Financial Performance - The company reported net sales of $18,783,908 for the three months ended September 30, 2025, a decrease of 19.1% compared to $23,210,850 in the same period of 2024[158]. - Net sales for the three months ended September 30, 2025, were $18,783,908, a decrease of 19.1% compared to $23,210,850 in 2024[173]. - Net sales for the nine months ended September 30, 2025, were $61,961,652, a decrease of 4.3% from $64,753,246 in 2024[192]. - The net loss for the three months ended September 30, 2025, was $2,437,462, a significant improvement from a net loss of $4,061,152 in 2024[182]. - For the nine months ended September 30, 2025, the company incurred a net loss of $8,244,603, a decrease from a net loss of $14,996,518 for the same period in 2024, reflecting improved gross profit and reduced expenses[201]. Revenue and Profitability - Gross billings increased by 28.8% to $39,086,540 for the three months ended September 30, 2025, compared to $30,341,126 in the prior year[170]. - Gross profit increased by $756,928, or 25.3%, with a gross margin of 20.0% for the three months ended September 30, 2025, compared to 12.9% in 2024[174]. - Gross profit for the nine months ended September 30, 2025, increased by $1,676,418, or 17.6%, with a gross margin of 18.1% compared to 14.7% in 2024[193]. - Modified EBITDA for the three months ended September 30, 2025, was $(268,508), an improvement from $(669,169) in 2024[185]. - The company reported a Modified EBITDA of $(1,048,967) for the nine months ended September 30, 2025, compared to $(1,684,289) for the same period in 2024, indicating a reduction in operational losses[204]. Operating Expenses - Operating expenses decreased to $6,235,209 for the three months ended September 30, 2025, from $6,770,812 in 2024, primarily due to a reduction in stock-based compensation[175]. - Selling, general and administrative expenses for the nine months ended September 30, 2025, were $17,247,499, down from $20,954,914 in 2024, a decrease of $3,707,415[195]. - The company experienced a decrease in stock-based compensation expense, contributing to the overall reduction in losses[198]. Cash Flow and Liquidity - The company reported cash of $4,021,227 available for operations as of September 30, 2025, with a negative working capital of $1,537,994[160]. - Cash used in operating activities was $496,067 for the nine months ended September 30, 2025, significantly improved from $2,858,368 in the same period of 2024[214]. - As of September 30, 2025, the company had a cash balance of $4,021,227, which is expected to last until March 31, 2026[209]. Acquisitions and Mergers - The acquisition of Takeout7, Inc. on May 29, 2025, expanded the company's technology offerings to include end-to-end solutions for independent restaurants[142]. - The merger with CardCash Exchange Inc. was completed on December 29, 2023, enhancing the company's position in the gift card exchange market[143]. Concerns and Risks - The company has faced operating losses and negative cash flows during 2024 and 2023, raising concerns about its ability to continue as a going concern[162]. - The company has expressed substantial doubt about its ability to continue as a going concern due to ongoing operating losses and negative cash flows[223]. - Inflationary pressures have increased operating costs, which could adversely affect the company's revenues and gross profit if not mitigated[159]. Tax and Interest - The company recorded an income tax benefit of $144,860 for the three months ended September 30, 2025, compared to no benefit in 2024[181]. - The company recorded an income tax benefit of $434,076 for the nine months ended September 30, 2025, compared to no income tax benefit in the prior year[200]. - Interest expense, net, decreased to $484,362 for the nine months ended September 30, 2025, down from $790,471 in the same period of 2024, due to reduced debt balances[199]. Customer Base - The company has a customer database of 6.2 million, which is expected to provide value to merchants for various services and products[154].

