Financial Performance - For the three months ended June 30, 2024, net sales were $20,020,502, a decrease of approximately $1,071,155, or 5.1%, compared to $21,091,657 for the same period in 2023[128]. - Gross margin improved to 16.3% for the three months ended June 30, 2024, up from 12.4% in the prior year period, despite a decrease in sales[128]. - The company reported a net loss of $7,744,646 for the three months ended June 30, 2024, compared to a net loss of $686,657 for the same period in 2023, reflecting an increase in net loss due to higher operating costs and stock-based compensation[137]. - For the six months ended June 30, 2024, net sales were $41,542,396, a decrease of approximately $3,710,989, or 8.2%, from $45,253,385 in the same period in 2023, despite an increase in gross margin from 12.2% to 15.7%[141]. - The net loss for the six months ended June 30, 2024, was $10,935,366, compared to a net loss of $1,117,035 for the same period in 2023[150]. Expenses - Selling, general and administrative expenses increased to $9,832,270 for the three months ended June 30, 2024, from $2,835,513 in the prior year, primarily due to $6,214,545 in stock-based compensation expense[132]. - Selling, general and administrative expenses increased to $15,046,311 for the six months ended June 30, 2024, compared to $5,638,341 in the same period in 2023, primarily due to stock-based compensation and legal fees related to acquisitions[145]. - Other expenses amounted to $261,917 for the three months ended June 30, 2024, compared to $170,414 in the prior year, primarily consisting of interest expenses[136]. - Other expenses amounted to $509,518 for the six months ended June 30, 2024, compared to $352,308 in the prior year, primarily due to increased interest expenses[149]. Operational Losses - Loss from operations for the three months ended June 30, 2024, was $7,482,429, compared to a loss of $516,243 for the same period in 2023[135]. - The company incurred a loss from operations of $10,425,848 for the six months ended June 30, 2024, compared to a loss of $793,124 for the same period in 2023[148]. Cash Flow and Financing - Cash used in operating activities for the six months ended June 30, 2024 was approximately $2,341,031, compared to $437,725 for the same period in 2023, reflecting increased operational losses[169][170]. - Cash provided by financing activities for the six months ended June 30, 2024 was $3,354,563, significantly higher than $343,742 in the prior year, primarily from the private sale of common stock[173]. - The outstanding line of credit balance increased to $7,670,449 as of June 30, 2024, up from $6,737,385 at the end of 2023, with an average interest rate of 12%[174]. - The company has a history of reporting net losses and has financed its working capital through borrowings and equity sales[162][164]. - The company anticipates its cash balance will last until at least June 2025, but faces uncertainty in securing additional financing[163][165]. Working Capital and Going Concern - The company reported a working capital deficit of $1,133,903 as of June 30, 2024, raising concerns about its ability to continue as a going concern[121]. - As of June 30, 2024, the company reported cash of $4,663,623 and a working capital deficit of $1,037,619, indicating substantial doubt about its ability to continue as a going concern[163]. - The company’s ability to continue operations is contingent upon raising additional debt or equity capital to achieve sustainable revenues and profitability[164]. Acquisitions and Revenue Recognition - 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[108]. - The company recognized revenue in accordance with FASB ASC 606, primarily from the sale of merchant gift cards and discount certificates[156]. Customer Base - Restaurant.com serves over 7.8 million customers and connects them with over 182,500 restaurants and retailers nationwide[114]. - The B2C division accounted for 45% of gross revenue, while the B2B division accounted for 55% for the fiscal year ended December 31, 2023[115].
RDE Inc(RSTN) - 2024 Q2 - Quarterly Report