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Item 9A. Controls and Procedures

2024-04-09 compared with 2023-03-07 · 232 added, 88 removed, 471 unchanged (40% of the section changed)

1 unchanged sentence

of Disclosure Controls and Procedures

maintain disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, that are designed to

ensure that information required to be disclosed in our reports under the Exchange Act, is recorded, processed, summarized, and reported

within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our

management, including our principal executive officer and our principal financial officer, as appropriate, to allow timely decisions

regarding required disclosure.

carried out an evaluation under the supervision and with the participation of our management, including our principal executive officer

and principal financial officer, of the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e)

under the Exchange Act) as of the year ended December 31, 2022.

Based on this evaluation, our principal executive officer and principal

financial officer concluded that our disclosure controls and procedures were not effective as of December 31, 2022.

August 18, 2023, RDE, Inc.

(“RDE”, the “Company”) entered into an agreement and plan of merger (the “Merger”)

to acquire CardCash Exchange Inc (“CardCash”, the “Predecessor”).

On December 29, 2023, the Merger was completed.

As a result of the Merger, the Company adopted the controls and procedures of the Predecessor.

The Company’s management, with the

participation of its Chief Executive and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures

pursuant to Rule 13a-15 under the Securities Exchange Act of 1934, as amended (“Exchange Act”), as of December 31, 2023.

controls and procedures are designed at a reasonable assurance level to ensure that information required to be disclosed in our reports

filed or submitted under the Exchange Act, is recorded, processed, summarized and reported within the time periods specified in the rules

and forms of the SEC, and that information relating to the Company is accumulated and communicated to management, including our principal

officers, as appropriate to allow timely decisions regarding required disclosure.

The Company’s Chief Executive and Chief Financial

Officer has evaluated the effectiveness of the Company’s disclosure controls and procedures as of December 31, 2023, and have concluded

that the Company’s disclosure controls and procedures were not effective as of December 31, 2023 due to material weaknesses in

the Company’s internal control over financial reporting as described below.

Annual Report on Internal Control over Financial Reporting

management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rules 13a-15(f)

and 15d-15(f) under the Exchange Act).

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer

and the oversight of our audit committee, has evaluated the effectiveness of our internal control over financial reporting as of December

In assessing the effectiveness of our internal control over financial reporting, our management used the framework established

in Internal Control Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission

Based on that evaluation, our management has concluded that our internal control over financial reporting was effective as of

December 31, 2022.

is responsible for establishing and maintaining adequate internal control over financial reporting, as s defined by Rule 13a-15(f) and

Rule 15d-15(f) under the Exchange Act.

The Company’s internal control over financial reporting is designed to provide reasonable

assurance regarding the reliability of financial reporting and the preparation of consolidated financial statements for external purposes

in accordance with GAAP.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because

of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Management conducted an assessment

of the Company’s internal control over financial reporting as of December 31, 2023, based on the framework and criteria established

by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control-Integrated Framework (2013) (COSO).

on the assessment, management concluded that, as of December 31, 2023, the Company’s internal controls over financial reporting

were not effective.

identified material weaknesses in our internal controls over financial reporting.

A material weakness is 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 financial statements will not be prevented or detected on a timely basis.

material weaknesses identified include (i) we had inadequate segregation of duties consistent with control objectives.

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.

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.

Notwithstanding

the identified material weaknesses, management has concluded that the Financial Statements included in this Annual Report on Form 10-K

present fairly, in all material respects, the Company’s financial position, results of operations and cash flows for the periods

disclosed in conformity with U.S.

Remediation of Material Weaknesses

has been actively engaged in developing and implementing remediation plans to address material weaknesses described above.

These remediation

efforts are ongoing and include or are expected to include designing and implementing controls to formalize roles and review

responsibilities to align with our team’s skills and experience and designing and implementing controls over segregation of duties,

and designing and implementing IT general controls, including controls over the review and update of user access rights and privileges

and program change management controls.

Limitations on Effectiveness of Controls

management, including our Chief Executive Officer and Chief Financial Officer, intends that our disclosure controls and procedures and

internal control over financial reporting are designed to provide reasonable assurance of achieving their objectives.

However, our management

does not expect that our disclosure controls and procedures or our internal control over financial reporting will prevent all errors

and all fraud.

A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that

the objectives of the control system are met.

Further, the design of a control system must reflect the fact that there are resource constraints,

and the benefits of controls must be considered relative to their costs.

Because of the inherent limitations in all control systems,

no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected.

These inherent limitations include the realities that judgments in decision-making can be faulty, and that breakdowns can occur because

of a simple error or mistake.

Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two

or more people or by management override of the controls.

The design of any system of controls also is based in part upon certain assumptions

about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under

all potential future conditions;

over time, controls may become inadequate because of changes in conditions, or the degree of compliance

with policies or procedures may deteriorate.

Because of the inherent limitations in a cost effective control system, misstatements due

to error or fraud may occur and not be detected.

Report on Internal Control Over Financial Reporting

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OTHER INFORMATION

DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE

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President and Chairman

Aaron Horowitz

President of Restaurant.com

Vice President, Enterprise B2B Sales of Restaurant.com

Balazs Wellisch

Chief Technology Officer of Restaurant.com

Director of Marketing of Restaurant.com

Director, President of CardCash

Marc Ackerman

Chief Operating Officer of CardCash

Kevin Harrington

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creates a critical link between management and the Board.

Horowitz has been President of Restaurant.com since 2017.

He joined Restaurant.com in 2010 as General Counsel.

Prior to joining Restaurant.com,

Horowitz served as General Counsel at Cosmetique.

Horowitz received his B.A.

from University of Michigan in 1985 and his Juris

Doctor from the University of Chicago Law School in 1988.

Miller joined Restaurant.com and the B2B division since its inception in 2004.

Before joining Restaurant.com, Mr.

Miller was with

Gordon Flesch Company, a leading National Cannon dealership for 15 years in sales and management.

He graduated from Eastern Illinois

University in 1988 with a B.A.

in Political Science.

Wellisch joined Restaurant.com in February 2022 following our acquisition of GameIQ acquisition.

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Wellisch graduated from San Diego State University with a degree in Computer Science.

Nason joined Restaurant.com in May 2011.

Nason is responsible for leading the marketing, creative and analytics teams to coordinate

and expand the company’s marketing across B2C and B2B platforms.

Prior to joining Restaurant.com, Ms.

Nason served as a project

lead providing analytics and consulting services at Allant Group from January 2003 to April 2011 to a variety of companies and developed

32 business models to measure the effectiveness of different marketing campaigns and from January 2000 to January 2003 was a consulting

analyst at NDCHealth engaging in the analysis of data to respond to complex sales and marketing business questions.

Nason graduated

from Marquette University with a Bachelor of Science in Mathematics and received her Master of Science in Applied Mathematics from Roosevelt

Bohm joined our Board of Directors on December 29, 2023, and is the Chief Executive Officer of our subsidiary, CardCash, following

the CardCash Merger.

our f following the CardCash Merger.

Bohm is a seasoned entrepreneur with a diverse background in leveraging

technology, both as an operator and a financier.

Co-founded CardCash.com in 2009 and swiftly transformed the startup into one of the

world’s largest gift card exchange marketplaces.

For his outstanding achievements, Forbes Magazine recognized Elliot as one of

America’s Most Promising CEOs under the age of 35, a prestigious list featuring only 22 individuals.

His strategic vision has fostered

key partnerships with industry giants such as Walmart, Amazon, CVS, and United Airlines, solidifying his reputation as a dynamic leader

in technology-driven entrepreneurship.

With a decade of experience in M&A, Elliot has successfully orchestrated investment and acquisition

deals, raising over tens of millions in venture capital and debt financing from esteemed names like Guggenheim Partners, Incomm, Pathward,

and Sterling National Bank.

Bohm graduated from the Institute of Advanced Judaic Studies in Toronto

Canada with a master’s degree in Judaic Studies.

Ackerman joined our Company as the Chief Operating Officer of our subsidiary, CardCash, on December 29, 2023, following the

CardCash Merger.

Ackerman is a experienced operator, Co-founded CardCash.com in 2009, and played a pivotal role in evolving the

operation from a startup with a handful of individuals into a thriving team of over 50 employees.

His visionary leadership and

management acumen have streamlined processes, ensuring the efficient coordination of various departments, including customer

service, shipping, bulk sales, human resources, and loss prevention.

With a track record of success, he continues to drive

operational excellence and contributes to the growth of innovative ventures.

Ackerman graduated from BMG in Lakewood, New

Jersey, with a master’s degree in Judaic Studies.

Harrington was appointed as a director of our Company on February 13, 2019, following the closing of the SkyAuction Merger.

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Wingo, Danner and Harrington, are independent within the meaning of

the Nasdaq Marketplace Rules cited above, and that Paul Danner We believe Paul Danner is also an audit committee financial expert as

that term is defined by listing standards of the national securities exchanges and SEC rules, including the rules relating to the independence

standards of an audit committee and the non-employee director definition of Rule 16b-3 under the Securities Exchange Act of 1934.

the Nasdaq Marketplace Rules cited above.

Paul Danner is also an audit committee financial expert as that term is defined by listing

standards of the national securities exchanges and SEC rules, including the rules relating to the independence standards of an audit

committee and the non-employee director definition of Rule 16b-3 under the Securities Exchange Act of 1934.

or Officer Involvement in Certain Legal Proceedings

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more than $100,000 in the form of salary and bonus during such year.

For purposes of this report, these individuals are collectively

For the purposes of this report, these individuals are collectively

the “named executive officers” of our Company.

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Chairman, President and CEO

Director, President CardCash

Marc Ackerman

Chief Operating Officer, CardCash

Aaron Horowitz

1 unchanged sentence

VP Technology

Includes $50,000 accrued compensation and $100,000 accrued

bonus that was earned but not paid as of December 31, 2023.

and Advisory Agreements

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Thakker may be entitled to receive, at the discretion of our Board, a cash bonus based on the performance goals of our Company.

July 1, 2023, the Board increased Mr.

Thakker’s annual base salary to $400,000.

employment agreement also provides for termination by us upon his death or disability (defined as three aggregate months of incapacity

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and one year thereafter and prohibiting him from disclosure of confidential information regarding our company at any time.

on December 29, 2023, the closing of our merger with CardCash, the Company entered into an Employment Agreement (the “Agreement”)

with Elliot Bohm.

Bohm was the President of CardCash prior to the closing of our merger, and per the terms of the Agreement, Mr.

Bohm will remain as President of CardCash, and will join the Board of Directors of RDE as well as serving as a member of the Board of

Directors of CardCash.

Under the terms of the four-year Agreement, Mr.

Bohm shall receive an annual base salary of $375,000 and 1,250,000

restricted shares of RDE’s common stock of which 625,000 shall be issued upon execution of the Agreements and an additional 625,000

restricted shares of RDE’s common stock shall vest 25% or 156,250 shares on each anniversary of the Agreement.

the Agreement is terminated by Mr.

Bohm for good reason, or the Company without cause, the Company is obligation to pay Mr.

payment, payable in equal installments over a six (6) month period (the “Severance Period), equal to the sum of the following:

The equivalent of the greater of (i) twelve (12) months of Executive’s then-current base salary or (ii) the remainder of

the term of this Agreement.

Earned but Unpaid Amounts.

Any previously earned but unpaid salary through Executive’s final date of employment with the Company,

and any previously earned but unpaid bonus amounts prior to the date of Executive’s termination of employment.

All Equity vested at time of termination shall be retained by Executive and all Equity that has not vested shall be accelerated

and be deemed vested.

Other Benefits.

The Company shall provide continued coverage for the remainder of the Severance Period under all health, life, disability

and similar employee benefit plans and programs of the Company on the same basis as Executive was entitled to participate immediately

prior to such termination.

Bohm also entered into a confidentiality and non-competition agreement in conjunction with his employment agreement which contains covenants

restricting Mr.

Bohm from engaging in any activities competitive with our business during the term of the employment agreement and one

year thereafter and prohibiting him from disclosure of confidential information regarding our company at any time.

on December 29, 2023, the closing of our merger with CardCash, the Company entered into an Employment Agreement (the “Agreement”)

with Mark Ackerman.

Ackerman was the Chief Operating Officer of CardCash prior to the closing of our merger, and per the terms of

the Agreement, Mr.

Ackerman will remain as the Chief Operating Officer of CardCash.

Under the terms of the four-year Agreement, Mr.

shall receive an annual base salary of $375,000 and 1,250,000 restricted shares of RDE’s common stock of which 625,000 shall be

issued upon execution of the Agreements and an additional 625,000 restricted shares of RDE’s common stock shall vest 25% or 156,250

shares on each anniversary of the Agreement.

the Agreement is terminated by Mr.

Ackerman for good reason, or the Company without cause, the Company is obligation to pay Mr.

a cash payment, payable in equal installments over a six (6) month period (the “Severance Period), equal to the sum of the following:

The equivalent of the greater of (i) twelve (12) months of Executive’s then-current base salary or (ii) the remainder of

the term of this Agreement.

Earned but Unpaid Amounts.

Any previously earned but unpaid salary through Executive’s final date of employment with the Company,

and any previously earned but unpaid bonus amounts prior to the date of Executive’s termination of employment.

All Equity vested at time of termination shall be retained by Executive and all Equity that has not vested shall be accelerated

and be deemed vested.

Other Benefits.

The Company shall provide continued coverage for the remainder of the Severance Period under all health, life, disability

and similar employee benefit plans and programs of the Company on the same basis as Executive was entitled to participate immediately

prior to such termination.

Ackerman also entered into a confidentiality and non-competition agreement in conjunction with his employment agreement which contains

covenants restricting Mr.

Ackerman from engaging in any activities competitive with our business during the term of the employment agreement

and one year thereafter and prohibiting him from disclosure of confidential information regarding our company at any time.

Compensation Plan Information

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Balazs Wellisch

Aaron Horowitz

Ketan Thakker

Kevin Harrington

All equity awards listed in this table were granted

pursuant to our 2019 Plan, the terms of which are described above under “Equity Compensation Plan Information.”

amount reflects the fair market value of our common stock of $0.50 per share as of February 28, 2022 (the determination of the fair

market value by our board of directors as of the grant date) multiplied by the amount shown in the column for the number of shares

that have been granted.

All equity awards listed

in this table were granted pursuant to our 2019 Plan, the terms of which are described above under “Equity Compensation Plan

Information.”

This amount reflects the

fair market value of our common stock of $3.50 per share as of April 1, 2023 (the determination of the fair market value by our

board of directors as of the grant date) multiplied by the amount shown in the column for the number of shares that have been granted.

Director Compensation

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as a member of one of our Board Committees will receive an additional cash payment of $1,000 annually.

The Board members received no

compensation for board service during the year ended December 31, 2023.

following table sets forth information regarding compensation earned by or paid to our directors for the fiscal year ended December 31,

Fees Earned or Paid in Cash ($)

Awards ($)(1)

All Other Compensation ($)

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Information.”

During the year ended December

31, 2022, the Company granted 720,000 of shares to members of the Company’s Board of Directors with a fair value of $360,000

or $0.50 per share.

The shares vest over a two-year period from grant date.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

following table sets forth certain information as of December 31, 2022, , the beneficial ownership of our common stock by the following

following table sets forth certain information as of March 1, 2024, the beneficial ownership of our common stock by the following persons:

each person or entity who,

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officers and directors as a group;

were 14,110,982 shares of our common stock outstanding on December 31, 2022.

were 25,398,385 shares of our common stock outstanding on March 1, 2024.

Beneficial ownership has been determined in accordance with

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computing the number of shares of common stock beneficially owned by a person and the percentage ownership of that person, shares of

common stock subject to options or warrants held by that person that are currently exercisable or exercisable within 60 days of December

common stock subject to options or warrants held by that person that are currently exercisable or exercisable within 60 days of March

1, 2024, are deemed outstanding.

1 unchanged sentence

percentage ownership of any other person.

person named in the table has sole voting and investment power and that person’s address is c/o RDE, Inc., 1500 West Shure Drive, Suite 200, Arlington Heights, IL 60004.

person named in the table has sole voting and investment power and that person’s address is c/o RDE, Inc., 1500 West Shure Drive,

Suite 200, Arlington Heights, IL 60004.

Name and Address of Beneficial Owners

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5% Stockholders

Higher Proof L.L.C.

Eldridge Industries, LLC (1)

Interactive Communications (2)

Named Executive Officers and Directors

Ketan Thakker (1)

Paul Danner III (2)

Kevin Harrington (3)

Scot Wingo (4)

Ketan Thakker, Director and Chief Executive Officer (3)

Elliot Bohm, Director, President of CardCash (4)

Marc Ackerman, Chief Operating Officer, CardCash (5)

Balazs Wellisch, Chief Technology Officer (6)

Paul Danner III, Director

Kevin Harrington, Director

Scot Wingo, Director

All executive officers and directors as a group (7 individuals)

address of the principal business office of each of the Reporting Persons is 600 Steamboat Road, Greenwich, CT 06830.Anthony Minella

of Eldridge Industries, LLC has the authority to buy and sell securities.

The address of the principal business office of each of the Reporting Persons

is 250 Williams Street, Atlanta, GA 30303.

Gruenhut of Interactive Communications

has the authority to buy and sell securities.

Includes 2,549,252 shares

owned, 133,334 vested but unissued restricted shares, and vested options to purchase 1,622 shares.

Includes 687,500 shares

owned, and 33,333 vested but unissued restricted shares.

Includes 687,500 shares

owned, and 33,333 vested but unissued restricted shares.

Includes 279,217 shares

owned, and vested options to purchase 417,323 shares.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS AND DIRECTOR INDEPENDENCE

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This category consists of fees for services other than the services described above.

December 31, 2022

December 31, 2021

Audit-related fees

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Specimen Stock Certificate Evidencing the Shares of Common Stock

Executive Employment Agreement dated May 1, 2022 between RDE, Inc.

Executive Employment Agreement dated July 1, 2023 between RDE, Inc.

and Ketan Thakker.

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and GameIQ, Inc.

Agreement dated April 21, 2022 between the Company and T-Mobile USA, Inc.

Code of Ethics

1 unchanged sentence

Power of Attorney

Certification of Chief Executive Officer pursuant to Rule 13a-14(a) or 15d-14 of the Securities Exchange Act of 1934

Certification of Principal Financial Officer pursuant to Rule 13a-14(a) or 15d-14 of the Securities Exchange Act of 1934

Section 1350 Certification of Chief Executive Officer

Section 1350 Certification of Principal Financial Officer

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