Financial Performance - Gross billings for the three months ended June 30, 2025, were $36,072,063, representing a 23.2% increase compared to $29,287,369 in the same period of 2024[152]. - Net sales for the three months ended June 30, 2025, were $20,900,731, up from $20,020,502 in 2024, indicating growth in revenue[168]. - The company reported a gross profit of $3,855,625 for the three months ended June 30, 2025, compared to $3,260,495 in 2024[168]. - The net loss for the three months ended June 30, 2025, was $2,589,809, a decrease from a net loss of $7,744,646 in the same period of 2024[168]. - Gross billings for the six months ended June 30, 2025, were $73,091,528, representing a 23.2% increase from $59,319,954 in 2024[183]. - Net sales for the six months ended June 30, 2025, were $43,177,744, an increase of 3.9% from $41,542,396 in 2024[186]. - Gross profit for the six months ended June 30, 2025, increased by $919,490, or 14.1%, with a gross margin of 17.2% compared to 15.7% in 2024[187]. - The net loss for the six months ended June 30, 2025, was $5,807,141, down from $10,935,366 in 2024, attributed to increased gross profit and decreased expenses[196]. - Modified EBITDA for the three months ended June 30, 2025, was $(150,236), an improvement from $(357,130) in 2024[182]. - For the six months ended June 30, 2025, the company reported a net loss of $5,807,141, an improvement from a net loss of $10,935,366 for the same period in 2024[199]. - Modified EBITDA for the six months ended June 30, 2025 was $(776,557), compared to $(1,015,119) for the same period in 2024, reflecting a reduction in losses[199]. Operational Challenges - The company experienced operating losses and negative cash flows during 2024 and 2023, raising concerns about its ability to continue as a going concern[156]. - Cash available to fund operations as of June 30, 2025, was $3,257,427, with a negative working capital of $1,710,474[154]. - The company had cash of $3,257,427 available as of June 30, 2025, with a negative working capital of $1,710,474, raising concerns about its ability to continue as a going concern[209]. - The company anticipates its cash balance will last until December 2025, indicating potential liquidity challenges ahead[209]. - The company is dependent on its ability to raise additional debt or equity capital to fund its business activities and achieve sustainable revenues[210]. Cost Management - Operating expenses for the three months ended June 30, 2025, were $6,433,149, down from $10,742,924 in 2024, primarily due to a decrease in stock-based compensation[172]. - The loss from operations for the three months ended June 30, 2025, was $2,577,524, significantly reduced from a loss of $7,482,429 in 2024[176]. Strategic Developments - The acquisition of Takeout7, Inc. on May 29, 2025, expanded the company's technology offerings to include comprehensive online ordering solutions for independent restaurants[136]. - The merger with CardCash Exchange Inc. was completed on December 29, 2023, enhancing the company's position in the gift card exchange market[137]. - The company has a customer database of 6.2 million, which is leveraged for various services and products, indicating strong market potential[148]. Cash Flow - Cash provided by operating activities for the six months ended June 30, 2025 was $289,951, a significant recovery from cash used of $(3,074,200) in the same period of 2024[214][216]. - Cash used in financing activities for the six months ended June 30, 2025 was $(1,443,909), primarily due to repayments of lines of credit and notes payable[219]. - The company has a revolving line of credit of up to $10,000,000, with an average interest rate of 12% as of June 30, 2025[221]. Revenue Recognition - The company recognized revenue in accordance with FASB ASC 606, primarily from the sale of merchant gift cards and discount certificates[201]. - The increase in net revenue recognized as an agent increased by $462,637, or 73%, during the three months ended June 30, 2025, compared to the prior year[163]. - Net sales for the three months ended June 30, 2025, were $20,900,731, an increase of 4.4% compared to $20,020,502 for the same period in 2024[169]. - Gross profit for the three months ended June 30, 2025, increased by $595,130, or 18.3%, with a gross margin of 18.4% compared to 16.3% in 2024[170]. Historical Performance - The company has a history of reporting net losses and has financed its working capital through borrowings and equity sales[208].
RDE Inc(RSTN) - 2025 Q2 - Quarterly Report