GIFTIFY, INC.

Giftify, Inc. operates in the digital deals and gift card exchange industries, primarily through its two divisions: CardCash and Restaurant.com. The company's profile significantly changed with the acquisition of CardCash Exchange, Inc. in December 2023, which expanded its focus beyond restaurant deals to a broader gift card marketplace. CardCash operates as a leading gift card exchange platform, facilitating the purchase of unused gift cards from the public and distributors at a discount and reselling them at a markup. This business model is principal-based when the company uses its own inventory of previously purchased discounted gift cards, recognizing revenue on a gross basis, and agent-based when it arranges for suppliers to deliver discounted gift cards directly to customers, recognizing only the commission earned ¹. Restaurant.com, a pioneer in the restaurant deal space, connects consumers, businesses, and communities with dining and merchant deal options. The company's primary customer segments are Business-to-Consumer (B2C) and Business-to-Business (B2B) for both CardCash and Restaurant.com.

CardCash's core service offering involves buying and selling gift cards from over 1,100 retailers, including prominent brands like Target, Home Depot, Starbucks, and TJ Maxx. It also provides white-label solutions for major retailers such as Amazon, Best Buy, CVS, and Dell, enabling them to integrate gift card exchange capabilities into their platforms. Furthermore, CardCash facilitates B2B exchanges for companies to manage surplus gift card inventory and procure gift cards in bulk. The company emphasizes its advanced fraud-prevention technology, FraudFix, which has contributed to saving consumers over $100 million since its inception ². CardCash also engages in social responsibility through partnerships with charitable organizations like Charity On Top and St. Jude's Research Hospital, allowing consumers to support charities through gift card usage.

The Restaurant.com division is split into B2C and B2B segments. The B2C division accounted for approximately 15% of gross revenue in fiscal year 2025 ³ and serves a database of 6.2 million customers ⁴. It sells discounted certificates for 10,000 restaurants, Discount Dining Passes for 170,000 restaurants and retailers, and "Specials by Restaurant.com" which bundle certificates with other entertainment options. The "Specials" offerings generate significantly higher revenue per customer, with an average order value nearly five times that of a certificate purchase ⁵. The B2B division accounted for approximately 85% of gross revenue in fiscal year 2025 ⁶ and sells certificates and Discount Dining Passes to corporations and marketers for purposes such as customer acquisition, sales incentives, loyalty programs, and customer service. Additionally, Restaurant.com generates a de minimis portion of gross revenue from third-party offers and display ads. The company acquired Takeout7, Inc. on May 29, 2025, for $609,000, consisting of 350,000 shares of common stock ⁷, expanding its technology offerings to include online ordering solutions and AI-powered digital marketing services for independent restaurants. Takeout7's operations were merged into Restaurant.com in early 2026.

For the fiscal year ended December 31, 2025, Giftify reported net sales of $83,181,716 ⁸, a decrease of 6.5% from $88,934,036 in 2024 ⁹. Cost of sales was $67,686,362 ¹⁰, resulting in a gross profit of $15,495,354 ¹¹. The gross margin, as a percentage of net sales, was 18.6% in 2025, an increase from 14.8% in 2024 ¹². Operating expenses totaled $25,850,100 ¹³, leading to a loss from operations of $10,354,746 ¹⁴. The company reported a net loss of $10,491,658 ¹⁵ for the year, compared to a net loss of $18,832,080 in 2024 ¹⁶. Basic and diluted EPS were $(0.35) ¹⁷. Cash and cash equivalents stood at $3,654,944 ¹⁸ as of December 31, 2025, with total current liabilities of $7,496,252 ¹⁹ and total liabilities of $9,530,111 ²⁰. The outstanding balance on the secured revolving line of credit was $3,212,935 ²¹, and notes payable (current and non-current) totaled $663,589 ²². The company used cash in operating activities of $1,590,074 ²³.

