UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2025 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ___________ to ____________ Commission File Number 001-42206 GIFTIFY, INC. (Exact name of registrant as specified in its charter) Delaware 45-2482974 (State or other ...

Financial Performance - For the three months ended March 31, 2025, net sales were $22,277,013, an increase of 3.5% from $21,521,894 in the same period of 2024[145]. - CardCash's net sales for the three months ended March 31, 2025, were $21,867,114, up from $21,160,007 in 2024, reflecting a focus on improving gross margin[146]. - Gross profit for the three months ended March 31, 2025, was $3,581,636, compared to $3,257,276 in 2024, marking an increase of 9.9%[145]. - The gross margin for CardCash improved to 14.7% in Q1 2025 from 13.8% in Q1 2024, contributing to a gross profit increase of $285,850[149]. Operating Expenses - Operating expenses for the three months ended March 31, 2025, totaled $6,749,301, an increase from $6,200,695 in the same period of 2024[151]. - Selling, general and administrative expenses rose to $6,043,841 in Q1 2025, up by $829,800 from $5,214,041 in Q1 2024, driven by increased stock-based compensation and payroll expenses[152]. Net Loss - The company reported a net loss of $3,217,332 for the three months ended March 31, 2025, compared to a net loss of $3,190,720 in the same period of 2024[145]. - The company reported a net loss of $3,217,332 for the three months ended March 31, 2025, compared to a net loss of $3,190,720 for the same period in 2024, indicating a slight increase in net loss[158]. Cash Flow and Liquidity - The company had cash of $2,121,814 available to fund operations as of March 31, 2025, with a negative working capital of $2,075,999[138]. - Cash used in operating activities for the three months ended March 31, 2025, was approximately $1,448,924, a significant increase from $6,636 in the same period of 2024[178]. - The company anticipates its cash balance will last until approximately December 2025, raising substantial doubt about its ability to continue as a going concern[171]. Debt and Financing - Interest expense decreased to $209,571 in Q1 2025 from $247,301 in Q1 2024, attributed to reduced debt balances[156]. - The company entered into a secured promissory note with Real World Digital Assets LLC for $1,000,000 at an annual interest rate of 11.5%, maturing on December 31, 2025[186]. - As of March 31, 2025, the company had an outstanding principal balance of $750,000 on promissory notes related to the acquisition of CardCash, with accrued interest payable of $84,375[185]. - The company has a revolving line of credit with availability of up to $10,000,000, with an average interest rate of 12% as of March 31, 2025[183]. - The Company received a total of $650,000 in proceeds from the Covid-19 Economic Injury Disaster Loan (EIDL) Program, with amounts of $150,000 on June 17, 2020, $350,000 on July 14, 2021, and another $150,000 on July 21, 2020[187][188]. - The loans bear an interest rate of 3.75% per annum, with a combined repayment of principal and interest of $3,500 per month starting 12 months from the date of the promissory note over a period of 30 years[188]. - As of December 31, 2024, the note payable had a principal balance outstanding of $664,500 and accrued interest payable of $15,558[188]. - As of March 31, 2025, the note payable remained at a principal balance of $664,500, with accrued interest payable reduced to $8,638[189]. Off-Balance Sheet Arrangements - The Company did not have any off-balance sheet arrangements as of March 31, 2025, and December 31, 2024[190]. Regulatory Classification - The Company is classified as a smaller reporting company and is not required to provide certain market risk disclosures[191].

