Giftify, Inc.: Form 10-Q for the period ended Jun 30, 2026

Management’s Discussion and Analysis of Financial Condition and Results of Operations is designed to provide a reader of the financial statements with a narrative report on our financial condition, results of operations, and liquidity. This discussion and analysis should be read in conjunction with the attached unaudited Condensed Consolidated Financial Statements and notes thereto and our Annual Report on Form 10-K for the year ended December 31, 2025, including the audited Consolidated Financial Statements and notes thereto. The following discussion contains forward-looking statements that involve risks and uncertainties, such as statements of our plans, objectives, expectations, and intentions. Our actual results could differ materially from those discussed in the forward-looking statements. Please also see the cautionary language at the beginning of this Quarterly Report regarding forward-looking statements.

Background

On September 4, 2024, our 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 our name from RDE, Inc. to Giftify, Inc. The change to Giftify, Inc. became effective on October 28, 2024. All references to RDE, Inc. have been changed to Giftify, Inc.

On August 6, 2024, The Nasdaq Stock Market granted our application for listing on the Nasdaq.

On May 29, 2025, the Company acquired Takeout7 Inc. Takeout7 is a restaurant technology company offering comprehensive online ordering solutions through its TakeOut7 platform and AI-powered digital marketing services through its Platr platform. The acquisition of Takeout7 expands the Company’s technology offerings to include end-to-end solutions for independent restaurants. In early 2026, Takeout7 and its operations were merged into our subsidiary, Restaurant.com, Inc.

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 accounted for as a business combination under the acquisition method. CardCash was formed in 2013 and purchases merchant gift cards and resells them at a markup.

On March 1, 2020, we acquired the assets of Restaurant.com, Inc., a pioneer in the restaurant deal space and the nation’s largest restaurant-focused digital deals brand.

Business Overview

We have two principal divisions, B2C and B2B, for both CardCash and for Restaurant.com.

CardCash

CardCash is a leading gift card exchange platform that facilitates the purchase and sale of unwanted gift cards at discounted rates for 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 buying and selling gift cards from over 1,100 retailers, including Target, Home Depot, Starbucks, and TJ 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 discount to their face value and resells them at a discount to discerning shoppers nationwide. This avenue not only allows individuals to redeem unwanted gift cards for cash but also enables them to make cost-effective purchases with discounted gift cards.

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

Restaurant.com

Restaurant.com is a pioneer in the restaurant deal space and the nation’s largest restaurant-focused digital deals brand. We derive our revenue from transactions in which we sell discount certificates for restaurants on behalf of third-party restaurants. Founded in 1999, we connect digital consumers, businesses, and communities offering dining and merchant deal options nationwide at over 182,500 restaurants and retailers to over 7.8 million customers. Our 10,000 core restaurants and 170,000 Dining Discount Pass restaurants and retailers extend nationwide. Our top three B2C markets are New York, Chicago and Los Angeles.

Restaurant.com Business to Customer Division

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

• Discounted certificates for 10,000 restaurants. The certificates range from $5 to $100 and never expire.
• Discount Dining Passes, which provide discounts at 170,000 restaurants and other retailers. These passes provide multiple uses for six months.
• “Specials by Restaurant.com,” which bundle Restaurant.com certificates with a variety of other entertainment options, including theatre, movies, wine, and travel. Customers have favored these bundled offerings (“Specials”), generating significantly higher revenue per customer than purchasing our other products. The average order value for these Specials sales is nearly five times that 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 present a significant revenue opportunity through such cross-promotions.

Restaurant.com Business to Business Division

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

• generate new customers;
• increase sales at the point of sale;
• reward points/customer loyalty;
• convert to paperless billing and auto-bill payment.
• motivate specific customer behavior, such as free home repair estimates and test drives for auto dealers;
• renew subscriptions and memberships; and
• address customer service issues.

Restaurant.com Other Business

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

Restaurant.com Attractive Customer Demographics

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

How We Measure Our Business

We use operating metrics to assess our business’s progress and make strategic decisions. Certain financial metrics are reported in accordance with GAAP, and others are non-GAAP financial measures. As our business evolves, we may update the key financial and operating metrics we use to measure our performance. For further information and reconciliations to the most applicable financial measures under GAAP, refer to our discussion under the Non-GAAP Financial Measures section.

