UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2025

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ___________ to ____________

Commission File Number 001-42206

GIFTIFY, INC.

(Exact name of registrant as specified in its charter)

Delaware

45-2482974

(State or other jurisdiction of
incorporation or organization)

(I.R.S. Employer

Identification No.)

1100 Woodfield Road, Suite 510

Schaumburg, IL

60173

(Address of principal executive offices)

(ZIP Code)

(847) 506-9680

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Common Stock, par value $.001		GIFT		The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ NO ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large, accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large, accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large, accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date: There were 29,334,336 shares of common stock outstanding as of May 5, 2025.

TABLE OF CONTENTS

PART I - FINANCIAL INFORMATION		F-1

Item 1. Condensed Financial Statements		F-1

Condensed Consolidated Balance Sheets – March 31, 2025 (Unaudited) and December 31, 2024		F-1

Condensed Consolidated Statements of Operations for the three months ended March 31, 2025 and 2024 (Unaudited)		F-2

Condensed Consolidated Statements of Changes in Stockholders’ Equity for the three months ended March 31, 2025 and 2024 (Unaudited)		F-3

Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2025 and 2024 (Unaudited)		F-5

Notes to Condensed Consolidated Financial Statements for the three months ended March 31, 2025 and 2024 (Unaudited)		F-6

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		1

Item 3. Quantitative and Qualitative Disclosures About Market Risk		9

Item 4. Controls and Procedures		9

PART II – OTHER INFORMATION		11

Item 1. Legal Proceedings		11

Item 1A. Risk Factors		11

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		11

Item 3. Defaults Upon Senior Securities		11

Item 4. Mine Safety Disclosures		11

Item 5. Other Information		11

Item 6. Exhibits		12

CAUTIONARY NOTE CONCERNING FORWARD-LOOKING STATEMENTS

Certain statements and information in this Quarterly Report on Form 10-Q for the quarter ended March 31, 2025 (the “Quarterly Report”) may constitute “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the Private Securities Litigation Reform Act of 1995. All statements, other than statements of historical facts, which address activities, events, or developments that we expect or anticipate will or may occur in the future, including such things as future capital expenditures, growth, product development, sales, business strategy, statements related to any further expected effects on our business from the coronavirus (“COVID-19”) pandemic, inflation, the Russia-Ukraine conflict, and other similar matters are forward-looking statements. In some cases, you can identify forward-looking statements by terminology such as “may,” “will,” “should,” “expect,” “plan,” “anticipate,” “believe,” “estimate,” “predict,” “potential,” or “continue,” or other comparable terminology. These forward-looking statements are based largely on our current expectations and assumptions and are subject to a number of risks and uncertainties, many of which are beyond our control. These statements are subject to many risks, uncertainties, and other important factors that could cause actual future results to differ materially from those expressed in the forward-looking statements including, but not limited to, the continued duration and scope of the COVID-19 pandemic and any impact on the demand for our products; our ability to obtain needed raw materials and components from our suppliers; additional actions governments, businesses, and individuals take in response to the pandemic, including mandatory business closures and restrictions on onsite commercial interactions; the impact of the pandemic and actions taken in response to the pandemic on global and regional economies and economic activity; the pace of recovery when the COVID-19 pandemic subsides; general economic uncertainty in key global markets and a worsening of global economic conditions or low levels of economic growth; the effects of steps that we could take to reduce operating costs; our inability to sustain profitable sales growth, or reduce our costs to maintain competitive prices for our products; circumstances or developments that may make us unable to implement or realize the anticipated benefits, or that may increase the costs, of our current and planned business initiatives; and those factors detailed by us in our public filings with the Securities and Exchange Commission (the “SEC”), including in Item 1A, Risk Factors, in our Annual Report on Form 10-K for the year ended December 31, 2024. In light of these risks and uncertainties, all of the forward-looking statements made herein are qualified by these cautionary statements and there can be no assurance that the actual results or developments anticipated by us will be realized. We undertake no obligation to update or revise any of the forward-looking statements contained herein.

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

GIFTIFY, INC. AND SUBSIDIARIES (FKA RDE, INC.)

CONDENSED CONSOLIDATED BALANCE SHEETS

	March 31, 2025			December 31, 2024
	As of
	March 31, 2025			December 31, 2024
	(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents (includes restricted cash of $1,258,826 at March 31, 2025 and December 31, 2024)	$	2,121,814		$	3,574,876
Accounts receivable		1,591,180			891,666
Inventories		3,825,181			4,116,180
Prepaid expenses and other current assets		308,440			63,210
Total current assets		7,846,615			8,645,932

Property and equipment, net		928,441			1,089,984
Operating lease right of use asset, net		1,329,181			1,406,242
Deposits		65,556			65,556
Intangible assets, net		3,724,415			4,268,332
Goodwill		20,007,670			20,007,670
Total assets	$	33,901,878		$	35,483,716

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	2,085,508		$	1,966,616
Accrued expenses		1,714,629			1,768,607
Customer deposits		271			95,000
Deferred revenue		113,360			77,051
Secured revolving line of credit		3,682,328			3,805,080
Convertible promissory notes		43,887			43,137
Secured note payable — related party, net of debt discount of $0 and $4,000, at March 31, 2025 and December 31, 2024, respectively		-			2,060,274
Notes payable, current portion, net of debt discount of $12,857 and $0, at March 31, 2025 and December 31, 2024, respectively		1,906,361			1,717,632
Operating lease liability, current portion		326,770			316,612
Total current liabilities		9,873,114			11,850,009

Notes payable, net of current portion		664,500			615,000
Deferred income taxes		976,142			1,123,000
Operating lease liability, net of current portion		1,048,620			1,133,371
Total liabilities		12,562,376			14,721,380

Commitments and contingencies		-			-

Stockholders’ equity:
Preferred stock, $0.001 par value, 10,000,000 shares authorized;		-			-
Common stock, $0.001 par value, 750,000,000 shares authorized; 29,273,359 and 27,021,423 shares issued and outstanding at March 31, 2025 and December 31, 2024, respectively		29,267			27,015
Additional paid-in-capital		112,471,311			108,679,065
Common stock issuable, 350,843 and 383,343 shares, respectively		350,843			350,843
Accumulated deficit		(91,511,919	)		(88,294,587	)
Total stockholders’ equity		21,339,502			20,762,336

Total liabilities and stockholders’ equity	$	33,901,878		$	35,483,716

The accompanying notes are an integral part of these consolidated financial statements.

F-1

GIFTIFY, INC. AND SUBSDIARIES (FKA RDE, INC.)
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS


	Three Months Ended March 31,
	2025			2024
	(Unaudited)			(Unaudited)

Net Sales	$	22,277,013		$	21,521,894
Cost of sales		18,695,377			18,264,618
Gross profit		3,581,636			3,257,276

Operating Expenses
Selling, general and administrative expenses		6,043,841			5,214,041
Depreciation of capitalized software costs		161,543			378,737
Amortization of intangible assets		543,917			607,917
Total operating expenses		6,749,301			6,200,695

Loss from operations		(3,167,665	)		(2,943,419	)

Other expense:
Interest expense		(209,571	)		(247,301	)
Total other expense, net		(209,571	)		(247,301	)
Net loss before income tax benefit		(3,377,236	)		(3,190,720	)
Income tax benefit		159,904			-
Net loss	$	(3,217,332	)	$	(3,190,720	)

Net loss per share – basic and diluted	$	(0.11	)	$	(0.13	)

Weighted average common shares outstanding – basic and diluted		28,354,277			25,004,222

The accompanying notes are an integral part of these consolidated financial statements.

F-2

GIFTIFY, INC. AND SUBSIDIARIES (FKA RDE, INC.)

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIENCY)

For the Three Months Ended March 31, 2025

	Shares		Amount		Shares		Amount		Capital		Deficit			Equity
	Common Stock				Common Stock Issuable				Additional Paid-In		Accumulated			Total Stockholders’
	Shares		Amount		Shares		Amount		Capital		Deficit			Equity
Balance, December 31, 2024		27,021,423	$	27,015		350,843	$	350,843	$	108,679,065	$	(88,294,587	)	$	20,762,336

Fair value of vested options		-		-		-		-		994,295					994,295

Fair value of vested restricted stock units		266,667		267		-		-		568,442					568,709

Fair value of common stock issued for services		158,332		158		-		-		238,972					239,130

Fair value of common stock issued for vendor settlement		75,000		75						108,675					108,750

Issuance of common stock for cash under at-the-market sale agreement, net		764,743		765		-		-		1,030,349					1,031,114

Issuance of common stock for cash under stock purchase agreement, net		387,194		387						374,113					374,500

Issuance of common stock for cash under public placement		600,000		600		-		-		477,400					478,000

Net loss		-		-		-		-		-		(3,217,332	)		(3,217,332	)

Balance, March 31, 2025 (Unaudited)		29,273,359	$	29,267		350,843	$	350,843	$	112,471,311	$	(91,511,919	)	$	21,339,502

F-3

For the Three Months Ended March 31, 2025

(Unaudited)

	Shares		Amount		Shares			Amount			Capital			Deficit			Equity
Successor:	Common Stock				Common Stock Issuable						Additional Paid-In			Accumulated			Total Stockholders’
	Shares		Amount		Shares			Amount			Capital			Deficit			Equity
Balance, December 31, 2023		24,119,967	$	24,114		383,343		$	383,343		$	93,376,244		$	(69,462,507	)	$	24,321,194
Balance		24,119,967	$	24,114		383,343		$	383,343		$	93,376,244		$	(69,462,507	)	$	24,321,194

Fair value of vested options		-		-		-			-			37,126						37,126

Fair value of vested restricted stock units		-		-		-			-			1,044,250						1,044,250

Issuance of common stock for services		50,000		50		-			-			217,450						217,500

Common shares issued on cashless exercise of stock options		1,130		1		-			-			(1	)					-

Common shares issued		12,500		13		(12,500	)		(12,500	)		12,487						-

Issuance of private placement of common stock for cash		1,354,500		1,354		-			-			2,707,646						2,709,000

Net loss		-		-		-			-			-			(3,190,720	)		(3,190,720	)

Balance, March 31, 2024 (Unaudited)		25,538,097	$	25,532		370,843		$	370,843		$	97,395,202		$	(72,653,227	)	$	25,138,350
Balance		25,538,097	$	25,532		370,843		$	370,843		$	97,395,202		$	(72,653,227	)	$	25,138,350

F-4

GIFTIFY, INC. AND SUBSDIARIES (FKA RDE, INC.)

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

	Three Months Ended March 31, 2025			Three Months Ended March 31, 2024
		(Unaudited)			(Unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$	(3,217,332	)	$	(3,190,720	)
Adjustments to reconcile net loss to net cash provided by operating activities
Fair value of vested stock options		994,295			37,126
Fair value of vested restricted common stock		568,709			1,044,250
Fair value of common stock issued for services		239,130			217,500
Loss on fair value of common stock issued for settlement of vendor		33,750			-
Depreciation of capitalized software costs		161,543			378,737
Amortization of intangible assets		543,917			607,917
Amortization of debt discount		6,143			-
Accrued interest		(62,438	)		15,934
Changes in operating assets and liabilities:
Accounts receivable		(699,514	)		569,794
Inventories		290,999			678,068
Prepaid expenses and other current assets		(245,230	)		(127,172	)
Right of use assets		77,061			65,632
Accounts payable		193,893			(374,262	)
Accrued expenses		(53,978	)		305,141
Customer deposits		(94,729	)		-
Deferred revenue		36,309			(168,818	)
Deferred taxes		(146,858	)		-
Operating lease liability		(74,594	)		(65,763	)
Net cash used in operating activities		(1,448,924	)		(6,636	)

CASH FLOWS FROM INVESTING ACTIVITIES
Capital expenditures		-			(224,815	)
Net cash provided by investing activities		-			(224,815	)

CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from line of credit		30,435,894			26,070,274
Repayment of line of credit		(30,558,645	)		(26,746,739	)
Proceeds from note payable		985,000			-
Repayment of notes payable		(750,000	)		-
Repayment of notes payable – related party		(2,000,000	)		-
Proceeds from sale of common stock, net of expenses, under at-the-market sale agreement		1,031,113			-
Proceeds from sale of common stock, net of expenses, under stock purchase agreement		374,500			-
Proceeds from public offering of common stock		478,000			-
Repayment of acquisition obligation		-			(500,000	)
Proceeds from private placement of common stock		-			2,709,000
Net cash provided by (used in) financing activities		(4,138	)		1,532,535

Net increase (decrease) in cash and cash equivalents		(1,453,062	)		1,301,084
Cash and cash equivalents beginning of period		3,574,876			4,099,737
Cash and cash equivalents end of period	$	2,121,814		$	5,400,821

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Interest paid	$	232,877		$	-
Taxes paid	$	-		$	-

NON-CASH INVESTING AND FINANCING ACTIVITIES
Common shares issued for trade accounts payable	$	108,750		$	-

The accompanying notes are an integral part of these condensed consolidated financial statements.

F-5

GIFTIFY, INC. AND SUBSDIARIES (FKA RDE, INC.)
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the Three Months Ended March 31, 2025 and 2024
(Unaudited)

1. Organization and Basis of Presentation

Giftify, Inc. (the “Company” or “Giftify”) was formed in 2011. Since 2020, the Company, through its wholly-owned subsidiary Restaurant.com, Inc., has been in the business of connecting digital consumers, businesses and communities with dining and merchant deal options throughout the United States. In December 2023, the Company acquired CardCash Exchange Inc (“CardCash”, see Note 3). CardCash was formed in 2013 and purchases merchant gift cards and resells them at a markup. During the three months ended March 31, 2025 and 2024, Card Cash accounted for 98% and 98%, respectively, of the Company’s revenues.

On September 4, 2024, the Company’s Board of Directors approved and, by written consent dated September 5, 2024, the holders of a majority of our common stock approved an amendment to our Certificate of Incorporation to change the Company’s name from RDE, Inc. to Giftify, Inc. The change to Giftify, Inc. became effective on October 28, 2024. All references throughout this filing to RDE, Inc. have been changed to Giftify, Inc.

On August 6, 2024, The Nasdaq Stock Market (“Nasdaq”) granted the Company’s application for listing on the Nasdaq.

The accompanying unaudited condensed consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”) pursuant to the applicable rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial information. The unaudited condensed consolidated financial statements have been prepared on the same basis as the Company’s annual financial statements for the year ended December 31, 2024, and, in the opinion of management, reflect all adjustments, which consist of normal recurring adjustments, considered necessary for a fair presentation of the periods presented. The results of operations for the interim periods presented are not necessarily indicative of the results of operations to be expected for the full fiscal year ending December 31,2025. These unaudited condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and accompanying notes included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2024, as filed with the SEC. The condensed consolidated balance sheet as of December 31, 2024 was derived from the audited consolidated financial statements as of that date, but does not include all disclosures, including notes, required by GAAP.

The unaudited condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiary, Card Cash Exchange, Inc. All intercompany balances and transactions have been eliminated in consolidation.

Substantial Doubt about the Company’s Ability to Continue as a Going Concern

The accompanying financial statements have been prepared under the assumption that the Company will continue as a going concern. In accordance with the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) 205-40, Going Concern, the Company’s management has evaluated whether there are conditions or events that raise substantial doubt about its ability to continue as a going concern within one year after the date the accompanying financial statements were issued. Giftify and CardCash have a history of reporting net losses and negative operating cash flows. These factors raise substantial doubt about the Company’s ability to continue as a going concern within one year of the date that the financial statements are issued. In addition, the Company’s independent registered public accounting firm, in its report on the Company’s consolidated financial statements for the year ended December 31, 2024, expressed substantial doubt about the Company’s ability to continue as a going concern. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

The Company’s ability to continue as a going concern is dependent upon its ability to raise additional debt or equity capital to fund its business activities and to ultimately achieve sustainable operating revenues and profitability. The Company has financed its working capital requirements through borrowings from various sources and the sale of its equity securities.

As market conditions present uncertainty as to the Company’s ability to secure additional funds, there can be no assurances that the Company will be able to secure additional financing on acceptable terms, as and when necessary to continue to conduct operations. There is also significant uncertainty as to the effect that the coronavirus may have on the Company’s business plans and the amount and type of financing available to the Company in the future. If the Company is unable to obtain the cash resources necessary to satisfy the Company’s ongoing cash requirements, the Company could be required to scale back its business activities or to discontinue its operations entirely.

F-6

2. Significant Accounting Policies

Use of Estimates

The preparation of the Company’s financial statements in conformity with accounting principles generally accepted in the United States of America (“GAAP”) requires management to make certain estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses, and the disclosure of contingent assets and liabilities. Actual results could differ from those estimates. On an ongoing basis, management reviews its estimates and if deemed appropriate, those estimates are adjusted. Significant estimates include those related to assumptions used in valuing inventories at net realizable value, assumptions used in valuing assets acquired in business acquisitions, impairment testing of goodwill and other long-term assets, assumptions used in valuing stock-based compensation, accruals for potential liabilities, and assumptions used in the determination of the Company’s liquidity.

Revenue Recognition

The Company recognizes revenue in accordance with FASB ASC 606, Revenue from Contracts with Customers.

The Company buys merchant gift cards from the general public and distributors at a discount and then resells the gift cards at a markup. The Company also derives revenue from the sale of discount certificates for restaurants on behalf of third-party restaurants.

Revenue and costs of sales are recognized when control of the products transfers to our customer, which generally occurs at a point in time when the risk and title to the product transfers to the customer upon delivery to the customer. The Company’s performance obligations are satisfied at that time. The Company’s standard terms of delivery are included in its contracts of sale, confirmation documents, and invoices. The Company recognizes revenue on a gross basis for the sales price of the merchant gift cards and discount certificates it collects.

Certain customers may receive incentives, which are accounted for as variable consideration. Provisions for sales returns are recognized in the period when the sale is recorded based upon the Company’s prior experience and current trends. These revenue reductions are established by the Company based upon management’s best estimates at the time of sale following the historical trend, adjusted to reflect known changes in the factors that impact such reserves and allowances, and the terms of agreements with customers.

Amounts billed and due from the Company’s customers are classified as accounts receivable on the balance sheet. Amounts received in advance from customers are recorded as deferred revenue on the balance sheet until the performance obligations have been satisfied. The Company has elected to apply the practical expedient to not assess contracts for significant financing component because the period between the receipt of advance payment and the Company’s transfer of services to the customer is less than one year.

Other

Sale of promotional gift cards, sale of travel, vacation and merchandise, and advertising revenues

The Company also recognizes revenue from the sale of Restaurant.com promotional gift cards (revenue recognized based on the Company’s historical redemption rates of its promotional gift cards), the sale of travel, vacation, and merchandise on behalf of third-party merchants (revenue reported on a net basis equal to the purchase price received from the customer less a portion of the purchase price paid by the Company to its merchant partners), and advertising revenue for third-party partners, such as Google Ads, wherein third-party website(s) and/or product(s) are shown or incorporated in the Company’s platform or website (revenue recognized when its determinable, which is generally upon receipt of a statement and/or proceeds from the third-party partners).

F-7

In the following table, revenue is disaggregated by our divisions and type of revenue for the three months ended March 31, 2025 and 2024:

Schedule of Disaggregation of Revenue

Sales Channels	CardCash Gift Cards		Restaurant.com Gift Cards and Coupons		Advertising		Total

Three Months Ended March 31, 2025
Business to consumer (B2C)	$	10,496,215	$	90,090	$	34,931	$	10,621,236
Business to business (B2B)		11,370,899		284,878		-		11,655,777
Total	$	21,867,114	$	374,968	$	34,931	$	22,277,013

Three Months Ended March 31, 2024
Business to consumer (B2C)	$	10,156,804	$	99,874	$	15,438	$	10,272,116
Business to business (B2B)		11,003,203		246,575		-		11,249,778
Total	$	21,160,007	$	346,449	$	15,438	$	21,521,894

Cost of Sales

Cost of sales consists primarily of the cost to purchase merchant gift cards, and transaction fees and costs.

Business Combinations

The Company allocates the fair value of purchase consideration to the tangible assets acquired, liabilities assumed, and separately identified intangible assets acquired based on their estimated fair values. The excess of the fair value of purchase consideration over the fair values of these identifiable assets and liabilities is recorded as goodwill. Such valuations require management to make significant estimates and assumptions, especially with respect to intangible assets. Significant estimates in valuing certain intangible assets include, but are not limited to, future expected cash flows from, acquired technology, trademarks and trade names, useful lives, and discount rates. Management’s estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and unpredictable and, as a result, actual results may differ from estimates. During the measurement period, which can be up to one year from the acquisition date, the Company may record adjustments to the assets acquired and liabilities assumed, with the corresponding offset to goodwill. Upon the conclusion of the measurement period, any subsequent adjustments are recorded in the consolidated statements of operations.

Intangible Assets

The Company has certain intangible assets that were initially recorded at their fair value at the time of acquisition. The finite-lived intangible assets consist of customer relationships, trade name, and developed technology. Intangible assets with finite useful lives are amortized using the straight-line method over their estimated useful life of three years.

The Company reviews all finite-lived intangible assets for impairment when circumstances indicate that their carrying values may not be recoverable. If the carrying value of an asset group is not recoverable, the Company recognizes an impairment loss for the excess carrying value over the fair value in our consolidated statements of operations.

Goodwill

Goodwill represents the excess purchase price and related costs over the value assigned to the net tangible and identifiable intangible assets of the business acquired. Goodwill that arose from acquisition of CardCash (see Note 3) was $20,007,669. Under ASC 350 Intangibles-Goodwill and Other, goodwill and other intangible assets with indefinite lives are not amortized, but instead are tested for impairment annually, or whenever events or circumstances indicate a potential impairment. The Company’s impairment testing is performed annually at December 31. Impairment of goodwill and indefinite lived intangible assets is determined by comparing the fair value of the Company’s reporting unit to the carrying value of the underlying net assets in the reporting unit. If the fair value of the reporting unit is determined to be less than the carrying value of its net assets, goodwill is deemed impaired and an impairment loss is recognized to the extent that the carrying value of goodwill exceeds the difference between the fair value of the reporting unit and the fair value of its other assets and liabilities. In accordance with the “Segment Reporting” Topic of the ASC, the Company’s chief operating decision maker (the Company’s Chief Executive Officer) determined that there is only one reporting unit. No impairment indicators were identified as of March 31, 2025.

F-8

Long-Lived Assets

The Company evaluates long-lived assets, other than goodwill and indefinite lived intangible assets, for impairment whenever events or changes in circumstances (“triggering events”) indicate that their net book value may not be recoverable. The measurement of possible impairment is based upon the ability to recover the carrying value of the asset through the expected future undiscounted cash flows from the use of the asset and its eventual disposition. An impairment loss, equal to the difference between the asset’s fair value and its carrying value, is recognized when the estimated future undiscounted cash flows are less than its carrying amount. No impairment indicators were identified as of March 31, 2025.

Leases

The Company leases certain corporate office space under lease agreements. The Company determines whether a contract contains a lease at contract inception. A contract is or contains a lease if the contract conveys the right to control the use of the identified asset for a period of time in exchange for consideration. Control is determined based on the right to obtain all of the economic benefits from use of the identified asset and the right to direct the use of the identified asset. Operating lease right-of-use assets (“ROU”) for operating leases represent the right to use an underlying asset for the lease term, and operating lease liabilities represent the obligation to make lease payments. Lease liabilities are recognized based on the present value of the future minimum lease payments over the lease term at the commencement date. Operating lease expense is recognized on a straight-line basis over the lease term and is included in the general and administrative line in the Company’s consolidated statements of operations. Leases with an initial term of 12 months or less are not included on the balance sheets.

Advertising

The Company expenses advertising costs as incurred and amounted to $290,684 and $261,042 for the three months ended March 31, 2025 and 2024, respectively, which are recorded in general and administrative in the Statements of Operations.

Stock-Based Compensation

The Company periodically issues share-based awards to employees and non-employees and consultants for services rendered. Stock options vest and expire according to terms established at the issuance date of each grant. Stock grants are measured at the grant date fair value. Stock-based compensation cost is measured at fair value on the grant date and is generally recognized as a charge to operations ratably over the requisite service, or vesting, period. Recognition of compensation expense for non-employees is in the same period and manner as if the Company had paid cash for the services.

The Company values its equity awards using the Black-Scholes option-pricing model, and accounts for forfeitures when they occur. Use of the Black-Scholes option pricing model requires the input of subjective assumptions, including expected volatility, expected term, and a risk-free interest rate. The expected volatility is based on the historical volatility of the Company’s common stock, calculated utilizing a look-back period approximately equal to the contractual life of the stock option being granted. The expected life of the stock option is calculated as the mid-point between the vesting period and the contractual term (the “simplified method”). The risk-free interest rate is estimated using comparable published federal funds rates.

Stock-based compensation expense recognized and recorded as part of selling, general and administrative expenses.

Earnings (Loss) Per Share

Basic earnings (loss) per share is computed using the weighted average number of common shares issued and outstanding during the period. Diluted earnings (loss) per share is computed using the weighted average number of common shares and the dilutive effect of contingent shares outstanding during the period. Potentially dilutive contingent shares, which primarily consist of convertible notes and stock issuable upon the exercise of stock options and warrants, have been excluded from the calculation of diluted loss per share because their effect is anti-dilutive.

F-9

Loss per common share is computed by dividing net loss by the weighted average number of shares of common stock issued and outstanding during the respective periods. Basic and diluted loss per common share was the same for all periods presented because all convertible notes and stock issuable upon the exercise of stock options and warrants outstanding were anti-dilutive.

At March 31, 2025 and 2024, the Company excluded the outstanding convertible debt and securities summarized below, which entitle the holders thereof to acquire shares of common stock, from its calculation of earnings per share, as their effect would have been anti-dilutive.

	March 31, 2025		March 31, 2024

Convertible notes payable		29,258		27,258
Common stock issuable		350,843		370,843
Common stock options		4,543,250		717,782
Total		4,923,351		1,115,883

The issuable and potentially issuable shares as summarized above. These potentially issuable common shares would have been anti-dilutive because the Company had a net loss for the periods ended March 31, 2025 and 2024, such common stock equivalents would have been excluded from the calculation of net loss per share.

Fair Value of Financial Instruments

Fair value of financial and non-financial assets and liabilities is defined as an exit price, which is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The three-tier hierarchy for inputs used to measure fair value, which prioritizes the inputs to valuation techniques used to measure fair value, is as follows:

Level 1 – quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2 – quoted prices for similar assets and liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the financial instrument.

Level 3 – unobservable inputs based on the Company’s assumptions used to measure assets and liabilities at fair value.

A financial asset or liability classification within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement. The assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the valuation of the assets and liabilities being measured and their placement within the fair value hierarchy.

The carrying value of the Company’s financial instruments (consisting of cash, accounts receivables, deposits to credit card processors, prepaid expense and other current assets, accounts payable, accrued expenses, notes payable, and other liabilities) are considered to be representative of their respective fair values due to the short-term nature of those instruments.

Concentration of Credit Risk

Financial instruments, which potentially subject the Company to concentrations of credit risk, consist principally of trade accounts receivable and cash. The credit risk exposure surrounding trade accounts receivable are limited as these amounts represent the timing difference between payments being settled by credit card processors and the cash being provided to the Company.

No significant customers comprised more than 10% of accounts receivable or revenue as of and for the period ended March 31, 2025 and 2024.

F-10

The Company maintains a balance at financial institutions, which at times exceed the federally insured limit. The Company has not experienced a loss on this account.

Segment Information

The Company’s Chief Executive Officer (“CEO”) is our chief operating decision maker (“CODM”) and evaluates performance and makes operating decisions about allocating resources based on financial data presented on a consolidated basis. Because our CODM evaluates financial performance on a consolidated basis, the Company has determined that it operates as a single reportable segment composed of the consolidated financial results of Giftify, Inc. (see Note 2).

Recent Accounting Pronouncements

In November 2024, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses which includes amendments that require disclosure in the notes to financial statements of specified information about certain costs and expenses, including purchases of inventory; employee compensation; and depreciation, amortization and depletion expenses for each caption on the income statement where such expenses are included. The amendments are effective for the Company’s annual periods beginning January 1, 2027, with early adoption permitted, and should be applied either prospectively or retrospectively. The Company is in the process of evaluating this ASU to determine its impact on the Company’s disclosures.

Other recent accounting pronouncements issued by the FASB, its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the Securities and Exchange Commission did not or are not believed by management to have a material impact on the Company’s present or future financial statements.

3. Acquisition of Card Cash

On December 29, 2023, the Company completed the acquisition of CardCash. The acquisition was made pursuant to an agreement and plan of merger dated August 18, 2023, between the Company and CardCash. The Company acquired all of the issued and outstanding equity of CardCash for $26,682,000, made up of the issuance of 6,108,007 shares of the Company’s common stock valued at $24,682,000, the issuance of a note payable for $1,500,000, and payment of $750,000 in cash.

The Company utilized the acquisition method of accounting for the acquisition in accordance with ASC 805, Business Combinations, and allocated the purchase price to CardCash’s tangible assets, identifiable intangible assets, and assumed liabilities at their estimated fair values as of the date of acquisition. The excess of the purchase price paid by the Company over the estimated fair value of identified tangible and intangible assets has been recorded as goodwill.

In accordance with ASC 805, the Company made an allocation of the purchase price for CardCash based on the fair value of the assets acquired and liabilities assumed.

F-11

The following table summarizes the allocation of the fair value of the purchase consideration to the fair value of tangible assets, identifiable intangible assets, and assumed liabilities of CardCash on the date of acquisition:

	Fair Value

Fair value of consideration:
Cash	$	750,000
Notes payable (see Note 11)		1,500,000
Common stock (6,108,007 shares of common stock at $4.00 per share)		24,432,000
Total purchase price	$	26,682,000

Allocation of the consideration to the fair value of assets acquired and liabilities assumed:

Cash	$	2,061,265
Accounts receivable		1,582,635
Inventories		4,152,273
Prepaids, deposits, and other		220,385
Property and equipment, net		2,563,312
Accounts payable and accrued liabilities		(2,068,154	)
Line of credit		(6,737,385	)
Deferred tax liability		(1,800,000	)
Net tangible assets		(25,669	)

Intangible assets:
Developed technology		2,600,000
Trade name		2,400,000
Customer relationships		1,700,000
Net identifiable intangible assets		6,700,000
Goodwill		20,007,669
Fair value of net asset acquired	$	26,682,000

4. Property and Equipment, Net

Property and equipment, net consisted of the following:

Schedule Property and Equipment, Net

	March 31, 2025			December 31, 2024
Website development costs	$	2,533,466		$	2,533,466
Leasehold improvements		29,846			29,846
Property and equipment, gross		2,563,312			2,563,312
Accumulated depreciation		(1,634,871	)		(1,473,328	)
Property and equipment, net	$	928,441		$	1,089,984

Depreciation expense for the three months ended March 31, 2025 and 2024 was $161,543 and $378,737, respectively.

F-12

5. Goodwill and Intangible Assets

Goodwill and intangible assets consist of the following:

Schedule of Other Intangible Assets

March 31,

2025

December 31,
2024

Goodwill

20,007,669

	March 31, 2025			December 31, 2024
Intangible Assets
Customer relationships	$	1,700,000		$	1,700,000
Trade name		2,400,000			2,400,000
Developed technology		2,600,000			2,600,000
Intangible assets, gross		6,700,000			6,700,000
Accumulated amortization		(2,975,585	)		(2,431,668	)
Intangible assets, net	$	3,724,415		$	4,268,332

On December 29, 2023, in relation to the acquisition of CardCash (See Note 3), the Company recorded goodwill of $20,007,669.

On December 29, 2023, in relation to the acquisition of CardCash (See Note 3), the Company recorded intangible assets of $6,700,000. At December 31, 2024, the unamortized intangible asset balance was $4,268,332. During the three months ended March 31, 2025, the Company recorded an amortization expense of $543,917, leaving a remaining unamortized intangible asset balance of $3,724,415 at March 31, 2025.

Identifiable intangibles are amortized over their estimated remaining useful lives, which are as follows:

Description		Weighted Average Useful Life (in years)
Description	Weighted Average Useful Life (in years)
Customer relationships		3
Trademarks, trade names and service marks		3
Developed technology		3
Remaining useful lives		3

Amortization expense on intangible assets was as follows:

		Three Months Ended March 31, 2025				Three Months Ended March 31, 2024
Amortization expense		$	543,917			$	607,917

Estimated amortization expense for the Company is as follows:


2025 (Remainder)	$	1,590,249
2026		2,134,166
Total	$	3,724,415

F-13

6. Leases

The Company leases its office facilities under noncancelable operating lease agreements. The Company has leases for office facilities in Woodbridge, New Jersey and Schaumburg, Illinois. The operating lease agreement for the Woodbridge, New Jersey location was renewed in April 2024 for a 60-month period ending in April 2029.

The Company’s operating lease liability balance was $1,449,983 as of December 31, 2024. During the three months ended March 31, 2025, the Company made payments of $74,594 against its operating lease liability, resulting in a lease liability of $1,375,390 as of March 31, 2025, of which the current portion of lease liability was $326,770, and a long-term lease liabilities balance of $1,048,620.

During the three months ended March 31, 2025 and 2024, lease costs totaled approximately $77,062 and $75,580, respectively.

As of March 31, 2025, the weighted average remaining lease terms for operating lease is 3.82 years, and the weighted average discount rate for operating lease is 8.00%.

Maturities of the Company’s operating lease liabilities are as follows as of March 31, 2025:

	As of March 31, 2025

2025 (remaining)	$	320,578
2026		438,374
2027		382,954
2028		359,654
2029		105,927
Thereafter		-
Total		1,607,487
Less: Imputed interest		(232,097	)
Total operating lease liability	$	1,375,390

7. Secured Revolving Line of Credit

The outstanding line of credit consists of the following at March 31, 2025 and December 31, 2024:

Schedule of Line of Credit

March 31,

2025

December 31,
2024

Line of credit

3,682,328

3,805,080

In November 2020, CardCash entered into an amended and restated promissory note for a revolving line of credit with availability of up to $10,000,000. The revolving line of credit is payable on demand, secured by the Company’s inventory, with interest based on the Wall Street Journal Prime Rate plus 3.00%, limited to a floor of 6.5%. At March 31, 2025 and December 31, 2024, the average interest rate was 12% and 12%, respectively. As of March 31, 2025, the Company complied with customary debt covenants. At March 31, 2025 and December 31, 2024, the line of credit requires a deposit of $1,258,826, included in restricted cash.

8. Convertible Debt

Convertible debt consists of the following at March 31, 2025 and December 31, 2024:

Schedule of Convertible Debt

	March 31, 2025		December 31, 2024
Incumaker, Inc. principal balance	$	20,000		20,000
Accrued interest		23,887		20,137
Total principal and accrued interest (all current)	$	43,887	$	40,137

F-14

On November 5, 2018, the Company completed the acquisition of Incumaker, Inc. and assumed certain outstanding convertible notes payable. At December 31, 2024, there was one remaining assumed convertible note payable outstanding that matured July 2017. The Company continues to be unsuccessful in reaching the Note holder to remit payment in full. At December 31, 2024, the principal balance of $20,000, and accrued interest of $23,137, are convertible at $1.50 per share into 28,758 shares of the Company’s common stock. At March 31, 2025, the principal balance of $20,000, and accrued interest of $23,887, are convertible at $1.50 per share into 29,258 shares of the Company’s common stock.

9. Secured Notes Payable – Related Party

Secured notes payable to a related party consists of the following at March 31, 2025 and December 31, 2024:

Schedule of Notes Payable Related Party

	March 31, 2025		December 31, 2024
Secured note payable – related party	$	-	$	2,000,000
Less debt discount		-		(4,000	)
Total principal balance		-		1,996,000
Accrued interest		-		64,274
Total principal and accrued interest		-		2,060,274
Less current portion		-		(2,060,274	)
Non-current portion	$	-	$	-

On September 20, 2024, the Company entered into a secured promissory note (the “Note”) with Spars Capital Group LLC (“Spars Capital”) in the principal amount of $2,000,000 bearing annual interest of 11.5% that has a maturity date of January 20, 2025. The Note has an origination fee and expenses of $22,000, which was recorded as a debt discount and is being amortized over the term of the Note and may be prepaid without penalty. The Note is collateralized by a blanket lien on the assets of the Company under the terms of a Security Agreement and is subordinated only to the line of credit (see Note 7). The Note and Security Agreement are subject to additional customary terms and conditions. Spars Capital is owned by a family trust affiliated with Elliot Bohm, a member of the Board of Directors of the Company and the President of CardCash Exchange, Inc., a subsidiary of Giftify. As of December 31, 2024, the notes payable had an aggregate principal balance outstanding of $2,000,000, a debt discount balance of $4,000, and accrued interest payable of $64,274. During the three months ended March 31, 2025, the Company paid the Note and accrued interest in full, and the Note was retired.

10. Notes Payable

Notes payable consist of the following at March 31, 2025 and December 31, 2024:

Schedule of Notes Payable

	March 31, 2025			December 31, 2024
CardCash acquisition notes payable	$	750,000		$	1,500,000
Real Word Digital Assets note payable		1,000,000			-
GameIQ acquisition note payable		62,100			75,928
Economic Injury Disaster Loans (EIDL) note payable		664,500			664,500
Less debt discount		(12,857	)		-
Total principal balance		2,463,743			2,240,428
Accrued interest		107,118			92,204
Total principal and accrued interest		2,570,861			2,332,632
Less current portion		(1,906,361	)		(1,717,632	)
Non-current portion	$	664,500		$	615,000

CardCash Acquisition Notes Payable

On December 29, 2023, the Company issued two-year promissory notes totaling $1,500,000 as partial consideration for the acquisition of CardCash (see Note 3). $750,000 is payable on December 29, 2024, bearing simple annual interest of 5%, and $750,000 is to be paid upon the earlier of (a) the completion of a firm commitment underwriting the Company’s initial public offering to allow the Company to become listed on the Nasdaq Capital Market or (b) December 29, 2025. As of December 31, 2024, the notes payable had an aggregate principal balance outstanding of $1,500,000 and accrued interest payable of $75,000. During the three months ended March 31, 2025, the Company made principal payments of $750,000, leaving at March 31, 2025, an aggregate principal balance outstanding of $750,000 and accrued interest payable of $84,375.

F-15

Real World Digital Assets Note Payable

On February 19, 2025, the Company entered into a secured promissory note with Real World Digital Assets LLC (“Real World”) in the principal amount of $1,000,000 bearing annual interest of 11.5% that has a maturity date of December 31, 2025. The Note has an origination fee and expenses of $15,000, which were recorded as a debt discount and are being amortized over the term of the Note and may be prepaid without penalty. The note is collateralized by a blanket lien on the assets of Giftify under the terms of a security agreement and is subordinated only to the line of credit owed by the Company to Pathward National Association (see Note 7). Proceeds from the note were used to pay the remaining balance owed on the secured promissory note with Spars Capital (See Note 9). As of March 31, 2025, the notes payable had a principal balance outstanding of $1,000,000, a debt discount balance of $12,857, and accrued interest payable of $12,918.

GameIQ Acquisition Note Payable

On February 1, 2022, the Company issued two notes payable for the purchase of GameIQ, one for $78,813 and another for $62,101. In accordance with Notes, the Company promised to pay the principal together with interest at 1% upon the earlier of (i) nine equal biannual installments with the first installment due on October 1, 2022, and the final payment due February 1, 2025 (the “Maturity Date”).

As of December 31, 2024, the notes payable had an aggregate principal balance outstanding of $75,928 and accrued interest payable of $1,646. As of March 31, 2025, the notes payable had an aggregate principal balance outstanding of $62,100 and accrued interest payable of $1,186 (see Note 15).

Economic Injury Disaster Loans (EIDL)

On June 17, 2020, the Company received $150,000 of proceeds applicable to loans administered by the SBA as disaster loan assistance under the Covid-19 Economic Injury Disaster Loan (EIDL) Program. On July 14, 2021, the Company received an additional $350,000 of proceeds pursuant to the loan. On July 21, 2020, the Company received $150,000 of proceeds applicable to loans administered by the SBA as disaster loan assistance under the Covid-19 EIDL Program. On January 31, 2022, the Company assumed an additional $14,500 EIDL and accrued interest of $900 as part of the consideration paid for the acquisition of GameIQ.

The loans bear interest at 3.75% per annum, with a combined repayment of principal and interest of $3,500 per month beginning 12 months from the date of the promissory note over a period of 30 years. As of December 31, 2024, the note payable had a principal balance outstanding of $664,500 and accrued interest payable of $15,558.

As of March 31, 2025, the note payable had a principal balance outstanding of $664,500 and accrued interest payable of $8,638.

11. Stockholders’ Equity

Preferred Stock

The Company is authorized to issue a total of 10,000,000 shares of preferred stock, par value $0.001 per share. As of March 31, 2025 and December 31, 2024, there were no shares of preferred stock issued and outstanding.

Common Stock

The Company is authorized to issue a total of 750,000,000 shares of common stock, par value $0.001 per share. As of March 31, 2025 and December 31, 2024, the Company had 29,273,359 shares and 27,021,423 shares, respectively, of common stock issued and outstanding.

Common Stock Transactions

Three Months Ended March 31, 2025

Common Shares Issued on Vesting of Restricted Stock

During the three months ended March 31, 2025, the Company issued 266,667 shares on vesting of restricted common stock to its employees and executive.

Common Stock Issued for Services

During the three months ended March 31, 2025, the Company issued 158,332 shares of common stock with a fair value of $239,130, or $1.51 per share, for service rendered.

F-16

Issuance of Common Stock for Settlement of Vendor Balance

During the three months ended March 31, 2025, the Company issued 75,000 shares of common stock with a fair value of $108,750, or $1.45 per share, to settle a trade vendor balance of $75,000. The excess of the fair value of the common stock issued over the trade vendor balance was $33,750, which was recorded as a component of selling, general and administrative expenses in the consolidated statement of operations.

Issuance of Common Stock on At-the-Market Issuance Sales Agreement

During the three months ended March 31, 2025, the Company sold 764,743 shares of Common Stock and received proceeds, net of expenses, of $1,031,113, or an average of $1.35 per share, utilizing its At-the-Market Issuance Sales Agreement with Ascendiant Capital Markets, LLC.

Issuance of Common Stock on Stock Purchase Agreement

On December 16, 2024, the Company entered into a Securities Purchase Agreement and Strata Purchase Agreement with ClearThink Capital Partners, LLC (ClearThink Capital”). Under the terms of the Strata Purchase Agreement, ClearThink Capital agreed to purchase up to $10 million of Giftify’s shares of common stock (the “Purchase Shares”) based on a series of request notices limited to the lesser of $1 million or 500% of the average number of shares traded for the 10 trading days prior to the closing request date with the minimum purchase notice to be $25,000. The Company will receive financing in an amount equal to 99% of the average of the closing prices of the Company shares of common stock on the Nasdaq stock market during the Valuation Period that is defined as three business days preceding the purchase date with respect to a request notice. No purchase of Company shares of common stock will be made by ClearThink if its beneficial ownership of Giftify common stock exceeds 9.99% of the issued and outstanding shares of Giftify common stock.

During the three months ended March 31, 2025, the Company received net proceeds of $374,500 from ClearThink Capital, which purchased 387,194 shares of the Company’s common stock.

On February 4, 2025, the Company exercised its right to terminate the SPA effective by mutual agreement of the parties.

Issuance of Common Stock on Public Offering

On January 15, 2025, the Company entered into a Placement Agency Agreement with Craft Capital Management LLC (“Craft Capital”), as placement agent, to issue and sell 600,000 shares of the Company’s common stock at a purchase price of $1.00 per Share. The shares were offered by the Company pursuant to its shelf registration statement on Form S-3 (File No. 333-282322), that was declared effective by the Securities and Exchange Commission on October 15, 2024, on a best efforts basis (the “Offering”). The offer and sale of the shares in the Offering are described in the Company’s prospectus constituting a part of the registration statement, as supplemented by a final prospectus supplement dated January 15, 2025. On January 16, 2025, the Company closed the Offering. The Company sold 600,000 shares for total gross proceeds of $600,000. After deducting the placement agent fee and offering expenses payable by the Company, the Company received net proceeds of $478,000.

Common Stock Issuable

At March 31, 2025, 350,843 shares of common stock with an aggregate value of $350,843 have not been issued and are reflected as common stock issuable in the accompanying consolidated financial statements.

F-17

Three Months Ended March 31, 2024

Issuance of Common Stock for Services

During the three months ended March 31, 2024, the Company issued 50,000 shares of common stock with a fair value of $217,500, or $4.35 per share, to a consultant for services rendered.

Issuance of Private Placement of Common Stock

During the three months ended March 31, 2024, the Company received net proceeds of approximately $2,709,000 for the sale of 1,354,500 shares of common stock at $2.00 per share, as part of a private placement.

Common Stock Issuable

At December 31, 2023, 383,343 shares of common stock with an aggregate value of $383,000 have not been issued and are reflected as common stock issuable in the accompanying consolidated financial statements. During the three months ended March 31, 2024, the Company issued 12,500 shares of common stock, leaving 370,843 shares of common stock issuable in the accompanying consolidated financial statements at March 31, 2024.

12. Share-Based Compensation

Summary of Restricted Common Stock

The following table summarizes restricted stock activity during the three months ended March 31, 2025:

Schedule of Restricted Stock

	Unvested Shares			Issuable Shares			Fair Value at Date of Issuance			Weighted Average Grant Date Fair Value
Balance, December 31, 2024		1,320,835			-		$	4,531,224			3.43
Granted		450,000			-			414,000			0.92
Vested		(266,668	)		266,668			-			-
Forfeited		-			-			-			-
Issued		-			(266,668	)		(568,709	)		-
Balance, March 31, 2025		1,504,167			-		$	4,376,515		$	2.91

On February 1, 2025, the Company granted its Chief Executive Officer 250,000 shares of the Company’s restricted stock and granted 200,000 shares of the Company’s restricted stock to other officers with an aggregate fair value of $414,000 or $0.92 per share. The restricted stock grant vest monthly over a 36-month period.

On March 1, 2024, the Company granted its Chief Executive Officer 200,000 shares of the Company’s restricted stock, and 225,000 shares of the Company’s restricted stock to other officers and employees with an aggregate fair value of $1,793,500 or $4.22 per share. The restricted stock grant vest 33% on the grant date, and 33% on each subsequent anniversary date. During the three months ended March 31, 2024, the Company issued 141,666 of these shares of restricted stock with a fair value of $597,831 based upon its vesting term.

Effective on December 29, 2023, with the closing of the acquisition of CardCash (see Note 3), the Company entered into an Employment Agreements with Elliot Bohm and Mark Ackerman. Mr. Bohm was the President of CardCash and Mr. Ackerman was the Chief Operating Officer of CardCash prior to the acquisition by the Company and now remain in those positions following the acquisition. Bohm also joined the Board of Directors of the Company. Under the terms of the four-year agreements, Mr. Bohm and Mr. Ackerman each received an annual base salary of $375,000 and a one-time award of 1,250,000 restricted shares of the Company’s common stock with aggregate fair value of $10 million, which 50% vesting immediately, and the remaining 50% vesting over 4 years equally on each anniversary of the closing of the acquisition of CardCash.

During the three months ended March 31, 2025 and 2024, the Company recognized stock compensation expense of $568,709 and $1,044,250 and issued 266,668 shares of restricted stock based upon its vesting term of the grants. As of March 31, 2025, the unamortized stock compensation expense amounted to $4,376,515, to be expensed upon vesting in future periods through February 2028.

F-18

Summary of Stock Options

A summary of stock option activity is presented below:

Schedule of Stock Options

	Number of			Weighted Average
	Options			Exercise Price

Stock options outstanding at December 31, 2024		4,122,830		$	4.28
Granted		1,170,000			4.01
Exercised		-			-
Expired or forfeited		(749,580	)		(1.05	)
Stock options outstanding at March 31, 2025		4,543,250		$	4.28
Stock options exercisable at March 31, 2025		2,532,250		$	4.32

On February 1, 2025, the Company, pursuant to the terms of its 2019 Stock Incentive Plan, granted options exercisable into 1,170,000 shares of the Company’s common stock to its executives and employees. The stock options vest over 36 months equally. The stock options are exercisable at a weighted average price of $0.92 per share with an average life to expiration of approximately three years. The total fair value of these options at grant date was approximately $1,073,000, which was determined using a Black-Scholes-Merton option pricing model with the following average assumption: stock price of $0.92 per share, expected term of 6.00 years, volatility of 241%, dividend rate of 0%, and weighted average risk-free interest rate of 4.45%. The expected term represents the weighted-average period of time that share option awards granted are expected to be outstanding giving consideration to vesting schedules and historical participant exercise behavior; the expected volatility is based upon historical volatility of the Company’s common stock; the expected dividend yield is based on the fact that the Company has not paid dividends in the past and does not expect to pay dividends in the future; and the risk-free interest rate is based on the U.S. Treasury yield curve in effect at the time of measurement corresponding with the expected term of the share option award.

During the three months March 31, 2025 and 2024, the Company recognized $994,295 and $37,126 of stock compensation expense relating to vested stock options. As of March 31, 2025, the aggregate amount of unvested compensation related to stock options was approximately $4,621,872 which will be recognized as an expense as the options vest in future periods through February 2028.

The weighted average remaining contractual life of common stock options outstanding and exercisable at March 31, 2025, was 8.38 years. Based on a fair market value of $1.96 per share on March 31, 2025, the intrinsic value attributed to exercisable but unexercised common stock options was $279,662 at March 31, 2025.

The exercise prices of common stock options outstanding and exercisable at March 31, 2025 are as follows:

Exercise Prices		Options Outstanding (Shares)		Options Exercisable (Shares)
$	0.92		1,170,000		65,000
$	1.05		7,500		7,500
$	1.25		28,500

SEC Form 10-Q filed by Giftify Inc.