and we may be less protected. In addition, we could incur significant costs in investigating and defending such claims, even if we ultimately are not found liable. If any of these events occurs, our net income could be materially and adversely affected.

We are subject to risks associated with information disseminated through our websites and applications, including consumer data, content that is produced by our editorial staff and errors or omissions related to our product offerings. Such information, whether accurate or inaccurate, may result in our being sued by our merchants, customers or third parties and as a result our revenue and goodwill could be materially and adversely affected.

Our business depends on our ability to maintain and scale the network infrastructure necessary to operate our websites and applications, and any significant disruption in service on our websites or applications could result in a loss of customers or merchants.

Customers access our deals through our websites and applications. Our reputation and ability to acquire, retain and serve our customers and merchants who are dependent upon the reliable performance of our websites and applications and the underlying network infrastructure. As our subscriber base and the amount of information shared on our websites and applications continue to grow, we will need an increasing amount of network capacity and computing power. We have spent and expect to continue to spend substantial amounts of money on data centers and equipment and related network infrastructure to handle the traffic on our websites and applications. The operation of these systems is expensive and complex and could result in operational failures. In the event that our customer base or the amount of traffic on our websites and applications grows more quickly than anticipated, we may be required to incur significant additional costs. Interruptions in these systems, whether due to system failures, computer viruses or physical or electronic break-ins, could affect the security or availability of our websites and applications, and prevent our customers from accessing our services. A substantial portion of our network infrastructure is hosted by third-party providers. Any disruption in these services or any failure of these providers to handle existing or increased traffic could significantly harm our business. Any financial or other difficulties these providers face may adversely affect our business, and we exercise little control over these providers, which increases our vulnerability to problems with the services they provide. If we do not maintain or expand our network infrastructure successfully or if we experience operational failures, we could lose current and potential customers and merchants, which could harm our operating results and financial condition.

Our business depends on the development and maintenance of the internet infrastructure.

The success of our services will depend largely on the development and maintenance of the internet infrastructure. This includes maintenance of a reliable network backbone with the necessary speed, data capacity and security, as well as timely development of complementary products, for providing reliable internet access and services. The internet has experienced, and is likely to continue to experience, significant growth in the number of users and amount of traffic. The internet infrastructure may be unable to support such demands. In addition, increasing numbers of users, increasing bandwidth requirements or problems caused by viruses, worms, malware and similar programs may harm the performance of the internet. The backbone computers of the internet have been the targets of such programs. The internet has experienced a variety of outages and other delays as a result of damage to portions of its infrastructure, and it could face outages and delays in the future. These outages and delays could reduce the level of internet usage generally as well as the level of usage of our services, which could adversely impact our business.

Our total number of customers may be higher than the number of our actual individual customers and may not be representative of the number of persons who are active potential customers.

Our total number of customers may be higher than the number of our actual individual customers because some customers have multiple registrations, other customers have died or become incapacitated and others may have registered under fictitious names. Given the challenges inherent in identifying these customers, we do not have a reliable system to accurately identify the number of actual individual customers, and thus we rely on the number of total customers as our measure of the size of our subscriber base. In addition, the number of customers includes the total number of individuals that have completed registration through a specific date, less individuals who have unsubscribed, and should not be considered as representative of the number of persons who continue to actively consider our deals by reviewing our email offers.

Our business may be subject to seasonal sales fluctuations which could result in volatility or have an adverse effect on the market price of our common stock.

Our business, like that of our restaurants and merchants, may be subject to some degree of sales seasonality. As the growth of our business stabilizes, these seasonal fluctuations may become more evident. Seasonality may cause our working capital cash flow requirements to vary from quarter to quarter depending on the variability in the volume and timing of sales. These factors, among other things, make forecasting more difficult and may adversely affect our ability to manage working capital and to predict financial results accurately, which could adversely affect the market price of our common stock.

We depend on the continued growth of online commerce.

The business of selling services and goods over the internet, including through discount certificates, raises concerns about fraud, privacy and other problems may discourage additional restaurants, consumers and merchants from adopting the internet as a medium of commerce and make the level of market penetration of our services high, making the acquisition of new customers for our services more difficult and costly than it has been in the past. If these customers prove to be less active than our earlier customers, or we are unable to gain efficiencies in our operating costs, including our cost of acquiring new customers, our business could be adversely impacted.

Our business is subject to interruptions, delays or failures resulting from earthquakes, other natural catastrophic events or terrorism.

Our services, operations and the data centers from which we provide our services are vulnerable to damage or interruption from earthquakes, fires, floods, power losses, telecommunications failures, terrorist attacks, acts of war, human errors, break-ins and similar events. A significant natural disaster, such as an earthquake, fire or flood, could have a material adverse impact on our business, financial condition and results of operations and our insurance coverage may be insufficient to compensate us for losses that may occur. Acts of terrorism could cause disruptions to the internet, our business or the economy as a whole. We may not have sufficient protection 18 or recovery plans in certain circumstances, such as natural disasters affecting areas where data centers upon which we rely are located, and our business interruption insurance may be insufficient to compensate us for losses that may occur. Such disruptions could negatively impact our ability to run our websites, which could harm our business.

Failure to deal effectively with fraudulent transactions and subscriber disputes would increase our loss rate and harm our business.

Our discount certificates and Dining Passes are issued in the form of redeemable coupons with unique identifiers. It is possible that consumers or other third parties will seek to create counterfeit certificates to fraudulently purchase discounted goods and services from our restaurants and other merchants. While we use advanced anti-fraud technologies, it is possible that technically knowledgeable criminals will attempt to circumvent our anti-fraud systems using increasingly sophisticated methods. In addition, our service could be subject to employee fraud or other internal security breaches, and we may be required to reimburse consumers and/or merchants for any funds stolen or revenue lost as a result of such breaches. Our restaurants and merchants could also request reimbursement, or stop using us, if they are affected by buyer fraud or other types of fraud.

We may incur significant losses from fraud and counterfeit certificates. We may incur losses from claims that the consumer did not authorize the purchase, from merchant fraud, from erroneous transmissions, and from consumers who have closed bank accounts or have insufficient funds in them to satisfy payments. In addition to the direct costs of such losses, if they are related to credit card transactions and become excessive, they could potentially result in our losing the right to accept credit cards for payment. If we were unable to accept credit cards for payment, we would suffer substantial reductions in revenue, which would cause our business to suffer. While we have taken measures to detect and reduce the risk of fraud, these measures need to be continually improved and may not be effective against new and continually evolving forms of fraud or in connection with new product offerings. If these measures do not succeed, our business will suffer.

We are subject to payments-related risks.

We accept payments using a variety of methods, including credit card, debit card and electronic payment services. As we offer new payment options to consumers, we may be subject to additional regulations, compliance requirements and fraud. For certain payment methods, including credit and debit cards, we pay interchange and other fees, which may increase over time and raise our operating costs and lower profitability. We rely on third parties to provide payment processing services, including the processing of credit cards and debit cards and it could disrupt our business if these companies become unwilling or unable to provide these services to us. We are also subject to payment card association operating rules, certification requirements and rules governing electronic funds transfers, which could change or be reinterpreted to make it difficult or impossible for us to comply. If we fail to comply with these rules or requirements, we may be subject to fines and higher transaction fees and lose our ability to accept credit and debit card payments from consumers or facilitate other types of online payments, and our business and operating results could be adversely affected.

We are also subject to or voluntarily comply with a number of other laws and regulations relating to money laundering, international money transfers, privacy and information security and electronic fund transfers. If we were found to be in violation of applicable laws or regulations, we could be subject to civil and criminal penalties or forced to cease our payments services business.

Federal laws and regulations, such as the Bank Secrecy Act and the USA PATRIOT Act and similar foreign laws, could be expanded to include discount certificates and Discount Dining Passes.

Various federal laws, such as the Bank Secrecy Act and the USA PATRIOT Act and foreign laws and regulations, such as the European Directive on the prevention of the use of the financial system for the purpose of money laundering and terrorist financing, impose certain anti-money laundering requirements on companies that are financial institutions or that provide financial products and services. For these purposes, financial institutions are broadly defined to include money services businesses such as money transmitters, check cashers and sellers or issuers of stored value cards. Examples of anti-money laundering requirements imposed on financial institutions include subscriber identification and verification programs, record retention policies and procedures and transaction reporting. We do not believe that we are a financial institution subject to these laws and regulations based, in part, upon the characteristics of discount certificates and Discount Dining Passes and our role with respect to the distribution of discount certificates and Discount Dining Passes to customers. However, the Financial Crimes Enforcement Network, a division of the U.S. Treasury Department tasked with implementing the requirements of the Bank Secrecy Act, recently proposed amendments to the scope and requirements for parties involved in stored value or prepaid access cards, including a proposed expansion of financial institutions to include sellers or issuers of prepaid access cards. In the event that this proposal is adopted as proposed, it is possible that our discount certificates and Discount Dining Passes could be considered a financial product and that we could be a financial institution. In the event that we become subject to the requirements of the Bank Secrecy Act or any other anti-money laundering law or regulation imposing obligations on us as a money services business, our regulatory compliance costs to meet these obligations would likely increase which could reduce our net income.

State laws regulating money transmission could be expanded to include our discount certificates and Discount Dining Passes.

Many states impose license and registration obligations on those companies engaged in the business of money transmission, with varying definitions of what constitutes money transmission. We do not currently believe we are a money transmitter given our role and the product terms of our discount certificates and Discount Dining Passes. However, a successful challenge to our position or expansion of state laws could subject us to increased compliance costs and delay our ability to offer discount certificates and Discount Dining Passes in certain jurisdictions pending receipt of any necessary licenses or registrations.

Current uncertainty in global economic conditions could adversely affect our revenue and business.

Our operations and performance depend primarily on economic conditions in the United States. The current economic environment continues to be uncertain, including as a result of the COVID 19 pandemic. These conditions may make it difficult for our restaurants and other merchants to accurately forecast and plan future business activities and could cause our merchants to terminate their relationships with us or could cause our customers to slow or reduce their spending. Furthermore, during challenging economic times, our merchants may face issues gaining timely access to sufficient credit, which could result in their unwillingness to continue with our service or impair their ability to make timely payments to us. If that were to occur, we may experience decreased revenue, be required to increase our allowance for doubtful accounts and our days receivables outstanding would be negatively impacted. If we are unable to finance our operations on acceptable terms as a result of renewed tightening in the credit markets, we may experience increased costs or we may not be able to effectively manage our business. We cannot predict the timing, strength or duration of any economic slowdown or subsequent economic recovery, worldwide, in the United States or in the restaurant and entertainment industry. These and other economic factors could have a material adverse effect on our financial condition and operating results.

Downturns in general economic and market conditions and reductions in spending may reduce demand for our digital dining products.

Our revenues, results of operations and cash flows depend on the overall demand for our discount dining certificates and discount Dining Passes. Negative conditions in the general U.S. economy as well as in other jurisdictions, including conditions resulting from changes in gross domestic product growth, financial and credit market fluctuations construction slowdowns, energy costs, international trade relations and other geopolitical issues, including those caused or may be caused by the Russia Ukraine conflict, and the availability and cost of credit could cause a decrease in consumer discretionary spending and diminish growth expectations for the restaurant, dining and entertainment industries. Moreover, government consumption or socio-economic policies or objectives pursued by countries in which we do business could potentially impact the demand for our discount dining certificates and discount Dining Passes.

Global inflation also increased during 2022. The Russia Ukraine conflict and other geopolitical conflicts, as well as related international response, has exacerbated inflationary pressures, including causing increases in the price for goods and services and global supply chain disruptions, which has resulted and may continue to result in shortages in food products, materials and services. Such shortages have resulted and may continue to result in inflationary cost increases for labor, fuel, food products, materials and services, and could continue to cause costs to increase as well as result in the scarcity of certain materials. We cannot predict any future trends in the rate of inflation or other negative economic factors or associated increases in our operating costs and how that may impact our business. To the extent we and the restaurant customers we service are unable to recover higher operating costs resulting from inflation or otherwise mitigate the impact of such costs on our and their business, our revenues and gross profit could decrease, and our financial condition and results of operations could be adversely affected. Currently, the most significant impact of inflation on us is the increase in employee wages.

Our ability to raise capital in the future may be limited, and our failure to raise capital when needed could prevent us from growing.

We may in the future be required to raise capital through public or private financing or other arrangements. Such financing may not be available on acceptable terms, or at all, and our failure to raise capital when needed could harm our business. Additional equity financing may dilute the interests of our common stockholders, and debt financing, if available, may involve restrictive covenants and could reduce our profitability. If we cannot raise funds on acceptable terms, we may not be able to grow our business or respond to competitive pressures.

We intend to make acquisitions that could disrupt our operations and adversely impact our business and operating results.

We intend to attempt to acquire complementary e-commerce businesses and to support the transition and integration of acquired operations with our ongoing business as a part of our growth strategy. Other than as disclosed herein, we currently have no binding commitments or agreements with respect to any such acquisitions and there can be no assurance that we will eventually consummate any acquisitions. The process of integrating acquired assets into our operations may result in unforeseen operating difficulties and expenditures and may absorb significant management attention that would otherwise be available for the ongoing development of our business. In addition, we have limited experience in performing acquisitions and managing growth. There can be no assurance that the anticipated benefits of any acquisition will be realized. In addition, future acquisitions could result in potentially dilutive issuances of equity securities, the incurrence of debt and contingent liabilities and amortization expenses related to goodwill and other intangible assets, any of which could materially and adversely affect our operating results and financial position. In addition, acquisitions also involve other risks, including risks inherent in entering markets in which we have no or limited prior experience and the potential loss of key employees.

If the products that we offer on our online marketplaces do not reflect our customers’ tastes and preferences, our sales and profit margins would decrease.

Our success depends in part on our ability to offer discount certificates and Discount Dining Passes to restaurants and other merchants that reflect consumers’ tastes and preferences. Consumers’ tastes are subject to frequent, significant and sometimes unpredictable changes. If our product fails to satisfy customers’ tastes or respond to changes in customer preferences, our sales could suffer which would depress our profit margins. In addition, any failure to offer products in line with customers’ preferences could allow our competitors to gain market share. This could have an adverse effect on our business, prospects, financial condition and results of operations.

Our plans for expansion cannot be implemented if we lose our key personnel or cannot recruit additional personnel.

We depend substantially on the continued services, specialized knowledge and performance of our senior management, particularly Ketan Thakker, our President and Chief Executive Officer, Steve Handy, our Chief Financial Officer, Elliot Bohm, the Chief Executive Officer of our subsidiary, CardCash, and Marc Ackerman, the Chief Operating Officer of our subsidiary, CardCash, and Balazs Wallisch, the Chief Operating Officer of our subsidiary, Restaurant.com. These executives may elect to pursue other opportunities at any time. If one or more of these individuals choose to leave our company, we may lose a significant number of supplier relationships and operating expertise which they have developed over many years, and which would be difficult to replace. The loss of the services of any executive officer or other key employee could hurt our business.

In addition, as our business expands, we will need to add new personnel, including information technology and engineering personnel to maintain and expand our website and systems, marketing and salespeople to attract and retain customers and merchants and customer support personnel to serve our growing customer base. Hiring and retaining qualified executives, engineers and qualified sales representatives are critical to our success, and competition for experienced and well-qualified employees can be intense. To attract and retain executives and other key employees in a competitive marketplace, we must provide a competitive compensation package, including cash and equity-based compensation. We currently utilize a stock incentive plan, including stock options, as a form of share-based incentive compensation. If the anticipated value of such equity-based incentive awards does not materialize, if our equity-based compensation otherwise ceases to be viewed as a valuable benefit or if our total compensation package is not viewed as competitive, our ability to attract, retain and motivate executives and key employees could be weakened.

The failure to successfully hire executives and key employees or the loss of any executives and key employees could have a significant impact on our operations. If we are unable to hire and successfully train employees or contractors in these areas, users of our website may have negative experiences and we may lose customers, which would diminish the value of our brand and harm our business. The market for recruiting qualified information technology and other personnel is extremely competitive, and we may experience difficulties in attracting and retaining employees. Should we fail to retain or attract qualified personnel, we may not be able to compete successfully or implement our plans for expansion.

To obtain future revenue growth and achieve and sustain profitability, we will have to attract and retain customers on cost-effective terms.

Our success depends on our ability to attract and retain customers on cost-effective terms. We have relationships with online services, search engines, affiliate marketing websites, directories and other website and e-commerce businesses to provide content, advertising banners and other links that direct customers to our website. We rely on these relationships as significant sources of traffic to our websites and to generate new customers. Further, many of the parties with which we may have online-advertising arrangements could provide advertising services for other online competitors. As a result, these parties may be reluctant to enter into or maintain relationships with us. Failure to achieve sufficient traffic or generate sufficient revenue from purchases originating from third parties may result in termination of these relationships by these third parties. If we are unable to develop or maintain these relationships on acceptable terms, our ability to attract new customers and our financial condition could be harmed. If the underlying technology’s development evolves in a manner that is no longer beneficial to us, our financial condition could be harmed. In addition, certain online marketing agreements may require us to pay upfront fees and make other payments prior to the realization of the sales, if any, associated with those payments. Accordingly, if these relationships or agreements that we may enter into in the future fail to produce the sales that we anticipate, our results of operations will be adversely affected. We cannot give any assurance that we will be able to increase our revenues, if at all, in a cost-effective manner.

We rely upon search engines like Google, Bing and Yahoo to rank our product offerings and may at times be subject to changes in search algorithms and ranking penalties if they believe we are not in compliance with their guidelines.

We rely on search engines to attract consumer interest in our product offerings. Potential and existing customers use search engines provided by search engine companies, including Google, Bing and Yahoo, which use algorithms and other devices to provide users a natural ranked listing of relevant internet sites matching a user’s search criteria and specifications. Generally, internet sites ranked higher in the paid and natural search results lists furnished to users attract the largest visitor share among similar internet sites. Those sites achieving the highest natural search ranking often benefit from increased sales. Natural search engine algorithms utilize information available throughout the internet, including information available on our website. Rules and guidelines of these natural search engine companies govern our participation on their sites and how we share relevant internet information that may be considered or incorporated into the algorithms utilized by these sites. If we fail to present, or improperly present, our website’s information for use by natural search engine companies, or if any of these natural search engine companies determine we have violated their rules or guidelines, or if others improperly present our website’s information to these search engine companies, or if natural search engine companies make changes to their search algorithms, we may fail to achieve an optimum ranking in natural search engine listing results, or we may be penalized in a way that could harm our business, prospects, financial condition and results of operations.

More individuals are using mobile devices to access the internet and versions of our service developed or optimized for these devices may not gain widespread adoption by users of such devices.

Mobile devices are increasingly used for e-commerce transactions. A significant and growing portion of our users access our platform through mobile devices. We may lose users if we are not able to continue to meet our users’ mobile and multi-screen experience expectations. If we are unable to attract and retain a substantial number of mobile device users to our online marketplaces and services, we may fail to capture a sufficient share of an increasingly important portion of the market for online services. Our ability to successfully address the challenges posed by the rapidly evolving market for mobile transactions is crucial to our continued success, and any failure to continuously increase the volume of mobile transactions effected through our platforms could harm our business.

We rely on third-party systems to conduct our business, and our revenues and market share may decrease if these systems are unavailable in the future or if they no longer offer quality performance.

We rely on third-party computer systems and third-party service providers, including credit card verifications and confirmations, to host our website and to advertise and deliver the discount certificates and Discount Dining Passes sold on our website to customers. We also rely on third-party licenses for components of the software underlying our technology platform. Any interruption in our ability to obtain the products or services of these or other third parties or deterioration in their performance could impair the timing and quality of our own service. If our service providers fail to deliver high-quality products and services in a timely manner to our customers, our services will not meet the expectations of our customers and our reputation and brand will be damaged. Furthermore, if our arrangements with any of these third parties are terminated, we may not find an alternate source of systems support on a timely basis or on terms as advantageous to us.

We are subject to cyber security risks and risks of data loss or other security breaches.

Our business involves the storage and transmission of users’ proprietary information, and security breaches could expose us to a risk of loss or misuse of this information, and to resulting claims, fines, and litigation. We have been subjected to a variety of cyber-attacks, which have increased in number and variety over time. We believe our systems are probed by potential hackers virtually 24/7, and we expect the problem will continue to grow worse over time. Cyber-attacks may target us, our customers, our suppliers, banks, credit card processors, delivery services, e-commerce in general or the communication infrastructure on which we depend. Any compromise of our security could result in a violation of applicable privacy and other laws, significant legal and financial exposure, damage to our reputation, and a loss of confidence in our security measures, any of which could have a material adverse effect on our financial results and business. Moreover, any insurance coverage we may carry may be inadequate to cover the expenses and other potential financial exposure we could face as a result of a cyber-attack or data breach.