Operating Metrics

• Gross billings are the total dollar value of customer purchases of goods and services. Gross billings are presented net of customer refunds and order discounts. A significant portion of our revenue consists of sales of discounted merchant gift cards, in which we collect the transaction price from the customer and remit a portion to the third-party suppliers who will provide the related goods or services. For these transactions, gross billings differ from Net Sales reported in our Consolidated Statements of Operations, which is presented net of the merchant’s share of the transaction price. Gross billings are an indicator of our growth and business performance, as they measure the dollar volume of transactions generated through our marketplaces. Tracking gross billings also allows us to monitor the percentage of gross billings we retain after merchant payments.

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

Inflation

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.

Going Concern

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

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 incurred operating losses and negative operating cash flows in 2025 and 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 concluded, and our independent registered public accounting firm has agreed with our conclusion that there is substantial doubt regarding our ability to continue as a going concern for a period of at least 12 months beyond the filing of this Quarterly Report on Form 10-Q. The report of our independent registered public 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. 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 depends on its ability to raise additional debt or equity capital to fund its business activities and ultimately achieve sustainable operating revenues and profitability.

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.

Revenue Recognition

We recognize revenue in accordance with FASB ASC 606, Revenue from Contracts with Customers. Based on the Company’s business model, it is sometimes necessary to determine whether we are acting as a principal or an agent in revenue-generating arrangements.

Deciding whether the Company is a principal or an agent requires significant judgment and analysis. This is particularly true when evaluating factors such as responsibility for fulfilling the customer promise, inventory risk, and pricing discretion. Changes in the assessment of these indicators could materially impact reported revenue and related metrics. The Company continuously evaluates our judgments and estimates to ensure accurate revenue recognition in accordance with ASC 606.

The following table reconciles the recording of the Company’s gross vs. net transactions to the Company’s reported net sales.

The increase in net revenue recognized as agent increased $509,862, or 46.6%, during the three months ended June 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 prior year period was from 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 June 30, 2026, Compared to the Three Months Ended June 30, 2025

Operating Metrics

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

Gross billings increased 26.2% during the three months ended June 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.

Financial Results

GIFTIFY, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(Unaudited)

The following is a discussion of our results of operations.

Net Sales

Net sales for the three months ended June 30, 2026 and 2025, were $21,747,024 and $20,900,731, respectively, a increase of 4.0%. The increase in net sales was due to the change in the mix of agent versus principal transactions as discussed above. Merchant gift card sales accounted for approximately 97% and 98% of our net sales for the three months ended June 30, 2026 and 2025, respectively.

Cost of Sales

Cost of sales consists primarily of the cost to purchase merchant gift cards. Cost of sales for the three months ended June 30, 2026 and 2025 were $17,343,380 and $17,045,106, respectively. Gross profit increased $548,019, or 14.2%, as compared to the prior year period. Our gross margin, as a percentage of net sales, were 20.2% and 18.4% for the three months ended June 30, 2026 and 2025, respectively. Our gross margin was positively impacted by the increase in net revenue (agent transactions) described above, compared with the prior-year period.

Operating Expenses

Selling, general, and administrative expenses consist of costs incurred to identify, communicate with, and evaluate potential customers and related business opportunities; compensation to officers and directors; legal and other professional fees; lease expense; and other general corporate expenses. Management expects selling, general, and administrative expenses to increase in future periods as the Company adds personnel and incurs additional costs related to its operation as a public company, including higher legal, accounting, insurance, compliance, compensation, and other costs.

Selling, general, and administrative expenses for the three months ended June 30, 2026 and 2025 were $4,978,565 and $5,714,543, respectively, a decrease of $735,978. The decrease was due to a reduction in stock-based compensation expense of $908,871, offset by increased employee compensation, legal and professional fees, and other general expenses to support our business.

Amortization of capitalized software costs.

Amortization of capitalized software costs are primarily attributed to the Company’s capitalized software development costs. Amortization expenses were $128,194 and $161,544 for the three months ended June 30, 2026 and 2025, respectively.

