GIFTIFY, INC.

Previous wording

On May 29, 2025, we acquired Takeout7, Inc (“Takeout7”). 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 Takeou7 expands our technology offerings to include end-to-end solutions for independent restaurants.

Current wording

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.

Previous wording

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

Current wording

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.

Previous wording

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

Current wording

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.

Previous wording

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

Current wording

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.

Previous wording

CardCash purchases unwanted gift cards at a value lower than their face worth and subsequently retails them at a discounted rate to discerning shoppers nationwide. This avenue not only allows individuals to obtain cash for their unneeded gift cards but also enables them to make cost-effective purchases through discounted gift cards.

Current wording

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.

Previous wording

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

Current wording

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.

Previous wording

To our database of 6.2 million customers, we sell:

Current wording

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

Previous wording

● Discount Dining Passes, which provide discounts at 170,000 restaurants and other retailers. These passes provide multiple uses for nine months.

Current wording

● Discount Dining Passes, which provide discounts at 170,000 restaurants and other retailers. These passes provide multiple uses for six months.

Previous wording

● “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 offering (“Specials”), generating significantly greater revenue per customer when compared to purchasing our other products. The average order value for these Specials sales is nearly five times a certificate purchase.

Current wording

● “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.

Previous wording

We sell certificates and Discount Dining Passes to corporations and marketers, which use them to:

Current wording

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

Previous wording

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

Current wording

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

Previous wording

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

Current wording

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.

Previous wording

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

Current wording

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.

Previous wording

A reconciliation of our net sales (as reported) to our gross billings for the three and nine months ended September 30, 2025 and 2024 were as follows:

Current wording

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

Previous wording

Global inflation also increased during 2021 and in 2022. The Russia and Ukraine conflict and other geopolitical conflicts, as well as related international response, have exacerbated inflationary pressures, including causing increases in the price for goods and services and global supply chain disruptions, which have resulted and may continue to result in shortages in food products, materials and services. Such shortages have resulted and may continue to result in inflationary cost increases for labor, fuel, food products, materials and services, and could continue to cause costs to increase as well as result in the scarcity of certain materials. We cannot predict any future trends in the rate of inflation or other negative economic factors or associated changes in our operating costs and how that 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.

Current wording

The Russia and Ukraine conflict and other geopolitical conflicts, as well as related international response, have exacerbated inflationary pressures, including causing increases in the price for goods and services and global supply chain disruptions, which have resulted and may continue to result in shortages in food products, materials and services. Such shortages have resulted and may continue to result in inflationary cost increases for labor, fuel, food products, materials and services, and could continue to cause costs to increase as well as result in the scarcity of certain materials. We cannot predict 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.

Previous wording

The Company has a history of reporting net losses. At September 30, 2025, the Company had cash of $4,021,227 available to fund its operations, including expansion plans, and to service its debt, and a negative working capital of $1,537,994.

Current wording

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

Previous wording

Our consolidated financial statements have been presented on the basis that it will continue as a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. We have experienced operating losses and negative operating cash flows during 2024 and 2023. We have financed our working capital requirements through borrowings from various sources and the sale of our equity securities.

Current wording

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.

Previous wording

As a result, management has concluded that there is substantial doubt about our ability to continue as a going concern. 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, has also expressed substantial doubt about the Company’s 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.

Current wording

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.

Previous wording

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.

Current wording

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.

Previous wording

Deciding whether the Company is a principal or an agent requires significant judgment and analysis. This is particularly true when evaluating factors like responsibility for fulfilling the promise to the customer, 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.

Current wording

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.

Previous wording

The increase in net revenue recognized as agent increased $873,157, or 191%, during the three months ended September 30, 2025, as compared to the prior year period. For the nine months ended September 30, 2025, net revenue recognized as agent increased $1,816,153, or 110%, as compared to the prior year period. The increase over the previous year was due to the sale of gift cards related to cruise line operators, fluctuations in the types of gift cards sold, and changes in the number of customer orders in which the Company acted as an agent.

Current wording

The increase in net revenue recognized as agent increased $599,742, or 57.4%, during the three months ended March 31, 2026, as compared to the prior year period. The increase over the previous year was due to 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.

Previous wording

Results of Operations – Three Months Ended September 30, 2025, Compared to Three Months Ended September 30, 2024

Current wording

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

Previous wording

Gross billings increased 28.8% during the three months ended September 30, 2025, 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 reflect only the fee and commission we retain from the sale of discounted merchant gift cards.

Current wording

Gross billings increased 25.0% during the three months ended March 31, 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.

Previous wording

Net sales for the three months ended September 30, 2025 and 2024, were $18,783,908 and $23,210,850, respectively, a decrease of 19.1%. The decrease 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 September 30, 2025 and 2024, respectively.

Current wording

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

Previous wording

Cost of sales consists primarily of the cost to purchase merchant gift cards. Cost of sales for the three months ended September 30, 2025 and 2024, were $15,036,367 and $20,220,237, respectively. Gross profit increased $756,928, or 25.3%, as compared to the prior year period. Our gross margin, as a percentage of net sales, were 20.0% and 12.9%, for the three months ended September 30, 2025 and 2024, 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.

Current wording

Cost of sales consists primarily of the cost to purchase merchant gift cards. Cost of sales for the three months ended March 31, 2026 and 2025 were $17,112,165 and $18,695,377, respectively. Gross profit increased $663,603, or 18.5%, as compared to the prior year period. Our gross margin, as a percentage of net sales, were 19.9% and 16.1% for the three months ended March 31, 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.

Previous wording

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.

Current wording

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.

Previous wording

Selling, general and administrative expenses were $17,247,499 for the nine months ended September 30, 2025, as compared to $20,954,914 for the nine months ended September 30, 2024, a decrease of $3,707,415. The decrease was due to a reduction in stock-based compensation expense of $4,879,170 during the nine months ended September 30, 2025, offset by increased payroll and benefits expenses, marketing and advertising costs, and other general expenses to support our business.

Current wording

Selling, general and administrative expenses for the three months ended March 31, 2026 and 2025 were $6,173,344 and $6,043,841, respectively, an increase of $129,503. The increase was due to increased employee compensation, legal and professional fees, and other general expenses to support our business, offset by a reduction in stock-based compensation expense of $606,865.

Previous wording

Amortization expenses are primarily attributed to the Company’s capitalized software development costs. Amortization expenses were $160,745 during the three months ended September 30, 2025, as compared to $254,292 during the three months ended September 30, 2025.

Current wording

Amortization of capitalized software costs are primarily attributed to the Company’s capitalized software development costs. Amortization expenses were $161,543 and $161,543 for the three months ended March 31, 2026 and 2025, respectively.

Previous wording

Amortization expenses are primarily attributable to the Company’s amortization of intangible assets with finite lives. Amortization expenses were $585,349 during the three months ended September 30, 2025, as compared to amortization expenses of $607,917 during the three months ended September 30, 2024.

Current wording

Amortization of intangible assets are attributable to the Company’s amortization of intangible assets with finite lives. Amortization expenses were $577,341 and $543,917 for the three months ended March 31, 2026 and 2025, respectively.

Previous wording

For the three months ended September 30, 2025, we incurred a loss from operations of $2,487,668, as compared to a loss from operations of $3,780,199 for the three months ended September 30, 2024. The decrease in loss from operations was due to our increased gross profit being offset by decreased stock-based compensation expense as discussed above.

Current wording

We incurred a loss from operations of $2,666,989 and $3,137,66 for the three months ended March 31, 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.

Previous wording

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.

Current wording

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.

Previous wording

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:

Current wording

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:

Previous wording

As reflected in the accompanying financial statements, for the nine months ended September 30, 2025, the Company recorded a net loss of $8,244,603 and used cash in operations of $496,067. Cash used in operations was primarily for working capital. As of September 30, 2025, we had a cash balance of $4,021,227. We have an aggregate note payables principal balance of $1,750,000 due in December 2025, for which we are evaluating repayment through a combination of a private issuance of common stock, selling shares in the open market utilizing our At-the-Market (ATM) facility, and using a portion of our existing cash balance.

Current wording

As reflected in the accompanying financial statements, for the three months ended March 31, 2026, the Company recorded a net loss of $2,650,408 and used cash in operations of $36,697. Cash used in operations was primarily for working capital.

Previous wording

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 $4,021,227 cash generated from operations to last until March 31, 2026.

Current wording

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 $4,181,974 cash generated from operations to last until March 31, 2027.

Previous wording

Cash used in operating activities for the nine months ended September 30, 2025 was $496,067 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.

Current wording

Cash used in operating activities for the three months ended March 31, 2026 was $36,697 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.

Previous wording

Cash used in operating activities for the nine months ended September 30, 2024 was approximately $2,858,368 and consisted of our net loss, adjusted for non-cash items, including amortization of intangible assets, fair value of vested stock options, and the fair value of common stock issued to executives, employees, and advisors, and routine changes in working capital and other activities.

Current wording

Cash used in operating activities for the three months ended March 31, 2025 was approximately $692,608 and consisted of our net loss, adjusted for non-cash items, including amortization of intangible assets, fair value of vested stock options, and the fair value of common stock issued to executives, employees, and advisors, and routine changes in working capital and other activities.

Previous wording

Cash provided by financing activities for the nine months ended September 30, 2024 was $2,028,837, which was from proceeds of $3,054,073 on the sale of common stock, proceeds from notes payable of $1,978,000, offset by repayment of our line of credit of $2,503,236, and payment of $500,000 on our acquisition obligation.

Current wording

Cash provided by financing activities for the three months ended March 31, 2026 was $563,727, which was from aggregate proceeds of $625,593 on the sale of common stock, offset by repayment of our line of credit balance of $58,688, and repayment of our notes payable of $3,178.

Previous wording

Cash provided by financing activities for the nine months ended September 30, 2025 was $105,909, which was from proceeds of $3,058,577 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 $1,111,345, and repayment of our notes payable of $2,826,323.

Current wording

Cash used in financing activities for the three months ended March 31, 2025 was $4,138, which was from proceeds of $1,883,613 on the sale of common stock, proceeds from notes payable of $985,000, offset by repayment of our line of credit of $122,751, and repayment of our notes payable of $2,750,000.

Previous wording

We have a history of reporting net losses. At September 30, 2025, we had cash of $4,021,227 available to fund our operations, including expansion plans, and to service our debt, and a negative working capital of $1,537,994. We anticipate our cash balance will last until March 2026. 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, 2024. The Company’s independent registered public accounting firm, in their report on the Company’s December 31, 2024 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.

Current wording

We have a history of reporting net losses. At March 31, 2026, we had cash of $4,181,974 available to fund our operations, including expansion plans, and to service our debt, and a working capital of $7,631. We anticipate our cash balance will last until March 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.

Previous wording

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.

Current wording

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.