Financial Performance - For the three months ended March 31, 2025, net sales were $22,277,013, an increase of 3.5% from $21,521,894 in the same period of 2024[145]. - CardCash's net sales for the three months ended March 31, 2025, were $21,867,114, up from $21,160,007 in 2024, reflecting a focus on improving gross margin[146]. - Gross profit for the three months ended March 31, 2025, was $3,581,636, compared to $3,257,276 in 2024, marking an increase of 9.9%[145]. - The gross margin for CardCash improved to 14.7% in Q1 2025 from 13.8% in Q1 2024, contributing to a gross profit increase of $285,850[149]. Operating Expenses - Operating expenses for the three months ended March 31, 2025, totaled $6,749,301, an increase from $6,200,695 in the same period of 2024[151]. - Selling, general and administrative expenses rose to $6,043,841 in Q1 2025, up by $829,800 from $5,214,041 in Q1 2024, driven by increased stock-based compensation and payroll expenses[152]. Net Loss - The company reported a net loss of $3,217,332 for the three months ended March 31, 2025, compared to a net loss of $3,190,720 in the same period of 2024[145]. - The company reported a net loss of $3,217,332 for the three months ended March 31, 2025, compared to a net loss of $3,190,720 for the same period in 2024, indicating a slight increase in net loss[158]. Cash Flow and Liquidity - The company had cash of $2,121,814 available to fund operations as of March 31, 2025, with a negative working capital of $2,075,999[138]. - Cash used in operating activities for the three months ended March 31, 2025, was approximately $1,448,924, a significant increase from $6,636 in the same period of 2024[178]. - The company anticipates its cash balance will last until approximately December 2025, raising substantial doubt about its ability to continue as a going concern[171]. Debt and Financing - Interest expense decreased to $209,571 in Q1 2025 from $247,301 in Q1 2024, attributed to reduced debt balances[156]. - The company entered into a secured promissory note with Real World Digital Assets LLC for $1,000,000 at an annual interest rate of 11.5%, maturing on December 31, 2025[186]. - As of March 31, 2025, the company had an outstanding principal balance of $750,000 on promissory notes related to the acquisition of CardCash, with accrued interest payable of $84,375[185]. - The company has a revolving line of credit with availability of up to $10,000,000, with an average interest rate of 12% as of March 31, 2025[183]. - The Company received a total of $650,000 in proceeds from the Covid-19 Economic Injury Disaster Loan (EIDL) Program, with amounts of $150,000 on June 17, 2020, $350,000 on July 14, 2021, and another $150,000 on July 21, 2020[187][188]. - The loans bear an interest rate of 3.75% per annum, with a combined repayment of principal and interest of $3,500 per month starting 12 months from the date of the promissory note over a period of 30 years[188]. - As of December 31, 2024, the note payable had a principal balance outstanding of $664,500 and accrued interest payable of $15,558[188]. - As of March 31, 2025, the note payable remained at a principal balance of $664,500, with accrued interest payable reduced to $8,638[189]. Off-Balance Sheet Arrangements - The Company did not have any off-balance sheet arrangements as of March 31, 2025, and December 31, 2024[190]. Regulatory Classification - The Company is classified as a smaller reporting company and is not required to provide certain market risk disclosures[191].
RDE Inc(RSTN) - 2025 Q1 - Quarterly Report