Business Overview - Restaurant.com connects over 7.8 million customers with more than 200,000 dining and merchant deal options across 182,500 restaurants and retailers[16]. - The B2C division accounted for 45% of gross revenue in the fiscal year ended December 31, 2022, while the B2B division accounted for 55%[23][25]. - The average order value for bundled offerings ("Specials") is nearly five times that of a standard certificate purchase, generating over 5% of B2C revenue from 60% of B2C orders in the previous fiscal year[24]. - Mobile applications have grown to represent 49% of B2C revenue and over 60% of B2C orders, with over 6.0 million downloads since their launch[19]. - Approximately 1.3 million unique visitors accessed the company's digital platforms monthly in the past year[19]. - The B2B division utilizes Restaurant.com certificates to help businesses attract new customers and increase sales, contributing to 40% of revenue[20]. Financial Performance - Revenue for the year ended December 31, 2022, was $4,444,595, an increase of approximately $1,121,086 or 34% compared to $3,323,509 in the same period of the prior year[185]. - The increase in revenue in 2022 was primarily due to an agreement with a national mobile telephone provider, generating $1,106,447 in revenues during the year[185]. - Cost of revenues increased to $825,242 during the year ended December 31, 2022, compared to $394,023 in the prior year, with cost of revenues as a percentage of revenue rising from 8% to 19%[187]. - The company incurred a net loss of $1,278,524 and utilized cash in operations of $1,053,571 for the year ended December 31, 2022[176]. - The net loss for the year ended December 31, 2022, was $1,278,524, a reduction from a net loss of $4,991,223 in 2021, attributed to increased revenue and decreased operating expenses[194]. - Cash used in operating activities was $1,053,571 in 2022, compared to $1,260,191 in 2021, reflecting improved operational efficiency[210]. Operational Challenges - The company faces competition from various established firms in the dining and savings category, which may have greater resources and customer bases[44]. - The company has received a going concern qualification in its 2022 and 2021 audits due to recurring losses and negative cash flows[61]. - The company may face increased costs or operational challenges due to unexpected regulations, particularly in the context of the COVID-19 pandemic[64]. - The company is subject to complex laws regarding unclaimed and abandoned property, which may affect its discount certificates and Discount Dining Passes[47]. - The company is subject to evolving internet and e-commerce regulations, which could impede growth and affect subscriber retention and revenue[70]. - The company faces risks from potential legal claims related to information disseminated through its websites and applications, which could affect revenue and goodwill[73]. Debt and Liquidity - For the year ended December 31, 2022, the company used net cash of $1,053,571 to fund operations and realized an operating loss of $2,286,846[61]. - As of December 31, 2022, the company had stockholders' deficiency of $3,049,107 and an accumulated deficit of $61,569,759[61]. - The company has a monthly debt service obligation of $3,323 for outstanding loans and will need approximately $600,000 to finance operations and service debt obligations over the next 12 months[61]. - The company does not have access to any credit facility or other borrowing arrangements, which could adversely affect its ability to fund additional losses or respond to liquidity issues[62]. - The company has expressed substantial doubt about its ability to continue as a going concern due to operating losses and negative cash flows[179]. Marketing and Customer Acquisition - The company spent approximately $486,000 on advertising and marketing efforts in 2022 to enhance visibility and relationships with customers and partners[28]. - Attracting and retaining customers on cost-effective terms is critical for future revenue growth and profitability[96]. - The company plans to significantly increase spending on marketing and branding initiatives, which may adversely affect financial results[107]. - The company relies heavily on email marketing, and any restrictions on email delivery could materially harm business operations[106]. Employee and Management - The company had 27 full-time employees as of December 31, 2022, and considers its employee relations to be good[56]. - The management team has limited experience in managing a public company, which may divert attention from day-to-day operations[89]. Regulatory and Compliance Risks - Non-compliance with privacy laws could lead to claims and liabilities, adversely impacting business operations and customer relationships[71]. - The company does not currently consider itself a financial institution under federal laws, but potential regulatory changes could increase compliance costs and reduce net income[84]. - Certain states classify discount certificates and Dining Passes as gift cards, which may require remittance of unredeemed balances to the government after one to five years, impacting financial statements[69]. Market Conditions - Uncertainty in global economic conditions, particularly due to the COVID-19 pandemic, may adversely affect revenue and business operations[86]. - Economic downturns and reduced consumer spending could decrease demand for the company's digital dining products[87]. - Global inflation has increased costs for labor, food products, and services, which could adversely impact revenues and gross profit[88]. - Seasonal sales fluctuations could result in volatility and adversely affect the market price of the company's common stock[77]. Stock and Securities - The company's common stock is currently trading on the OTCQB Venture Market, with limited recent trading activity and no assurance of a more active market developing in the future[133]. - The stock price may be highly volatile, influenced by various factors including operating results and market conditions[137]. - Approximately 22% of the outstanding shares of common stock are beneficially owned by insiders, which may adversely affect the price of the stock[139]. - The company’s securities are classified as "Penny Stock," subjecting them to specific regulatory rules for transactions[128].