Core Insights - Giftify, Inc. reported a significant increase in gross billings, which rose by 28.8% year-over-year to $39.1 million, indicating strong underlying business momentum despite a decline in net sales [5][10][11] - The company's gross margin expanded by 710 basis points to 20.0%, reflecting improved operational efficiency and a shift towards agent transactions that carry lower inventory risk [9][11] - Net loss improved by 40% to $2.4 million, demonstrating progress in financial performance and operational strategy [9][13] Financial Highlights for Q3 2025 - Reported net sales decreased by 19.1% to $18.8 million compared to $23.2 million in Q3 2024, primarily due to a higher proportion of agent transactions [5][10] - Gross profit increased by 25.3% to $3.7 million, with gross margin improving to 20.0% from 12.9% in the prior year [11][13] - Modified EBITDA loss improved by 60% to $(0.3) million, reflecting enhanced operational efficiency [13] Year-to-Date Financial Highlights for 2025 - Gross billings for the year-to-date increased by 23.8% to $111.2 million compared to $89.8 million in the same period of 2024 [7][28] - Gross profit for the year-to-date rose by 17.6% to $11.1 million, with gross margin expanding to 18.1% from 14.7% [7][28] - Net loss for the year-to-date improved by 45% to $8.2 million, indicating a positive trend in financial performance [7][28] Strategic Initiatives and Operational Progress - The integration of Takeout7 has expanded the company's technology offerings, enhancing online ordering solutions and AI-powered digital marketing services for independent restaurants [8] - Operating expenses were reduced by 8% year-over-year while maintaining investment in growth initiatives [8] - The company is focusing on expanding B2B relationships and optimizing its transaction mix to balance growth in gross billings with margin expansion [8][9]

Core Insights - Giftify, Inc. has reported a significant increase in new customer approval rates for CardCash.com, exceeding 10% due to enhancements in its proprietary fraud detection system [1][3]. Group 1: Fraud Prevention Enhancements - The gift card secondary marketplace is exposed to unique fraud risks, necessitating specialized detection capabilities [2]. - Previous fraud prevention systems, while effective, posed challenges for legitimate first-time customers, prompting a comprehensive overhaul of fraud detection protocols [2][3]. - The new system utilizes proprietary technology tailored for gift card transaction patterns, improving the differentiation between legitimate customers and potential fraud attempts [3]. Group 2: Strategic Impact - The initiative represents a strategic breakthrough in balancing customer acquisition with risk management, allowing for more legitimate first-time customers while maintaining security standards [4]. - Collaboration among growth, research, engineering, and fraud prevention teams facilitated the enhancement, providing real-time risk assessment capabilities that scale with transaction volume [4]. - The CEO of Giftify, Inc. emphasized that this enhancement reflects the company's commitment to operational excellence and sustainable growth, forming part of CardCash's broader growth strategy for 2025 [5]. Group 3: Company Overview - Giftify, Inc. operates in the incentives and rewards industry, owning platforms like CardCash.com and Restaurant.com, which facilitate buying and selling gift cards and provide dining deals [6]. - CardCash.com is recognized as a leading secondary gift card exchange platform, enabling value realization for consumers and retailers [6].

Core Insights - Giftify, Inc. achieved record performance with nearly $150 million in gift cards delivered, including close to 1 million digital cards, showcasing the company's strong market position and operational efficiency [1][4] - The company's proprietary automation technology has created sustainable competitive advantages, enabling faster fulfillment and processing of gift card orders [2][4] - CardCash's partnerships with retailers have expanded the availability of digital gift cards, enhancing customer satisfaction and operational efficiency [3][4] Performance Metrics - A total of 941,984 digital cards were delivered, valued at over $142 million, representing a 15.2% increase in face value year-over-year compared to $124 million last year [8] - The company achieved a 99.5% instant fulfillment rate for digital orders, with nearly 100,000 physical cards delivered, 75% of which were shipped within 48 hours [8] - U.S. gift card sales are projected to exceed $190 billion annually, positioning CardCash to capture significant market share growth [4] Technology and Strategy - The proprietary automation technology includes a room-sized machine that automates physical gift card orders, enhancing processing speed and reliability [2][4] - The company's digital-first strategy and proven infrastructure are key to capturing a larger portion of the expanding secondary gift card market [4] - CardCash maintains a 45-day fraud guarantee, reinforcing its value proposition as a trusted solution for consumers and partners [5]

Core Viewpoint - Zenergy is positioned as a competitive player in the lithium-ion battery manufacturing sector, benefiting from a lower legacy burden and a focus on manufacturing efficiency through standardized cells and platform-based packs [1] Industry Outlook - The battery sales outlook remains strong, with a projected 5-year CAGR of 29% for China's EV battery installation from 2024 to 2029, indicating significant growth potential for Zenergy given its low base [2] - Despite the dominance of CATL and BYD, which together hold about 70% of China's EV battery market, Zenergy's current market share of approximately 2% allows for growth without immediate concern from the competitive landscape [3] Company Performance - Zenergy has achieved profitability since the second half of 2024, with gross margins reaching 17.2% in 2H24 and 17.9% in 1H25, supported by a client mix where the top 5 clients contribute over 80% of revenue [4][5] - The company is expected to see revenue growth of 50% in FY25, 76% in FY26, and 48% in FY27, with gross margins projected to improve to 18.2%, 18.9%, and 19.0% respectively during the same period [5] Client Diversification - Zenergy's client base is diversifying, with new clients such as GAC Toyota, VW, and SAIC Motor expected to enhance sales and margins, while foreign brands are projected to account for about half of Zenergy's revenue by FY27 [4][5] Financial Projections - Net profits are projected to reach RMB 569 million in FY25, RMB 1,307 million in FY26, and RMB 1,880 million in FY27, reflecting a strong growth trajectory [5] - The company has been initiated with a BUY rating and a target price of HK$18.00, based on a P/E ratio of 22x for FY27, which is justified by its higher profit growth outlook compared to peers [5]

Core Insights - Giftify, Inc. has reported a significant year-to-date growth in its affiliate marketing channel, with a 75% increase in sales and improvements across all key performance indicators [1][8]. Performance Highlights - Sales increased by 75% compared to the prior year period [8]. - Affiliate commissions grew by 37%, indicating enhanced partner performance [8]. - Clicks per Impression surged by 130%, demonstrating significantly enhanced consumer engagement [8]. - Orders per Click improved by 11%, evidencing higher conversion efficiency [8]. - Average Order Value climbed by 51%, showing greater consumer spend per transaction [8]. Strategic Initiatives - The company has intensified its focus on performance-driven affiliate partnerships and strategic use of data insights to optimize engagement and conversion rates [2][3]. - A new partnership with Snow Consulting has expanded affiliate opportunities and optimized program performance, particularly in the high-growth travel sector [3][4]. - The expansion of the affiliate channel aligns with broader consumer trends toward budget-conscious purchasing behavior amid ongoing economic pressures [4]. Company Overview - Giftify, Inc. operates leading digital platforms such as CardCash.com and Restaurant.com, focusing on the incentives and rewards industry [6]. - CardCash.com is a secondary gift card exchange platform, while Restaurant.com connects consumers with dining deals across over 184,000 restaurants and retailers [6].