Amortization of intangible assets.

Amortization of intangible assets are attributable to the Company’s amortization of intangible assets with finite lives. Amortization expenses were $550,849 and $557,062 for the three months ended June 30, 2026 and 2025, respectively.

Loss from Operations

We incurred a loss from operations of $1,253,964 and $2,577,524 for the three months ended June 30, 2026 and 2025, respectively. The decrease in loss from operations was due to our increased gross profit offset by decreased stock-based compensation expense, as discussed above.

Other Expenses, Net

Other expenses, net was $112,538 and $141,597 for the three months ended June 30, 2026 and 2025, respectively, and is comprised of interest expense, net of interest income. The decrease in interest expense, net was due to our decreased debt balances.

Income Tax Benefit

Income tax benefit for the three months ended June 30, 2026 and 2025 was $125,450 and $129,312, respectively.

Net Loss

Net loss for the three months ended June 30, 2026 and 2025 was $1,241,052 and $2,589,809, respectively. The decrease in net loss was driven by higher gross profit, lower stock-based compensation expense, and lower interest expense, as discussed above.

Non-GAAP Financial Measure - Modified EBITDA

In addition to our GAAP results, we present Modified EBITDA as a supplemental 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 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 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-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 three months ended June 30, 2026 and 2025 (unaudited):

We present Modified EBITDA because we believe it helps investors and analysts compare our performance across reporting periods on a consistent basis by excluding items we do not believe are indicative of our core operating performance. In addition, we use Modified EBITDA to develop our internal budgets, forecasts, and strategic plan; to analyze the effectiveness of our business strategies and evaluate potential acquisitions; to make compensation decisions; and to communicate with our board of directors regarding our financial performance. Modified EBITDA has limitations as an analytical tool, which include, among others, the following:

• Modified EBITDA does not reflect our cash expenditures or future requirements for capital expenditures or contractual commitments;
• Modified EBITDA does not reflect changes in, or cash requirements for, our working capital needs;
• Modified EBITDA does not reflect future interest expense, or the cash requirements necessary to service interest or principal payments, on our debts; and
• Although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and Modified EBITDA does not reflect any cash requirements for such replacements.

7

Results of Operations – Six Months Ended June 30, 2026, Compared to Six Months Ended June 30, 2025

Operating Metrics

Our gross billings for the six months ended June 30, 2026 and 2025 were as follows:

Gross billings increased 25.6% during the six months ended June 30, 2026, as compared to the prior year period. A significant portion of our revenue transactions are comprised of sales of discounted merchant gift cards in which we collect the transaction price from the customer and remit a portion of the transaction price to the third-party suppliers who provide the related goods or services. For these transactions, gross billings differ from Net Sales reported in our Condensed Consolidated Statements of Operations, which is presented net of the merchant’s share of the transaction price.

Financial Results

GIFTIFY, INC. AND SUBSDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(Unaudited)

The following is a discussion of our results of operations.

Net Sales

Net sales for the six months ended June 30, 2026 and 2025, were $43,104,428 and $41,177,744, respectively, a decrease of 0.2%. Merchant gift card sales accounted for approximately 98% and 98% of our net sales for the six months ended June 30, 2026 and 2025, respectively.

Cost of Sales

Cost of sales consists primarily of the cost to purchase merchant gift cards. Cost of sales for the six months ended June 30, 2026 and 2025, were $34,455,545 and $35,740,483, respectively. Gross profit increased $1,211,622, or 16.3%, as compared to the prior year period. Our gross margin, as a percentage of net sales, were 20.1% and 17.2%, for the six months ended June 30, 2026 and 2025, respectively. Our gross margin was positively impacted by the increase in net revenue (agent transactions), as described above, as compared to the prior year period.

Operating Expenses

Selling, general and administrative expenses consist of costs incurred to identify, communicate with and evaluate potential customers and related business opportunities, and compensation to officers and directors, as well as legal and other professional fees, lease expense, and other general corporate expenses. Management expects selling, general and administrative expenses to increase in future periods as the Company adds personnel and incurs additional costs related to its operation as a public company, including higher legal, accounting, insurance, compliance, compensation and other costs.