We may not be able to compete successfully against existing or future competitors including larger, well-established and well-financed e-commerce companies and restaurants and merchants increasing their own online operations.

The market for discounts at restaurants and other merchants is intensely competitive. We also compete with other companies that offer digital coupons through their websites or mobile applications. In addition, we compete with traditional offline coupon and discount services, as well as newspapers, magazines and other traditional media companies that provide coupons and discounts on services and products.

Many of our current and potential competitors have longer operating histories, larger customer bases, greater brand recognition and significantly greater financial, marketing and other resources than we do. Increased competition may result in reduced operating margins, loss of market share and a diminished brand franchise. We cannot provide assurance that we will be able to compete successfully against existing or future competitors.

Our competitors may directly increase our marketing costs and also may cause us to decrease certain types of marketing.

In addition to competing with us for customers, merchants, and employees, our competitors may directly increase our operating costs, by driving up the cost of various forms of online advertising or otherwise. We may elect to decrease our use of sponsored search or other forms of marketing from time to time to decrease our costs, which may have a material adverse effect on our financial results and business. We may also elect to spend additional amounts on sponsored search or other forms of marketing from time to time to increase traffic to our website, or to take other actions to increase traffic and/or conversion, and the additional expenditures may have a material adverse effect on our financial results and business.

Our business depends on effective marketing, including marketing via email and social networking messaging, and we intend to increase our spending on marketing and branding, which may adversely affect our financial results.

We depend on effective marketing and high customer traffic. We depend on email to promote our site and offerings and to generate a substantial portion of our revenue. If a significant portion of our target customers no longer utilize email, or if we are unable to effectively and economically deliver email to our potential customers, whether for legal, regulatory or other reasons, it would have a material adverse effect on our business.

If email providers or Internet service providers implement new or more restrictive email or content delivery or accessibility policies, including with respect to net neutrality, it may become more difficult to deliver emails to our customers or for customers to access our site and services. For example, certain email providers, including Google, categorize our emails as “promotional,” and these emails are directed to an alternate, and less readily accessible, section of a customer’s inbox. If email providers materially limit or halt the delivery of our emails, or if we fail to deliver emails to customers in a manner compatible with email providers’ email handling or authentication technologies, our ability to contact customers through email could be significantly restricted. In addition, if we are placed on “spam” lists or lists of entities that have been involved in sending unwanted, unsolicited emails, our operating results and financial condition could be substantially harmed.

We also rely on social networking messaging services for marketing purposes, and anything that limits our ability or our customers’ ability or desire to utilize social networking services could have a material adverse effect on our business. If we are unable to develop, implement and maintain effective and efficient cost-effective advertising and marketing programs, it would have a material adverse effect on our financial results and business. Further, as part of our growth strategies, we intend to increase our spending on marketing and branding initiatives significantly, which may adversely affect our financial results. There is no assurance that any increase in our marketing or branding expenditures will result in increased market shares or will ultimately have a positive effect on our financial results.

We also rely heavily on Internet search engines to generate traffic to our websites, principally through search engine marketing and search engine optimization. The number of consumers we attract from search engines to our platform is due in large part to how and where information from, and links to, our websites are displayed on search engine results pages. The display, including rankings, of search results can be affected by a number of factors, many of which are not in our control and may change at any time. Search engines frequently update and change the logic that determines the placement and display of the results of a user’s search, such that the purchased or algorithmic placement of links to our websites can be negatively affected. In addition, a search engine could, for competitive or other purposes, alter its search algorithms or results causing our websites to place lower in search query results. If a major Internet search engine changes its algorithms in a manner that negatively affects the search engine ranking it could create additional traffic headwinds for us and negatively affect our results of operations.

We also rely on mobile marketplace operators (i.e., app store operators) to drive downloads of our mobile application. If any mobile marketplace operator determines that our mobile application is non-compliant with its vendor policies, the operator may revoke our rights to distribute through its marketplace or refuse to permit a mobile application update at any time. These operators may also change their mobile application marketplaces in a way that negatively affects the prominence of, or ease with which users can access, our mobile application. Such actions may adversely impact the ability of customers to access our offerings through mobile devices, which could have a negative impact on our business and results of operations.

Our operating results depend on our websites, network infrastructure and transaction-processing systems. Capacity constraints or system failures would harm our business, prospects, financial condition and results of operations.

Any system interruptions that result in the unavailability of our website marketplaces or reduced performance of our transaction systems would reduce our transaction volume and the attractiveness of the services that we provide to suppliers and third parties and would harm our business, prospects, financial condition and results of operations.

We use internally developed systems for our website and certain aspects of transaction processing, including databases used for internal analytics and order verifications. We have experienced periodic systems interruptions due to server failure and power failure, which we believe will continue to occur from time to time. Our transaction processing systems and network infrastructure may be unable to accommodate increases in traffic in the future. We may be unable to project accurately the rate or timing of traffic increases or successfully upgrade our systems and infrastructure to accommodate future traffic levels on our website. In addition, we may be unable to upgrade and expand our transaction processing systems in an effective and timely manner or to integrate any newly developed or purchased functionality with our existing systems.

If we do not respond to rapid technological changes, our services could become obsolete, and we could lose customers.

To remain competitive, we must continue to enhance and improve the functionality and features of our e-commerce businesses. We may face material delays in introducing new services, products and enhancements. If this happens, our customers may forego the use of our websites and use those of our competitors. The internet and the online commerce industry are rapidly changing. If competitors introduce new products and services using new technologies or if new industry standards and practices emerge, our existing websites and our proprietary technology and systems may become obsolete. Our failure to respond to technological change or to adequately maintain, upgrade and develop our computer network and the systems used to process customers’ orders and payments could harm our business, prospects, financial condition and results of operations.

Use of social media may adversely impact our reputation.

There has been a marked increase in the use of social media platforms and similar devices, including blogs, social media websites and other forms of internet-based communications that allow individuals access to a broad audience of consumers and other interested persons. Consumers value readily available information concerning retailers, manufacturers, and their goods and services and often act on such information without further investigation, authentication and without regard to its accuracy. The availability of information on social media platforms and devices is virtually immediate as is its impact. Social media platforms and devices immediately publish the content their customers and participants post, often without filters or checks on accuracy of the content posted. The opportunity for dissemination of information, including inaccurate information, is seemingly limitless and readily available. Information concerning our company may be posted on such platforms and devices at any time. Information posted may be adverse to our interests, may be inaccurate, and may harm our performance, prospects or business. The harm may be immediate without affording us an opportunity for redress or correction. Such platforms also could be used for the dissemination of trade secret information or otherwise compromise valuable company assets, all of which could harm our business, prospects, financial condition and results of operations.

We may experience unexpected expenses or delays in service enhancements if we are unable to license third-party technology on commercially reasonable terms.

We rely on a variety of technology that we license from third parties, such as Microsoft. These third-party technology licenses might not continue to be available to us on commercially reasonable terms or at all. If we are unable to obtain or maintain these licenses on favorable terms, or at all, we could experience delays in completing and developing our proprietary software.

If we fail to forecast our revenue accurately due to lengthy sales cycles, or if we fail to match our expenditures with corresponding revenue, our operating results could be adversely affected.

We may be unable to prepare accurate internal financial forecasts or replace anticipated revenue that we do not receive as anticipated. As a result, our operating results in future reporting periods may be significantly below the expectations of the public market, equity research analysts or investors, which could harm the price of our common stock.

We could be subject to additional sales tax or other tax liabilities.

We are also subject to U.S. (federal and state) and foreign laws, regulations, and administrative practices that require us to collect information from our customers, vendors, merchants, and other third parties for tax reporting purposes and report such information to various government agencies. The scope of such requirements continues to expand, requiring us to develop and implement new compliance systems. Failure to comply with such laws and regulations could result in significant penalties.

The 26 adoption of tax reform policies, including the enactment of legislation or regulations implementing changes in the tax treatment of companies engaged in Internet commerce or the U.S. taxation of international business activities could materially affect our financial position and results of operations.

If we do not begin to generate significant revenues, we will still need to raise additional capital to meet our long-term business requirements. Any such capital raising may be costly or difficult to obtain and would likely dilute current stockholders’ ownership interests. If we are unable to secure additional financing in the future, we will not be able to continue as a going concern.

If we do not begin to generate significant revenues from our operations, we will need additional capital, which may not be available on reasonable terms or at all. The raising of additional capital will dilute current stockholders’ ownership interests. We may need to raise additional funds through public or private debt or equity financings to meet various objectives including, but not limited to:

	●	maintaining enough working capital to run our business;

	●	pursuing growth opportunities, including more rapid expansion;

	●	acquiring complementary businesses and technologies;

	●	making capital improvements to improve our infrastructure;

	●	responding to competitive pressures;

	●	complying with regulatory requirements for advertising or taxation; and

	●	maintaining compliance with applicable laws.

Any additional capital raised through the sale of equity or equity-linked securities may dilute current stockholders’ ownership percentages and could also result in a decrease in the fair market value of our equity securities because our assets would be owned by a larger pool of outstanding equity. The terms of those securities issued by us in future capital transactions may be more favorable to new investors, and may include preferences, superior voting rights and the issuance of warrants or other derivative securities, which may have a further dilutive effect that is different from or in addition to that reflected in the capitalization described in this report.

Further, any additional debt or equity financing that we may need may not be available on terms favorable to us, or at all. If we are unable to obtain required additional capital, we may have to curtail our growth plans or cut back on existing business and we may not be able to continue operating if we do not generate sufficient revenues from operations needed to stay in business.

We may incur substantial costs in pursuing future capital financing, including investment banking fees, legal fees, accounting fees, securities law compliance fees and other costs. We may also be required to recognize non-cash expenses in connection with certain securities we issue, such as convertible notes and warrants, which may adversely impact our financial condition.

Our insurance coverage and indemnity rights may not adequately protect us against loss.

The types, coverage, or the amounts of any insurance coverage we may carry from time to time may not be adequate to compensate us for any losses we may actually incur in the operation of our business. Further, any insurance we may desire to purchase may not be available to us on terms we find acceptable or at all. We are not indemnified by all of our suppliers, and any indemnification rights we may have may not be enforceable or adequate to cover actual losses we may incur as a result of our sales of their products. Actual losses for which we are not insured or indemnified, or which exceed our insurance coverage or the capacity of our indemnitors or our ability to enforce our indemnity agreements, could have a material adverse effect on our business.

Our operating results may vary significantly from quarter to quarter.

Our operating results may vary significantly from quarter to quarter due to seasonality and other reasons such as the rapidly evolving nature of our business. We believe that our ability to achieve and maintain revenue growth and profitability will depend, among other factors, on our ability to:

	●	acquire new customers and retain existing customers;

	●	attract and retain high-quality restaurants and other merchants;

	●	increase the number, variety, quality and relevance of discount certificates and Discount Dining Passes, including through third party business partners and technology integrations, as we attempt to expand our current platform;

	●	leverage other platforms to display our offerings;


	●	deliver a modern mobile experience and achieve additional mobile adoption to capitalize on customers’ continued shift toward mobile device usage;

	●	increase booking capabilities;

	●	increase the awareness of, and evolve, our brand to an expanded customer base;

	●	reduce costs and improve selling, general and administrative (SG&A) leverage;

	●	successfully achieve the anticipated benefits of business combinations or acquisitions, strategic investments, divestitures and restructuring activities;

	●	provide a superior customer service experience for our customers;

	●	avoid interruptions to our services, including as a result of attempted or successful cybersecurity attacks or breaches;

	●	respond to continuous changes in consumer and merchant use of technology;

	●	offset declines in email, search engine optimization (“SEO”) and other traffic channels and further diversify our traffic channels;

	●	react to challenges from existing and new competitors;

	●	respond to seasonal changes in supply and demand; and

	●	address challenges from existing and new laws and regulations.

In addition, our margins and profitability may depend on our inventory mix, geographic revenue mix, discount rates mix and merchant and third-party business partner pricing terms. Accordingly, our operating results and profitability may vary significantly from quarter to quarter.

If we fail to retain our existing customers or acquire new customers, our operating results and business will be harmed.

We must continue to retain and acquire customers who make purchases on our platform to increase profitability. Further, as our customer base evolves, the composition of our customers may change in a manner that makes it more difficult to generate revenue to offset the loss of existing customers and the costs associated with acquiring and retaining customers and to maintain or increase our customers’ purchase frequency. If customers do not perceive our offerings to be attractive or if we fail to introduce new and more relevant deals or increase awareness and understanding of the offerings on our marketplace platform, we may not be able to retain or acquire customers at levels necessary to grow our business and profitability. Further, the traffic to our website and mobile applications, including traffic from consumers responding to our emails and search engine optimization, has declined in recent years, such that an increasing proportion of our traffic is generated from paid marketing channels, such as search engine marketing. In addition, changes to search engine algorithms or similar actions are not within our control and could adversely affect traffic to our website and mobile applications. If we are unable to acquire new customers in numbers sufficient to grow our business and offset the number of existing active customers that have ceased to make purchases, or if new customers do not make purchases at expected levels, our profitability may decrease and our operating results may be adversely affected.

Our future success depends upon our ability to attract and retain high quality merchants and third-party business partners.

We must continue to attract and retain high quality restaurants and other merchants to increase profitability. A key priority of our strategy is to increase our sales and marketing efforts to attract more high-quality restaurants and other merchants. We do not have long-term arrangements to guarantee the availability of deals that offer attractive quality, value and variety to customers or favorable payment terms to us. If merchants decide that utilizing our services no longer provides an effective means of attracting new customers or selling their offerings, they may stop working with us or negotiate to pay us lower margins or fees. In addition, current or future competitors may accept lower margins, or negative margins, to secure merchant offers that attract attention and acquire new customers. We also may experience attrition in our merchants resulting from several factors, including losses to competitors and merchant closures or merchant bankruptcies. If we are unable to attract and retain high quality merchants in numbers sufficient to grow our business, or if merchants are unwilling to offer products or services with compelling terms through our marketplace, our operating results may be adversely affected.

Risks Related to Our Common Stock

Our securities are “Penny Stock” and subject to specific rules governing their sale to investors.

The SEC has adopted Rule 15g-9 which establishes the definition of a “penny stock,” for the purposes relevant to the Company, as any equity security that has a market price of less than $5.00 per share or with an exercise price of less than $5.00 per share, subject to certain exceptions. For any transaction involving a penny stock, unless exempt, the rules require that a broker or dealer approve a person’s account for transactions in penny stocks; and the broker or dealer receive from the investor a written agreement to the transaction, setting forth the identity and quantity of the penny stock to be purchased.

In order to approve a person’s account for transactions in penny stocks, the broker or dealer must obtain financial information and investment experience objectives of the person; and make a reasonable determination that the transactions in penny stocks are suitable for that person and the person has sufficient knowledge and experience in financial matters to be capable of evaluating the risks of transactions in penny stocks.

The broker or dealer must also deliver, prior to any transaction in a penny stock, a disclosure schedule prescribed by the SEC relating to the penny stock market, which, in highlight form sets forth the basis on which the broker or dealer made the suitability determination; and that the broker or dealer received a signed, written agreement from the investor prior to the transaction.

Generally, brokers may be less willing to execute transactions in securities subject to the “penny stock” rules. This may make it more difficult for Company’s shareholders to sell shares of our common stock.

Disclosure also has to be made about the risks of investing in penny stocks in both public offerings and in secondary trading and about the commissions payable to both the broker-dealer and the registered representative, current quotations for the securities and the rights and remedies available to an investor in cases of fraud in penny stock transactions. Finally, monthly statements have to be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stocks.

There is limited recent trading activity in our common stock and there is no assurance that an active market will develop in the future.

There is limited trading activity in our common stock. Although our common stock is now trading on the Nasdaq Marketplace, there can be no assurance that a more active market for the common stock will develop, or if one should develop, there is no assurance that it will be sustained. If a market does not develop or is not sustained it may be difficult for you to sell your common stock at the time you wish to sell them, at a price that is attractive to you, or at all. You may not be able to sell your common stock at or above the offering price per share.

Our second amended and restated bylaws designate specific courts 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 second amended and restated bylaws, unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware is the sole and exclusive forum for any state law claim for (1) any derivative action or proceeding brought on our behalf; (2) any action asserting a claim of or based on a breach of a fiduciary duty owed by any director, officer or other employee of ours to us or our stockholders; (3) any action asserting a claim pursuant to any provision of the Delaware General Corporation Law; or (4) any action asserting a claim governed by the internal affairs doctrine (the “Delaware Forum Provision”). The Delaware Forum Provision will not apply to any causes of action arising under the Securities Act or the Securities and Exchange Act of 1934, as amended (the “Exchange Act”). Our second amended and restated bylaws further provides that unless we consent in writing to the selection of an alternative forum, the United States District Court in Delaware shall be the sole and exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act (the “Federal Forum Provision”). In addition, our second amended and restated bylaws provide that any person or entity purchasing or otherwise acquiring any shares of our common stock is deemed to have notice of and consented to the Delaware Forum Provision and the Federal Forum Provision; provided, however, that stockholders cannot and will not be deemed to have waived our compliance with the federal securities laws and the rules and regulations thereunder.

We recognize that the Delaware Forum Provision and the Federal Forum Provision in our second amended and restated bylaws may impose additional litigation costs on stockholders in pursuing any such claims, particularly if the stockholders do not reside in or near the State of Delaware. Additionally, the forum selection clauses in our second amended and restated bylaws may limit our stockholders’ ability to bring a claim in a judicial forum that they find favorable for disputes with us or our directors, officers or employees, which may discourage the filing of lawsuits against us and our directors, officers and employees, even though an action, if successful, might benefit our stockholders. In addition, while the Delaware Supreme Court ruled in March 2020 that federal forum selection provisions purporting to require claims under the Securities Act be brought in federal court were “facially valid” under Delaware law, there is uncertainty as to whether other courts will enforce our Federal Forum Provision. If the Federal Forum Provision is found to be unenforceable, we may incur additional costs associated with resolving such matters. The Federal Forum Provision may also impose additional litigation costs on stockholders who assert that the provision is not enforceable or invalid. The Court of Chancery of the State of Delaware may also reach different judgments or results than would other courts, including courts where a stockholder considering an action may be located or would otherwise choose to bring the action, and such judgments may be more or less favorable to us than our stockholders.

If we fail to maintain an effective system of internal controls, we may not be able to accurately report our financial results or detect fraud. Consequently, investors could lose confidence in our financial reporting and this may decrease the trading price of our stock.

We must maintain effective internal controls to provide reliable financial reports and detect fraud. We have been assessing our internal controls to identify areas that need improvement. Failure to identify and thereafter implement required changes to our internal controls or any others that we identify as necessary to maintain an effective system of internal controls, if any, could harm our operating results and cause investors to lose confidence in our reported financial information. Any such loss of confidence would have a negative effect on the trading price of our stock.

The price of our common stock may become volatile, which could lead to losses by investors and costly securities litigation.

The trading price of our common stock is likely to be highly volatile and could fluctuate in response to factors such as:

	●	actual or anticipated variations in our operating results;
	●	announcements of developments by us or our competitors;
	●	regulatory actions regarding our products;
	●	announcements by us or our competitors of significant acquisitions, strategic partnerships, joint ventures or capital commitments;
	●	adoption of new accounting standards affecting our industry;
	●	additions or departures of key personnel;
	●	introduction of new products by us or our competitors;
	●	sales of our common stock or other securities in the open market; and
	●	other events or factors, many of which are beyond our control.

The stock market is subject to significant price and volume fluctuations. In the past, following periods of volatility in the market price of a company’s securities, securities class action litigation has often been initiated against such a company. Litigation initiated against the Company, whether or not successful, could result in substantial costs and diversion of its management’s attention and resources, which could harm our business and financial condition.

Investors may experience dilution of their ownership interests because of the future issuance of additional shares of our common stock.

In the future, we may issue additional authorized but previously unissued equity securities, resulting in the dilution of the ownership interests of our present stockholders. We may also issue additional shares of common stock or other securities that are convertible into or exercisable for common stock in connection with hiring or retaining employees, future acquisitions, future sales of our securities for capital raising purposes, or for other business purposes. In addition, conversion of the currently outstanding warrants will further dilute the voting power of investors in this offering and will disproportionately diminish their ability to influence our management given the large percentage of shares currently held by our directors and officers as discussed in the risk factor below. The future issuance of any such additional shares of common stock may also create downward pressure on the trading price of our common stock. There can be no assurance that we will not be required to issue additional shares, warrants or other convertible securities in the future in conjunction with any capital raising efforts, including at a price (or exercise prices) below the price at which shares of our common stock is currently traded.