Comparing fiscal year 2025 to 2024, net sales decreased by 6.5% ²⁴, primarily due to a change in the mix of agent versus principal transactions. Gross profit increased by $2,350,573, or 17.9% ²⁵, and gross margin improved from 14.8% to 18.6% ²⁶, positively impacted by the increase in net revenue from agent transactions. Selling, general, and administrative expenses decreased by $4,682,813 ²⁷, largely due to a $5,182,023 reduction in stock-based compensation expense ²⁸, partially offset by increases in payroll, benefits, marketing, and advertising costs. Loss from operations decreased from $18,375,726 in 2024 to $10,354,746 in 2025 ²⁹. Net loss also decreased from $18,832,080 in 2024 to $10,491,658 in 2025 ³⁰.

During the fiscal year, Giftify completed the acquisition of Takeout7, Inc. on May 29, 2025, for $609,000 ³¹, which included the issuance of 350,000 shares of common stock ³². This acquisition is intended to expand the company's technology offerings for independent restaurants. The company also sold 1,283,246 shares of common stock under its At-the-Market Issuance Sales Agreement, receiving net proceeds of $1,735,406 ³³, and 2,210,910 shares in a private placement, generating net proceeds of $2,431,999 ³⁴. Additionally, 600,000 shares were sold in a public offering, yielding net proceeds of $478,000 ³⁵. The company also retired a secured promissory note with Spars Capital Group LLC in the principal amount of $2,000,000 ³⁶ and notes payable related to the CardCash and GameIQ acquisitions totaling $1,500,000 and $75,928, respectively ³⁷.

Giftify's management expects its existing cash balance of $3,654,944 ³⁸ as of December 31, 2025, to last until December 2026 ³⁹. The company's ability to continue as a going concern is dependent on its capacity to raise additional debt or equity capital to fund business activities and achieve sustainable operating revenues and profitability. Management is actively evaluating funding alternatives, including equity issuances, debt securities, strategic partner arrangements, strategic transactions, or credit from financial institutions.

CardCash intends to grow its four business channels: bulk to bulk, bulk to retail, retail to bulk, and retail to retail, to capitalize on the projected expansion of the global gift card market to $400 billion by 2026 ⁴⁰. A key growth strategy involves increasing access to strategic partnerships and expanded data by transitioning from operating its own online platform to operating exchanges. CardCash is focusing on three business growth concepts: Branded Exchange for Retailer Partnerships, aiming to increase the number of gift card exchanges on partner websites to drive traffic to CardCash.com, building on successful partnerships with CVS Pharmacy and Amazon. CardCash Checkout is a technology under development that will enable retailers to accept any gift card at checkout, reducing interchange fees for businesses, increasing customer value, and increasing average purchase amounts, with CardCash profiting by reselling the card on the secondary market. CardCash Giving is a donation platform allowing consumers to pay for retail purchases with gift cards while a portion of the discount (70% of the 5%-20% negotiated discount) is donated to a charity of their choice, such as St. Jude Children's Research Hospital, with the retailer receiving a tax write-off of 70% ⁴¹.

CardCash also plans to increase its marketing efforts to retailers and consumers to accelerate gift card sales. The company anticipates increasing its gross margins by approximately 8% over the next two years ⁴², driven by retail-sourced inventory and retail sales. This will be achieved by maximizing inventory sourced through checkout and branded exchange initiatives to drive significant volume in the secondary market and achieve higher gross margins. While the bulk-to-bulk channel is expected to remain the largest contributor to CardCash's sales, the other three channels are projected to grow at a faster rate and collectively account for an aggregate 50% of sales over the next two years ⁴³.

Operationally, management expects selling, general, and administrative expenses to increase in future periods as the company adds personnel and incurs additional costs related to its operation as a public company, including higher legal, accounting, insurance, compliance, and compensation costs. The company is also taking actions to improve operating performance and cash generation, including product optimization, sales growth strategies, operational streamlining, negotiating equitable vendor contracts, and managing product pricing. The company's technology strategy involves continuing to develop and refine its technology, dedicating substantial resources to developing new features and products, and maintaining its websites and internal operations systems.

Regarding capital allocation, the company has historically financed operations through existing cash balances, public and private issuance of common stock, term loans, and credit lines. Subsequent to December 31, 2025, the company sold 25,795 shares of common stock, receiving net proceeds of $27,551 ⁴⁴, and 470,000 shares in a private placement, generating net proceeds of $510,000 ⁴⁵. On February 2, 2026, the company granted 1,400,000 restricted shares of common stock and options exercisable into 765,000 shares of common stock to executives and employees, with a total fair value of approximately $791,000 ⁴⁶. The company has not declared or paid any cash dividends and intends to retain future earnings, if any, to finance business expansion.

Management has explicitly flagged several structural headwinds and execution risks. The company's ability to continue as a going concern is in substantial doubt due to a history of net losses and negative operating cash flows ⁴⁷. There is no assurance that future operations will result in net income, and failure to increase revenue or improve gross margins will harm the business. CardCash's inability to maintain profitability could significantly delay or threaten the company's business plan. The company is subject to risks from government regulations, including the CARD Act and privacy concerns, which could increase costs or harm the business if discount certificates and dining passes are deemed subject to stricter rules. The company also faces risks from new competitors, liability claims, maintaining network infrastructure, preventing security breaches, limiting fraudulent transactions, payment-related risks, and the potential loss of key executives.

Giftify faces substantial doubt about its ability to continue as a going concern, evidenced by a net loss of $10,491,658 ⁴⁸ and cash used in operating activities of $1,590,074 ⁴⁹ for the year ended December 31, 2025, with a cash balance of $3,654,944 ⁵⁰. The company is exposed to significant regulatory risks, particularly concerning the Credit Card Accountability Responsibility and Disclosure Act of 2009 (CARD Act) and state unclaimed property laws, which could classify its discount certificates and dining passes as gift cards, potentially increasing liabilities for unredeemed balances and subjecting the company to fines or penalties. Cybersecurity threats pose a continuous risk, with systems probed virtually 24/7, potentially leading to data loss, security breaches, legal and financial exposure, and reputational damage. The business is highly dependent on maintaining and scaling its network infrastructure and relies on third-party systems for website hosting and transaction processing, making it vulnerable to disruptions. Competition is intense from existing and future competitors, including larger, well-established e-commerce companies, which could lead to reduced operating margins and loss of market share. Economic downturns, global inflation, and geopolitical conflicts, such as the Russia-Ukraine conflict, could reduce consumer discretionary spending, increase operating costs, and negatively impact demand for digital dining products. The company also faces risks related to its ability to attract and retain customers and high-quality merchants on cost-effective terms, as well as the potential for changes in search engine algorithms or mobile marketplace operator policies to negatively affect traffic and mobile application prominence.

Management's message to shareholders conveys a focus on strategic growth through acquisitions and internal development, particularly in the gift card exchange market, while acknowledging significant financial challenges. The company's overall tone indicates a commitment to improving operating performance and cash generation, despite a history of net losses and negative operating cash flows, which raise substantial doubt about its ability to continue as a going concern. Management explicitly states that the company's existing cash balance of $3,654,944 ⁵¹ is expected to last until December 2026 ⁵², and that securing additional financing is crucial for future operations and profitability. Key strategic priorities emphasized for the period ahead include expanding CardCash's business channels to capitalize on the projected $400 billion ⁵³ global gift card market by 2026, increasing strategic partnerships and data access through initiatives like branded exchanges and CardCash Checkout, and enhancing marketing efforts to accelerate gift card sales. Additionally, management aims to increase CardCash's gross margins by approximately 8% ⁵⁴ over the next two years by optimizing retail-sourced inventory and retail sales. The integration of Takeout7, Inc. is also a strategic priority, expanding technology offerings for independent restaurants.