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Recruiter.com Announces First Quarter 2023 Financial Results

By: ACCESSWIRE

NEW YORK, NY / May 15, 2023 / Recruiter.com Group, Inc. (NASDAQ:RCRT)(NASDAQ:RCRTW) ("Recruiter.com"), an on-demand recruiting platform, today announced financial results for its first quarter ended March 31, 2023.

Evan Sohn, CEO of Recruiter.com, commented on the quarter. "We are pleased to share that we have made significant progress in reducing net loss and improving cash management in our operating activities. Through strategic partnerships, we are actively reducing our operating burn and expect this to be demonstrated in our Q2 operating results. We have encountered some challenges in the past two quarters, including sequential declines in revenue due to a deteriorated economic environment. However, we remain resilient and committed to overcoming these obstacles."

Mr. Sohn continued: "Our focus continues to be on improving our profitability. In line with our cost reduction initiatives, we launched new high-margin offerings, including our AI-enabled Candidate Pitch software, digital upskilling through Recruiting Classes, and a self-service platform, Recruiter Marketplace. By emphasizing these growth initiatives and remaining dedicated to our strategic goals, we are confident in our ability to navigate the current landscape and drive long-term success for our stakeholders."

First Quarter 2023 Financial Highlights (Full Results in Tables Below)

  • Revenue for the first quarter totaled $3.3 million, a 52% decrease compared to revenue of $6.9 million in the first quarter of 2022, due primarily to a decrease in the Recruiters on Demand business.
  • Gross profit for the first quarter was $737 thousand, a 73% decrease compared to gross profit of $2.7 million in the first quarter of 2022, due to lower total revenue and a shift away from permanent placement.
  • Total operating expenses for the first quarter were $3.5 million, a 48% decrease compared to operating expenses of $6.8 million in the first quarter of 2022, due primarily to reductions in staff and the ongoing efficiencies gained from the integration of asset acquisitions.
  • Net loss for the first quarter was $3.3 million, a 21% improvement compared to a net loss of $4.2 million in the first quarter of 2022. The net loss in the first quarter of 2023 included interest expense and finance cost of $512 thousand, non-cash depreciation and amortization expense of $314 thousand, bad debt expense of $200 thousand, and equity-based compensation expense of $543 thousand.

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:

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. 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
Condensed Consolidated Balance Sheets

 March 31, December 31,
2023 2022
ASSETS
Current assets:
Cash
 $ 238,235 $ 946,804
Accounts receivable, net of allowance for doubtful accounts of $1,566,828 and $1,446,613, respectively
 1,987,912 3,189,816
Prepaid expenses and other current assets
 348,152 255,548
Total current assets
 2,574,299 4,392,168
Property and equipment, net of accumulated depreciation of $23,463 and $17,210, respectively
 55,082 61,340
Intangible assets, net
 2,270,966 2,578,692
Goodwill
 7,101,084 7,101,084
Total assets
 $ 12,001,431 $ 14,133,284
Liabilities and Stockholders' (Deficit)
Current liabilities:
Accounts payable
 $ 1,760,855 $ 1,569,814
Accrued expenses
 869,969 911,386
Accrued compensation
 454,011 410,957
Accrued interest
 114,040 81,576
Deferred payroll taxes
 2,484 2,484
Other liabilities
 50,677 17,333
Loans payable - current portion
 3,946,815 3,700,855
Refundable deposit on preferred stock purchase
 285,000 285,000
Warrant liability
 600,000 600,000
Deferred revenue
 271,291 215,219
Total current liabilities
 8,355,142 7,794,624
Loans payable - long term portion
 1,025,614 1,260,343
Total liabilities
 9,380,756 9,054,967
Commitments and contingencies
Stockholders' Equity (Deficit):
Preferred stock, 10,000,000 shares authorized, $0.0001 par value: undesignated: 7,013,600 shares authorized; no shares issued and outstanding as of December 31, 2021 and 2020, respectively
 - -
Preferred stock, Series D, $0.0001 par value; 2,000,000 shares authorized; 0 shares issued and outstanding as of June 30, 2022 and December 31, 2021, respectively
 - -
Preferred stock, Series E, $0.0001 par value; 775,000 shares authorized; 86,000 shares issued and outstanding as of March 31, 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 March 31, 2023 and December 31, 2022, respectively
 - -
Common stock, $0.0001 par value; 100,000,000 shares authorized; 14,851,146 and 16,277,764 shares issued and outstanding as of March 31, 2023 and December 31, 2022, respectively
 1,722 1,629
Shares to be issued, 587,945 shares as of March 31, 2023 and December 31, 2022
 59 59
Additional paid-in capital
 75,693,838 74,332,161
Accumulated deficit
 (73,074,953 ) (69,255,541 )
Total stockholders' equity
 2,620,675 5,078,317
Total liabilities and stockholders' equity
 $ 12,001,431 $ 14,133,284

Recruiter.com
Condensed Consolidated Statements of Operations
Unaudited

 Three months Three Months
Ended Ended
March 31, 2023 March 31, 2022
Revenue
 $ 3,292,739 $ 6,868,653
Cost of revenue
 2,555,425 4,178,071
Gross Profit
 737,314 2,690,582
Operating expenses:
Sales and marketing
 156,583 118,756
Product development (including related party expense of $9,186 and $16,771, respectively)
 242,280 593,386
Amortization of intangibles
 307,726 1,008,473
Impairment expense
 - -
General and administrative (including share-based compensation expense of $542,949 and $1,735,017, respectively, and related party expenses of $0 and $19,825, respectively) 2,834,125 5,095,704
Total operating expenses
 3,540,714 6,816,319
Loss from Operations
 (2,803,400 ) (4,125,737 )
Other income (expenses):
Interest expense
 (514,156 ) (67,415 )
Other expense
 1,787 10,814
Total other income (expenses)
 (512,369 ) (56,601 )
Loss before income taxes
 (3,315,769 ) (4,182,338 )
Provision for income taxes
 - -
Net Loss
 $ (3,315,769 ) $ (4,182,338 )
Deemed dividends
 (503,643 ) -
Net loss attributable to common shareholders
 $ (3,819,412 ) $ (4,182,338 )
Net loss per common share - basic
 $ (0.23 ) $ (0.28 )
Net loss per common share - diluted
 (0.23 ) (0.28 )
Weighted average common shares - basic and diluted
 16,795,738 14,760,254

Recruiter.com
Condensed Consolidated Statements Of Cash Flows

 Three months Three months
March 31 March 31
2023 2022
Cash Flows From Operating Activities
Net loss
 $ (3,315,769 ) $ (4,182,338 )
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization expense
 313,984 1,008,763
Bad debt expense
 200,000 18,500
Equity based compensation expense
 542,949 1,735,017
Warrant modification expense
 - 152,244
Amortization of debt discount and debt costs
 363,871 -
Factoring discount fee and interest
 18,750 -
Change in fair value of earn-out liability
 - 26,604
Changes in assets and liabilities:
Increase in accounts receivable
 126,195 824,441
Decrease in accounts receivable - related parties
 - 49,033
Increase in prepaid expenses and other current assets
 (92,604 ) 26,358
Increase in accounts payable and accrued liabilities
 225,143 (724,810 )
Decrease in accounts payable and accrued liabilities - related parties
 - (124,337 )
Customer advances
 33,344 -
(Decrease) increase in deferred revenue
 56,071 (5,538 )
Net cash used in operating activities
 (1,528,066 ) (1,196,063 )

Cash Flows From Investing Activities:
Capitalized software development costs
 - -
Proceeds from sale of internal-use software
 - -
Purchase of property and equipment
 - -
Net cash used in investing activities
 - -

Cash Flows From Financing Activities:
Payments of loans
 (91,571 ) (479,505 )
Proceeds from factoring agreement
 771,017 -
Repayments of factoring agreement
 (175,127 ) -
Proceeds from exercise of warrants
 315,178 -
Net cash provided by financing activities
 819,497 (479,505 )

Net increase (decrease) in cash
 (708,569 ) (1,675,568 )
Cash, beginning of period
 946,804 2,584,062

Cash, end of period
 $ 238,235 $ 908,494

Supplemental disclosures of cash flow information:
Cash paid during the period for interest
 $ 98,867 $ 60,018
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
 $ 875,709 $ -
Purchase price measurement period adjustment to goodwill and accounts receivable
 $ - $ 35,644
Deemed dividends
 $ 503,643 $ -
Offering costs as a result of modification of warrants to induce exercise
 $ 10,400 $ -

SOURCE: Recruiter.com Group, Inc.



View source version on accesswire.com:
https://www.accesswire.com/754882/Recruitercom-Announces-First-Quarter-2023-Financial-Results

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