Our common stock is controlled by insiders.

Our officers and directors beneficially own approximately 20% of our outstanding shares of common stock. Such concentrated control may adversely affect the price of our common stock. Investors who acquire common stock may have no effective voice in our management since the insiders will have the ability to influence us through this ownership position. These stockholders may be able to determine all matters requiring stockholder approval. For example, these stockholders, acting together, may be able to control elections of directors, amendments of our organizational documents, or approval of any merger, sale of assets, or other major corporate transaction. This may prevent or discourage unsolicited acquisition proposals or offers for our common stock that you may believe are in your best interest as one of our stockholders. In addition, sales by our insiders or affiliates along with any other market transactions, could negatively affect the market price of our common stock.

The market price of our common stock may fluctuate, and you could lose all or part of your investment.

The price of our common stock may decline. The stock market in general, and the market price of our common stock will likely be subject to fluctuation, whether due to, or irrespective of, our operating results, financial condition and prospects.

Our financial performance, our industry’s overall performance, changing consumer preferences, technologies, government regulatory action, tax laws and market conditions in general could have a significant impact on the future market price of our common stock. Some of the other factors that could negatively affect our share price or result in fluctuations in our share price include:

	●	actual or anticipated variations in our periodic operating results;

	●	increases in market interest rates that lead purchasers of our common stock to demand a higher investment return;

	●	changes in earnings estimates;

	●	changes in market valuations of similar companies;

	●	actions or announcements by our competitors;

	●	adverse market reaction to any increased indebtedness we may incur in the future;

	●	additions or departures of key personnel;

	●	actions by stockholders;

	●	speculation in the media, online forums, or investment community; and

	●	our intentions and ability to list our common stock on the NYSE MKT and our subsequent ability to maintain such listing.

As a smaller reporting company, we are subject to scaled disclosure requirements that may make it more challenging for investors to analyze our results of operations and financial prospects.

Currently, we are a “smaller reporting company,” as defined by Rule 12b-2 of the Exchange Act. As a “smaller reporting company,” we are able to provide simplified executive compensation disclosures in our filings and have certain other decreased disclosure obligations in our filings with the SEC, including being required to provide only two years of audited financial statements in annual reports. Consequently, it may be more challenging for investors to analyze our results of operations and financial prospects.

Furthermore, we are a non-accelerated filer as defined by Rule 12b-2 of the Exchange Act, and, as such, are not required to provide an auditor attestation of management’s assessment of internal control over financial reporting, which is generally required for SEC reporting companies under Section 404(b) of the Sarbanes-Oxley Act. Because we are not required to, and have not, had our auditors provide an attestation of our management’s assessment of internal control over financial reporting, a material weakness in internal controls may remain undetected for a longer period.

ITEM 1B. UNRESOLVED STAFF COMMENTS

Not applicable.

ITEM 1C. CYBERSECURITY

We use, store and process data for and about our customers, employees, partners and suppliers. We have implemented a cybersecurity risk management program that is designed to identify, assess, and mitigate risks from cybersecurity threats to this data, our systems and business operations.

Cyber Risk Management and Strategy

Under the oversight of the Board of Directors and Audit Committee, we have implemented and maintain a risk management program that includes processes for the systematic identification, assessment, management, and treatment of cybersecurity risks. Our cybersecurity oversight and operational processes are integrated into our overall risk management processes, and cybersecurity is one of our designated risk categories. We use the National Institute of Standards and Technology Cybersecurity Framework to guide our approach, ensuring a structured and comprehensive strategy for managing cybersecurity risks. We implement a risk-based approach to the management of cyber threats, supported by cybersecurity technologies, including automated tools, designed to monitor, identify, and address cybersecurity risks. In support of this approach, our IT security team implements processes to assess, identify, and manage security risks to the company, including in the areas of security and compliance, application security, infrastructure security and data privacy. This process includes regular compliance and critical system access reviews. In addition, we conduct application security assessments, vulnerability management, penetration testing, security audits and ongoing risk assessments as part of our risk management process. We also maintain an incident response plan to guide our processes in the event of an incident. We also have a process to require corporate employees to undertake cybersecurity training and compliance programs annually.

We utilize third parties and consultants to assist in the identification and assessment of risks, including to support tabletop exercises and to conduct security testing.

Further, we have processes in place to evaluate potential risks from cybersecurity threats associated with our use of third-party service providers that will have access to Company data, including a review process for such providers’ cybersecurity practices, risk assessments, contractual requirement and system monitoring.

We continue to evaluate and enhance our systems, controls, and processes where possible, including in response to actual or perceived threats specific to us or experienced by other companies.

Although risks from cybersecurity threats have to date not materially affected us, our business strategy, results of operations or financial condition, we have, from time to time, experienced threats to and breaches of our and our third-party vendors’ data and systems. For more information, please see Item 1A. Risk Factors, the section titled “Risk Factors—Risks Related to Our Company and Our Business—We are subject to cyber security risks and risks of data loss or other security breaches.”

Risk Management Oversight and Governance

Our Board of Directors has oversight of our cybersecurity program and has delegated the quarterly assessments and management of cybersecurity risks to the Audit Committee.

Our IT Manager and our IT Administrator oversee our information security program and lead our information security team. Our IT Manager has primary responsibility for assessing and managing our cybersecurity threat management program, informed by over ten years of experience leading cross-functional organizations in the development and operation of large-scale systems.

Our IT Manager reports quarterly to the Audit Committee of the Board of Directors on the information security program and related cyber risks and provides an annual update to the Board of Directors on the Company’s overall risk management strategy, which includes addressing cybersecurity risks. Any cybersecurity incidents at the Company are reported to the Audit Committee by the IT Manager.

ITEM 2. PROPERTIES

Our principal executive offices, including Restaurant.com, are located at 1100 Woodfield Road, Suite 510, Schaumburg, IL 60173 and consist of approximately 7,850 square feet. The corresponding lease was executed in April 2023 for a term of 36 months and an average base rent of approximately $7,500 per month.

In July 2018, CardCash signed a lease for its office located in Woodbridge, New Jersey. The lease has a term of 70 months through April 2024, and an average base rent of approximately $17,000 per month.

ITEM 3. LEGAL PROCEEDINGS

From time to time the Company may be named in claims arising in the ordinary course of business. Currently, there are no such legal proceedings that are pending against the Company or that involve the Company that, in the opinion of management, could reasonably be expected to have a material adverse effect on the Company’s business or financial condition.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

PART II

ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Recent Sales of Unregistered Securities

In December 2024, the Company received net proceeds of $200,000 for the sale of 150,000 shares of common stock, as part of a Securities Purchase Agreement and Strata Purchase Agreement with ClearThink Capital Partners, LLC. As a condition of the right of the Company to commence sales of its Purchase Shares to ClearThink Capital under the Strata Purchase Agreement, the Company issued to ClearThink Capital under the terms of the Securities Purchase Agreement, 100,000 restricted shares of Giftify’s common stock and an effective registration statement covering the resale of the Purchase Shares.

Market Information

On August 6, 2024, The Nasdaq Stock Market (“Nasdaq”) granted the Company’s application for listing on the Nasdaq. Prior to August 6, 2024, our common stock has been quoted on the OTC:QB under the symbol RSTN since September 25, 2020. From April 17, 2020 to September 25, 2020, our common stock was quoted on the OTC:Pink under the symbol UBID and prior thereto under the symbol QMKR.

On September 4, 2024, the Company’s Board of Directors approved and, by written consent dated September 5, 2024, the holders of a majority of our common stock approved an amendment to our Certificate of Incorporation to change our name from RDE, Inc. to Giftify, Inc. The change to Giftify, Inc. became effective on October 28, 2024.

On October 25, 2024, Nasdaq announced that the change of the Company’s name to Giftify and its trading symbol to GIFT would be effective on October 28, 2024.

The following table sets forth the high and low bid closing prices for our common stock for the periods indicated, as reported by Nasdaq and the OTC:QB. The quotations reflect inter-dealer prices, without retail mark-up, mark-down or commission.

	High		Low
Year Ending December 31, 2024
October 1, 2024 through December 31, 2024	$	2.54	$	0.92
July 1, 2024 through September 30, 2024	$	4.22	$	0.50
April 1, 2024 through June 30, 2024	$	4.27	$	3.60
January 1, 2024 through March 31, 2024	$	4.65	$	3.25

Year Ending December 31, 2023
October 1, 2023 through December 31, 2023	$	4.45	$	3.15
July 1, 2023 through September 30, 2023	$	4.60	$	2.97
April 1, 2023 through June 30, 2023	$	3.70	$	2.88
January 1, 2023 through March 31, 2023	$	3.39	$	1.35

Holders

As of December 31, 2024, there were 809 holders of record of our common stock.

Dividends

We have not declared nor paid any cash dividend on our common stock, and we currently intend to retain future earnings, if any, to finance the expansion of our business, and we do not expect to pay any cash dividends in the foreseeable future. The decision whether to pay cash dividends on our common stock will be made by our board of directors, in their discretion, and will depend on our financial condition, results of operations, capital requirements and other factors that our board of directors considers significant.

Securities Authorized for Issuance under Equity Compensation Plans

The following table provides information about the common stock that may be issued upon the exercise of options, warrants and rights under all of the Company’s existing equity compensation plans as of December 31, 2024.

Number of Securities

to be issued upon

exercise of vested

Options, Warrants

and Rights

Weighted Average

Exercise Price

of Outstanding

Options, Warrants

and Rights

Number of Securities

remaining available

for issuance under

equity compensation

plans (excluding

securities reflected

in column (a))

Plan Category

(a)

(b)

Equity Compensation Plans (1)

Approved by Security Holders 2019 Plan

4,121,830

4.28

35,878,170

(1) The only equity compensation plan approved by security holders is our 2019 Stock Incentive Plan. There are 40 million authorized shares under the 2019 Stock Incentive Plan.

Purchases of Equity Securities by the Issuer and Affiliated Purchasers

None.

ITEM 6. SELECTED FINANCIAL DATA

Not applicable.

ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Unless otherwise indicated or the context otherwise requires, references in this section to “the Company,” “Giftify” “we,” “us,” “our” and other similar terms refer to Giftify, Inc. and its subsidiaries and references to “CardCash” refer to the Company, formerly known as CardCash Acquisition Corp., prior to the Merger (as defined below).

The following discussion and analysis of the financial condition and results of operations of Giftify should be read together with our consolidated financial statements and related notes included elsewhere in this Annual Report on Form 10-K. The following discussion and analysis should also be read together with the section entitled “Organization and description of business” as of December 31,2024 and 2023 (Successor) and for the period from January 1, 2023 through December 29, 2023 (Predecessor). In addition to historical information, the following discussion and analysis contains forward-looking statements. Our actual results may differ significantly from those projected in such forward-looking statements. Factors that might cause future results to differ materially from those projected in such forward-looking statements include, but are not limited to, those discussed in the sections entitled “Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements.” All figures are presented in thousands, except percentages, rates and unless otherwise noted.

References to “Notes” are notes included in our audited consolidated financial statements appearing elsewhere in this Annual Report on Form 10-K.

Background

On September 4, 2024, our Board of Directors approved and, by written consent dated September 5, 2024, the holders of a majority of our common stock approved an amendment to our Certificate of Incorporation to change our name from RDE, Inc. to Giftify, Inc. The change to Giftify, Inc. became effective on October 28, 2024. All references to RDE, Inc. have been changed to Giftify, Inc.

On August 6, 2024, The Nasdaq Stock Market granted our application for listing on the Nasdaq.

On August 18, 2023, we entered into an agreement and plan of merger to acquire CardCash Exchange Inc (“CardCash”). On December 29, 2023, the merger was completed and has been accounted for as a business combination using the acquisition method of accounting. CardCash was formed in 2013 and purchases merchant gift cards and resells them at a markup.

On March 1, 2020, we acquired the assets of Restaurant.com, Inc., a pioneer in the restaurant deal space and the nation’s largest restaurant-focused digital deals brand.

Business Overview

We have two principal divisions, B2C and B2B, for both CardCash and for Restaurant.com.

CardCash

CardCash operates as a leading gift card exchange platform, facilitating the purchase and sale of unwanted gift cards at discounted rates for both consumers and businesses. The Company’s mission is to provide a seamless marketplace for individuals looking to maximize the value of their gift cards while also offering businesses innovative solutions to leverage this market.

CardCash purchases unwanted gift cards at a value lower than their face worth and subsequently retails them at a discounted rate to discerning shoppers nationwide. This avenue not only allows individuals to obtain cash for their unneeded gift cards but also enables them to make cost-effective purchases through discounted gift cards.

Restaurant.com

Restaurant.com is a pioneer in the restaurant deal space and the nation’s largest restaurant-focused digital deals brand. We derive our revenue from transactions in which we sell discount certificates for restaurants on behalf of third-party restaurants. Founded in 1999, we connect digital consumers, businesses, and communities offering dining and merchant deal options nationwide at over 182,500 restaurants and retailers to over 7.8 million customers. Our 10,000 core restaurants and 170,000 Dining Discount Pass restaurants and retailers extend nationwide. Our top three B2C markets are New York, Chicago and Los Angeles.

Restaurant.com Business to Customer Division

Our B2C division accounted for approximately 50% of gross revenue in our fiscal year ended December 31, 2024. To our database of 6.2 million customers, we sell:

● Discounted certificates for 10,000 restaurants. The certificates range from $5 to $100 and never expire.

● Discount Dining Passes, which provide discounts at 170,000 restaurants and other retailers. These passes provide multiple uses for six months.

Restaurant.com Business to Business Division

Our B2B division accounted for approximately 50% of our gross revenue in our fiscal year ended December 31, 2023. We sell certificates and Discount Dining Passes to corporations and marketers, which use them to:

	●	generate new customers;

	●	increase sales at the point of sale;

	●	reward points/customer loyalty;

	●	convert to paperless billing and auto-bill payment.

	●	motivate specific customer behavior such as free home repair estimates and test drives for auto dealers;

	●	renew subscriptions and memberships; and

	●	address customer service issues.

Restaurant.com Other Business

We also generate revenue through third-party offers and display ad revenue. This comprises a de minimis portion of our gross revenue.

Restaurant.com Attractive Customer Demographics

We intend to grow and leverage our customer database of 6.2 million which we believe is of value to merchants for a variety of services and products.

In March 2020, the World Health Organization declared COVID-19 a global pandemic. This contagious disease outbreak, adversely affected work forces, economies and financial markets globally. The outbreak has negatively impacted our revenues as a result of the temporary closures of restaurants throughout the United States where our discount certificates and Discount Dining Passes were accepted and where dining was being restricted to outdoor locations or to capacity constraints for indoor dining. Our revenues from purchase of our discount certificates in 2020, 2021 and 2022 declined since they could only be redeemed when dining in the restaurants and also were not accepted for payment by third-party platforms that facilitated ordering and delivery of food on-demand. As the COVID-19 pandemic has abated, our revenues improved in fiscal 2023.

Inflation

Global inflation also increased during 2021 and in 2022. The Russia and Ukraine conflict and other geopolitical conflicts, as well as related international response, have exacerbated inflationary pressures, including causing increases in the price for goods and services and global supply chain disruptions, which have resulted and may continue to result in shortages in food products, materials and services. Such shortages have resulted and may continue to result in inflationary cost increases for labor, fuel, food products, materials and services, and could continue to cause costs to increase as well as result in the scarcity of certain materials. We cannot predict any future trends in the rate of inflation or other negative economic factors or associated increases in our operating costs and how that may impact our business. To the extent we and the restaurant customers we service are unable to recover higher operating costs resulting from inflation or otherwise mitigate the impact of such costs on our and their business, our revenues and gross profit could decrease, and our financial condition and results of operations could be adversely affected.

Going Concern

The Company has a history of reporting net losses. At December 31, 2024, the Company had cash of $3,574,876 available to fund its operations, including expansion plans, and to service its debt, and a negative working capital of $3,204,077.

Our consolidated financial statements have been presented on the basis that it will continue as a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. We have experienced operating losses and negative operating cash flows during 2024 and 2023. We have financed our working capital requirements through borrowings from various sources and the sale of our equity securities.

As a result, management has concluded that there is substantial doubt about our ability to continue as a going concern. The Company’s independent registered public accounting firm, in its report on the Company’s consolidated financial statements for the year ended December 31, 2024, has also expressed substantial doubt about the Company’s ability to continue as a going concern. The Company’s consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

If the Company is unable to obtain the cash resources necessary to satisfy the Company’s ongoing cash requirements, the Company could be required to scale back its business activities or to discontinue its operations entirely.

Basis of Presentation

On August 18, 2023, Giftify, Inc. entered into an agreement and plan of merger to acquire CardCash Exchange Inc (“CardCash”). On December 29, 2023, the merger was completed. Giftify’s operations are not considered significant compared to the operations of CardCash before the acquisition. Accordingly, for the purpose of the accompanying consolidated financial statements, periods before December 29, 2023 reflect the financial position, results of operations and cash flows of CardCash prior to the acquisition, and is referred to as the “Predecessor”. Periods beginning after December 29, 2023 reflect the financial position, results of operations and cash flows of Giftify consolidated with CardCash, and is referred to as the “Successor”. A black-line between the Successor and Predecessor periods has been placed in the consolidated financial statements and in the tables to the notes to the consolidated financial statements to highlight the lack of comparability between these periods. Collectively, Giftify (Successor) and CardCash (Predecessor) are referred to as the “Company”.

Results of Operations – Year ended December 31, 2024, compared to year ended December 31, 2023

GIFTIFY, INC. AND SUBSDIARIES (FKA RDE, INC.)
CONSOLIDATED STATEMENTS OF OPERATIONS

	Successor						Predecessor
	Year Ended			December 30, 2023 to			January 1, 2023 to
	December 31, 2024			December 31, 2023			December 29, 2023

Net Sales	$	88,934,036		$	484,860		$	86,661,944
Cost of sales		75,789,255			418,350			76,220,645
Gross profit		13,144,781			66,510			10,441,299

Operating Expenses
Selling, general and administrative expenses		27,615,865			5,086,510			11,152,428
Amortization of capitalized software costs		1,472,974			-			1,080,537
Amortization of intangible assets		2,431,668			-			300,000
Impairment of property and equipment		-			-			738,740
Impairment of intangibles		-			-			250,000
Total operating expenses		31,520,507			5,086,510			13,521,705

Loss from operations		(18,375,726	)		(5,020,000	)		(3,080,406	)

Other income (expense):
Interest expense		(1,002,354	)		-			(2,890,466	)
Financing costs		(131,000	)		-			-
Gain on forgiveness of debt		-			-			5,876,000
Total other income (expense), net		(1,133,354	)		-			2,985,534
Net loss before income taxes		(19,509,080	)		(5,020,000	)		(94,872	)
Income taxes (expense) benefit		677,000			-			(29,673	)
Net loss	$	(18,832,080	)	$	(5,020,000	)	$	(124,545	)

Net Sales

For the year ended December 31, 2023, the Company’s operating revenues consisted of sales generated by our CardCash business. See our Basis of Presentation discussion above.

	Successor				Predecessor
	Year Ended		December 30, 2023 to		January 1, 2023 to
	December 31, 2024		December 31, 2023		December 29, 2023

CardCash	$	86,991,638	$	484,860	$	86,661,944
Restaurant.com		1,942,398		-		-
Sales	$	88,934,036	$	484,860	$	86,661,944

CardCash

Sales for the year ended December 31, 2024 and 2023, were $86,991,638 and $87,146,804, respectively. During the current year period, we focused on improving our gross margin. We assessed the quality of our purchased gift card brands, allowing us to increase the sales price to our customers, resulting in a gross margin of 13.0%, as compared to a gross margin of 12.0% in the prior year period, which generated an increase in gross profit as compared to the prior year period.

Restaurant.com

Sales for the year ended December 31, 2024 were $1,942,399. Per our Basis of Presentation discussion above, Restaurant.com sales were not included in the prior year numbers.

Cost of Sales

	Successor				Predecessor
	Year Ended December 31, 2024		December 30, 2023 to December 31, 2023		January 1, 2023 to December 29, 2023

CardCash	$	75,654,690	$	418,350	$	76,220,645
Restaurant.com		134,565		-		-
Cost of Sales	$	75,789,255	$	418,350	$	76,220,645

For the year ended December 31, 2023, the Company’s cost of sales consisted of solely our CardCash business. See our Basis of Presentation discussion above. Amortization of developed technology is excluded from cost of sales and included in amortization expense in the Statements of Operations.

