Revenue Performance - Revenue for the three months ended September 30, 2023, was $572,916, a decrease of approximately $251,831 or 31% compared to $824,747 in the same period of the prior year[107]. - Business to consumer (B2C) revenue decreased from $273,001 in Q3 2022 to $195,757 in Q3 2023, reflecting a decline of approximately 28.3%[107]. - Revenue for the nine months ended September 30, 2023, was $2,106,115, a decrease of approximately $1,289,566 or 38% compared to $3,395,681 in the same period of the prior year[116]. Cost and Expenses - Cost of revenues increased to $59,417 during Q3 2023, representing 10% of total revenue, up from 5% in Q3 2022[109]. - Cost of revenues decreased to $255,683 during the nine months ended September 30, 2023, compared to $637,096 during the same period in 2022, with cost of revenues as a percentage of revenue at 12% in 2023 versus 19% in 2022[119]. - Selling, general and administrative expenses were $669,386 in Q3 2023, a decrease of $646,330 from $1,315,716 in Q3 2022, primarily due to a $637,681 employee retention tax refund[111]. - Selling, general and administrative expenses were $4,273,187 during the nine months ended September 30, 2023, an increase of $45,421 from $4,227,766 in the same period of 2022[121]. Losses and Financial Challenges - The company incurred a loss from operations of $190,054 for Q3 2023, an improvement from a loss of $566,911 in Q3 2022[113]. - Net loss for Q3 2023 was $191,970, compared to a net loss of $596,342 in Q3 2022, reflecting reduced operating expenses[115]. - The company experienced a net loss of $2,457,522 during the nine months ended September 30, 2023, highlighting ongoing financial challenges[100]. - The company incurred a loss from operations of $2,422,755 for the nine months ended September 30, 2023, compared to a loss of $1,555,849 for the same period in 2022[123]. - The net loss for the nine months ended September 30, 2023, was $2,457,572, compared to a net loss of $517,851 for the same period in 2022[125]. Cash Flow and Financing - The company had cash of $2,613,868 available to fund operations as of September 30, 2023[100]. - Cash used in operating activities for the nine months ended September 30, 2023, was approximately $1,001,156, compared to $717,244 in the same period of 2022[130]. - Cash provided by financing activities for the nine months ended September 30, 2023, was $2,492,066, compared to $236,864 in the same period of 2022[135]. - As of September 30, 2023, the company had cash on hand of $2,613,868, with substantial doubt about its ability to continue as a going concern[126][128]. Debt and Loans - The total principal and accrued interest of convertible debt assumed upon reverse merger was $38,637 as of September 30, 2023[136]. - The Company received a total of $650,000 from two Economic Injury Disaster Loans (EIDL) in 2020 and 2021, and assumed an additional $14,500 EIDL on January 31, 2022[141]. - The loans have an interest rate of 3.75% per annum, with a combined repayment of principal and interest of $3,500 per month over 30 years[142]. - As of September 30, 2023, the note payable had a principal balance of $661,035 and accrued interest payable of $34,411[142]. Accounting Policies and Estimates - The Company follows U.S. GAAP and regularly evaluates key estimates and assumptions that could materially affect reported amounts[144]. - Significant estimates include reserves for uncollectible accounts and the valuation of stock instruments issued for services[144]. - There were no changes to critical accounting policies that impacted the condensed consolidated financial statements[144]. - Recent accounting pronouncements are discussed in Note 2 of the Notes to Condensed Financial Statements[145]. - A smaller reporting company is not required to provide market risk disclosures[146]. Mergers and Acquisitions - The company has entered into a merger agreement with CardCash Exchange, Inc. for a total consideration of $29.7 million, including $2 million in cash and 6,108,077 restricted shares[97]. Other Financial Activities - The company recorded no investing activities for the nine months ended September 30, 2023, compared to cash provided by investing activities of $12,805 in the same period of 2022[134]. - There were no off-balance sheet arrangements reported by the Company[143].
RDE Inc(RSTN) - 2023 Q3 - Quarterly Report