Giftify Subsidiary Restructures $7M Debt with Pathward

Giftify, Inc. (NASDAQ:GIFT), a retail company specializing in catalog and mail-order houses with a market capitalization of $53.87 million and annual revenue of $88.93 million, has entered into a revised financial agreement with Pathward, National Association, according to a recent SEC filing. According to InvestingPro analysis, the company currently operates with moderate debt levels while facing challenges with short-term obligations exceeding liquid assets. The subsidiary CardCash Exchange, Inc. has restructured its debt through a second amended and restated secured promissory note, altering the terms of its previous $10 million debt.

On April 23, 2025, the new arrangement reduced the principal amount to $7 million. The note’s interest rate is pegged to the prime rate published in the Wall Street Journal, plus an additional 3%. The effective rate will not fall below 6.50% per annum, regardless of any fluctuations or discontinuations of the prime rate reference.

Monthly interest payments on the outstanding principal are mandated, beginning the month following the transaction’s funding. A default event, such as a missed payment, would trigger an additional interest charge at an "Extra Rate" of the effective rate plus 8.00% per annum.

The debt is secured by CardCash’s assets under an amended and restated loan and security agreement dated December 23, 2020. Advances under the new note are contingent upon a percentage of eligible accounts and inventory, with the maximum loan amount capped at $7 million. This restructuring comes as the company maintains a current ratio of 0.73, indicating potential liquidity challenges that InvestingPro subscribers can track in real-time along with over 30 other key financial metrics. Notably, the cash collateral balance requirement for CardCash has been decreased from $1.25 million to $1 million, releasing $250,000 in liquidity to the company.

Should CardCash terminate the agreement before December 31, 2025, they will incur an exit fee of 0.50% of the $7 million, along with any unpaid loan and maintenance fees.

This financial move comes as part of Giftify’s broader strategy to manage its debt effectively, with total debt currently standing at $9.69 million. The details of the note and the amendment are referenced in Exhibits 10.1 and 10.2 of the 8-K filing, which provide additional terms and conditions of the agreement. For comprehensive analysis of Giftify’s financial health and detailed metrics, investors can access InvestingPro, which offers exclusive insights and Fair Value estimates to help make informed investment decisions.

The restructuring of this debt reflects Giftify’s ongoing efforts to optimize its financial structure and maintain operational flexibility. This news is based on a press release statement and provides a glimpse into the company’s financial maneuvers.

In other recent news, Giftify, Inc. has announced significant developments across various sectors. The company reported operational improvements after implementing artificial intelligence, resulting in increased efficiency and customer engagement. Their AI-driven strategies have optimized marketing campaigns, leading to better conversion rates and reduced operational costs. Additionally, Giftify has extended a loan repayment agreement with Spars Capital Group LLC, paying $1 million towards the principal with the remaining balance due by February 2025. This financial move allows Giftify more time to manage its debt obligations. On another front, Giftify’s subsidiary, CardCash.com, has expanded its platform to offer discounted gift cards for sports retailers, providing cost-saving opportunities for sports fans. CardCash.com is also addressing high GLP-1 medication costs by offering discounted pharmacy gift cards, helping consumers save on prescriptions. These initiatives align with Giftify’s strategic focus on expanding into high-growth consumer markets.

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