Nixxy Inc
For the period ended Sep 30, 2024. Filed Nov 14, 2024.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2024 · Filed Nov 14, 2024
NIXX$0.21+2.4%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-06-30; filed 2024-08-14.
0001654954-24-010646
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-09-30; filed 2024-11-14.
0001654954-24-014482
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 101 previous paragraphs and 92 current paragraphs.
61 unchanged; 27 reworded; 4 added; 13 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 8 previous and 8 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (4)
Current report
On September 27, 2024, the Company filed a Certificate of Amendment with the Secretary of State of Nevada, officially changing its legal name from Recruiter.com Group, Inc. to Nixxy, Inc., effective October 1, 2024. Additionally, the Company’s bylaws were amended to reflect the new name, effective October 1, 2024. The Company also announced, via a press release on September 30, 2024, that effective October 1, 2024, the Company’s common stock would begin trading under the new ticker symbol “NIXX” on the Nasdaq Stock Market, with its common stock purchase warrants trading under “NIXXW.” Subsequent Events On October 17, 2024, Nixxy, Inc. (the “Company”) issued two press releases: one outlining its strategy to acquire businesses in traditional markets and enhance their operations with advanced technology and data analytics, and another announcing the signing of a letter of intent to acquire a privately held wholesale gifts business as part of its initiative to leverage data in transforming old-line industry sectors. Both press releases are available as Exhibit 99.1 and Exhibit 99.2, respectively, in the Company’s Current Report on Form 8-K. On October 18, 2024, the Company announced an update regarding its previously disclosed plan to consolidate certain assets and liabilities into Atlantic Energy Solutions (OTC), which is to be rebranded as CognoGroup (“CognoGroup”). On August 8, 2024, the Company entered into a non-binding letter of intent with Just Got 2 Have It, Inc., and related entities (“JG”), for the acquisition of 100% of JG’s outstanding shares. The proposed acquisition terms include $6,000,000 in cash, 600,000 shares of newly issued restricted Company common stock, and options to purchase 600,000 additional shares at an exercise price of $1.50, exercisable up to three years post-closing. On November 1, 2024, Miles Jennings resigned from his position as Chief Financial Officer of Nixxy, Inc., effective immediately. His resignation was not due to any disagreement with the Company, and Mr. Jennings will continue his role as Managing Director of the Company’s subsidiary, Recruiter.com Recruiting Solutions, LLC. Concurrently, Xuqiang (Adam) Yang, a Certified Public Accountant with extensive experience in financial reporting and public company management, was appointed as the Company’s Chief Financial Officer. Mr. Yang will receive a fixed monthly compensation of $8,666. Also, on November 1, 2024, the Company issued a press release detailing updates on its strategic growth plans, including the ongoing acquisition of JustGot2HaveIt and the record date for the spinoff of CognoGroup. The record date for the CognoGroup spinoff is set for November 15, 2024, with the payable date anticipated in January 2025. This distribution will be available to shareholders of record as of the established record date.
Current report
Nine Months Ended September 30, 2024, Compared to Nine Months Ended September 30, 2023:
Current report
For the nine months ended September 30, 2024, net cash provided by investing activities was $1.8 million. The principal factor was proceeds from a sale of assets for $1.8 million.
Current report
For the nine months ended September 30, 2024, net cash provided by financing activities was $1.2 million. The principal factor was issuance of common stock for $2.2 million which was partially offset by repayment of notes payable for $1.0 million.
Removed paragraphs (13)
Previous report
For employers needing talent acquisition services, we place independent recruiters from our network with our clients on a project basis. To round out our offerings, we provide other talent acquisition support services, including job posting, consulting, and staffing.
Previous report
The Company is also expected to close the sale of its Recruiter.com website to Job Mobz shortly; however, the Company executed an extension with Job Mobz as per below Key Highlights.
Previous report
Subsequent Events:
Previous report
Six Months Ended June 30, 2024, Compared to Six Months Ended June 30, 2023:
Previous report
Non-GAAP Financial Measures
Previous report
The following discussion and analysis includes both financial measures in accordance with Generally Accepted Accounting Principles, or GAAP, as well as non-GAAP financial measures. Generally, a non-GAAP financial measure is a numerical measure of a company’s performance, financial position or cash flows that either excludes or includes amounts that are not normally included or excluded in the most directly comparable measure calculated and presented in accordance with GAAP. Non-GAAP financial measures should be viewed as supplemental to, and should not be considered as alternatives, to net income, operating income, and cash flow from operating activities, liquidity or any other financial measures. They may not be indicative of our historical operating results nor are they intended to be predictive of potential future results. Investors should not consider non-GAAP financial measures in isolation or as substitutes for performance measures calculated in accordance with GAAP.
Previous report
Our management uses and relies on EBITDA and Adjusted EBITDA, which are non-GAAP financial measures. We believe that both management and shareholders benefit from referring to the following non-GAAP financial measures in planning, forecasting and analyzing future periods. Our management uses these non-GAAP financial measures in evaluating its financial and operational decision making and as a means to evaluate period-to-period comparison. Our management recognizes that the non-GAAP financial measures have inherent limitations because of the described excluded items.
Previous report
We define Adjusted EBITDA as earnings (or loss) from continuing operations before the items in the table below. Adjusted EBITDA is an important measure of our operating performance because it allows management, investors and analysts to evaluate and assess our core operating results from period-to-period after removing the impact of items of a non-operational nature that affect comparability.
Previous report
We have included a reconciliation of our non-GAAP financial measures to the most comparable financial measure calculated in accordance with GAAP. We believe that providing the non-GAAP financial measures, together with the reconciliation to GAAP, helps investors make comparisons between us and other companies. In making any comparisons to other companies, investors need to be aware that companies use different non-GAAP measures to evaluate their financial performance. Investors should pay close attention to the specific definition being used and to the reconciliation between such measure and the corresponding GAAP measure provided by each company under applicable SEC rules.
Previous report
The following table presents a reconciliation of net loss to Adjusted EBITDA:
Previous report
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 report
For the six months ended June 30, 2024, net cash provided by financing activities was $233 thousand. The principal factor was $481 thousand of cash received from a fundraising event in which the Company agreed to sell 481,000 shares of their common stock (See Note 8). This cash proceed was partially offset by $258 thousand in repayments of notes payable in the period.
Previous report
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.
Reworded paragraphs (27)
Previous wording
For purposes of this Quarterly Report, “Recruiter.com,” “we,” “our,” “us,” or similar references refers to Recruiter.com Group, Inc. and its consolidated subsidiaries, unless the context requires otherwise.
Current wording
For purposes of this Quarterly Report, “Nixxy,” “we,” “our,” “us,” or similar references refers to Nixxy, Inc. and its consolidated subsidiaries, unless the context requires otherwise.
Previous wording
Recruiter.com Group, Inc., a Nevada corporation (along with its subsidiaries, “we”, “the Company”, “us”, and “our”), is a holding company that, through its subsidiaries, operates an On Demand recruiting platform aimed at transforming the $28.5 billion dollar Employment and Recruiting Agency industry (Per IBIS World Employment& Recruiting Agencies in the US 2005-2030). The Company offers recruitment-related services, including on-demand contract recruiting, job board platforms, recruitment education services, and a candidate marketing software.
Current wording
Nixxy, Inc., a Nevada corporation (along with its subsidiaries, “we”, “the Company”, “us”, and “our”), is a holding company that, through its subsidiaries, operates recruitment and career-related software platforms. Historically, the Company offered additional recruitment-related services, including on-demand contract recruiting and staffing.
Previous wording
The Company is currently undergoing a strategic transformation, having sold its staffing business in 2023 and planning to sell its Recruiter.com website in 2024. The Company has announced plans to shift its focus, along with its license agreement with GoLogiq, and spin out the recruitment related businesses to Atlantic Energy Solutions, which is currently undergoing a name change to CognoGroup, Inc. There can be no assurance that the Company will be able to complete its planned spinout and strategic transformation.
Current wording
The Company is currently undergoing a strategic transformation, having sold its staffing business in 2023 and sold its Recruiter.com website in Q3 of 2024. The Company has announced plans to shift its focus, along with its license agreement with GoLogiq, and spin out the recruitment-related businesses to Atlantic Energy Solutions, which is currently undergoing a name change to CognoGroup, Inc. There can be no assurance that the Company will be able to complete its planned spinout and strategic transformation.
Previous 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.
Current wording
In the third quarter of 2024, the period ending September 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
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.
Current wording
We had revenue of $0.1 million for the three-month period ended September 30, 2024, as compared to $0.2 million for the three-month period ended September 30, 2023, representing a decrease of $48 thousand or 26%. The decreases resulted primarily from a decrease in our Recruiters on Demand business of $46 thousand or 100% as we transitioned this business to JobMobz, a Recruitment Process Outsourcing company.
Previous 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.
Current wording
Our gross profit for the three-month period ended September 30, 2024, was $0.1 million, producing a gross profit margin of 100%. Our gross profit (loss) for the corresponding 2023 three-month period was ($70) thousand, producing a gross profit margin of -37%. 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
We had total operating expenses of $1.1 million for the three-month period ended June 30, 2024, compared to $1.4 million for the corresponding three-month period in 2023, a decrease of $0.3 million or 19%. This decrease was due to decreases in general and administrative, sales and marketing, product development, and amortization expenses of $88, $39, 79, and $53 thousand, respectively.
Current wording
We had total operating expenses of $5.6 million for the three-month period ended September 30, 2024, compared to $2.0 million for the corresponding three-month period in 2023, an increase of $3.6 million or 178%. This increase was due to decreases in sales and marketing, product development, and amortization expenses of $70, $70, and $86 thousand, respectively, which were offset by an increase in general and administrative expenses of $3.8 million.
Previous 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.
Current wording
Our sales and marketing expense for the three-month period ended September 30, 2024, was $15 thousand compared to $85 thousand for the corresponding three-month period in 2023, a reduction of $70 thousand, which reflects a decrease in technology and advertising expenses.
Previous wording
Our product development expense for the three-months ended June 30, 2024, decreased to $5 thousand from $84 thousand for the corresponding period in 2023 due to the reduction in operations and revenue during that same period.
Current wording
Our product development expense for the three-months ended September 30, 2024, decreased to $15 thousand from $85 thousand for the corresponding period in 2023 due to the reduction in operations and revenue during that same period.
Previous 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.
Current wording
For the three-month period ended September 30, 2024, we incurred a non-cash amortization charge of $236 thousand as compared to $322 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 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.
Current wording
General and administrative expense for the three-month period ended September 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 September 30, 2024, our general and administrative expenses were $5.2 million, including $4.7 million of non-cash stock-based compensation. In 2023, for the corresponding period, our general and administrative expenses were $1.5 million, including $344 thousand of non-cash stock-based compensation.
Previous wording
Other income (expense) for the three-month period ended June 30, 2024, was expense of ($32) thousand compared to expense of ($41) thousand in the corresponding 2023 period.
Current wording
Other income (expense) for the three-month period ended September 30, 2024, was expense of $7.8 million compared to income of $787 thousand in the corresponding 2023 period. The principal factor for the additional expense in the current year is Loss on debt settlement of $9.1 million in the current period which is partially offset through a $1.5 million gain on assets sale.
Previous 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.
Current wording
For the three-months ended September 30, 2024, we had a net loss from continuing operations of $13.3 million compared to a net loss of $1.3 million during the corresponding three-month period in 2023. For the three-months ended September 30, 2024, we had a net income from discontinued operations of $0 thousand compared to a net income of $277 thousand during the corresponding three-month period in 2023.
Previous wording
We had revenue of $0.4 million for the six-month period ended June 30, 2024, as compared to $2.8 million for the six-month period ended June 30, 2023, representing a decrease of $2.4 million or 87%. The decreases resulted primarily from decreases within our Recruiters on Demand, Consulting and Staffing Services, and Software Subscriptions business lines of $1.8 million, $0.1 million, and $0.4, respectively.
Current wording
We had revenue of $0.5 million for the nine-month period ended September 30, 2024, as compared to $3.0 million for the nine-month period ended September 30, 2023, representing a decrease of $2.5 million or 84%. The decreases resulted primarily from decreases within our Recruiters on Demand, Consulting and Staffing Services, Software Subscriptions, and Revenue Share business lines of $1.8 million, $0.1 million, $0.4 million, and $0.1 million, respectively.
Previous wording
Cost of revenue was $3 thousand for the six-month period ended June 30, 2024, compared to $1.9 million for the corresponding six-month period in 2023, representing a decrease of $1.9 million or 99%. 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 $3 thousand for the nine-month period ended September 30, 2024, compared to $2.2 million for the corresponding nine-month period in 2023, representing a decrease of $2.2 million or 99%. 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 six-month period ended June 30, 2024, was $0.4 million, producing a gross profit margin of 99%. Our gross profit for the corresponding 2023 three-month period was $0.9 million, producing a gross profit margin of 32%. 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 nine-month period ended September 30, 2024, was $0.5 million, producing a gross profit margin of 99%. Our gross profit for the corresponding 2023 three-month period was $0.8 million, producing a gross profit margin of 28%. 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
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.
Current wording
We had total operating expenses of $8.0 million for the nine-month period ended September 30, 2024, compared to $6.9 million for the corresponding nine-month period in 2023, an increase of $1.1 million or 16%. This increase was primarily due to an increase in general and administrative expenses of $1.8 million partially offset by decreases in sales and marketing, product and development, and amortization expenses of $0.2 million, $0.4 million, and $0.1 million, respectively.
Previous wording
Our sales and marketing expense for the six-month period ended June 30, 2024, was $93 thousand compared to $236 thousand for the corresponding three-month period in 2023, a reduction of $144 thousand, which reflects a decrease in technology and advertising expenses.
Current wording
Our sales and marketing expense for the nine-month period ended September 30, 2024, was $107 thousand compared to $321 thousand for the corresponding nine-month period in 2023, a reduction of $213 thousand, which reflects a decrease in technology and advertising expenses.
Previous 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.
Current wording
Our product development expense for the nine-months ended September 30, 2024, decreased to $32 thousand from $411 thousand for the corresponding period in 2023. This decrease was primarily attributable to a $379 thousand decrease in hosting and data expenses during the period.
Previous wording
For the six-month period ended June 30, 2024, we incurred a non-cash amortization charge of $587 thousand as compared to $633 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 nine-month period ended September 30, 2024, we incurred a non-cash amortization charge of $823 thousand as compared to $1.0 million 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 six-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 six-month period ended June 30, 2024, our general and administrative expenses were $1.7 million, including $328 thousand of non-cash stock-based compensation. In 2023, for the corresponding period, our general and administrative expenses were $3.7 million, including $763 thousand of non-cash stock-based compensation.
Current wording
General and administrative expense for the nine-month period ended September 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 nine-month period ended September 30, 2024, our general and administrative expenses were $7.1 million, including $5.7 million of non-cash stock-based compensation. In 2023, for the corresponding period, our general and administrative expenses were $5.3 million, including $1.1 million of non-cash stock-based compensation.
Previous 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.
Current wording
Other income (expense) for the nine-month period ended September 30, 2024, was expense of $7.6 million compared to income of $234 thousand in the corresponding 2023 period. The primary reason for the loss in 2024 was due to a loss on debt settlement of $9.2 million.
Previous wording
For the six-months ended June 30, 2024, we had a net loss from continuing operations of $1.8 million compared to a net loss of $4.6 million during the corresponding six-month period in 2023. For the six-months ended June 30, 2024, we had a net income from discontinued operations of $0 thousand compared to a net income of $259 thousand during the corresponding three-month period in 2023.
Current wording
For the nine-months ended September 30, 2024, we had a net loss from continuing operations of $15.1 million compared to a net loss of $5.9 million during the corresponding nine-month period in 2023. For the nine-months ended September 30, 2024, we had a net income from discontinued operations of $0 thousand compared to a net income of $0.5 million during the corresponding nine-month period in 2023.
Previous 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.
Current wording
For the nine months ended September 30, 2024, net cash used in operating activities was $1.7 million, compared to net cash used in operating activities of $1.9 million for the corresponding nine-month period in 2023. For the nine months ended September 30, 2024, net loss was $15.1 million. Net loss includes non-cash items of depreciation and amortization expense of $844 thousand, bad debt recovery of $86 thousand, impairment expense of $25 thousand, loss on settlement of consulting agreement of $153 thousand, loss or (gain) on settlement of debt settlement of $8.5 million, stock-based compensation expense of $5.0 million, loss on fair value of marketable securities of $247 thousand, gain on sale of assets of $1.8 million, change in fair value of warrant liability of $73 thousand, and amortization of debt discount and debt costs of $177 thousand.
Previous 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.
Current wording
For the nine months ended September 30, 2023, net cash used in operating activities was $1.9 million, compared to net cash used in operating activities of $4.7 million for the corresponding nine-month period in 2022. For the nine months ended September 30, 2023, net loss was $5.3 million. Net loss includes non-cash items of depreciation and amortization expense of $974 thousand, bad debt expense of $175 thousand, equity-based compensation expense of $1.1 million, amortization of debt discount and debt costs of $1.2 million, and a factoring discount fee and interest of $20 thousand. Changes in operating assets and liabilities include primarily the following: accounts receivable decreased by $99 thousand and prepaid expenses and other current assets decreased by $684. Accounts payable, accrued liabilities, deferred payroll taxes, other liabilities, and deferred revenue increased in total by $245 thousand.
Previous 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.
Current wording
Based on cash on hand as of September 30, 2024, of approximately $2.2 million, 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 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.
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 nine months ended September 30, 2024, we recorded a net loss of $15.6 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.