What changed in this filing

/stocks — the workspaceLOADING

Item 7. Management’s Discussion and Analysis

2025-03-31 compared with 2024-04-09 · 247 added, 189 removed, 255 unchanged (63% of the section changed)

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

otherwise indicated or the context otherwise requires, references in this section to “the Company,” “RDE” “we,”

“us,” “our” and other similar terms refer to RDE, 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).

following discussion and analysis of the financial condition and results of operations of RDE should be read together with our consolidated

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).

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, 2023 (Successor) and

for the period from January 1, 2023 through December 29, 2023 (Predecessor), and for the year ended December 31, 2022 (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.

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

to “Notes” are notes included in our audited consolidated financial statements appearing elsewhere in this Annual Report

on Form 10-K.

March 1, 2020, we acquired the assets of Restaurant.com, Inc.

Restaurant.com, Inc.

is a pioneer in the restaurant deal space and the

nation’s largest restaurant-focused digital deals brand.

February 28, 2022, the Company completed the acquisition of GameIQ, a California

corporation, that is a developer of consumer gamification technologies for retail businesses.

The Company issued 600,000 restricted shares

of its common stock with a fair value of $300,000, and promissory notes aggregating $140,914 and bearing interest at 1% per annum, to

Balazs Wellisch, President and co-founder, and Quentin Blackford, Director, of GameIQ.

Each note required repayment in nine equal biannual

installments, with the first installment due on the nine-month anniversary of the closing.

Balazs Wellisch became Chief Technology Officer

of Restaurant.com, a subsidiary of the Company.

December 29, 2023, RDE, 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 RDE, 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 RDE’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.

Elliot Bohm, President

of CardCash prior to the merger with RDE, remains as President of CardCash following the closing of the merger and has joined the Board

of Directors of RDE as well as serving as a member of the Board of Directors of CardCash.

Marc Ackerman, Chief Operating Officer of CardCash

prior to the merger with RDE, continues to serve as Chief Operating Officer of CardCash following the closing of the merger.

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.

became effective on October 28, 2024.

All references to RDE, Inc.

have been changed to Giftify, Inc.

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

August 18, 2023, we entered into an agreement and plan of merger to acquire CardCash Exchange Inc (“CardCash”).

29, 2023, the merger was completed and has been accounted for as a business combination using the acquisition method of accounting.

was formed in 2013 and purchases merchant gift cards and resells them at a markup.

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.

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

26 unchanged sentences

Business to Customer Division

B2C division accounted for 45% of gross revenue in our fiscal year ended December 31, 2023.

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,

15 unchanged sentences

Business to Business Division

B2B division accounted for 55% of our gross revenue in our fiscal year ended December 31, 2023.

B2B division accounted for approximately 50% of our gross revenue in our fiscal year ended December 31, 2023.

We sell certificates and Discount Dining

4 unchanged sentences

convert to paperless billing and auto-bill payment.

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

motivate specific customer behavior such as free home

repair estimates and test drives for auto dealers;

renew subscriptions and memberships;

54 unchanged sentences

be required to scale back its business activities or to discontinue its operations entirely.

Basis of Presentation

August 18, 2023, RDE, Inc.

(“RDE”) entered

of Presentation

August 18, 2023, Giftify, Inc.

into an agreement and plan of merger to acquire CardCash Exchange Inc (“CardCash”).

On December 29, 2023, the merger was

RDE’s operations are not considered significant compared to the operations of CardCash before the acquisition.

Giftify’s operations are not considered significant compared to the operations of CardCash before the acquisition.

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 Card Cash prior to the acquisition, and is referred to as the “Predecessor”.

beginning after December 29, 2023 reflect the financial position, results of operations and cash flows of RDE consolidated with CardCash,

results of operations and cash flows of CardCash prior to the acquisition, and is referred to as the “Predecessor”.

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”.

2 unchanged sentences

between these periods.

Collectively, RDE (Successor) and CardCash (Predecessor) are referred to as the “Company”.

ended December 31, 2023 compared to Year ended December 31, 2022

of Operations – Twelve months ended December 31, 2023, compared to twelve months ended December 31, 2022

AND SUBSIDIARIES

STATEMENTS OF OPERATIONS

Collectively, Giftify (Successor) and CardCash (Predecessor) are referred to as the “Company”.

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

AND SUBSDIARIES (FKA RDE, INC.)

