GIFT 10-K & 10-Q changes, risk factors and insider trading

There is substantial doubt about our ability to continue as a going concern. We have a history of annual net losses which may continue, and which may negatively impact our ability to achieve our business objectives, and we received a going concern qualification in our 2024 audit.objectives.

Our audited financial statements for the fiscal year ended December 31, 2025 were prepared under the assumption that we will continue as a going concern; however, we have incurred significant losses from operations to date, and we expect our expenses to increase in connection with our ongoing activities. For the year ended December 31, 2024,2025, we recorded a net loss of $18,832,080$10,491,658 and used cash in operating activities of $2,551,870.$1,590,074. At December 31, 2024,2025, our cash and cash equivalents balance was $3,574,876.$3,654,944. AtAs of December 31, 2024,2025, the outstanding balance on our line of credit facility facility was $3,805,080,$3,212,935; we had $4,392,906$663,589 outstanding in promissory notes,notes and $43,137$46,137 ofin convertible notes payable, including interest. Our As a result, management has concluded, and our independent registered public accounting firm,firm inhas theiragreed report towith our Decemberconclusion 31,that 2024, financial statements, expressedthere is substantial doubt aboutregarding our ability to continue as a going concern duefor toa period of at least 12 months beyond the filing of this Annual Report on Form 10-K. As a result, the report of our recurringindependent lossesregistered frompublic operations.accounting firm on our financial statements for the year ended December 31, 2025, includes an explanatory paragraph regarding the existence of substantial doubt about our ability to continue as a going concern. There can be no assurance that our future operations will result in net income. Our failure to increase our revenues revenue or improve our gross margins will harm our business. We may not be able to generate profitability on a quarterly or annual basis in the future. If our revenues grow more slowly than we anticipate, our gross margins fail to improve or our operating expenses exceed our expectations, our operating results will suffer.

If CardCash is not able to achievemaintain profitability withinover the next few years, our shareholders will have experienced unnecessary dilution, and our ability to achieve our business plan could be significantly delayed or threatened.

CardCash has had a history ofincurred net operating losses since its inception. For the years ended December 31, 20232024 and 2022,2023, CardCash had operating net losses of $3,080,406$2,052,198 and $5,600,348, $124,546, respectively. During the year ended December 31, 2025, Cash realized net income of $830,197. Our business plan contemplates our growth in gross and net revenues to increase our share price and to facilitate accretive acquisitions of ecommercee-commerce companiescompanies. soHowever, the CardCash’s inability of CardCash to be profitable could delay or thwarthinder our efforts to achieve our business goals. The principal risks to CardCash achievingmaintaining future profitability are (i) feasibility of the Company’s expense management activities, (ii) government regulations, including the Card Act, privacy concerns and oversight of financial institutions and money transmitters as set forth in the risk factors below, (iii) new competitors, (iv) liability for claims relating to service offerings and branded exchanges, (v) maintaining its network infrastructure as set forth below, (vi) preventing security breaches as set forth below, (vii) limiting fraudulent transactions and chargebacks on gift cards, (viii) payment related risks as set forth below, (ix) overcoming the limited experience of principals in operating a public company, (x) the potential loss of key executives as set forth below, and (xi) future pandemics.

Our business depends on our reputation for providing high-quality discounts, and our brand and reputation may be harmed by actions taken by restaurants and other merchants that are outside our control. Any shortcomings of one or more of our restaurants and other merchants, particularly with respect to an issue affecting the quality of the meals offered or the products or services sold, may be attributed by our customers to us, thus damaging our reputation, brand valuevalue, and potentially affecting our results of operations. In addition, negative negative publicity and subscriber sentiment generatedarising as a result offrom fraudulent or deceptive conduct by our restaurants and other merchants could damage our reputation, reduce our ability to attract new customers or retain our current customers, and diminish the value of our brand.

From time to time, we may also may be notified of additional laws and regulations whichthat governmental organizations or others may claim should be applicableapply to our business. If we are required to alter our business practices asdue a result of anyto laws and regulations, our revenue could decrease, our costs could increase increase, and our business could otherwise be harmed. Further, the costs and expenses associated with defending any actions related to such additional laws and regulationsregulations, and any payments of related penalties, judgmentsjudgments, or settlements could adversely impact our profitability.

Our discount certificates and Discount Dining Passes may be considered gift cards, gift certificates, stored value cardscards, or prepaid cards andand, thereforetherefore, governedmay by,be subject to, among other laws, the CARD Act,Act and state laws governing gift cards, stored value cardscards, and coupons. Many Many of these laws contain provisions governing the use of gift cards, gift certificates, storedstored-value value cardscards, or prepaid cards, including specific specific disclosure requirements andrequirements, prohibitions or limitations on the use of expiration datesdates, and the imposition of certain fees. For example, if if our discount certificates and Discount Dining Passes are subject to the CARD Act and are not included in the exemption for promotional programs, it is possible that the purchase value, which is the amount equal to the price paid for our certificates and Discount Dining Passes, or the promotional value, which is the add-on value of these items in excess of the price paid, or both, may not expire before the later of (i) five years after the date on which these items were issued; (i) the certificate’s stated expiration date (if any); or (iii) a later date provided by applicable state law. In the event that it is determined that our discount certificates and Discount Dining Passes are subject to the CARD Act or any similar state regulation, and are not within various exemptions that may be available under the CARD Act or under some of the various state jurisdictions, our liabilities with respect to unredeemed certificates and Discount Dining Passes may be materially higher than the amounts shown in our financial statements and we may be subject to additional fines and penalties. In addition, if federal or state laws require that the face value of our discount certificates and Discount Dining Passes have a minimum expiration period beyond the period desired by a merchant for its promotional program, or no expiration period, this may affect the willingness of merchants to issue discount certificates in jurisdictions where these laws apply. If we are required to materially increase the estimated liability recorded in our financial statements with respect to unredeemed discount certificates and Discount Dining Passes, our net income could be materially and adversely affected.

In certain states, our discount certificates and Discount Dining Passes may be consideredtreated aas gift card.cards. Some of these states includetreat gift cards as unclaimed cardsor abandoned property under their unclaimed and abandoned property lawslaws, which require companies to remit to the government the value of the unredeemed balance on the gift cards after a specified period of time (generally between one and five years) and impose certain reporting and recordkeeping obligations. We do not remit any amounts relating tofor unredeemed discount certificates andor Discount Dining PassesPasses, based on our assessment assessment of applicable laws. The analysis of the potential application of the unclaimed and abandoned property laws to discount certificates and and Discount Dining Passes is complex, involving an analysis of constitutional and statutory provisions and factual issues, including our our relationship with customers and merchants and our role as it relates to the issuance and delivery of such certificates and Discount Dining Dining Passes. In the event that one or more states successfully challenges our position on the application of its unclaimed and abandoned property property laws to discount certificates and Discount Dining Passes, or if the estimates that we use in projecting the likelihood of discount certificates certificates and Discount Dining Passes being redeemed prove to be inaccurate, our liabilities with respect to unredeemed discount certificates and and Discount Dining Passes may be materially higher than the amounts shown in our financial statements. If we are required to materially increase the estimated liability recorded in our financial statements with respect to unredeemed gift cards, our net income could be materially and adversely affected. Moreover, a successful challenge to our position could subject us to penalties or interest on unreported and unremitted sums, and any such penalties or interest would have a further material adverse impact on our net income.