Selling, general and administrative expenses were $11,151,909 for the six months ended June 30, 2026, as compared to $11,758,384 for the six months ended June 30, 2025, a decrease of $606,475. The decrease was due to a reduction in stock-based compensation expense of $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 costs.

Amortization expenses are primarily attributed to the Company’s capitalized software development costs. Amortization expenses were $289,737 during the six months ended June 30, 2026, as compared to $323,087 during the six months ended June 30, 2025.

Amortization of intangible assets.

Amortization expenses are primarily attributable to the Company’s amortization of intangible assets with finite lives. Amortization expenses were $1,128,190 during the six months ended June 30, 2026, as compared to amortization expenses of $1,100,979 during the six months ended June 30, 2025.

Loss from Operations

For the six months ended June 30, 2026, we incurred a loss from operations of $3,920,953, as compared to a loss from operations of $5,745,189 for the six months ended June 30, 2025. The decrease in loss from operations was due to our increased gross profit being offset by decreased stock-based compensation expense as discussed above.

Other Expenses

For the six months ended June 30, 2026, we incurred interest expense, net of $224,858, as compared to interest expense, net of $351,168 for the six months ended June 30, 2025. The decrease in interest expense was due to our decreased debt balances.

Income Tax Benefit

For the six months ended June 30, 2026, we realized an income tax benefit of $254,352 as compared to an income tax benefit of $289,216 for the six months ended June 30, 2025.

Net Loss

We realized a net loss of $3,891,460 for the six months ended June 30, 2026, as compared to a net loss of $5,807,141 for the six months ended June 30, 2025. The decrease in net loss was due to our increased gross profit, decreased stock-based compensation expense, decreased interest expense, an income tax benefit, as discussed above.

Modified EBITDA

In addition to our GAAP results, we present Modified EBITDA as a supplemental 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 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 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 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 six months ended June 30, 2026 and 2025 (unaudited):

We present Modified EBITDA because we believe it assists investors and analysts in 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 in developing our internal budgets, forecasts and strategic plan; in analyzing the effectiveness of our business strategies in evaluating potential acquisitions; making compensation decisions; and in communications with our board of directors concerning our financial performance. Modified EBITDA has limitations as an analytical tool, which includes, among others, the following:

• Modified EBITDA does not reflect our cash expenditures, or future requirements, for capital expenditures or contractual commitments;
• Modified EBITDA does not reflect changes in, or cash requirements for, our working capital needs;
• Modified EBITDA does not reflect future interest expense, or the cash requirements necessary to service interest or principal payments, on our debts; and
• Although depreciation and amortization are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and Modified EBITDA does not reflect any cash requirements for such replacements.

10

Critical Accounting Policies and Estimates

The following discussion and analysis of financial condition and results of operations is based upon the Company’s consolidated financial statements for the years ended December 31, 2024 and 2023 presented elsewhere in this report, which have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”). Certain accounting policies and estimates are particularly important to the understanding of the Company’s financial position and results of operations and require the application of significant judgment by management or can be materially affected by changes from period to period in economic factors or conditions that are outside of the Company’s control. As a result, these issues are subject to an inherent degree of uncertainty. In applying these policies, management uses its judgment to determine the appropriate assumptions to be used in the determination of certain estimates. Those estimates are based on the Company’s historical operations, the future business plans and the projected financial results, the terms of existing contracts, trends in the industry, and information available from other outside sources.

Liquidity and Capital Resources

As reflected in the accompanying financial statements, for the six months ended June 30, 2026, the Company recorded a net loss of $3,891,460 and used cash in operations of $310,447. Cash used in operations was primarily for working capital.

Historically, we have financed our operations through existing cash balances, public and private issuance of common stock, term loans and credit lines from financial institutions.

As of the issuance date of the financial statements included in this Quarterly Report on Form 10-Q, management expects that the Company’s existing cash of $3,924,338 cash generated from operations to last until June 30, 2027.

