GIFTIFY, INC. 10-K

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 46 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 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. All references throughout this filing to RDE, Inc. have been changed to Giftify, Inc. 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 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. 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 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. 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. Schedule of Anti- dilutive Securities Excluded from Computation of Earning Loss Per Share 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: Schedule of Segment Reporting Information 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: Schedule of Fair Value of Assets Acquired and Liabilities Assumed 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. Schedule of Pro Forma Statements of Operations 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 Schedule of Goodwill and Intangible Assets 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: Schedule of Identifiable Intangibles Assets Estimated Remaining Useful Lives 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: Schedule of Amortization Expense on Intangible Assets 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: Schedule of Estimated Amortization Expense 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: Schedule of components of Lease 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 Operating lease expense $ 446,229 $ - $ 191,152 Supplemental information related to leases was as follows: Schedule of Supplemental Cash Flow Information 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: Schedule of Maturities of Operating Lease Liabilities 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 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. 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 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 (see Note 14). 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. F- 20 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 . 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: Schedule of Income Tax Effective Tax Rate 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. Schedule of Deferred Tax Assets and Liabilities 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: Schedule of Stock-based Compensation Expense 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: Schedule of Options Summarized by Exercise Price 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 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. 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) a ll vested equity awards shall be retained and all unvested equity awards shall be accelerated and be deemed vested and (d) o ther 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.