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 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]. - 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]. Revenue and Billing - 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 billings for the nine months ended September 30, 2025, were $111,178,068, an increase of 23.8% from $89,795,695 in the same period of 2024[158]. - The company experienced a significant increase in net revenue recognized as an agent, which rose by $873,157, or 191%, during the three months ended September 30, 2025, compared to the previous year[169]. 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 total operating expenses for the nine months ended September 30, 2025, were $19,417,659, down from $23,714,431 in 2024[194]. - Amortization of capitalized software costs decreased to $483,832 for the nine months ended September 30, 2025, from $935,766 in 2024[196]. - Amortization expenses for intangible assets were $1,686,328 for the nine months ended September 30, 2025, compared to $1,823,751 for the same period in 2024[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]. Business Developments - 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]. - The company has a customer database of 6.2 million, which is leveraged for various services and products[154]. Concerns and Risks - The company has faced operating losses and negative cash flows during 2024 and 2023, raising substantial doubt about its ability to continue as a going concern[162]. - The company is evaluating repayment options for a note payable principal balance of $1,750,000 due in December 2025, which may include private stock issuance and utilizing existing cash[206]. - The company has substantial doubt about its ability to continue as a going concern, as indicated by its negative working capital of $1,537,994 as of September 30, 2025[223]. - The company has been impacted by inflationary pressures, which may affect its operating costs and financial performance[159]. - The company experienced a decrease in stock-based compensation expense, which contributed to the reduction in net loss[201].
RDE Inc(RSTN) - 2025 Q3 - Quarterly Report