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Recruiter.com Announces Third Quarter 2022 Financial Results

By: ACCESSWIRE

Quarterly Revenue Increased 11% y/y to $7M

NEW YORK, NY / ACCESSWIRE / November 14, 2022 / Recruiter.com Group, Inc. (NASDAQ:RCRT)(NASDAQ:RCRTW) ("Recruiter.com"), an on-demand recruiting platform, today announced financial results for the third quarter of 2022, ended September 30, 2022.

"In the third quarter, Recruiter.com delivered solid revenue growth versus the prior-year quarter," said Evan Sohn, CEO of Recruiter.com. "During the quarter, we focused on improving operating efficiencies within our management, sales, and delivery functions. With our recently announced growth strategy being implemented, we are now focused on our segments with the strongest operating margins and client demand. The cost reductions are aimed to accelerate profitability and concentrate efforts on our strongest growth drivers."

"Revenues dipped slightly (2%) from the previous quarter due to a more volatile business climate. We remain steadfast on achieving profitability and are pleased with the improvement in net loss and reduction in operating expenses. This quarter is challenging, but we are focused on managing accordingly and continuing to explore strategic opportunities. We remain confident that our on-demand, flexible business model is well suited to the current environment."

Third Quarter 2022 Financial Highlights (Full Results in Tables Below)

  • Revenue for the third quarter totaled $7.0 million, an 11% increase compared to revenue of $6.3 million in the third quarter of 2021, due primarily to an increase in the Recruiters on Demand business.
  • Gross profit for the third quarter was $2.2 million, a 4.9% decrease compared to gross profit of $2.3 million in the third quarter of 2021, due primarily to the Company's continuing shift away from Permanent Placement.
  • Total operating expenses for the third quarter were $7.6 million, a 14% decrease compared to operating expenses of $8.9 million in the third quarter of 2021, due primarily to the ongoing efficiencies gained from the integration of staff and asset acquisitions.
  • Net loss for the third quarter was $5.6 million, a 26% improvement compared to a net loss of $7.6 million in the third quarter of 2021. The net loss in the third quarter of 2022 included non-cash amortization expense of $952 thousand, impairment expense of $2.129 million, and equity-based compensation expense of $766 thousand.

Conference Call Details

Date: Monday, November 14th, 2022
Time: 4:30 pm ET / / 1:30 pm PT
Register at: https://www.webcaster4.com/Webcast/Page/2765/47094

To access the conference by phone:

U.S. Dial-in: (800) 285-6670
International Dial-in: (713) 481-1320
Participant Access Code: Recruiter.com

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, advanced artificial intelligence sourcing software, 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:

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 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, 2021. 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
investors@recruiter.com

-Tables Follow-

Recruiter.com Group, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets

 September 30, December 31,
2022 2021
(unaudited)
ASSETS
Current assets:
Cash
 $ 8,542 $ 2,584,062
Accounts receivable, net of allowance for doubtful accounts of $1,300,172 and $934,219, respectively
 4,524,970 5,650,668
Accounts receivable - related parties
 - 49,033
Prepaid expenses and other current assets
 403,256 546,079
Total current assets
 4,936,768 8,829,842
Property and equipment, net of accumulated depreciation of $4,085 and $2,982, respectively
 69,433 481
Intangible assets, net
 6,642,453 9,741,832
Goodwill
 7,101,084 7,718,842
Total assets
 $ 18,749,738 $ 26,290,997
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable
 $ 1,577,373 $ 1,121,510
Accounts payable - related parties
 - 163,672
Accrued expenses
 1,326,381 1,285,339
Accrued compensation
 889,328 1,551,162
Accrued interest
 38,249 19,726
Contingent consideration for acquisitions
 - 578,591
Deferred payroll taxes
 81,728 81,728
Other liabilities
 17,333 17,333
Loans payable - current portion, net
 4,300,891 1,712,387
Refundable deposit on preferred stock purchase
 285,000 285,000
Deferred revenue
 520,241 746,449
Total current liabilities
 9,036,524 7,562,897
Loans payable - long term portion
 226,740 2,637,875
Total liabilities
 9,263,264 10,200,772
Commitments and contingencies (Note 11)
Stockholders' Equity:
Preferred stock, Series E, $0.0001 par value; 775,000 shares designated; 86,000 shares issued and outstanding as of September 30, 2022 and December 31, 2021
 9 9
Common stock, $0.0001 par value; 100,000,000 shares authorized; 14,851,146 and 14,566,420 shares issued and outstanding as of September 30, 2022 and December 31, 2021, respectively
 1,486 1,457
Shares to be issued, 587,945 shares as of September 30, 2022 and December 31, 2021
 59 59
Additional paid-in capital
 72,000,289 66,948,340
Accumulated deficit
 (62,515,369 ) (50,859,640 )
Total Stockholders' Equity
 9,486,474 16,090,225
Total Liabilities and Stockholders' Equity
 $ 18,749,738 $ 26,290,997

