- Achieves Significant Reduction in Net Loss through Cost Management
- Continues Progress toward Proposed Strategic Transactions with GoLogiq and Job Mobz
NEW YORK, NY / ACCESSWIRE / November 20, 2023 / Recruiter.com Group, Inc. (NASDAQ:RCRT)(NASDAQ:RCRTW) ("Recruiter.com" or the "Company"), a provider of on-demand recruiting solutions, today announced its financial results for the third quarter ended September 30, 2023.
Miles Jennings, CEO of Recruiter.com, commented on the quarter, "Q3 2023 was a period of profound transition and strategic reorganization for our company. Despite facing a challenging landscape, we have made strides in aligning our operations with high-margin technology solutions. Our focused efforts on streamlining operations have led to an 82% reduction in net loss compared to the previous year period."
"We also continued progress on our strategic transactions, closing on the sale of our healthcare staffing business to Futuris, and making progress toward the sale of certain intellectual property to Job Mobz and expanding into financial technology ("Fintech") through an acquisition from GoLogiq. This quarter reflects our ongoing commitment to evolving our business model and building back value for our shareholders."
Third Quarter 2023 Financial Highlights (Full Results in Tables Below)
- Revenue: Revenue for the third quarter totaled $183,722, excluding $1.09 million from discontinued operations, compared to $5.78 million in the third quarter of 2022. This decline primarily reflected the Company's ongoing strategic shifts, including the transfer of Recruiter On Demand revenue clients to Job Mobz and market challenges.
- Gross Profit: Gross profit (loss) for the third quarter was ($68,169), excluding $277,578 from discontinued operations, compared to gross profit of $1.89 million in the third quarter of 2022. The decrease was due to lower total revenue following strategic realignments.
- Total Operating Expenses: Operating expenses for the third quarter were $2.03 million, compared to operating expenses of $7.60 million in the third quarter of 2022. This decrease was due primarily to focused cost control efforts and the streamlining of operations.
- Net Loss: Net loss for the third quarter was $1.03 million, including $276,529 of net income from discontinued operations, demonstrating an improvement compared to a net loss of $5.63 million in the third quarter of 2022. The reduced net loss for Q3 2023 reflected the effective implementation of cost-saving measures and strategic realignments.
- Liquidity and Capital Resources: On September 30, 2023, Recruiter.com had $296 thousand in cash and cash equivalents, accounts receivable, net, of $71,615, and current assets from discontinued operations of $2.04 million. There were 1,433,903 common shares outstanding at quarter-end.
Strategic Developments
Recruiter.com's third quarter was characterized by key strategic decisions and a continued focus on technology-driven solutions.
- Divestiture of Healthcare Staffing Business to Futuris: Completing this transaction allows Recruiter.com to concentrate further on strategic transactions and AI-centric solutions.
- Acquisition of GoLogiq Assets: The proposed acquisition of select assets of GoLogiq is expected to pivot the company to a Fintech focus while spinning out recruiting and AI-related assets.
- Sale of Recruiter.com IP to Job Mobz: This strategic move is expected to strengthen the Company's balance sheet.
- Ongoing Negotiations with Debt Holders: As set forth in the Company's recent Form 8-K that was filed on November 9, the Company is in default on certain debt obligations. The Company continues negotiating with its debt holders as part of its financial strategy.
Looking Forward
Jennings concluded, "While we recognize the challenges presented by the substantial decrease in revenue and debt negotiations, we are encouraged by the improvement in our net loss and the effective cost-control measures implemented. Our focus remains now on stabilizing and growing high-margin, technology-led revenue streams while moving to complete our strategic transactions with GoLogiq and Job Mobz. As we navigate these changes, we are optimistic about the future and are committed to driving success for the Company and our shareholders."
About Recruiter.com Group, Inc.
Recruiter.com is an on-demand recruiting platform providing flexible talent acquisition solutions that scale from startups to the Fortune 100. With an on-tap network of thousands of recruiting professionals and recruitment marketing automation, Recruiter.com helps businesses solve today's complex hiring challenges.
For investor information, visit https://investors.recruiter.com
Please follow social media channels for additional updates:
- LinkedIn Recruiter Network Group: https://www.linkedin.com/groups/42370/
- LinkedIn Company Page: https://www.linkedin.com/company/1240434
- Twitter Company Page: https://twitter.com/recruiterdotcom
- Facebook Company Page: https://www.facebook.com/RecruiterDotCom
Cautionary Note Regarding Forward-Looking Statements:
This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The words "predict," "forecast," "believe," "may," "estimate," "continue," "anticipates," "intend," "should," "plan," "could," "target," "potential," "is likely," "will," "expect" and similar expressions, as they relate to us, are intended to identify forward-looking statements. We have based these forward-looking statements primarily on our current expectations and projections about future events and financial trends that we believe may affect our financial condition, results of operations, business strategy, and financial needs. Important factors that could cause actual results to differ from those in the forward-looking statements include continued demand for professional hiring, the accuracy of the Recruiter Index® survey, the economic environment, the impact of the COVID-19 pandemic on the job market and the economy as virus levels are again rising in many states, and the Risk Factors contained within our filings with the Securities and Exchange Commission, including our Annual Report on Form 10-K for the year ended December 31, 2022. [With respect to the proposed GoLogiq transaction, factors that may cause actual future events to differ materially from the excepted results include, but are not limited to: (i) the risk that the merger between Recruiter.com and GoLogiq SPV (or similarly formed subsidiary to effectuate the transaction) may not be completed in a timely manner or at all, which may adversely affect the price of the securities of Recruiter.com, (ii) the failure to satisfy the conditions to the consummation of the transaction, including the adoption of the Agreement by the stockholders of Recruiter.com and GoLogiq's, (iii) the occurrence of any event, change or other circumstance that could give rise to the termination of the Agreement, (iv) the receipt of an unsolicited offer from another party for an alternative transaction that could interfere with the Merger, (v) the effect of the announcement or pendency of the transaction on GoLogiq's business relationships, performance, and business generally, (vi) the inability to recognize the anticipated benefits of the Merger, which may be affected by, among other things, competition and the ability of the post-Merger company to grow and manage growth profitability and retain its key employees, (vii) costs related to the Merger, (viii) the outcome of any legal proceedings that may be instituted against Recruiter.com and GoLogiq following the announcement of the proposed merger, (ix) the ability to maintain the listing of Recruiter.com's securities on Nasdaq, (x) the ability to implement business plans, forecasts, and other expectations after the completion of the Merger, and identify and realize additional opportunities, (xi) the risk of downturns and the possibility of rapid change in the highly competitive industry in which GoLogiq operates, (xii) the risk that GoLogiq may not sustain profitability, (xiii) the risk that GoLogiq may need to raise additional capital to execute its business plan, which many not be available on acceptable terms or at all, (xiii) the risk that third-party suppliers and manufacturers are not able to fully and timely meet their obligations, (xiv) the risk of product liability or regulatory lawsuits or proceedings relating to the products and services of GoLogiq, (xv) the risk that GoLogiq is unable to secure or protect its intellectual property, (xvi) the risk that the securities of the post-Merger company will not be approved for listing on Nasdaq or if approved, maintain the listing, and (xvii) other risks and uncertainties indicated in the filings that are made from time to time with the SEC by Recruiter.com (including those under the "Risk Factors" sections therein). The foregoing list of factors is not exhaustive. Forward-looking statements speak only as of the date they are made. Readers are cautioned not to put undue reliance on forward-looking statements, and Recruiter.com and GoLogiq assume no obligation and do not intend, to update or revise these forward-looking statements, whether as a result of new information, future events, or otherwise.] Any forward-looking statement made by us herein speaks only as of the date on which it is made. Factors or events that could cause our actual results to differ may emerge from time to time, and it is not possible for us to predict all of them. We undertake no obligation to update any forward-looking statements publicly, whether as a result of new information, future developments, or otherwise, except as may be required by law.
Company Contact:
Corporate Communications
[email protected]
-Tables Follow-
Recruiter.com Group, Inc. and Subsidiaries
Consolidated Balance Sheets
| September 30, | December 31, | |||||||
| 2023 | 2022 | |||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash | $ | 296,263 | $ | 946,804 | ||||
Accounts receivable, net of allowance for doubtful accounts of $1,131,457 and $1,384,186, respectively | 71,615 | 1,965,947 | ||||||
Prepaid expenses and other current assets | 256,232 | 255,548 | ||||||
Current assets from discontinued operations | 2,042,519 | 1,223,869 | ||||||
Total current assets | 2,666,629 | 4,392,168 | ||||||
Property and equipment, net of accumulated depreciation of $35,519 and $17,210, respectively | 42,568 | 61,340 | ||||||
Intangible assets, net | 1,623,300 | 2,578,692 | ||||||
Goodwill | 7,101,084 | 7,101,084 | ||||||
Total assets | $ | 11,433,581 | $ | 14,133,284 | ||||
LIABILITIES AND MEMBERS'/STOCKHOLDERS' EQUITY | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 1,338,049 | $ | 1,569,814 | ||||
Accrued expenses | 843,659 | 908,743 | ||||||
Accrued compensation | 175,084 | 410,957 | ||||||
Accrued interest | 222,126 | 81,576 | ||||||
Deferred payroll taxes | 2,484 | 2,484 | ||||||
Other liabilities | 17,333 | 17,333 | ||||||
Contingent consideration for acquisitions | - | - | ||||||
Loans payable - current portion, net of discount | 4,744,885 | 3,700,855 | ||||||
Refundable deposit on preferred stock purchase | 285,000 | 285,000 | ||||||
Warrant liability | 1,200,000 | 600,000 | ||||||
Deferred revenue | 182,523 | 215,219 | ||||||
Current liabilities associated with discontinued operations | 543,698 | 2,643 | ||||||
Total current liabilities | 9,554,841 | 7,794,624 | ||||||
Loans payable - long term portion | - | 1,260,343 | ||||||
Total liabilities | 9,554,841 | 9,054,967 | ||||||
Commitments and contingencies (Note 9) | ||||||||
Members'/Stockholders' Equity | ||||||||
Preferred stock, Series D, $0.0001 par value; 2,000,000 shares authorized; 0 shares issued and outstanding as of September 30, 2023 and December 31, 2022, respectively | - | - | ||||||
Preferred stock, Series E, $0.0001 par value; 775,000 shares authorized; 86,000 shares issued and outstanding as of September 30, 2023 and December 31, 2022, respectively | 9 | 9 | ||||||
Preferred stock, Series F, $0.0001 par value; 200,000 shares authorized; 0 shares issued and outstanding as of September 30, 2023 and December 31, 2022, respectively | - | - | ||||||
Common stock, $0.0001 par value; 6,666,667 shares authorized; 1,433,903 and 1,085,184 shares issued and outstanding as of September 30, 2023 and December 31, 2022, respectively | 143 | 109 | ||||||
Shares to be issued, 0 and 587,945 shares as of June 30, 2023 and December 31, 2022, respectively | - | 4 | ||||||
Additional paid-in capital | 76,964,496 | 74,333,736 | ||||||
Accumulated deficit | (75,085,908 | ) | (69,255,541 | ) | ||||
Total members'/stockholders' deficit | 1,878,740 | 5,078,317 | ||||||
Total liabilities and members'/stockholders' deficit | $ | 11,433,581 | $ | 14,133,284 | ||||
| The accompanying notes are an integral part of these financial statements. | ||||||||
Recruiter.com Group, Inc. and Subsidiaries
Consolidated Statements of Operations
For the Three and Nine Months ended September 30, 2022 and 2023
(Unaudited)
| Three Months Ended | Three Months Ended | Nine Months Ended | Nine Months Ended | |||||||||||||
| September 30, | September 30, | September 30, | September 30, | |||||||||||||
| 2023 | 2022 | 2023 | 2022 | |||||||||||||
REVENUE | ||||||||||||||||
Revenue | $ | 183,722 | 5,784,424 | 3,010,870 | 18,296,826 | |||||||||||
Cost of revenue | $ | 251,891 | 3,899,157 | 2,163,354 | 11,331,346 | |||||||||||
Gross profit (loss) | $ | (68,169 | ) | 1,885,267 | 847,516 | 6,965,480 | ||||||||||
| -4 | % | -3 | % | 28 | % | 38 | % | |||||||||
OPERATING EXPENSES | ||||||||||||||||
Sales and marketing | 85,193 | 342,622 | 321,229 | 619,418 | ||||||||||||
Product development (including related party expense of $0, $8,636, $0, and $25,407 respectively) | 84,871 | 467,605 | 411,433 | 1,150,464 | ||||||||||||
Amortization of intangibles | 321,963 | 952,170 | 955,391 | 2,877,882 | ||||||||||||
Impairment expense | - | 2,129,101 | - | 2,129,101 | ||||||||||||
General and administrative (including share-based compensation expense of $343,951, $765,743, $1,106,460, and $3,415,670 respectively, and related party expenses of $0, $0, $0, and $19,825 respectively) | 1,534,339 | 3,714,066 | 5,255,043 | 12,876,714 | ||||||||||||
Total operating expenses | $ | 2,026,366 | 7,605,564 | 6,943,096 | 19,653,579 | |||||||||||
| - | - | |||||||||||||||
LOSS FROM OPERATIONS | $ | (2,094,535 | ) | (5,720,297 | ) | (6,095,580 | ) | (12,688,099 | ) | |||||||
OTHER INCOME (EXPENSES) | ||||||||||||||||
Interest expense | (622,883 | ) | (208,351 | ) | (1,784,252 | ) | (340,257 | ) | ||||||||
Income from ERC Credit | 1,422,773 | - | 2,177,568 | |||||||||||||
Other income (expense) | (12,566 | ) | (610 | ) | (11,262 | ) | 13,917 | |||||||||
Initial derivative expense | - | - | - | - | ||||||||||||
Finance cost | - | - | (327,073 | ) | - | |||||||||||
Gain on settlement of payables | - | - | 178,749 | - | ||||||||||||
Gain on assets sale | - | - | - | - | ||||||||||||
Gain on debt extinguishment | - | - | - | 1,205,195 | ||||||||||||
Total other income (expenses) | $ | 787,324 | (208,961 | ) | 233,730 | 878,855 | ||||||||||
LOSS BEFORE INCOME TAXES | (1,307,211 | ) | (5,929,258 | ) | (5,861,850 | ) | (11,809,244 | ) | ||||||||
Provision for income taxes | - | - | - | - | ||||||||||||
Net loss from continuing operations | $ | (1,307,211 | ) | (5,929,258 | ) | (5,861,850 | ) | (11,809,244 | ) | |||||||
Net income from discontinued operations | 276,529 | 302,893 | 535,126 | 811,781 | ||||||||||||
Net Loss | (1,030,682 | ) | (5,626,365 | ) | (5,326,724 | ) | (10,997,463 | ) | ||||||||
Deemed dividends | - | (658,266 | ) | (503,643 | ) | (658,266 | ) | |||||||||
Net loss attributable to Common Shareholders | $ | (1,030,682 | ) | (6,284,631 | ) | (5,830,367 | ) | (11,655,729 | ) | |||||||
Net loss from continuing operations per common share - basic and diluted | $ | (0.96 | ) | (6.65 | ) | (5.23 | ) | (12.62 | ) | |||||||
Net income from discontinued operations per common share - basic and diluted | $ | 0.19 | 0.31 | 0.42 | 0.82 | |||||||||||
Net loss per common share - basic and diluted | $ | (0.75 | ) | (6.35 | ) | (4.79 | ) | (11.80 | ) | |||||||
Weighted average common shares - basic and diluted | 1,367,343 | 990,076 | 1,215,995 | 987,625 | ||||||||||||
| The accompanying notes are an integral part of these financial statements. | ||||||||||||||||
Recruiter.com Group, Inc. and Subsidiaries
Consolidated Statement of Changes in Stockholders' Equity
For the Three and Nine Months ended September 30, 2023 and 2022
(Unaudited)
| Preferred stock Series D | Preferred stock Series E | Preferred stock Series F | Common stock | Common stock to be issued | ||||||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Shares | Amount | Shares | Amount | Shares | Amount | Additional Paid in Capital | Accumulated Deficit | Total Stockholders' Equity | ||||||||||||||||||||||||||||
Balance as of December 31, 2022 | - | $ | - | 86,000 | $ | 9 | - | $ | - | 1,085,184 | $ | 109 | 39,196 | $ | 4 | $ | 74,333,736 | $ | (69,255,541 | ) | $ | 5,078,317 | ||||||||||||||||||
Stock based compensation - option | - | - | - | - | - | - | - | - | - | - | 390,806 | - | 390,806 | |||||||||||||||||||||||||||
Stock based compensation - RSUs | - | - | - | - | - | - | - | - | - | - | 152,143 | - | 152,143 | |||||||||||||||||||||||||||
Anti-dilution adjustment to warrants | - | - | - | - | - | - | - | - | - | - | 503,643 | (503,643 | ) | - | ||||||||||||||||||||||||||
Common stock issued for restricted stock units | - | - | - | - | - | - | 7,387 | 1 | - | - | (1 | ) | - | (0 | ) | |||||||||||||||||||||||||
Common stock issued upon exercise of warrants | - | - | - | - | - | - | 54,768 | 5 | - | - | 315,173 | - | 315,178 | |||||||||||||||||||||||||||
Net loss | - | - | - | - | - | - | - | - | - | - | - | (3,315,769 | ) | (3,315,769 | ) | |||||||||||||||||||||||||
Balance as of March 31, 2023 | - | $ | - | 86,000 | $ | 9 | - | $ | - | 1,147,339 | $ | 115 | 39,196 | $ | 4 | $ | 75,695,500 | $ | (73,074,953 | ) | $ | 2,620,675 | ||||||||||||||||||
Stock based compensation - option | - | - | - | - | - | - | - | - | - | - | 219,560 | - | 219,560 | |||||||||||||||||||||||||||
Common stock issued for the exchange of warrants | - | - | - | - | - | - | 38,804 | 4 | (39,196 | ) | (4 | ) | - | - | - | |||||||||||||||||||||||||
Net loss | - | - | - | - | - | - | - | - | - | - | - | (980,273 | ) | (980,273 | ) | |||||||||||||||||||||||||
Balance as of June 30, 2023 | - | $ | - | 86,000 | $ | 9 | - | $ | - | 1,186,143 | $ | 119 | - | $ | - | $ | 75,915,060 | $ | (74,055,226 | ) | $ | 1,859,962 | ||||||||||||||||||
Stock based compensation - option | - | - | - | - | - | - | - | - | - | - | 343,951 | - | 343,951 | |||||||||||||||||||||||||||
Issuance of common stock, net of equity issuance costs of $250,490 | - | - | - | - | - | - | 130,000 | 13 | - | - | 785,496 | - | 785,509 | |||||||||||||||||||||||||||
Recapitalization | - | - | - | - | - | - | - | - | - | - | (80,000 | ) | - | (80,000 | ) | |||||||||||||||||||||||||
Effect of the August 2023 reverse stock split on common stock | - | - | - | - | - | - | 25,537 | 2 | - | - | (2 | ) | - | - | ||||||||||||||||||||||||||
Common stock issued upon exercise of pre-funded warrants | - | - | - | - | - | - | 92,223 | 9 | - | - | (9 | ) | - | - | ||||||||||||||||||||||||||
Net Loss | - | - | - | - | - | - | - | - | - | (1,030,682 | ) | (1,030,682 | ) | |||||||||||||||||||||||||||
Balance as of September 30, 2023 | - | $ | - | 86,000 | $ | 9 | - | $ | - | 1,433,904 | $ | 143 | - | $ | - | $ | 76,964,496 | $ | (75,085,908 | ) | $ | 1,878,740 | ||||||||||||||||||
| Preferred stock Series D | Preferred stock Series E | Preferred stock Series F | Common stock | Common stock to be issued | ||||||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | Shares | Amount | Shares | Amount | Shares | Amount | Additional Paid in Capital | Accumulated Deficit | Total Stockholders' Equity | ||||||||||||||||||||||||||||
Balance as of December 31, 2021 | - | $ | - | 86,000 | $ | 9 | - | $ | - | 971,095 | $ | 97 | 39,196 | $ | 4 | $ | 66,949,755 | $ | (50,859,640 | ) | $ | 16,090,225 | ||||||||||||||||||
Stock based compensation - Options and Warrants | - | - | - | - | - | - | - | - | - | - | 1,397,804 | - | 1,397,804 | |||||||||||||||||||||||||||
Stock based compensation - RSUs | - | - | - | - | - | - | - | - | - | - | 268,956 | - | 268,956 | |||||||||||||||||||||||||||
Common stock issued for the exchange of warrants | - | - | - | - | - | - | 7,515 | 1 | - | - | 152,243 | - | 152,244 | |||||||||||||||||||||||||||
Common stock issued for restricted stock units | - | - | - | - | - | - | 7,045 | 1 | - | - | (1 | ) | - | - | ||||||||||||||||||||||||||
Net loss | - | - | - | - | - | - | - | - | - | - | - | (4,182,338 | ) | (4,182,338 | ) | |||||||||||||||||||||||||
Balance as of March 31, 2022 | - | $ | - | 86,000 | $ | 9 | - | $ | - | 985,655 | $ | 99 | 39,196 | $ | 4 | $ | 68,768,757 | $ | (55,041,978 | ) | $ | 13,726,891 | ||||||||||||||||||
Stock based compensation - Options and Warrants | - | - | - | - | - | - | - | - | - | - | 381,351 | - | 381,351 | |||||||||||||||||||||||||||
Stock based compensation - RSUs | - | - | - | - | - | - | - | - | - | - | 237,906 | - | 237,906 | |||||||||||||||||||||||||||
Common stock issued for restricted stock units | - | - | - | - | - | - | 4,422 | 1 | - | - | (1 | ) | - | - | ||||||||||||||||||||||||||
Net loss | - | - | - | - | - | - | - | - | - | - | - | (1,188,760 | ) | $ | (1,188,760 | ) | ||||||||||||||||||||||||
Balance as of June 30, 2022 | - | $ | - | 86,000 | $ | 9 | - | $ | - | 990,076 | $ | 100 | 39,196 | $ | 4 | $ | 69,386,572 | $ | (56,230,738 | ) | 13,157,388 | |||||||||||||||||||
Stock based compensation - Options | - | - | - | - | - | - | - | - | - | - | 765,743 | - | 765,743 | |||||||||||||||||||||||||||
Stock based compensation - RSUs | - | - | - | - | - | - | - | - | - | - | 156,866 | - | 156,866 | |||||||||||||||||||||||||||
Anti-dilution adjustment to warrants | - | - | - | - | - | - | - | - | - | - | 658,266 | (658,266 | ) | - | ||||||||||||||||||||||||||
Relative fair value of warrants issued with debt | - | - | - | - | - | - | - | - | - | - | 1,032,842 | - | 1,032,842 | |||||||||||||||||||||||||||
Net loss | - | - | - | - | - | - | - | - | - | - | - | (5,626,365 | ) | (5,626,365 | ) | |||||||||||||||||||||||||
Balance as of September 30, 2022 | - | $ | - | 86,000 | $ | 9 | - | $ | - | 990,076 | $ | 100 | 39,196 | $ | 4 | $ | 72,000,289 | $ | (62,515,369 | ) | $ | 9,486,474 | ||||||||||||||||||
Recruiter.com Group, Inc. and Subsidiaries
Condensed Consolidated Statements Of Cash Flows
For the Nine Months ended September 30, 2023 and 2022
(Unaudited)
| Nine months | Nine months | |||||||
| September 30, | September 30, | |||||||
| 2023 | 2022 | |||||||
Cash Flows From Operating Activities | ||||||||
Net loss | $ | (5,326,724 | ) | $ | (10,997,463 | ) | ||
Adjustments to reconcile net loss to net cash used in operating activities: | ||||||||
Depreciation and amortization expense | 974,164 | 2,881,967 | ||||||
Bad debt expense | 175,463 | 479,065 | ||||||
Gain on debt extinguishment | - | (1,205,195 | ) | |||||
Gain on assets sale | - | |||||||
Gain on Settlement of debt | (178,749 | ) | - | |||||
Equity based compensation expense | 1,106,460 | 3,415,670 | ||||||
Warrant modification expense | - | 152,244 | ||||||
Anniversary fee on warrant liability | - | - | ||||||
Amortization of debt discount and debt costs | 1,212,006 | 135,161 | ||||||
Impairment expense | - | 2,129,101 | ||||||
Change in fair value of earn-out liability | - | 26,604 | ||||||
Factoring discount fee and interest | 20,480 | 150,117 | ||||||
Changes in assets and liabilities: | - | - | ||||||
Decrease in accounts receivable | (99,801 | ) | (1,273,012 | ) | ||||
Decrease in accounts receivable - related parties | - | 49,033 | ||||||
Decrease in prepaid expenses and other current assets | (684 | ) | (64,221 | ) | ||||
Increase (decrease) in accounts payable and accrued liabilities | 277,632 | (146,405 | ) | |||||
Decrease in accounts payable and accrued liabilities - related parties | - | (163,672 | ) | |||||
Deferred payroll taxes | - | - | ||||||
Increase in other liabilities | - | - | ||||||
Customer advances | - | - | ||||||
Decrease in deferred revenue | (32,696 | ) | (226,208 | ) | ||||
Net cash used in operating activities | (1,872,449 | ) | (4,657,214 | ) | ||||
Cash Flows From Investing Activities: | ||||||||
Capitalized software development costs | - | (1,325,491 | ) | |||||
Proceeds from sale of internal-use software | - | - | ||||||
Purchase of property and equipment | - | (73,037 | ) | |||||
Net cash used in investing activities | - | (1,398,528 | ) | |||||
Cash Flows From Financing Activities: | ||||||||
Proceeds from notes | - | 2,135,000 | ||||||
Proceeds from ERC advances | 450,000 | - | ||||||
Repayment of ERC advances | (450,000 | ) | - | |||||
Issuance of common stock, net of equity issuance costs of $300,490 | 785,509 | |||||||
Payments of loans | (495,473 | ) | (1,323,773 | ) | ||||
Proceeds from factoring agreement | 871,821 | 5,613,871 | ||||||
Repayments of factoring agreement | (175,127 | ) | (2,944,876 | ) | ||||
Purchase of preferred shares pursuant to recapitalization | (80,000 | ) | - | |||||
Debt issuance costs | - | - | ||||||
Gross proceeds from exercise of warrants | 315,178 | - | ||||||
Net cash provided by financing activities | 1,221,908 | 3,480,222 | ||||||
Net decrease in cash | (650,541 | ) | (2,575,520 | ) | ||||
Cash, beginning of period | 946,804 | 2,584,062 | ||||||
Cash, end of period | $ | 296,263 | $ | 8,542 | ||||
Supplemental disclosures of cash flow information: | ||||||||
Cash paid during the period for interest | $ | 256,552 | $ | 208,351 | ||||
Cash paid during the period for income taxes | $ | - | $ | - | ||||
Supplemental schedule of non-cash investing and financing activities: | ||||||||
Accounts receivable owed under factoring agreement collected directly by factor | $ | 1,000,020 | $ | 1,955,289 | ||||
Purchase price measurement period adjustment to goodwill and accounts receivable | $ | - | $ | 35,644 | ||||
Debt discount on warrants granted with notes | $ | 600,000 | $ | 1,032,842 | ||||
Debt Issuance costs accrued | $ | 50,000 | $ | - | ||||
Deemed dividends | $ | 503,643 | $ | - | ||||
Offering costs as a result of modification of warrants to induce exercise | $ | 10,400 | $ | - | ||||
| Nine months Ended September 30, | Three months Ended September 30, | ||||||||||||||||
| 2023 | 2022 | 2023 | 2022 | ||||||||||||||
Net Income (loss) | $ | (5,326,724 | ) | $ | (10,997,463 | ) | Net Income (loss) | $ | (1,030,682 | ) | $ | (6,284,631 | ) | ||||
Interest expense and finance cost, net | 1,784,252 | 340,257 | Interest expense and finance cost, net | 622,883 | 208,351 | ||||||||||||
Depreciation & amortization | 974,164 | 2,881,967 | Depreciation & amortization | 328,221 | 955,774 | ||||||||||||
EBITDA (loss) | (2,568,308.5 | ) | (7,775,239 | ) | EBITDA (loss) | (79,578 | ) | (5,120,506.0 | ) | ||||||||
Bad debt expense | 175,463 | 479,065 | Bad debt (recovery) expense | (24,537 | ) | 115,363 | |||||||||||
Gain on Settlement of Payables | (178,749 | ) | - | Gain on Settlement of Payables | - | - | |||||||||||
Restricted Stock Units issued for services | - | 424,265 | Restricted Stock Units issued for services | - | 97,029 | ||||||||||||
Stock-based compensation | 1,106,460 | 3,415,670 | Stock-based compensation | 343,951.00 | 1,011,606 | ||||||||||||
Impairment expense | - | 2,129,101 | Impairment expense | - | 2,129,101 | ||||||||||||
Gain on debt extinguishment | - | (1,205,195 | ) | Gain on debt extinguishment | - | - | |||||||||||
Adjusted EBITDA (Loss) | $ | (1,465,134 | ) | $ | (2,532,333 | ) | Adjusted EBITDA (Loss) | $ | 239,836.0 | $ | (1,767,407 | ) | |||||
SOURCE: Recruiter.com Group, Inc.
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