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: DecemberMarch 31, 2017

2021

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

For the transition period from:

from _________ to _________:

Commission file number: 000-53641

TRULI MEDIA

RECRUITER.COM GROUP, INC

INC.

(Exact name of registrant as specified in its charter)

DelawareNevada 26-3090646

(State or other jurisdiction of

incorporation or organization)

 

(I.R.S. Employer

Identification No.)

   
PO Box 86, Bristol, CT  100 Waugh Dr. Suite 300, Houston, Texas 0601177007
(Address of principal executive offices) (Zip Code)

Issuer’s telephone number (888) 925-7010

(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 ClassTrading Symbol(s)Name of each exchange on which registered
NoneN/AN/A
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 and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period thanthat the registrant was required to submit and post 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☐ (Do not check if a smaller reporting company)☒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 February 15, 2018,May 10, 2021, the number of shares of the registrant’s common stock outstanding was 131,554,197.

8,481,967.


 

  Page
  number
Part I -
Financial Information 
Item 1.
Financial Statements (Unaudited)
1
 
Condensed Consolidated Balance Sheets as of March 31, 2021 (unaudited) and December 31, 2017 (unaudited) and March 31, 20172020
1
 
Unaudited Condensed Consolidated Statements of Operations for the three and nine months ended DecemberMarch 31, 20172021 and 20162020
2
 
Unaudited Condensed Consolidated Statements of Changes in Stockholders’ (Deficit) Equity for the three months ended March 31, 2021 and 2020
3
Unaudited Condensed Consolidated Statements of Cash Flows for the ninethree months ended DecemberMarch 31, 20172021 and 20162020
34
 
Notes to Unaudited Condensed Consolidated Financial Statements
45
Forward-Looking Statements
Item 2.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
1425
Item 3.
Quantitative and Qualitative Disclosures About Market Risk
1935
Item 4.
Controls and Procedures
1935
   
Part II -
Other Information 
Item 1.
Legal Proceedings
2036
Item 1A.
Risk Factors
2036
Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds
2036
Item 3.
Defaults Upon Senior Securities
2036
Item 4.
Mine Safety Disclosures
2036
Item 5.
Other Information
2036
Item 6.
Exhibits
2037

Item 1.Financial Statements


  i
Truli MediaPART I: FINANCIAL INFORMATION
Item 1. Financial Statements
  Recruiter.com Group, Inc.

Condensed

Condensed Consolidated Balance Sheets

  December 31, 2017 March 31,
2017
Assets (Unaudited)  
Current Assets    
Cash and cash equivalents $363,512  $1,983 
Total Current Assets  363,512   1,983 
License  625,000   - 
Software development  28,750   - 
Total Assets $1,017,262  $1,983 
         
Liabilities and Stockholders’ Deficit        
Current Liabilities:        
Accounts payable and accrued liabilities $64,121  $160,781 
Accrued interest, related party  -   12,677 
Accrued interest - other  -   106,388 
Note payable - related party  -   457,801 
Convertible notes payable - others, net of discount of $0 and $48, respectively  -   49,952 
Derivative liability  -   33,452 
Total Current Liabilities  64,121   821,051 
Long-Term Liabilities:        
Convertible note payable - other  -   1,955,934 
Total Liabilities  64,121   2,776,985 
Commitments and Contingencies        
         
Redeemable Preferred Stock,Series A, Series B, Series C, and Series C-1, $0.0001 par value; 2,695,939 shares designated, 720,939 shares issued and outstanding at December 31, 2017. No shares were designated, issued or outstanding at March 31, 2017.  2,849,090   - 
         
Stockholders’ Deficit:        
Preferred stock, undesignated, $0.0001 par value; 7,304,061 and 10,000,000 shares authorized  -   - 
Common stock, $0.0001 par value; 250,000,000 shares authorized; 127,554,197 and 2,554,197 shares issued and outstanding as of December 31, 2017 and March 31, 2017, respectively  12,755   255 
Additional paid in capital  4,167,912   2,984,108 
Accumulated deficit  (6,076,616)  (5,759,365)
Total stockholders’ deficit  (1,895,949)  (2,775,002)
Total Liabilities and Stockholders’ Deficit $1,017,262  $1,983 

 
 
March 31,
 
 
December 31,
 
 
 
2021
 
 
2020
 
 
 
(Unaudited)
 
 
 
 
Assets
 
 
 
 
 
 
 
 
 
 
 
 
 
Current assets:
 
 
 
 
 
 
  Cash
 $662,356 
 $99,906 
  Accounts receivable, net of allowance for doubtful accounts of $47,463 and $33,000, respectively
  1,780,401 
  942,842 
  Accounts receivable - related parties
  44,383 
  41,124 
  Prepaid expenses and other current assets
  138,122 
  167,045 
  Investments - marketable securities
  1,647 
  1,424 
 
    
    
Total current assets
  2,626,909 
  1,252,341 
 
    
    
Property and equipment, net of accumulated depreciation of $2,116 and $1,828, respectively
  1,347 
  1,635 
Right of use asset - related party
  122,297 
  140,642 
Intangible assets, net
  6,489,722 
  795,864 
Goodwill
  3,517,315 
  3,517,315 
 
    
    
Total assets
 $12,757,590 
 $5,707,797 
 
    
    
 
    
    
Liabilities and Stockholders' Deficit
    
    
 
    
    
Current liabilities:
    
    
Accounts payable
 $748,764 
 $616,421 
Accounts payable - related parties
  921,220 
  779,928 
Accrued expenses
  710,855 
  423,237 
Accrued expenses - related party
  9,656 
  8,000 
Accrued compensation
  886,002 
  617,067 
Accrued compensation - related party
  116,000 
  122,500 
Accrued interest
  101,946 
  60,404 
Contingent consideration for acquisitions
  1,974,377 
  - 
Liability on sale of future revenues, net of discount of $0 and $2,719, respectively
  - 
  8,185 
Deferred payroll taxes
  159,032 
  159,032 
Other liabilities
  14,493 
  14,493 
Loans payable - current portion
  28,609 
  28,249 
Convertible notes payable, net of unamortized discount and costs of $2,864,099 and $1,205,699, respectively
  2,795,010 
  1,905,826 
Refundable deposit on preferred stock purchase
  285,000 
  285,000 
Warrant derivative liability
  16,496,364 
  11,537,997 
Lease liability - current portion - related party
  73,378 
  73,378 
Deferred revenue
  139,382 
  51,537 
 
    
    
Total current liabilities
  25,460,088 
  16,691,254 
 
    
    
Lease liability - long term portion - related party
  48,919 
  67,264 
Loans payable - long term portion
  41,435 
  73,541 
 
    
    
Total liabilities
  25,550,442 
  16,832,059 
 
    
    
Commitments and contingencies (Note 10)
  - 
  - 
 
    
    
Stockholders' 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 March 31, 2021 and December 31, 2020, respectively
  - 
  - 
Preferred stock, Series D, $0.0001 par value; 2,000,000 shares authorized; 444,587 and 527,795 shares issued and outstanding as of March 31, 2021 and December 31, 2020, respectively
  46 
  54 
Preferred stock, Series E, $0.0001 par value; 775,000 shares authorized; 731,845 shares issued and outstanding as of March 31, 2021 and December 31, 2020, respectively
  74 
  74 
Preferred stock, Series F, $0.0001 par value; 200,000 shares authorized; 46,847 and 64,382 shares issued and outstanding as of March 31, 2021 and December 31, 2020, respectively
  5 
  7 
Common stock, $0.0001 par value; 250,000,000 shares authorized; 7,275,185 and 5,504,008 shares issued and outstanding as of March 31, 2021 and December 31, 2020, respectively
  727 
  550 
Shares to be issued for acquisitions, 716,861 shares as of March 31, 2021
  2,248,367 
  - 
Additional paid-in capital
  25,763,020 
  23,400,078 
Accumulated deficit
  (40,805,091)
  (34,525,025)
Total stockholders' deficit
  (12,792,852)
  (11,124,262)
 
    
    
Total liabilities and stockholders' deficit
 $12,757,590 
 $5,707,797 
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.



Truli Media

Recruiter.com Group, Inc.

Condensed

Condensed Consolidated Statements of Operations

(Unaudited)

  Three Months ended
December 31,		  Three Months ended
December 31,		  Nine Months ended
December 31,		  Nine Months ended
December 31,		 
  2017  2016  2017  2016 
Operating expenses:            
Selling, general and administrative $64,867  $81,351  $284,875  $230,732 
Total operating expenses  64,867   81,351   284,875   230,732 
Loss from operations  (64,867)  (81,351)  (284,875)  (230,732)
                 
Other income (expenses):                
Interest expense  (14,714)  (26,973)  (84,386)  (73,061)
Loss on change in fair value of derivative liability  (532,788)  (70,168)  (582,425)  (69,832)
Gain on extinguishment of debt  634,435   -   634,435   - 
Total other income (expenses)  86,933   (97,141)  (32,376)  (142,893)
                 
Income (loss) from operations before income taxes  22,066   (178,492)  (317,251)  (373,625)
Provision for income taxes  -   -   -   - 
Net income (loss)  22,066   (178,492)  (317,251)  (373,625)
Preferred stock dividend  (35,573,626)  -   (35,573,626)  - 
Net loss attributable to common shareholders $(35,551,560) $(178,492) $(35,890,877) $(373,625)
                 
Net loss per common share – basic and diluted $(0.40) $(0.07) $(1.15) $(0.15)
                 
Weighted average common shares – basic and diluted  88,152,023   2,554,197   31,190,561   2,554,197 

 
 
Three Months Ended
 
 
Three Months Ended
 
 
 
March 31,
2021
 
 
March 31,
2020
 
 
 
 
 
 
 
 
Revenue (including related party revenue of $970 and $6,410, respectively)
 $3,164,545 
 $2,313,123 
Cost of revenue (including related party costs of $205,261 and $655,384, respectively)
  2,254,910 
  1,751,196 
 
    
    
Gross profit
  909,635 
  561,927 
 
    
    
Operating expenses:
    
    
  Sales and marketing
  57,543 
  25,243 
Product development (including related party expense of $57,988 and $60,979, respectively)
  70,660 
  83,093 
  Amortization of intangibles
  159,173 
  159,173 
General and administrative (including share based compensation expense of $502,407 and $870,722, respectively, and related party expenses of $126,632 and $122,918, respectively)
  2,545,905 
  2,148,943 
 
    
    
Total operating expenses
  2,833,281 
  2,416,452 
 
    
    
Loss from operations
  (1,923,646)
  (1,854,525)
 
    
    
Other income (expenses):
    
    
Interest expense (including related party interest expense of $12,273 and $0, respectively)
    (1,427,588) 
  (44,206)
Initial derivative expense
  (3,585,983)
  - 
Change in fair value of derivative liability
  628,621 
  (565,088)
Forgiveness of debt income
  24,925 
  - 
Grant income
  3,382 
  - 
Net recognized gain (loss) on marketable securities
  223 
  (18,786)
Total other income (expenses)
  (4,356,420)
  (628,080)
 
    
    
Loss before income taxes
  (6,280,066)
  (2,482,605)
Provision for income taxes
  - 
  - 
Net loss
 $(6,280,066)
 $(2,482,605)
 
    
    
Net loss per common share – basic and diluted
 $(0.96)
 $(0.59)
 
    
    
Weighted average common shares – basic and diluted
  6,537,308 
  4,182,256 
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.


Truli Media

Recruiter.com Group, Inc.

Condensed Consolidated StatementsStatement of Cash Flows

Unaudited

  Nine Months ended December 31,  Nine Months ended December 31, 
  2017  2016 
Cash Flows from Operating Activities      
Net loss $(317,251) $(373,625)
Adjustments to reconcile net loss to net cash used in operating activities        
Equity based compensation expense  188   267 
Change in fair market value of derivative liability  582,425   69,832 
Loss on excess fair value of derivative liability at inception  7,441   1,067 
Amortization of debt discount  11,165   380 
Gain on extinguishment of debt  (634,435)  - 
Gain on reversal of liabilities  (98,593)  - 
Expenses paid through financings  43,627   - 
Changes in operating assets and liabilities:        
Increase (decrease) in accounts payable and accrued liabilities  105,591   (34,725)
Increase in accrued interest  63,288   67,396 
Net cash used in operating activities  (236,554)  (269,408)
         
Cash Flows from Investing Activities        
Cash disposed of through exercise of purchase option  (9,040)  - 
Cash paid for software development  (28,750)  - 
Net cash used in investing activities  (37,790)  - 
         
Cash Flows from Financing Activities        
Proceeds from notes payable, related party  114,500   296,500 
Proceeds from convertible notes  40,000   50,000 
Repayments of notes to related party  -   (6,210)
Payments on debt settlement  -   (45,000)
Advances received  10,000   - 
Proceeds from sale of preferred stock  471,373   - 
Net cash provided by financing activities  635,873   295,290 
         
Net increase in cash and cash equivalents  361,529   25,882 
         
Cash and cash equivalents, beginning of period  1,983   13,245 
         
Cash and cash equivalents, end of period $363,512  $39,127 
         
Supplemental disclosures of cash flow information:        
Cash paid during the period for interest $2,493  $4,218 
Cash paid during the period for income taxes $-  $- 
         
Supplemental schedule of non-cash investing and financing activities:        
Extinguished derivative liability $634,435  $- 
Preferred stock issued upon settlement of convertible debt $2,203,487  $- 
Accounts payable and advance paid through proceeds of preferred stock $85,000  $- 
Liabilities transferred through exercise of subsidiary purchase option $620,759  $- 
Common stock issued for acquisition of license $625,000  $- 
Dividend on redeemable preferred stock $45,603  $- 
Discount attributable to derivative liability $11,117  $951 

Changes in Stockholders’ (Deficit) Equity

For the Three Months ended March 31, 2021 and 2020
(Unaudited)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Common stock to be
 
 
 
 
 
 
 
 
 
 
 
 
Preferred stock Series D
 
 
Preferred stock Series E
 
 
Preferred stock Series F
 
 
Common stock
 
 
Issued for Acquisitions
 
 
Additional Paid in
 
 
Accumulated
 
 
Total Stockholders'
 
 
 
 Shares
 
 
Amount
 
 
 Shares
 
 
Amount
 
 
 Shares
 
 
Amount
 
 
 Shares
 
 
Amount
 
 
 Shares
 
 
Amount
 
 
Capital
 
 
Deficit
 
 
Equity (Deficit)
 
Balance as of December 31, 2020
  527,795 
 $54 
  731,845 
 $74 
  64,382 
 $7 
  5,504,008 
 $550 
  - 
 $- 
 $23,400,078 
 $(34,525,025)
 $(11,124,262)
Stock based compensation
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  502,407 
  - 
  502,407 
Issuance of common shares for Scouted acquisition
  - 
  - 
  - 
  - 
  - 
  - 
  438,553 
  44 
  38,978 
  113,036 
  1,271,760 
  - 
  1,384,840 
Issuance of common shares for Upsider acquisition
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  677,883 
  2,135,331 
  - 
  - 
  2,135,331 
Issuance of common shares for accrued compensation
  - 
  - 
  - 
  - 
  - 
  - 
  4,063 
  - 
  - 
  - 
  16,425 
  - 
  16,425 
issuance of common shares upon conversion of debentures and accrued interest
  - 
  - 
  - 
  - 
  - 
  - 
  178,712 
  18 
  - 
  - 
  199,385 
  - 
  199,403 
Cancellation of Series D preferred stock
  (8,755)
  (1)
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  1 
  - 
  - 
Reclassification of derivative liability upon cancellation of Series D warrants
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  373,070 
  - 
  373,070 
Issuance of common shares upon conversion of Series D preferred stock
  (74,453)
  (7)
  - 
  - 
  - 
  - 
  930,664 
  93 
  - 
  - 
  (86)
  - 
  - 
Issuance of common shares upon conversion of Series F preferred stock
  - 
  - 
  - 
  - 
  (17,535)
  (2)
  219,185 
  22 
  - 
  - 
  (20)
  - 
  - 
Net loss three months ended March 31, 2021
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  (6,280,066)
  (6,280,066)
Balance as of March 31, 2021
  444,587 
 $46 
  731,845 
 $74 
  46,847 
 $5 
  7,275,185 
 $727 
  716,861 
 $2,248,367 
 $25,763,020 
 $(40,805,091)
 $(12,792,852)
 
    
    
    
    
    
    
    
    
    
    
    
    
    
Balance as of December 31, 2019
  454,546 
 $46 
  734,986 
 $74 
  139,768 
 $14 
  3,619,658 
 $362 
  - 
 $- 
 $18,203,048 
 $(17,488,188)
 $715,356 
Stock based compensation
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  870,722 
  - 
  870,722 
Series D Preferred stock issued for accrued penalties
  106,134 
  11 
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  1,929,505 
  - 
  1,929,516 
Issuance of common shares upon conversion of Series D preferred stock
  (12,900)
  (1)
  - 
  - 
  - 
  - 
  161,250 
  16 
  - 
  - 
  (15)
  - 
  - 
Issuance of common shares upon conversion of Series E preferred stock
  - 
  - 
  (3,141)
  - 
  - 
  - 
  39,260 
  4 
  - 
  - 
  (4)
  - 
  - 
Issuance of common shares upon conversion of Series F preferred stock
  - 
  - 
  - 
  - 
  (64,272)
  (6)
  803,414 
  80 
  - 
  - 
  (74)
  - 
  - 
Net loss three months ended March 31, 2020
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  - 
  (2,482,605)
  (2,482,605)
Balance as of March 31, 2020
  547,780 
 $56 
  731,845 
 $74 
  75,496 
 $8 
  4,623,582 
 $462 
  - 
 $- 
 $21,003,182 
 $(19,970,793)
 $1,032,989 
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.



Recruiter.com Group, Inc.
TRULI MEDIACondensed Consolidated Statements of Cash Flows
(Unaudited)
 
 
Three Months Ended
 
 
Three Months Ended
 
 
 
March 31, 2021
 
 
March 31, 2020
 
 
 
 
 
 
 
 
Cash Flows from Operating Activities
 
 
 
 
 
 
Net loss
 $(6,280,066)
 $(2,482,605)
 
Adjustments to reconcile net loss to net cash used in operating activities
 
    
Depreciation and amortization expense
  159,461 
  159,461 
Bad debt expense
  16,963 
  11,250 
Gain on forgiveness of debt
  (24,925)
  - 
Equity based compensation expense
  502,407 
  870,722 
Recognized loss (gain) on marketable securities
  (223)
  18,786 
Loan principal paid directly through grant
  (2,992)
  - 
Amortization of debt discount and debt costs
  1,309,212 
  31,976 
Initial derivative expense
  3,585,983 
  - 
Change in fair value of derivative liability
  (628,621)
  565,088 
Changes in operating assets and liabilities:
    
    
      (Increase) decrease in accounts receivable
  (854,522)
  9,749 
      Increase in accounts receivable - related parties
  (3,259)
  (5,942)
      (Increase) decrease in prepaid expenses and other current assets
  28,923 
  (19,954)
Increase in accounts payable and accrued liabilities
  643,270 
  387,823 
Increase in accounts payable and accrued liabilities - related parties
  136,448 
  324,073 
Increase in other liabilities
  - 
  51,780 
Increase (decrease) in deferred revenue
  87,845 
  (15,434)
Net cash used in operating activities
  (1,324,096)
  (93,227)
 
    
    
Cash Flows from Investing Activities
    
    
   Proceeds from sale of marketable securities
  - 
  14,955 
   Cash paid for acquisitions, net of cash assumed
  (249,983)
  - 
Net cash (used in) provided by investing activities
  (249,983)
  14,955 
 
    
    
Cash Flows from Financing Activities
    
    
Proceeds from convertible notes, net
  2,153,200 
  - 
Payments of notes
  (5,767)
  (4,984)
   Advances on receivables
  - 
  180,778 
Repayments of sale of future revenues
  (10,904)
  (127,241)
Deposit on purchase of preferred stock
  - 
  25,000 
Net cash provided by financing activities
  2,136,529 
  73,553 
 
    
    
Net increase (decrease) in cash
  562,450 
  (4,719)
Cash, beginning of period
  99,906 
  306,252 
 
    
    
Cash, end of period
 $662,356 
 $301,533 
 
    
    
Supplemental disclosures of cash flow information:
    
    
Cash paid during the period for interest
 $63,746 
 $38,721 
Cash paid during the period for income taxes
 $- 
 $- 
 
    
    
Supplemental schedule of non-cash investing and financing activities:
    
    
Original issue discount deducted from convertible note proceeds
 $342,554 
 $- 
Debt costs deducted from convertible note proceeds
 $334,800 
 $- 
Contingent consideration for acquisitions
 $1,974,377 
 $  - 
Notes and accrued interest converted to common stock
 $285,939 
 $- 
Common stock issued/to be issued for asset acquisition
 $3,520,171 
 $- 
   Notes payable and accrued interest exchanged for debentures
 $252,430 
 $- 
Accrued compensation paid with common stock
 $16,425 
 $- 
Warrant derivative liability extinguished
 $373,070 
 $- 
Liabilities assumed in acquisition
 $108,500 
 $- 
Warrant derivative liability at inception
 $5,960,058 
 $- 
Preferred stock issued for accrued penalties
 $- 
 $1,929,516 
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

RECRUITER.COM GROUP, INC.

NOTESNOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

DECEMBER

March 31, 2017

(Unaudited)

2021

(UNAUDITED)
NOTE 1 — ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
General
Recruiter.com Group, Inc., a Nevada corporation (“RGI”), is a holding company based in Houston, Texas. The Company has seven subsidiaries, Recruiter.com, Inc., Recruiter.com Recruiting Solutions LLC (“Recruiting Solutions”), Recruiter.com Consulting, LLC, VocaWorks, Inc. (“VocaWorks”), Recruiter.com Scouted Inc. (“Scouted”), Recruiter.com Upsider Inc. (“Upsider”) and Recruiter.com OneWire Inc. (“OneWire”) (see Note 13 Subsequent Events) . RGI and its subsidiaries as a consolidated group is hereinafter referred to as the “Company.” The Company operates in Connecticut, Texas, New York, California and Vancouver, Canada.
Recruiter.com operates an on-demand recruiting platform (the “Platform”) we have developed to help disrupt the $120 billion recruiting and staffing industry. Recruiter.com combines an online hiring platform with the world’s largest network of over 28,000 small and independent recruiters. Businesses of all sizes recruit talent faster using the 

GeneralRecruiter.com

Truli Media platform, which is powered by virtual teams of Recruiters On Demand and Video and AI job-matching technology.

Our website, www.Recruiter.com, provides access to over 28,000 recruiters and utilizes an innovative web platform, with integrated AI-driven candidate to job matching and video screening software to more easily and quickly source qualified talent.
We help businesses accelerate and streamline their recruiting and hiring processes by providing on-demand recruiting services and technology. Recruiter.com leverages our expert network of recruiters to place recruiters on a project basis, aided by cutting edge artificial intelligence-based candidate sourcing, matching and video screening technologies. We operate a cloud-based scalable SaaS-enabled marketplace platform for professional hiring, which provides prospective employers access to a network of thousands of independent recruiters from across the country and worldwide, with a diverse talent sourcing skillset that includes information technology, accounting, finance, sales, marketing, operations, and healthcare specializations.
Through our Recruiting.com Solutions division, we also provide consulting and staffing, and full-time placement services to employers which leverages our platform and rounds out our services.
Our mission is to grow our most collaborative and connective global platform to connect recruiters and employers and become the preferred solution for hiring specialized talent. 
Reincorporation
On May 13, 2020, the Company effected a reincorporation from the State of Delaware to the State of Nevada. Following the approval by the Company’s stockholders at a special meeting held on May 8, 2020, Recruiter.com Group, Inc., a Delaware corporation (the “Company”(“Recruiter.com Delaware”) is a holding company based in Bristol, Connecticut. Immediately following the October 30, 2017 closing of the License, entered into an Agreement and issuancePlan of preferred shares described belowMerger (the “Merger Agreement”) with Recruiter.com Group, Inc., a Nevada corporation and in Note 2, Mr. Michael Solomon, then a director of the Company, exercised his option, granted to him in September 2016, to purchase the Company’s subsidiary, Truli Media Corp (“TMC”) for $5,000. As a result, TMC is no longer a subsidiary of the Company. See Note 2 and Note 10 for additional information on the sale of TMC.

On October 17, 2017, the Company formed a new, wholly owned subsidiary VocaWorks, Inc.of Recruiter.com Delaware (“VocaWorks”Recruiter.com Nevada”), a New Jersey corporation.

Priorpursuant to which Recruiter.com Delaware merged with and into Recruiter.com Nevada, with Recruiter.com Nevada continuing as the exercisesurviving entity. Simultaneously with the reincorporation, the number of shares of common stock the Company is authorized to issue was increased from 31,250,000 shares to 250,000,000 shares.

The reincorporation did not result in any change in the corporate name, business, management, fiscal year, accounting, location of the option by Mr. Solomon to purchase TMC, the Company was focused on the on-demand media and social networking markets as an aggregator of family-friendly, faith-based Christian content, media, music and Internet Protocol Television (“IPTV”) programming. With the exerciseprincipal executive office, or assets or liabilities of the option by Mr. Solomon, the Company has exited those activities.

Effective October 30, 2017, the Company entered into a License Agreement (the “License”) with Recruiter.com, Inc., a Delaware corporation (“Recruiter”) under which Recruiter granted the Company’s newly created subsidiary, VocaWorks, a license to use certainCompany.

Principles of Recruiter’s proprietary softwareConsolidation and related intellectual property. The Company is rebranding itself under the "VocaWorks" brand name and moving into the rapidly expanding fieldBasis of online and mobile-enabled staffing and talent acquisition solutions through its entry into the License with Recruiter. VocaWorks will offer a native mobile iOS app solution, as well as a web-based SaaS platform offering and will facilitate the hiring of personnel, including project-based consultants, focusing initially on specialized technology talent.

“Truli”, “our”, “us”, “we” or the “Company” refer to Truli Media Group, Inc. and its subsidiaries. Presentation

The operations of TMC are included through the date of the exercise of the purchase option by Mr. Solomon. In discussing the business of the Company, we refer to the business now operated by VocaWorks except as otherwise made clear from the context.

From commencement of its former and current business operations through the date of these unaudited condensed consolidated financial statements include the Company has not generated any revenuesaccounts of RGI and has incurred significant expenses.

The Company’s operations are subject to all the risksits wholly owned subsidiaries. All intercompany transactions and uncertainties inherentbalances have been eliminated in the establishment of a new business enterprise, including failing to secure additional funding to carry out the Company’s business plan.

Basis of Presentation

consolidation.

The accompanying condensed consolidated financial statements are unaudited. The unaudited interim financial statements have been prepared in accordance with accounting principles generally accepted in the United States ("GAAP"(“GAAP”) and pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”). Certain information and note disclosures normally included in annual consolidated financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to those rules and regulations, although the Company believes that the disclosures made are adequate to make the information not misleading.

These Accordingly, these interim unaudited condensed consolidated financial statements should be read in conjunction with the financial statements and notes thereto of RGI for the years ended December 31, 2020 and 2019, filed with the SEC on March 9, 2021. The December 31, 2020 balance sheet is derived from those statements.




In the opinion of management, these unaudited interim financial statements as of and for the three and nine months ended DecemberMarch 31, 20172021 and 2016 are unaudited; however, in the opinion of management, such statements2020 include all adjustments (consisting of normal recurring accruals)adjustments and non-recurring adjustments necessary to present fairly the financial position, results of operations and cash flows of the Company for the periods presented.presented). The results for the three and nine months ended DecemberMarch 31, 20172021 are not necessarily indicative of the results to be expected for the year ending MarchDecember 31, 20182021 or for any future period. All references to DecemberMarch 31, 20172021 and 20162020 in these footnotes are unaudited.

These unaudited condensed consolidated

Use of Estimates
The preparation of financial statements should be read in conjunctionconformity with our audited consolidated financial statements and the notes thereto for the year ended March 31, 2017, included in the Company’s annual report on Form 10-K filed with the SEC on June 30, 2017.

The condensed consolidated balance sheet as of March 31, 2017 has been derived from the audited consolidated financial statements at that date but does not include all disclosures required by the accounting principles generally accepted in the United States of America.

4

Cash and Cash Equivalents

The Company considers all short-term highly liquid investments with a remaining maturity at the date of purchase of three months or less to be cash equivalents.

Use of Estimates

The preparation of financial statements in conformity with generally accepted accounting principles(“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenuerevenues and expenses during the reporting period. Actual results couldand outcomes may differ from those estimates.management’s estimates and assumptions. Included in these estimates are assumptions used to estimate collection of accounts receivable, fair value of marketable securities, fair value of assets acquired and liabilities assumed in an asset acquisition and the estimated useful liveslife of assets acquired, fair value of contingent consideration in asset acquisitions, fair value of derivative liabilities, fair value of securities issued for acquisitions, fair value of assets acquired and liabilities assumed in a business combination, fair value of intangible assets calculate the beneficial conversion featureand goodwill, valuation of convertible notes payablelease liabilities and convertible preferred stock,related right of use assets, deferred income tax asset valuation allowances, and valuation of derivative liabilities.

Earnings (Loss) Per Share

stock based compensation expense. 

Cash and Cash Equivalents
The Company follows ASC 260, “Earnings Per Share” for calculatingconsiders all short-term highly liquid investments with a remaining maturity at the basicdate of purchase of three months or less to be cash equivalents. Cash and diluted earnings (loss) per share. Basic earnings (loss) per share are computed by dividing earnings (loss) available to common shareholders by the weighted-average number of common shares outstanding. Diluted earnings (loss) per share is computed similar to basic loss per share except that the denominator is increased to include the number of additional common shares that would have been outstanding if the potential common shares had been issued and if the additional common shares were dilutive. Common sharecash equivalents are excluded from the diluted earnings (loss) per share computation if their effect is anti-dilutive.maintained at financial institutions and, at times, balances may exceed federally insured limits. The Company has not experienced any losses related to these balances as of March 31, 2020. There were 365,034,400no uninsured balances as of March 31, 2021 and 104,782,090 outstanding common share equivalents at December 31, 2017 and 2016, respectively.

  December 31, December 31,
  2017 2016
Options  80,000   193,040 
Warrants  120,000,000   - 
Convertible preferred stock  244,954,400   - 
Convertible notes payable  -   104,589,050 
   365,034,400   104,782,090 

Fair Value

2020. The Company had no cash equivalents during or at the end of either period.

Revenue Recognition 
The Company recognizes revenue in accordance with Financial Accounting Standards Board (“FASB”) Accounting Standards Codification subtopic 825-10,(“ASC”) Topic 606, “Revenue from Contracts with Customers” (“ASC 606”). Revenues are recognized when control is transferred to customers in amounts that reflect the consideration the Company expects to be entitled to receive in exchange for those goods. Revenue recognition is evaluated through the following five steps: (i) identification of the contract, or contracts, with a customer; (ii) identification of the performance obligations in the contract; (iii) determination of the transaction price; (iv) allocation of the transaction price to the performance obligations in the contract; and (v) recognition of revenue when or as a performance obligation is satisfied.

We generate revenue from the following activities:
●Recruiters on Demand: Consists of a consulting and staffing service specifically for the placement of professional recruiters, which we market as Recruiters on Demand. Recruiters on Demand is a flexible, time-based solution that provides businesses of all sizes access to recruiters on an outsourced, virtual basis for help with their hiring needs. As with other consulting and staffing solutions, we procure for our employer clients qualified professional recruiters, and then place them on assignment with our employer clients. Revenue earned through Recruiters on Demand is derived by billing the employer clients for the placed recruiters’ ongoing work at an agreed-upon, time-based rate. We directly source recruiter candidates from our network of recruiters on the Platform, as the recruiter user base of our Platform has the proper skill-set for recruiting and hiring projects. We had previously referred to this service in our revenue disaggregation disclosure in our consolidated financial statements as license and other, but on July 1, 2020, we rebranded as Recruiters on Demand.

●Consulting and Staffing: Consists of providing consulting and staffing personnel services to employers to satisfy their demand for long- and short-term consulting and temporary employee needs. We generate revenue by first referring qualified personnel for the employer’s specific talent needs, then placing that personnel with the employer, but with us or our providers acting as the employer of record, and finally, billing the employer for the time and work of our placed personnel on an ongoing basis. Our process for finding candidates for consulting and staffing engagements largely mirrors our process for full-time placement hiring. This process includes employers informing us of open consulting and temporary staffing opportunities and projects, sourcing qualified candidates through the Platform and other similar means, and, finally, the employer selecting our candidates for placement after a process of review and selection. We bill these employer clients for our placed candidates’ ongoing work at an agreed-upon, time-based rate, typically on a weekly schedule of invoicing.

●Full-time Placement: Consists of providing referrals of qualified candidates to employers to hire staff for full-time positions. We generate full-time placement revenue by earning one-time fees for each time that employers hire one of the candidates that we refer. Employers alert us of their hiring needs through our Platform or other communications. We source qualified candidate referrals for the employers’ available jobs through independent recruiter users that access our Platform and other tools. We support and supplement the independent recruiters’ efforts with dedicated internal employees we call our internal talent delivery team. Our talent delivery team selects and delivers candidate profiles and resumes to our employer clients for their review and ultimate selection. Upon the employer hiring one or more of our candidate referrals, we earn a “full-time placement fee”, an amount separately negotiated with each employer client. The full-time placement fee is typically either a percentage of the referred candidates’ first year’s base salary or an agreed-upon flat fee.
●Marketing Solutions: Our “Marketing Solutions” allow companies to promote their unique brands on our website, the Platform, and our other business-related content and communication. This is accomplished through various forms of online advertising, including sponsorship of digital newsletters, online content promotion, social media distribution, banner advertising, and other branded electronic communications, such as in our quarterly digital publication on recruiting trends and issues. Customers who purchase our Marketing Solutions typically specialize in B2B software and other platform companies that focus on recruitment and human Resources processing. We earn revenue as we complete agreed upon marketing related deliverables and milestones using pricing and terms set by mutual agreement with the customer. In addition to its work with direct clients, the Company categorizes all online advertising and affiliate marketing revenue as Marketing Solutions.
●Career Solutions: We provide services to assist job seekers with their career advancement. These services include a resume distribution service which involves promoting these job seekers’ profiles and resumes to assist with their procuring employment, and upskilling and training. Our resume distribution service allows a job seeker to upload his/her resume to our database, which we then distribute to our network of recruiters on the Platform. We earn revenue from a one-time flat fee for this service. We also offer a recruiter certification program which encompasses our recruitment related training content, which we make accessible through our online learning management system. Customers of the recruiter certification program use a self-managed system to navigate through a digital course of study. Upon completion of the program, we issue a certificate of completion and make available a digital badge to certify their achievement for display on their online recruiter profile on the Platform. For approximately the four months following March 31, 2020, the Company provided the recruiter certification program free in response to COVID-19. We partner with Careerdash, a high-quality training company, to provide Recruiter.com Academy, an immersive training experience for career changers.
We have a sales team and sales partnerships with direct employers as well as Vendor Management System companies and Managed Service companies that help create sales channels for clients that buy staffing, direct hire, and sourcing services. Once we have secured the relationship and contract with the interested Enterprise customer the delivery and product teams will provide the service to fulfill any or all of the revenue segments.


Revenues as presented on the statement of operations represent services rendered to customers less sales adjustments and allowances.
Recruiters on Demand services are billed to clients as either monthly subscriptions or time-based billings. Revenues for Recruiters on Demand are recognized on a gross basis when each monthly subscription service is completed.
Consulting and Staffing Services revenues represent services rendered to customers less sales adjustments and allowances. Reimbursements, including those related to travel and out-of-pocket expenses, are also included in the net service revenues and equivalent amounts of reimbursable expenses are included in costs of revenue. We record substantially all revenue on a gross basis as a principal versus on a net basis as an agent in the presentation of this line of revenues and expenses. We have concluded that gross reporting is appropriate because we have the task of identifying and hiring qualified employees, and our discretion to select the employees and establish their compensation and duties causes us to bear the risk for services that are not fully paid for by customers. Consulting and staffing revenues are recognized when the services are rendered by the temporary employees. Payroll and related taxes of certain employees that are placed on temporary assignment are outsourced to third party payors or related party payors. The payors pay all related costs of employment for these employees, including workers’ compensation insurance, state and federal unemployment taxes, social security and certain fringe benefits. We assume the risk of acceptability of the employees to customers. Payments for consulting and staffing services are typically due within 90 days of completion of services.
Full time placement revenues are recognized on a gross basis when the guarantee period specified in each customer’s contract expires. No fees for direct hire placement services are charged to the employment candidates. Any payments received prior to the expiration of the guarantee period are recorded as a deferred revenue liability. Payments for recruitment services are typically due within 90 days of completion of services.
Marketplace Solutions services revenues are recognized on a gross basis when the advertising is placed and displayed or when lead generation activities and online publications are completed, which is the point at which the performance obligations are satisfied. Payments for marketing and publishing are typically due within 30 days of completion of services.
Career services revenues are recognized on a gross basis upon distribution of resumes or completion of training courses, which is the point at which the performance obligations are satisfied. Payments for career services are typically due upon distribution or completion of services. 
Deferred revenue results from transactions in which the Company has been paid for services by customers, but for which all revenue recognition criteria have not yet been met. Once all revenue recognition criteria have been met, the deferred revenues are recognized.
Sales tax collected is recorded on a net basis and is excluded from revenue.
Contract Assets
The Company does not have any contract assets such as work-in-process. All trade receivables on the Company’s balance sheet are from contracts with customers.
Contract Costs
Costs incurred to obtain a contract are capitalized unless they are short term in nature. As a practical matter, costs to obtain a contract that are short term in nature are expensed as incurred. The Company does not have any contract costs capitalized as of March 31, 2021 or December 31, 2020.
Contract Liabilities - Deferred Revenue
The Company’s contract liabilities consist of advance customer payments and deferred revenue. Deferred revenue results from transactions in which the Company has been paid for services by customers, but for which all revenue recognition criteria have not yet been met. Once all revenue recognition criteria have been met, the deferred revenues are recognized.
For each of the identified periods, revenues can be categorized into the following: 
 
 
Three Months Ended March 31,
 
 
 
2021
 
 
2020
 
Recruiters on Demand
 $957,479 
 $184,975 
Consulting and staffing services
  2,072,446 
  1,913,394 
Permanent placement fees
  39,966 
  137,627 
Marketplace Solutions
  40,981 
  40,193 
Career services
  53,673 
  36,934 
Total revenue
 $3,164,545 
 $2,313,123 


As of March 31, 2021 and December 31, 2020, deferred revenue amounted to $139,382 and $51,537 respectively. As of March 31, 2021, deferred revenues associated with placement services are $139,382 and we expect the recognition of such services to be within the three months ended June 30, 2021. 
Revenue from international sources was approximately 2% and 2% for the three months ended March 31, 2021 and 2020, respectively.
Costs of Revenue
Costs of revenues consist of employee costs, third party staffing costs and other fees, outsourced recruiter fees and commissions based on a percentage of Recruiting Solutions gross margin.
Accounts Receivable
Credit is extended to customers based on an evaluation of their financial condition and other factors. Management periodically assesses the Company’s accounts receivable and, if necessary, establishes an allowance for estimated uncollectible amounts. Accounts determined to be uncollectible are charged to operations when that determination is made. The Company usually does not require collateral. We have recorded an allowance for doubtful accounts of $47,463 and $33,000 as of March 31, 2021 and December 31, 2020, respectively. Bad debt expense was $16,963 and $11,250 for the three-month periods ended March 31, 2021 and 2020, respectively.
Concentration of Credit Risk and Significant Customers and Vendors
As of March 31, 2021, two customers accounted for more than 10% of the accounts receivable balance, at 26% and 11%, for a total of 37%.
As of March 31, 2020, three customers accounted for more than 10% of the accounts receivable balance, at 32%, 16% and 12% for a total of 60%.
For the three months ended March 31, 2021 two customers accounted for 10% of more of total revenue, at 27% and 15%, for a total of 42%.
For the three months ended March 31, 2020 two customers accounted for 10% or more of total revenue, at 33% and 18%, for a total of 51%.
We use a related party firm for software development and maintenance related to our website and the platform underlying our operations. One of our officers and principal shareholders is an employee of this firm and exerts control over this firm (see Note 11). 
We are a party to that certain license agreement with a related party firm (see Note 11). Pursuant to the license agreement the firm has granted us an exclusive license to use certain candidate matching software and render certain related services to us. If this relationship was terminated or if the firm was to cease doing business or cease to support the applications we currently utilize, we may be forced to expend significant time and resources to replace the licensed software. Further, the necessary replacements may not be available on a timely basis on favorable terms, or at all. If we were to lose the ability to use this software our business and operating results could be materially and adversely affected. 
We use a related party firm to provide certain employer of record services (see Note 11).
We use a related party firm to provide certain recruiting services (see Note 11).
Advertising and Marketing Costs
The Company expenses all advertising and marketing costs as incurred. Advertising and marketing costs were $57,543 and $25,243 for the three months ended March 31, 2021 and 2020, respectively. 
Fair Value of Financial Instruments (“ASC 825-10”) requires disclosure ofand Fair Value Measurements
The Company measures and discloses the fair value of certainassets and liabilities required to be carried at fair value in accordance with ASC 820, Fair Value Measurements and Disclosures. ASC 820 defines fair value, establishes a hierarchical framework for measuring fair value, and enhances fair value measurement disclosure. 
ASC 825 defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Company considers the principal or most advantageous market in which it would transact and considers assumptions that market participants would use when pricing the asset or liability, such as inherent risk, transfer restrictions, and risk of nonperformance. ASC 825 establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 825 establishes three levels of inputs that may be used to measure fair value:

Level 1 - Quoted prices for identical assets or liabilities in active markets to which we have access at the measurement date.
Level 2 - Inputs other than quoted prices within Level 1 that are observable for the asset or liability, either directly or indirectly.
Level 3 - Unobservable inputs for the asset or liability.
The determination of where assets and liabilities fall within this hierarchy is based upon the lowest level of input that is significant to the fair value measurement.
The Company’s investment in available for sale securities and warrant derivative liabilities are measured at fair value. The securities are measured based on current trading prices using Level 1 fair value inputs. The Company’s derivative instruments are valued using Level 3 fair value inputs. The Company does not have any other financial instruments.instruments which require re-measurement to fair value. The carrying amount reported in the condensed consolidated balance sheet forvalues of cash and cash equivalents, accounts receivable, accounts payable and accrued expenses, and notesloans payable approximatesrepresent fair value becausebased upon their short-term nature.
A financial asset or liability’s classification within the hierarchy is determined based on the lowest level input that is significant to the fair value measurement. The table below summarizes the fair values of our financial assets and liabilities as of March 31, 2021:
 
 
Fair Value at
March 31,
 
 
Fair Value Measurement Using
 
 
 
2021
 
 
Level 1
 
 
Level 2
 
 
Level 3
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Available for sale marketable securities (Note 3)
 $1,647 
 $1,647 
 $- 
 $- 
Warrant derivative liability (Note 9)
 $16,496,364 
 $- 
 $- 
 $16,496,364 
The reconciliation of the immediatederivative liability measured at fair value on a recurring basis using unobservable inputs (Level 3) is as follows for the three months ended March 31, 2021 and 2020:
 
 
Three Months Ended
March 31,
 
 
 
2021
 
 
2020
 
Balance at January 1
 $11,537,997 
 $612,042 
   Additions to derivative instruments
  5,960,058 
  - 
   Reclassifications to equity upon extinguishment
  (373,070)
  - 
   (Gain) loss on change in fair value of derivative liability
  (628,621)
  565,088 
Balance at March 31
 $16,496,364 
 $1,177,130 


Business Combinations
For all business combinations (whether partial, full or short-term maturitystep acquisitions), the Company records 100% of all assets and liabilities of the acquired business, including goodwill, generally at their fair values; contingent consideration, if any, is recognized at its fair value on the acquisition date and, for certain arrangements, changes in fair value are recognized in earnings until settlement and acquisition-related transaction and restructuring costs are expensed rather than treated as part of the cost of the acquisition.
Intangible Assets
Intangible assets consist primarily of the assets acquired from Genesys in 2019, including customer contracts and intellectual property, acquired on March 31, 2019 and the assets acquired from Scouted and Upsider during the first quarter of 2021 (see Note 12). Amortization expense will be recorded on the straight line basis over the estimated economic lives.
Goodwill
Goodwill is comprised of the purchase price of business combinations in excess of the fair value assigned at acquisition to the net tangible and identifiable intangible assets acquired. Goodwill is not amortized. The Company tests goodwill for impairment for its reporting units on an annual basis, or when events occur, or circumstances indicate the fair value of a reporting unit is below its carrying value.
The Company performs its annual goodwill and impairment assessment on December 31st of each year (see Note 4).
When evaluating the potential impairment of goodwill, management first assess a range of qualitative factors, including but not limited to, macroeconomic conditions, industry conditions, the competitive environment, changes in the market for the Company’s products and services, regulatory and political developments, entity specific factors such as strategy and changes in key personnel, and the overall financial performance for each of the Company’s reporting units. If, after completing this assessment, it is determined that it is more likely than not that the fair value of a reporting unit is less than its carrying value, we then proceed to the impairment testing methodology primarily using the income approach (discounted cash flow method).
We compare the carrying value of the reporting unit, including goodwill, with its fair value, as determined by its estimated discounted cash flows. If the carrying value of a reporting unit exceeds its fair value, then the amount of impairment to be recognized is recognized as the amount by which the carrying amount exceeds the fair value.
When required, we arrive at our estimates of fair value using a discounted cash flow methodology which includes estimates of future cash flows to be generated by specifically identified assets, as well as selecting a discount rate to measure the present value of those anticipated cash flows. Estimating future cash flows requires significant judgment and includes making assumptions about projected growth rates, industry-specific factors, working capital requirements, weighted average cost of capital, and current and anticipated operating conditions. The use of different assumptions or estimates for future cash flows could produce different results.
Long-lived assets
Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the book value of the asset may not be recoverable. The Company periodically evaluates whether events and circumstances have occurred that indicate possible impairment. When impairment indicators exist, the Company estimates the future undiscounted net cash flows of the related asset or asset group over the remaining life of the asset in measuring whether or not the asset values are recoverable.
Stock-Based Compensation
We account for our stock-based compensation under ASC 718 “Compensation – Stock Compensation” using the fair value based method. Under this method, compensation cost is measured at the grant date based on the value of the award and is recognized over the shorter of the service period or the vesting period of the stock-based compensation. This guidance establishes standards for the accounting for transactions in which an entity exchanges it equity instruments for goods or services. It also addresses transactions in which an entity incurs liabilities in exchange for goods or services that are based on the fair value of the entity’s equity instruments or that may be settled by the issuance of those equity instruments. The Company estimates the fair value of each stock option at the grant date by using the Black-Scholes option pricing model. Determining the fair value of stock-based compensation at the grant date under this model requires judgment, including estimating volatility, employee stock option exercise behaviors and forfeiture rates. The assumptions used in calculating the fair value of stock-based compensation represent the Company’s best estimates, but these financial instruments.

estimates involve inherent uncertainties and the application of management judgment. 



Convertible Instruments

The Company evaluates and accounts for conversion options embedded in its convertible instruments in accordance with professional standards for “Accounting for Derivative Instrumentsvarious accounting standards.
ASC 480 “Distinguishing Liabilities From Equity” provides that instruments convertible predominantly at a fixed rate resulting in a fixed monetary amount due upon conversion with a variable quantity of shares (“stock settled debt”) be recorded as a liability at the fixed monetary amount.
ASC 815 “Derivatives and Hedging Activities”.

Professional standardsHedging” generally provides three criteria that, if met, require companies to bifurcate conversion options from their host instruments and account for them as free standing derivative financial instruments. These three criteria include circumstances in which (a) the economic characteristics and risks of the embedded derivative instrument are not clearly and closely related to the economic characteristics and risks of the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contract is not re-measured at fair value under otherwise applicable generally accepted accounting principles with changes in fair value reported in earnings as they occur, and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument. Professional standards also provide an exception to this rule when the host instrument is deemed to be conventional as defined under professional standards as “The Meaning of Conventional Convertible Debt Instrument”.

Instrument.”

The Company accounts for convertible instruments (when it has determined that the instrument is not a stock settled debt and the embedded conversion options should not be bifurcated from their host instruments) in accordance with professional standards when “Accounting for Convertible Securities with Beneficial Conversion Features,” as those professional standards pertain to “Certain Convertible Instruments.” Accordingly, the Company records, when necessary, discounts to convertible notes for the intrinsic value of conversion options embedded in debt instruments based upon the differences between the fair value of the underlying common stock at the commitment date of the note transaction and the effective conversion price embedded in the note. Debt discountsDiscounts under these arrangements are amortized over the term of the related debt to their earliest date of redemption. The Company also records when necessary deemed dividends for the intrinsic value of conversion options embedded in preferred shares based upon the differences between the fair value of the underlying common stock at the commitment date of the preferred sharesshare transaction and the effective conversion price embedded in the preferred shares.

ASC 815-40 provides that among other things, generally if an event is not within the entity’s control orand could require net cash settlement, then the contract shall be classified as an asset or a liability.

5


Derivative Instruments

The Company’s derivative financial instruments consist of embedded derivatives related to the convertible debt and conversion features embedded withinwarrants issued with the sale of our convertible debt.notes in 2020 and 2021 (see Notes 7 and 9) and the warrants issued with the sale of our Series D Preferred Stock in 2020 and 2019 (see Note 9). The accounting treatment of derivative financial instruments requires that we record the derivatives at their fair values as of the inception date of the debt agreements and at fair value as of each subsequent balance sheet date. Any change in fair value wasis recorded as non-operating, non-cash income or expense at each balance sheet date. If the fair value of the derivatives was higher at the subsequent balance sheet date, we recorded a non-operating, non-cash charge. If the fair value of the derivatives was lower at the subsequent balance sheet date, we recorded non-operating, non-cash income.

Stock-Based Compensation

The Company utilizes Upon the Black-Scholes option-pricing modeldetermination that an instrument is no longer subject to determinederivative accounting, the fair value of options and warrants granted as stock-based compensation, which requires usthe derivative instrument at the date of such determination will be reclassified to make judgments relating to the inputs required to bepaid in capital.

Product Development
Product development costs are included in selling, general and administrative expenses and consist of support, maintenance and upgrades of our website and IT platform and are charged to operations as incurred.
Earnings (Loss) Per Share
The Company follows ASC 260 “Earnings Per Share” for calculating the model. In this regard,basic and diluted earnings (or loss) per share. Basic earnings (or loss) per share are computed by dividing earnings (or loss) available to common shareholders by the expected volatilityweighted-average number of common shares outstanding. Diluted earnings (or loss) per share is based oncomputed similar to basic loss per share except that the historical price volatilitydenominator is increased to include the number of additional shares of common stock that would have been outstanding if the potential shares of common stock had been issued and if the additional shares were dilutive. Common stock equivalents are excluded from the diluted earnings (or loss) per share computation if their effect is anti-dilutive. Common stock equivalents in amounts of 27,430,594 and 18,685,872 were excluded from the computation of diluted earnings per share for the 3 months ended March 31, 2021 and 2020, respectively, because their effects would have been anti-dilutive.
 
 
March 31,
 
 
March 31,
 
 
 
2021
 
 
2020
 
Options
  2,188,258 
  873,420 
Stock awards
  554,000 
  402,500 
Warrants
  5,796,843 
  470,939 
Convertible notes
  3,600,505 
  - 
Convertible preferred stock
  15,290,988 
  16,939,013 
 
  27,430,594 
  18,685,872 
Business Segments
The Company uses the “management approach” to identify its reportable segments. The management approach designates the internal organization used by management for making operating decisions and assessing performance as the basis for identifying the Company’s common stock. The dividend yield representsreportable segments. Using the Company’s anticipated cash dividend on common stock overmanagement approach, the expected life of the stock options. The U.S. Treasury bill rate for the expected life of the stock options is utilized to determine the risk-free interest rate. The expected term of stock options represents the period of time the stock options granted are expected to be outstanding.

Intangible Assets

Intangible assets consist of a license agreement and related software, website and iPhone App development costs. These costs will be amortized over their estimated economic lives once placed in service. The assets have not been placed in service as of December 31, 2017.

Company determined that it has one operating segment.

Recently Issued Accounting Pronouncements

With the exception of those discussed below, there

There have not been any recent changes in accounting pronouncements and Accounting Standards Update (ASU)ASU issued by the Financial Accounting Standards Board (FASB) during the nine months ended December 31, 2017FASB that are of significance or potential significance to the Company.

Company except as disclosed below.

In May 2017,December 2019, the FASB issued ASU 2017-09, “Compensation – Stock Compensation (Topic 718): Scope of Modification Accounting”, which clarifies when2019-12, “Simplifying the Accounting for Income Taxes.” This guidance, among other provisions, eliminates certain exceptions to account for a changeexisting guidance related to the termsapproach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. This guidance also requires an entity to reflect the effect of an enacted change in tax laws or conditionsrates in its effective income tax rate in the first interim period that includes the enactment date of a share-based payment award as a modification. Under the new guidance, modification accounting is required only iflegislation, aligning the fair value, the vesting conditions, or the classificationtiming of recognition of the awardeffects from enacted tax law changes as a resulton the effective income tax rate with the effects on deferred income tax assets and liabilities. Under existing guidance, an entity recognizes the effects of the enacted tax law change on the effective income tax rate in terms or conditions. If an award is not probablethe period that includes the effective date of vesting at the time a change is made, the new guidance clarifies that no new measurement date will be required if there is no change to the fair value, vesting conditions, and classification. Thistax law. ASU will be applied prospectively and2019-12 is effective for fiscal yearsinterim and annual periods beginning after December 15, 2017, and interim periods within those years,2020, with early adoption permitted. The Company doesadoption of ASU 2019-12 did not expect this standard to have a material impact on itsour consolidated financial statements.

In July 2017, the FASB issued Accounting Standards Update No. (“ASU’’) 2017-11, Earnings Per Share (Topic 260), Distinguishing Liabilities from Equity (Topic 480) and Derivatives and Hedging (Topic 815). The amendments in this Update provide guidance about:

1. Accounting for certain financial instruments with down round features

2. Replacement of the indefinite deferral for mandatorily redeemable financial instruments of certain non-public entities and certain non-controlling interests

The amendments in Part I of this Update change the classification analysis of certain equity-linked financial instruments (or embedded features) with down round features. When determining whether certain financial instruments should be classified as liabilities or equity instruments, a down round feature no longer precludes equity classification when assessing whether the instrument is indexed to an entity’s own stock. The amendments also clarify existing disclosure requirements for equity-classified instruments. As a result, a freestanding equity-linked financial instrument (or embedded conversion option) no longer would be accounted for as a derivative liability at fair value as a result of the existence of a down round feature. For freestanding equity classified financial instruments, the amendments require entities that present earnings per share (EPS) in accordance with Topic 260 to recognize the effect of the down round feature when it is triggered. That effect is treated as a dividend and as a reduction of income available to common shareholders in basic EPS. Convertible instruments with embedded conversion options that have down round features are now subject to the specialized guidance for contingent beneficial conversion features (in Subtopic 470-20, Debt—Debt with Conversion and Other Options), including related EPS guidance (in Topic 260).

The amendments in Part II of this Update recharacterize the indefinite deferral of certain provisions of Topic 480 that now are presented as pending content in the Codification, to a scope exception. Those amendments do not have an accounting effect.

The amendments in Part I of this Update are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. Early adoption is permitted for all entities, including adoption in an interim period. If an entity early adopts the amendments in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. The amendments in Part 1 of this Update should be applied in either of the following ways: 1. Retrospectively to outstanding financial instruments with a down round feature by means of a cumulative-effect adjustment to the statement of financial position as of the beginning of the first fiscal year and interim period(s) in which the pending content that links to this paragraph is effective 2. Retrospectively to outstanding financial instruments with a down round feature for each prior reporting period presented in accordance with the guidance on accounting changes in paragraphs 250-10-45-5 through 45-10. The Company has adopted this update during the quarter ended December 31, 2017. The Company has retrospectively applied amendments in Part I of ASU 2017-11 to outstanding financial instruments with a down round feature by means of a cumulative-effect adjustment to the statement of financial position as of the beginning of the first fiscal year and interim period(s) in which the pending content that links to this paragraph is effective. On the date of adoption, there were no previously issued outstanding financial instruments with a down round feature.

The amendments in Part II of this Update do not require any transition guidance because those amendments do not have an accounting effect.


NOTE 2 — NOTES PAYABLE

Note Payable – Related Party 

Michael Solomon, the Company’s founder and former Chief Executive Officer (the “Founder”), advanced funds to TMC, evidenced by an unsecured term note (the “Note”), with an outstanding principal amount of $572,301 and $457,801 on October 31, 2017 (the date that Mr. Solomon exercised his option to purchase TMC) and March 31, 2017, respectively. The Note was without recourse to Truli Media Group, Inc. The Note bore interest at 4% per annum. The Company recorded interest expense of $1,910 and $3,639 for the three months ended December 31, 2017 and 2016, respectively. The Company recorded interest expense of $12,123 and $7,699 for the nine months ended December 31, 2017 and 2016, respectively. As a result of Mr. Solomon’s exercise of the purchase option to acquire TMC, this note and the related accrued interest of $24,800 is no longer a liability of the Company. Accrued interest payable was $12,677 at March 31, 2017. 

Convertible Notes Payable – Related Party 

On December 1, 2015, the Company issued an unsecured, convertible promissory note (the “Convertible Note”) to the Founder with a principal amount of $1,955,934, as satisfaction of $1,822,109 of principal and $133,825 of accrued interest outstanding under the Note described above. The Convertible Note, which carried interest at the rate of 4% per annum, matures on December 1, 2020. The Convertible Note and related accrued interest is convertible into shares of the Company’s common stock at the rate of $0.02 per share, subject to certain restrictions of beneficial ownership. The Company recorded interest expense of $6,645 and $19,720 for the three months ended December 31, 2017 and 2016, respectively. The Company recorded interest expense of $45,871 and $58,946 for the nine months ended December 31, 2017 and 2016, respectively. Accrued interest payable was $150,259 and $104,388 at October 30, 2017 (the date of the exchange of the notes into Series C Convertible Preferred Stock) and March 31, 2017, respectively.

Effective September 21, 2016, the Company, the Founder and two institutional investors (the “Investors”) entered into a Note Purchase Agreement (the “NPA”) pursuant to which the Founder sold the Convertible Note with a principal amount of $1,955,934 previously issued by the Company to the Founder to the Investors in equal amounts in exchange for $102,500 from each Investor, each of whom acquired a convertible note for one-half of the principal (together the “Investor Convertible Notes”). The NPA included a provision under which the Founder has an option to purchase all of the Company’s current operating assets for $5,000. The option is exercisable through March 23, 2017 with the consent of one of the Investors, and thereafter through September 23, 2017 without the consent of the Investors. Effective as of September 23, 2017, the Company agreed to extend the option held by the Founder through October 31, 2017, and the option was exercised on that date. On October 30, 2017, the Investors exchanged the Convertible Notes for 102,099.752 shares of Series C Convertible Preferred Stock.

Subsequent to September 30, 2016, Truli transferred the Company’s operating assets to its newly-formed, wholly-owned subsidiary, TMC. Under the NPA, the Company agreed with the Founder that it will be an Event of Default under the Convertible Notes if the Founder does not pay all operating costs of the Company, which essentially are the operating expenses of TMC. The NPA clearly indicates that public company compliance costs, including accounting, auditing and legal fees relating to securities matters are not operating costs. In addition, the Founder agreed to assume and pay all of the Company’s liabilities arising prior to the date of the NPA, except for the Convertible Notes and pay operating liabilities thereafter. The Investors agreed to pay all of the public company costs for a period of one year following the date of the NPA.

GOING CONCERN

Convertible Notes Payable – Other 

On November 8, 2016, the Company sold an aggregate of $50,000 principal amount of its convertible promissory notes (the “November Notes”) to the Investors and received $50,000 in gross proceeds. The Notes are convertible, at the option of the holder, into shares of the Company’s common stock, par value $0.001 per share, at a per share price of $0.02, subject to adjustment as provided in the Notes and subject to a total beneficial ownership limitation of 9.99% of the Company’s issued and outstanding common stock. