rcrt_10q.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒	QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended: June 30, 2024

☐	TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _________ to _________:

Commission file number: 001-40563

RECRUITER.COM GROUP, INC.

(Exact name of registrant as specified in its charter)

Nevada		90-1505893
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

123 Farmington Avenue, Suite 252 Bristol, CT		06010
(Address of principal executive offices)		(Zip Code)

Issuer’s telephone number (855) 931-1500

___________________________________________________________

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock

Common Stock Purchase Warrants

RCRT

RCRTW

The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files) Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated Filer	☒	Smaller reporting company	☒
		Emerging growth company	☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒

As of August 13, 2024, the number of shares of the registrant’s common stock outstanding was 3,309,582.

		Page
		number

Part I - Financial Information
Item 1.	Condensed Consolidated Financial Statements	3
	Condensed Consolidated Balance Sheets as of June 30, 2024 (unaudited) and December 31, 2023	3
	Condensed Consolidated Statements of Operations for the three and six months ended June 30, 2024 and 2023 (Unaudited)	4
	Condensed Consolidated Statements of Changes in Stockholders’ Equity for the three and six months ended June 30, 2024 and 2023 (Unaudited)	5
	Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2024 and 2023 (Unaudited)	6
	Notes to Unaudited Condensed Consolidated Financial Statements	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	27
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	35
Item 4.	Controls and Procedures	35

Part II - Other Information
Item 1.	Legal Proceedings	36
Item 1A.	Risk Factors	36
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	36
Item 3.	Defaults Upon Senior Securities	36
Item 4.	Mine Safety Disclosures	36
Item 5.	Other Information	36
Item 6.	Exhibits	37

Table of Contents

PART I: FINANCIAL INFORMATION

Item 1. Financial Statements

Recruiter.com Group, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

	June 30,			December 31,
	2024			2023
ASSETS	(Unaudited)
Current assets:
Cash	$	257,024		$	1,008,408
Accounts receivable, net of allowance for doubtful accounts of $902,245 and $1,051,411, respectively		41,042			405,786
Prepaid expenses and other current assets		271,129			252,099
Investment in marketable securities		240,317			382,144
Total current assets		809,512			2,048,437

Property and equipment, net of accumulated depreciation of $57,336 and $38,776, respectively		21,214			36,311
Intangible assets, net		1,841,653			1,301,337
Goodwill		7,101,084			7,101,084
Total assets	$	9,773,463		$	10,487,169

LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
Accounts payable	$	1,296,551		$	1,696,022
Accrued expenses		787,058			770,625
Accrued compensation		125,721			154,764
Accrued interest		410,599			280,597
Deferred payroll taxes		-			2,484
Other liabilities		17,333			82,188
Loans payable - current portion, net of discount		3,684,437			5,631,633
Warrant liability		436,380			504,000
Refundable deposit on preferred stock purchase		285,000			285,000
Deferred revenue		116,109			149,848
Total current liabilities		7,159,188			9,557,161

Total liabilities		7,159,188			9,557,161

Commitments and contingencies (Note 10)

Stockholders' Equity:
Preferred Stock, 10,000,000 authorized, $0.0001 par value		-			-
Preferred stock, Series D, $0.0001 par value; 2,000,000 shares authorized; no shares issued and outstanding as of June 30, 2024, and December 31, 2023		-			-
Preferred stock, Series E, $0.0001 par value; 775,000 shares authorized; 0 and 86,000 shares issued and outstanding as of June 30, 2024, and December 31, 2023		-			9
Preferred stock, Series F, 0.0001 par value; 200,000 shares authorized; no shares issued and outstanding as of June 30, 2024, and December 31, 2023		-			-
Common stock, $0.0001 par value; 6,666,667 shares authorized; 3,272,582 and 1,433,903 shares issued and outstanding as of June 30, 2024, and December 31, 2023, respectively		327			143
Additional paid-in capital		80,826,730			77,348,939
Accumulated deficit		(78,212,782	)		(76,419,083	)
Total stockholders' equity		2,614,275			930,008

Total liabilities and stockholders' equity	$	9,773,463		$	10,487,169

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

Table of Contents

Recruiter.com Group, Inc. and Subsidiaries

Condensed Consolidated Statements of Operations

For the Three and Six Months ended June 30, 2024 and 2023

(Unaudited)

	Three months Ended June 30,			Three months Ended June 30,			Six months Ended June 30,			Six months Ended June 30,
	2024			2023			2024			2023
REVENUE
Revenue	$	133,101		$	575,353		$	355,658		$	2,827,149
Cost of revenue		-			317,974			3,029			1,911,464

Gross Profit		133,101			257,379			352,629			915,685

OPERATING EXPENSES
Sales and marketing		39,773			79,453			92,519			236,036
Product development		5,320			84,282			17,257			326,562
Amortization of intangibles		272,687			325,702			587,097			633,428
General and administrative		798,510			886,579			1,692,250			3,720,704
Total operating expenses		1,116,290			1,376,016			2,389,123			4,916,730

LOSS FROM CONTINUING OPERATIONS		(983,189	)		(1,118,637	)		(2,036,494	)		(4,001,045	)

OTHER INCOME (EXPENSES)
Interest expense		(152,468	)		(647,213	)		(518,321	)		(1,161,369	)
Other income		176			754,312			5,346			756,099
Finance cost		-			(327,073	)		-			(327,073	)
Gain on assets sale		150,000			-			250,000			-
Gain on settlement of payables		-			178,749			-			178,749
Loss on fair value of marketable securities		(33,315	)		-			(141,827	)		-
Gain on debt extinguishment, net		-			-			579,977			-
Change in fair value of warrant liability		3,524			-			67,620			-
Total other (expenses) income		(32,083	)		(41,225	)		242,795			(553,594	)

LOSS BEFORE INCOME TAXES		(1,015,272	)		(1,159,862	)		(1,793,699	)		(4,554,639	)
Provision for income taxes		-			-			-			-
Net loss from continuing operations	$	(1,015,272	)	$	(1,159,862	)	$	(1,793,699	)	$	(4,554,639	)
Net income from discontinued operations		-			179,589			-			258,597
Net Loss		(1,015,272	)		(980,273	)		(1,793,699	)		(4,296,042	)
Deemed dividends		-			-			-			(503,643	)
NET LOSS ATTRIBUTABLE TO COMMON SHAREHOLDERS	$	(1,015,272	)	$	(980,273	)	$	(1,793,699	)	$	(4,799,685	)

NET LOSS FROM CONTINUING OPERATIONS PER COMMON SHARE - BASIC AND DILUTED	$	(0.35	)	$	(1.00	)	$	(0.74	)	$	(4.01	)
NET INCOME FROM DISCONTIUNED OPERATIONS PER COMMON SHARE - BASIC AND DILUTED		-			0.15			-			0.23
NET LOSS PER COMMON SHARE - BASIC AND DILUTED		(0.35	)		(0.85	)		(0.74	)		(4.22	)
WEIGHTED AVERAGE COMMON SHARES - BASIC AND DILUTED		2,860,568			1,159,279			2,419,204			1,137,127

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

Table of Contents

Recruiter.com Group, Inc. and Subsidiaries

Consolidated Statement of Changes in Stockholders’ Equity

For The Three and Six Months Ended June 30, 2024, and 2023

(Unaudited)

	Preferred stock Series E						Common stock				Additional Paid in		Accumulated			Total Stockholders’
	Shares			Amount			Shares		Amount		Capital		Deficit			Equity
Balance as of December 31, 2023		86,000		$	9			1,433,903	$	143	$	77,348,939	$	(76,419,083	)	$	930,008
Stock based compensation - Options		-			-			-		-		44,247		-			44,247
Common stock issued for services		-			-			180,000		18		255,582		-			255,600
Conversion of Preferred stock, Series E, to Common stock		(86,000	)		(9	)		28,667		3		6		-			(0	)
Common stock issued in connection with purchase of intangible assets		-			-			392,155		39		647,016		-			647,055
Warrants issued in connection with purchase of intangible assets		-			-			-		-		480,358		-			480,358
Issuance of common stock upon conversion of promissory note		-			-			168,414		17		273,656		-			273,673
Issuance of common stock upon conversion of promissory notes		-			-			286,001		29		523,351		-			523,380
Common stock issued upon exercise of warrants		-			-			213,186		21		592,036		-			592,057
Net loss		-			-			-		-		-		(778,427	)		(778,427	)
Balance as of March 31, 2024		-		$	-			2,702,326	$	270	$	80,165,191	$	(77,197,510	)	$	2,967,951
Stock based compensation - Options		-			-			-		-		27,967		-			27,967
Proceeds from sale of common stock in offering		-			-			481,000		48		480,952		-			481,000
Issuance of common stock upon settlement of consulting agreement		-			-			89,256		9		152,620		-			152,629
Net loss		-			-			-		-		-		(1,015,272	)		(1,015,272	)
Balance as of June 30, 2024		-		$	-			3,272,582	$	327	$	80,826,730	$	(78,212,782	)	$	2,614,275

	Preferred stock Series E				Common stock				Common stock to be issued				Additional Paid in		Accumulated			Total Stockholders’
	Shares		Amount		Shares		Amount		Shares		Amount		Capital		Deficit			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 - Options and Warrants		-		-		-		-		-		-		390,806		-			390,806
Stock based compensation - RSUs		-		-		-		-		-		-		152,143		-			152,143
Anti-dilution adjustment to warrants		-		-

SEC Form 10-Q filed by Recruiter.com Group Inc.