Financial Performance - For the three months ended March 31, 2024, net sales were $21,521,894, a decrease of approximately $2,639,834, or 10.9%, compared to $24,161,728 in the same period of 2023[126]. - The gross margin for the current year period improved to 15.1%, up from 12.1% in the prior year period, despite a decrease in sales[126]. - Operating expenses increased to $5,214,041 for the three months ended March 31, 2024, compared to $2,802,828 for the same period in 2023, reflecting an increase of $2,411,213[131]. - The loss from operations for the three months ended March 31, 2024, was $2,943,419, significantly higher than the loss of $276,881 for the same period in 2023[134]. - The company reported a net loss of $3,190,720 for the three months ended March 31, 2024, compared to a net loss of $430,378 for the same period in 2023, indicating an increase in net loss of approximately 642%[137]. - Modified EBITDA for the three months ended March 31, 2024, was $(657,439), a decrease from Modified EBITDA of $110,822 for the same period in 2023, reflecting a significant decline in operational performance[140]. Cash Flow and Working Capital - The company reported a working capital deficit of $228,112 as of March 31, 2024, with cash available for operations at $5,400,821[119]. - Cash used in operating activities for the three months ended March 31, 2024, was approximately $6,636, a stark contrast to cash provided by operating activities of $803,483 for the same period in 2023[154][156]. - Cash used for investing activities increased to $224,815 for the three months ended March 31, 2024, compared to $38,449 for the same period in 2023, indicating a rise in capital expenditures[158]. - Cash provided by financing activities was $1,532,535 for the three months ended March 31, 2024, primarily from proceeds of $2,709,000 on the private sale of common stock, after accounting for repayments[159]. - The company had cash of $5,400,821 available to fund operations as of March 31, 2024, with a working capital deficit of $228,112, raising concerns about its ability to continue as a going concern[149]. - The company anticipates its cash balance will last until at least March 2025, but there is substantial doubt about its ability to continue as a going concern without raising additional capital[149][150]. Debt and Financing - The outstanding line of credit balance was $6,060,920 as of March 31, 2024, down from $6,737,385 at December 31, 2023, reflecting ongoing debt management efforts[160]. - The company issued two-year promissory notes totaling $1,500,000 as partial consideration for the acquisition of CardCash, with specific repayment terms outlined[162]. - The company has a history of reporting net losses and has financed its working capital requirements through borrowings and equity sales, indicating reliance on external funding sources[148]. Business Operations - The B2C division accounted for 45% of gross revenue, while the B2B division accounted for 55% for the fiscal year ended December 31, 2023[113][115]. - Restaurant.com serves over 182,500 restaurants and retailers, connecting with over 7.8 million customers[112]. - The acquisition of CardCash Exchange, Inc. was completed for a total consideration of $26,682,000, including 6,108,007 shares of common stock valued at $24,432,000[106]. Going Concern - Management has expressed substantial doubt about the company's ability to continue as a going concern due to a history of net losses and negative operating cash flows[121].
RDE Inc(RSTN) - 2024 Q1 - Quarterly Report