CONSOLIDATED STATEMENTS OF OPERATIONS

Cost of sales

3 unchanged sentences

Amortization of intangible assets

Intangibles and property and equipment

Impairment of property and equipment

Impairment of intangibles

Goodwill impairment

Total operating expenses

Loss from operations

(18,375,726 )

Other income (expense):

Interest expense

Financing costs

Gain on forgiveness of debt

2 unchanged sentences

(19,509,080 )

Income taxes (expense) benefit

$ (18,832,080 )

the years ended December 31, 2023 and 2022, the Company’s operating revenues consisted of sales generated by our CardCash business.

Sales for the period January 1, 2023 to December 29, 2023, were $86,661,944,

a decrease of approximately $10,346,158 or 10.7%, as compared to $97,008,102 in the year ended December 31, 2022.

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 12.0%, as compared to a gross margin of 10.8% in the prior year period.

our sales decreased 10.7% over the prior year period, our gross profit was consistent with the prior year period.

Sales for the period December 30, 2023 to December 31, 2023, were $484,860.

$ (5,020,000 )

the year ended December 31, 2023, the Company’s operating revenues consisted of sales generated by our CardCash business.

Basis of Presentation discussion above.

Restaurant.com

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

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.

December 31, 2024

December 30, 2023 to

December 31, 2023

January 1, 2023 to

December 29, 2023

Restaurant.com

Cost of Sales

Cost of sales consists primarily of the cost to purchase

merchant gift cards.

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.

Costs of sales for the period January 1, 2023 to December

29, 2023 decreased to $76,220,645, as compared to $86,527,509 during the year ended December 31, 2022.

Our cost of sales, as a percentage

of sales, were 88.0% and 89.2%, respectively.

The decline in our cost of sales, and the increase in our gross margin, as compared to the

prior year period, is discussed above.

Cost of sales for the period December 30, 2023 to

December 31, 2023, were $418,350, and were related to our Successor sales discussed above.

General and Administrative Expenses

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

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.

December 31, 2024

to December 31,

January 1, 2023

to December 29,

Selling, general and administrative expenses

Amortization of capitalized software costs

Amortization of intangible assets

Impairment of property and equipment

Impairment of intangibles

Operating expenses

general and administrative expenses .

general and administrative expenses consist of costs incurred to identify, communicate with and evaluate potential customers and related

4 unchanged sentences

insurance, compliance, compensation and other costs.

Selling, general and administrative expenses

were $11,152,428 for the period January 1, 2023 to December 29, 2023, as compared to $11,268,508 during the year ended December 31,

2022, an increase of $339,920.

The increase was from general changes in our business and operations.

general and administrative expenses were $5,086,510 during the period December 30, 2023 to December 31, 2023.

Selling, general and administrative expenses

were for common shares issued per the term of executive employment agreements including $5,000,000

recognized upon the close of the Merger, and $86,510 general changes in our business and operations.

Amortization of capitalized software

Amortization expenses are primarily attributable to the Company’s capitalized software development costs.

Amortization expenses were $1,080,537 during the year ended December 31, 2023, as compared to $3,678,000 during the year ended

December 31, 2022, a decrease of $2,597,696.

Amortization of intangible assets.

A mortization

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.

Basis of Presentation discussion above.

of capitalized software costs .

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.

of intangible assets.

expenses are primarily attributable to the Company’s amortization of intangible assets with finite lives.

A mortization

expenses were $3 00 , 000 during the year ended December

31, 2023, as compared to $ 300,000 during the year ended December 31, 2022 .

Impairment of property and equipment.

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 prior year period.

Write-off of Impaired Intangible Assets

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 prior year period.

of Goodwill .

We test for goodwill annually or if an event occurs or circumstances change that would more likely than not reduce the

fair value of a reporting unit below its carrying amount.

During the year ended December 31, 2022, the Company determined that its

goodwill was impaired, resulting in a charge to operations of $834,200 at December 31, 2022.

No similar event occurred in the current

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.

of property and equipment.

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.

of intangibles

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.

from Operations

December 31, 2024

to December 31,

January 1, 2023

to December 29,

Loss from operations

2 unchanged sentences

$ (3,080,406 )

For the period January 1, 2023 to December 29, 2023,

we incurred a loss from operations of $3,080,406, as compared to a loss from operations of $5,600,348 for the year ended December 31,

The decrease in loss from operations was due to our decreased operating costs discussed above.

For the period December 30, 2023 to December 31, 2023, we incurred a loss from operations of $5,020,000, due primarily

to stock compensation of $5,000,000 and routine operating costs of $86,510 as discussed above.

Other Income (Expenses)

We had other income of $2,985,534 for the year ended

December 31, 2023, as compared to other expenses of $2,723,332 for the year ended December 31, 2022.

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

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.

Income (Expenses)

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

Gain on forgiveness of debt

Total other income (expense), net

$ (1,133,354 )

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 expense for the year ended December 31, 2022, consisted of interest expense of $2,723,332.

to December 31,

January 1, 2023

to December 29,

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.

