Recruitercom Group Inc

Previous wording

In the first quarter of 2024, the period ending March 31, 2024, the Company concentrated on finalizing its strategic transactions critical to its evolution. The Company navigated through a significant restructuring of its balance sheet and executed a license agreement with GoLogiq, as well as an extension of the Asset Purchase Agreement with Job Mobz. The strategic relationships with Job Mobz and GoLogiq are about expanding our capabilities and aligning our resources with our most promising opportunities. The Company is in a period of profound change after significantly reducing its operating footprint to focus primarily on strategic financial matters. The Company also prepared for its planned spin-out transaction of certain operating assets to its Atlantic Energy Solutions subsidiary, which is currently being renamed CognoGroup, a Nevada Corporation ("CognoGroup"). CognoGroup is planned to hold the current recruitment-related technology assets, including Mediabistro, a job board for the media industry, and Recruiter.com, the website, and tradename, as well as other assets and projects of the Company, such as its AI-enabled CandidatePitch software and RecruitingClasses.com. It is expected, but management cannot guarantee, that by June 30, 2024, the Company will close the sale of Recruiter.com to Job Mobz, Inc.

Current wording

In the second quarter of 2024, the period ending June 30, 2024, the Company continued to concentrate on finalizing its strategic transactions critical to its evolution. The Company is in a period of profound change after significantly reducing its operating footprint to focus primarily on strategic financial matters. The Company also continued preparing for its planned spin-out transaction of certain operating assets to its Atlantic Energy Solutions subsidiary, which is currently being renamed CognoGroup, a Nevada Corporation ("CognoGroup"). CognoGroup is planned to hold the current recruitment-related technology assets, including Mediabistro, a job board for the media industry, as well as other assets and projects of the Company, such as its AI-enabled CandidatePitch software and RecruitingClasses.com.

Previous wording

Product development efforts were limited to continued improvements to Mediabistro and its underlying job board technology. The Company also introduced an AI-powered predictive analytics capability for Mediabistro, to uncover job trends in the media industry and showcase these trends to hiring managers and job seekers.

Current wording

Product development efforts were limited to continued improvements to Mediabistro and its underlying job board technology, as well as technical projects related to the expected sale of Recruiter.com.

Previous wording

We had revenue of $0.2 million for the three-month period ended March 31, 2024, as compared to $2.3 million for the three-month period ended March 31, 2023, representing a decrease of $2.1 million or 90%. The decreases resulted primarily from a decrease in our Recruiters on Demand business of $1.6 million or 100% as we transitioned this business to JobMobz, a Recruitment Process Outsourcing company. Software Subscriptions contributed $0 of revenue in 2024 compared to $378 thousand in 2023 as we had sold our AI sourcing software technology last year to Talent, Inc. We also had a decrease in Permanent Placement fees of $20 thousand or 100% due to reduced focus on this line of business. Marketplace Solutions revenue of $206 thousand increased by $7 thousand or 4% and only partially offset the decreases outlined above.

Current wording

We had revenue of $0.1 million for the three-month period ended June 30, 2024, as compared to $0.6 million for the three-month period ended June 30, 2023, representing a decrease of $0.5 million or 77%. The decreases resulted primarily from a decrease in our Recruiters on Demand business of $0.2 million or 100% as we transitioned this business to JobMobz, a Recruitment Process Outsourcing company. Software Subscriptions contributed $0 of revenue in 2024 compared to $35 thousand in 2023 as we had sold our AI sourcing software technology last year to Talent, Inc. Marketplace Solutions revenue of $133 thousand decreased by $49 thousand or 27% and only partially offset the decreases outlined above.

Previous wording

Cost of revenue was $3 thousand for the three-month period ended March 31, 2024, compared to $1.6 million for the corresponding three-month period in 2023, representing a decrease of $1.6 million or 99%. This decrease resulted primarily from a decrease in compensation expense in line with the decrease in revenue and a higher margin revenue stream in 2024. Cost of revenue in 2023 was primarily attributable to third party staffing costs and other fees related to the recruitment and staffing business acquired from Genesys, which after its purchase, serves as our Recruiting Solutions division, as well as costs for contract recruiters supporting the Recruiters on Demand business.

Current wording

Cost of revenue was $0 for the three-month period ended June 30, 2024, compared to $0.3 million for the corresponding three-month period in 2023, representing a decrease of $0.3 million or 100%. This decrease resulted primarily from a decrease in compensation expense in line with the decrease in revenue and a higher margin revenue stream in 2024. Cost of revenue in 2023 was primarily attributable to third party staffing costs and other fees related to the recruitment and staffing business acquired from Genesys, which after its purchase, serves as our Recruiting Solutions division, as well as costs for contract recruiters supporting the Recruiters on Demand business.

Previous wording

Our gross profit for the three-month period ended March 31, 2024, was $0.2 million, producing a gross profit margin of 98%. Our gross profit for the corresponding 2023 three-month period was $0.7 million, producing a gross profit margin of 29%. The increase in the gross profit margin from the 2024 period to the 2023 period reflects the shift in the mix in sales for the period as revenue is now primarily generated through marketplace solutions.

Current wording

Our gross profit for the three-month period ended June 30, 2024, was $0.1 million, producing a gross profit margin of 100%. Our gross profit for the corresponding 2023 three-month period was $0.3 million, producing a gross profit margin of 45%. The increase in the gross profit margin from the 2024 period to the 2023 period reflects the shift in the mix in sales for the period as revenue is now primarily generated through marketplace solutions.

Previous wording

Our sales and marketing expense for the three-month period ended March 31, 2024, was $53 thousand compared to $157 thousand for the corresponding three-month period in 2023, a reduction of $104 thousand, which reflects a decrease in technology and advertising expenses.

Current wording

Our sales and marketing expense for the three-month period ended June 30, 2024, was $40 thousand compared to $79 thousand for the corresponding three-month period in 2023, a reduction of $39 thousand, which reflects a decrease in technology and advertising expenses.

Previous wording

For the three-month period ended March 31, 2024, we incurred a non-cash amortization charge of $314 thousand as compared to $308 thousand for the corresponding period in 2023. The amortization expense in 2024 and 2023 relates to the intangible assets acquired from Genesys (now our Recruiting Solutions division), Scouted, Upsider, OneWire, Parrut Novo Group, and GOLQ in 2024.

Current wording

For the three-month period ended June 30, 2024, we incurred a non-cash amortization charge of $273 thousand as compared to $326 thousand for the corresponding period in 2023. The amortization expense in 2024 and 2023 relates to the intangible assets acquired from Genesys (now our Recruiting Solutions division), Scouted, Upsider, OneWire, Parrut Novo Group, and GOLQ in 2024.

Previous wording

General and administrative expense for the three-month period ended March 31, 2024, includes compensation-related costs for our employees dedicated to general and administrative activities, legal fees, audit and tax fees, consultants and professional services, and general corporate expenses. For the three-month period ended March 31, 2024, our general and administrative expenses were $0.9 million, including $300 thousand of non-cash stock-based compensation. In 2023, for the corresponding period, our general and administrative expenses were $2.8 million, including $543 thousand of non-cash stock-based compensation.

Current wording

General and administrative expense for the three-month period ended June 30, 2024, includes compensation-related costs for our employees dedicated to general and administrative activities, legal fees, audit and tax fees, consultants and professional services, and general corporate expenses. For the three-month period ended June 30, 2024, our general and administrative expenses were $797 thousand, including $28 thousand of non-cash stock-based compensation. In 2023, for the corresponding period, our general and administrative expenses were $887 thousand, including $220 thousand of non-cash stock-based compensation.

Previous wording

For the three-months ended March 31, 2024, we had a net loss from continuing operations of $0.8 million compared to a net loss of $3.4 million during the corresponding three-month period in 2023. For the three-months ended March 31, 2024, we had a net income from discontinued operations of $0 thousand compared to a net income of $79 thousand during the corresponding three-month period in 2023.

Current wording

For the three-months ended June 30, 2024, we had a net loss from continuing operations of $1.0 million compared to a net loss of $1.2 million during the corresponding three-month period in 2023. For the three-months ended June 30, 2024, we had a net income from discontinued operations of $0 thousand compared to a net income of $180 thousand during the corresponding three-month period in 2023.

Previous wording

We had total operating expenses of $1.3 million for the three-month period ended March 31, 2024, compared to $3.5 million for the corresponding three-month period in 2023, a decrease of $2.2 million or 64%. This decrease was primarily due to a decrease in general and administrative expenses of $1.9 million. Additionally, sales and marketing, and product development decreased by $104 and $230 thousand, respectively.

Current wording

We had total operating expenses of $2.4 million for the six-month period ended June 30, 2024, compared to $4.9 million for the corresponding six-month period in 2023, a decrease of $2.5 million or 51%. This decrease was primarily due to a decrease in general and administrative expenses of $2.0 million. Additionally, sales and marketing, and product development decreased by $144 and $309 thousand, respectively.

Previous wording

Our product development expense for the three-months ended March 31, 2024, decreased to $12 thousand from $242 thousand for the corresponding period in 2023. This decrease was primarily attributable to a $222 thousand decrease in hosting and data expenses during the quarter.

Current wording

Our product development expense for the six-months ended June 30, 2024, decreased to $17 thousand from $327 thousand for the corresponding period in 2023. This decrease was primarily attributable to a $309 thousand decrease in hosting and data expenses during the period.

Previous wording

Other income (expense) for the three-month period ended March 31, 2024, was income of $275 thousand compared to expense of ($512) thousand in the corresponding 2023 period. The primary reason for the increase in income in 2024 was due to a gain on debt extinguishment of $580 thousand taken in the quarter.

Current wording

Other income (expense) for the six-month period ended June 30, 2024, was income of $243 thousand compared to expense of ($554) thousand in the corresponding 2023 period. The primary reason for the increase in income in 2024 was due to a gain on debt extinguishment of $580 thousand.

Previous wording

For the three months ended March 31, 2024, net cash used in operating activities was $0.7 million, compared to net cash used in operating activities of $1.5 million for the corresponding three-month period in 2023. For the three months ended March 31, 2024, net loss was $0.8 million. Net loss includes non-cash items of depreciation and amortization expense of $320 thousand, bad debt recovery (expense) of $49 thousand, equity-based compensation expense of $300 thousand, warrant modification expense of $64 thousand, amortization of debt discount and debt costs of $177 thousand, unrealized loss on marketable securities of $109 thousand, and a gain on extinguishment of debt of $580 thousand. Changes in operating assets and liabilities include primarily the following: accounts receivable decreased by $392 thousand, and prepaid expenses and other current assets decreased by $30 thousand. Accounts payable, accrued liabilities, deferred payroll taxes, other liabilities, and deferred revenue decreased in total by $427 thousand.

Current wording

For the six months ended June 30, 2024, net cash used in operating activities was $1.2 million, compared to net cash used in operating activities of $1.7 million for the corresponding six-month period in 2023. For the six months ended June 30, 2024, net loss was $1.8 million. Net loss includes non-cash items of depreciation and amortization expense of $602 thousand, equity-based compensation expense of $328 thousand, change in fair value of warrant of $68 thousand, amortization of debt discount and debt costs of $177 thousand, loss on marketable securities of $142 thousand, and a gain on extinguishment of debt of $580 thousand. Changes in operating assets and liabilities include primarily the following: accounts receivable decreased by $434 thousand, and prepaid expenses and other current assets increased by $19 thousand. Accounts payable, accrued liabilities, deferred payroll taxes, other liabilities, and deferred revenue decreased in total by $280 thousand.

Previous wording

For the three months ended March 31, 2023, net cash used in operating activities was $1.5 million. For the three months ended March 31, 2023, net loss was $3.3 million. Net loss includes non-cash items of depreciation and amortization expense of $313 thousand, bad debt expense of $200 thousand, equity-based compensation expense of $543 thousand, and a factoring discount fee and interest of $19 thousand. Changes in operating assets and liabilities include primarily the following: accounts receivable decreased by $126 thousand and prepaid expenses and other current assets increase by $92 thousand. Accounts payable, accrued liabilities, deferred payroll taxes, other liabilities, and deferred revenue increase in total by $315 thousand.

Current wording

For the six months ended June 30, 2023, net cash used in operating activities was $1.7 million, compared to net cash used in operating activities of $1.7 million for the corresponding six-month period in 2022. For the six months ended June 30, 2023, net loss was $4.3 million. Net loss includes non-cash items of depreciation and amortization expense of $646 thousand, bad debt expense of $200 thousand, equity-based compensation expense of $763 thousand, amortization of debt discount and debt costs of $727 and a factoring discount fee and interest of $20 thousand, and a gain on settlement of payables of $179 thousand. Changes in operating assets and liabilities include primarily the following: accounts receivable increased by $591 thousand and prepaid expenses and other current assets decrease by $10 thousand. Accounts payable, accrued liabilities, deferred payroll taxes, other liabilities, and deferred revenue increase in total by $184 thousand.

Previous wording

For the three months ended March 31, 2024, and 2023, net cash provided by investing activities was $100,000 and $0, respectively.

Current wording

For the six months ended June 30, 2024, and 2023, net cash provided by investing activities was $250,000 and $0, respectively. The Company received $250 thousand through proceeds of a sale of asset in 2024 comprising of the total amount during the year.

Previous wording

For the three months ended March 31, 2023, net cash provided by financing activities was $819 thousand. The principal factor was $771 thousand of proceeds from the factoring agreement and $315 thousand of proceeds from the exercise of warrants, offset by repayment of notes and the factoring agreement of $267 thousand.

Current wording

For the six months ended June 30, 2023, net cash provided by financing activities was $1.2 million. The principal factor was $450 thousand of proceeds from ERC advances, $871 thousand of proceeds from factoring agreement, and $315 thousand of proceeds from the exercise of warrants, offset by repayment of ERC advances notes and the factoring agreement of $347 thousand.

Previous wording

Based on cash on hand as of March 31, 2024, of approximately $310 thousand, we do not have the capital resources to meet our working capital needs for the next 12 months.

Current wording

Based on cash on hand as of June 30, 2024, of approximately $257 thousand, we do not have the capital resources to meet our working capital needs for the next 12 months.

Previous wording

Our condensed consolidated financial statements are prepared using generally accepted accounting principles in the United States of America applicable to a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. We incurred net losses and negative operating cash flows since inception. For the three months ended March 31, 2024, we recorded a net loss of $0.8 million. We have not yet established an ongoing source of revenue that is sufficient to cover our operating costs and allow us to continue as a going concern. Our ability to continue as a going concern is dependent on us obtaining adequate capital to fund operating losses until we become profitable.

Current wording

Our condensed consolidated financial statements are prepared using generally accepted accounting principles in the United States of America applicable to a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business. We incurred net losses and negative operating cash flows since inception. For the six months ended June 30, 2024, we recorded a net loss of $1.8 million. We have not yet established an ongoing source of revenue that is sufficient to cover our operating costs and allow us to continue as a going concern. Our ability to continue as a going concern is dependent on us obtaining adequate capital to fund operating losses until we become profitable.