CardCash

Cost of sales consists primarily of the cost to purchase merchant gift cards. Cost of sales for the year ended December 31, 2024 and 2023, were $75,654,690 and $76,638,995, respectively. Our cost of sales declined 1.3%, which generated an increase in gross margin of $829,139, or 7.9%, as compared to the prior year period. Our cost of sales, as a percentage of sales, were 87.0% and 87.9%, for the year ended December 31, 2024 and 2023, respectively.

Restaurant.com

Cost of sales for the year ended December 31, 2024 were $134,565. Per our Basis of Presentation discussion above, Restaurant.com sales were not included in the prior year numbers.

Operating Expenses

	Successor				Predecessor
	Year Ended December 31, 2024		December 30, 2023 to December 31, 2023		January 1, 2023 to December 29, 2023

Selling, general and administrative expenses	$	27,615,865	$	5,086,510	$	11,152,428
Amortization of capitalized software costs		1,472,974		-		1,080,537
Amortization of intangible assets		2,431,668		-		300,000
Impairment of property and equipment		-		-		738,740
Impairment of intangibles		-		-		250,000
Operating expenses	$	31,520,507	$	5,086,510	$	13,521,705

Selling, general and administrative expenses.

Selling, general and administrative expenses consist of costs incurred to identify, communicate with and evaluate potential customers and related business opportunities, and compensation to officers and directors, as well as legal and other professional fees, lease expense, and other general corporate expenses. Management expects selling, general and administrative expenses to increase in future periods as the Company adds personnel and incurs additional costs related to its operation as a public company, including higher legal, accounting, insurance, compliance, compensation and other costs.

Selling, general and administrative expenses were $27,615,865 for the year ended December 31, 2024, as compared to $16,238,938 for the year ended December 31, 2023, an increase of $11,376,927. The increase was from increased stock-based compensation expense of $6,482,766 during the year ended December 31, 2024, increased payroll and benefit expenses, and general changes in our business and operations. For the period January 1, 2023 to December 29, 2023, selling, general and administrative expenses of Giftify were excluded. See our Basis of Presentation discussion above.

Amortization of capitalized software costs.

Amortization expenses are primarily attributed to the Company’s capitalized software development costs. Amortization expenses were $1,472,974 during the year ended December 31, 2024, as compared to $1,080,537 during the year ended December 31, 2023.

Amortization of intangible assets.

Amortization expenses are primarily attributable to the Company’s amortization of intangible assets with finite lives. Amortization expenses were $2,431,668 during the year ended December 31, 2024. Amortization expenses were $300,000 during the year ended December 31, 2023.

Impairment of property and equipment.

During the year ended December 31, 2023, the Company determined that certain property and equipment were impaired, resulting in a charge to operations of $738,740 at December 31, 2023. No similar event occurred in the current year period.

Impairment of intangibles

During the year ended December 31, 2023, the Company determined that certain intangible assets were impaired, based on a third-party valuation, resulting in a charge to operations of $250,000 at December 31, 2023. No similar event occurred in the current year period.

Loss from Operations

	Successor						Predecessor
	Year Ended December 31, 2024			December 30, 2023 to December 31, 2023			January 1, 2023 to December 29, 2023

Loss from operations	$	(18,375,726	)	$	(5,020,000	)	$	(3,080,406	)

For the year ended December 31, 2024, we incurred a loss from operations of ($18,375,726), as compared to a loss from operations of ($8,100,406) for the year ended December 31, 2023. The increase in loss from operations was due to our increased gross profit offset by increased stock-based compensation expense, impairment of goodwill and intangible assets, and operating costs, as discussed above. For the period January 1, 2023 to December 29, 2023, operations of Giftify were excluded. See our Basis of Presentation discussion above.

Other Income (Expenses)

	Successor					Predecessor
	Year Ended December 31, 2024			December 30, 2023 to December 31, 2023		January 1, 2023 to December 29, 2023

Interest expense	$	(1,002,354	)	$	-	$	(2,890,466	)
Financing costs		(131,000	)		-		-
Gain on forgiveness of debt		-			-		5,876,000
Total other income (expense), net	$	(1,133,354	)	$	-	$	2,985,534

We had other expenses of ($1,133,354) for the year ended December 31, 2024, as compared to other income of $2,985,534 for the year ended December 31, 2023. Other expense income for the year ended December 31, 2024, consisted of financing costs of $131,000 and interest expense of $1,002,354. Other income for the year ended December 31, 2023, consisted of a gain from the forgiveness of convertible notes and promissory notes totaling $5,876,000, offset by interest expense of $2,890,466.

Net Loss

	Successor						Predecessor
	Year Ended December 31, 2024			December 30, 2023 to December 31, 2023			January 1, 2023 to December 29, 2023

Net Loss	$	(18,832,080	)	$	(5,020,000	)	$	(124,546	)

We realized a net loss of ($18,832,080) for the year ended December 31, 2024, as compared to a net loss of ($5,144,546) for the year ended December 31, 2023 (including Predecessor from January 1, 2023 to December 29, 2023). The increase in net loss was due to our increased gross profit offset by increased stock-based compensation expense, operating costs, other expenses, and decreased income taxes, as discussed above.

Modified EBITDA

In addition to our GAAP results, we present Modified EBITDA as a supplemental measure of our performance. However, Modified EBITDA is not a recognized measurement under GAAP and should not be considered as an alternative to net income, income from operations or any other performance measure derived in accordance with GAAP, or as an alternative to cash flow from operating activities as a measure of liquidity. We define Modified EBITDA as net income (loss), plus interest expense, depreciation and amortization, stock-based compensation, and fair value of common stock issued for services.

Management considers our core operating performance to be that which our managers can affect in any particular period through their management of the resources that affect our underlying revenue and profit generating operations during that period. Non-GAAP adjustments to our results prepared in accordance with GAAP are itemized below. You are encouraged to evaluate these adjustments and the reasons we consider them appropriate for supplemental analysis. In evaluating Modified EBITDA, you should be aware that in the future we may incur expenses that are the same as or similar to some of the adjustments in this presentation. Our presentation of Modified EBITDA should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items.

Set forth below is a reconciliation of net loss to Modified EBITDA for the year ended December 31, 2024 and 2023 (unaudited):

	Successor						Predecessor
	Year Ended December 31, 2024			December 30, 2023 to December 31, 2023			January 1, 2023 to December 29, 2023

Net Loss	$	(18,832,080	)	$	(5,020,000	)	$	(124,545	)

Modified EBITDA adjustments:
Income taxes		(677,000	)					29,673
Interest expense		1,002,354			-			2,890,466
Financing costs		131,000			-			-
Gain on forgiveness of debt		-			-			(5,876,000	)
Amortization of intangible assets		2,431,668			-			300,000
Amortization of capitalized software costs		1,472,974			-			1,080,537
Stock option and other noncash compensation		11,484,708			5,000,000			1,942
Fair value of stock issued on vendor settlement		150,000			-			-
Impairment of intangible assets and property and equipment		-			-			988,740
Total Modified EBITDA adjustments		15,995,704			5,000,000			(584,642	)

Mofified EBITDA	$	(2,836,376	)	$	(20,000	)	$	(709,187	)

We present Modified EBITDA because we believe it assists investors and analysts in comparing our performance across reporting periods on a consistent basis by excluding items that we do not believe are indicative of our core operating performance. In addition, we use Modified EBITDA in developing our internal budgets, forecasts and strategic plan; in analyzing the effectiveness of our business strategies in evaluating potential acquisitions; making compensation decisions; and in communications with our board of directors concerning our financial performance. Modified EBITDA has limitations as an analytical tool, which includes, among others, the following:

	●	Modified EBITDA does not reflect our cash expenditures, or future requirements, for capital expenditures or contractual commitments;

	●	Modified EBITDA does not reflect changes in, or cash requirements for, our working capital needs;

	●	Modified EBITDA does not reflect future interest expense, or the cash requirements necessary to service interest or principal payments, on our debts; and

	●	Although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and Modified EBITDA does not reflect any cash requirements for such replacements.

Critical Accounting Policies and Estimates

The following discussion and analysis of financial condition and results of operations is based upon the Company’s consolidated financial statements for the years ended December 31, 2024 and 2023 presented elsewhere in this report, which have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”). Certain accounting policies and estimates are particularly important to the understanding of the Company’s financial position and results of operations and require the application of significant judgment by management or can be materially affected by changes from period to period in economic factors or conditions that are outside of the Company’s control. As a result, these issues are subject to an inherent degree of uncertainty. In applying these policies, management uses its judgment to determine the appropriate assumptions to be used in the determination of certain estimates. Those estimates are based on the Company’s historical operations, the future business plans and the projected financial results, the terms of existing contracts, trends in the industry, and information available from other outside sources.

Revenue Recognition

The Company recognizes revenue in accordance with FASB ASC 606, Revenue from Contracts with Customers.

The Company buys merchant gift cards from the general public and distributors at a discount and then resells them at a markup. The Company also derives revenue from the sale of discount certificates for restaurants on behalf of third-party restaurants.

Revenue and costs of sales are recognized when control of the products transfers to our customer, which generally occurs at a point in time when the risk and title to the product transfers to the customer upon delivery to the customer. The Company’s performance obligations are satisfied at that time. The Company’s standard terms of delivery are included in its contracts of sale, order confirmation documents, and invoices. The Company recognizes revenue on a gross basis for the sales price of the merchant gift cards and discount certificates it collects.

Share-Based Compensation

The Company periodically issues share-based awards to employees and non-employees and consultants for services rendered. Stock options vest and expire according to terms established at the issuance date of each grant. Stock grants are measured at the grant date fair value. Stock-based compensation cost is measured at fair value on the grant date and is generally recognized as a charge to operations ratably over the requisite service, or vesting, period. Recognition of compensation expense for non-employees is in the same period and manner as if the Company had paid cash for the services.

Acquisitions and Business Combinations

The Company allocates the fair value of purchase consideration to the tangible assets acquired, liabilities assumed, and separately identified intangible assets acquired based on their estimated fair values. The excess of the fair value of purchase consideration over the fair values of these identifiable assets and liabilities is recorded as goodwill. Such valuations require management to make significant estimates and assumptions, especially with respect to intangible assets. Significant estimates in valuing certain intangible assets include, but are not limited to, future expected cash flows from, acquired technology, trademarks and trade names, useful lives, and discount rates. Management’s estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates. During the measurement period, which can be up to one year from the acquisition date, the Company may record adjustments to the assets acquired and liabilities assumed, with the corresponding offset to goodwill. Upon the conclusion of the measurement period, any subsequent adjustments are recorded in the consolidated statements of operations.

Recent Accounting Pronouncements

See discussion of recent accounting pronouncements in Note 1 to the accompanying financial statements.

Liquidity and Capital Resources

The accompanying consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classifications of liabilities that may result from the outcome of the uncertainty concerning our ability to continue as a going concern.

Going Concern

Our consolidated financial statements have been presented on the basis that it will continue as a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. We experienced operating losses and negative operating cash flows during 2024 and 2023. We have financed our working capital requirements through borrowings from various sources and the sale of equity securities.

We have a history of reporting net losses. At December 31, 2024, we had cash of $3,574,876 available to fund our operations, including expansion plans, and to service our debt, and a negative working capital of $3,204,077. We anticipate our cash balance will last until approximately December 2025. As a result, we have concluded that there is substantial doubt about the Company’s ability to continue as a going concern. In addition, the Company’s independent registered public accounting firm has included an explanatory paragraph in their report with respect to this uncertainty that accompanies the Company’s audited consolidated financial statements as of and for the year ended December 31, 2024. The Company’s independent registered public accounting firm, in their report on the Company’s December 31, 2024 audited consolidated financial statements, has expressed substantial doubt about the Company’s ability to continue as a going concern. Our consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Our ability to continue as a going concern is dependent upon its ability to raise additional debt or equity capital to fund its business activities and to ultimately achieve sustainable operating revenues and profitability.

As market conditions present uncertainty as to our ability to secure additional funds, there can be no assurances that we will be able to secure additional financing on acceptable terms, as and when necessary, to continue to conduct operations. There is also significant uncertainty as to the amount and type of financing available to us in the future.

If we are unable to obtain the cash resources necessary to satisfy our ongoing cash requirements, we could be required to scale back its business activities or to discontinue its operations entirely.

Our consolidated statements of cash flows as discussed herein are presented below.

	Successor					Predecessor
	Year Ended December 31, 2024			December 30, 2023 to December 31, 2023		January 1, 2023 to December 29, 2023

Net cash used in operating activities	$	(2,551,870	)	$	-	$	(541,791	)
Net cash used in investing activities		-			2,038,472		(900,000	)
Net cash provided by financing activities		2,027,009					1,462,376
Net increase (decrease) in cash and cash equivalents	$	(524,861	)	$	2,037,472	$	20,585

Operating Activities

Cash provided by or used in operating activities primarily consists of net loss adjusted for certain non-cash items, including amortization of intangible assets, impairment of intangible assets, gain on forgiveness of government assistance notes payable, and the fair value of common stock issued for directors, employees, and service providers, and the effect of changes in working capital and other activities.

Cash used in operating activities for the year ended December 31, 2024 was approximately $2,551,870 and consisted of our net loss, adjusted for non-cash items, including amortization of intangible assets, impairment of goodwill and intangible assets, the fair value of vested stock options, common stock issued to executives, employees, and advisors, and routine changes in working capital and other activities.

Cash used in operating activities for the year ended December 31, 2023 was approximately $541,791 and consisted of our net loss, adjusted for non-cash items, including amortization of intangible assets, impairment of intangible assets, fair value of vested stock options, and the fair value of common stock issued to executives, and routine changes in working capital and other activities.

Investing Activities

The Company had no cash flows from investing activities for the year ended December 31, 2024.

Cash provided by investing activities for the year ended December 31, 2023 was $1,138,472, which was comprised of $2,038,472 of cash received from an acquisition, offset by $900,000 of cash used for capital expenditures.

Financing Activities

Cash provided by financing activities for the year ended December 31, 2024 was $2,027,009, which was from proceeds of $3,507,585 on the sale of common stock, net proceeds of $1,978,000 from a note payable to a related party, offset by repayment of our line of credit balance of $2,932,305, repayment of our notes payable of $26,271, and payment of $500,000 on our acquisition obligation.

For the year ended December 31, 2023, cash provided by financing activities was $1,462,376, which was from net proceeds received from our line of credit facility of $1,212,376, and a $250,000 working capital advance from Giftify.

Secured Revolving Line of Credit

In November 2020, CardCash entered into an amended and restated promissory note for a revolving line of credit with availability of up to $10,000,000. The revolving line of credit is payable on demand, secured by the Company’s inventory, with interest based on the Wall Street Journal Prime Rate plus 3.00%, limited to a floor of 6.5%. At December 31, 2024 and December 31, 2023, the average interest rate was 12% and 12%, respectively. As of December 31, 2024, the Company was in compliance with customary debt covenants. As of December 31, 2024, the line of credit balance was $3,805,080, and this line of credit requires a deposit of $1,258,826, which is included in restricted cash.

Convertible Debt

On November 5, 2018, the Company completed the acquisition of Incumaker, Inc. and assumed certain outstanding convertible notes payable. At December 31, 2024, there was one remaining assumed convertible note payable outstanding that matured July 2017. The Company continues to be unsuccessful in reaching the Note holder to remit payment in full. At December 31, 2024, the principal balance of $20,000, and accrued interest of $23,137, are convertible at $1.50 per share into 28,758 shares of the Company’s common stock.

Secured Note Payable

On February 19, 2025, the Company entered into a secured promissory note (the “Note”) with Real World Digital Assets LLC (“Real World”) in the principal amount of $1,000,000 bearing annual interest of 11.5% that had a maturity date of December 31, 2025. The Note is collateralized by a blanket lien on the assets of Giftify under the terms of a Security Agreement and is subordinated only to the line of credit owed by Company to Pathward National Association.

Notes Payable

CardCash Acquisition Notes Payable

On December 29, 2023, the Company issued two-year promissory notes totaling $1,500,000 as partial consideration for the acquisition of CardCash (see Note 3). $750,000 is payable on December 29, 2024 (see Note 13), bearing simple annual interest of 5%, and $750,000 is to be paid upon the earlier of (a) the completion of a firm commitment underwriting the Company’s initial public offering to allow the Company to become listed on the Nasdaq Capital Market or (b) December 29, 2025. As of December 31, 2023, the notes payable had an aggregate principal balance outstanding of $1,500,000. As of December 31, 2024, the notes payable had an aggregate principal balance outstanding of $1,500,000 and accrued interest payable of $75,000.

GameIQ Acquisition Note Payable

On February 1, 2022, the Company issued two notes payable for the purchase of GameIQ, one for $78,813 and another for $62,101. In accordance with Notes, the Company promised to pay the principal together with interest at 1% upon the earlier of (i) nine equal biannual installments with the first installment due on October 1, 2022, and the final payment due February 1, 2025 (the “Maturity Date”).

As of December 31, 2023, the notes payable had an aggregate principal balance outstanding of $102,199 and accrued interest payable of $821. As of December 31, 2024, the notes payable had an aggregate principal balance outstanding of $75,928 and accrued interest payable of $1,646.

Economic Injury Disaster Loans (EIDL)

On June 17, 2020, the Company received $150,000 of proceeds applicable to loans administered by the SBA as disaster loan assistance under the Covid-19 Economic Injury Disaster Loan (EIDL) Program. On July 14, 2021, the Company received an additional $350,000 of proceeds pursuant to the loan. On July 21, 2020, the Company received $150,000 of proceeds applicable to loans administered by the SBA as disaster loan assistance under the Covid-19 EIDL Program. On January 31, 2022, the Company assumed an additional $14,500 EIDL, and accrued interest of $900, as part of the consideration paid for the acquisition of GameIQ.

The loans bear interest at 3.75% per annum, with a combined repayment of principal and interest of $3,500 per month beginning 12 months from the date of the promissory note over a period of 30 years. As of December 31, 2023, the note payable had a principal balance outstanding of $664,500 and accrued interest payable of $27,259. As of December 31, 2024, the note payable had a principal balance outstanding of $664,500 and accrued interest payable of $15,558.

Off-Balance Sheet Arrangements

At December 31, 2024 and December 31, 2023, the Company did not have any transactions, obligations or relationships that could be considered off-balance sheet arrangements.

Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

As a smaller reporting company, the Company is not required to provide the information required by this Item 7A.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

INDEX TO FINANCIAL STATEMENTS

Financial Statements of Giftify, Inc.
Report of Independent Registered Public Accounting Firm for Giftify, Inc. (PCAOB ID: 572)		F-1
Consolidated Financial Statements as of December 31, 2024 and December 31, 2023 (Successor) and for the year ended December 31, 2024 (Successor), and the periods from December 30, 2023 to December 31, 2023 (Successor), and January 1, 2023 to December 29, 2023 (Predecessor)
Consolidated Balance Sheets		F-2
Consolidated Statements of Operations		F-3
Consolidated Statements of Stockholders’ Deficiency		F-4
Consolidated Statements of Cash Flows		F-6
Notes to the Consolidated Financial Statements		F-7

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Stockholders and Board of Directors of Giftify, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheet of Giftify, Inc. and subsidiaries (the “Company”) as of December 31, 2024 and 2023 (Successor), the related consolidated statements of operations, stockholders’ equity (deficiency), and cash flows for the year ended December 31, 2024 (Successor), the period from December 30, 2023 through December 31, 2023 (Successor), and January 1, 2023 through December 29, 2023 (Predecessor), and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2024 and 2023 (Successor), and the results of its operations and its cash flows for the year ended December 31, 2024 (Successor), the periods from December 29, 2023 through December 31, 2023 (Successor), and January 1, 2023 through December 29, 2023 (Predecessor), in conformity with U.S. generally accepted accounting principles.

Going Concern

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company has a history of reporting net losses and negative operating cash flows. Management’s plans in regard to these matters are also described in Note 1. The financial statements do not include any adjustments that might result from the outcome of these uncertainties.

Basis for Opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Share-based compensation

As described in Note 13 to the consolidated financial statements, the Company recognized $8 million of share-based compensation expense relating to vested stock options, including $7.9 million for stock options granted to executives and employees in 2024. Management accounts for share-based compensation based on the grant-date fair value of each award, which is amortized as expense over the requisite service period of the award. The fair value of each option is estimated on the grant-date using the Black-Scholes option pricing model which includes assumptions made by management.

We identified share-based compensation as a critical audit matter. Auditing management’s estimate of share-based compensation required a high degree of auditor effort in performing procedures and evaluating audit evidence related to the grant-date fair value of awards.

The following are the primary procedures we performed to address this critical audit matter.

	●	Obtaining and reading the share-based award agreements, and obtaining board approvals related to the share-based awards.
	●	Evaluating the option pricing model management selected to determine the grant-date fair value, and evaluating the reasonableness of management’s significant valuation assumptions.
	●	Performing a recalculation of the grant-date fair value estimate for a sample of the awards.

We have served as the Company’s auditor since 2017.

/s/ Weinberg & Company, P.A.

Los Angeles, California

March 31, 2025

F-1

GIFTIFY, INC. AND SUBSIDIARIES (FKA RDE, INC.)

CONSOLIDATED BALANCE SHEETS

	December 31, 2024			December 31, 2023
	Successor
	December 31, 2024			December 31, 2023

ASSETS
Current assets:
Cash and cash equivalents (includes restricted cash of $1,258,826 at December 31, 2024 and 2023)	$	3,574,876		$	4,099,737
Accounts receivable		891,666			1,681,165
Inventories		4,116,180			4,152,273
Prepaid expenses and other current assets		63,210			177,119
Total current assets		8,645,932			10,110,294

Property and equipment, net		1,089,984			2,563,312
Operating lease right of use asset, net		1,406,242			315,183
Deposits		65,556			65,556
Intangible assets, net		4,268,332			6,700,000
Goodwill		20,007,670			20,007,669
Total assets	$	35,483,716		$	39,762,014

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	1,966,616		$	2,218,285
Accrued expenses		1,768,607			1,175,934
Customer deposits		95,000			-
Deferred revenue		77,051			336,996
Secured revolving line of credit		3,805,080			6,737,385
Convertible promissory notes		43,137			40,137
Secured note payable — related party, net of debt discount of $4,000 and $0, at December 31, 2024 and 2023, respectively		2,060,274			-
Notes payable, current portion		1,717,632			836,509
Acquisition obligation		-			500,000
Operating lease liability, current portion		316,612			134,475
Total current liabilities		11,850,009			11,979,721

Notes payable, net of current portion		615,000			1,458,270
Deferred income taxes		1,123,000			1,800,000
Operating lease liability, net of current portion		1,133,371			202,829
Total liabilities		14,721,380			15,440,820

Commitments and contingencies		-			-

Stockholders’ equity:
Preferred stock, $0.001 par value, 10,000,000 shares authorized;		-			-
Common stock, $0.001 par value, 750,000,000 shares authorized; 27,021,423 and 24,119,967 shares issued and outstanding at December 31, 2024 and 2023, respectively		27,015			24,114
Additional paid-in-capital		108,679,065			93,376,244
Common stock issuable, 350,843 and 383,343 shares, respectively		350,843			383,343
Accumulated deficit		(88,294,587	)		(69,462,507	)
Total stockholders’ equity		20,762,336			24,321,194

Total liabilities and stockholders’ equity	$	35,483,716		$	39,762,014

The accompanying notes are an integral part of these consolidated financial statements.

F-2

GIFTIFY, INC. AND SUBSDIARIES (FKA RDE, INC.)
CONSOLIDATED STATEMENTS OF OPERATIONS

	Year Ended December 31, 2024			December 30, 2023 to December 31, 2023			January 1, 2023 to December 29, 2023
	Successor						Predecessor
	Year Ended December 31, 2024			December 30, 2023 to December 31, 2023			January 1, 2023 to December 29, 2023

Net Sales	$	88,934,036		$	484,860		$	86,661,944
Cost of sales		75,789,255			418,350			76,220,645
Gross profit		13,144,781			66,510			10,441,299

Operating Expenses
Selling, general and administrative expenses		27,615,865			5,086,510			11,152,428
Amortization of capitalized software costs		1,472,974			-			1,080,537
Amortization of intangible assets		2,431,668			-			300,000
Impairment of property and equipment		-			-			738,740
Impairment of intangibles		-			-			250,000
Total operating expenses		31,520,507			5,086,510			13,521,705

Loss from operations		(18,375,726	)		(5,020,000	)		(3,080,406	)

Other income (expense):
Interest expense		(1,002,354	)		-			(2,890,466	)
Financing costs		(131,000	)		-			-
Gain on forgiveness of debt		-			-			5,876,000
Total other income (expense), net		(1,133,354	)		-			2,985,534
Net loss before income taxes		(19,509,080	)		(5,020,000	)		(94,872	)
Income tax (expense) benefit		677,000			-			(29,673	)
Net loss	$	(18,832,080	)	$	(5,020,000	)	$	(124,545	)

Net loss per share – basic and diluted	$	(0.73	)	$	(0.21	)	$	(0.01	)

Weighted average common shares outstanding – basic and diluted		25,745,113			24,119,967			15,927,387

The accompanying notes are an integral part of these consolidated financial statements.

F-3

GIFTIFY, INC. AND SUBSIDIARIES (FKA RDE, INC.)

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIENCY)

For the Year Ended December 31, 2024 (Successor)

	Shares		Amount		Shares			Amount			Capital			Deficit			Equity
	Common Stock				Common Stock Issuable						Additional Paid-In			Accumulated			Total Stockholders’
	Shares		Amount		Shares			Amount			Capital			Deficit			Equity
Balance, December 31, 2023 (Successor)		24,119,967	$	24,114		383,343		$	383,343		$	93,376,244		$	(69,462,507	)	$	24,321,194

Fair value of vested options		-		-		-			-			8,031,289						8,031,289

Fair value of vested restricted stock units		241,666		242		-			-			1,431,606						1,431,848

Fair value of common stock issued for employment agreements		312,500		313		-			-			1,249,687						1,250,000

Fair value of common stock issuance for services		210,000		210		-			-			771,290						771,500

Fair value of common stock issued for vendor settlement		104,167		104								149,896						150,000

Fair value of common shares issued for financing costs		100,000		100								130,900						131,000

Common shares issued on cashless exercise of stock options		1,130		1								(1	)					-

Common shares issued		32,500		32		(32,500	)		(32,500	)		32,468						-

Issuance of common stock for cash, under stock purchase agreement		150,000		150		-			-			199,850						200,000

Issuance of common stock for cash, net, under at-the-market sale agreement		209,993		210		-			-			285,853						286,063

Issuance of common stock for cash, net, on private sales		1,539,500		1,539		-			-			3,019,983						3,021,522

Net loss		-		-		-			-			-			(18,832,080	)		(18,832,080	)

Balance, December 31, 2024 (Successor)		27,021,423	$	27,015		350,843		$	350,843		$	108,679,065		$	(88,294,587	)	$	20,762,336

F-4

Period December 30, 2023 to December 31, 2023 (Successor)

	Shares		Amount		Shares		Amount		Capital		Deficit			(Deficiency)
	Common Stock				Common Stock Issuable				Additional Paid-In		Accumulated			Total Stockholders’ Equity
	Shares		Amount		Shares		Amount		Capital		Deficit			(Deficiency)
Balance, December 29, 2023 (Successor)		16,761,960	$	16,756		383,343	$	383,343	$	63,951,602	$	(64,442,507	)	$	(90,806	)
Effects of the merger		6,108,007		6,108		-		-		24,425,892		-			24,432,000
Balance, December 30, 2023		22,869,967		22,864		383,343		383,343		88,377,494		(64,442,507	)		24,341,194

Fair value of common stock issued for employment agreements		1,250,000		1,250		-		-		4,998,750		-			5,000,000

Net loss		-		-		-		-		-		(5,020,000	)		(5,020,000	)
Balance, December 31, 2023 (Successor)		24,119,967	$	24,114		383,343	$	383,343	$	93,376,244	$	(69,462,507	)	$	24,321,194

Period from January 1, 2023 to December 29, 2023 (Predecessor)

	Shares		Amount		Capital			Deficit			Deficiency
	Common Stock				Additional Paid-In			Accumulated			Total Stockholders’
	Shares		Amount		Capital			Deficit			Deficiency
Balance, December 31, 2022 (Predecessor)		29,035,625	$	2,900	$	4,934,052		$	(30,335,139	)	$	(25,398,187	)
Balance		29,035,625	$	2,900	$	4,934,052		$	(30,335,139	)	$	(25,398,187	)
Stock based compensation				-		1,942			-			1,942
Purchase of employee stock options				-		(36,916	)		-			(36,916	)
Capital contribution – retirement of Series B				-		4,084,353			-			4,084,353
Capital contribution				-		22,997,712			-			22,997,712
Net loss		-		-		-			(124,545	)		(124,545	)
Balance, December 29, 2023 (Predecessor)		29,035,625	$	2,900	$	31,981,143		$	(30,459,684	)	$	1,524,359
Balance		29,035,625	$	2,900	$	31,981,143		$	(30,459,684	)	$	1,524,359

The accompanying notes are an integral part of these consolidated financial statements.

F-5

GIFTIFY, INC. AND SUBSDIARIES (FKA RDE, INC.)

CONSOLIDATED STATEMENTS OF CASH FLOWS

	Year Ended December 31, 2024			December 30, 2023 to December 31, 2023			January 1, 2023 to December 29, 2023
	Successor						Predecessor
	Year Ended December 31, 2024			December 30, 2023 to December 31, 2023			January 1, 2023 to December 29, 2023

CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$	(18,832,080	)	$	(5,020,000	)	$	(124,545	)
Adjustments to reconcile net loss to net cash used in operating activities
Fair value of vested stock options		8,031,289			-			1,942
Fair value of vested restricted common stock		1,431,848
Fair value of common stock issued for employment agreements		1,250,000			5,000,000			-
Fair value of common stock issued for services		771,500			-			-
Loss on settlement of vendor balance		135,415			-			-
Fair value of common stock issued for financing costs		131,000			-			-
Change in inventory reserve balance		(61,000	)		-			-
Amortization of capitalized software costs		1,472,974			-			1,290,190
Amortization of intangible assets		2,431,668			-			300,000
Amortization of debt discount		18,000			-			-
Impairment of intangible assets and property and equipment		-			-			988,740
Accrued interest		131,398			-			2,100,610
Gain on forgiveness of debt		-			-			(5,876,000	)
Changes in operating assets and liabilities:
Accounts receivable		789,499			-			(74,340	)
Inventories		97,093			-			816,853
Prepaid expenses		113,909			-			(38,328	)
Change in right of use asset		304,481			-			191,953
Accounts payable		(236,731	)		-			84,611
Accrued expenses		592,673			20,000			(39,515	)
Customer deposits		95,000			-			-
Deferred revenue		(259,945	)		-			27,991
Deferred taxes		(677,000	)		-			-
Operating lease liability		(282,861	)		-			(191,953	)
Net cash used in operating activities	$	(2,551,870	)	$	-		$	(541,791	)

CASH FLOWS FROM INVESTING ACTIVITIES
Cash, net, received from acquisition		-			2,038,472			-
Capital expenditures		-			-			(900,000	)
Net cash provided by (used in) investing activities	$	-		$	2,038,472		$	(900,000	)

CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from line of credit		104,752,474			-			104,752,474
Repayment of line of credit		(107,684,779	)		-			(103,540,098
Proceeds from note payable – related party		1,978,000			-			-
Repayment of acquisition obligation		(500,000	)		-			-
Repayment of notes payable		(26,271	)		-			-
Proceeds from sale of common stock under stock purchase agreement		200,000			-			-
Proceeds from public sale of common stock under at-the-market sale agreement		286,063
Proceeds from private sale of common stock		3,021,522
Advance on purchase consideration from Giftify		-			-			250,000
Net cash provided by financing activities	$	2,027,009		$	-		$	1,462,376

Net increase (decrease) in cash and cash equivalents		(524,861	)		2,038,472			20,585
Cash and cash equivalents beginning of period		4,099,737			2,061,265			2,040,680
Cash and cash equivalents end of period	$	3,574,876		$	4,099,737		$	2,061,265

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Interest paid	$	841,260		$	-		$	-
Taxes paid	$	-		$	-		$	29,673

SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:
Present value of operating lease right of use asset and lease liability	$	1,395,541		$	-		$	-
Fair value of common stock issued for settlement of vendor balance	$	150,000		$	-		$	-
Issuance of common stock issued for common stock issuable	$	32,500		$	-		$	-
Fair value of Giftify common stock received	$	-		$	-		$	22,962,739
Gain on forgiveness of notes payable	$	-		$	-		$	5,462,739
Settlement of notes payable and accrued interest	$	-		$	-		$	28,873,696
Termination of Series B convertible preferred stock	$	-		$	-		$	4,084,353

The accompanying notes are an integral part of these consolidated financial statements.

F-6

GIFTIFY, INC. AND SUBSDIARIES (FKA RDE, INC.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the twelve months ended December 31, 2024 (Successor)
For the period December 30, 2023 to December 31, 2023 (Successor)
For the period January 1, 2023 to December 29, 2023 and year ended December 31, 2022 (Predecessor)

1. Organization, Basis of Presentation, and Summary of Significant Accounting Policies

Giftify, Inc. (the “Company” or “Giftify”) through its wholly-owned subsidiary Restaurant.com, Inc., has been in the business of connecting digital consumers, businesses and communities with dining and merchant deal options throughout the United States.

On August 6, 2024, The Nasdaq Stock Market (“Nasdaq”) granted the Company’s application for listing on the Nasdaq.

In August, 2023, the Company entered into an agreement and plan of merger to acquire CardCash Exchange Inc (“CardCash”). On December 29, 2023, the merger was completed and has been accounted for as a business combination using the acquisition method of accounting (see Note 3). CardCash was formed in 2013 and purchases merchant gift cards and resells the gift cards at a markup.

The Company’s operations are not considered significant compared to the operations of CardCash before the acquisition. Accordingly, for the purpose of the accompanying consolidated financial statements, periods before December 29, 2023 reflect the financial position, results of operations and cash flows of CardCash prior to the acquisition, and is referred to as the “Predecessor”. Periods beginning after December 29, 2023, reflect the financial position, results of operations and cash flows of the Company consolidated with CardCash, and is referred to as the “Successor”. A black-line between the Successor and Predecessor periods has been placed in the consolidated financial statements and in the tables to the notes to the consolidated financial statements to highlight the lack of comparability between these periods. Collectively, the Company (Successor) and CardCash (Predecessor) are referred to as the “Company”.

Substantial Doubt about the Company’s Ability to Continue as a Going Concern

The accompanying financial statements have been prepared under the assumption that the Company will continue as a going concern. In accordance with the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 205-40, Going Concern, the Company’s management has evaluated whether there are conditions or events that raise substantial doubt about its ability to continue as a going concern within one year after the date the accompanying financial statements were issued. Giftify and CardCash have a history of reporting net losses and negative operating cash flows. These factors raise substantial doubt about the Company’s ability to continue as a going concern within one year of the date that the financial statements are issued. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

The Company’s ability to continue as a going concern is dependent upon its ability to raise additional debt or equity capital to fund its business activities and to ultimately achieve sustainable operating revenues and profitability. The Company has financed its working capital requirements through borrowings from various sources and the sale of its equity securities.

As market conditions present uncertainty as to the Company’s ability to secure additional funds, there can be no assurances that the Company will be able to secure additional financing on acceptable terms, as and when necessary to continue to conduct operations. There is also significant uncertainty as to the effect that the coronavirus may have on the Company’s business plans and the amount and type of financing available to the Company in the future. If the Company is unable to obtain the cash resources necessary to satisfy the Company’s ongoing cash requirements, the Company could be required to scale back its business activities or to discontinue its operations entirely.

F-7

Basis of Presentation and Principles of Consolidation

The accompanying consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) and include the financial statements of the Company’s wholly-owned operating subsidiaries. Intercompany balances and transactions have been eliminated in consolidation. For the purpose of the accompanying consolidated financial statements, periods before December 29, 2023 reflect the financial position, results of operations and cash flows of CardCash prior the acquisition, and is referred to as the “Predecessor”. Periods beginning after December 29, 2023 reflect the financial position, results of operations and cash flows of Giftify consolidated with CardCash, and is referred to as the “Successor”. A black-line between the Successor and Predecessor periods has been placed in the consolidated financial statements and in the table to the notes to the consolidated financial statements to highlight the lack of comparability between the periods. Collectively, Giftify (Successor) and CardCash (Predecessor) are referred to as the “Company”.

Use of Estimates

The preparation of the Company’s financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make certain estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and the disclosure of contingent assets and liabilities. Actual results could differ from those estimates. On an ongoing basis, management reviews its estimates and if deemed appropriate, those estimates are adjusted. Significant estimates include those related to assumptions used in valuing inventories at net realizable value, assumptions used in valuing assets acquired in business acquisitions, impairment testing of goodwill and other long-term assets, assumptions used in valuing stock-based compensation, accruals for potential liabilities, and assumptions used in the determination of the Company’s liquidity.

Revenue Recognition

The Company recognizes revenue in accordance with FASB ASC 606, Revenue from Contracts with Customers.

The Company buys merchant gift cards from the general public and distributors at a discount and then resells the gift cards at a markup. The Company also derives revenue from the sale of discount certificates for restaurants on behalf of third-party restaurants.

Revenue and costs of sales are recognized when control of the products transfers to our customer, which generally occurs at a point in time when the risk and title to the product transfers to the customer upon delivery to the customer. The Company’s performance obligations are satisfied at that time. The Company’s standard terms of delivery are included in its contracts of sale, confirmation documents, and invoices. The Company recognizes revenue on a gross basis for the sales price of the merchant gift cards and discount certificates it collects.

Certain customers may receive incentives, which are accounted for as variable consideration. Provisions for sales returns are recognized in the period when the sale is recorded based upon the Company’s prior experience and current trends. These revenue reductions are established by the Company based upon management’s best estimates at the time of sale following the historical trend, adjusted to reflect known changes in the factors that impact such reserves and allowances, and the terms of agreements with customers.

Amounts billed and due from the Company’s customers are classified as accounts receivable on the balance sheet. Amounts received in advance from customers are recorded as deferred revenue on the balance sheet until the performance obligations have been satisfied. The Company has elected to apply the practical expedient to not assess contracts for significant financing component because the period between the receipt of advance payment and the Company’s transfer of services to the customer is less than one year.

F-8

Other

Sale of promotional gift cards, sale of travel, vacation and merchandise, and advertising revenues

The Company also recognizes revenue from the sale of Restaurant.com promotional gift cards (revenue recognized based on the Company’s historical redemption rates of its promotional gift cards), the sale of travel, vacation, and merchandise on behalf of third-party merchants (revenue reported on a net basis equal to the purchase price received from the customer less a portion of the purchase price paid by the Company to its merchant partners), and advertising revenue for third-party partners, such as Google Ads, wherein third-party website(s) and/or product(s) are shown or incorporated in the Company’s platform or website (revenue recognized when its determinable, which is generally upon receipt of a statement and/or proceeds from the third-party partners).

In the following table, revenue is disaggregated by our divisions and type of revenue for the years ended December 31, 2024 and 2023:

Schedule of Disaggregation of Revenue

Sales Channels	CardCash Gift Cards		Restaurant.com Gift Cards and Coupons		Advertising		Total

Year Ended December 31, 2024 (Successor)
Business to consumer (B2C)	$	40,894,072	$	878,582	$	73,075	$	41,845,729
Business to business (B2B)		46,097,566		990,742		-		47,088,308
Total	$	86,991,638	$	1,869,324	$	73,075	$	88,934,036

Year Ended December 31, 2023 (includes Predecessor Jan 1, 2023 to Dec 29, 2023)
Business to consumer (B2C)	$	32,075,843	$	-	$	-	$	32,075,843
Business to business (B2B)		33,385,061		-		-		33,385,061
Total	$	87,146,804	$	-	$	-	$	87,146,804

Cost of Sales

Cost of sales consists primarily of the cost to purchase merchant gift cards, and transaction fees and costs.

Shipping and Handling Costs

Shipping and handling costs billed to customers are recorded as revenue. The costs associated with shipping goods to customers are recorded as a delivery expense and are included in general and administrative.

Schedule of Shipping and Handling Costs

	Year Ended December 31, 2024		December 30 to December 31, 2023		January 1, 2023 to December 29, 2023
	Successor				Predecessor
	Year Ended December 31, 2024		December 30 to December 31, 2023		January 1, 2023 to December 29, 2023
Shipping and handling costs	$	164,000	$	-	$	56,000

Cash and Cash Equivalents

The Company considers all highly liquid investments with maturities of three months or less when purchased, to be cash and/or cash equivalents.

F-9

Accounts Receivable

The Company’s trade accounts receivable are recorded at amounts billed to customers and presented on the balance sheet net of the allowance for estimated credit losses, if required. The allowance is determined by a variety of factors, including the age of the receivables, current economic conditions, historical losses and other information management obtains regarding the financial condition of customers. Receivables are charged off when they are deemed uncollectible. As of December 31, 2024 and 2023, the Company had no allowance for credit losses.

Inventories

Inventories consist of merchant gift cards on hand that are available for sale. Inventories are valued at the lower of cost and net realizable value, with cost determined on a first in, first-out basis. Adjustments, if required, reduce the cost of inventory to its net realizable value for estimated excess, obsolescence or impaired balances. Factors influencing these adjustments include changes in customer demand, rapid technological changes, and merchant bankruptcy. As of December 31, 2024 and 2023, no provision for write downs of inventories was deemed necessary.

Property and Equipment

Property and equipment are recorded at cost less accumulated depreciation and amortization.

The Company accounts for capitalized software and website development costs to develop software programs to be used solely to meet the Company’s internal needs in accordance with ASC 350-40. Costs incurred during the application development stage for software programs to be used solely to meet its internal needs are capitalized. Capitalized website development costs are included in property and equipment, net. All ordinary maintenance costs are expensed as incurred. Amortization of capitalized software costs is excluded from cost of sales and included in amortization expense in the Statements of Operations.

Depreciation and amortization is computed using the straight-line method over the estimated useful lives of the related assets. The Company provides for depreciation, as follows:

Schedule of Depreciation

		Estimated Useful Life
Capitalized software and website development costs		3 years
Equipment		5-7 years
Leasehold improvements		Shorter of estimated useful life or lease term

Expenditures for additions and improvements that extend the useful lives of property and equipment are capitalized. Expenditures for maintenance and repair costs are charged to expense as incurred.

Business Combinations

Intangible Assets

The Company has certain intangible assets that were initially recorded at their fair value at the time of acquisition. The finite-lived intangible assets consist of customer relationships, trade name, and developed technology. Intangible assets with finite useful lives are amortized using the straight-line method over their estimated useful life of three years.

F-10

The Company reviews all finite-lived intangible assets for impairment when circumstances indicate that their carrying values may not be recoverable. If the carrying value of an asset group is not recoverable, the Company recognizes an impairment loss for the excess carrying value over the fair value in our consolidated statements of operations. During the period January 1, 2023 to December 29, 2023, CardCash (Predecessor) recorded impairment of intangible assets of $250,000.

Goodwill

Goodwill represents the excess of the purchase price in a business combination over the value assigned to the net tangible and identifiable intangible assets of the business acquired. As of December 31, 2024 and 2023, the Company had $20 million of goodwill. Under ASC 350 Intangibles-Goodwill and Other, goodwill and other intangible assets with indefinite lives are not amortized, but instead are tested for impairment annually, or whenever events or circumstances indicate a potential impairment. The Company’s impairment testing is performed annually at December 31. In accordance with ASC 350, we first assess qualitative factors to determine whether it is necessary to perform the quantitative goodwill impairment test. If after assessing the totality of events or circumstances, we determine that it is more likely than not (i.e., greater than 50% likelihood) that the fair value of the reporting unit is less than its carrying amount, then the quantitative test is required. The quantitative goodwill impairment test requires us to estimate and compare the fair value of the reporting unit, determined using an income approach and a market approach, with its carrying value. If the fair value of the reporting unit exceeds the carrying value of the net assets, goodwill is not impaired. If the fair value of the reporting unit is less than the carrying value, the difference is recorded as an impairment loss up to the amount of goodwill. There was no goodwill impairment in any of the periods presented.

Long-Lived Assets

The Company evaluates long-lived assets, other than goodwill and indefinite lived intangible assets, for impairment whenever events or changes in circumstances indicate that their net book value may not be recoverable. The measurement of possible impairment is based upon the ability to recover the carrying value of the asset through the expected future undiscounted cash flows from the use of the asset and its eventual disposition. An impairment loss, equal to the difference between the asset’s fair value and its carrying value, is recognized when the estimated future undiscounted cash flows are less than its carrying amount. No impairment indicators were identified as of December 31, 2024 and the period December 30, 2023 to December 31, 2023 (Successor). During the period January 1, 2023 to December 29, 2023, an impairment of $738,740 was recorded by CardCash (Predecessor).

Leases

The Company leases certain corporate office space under lease agreements. The Company determines whether a contract contains a lease at contract inception. A contract is or contains a lease if the contract conveys the right to control the use of the identified asset for a period of time in exchange for consideration. Control is determined based on the right to obtain all of the economic benefits from use of the identified asset and the right to direct the use of the identified asset. Operating lease right-of-use assets (“ROU”) for operating leases represent the right to use an underlying asset for the lease term, and operating lease liabilities represent the obligation to make lease payments. Lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at the commencement date. Operating lease expense is recognized on a straight-line basis over the lease term and is included in the general and administrative line in the Company’s consolidated statements of operations.

Income Taxes

The Company uses an asset and liability approach for accounting and reporting for income taxes that allows recognition and measurement of deferred tax assets based upon the likelihood of realization of tax benefits in future years. Under the asset and liability approach, deferred taxes are provided for the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. A valuation allowance is provided for deferred tax assets if it is more likely than not these items will either expire before the Company is able to realize their benefits, or that future deductibility is uncertain. The Company’s policy is to recognize interest and/or penalties related to income tax matters in income tax expense.

F-11

Advertising

The Company expenses advertising costs as incurred, which are recorded in general and administrative in the Statements of Operations. Advertising expenses are as follows:

Schedule of Advertising Expenses

	Year Ended December 31, 2024		December 30 to December 31, 2023		January 1, 2023 to December 29, 2023
	Successor				Predecessor
	Year Ended December 31, 2024		December 30 to December 31, 2023		January 1, 2023 to December 29, 2023
Advertising costs	$	892,994	$	-	$	807,031

Share-Based Compensation

The Company values its equity awards using the Black-Scholes option-pricing model, and accounts for forfeitures when they occur. Use of the Black-Scholes option pricing model requires the input of subjective assumptions, including expected volatility, expected term, and a risk-free interest rate. The expected volatility is based on the historical volatility of the Company’s common stock, calculated utilizing a look-back period approximately equal to the contractual life of the stock option being granted. The expected life of the stock option is calculated as the mid-point between the vesting period and the contractual term (the “simplified method”). The risk-free interest rate is estimated using comparable published federal funds rates.

Share-based compensation expense recognized and recorded as part of selling, general and administrative expenses are as follows:

Schedule of Stock-Based Expense

	Year Ended December 31, 2024		December 30 to December 31, 2023		January 1, 2023 to December 29, 2023
	Successor				Predecessor
	Year Ended December 31, 2024		December 30 to December 31, 2023		January 1, 2023 to December 29, 2023
Stock based compensation costs	$	11,634,637	$	5,000,000	$	1,942

Earnings (Loss) Per Share

Basic earnings (loss) per share is computed using the weighted average number of common shares issued and outstanding during the period. Diluted earnings (loss) per share is computed using the weighted average number of common shares and the dilutive effect of contingent shares outstanding during the period. Potentially dilutive contingent shares, which primarily consist of convertible notes and stock issuable upon the exercise of stock options and warrants, have been excluded from the calculation of diluted loss per share because their effect is anti-dilutive.

Loss per common share is computed by dividing net loss by the weighted average number of shares of common stock issued and outstanding during the respective periods. Basic and diluted loss per common share was the same for all periods presented because all convertible notes and stock issuable upon the exercise of stock options and warrants outstanding were anti-dilutive.

At December 31, 2024 and 2023, the Company excluded the outstanding convertible debt and securities summarized below, which entitle the holders thereof to acquire shares of common stock, from its calculation of earnings per share, as their effect would have been anti-dilutive.

	2024		2023
	December 31,
	2024		2023

Convertible notes payable		28,753		26,758
Common stock issuable		350,843		383,343
Common stock options		4,121,830		743,116
Total		4,501,426		1,153,217

The issuable and potentially issuable shares as summarized above. These potentially issuable common shares would have been anti-dilutive because the Company had a net loss for the period ended December 31, 2024 and 2023, as such common stock equivalents would have been excluded from the calculation of net loss per share.

F-12

Fair Value of Financial Instruments

Fair value of financial and non-financial assets and liabilities is defined as an exit price, which is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The three-tier hierarchy for inputs used to measure fair value, which prioritizes the inputs to valuation techniques used to measure fair value, is as follows:

Level 1 – quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2 – quoted prices for similar assets and liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the financial instrument.

Level 3 – unobservable inputs based on the Company’s assumptions used to measure assets and liabilities at fair value.

A financial asset or liability’s classification within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement. The assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the valuation of the assets and liabilities being measured and their placement within the fair value hierarchy.

The carrying value of the Company’s financial instruments (consisting of cash, accounts receivables, deposits to credit card processor, prepaid expense and other current assets, accounts payable, accrued expenses, notes payable, and other liabilities) are considered to be representative of their respective fair values due to the short-term nature of those instruments.

Concentration of Credit Risk

Financial instruments, which potentially subject the Company to concentrations of credit risk, consist principally of trade accounts receivable and cash. The credit risk exposure surrounding trade accounts receivable is limited as these amounts represent the timing difference between payments being settled by credit card processors and the cash being provided to the Company.

No significant customers comprised more than 10% of accounts receivable or revenue as of and for the period ended December 31, 2024 and 2023 (Successor), and for the period ended December 29, 2023 (Predecessor).

The Company maintains a balance at financial institutions, which at times exceed the federally insured limit. The Company has not experienced a loss on this account.

F-13

Segment Information

The Company’s Chief Executive Officer (“CEO”) is our chief operating decision maker (“CODM”) and evaluates performance and makes operating decisions about allocating resources based on financial data presented on a consolidated basis. Because our CODM evaluates financial performance on a consolidated basis, the Company has determined that it operates as a single reportable segment composed of the consolidated financial results of Giftify, Inc. (see Note 2).

Recent Accounting Pronouncements

In November 2024, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses which includes amendments that require disclosure in the notes to financial statements of specified information about certain costs and expenses, including purchases of inventory; employee compensation; and depreciation, amortization and depletion expenses for each caption on the income statement where such expenses are included. The amendments are effective for the Company’s annual periods beginning January 1, 2027, with early adoption permitted, and should be applied either prospectively or retrospectively. The Company is in the process of evaluating this ASU to determine its impact on the Company’s disclosures.

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosure. These amendments expand a public entity’s segment disclosures by requiring disclosure of significant segment expenses that are regularly provided to the chief operating decision maker, requiring other new disclosures, and requiring enhanced interim disclosures. ASU 2023-07 requires public entities with a single reportable segment to provide all the disclosures required by this standard and all existing segment disclosures in Topic 280 on an interim and annual basis. ASU 2023-07 is effective for annual periods beginning after December 15, 2023, and interim periods beginning after December 15, 2024, applied retrospectively with early adoption permitted. As of December 31, 2024, the Company has adopted ASU 2023-07. The adoption of this standard did not have a material impact on the Company’s consolidated financial statements but has resulted in additional disclosures within the footnotes to our consolidated financial statements (See Note 2).

Other recent accounting pronouncements issued by the FASB, its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the Securities and Exchange Commission did not or are not believed by management to have a material impact on the Company’s present or future financial statements.

2. Segment information

The Company operates and manages its business as one reportable and operating segment concentrating on the sale of gift cards and discount certificates to our customers. The measure of segment assets is reported on the balance sheet as total consolidated assets. The Company derives revenue primarily in the United States of America and manages its business activities on a consolidated basis.

The Company’s chief operating decision maker (CODM), its Chief Executive Officer, reviews financial information presented on a consolidated basis and decides how to allocate resources based on net loss. Consolidated net loss is used for evaluating financial performance. The monitoring of budgeted versus actual results is used in assessing performance of the Company and in establishing management’s compensation.

Significant segment expenses include employee compensation, stock-based compensation, merchant fees, and consulting and outside provider costs. Other operating expenses include all remaining costs necessary to operate our business and primarily include advertising, corporate compliance, and overhead expenses. The following table presents the significant segment expenses and other segment items regularly reviewed by our CODM:

	Year Ended December 31, 2024			December 30 to December 31, 2023			January 1, 2023 to December 29, 2023
	Successor						Predecessor
	Year Ended December 31, 2024			December 30 to December 31, 2023			January 1, 2023 to December 29, 2023

Net sales	$	88,934,036		$	484,860		$	86,661,944
Cost of sales		75,789,255			418,350			76,220,645
Gross profit		13,144,781			66,510			10,441,299

Less:
Employee compensation and benefits		6,520,852			-			3,864,329
Stock-based compensation expense		11,634,708			5,000,000			1,942
Merchant and bank fees		3,812,064			-			3,737,748
Consulting and outside provider costs		2,395,550			-			293,950
Sales and marketing expenses		1,911,006			-			1,808,895
Amortization of capitalized software costs		1,472,974			-			1,290,190
Amortization of intangible assets		2,431,668			-			300,000
Impairment of property and equipment		-			-			738,740
Impairment of intangibles		-			-			250,000
Other operating expenses		1,341,685			86,510			1,235,911
Total operating expenses		31,520,507			5,086,510			13,521,705
Loss from operations	$	(18,375,726	)	$	(5,020,000	)	$	(3,080,406	)

F-14

3. Acquisition of Card Cash

On December 29, 2023, the Company completed the acquisition of CardCash. The acquisition was made pursuant to an agreement and plan of merger dated August 18, 2023, between the Company and CardCash. The Company acquired all of the issued and outstanding equity of CardCash for $26,682,000, made up of the issuance of 6,108,007 shares of the Company’s common stock valued at $24,682,000, the issuance of a note payable for $1,500,000, and payment of $750,000 in cash.

The Company utilized the acquisition method of accounting for the acquisition in accordance with ASC 805, Business Combinations, and allocated the purchase price to CardCash’s tangible assets, identifiable intangible assets, and assumed liabilities at their estimated fair values as of the date of acquisition. The fair value assigned to the developed technology was determined using the relief from royalty method. The fair value assigned to trade name were determined using the relief from royalty method. The fair value of the customer relationships was determined using the multi-period excess earnings method, which estimates the direct cash flow expected to be generated from the existing customers acquired. The cash flows were based on estimates used to value the acquisition, and the discount rates applied were benchmarked with reference to the implied rate of return from the transaction model, as well as the weighted average cost of capital. The valuation assumptions took into consideration the Company’s estimates of customer attrition and revenue growth projections. The excess of the purchase price paid by the Company over the estimated fair value of identified tangible and intangible assets has been recorded as goodwill. Goodwill also represents the future benefits as a result of the acquisition that the Company believes will enhance the Company’s product offerings and lineup available to both new and existing customers and generate future synergies within the discount coupon and gift card business.

In accordance with ASC 805, the Company made an allocation of the purchase price for CardCash based on the fair value of the assets acquired and liabilities assumed.

F-15

The following table summarizes the allocation of the fair value of the purchase consideration to the fair value of tangible assets, identifiable intangible assets, and assumed liabilities of CardCash on the date of acquisition:

	Fair Value

Fair value of consideration:
Cash	$	750,000
Notes payable ($750,000 due December 30, 2024; $750,000 due December 30, 2025)		1,500,000
Common stock (6,108,007 shares of common stock at $4.00 per share)		24,432,000
Total purchase price	$	26,682,000

Allocation of the consideration to the fair value of assets acquired and liabilities assumed:

Cash	$	2,061,265
Accounts receivable		1,582,635
Inventories		4,152,273
Prepaids, deposits, and other		220,385
Property and equipment, net		2,563,312
Accounts payable and accrued liabilities		(2,068,154	)
Line of credit		(6,737,385	)
Deferred tax liability		(1,800,000	)
Net tangible assets		(25,669	)

Intangible assets:
Developed technology		2,600,000
Trade name		2,400,000
Customer relationships		1,700,000
Net identifiable intangible assets		6,700,000
Goodwill		20,007,669
Fair value of net asset acquired	$	26,682,000

The amount of revenue and net loss of CardCash included in the Company’s (Successor) consolidated statements of operations during the period December 30, 2023 to December 31, 2023, was zero and $5,000,000, respectively.

The following unaudited pro forma statements of operations present the Company’s pro forma results of operations after giving effect to the purchase of CardCash based on the historical financial statements of the Company and CardCash. The unaudited pro forma statements of operations for the twelve months ended December 31, 2023, give effect to the transaction as if it had occurred on January 1, 2023.

	Year Ended December 31, 2023
	(Proforma, unaudited)

Sales	$	89,307,460
Net loss	$	(9,122,246	)
Net loss per share	$	(0.41	)

4. Property and Equipment, Net

Property and equipment, net consisted of the following:

Schedule Property and Equipment, Net

	December 31, 2024			December 31, 2023
	Successor
	December 31, 2024			December 31, 2023
Website development costs	$	2,533,466		$	2,533,466
Leasehold improvements		29,846			29,846
Property and equipment, gross		2,563,312			2,563,312
Accumulated depreciation		(1,473,328	)		-
Property and equipment, net	$	1,089,984		$	2,563,312

The depreciation expense on property and equipment was as follows:

	Year Ended December 31, 2024		December 30 to December 31, 2023		January 1, 2023 to December 29, 2023
	Successor				Predecessor
	Year Ended December 31, 2024		December 30 to December 31, 2023		January 1, 2023 to December 29, 2023
Depreciation expense	$	1,473,328	$	-	$	1,290,190

At December 29, 2023 (Predecessor), the Company determined certain of its capitalized website development costs were impaired and recorded an impairment charge of $738,740 on the accompanying Consolidated Statements of Operations.

F-16

5. Goodwill and Intangible Assets

Goodwill and intangible assets consist of the following:

Schedule of Other Intangible Assets

	December 31, 2024		December 31, 2023
	Successor
	December 31, 2024		December 31, 2023
Goodwill	$	20,007,669	$	20,007,669

	December 31, 2024			December 31, 2023
	Successor
	December 31, 2024			December 31, 2023
Intangible Assets
Customer relationships	$	1,700,000		$	1,700,000
Trade name		2,400,000			2,400,000
Developed technology		2,600,000			2,600,000
Intangible assets, gross		6,700,000			6,700,000
Accumulated amortization		(2,431,668	)		-
Intangible assets, net	$	4,268,332		$	6,700,000

On December 29, 2023, in relation to the acquisition of CardCash (See Note 3), the Company recorded goodwill of $20,007,669.

On December 29, 2023, in relation to the acquisition of CardCash (See Note 3), the Company recorded intangible assets of $6,700,000. During the twelve months ended December 31, 2024, the Company recorded an amortization expense of $2,431,668, leaving a remaining intangible asset balance of $4,268,332 at December 31, 2024.

During the period January 1, 2023 to December 29, 2023, CardCash (Predecessor) recorded amortization expense of $300,000, and at December 29, 2023, determined its Intangible Assets were impaired and recorded an impairment charge of $250,000.

Identifiable intangibles are amortized over their estimated remaining useful lives, which are as follows:

Description		Weighted Average Useful Life (in years)
Customer relationships		3
Trademarks, trade names and service marks		3
Developed technology		3
Remaining useful lives		3

Amortization expense on intangible assets was as follows:

	Year Ended December 31, 2024		December 30 to December 31, 2023		January 1, 2023 to December 29, 2023
	Successor				Predecessor
	Year Ended December 31, 2024		December 30 to December 31, 2023		January 1, 2023 to December 29, 2023
Amortization expense	$	2,431,668	$	-	$	300,000

Estimated amortization expense for the Company is as follows:


2025	$	2,134,166
2026		2,134,166
Total	$	4,268,332

F-17

6. Leases

The Company leases its office facilities under noncancelable operating lease agreements. The Company has leases for office facilities in Woodbridge, New Jersey and Schaumburg, Illinois. The operating lease agreement for the Woodbridge, New Jersey location was renewed in April 2024 for a 60-month period ending in April 2029.

The Company’s operating lease liability balance was $337,304 as of December 31, 2023. During 2024, the Company renewed its office lease as discussed above and recorded an additional operating lease liability of $1,395,540. In 2024, the Company made payments of $282,861 against its operating lease liability, resulting in a lease liability of $1,449,983 as of December 31, 2024, of which the current portion of lease liability was $316,612, and a long-term lease liabilities balance of $1,133,371.

The components of lease expense were as follows:

	Year Ended December 31, 2024		December 30 to December 31, 2023		January 1, 2023 to December 29, 2023
	Successor				Predecessor
	Year Ended December 31, 2024		December 30 to December 31, 2023		January 1, 2023 to December 29, 2023
Operating lease expense	$	446,229	$	-	$	191,152

Supplemental information related to leases was as follows:

	Successor
	As of December 31, 2024

Weighted average remaining lease terms (in years)		4.05
Weighted average discount rate		8	%

Maturities of the Company’s operating lease liabilities are as follows as of December 31, 2024:

	Successor
	As of December 31, 2024

2025	$	424,660
2026		438,374
2027		382,954
2028		359,654
2029		105,927
Thereafter		-
Total		1,711,569
Less: Imputed interest		(261,586	)
Total operating lease liability	$	1,449,983

F-18

7. Secured Revolving Line of Credit

The outstanding line of credit consists of the following at December 31, 2024 and 2023:

Schedule of Line of Credit

	December 31, 2024		December 31, 2023
	Successor
	December 31, 2024		December 31, 2023
Line of credit	$	3,805,080	$	6,737,385

In November 2020, CardCash entered into an amended and restated promissory note for a revolving line of credit with availability of up to $10,000,000. The revolving line of credit is payable on demand, secured by the Company’s inventory, with interest based on the Wall Street Journal Prime Rate plus 3.00%, limited to a floor of 6.5%. At December 31, 2024 and December 31, 2023, the average interest rate was 12% and 12%, respectively. As of December 31, 2024, the Company was in compliance with customary debt covenants. At December 31, 2024 and 2023, this line of credit requires a deposit of $1,258,826, included in restricted cash.

8. Convertible Debt

Convertible debt consists of the following at December 31, 2024 and 2023:

Schedule of Convertible Debt

	December 31, 2024		December 31, 2023
	Successor
	December 31, 2024		December 31, 2023
Incumaker, Inc. principal balance	$	20,000		20,000
Accrued interest		23,137		20,137
Total principal and accrued interest (all current)	$	43,137	$	40,137

9. Secured Notes Payable – Related Party

Secured notes payable to a related party consists of the following at December 31, 2024 and 2023:

Schedule of Notes Payable Related Party

	December 31, 2024			December 31, 2023
	Successor
	December 31, 2024			December 31, 2023
Secured note payable – related party	$	2,000,000		$	-
Less debt discount		(4,000	)		-
Total principal balance		1,996,000			-
Accrued interest		64,274			-
Total principal and accrued interest		2,060,274			-
Less current portion		(2,060,274	)		-
Non-current portion	$	-		$	-

On September 20, 2024, the Company entered into a secured promissory note (the “Note”) with Spars Capital Group LLC (“Spars Capital”) in the principal amount of $2,000,000 bearing annual interest of 11.5% that has a maturity date of January 20, 2025. The Note has an origination fee and expenses of $22,000, which was recorded as a debt discount and is being amortized over the term of the Note and may be prepaid without penalty. The Note is collateralized by a blanket lien on the assets of the Company under the terms of a Security Agreement and is subordinated only to the line of credit (see Note 7). The Note and Security Agreement are subject to additional customary terms and conditions. Spars Capital is owned by a family trust affiliated with Elliot Bohm, a member of the Board of Directors of the Company and the President of CardCash Exchange, Inc., a subsidiary of Giftify. As of December 31, 2024, the notes payable had an aggregate principal balance outstanding of $2,000,000, a debt discount balance of $4,000, and accrued interest payable of $64,274.

F-19

10. Notes Payable

Notes payable consist of the following at December 31, 2024 and 2023:

Schedule of Notes Payable

	December 31, 2024			December 31, 2023
	Successor
	December 31, 2024			December 31, 2023
CardCash acquisition notes payable	$	1,500,000		$	1,500,000
GameIQ acquisition note payable		75,928			102,199
Economic Injury Disaster Loans (EIDL) note payable		664,500			664,500
Total principal balance		2,240,428			2,266,699
Accrued interest		92,204			28,080
Total principal and accrued interest		2,332,632			2,294,779
Less current portion		(1,717,632	)		(836,509	)
Non-current portion	$	615,000		$	1,458,270

CardCash Acquisition Notes Payable

On December 29, 2023, the Company issued two-year promissory notes totaling $1,500,000 as partial consideration for the acquisition of CardCash (see Note 3). $750,000 is payable on December 29, 2024 (see Note 14), bearing simple annual interest of 5%, and $750,000 is to be paid upon the earlier of (a) the completion of a firm commitment underwriting the Company’s initial public offering to allow the Company to become listed on the Nasdaq Capital Market or (b) December 29, 2025. As of December 31, 2023, the notes payable had an aggregate principal balance outstanding of $1,500,000. As of December 31, 2024, the notes payable had an aggregate principal balance outstanding of $1,500,000 and accrued interest payable of $75,000.

GameIQ Acquisition Note Payable

Economic Injury Disaster Loans (EIDL)

F-20

11. Income Taxes

No federal tax provision has been provided for the periods ended December 31, 2023, December 30, 2023 to December 31, 2023, and January 1, 2023 to December 29, 2023, due to the losses incurred during the periods. Reconciled below is the difference between the income tax rate computed by applying the U.S. federal statutory rate and the effective tax rates for the respective period:

	Year Ended December 31, 2024			December 30 to December 31, 2023			January 1, 2023 to December 29, 2023
	Successor						Predecessor
	Year Ended December 31, 2024			December 30 to December 31, 2023			January 1, 2023 to December 29, 2023

U.S. federal statutory tax rate	$	(21.0	)%	$	(21.0	)%	$	(21.0	)%
State income taxes, net of federal tax benefit		(6.0	)%		(6.0	)%		(6.0	)%
Change in valuation allowance		27.0	%		27.0	%		27.0	%
Effective tax rate	$	0.0	%	$	0.0	%	$	0.0	%

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets as of December 31, 2024 and 2023 are summarized below.

	Year Ended December 31, 2024			December 30 to December 31, 2023			January 1, 2023 to December 29, 2023
	Successor						Predecessor
	Year Ended December 31, 2024			December 30 to December 31, 2023			January 1, 2023 to December 29, 2023
Deferred tax assets
Net operating loss carryforwards	$	7,763,000		$	6,890,000		$	6,331,000
Share-based compensation		4,941,000			1,795,000			455,000
163(j) disallowed interest		2,695,000			2,384,000			3,063,000
Operating lease liability		397,000			91,000			-
Property and equipment		74,000			82,000

Gross deferred taxes		15,870,000			11,242,000			9,849,000
Less: valuation allowance		(15,870,000	)		(11,157,000	)		(8,671,000	)
Total deferred tax assets	$	-		$	85,000		$	1,178,000

Deferred tax liabilities
Intangible assets		(738,000	)		(1,800,000	)
Operating lease right-of-use asset		(385,000	)		(85,000	)
Property and equipment		-			-			(1,178,000	)
Total deferred tax liabilities		(1,123,000	)		(1,885,000	)		(1,178,000	)
Net deferred tax liability	$	(1,123,000	)	$	(1,800,000	)	$	-

In assessing the potential realization of deferred tax assets, management considers whether it is more likely than not that some portion or all of the deferred tax assets will be realized. The ultimate realization of deferred tax assets is dependent upon the Company attaining future taxable income during the periods in which those temporary differences become deductible. As of December 31, 2024 and 2023, management was unable to determine if it is more likely than not that the Company’s deferred tax assets will be realized and has therefore recorded an appropriate valuation allowance against deferred tax assets at such dates.

F-21

At December 31, 2024, the Company has available net operating loss carryforwards for federal and state income tax purposes of approximately $48,317,000. Federal net operating losses, if not utilized earlier, will begin to expire in the year ending December 31, 2032, subject to Internal Revenue Service limitations, including change in ownership regulations.

12. Stockholders’ Equity

Preferred Stock

The Company is authorized to issue a total of 10,000,000 shares of preferred stock, par value $0.001 per share. As of December 31, 2024 and 2023, there were no shares of preferred stock issued and outstanding.

Common Stock

The Company is authorized to issue a total of 750,000,000 shares of common stock, par value $0.001 per share. As of December 31, 2024 and 2023, the Company had 27,021,423 shares and 24,119,967 shares, respectively, of common stock issued and outstanding.

Common Stock Transactions

2024

Issuance of Common Stock for Services

During the year ended December 31, 2024, the Company issued 210,000 shares of common stock with a fair value of $771,500, or $3.67 per share, to consultants for services rendered.

Issuance of Common Stock for Vender Settlement

During the year ended December 31, 2024, the Company issued 104,167 shares of common stock with a fair value of $150,000, or $1.44 per share, per settlement agreement with a vender. The fair value of the common shares of $150,000 was recorded as a component of selling, general and administrative expenses in the consolidated statement of operations.

Sale of Common Stock on Stock Purchase Agreement

ClearThink Capital

On December 16, 2024, the Company entered into a Securities Purchase Agreement and Strata Purchase Agreement with ClearThink Capital Partners, LLC (ClearThink Capital”). Under the terms of the Strata Purchase Agreement, ClearThink Capital agreed to purchase up to $10 million of Giftify’s shares of common stock (the “Purchase Shares”) based on a series of request notices limited to the lesser of $1 million or 500% of the average number of shares traded for the 10 trading days prior to the closing request date with the minimum purchase notice to be $25,000. The Company will receive financing in an amount equal to 99% of the average of the closing prices of the Company shares of common stock on the Nasdaq stock market during the Valuation Period that is defined as three business days preceding the purchase date with respect to a request notice. No purchase of Company shares of common stock will be made by ClearThink if its beneficial ownership of Giftify common stock exceeds 9.99% of the issued and outstanding shares of Giftify common stock.

As a condition of the right of the Company to commence sales of its Purchase Shares to ClearThink Capital under the Strata Purchase Agreement, the Company issued to ClearThink Capital under the terms of the Securities Purchase Agreement, 100,000 restricted shares of Giftify’s common stock and an effective registration statement covering the resale of the Purchase Shares. The fair value of the 100,000 restricted shares was determined to be $131,000 and was recorded as a financing cost, a component of other expenses, in the accompanying Consolidated Statement of Operations during the year ended December 31, 2024.

Under the terms of the Securities Purchase Agreement, ClearThink Capital has agreed to purchase a total of 150,000 restricted shares of Giftify common stock in at an effective price of $1.3333 per share to be delivered to ClearThink Capital by book entry within seven calendar days following the two closing dates as follows: 75,000 restricted shares of Giftify common stock on December 16, 2024, and 75,000 shares of Giftify common stock within five days after the filing of the Prospectus Supplement underlying the Strata Purchase Agreement. During the year end December 31, 2024, ClearThink purchased a total of 150,000 sales of the Company’s common stock for $200,000.

On February 4, 2025, the Company exercised its right to terminate the SPA effective by mutual agreement of the parties.

Issuance of Common Stock on At-the-Market Issuance Sales Agreement

On October 25, 2024, the Company entered into an At-the-Market Issuance Sales Agreement with Ascendiant Capital Markets, LLC, as sales agent to sell shares of its common stock, par value $0.001 (the “Common Stock”), having an aggregate offering price of up to $30,000,000 (the “Shares”) from time to time, through an “at the market offering” (the “ATM Offering”) as defined in Rule 415 under the Securities Act of 1933, as amended (the “Securities Act”). During the year ended December 31, 2024, the Company sold 209,993 shares of Common Stock and received proceeds next of expenses of $286,063, or an average of $1.36 per share.

Issuance of Common Stock on Private Sales

During the year ended December 31, 2024, the Company received net proceeds of $3,021,523 from the sale of 1,539,500 shares of common stock at $1.96 per share, as part of a private placement.

Common Stock Issuable

At December 31, 2023, 383,343 shares of common stock with an aggregate value of $383,000 have not been issued and are reflected as common stock issuable in the accompanying consolidated financial statements. During the year ended December 31, 2024, the Company issued 32,500 shares of common stock, leaving 350,843 shares of common stock issuable in the accompanying consolidated financial statements at December 31, 2024.

F-22

2023

Issuance of Restricted Stock for Employment Agreements

Effective on December 29, 2023, with the closing of the acquisition of CardCash (see Note 3), the Company entered into a four-year employment agreement with Elliot Bohm and Mark Ackerman. Mr. Bohm was the President of CardCash and Mr. Ackerman was the Chief Operating Officer of CardCash prior to the acquisition by the Company and will remain in those positions following the acquisition. Mr. Bohm also joined the Board of Directors of the Company.

Under the terms of the agreements, Mr. Bohm and Mr. Ackerman received a one-time award of 1,250,000 restricted shares of the Company’s common stock with an aggregate fair value of $10,000,000, 50% vesting immediately and 50% vesting over 4 years. During the year ended December 31, 2023, the Company recorded stock compensation for 1,250,000 of these shares of restricted stock with a fair value of $5,000,000 based upon its vesting term. During the year ended December 31, 2024, the Company recorded stock compensation expense for 312,500 shares of restricted stock with a fair value of $1,250,000 based upon its vesting term. As of December 31, 2024, the unamortized stock compensation amounted to $3,750,000 to be expensed upon vesting in future periods through December 2027.

Issuance of Common Stock for Acquisition of CardCash (Successor)

During the period December 29, 2023 to December 31, 2023, RDE issued 6,108,007 shares of common stock with a fair value of $24,432,000, or $4.00 per share, as partial consideration paid on the acquisition of CardCash (see Note 3).

13. Share-Based Compensation

Summary of Restricted Common Stock

The following table summarizes restricted stock activity during the year ended December 31, 2024:

Schedule of Restricted Stock

	Unvested Shares			Issuable Shares			Fair Value at Date of Issuance			Weighted Average Grant Date Fair Value
Balance, December 31, 2023		125,000			-		$	418,750			3.35
Granted		425,000			-			1,793,500			4.22
Vested		(241,666	)		241,666			-			-
Forfeited		-			-			-			-
Issued		-			(241,666	)		(731,400	)		-
Balance, December 31, 2024		308,334			-		$	1,480,850		$	3.99

F-23

On March 1, 2023, the Company granted its Chief Executive Officer 200,000 shares of the Company’s restricted stock, and 100,000 shares of the Company’s restricted stock to employees with an aggregate fair value of $1,005,000 or $3.35 per share. The restricted stock grant vest 33% on the grant date, and 33% on each subsequent anniversary date.

On March 1, 2024, the Company granted its Chief Executive Officer 200,000 shares of the Company’s restricted stock, and 225,000 shares of the Company’s restricted stock to other officers and employees with an aggregate fair value of $1,793,500 or $4.22 per share. The restricted stock grant vest 33% on the grant date, and 33% on each subsequent anniversary date.

During the year ended December 31, 2024, the Company recognized stock compensation expense of $1,431,026 and issued 241,666 shares of restricted stock based upon its vesting term of the grants. As of December 31, 2024, the unamortized stock compensation expense amounted to $781,224, to be expensed upon vesting in future periods through March 1, 2026.

Summary of Stock Options

The Company issues common stock and stock options as incentive compensation to directors and as compensation for the services of employees, contractors and consultants of the Company.

The fair value of a stock option award is calculated on the grant date using the Black-Scholes option-pricing model. The risk-free interest rate is based on the U.S. Treasury yield curve in effect as of the grant date. The expected dividend yield assumption is based on the Company’s expectation of dividend payouts and is assumed to be zero. The expected volatility is based on the historical volatility of the Company’s common stock, calculated utilizing a look-back period approximately equal to the contractual life of the stock option being granted. The expected life of the stock option is calculated as the mid-point between the vesting period and the contractual term (the “simplified method”). The fair market value of the common stock is determined by reference to the quoted market price of the common stock on the grant date.

The expected term represents the weighted-average period of time that share option awards granted are expected to be outstanding giving consideration to vesting schedules and historical participant exercise behavior; the expected volatility is based upon historical volatility of the Company’s common stock; the expected dividend yield is based on the fact that the Company has not paid dividends in the past and does not expect to pay dividends in the future; and the risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of measurement corresponding with the expected term of the share option award.

A summary of stock option activity is presented below:

Schedule of Stock Options

	Number of			Weighted Average
	Options			Exercise Price

Stock options outstanding at December 29, 2023		743,116			4.43
Granted		-			-
Exercised		-			-
Expired or forfeited		-			-
Stock options outstanding at December 31, 2023		743,116		$	4.43
Granted		3,405,500			4.01
Exercised		(2,843	)		3.35
Expired or forfeited		(23,943	)		(1.05	)
Stock options outstanding at December 31, 2024		4,121,830		$	4.28
Stock options exercisable at December 31, 2024		2,395,125		$	4.32

F-24

Stock option expense was as follows:

	Successor		Successor		Predecessor
	2024		December 30 to December 31, 2023		January 1, 2023 to December 29, 2023

Stock option expense	$	8,031,290	$	5,000,000	$	1,942

On April 1, 2024, the Company, pursuant to the terms of its 2019 Stock Incentive Plan, granted options exercisable into 3,405,500 shares to be issued to its executives and employees. The 3,405,500 stock options had an exercise price of $4.01 per share, with vesting of 33% on April 1, 2024, and then 33% on each subsequent anniversary date.

The stock options are exercisable at a weighted average price of $4.01 per share with an average life to expiration of approximately nine years. The total fair value of these options at grant date was approximately $13,500,000, which was determined using a Black-Scholes-Merton option pricing model with the following average assumption: stock price of $4.01 per share, expected term of 6.00 years, volatility of 220%, dividend rate of 0%, and weighted average risk-free interest rate of 4.33%. The expected term represents the weighted-average period of time that share option awards granted are expected to be outstanding giving consideration to vesting schedules and historical participant exercise behavior; the expected volatility is based upon historical volatility of the Company’s common stock; the expected dividend yield is based on the fact that the Company has not paid dividends in the past and does not expect to pay dividends in the future; and the risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of measurement corresponding with the expected term of the share option award.

During the year ended December 31, 2024, the Company recognized $8,031,290 of stock compensation expense relating to vested stock options. As of December 31, 2024, the aggregate amount of unvested compensation related to stock options was approximately $5,680,244 which will be recognized as an expense as the options vest in future periods through March 2026.

The weighted average remaining contractual life of common stock options outstanding and exercisable at December 31, 2024 was 8.25 years. Based on a fair market value of $1.09 per share on December 31, 2024, the intrinsic value attributed to exercisable but unexercised common stock options was $5,870 at December 31, 2024.

The exercise prices of common stock options outstanding and exercisable at December 31, 2024 are as follows:

Exercise Prices		Options Outstanding (Shares)		Options Exercisable (Shares)
$	1.00		61,004		61,000
$	1.05		9,500		9,500
$	1.50		400,000		400,000
$	2.50		50,000		50,000
$	3.00		100,000		100,000
$	3.35		92,166		76,728
$	4.22		3,405,500		1,694,236
$	363.17		3,660		3,661
			4,121,830		2,395,125

F-25

14. Commitments and Contingencies

Employment Agreements

Ketan Thakker

Effective July 1, 2023, Giftify entered into a new employment agreement with Ketan Thakker, its Chairman, President and Chief Executive Officer, pursuant to which Mr. Thakker’s annual salary is $250,000, increasing to $400,000 on July 1, 2024. In addition, Mr. Thakker may be entitled to receive, at the discretion of our Board, a cash bonus based on the performance goals of our Company.

In the event of a change of control of our company, Mr. Thakker may terminate his employment within six months after such event and will be entitled to continue to be paid pursuant to the terms of his employment agreement.

Steve Handy

Effective August 21, 2024, Giftify entered into a new employment agreement with Steve Handy, its Chief Financial Officer, pursuant to which Mr. Handy’s annual salary is $250,000, increasing at 3% annually. In addition, Mr. Handy is to receive a minimum annual cash bonus of $25,000.

Elliot Bohm and Marc Ackerman

Effective on December 29, 2023, with the closing of the acquisition of CardCash (see Note 3), the Company entered into an Employment Agreements with Elliot Bohm and Mark Ackerman. Mr. Bohm was the President of CardCash and Mr. Ackerman was the Chief Operating Officer of CardCash prior to the acquisition by Giftify and will remain in those positions following the acquisition. Bohm also joined the Board of Directors of Giftify.

Under the terms of the four-year agreements, Mr. Bohm and Mr. Ackerman shall each receive an annual base salary of $375,000 and a one-time award of 1,250,000 restricted shares of Giftify’s common stock with aggregate fair value of $10 million, 50% vesting immediately and 50% vesting over 4 years. In addition, Mr. Bohm and Mr. Ackerman shall receive a minimum annual bonus of $100,000 to be paid in cash, stock, or both on terms that shall be mutually acceptable to the Board and Mr. Bohm and Mr. Ackerman.

If Mr. Bohn’s or Mr. Ackerman’s employment is terminated by the Company without cause, as defined under their employment agreements, Mr. Bohn or Mr. Ackerman will be entitled to (a) twelve months’ base salary, (b) Earned but Unpaid Amounts, as defined, (c) all vested equity awards shall be retained and all unvested equity awards shall be accelerated and be deemed vested and (d) other benefits, as defined, for health, life, disability and similar employee benefit plans will continue, as defined.

Mr. Bohm and Mr. Ackerman also entered into a confidentiality and non-competition agreement in conjunction with his employment agreement which contains covenants restricting them from engaging in any activities competitive with our business during the term of the employment agreement and one year thereafter and prohibiting him from disclosure of confidential information regarding our company at any time.

During the year ended December 31, 2023, the Company recognized $5,000,000 of stock compensation expense and issued 1,250,000 vested restricted shares. During the year ended December 31, 2024, the Company recognized $1,250,000 of stock compensation expense and issued 312,500 vested restricted shares. As of December 31, 2024, the aggregate amount of unvested compensation related to 937,500 unvested restricted shares was approximately $3,750,000, which will be recognized as an expense as the restricted shares vest in future periods through December 2027.

F-26

15. Subsequent Events

Public Offering

On January 15, 2025, the Company entered into a Placement Agency Agreement with Craft Capital Management LLC (“Craft Capital”), as placement agent, to issue and sell 600,000 shares of the Company’s common stock at a purchase price of $1.00 per Share. The shares were offered by the Company pursuant to its shelf registration statement on Form S-3 (File No. 333-282322), that was declared effective by the Securities and Exchange Commission on October 15, 2024, on a best efforts basis (the “Offering”). The offer and sale of the shares in the Offering are described in the Company’s prospectus constituting a part of the registration statement, as supplemented by a final prospectus supplement dated January 15, 2025. On January 16, 2025, the Company closed the Offering. The Company sold 600,000 shares for total gross proceeds of $600,000. After deducting the placement agent fee and offering expenses payable by the Company, the Company received net proceeds of $483,000.

Issuance of Common Stock on At-the-Market Issuance Sales Agreement

Subsequent to December 31, 2024, the Company sold 751,152 shares of Common Stock and received proceeds next of expenses of $1,004,991, or an average of $1.34 per share, utilizing its At-the-Market Issuance Sales Agreement with Ascendiant Capital Markets, LLC.

Secured Notes Payable – Related Party

Subsequent to December 31, 2024, the Company paid in full its secured promissory note of $2,000,000 plus accrued interest with a related party, Spars Capital (see Note 8).

Common Shares Issued in Settlement of Vendor Balance

Subsequent to December 31, 2024, the Company issued 75,000 shares of common stock to pay a $75,000 vendor balance.

Common Shares Issued on Vesting of Restricted Stock

Subsequent to December 31, 2024, the Company issued 554,166 shares on vesting of restricted stock.

Issuance of Common Stock for Services

Subsequent to December 31, 2024, the Company issued 116,666 shares of common stock to consultants for services rendered.

Secured Notes Payable

On February 19, 2025, the Company entered into a secured promissory note with Real World Digital Assets LLC (“Real World”) in the principal amount of $1,000,000 bearing annual interest of 11.5% that has a maturity date of December 31, 2025. The note is collateralized by a blanket lien on the assets of Giftify under the terms of a security agreement and is subordinated only to the line of credit owed by Company to Pathward National Association (see Note 7). Proceeds from the note were used to pay the remaining balance owed on the secured promissory note with Spars Capital (See Note 9).

CardCash Acquisition Note Payable

Subsequent to December 31, 2024, the Company made its $750,000 principal payment plus accrued interest (see Note 9), which was due on December 29, 2024.

Stock Based Compensation

On February 1, 2025, the Company, pursuant to the terms of its 2019 Stock Incentive Plan, granted 450,000 restricted shares of common stock and options exercisable into 1,170,000 shares of the Company’s common stock to its executives and employees.

The restricted share of common stock and stock options vest over 36 months equally. The stock options are exercisable at a weighted average price of $0.92 per share with an average life to expiration of approximately three years. The total fair value of these options at grant date was approximately $1,073,000, which was determined using a Black-Scholes-Merton option pricing model with the following average assumption: stock price of $0.92 per share, expected term of 6.00 years, volatility of 241%, dividend rate of 0%, and weighted average risk-free interest rate of 4.45%. The expected term represents the weighted-average period of time that share option awards granted are expected to be outstanding giving consideration to vesting schedules and historical participant exercise behavior; the expected volatility is based upon historical volatility of the Company’s common stock; the expected dividend yield is based on the fact that the Company has not paid dividends in the past and does not expect to pay dividends in the future; and the risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of measurement corresponding with the expected term of the share option award.

F-27

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

Not applicable.

ITEM 9A. CONTROLS AND PROCEDURES

The information contained in this section covers management’s evaluation of our disclosure controls and procedures and our assessment of our internal control over financial reporting for the year ended December 31, 2024.

Evaluation of Disclosure Controls and Procedures

Disclosure controls and procedures are designed at a reasonable assurance level to ensure that information required to be disclosed in our reports filed or submitted under the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC, and that information relating to the Company is accumulated and communicated to management, including our principal officers, as appropriate to allow timely decisions regarding required disclosure. The Company’s Chief Executive and Chief Financial Officer has evaluated the effectiveness of the Company’s disclosure controls and procedures as of December 31, 2024, and have concluded that the Company’s disclosure controls and procedures were not effective as of December 31, 2024, due to the material weakness described below in the subsection titled “Management’s Annual Report on Internal Control over Financial Reporting.

Notwithstanding the identified material weakness, management has concluded that the Financial Statements included in this Annual Report on Form 10-K present fairly, in all material respects, the Company’s financial position, results of operations and cash flows for the periods disclosed in conformity with U.S. GAAP.

On December 29, 2023, Giftify, Inc. (“Giftify”, the “Company”) completed the acquisition of CardCash Exchange Inc (“CardCash”, the “Predecessor”). As a result of the merger, the Company adopted the controls and procedures of the Predecessor.

Inherent Limitations on Effectiveness of Controls

Management does not expect the Company’s disclosure controls or internal control over financial reporting will prevent or detect all errors and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. The Company’s controls and procedures are designed to provide reasonable assurance that control system’s objective will be met, and the CEO and CFO have concluded that the Company’s disclosure controls and procedures are ineffective at the reasonable assurance level. The design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Further, because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, within the company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple errors or mistakes. Controls can also be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls. The design of any system of controls is based in part on certain assumptions about the likelihood of future events and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Projections of any evaluation of the effectiveness of controls in future periods are subject to risks. Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with policies or procedures.

Management’s Annual Report on Internal Control over Financial Reporting

Management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined by Rule 13a-15(f) and Rule 15d-15(f) under the Exchange Act. The Company’s internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of consolidated financial statements for external purposes in accordance with GAAP. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Management conducted an assessment of the Company’s internal control over financial reporting as of December 31, 2024, based on the framework and criteria established by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control-Integrated Framework (2013) (COSO). Based on the assessment, management concluded that, as of December 31, 2024, the Company’s internal controls over financial reporting were not effective.

We identified a material weakness in our internal controls over financial reporting. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our financial statements will not be prevented or detected on a timely basis.

As previously reported, the material weaknesses continued to exist as of December 31, 2024, relating to the Company did not design and maintain effective controls over certain information technology (“IT”) general controls for information systems that are relevant to the preparation of its consolidated financial statements. Specifically, Company did not design and maintain effective program change management controls to ensure that access to information technology program and data changes affecting certain financial IT applications and underlying accounting records are identified, documented, tested, authorized and implemented appropriately.

Remediation Plan for Material Weaknesses in Internal Control Over Financial Reporting

In response to the material weaknesses identified in “Management’s Reporting on Internal Control Over Financial Reporting,” we, with oversight from the Audit Committee of the Board of Directors, developed a plan to remediate the material weakness. Ongoing remediation activities include:

	●	Continue to design and implement ITGCs, focusing on user access controls, periodic access reviews, and change management;
	●	Continue to enhance documentation and control execution, ensuring the completeness and accuracy of supporting data; and
	●	Continue to provide training to our control operators.

We believe the foregoing efforts will effectively remediate the material weaknesses described in “Management’s Report on Internal Control Over Financial Reporting.” Because the reliability of the internal control process requires repeatable execution, the successful on-going remediation of the material weaknesses will require on-going review and evidence of effectiveness prior to concluding that controls are effective

Remediation of Previously Identified Material Weaknesses

In the year ending December 31, 2023, we had the following material weakness:

The Company did not maintain adequate segregation of duties consistent with control objectives. Specifically, certain personnel had the ability to both (i) create and post journal entries within our general ledger system and (ii) prepare and review account reconciliations.

As of December 31, 2024, management implemented the following to address the previously identified material weakness.

	●	hiring a Chief Financial Officer in August 2024, who has extensive experience leading public companies;
	●	executing plans to remediate control deficiencies and performing a risk assessment under the COSO framework; and
	●	ensuring optimal segregation of duties and levels of oversight.

Management determined these controls were in place and were effectively operating for a sufficient period of time as of December 31, 2024 and, therefore, the previously identified material weakness related to inadequate segregation of duties were remediated as of December 31, 2024.

There are, however, inherent limitations in all control systems and no evaluation of controls can provide absolute assurance that all deficiencies have been detected. While these actions and planned actions are subject to ongoing management evaluation and will require validation and testing of the design and operating effectiveness of internal controls over a sustained period of financial reporting cycles, we are committed to the continuous improvement and diligent review of our internal controls over financial reporting.

Changes in Internal Control over Financial Reporting

Other than as described above, there were no changes in our internal control over financial reporting during the quarter ended December 31, 2024 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

ITEM 9B. OTHER INFORMATION

None.

Item 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

None.

PART III

ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

Directors and Executive Officers

Set forth below is certain information regarding our executive officers and directors. Each of the directors listed below was elected to our board of directors to serve until our next annual meeting of stockholders or until his or her successor is elected and qualified. All directors hold office for one-year terms until the election and qualification of their successors. The following table sets forth information regarding the members of our board of directors and our executive officers:

Name	Age	Position
Ketan Thakker	56	Chief Executive Officer; President and Chairman
Steve Handy	57	Chief Financial Officer
Balazs Wellisch	53	Chief Operating Officer of Restaurant.com
Elliot Bohm	43	Director, President of CardCash
Marc Ackerman	41	Chief Operating Officer of CardCash
Kevin Harrington	65	Director
M. Scot Wingo	52	Director
Paul K. Danner	67	Director

Business Experience

The following is a brief overview of the business experience of each of our directors and executive officers during at least the past five years, including their principal occupations or employment during the period, the name and principal business of the organization by which they were employed, and certain of their other directorships:

Ketan Thakker has been our Chairman, President and Chief Executive Officer since August 2014. He joined our company as Chief Financial Officer in July 2013, leading our restructuring, and was promoted the following year. Mr. Thakker is an entrepreneurial leader with more than 20 years in finance and operations. He has significant hands-on experience in building and growing new and existing businesses in the online space. He founded and served as President of TripRental.com and TripRental Software, an online listing site for vacation rental properties, from March 2011 to June 2013. He previously served as the Chief Financial Officer for Apartments.com, a Classified Ventures Company from 2006 to 2011. Mr. Thakker also held leadership roles in financial management at Abbott Laboratories and Baxter International Inc. Mr. Thakker received an M.B.A. from Northwestern University’s Kellogg School of Management and is an accredited certified public accountant (inactive).

As the Chairman, President and Chief Executive Officer, Mr. Thakker leads the Board and guides our company. Mr. Thakker brings extensive e-commerce industry knowledge of the company and a deep background in technology growth companies, mergers and acquisitions and capital market activities, making him well qualified as a member of the Board. His service as Chairman, President and Chief Executive Officer creates a critical link between management and the Board.

Steve Handy joined Giftify, Inc. on August 26, 2024, as its Chief Financial Officer. Mr. Handy brings over two decades of extensive financial leadership experience to the Company with a proven track record in guiding companies through significant growth phases, public offerings, and operational transformations. He joins Giftify from Sacks Parente Golf, Inc., a Nasdaq listed company, where he played a pivotal role as Chief Financial Officer in its successful initial public offering and its realized accelerated revenue growth of over 700% in the first half of 2024 compared to 2023. Mr. Handy attended numerous investor conferences, and established controls and procedures to facilitate the company’s transition from a private to a public entity, including the implementation of Oracle’s NetSuite ERP System.

Before his tenure at Sacks Parente Golf, Mr. Handy served as Chief Financial Officer and Director of Operations at Opti-Harvest, Inc., an agriculture innovation company, where he oversaw financial strategy and operational management. His earlier experience includes his role as Chief Financial Officer of Tix Corporation, a former publicly traded entertainment ticketing company, where he led financial operations from March 2010 to May 2021. Mr. Handy’s extensive experience also includes senior financial roles including Chief Financial Officer at SM&A, a former Nasdaq-listed professional services firm, and Dot Hill Systems, a former publicly traded technology manufacturer, where he managed operations in Europe. Mr. Handy began his career as a Senior Auditor for Deloitte & Touche LLP. He holds a Bachelor of Science in Management from California State University, San Marcos, and is a Certified Public Accountant in California.

Balazs Wellisch joined Restaurant.com in February 2022 following our acquisition of GameIQ acquisition. He is responsible for the strategy, formulation, development and delivery of Restaurant.com’s product portfolio as well as the operation of the company’s IT infrastructure. Mr. Wellisch has more than 25 years of experience leading high-performing organizations and driving modern technology development and adoption for global organizations. From November 2014 to February 2022, he served as founder and CEO GameIQ. From March 2002 to September 2009 Mr. Wellisch was President and CEO of Solana Consulting, a company providing e-business management solutions to companies worldwide. From March 2000 to February 2002 Mr. Wellisch was Vice President of Engineering at Eriss Corp., a company providing dynamic internet application services to government workforce boards, cities, counties, states and commercial service providers, and from September 1997 to February 2000 he served as Chief Technology Officer of Digital Trends, a managed high growth applications services company delivering e-commerce solutions. Mr. Wellisch graduated from San Diego State University with a degree in Computer Science.

Elliot Bohm joined our Board of Directors on December 29, 2023, and is the Chief Executive Officer of our subsidiary, CardCash, following the CardCash Merger. our f following the CardCash Merger. Mr. Bohm is a seasoned entrepreneur with a diverse background in leveraging technology, both as an operator and a financier. Co-founded CardCash.com in 2009 and swiftly transformed the startup into one of the world’s largest gift card exchange marketplaces. For his outstanding achievements, Forbes Magazine recognized Elliot as one of America’s Most Promising CEOs under the age of 35, a prestigious list featuring only 22 individuals. His strategic vision has fostered key partnerships with industry giants such as Walmart, Amazon, CVS, and United Airlines, solidifying his reputation as a dynamic leader in technology-driven entrepreneurship. With a decade of experience in M&A, Elliot has successfully orchestrated investment and acquisition deals, raising over tens of millions in venture capital and debt financing from esteemed names like Guggenheim Partners, Incomm, Pathward, and Sterling National Bank. Mr. Bohm graduated from the Institute of Advanced Judaic Studies in Toronto Canada with a master’s degree in Judaic Studies.

Marc Ackerman joined our Company as the Chief Operating Officer of our subsidiary, CardCash, on December 29, 2023, following the CardCash Merger. Mr. Ackerman is a experienced operator, Co-founded CardCash.com in 2009, and played a pivotal role in evolving the operation from a startup with a handful of individuals into a thriving team of over 50 employees. His visionary leadership and management acumen have streamlined processes, ensuring the efficient coordination of various departments, including customer service, shipping, bulk sales, human resources, and loss prevention. With a track record of success, he continues to drive operational excellence and contributes to the growth of innovative ventures. Mr. Ackerman graduated from BMG in Lakewood, New Jersey, with a master’s degree in Judaic Studies.

Kevin Harrington was appointed as a director of our Company on February 13, 2019, following the closing of the SkyAuction Merger. Mr. Harrington has almost 40 years’ experience in product introduction and direct marketing, being one of the first to market products through infomercials in 1984. Since 2005, he has been Chief Executive Officer of Harrington Business Development, Inc. and, since November 2015, Chief Executive Officer of KBHS, LLC, each privately held consulting firms controlled by him. A serial entrepreneur, Mr. Harrington appeared as one of the original panelists on the ABC television program, “Shark Tank,” from 2009 to 2011. He currently serves as a director of Celsius Corp., a developer of calorie-burning fitness beverages, since March 2013, Emergent Health Corp., a developer of nutritional products, since December 2014, and Redwood Scientific Technologies, Inc., a marketer of consumer homeopathic drugs and supplements, since April 2015. He also serves on the Advisory Board of Good Gaming, Inc., an eSports tournament gaming platform, since March 2016, and was formerly the Chairman of the Board of As Seen On TV, Inc., a public company that focuses on marketing products through infomercials and other direct marketing, from May 2010 to April 2014. Mr. Harrington is the author of “Act Now! How to Turn Ideas into Million-Dollar Products,” which chronicles his life and experiences in the direct response industry. Mr. Harrington is a co-founder of two global networking associations, the Entrepreneur’s Organization (formerly the Young Entrepreneurs Organization) in 1997, and the Electronic Retailing Association in 2000. Mr. Harrington’s in-depth knowledge of the e-commerce market and the broad range of companies in the industry make him well qualified as a member of the Board. He also brings transactional expertise in mergers and acquisitions and capital markets.

M. Scot Wingo was appointed as a director of our Company on February 13, 2019, following the closing of the SkyAuction Merger. Mr. Wingo is a co-founder of ChannelAdvisor Corporation (NYSE) and has served as chairman of its board of directors since its inception in 2001, as its executive chairman since May 2015 and as its chief executive officer from 2001 until May 2015. Mr. Wingo is a co-founder of, and since July 2016 has served as the chief executive officer of, Get Spiffy, Inc., an on-demand car cleaning technology and services company. Prior to founding ChannelAdvisor, he served as general manager of GoTo Auctions, chief executive officer and co-founder of AuctionRover.com, which was acquired by GoTo.com, and as chief executive officer and co-founder of Stingray Software, which was acquired by RogueWave. He has appeared on CNBC, The Today Show and contributed thought leadership to the WSJ, New York Times, Washington Post, Bloomberg/Business Week, LA Times, AP, Reuters and many other publications. Mr. Wingo regularly speaks about e-commerce and on-demand topics at IRCE (internet Retailer Conference and Exhibition), NRF’s/shop.org Digital Summit, NRF’s Big Show, Shoptalk, NPD Idea, Bronto Summit, ChannelAdvisor Catalyst and many e-commerce/retail-oriented Wall Street conferences. Mr. Wingo has received numerous awards including Ernst and Young’s Entrepreneur of the Year and Triangle Business Journal’s Businessperson of the Year. Mr. Wingo received a B.S. degree in Computer Engineering from the University of South Carolina and an M.S. degree in Computer Engineering from North Carolina State University. The Board of Directors believes that Mr. Wingo’s reputation as a thought leader in the e-commerce industry, transactional expertise in mergers and acquisitions and capital markets and his business experience in founding and overseeing the growth of software companies makes him well qualified to be a member of the Board.

Paul K. Danner joined our Board of Directors on February 13, 2019, following the SkyAuction Merger. He is currently serving as the Chief Executive Officer of Pepex Biomedical, Inc. From 2016 to 2018, he was Chairman & Chief Executive Officer of Alliance MMA, Inc., Nasdaq-listed sports promotion and media firm. Formerly, Mr. Danner was the Managing Director of Destiny Partners Worldwide, a global organizational management and business operations consultancy since 2006. From 2008 to 2010, Mr. Danner was also the Chief Executive Officer of Shanghai-based China Crescent Enterprises, a fully-reporting OTCBB-listed information technologies company which operated primarily in Asia. Previously, he served as Chairman & Chief Executive Officer of Paragon Financial Corporation, a Nasdaq-listed financial services firm, from 2002 to 2006. From January 1998 to 2001 Mr. Danner was employed in various roles at MyTurn.com, Inc., a Nasdaq-listed information technologies company, including as Chief Executive Officer. From 1996 to 1997, Mr. Danner was the Managing Partner of Technology Ventures, a business consultancy firm. From 1985 to 1996 he held executive-level and sales & marketin

GIFTIFY, INC. 10-K/A