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What changed in GIFTIFY, INC.'s 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of GIFTIFY, INC.'s 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+219 added−195 removedSource: 10-K (2024-04-09) vs 10-K (2023-03-07)

Top changes in GIFTIFY, INC.'s 2023 10-K

219 paragraphs added · 195 removed · 98 edited across 6 sections

Item 1. Business

Business — how the company describes what it does

27 edited+43 added−20 removed47 unchanged
Biggest changeAmong the companies that focus on the dining and savings category and certain of the subcategories in which we participate are the following: ● discount (e.g., Groupon.com, Entertainment.com); ● ratings and reviews communities (Zagat.com, TripAdvisor); ● restaurant listings (Yelp, Zomato and OpenTable); ● food content (Food Network, Food.com and Epicurious); ● eCommerce (Groupon, TravelZoo and Woot); and ● takeout and delivery (DoorDash.com, GrubHub.com UberEats.com and Delivery.com).
Biggest changeAmong the companies that focus on the dining and savings category and certain of the subcategories in which we participate are the following: ● discount (e.g., Groupon.com, Entertainment.com); ● ratings and reviews communities (Zagat.com, TripAdvisor); ● restaurant listings (Yelp, Zomato and OpenTable); ● food content (Food Network, Food.com and Epicurious); ● eCommerce (Groupon, TravelZoo and Woot); and ● takeout and delivery (DoorDash.com, GrubHub.com UberEats.com and Delivery.com). 6 We believe the principal competitive factors in our market include the following: ● breadth of customer base and number of restaurants featured; ● ability to deliver a high volume of relevant deals to consumers; ● ability to produce high purchase rates for deals among customers; ● ability to generate positive return on investment for merchants; and ● strength and recognition of our brand.
We sell certificates and Discount Dining Passes to corporations and marketers, which use them to: ● generate new customers; ● increase sales at the point of sale; ● reward points/customer loyalty; ● convert to paperless billing and auto-bill payment. ● motivate specific customer behavior such as free home repair estimates and test drives for auto dealers; ● renew subscriptions and memberships; and ● address customer service issues.
We sell certificates and Discount Dining Passes to corporations and marketers, which use them to: ● generate new customers; ● increase sales at the point of sale; ● reward points/customer loyalty; ● convert to paperless billing and auto-bill payment. 4 ● motivate specific customer behavior such as free home repair estimates and test drives for auto dealers; ● renew subscriptions and memberships; and ● address customer service issues.
Although we do not believe we are a financial institution or otherwise subject to these laws and regulations, it is possible that the Company could be considered a financial institution or provider of financial products. Intellectual Property We protect our intellectual property rights by relying on federal, state and common law rights, as well as contractual restrictions.
Although we do not believe we are a financial institution or otherwise subject to these laws and regulations, it is possible that the Company could be considered a financial institution or provider of financial products. 8 Intellectual Property We protect our intellectual property rights by relying on federal, state and common law rights, as well as contractual restrictions.
While we are attempting to comply with exemptions for promotional programs available under these laws so that our discount certificates’ and Discount Dining Passes’ promotional value can expire on the date stated on the certificate and Discount Pass, we continue to require that merchants with whom we partner honor discount certificates and Discount Dining Passes under the provisions of all laws applicable to discount certificates and Discount Dining Passes, including laws that prohibit expiration. 5 In addition, some states also include gift cards under their unclaimed and abandoned property laws which require companies to remit to the government the value of the unredeemed balance on the gift cards after a specified period of time (generally between one and five years) and impose certain reporting and recordkeeping obligations.
While we are attempting to comply with exemptions for promotional programs available under these laws so that our discount certificates’ and Discount Dining Passes’ promotional value can expire on the date stated on the certificate and Discount Pass, we continue to require that merchants with whom we partner honor discount certificates and Discount Dining Passes under the provisions of all laws applicable to discount certificates and Discount Dining Passes, including laws that prohibit expiration. 7 In addition, some states also include gift cards under their unclaimed and abandoned property laws which require companies to remit to the government the value of the unredeemed balance on the gift cards after a specified period of time (generally between one and five years) and impose certain reporting and recordkeeping obligations.
The average order value for these Specials sales is nearly five times a certificate purchase. Specials generated over 5% of our past year’s B2C revenue from 60% of the B2C orders for the fiscal year ended December 31, 2021. We believe that our relationships with small businesses presents a significant revenue opportunity through such cross-promotions.
The average order value for these Specials sales is nearly five times a certificate purchase. Specials generated over 5% of our past year’s B2C revenue from 60% of the B2C orders for the fiscal year ended December 31, 2023. We believe that our relationships with small businesses presents a significant revenue opportunity through such cross-promotions.
The emails for discount certificates for restaurant contain one headline deal with a full description of the deal and a sampling of dining deals which are available within a customer’s market. The emails for Specials by Restaurant.com include featured travel, entertainment and wine deals in addition to various other product deals. Websites.
The emails for discount certificates for restaurants contain one headline deal with a full description of the deal and a sampling of dining deals which are available within a customer’s market. The emails for Specials by Restaurant.com include featured travel, entertainment and wine deals in addition to various other product deals. 5 Websites.
Operations Our business operations are divided into the following core functions to address the needs of our merchants and customers. 3 Marketing.
Operations Our business operations are divided into the following core functions to address the needs of our merchants and customers. Marketing.
Our customer service representatives can be reached via email 24 hours a day, seven days a week. The customer service team also works with our information technology team to improve the customer experience on the website and mobile applications based on customer feedback. As of December 31, 2022, we employed four customer representatives. Technology.
Our customer service representatives can be reached via email 24 hours a day, seven days a week. The customer service team also works with our information technology team to improve the customer experience on the website and mobile applications based on customer feedback. As of December 2023, we employed four customer representatives. Technology.
Employees As of December 31, 2022, we had 27 full time employees. None of our employees or personnel is represented by a labor union, and we consider our employee/personnel relations to be good. Competition for qualified personnel in our industry is intense, particularly for software development and other technical staff.
Employees As of December 31, 2023, we had 64 full time employees. None of our employees or personnel is represented by a labor union, and we consider our employee/personnel relations to be good. Competition for qualified personnel in our industry is intense, particularly for software development and other technical staff.
Emerging Growth Company We are and we will remain an “emerging growth company” as defined under The Jumpstart Our Business Startups Act (the “JOBS Act”), until the earliest to occur of (i) the last day of the fiscal year during which our total annual revenues equal or exceed $1 billion (subject to adjustment for inflation), (ii) the last day of the fiscal year following the fifth anniversary of our initial public offering, (iii) the date on which we have, during the previous three-year period, issued more than $1 billion in non-convertible debt securities, or (iv) the date on which we are deemed a “large accelerated filer” (with at least $700 million in public float) under the Exchange Act.
Emerging Growth Company We are and we will remain an “emerging growth company” as defined under The Jumpstart Our Business Startups Act (the “JOBS Act”), until the earliest to occur of (i) the last day of the fiscal year during which our total annual revenues equal or exceed $1.235 billion (subject to adjustment for inflation), (ii) the last day of the fiscal year following the fifth anniversary of our initial public offering, (iii) the date on which we have, during the previous three-year period, issued more than $1 billion in non-convertible debt securities, or (iv) the date on which we are deemed a “large accelerated filer” (with at least $700 million in public float) under the Exchange Act. 9 As an “emerging growth company”, we may take advantage of specified reduced disclosure and other requirements that are otherwise applicable generally to public companies.
As of December 31, 2022, our Marketing team consisted of three employees.
As of December 31, 2023, our Marketing team consisted of three employees.
Business to Business Division Our B2B division accounted for 55% of our gross revenue in our fiscal year ended December 31, 2022.
Restaurant.com Business to Business Division Our B2B division accounted for 55% of our gross revenue in our fiscal year ended December 31, 2023.
ITEM 1. BUSINESS As used in this Annual Report, the terms “we,” “us,” “our,” and the “Company” refer to RDE, Inc., a Delaware corporation. RDE, Inc. owns and operates Restaurant.com. Restaurant.com is a pioneer in the restaurant deal space and the nation’s largest restaurant-focused digital deals brand.
ITEM 1. BUSINESS As used in this Annual Report, the terms “we,” “us,” “our,” and the “Company” refer to RDE, Inc., a Delaware corporation, and its consolidated subsidiaries. RDE, Inc. owns and operates Restaurant.com, a pioneer in the restaurant deal space and the nation’s largest restaurant-focused digital deals brand. Our profile fundamentally changed with the acquisition of CardCash Exchange, Inc.
We pursue the registration of our copyrights, trademarks, service marks and domain names in the United States and in certain locations outside the United States. Our registration efforts have focused on gaining protection of the following trademarks (among others): The Company owns the registered marks “RESTAURANT.COM,” “DINING DOUGH,” and has submitted applications for several others.
Our registration efforts have focused on gaining protection of the following trademarks (among others): The Company owns the registered marks “RESTAURANT.COM,” “DINING DOUGH,” and has submitted applications for several others.
Our website and mobile applications enable consumers to share our offerings with their personal social networks. We also promote our offerings using display advertising on websites. Offline. We use offline marketing such as print to help build awareness of brand. Distribution We distribute our deals directly through several platforms: email, our websites, our mobile applications and social networks.
We use offline marketing such as print to help build awareness of brand. Distribution We distribute our deals directly through several platforms: email, our websites, our mobile applications and social networks. We also utilize various affiliate partnerships to display and promote our deals on their websites, such as with AMAC, Groupon, MemberHub and others.
Any unauthorized disclosure or use of our intellectual property could make it more expensive to do business and harm our operating results. 6 Companies on the internet, social media technology and other industries may own large numbers of patents, copyrights and trademarks and may frequently request license agreements, threaten litigation or file suit against us based on allegations of infringement or other violations of intellectual property rights.
Companies on the internet, social media technology and other industries may own large numbers of patents, copyrights and trademarks and may frequently request license agreements, threaten litigation or file suit against us based on allegations of infringement or other violations of intellectual property rights.
We are choosing to take advantage of such extended transition period, and as a result, we will not comply with new or revised accounting standards on the relevant dates on which adoption of such standards is required for non-emerging growth companies. = Notwithstanding the above, we are also currently a “smaller reporting company”, meaning that we are not an investment company, an asset-backed issuer, or a majority-owned subsidiary of a parent company that is not a smaller reporting company and have a public float of less than $75 million and annual revenues of less than $50 million during the most recently completed fiscal year.
Notwithstanding the above, we are also currently a “smaller reporting company”, meaning that we are not an investment company, an asset-backed issuer, or a majority-owned subsidiary of a parent company that is not a smaller reporting company and have a public float of less than $75 million and annual revenues of less than $50 million during the most recently completed fiscal year.
Customers can access our offerings indirectly through third-party search engines. We use search engine optimization and search engine marketing to increase the visibility of our offerings in web search results. Email. We communicate offerings through email to our customers based on their locations and personal preferences.
We use a variety of marketing channels to make customers aware of the offerings, including search engines, email and affiliate partnerships and social media. Search engines. Customers can access our offerings indirectly through third-party search engines. We use search engine optimization and search engine marketing to increase the visibility of our offerings in web search results. Email.
As of December 31, 2022, our customer base was 7.8 million and during 2022 we featured deals at over 184,000 restaurants and merchants. 4 Although we believe we compete favorably on the factors described above, we anticipate that larger, more established companies may directly compete with us as we continue to demonstrate the viability of a local e-commerce business model.
Although we believe we compete favorably on the factors described above, we anticipate that larger, more established companies may directly compete with us as we continue to demonstrate the viability of a local e-commerce business model.
We have taken advantage of some of these reduced burdens, and thus the information we provide stockholders may be different from what you might receive from other public companies in which you hold shares. 7 In addition, Section 107 of the JOBS Act also provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards.
In addition, Section 107 of the JOBS Act also provides that an emerging growth company can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards.
A customer who interacts with an email is directed to our website and mobile applications to learn more about the deal and to make a purchase. Social. We publish offerings through various social networks and adapt our marketing to the particular format of each of these social networking platforms.
We communicate offerings through email to our customers based on their locations and personal preferences. A customer who interacts with an email is directed to our website and mobile applications to learn more about the deal and to make a purchase. Social.
To our database of 7.8 million customers, we sell: ● Discounted certificates for 12,500 restaurants. The certificates range from $5 to $100 and never expire. ● Discount Dining Passes, which provide discounts at 170,000 restaurants and other retailers.
Restaurant.com Business to Customer Division Our B2C division accounted for 45% of gross revenue in our fiscal year ended December 31, 2023. To our database of 6.2 million customers, we sell: ● Discounted certificates for 10,000 restaurants. The certificates range from $5 to $100 and never expire. ● Discount Dining Passes, which provide discounts at 170,000 restaurants and other retailers.
We control access to our proprietary technology by entering into confidentiality and invention assignment agreements with our employees and contractors, and confidentiality agreements with third parties. In addition to these contractual arrangements, we also rely on a combination of trade secrets, copyrights, trademarks, service marks, trade dress, domain names and patents to protect our intellectual property.
In addition to these contractual arrangements, we also rely on a combination of trade secrets, copyrights, trademarks, service marks, trade dress, domain names and patents to protect our intellectual property. We pursue the registration of our copyrights, trademarks, service marks and domain names in the United States and in certain locations outside the United States.
We believe we compete favorably on several of the factors described above and plan to increase our standing in each of these categories.
We believe we compete favorably on several of the factors described above and plan to increase our standing in each of these categories. As of December 31, 2023, our customer base was 6.2 million and during 2023 we featured deals at over 184,000 restaurants and merchants.
Other Business We also generate revenue through third-party offers and display ad revenue. This comprises a de minimis portion of our gross revenue.
Restaurant.com Other Business We also generate revenue through third-party offers and display ad revenue. This comprises a de minimis portion of our gross revenue. Restaurant.com Attractive Customer Demographics We intend to grow and leverage our customer database of 6.2 million which we believe is of value to merchants for a variety of services and products.
In 2022, we spent approximately $486,000 on advertising and marketing efforts to increase our visibility and establish stronger relationships with our customers, merchants and partners. We use a variety of marketing channels to make customers aware of the offerings, including search engines, email and affiliate partnerships and social media. Search engines.
Marketing We primarily use marketing to acquire and retain high-quality merchants and customers and promote awareness of our marketplaces. In 2023, for Restaurant.com we spent approximately $807,000 on advertising and marketing efforts to increase our visibility and establish stronger relationships with our customers, merchants and partners.
As of December 31, 2022 our information technology team consisted of five employees. Competition We have a substantial number of competing groups buying sites. These competitors offer substantially the same or similar product offerings as us.
These competitors offer substantially the same or similar product offerings as us.
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Founded in 1999, we connect digital consumers, businesses, and communities offering over 200,000 dining and merchant deal options nationwide at over 182,500 restaurants and retailers to over 7.8 million customers. Our 12,500 core restaurants and 170,000 Dining Discount Pass restaurants and retailers extend nationwide. Our top three B2C markets are New York, Chicago, and Los Angeles.
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(“CardCash”) in December 2023. CardCash buys merchant gift cards from the general public and distributors at a discount and then resells them at a markup. CardCash’s core service offering includes the buying and selling of gift cards from over 1,100 retailers including Target, Home Depot, Starbucks and TJ Maxx, among others.
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We earn revenue from transactions in which we sell discount certificates for restaurants and complementary entertainment and travel offerings and consumer products on behalf of third-party merchants.
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The acquisition and integration of the CardCash has changed our financial position, market profile and brand focus, and has also expanded our search for additional business opportunities in the short-term, both internal and external.
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Those complementary offerings and products transactions generally involve a customer’s purchase of a voucher through one of our websites that can be redeemed with a third-party merchant for services or goods (or for discounts on services and goods).
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We believe the CardCash acquisition added valuable attributes, including (1) CardCash’s brand awareness and acceptance from the consumer; and (2) experienced management. ● Brand awareness – CardCash was initially formed approximately 15 years ago, and we believe this history, along with strong marketing push along multiple front have led to strong consumer awareness and acceptance. ● Experienced management – As part of the CardCash acquisition, member of the executive leadership team of CardCash have joined us.
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Revenue from those transactions is reported on a net basis and equals the purchase price received from the customer for the voucher less an agreed upon portion of the purchase price paid to the merchant. Revenue also includes direct sales of our restaurant discount certificates on our website and is the purchase price received from the customer.
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Elliot Bohm, President of CardCash prior to the merger with RDE, remains as President of CardCash following the closing of the merger and has joined the Board of Directors of RDE. Marc Ackerman, Chief Operating Officer of CardCash prior to the merger with RDE, continues to serve as Chief Operating Officer of CardCash following the closing of the merger.
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We also earn revenue when online partners drive customers to our websites to purchase our discount certificates and complementary offerings and products, where the revenue equals the purchase price less an agreed upon portion paid to the partners. Approximately 9-13 days each month we email our customers offers for restaurant discounts experiences and products based on location and personal preferences.
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Merger with CardCash Exchange, Inc. On December 29, 2023, RDE, Inc. completed the acquisition of CardCash Exchange, Inc. (“CardCash”). The acquisition was made pursuant to a plan of merger agreement dated August 18, 2023, between RDE, and Elliott Bohn, in his capacity as stockholder representative for CardCash’s stockholders.
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Consumers also access our deals directly through our websites and mobile applications. A typical restaurant discount deal might offer a $25 discount that can be used toward a $50 purchase at a participating restaurant. Additional deals include discounted pricing at theatres, movies or other merchants. Customers purchase deals from us and redeem them with our merchant partners.
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The Company acquired all of the issued and outstanding equity interests of CardCash from CardCash’s stockholders for $26,682,000, made up of 6,108,007 shares of RDE’s common stock with a fair value of $24,432,000 or $4.00 per share, $750,000 in cash (including $250,000 advanced in October 2023), and the issuance of notes payable for $1,500,000. 1 Our Business We have two principal divisions, B2C and B2B, for both CardCash and for Restaurant.com.
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Through our websites, www.restaurant.com, www.specials.restaurant.com, and mobile iOS and Android apps, we provide an affordable dining and entertainment experiences.
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CardCash CardCash operates as a leading gift card exchange platform, facilitating the purchase and sale of unused gift cards at discounted rates for both consumers and businesses. The Company’s mission is to provide a seamless marketplace for individuals looking to maximize the value of their gift cards while also offering businesses innovative solutions to leverage this market.
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In addition to purchasing restaurant and discount certificates, entertainment and travel deals and consumer products as well as company gift card redemption, our website and mobile platform provide additional information to assist the customer and encourage return visits to our websites, including restaurant menus, entree pricing, mapping and directions, and extensive filtering options, including most popular cuisine type and “Deals Near Me” for nearby restaurants.
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CardCash’s core service offering includes the buying and selling of gift cards from over 1,100 retailers, such as Target, Home Depot, Starbucks and TJ Maxx, among others. By connecting buyers and sellers, CardCash enables consumers to unlock value from unused gift cards and save significant amounts on their purchases.
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Paperless restaurant certificate redemption and validation can also occur on our mobile platforms. In the past year, there were an average of 1.3 million unique visitors per month to our digital platforms including our mobile and Specials offerings.
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CardCash purchases unused gift cards at a value lower than their face worth and subsequently retails them at a discounted rate to discerning shoppers nationwide. This avenue not only allows individuals to obtain cash for their unneeded gift cards but also enables them to make cost-effective purchases through discounted gift cards.
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Since the launch of our mobile apps in 2012, mobile has grown from zero to 49% of our B2C revenue and over 60% of the B2C orders with over 6.0 million downloads of our apps for the year months ending December 31, 2022.
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With advanced fraud prevention technology, known as FraudFix, CardCash ensures the security and integrity of all transactions conducted on its platform. This commitment to trust and reliability has contributed to its success in saving consumers over $100 million since its inception.
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Restaurant.com’s B2B sales program has grown significantly since its introduction in 2004 and now comprises 40% of our revenue. Our high-value, low-cost features enable businesses to use Restaurant.com certificates to entice new and existing customers to increase sales, promote customer satisfaction and incent desired behavior.
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In addition to its consumer-focused operations, CardCash provides white-label solutions for brands, allowing them to integrate gift card exchange capabilities into their own platforms. Major retailers like Amazon, Best Buy, CVS and Dell have capitalized on these solutions to enhance their customer offerings and drive additional revenue streams through gift cards without compromising product value.
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The availability of use in every market, features like “never expire” and online exchange, and use by every customer demographic to fit every business’s customer base are features which we believe provide almost unlimited market potential for Restaurant.com’s B2B division.
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By fostering a mutually beneficial ecosystem, CardCash.com drives a scenario where consumers and businesses effortlessly trade unwanted gift cards while others access these cards at discounted rates, simultaneously benefiting merchants as unused gift cards are utilized to convert financial liabilities into revenue.
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Recent Mergers and Acquisitions Effective February 28, 2022, we closed the acquisition of GameIQ, Inc., a developer of consumer gamification technologies for retail businesses.
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Furthermore, CardCash facilitates Business-to-Business (B2B) exchanges, enabling companies to efficiently manage surplus gift card inventory and procure gift cards in bulk for various business needs. This service not only benefits businesses but also contributes to a thriving gift card market projected to reach $1.4 trillion by 2026. Moreover, CardCash is committed to social responsibility through partnerships with charitable organizations.
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Under the terms of the Agreement and Plan of Merger (the “Merger Agreement”), we agreed to issue 600,000 restricted shares of our common stock and issued promissory notes to Balazs Wellisch, President and co-founder, and Quentin Blackford, Director, of GameIQ, in the principal amounts of $78,813 and $62,101, respectively, bearing interest at 1% per annum, to repay loans by Mr.
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Initiatives like the collaboration with Charity On Top for fundraising efforts during natural disasters showcase CardCash’s dedication to giving back to the community. Partnerships with reputable institutions such as St.
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Wellisch and Mr. Blackford to GameIQ. Each note requires repayment in six equal biannual instalments, with the first instalment due on the six-month anniversary of the Closing Date as that term is defined in the Acquisition Agreement.
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Jude’s Research Hospital demonstrate CardCash’s commitment to supporting critical causes and making a positive impact. 2 Among its offerings, CardCash Incentives provides new gift cards for over 300 brands at discounted rates, catering to businesses seeking employee engagement and customer loyalty through customized gift card solutions.
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Following the merger, Balazs Wellisch became the Chief Technology Officer of Restaurant.com, a subsidiary of ours. 1 Our Business We have three principal divisions, the B2C, the B2B and all other services and products division. Business to Customer Division Our B2C division accounted for 45% of gross revenue in our fiscal year ended December 31, 2022.
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The recent introduction of the CardCash uChoose platform further enhances the Company’s portfolio by offering businesses the option to provide gift card choices from a wide selection of brands to recipients.
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Attractive Customer Demographics We intend to grow and leverage our customer database of 7.8 million which we believe is of value to merchants for a variety of services and products. 2 Marketing We primarily use marketing to acquire and retain high-quality merchants and customers and promote awareness of our marketplaces.
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Overall, CardCash’s multifaceted approach to the gift card market, coupled with its focus on innovation and social impact, positions the Company as a key player in the industry with a strategic vision for continued growth and success.
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We also utilize various affiliate partnerships to display and promote our deals on their websites, such as with AMAC, Groupon, MemberHub and others.
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CardCash Growth Plans CardCash intends to grow its current four business channels, bulk to bulk, bulk to retail, retail to bulk and retail to retail, to take advantage of the projected expansion by 2026 of the global market for gift cards to $1.4 trillion (see ““Business - Pending Acquisition – CardCash Exchange, Inc.”) as follows: ● Increase Access to Strategic Partnerships and Expanded Data .
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We believe the principal competitive factors in our market include the following: ● breadth of customer base and number of restaurants featured; ● ability to deliver a high volume of relevant deals to consumers; ● ability to produce high purchase rates for deals among customers; ● ability to generate positive return on investment for merchants; and ● strength and recognition of our brand.
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CardCash intends to transition from having its own online platform for both consumers and repeat high-volume sellers of gift cards to operating exchanges. CardCash currently operates approximately 25 branded exchanges.
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As an “emerging growth company”, we may take advantage of specified reduced disclosure and other requirements that are otherwise applicable generally to public companies.
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CardCash is focusing on three business growth concepts: Branded Exchange for Retailer Partnerships CardCash intends to increase the number of gift card exchanges on partner websites to send traffic to CardCash.com. CardCash launched its first branded exchange partnership with CVS Pharmacy in 2012 and experienced an increase in the amount of spending by both new and existing customers.
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In 2017, CardCash and Amazon launched a branded exchange which has grown to be CardCash’s most successful partnership to date. In 2023, Mastercard and Amazon led all CardCash branded exchanges with $1,800,000 and $1,900,000 in revenue, respectively.
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CardCash Checkout CardCash is developing the technology to allow retailers to accept any gift card, anywhere, at any time to reduce the combined interchange fee for businesses, result in new-found money for customers and increase the average amount purchased.
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CardCash profits by selling the card on the secondary market, the transaction is sourced from the point of checkout, and by not being on CardCash’s website, represents a perpetuating network.
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CardCash Giving The purpose of this concept is to allow consumers to pay for their retail purchases with gift cards and to have the charity of their choice receive a donation, thereby increasing the appeal of using CardCash at checkout.
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CardCash has developed this donation platform to allow customers to use the power of their shopping to support the charity of their choice. CardCash has an existing partnership with St. Jude Children’s Research Hospital that allows customers to spend gift cards anywhere they want while donating to cutting-edge medical research.
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The giving platform works by (i) CardCash negotiating 5% - 20% discounts on the gift cards, (ii) splitting that discount 70/30 with the charity and (iii) giving the retailer a tax write-off of 70%.
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Through CardCash’s platform, consumers can, for example, help families pay down student loan debt and contribute to research and awareness for childhood illnesses, improved heart health, etc. ● Increase Marketing Efforts . CardCash has spent only $807,031 in marketing its services or 0.9% of its gross revenues.
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CardCash intends to increase its marketing to retailers and consumers to accelerate its sales of gift cards. 3 ● Increase Profit Margins . CardCash intends to shift its cost structure to allow it to process scalable volumes of 4-5X its current number of gift cards with a very slight increase in cost.
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CardCash believes that a more efficient use of machine learning transaction processing with richer data from a strategic subset can empower it to scale its model to meet the needs of the gift card market.
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CardCash is seeking a strategic investment and collaboration, in addition to what it receives by its merger with RDE, to bring data synergy and higher margins from more reliable processing.
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While the bulk-to-bulk channel is expected to represent the largest contributor of CardCash’s sales in the years to come, the other three channels are projected to grow at a faster rate and account for an aggregate 50% of sales over the next two years.
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CardCash expects to drive top-line growth by adding new branded exchange partnerships that in turn are expected to generate more users and increase demand for other services. CardCash currently has a 13.3% gross margin for its four revenue streams combined.
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Of the four channels, retail-to-bulk has the highest margin at approximately 17%, while bulk-to-bulk has the lowest margins at approximately 10%. CardCash is working to improve its gross margin by switching to a more balanced and profitable sales channel breakdown. CardCash’s goal is to achieve gross margin of 15% in 2023 and 19% in 2024.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

27 edited+17 added−9 removed225 unchanged
Biggest changeWe may not be able to generate profitability on a quarterly or annual basis in the future. If our revenues grow more slowly than we anticipate, our gross margins fail to improve or our operating expenses exceed our expectations, our operating results will suffer. We do not have access to any credit facility or other arrangement for borrowing funds.
Biggest changeOur failure to increase our revenues or improve our gross margins will harm our business. We may not be able to generate profitability on a quarterly or annual basis in the future.
If we fail to present, or improperly present, our website’s information for use by natural search engine companies, or if any of these natural search engine companies determine we have violated their rules or guidelines, or if others improperly present our website’s information to these search engine companies, or if natural search engine companies make changes to their search algorithms, we may fail to achieve an optimum ranking in natural search engine listing results, or we may be penalized in a way that could harm our business, prospects, financial condition and results of operations. 16 More individuals are using mobile devices to access the internet and versions of our service developed or optimized for these devices may not gain widespread adoption by users of such devices.
If we fail to present, or improperly present, our website’s information for use by natural search engine companies, or if any of these natural search engine companies determine we have violated their rules or guidelines, or if others improperly present our website’s information to these search engine companies, or if natural search engine companies make changes to their search algorithms, we may fail to achieve an optimum ranking in natural search engine listing results, or we may be penalized in a way that could harm our business, prospects, financial condition and results of operations. 18 More individuals are using mobile devices to access the internet and versions of our service developed or optimized for these devices may not gain widespread adoption by users of such devices.
Moreover, government consumption or socio-economic policies or objectives pursued by countries in which we do business could potentially impact the demand for our discount dining certificates and discount Dining Passes. Global inflation also increased during 2021 and in 2022.
Moreover, government consumption or socio-economic policies or objectives pursued by countries in which we do business could potentially impact the demand for our discount dining certificates and discount Dining Passes. Global inflation also increased during 2022.
In the event that we become subject to the requirements of the Bank Secrecy Act or any other anti-money laundering law or regulation imposing obligations on us as a money services business, our regulatory compliance costs to meet these obligations would likely increase which could reduce our net income. 13 State laws regulating money transmission could be expanded to include our discount certificates and Discount Dining Passes.
In the event that we become subject to the requirements of the Bank Secrecy Act or any other anti-money laundering law or regulation imposing obligations on us as a money services business, our regulatory compliance costs to meet these obligations would likely increase which could reduce our net income. 15 State laws regulating money transmission could be expanded to include our discount certificates and Discount Dining Passes.
This may make it more difficult for Company’s shareholders to sell shares of our common stock. 22 Disclosure also has to be made about the risks of investing in penny stocks in both public offerings and in secondary trading and about the commissions payable to both the broker-dealer and the registered representative, current quotations for the securities and the rights and remedies available to an investor in cases of fraud in penny stock transactions.
This may make it more difficult for Company’s shareholders to sell shares of our common stock. 24 Disclosure also has to be made about the risks of investing in penny stocks in both public offerings and in secondary trading and about the commissions payable to both the broker-dealer and the registered representative, current quotations for the securities and the rights and remedies available to an investor in cases of fraud in penny stock transactions.
We may also elect to spend additional amounts on sponsored search or other forms of marketing from time to time to increase traffic to our website, or to take other actions to increase traffic and/or conversion, and the additional expenditures may have a material adverse effect on our financial results and business. 17 Our business depends on effective marketing, including marketing via email and social networking messaging, and we intend to increase our spending on marketing and branding, which may adversely affect our financial results.
We may also elect to spend additional amounts on sponsored search or other forms of marketing from time to time to increase traffic to our website, or to take other actions to increase traffic and/or conversion, and the additional expenditures may have a material adverse effect on our financial results and business. 19 Our business depends on effective marketing, including marketing via email and social networking messaging, and we intend to increase our spending on marketing and branding, which may adversely affect our financial results.
Any system interruptions that result in the unavailability of our website marketplaces or reduced performance of our transaction systems would reduce our transaction volume and the attractiveness of the services that we provide to suppliers and third parties and would harm our business, prospects, financial condition and results of operations. 18 We use internally developed systems for our website and certain aspects of transaction processing, including databases used for internal analytics and order verifications.
Any system interruptions that result in the unavailability of our website marketplaces or reduced performance of our transaction systems would reduce our transaction volume and the attractiveness of the services that we provide to suppliers and third parties and would harm our business, prospects, financial condition and results of operations. 20 We use internally developed systems for our website and certain aspects of transaction processing, including databases used for internal analytics and order verifications.
If the anticipated value of such equity-based incentive awards does not materialize, if our equity-based compensation otherwise ceases to be viewed as a valuable benefit or if our total compensation package is not viewed as competitive, our ability to attract, retain and motivate executives and key employees could be weakened. 15 The failure to successfully hire executives and key employees or the loss of any executives and key employees could have a significant impact on our operations.
If the anticipated value of such equity-based incentive awards does not materialize, if our equity-based compensation otherwise ceases to be viewed as a valuable benefit or if our total compensation package is not viewed as competitive, our ability to attract, retain and motivate executives and key employees could be weakened. 17 The failure to successfully hire executives and key employees or the loss of any executives and key employees could have a significant impact on our operations.
The stock market in general, and the market price of our common stock will likely be subject to fluctuation, whether due to, or irrespective of, our operating results, financial condition and prospects. 24 Our financial performance, our industry’s overall performance, changing consumer preferences, technologies, government regulatory action, tax laws and market conditions in general could have a significant impact on the future market price of our common stock.
The stock market in general, and the market price of our common stock will likely be subject to fluctuation, whether due to, or irrespective of, our operating results, financial condition and prospects. 26 Our financial performance, our industry’s overall performance, changing consumer preferences, technologies, government regulatory action, tax laws and market conditions in general could have a significant impact on the future market price of our common stock.
Failure to comply with such laws and regulations could result in significant penalties. 19 The 26 adoption of tax reform policies, including the enactment of legislation or regulations implementing changes in the tax treatment of companies engaged in Internet commerce or the U.S. taxation of international business activities could materially affect our financial position and results of operations.
Failure to comply with such laws and regulations could result in significant penalties. 21 The 26 adoption of tax reform policies, including the enactment of legislation or regulations implementing changes in the tax treatment of companies engaged in Internet commerce or the U.S. taxation of international business activities could materially affect our financial position and results of operations.
In addition, our margins and profitability may depend on our inventory mix, geographic revenue mix, discount rates mix and merchant and third-party business partner pricing terms. Accordingly, our operating results and profitability may vary significantly from quarter to quarter. 21 If we fail to retain our existing customers or acquire new customers, our operating results and business will be harmed.
In addition, our margins and profitability may depend on our inventory mix, geographic revenue mix, discount rates mix and merchant and third-party business partner pricing terms. Accordingly, our operating results and profitability may vary significantly from quarter to quarter. 23 If we fail to retain our existing customers or acquire new customers, our operating results and business will be harmed.
In particular, these new obligations will require substantial attention from our senior management and could divert their attention away from the day-to-day management of our business, which could materially and adversely impact our business operations. 14 Our ability to raise capital in the future may be limited, and our failure to raise capital when needed could prevent us from growing.
In particular, these new obligations will require substantial attention from our senior management and could divert their attention away from the day-to-day management of our business, which could materially and adversely impact our business operations. 16 Our ability to raise capital in the future may be limited, and our failure to raise capital when needed could prevent us from growing.
Our officers and directors beneficially own approximately 22% of our outstanding shares of common stock. Such concentrated control may adversely affect the price of our common stock. Investors who acquire common stock may have no effective voice in our management since the insiders will have the ability to influence us through this ownership position.
Our officers and directors beneficially own approximately 24% of our outstanding shares of common stock. Such concentrated control may adversely affect the price of our common stock. Investors who acquire common stock may have no effective voice in our management since the insiders will have the ability to influence us through this ownership position.
Actual losses for which we are not insured or indemnified, or which exceed our insurance coverage or the capacity of our indemnitors or our ability to enforce our indemnity agreements, could have a material adverse effect on our business. 20 Our operating results may vary significantly from quarter to quarter.
Actual losses for which we are not insured or indemnified, or which exceed our insurance coverage or the capacity of our indemnitors or our ability to enforce our indemnity agreements, could have a material adverse effect on our business. 22 Our operating results may vary significantly from quarter to quarter.
These outages and delays could reduce the level of internet usage generally as well as the level of usage of our services, which could adversely impact our business. 11 Our total number of customers may be higher than the number of our actual individual customers and may not be representative of the number of persons who are active potential customers.
These outages and delays could reduce the level of internet usage generally as well as the level of usage of our services, which could adversely impact our business. 13 Our total number of customers may be higher than the number of our actual individual customers and may not be representative of the number of persons who are active potential customers.
The regulation of these cookies and other current online advertising practices could adversely affect our business. 10 We may suffer liability as a result of information retrieved from or transmitted over the internet and claims related to our service offerings.
The regulation of these cookies and other current online advertising practices could adversely affect our business. 12 We may suffer liability as a result of information retrieved from or transmitted over the internet and claims related to our service offerings.
Any such loss of confidence would have a negative effect on the trading price of our stock. 23 The price of our common stock may become volatile, which could lead to losses by investors and costly securities litigation.
Any such loss of confidence would have a negative effect on the trading price of our stock. 25 The price of our common stock may become volatile, which could lead to losses by investors and costly securities litigation.
If we are required to materially increase the estimated liability recorded in our financial statements with respect to unredeemed discount certificates and Discount Dining Passes, our net income could be materially and adversely affected. 9 If we are required to materially increase the estimated liability recorded in our financial statements with respect to unredeemed discounts and Discount Dining Passes, our net income could be materially and adversely affected.
If we are required to materially increase the estimated liability recorded in our financial statements with respect to unredeemed discount certificates and Discount Dining Passes, our net income could be materially and adversely affected. 11 If we are required to materially increase the estimated liability recorded in our financial statements with respect to unredeemed discounts and Discount Dining Passes, our net income could be materially and adversely affected.
Our restaurants and merchants could also request reimbursement, or stop using us, if they are affected by buyer fraud or other types of fraud. 12 We may incur significant losses from fraud and counterfeit certificates.
Our restaurants and merchants could also request reimbursement, or stop using us, if they are affected by buyer fraud or other types of fraud. 14 We may incur significant losses from fraud and counterfeit certificates.
ITEM 1A. RISK FACTORS Risks Related to Our Company and Our Business We have a history of annual net losses which may continue and which may negatively impact our ability to achieve our business objectives, and we received a going concern qualification in our 2022 and 2021 audits.
ITEM 1A. RISK FACTORS Risks Related to Our Company and Our Business There is substantial doubt about our ability to continue as a going concern. We have a history of annual net losses which may continue and which may negatively impact our ability to achieve our business objectives, and we received a going concern qualification in our 2023 audit.
In addition, negative publicity and subscriber sentiment generated as a result of fraudulent or deceptive conduct by our restaurants and other merchants could damage our reputation, reduce our ability to attract new customers or retain our current customers, and diminish the value of our brand. 8 We may be subject to additional unexpected regulation which could increase our costs or otherwise harm our business.
In addition, negative publicity and subscriber sentiment generated as a result of fraudulent or deceptive conduct by our restaurants and other merchants could damage our reputation, reduce our ability to attract new customers or retain our current customers, and diminish the value of our brand.
Our business depends on our reputation for providing high-quality discounts, and our brand and reputation may be harmed by actions taken by restaurants and other merchants that are outside our control.
If our restaurants and other merchants do not meet the needs and expectations of our customers, our business could suffer. Our business depends on our reputation for providing high-quality discounts, and our brand and reputation may be harmed by actions taken by restaurants and other merchants that are outside our control.
These include laws and regulations such as the Credit Card Accountability Responsibility and Disclosure Act of 2009, or the CARD Act, and unclaimed and abandoned property laws.
In addition, the application of certain laws and regulations to our discount certificates and dining cards is uncertain. These include laws and regulations such as the Credit Card Accountability Responsibility and Disclosure Act of 2009, or the CARD Act, and unclaimed and abandoned property laws.
While we have an employment agreement with Ketan Thakker, Messrs. Horowitz, Mrazek, Miller and Nason are at-will employees without employment agreements. Mr. Thakker’s employment agreement does not prevent him from terminating his employment with us at any time. As a result, these executives may elect to pursue other opportunities at any time.
Thakker’s employment agreement does not prevent him from terminating his employment with us at any time. As a result, these executives may elect to pursue other opportunities at any time.
Our independent registered public accounting firm, in their report to our December 31, 2022 and 2021 financial statements, expressed substantial doubt about our ability to continue as a going concern due to our recurring losses from operations, negative cash flows from operations, net capital deficiency and inability to service debt as it becomes due.
Our independent registered public accounting firm, in their report to our December 31, 2023, financial statements, expressed substantial doubt about our ability to continue as a going concern due to our recurring losses from operations. There can be no assurance that our future operations will result in net income.
An essential part of our success depends on restaurants remaining in business and customers wanting to dine at those restaurants.
An essential part of our success depends on restaurants remaining in business and customers wanting to dine at those restaurants. The COVID-19 outbreak caused restaurants in many states to have to close temporarily and a similar pandemic in the future could negatively impact sales and our overall liquidity.
We depend substantially on the continued services, specialized knowledge and performance of our senior management, particularly Ketan Thakker, our President and CEO, Aaron Horowitz, President of Restaurant.com, Lisa Nason, Director of Marketing at Restaurant.com, Tim Miller, Vice President, Enterprise B2B Sales at Restaurant.com and Tim Mrazek, Vice President, Information Technology at Restaurant.com.
We depend substantially on the continued services, specialized knowledge and performance of our senior management, particularly Ketan Thakker, our President and CEO, Elliot Bohm, Chief Executive Officer of our subsidiary, CardCash, and Marc Ackerman, Chief Operating Officer of our subsidiary, CardCash, and Balazs Wallisch Chief Technology Officer at Restaurant.com. Mr.
Removed
For the year ended December 31, 2022, we used net cash of $1,053,571 to fund our operations and realized an operating loss of $2,286,846. At December 31, 2022, we had stockholders’ deficiency of $3,049,107. Our accumulated deficit was $61,569,759 through December 31, 2022. Our debt service obligation is $3,323 per month for outstanding loans.
Added
For the year ended December 31, 2023, we recorded a loss from operations of $8,100,406 and used cash in operating activities of $541,791. At December 31, 2023, our cash and cash equivalents balance was $4,099,737.
Removed
For the next 12 months we will need approximately $600,000 to finance our operations and service our debt obligations.
Added
At December 31, 2023, the outstanding balance on our line of credit facility was $6,737,385, we had $2,294,779 outstanding in promissory notes, and $40,137 of convertible notes payable, including interest, were past due.
Removed
As of December 31, 2022, $37,137 of convertible notes payable, including interest, are past due. There can be no assurance that our future operations will result in net income. Our failure to increase our revenues or improve our gross margins will harm our business.
Added
If our revenues grow more slowly than we anticipate, our gross margins fail to improve or our operating expenses exceed our expectations, our operating results will suffer. 10 If CardCash is not able to achieve profitability within the next few years, our shareholders will have experienced unnecessary dilution, and our ability to achieve our business plan could be significantly delayed or threatened.
Removed
We currently do not have access to a credit facility or to the proceeds of any mortgage indebtedness or other secured or unsecured indebtedness for borrowed money. We may be unable to obtain financing on favorable terms, or at all.
Added
CardCash has had a history of net operating losses since its inception. For the years ended December 31, 2023 and 2022, CardCash had operating losses of $3,080,406 and $5,600,348, respectively.
Removed
Our lack of any credit facility or other ready access to borrowed funds could have a material adverse effect on our ability to fund additional losses in the near future, or to respond to unexpected cash requirements or other liquidity issues that we may face from time to time.
Added
Our business plan contemplates our growth in gross and net revenues to increase our share price and to facilitate accretive acquisitions of ecommerce companies so the inability of CardCash to be profitable could delay or thwart our efforts to achieve our business goals.
Removed
Our inability to generate sufficient cash flow from operations or obtain financing on acceptable terms would have a material adverse effect on our financial results, business and prospects. If our restaurants and other merchants do not meet the needs and expectations of our customers, our business could suffer.
Added
The principal risks to CardCash achieving profitability are (i) feasibility of the Company’s expense management activities, (ii) government regulations, including the Card Act, privacy concerns and oversight of financial institutions and money transmitters as set forth in the risk factors below, (iii) new competitors, (iv) liability for claims relating to service offerings and branded exchanges, (v) maintaining its network infrastructure as set forth below, (vi) preventing security breaches as set forth below, (vii) limiting fraudulent transactions and chargebacks on gift cards, (viii) payment related risks as set forth below, (ix) overcoming the limited experience of principals in operating a public company, (x) the potential loss of key executives as set forth below, and (xi) future pandemics.
Removed
In light of the COVID-19 outbreak, restaurants in many states have had to close temporarily and even when allowed to reopen may be subject to restrictions on indoor as well as outdoor dining, the number of patrons who can be seated at one time to ensure social distancing as well as the requirement to wear masks which some diners may not want to do.
Added
We have identified material weaknesses in our disclosure controls and procedures and internal control over financial reporting. Maintaining effective internal control over financial reporting and effective disclosure controls and procedures are necessary for us to produce reliable financial statements.
Removed
Many prospective diners also may not want to dine out at any restaurant in light of concerns about the risk of infection from the COVID-19 virus even if allowed under current state guidelines to do so.
Added
We have evaluated our internal control over financial reporting and our disclosure controls and procedures and concluded that they were not effective as of December 31, 2023.
Removed
As a result of the uncertainty about the length of time until a vaccine would be available to the U.S. population as a whole, we expect the COVID-19 outbreak to negatively impact sales in fiscal years 2023 and our overall liquidity. In addition, the application of certain laws and regulations to our discount certificates and dining cards is uncertain.
Added
A material weakness is defined as a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis.
Added
The material weaknesses identified include (i) we had inadequate segregation of duties consistent with control objectives.
Added
Specifically, certain personnel have the ability to both (i) create and post journal entries within our general ledger system and (ii) prepare and review account reconciliations; and (ii) we did not design and maintain effective controls over certain information technology (“IT”) general controls for information systems that are relevant to the preparation of our consolidated financial statements.
Added
Specifically, we did not design and maintain effective program change management controls to ensure that information technology program and data changes affecting certain financial IT applications and underlying accounting records are identified, tested, authorized and implemented appropriately. The Company is committed to remediating its material weaknesses as promptly as possible.
Added
Implementation of the Company’s remediation plans has commenced and is being overseen by the board. However, there can be no assurance as to when these material weaknesses will be remediated or that additional material weaknesses will not arise in the future.
Added
Even effective internal control can provide only reasonable assurance with respect to the preparation and fair presentation of financial statements.
Added
Any failure to remediate the material weaknesses, or the development of new material weaknesses in our internal control over financial reporting, could result in material misstatements in our financial statements, which in turn could have a material adverse effect on our financial condition and the trading price of our common stock and we could fail to meet our financial reporting obligations.
Added
We have identified weaknesses in our internal controls, and we cannot provide assurances that these weaknesses will be effectively remediated or that additional material weaknesses will not occur in the future.
Added
If not remediated, our failure to establish and maintain effective disclosure controls and procedures and internal control over financial reporting could result in material misstatements in our financial statements and a failure to meet our reporting and financial obligations, each of which could have a material adverse effect on our financial condition and the trading price of our common We may be subject to additional unexpected regulation which could increase our costs or otherwise harm our business.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeITEM 2. PROPERTIES Our principal executive offices are located at 1500 West Shure Drive, Suite 200, Arlington Heights, IL 60004 and consist of approximately 4,000 square feet. We currently lease such facility for $7,500 per month and our lease has a lease escalation clause under which has 3% in each the three years. The lease expires on June 30, 2023.
Biggest changeITEM 2. PROPERTIES Our principal executive offices, including Restaurant.com, are located at 1100 Woodfield Road, Suite 510, Schaumberg, IL 60173 and consists of approximately 7,850 square feet. The corresponding lease was executed in April 2023 for a term of 36 months and an average base rent of approximately $7,500 per month.
Removed
We also had an office lease at Lakeside Corporate Court, 5880 Live Oak Parkway, Suite 100, Norcross, Georgia 30093. The lease is for 2,475 rentable square feet and expires August 1, 2024. The monthly lease expense commenced at $1,000 for the first year and rises to $2,900 per month in the fifth year of the lease.
Added
In July 2018, CardCash signed a lease for its office located in Woodbridge , New Jersey. The lease has a term of 70 months through April 2024, and an average base rent of approximately $17,000 per month.
Removed
This lease was terminated in December 2022. As we expand, we will need to find suitable additional space, which we believe is available on commercially reasonable terms for Restaurant.com. We do not own any real estate.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeCurrently, there are no such legal proceedings that are pending against the Company or that involve the Company that, in the opinion of management, could reasonably be expected to have a material adverse effect on the Company’s business or financial condition, other than the following.
Biggest changeCurrently, there are no such legal proceedings that are pending against the Company or that involve the Company that, in the opinion of management, could reasonably be expected to have a material adverse effect on the Company’s business or financial condition.
Removed
On April 17, 2019, a lawsuit was filed by Dupree Productions, LLC against uBid Holdings, Inc. and Ketan Thakker (Case No.
Removed
L2019000436) in the Circuit Court of DuPage County, Illinois, alleging that a Partial Equity Payment Agreement dated August 1, 2016, which was intended to compensate services in the amount of $60,000 in return for shares of uBid common stock, was inadequate to compensate for the alleged higher value of advertising and endorsement services of approximately $195,000.
Removed
The case was dismissed on the basis that there was a binding arbitration clause in the Partial Equity Payment Agreement. On February 3, 2021, the arbitrator awarded DuPree Productions $195,000, and $24,000 in attorneys’ fees, which was included in accrued expenses in the consolidated balance sheets as of December 31, 2021. The Company filed an appeal of the arbitrator’s award.
Removed
On January 28, 2022, a final settlement of $150,000 was reached, which was paid on May 9, 2022. Since final settlement was $69,000 less than the amount accrued by the Company, a gain on legal settlement of $69,000 was recognized in the statements of operations during the year ended December 31, 2022. ITEM 4.
Removed
MINE SAFETY DISCLOSURES Not applicable. 25 PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeFrom April 17, 2020 to September 25, 2020, our common stock was quoted on the OTC:Pink under the symbol UBID and prior thereto under the symbol QMKR. The following table sets forth the high and low bid closing prices for our common stock for the periods indicated, as reported by the OTC Pink and the OTC:QB.
Biggest changeMarket Information Our common stock has been quoted on the OTC:QB under the symbol RSTN since September 25, 2020. From April 17, 2020 to September 25, 2020, our common stock was quoted on the OTC:Pink under the symbol UBID and prior thereto under the symbol QMKR.
Plan Number of Securities to be issued upon exercise of vested Options, Warrants and Rights Weighted Average Exercise Price of Outstanding Options, Warrants and Rights Number of Securities remaining available for issuance under equity compensation plans (excluding securities reflected in column (a)) Category (a) (b) I Equity Compensation Plans (1) Approved by Security Holders 2019 Plan 648,116 $ 4.59 39,351,884 (1) The only equity compensation plan approved by security holders is our 2019 Stock Incentive Plan.
Plan Number of Securities to be issued upon exercise of vested Options, Warrants and Rights Weighted Average Exercise Price of Outstanding Options, Warrants and Rights Number of Securities remaining available for issuance under equity compensation plans (excluding securities reflected in column (a)) Category (a) (b) I Equity Compensation Plans (1) Approved by Security Holders 2019 Plan 743,116 $ 4.43 39,256,884 (1) The only equity compensation plan approved by security holders is our 2019 Stock Incentive Plan.
There are 40 million authorized shares under the 2019 Stock Incentive Plan. Purchases of Equity Securities by the Issuer and Affiliated Purchasers None. ITEM 6. SELECTED FINANCIAL DATA Not applicable.
There are 40 million authorized shares under the 2019 Stock Incentive Plan. Purchases of Equity Securities by the Issuer and Affiliated Purchasers None.
High Low Year Ending December 31, 2022 October 1, 2022 through December 31, 2022 $ 3.00 $ 1.42 July 1, 2022 through September 30, 2022 $ 3.20 $ 0.20 April 1, 2022 through June 30, 2022 $ 1.61 $ 0.40 January 1, 2022 through March 31, 2022 $ 1.10 $ 0.35 Year Ending December 31, 2021 October 1, 2021 through December 31, 2021 $ 1.75 $ 0.39 July 1, 2021 through September 30, 2021 $ 2.72 $ 1.75 April 1, 2021 through June 30, 2021 $ 3.70 $ 1.93 January 1, 2021 through March 31, 2021 $ 4.50 $ 3.80 Holders As of December 31, 2022, there were 1,196 holders of record of our common stock.
High Low Year Ending December 31, 2023 October 1, 2023 through December 31, 2023 $ 4.45 $ 3.15 July 1, 2023 through September 30, 2023 $ 4.60 $ 2.97 April 1, 2023 through June 30, 2023 $ 3.70 $ 2.88 January 1, 2023 through March 31, 2023 $ 3.39 $ 1.35 Year Ending December 31, 2022 October 1, 2022 through December 31, 2022 $ 3.00 $ 1.42 July 1, 2022 through September 30, 2022 $ 3.20 $ 0.20 April 1, 2022 through June 30, 2022 $ 1.61 $ 0.40 January 1, 2022 through March 31, 2022 $ 1.10 $ 0.35 Holders As of December 31, 2023, there were 1,621 holders of record of our common stock.
The decision whether to pay cash dividends on our common stock will be made by our board of directors, in their discretion, and will depend on our financial condition, results of operations, capital requirements and other factors that our board of directors considers significant. 26 Securities Authorized for Issuance under Equity Compensation Plans The following table provides information about the common stock that may be issued upon the exercise of options, warrants and rights under all of the Company’s existing equity compensation plans as of December 31, 2022.
The decision whether to pay cash dividends on our common stock will be made by our board of directors, in their discretion, and will depend on our financial condition, results of operations, capital requirements and other factors that our board of directors considers significant.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Recent Sales of Unregistered Securities During 2022, we sold 100,000 shares of our common stock for $250,000 an investor under the terms of our Form 1-A Offering Circular for our Tier 2 offering under SEC Rule 251.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Recent Sales of Unregistered Securities Subsequent to December 31, 2023, the Company received net proceeds of $2,809,000 for the sale of 1,404,500 shares of common stock at $2.00 per share, as part of a private placement.
The quotations reflect inter-dealer prices, without retail mark-up, mark-down or commission.
The following table sets forth the high and low bid closing prices for our common stock for the periods indicated, as reported by the OTC Pink and the OTC:QB. The quotations reflect inter-dealer prices, without retail mark-up, mark-down or commission.
Removed
The proceeds of such sale were used for general corporate purposes, including marketing, sales, operations and accounting and legal expenses. Market Information Our common stock has been quoted on the OTC:QB under the symbol RSTN since September 25, 2020.
Added
Securities Authorized for Issuance under Equity Compensation Plans The following table provides information about the common stock that may be issued upon the exercise of options, warrants and rights under all of the Company’s existing equity compensation plans as of December 31, 2023.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

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Biggest changeSelling, General and Administrative Expenses Selling, general and administrative expenses consist of costs incurred to identify, communicate with and evaluate potential customers and related business opportunities, and compensation to officers and directors, as well as legal and other professional fees, lease expense, and other general corporate expenses.
Biggest changeSuccessor Cost of sales for the period December 30, 2023 to December 31, 2023, were $418,350, and were related to our Successor sales discussed above. 33 Operating Expenses Selling, General and Administrative Expenses Successor Predecessor December 30, 2023 to December 31, January 1, 2023 to December 29, Year Ended December 31, 2023 2023 2022 Selling, general and administrative expenses $ 5,086,510 $ 11,152,428 $ 11,268,508 Selling, general and administrative expenses consist of costs incurred to identify, communicate with and evaluate potential customers and related business opportunities, and compensation to officers and directors, as well as legal and other professional fees, lease expense, and other general corporate expenses.
On July 21, 2020, the Company received an additional $150,000 of proceeds applicable to loans administered by the SBA as disaster loan assistance under the Covid-19 EIDL Program. On July 14, 2021, the Company received an additional $350,000 of proceeds pursuant to the loan.
On July 14, 2021, the Company received an additional $350,000 of proceeds pursuant to the loan. On July 21, 2020, the Company received $150,000 of proceeds applicable to loans administered by the SBA as disaster loan assistance under the Covid-19 EIDL Program.
The Company’s independent registered public accounting firm, in its report on the Company’s consolidated financial statements for the year ended December 31, 2022, has also expressed substantial doubt about the Company’s ability to continue as a going concern. The Company’s consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
The Company’s independent registered public accounting firm, in its report on the Company’s consolidated financial statements for the year ended December 31, 2023, has also expressed substantial doubt about the Company’s ability to continue as a going concern. The Company’s consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Critical Accounting Policies and Estimates The following discussion and analysis of financial condition and results of operations is based upon the Company’s consolidated financial statements for the years ended December 31, 2022 and 2021 presented elsewhere in this report, which have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”).
Critical Accounting Policies and Estimates The following discussion and analysis of financial condition and results of operations is based upon the Company’s consolidated financial statements for the years ended December 31, 2023 and 2022 presented elsewhere in this report, which have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”).
Our consolidated financial statements have been presented on the basis that it will continue as a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. We have experienced operating losses and negative operating cash flows during 2022 and 2021.
Our consolidated financial statements have been presented on the basis that it will continue as a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. We have experienced operating losses and negative operating cash flows during 2023 and 2022.
The outbreak has negatively impacted our revenues as a result of the temporary closures of restaurants throughout the United States where our discount certificates and Discount Dining Passes are accepted and where dining is being restricted to outdoor locations or to capacity constraints for indoor dining.
The outbreak has negatively impacted our revenues as a result of the temporary closures of restaurants throughout the United States where our discount certificates and Discount Dining Passes were accepted and where dining was being restricted to outdoor locations or to capacity constraints for indoor dining.
In March 2020, the World Health Organization declared COVID-19 a global pandemic. This contagious disease outbreak, which has continued to spread, and the related adverse public health developments, have adversely affected work forces, economies and financial markets globally.
In March 2020, the World Health Organization declared COVID-19 a global pandemic. This contagious disease outbreak, adversely affected work forces, economies and financial markets globally.
The loans bear interest at 3.75% per annum, with a combined repayment of principal and interest of $3,500 per month beginning 12 months from the date of the promissory note over a period of 30 years. During the year ended December 31, 2022, the Company made principal payments of $3,465.
The loans bear interest at 3.75% per annum, with a combined repayment of principal and interest of $3,500 per month beginning 12 months from the date of the promissory note over a period of 30 years. As of December 31, 2023, the note payable had a principal balance outstanding of $664,500 and accrued interest payable of $27,259.
Economic Injury Disaster Loans (EIDL): On June 17, 2020, the Company received $150,000 of proceeds applicable to loans administered by the SBA as disaster loan assistance under the Covid-19 Economic Injury Disaster Loan (EIDL) Program.
As of December 31, 2023, the notes payable had an aggregate principal balance outstanding of $102,199 and accrued interest payable of $821. Economic Injury Disaster Loans (EIDL): On June 17, 2020, the Company received $150,000 of proceeds applicable to loans administered by the SBA as disaster loan assistance under the Covid-19 Economic Injury Disaster Loan (EIDL) Program.
If the Company is unable to obtain the cash resources necessary to satisfy the Company’s ongoing cash requirements, the Company could be required to scale back its business activities or to discontinue its operations entirely.
If we are unable to obtain the cash resources necessary to satisfy our ongoing cash requirements, we could be required to scale back its business activities or to discontinue its operations entirely. Our consolidated statements of cash flows as discussed herein are presented below.
Year Ended December 31, 2022 2021 Net cash used in operating activities $ (1,053,571 ) $ (1,260,191 ) Net cash provided by investing activities 12,805 - Net cash provided by financing activities 233,399 2,589,940 Net increase (decrease) in cash $ (807,367 ) $ 1,930,325 33 Operating Activities Cash provided by or used in operating activities primarily consists of net loss adjusted for certain non-cash items, including amortization of intangible assets, impairment of intangible assets, gain on forgiveness of government assistance notes payable, and the fair value of common stock issued for directors, employees, and service providers, and the effect of changes in working capital and other activities.
Successor Predecessor December 30, 2023 to December 31, 2023 January 1, 2023 to December 29, 2023 Year Ended December 31, 2022 Net cash used in operating activities $ - $ (541,791 ) $ (102,411 ) Net cash used in investing activities - (900,000 ) (1,000,479 ) Net cash provided by financing activities - 1,462,376 409,331 Net increase (decrease) in cash and cash equivalents $ - $ 20,585 $ (693,559 ) 36 Operating Activities Cash provided by or used in operating activities primarily consists of net loss adjusted for certain non-cash items, including amortization of intangible assets, impairment of intangible assets, gain on forgiveness of government assistance notes payable, and the fair value of common stock issued for directors, employees, and service providers, and the effect of changes in working capital and other activities.
Those estimates are based on the Company’s historical operations, the future business plans and the projected financial results, the terms of existing contracts, trends in the industry, and information available from other outside sources. 31 Stock-Based Compensation The Company periodically issues share-based awards to employees and non-employees and consultants for services rendered.
Those estimates are based on the Company’s historical operations, the future business plans and the projected financial results, the terms of existing contracts, trends in the industry, and information available from other outside sources. Revenue Recognition The Company recognizes revenue in accordance with FASB ASC 606, Revenue from Contracts with Customers .
There is also significant uncertainty as to the effect that the coronavirus may have on the Company’s business plans and the amount and type of financing available to the Company in the future.
There is also significant uncertainty as to the effect that the coronavirus may have on the Company’s business plans and the amount and type of financing available to the Company in the future. 32 If the Company is unable to obtain the cash resources necessary to satisfy the Company’s ongoing cash requirements, the Company could be required to scale back its business activities or to discontinue its operations entirely.
As of December 31, 2022, and December 31, 2021, the note payable had a principal balance outstanding of $661,035 and accrued interest payable of $45,541 and $25,321 respectively. Off-Balance Sheet Arrangements At December 31, 2022 and December 31, 2021, the Company did not have any transactions, obligations or relationships that could be considered off-balance sheet arrangements.
Off-Balance Sheet Arrangements At December 31, 2023 and December 31, 2022, the Company did not have any transactions, obligations or relationships that could be considered off-balance sheet arrangements.
Under the terms of the Merger Agreement, the Company agreed to issue 600,000 restricted shares of its common stock and issued promissory notes to Balazs Wellisch, President and co-founder, and Quentin Blackford, Director, of GameIQ, in the principal amounts of $78,813 and $62,101, respectively, bearing interest at 1% per annum, to repay loans by Mr. Wellisch and Mr.
The Company issued 600,000 restricted shares of its common stock with a fair value of $300,000, and promissory notes aggregating $140,914 and bearing interest at 1% per annum, to Balazs Wellisch, President and co-founder, and Quentin Blackford, Director, of GameIQ.
Cash used in operating activities for the year ended December 31, 2022 was approximately $1,053,571 and consisted of a net loss of $1,278,524, adjustments for non-cash items, including amortization of intangible assets, gain on legal settlement, gain on forgiveness of government assistance notes payable, fair value of vested stock options, and the fair value of common stock and issued for directors, employees, and service providers, which in the aggregate total $(14,874), and $183,827 in changes in working capital and other activities.
Cash used in operating activities for the year ended December 31, 2022 was approximately $102,411 and consisted of our net loss, adjusted for non-cash items, including amortization of intangible assets, goodwill impairment, fair value of vested stock options, and the fair value of common stock issued to executives, and routine changes in working capital and other activities.
In accordance with Notes, RDE, Inc. promises to pay to the order of the Holders the principal amounts together with annual interest on the unpaid principal amount of 1% computed on the basis of the actual number of days elapsed and a year of 365 days from the date of the Notes (the “Total Amount”), which shall be paid upon the earlier of (i) nine (6) equal biannual installments with the first installment due on the nine-month anniversary of February 1, 2022, and the final payment due February 1, 2025 (the “Maturity Date”).
In accordance with Notes, the Company promised to pay the principal together with interest at 1% upon the earlier of (i) nine equal biannual installments with the first installment due on October 1, 2022, and the final payment due February 1, 2025 (the “Maturity Date”).
Business Overview Restaurant.com is a pioneer in the restaurant deal space and the nation’s largest restaurant-focused digital deals brand. Founded in 1999, we connect digital consumers, businesses, and communities offering dining and merchant deal options nationwide at over 182,500 restaurants and retailers to over 7.8 million customers.
We derive our revenue from transactions in which we sell discount certificates for restaurants on behalf of third-party restaurants. Founded in 1999, we connect digital consumers, businesses, and communities offering dining and merchant deal options nationwide at over 182,500 restaurants and retailers to over 7.8 million customers.
During the year ended December 31, 2022, the Company determined that certain intangible assets acquired in connection with the acquisition of the GameIQ business were impaired, resulting in a charge to operations of $258,714 at December 31, 2022.
During the year ended December 31, 2023, the Company determined that certain property and equipment were impaired, resulting in a charge to operations of $738,740 at December 31, 2023. No similar event occurred in the prior year period.
Our 12,500 core restaurants and 170,000 Dining Discount Pass restaurants and retailers extend nationwide. Our top three B2C markets are New York, Chicago and Los Angeles. We derive our revenue from transactions in which we sell discount certificates for restaurants on behalf of third-party restaurants.
Our 10,000 core restaurants and 170,000 Dining Discount Pass restaurants and retailers extend nationwide. Our top three B2C markets are New York, Chicago and Los Angeles. 30 Restaurant.com Business to Customer Division Our B2C division accounted for 45% of gross revenue in our fiscal year ended December 31, 2023.
Loss from Operations For the year ended December 31, 2022, we incurred a loss from operations of $2,286,846, as compared to a loss from operations of $5,507,695 for the year ended December 31, 2021. The decrease in loss from operations was due to the increase in revenue and decreased operating expenses discussed above.
The decrease in loss from operations was due to our decreased operating costs discussed above. Predecessor For the period December 30, 2023 to December 31, 2023, we incurred a loss from operations of $5,020,000, due primarily to stock compensation of $5,000,000 and routine operating costs of $86,510 as discussed above.
Cash used in operating activities for the year ended December 31, 2021 was $1,260,191 and consisted of a net loss of $4,991,223, adjustments for non-cash items, including amortization of intangible assets, gain on forgiveness of government assistance notes payable, and the fair value of common stock issued for directors, employees, and service providers, which in the aggregate total approximately $3,155,142, and approximately $575,890 in changes in working capital and other activities.
Cash used in operating activities for the year ended December 31, 2023 was approximately $541,791 and consisted of our net loss, adjusted for non-cash items, including amortization of intangible assets, impairment of intangible assets, fair value of vested stock options, and the fair value of common stock issued to executives, and routine changes in working capital and other activities.
On January 31, 2022, the Company, through its newly formed Delaware subsidiary, GameIQ Acquisition Corp., Inc., entered into an Agreement and Plan of Merger (the “Merger Agreement”) with GameIQ, a California corporation, that is a developer of consumer gamification technologies for retail businesses.
On February 28, 2022, the Company completed the acquisition of GameIQ, a California corporation, that is a developer of consumer gamification technologies for retail businesses.
Liquidity and Capital Resources The accompanying financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities and commitments in the normal course of business.
Our consolidated financial statements have been presented on the basis that it will continue as a going concern, which contemplates the realization of assets and satisfaction of liabilities in the normal course of business. We experienced operating losses and negative operating cash flows during 2023 and 2022.
During the year ended December 31, 2021, the Company determined that certain intangible assets acquired in connection with the acquisition of the Restaurant.com business were impaired, resulting in a charge to operations of $570,030 at December 31, 2021.
Write-off of Impaired Intangible Assets During the year ended December 31, 2023, the Company determined that certain intangible assets were impaired, based on a third party valuation, resulting in a charge to operations of $250,000 at December 31, 2023. No similar event occurred in the prior year period. Impairment of Goodwill .
In addition, our dining certificates are not accepted for payment by third-party platforms that facilitate ordering and delivery of food on-demand. As the COVID-19 pandemic appears to be abating, we expect an improvement in our revenues in fiscal 2023. 28 Inflation Global inflation also increased during 2021 and in 2022.
Our revenues from purchase of our discount certificates in 2020, 2021 and 2022 declined since they could only be redeemed when dining in the restaurants and also were not accepted for payment by third-party platforms that facilitated ordering and delivery of food on-demand.
We have financed our working capital requirements through borrowings from various sources and the sale of our equity securities. Our operations have been significantly and negatively impacted by the COVID-19 pandemic.
We have financed our working capital requirements through borrowings from various sources and the sale of our equity securities. As a result, management has concluded that there is substantial doubt about our ability to continue as a going concern.
Net Loss We realized a net loss of $1,278,524 for the year ended December 31, 2022, as compared to realizing a net loss of $4,991,223 for the year ended December 31, 2021. The decrease in net loss is primarily due to a gain on forgiveness of government assistance notes payable, increased revenue and decreased operating expenses, as discussed above.
The decrease in net loss is primarily due to a gain on forgiveness of convertible notes and promissory notes, and decreased depreciation and amortization expense, as discussed above.
Going Concern During the year ended December 31, 2022, we incurred a net loss of $1,278,524, utilized cash in operations of $1,053,571, and had a stockholders’ deficiency of $3,049,017 as of December 31, 2022. At December 31, 2022, we had cash of $1,122,958 available to fund its operations, including expansion plans, and to service its debt.
Going Concern The Company has a history of reporting net losses. At December 31, 2023, the Company had cash of $4,099,737 available to fund its operations, including expansion plans, and to service its debt, and a negative working capital of $1,849,427.
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion should be read in conjunction with the consolidated financial statements and the related notes contained elsewhere in this prospectus. In addition to historical information, the following discussion contains forward looking statements based upon current expectations that are subject to risks and uncertainties.
The following discussion and analysis of the financial condition and results of operations of RDE should be read together with our consolidated financial statements and related notes included elsewhere in this Annual Report on Form 10-K.
Investing Activities Cash provided by investing activities for the year ended December 31, 2022 was $12,805 and was cash received on the acquisition of GameIQ. The Company had no investing activities for the year ended December 31, 2021.
For the year ended December 31, 2022, cash provided by financing activities was $409,331, which was from net proceeds received from our line of credit facility.
As of December 31, 2022, the notes payable had an aggregate principal balance outstanding of $127,788 and accrued interest payable of $687.
As of December 31, 2023, the notes payable had an aggregate principal balance outstanding of $1,500,000. GameIQ Acquisition Note Payable On February 1, 2022, RDE issued two notes payable for the purchase of GameIQ, one for $78,813 and another for $62,101.
As a result, management has concluded that there is substantial doubt about our ability to continue as a going concern. Our independent registered public accounting firm, in its report on the Company’s consolidated financial statements for the year ended December 31, 2022, has also expressed substantial doubt about our ability to continue as a going concern.
We anticipate our cash balance will last until approximately December 2024. As a result, we have concluded that there is substantial doubt about the Company’s ability to continue as a going concern. Our consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Financing Activities For the year ended December 31, 2022, cash provided by financing activities was $233,399, which was from proceeds received of $250,000 the sale of common stock, less $13,136 of principal payments on our acquisition notes payable, and $3,465 in principal payments on our note payable – government assistance loans.
Cash used for investing activities for the year ended December 31, 2022 was $1,000,479, which was for capital expenditures. Financing Activities For the year ended December 31, 2023, cash provided by financing activities was $1,462,376, which was from net proceeds received from our line of credit facility of $1,212,376, and a $250,000 working capital advance from RDE.
Other income for the year ended December 31, 2021, consisted of a gain from the forgiveness of a government assistance loan of $648,265, offset by financing costs of $7,500, and interest expense of $124,293.
Other Income (Expenses) We had other income of $2,985,534 for the year ended December 31, 2023, as compared to other expenses of $2,723,332 for the year ended December 31, 2022. Other income for the year ended December 31, 2023, consisted of a gain from the forgiveness of convertible notes and promissory notes totaling $5,876,000, offset by interest expense of $2,890,466.
Removed
Actual results may differ substantially from those referred to herein due to a number of factors, including, but not limited to, risks described in the section entitled “Risk Factors” and elsewhere in this prospectus. Background and Basis of Presentation On March 1, 2020, we acquired the assets of Restaurant.com, Inc.
Added
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Unless otherwise indicated or the context otherwise requires, references in this section to “the Company,” “RDE” “we,” “us,” “our” and other similar terms refer to RDE, Inc. and its subsidiaries and references to “CardCash” refer to the Company, formerly known as CardCash Acquisition Corp., prior to the Merger (as defined below).
Removed
Restaurant.com, Inc. is a pioneer in the restaurant deal space and the nation’s largest restaurant-focused digital deals brand. Founded in 1999, Restaurant.com connects digital consumers, businesses, and communities offering over 200,000 dining and merchant deal options nationwide at 187,000 restaurants and retailers to over 7.8 million customers.
Added
The following discussion and analysis should also be read together with the section entitled “Organization and description of business” as of December 31, 2023 (Successor) and for the period from January 1, 2023 through December 29, 2023 (Predecessor), and for the year ended December 31, 2022 (Predecessor). In addition to historical information, the following discussion and analysis contains forward-looking statements.
Removed
We have decided to leverage our experience in ecommerce and concentrate on developing what we believe are significant growth opportunities in the B2B and B2C business of Restaurant.com, Inc.
Added
Our actual results may differ significantly from those projected in such forward-looking statements.
Removed
Blackford to GameIQ. Each note requires repayment in nine equal biannual installments, with the first installment due on the nine-month anniversary of the Closing Date as that term is defined in the Merger Agreement. Following the merger, GameIQ shall merge with and into the Company.
Added
Factors that might cause future results to differ materially from those projected in such forward-looking statements include, but are not limited to, those discussed in the sections entitled “Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements.” All figures are presented in thousands, except percentages, rates and unless otherwise noted.
Removed
In addition, Balazs Wellisch will become Chief Technology Officer of Restaurant.com, a subsidiary of the Company. The Merger Agreement closed on February 28, 2022. The closing price of the Company’s common stock was $0.50 per share on both January 31, 2022 and February 28, 2022.
Added
References to “Notes” are notes included in our audited consolidated financial statements appearing elsewhere in this Annual Report on Form 10-K. Background On March 1, 2020, we acquired the assets of Restaurant.com, Inc. Restaurant.com, Inc. is a pioneer in the restaurant deal space and the nation’s largest restaurant-focused digital deals brand.
Removed
Approximately 9-13 days each month we email our customers offers for restaurant discounts based on location and personal preferences. Consumers also access our deals directly through our websites and mobile applications. A typical restaurant discount deal might offer a $25 discount that can be used toward a $50 purchase at a restaurant.
Added
Each note required repayment in nine equal biannual installments, with the first installment due on the nine-month anniversary of the closing. Balazs Wellisch became Chief Technology Officer of Restaurant.com, a subsidiary of the Company. On December 29, 2023, RDE, Inc. completed the acquisition of CardCash Exchange, Inc. (“CardCash”).
Removed
Additional deals include discounted pricing at theaters, movies or other merchants. Customers purchase restaurant deals from us and redeem them with our merchant partners. We charge, and only collect, a service fee from our customers which allows them to download the discount certificates and redeem them at the restaurant.
Added
The acquisition was made pursuant to a plan of merger agreement dated August 18, 2023, between RDE, and Elliott Bohn, in his capacity as stockholder representative for CardCash’s stockholders.
Removed
We receive no revenue or commission from the restaurants offering the discount deals. 27 We derive our revenue from transactions in which we sell complimentary entertainment and travel offerings and consumer products on behalf of third-party merchants. Approximately 9-13 days each month we email our customers offers for discounted experiences and products based on location and personal preferences.
Added
The Company acquired all of the issued and outstanding equity interests of CardCash from CardCash’s stockholders for $26,682,000, made up of 6,108,007 shares of RDE’s common stock with a fair value of $24,432,000 or $4.00 per share, $750,000 in cash (including $250,000 advanced in October 2023), and the issuance of notes payable for $1,500,000.
Removed
Consumers also access our deals directly through our websites and mobile applications. Those discounted experiences and products generally involve a customer’s purchase of a voucher through one of our websites that can be redeemed with a third-party merchant for services or goods (or for discounts on services and goods).
Added
Elliot Bohm, President of CardCash prior to the merger with RDE, remains as President of CardCash following the closing of the merger and has joined the Board of Directors of RDE as well as serving as a member of the Board of Directors of CardCash.
Removed
Revenue from those transactions is reported on a net basis and equals the purchase price received from the customer for the voucher less an agreed upon portion of the purchase price paid by us to our partners. Through our websites, www.restaurant.com, www.specials.restaurant.com, and mobile iOS and Android apps, we provide affordable dining and entertainment experiences.
Added
Marc Ackerman, Chief Operating Officer of CardCash prior to the merger with RDE, continues to serve as Chief Operating Officer of CardCash following the closing of the merger. Business Overview We have two principal divisions, B2C and B2B, for both CardCash and for Restaurant.com.
Removed
In addition to purchasing restaurant discount certificates, entertainment and travel deals and consumer products as well as company gift card redemption, our website and mobile platform provide additional information to assist the customer and encourage return visits to our websites, including restaurant menus, entrée pricing, mapping and directions, and extensive filtering options, including most popular, cuisine type and “Deals Near Me” for nearby restaurants.
Added
CardCash CardCash operates as a leading gift card exchange platform, facilitating the purchase and sale of unwanted gift cards at discounted rates for both consumers and businesses. The Company’s mission is to provide a seamless marketplace for individuals looking to maximize the value of their gift cards while also offering businesses innovative solutions to leverage this market.
Removed
Paperless restaurant certificate redemption and validation can also occur on our mobile platforms. During the year ended December 31, 2022 , there were an average of 700,000 unique visitors per month to our digital platforms including our mobile and Specials offerings.
Added
CardCash’s core service offering includes the buying and selling of gift cards from over 1,100 retailers, such as Target, Home Depot, Starbucks and TJ Maxx, among others. By connecting buyers and sellers, CardCash enables consumers to unlock value from unused gift cards and save significant amounts on their purchases.
Removed
Since the launch of our mobile apps in 2012, mobile has grown from zero to 49% of our B2C revenue and over 60% of the B2C orders with over 6.4 million downloads of our apps for the year ended December 31, 2022. Our B2B sales program has grown significantly since its introduction in 2004 and comprises 50% of revenue.
Added
CardCash purchases unwanted gift cards at a value lower than their face worth and subsequently retails them at a discounted rate to discerning shoppers nationwide. This avenue not only allows individuals to obtain cash for their unneeded gift cards but also enables them to make cost-effective purchases through discounted gift cards.
Removed
Our high-value, low-cost features enable businesses to use Restaurant.com Gift Cards to entice new and existing customers to increase sales, promote customer satisfaction and incent desired behavior. The availability of use in every market, features like “never expire” and online exchange, and use by every customer demographic fit every business’s customer base; features no other incentive product can match.
Added
With advanced fraud prevention technology, known as FraudFix, CardCash ensures the security and integrity of all transactions conducted on its platform. This commitment to trust and reliability has contributed to its success in saving consumers over $100 million since its inception. Restaurant.com Restaurant.com is a pioneer in the restaurant deal space and the nation’s largest restaurant-focused digital deals brand.
Removed
We expect that for the next several months, as the virus continues to limit visits to restaurants and as many prospective patrons choose to order delivery of meals from restaurants or take advantage of picking-up meals from restaurants, to continue to negatively impact our revenues from purchase of our discount certificates, since they can only be redeemed when dining in the restaurants.
Added
To our database of 6.2 million customers, we sell: ● Discounted certificates for 10,000 restaurants. The certificates range from $5 to $100 and never expire. ● Discount Dining Passes, which provide discounts at 170,000 restaurants and other retailers.
Removed
Due to the uncertain and rapidly evolving nature of current conditions around the world, we are unable to predict accurately the impact that the COVID-19 pandemic will have on its business going forward.
Added
These passes provide multiple uses for six months. ● “Specials by Restaurant.com” which bundle Restaurant.com certificates with a variety of other entertainment options, including theatre, movies, wine and travel. Customers have favored these bundled offering (“Specials”), generating significantly greater revenue per customer when compared to purchasing our other products.
Removed
We expect the COVID-19 pandemic and its effects to continue to have a significant adverse impact on its business for the duration of the pandemic and during the subsequent economic recovery, which could be for an extended period of time. As a result, management has concluded that there is substantial doubt about our ability to continue as a going concern.
Added
The average order value for these Specials sales is nearly five times a certificate purchase. Specials generated over 5% of our past year’s B2C revenue from 60% of the B2C orders for the fiscal year ended December 31, 2023. We believe that our relationships with small businesses presents a significant revenue opportunity through such cross-promotions.
Removed
Year ended December 31, 2022 compared to Year ended December 31, 2021 Results of Operations – Twelve months ended December 31, 2022, compared to twelve months ended December 31, 2021 Revenue For the year ended December 31, 2022 and 2022, the Company’s operating revenues consisted of revenues generated by the Restaurant.com business. 29 For the years ended December 31, 2022 and 2021, disaggregated revenue by the Company’s divisions and type of revenue is presented below.
Added
Restaurant.com Business to Business Division Our B2B division accounted for 55% of our gross revenue in our fiscal year ended December 31, 2023.
Removed
Sales Channels Restaurant Coupons Sale of Travel, Vacation and Merchandise Advertising Total Year Ended December 31, 2022 Business to consumer (B2C) $ 704,586 $ 363,281 $ 198,519 $ 1,266,386 Business to business (B2B) 3,148,377 - - 3,148,377 Other 29,832 - - 29,832 Total $ 3,882,795 $ 363,281 $ 198,519 $ 4,444,595 Year Ended December 31, 2021 Business to consumer (B2C) $ 867,465 $ 375,261 $ 182,503 $ 1,425,229 Business to business (B2B) 1,861,795 - - 1,861,795 Other 36,485 - - 36,485 Total $ 2,765,745 $ 375,261 $ 182,503 $ 3,323,509 Revenue for the year ended December 31, 2022, was $4,444,595, an increase of approximately $1,121,086 or 34%, as compared to $3,323,509 in the same period of the prior year.
Added
We sell certificates and Discount Dining Passes to corporations and marketers, which use them to: ● generate new customers; ● increase sales at the point of sale; ● reward points/customer loyalty; ● convert to paperless billing and auto-bill payment. ● motivate specific customer behavior such as free home repair estimates and test drives for auto dealers; ● renew subscriptions and memberships; and ● address customer service issues.
Removed
The increase in 2022 relates to an agreement we entered into an agreement with a national mobile telephone provider (“Provider”) to provide our coupon codes to the Provider’s mobile phone application user that are verified nurses and teachers. Each Provider participant who redeemed the promotion received a dining credit of $25.00 and two movie tickets.
Added
Restaurant.com Other Business We also generate revenue through third-party offers and display ad revenue. This comprises a de minimis portion of our gross revenue. Restaurant.com Attractive Customer Demographics We intend to grow and leverage our customer database of 6.2 million which we believe is of value to merchants for a variety of services and products.
Removed
The dining credit can be redeemed for a certificate at any of our participating local restaurants. The movie tickets provided by us are through Fandango for use at participating theatres. The agreement started in May 2022 and ended in August 2022, and we earned $1,106,447 in revenues from this agreement during the year ended December 31, 2022.
Added
As the COVID-19 pandemic has abated, our revenues improved in fiscal 2023. 31 Inflation Global inflation also increased during 2021 and in 2022.
Removed
Operating Expenses Cost of Revenues Cost of revenues consists primarily of the costs incurred to generate revenues, consisting primarily of transaction fees. Management expects these costs to increase in the future as the Company focuses on increasing its revenues.
Added
Basis of Presentation On August 18, 2023, RDE, Inc. (“RDE”) entered into an agreement and plan of merger to acquire CardCash Exchange Inc (“CardCash”). On December 29, 2023, the merger was completed. RDE’s operations are not considered significant compared to the operations of CardCash before the acquisition.
Removed
Costs of revenues increased to $825,242 during the year ended December 31, 2022 as compared to $394,023 during the year ended December 31, 2021, as a result of our increase in revenue. During the year ended December 31, 2022 and 2021, our cost of revenues, as a percentage of revenue, was 19% and 8%, respectively.

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