December 31, 2024

$ (18,832,080 )

$ (5,020,000 )

We realized a net loss of $124,546 for the period January 1, 2023 to

December 29, 2023, as compared to a net loss of $8,324,579 for the year ended December 31, 2022.

The decrease in net loss is primarily

due to a gain on forgiveness of convertible notes and promissory notes, and decreased depreciation and amortization expense, as discussed

We realized a net loss of $5,020,000 for the period

December 30, 2023 to December 31, 2023 due primarily to stock compensation of $5,000,000 and routine operating costs of $86,510 as discussed

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.

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.

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.

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

December 31, 2024

$ (18,832,080 )

$ (5,020,000 )

Modified EBITDA adjustments:

Interest expense

Financing costs

Gain on forgiveness of debt

Amortization of intangible assets

Amortization of capitalized software costs

Stock option and other noncash compensation

Fair value of stock issued on vendor settlement

Impairment of intangible assets and property and equipment

Total Modified EBITDA adjustments

Mofified EBITDA

$ (2,836,376 )

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

Modified EBITDA has limitations as an analytical tool, which includes, among others, the following:

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

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

EBITDA does not reflect future interest expense, or the cash requirements necessary to service interest or principal payments, on

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.

Accounting Policies and Estimates

51 unchanged sentences

our ability to continue as a going concern.

Going Concern

consolidated financial statements have been presented on the basis that it will continue as a going concern, which contemplates the realization

5 unchanged sentences

have a history of reporting net losses.

At December 31, 2023, we had cash of $4,099,737 available to fund our operations, including expansion

plans, and to service our debt, and a negative working capital of $1,099,428.

We anticipate our cash balance will last until approximately

December 2024.

As a result, we have concluded that there is substantial doubt about the Company’s ability to continue as a going

Our consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

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.

ability to continue as a going concern is dependent upon its ability to raise additional debt or equity capital to fund its business

2 unchanged sentences

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.

There is also significant

uncertainty as to the amount and type of financing available to us in the future.

we are unable to obtain the cash resources necessary to satisfy our ongoing cash requirements, we could be required to scale back its

2 unchanged sentences

December 31, 2024

to December 31,

January 1, 2023

to December 29,

Net cash used in operating activities

$ (2,551,870 )

Net cash used in investing activities

5 unchanged sentences

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 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

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.

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, goodwill impairment, 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.

Cash used for investing activities for the year ended

December 31, 2023 was $900,000, which was for capital expenditures (predecessor).

Cash provided by investing activities for the year ended December 31, 2023 was $2,038,472,

which was from net cash received from the acquisition of CardCash (successor).

Cash used for investing activities for the year ended

December 31, 2022 was $1,000,479, which was for capital expenditures.

Financing Activities

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 RDE.

For the year ended December 31, 2022, cash provided

by financing activities was $409,331, which was from net proceeds received from our line of credit facility.

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.

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

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.

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.

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.

Revolving Line of Credit

outstanding line of credit balance at December 31, 2023 and December 31, 2022 was:

December 31, 2023

December 31, 2022

(Predecessor)

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, with interest based on the Wall Street Journal Prime

Rate plus 3.00%, limited to a floor of 6.5%.

At December 31, 2023 and 2022, the average interest rate was 12% and 11%, respectively.

of December 31, 2023 the Company was in compliance with customary debt covenants.

On November 5, 2018, RDE completed the acquisition of Incumaker, Inc.

assumed certain outstanding convertible notes payable.

At December 31, 2023, there was one remaining assumed convertible note payable

outstanding that matured July 2017, and is past due.

At December 31, 2023, the principal balance of $20,000, and accrued interest of $20,137,

are convertible at $1.50 per share into 26,758 shares of the Company’s common stock.

Notes Payable

CardCash Acquisition Notes Payable

December 29, 2023, the Company issued two year promissory notes totaling $1,500,000 as partial consideration for the acquisition of

$750,000 is payable on the December 29, 2025, 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 RDE’s initial public offering to allow the Company to become

listed on the Nasdaq Capital Market or (b) December 29, 2024.

November 2020, CardCash entered into an amended and restated promissory note for a revolving line of credit with availability of up to

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

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.

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

Acquisition Notes Payable

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.

Acquisition Note Payable

February 1, 2022, RDE 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

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”).

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

Injury Disaster Loans (EIDL)

6 unchanged sentences

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 (see Note 3).

of $900, as part of the consideration paid for the acquisition of GameIQ.

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

2 unchanged sentences

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.

Sheet Arrangements

4 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis