What changed in this filing

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Item 1. Business

2024-04-09 compared with 2023-03-07 · 180 added, 76 removed, 286 unchanged (47% of the section changed)

used in this Annual Report, the terms “we,” “us,” “our,” and the “Company” refer to RDE,

Inc., a Delaware corporation.

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.

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.

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.

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).

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.

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.

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.

our websites, www.restaurant.com, www.specials.restaurant.com, and mobile iOS and Android apps, we provide an affordable dining and entertainment

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.

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.

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,

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.

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.

Mergers and Acquisitions

February 28, 2022, we closed the acquisition of GameIQ, Inc., a developer of consumer gamification technologies for retail

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.

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.

Following the merger, Balazs Wellisch became the Chief Technology Officer of Restaurant.com, a subsidiary of

have three principal divisions, the B2C, the B2B and all other services and products division.

to Customer Division

Inc., a Delaware corporation, and its consolidated subsidiaries.

owns and operates Restaurant.com, a pioneer in the restaurant deal space and the nation’s largest restaurant-focused digital

Our profile fundamentally changed with the acquisition of CardCash Exchange, Inc.

(“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.

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.

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.

believe the CardCash acquisition added valuable attributes, including (1) CardCash’s brand awareness and acceptance from the consumer;

and (2) experienced management.

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.

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.

with CardCash Exchange, Inc.

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.

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.

have two principal divisions, B2C and B2B, for both CardCash and for Restaurant.com.

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.

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.

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.

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

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.

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.

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.

CardCash is committed to social responsibility through partnerships with charitable organizations.

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.

Jude’s Research Hospital demonstrate CardCash’s commitment to supporting critical

causes and making a positive impact.

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.

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.

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.

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:

Access to Strategic Partnerships and Expanded Data .

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.

CardCash is focusing on three business growth concepts:

Exchange for Retailer Partnerships

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

In 2017, CardCash and Amazon launched a branded exchange which has grown to be CardCash’s most successful partnership

In 2023, Mastercard and Amazon led all CardCash branded exchanges with $1,800,000 and $1,900,000 in revenue, respectively.

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.

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.

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.

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.

Children’s Research Hospital that allows customers to spend gift cards anywhere they want while donating to cutting-edge medical

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%.

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.

Marketing Efforts .

CardCash has spent only $807,031 in marketing its services

or 0.9% of its gross revenues.

CardCash intends to increase its marketing to retailers and

consumers to accelerate its sales of gift cards.

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

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.

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.

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.

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

CardCash currently has a 13.3% gross margin for its four revenue streams combined.

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.

goal is to achieve gross margin of 15% in 2023 and 19% in 2024.

CardCash anticipates that

its gross margins will increase approximately 8% in the next two years based on retail-sourced

inventory and retail sales.

CardCash’s focus is to maximize inventory sourced through

checkout and branded exchange initiatives to drive significant volume on the secondary market

and generate higher gross margins.

Restaurant.com

Business to Customer Division

B2C division accounted for 45% of gross revenue in our fiscal year ended December 31, 2023.

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such cross-promotions.

to Business Division

Restaurant.com

Business to Business Division

B2B division accounted for 55% of our gross revenue in our fiscal year ended December 31, 2023.

8 unchanged sentences

address customer service issues.

Restaurant.com

Other Business

also generate revenue through third-party offers and display ad revenue.

This comprises a de minimis portion of our gross revenue.

Customer Demographics

Restaurant.com

Attractive Customer Demographics

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

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primarily use marketing to acquire and retain high-quality merchants and customers and promote awareness of our marketplaces.

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.

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.

use a variety of marketing channels to make customers aware of the offerings, including search engines, email and affiliate partnerships

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be redeemed for awards such as free or discounted services or goods in the future.

The emails for discount certificates for restaurant contain one headline deal with a full description of the deal and a sampling of dining

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.

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As of December 31, 2023, our information technology team consisted of five employees.

have a substantial number of competing groups buying sites.

These competitors offer substantially the same or similar product offerings

Among 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);

takeout and delivery (DoorDash.com, GrubHub.com UberEats.com and Delivery.com).

CardCash faces competition from a number

of competitors but believes that it has key attributes that provide it with a competitive advantage in the market for unused gift cards.

The following chart summarizes the principal differences between CardCash and its competitors:

to dictate pricing

seller/buyer services

exchange partnerships

Leading Fraud prevention

Principal-based

Although CardCash believes it compete favorably on

the factors described above, it anticipates that larger, more established companies may directly compete with it on a principal-based

model and such a competitor could have greater financial, technical, marketing and other resources than it does.

These competitors may

engage in more extensive research and development efforts, undertake more far-reaching marketing campaigns and adopt more aggressive pricing

policies, which may allow them to reduce the number of potential consumers and retailers that form the basis of CardCash’s revenue

Restaurant.com

We have a substantial number of competing groups buying

These competitors offer substantially the same or similar product offerings as us.

Among 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

● takeout and delivery (DoorDash.com,

GrubHub.com UberEats.com and Delivery.com).

believe the principal competitive factors in our market include the following:

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and contractors, and confidentiality agreements with third parties.

CardCash purchased a patent

(US 8,751,294 B2) from e2interactive relating to the processing of valuable-ascertainable items, such as gift cards, by retailers.

patent was issued on June 10, 2014, and is expected to expire December 4, 2029.

CardCash has a registered trademark for “CardCash”

that was first issued on June 12, 2012, and is renewable every ten years.

CardCash renewed the trademark in 2022 for an additional ten-year

addition to these contractual arrangements, we also rely on a combination of trade secrets, copyrights, trademarks, service marks, trade

85 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business