The accompanying unaudited notes are an integral part of these unaudited condensed consolidated financial statements.

Recruiter.com Group, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
For the Three and Nine Months ended September 30, 2022 and 2021
(Unaudited)

 Three Three Nine Nine
Months Ended Months Ended Months Ended Months Ended
September 30, 2022 September 30, 2021 September 30, 2022 September 30, 2021
Revenue (including related party revenue of $0, $0, $0 and $970, respectively)
 $ 6,967,642 $ 6,257,882 $ 20,948,745 $ 13,803,321
Cost of revenue (including related party costs of $0, $212,279, $0 and $417,540, respectively)
 4,776,192 3,953,660 13,137,741 9,154,654
Gross Profit
 2,191,450 2,304,222 7,811,004 4,648,667
Operating expenses:
Sales and marketing
 342,622 138,442 619,418 270,991
Product development (including related party expense of $8,636, $38,473, $25,407 and $151,157, respectively)
 467,605 465,141 1,150,464 610,805
Amortization of intangibles
 952,170 842,934 2,877,882 1,677,202
Impairment expense
 2,129,101 2,530,325 2,129,101 2,530,325
General and administrative (including share-based compensation expense of $765,743, $1,928,646, $3,415,670 and $3,543,887, respectively, and related party expenses of $0, $25,121, $19,825 and $112,149, respectively)
 3,717,357 4,882,762 12,910,457 10,491,264
Total operating expenses
 7,608,854 8,859,604 19,687,322 15,580,587
Loss from Operations
 (5,417,404 ) (6,555,382 ) (11,876,318 ) (10,931,920 )
Other income (expenses):
Interest expense (including related party interest expense of $0, $0, $0 and $30,466, respectively)
 (208,351 ) (167,728 ) (340,257 ) (3,188,138 )
Initial derivative expense
 - - - (3,585,983 )
Change in fair value of derivative liability
 - (887,791 ) - 7,315,580
Gain on debt extinguishment
 - - 1,205,195 24,925
Grant income
 - - - 3,382
Net recognized loss on marketable securities
 - (890 ) - (1,424 )
Other expense
 (610 ) (38,285 ) 13,917 (38,285 )
Total other income (expenses)
 (208,961 ) (1,094,694 ) 878,855 530,057
Loss before income taxes
 (5,626,365 ) (7,650,076 ) (10,997,463 ) (10,401,863 )
Provision for income taxes
 - - - -
Net Loss
 $ (5,626,365 ) $ (7,650,076 ) $ (10,997,463 ) $ (10,401,863 )
Deemed dividends
 (658,266 ) - (658,266 ) -
Net loss attributable to common shareholders
 $ (6,284,631 ) $ (7,650,076 ) $ (11,655,729 ) $ (10,401,863 )
Net loss per common share - basic and diluted
 $ (0.38 ) $ (0.56 ) $ (0.74 ) $ (1.57 )
Weighted average common shares -basic and diluted
 14,851,146 13,592,644 14,814,379 6,624,388

The accompanying unaudited notes are an integral part of these unaudited condensed consolidated financial statements.

Recruiter.com Group, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
For the Nine Months ended September 30, 2022 and 2021
(Unaudited)

 Nine Months Ended Nine Months Ended
September 30, September 30,
2022 2021
Cash Flows From Operating Activities
Net loss
 $ (10,997,463 ) $ (10,401,863 )
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization expense
 2,881,967 1,678,067
Bad debt expense
 479,065 79,305
Gain on debt extinguishment
 (1,205,195 ) (24,925 )
Equity based compensation expense
 3,415,670 3,543,887
Warrant modification expense
 152,244 12,624
Recognized loss on marketable securities
 - 1,424
Loan principal paid directly through grant
 - (2,992 )
Amortization of debt discount and debt costs
 135,161 2,503,160
Impairment expense
 2,129,101 2,530,325
Initial derivative expense
 - 3,585,983
Change in fair value of derivative liability
 - (7,315,580 )
Factoring discount fee and interest
 150,117 -
Change in fair value of earn-out liability
 26,604 102,116
Changes in assets and liabilities:
Increase in accounts receivable
 (1,273,012 ) (3,517,385 )
Decrease in accounts receivable - related parties
 49,033 15,043
Increase in prepaid expenses and other current assets
 (64,221 ) (53,823 )
Increase in accounts payable and accrued liabilities
 (146,406 ) 642,427
Decrease in accounts payable and accrued liabilities - related parties
 (163,672 ) (687,460 )
Deferred payroll taxes
 - (135,699 )
Increase in other liabilities
 - 2,840
(Decrease) increase in deferred revenue
 (226,208 ) 456,824
Net cash used in operating activities
 (4,657,214 ) (6,985,702 )
Cash Flows From Investing Activities:
Cash and receivables acquired
 - 230,855
Capitalized software development costs
 (1,325,491 ) -
Cash paid for acquisitions; net of cash acquired
 - (2,304,528 )
Purchase of property and equipment
 (73,037 ) -
Net cash used in investing activities
 (1,398,528 ) (2,073,673 )
Cash Flows From Financing Activities:
Proceeds from notes
 2,135,000 250,000
Proceeds from convertible notes
 - 2,153,200
Deferred offering costs
 - (78,038 )
Payments of loans
 (1,323,773 ) (156,131 )
Repayments of sale of future revenues
 - (10,904 )
Proceeds from factoring agreement
 5,613,871 -
Repayments of factoring agreement
 (2,944,876 ) -
Offering Costs
 - (1,651,889 )
Proceeds from sale of common stock and warrants
 - 13,800,000
Net cash provided by financing activities
 3,480,222 14,306,238
Net increase (decrease) in cash
 (2,575,520 ) 5,246,863
Cash, beginning of period
 2,584,062 99,906
Cash, end of period
 $ 8,542 $ 5,346,769
Supplemental disclosures of cash flow information:
Cash paid during the period for interest
 $ 208,351 $ 175,580
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
 $ 1,955,289 $ -
Purchase price measurement period adjustment to goodwill and accounts receivable
 $ 35,644 $ -
Original issue discount deducted from convertible note proceeds
 $ - $ 342,554
Debt discount on warrants granted with notes
 $ 1,032,842 $ -
Debt costs deducted from convertible note proceeds
 $ - $ 334,800
Loans issued as consideration for acquisitions
 $ - $ 4,750,000
Notes and accrued interest converted to common stock
 $ - $ 4,647,794
Common stock issued/to be issued for asset acquisitions
 $ - $ 8,241,082
Notes payable and accrued interest exchanged for debentures
 $ - $ 252,430
Accounts payable paid with common stock
 $ - $ 140,000
Accrued compensation paid with common stock
 $ - $ 16,425
Warrant derivative liability extinguished
 $ - $ 10,182,476
Write off of right-of-use asset and lease liability
 $ - $ 103,953
Earn-out liability consideration for acquisition
 $ - $ 1,668,297
Shares issued for Upsider earn-out liability
 $ - $ 1,394,768
Deferred offering costs charged to additional paid-in capital
 $ - $ 78,038
Warrant derivative liability at inception recorded as debt discount
 $ - $ 2,374,076

The accompanying unaudited notes are an integral part of these unaudited condensed consolidated financial statements.

SOURCE: Recruiter.com Group, Inc.



View source version on accesswire.com:
https://www.accesswire.com/725425/Recruitercom-Announces-Third-Quarter-2022-Financial-Results

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