To alleviate any funding considerations, management periodically evaluates various funding alternatives and may seek to raise additional funds through the issuance of equity, debt securities, through arrangements with strategic partners, strategic transactions, or through obtaining credit from financial institutions. As we seek additional sources of financing, there can be no assurance that such financing will be available to us on favorable terms or at all. Our ability to obtain additional financing in the debt and equity capital markets is subject to several factors, including market and economic conditions, our performance and investor sentiment with respect to us and our industry.

We are also continuing to take actions to improve the Company’s operating performance and cash generated from operations, including product optimization, implementing strategies to increase sales, streamlining operations, negotiating equitable vendor contracts, and managing product price. However, we may be unsuccessful in executing these actions in a timely manner or at all.

If the Company is unable to raise additional capital whenever necessary or otherwise improve its operating performance or generation of cash from operations, it may be forced to decelerate or curtail certain of its operations until such time as additional capital becomes available.

Our consolidated statements of cash flows as discussed herein are presented below.

11

Operating Activities

Cash provided by or used in operating activities primarily consists of net loss adjusted for certain non-cash items, including amortization of intangible assets, impairment of intangible assets, gain on forgiveness of government assistance notes payable, and the fair value of common stock issued for directors, employees, and service providers, and the effect of changes in working capital and other activities.

Cash used in operating activities for the six months ended June 30, 2026 was $310,447 and consisted of our net loss, adjusted for non-cash items, including amortization of intangible assets, the fair value of vested stock options, common stock issued to executives, employees, and advisors, and routine changes in working capital and other activities.

Cash provided by operating activities for the six months ended June 30, 2025 was $289,951 and consisted of our net loss, adjusted for non-cash items, including amortization of intangible assets, the fair value of vested stock options, common stock issued to executives, employees, and advisors, and routine changes in working capital and other activities.

Investing Activities

The Company has no investing activities for the six months ended June 30, 2026.

Cash used provided by investing activities for the six months ended June 30, 2025 was $109,543, which was from cash received on an acquisition.

Financing Activities

Cash provided by financing activities for the six months ended June 30, 2026 was $579,841, which was from aggregate proceeds of $750,593 on the sale of common stock, offset by repayment of our line of credit balance of $163,764, and repayment of our notes payable of $6,988.

Cash used in financing activities for the six months ended June 30, 2025 was $1,443,909, which was from proceeds of $2,486,202 on the sale of common stock, net proceeds of $985,000 from a note payable, offset by repayment of our line of credit balance of $2,089,183, and repayment of our notes payable of $2,825,928.

Going Concern

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 experienced operating losses and negative operating cash flows during the six months ended June 30, 2026. We have financed our working capital requirements through borrowings from various sources and the sale of equity securities.

We have a history of reporting net losses. At June 30, 2026, we had cash of $3,924,338 available to fund our operations, including expansion plans, and to service our debt, and a working capital of $141,944. We anticipate our cash balance will last until June 2027. As a result, we have concluded that there is substantial doubt about the Company’s ability to continue as a going concern. In addition, the Company’s independent registered public accounting firm has included an explanatory paragraph in their report with respect to this uncertainty that accompanies the Company’s audited consolidated financial statements as of and for the year ended December 31, 2025. The Company’s independent registered public accounting firm, in their report on the Company’s December 31, 2025 audited consolidated financial statements, has expressed substantial doubt about the Company’s ability to continue as a going concern. Our consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Our 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.

As market conditions present uncertainty as to our ability to secure additional funds, there can be no assurances that we 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 amount and type of financing available to us in the future.

If we are unable to obtain the cash resources necessary to satisfy our ongoing cash requirements, we could be required to scale back its business activities or to discontinue its operations entirely.

Critical Accounting Policies and Estimates

The following discussion and analysis of financial condition and results of operations is based upon the Company’s consolidated financial statements for the years ended December 31, 2026 and 2025 presented elsewhere in this report, which have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”). Certain accounting policies and estimates are particularly important to the understanding of the Company’s financial position and results of operations and require the application of significant judgment by management or can be materially affected by changes from period to period in economic factors or conditions that are outside of the Company’s control. As a result, these issues are inherently uncertain. In applying these policies, management uses its judgment to select the appropriate assumptions for certain estimates. Those estimates are based on the Company’s historical operations, the future business plans and the projected financial results, the terms of existing contracts, trends in the industry, and information available from other outside sources.