We are subject to general business regulations and laws as well as regulations and laws specifically governing the internet and e-commerce, including the California Consumer Protection Act, the General Data Protection Regulation, the CAN-SPAM Act, the Digital Millennium Copyright Act, the Electronic Signatures in Global and National Commerce ActAct, and the Uniform Electronic Transactions Act. Existing and future regulations regulations and laws could impede the growth of the internet or other online services. These regulations and laws may involve taxation, tariffs, tariffs, subscriber privacy, anti-spam, data protection, content, copyrights, distribution, electronic contracts and other communications, consumer consumer protection, the provision of online payment servicesservices, and the characteristics and quality of services. It is not clear how existing laws laws governing issues such as property ownership, sales and other taxes, libellibel, and personal privacy apply to the internetinternet, as the vast majority majority of these laws were adopted prior to the advent of the internet and do not contemplate or address the unique issues raised by the internet or e-commerce. In addition, it is possible that governments ofin one or more countries may seek to censor content available on our websites and applications applications, or may even attempt to completely block access to our websites. Adverse legal or regulatory developments could substantially harm our business. In particular, in the event that we are restricted, in whole or in part, from operating in one or more countries, our ability to retain or increase our subscriber base may be adversely affected and we may not be able to maintain or grow our revenue as anticipated.

A variety of federal and state laws and regulations govern the collection, use, retention, sharingsharing, and security of consumer data. The existingExisting privacy-relatedprivacy laws and regulations are evolving and subject to potentially differingvarying interpretations. In addition, various federal, state state, and foreign legislative and regulatory bodies may expand current laws or enact new laws regarding privacy matters. For example, recently there have recently been Congressional hearings and increased attention to the capture and use of location-based information relatingfrom to users of smartphonessmartphone and other mobile devices.device users. We have posted privacy policies and practices concerning the collection, useuse, and disclosure of subscriber data on our websites and applications. Several internet companies have incurred penalties for failing to abide byhonor the representations made in their privacy policies and practices. In addition, several states have adoptedenacted legislation that requiresrequiring businesses to implement and maintain reasonable security procedures and practices to protect sensitive personal information and to provide notice to consumers in the event of a security breach. Any failure, or perceived failure, by us to comply with our posted privacy policies or with any data-related consent orders, Federal Trade Commission requirements or orders or other federal, state or international privacy or consumer protection-related laws, regulations or industry self-regulatory principles could result in claims, proceedings or actions against us by governmental entities or others or other liabilities, which could adversely affect our business. In addition, a failure or perceived failure to comply with industry standards or with our own privacy policies and practices could result in a loss of customers or merchants and adversely affect our business. Federal, state and international governmental authorities continue to evaluate the privacy implications inherent in the use of third-party web “cookies” for behavioral advertising. The regulation of these cookies and other current online advertising practices could adversely affect our business.

We may be sued for defamation, civil rights infringement, negligence, patent, copyright or trademark infringement, invasion of privacy, personal injury, product liability, breach of contract, unfair competition, discrimination, antitrust or other legal claims relating to information that is published or made available on our websites or service offerings we make available (including provision of an application programming interface platform for third parties to access our website, mobile device services and geolocation applications). This risk is enhanced in certain jurisdictions outside the United States, where our liability for such third-party actions may be less clearclear, and we may be less protected. In addition, we could incur significant costs in investigating and defending such claims, even if we ultimately are not found liable. If any of these events occurs,occur, our net income could be materially and adversely affected.

We are subject to risks associated with information disseminated through our websites and applications, including consumer data, content that is produced by our editorial staff and errors or omissions related to our product offerings. Such information, whether accurate or inaccurate, may result in our being sued by our merchants, customerscustomers, or third partiesparties, and as a resultresult, our revenue and goodwill could could be materially and adversely affected.

Our business depends on our ability to maintainmaintaining and scalescaling the network infrastructure necessaryrequired to operate our websites and applications, and any significant disruption into service on our websites or applications could result in a loss of customers or merchants.

Customers access our deals through our websites and applications. Our reputation and ability to acquire, retain and serve our customers and merchants who are dependent upon the reliable performance of our websites and applications and the underlying network infrastructure. As our subscriber base and the amountvolume of information shared on our websites and applications continue to grow, we will need an increasing amount ofmore network capacity and computing power. We have spentspent, and expect to continue to spendspend, substantial amounts of money on data centerscenters, andequipment, equipment and related network infrastructure to handle the traffic onfor our websites and applications. The operation of these systems is expensive and complexcomplex, and could resultlead into operational failures. In the event that our customer base or the amount of traffic on our websites and applications grows more quickly than anticipated, we may be required to incur significant additional costs. Interruptions in these systems, whether due to system failures, computer viruses or physical or electronic break-ins, could affect the security or availability of our websites and applications, and prevent our customers from accessing our services. A substantial portion of our network infrastructure is hosted by third-party providers. Any disruption in to these servicesservices, or any failure ofby these providers to handle existing or increased traffic traffic, could significantly harm our business. Any financial or other difficulties these providers face may adversely affect our business, and we exercise littlelimited control over these providers,them, which increases our vulnerability to problemsissues with the services they provide. If we do not successfully maintain or expand our network infrastructure successfully infrastructure, or if we experience operational failures, we could lose current and potential customers and merchants, which could harm our operating results and financial condition.

The success of our services will largely depend largely on the development and maintenance of theour internet infrastructure. This includes maintenancemaintaining of a reliable network backbone with the necessary speed, data capacitycapacity, and security, as well as the timely development of complementary products products, forto providingprovide reliable internet access and services. The internet has experienced, and is likely to continue to experience, significant growth in the number of users and amountin oftraffic traffic.volume. The internet infrastructure may be unable to support such demands. In addition, increasing numbers of users, increasinghigher bandwidth requirementsrequirements, orand problemsissues caused by viruses, worms, malwaremalware, and similar programs may degrade harminternet the performance of the internet.performance. The backbone computers of the internet have been the targets of such programs. The internet has experienced a variety range of outages and other delays asdue a result ofto damage to portionsparts of its infrastructure, and it could face outages andfurther delaysdisruptions in the future. These outages and delays could reduce the level ofoverall internet usage generally as well as the level ofand usage of our services, which could adversely impact our business.

Our total numbercustomer of customerscount may be higher thanexceed the number of our actual individual customers because some customers have multiple registrations, other customerssome have died or become incapacitatedincapacitated, and others may have registered under fictitious names. Given the challenges inherent in identifying these customers, we do not have a reliable system to accurately identifydetermine the number of actual individual customers, and thusso we rely on the number of total customers as our measure of the size of our subscriber base.base size. In addition, the numbercustomer ofcount customers includes the total number of individuals that havewho completed registration throughas of a specific date, less individualsthose who have unsubscribed, and should not be considered as representative of the number of personspeople who continue to actively consider our deals by reviewing our email offers.

Our business, like that of our restaurants and merchants, may be subject to some degree of sales seasonality. As theour business growth of our businessstabilizes, stabilizes, these seasonal fluctuations may become more evident.pronounced. Seasonality may cause our working capital cash flow requirements to vary from quarter to quarterquarter, depending on the variability in the volume and timing of sales. These factors, among other things,others, make forecasting more difficult and may adversely affectimpair our ability to manage working capital and to predict financial results accurately, which could adversely affect the market price of our common stock.

Our services, operationsoperations, and the data centers from which we provide our services are vulnerable to damage or interruption from earthquakes, fires, floods, power losses, telecommunications failures, terrorist attacks, acts of war, human errors, break-insbreak-ins, and similar events. A significant natural disaster, such as an earthquake, firefire, or flood, could have a material adverse impact on our business, financial conditioncondition, and results of operationsoperations, and our insurance coverage may be insufficient to compensate us for lossesany thatresulting may occur.losses. Acts of of terrorism could cause disruptions todisrupt the internet, our businessbusiness, or the economy as a whole. We may not have sufficient protection 18or or recovery plans in certain circumstances, such as natural disasters affecting areas where the data centers uponon which we rely are located, and our business interruption insurance may be insufficient to compensate us for any losses that may occur. Such disruptions could negatively impact affect our ability to runoperate our websites, whichpotentially could harmharming our business.

Our discount certificates and Dining Passes are issued in the form ofas redeemable coupons with unique identifiers. ItConsumers is possible that consumers or other third parties willmay seek attempt to createissue counterfeit certificates to fraudulently purchaseobtain discounted goods and services from our restaurants and other merchants. While we use advanced anti-fraud technologies, it is possible that technically knowledgeable criminals willmay attempt to circumvent our anti-fraud systems usingthrough increasingly sophisticated methods. In addition, our service couldmay be subject to employee fraud or other internal security breaches, and we may be required to reimburse consumers and/or merchants for any funds stolen or revenue lost as a result of such breaches.result. Our restaurants and merchants couldmay also request reimbursement, reimbursement or stopcease using us,us if they are affected by buyer fraud or other types of fraud.

We may incur significant losses from fraud and counterfeit certificates. We may incur losses from claims that the consumer did not authorize the purchase, from merchant fraud, from erroneous transmissions, and from consumers who have closed bank accounts or have insufficient funds in them to satisfy payments. In addition to the direct costs of such losses, if they are related to credit card transactions and become excessive, they could potentially result in our losing the right to accept credit cards for payment. If we were unable to accept credit cards for payment,cards, we would sufferexperience substantial reductionsrevenue in revenue,reductions, which would causeharm our business to suffer.business. While we have taken measures to detect and reducemitigate thefraud risk of fraud,risk, these measures need tomust be continually improved and may not be effective against new and continuallyor evolving forms of fraud or in connection with new product offerings. If these measures do not succeed, our business will suffer.

We accept payments using a variety of methods, including credit card, debit card and electronic payment services. As we offer new payment options to consumers, we may be subject to additional regulations, compliance requirements and fraud. For certain payment methods, including credit and debit cards, we pay interchange and other fees,fees whichthat may increase over time andtime, raise our operating costscosts, and lowerreduce profitability. We rely on third parties to provide payment processing services, including the processing of credit cards and debit cards and it could disrupt our business if these companies become unwilling or unable to provide these services to us. We are also subject to payment card association operating rules, certification requirements and rules governing electronic funds transfers, which could change or be reinterpreted to make it difficult or impossible for us to comply. If we fail to comply with these rules or requirements, we may be subject to fines and higher transaction fees andfees, lose our ability to accept credit and debit card payments from consumers or facilitate other types of online payments, and our business and operating results could be adversely affected.

We are also subject to or voluntarily comply with a number of other laws and regulations relating to money laundering, international money transfers, privacy and information security and electronic fund transfers. If we were found to be in violation of applicable laws or regulations, we could be subject to civil and criminal penalties or forced to cease our paymentspayment services business.

Various federal laws, such as the Bank Secrecy Act and the USA PATRIOT Act and foreign laws and regulations, such as the European Directive on the prevention of the use of the financial system for the purpose of money laundering and terrorist financing, impose certain anti-money laundering requirements on companies that are financial institutions or that provide financial products and services. For these purposes, financial institutions are broadly defined to include money services businesses such as money transmitters, check cashers and sellers or issuers of stored value cards. Examples of anti-money laundering requirements imposed on financial institutions include subscriber identification and verification programs, record retention policies and procedures and transaction reporting. We do not believe that we are a financial institution subject to these laws and regulationsregulations, based,based in part,part uponon the characteristics of discount certificates and Discount Dining Passes and our role within respectdistributing to the distribution of discount certificates and Discount Dining Passesthem to customers. However, the Financial Crimes Enforcement Network, a division of the U.S. Treasury Department tasked with implementing the requirements of the Bank Secrecy Act, recently proposed amendments to the scope and requirements for parties involved in stored value or prepaid access cards, including a proposed expansion of financial institutions to include sellers or issuers of prepaid access cards. InIf the event that this proposal is adopted as proposed, it is possible that our discount certificates and Discount Dining Passes couldmay be considered a financial productproducts, and that we couldmay be deemed a financial institution. In the event that we become subject to the requirements of the Bank Secrecy Act or any other anti-money laundering law or regulation imposing obligations on us as a money services business, our regulatory compliance costs to meet these obligations would likely increase which could reduce our net income.

Many states impose licenselicensing and registration obligationsrequirements on those companies engaged in the business of money transmission, with varying definitions of what constitutes money transmission. We do not currently believe we are a money transmittertransmitter, given our role and the product terms of our discount certificates and Discount Dining Passes. However, a successful challenge to our position or expansion of state laws could subject us to increased compliance costs and delay our ability to offer discount certificates and Discount Dining Passes in certain jurisdictions pending receipt of any necessary licenses or registrations.

Our operations and performance depend primarily on economic conditions in the United States. The current economic environment continuesremains uncertain due to be uncertain,geopolitical including as a result of the COVID 19 pandemic.conflict. These conditions may make it difficult for our restaurants and other merchants to accurately forecast and plan future business activities and could causelead our merchants to terminate their relationships with us or could cause our customers to slow or reduce their spending. Furthermore, during challenging economic times, our merchants may face issues gainingdifficulties obtaining timely access to sufficient credit, which could resultlead in their unwillingnessthem to continue withdiscontinue our service or impair their ability to make timely payments to us. If that were to occur, we may experience decreased revenue, be required to increase our allowance for doubtful accountsaccounts, and see our days receivables receivable outstanding would be negatively impacted. If we are unable to finance our operations on acceptable terms asdue ato result of renewedfurther tightening in the credit markets, we may experienceincur increasedhigher costs or we may not be ableunable to effectively manage our business. We cannot predict the timing, strengthstrength, or duration of any worldwide economic slowdown or subsequent economic recovery, worldwide, in the United StatesStates, or in the restaurant and entertainment industry. These and other economic factors could have a material adverse effect on our financial condition and operating results.

Our revenues, results of operationsoperations, and cash flows depend on the overall demand for our discount dining certificates and discount Dining Passes. Negative conditions in the general U.S. economy as well as in other jurisdictions, including conditions resulting from changes in gross domestic product growth, financial and credit market fluctuations construction slowdowns, energy costs, international trade relations and other geopolitical issues, including those caused or may be caused by the Russia Ukraine conflict, and the availability and cost of credit could cause a decrease in consumer discretionary spending and diminish growth expectations for the restaurant, dining and entertainment industries. Moreover, government consumption orconsumption, socio-economic policiespolicies, or objectives pursued by countries inwhere whichwe we do business could potentially impact theaffect demand for our discount dining certificates and discount Dining Passes.

Global inflation also increased during 2022. The Russia UkraineRussia-Ukraine conflict and other geopolitical conflicts, as well as related international response, hashave exacerbated inflationary pressures, including causing increases in the price for goods and services and global supply chain chain disruptions, which hashave resulted and may continue to result in shortages in food products, materialsmaterials, and services. Such shortages have have resulted and may continue to result in inflationary cost increases forin labor, fuel, food products, materialsmaterials, and services, and could continue toalso cause costs to increaserise asand welllead asto result in the scarcityshortages of certain materials. We cannot predict any future trends in the rate of inflation or other negative economic factors factors, or the associated increases in our operating costscosts, and how thatthese may impact our business. To the extent we andthat the restaurant customers we serviceserve are unable to recover higher operating costs resulting from inflation or otherwise mitigate the impact of such costs on our and their business,businesses, our revenues and gross profit could decrease, and our financial condition and results of operations could be adversely affected. Currently, the most significant impact of inflation on us is the increase in employee wages.

We intend to attempt to acquire complementary e-commerce businesses and to support the transition and integration of acquired operations with into our ongoing business as a part of our growth strategy. Other than as disclosed herein, we currently have no binding commitments or agreements with respect to any such acquisitions and there can be no assurance that we will eventually consummate any acquisitions. The process of integrating acquired assets into our operations may result in unforeseen operating difficulties and expenditures and may absorb significant management attention that would otherwise be available for the ongoing development of our business. In addition, we have limited experience in performing acquisitions and managing growth. There can be no assurance that the anticipated benefits of any acquisition will be realized. In addition, future acquisitions could result in potentially dilutive issuances of equity securities, the incurrence of debt and contingent liabilities and amortization expenses related to goodwill and other intangible assets, any of which could materially and adversely affect our operating results and financial position. In addition, acquisitions also involve otherrisks, risks, including risksthose inherent in entering markets in which we havewith no or limited prior experience and the potential loss of key employees.

Our success depends in part on our ability to offer discount certificates and Discount Dining Passes to restaurants and other merchants that reflect consumers’ tastes and preferences. Consumers’ tastes are subject to frequent, significantsignificant, and sometimes unpredictable changes. If our product fails to satisfy customers’ tastes or respond to changes in customer preferences, our sales could suffer which would depress our profit margins. In addition, any failurefailing to offer products in linealigned with customers’ preferences could allow our competitors to gain market share. This could haveadversely an adverse effect onaffect our business, prospects, financial conditioncondition, and results of operations.

Our expansion plans for expansion cannot be implemented if we lose our key personnel or cannotare unable to recruit additional personnel.

We depend substantially on the continued services, specialized knowledge and performance of our senior management, particularly Ketan Thakker, our President and Chief Executive Officer, Steve Handy, our Chief Financial Officer, Elliot Bohm, the Chief Executive Officer of our subsidiary, CardCash, and Marc Ackerman, the Chief Operating Officer of our subsidiary, CardCash, and Balazs Wallisch, the Chief Operating Officer of our subsidiary, Restaurant.com.CardCash. These executives may elect to pursue other opportunities at any time. If one or more of these individuals choose to leave our company, we may lose a significant number of supplier relationships and andthe operating expertise whichthey they have developed over many years, andboth of which would be difficult to replace. The loss of the services of any executive officer or other key employee could hurtharm our business.

In addition, as our business expands, we will need to add newpersonnel personnel, includingacross information technology and engineering personnel to maintain and expand our website and systems, marketing and salespeoplesales to attract and retain customers and merchantscustomers, and customer support personnel to serve our growing customer base. Hiring and retaining qualified executives, engineers and qualified sales representatives are critical to our success, and competition for experienced and well-qualified employees can be intense. To attract and retain executives and other key employees in a competitive marketplace, we must provide a competitive compensation package, including cash and equity-based compensation. We currently utilize a stock incentive plan, including stock options, as a form of share-based incentive compensation. If the anticipated value of such equity-based incentive awards does not materialize, if our equity-based compensation otherwise ceases to be viewed as a valuable benefit or if our total compensation package is not viewed as competitive, our ability to attract, retain and motivate executives and key employees could be weakened.

The failure to successfully hire executives and key employeesemployees, or the loss of any executivesof and key employeesthem, could have a significantsignificantly impact on our operations. If we are unable to hire and successfully train employees or contractors in these areas, users of our website may have negative experiences and we may lose customers, which would diminish the value of our brand and harm our business. The market for recruiting qualified information technology and other personnel is extremelyhighly competitive, and we may experienceface difficultieschallenges in attracting and retaining employees. ShouldIf we fail to retain or attract qualified personnel, we may not be ableunable to compete successfully or implement our plansexpansion for expansion.plans.

Our success depends on our ability to attract and retain customers on cost-effective terms. We have relationships with online services, search engines, affiliate marketing websites, directoriesdirectories, and other websitewebsites and e-commerce businesses to provide content, advertising bannersbanners, and other links that direct customers to our website. We rely on these relationships as significant sources of traffic to our websites and to generate new customers. Further,Furthermore, many of the parties with whichwhom we may have online-advertisingonline advertising arrangements could provide advertising services forto other online competitors. As a result, these parties may be reluctant to enter into or maintain relationships with us. Failure to achieve sufficient traffic or generate sufficient revenue from third-party purchases originating from third parties may result in termination of these relationships by these third parties. If we are unable to develop or maintain these relationships on acceptable terms, our ability to attract new customers and our financial condition could be harmed. If the underlying technology’s development evolves in a manner way that is no longer beneficial to us, our financial condition could be harmed.adversely affected. In addition, certain online marketing agreements may require us to pay upfront fees and make other payments priorbefore toany thesales realizationare of the sales,realized, if any, associated with those payments.any. Accordingly, if thesefuture relationships or agreements thatdo wenot may enter into in the future fail to produce generate the sales that we anticipate, our results of operations will be adversely affected. We cannot give any assuranceguarantee that we will be able to increase our revenues, if at all, in a cost-effective manner.

We rely on search engines to attract consumer interest in our product offerings. Potential and existing customers use search engines provided by search engine companies, including Google, Bing and Yahoo, which use algorithms and other devices to provide users a natural ranked listing of relevant internet sites matching a user’s search criteria and specifications. Generally, internet sites ranked higher in the paid and natural search results lists furnished to users attract the largest visitorshare shareof visitors among similar internet sites. Those sitesSites achievingthat achieve the highest natural search rankingrankings often benefit fromsee increased sales. Natural search engine algorithms utilizeuse information available throughoutfrom across the internet, including information available content on our website. Rules and guidelines offrom these natural search engine companies govern our participation on their sites and how we share relevant internetonline information that may be considered or incorporated into thetheir algorithms utilized by these sites.algorithms. If we fail to present, or improperly present, our website’s information for use by natural search engine companies, or if any of these natural search engine companies determine we have violated their rules or guidelines, or if others improperly present our website’s information to these search engine companies, or if natural search engine companies make changes to their search algorithms, we may fail to achieve an optimum ranking in natural search engine listing results, or we may be penalized in a way that could harm our business, prospects, financial condition and results of operations.

Mobile devices are increasingly used for e-commerce transactions. A significant and growing portion of our users access our platform through mobile devices. We may lose users if we are not able tocannot continue to meet our users’ mobile and multi-screen experience expectations. If If we are unable to attract and retain a substantial number of mobile device users to our online marketplaces and services, we may fail to capture a sufficient share of an increasingly important portionsegment of the market for online services.services market. Our ability to successfully address the challenges posed by the rapidly evolving market for mobile transactions is crucial to our continued success, and any failure to continuously increase the volume of mobile transactions effected through our platforms could harm our business.

We rely on third-party systems to conduct our business, and our revenues and market share may decreasedecline if these systems are unavailable in in the future or if they no longer offerperform qualityat performance.a satisfactory level.

We rely on third-party computer systems and third-party service providers, including credit card verificationsverification and confirmations,confirmation, to host our website and to advertise and deliver the discount certificates and Discount Dining Passes sold on our website to customers. We also rely on third-party licenses for components of the software underlying our technology platform. Any interruption in our ability to obtain the products or services of from these or other third partiesparties, or any deterioration in their performanceperformance, could impair the timing and quality of our own service. If our service providers fail to deliver high-quality products and services in a timely manner to our customers, our services will not meet the expectations of our customers and our reputation and brand will be damaged. Furthermore, if our arrangements with any of these third parties are terminated, we may not find an alternate source of systems support on a timely basis or on terms as advantageous to us.

If we do not respondkeep topace with rapid technological changes,change, our services could become obsolete,obsolete and we could lose customers.

To remain competitive, we must continue to enhance and improve the functionality and features of our e-commerce businesses. We may face material delays in introducing new services, productsproducts, and enhancements. If this happens, our customers may foregoforgo the use ofusing our websites and instead use those of our competitors. The internet and the online commerce industry are rapidly changing. If competitors introduce new products and services using newemerging technologiestechnologies, or if new industry standards and practices emerge, our existing websites and ourproprietary technology proprietary technology and systems may become obsolete. Our failure to respond to technological change or to adequately maintain, upgrade and develop our computer network and the systems used to process customers’ orders and payments could harm our business, prospects, financial condition condition and results of operations.

There has been a marked increase in the use of social media platforms and similar devices,channels, including blogs, social media websiteswebsites, and other forms of internet-based communicationscommunication, thatwhich allow individuals accessto toreach a broad audience of consumers and other interested persons.parties. Consumers value readily available information concerningabout retailers, manufacturers, and their goods and servicesservices, and often act on suchit information without further investigation, authenticationauthentication, and withoutor regard tofor its accuracy. The availability of information on social media platforms and devices is virtually immediate immediate, as is its impact. Social media platforms and devices immediately publish thecontent contentfrom their customers users and participants post,participants, often without filters or checks on accuracyits of the content posted.accuracy. The opportunity forto dissemination ofdisseminate information, including inaccurate information, is seemingly limitless and readily available. Information concerning our company may be posted on such platforms and devices at any time. Information posted may be adverse to our interests, may be inaccurate, and may harm our performance, prospects prospects, or business. The harm may be immediate immediate, without affording us an opportunity forto seek redress or correction. Such platforms could also could be used forto the dissemination ofdisseminate trade secret information or otherwise compromise valuable company assets, all of which could harm our business, prospects, financial conditioncondition, and results of operations.

We rely on a variety of technologythird-party thatlicensed we license from third parties,technologies, such as Microsoft.Microsoft’s. These third-party technology licenses mightmay notno longer continue to be available to us on commercially reasonable termsterms, or at all. If we are unable to obtain or maintain these licenses on favorable terms, terms, or at all, we could experience delays in completing and developing our proprietary software.

We are also subject to U.S. (federal and state) and foreign laws, regulations, and administrative practices that require us to collect information from our customers, vendors, merchants, and other third parties for tax reporting purposes and report such information to various government agencies. The scope of suchthese requirements continues to expand, requiringnecessitating usthe to developdevelopment and implementimplementation of new compliance systems. Failure to comply with such laws and regulations could result in significant penalties.

The 26 adoption of tax reform policies, including the enactment of legislation or regulations implementingthat changes inchange the tax treatment of companies engaged in Internet commerce or the U.S. taxation of international business activitiesactivities, could materially affect our financial position and results of operations.

If we do not begin to generategenerating significant revenues,revenue, we will still need to raise additional capital to meet our long-term business requirements. Any such capital raising may be costly or difficult to obtain and would likely dilute current stockholders’ ownership interests. If we are unable to secure additional financing in the future, we will not be able to continue as a going concern.

If we do not begin to generategenerating significant revenuesrevenue from our operations, we will need additional capital, which may not be available on reasonable reasonable terms or at all. The raising ofRaising additional capital will dilute current stockholders’ ownership interests. We may need to raise additional funds through public or private debt or equity financings to meet various objectivesobjectives, including, but not limited to:

Further,Furthermore, any additional debt or equity financing that we may need may not be available on terms favorable to us,terms, or at all. If we are unable to obtain the required additional capital, we may have to curtail our growth plans or cut back onreduce existing businessbusiness, and we may not be able to continue continue operating if we do not generate sufficient revenuesoperating from operations neededrevenue to stayremain in business.viable.

We may incur substantial costs in pursuing future capital financing, including investment banking fees, legal fees, accounting fees, securities law compliance fees and other costs. We may also be required to recognize non-cash expenses inrelated connection withto certain securities we issue, such as convertible notes and warrants, which may adversely impactaffect our financial condition.

The types, coverage, or the amounts of any insurance coverage we may carry from time to time may not be adequate to compensate us for any losses losses we may actually incur in the operation of our business. Further,Furthermore, any insurance we may desirewish to purchase may not be available to us on terms we find acceptableacceptable, or at all. We are not indemnified by all of our suppliers, and any indemnification rights we may have may may not be enforceable or adequate to cover actual losses we may incur asarising a result offrom our sales of their products. Actual losses for which which we are not insured or indemnified, or which exceed our insurance coverage or the capacity of our indemnitors or our ability to enforce enforce our indemnity agreements, could have a material adverse effect on our business.

We must continue to retain and acquire customers who make purchases on our platform to increase profitability. Further, as our customer base evolves, the composition of our customerscustomer base may change in a mannerways that makesmake it more difficult to generate revenue to offset the loss loss of existing customerscustomers, andcover the costs associated withof acquiring and retaining customerscustomers, and to maintain or increase our customers’ purchase frequency. If customers do not perceive our offerings toas be attractiveattractive, or if we fail to introduce new andnew, more relevant deals deals, or to increase awareness and understanding of theour offerings on our marketplace platform, we may not be ableunable to retain or acquire customers at levels necessary to grow our business and profitability. Further, the traffic to our website and mobile applications, including traffic from consumers responding to our emails and search engine optimization, has declined in recent years, such that an increasing proportion of our traffic is generated from paid marketing channels, such as search engine marketing. In addition, changes to search engine algorithms or similar actions are not within our control and could adversely affect traffic to our website and mobile applications. If we are unable to acquire new customers in numbers sufficient to grow our business and offset the number of existing active customers that have ceased to make purchases, or if new customers do not make purchases at expected levels, our profitability may decrease and our operating results may be adversely affected.

Our future success depends upon our ability to attract and retain high qualityhigh-quality merchants and third-party business partners.

We must continue to attract and retain high qualityhigh-quality restaurants and other merchants to increase profitability. A key priority of our strategy is to increase our sales and marketing efforts to attract more high-quality restaurants and other merchants. We do not have long-term arrangements to guarantee the availability of deals that offer attractive quality, value and variety to customers or favorable payment terms to us. If merchants decide that utilizingusing our services no longer provideseffectively an effective means of attractingattracts new customers or selling sells their offerings,products, they may stop working with us or negotiate to pay us lower margins or fees. In addition, current or future competitors may accept lower margins, or negative margins, to secure merchant offers that attract attention and acquire new customers. We may also may experience attrition inamong our merchantsmerchants, driven resultingby fromfactors severalsuch factors, includingas losses to competitors and merchant closures or merchant bankruptcies. If we are unable to attract and retain high qualityhigh-quality merchants in numbers sufficient to grow our business, or if merchants are unwilling to offer products or services with compelling terms through our marketplace, our operating results may be adversely affected.

Generally, brokers may be less willing to execute transactions in securities subject to the “penny stock” rules. This may make it more difficult for the Company’s shareholders to sell shares of our common stock.

Disclosure also has to be made about the risks of investing in penny stocks in both public offerings and in secondary tradingtrading, and about the commissions payable to both the broker-dealer and the registered representative, current quotations for the securitiessecurities, and the rights and remedies available to an investor in cases of fraud in penny stock transactions. Finally, monthly statements have tomust be sent disclosing recent price price information for the penny stock held in the account and information on the limited market infor penny stocks.

There is limited trading activity in our common stock. Although our common stock is now trading on the Nasdaq Marketplace, there can beis no assurance assurance that a more active market for the common stock will develop, oror, if one should develop, there is no assurancedoes, that it will be sustained. If a market does not develop or is not sustainedsustained, it may be difficult for you to sell your common stock at the time you wish to sell them,it, at a price that is attractive to you, or at all. You may not be able to sell your common stock at or above the offering price per share.

Pursuant to our second amended and restated bylaws, unless we consent in writing to the selection of an alternative forum, the Court of Chancery of the State of Delaware is the sole and exclusive forum for any state law claim for (1) any derivative action or proceeding brought on our behalf; (2) any action asserting a claim of or based on a breach of a fiduciary duty owed by any director, officer or other employee of ours to us or our stockholders; (3) any action asserting a claim pursuant to any provision of the Delaware General Corporation Law; or (4) any action asserting a claim governed by the internal affairs doctrine (the “Delaware Forum Provision”). The Delaware Forum Provision will not apply to any causes of action arising under the Securities Act or the Securities and Exchange Act of 1934, as amended (the “Exchange Act”). Our second amended and restated bylaws further providesprovide that unless we consent in writing to the selection of an alternative forum, the United States District Court in Delaware shall be the sole and exclusive forum for resolving any complaint asserting a cause of action arising under the Securities Act (the “Federal Forum Provision”). In addition, our second amended and restated bylaws provide that any person or entity purchasing or otherwise acquiring any shares of our common stock is deemed to have notice of and consented to the Delaware Forum Provision and the Federal Forum Provision; provided, however, that stockholders cannot and will not be deemed to have waived our compliance with the federal securities laws and the rules and regulations thereunder.

We recognize that the Delaware Forum Provision and the Federal Forum Provision in our second amended and restated bylaws may impose additional litigation costs on stockholders in pursuing any such claims, particularly if the stockholders do not reside in or near the State of Delaware. Additionally, the forum selection clauses in our second amended and restated bylaws may limit our stockholders’ ability to bring a claim in a judicial forum that they find favorable for disputes with us or our directors, officers or employees, which may discourage the filing of lawsuits against us and our directors, officers and employees, even though an action, if successful, might benefit our stockholders. In addition, while the Delaware Supreme Court ruled in March 2020 that federal forum selection provisions purporting to require claims under the Securities Act to be brought in federal court were “facially valid” under Delaware law, there is is uncertainty as toabout whether other courts will enforce our Federal Forum Provision. If the Federal Forum Provision is found to be unenforceable, we may incur additional costs associatedto with resolvingresolve such matters. The Federal Forum Provision may also impose additional litigation costs on stockholders who assert that the provision is not enforceable or invalid. The Court of Chancery of the State of Delaware may also reach different judgments or results than would other courts, including courts where a stockholder considering an action may be located or would otherwise choose to bring the action, and such judgments may be more or less favorable to us than our stockholders.

We must maintain effective internal controls to provide reliable financial reports and detect fraud. We have been assessing our internal controls to identify areas that need improvement. Failure to identify and thereafter implement required changes to our internal controls controls, or any others that we identify as necessary to maintain an effective system of internal controls, if any, could harm our operating results and cause investors to lose confidence in our reported financial information. Any such loss of confidence would havenegatively a negative effect onaffect the trading price of our stock.

The price of our common stock may become volatile, which could lead to investor losses by investors and costly securities litigation.

The stock market is subject to significant price and volume fluctuations. In the past, following periods of volatility in the market price of a company’s stock securities,price, securities class action litigation has often been initiated against such athe company. Litigation initiated against the Company, whether or not successful, could result in substantial costs and diversion of its management’s attention and resources, which could harm our business and financial condition.

The following discussion and analysis of the financial condition and results of operations of Giftify should be read together with our consolidated financial statements and related notes included elsewhere in this Annual Report on Form 10-K. The following discussion and analysis should also be read together with the section entitled “Organization and description of business” as of December 31,2024 and 2023 (Successor) and for the period from January 1, 2023 through December 29, 2023 (Predecessor). In addition to historical information, the following discussion and analysis contains forward-looking statements. Our actual results may differ significantly from those projected in such forward-looking statements. Factors that might cause future results to differ materially from those projected in such forward-looking statements include, but are not limited to, those discussed in the sections entitled “Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements.” All figures are presented in thousands, except percentages, rates and unless otherwise noted.

On August 18, 2023, we entered into an agreement and plan of merger to acquire CardCash Exchange Inc (“CardCash”). On December 29, 2023, the merger was completed and has been accounted for as a business combination usingunder the acquisition method of accounting.method. CardCash was formed in 2013 and purchases merchant gift cards and resells them at a markup.

CardCash operates asis a leading gift card exchange platform,platform facilitatingthat facilitates the purchase and sale of unwanted gift cards at discounted rates for both consumers and businesses. The Company’s mission is to provide a seamless marketplace for individuals looking to maximize the value of their gift cards while also offering businesses innovative solutions to leverage this market.

CardCash’s core service offering includes the buying and selling of gift cards from over 1,100 retailers, such asincluding Target, Home Depot, StarbucksStarbucks, and and TJ Maxx, among others.Maxx. By connecting buyers and sellers, CardCash enables consumers to unlock value from unused gift cards and save significant amounts on their purchases.

CardCash purchases unwanted gift cards at a valuediscount lower thanto their face worthvalue and subsequently retailsresells them at a discounted ratediscount to discerning shoppers nationwide. This avenue not only allows individuals to obtainredeem cash for their unneededunwanted gift cards for cash but also enables them to make cost-effective purchases through with discounted gift cards.

With advanced fraud preventionfraud-prevention technology, known as FraudFix, CardCash ensures the security and integrity of all transactions conductedon on its platform. This commitment to trust and reliability has contributed to its success in saving consumers over $100 million since its inception.

● “Specials by Restaurant.comRestaurant.com,” which bundle Restaurant.com certificates with a variety of other entertainment options, including theatre, movies, winewine, and travel. Customers have favored these bundled offeringofferings (“Specials”), generating significantly higher greater revenue per customer when compared tothan purchasing our other products. The average order value for these Specials sales is nearly five times timesthat of a certificate purchase. Specials generated over 5% of our past year’s B2C revenue from 60% of the B2C orders for the fiscal year ended December 31, 2023. We believe that our relationships with small businesses presentspresent a significant revenue opportunity through such cross-promotions.

We also generate revenue throughfrom third-party offers and display ad revenue.ads. This comprises a de minimis portion of our gross revenue.

We intend to grow and leverage our customer database of 6.2 million customer database, which we believe is of valuevaluable to merchants for a variety of services and and products.

In March 2020, the World Health Organization declared COVID-19 a global pandemic. This contagious disease outbreak,outbreak adversely affected workworkforces, forces, economieseconomies, and financial markets globally. The outbreak has negatively impacted our revenues asdue a result of theto temporary restaurant closures across of restaurants throughout the United StatesStates, where our discount certificates and Discount Dining Passes were acceptedaccepted, and where dining was being restricted to outdoor locations or to capacity constraintslimits for indoor dining. Our revenues from the purchase of our discount certificates in 2020, 20212021, and 2022 declined since they could only be redeemed when dining in the restaurants and also were not accepted for payment by third-party platforms that facilitated ordering and delivery of food on-demand.on demand. As the COVID-19 pandemic has abated, our revenues improved in fiscal 2023.

GlobalThe inflation also increased during 2021 and in 2022. The Russia and Ukraine conflict and other geopolitical conflicts, as well as related international response, have exacerbated inflationary pressures, including causing increases in the price for goods and services and global supply chain disruptions, which have resulted and may continue to result in shortages in food products, materials and services. Such shortages have resulted and may continue to result in inflationary cost increases for labor, fuel, food products, materials and services, and could continue to cause costs to increase as well as result in the scarcity of certain materials. We cannot predict any future trends in the rate of inflation or other negative economic factorsfactors, or orthe associated increaseschanges in our operating costscosts, and how that these may impact our business. To the extent we and the restaurant customers we service are unable to recover higher operating costs resulting from inflation or otherwise mitigate the impact of such costs on our and their business, our revenues and gross profit could decrease, and our financial condition and results of operations could be adversely affected.

The Company has a history of reporting net losses. AtAs of December 31, 2024,2025, the Company had $3,654,944 in cash of $3,574,876 available to fund its operations, including expansion plans, and to service its debt, and a negative working capital of $3,204,077.$249,223.

Our consolidated financial statements have been presented on the basis that it will continue as a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. We have experiencedincurred operating losses and negative operating cash cash flows duringin 20242025 and 2023.2024. We have financed our working capital requirements through borrowings from various sources and the sale of our equity securities.

As a result, management has concludedconcluded, and our independent registered public accounting firm has agreed with our conclusion that there is a substantial doubt aboutregarding our ability to continue as a going concern.concern for a period of at least 12 months beyond the filing of this Annual Report on Form 10-K. The Company’s report of our independent registered public accounting firm, in its reportfirm on the Company’s consolidatedour financial statements for the year ended December 31, 2024,2025, hasincludes alsoan expressedexplanatory paragraph regarding the existence of substantial doubt about the Company’sour ability to continue as a going concern. The Company’s consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

The Company’s ability to continue as a going concern isdepends dependent uponon its ability to raise additional debt or equity capital to fund its its business activities and to ultimately achieve sustainable operating revenues and profitability.

Cost of sales consists primarily of the cost to purchase merchant gift cards. Cost of sales for the year ended December 31, 20242025 and 2023,2024, were $75,654,690$67,686,362 and $76,638,995,$75,789,255, respectively. OurGross costprofit ofincreased sales$2,350,573, declined 1.3%, which generated an increase in gross margin of $829,139, or 7.9%,17.9%, as compared to the prior year period. Our gross cost of sales,margin, as a percentage of net sales, were 87.0%18.6% and 87.9%,14.8% for the year ended December 31, 20242025, and 2023,2024, respectively. Our gross margin was positively impacted by the increase in net revenue (agent transactions) described above, compared with the prior-year period.

Selling, generalgeneral, and administrative expenses consist of costs incurred to identify, communicate withwith, and evaluate potential customers and related business opportunities, andopportunities; compensation to officers and directors, as well asdirectors; legal and other professional fees,fees; lease expense,expense; and other general corporate expenses. Management expects selling, generalgeneral, 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, compensation compensation, and other costs.

Selling, general and administrative expenses were $27,615,865$22,933,052 for the year ended December 31, 2024,2025, as compared to $16,238,938$27,615,865 for the year ended ended December 31, 2023,2024, ana increasedecrease of $11,376,927.$4,682,813. The increasedecrease was fromdue increasedto a $5,182,023 reduction in stock-based compensation expense of $6,482,766during during the year ended December 31, 2024,2025, increasedpartially offset by increases in payroll and benefitbenefits expenses, marketing and advertising costs, and other general changesexpenses into support our business and operations. For the period January 1, 2023 to December 29, 2023, selling, general and administrative expenses of Giftify were excluded. See our Basis of Presentation discussion above.business.

Amortization expenses are primarily attributable to the Company’s amortization of intangible assets with finite lives. Amortization expenses were $2,431,668$2,271,673 during the year ended December 31, 2024.2025, Amortizationas compared to amortization expenses wereof $300,000$2,431,668 during the year ended December 31, 2023.2024.

For the year ended December 31, 2024,2025, we incurred a loss from operations of ($18,375,726), as$10,354,746, compared towith a$18,375,726 loss from operations of ($8,100,406) for the year ended December 31, 2023.2024. The increasedecrease in loss from operations was due to our increased gross profit offset by increased decreased stock-based compensation expense, impairment of goodwill and intangible assets, and operating costs, as discussed above. For the period January 1, 2023 to December 29, 2023, operations of Giftify were excluded. See our Basis of Presentation discussion above.

Other IncomeExpenses, (Expenses)Net

We realized a net loss of ($18,832,080)$10,491,658 for the year ended December 31, 2024,2025, as compared to a net loss of ($5,144,546)$18,832,080 for the year ended ended December 31, 2023 (including Predecessor from January 1, 2023 to December 29, 2023).2024. The increasedecrease in net loss was duedriven toby our increasedhigher gross profitprofit, offset by increasedlower stock-based compensation expense, operating costs, other expenses, and decreasedlower income taxes,interest expense, as discussed above.

Non-GAAP Financial Measure - Modified EBITDA

In addition to our GAAP results, we present Modified EBITDA as a supplemental measureperformance of our performance.measure. However, Modified EBITDA is not a recognized measurement under GAAP and should not be considered as an alternative to net income, income from operations or any other performance performance measure derived in accordance with GAAP, or as an alternative to cash flow from operating activities as a measure of liquidity. We define Modified EBITDA as net income (loss), plus interest expense, depreciation and amortization, stock-based compensation, and fair value value of common stock issued for services.

Management considers our core operating performance to be that which our managers can affect in any particular period through their management of the resources that affect our underlying revenue and profit generatingprofit-generating operations during that period. Non-GAAP adjustments to our results prepared in accordance with GAAP are itemized below. You are encouraged to evaluate these adjustments and the reasons we consider them appropriate for supplemental analysis. In evaluating Modified EBITDA, you should be aware that in the future we may incur expenses that are the same as or similar to some of the adjustments in this presentation. Our presentation of Modified EBITDA should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items.

We present Modified EBITDA because we believe it assistshelps investors and analysts in comparingcompare our performance across reporting periods on a consistent basis by excluding items that we do not believe are indicative of our core operating performance. In addition, we use Modified EBITDA into developing develop our internal budgets, forecastsforecasts, and strategic plan; into analyzinganalyze the effectiveness of our business strategies in evaluatingand evaluate potential acquisitions; to makingmake compensation decisions; and into communicationscommunicate with our board of directors concerningregarding our financial performance. Modified EBITDA has limitations as an analytical tool, which includes,include, among others, the following:

Our B2C division accounted for approximately 3% of gross revenue in the three months ended MarchJune 31,30, 2026. To our database of 6.2 million customers, we sell:

Our B2B division accounted for approximately 97% of our gross revenue in the three months ended MarchJune 31,30, 2026. We sell certificates and Discount Dining Passes to corporations and marketers, which use them to:

A reconciliation of our net sales (as reported) to our gross billings for the three and six months ended MarchJune 31,30, 2026 and 2025 were as follows:

The Iran, Russia and Ukraine conflict and other geopolitical conflicts, as well as related international response, have exacerbated inflationary pressures, including causing increases in the price for goods and services and global supply chain disruptions, which have resulted and may continue to result in shortages in food products, materials and services. Such shortages have resulted and may continue to result in inflationary cost increases for labor, fuel, food products, materials and services, and could continue to cause costs to increase as well as result in the scarcity of certain materials. We cannot predict future trends in inflation or other negative economic factors, or the associated changes in our operating costs, and how these may impact our business. To the extent we and the restaurant customers we service are unable to recover higher operating costs resulting from inflation or otherwise mitigate the impact of such costs on our and their business, our revenues and gross profit could decrease, and our financial condition and results of operations could be adversely affected.

The Company has a history of reporting net losses. As of MarchJune 31,30, 2026, the Company had $4,181,974$3,924,338 in cash available to fund its operations, including expansion plans, and to service its debt, and working capital of $7,631.$141,944.

The increase in net revenue recognized as agent increased $599,742,$509,862, or 57.4%,46.6%, during the three months ended MarchJune 31,30, 2026, as compared to the prior year period. The increase in net revenue recognized as agent increased $1,109,603, or 51.9%, during the six months ended June 30, 2026, as compared to the prior year period. The increase over the previousprior year period was due tofrom the sale of cruise-line-related gift cards, fluctuations in the types of gift cards sold, and changes in the number of customer orders in which the Company acted as an agent.

Results of Operations – Three Months Ended MarchJune 31,30, 2026, Compared to the Three Months Ended MarchJune 31,30, 2025

Our gross billings for the three months ended MarchJune 31,30, 2026 and 2025 were as follows:

Gross billings increased 25.0%26.2% during the three months ended MarchJune 31,30, 2026, as compared to the prior year period. A significant portion of our revenue comes from discounted merchant gift card sales, in which we collect the transaction price from the customer and remit a portion to third-party suppliers of the related goods or services. For these transactions, gross billings differ from the Net Sales reported in our Condensed Consolidated Statements of Operations, which reflect only the fees and commissions we retain from the sale of discounted merchant gift cards.

Net sales for the threesix months ended MarchJune 31,30, 2026 and 2025, were $21,357,404$43,104,428 and $22,277,013,$41,177,744, respectively, a decrease of 4.1%. The decrease in net sales was due to the change in the mix of agent versus principal transactions as discussed above.0.2%. Merchant gift card sales accounted for approximately 97%98% and 98% of our net sales for the threesix months ended MarchJune 31,30, 2026 and 2025, respectively.

Cost of sales consists primarily of the cost to purchase merchant gift cards. Cost of sales for the threesix months ended MarchJune 31,30, 2026 and 2025, 2025 were $17,112,165$34,455,545 and $18,695,377,$35,740,483, respectively. Gross profit increased $663,603,$1,211,622, or 18.5%,16.3%, as compared to the prior year period. Our Our gross margin, as a percentage of net sales, were 19.9%20.1% and 16.1%17.2%, for the threesix months ended MarchJune 31,30, 2026 and 2025, respectively. Our Our gross margin was positively impacted by the increase in net revenue (agent transactions), as described above, as compared withto the prior-yearprior year period.

Selling, general,general and administrative expenses consist of costs incurred to identify, communicate with,with and evaluate potential customers and related business opportunities;opportunities, and compensation to officers and directors;directors, as well as legal and other professional fees;fees, lease expense;expense, and other general corporate expenses. Management expects selling, general,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, compensation, compensation and other costs.

Selling, general and administrative expenses were $11,151,909 for the threesix months ended MarchJune 31,30, 20262026, andas 2025compared wereto $6,173,344$11,758,384 andfor $6,043,841,the respectively,six months anended increaseJune 30, 2025, a decrease of $129,503.$606,475. The increasedecrease was due to increased employee compensation, legal and professional fees, and other general expenses to support our business, offset by a reduction in stock-based compensation expense of $606,865.$1,513,736 during the six months ended June 30, 2026, offset by increased payroll and benefits expenses, marketing and advertising costs, and other general expenses to support our business.

Amortization of capitalized software costsexpenses are primarily attributed to the Company’s capitalized software development costs. Amortization expenses were $161,543 and $161,543 for$289,737 during the threesix months ended MarchJune 31,30, 20262026, andas 2025,compared respectively.to $323,087 during the six months ended June 30, 2025.

Amortization of intangible assetsexpenses are primarily attributable to the Company’s amortization of intangible assets with finite lives. Amortization expenses were $577,341$1,128,190 and $543,917 forduring the threesix months ended MarchJune 31,30, 20262026, andas 2025,compared respectively.to amortization expenses of $1,100,979 during the six months ended June 30, 2025.

WeFor the six months ended June 30, 2026, we incurred a loss from operations of $2,666,989$3,920,953, andas $3,137,66compared to a loss from operations of $5,745,189 for the threesix months ended MarchJune 31,30, 2026 and 2025, respectively.2025. The decrease in loss from operations was due to our increased gross profit being offset by decreased stock-based compensation expense,expense as discussed above.

Other Expenses, NetExpenses

OtherFor expenses, net was $112,321 and $209,571 for the threesix months ended MarchJune 31,30, 20262026, andwe 2025, respectively, and is comprised ofincurred interest expense, net of $224,858, as compared to interest income.expense, net of $351,168 for the six months ended June 30, 2025. The decrease in interest expense, netexpense was due to our decreased debt balances.

NetWe realized a net loss of $3,891,460 for the threesix months ended MarchJune 31,30, 20262026, andas 2025compared wasto $2,650,408a andnet $3,217,332,loss respectively.of $5,807,141 for the six months ended June 30, 2025. The decrease in net loss was driven bydue higherto our increased gross profit, lowerdecreased stock-based compensation expense, and lower decreased interest expense, an income tax benefit, as discussed above.

Non-GAAPModified Financial Measure - Modified EBITDA

In addition to our GAAP results, we present Modified EBITDA as a supplemental performancemeasure measure.of our performance. However, Modified EBITDA is not a recognized measurement under GAAP and should not be considered as an alternative to net income, income from operations or any other performance performance measure derived in accordance with GAAP, or as an alternative to cash flow from operating activities as a measure of liquidity. We define Modified EBITDA as net income (loss), plus interest expense, depreciation and amortization, stock-based compensation, and fair value value of common stock issued for services.

Management considers our core operating performance to be that which our managers can affect in any particular period through their management of the resources that affect our underlying revenue and profit-generatingprofit generating operations during that period. Non-GAAP adjustments to our results prepared in accordance with GAAP are itemized below. You are encouraged to evaluate these adjustments and the reasons we consider them appropriate for supplemental analysis. In evaluating Modified EBITDA, you should be aware that in the future we may incur expenses that are the same as or similar to some of the adjustments in this presentation. Our presentation of Modified EBITDA should not be construed as an inference that our future results will be unaffected by unusual or non-recurring items.

Set forth below is a reconciliation of net loss to Modified EBITDA for the threesix months ended MarchJune 31,30, 2026 and 2025 (unaudited):

We present Modified EBITDA because we believe it helpsassists investors and analysts comparein comparing our performance across reporting periods on a consistent basis by excluding items that we do not believe are indicative of our core operating performance. In addition, we use Modified EBITDA toin develop developing our internal budgets, forecasts,forecasts and strategic plan; toin analyzeanalyzing the effectiveness of our business strategies and evaluatein evaluating potential acquisitions; to makemaking compensation decisions; and toin communicatecommunications with our board of directors regardingconcerning our financial performance. Modified EBITDA has limitations as an analytical tool, which include,includes, among others, the following: