Revenue for the three and nine month periods ending September 30, 2019 totaled $1,945,744 and $4,081,527 respectively
Network of independent recruiters increased 12% sequentially from 10,034 in Q2 to 11,279 in Q3
HOUSTON, Nov. 21, 2019 (GLOBE NEWSWIRE) -- Recruiter.com Group, Inc. ("Recruiter.com" or the "Company") RCRT, the expert network platform for recruiters, provides shareholder update and reported its financial results for the three and nine month periods ending September 30, 2019.
Recruiter.com CEO, Miles Jennings, commented, "After two quarters of integration and process efforts, we are now extremely excited to shift focus to accelerating our revenue expansion with top name clients and executing against our business model. We are confident in our vision of disrupting the recruiting and staffing industry by aggregating small and independent recruiters under a common platform, giving them access to large enterprise companies and technologies and becoming the largest recruiting firm in the world. We are primarily focused on onboarding several new key strategic clients and improving our communication and engagement with our independent recruiter network. We are simultaneously engaged in our strategic efforts to position Recruiter.com for an uplisting to a national securities exchange."
The network of independent recruiters increased over 12% sequentially from 10,034 users at the end of the 2019 second quarter to 11,279 users at the end of the 2019 third quarter. Information Technology and Computer Software remained the most popular specialties and industries among the community of recruiters.
Financial Highlights for the Three and Nine Month Periods Ending September 30, 2019:
- Revenue for the 2019 third quarter totaled $1,945,744, as compared to $158,706 for the same period the year prior, an increase of $1,787,038.
- Revenue for the first nine months of 2019 totaled $4,081,527, as compared to $687,538 for the same period the year prior, an increase of $3,393,989.
- Revenue growth year-over-year during both periods was primarily attributable to the Recruiting Solutions line of business, acquired from Genesys Talent, LLC in March 2019, as the Company invested resources in its recruiting platform business and away from Career and Marketing Solutions.
- Gross profit for the 2019 third quarter totaled $453,939 compared to $510,559 in the 2019 second quarter due to growth within a lower margin enterprise client and the Company's general shift away from Marketing Solutions, yielding gross profit margin of 23.3% compared 25.9% in the 2019 second quarter.
- Gross profit for the first nine months of 2019 totaled $1,127,800 yielding gross profit margin of 27.6%.
- With $2,404,642 in Operating Expenses, the Company generated an overall Net Loss of $1,028,034 for the quarter. Net Loss included a $1,411,565 share-based compensation expense and a $951,271 positive change in fair value of the derivative liability, resulting from a decrease in the market value of the Company's common stock, both of which are non-cash items.
Operational Highlights:
- Signing a major Fortune 50 customer and multiple additional mid-market customers.
- Accelerating independent recruiter network growth by 12% versus 8% in the second quarter.
- Rolled out "Team Management" on the Recruiter.com platform to support our 15+ independent recruiting teams.
- Continued the technical integration with Censia, an AI platform for talent identification.
Recruiter.com has completed the integration of the business, systems, and team following the acquisition of certain assets of Genesys Talent, LLC in the second quarter of 2019. The assets acquired, primarily client lists and book of business, successfully held their value and sales from its recruiting clients rose slightly in the 2019 third quarter. The acquisition is expected to continue to drive revenue growth in subsequent quarters, as further opportunities are unlocked through the marketing and technology capabilities of Recruiter.com. The Company plans to continue to look for accretive acquisition opportunities in the recruiting and RPO space.
About Recruiter.com Group, Inc.
Recruiter.com Group, Inc., the expert network platform for recruiters, pairs enterprises with the most extensive network of recruiters to drive the hiring of top talent faster and smarter. Recruiter.com offers recruiters SHRM-certified recruitment training and independent earning opportunities. Recruiter.com was voted "Top Tech Company to Watch" by the CT Tech Council, cited as one of the "Top 35 Most Influential Career Sites" by Forbes, and listed by Inc. as one of the "9 Best Websites for Finding Top Talent."
Please visit https://www.recruiter.com or the following social media channels for more information.
LinkedIn Recruiter Network Group: https://www.linkedin.com/groups/42370/
LinkedIn Company Page: https://www.linkedin.com/company/1240434
Twitter Company Page: https://twitter.com/recruiterdotcom
Facebook Company Page: https://www.facebook.com/RecruiterDotCom
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, including statements regarding the expected future revenue growth and its drivers. The words "believe," "may," "estimate," "continue," "anticipate," "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 largely 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 the ability of our technology to perform to function as expected, our ability to hire qualified professionals, our ability to successfully integrate businesses, teams, and technology, product marketing, and community management functions, continued demand for professional hiring, our ability to obtain additional financing,, 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 March 31, 2018. 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 publicly update any forward-looking statement, whether as a result of new information, future developments or otherwise, except as may be required by law.
Recruiter.com Contact:
Recruiter.com Group, Inc.
Phone: (855) 931-1500
Investor Contact:
KCSA Strategic Communications
Valter Pinto, Managing Director
Phone: (212) 896-1254
Valter@KCSA.com
Recruiter.com Group, Inc.
Consolidated Balance Sheets
| September 30, | December 31, | |||||||
| 2019 | 2018 | |||||||
| (Unaudited) | ||||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash | $ | 675,735 | $ | 14,152 | ||||
| Accounts receivable, net | 634,263 | 56,766 | ||||||
| Accounts receivable – related party | 22,200 | - | ||||||
| Prepaid expenses and other current assets | 162,045 | 14,883 | ||||||
| Investments - available for sale marketable securities | 85,360 | 33,917 | ||||||
| Total current assets | 1,579,603 | 119,718 | ||||||
| Property and equipment, net of accumulated depreciation of $385 | 3,078 | - | ||||||
| Right of use asset | 232,366 | - | ||||||
| Intangible assets | 8,521,906 | - | ||||||
| Software development | 113,020 | 101,520 | ||||||
| Total assets | $ | 10,449,973 | $ | 221,238 | ||||
| Liabilities and Stockholders' Equity (Deficit) | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 602,990 | $ | 222,266 | ||||
| Accounts payable – related parties | 860,717 | - | ||||||
| Accrued expenses | 8,355 | 100,265 | ||||||
| Accrued compensation | 258,825 | 248,398 | ||||||
| Accrued interest | - | 179,768 | ||||||
| Loans payable - current portion | 25,521 | 105,028 | ||||||
| Convertible notes payable | - | 55,000 | ||||||
| Convertible notes payable - related parties | - | 200,000 | ||||||
| Notes payable, net of unamortized discount of $0 and $3,056, respectively | - | 151,944 | ||||||
| Notes payable - related parties | - | 150,000 | ||||||
| Refundable deposit on preferred stock purchase | 285,000 | - | ||||||
| Warrant derivative liability | 781,748 | - | ||||||
| Lease liability - current portion | 73,378 | - | ||||||
| Deferred revenue | 104,924 | 59,468 | ||||||
| Total current liabilities | 3,001,458 | 1,472,137 | ||||||
| Lease liability - long term portion | 158,988 | - | ||||||
| Loans payable - long term portion | 84,538 | 103,806 | ||||||
| Total liabilities | 3,244,984 | 1,575,943 | ||||||
| Commitments and contingencies (Note 10) | ||||||||
| Redeemable Preferred Stock of Subsidiary - Noncontrolling interest at redemption value (See Note 8 for liquidation value) | - | 2,059,764 | ||||||
| Stockholders' Equity (Deficit): | ||||||||
| Preferred stock, 10,000,000 shares authorized, $0.0001 par value: undesignated: 7,013,600 and 6,704,061 shares authorized; no shares issued and outstanding as of September 30, 2019 and December 31, 2018, respectively | - | - | ||||||
| Preferred stock, Series D, $0.0001 par value; 2,000,000 and no shares authorized; 454,546 and no shares issued and outstanding as of September 30, 2019 and December 31, 2018, respectively | 46 | - | ||||||
| Preferred stock, Series E, $0.0001 par value; 775,000 shares authorized; 775,000 and 775,000 shares issued and outstanding as of September 30, 2019 and December 31, 2018, respectively | 78 | 78 | ||||||
| Preferred stock, Series F, $0.0001 par value; 200,000 and no shares authorized; 200,000 and no shares issued and outstanding as of September 30, 2019 and December 31, 2018, respectively | 20 | - | ||||||
| Common stock, $0.0001 par value; 31,250,000 shares authorized; 2,366,581 and no shares issued and outstanding as of September 30, 2019 and December 31, 2018, respectively | 237 | - | ||||||
| Additional paid-in capital | 16,539,628 | 679,259 | ||||||
| Accumulated deficit | (9,335,020 | ) | (5,675,391 | ) | ||||
| Stockholders' equity attributable to Recruiter.com, Inc. common shareholders | 7,204,989 | (4,996,054 | ) | |||||
| Stockholders' equity attributable to the noncontrolling interest | - | 1,581,585 | ||||||
| Total stockholders' equity (deficit) | 7,204,989 | (3,414,469 | ) | |||||
| Total liabilities and stockholders' equity (deficit) | $ | 10,449,973 | $ | 221,238 | ||||
Recruiter.com Group, Inc.
Condensed Consolidated Statements of Operations
(Unaudited)
| Three Months Ended | Three Months Ended | Nine Months Ended | Nine Months Ended | |||||||||||||
| September 30, 2019 | September 30, 2018 | September 30, 2019 | September 30, 2018 | |||||||||||||
| Revenue | $ | 1,945,744 | $ | 158,706 | $ | 4,081,527 | $ | 687,538 | ||||||||
| Cost of revenue (including related party costs of $657,196, $0, $1,451,331 and $0, respectively) | 1,491,805 | - | 2,953,727 | - | ||||||||||||
| Gross profit | 453,939 | 158,706 | 1,127,800 | 687,538 | ||||||||||||
| Operating expenses: | ||||||||||||||||
| Sales and marketing | 63,423 | 4,205 | 66,392 | 13,619 | ||||||||||||
| Product development | 47,728 | 50,690 | 142,516 | 227,563 | ||||||||||||
| General and administrative (including share based compensation expense of $1,411,565, $45,928, $2,979,592 and $136,956, respectively) | 2,293,491 | 398,199 | 5,366,751 | 1,264,329 | ||||||||||||
| Total operating expenses | 2,404,642 | 453,094 | 5,575,659 | 1,505,511 | ||||||||||||
| Loss from operations | (1,950,703 | ) | (294,388 | ) | (4,447,859 | ) | (817,973 | ) | ||||||||
| Other income (expenses): | ||||||||||||||||
| Interest expense | (10,165 | ) | (32,570 | ) | (91,530 | ) | (104,208 | ) | ||||||||
| Change in fair value of derivative liability | 951,271 | - | 968,898 | - | ||||||||||||
| Net recognized (loss) gain on marketable securities | (18,437 | ) | 10,000 | (119,854 | ) | (60,125 | ) | |||||||||
| Total other income (expenses) | 922,669 | (22,570 | ) | 757,514 | (164,333 | ) | ||||||||||
| Loss before income taxes | (1,028,034 | ) | (316,958 | ) | (3,690,345 | ) | (982,306 | ) | ||||||||
| Provision for income taxes | - | - | - | - | ||||||||||||
| Net loss | (1,028,034 | ) | (316,958 | ) | (3,690,345 | ) | (982,306 | ) | ||||||||
| Net loss attributable to the noncontrolling interest | - | (17,799 | ) | (30,716 | ) | (37,697 | ) | |||||||||
| Net loss attributable to the controlling interest before preferred stock dividends | (1,028,034 | ) | (299,159 | ) | (3,659,629 | ) | (944,609 | ) | ||||||||
| Preferred stock dividend | - | (144,110 | ) | (140,410 | ) | (1,004,062 | ) | |||||||||
| Net loss attributable to Recruiter.com Group, Inc. shareholders | $ | (1,028,034 | ) | $ | (443,269 | ) | $ | (3,800,039 | ) | $ | (1,948,671 | ) | ||||
| Net loss per common share – basic and diluted | $ | (0.56 | ) | $ | - | $ | (3.11 | ) | $ | - | ||||||
| Weighted average common shares – basic and diluted | 1,837,150 | - | 1,221,649 | - | ||||||||||||
Recruiter.com Group, Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
| Nine Months Ended | Nine Months Ended | |||||||
| September 30, 2019 | September 30, 2018 | |||||||
| Cash Flows from Operating Activities | ||||||||
| Net loss | $ | (3,690,345 | ) | $ | (982,306 | ) | ||
| Adjustments to reconcile net loss to net cash used in operating activities | ||||||||
| Depreciation expense | 385 | |||||||
| Bad debt expense | 16,000 | - | ||||||
| Equity based compensation expense | 2,979,592 | 136,956 | ||||||
| Recognized loss on marketable securities | 119,854 | 60,125 | ||||||
| Expenses paid through financings | 15,000 | - | ||||||
| Amortization of debt discount | 32,522 | - | ||||||
| Change in fair value of derivative liability | (968,898 | ) | - | |||||
| Changes in operating assets and liabilities: | ||||||||
| (Increase) decrease in accounts receivable | 140,912 | 20,317 | ||||||
| Increase in prepaid expenses | (147,162 | ) | (10,433 | ) | ||||
| Increase in accounts payable and accrued liabilities | 916,400 | 155,746 | ||||||
| (Decrease) increase in deferred revenue | (17,644 | ) | 7,242 | |||||
| Net cash used in operating activities | (603,384 | ) | (612,353 | ) | ||||
| Cash Flows from Investing Activities | ||||||||
| Proceeds from sale of marketable securities | 68,703 | 284 | ||||||
| Cash paid for equipment | (3,463 | ) | - | |||||
| Cash paid for software development | (11,500 | ) | (51,750 | ) | ||||
| Net cash provided (used) by investing activities | 53,740 | (51,466 | ) | |||||
| Cash Flows from Financing Activities | ||||||||
| Proceeds from notes | 45,005 | - | ||||||
| Payments of notes | (98,775 | ) | (1,499 | ) | ||||
| Deposit on purchase of preferred stock | 500,000 | - | ||||||
| Repayment of deposit on purchase of preferred stock | (215,000 | ) | - | |||||
| Contributions to capital | - | 30,000 | ||||||
| Proceeds from sale of common stock | - | 66,668 | ||||||
| Proceeds from sale of preferred stock | 979,997 | 300,000 | ||||||
| Net cash provided by financing activities | 1,211,227 | 395,169 | ||||||
| Net increase (decrease) in cash | 661,583 | (268,650 | ) | |||||
| Cash, beginning of period | 14,152 | 378,149 | ||||||
| Cash, end of period | $ | 675,735 | $ | 109,499 | ||||
| Supplemental disclosures of cash flow information: | ||||||||
| Cash paid during the period for interest | $ | 35,035 | $ | 38,208 | ||||
| Cash paid during the period for income taxes | $ | - | $ | - | ||||
| Supplemental schedule of non-cash investing and financing activities: | ||||||||
| Preferred stock issued for asset acquisition | $ | 8,600,000 | $ | - | ||||
| Subsidiary preferred shares converted to subsidiary common shares | $ | - | $ | 154,000 | ||||
| Non-cash adjustments to Redeemable Preferred Stock of subsidiary | $ | 2,059,764 | $ | 925,794 | ||||
| Notes payable and accrued interest exchanged for preferred stock | $ | 116,380 | $ | - | ||||
| Accounts payable paid through proceeds of preferred stock | $ | 100,000 | $ | - | ||||
| Accrued compensation paid with common stock | $ | 56,250 | $ | - | ||||
| Value of warrant issued with note | $ | 42,000 | $ | - | ||||
| Accounts payable paid through proceeds of note | $ | 4,995 | $ | - | ||||
| Warrant derivative liability at inception | $ | 1,750,646 | $ | - | ||||
| Accrued compensation forgiven and credited to contributed capital | $ | 187,500 | $ | - | ||||
| Marketable securities received as payment for Series D preferred stock | $ | 240,000 | $ | - | ||||
| Note and accrued interest forgiven | $ | 706,502 | $ | - | ||||
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