7. Secured Revolving Line of Credit

The outstanding line of credit consists of the following at June 30, 2025 and December 31, 2024:

Schedule of Line of Credit

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 June 30, 2025 and December 31, 2024, the average interest rate was 10.5% and 12%, respectively. As of June 30, 2025, the Company complied with customary debt covenants.

On April 23, 2025, CardCash Exchange, Inc. (“CardCash”), a wholly owned subsidiary of the registrant (“Giftify”), entered into a second amended and restated secured promissory note (the “Note”) with Pathward, National Association (“Pathward”) in the principal amount of $7,000,000 that amends and restates the Amended and Restated Promissory Note dated December 23, 2020, in the original principal amount of $10,000,000 (the “Original Note”) and bearing annual interest of 3% in excess of that rate shown in the Wall Street Journal as the prime rate (the “Effective Rate”). Interest on the Note fluctuates with each change in the prime rate so published. If at any time Pathward either abandons the use of the Wall Street Journal prime rate or the Wall Street Journal prime rate is no longer published, then Pathward will establish a similar replacement rate in its sole discretion but at no time will the Effective Rate be less than 6.50% per annum.

CardCash must pay interest on the principal amount which is outstanding each month in arrears commencing on the first day of the month following the funding of the transaction and continuing on the first day of each month thereafter until the unpaid principal and interest are fully paid. Any failure to pay the entire amount when due will be an event of default that will result in an interest charge at the “Extra Rate” that is defined in the Note as the Effective Rate plus 8.00% per annum.

The Note is collateralized by a blanket lien on the assets of CardCash under the terms of an Amended and Restated Loan and Security Agreement dated December 23, 2020. Under Amendment No. 2 to Amended and Restated Loan and Security Agreement (“Amendment No. 2”) executed on April 23, 2025, advances under the Note may be measured against a percentage of Eligible Accounts and Eligible Inventory as those terms are defined in Amendment No. 2. The amount advanced as a loan under the Noted may not exceed an amount which is the lesser of: (i) $7,000,000 and the sum of (a) 100% of Eligible Credit Card Receivables (as defined in Amendment No. 2), plus 100% of the Product Costs for Eligible Inventory (as those capitalized terms are defined in Amendment No. 2), provided however, that the Product Costs for Eligible Inventory consisting of Prepaid Inventory shall not exceed $750,000. In addition, if CardCash terminates Amendment No. 2 prior to December 31, 2025, it must pay an Exit Fee of 0.50% of $7,000,000, together with all unpaid Loan Fees and Maintenance Fees (as those terms are defined under Amendment No. 2) due under the Agreement. The required minimum cash collateral balance decreased from $1,250,000 to $1,000,000, releasing $250,000 to CashCard.

At June 30, 2025 and December 31, 2024, the line of credit requires a deposit of $1,000,000 and $1,258,826, respectively, which is included in cash and cash equivalents in the accompanying condensed consolidated balance sheets.