Core Insights - Giftify, Inc. reported a gross profit increase of 18.3% to $3.9 million for the second quarter ended June 30, 2025, driven by strategic initiatives including the acquisition of TakeOut7 and AI implementation [1][4][6] - The company achieved net sales of $20.9 million, reflecting a 4.4% increase compared to the prior year period, supported by strong performance in both business-to-consumer and business-to-business channels [5][8] - Gross margin improved to 18.4% from 16.3%, indicating a focus on optimizing pricing strategies and operational efficiencies [6][7] Financial Performance - Net sales increased 4.4% to $20.9 million compared to $20.0 million in the prior year period [5] - Gross billings rose 23.2% to $36.1 million, indicating strong growth in transaction volume [4][23] - Operating expenses decreased significantly to $6.4 million from $10.7 million in the prior year, primarily due to a reduction in stock-based compensation [6] - The company reported a net loss of $2.6 million, an improvement from a net loss of $7.7 million in the prior year period [7][8] Strategic Initiatives - The acquisition of TakeOut7 in June 2025 enhances the company's restaurant technology ecosystem, providing end-to-end solutions for independent restaurants [4][3] - A new partnership with Zip Co. introduced a Buy Now, Pay Later payment option, improving customer access to CardCash.com's offerings [4][3] - The launch of the Restaurant Management Center and uChoose corporate rewards platform in July 2025 aims to create new revenue streams targeting high-growth markets [4][3] Operational Efficiency - The company continues to deploy enterprise-wide AI solutions, driving measurable operational efficiencies [4][3] - Modified EBITDA loss improved to $0.15 million from $0.36 million in the prior year, reflecting progress toward operational efficiency [7][9] - The balance sheet remains strong with total assets of $31.5 million and stockholders' equity of $21.6 million [4][8]

[Report Overview](index=1&type=section&id=Report%20Overview) [Filing Information](index=1&type=section&id=Filing%20Information) Giftify, Inc. filed its Quarterly Report on Form 10-Q for the period ended June 30, 2025, as a non-accelerated, smaller reporting, and emerging growth company - Giftify, Inc. is filing its **Quarterly Report on Form 10-Q** for the period ended June 30, 2025[1](index=1&type=chunk) - As of August 6, 2025, **30,542,165 shares of common stock** were outstanding[5](index=5&type=chunk) Filer Status | Filer Status | Value | | :------------- | :---- | | Large, accelerated filer | No | | Accelerated filer | No | | Non-accelerated filer | Yes | | Smaller reporting company | Yes | | Emerging growth company | Yes | [Cautionary Note Concerning Forward-Looking Statements](index=4&type=section&id=Cautionary%20Note%20Concerning%20Forward-Looking%20Statements) This section cautions that forward-looking statements are subject to risks like pandemics, inflation, and supply chain disruptions, with no obligation to update - The report contains **forward-looking statements** regarding future activities, events, and business strategy[8](index=8&type=chunk) - These statements are subject to risks including the **COVID-19 pandemic, inflation, geopolitical conflicts**, and raw material availability[8](index=8&type=chunk) - Actual results may differ materially, and the company does not undertake to update or revise these statements[8](index=8&type=chunk) [PART I - FINANCIAL INFORMATION](index=5&type=section&id=PART%20I%20-%20FINANCIAL%20INFORMATION) [Item 1. Condensed Financial Statements](index=5&type=section&id=Item%201.%20Condensed%20Financial%20Statements) This section presents Giftify, Inc.'s unaudited condensed consolidated financial statements, showing reduced net loss and improved operating cash flow Condensed Consolidated Balance Sheet Highlights | Metric | June 30, 2025 (Unaudited) | December 31, 2024 | | :-------------------------------- | :------------------------ | :------------------ | | Total assets | $31,502,630 | $35,483,716 | | Total liabilities | $9,933,476 | $14,721,380 | | Total stockholders' equity | $21,569,154 | $20,762,336 | Condensed Consolidated Statements of Operations Highlights | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :-------------------------------- | :------------------------------- | :------------------------------- | :----------------------------- | :----------------------------- | | Net Sales | $20,900,731 | $20,020,502 | $43,177,744 | $41,542,396 | | Gross profit | $3,855,625 | $3,260,495 | $7,437,261 | $6,517,771 | | Loss from operations | $(2,577,524) | $(7,482,429) | $(5,745,189) | $(10,425,848) | | Net loss | $(2,589,809) | $(7,744,646) | $(5,807,141) | $(10,935,366) | | Net earnings/(loss) per share – basic and diluted | $(0.09) | $(0.30) | $(0.20) | $(0.43) | Condensed Consolidated Statements of Cash Flows Highlights (Six Months Ended) | Metric | June 30, 2025 | June 30, 2024 | | :------------------------------------ | :------------ | :------------ | | Net cash provided by (used in) operating activities | $289,951 | $(3,074,200) | | Net cash provided by (used in) investing activities | $109,543 | $(449,646) | | Net cash provided (used in) by financing activities | $(1,443,909) | $3,354,563 | | **Net increase (decrease) in cash and cash equivalents** | **$(1,044,415)** | **$(169,283)** | [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) [Condensed Consolidated Statements of Operations](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) [Condensed Consolidated Statements of Changes in Stockholders' Equity](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Stockholders%27%20Equity) [Condensed Consolidated Statements of Cash Flows](index=11&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) [Notes to Condensed Consolidated Financial Statements](index=13&type=section&id=Notes%20to%20Condensed%20Consolidated%20Financial%20Statements) [1. Organization and Basis of Presentation](index=13&type=section&id=1.%20Organization%20and%20Basis%20of%20Presentation) Giftify, Inc. operates through Restaurant.com and CardCash, recently acquiring Takeout7, but faces substantial doubt about its going concern ability - Giftify, Inc. operates through subsidiaries **Restaurant.com, Inc.** and **CardCash Exchange Inc.** (acquired December 2023)[26](index=26&type=chunk)[27](index=27&type=chunk)[29](index=29&type=chunk) - The company acquired **Takeout7 Inc.** in May 2025, expanding into online ordering and AI-powered digital marketing for restaurants[28](index=28&type=chunk) - Management concluded substantial doubt exists about the company's ability to **continue as a going concern** due to historical net losses and negative operating cash flows[33](index=33&type=chunk) [2. Significant Accounting Policies](index=14&type=section&id=2.%20Significant%20Accounting%20Policies) This section details significant accounting policies, including revenue recognition (principal vs. agent) and intangible assets, noting the company operates as a single segment - Revenue recognition under **FASB ASC 606** requires significant judgment to determine principal versus agent roles, impacting reported revenue[37](index=37&type=chunk)[41](index=41&type=chunk)[42](index=42&type=chunk)[43](index=43&type=chunk)[44](index=44&type=chunk) - Goodwill and indefinite-lived intangible assets are tested for impairment annually, with no indicators identified as of June 30, 2025[51](index=51&type=chunk) - The company operates as a **single reportable segment**, with the CEO evaluating performance and allocating resources on a consolidated basis[69](index=69&type=chunk) Disaggregated Revenue by Division and Type (Three Months Ended June 30, 2025 vs 2024) | Sales Channels | CardCash Gift Cards (2025) | CardCash Gift Cards (2024) | Restaurant.com Gift Cards and Coupons (2025) | Restaurant.com Gift Cards and Coupons (2024) | Advertising (2025) | Advertising (2024) | Total (2025) | Total (2024) | | :--------------- | :------------------------- | :------------------------- | :------------------------------------------- | :------------------------------------------- | :----------------- | :----------------- | :----------- | :----------- | | B2C | $9,741,432 | $9,412,823 | $74,611 | $118,932 | $36,048 | $14,551 | $9,852,091 | $9,546,306 | | B2B | $10,553,218 | $10,103,749 | $495,422 | $370,447 | - | - | $11,048,640 | $10,474,196 | | **Total** | **$20,294,650** | **$19,516,572** | **$570,033** | **$489,379** | **$36,048** | **$14,551** | **$20,900,731** | **$20,020,502** | [3. Acquisitions](index=20&type=section&id=3.%20Acquisitions) Giftify completed two acquisitions: CardCash Exchange Inc. in December 2023 for **$26.68 million**, and Takeout7, Inc. in May 2025 for **$609,000** in common stock - Acquired **CardCash Exchange Inc.** on December 29, 2023, for **$26,682,000** in cash, notes, and common stock[73](index=73&type=chunk)[75](index=75&type=chunk) - Acquired **Takeout7, Inc.** on May 29, 2025, for **$609,000**, paid via **350,000 shares of common stock**[77](index=77&type=chunk)[80](index=80&type=chunk) - Provisional allocation for Takeout7 includes **$473,165 in intangible assets**, with no goodwill initially recognized[81](index=81&type=chunk) CardCash Acquisition Purchase Price Allocation (December 29, 2023) | Asset/Liability | Fair Value | | :-------------------------- | :----------- | | Net tangible assets | $(25,669) | | Developed technology | $2,600,000 | | Trade name | $2,400,000 | | Customer relationships | $1,700,000 | | Goodwill | $20,007,669 | | **Total purchase price** | **$26,682,000** | [4. Property and Equipment, Net](index=21&type=section&id=4.%20Property%20and%20Equipment,%20Net) Net property and equipment decreased from **$1,089,984** at December 31, 2024, to **$766,904** at June 30, 2025, primarily due to accumulated depreciation - Depreciation expense for the six months ended June 30, 2025, was **$323,080**, a decrease from the prior year[83](index=83&type=chunk) Property and Equipment, Net | Category | June 30, 2025 | December 31, 2024 | | :-------------------------- | :------------ | :---------------- | | Property and equipment, gross | $2,563,312 | $2,563,312 | | Accumulated depreciation | $(1,796,408) | $(1,473,328) | | **Property and equipment, net** | **$766,904** | **$1,089,984** | [5. Goodwill and Intangible Assets](index=22&type=section&id=5.%20Goodwill%20and%20Intangible%20Assets) Goodwill remained constant at **$20 million**, while net intangible assets decreased to **$3.64 million** due to amortization, despite new assets from the Takeout7 acquisition - Goodwill of **$20,007,669** was recorded from the CardCash acquisition on December 29, 2023[84](index=84&type=chunk) - During the six months ended June 30, 2025, **$473,165** in intangible assets were added from Takeout7, offset by **$1,100,979** in amortization expense[85](index=85&type=chunk) Goodwill and Intangible Assets, Net | Category | June 30, 2025 | December 31, 2024 | | :-------------------------- | :------------ | :---------------- | | Goodwill | $20,007,670 | $20,007,670 | | Intangible assets, net | $3,640,517 | $4,268,332 | Estimated Amortization Expense for Intangible Assets | Year | Amount | | :----------------- | :----------- | | 2025 (Remainder) | $1,125,190 | | 2026 | $2,291,888 | | 2027 | $157,722 | | 2028 | $65,717 | | **Total** | **$3,640,517** | [6. Leases](index=23&type=section&id=6.%20Leases) Operating lease liability decreased to **$1,297,581** at June 30, 2025, with lease costs of **$237,765** for the six months, and a weighted average term of 3.58 years - Operating lease liability decreased to **$1,297,581** at June 30, 2025, from **$1,449,983** at December 31, 2024[88](index=88&type=chunk) - Lease costs for the six months ended June 30, 2025, totaled approximately **$237,765**[89](index=89&type=chunk) - The weighted average remaining lease term is **3.58 years**, with a weighted average discount rate of **8.00%** as of June 30, 2025[89](index=89&type=chunk) [7. Secured Revolving Line of Credit](index=23&type=section&id=7.%20Secured%20Revolving%20Line%20of%20Credit) The secured revolving line of credit decreased to **$1,715,897** at June 30, 2025, after an amendment reduced the principal to **$7 million** and minimum cash collateral to **$1 million** - The revolving line of credit with Pathward, National Association, was amended on April 23, 2025, to a principal amount of **$7,000,000**[92](index=92&type=chunk) - The average interest rate was **10.5%** at June 30, 2025, and the minimum cash collateral balance decreased to **$1,000,000**[91](index=91&type=chunk)[94](index=94&type=chunk) Secured Revolving Line of Credit | Metric | June 30, 2025 | December 31, 2024 | | :---------------- | :------------ | :---------------- | | Line of credit | $1,715,897 | $3,805,080 | [8. Convertible Promissory Notes](index=24&type=section&id=8.%20Convertible%20Promissory%20Notes) Outstanding convertible promissory notes from the Incumaker acquisition total **$44,637** (principal and interest), convertible into **29,758 shares** at **$1.50 per share** - The notes are convertible at **$1.50 per share** into **29,758 shares of common stock** as of June 30, 2025[96](index=96&type=chunk) Convertible Promissory Notes | Metric | June 30, 2025 | December 31, 2024 | | :-------------------------------- | :------------ | :---------------- | | Incumaker, Inc. principal balance | $20,000 | $20,000 | | Accrued interest | $24,637 | $23,137 | | **Total principal and accrued interest** | **$44,637** | **$43,137** | [9. Secured Notes Payable – Related Party](index=24&type=section&id=9.%20Secured%20Notes%20Payable%20%E2%80%93%20Related%20Party) The **$2,000,000** secured note payable to Spars Capital Group LLC, a related party, was fully repaid during the six months ended June 30, 2025 - The **$2,000,000** secured promissory note with Spars Capital Group LLC was paid in full and retired during the six months ended June 30, 2025[98](index=98&type=chunk) Secured Notes Payable – Related Party | Metric | June 30, 2025 | December 31, 2024 | | :-------------------------------- | :------------ | :---------------- | | Secured note payable – related party | $- | $2,000,000 | | Accrued interest | $- | $64,274 | | **Total principal and accrued interest** | **$-** | **$2,060,274** | [10. Notes Payable](index=25&type=section&id=10.%20Notes%20Payable) Total notes payable increased to **$2,546,168** at June 30, 2025, including a new **$1 million** note and remaining CardCash and EIDL balances - A new **$1,000,000** secured promissory note with Real World Digital Assets LLC was entered into on February 19, 2025, at **11.5% annual interest**[101](index=101&type=chunk) - The **GameIQ acquisition note payable** was fully repaid during the six months ended June 30, 2025[103](index=103&type=chunk) Notes Payable | Note Type | June 30, 2025 | December 31, 2024 | | :-------------------------------- | :------------ | :---------------- | | CardCash acquisition notes payable | $750,000 | $1,500,000 | | Real World Digital Assets note payable | $1,000,000 | $- | | GameIQ acquisition note payable | $- | $75,928 | | Economic Injury Disaster Loans (EIDL) note payable | $664,500 | $664,500 | | **Total principal and accrued interest** | **$2,546,168** | **$2,332,632** | [11. Stockholders' Equity](index=26&type=section&id=11.%20Stockholders%27%20Equity) Total stockholders' equity increased to **$21,569,154** at June 30, 2025, driven by various common stock issuances for vesting, services, acquisitions, and offerings - During the six months ended June 30, 2025, common stock was issued for **restricted stock vesting (339,582 shares)**, **services (245,832 shares)**, **vendor settlement (75,000 shares)**, **at-the-market sales (968,914 shares)**, an **acquisition (350,000 shares)**, a **stock purchase agreement (387,194 shares)**, a **public offering (600,000 shares)**, and a **private placement (166,667 shares)**[108](index=108&type=chunk)[109](index=109&type=chunk)[110](index=110&type=chunk)[111](index=111&type=chunk)[112](index=112&type=chunk)[114](index=114&type=chunk)[116](index=116&type=chunk)[117](index=117&type=chunk) - The stock purchase agreement with ClearThink Capital Partners, LLC was **terminated by mutual agreement** on February 4, 2025[115](index=115&type=chunk) Common Stock Issued and Outstanding | Date | Shares Issued and Outstanding | | :----------------- | :---------------------------- | | June 30, 2025 | 30,154,612 | | December 31, 2024 | 27,021,423 | [12. Share-Based Compensation](index=28&type=section&id=12.%20Share-Based%20Compensation) For the six months ended June 30, 2025, **$1,063,918** in restricted stock and **$1,962,000** in stock option compensation expense were recognized, with significant unamortized balances remaining - Recognized **$1,063,918** in stock compensation expense for restricted stock and **$1,962,000** for vested stock options during the six months ended June 30, 2025[124](index=124&type=chunk)[126](index=126&type=chunk) Restricted Stock Activity (Six Months Ended June 30, 2025) | Metric | Shares | | :-------------------------- | :------- | | Balance, December 31, 2024 | 1,320,834 | | Granted | 450,000 | | Vested | (339,584) | | Issued | (339,584) | | **Balance, June 30, 2025** | **1,431,250** | Stock Option Activity (Six Months Ended June 30, 2025) | Metric | Number of Options | | :-------------------------------- | :---------------- | | Stock options outstanding at December 31, 2024 | 4,122,830 | | Granted | 1,170,000 | | Expired or forfeited | (1,166,208) | | **Stock options outstanding at June 30, 2025** | **4,126,622** | | Stock options exercisable at June 30, 2025 | 2,261,900 | [13. Commitments and Contingencies](index=29&type=section&id=13.%20Commitments%20and%20Contingencies) The company is not currently involved in any legal proceedings expected to have a material adverse effect on its business or financial condition - No material legal proceedings are pending against the company as of June 30, 2025[128](index=128&type=chunk) [14. Segment Information](index=30&type=section&id=14.%20Segment%20Information) Giftify operates as a **single reportable segment**, with the CEO evaluating performance and allocating resources based on consolidated net loss - The company operates as a **single reportable and operating segment**, focusing on gift card and discount certificate sales[129](index=129&type=chunk) - The CEO, as CODM, reviews consolidated financial information and uses **net loss** to evaluate performance[130](index=130&type=chunk) [15. Subsequent Events](index=30&type=section&id=15.%20Subsequent%20Events) Subsequent to June 30, 2025, the company sold **54,219 shares** for **$60,411** via an ATM agreement and **333,334 shares** for **$500,000** in a private placement - Subsequent to June 30, 2025, the company sold **54,219 shares of common stock** for **$60,411** via an At-the-Market Issuance Sales Agreement[132](index=132&type=chunk) - The company also received **$500,000** from the sale of **333,334 shares of common stock** in a private placement after June 30, 2025[133](index=133&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=31&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses Giftify's financial condition, operations, and liquidity, covering acquisitions, segments, and key metrics, while reiterating going concern doubts due to historical losses - Giftify acquired **Takeout7, Inc.** in May 2025, expanding its restaurant technology and AI-powered digital marketing services[136](index=136&type=chunk) - The company's two principal divisions are **CardCash** (gift card exchange) and **Restaurant.com** (restaurant deal certificates)[139](index=139&type=chunk)[140](index=140&type=chunk)[144](index=144&type=chunk) - Management reiterates **substantial doubt** about the company's ability to continue as a going concern due to historical net losses and **negative working capital of $1,710,474**[154](index=154&type=chunk)[155](index=155&type=chunk)[156](index=156&type=chunk)[209](index=209&type=chunk) Gross Billings (Three and Six Months Ended June 30) | Period | 2025 | 2024 | Change % | | :----------------- | :----------- | :----------- | :------- | | Three Months Ended | $36,072,063 | $29,287,369 | 23.2% | | Six Months Ended | $73,091,528 | $59,319,954 | 23.2% | [Background](index=31&type=section&id=Background) [Business Overview](index=31&type=section&id=Business%20Overview) [How We Measure Our Business](index=33&type=section&id=How%20We%20Measure%20Our%20Business) [Revenue Recognition](index=34&type=section&id=Revenue%20Recognition) [Results of Operations – Three Months Ended June 30, 2025, Compared to Three Months Ended June 30, 2024](index=35&type=section&id=Results%20of%20Operations%20%E2%80%93%20Three%20Months%20Ended%20June%2030,%202025,%20Compared%20to%20Three%20Months%20Ended%20June%2030,%202024) Net sales increased by **4.4%** to **$20.9 million**, gross profit rose by **18.3%**, and net loss significantly decreased to **$2.59 million** for the three months ended June 30, 2025 - The decrease in selling, general and administrative expenses was primarily due to a **$4,606,671 decrease in stock-based compensation expense**[173](index=173&type=chunk) - Gross margin increased from **16.3% in 2024 to 18.4% in 2025**, positively impacted by increased net revenue from agent transactions[170](index=170&type=chunk) Key Financial Results (Three Months Ended June 30) | Metric | 2025 | 2024 | Change | | :-------------------------------- | :----------- | :----------- | :------- | | Net Sales | $20,900,731 | $20,020,502 | +4.4% | | Gross profit | $3,855,625 | $3,260,495 | +18.3% | | Selling, general and administrative expenses | $5,714,543 | $9,832,270 | -41.9% | | Loss from operations | $(2,577,524) | $(7,482,429) | -65.6% | | Net loss | $(2,589,809) | $(7,744,646) | -66.5% | | Modified EBITDA | $(150,236) | $(357,130) | +57.9% | [Results of Operations – Six Months Ended June 30, 2025, Compared to Six Months Ended June 30, 2024](index=40&type=section&id=Results%20of%20Operations%20%E2%80%93%20Six%20Months%20Ended%20June%2030,%202025,%20Compared%20to%20Six%20Months%20Ended%20June%2030,%202024) Net sales increased by **3.9%** to **$43.18 million**, gross profit grew by **14.1%**, and net loss significantly decreased to **$5.81 million** for the six months ended June 30, 2025 - The decrease in selling, general and administrative expenses was primarily due to a **$4,103,413 reduction in stock-based compensation expense**[190](index=190&type=chunk) - Gross margin increased from **15.7% in 2024 to 17.2% in 2025**, positively impacted by increased net revenue from agent transactions[187](index=187&type=chunk) Key Financial Results (Six Months Ended June 30) | Metric | 2025 | 2024 | Change | | :-------------------------------- | :----------- | :----------- | :------- | | Net Sales | $43,177,744 | $41,542,396 | +3.9% | | Gross profit | $7,437,261 | $6,517,771 | +14.1% | | Selling, general and administrative expenses | $11,758,384 | $15,046,311 | -21.8% | | Loss from operations | $(5,745,189) | $(10,425,848) | -45.0% | | Net loss | $(5,807,141) | $(10,935,366) | -46.9% | | Modified EBITDA | $(776,557) | $(1,015,119) | +23.5% | [Critical Accounting Policies and Estimates](index=44&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) [Liquidity and Capital Resources](index=45&type=section&id=Liquidity%20and%20Capital%20Resources) Giftify faces substantial doubt about its going concern ability due to negative working capital, despite operating activities providing **$289,951** in cash for the six months ended June 30, 2025 - The company had cash of **$3,257,427** and **negative working capital of $1,710,474** at June 30, 2025, raising substantial doubt about its going concern ability[209](index=209&type=chunk) - Cash provided by operating activities improved significantly to **$289,951** in 2025 from cash used of **$3,074,200** in 2024[216](index=216&type=chunk)[217](index=217&type=chunk) - Financing activities used **$1,443,909**, primarily due to debt repayments, partially offset by common stock sales and a new note payable[219](index=219&type=chunk) Cash Flow Summary (Six Months Ended June 30) | Activity | 2025 | 2024 | | :------------------------------------ | :----------- | :----------- | | Net cash provided by (used in) operating activities | $289,951 | $(3,074,200) | | Net cash provided by (used in) investing activities | $109,543 | $(449,646) | | Net cash provided (used in) by financing activities | $(1,443,909) | $3,354,563 | | **Net increase (decrease) in cash and cash equivalents** | **$(1,044,415)** | **$(169,283)** | [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=48&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) As a smaller reporting company, Giftify, Inc. is exempt from providing quantitative and qualitative disclosures about market risk - Giftify, Inc. is exempt from providing market risk disclosures as a **smaller reporting company**[227](index=227&type=chunk)[243](index=243&type=chunk) [Item 4. Controls and Procedures](index=48&type=section&id=Item%204.%20Controls%20and%20Procedures) Disclosure controls were ineffective as of December 31, 2024, due to a material weakness in IT general controls, though remediation efforts are ongoing - Disclosure controls and procedures were **not effective** as of December 31, 2024, due to a **material weakness** in internal controls over financial reporting[228](index=228&type=chunk)[231](index=231&type=chunk) - The material weakness relates to ineffective design and maintenance of **IT general controls**, specifically program change management[233](index=233&type=chunk) - A previously identified material weakness regarding **inadequate segregation of duties was remediated** as of December 31, 2024[235](index=235&type=chunk)[237](index=237&type=chunk)[240](index=240&type=chunk) - Ongoing remediation efforts include designing and implementing **ITGCs**, enhancing documentation, and providing training[234](index=234&type=chunk)[239](index=239&type=chunk) [PART II – OTHER INFORMATION](index=50&type=section&id=PART%20II%20%E2%80%93%20OTHER%20INFORMATION) [Item 1. Legal Proceedings](index=50&type=section&id=Item%201.%20Legal%20Proceedings) Giftify, Inc. is not currently involved in any legal proceedings expected to have a material adverse effect on its business or financial condition - No material legal proceedings are pending against the company[242](index=242&type=chunk) [Item 1A. Risk Factors](index=50&type=section&id=Item%201A.%20Risk%20Factors) As a smaller reporting company, Giftify, Inc. is exempt from providing specific risk factor disclosures under this item - Giftify, Inc. is exempt from providing risk factor information as a **smaller reporting company**[243](index=243&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=50&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) There were no unregistered sales of equity securities or use of proceeds to report for the period - No unregistered sales of equity securities or use of proceeds to report[244](index=244&type=chunk) [Item 3. Defaults Upon Senior Securities](index=50&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) There were no defaults upon senior securities to report for the period - No defaults upon senior securities to report[245](index=245&type=chunk) [Item 4. Mine Safety Disclosures](index=50&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to Giftify, Inc.'s operations - Mine Safety Disclosures are not applicable to the company[246](index=246&type=chunk) [Item 5. Other Information](index=50&type=section&id=Item%205.%20Other%20Information) There is no other information to report under this item - No other information to report[247](index=247&type=chunk) [Item 6. Exhibits](index=50&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed, including certifications by the Principal Executive and Financial Officers and Inline XBRL documents - Exhibits include certifications by the **Principal Executive Officer** and **Principal Financial Officer** under Sarbanes-Oxley Act Sections 302 and 1350[249](index=249&type=chunk)[250](index=250&type=chunk) - The report also includes various **Inline XBRL documents** such as Instance, Schema, and Cover Page Interactive Data File[249](index=249&type=chunk) [SIGNATURES](index=52&type=section&id=SIGNATURES) [Signature Block](index=52&type=section&id=Signature%20Block) The report is duly signed on behalf of Giftify, Inc. by Ketan Thakker, President and Chief Executive Officer, on August 13, 2025 - The report was signed by **Ketan Thakker**, President and Chief Executive Officer, on August 13, 2025[255](index=255&type=chunk)

Core Insights - Giftify, Inc. has launched uChoose, a corporate rewards platform that enhances employee and customer engagement through choice-based gift card solutions [1][5] - The platform allows recipients to redeem rewards at over 200 brands, improving ROI for businesses by utilizing proprietary cost advantages and breakage sharing technology [2][5] - uChoose aims to address common issues in corporate rewards, such as low satisfaction and wasted rewards, by allowing recipients to select their desired rewards [5] Company Overview - Giftify, Inc. operates CardCash.com and Restaurant.com, focusing on the incentives and rewards industry [7] - The company is leveraging its expertise in the secondary gift card marketplace to provide high-value pricing and additional benefits through uChoose [3][5] Market Opportunity - The launch of uChoose represents a strategic move into the $46 billion corporate rewards market, transforming traditional gifting into a strategic investment with measurable returns [5] - Early adoption of uChoose is gaining traction in various industries, including automotive, gaming, healthcare, and marketing, with reported improvements in customer engagement and retention [4][5] Platform Features - uChoose offers a scalable solution with comprehensive analytics, real-time redemption tracking, and seamless integration capabilities for organizations across multiple sectors [6] - The platform's breakage sharing feature allows companies to recover value from unused gift card balances, enhancing overall program effectiveness [5]

Core Insights - The launch of the Restaurant Management Center (RMC) by Giftify, Inc. represents a significant technological advancement for Restaurant.com, providing restaurant partners with enhanced control over their digital presence and deal management capabilities [3][5] - The introduction of a tiered subscription model creates new revenue opportunities for the company while offering restaurant partners various levels of promotional support and analytics [4][8] Group 1: Technology and Features - The RMC allows restaurant partners to manage offers in real-time, handle multiple locations from a single dashboard, and access detailed analytics on customer engagement and certificate redemption [3][6] - The self-service portal eliminates the need for phone communications and manual paperwork, streamlining the management process for restaurants [6][9] - Advanced features include performance analytics, review management, and customer communication tools, enabling restaurants to make data-driven decisions [7][9] Group 2: Revenue and Market Position - The tiered subscription model offers premium placement opportunities and enhanced visibility, creating recurring revenue streams for Giftify [4][8] - The scalable infrastructure of the RMC is expected to support significant growth in restaurant partner acquisition and improve the value proposition for existing partners [8][9] - The RMC addresses critical pain points for independent restaurants, providing cost-effective customer acquisition tools and simplified digital marketing management [9] Group 3: Strategic Vision - The CEO of Giftify emphasized that the RMC marks a pivotal moment in the company's evolution, transforming it into a comprehensive technology partner for restaurants [5] - The launch complements the recent acquisition of TakeOut7, positioning Giftify as a complete technology solutions provider for the restaurant industry [5]