Acquisition and Business Expansion - Giftify, Inc. acquired CardCash Exchange, Inc. for $26,682,000, consisting of 6,108,007 shares of common stock valued at $24,432,000, $750,000 in cash, and $1,500,000 in notes payable[19] - The company completed the merger with CardCash Exchange Inc on December 29, 2023, which has been accounted for as a business combination[188] - The company intends to pursue acquisitions to support growth, but integration challenges and potential dilution of equity could adversely affect operations[105] - Future operational strategies will likely focus on integrating CardCash's operations and enhancing profitability through improved sales and marketing efforts[209] Financial Performance - For the year ended December 31, 2024, net sales were $88,934,036, a significant increase from $484,860 in the prior year[211] - Gross profit for the year ended December 31, 2024, was $13,144,781, compared to $66,510 for the Predecessor period, reflecting improved operational efficiency[211] - The net loss for the year ended December 31, 2024, was $18,832,080, compared to a net loss of $5,020,000 in the previous year[211] - CardCash sales for the year ended December 31, 2024, were $86,991,638, slightly down from $87,146,804 in 2023, indicating stable performance despite market challenges[214] - The Company incurred interest expenses of $1,002,354 in 2024, compared to $2,890,466 in the previous year, reflecting a reduction in financing costs[211] - The Company reported a gain on forgiveness of debt amounting to $5,876,000 in the Predecessor period, which positively impacted prior year results[211] Market and Growth Potential - The global gift card market is projected to reach $400 billion by 2026, with CardCash planning to expand its four business channels to capitalize on this growth[27] - CardCash has saved consumers over $100 million since its inception through its gift card exchange platform[24] - The average order value for bundled offerings ("Specials") from Restaurant.com is nearly five times that of standard certificate purchases, generating over 5% of B2C revenue from 60% of orders[37] - Restaurant.com connects over 182,500 restaurants and retailers to 7.8 million customers, generating significant revenue through discount certificates[195] Operational Challenges and Risks - The company faces substantial doubt about its ability to continue as a going concern due to recurring losses from operations[76] - The company anticipates competition from larger, more established companies with greater financial and technical resources[60] - The company is subject to evolving foreign and domestic laws and regulations that could adversely affect its business[61] - The company faces risks related to payment processing services, including potential disruptions if third-party providers are unable to deliver services[96] - The company may incur significant losses from fraud and counterfeit certificates, which could adversely affect revenue if credit card acceptance is lost[95] - Current economic uncertainty, including the impact of the COVID-19 pandemic, may hinder revenue growth and lead to decreased spending by customers[101] Marketing and Customer Acquisition - CardCash plans to increase marketing efforts to retailers and consumers to accelerate gift card sales[35] - The ability to attract and retain customers on cost-effective terms is critical for future revenue growth and profitability[110] - The company plans to increase marketing and branding expenditures significantly, which may adversely impact financial results if not effective[120] - Retaining and acquiring customers is crucial for profitability, with recent declines in website and mobile application traffic raising concerns[139] Regulatory and Compliance Issues - The company is subject to various regulations related to payments and anti-money laundering, which could increase compliance costs and impact operations[98] - The implementation of the CARD Act may classify discount certificates as gift cards, potentially increasing liabilities related to unredeemed certificates[81] - The company may incur unexpected expenses related to compliance with expanding tax regulations, which could affect financial stability[129] Cybersecurity and Technology - Cybersecurity risks are significant, with potential breaches leading to legal and financial repercussions, which could adversely affect financial results[114] - The company has implemented a cybersecurity risk management program to protect customer and operational data from threats[160] - The cybersecurity strategy includes regular assessments, vulnerability management, and employee training to mitigate risks[161] - The reliance on third-party technology licenses may result in delays if not maintained on favorable terms, impacting software development[127] Employee and Operational Structure - The company employs 42 full-time employees, with no representation by a labor union[74] - Insiders control approximately 20% of the company's outstanding shares, which may affect stockholder influence and stock price[154] - The company is classified as a "smaller reporting company," allowing for simplified disclosures in SEC filings[75]

Financial Performance - For the three months ended September 30, 2024, net sales were $23,210,850, an increase of approximately $3,003,331, or 14.9%, compared to $20,207,519 for the same period in 2023[130]. - The gross margin for the three months ended September 30, 2024, was 12.9%, slightly up from 12.8% in the prior year period[130]. - Cost of sales increased to $20,220,237 for the three months ended September 30, 2024, compared to $17,629,985 for the same period in 2023, with cost of sales as a percentage of sales at 87.1%[132]. - Selling, general and administrative expenses rose to $5,908,603 for the three months ended September 30, 2024, an increase of $3,308,447 from $2,600,156 in the prior year[134]. - The company incurred a loss from operations of $3,780,199 for the three months ended September 30, 2024, compared to a loss of $365,607 for the same period in 2023[137]. - The net loss for the three months ended September 30, 2024, was $4,061,152, compared to a net loss of $556,582 for the same period in 2023[139]. - For the nine months ended September 30, 2024, net sales were $64,753,246, a decrease of approximately $707,658, or 1.1%, from $65,460,904 in the same period in 2023, despite an increase in gross margin from 12.4% to 14.7%[144]. - The company incurred a loss from operations of $14,206,047 for the nine months ended September 30, 2024, compared to a loss of $1,158,731 for the same period in 2023[153]. - The net loss for the nine months ended September 30, 2024, was $14,996,518, compared to a net loss of $1,673,617 for the same period in 2023[156]. - Modified EBITDA for the nine months ended September 30, 2024, was $(1,684,289), compared to $(129,775) for the same period in 2023[159]. Expenses and Costs - Cost of sales decreased to $55,244,862 for the nine months ended September 30, 2024, compared to $57,352,182 in the prior year, resulting in a cost of sales percentage of 85.3% versus 87.6%[146]. - Selling, general and administrative expenses rose to $20,954,914 for the nine months ended September 30, 2024, an increase of $12,716,417 from $8,238,497 in the same period in 2023, primarily due to stock-based compensation[150]. - Other expenses amounted to $280,953 for the three months ended September 30, 2024, compared to $191,326 for the same period in 2023[138]. - Stock-based compensation expense recorded during the nine months ended September 30, 2024, was $9,762,242, significantly impacting overall expenses[150]. Cash Flow and Financing - The company has a working capital deficit of $2,182,182 as of September 30, 2024, with cash available for operations at $3,090,980[123]. - Cash used in operating activities for the nine months ended September 30, 2024 was approximately $2,362,948, compared to $220,267 for the same period in 2023[176][178]. - Cash used for investing activities for the nine months ended September 30, 2024 was $674,646, similar to $675,000 for the same period in 2023[180]. - Cash provided by financing activities for the nine months ended September 30, 2024 was $2,028,837, significantly higher than $634,926 for the same period in 2023[181][182]. - The outstanding line of credit balance at September 30, 2024 was $4,234,149, down from $6,737,385 at December 31, 2023[183]. - The company entered into an At-the-Market Issuance Sales Agreement to sell shares of common stock with an aggregate offering price of up to $30,000,000[171]. - The company has a remaining convertible note payable of $20,000, with accrued interest of $22,238, convertible at $1.50 per share[184]. - The company issued two-year promissory notes totaling $1,500,000 as partial consideration for the acquisition of CardCash, with an aggregate principal balance outstanding of $1,500,000 as of September 30, 2024[186]. - The company received a total of $150,000 and $350,000 from the SBA under the Covid-19 Economic Injury Disaster Loan (EIDL) Program, with a principal balance outstanding of $664,500 as of September 30, 2024[190]. - The company anticipates its cash balance will last until at least June 2025, but faces uncertainty in securing additional financing[172][173]. Acquisition and Business Operations - The acquisition of CardCash Exchange, Inc. was completed for a total consideration of $26,682,000, including 6,108,007 shares of common stock valued at $24,432,000[109]. - The B2C division accounted for 45% of gross revenue, while the B2B division accounted for 55% for the fiscal year ended December 31, 2023[117][119]. - The company focuses on improving gross margin by assessing the quality of purchased gift card brands, which has allowed for increased sales prices to customers[144]. - The company expects selling, general and administrative expenses to increase in future periods due to the addition of personnel and higher operational costs associated with being a public company[149]. - As of September 30, 2024, the company had cash of $3,090,980 and a working capital deficit of $2,182,182, raising substantial doubt about its ability to continue as a going concern[170].

Financial Performance - For the three months ended June 30, 2024, net sales were $20,020,502, a decrease of approximately $1,071,155, or 5.1%, compared to $21,091,657 for the same period in 2023[128]. - Gross margin improved to 16.3% for the three months ended June 30, 2024, up from 12.4% in the prior year period, despite a decrease in sales[128]. - The company reported a net loss of $7,744,646 for the three months ended June 30, 2024, compared to a net loss of $686,657 for the same period in 2023, reflecting an increase in net loss due to higher operating costs and stock-based compensation[137]. - For the six months ended June 30, 2024, net sales were $41,542,396, a decrease of approximately $3,710,989, or 8.2%, from $45,253,385 in the same period in 2023, despite an increase in gross margin from 12.2% to 15.7%[141]. - The net loss for the six months ended June 30, 2024, was $10,935,366, compared to a net loss of $1,117,035 for the same period in 2023[150]. Expenses - Selling, general and administrative expenses increased to $9,832,270 for the three months ended June 30, 2024, from $2,835,513 in the prior year, primarily due to $6,214,545 in stock-based compensation expense[132]. - Selling, general and administrative expenses increased to $15,046,311 for the six months ended June 30, 2024, compared to $5,638,341 in the same period in 2023, primarily due to stock-based compensation and legal fees related to acquisitions[145]. - Other expenses amounted to $261,917 for the three months ended June 30, 2024, compared to $170,414 in the prior year, primarily consisting of interest expenses[136]. - Other expenses amounted to $509,518 for the six months ended June 30, 2024, compared to $352,308 in the prior year, primarily due to increased interest expenses[149]. Operational Losses - Loss from operations for the three months ended June 30, 2024, was $7,482,429, compared to a loss of $516,243 for the same period in 2023[135]. - The company incurred a loss from operations of $10,425,848 for the six months ended June 30, 2024, compared to a loss of $793,124 for the same period in 2023[148]. Cash Flow and Financing - Cash used in operating activities for the six months ended June 30, 2024 was approximately $2,341,031, compared to $437,725 for the same period in 2023, reflecting increased operational losses[169][170]. - Cash provided by financing activities for the six months ended June 30, 2024 was $3,354,563, significantly higher than $343,742 in the prior year, primarily from the private sale of common stock[173]. - The outstanding line of credit balance increased to $7,670,449 as of June 30, 2024, up from $6,737,385 at the end of 2023, with an average interest rate of 12%[174]. - The company has a history of reporting net losses and has financed its working capital through borrowings and equity sales[162][164]. - The company anticipates its cash balance will last until at least June 2025, but faces uncertainty in securing additional financing[163][165]. Working Capital and Going Concern - The company reported a working capital deficit of $1,133,903 as of June 30, 2024, raising concerns about its ability to continue as a going concern[121]. - As of June 30, 2024, the company reported cash of $4,663,623 and a working capital deficit of $1,037,619, indicating substantial doubt about its ability to continue as a going concern[163]. - The company’s ability to continue operations is contingent upon raising additional debt or equity capital to achieve sustainable revenues and profitability[164]. Acquisitions and Revenue Recognition - The acquisition of CardCash Exchange, Inc. was completed for a total consideration of $26,682,000, including 6,108,007 shares of common stock valued at $24,432,000[108]. - The company recognized revenue in accordance with FASB ASC 606, primarily from the sale of merchant gift cards and discount certificates[156]. Customer Base - Restaurant.com serves over 7.8 million customers and connects them with over 182,500 restaurants and retailers nationwide[114]. - The B2C division accounted for 45% of gross revenue, while the B2B division accounted for 55% for the fiscal year ended December 31, 2023[115].

Financial Performance - For the three months ended March 31, 2024, net sales were $21,521,894, a decrease of approximately $2,639,834, or 10.9%, compared to $24,161,728 in the same period of 2023[126]. - The gross margin for the current year period improved to 15.1%, up from 12.1% in the prior year period, despite a decrease in sales[126]. - Operating expenses increased to $5,214,041 for the three months ended March 31, 2024, compared to $2,802,828 for the same period in 2023, reflecting an increase of $2,411,213[131]. - The loss from operations for the three months ended March 31, 2024, was $2,943,419, significantly higher than the loss of $276,881 for the same period in 2023[134]. - The company reported a net loss of $3,190,720 for the three months ended March 31, 2024, compared to a net loss of $430,378 for the same period in 2023, indicating an increase in net loss of approximately 642%[137]. - Modified EBITDA for the three months ended March 31, 2024, was $(657,439), a decrease from Modified EBITDA of $110,822 for the same period in 2023, reflecting a significant decline in operational performance[140]. Cash Flow and Working Capital - The company reported a working capital deficit of $228,112 as of March 31, 2024, with cash available for operations at $5,400,821[119]. - Cash used in operating activities for the three months ended March 31, 2024, was approximately $6,636, a stark contrast to cash provided by operating activities of $803,483 for the same period in 2023[154][156]. - Cash used for investing activities increased to $224,815 for the three months ended March 31, 2024, compared to $38,449 for the same period in 2023, indicating a rise in capital expenditures[158]. - Cash provided by financing activities was $1,532,535 for the three months ended March 31, 2024, primarily from proceeds of $2,709,000 on the private sale of common stock, after accounting for repayments[159]. - The company had cash of $5,400,821 available to fund operations as of March 31, 2024, with a working capital deficit of $228,112, raising concerns about its ability to continue as a going concern[149]. - The company anticipates its cash balance will last until at least March 2025, but there is substantial doubt about its ability to continue as a going concern without raising additional capital[149][150]. Debt and Financing - The outstanding line of credit balance was $6,060,920 as of March 31, 2024, down from $6,737,385 at December 31, 2023, reflecting ongoing debt management efforts[160]. - The company issued two-year promissory notes totaling $1,500,000 as partial consideration for the acquisition of CardCash, with specific repayment terms outlined[162]. - The company has a history of reporting net losses and has financed its working capital requirements through borrowings and equity sales, indicating reliance on external funding sources[148]. Business Operations - The B2C division accounted for 45% of gross revenue, while the B2B division accounted for 55% for the fiscal year ended December 31, 2023[113][115]. - Restaurant.com serves over 182,500 restaurants and retailers, connecting with over 7.8 million customers[112]. - The acquisition of CardCash Exchange, Inc. was completed for a total consideration of $26,682,000, including 6,108,007 shares of common stock valued at $24,432,000[106]. Going Concern - Management has expressed substantial doubt about the company's ability to continue as a going concern due to a history of net losses and negative operating cash flows[121].

Acquisition and Financial Overview - RDE, Inc. acquired CardCash Exchange, Inc. for a total consideration of $26,682,000, which included 6,108,007 shares of common stock valued at $24,432,000, $750,000 in cash, and $1,500,000 in notes payable[19]. - The company completed the acquisition of CardCash Exchange, Inc. for $26,682,000, consisting of 6,108,007 shares of common stock valued at $24,432,000, $750,000 in cash, and $1,500,000 in notes payable[202]. - For the year ended December 31, 2023, the company recorded a loss from operations of $8,100,406 and used cash in operating activities of $541,791[83]. - The company has a history of net operating losses, with losses of $3,080,406 and $5,600,348 for the years ended December 31, 2023 and 2022, respectively[85]. - The outstanding balance on the company's line of credit facility was $6,737,385, with $2,294,779 in promissory notes and $40,137 in past due convertible notes payable[83]. - The company has not declared or paid any cash dividends on its common stock and intends to retain future earnings to finance business expansion[192]. Revenue and Market Performance - The B2C division of Restaurant.com accounted for 45% of gross revenue in the fiscal year ended December 31, 2023, while the B2B division accounted for 55%[37]. - Revenue improved in fiscal 2023 as the impact of COVID-19 abated, following declines in 2020, 2021, and 2022 due to restaurant closures[213]. - CardCash's gross margin is currently 13.3%, with the retail-to-bulk channel having the highest margin at approximately 17% and bulk-to-bulk at about 10%[36]. - CardCash expects to achieve a gross margin of 15% in 2023 and 19% in 2024, anticipating an 8% increase in gross margins over the next two years[36]. - The global gift card market is projected to reach $1.4 trillion by 2026, which CardCash aims to capitalize on by expanding its business channels[28]. Customer Base and Marketing - As of December 31, 2023, the company had a customer base of 6.2 million and featured deals at over 184,000 restaurants and merchants[61]. - CardCash spent only $807,031 on marketing in 2023, representing 0.9% of its gross revenues, and plans to increase marketing efforts to accelerate sales[35]. - The average order value for bundled offerings ("Specials") from Restaurant.com is nearly five times that of standard certificate purchases, generating over 5% of B2C revenue from 60% of orders[38]. - The B2B division contributed 55% of gross revenue in fiscal year 2023, selling certificates and Discount Dining Passes to corporations[211]. - Restaurant.com serves over 182,500 restaurants and retailers, connecting with 7.8 million customers nationwide[208]. Competition and Market Challenges - The company faces competition from larger, established companies with greater financial and technical resources, which may impact its revenue base[59]. - The company faces intense competition in the market for discounts, which may lead to reduced operating margins and loss of market share[129]. - The company’s operating results are affected by its reliance on search engines for traffic, and changes in algorithms could negatively impact visibility and sales[135]. - The company is dependent on the growth of online commerce, with concerns about fraud and privacy potentially hindering customer acquisition[105]. - Economic uncertainty, including the impact of the COVID-19 pandemic, could adversely affect revenue and business operations[113]. Regulatory and Legal Risks - The company is subject to various foreign and domestic laws affecting online business, which could harm its operations[63]. - The company is not currently considered a financial institution under anti-money laundering laws, but proposed amendments could change this status[69]. - The company may incur significant costs related to legal claims, including defamation and copyright infringement, which could materially impact its net income[99]. - The company is subject to evolving internet and e-commerce regulations, which could adversely affect its business operations and revenue growth[97]. - Failure to comply with privacy laws and regulations could result in significant liabilities and adversely affect the company's business[98]. Internal Controls and Governance - The company has identified material weaknesses in its internal control over financial reporting, concluding that these controls were not effective as of December 31, 2023[87]. - The company is committed to remediating its material weaknesses in internal controls, but there is no assurance on the timeline for remediation[89]. - The company has not had its auditors provide an attestation of management's assessment of internal control over financial reporting, which may leave material weaknesses undetected[170]. - The company must maintain effective internal controls to provide reliable financial reports and detect fraud, as failure to do so could harm operating results and investor confidence[163]. - The company has a risk management program overseen by the Board of Directors and Audit Committee, integrating cybersecurity into overall risk management processes[179]. Employee and Operational Considerations - The company employs 64 full-time employees as of December 31, 2023, and considers its employee relations to be good[78]. - The company relies heavily on key personnel, including the President and CEO, and any loss of these executives could significantly harm business operations[120]. - As the business expands, the company needs to hire additional personnel, particularly in IT, engineering, marketing, and customer support, to maintain growth[121]. - The company recognizes that its operating results may vary significantly from quarter to quarter due to seasonality and the rapidly evolving nature of its business[151]. Financial and Stock Market Considerations - Approximately 24% of the company's outstanding shares of common stock are beneficially owned by insiders, which may adversely affect stock price and limit investor influence[166]. - The trading price of the company's common stock is likely to be highly volatile, which could lead to losses for investors[164]. - The company may experience dilution of ownership interests due to future issuance of additional shares or convertible securities[165]. - Limited trading activity in the company's common stock may make it difficult for shareholders to sell shares at attractive prices[160]. - The company may need to raise additional capital to meet long-term business requirements, which could dilute current stockholders' ownership interests[145].

Revenue Performance - Revenue for the three months ended September 30, 2023, was $572,916, a decrease of approximately $251,831 or 31% compared to $824,747 in the same period of the prior year[107]. - Business to consumer (B2C) revenue decreased from $273,001 in Q3 2022 to $195,757 in Q3 2023, reflecting a decline of approximately 28.3%[107]. - Revenue for the nine months ended September 30, 2023, was $2,106,115, a decrease of approximately $1,289,566 or 38% compared to $3,395,681 in the same period of the prior year[116]. Cost and Expenses - Cost of revenues increased to $59,417 during Q3 2023, representing 10% of total revenue, up from 5% in Q3 2022[109]. - Cost of revenues decreased to $255,683 during the nine months ended September 30, 2023, compared to $637,096 during the same period in 2022, with cost of revenues as a percentage of revenue at 12% in 2023 versus 19% in 2022[119]. - Selling, general and administrative expenses were $669,386 in Q3 2023, a decrease of $646,330 from $1,315,716 in Q3 2022, primarily due to a $637,681 employee retention tax refund[111]. - Selling, general and administrative expenses were $4,273,187 during the nine months ended September 30, 2023, an increase of $45,421 from $4,227,766 in the same period of 2022[121]. Losses and Financial Challenges - The company incurred a loss from operations of $190,054 for Q3 2023, an improvement from a loss of $566,911 in Q3 2022[113]. - Net loss for Q3 2023 was $191,970, compared to a net loss of $596,342 in Q3 2022, reflecting reduced operating expenses[115]. - The company experienced a net loss of $2,457,522 during the nine months ended September 30, 2023, highlighting ongoing financial challenges[100]. - The company incurred a loss from operations of $2,422,755 for the nine months ended September 30, 2023, compared to a loss of $1,555,849 for the same period in 2022[123]. - The net loss for the nine months ended September 30, 2023, was $2,457,572, compared to a net loss of $517,851 for the same period in 2022[125]. Cash Flow and Financing - The company had cash of $2,613,868 available to fund operations as of September 30, 2023[100]. - Cash used in operating activities for the nine months ended September 30, 2023, was approximately $1,001,156, compared to $717,244 in the same period of 2022[130]. - Cash provided by financing activities for the nine months ended September 30, 2023, was $2,492,066, compared to $236,864 in the same period of 2022[135]. - As of September 30, 2023, the company had cash on hand of $2,613,868, with substantial doubt about its ability to continue as a going concern[126][128]. Debt and Loans - The total principal and accrued interest of convertible debt assumed upon reverse merger was $38,637 as of September 30, 2023[136]. - The Company received a total of $650,000 from two Economic Injury Disaster Loans (EIDL) in 2020 and 2021, and assumed an additional $14,500 EIDL on January 31, 2022[141]. - The loans have an interest rate of 3.75% per annum, with a combined repayment of principal and interest of $3,500 per month over 30 years[142]. - As of September 30, 2023, the note payable had a principal balance of $661,035 and accrued interest payable of $34,411[142]. Accounting Policies and Estimates - The Company follows U.S. GAAP and regularly evaluates key estimates and assumptions that could materially affect reported amounts[144]. - Significant estimates include reserves for uncollectible accounts and the valuation of stock instruments issued for services[144]. - There were no changes to critical accounting policies that impacted the condensed consolidated financial statements[144]. - Recent accounting pronouncements are discussed in Note 2 of the Notes to Condensed Financial Statements[145]. - A smaller reporting company is not required to provide market risk disclosures[146]. Mergers and Acquisitions - The company has entered into a merger agreement with CardCash Exchange, Inc. for a total consideration of $29.7 million, including $2 million in cash and 6,108,077 restricted shares[97]. Other Financial Activities - The company recorded no investing activities for the nine months ended September 30, 2023, compared to cash provided by investing activities of $12,805 in the same period of 2022[134]. - There were no off-balance sheet arrangements reported by the Company[143].

Revenue Performance - Revenue for the three months ended June 30, 2023, was $721,488, a decrease of approximately $1,089,666 or 60% compared to $1,811,154 in the same period of the prior year[101] - Revenue for the six months ended June 30, 2023, was $1,533,199, a decrease of approximately $1,037,735 or 40% compared to $2,570,934 in the same period of the prior year[112] - The company expects an improvement in revenues in fiscal 2023 as the COVID-19 pandemic appears to be abating[92] Cost of Revenues - The cost of revenues decreased to $101,389 during the three months ended June 30, 2023, compared to $497,733 during the same period in 2022, with cost of revenues as a percentage of revenue at 14% in 2023 versus 27% in 2022[104] - Cost of revenues decreased to $196,266 during the six months ended June 30, 2023, compared to $598,298 during the same period in 2022, with cost of revenues as a percentage of revenue decreasing from 23% to 13%[115] Expenses - Selling, general and administrative expenses were $2,453,615 during the three months ended June 30, 2023, an increase of $978,161 from $1,475,455 in the same period of 2022[106] - Selling, general and administrative expenses increased to $3,569,634 during the six months ended June 30, 2023, compared to $2,912,050 in the same period of 2022, an increase of $657,584[117] Losses - The company incurred a loss from operations of $1,833,516 for the three months ended June 30, 2023, compared to a loss of $193,078 for the same period in 2022[108] - The company incurred a loss from operations of $2,232,701 for the six months ended June 30, 2023, compared to a loss of $988,938 for the same period in 2022[119] - The net loss for the three months ended June 30, 2023, was $1,840,686, compared to a net loss of $193,590 for the same period in 2022[110] - The net loss for the six months ended June 30, 2023, was $2,265,602, compared to a net income of $78,491 for the same period in 2022[121] Cash Position - The company had cash of $2,134,182 available to fund operations and expansion plans as of June 30, 2023[94] - Cash used in operating activities for the six months ended June 30, 2023, was approximately $981,092, compared to $35,910 in the same period of 2022[128] - Cash provided by financing activities for the six months ended June 30, 2023, was $1,992,316, compared to $250,000 in the same period of 2022[131] - As of June 30, 2023, the company had cash on hand amounting to $2,134,182[124] Financial Health - The company recorded a stockholders' deficit of $273,935 at June 30, 2023, raising substantial doubt about its ability to continue as a going concern[122] - The loans have an interest rate of 3.75% per annum, with a combined repayment of principal and interest of $3,500 per month over 30 years[138] - As of June 30, 2023, the note payable had a principal balance of $661,035 and accrued interest payable of $38,098[138] - As of December 31, 2022, the accrued interest payable was $45,541, indicating a decrease in interest payable over the period[138] Accounting Policies and Estimates - The company has not made any changes to its critical accounting policies that would impact the condensed consolidated financial statements[140] - Significant estimates include those related to uncollectible accounts, depreciable lives of property and equipment, and impairments of long-term assets[140] - The company is not required to provide quantitative and qualitative disclosures about market risk as a smaller reporting company[142] Digital Engagement - The average number of unique visitors to the company's digital platforms was 700,000 per month during the year ended December 31, 2022[90] - Mobile revenue has grown to 49% of B2C revenue, with over 6.4 million downloads of the company's apps for the year ended December 31, 2022[90] - The B2B sales program comprises 50% of revenue, indicating significant growth since its introduction in 2004[91] Investing Activities - The company had no investing activities for the six months ended June 30, 2023, while cash provided by investing activities for the same period in 2022 was $12,805[130] - There were no off-balance sheet arrangements reported by the company[139]

Revenue Performance - Revenue for the three months ended March 31, 2023, was $811,711, an increase of approximately $51,931 or 7% compared to $759,780 in the same period of the prior year[93]. - The B2B sales program comprises 50% of total revenue, indicating significant growth since its introduction in 2004[83]. - The company expects an improvement in revenues in fiscal 2023 as the COVID-19 pandemic appears to be abating[84]. Cost Management - Cost of revenues decreased to $94,877 during the three months ended March 31, 2023, compared to $100,565 during the same period in 2022, with a percentage of revenue decrease from 13% to 12%[95]. - Selling, general and administrative expenses were $1,116,020 for the three months ended March 31, 2023, a decrease of $320,575 from $1,436,595 in the same period of 2022[98]. - For the three months ended March 31, 2023, net cash used in operating activities was $350,814, a decrease from $431,356 in the same period of 2022, indicating improved cash flow management[107][109]. Financial Condition - The company incurred a net loss of $424,916 for the three months ended March 31, 2023, compared to a net income of $272,081 for the same period in 2022[102]. - Management has expressed substantial doubt about the company's ability to continue as a going concern due to operating losses and negative cash flows[89]. - Inflationary pressures and geopolitical conflicts have resulted in increased costs for labor, fuel, and materials, potentially impacting the company's financial condition[85]. Cash Position - The company had cash of $755,478 available to fund operations as of March 31, 2023, following a net proceeds of approximately $1.88 million from a private placement[86]. - As of March 31, 2023, the company had cash on hand amounting to $755,478 and received net proceeds of approximately $1.88 million from the sale of 937,500 shares at $2.00 per share[105]. Debt Obligations - The total principal balance of convertible debt assumed upon the reverse merger was $20,000, with accrued interest of $17,887 as of March 31, 2023[113]. - Economic Injury Disaster Loans (EIDL) had a principal balance of $657,274 and accrued interest of $45,615 as of March 31, 2023, reflecting ongoing financial obligations[116][118]. - The company made principal payments of $12,675 during the three months ended March 31, 2023, reducing the aggregate principal balance of notes payable to $115,103[115]. - The company’s total principal and accrued interest for government assistance notes payable was $702,889 as of March 31, 2023, slightly down from $706,576 at the end of 2022[116]. Operational Focus - There were no investing activities reported for the three months ended March 31, 2023, indicating a focus on operational cash flow management[111]. - The company’s future operations depend on its ability to secure necessary debt or equity financing to continue until it generates positive cash flow[105].