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 them at a markup. The Company also derives revenue from the sale of discount certificates for third-party restaurants.

Revenue and costs of sales are recognized when control of the products transfers to our customer, which generally occurs when the risk and title to the products transfer to the customer upon delivery. The Company’s performance obligations are satisfied at that time. The Company’s standard terms of delivery are included in its contracts of sale, order 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.

Share-Based Compensation

The Company periodically issues share-based awards to employees, non-employees, and consultants for services rendered. Stock options vest and expire according to the terms established at the grant’s issuance date. 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 an expense in the statement of operations ratably over the requisite service period or vesting period. Recognition of compensation expense for non-employees occurs in the same period and in the same manner as if the Company had paid cash for the services.

Acquisitions and Business Combinations

The Company allocates the fair value of the purchase consideration to the tangible assets acquired, the liabilities assumed, and the separately identifiable 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, particularly regarding 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.

Recent Accounting Pronouncements

See discussion of recent accounting pronouncements in Note 1 to the accompanying financial statements.

Off-Balance Sheet Arrangements

At June 30, 2026 and December 31, 2025, the Company did not have any transactions, obligations or relationships that could be considered off-balance sheet arrangements.

Evaluation of Disclosure Controls and Procedures

The Company’s Chief Executive Officer and Chief Financial Officer evaluated the effectiveness of our “disclosure controls and procedures” (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended), as of June 30, 2026. Based on that evaluation, the Company’s Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were not effective as of June 30, 2026, due to a material weakness in internal control over financial reporting that was previously identified for the year ended December 31, 2025, and has not been fully remediated.

Notwithstanding this conclusion, in the opinion of management, including the Company’s Chief Executive Officer and Chief Financial Officer, the unaudited condensed consolidated financial statements in this Quarterly Report on Form 10-Q fairly present, in all material respects, our financial position, results of operations and cash flows as of and for the periods presented, in accordance with U.S. GAAP.

Previously Reported Material Weakness

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis.

As disclosed in Part II, Item 9A. “Controls and Procedures” in our Annual Report on Form 10-K for the year ended December 31, 2025, management identified a material weakness related to the Company’s information technology (“IT”) general controls. Specifically, the Company did not design and maintain effective program change management controls to ensure that IT program and data changes affecting certain financial IT applications and underlying accounting records are identified, tested, authorized and implemented appropriately.

Remediation of Previously Reported Material Weakness

In response to the material weaknesses identified management, with oversight from the Audit Committee of the Board of Directors, developed a plan to remediate the material weakness. Ongoing remediation activities include:

• Continue to design and implement ITGCs, focusing on user access controls, periodic access reviews, and change management;
• Continue to enhance documentation and control execution, ensuring the completeness and accuracy of supporting data; and
• Continue to provide training to our control operators.

While management believes these controls are appropriately designed, the material weakness will not be considered fully remediated until the controls have operated for a sufficient period of time and management has completed testing to conclude that the controls are operating effectively.

The Company will continue to monitor the effectiveness of its remediation efforts and will make refinements as necessary.

Inherent Limitations on Effectiveness of Controls

Management does not expect the Company’s disclosure controls or internal control over financial reporting will prevent or detect all errors and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. The Company’s controls and procedures are designed to provide reasonable assurance that control system’s objective will be met, and the CEO and CFO have concluded that the Company’s disclosure controls and procedures are ineffective at the reasonable assurance level. The design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Further, because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, within the company have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple errors or mistakes. Controls can also be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls. The design of any system of controls is based in part on certain assumptions about the likelihood of future events and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Projections of any evaluation of the effectiveness of controls in future periods are subject to risks. Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with policies or procedures.

Changes in Internal Control over Financial Reporting

Other than as described above, there were no changes in our internal control over financial reporting during the quarter ended June 30, 2026 that materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

We are a smaller reporting company as defined by Rule 12b-2 of the Securities Exchange Act of 1934 and are not required to provide the information under this item.