Financial Performance - The company reported net sales of $18,783,908 for the three months ended September 30, 2025, a decrease of 19.1% compared to $23,210,850 in the same period of 2024[158]. - Net sales for the three months ended September 30, 2025, were $18,783,908, a decrease of 19.1% compared to $23,210,850 in 2024[173]. - Net sales for the nine months ended September 30, 2025, were $61,961,652, a decrease of 4.3% from $64,753,246 in 2024[192]. - The net loss for the three months ended September 30, 2025, was $2,437,462, a significant improvement from a net loss of $4,061,152 in 2024[182]. - For the nine months ended September 30, 2025, the company incurred a net loss of $8,244,603, a decrease from a net loss of $14,996,518 for the same period in 2024, reflecting improved gross profit and reduced expenses[201]. Revenue and Profitability - Gross billings increased by 28.8% to $39,086,540 for the three months ended September 30, 2025, compared to $30,341,126 in the prior year[170]. - Gross profit increased by $756,928, or 25.3%, with a gross margin of 20.0% for the three months ended September 30, 2025, compared to 12.9% in 2024[174]. - Gross profit for the nine months ended September 30, 2025, increased by $1,676,418, or 17.6%, with a gross margin of 18.1% compared to 14.7% in 2024[193]. - Modified EBITDA for the three months ended September 30, 2025, was $(268,508), an improvement from $(669,169) in 2024[185]. - The company reported a Modified EBITDA of $(1,048,967) for the nine months ended September 30, 2025, compared to $(1,684,289) for the same period in 2024, indicating a reduction in operational losses[204]. Operating Expenses - Operating expenses decreased to $6,235,209 for the three months ended September 30, 2025, from $6,770,812 in 2024, primarily due to a reduction in stock-based compensation[175]. - Selling, general and administrative expenses for the nine months ended September 30, 2025, were $17,247,499, down from $20,954,914 in 2024, a decrease of $3,707,415[195]. - The company experienced a decrease in stock-based compensation expense, contributing to the overall reduction in losses[198]. Cash Flow and Liquidity - The company reported cash of $4,021,227 available for operations as of September 30, 2025, with a negative working capital of $1,537,994[160]. - Cash used in operating activities was $496,067 for the nine months ended September 30, 2025, significantly improved from $2,858,368 in the same period of 2024[214]. - As of September 30, 2025, the company had a cash balance of $4,021,227, which is expected to last until March 31, 2026[209]. Acquisitions and Mergers - The acquisition of Takeout7, Inc. on May 29, 2025, expanded the company's technology offerings to include end-to-end solutions for independent restaurants[142]. - The merger with CardCash Exchange Inc. was completed on December 29, 2023, enhancing the company's position in the gift card exchange market[143]. Concerns and Risks - The company has faced operating losses and negative cash flows during 2024 and 2023, raising concerns about its ability to continue as a going concern[162]. - The company has expressed substantial doubt about its ability to continue as a going concern due to ongoing operating losses and negative cash flows[223]. - Inflationary pressures have increased operating costs, which could adversely affect the company's revenues and gross profit if not mitigated[159]. Tax and Interest - The company recorded an income tax benefit of $144,860 for the three months ended September 30, 2025, compared to no benefit in 2024[181]. - The company recorded an income tax benefit of $434,076 for the nine months ended September 30, 2025, compared to no income tax benefit in the prior year[200]. - Interest expense, net, decreased to $484,362 for the nine months ended September 30, 2025, down from $790,471 in the same period of 2024, due to reduced debt balances[199]. Customer Base - The company has a customer database of 6.2 million, which is expected to provide value to merchants for various services and products[154].
RDE, Inc.(GIFT) - 2025 Q3 - Quarterly Report