What changed in this filing

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Item 7. Management’s Discussion and Analysis

2024-04-09 compared with 2023-03-07 · 358 added, 336 removed, 86 unchanged (89% of the section changed)

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

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.

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.

and Basis of Presentation

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).

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.

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.

Our actual results

may differ significantly from those projected in such forward-looking statements.

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.

to “Notes” are notes included in our audited consolidated financial statements appearing elsewhere in this Annual Report

on Form 10-K.

March 1, 2020, we acquired the assets of Restaurant.com, Inc.

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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

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.

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.

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.

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.

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

February 28, 2022, the Company completed the acquisition of GameIQ, a California

corporation, that is a developer of consumer gamification technologies for retail businesses.

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.

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.

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.

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.

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.

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 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.

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 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.

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

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.

Our 12,500 core restaurants and 170,000 Dining Discount Pass restaurants and retailers extend

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.

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.

derive our revenue from transactions in which we sell discount certificates for restaurants on behalf of third-party restaurants.

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.

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.

We receive no revenue or commission

from the restaurants offering the discount deals.

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.

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).

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.

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

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.

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.

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

Restaurant.com

Business to Customer Division

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

To our database of 6.2 million customers,

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.

These passes provide multiple uses for six

“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.

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.

B2B sales program has grown significantly since its introduction in 2004 and comprises 50% of revenue.

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.

We believe that our relationships with small businesses presents a significant revenue opportunity through

such cross-promotions.

Restaurant.com

Business to Business Division

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

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;

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.

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

and products.

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.

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.

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.

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.

This contagious disease outbreak, adversely affected work

forces, economies and financial markets globally.

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.

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.

As the COVID-19 pandemic has abated, our revenues

improved in fiscal 2023.

inflation also increased during 2021 and in 2022.

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and our financial condition and results of operations could be adversely affected.

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.

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.

consolidated financial statements have been presented on the basis that it will continue as a going concern, which contemplates the realization

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of our equity securities.

operations have been significantly and negatively impacted by the COVID-19 pandemic.

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.

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.

a result, management has concluded that there is substantial doubt about our ability to continue as a going concern.

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be required to scale back its business activities or to discontinue its operations entirely.

Basis of Presentation

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

RDE’s operations are not considered significant compared to the operations of CardCash before the acquisition.

for the purpose of the accompanying consolidated financial statements, periods before December 29, 2023 reflect the financial position,

results of operations and cash flows of Card Cash prior to the acquisition, and is referred to as the “Predecessor”.

beginning after December 29, 2023 reflect the financial position, results of operations and cash flows of RDE consolidated with CardCash,

and is referred to as the “Successor”.

A black-line between the Successor and Predecessor periods has been placed in the

consolidated financial statements and in the tables to the notes to the consolidated financial statements to highlight the lack of comparability

between these periods.

Collectively, RDE (Successor) and CardCash (Predecessor) are referred to as the “Company”.

ended December 31, 2023 compared to Year ended December 31, 2022

of Operations – Twelve months ended December 31, 2023, compared to twelve months ended December 31, 2022

the year ended December 31, 2022 and 2022, the Company’s operating revenues consisted of revenues generated by the Restaurant.com

the years ended December 31, 2022 and 2021, disaggregated revenue by the Company’s divisions and type of revenue is presented below.

Sales Channels

Restaurant Coupons

and Merchandise

Year Ended December 31, 2022

Business to consumer (B2C)

Business to business (B2B)

Year Ended December 31, 2021

Business to consumer (B2C)

Business to business (B2B)

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.

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.

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.

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.

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.

The increase in cost of revenues, as a percentage of revenue, was from Fandango movie ticket

costs related to the agreement with our Provider discussed above.

No similar Provider agreement activity occurred during the prior year

AND SUBSIDIARIES

STATEMENTS OF OPERATIONS

Cost of sales

Operating Expenses

Selling, general and administrative expenses

Amortization of capitalized software costs

Amortization of intangible assets

Intangibles and property and equipment

Impairment of intangibles

Goodwill impairment

Total operating expenses

Loss from operations

Other income (expense):

Interest expense

Gain on forgiveness of debt

Total other income (expense), net

Net loss before income taxes

$ (5,020,000 )

$ (8,324,579 )

the years ended December 31, 2023 and 2022, the Company’s operating revenues consisted of sales generated by our CardCash business.

Sales for the period January 1, 2023 to December 29, 2023, were $86,661,944,

a decrease of approximately $10,346,158 or 10.7%, as compared to $97,008,102 in the year ended December 31, 2022.

During the current year

period, we focused on improving our gross margin.

We assessed the quality of our purchased gift card brands, allowing us to increase the

sales price to our customers, resulting in a gross margin of 12.0%, as compared to a gross margin of 10.8% in the prior year period.

our sales decreased 10.7% over the prior year period, our gross profit was consistent with the prior year period.

Sales for the period December 30, 2023 to December 31, 2023, were $484,860.

Cost of Sales

Cost of sales consists primarily of the cost to purchase

merchant gift cards.

Amortization of developed technology is excluded from cost of sales and included in amortization expense in the Statements

of Operations.

Costs of sales for the period January 1, 2023 to December

29, 2023 decreased to $76,220,645, as compared to $86,527,509 during the year ended December 31, 2022.

Our cost of sales, as a percentage

of sales, were 88.0% and 89.2%, respectively.

The decline in our cost of sales, and the increase in our gross margin, as compared to the

prior year period, is discussed above.

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.

General and Administrative Expenses

December 30, 2023

to December 31,

January 1, 2023

to December 29,

Selling, general and administrative expenses

general and administrative expenses consist of costs incurred to identify, communicate with and evaluate potential customers and related

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insurance, compliance, compensation and other costs.

general and administrative expenses were $5,462,690 during the year ended December 31, 2022, as compared to $7,243,151 during the year

ended December 31, 2021, a decrease of $1,780,461.

The decrease was related mainly to a $1,939,031 decrease in stock-based compensation

for directors, employees and contractors in the current period as compared to the prior year.

Excluding stock-based compensation, our

selling, general and administrative expenses increased $158,570 during the current period, related to general changes in our business

and operations.

of Intangible Assets

of intangible assets relates to our acquisition of GameIQ effective February 28, 2022, and Restaurant.com, effective January 30, 2020.

Amortization of intangible assets was $184,795 and $624,000 during the year ended December 31, 2022 and 2021, respectively.

of Impaired Intangible Assets .

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, 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.

Selling, general and administrative expenses

were $11,152,428 for the period January 1, 2023 to December 29, 2023, as compared to $11,268,508 during the year ended December 31,

2022, an increase of $339,920.

The increase was from general changes in our business and operations.

general and administrative expenses were $5,086,510 during the period December 30, 2023 to December 31, 2023.

Selling, general and administrative expenses

were for common shares issued per the term of executive employment agreements including $5,000,000

recognized upon the close of the Merger, and $86,510 general changes in our business and operations.

Amortization of capitalized software

Amortization expenses are primarily attributable to the Company’s capitalized software development costs.

Amortization expenses were $1,080,537 during the year ended December 31, 2023, as compared to $3,678,000 during the year ended

December 31, 2022, a decrease of $2,597,696.

Amortization of intangible assets.

A mortization

expenses are primarily attributable to the Company’s amortization of intangible assets with finite lives.

A mortization

expenses were $3 00 , 000 during the year ended December

31, 2023, as compared to $ 300,000 during the year ended December 31, 2022 .

Impairment of property and equipment.

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.

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.

of Goodwill .

We test for goodwill annually or if an event occurs or circumstances change that would more likely than not reduce the

fair value of a reporting unit below its carrying amount.

During the year ended December 31, 2022, the Company determined that its

goodwill was impaired, resulting in a charge to operations of $834,200 at December 31, 2022.

No similar event occurred in the current

from Operations

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.

Income (Expenses)

Company had other income of $1,025,322 for the year ended December 31, 2022, as compared to other income of $516,472 for the year ended

December 30, 2023

Other income for the year ended December 31, 2022, consisted of a gain on legal settlement of $69,000, a gain on vendor

settlement of $28,600, a gain from the forgiveness of a government assistance loan of $1,025,535, offset by interest expense of $114,813.

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.

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.

to December 31,

January 1, 2023

to December 29,

Loss from operations

$ (5,020,000 )

$ (3,080,406 )

$ (5,600,348 )

For the period January 1, 2023 to December 29, 2023,

we incurred a loss from operations of $3,080,406, as compared to a loss from operations of $5,600,348 for the year ended December 31,

The decrease in loss from operations was due to our decreased operating costs discussed above.

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.

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.

Other expense for the year ended December 31, 2022, consisted of interest expense of $2,723,332.

to December 31,

January 1, 2023

to December 29,

$ (5,020,000 )

$ (8,324,579 )

We realized a net loss of $124,546 for the period January 1, 2023 to

December 29, 2023, as compared to a net loss of $8,324,579 for the year ended December 31, 2022.

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

We realized a net loss of $5,020,000 for the period

December 30, 2023 to December 31, 2023 due primarily to stock compensation of $5,000,000 and routine operating costs of $86,510 as discussed

Accounting Policies and Estimates

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the terms of existing contracts, trends in the industry, and information available from other outside sources.

Company recognizes revenue in accordance with FASB ASC 606, Revenue from Contracts with Customers .

Company buys merchant gift cards from the general public and distributors at a discount and then resells them at a markup.

also derives revenue from the sale of discount certificates for restaurants on behalf of third-party restaurants.

and costs of sales are recognized when control of the products transfers to our customer, which generally occurs at a point in time when

the risk and title to the product transfers to the customer upon delivery to the customer.

The Company’s performance obligations

are satisfied at that time.

The Company’s standard terms of delivery are included in its contracts of sale, order confirmation

documents, and invoices.

The Company recognizes revenue on a gross basis for the sales price of the merchant gift cards and discount

certificates it collects.

Company periodically issues share-based awards to employees and non-employees and consultants for services rendered.

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over the requisite service, or vesting, period.

Company values its equity awards using the Black-Scholes option-pricing model, and accounts for forfeitures when they occur.

Black-Scholes option pricing model requires the input of subjective assumptions, including expected volatility, expected term, and a

risk-free interest rate.

The expected volatility is based on the historical volatility of the Company’s common stock, calculated

utilizing a look-back period approximately equal to the contractual life of the stock option being granted.

The expected life of the

stock option is calculated as the mid-point between the vesting period and the contractual term (the “simplified method”).

The risk-free interest rate is estimated using comparable published federal funds rates.

has determined that the Company has one operating segment.

The Company’s reporting segment reflects the manner in which its chief

operating decision maker reviews results and allocates resources.

The Company’s reporting segment meets the definition of an operating

segment and does not include the aggregation of multiple operating segments.

reaching such a conclusion management evaluated the Company’s reporting units by first identifying its operating segments.

Company then evaluated each operating segment to determine if it includes one or more components that constitute a business.

are components within an operating segment that meet the definition of a business, the Company evaluates those components to determine

if they must be aggregated into one or more reporting units.

If applicable, when determining if it is appropriate to aggregate different

operating segments, the Company determines if the segments are economically similar and, if so, the operating segments are aggregated.

is recognized when, or as, control of a promised product transfers to a customer, in an amount that reflects the consideration to which

the Company expects to be entitled in exchange for transferring those products.

Revenue excludes taxes that have been assessed by governmental

authorities and that are directly imposed on revenue-producing transactions between the Company and its customers, including sales and

Revenue recognition is evaluated through the following five-step process:

identification of the agreement

with a customer;

identification of the performance

obligations in the agreement;

determination of the transaction

allocation of the transaction

price to the performance obligations in the agreement;

recognition of revenue

when or as a performance obligation is satisfied.

Company operates online websites that sell discounted restaurant coupons, travel and vacation packages, and other merchandise across

a wide range of product categories, including, but not limited to, computer products, consumer electronics, apparel, housewares, watches,

jewelry, travel, sporting goods, automobiles, home improvement products, and collectibles.

In addition, the Company also generates revenues

based upon the number of times a third-party website(s) or products(s) are accessed or viewed by consumers from the Company’s website

Recognition of compensation expense for non-employees is in the same period and manner

as if the Company had paid cash for the services.

and Business Combinations

Company allocates the fair value of purchase consideration to the tangible assets acquired, liabilities assumed, and separately identified

intangible assets acquired based on their estimated fair values.

The excess of the fair value of purchase consideration over the fair

values of these identifiable assets and liabilities is recorded as goodwill.

Such valuations require management to make significant estimates

and assumptions, especially with respect to intangible assets.

Significant estimates in valuing certain intangible assets include, but

are not limited to, future expected cash flows from, acquired technology, trademarks and trade names, useful lives, and discount rates.

Management’s estimates of fair value are based upon assumptions believed to be reasonable, but which are inherently uncertain and

unpredictable and, as a result, actual results may differ from estimates.

During the measurement period, which can be up to one year

from the acquisition date, the Company may record adjustments to the assets acquired and liabilities assumed, with the corresponding

offset to goodwill.

Upon the conclusion of the measurement period, any subsequent adjustments are recorded in the consolidated statements

of operations.

Accounting Pronouncements

1 unchanged sentence

and Capital Resources

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.

As reflected in the accompanying financial statements, during the year

ended December 31, 2022, the Company recorded an operating loss of $2,286,846, used cash in operations of $1,053,571, and had a stockholders’

deficit of $3,049,017 at December 31, 2022.

These factors raise substantial doubt about our ability to continue as a going concern within

one year after the date of the financial statements being issued.

ability to continue as a going concern is dependent upon our ability to raise additional funds and implement our business plan.

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.

The financial statements do not include any adjustments

that might be necessary if we are unable to continue as a going concern.

December 31, 2022, we had cash on hand in the amount of $1,122,958.

Our continuation as a going concern is dependent upon its ability

to obtain necessary debt or equity financing to continue operations until it begins generating positive cash flow.

No assurance can be

given that any future financing will be available or, if available, that it will be on terms that are satisfactory to us.

are able to obtain additional financing, it may contain undue restrictions on our operations, in the case of debt financing or cause

substantial dilution for our stockholders, in case or equity financing.

Company’s consolidated statements of cash flows as discussed herein are presented below.

accompanying consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability

and classification of assets or the amounts and classifications of liabilities that may result from the outcome of the uncertainty concerning

our ability to continue as a going concern.

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.

We have financed our working capital requirements through borrowings from various sources and the sale of

equity securities.

have a history of reporting net losses.

At December 31, 2023, we had cash of $4,099,737 available to fund our operations, including expansion

plans, and to service our debt, and a negative working capital of $1,099,428.

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

Our consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

ability to continue as a going concern is dependent upon its ability to raise additional debt or equity capital to fund its business

activities and to ultimately achieve sustainable operating revenues and profitability.

market conditions present uncertainty as to our ability to secure additional funds, there can be no assurances that we will be able to

secure additional financing on acceptable terms, as and when necessary, to continue to conduct operations.

There is also significant uncertainty

as to the amount and type of financing available to us in the future.

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.

consolidated statements of cash flows as discussed herein are presented below.

December 30, 2023

to December 31,

January 1, 2023

to December 29,

Net cash used in operating activities

$ (1,053,571 )

$ (1,260,191 )

Net cash provided by investing activities

Net cash used in investing activities

Net cash provided by financing activities

Net increase (decrease) in 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.

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.

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.

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.

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.

For the year ended December 31, 2021, cash provided by financing activities was $2,589,940,

and included net proceeds of $1,958,466 received from the sale of common stock, and $1,375,535 in proceeds from government assistance

loans, offset by the repayment of $303,147 of bridge notes payable, repayment of $400,000 of convertible notes payable, and repayment

of $40,914 of acquisition obligations.

Debt Assumed Upon Reverse Merger - Past Due

debt assumed upon reverse merger consists of the following at December 31, 2022 and December 31, 2021:

Total principal balance

Accrued interest

Total principal and accrued interest

November 5, 2018, the Company completed a merger agreement dated October 23, 2018 with Incumaker, Inc., whereby all of the shareholders

of the Company exchanged their shares of common stock in exchange for shares of Incumaker, Inc.

common stock.

The merger was treated

as a reverse merger and recapitalization of the Company for financial accounting purposes.

In conjunction with the merger agreement with

Incumaker, Inc., the Company assumed certain outstanding convertible notes payable.

The notes payable had interest rates ranging from

8% to 22% per annum.

At December 31, 2022 and December 31, 2021, the remaining convertible debt assumed in the transaction had a principal

balance outstanding of $20,000, and accrued interest payable of $17,137 and $11,537, respectively.

As of December 31, 2022, convertible

debt assumed in the transaction, including accrued interest payable, was convertible at $1.50 per share into 24,758 shares of the Company’s

common stock.

Net increase (decrease) in cash and cash equivalents

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.

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

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.

Cash used for investing activities for the year ended

December 31, 2023 was $900,000, which was for capital expenditures (predecessor).

Cash provided by investing activities for the year ended December 31, 2023 was $2,038,472,

which was from net cash received from the acquisition of CardCash (successor).

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.

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.

Revolving Line of Credit

outstanding line of credit balance at December 31, 2023 and December 31, 2022 was:

December 31, 2023

December 31, 2022

(Predecessor)

Line of credit

In November 2020, CardCash entered into an amended and restated promissory note for a revolving line of credit with

availability of up to $10,000,000.

The revolving line of credit is payable on demand, with interest based on the Wall Street Journal Prime

Rate plus 3.00%, limited to a floor of 6.5%.

At December 31, 2023 and 2022, the average interest rate was 12% and 11%, respectively.

of December 31, 2023 the Company was in compliance with customary debt covenants.

On November 5, 2018, RDE completed the acquisition of Incumaker, Inc.

assumed certain outstanding convertible notes payable.

At December 31, 2023, there was one remaining assumed convertible note payable

outstanding that matured July 2017, and is past due.

At December 31, 2023, the principal balance of $20,000, and accrued interest of $20,137,

are convertible at $1.50 per share into 26,758 shares of the Company’s common stock.

Notes Payable

notes payable consists of the following at December 31, 2022 and December 31, 2021:

GameIQ acquisition note payable

Restaurant.com acquisition note payable

Total principal balance

Accrued interest

Total principal and accrued interest

Less current portion

Non-current portion

CardCash Acquisition Notes Payable

December 29, 2023, the Company issued two year promissory notes totaling $1,500,000 as partial consideration for the acquisition of

$750,000 is payable on the December 29, 2025, bearing simple annual interest of 5%, and $750,000 is to be paid upon the

earlier of (a) the completion of a firm commitment underwriting RDE’s initial public offering to allow the Company to become

listed on the Nasdaq Capital Market or (b) December 29, 2024.

As of December 31, 2023, the notes payable had an aggregate principal

balance outstanding of $1,500,000.

Acquisition Note Payable

February 1, 2022, notes payable for the purchase of GameIQ was issued to two holders, one for $78,813.

and another for $62,101.

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”).

Notwithstanding

any other provision of this Note, the Holders does not intend to charge, and the RDE, Inc.

shall not be required to pay, any fees or

charges in excess of the maximum permitted by applicable law;

any payments in excess of such maximum shall be refunded to the RDE, Inc.

or credited to reduce the principal hereunder.

All payments received by the Holder will be applied first to costs of collection, if any,

then the balance to the unpaid principal and interest.

In the event of default, the notes to the holders are secured, in the manner that

such payment to be made in cash or shares of the RDE, Inc.’s common stock at the election of the Holders.

These Notes may be prepaid

in whole or in part by the RDE, Inc.

For purposes of clarity, if RDE’s payments to the Holders pursuant to (i) of the agreement,

do not in the aggregate equal the Total Amount, the amount remaining owed to the Holders shall be paid to the Holders on or before the

Maturity Date.

the year ended December 31, 2022, the Company made principal payments of $13,136.

As of December 31, 2022, the notes payable had an aggregate

principal balance outstanding of $127,788 and accrued interest payable of $687.

Restaurant.com

to the terms of the acquisition agreement with Restaurant.com, Inc.

entered into on March 1, 2020, the Company executed an unsecured

promissory note in the principal amount of $1,500,000 that matures on March 1, 2023.

The promissory note bears interest at a rate of

6% per annum and is convertible at the option of the Company into common shares at a price to be determined on the date of conversion.

of December 31, 2022 and December 31, 2021, the note payable had a principal balance outstanding of $1,500,000 and accrued interest payable

of $251,507 and $162,300 respectively.

March 1, 2023, the principal and interest balance of approximately $1,770,000, was converted into 554,859 shares of the Company’s

common stock, and the note was retired.

Assistance Notes Payable

Assistance Notes Payable consists of the following at December 31, 2022, and December 31, 2021:

Paycheck Protection Loan

Economic Injury/Disaster Loans

Total principal balance

Accrued interest

Total principal and accrued interest

Less current portion

Non-current portion

Protection Note Payable

March 22, 2021, the Company received loan proceeds of $1,025,535 pursuant to the Paycheck Protection Program (2nd draw).

The note payable

was scheduled to mature in March 2026, bears interest at the rate of 1% per annum, and is subject to the terms and conditions applicable

to loans administered by the SBA under the CARES Act.

The loan and accrued interest payable are forgivable provided the Company uses

the loan proceeds for eligible purposes, including payroll, benefits, rent and utilities, and maintains its payroll levels.

February 28, 2022, the Company received formal notice that the note payable, including accrued interest of $9,743, was forgiven.

result, the gain from the forgiveness of the government assistance notes payable aggregating $1,025,535 was recognized in the statement

of operations during the year ended December 31, 2022.

February 1, 2022, RDE issued two notes payable for the purchase of GameIQ, one for $78,813 and another for $62,101.

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”).

of December 31, 2023, the notes payable had an aggregate principal balance outstanding of $102,199 and accrued interest payable of $821.

Injury Disaster Loans (EIDL):

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.

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 January 31, 2022, the Company assumed an additional $14,500 EIDL, and

accrued interest of $900, as part of the consideration paid for the acquisition of GameIQ (see Note 3).

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.

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.

On January 31, 2022, the Company assumed an additional $14,500 EIDL, and accrued interest

of $900, as part of the consideration paid for the acquisition of GameIQ (see Note 3).

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

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.

As of December 31, 2023, the note payable had a principal balance outstanding

of $664,500 and accrued interest payable of $27,259.

Sheet Arrangements

4 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 7. Management’s Discussion and Analysis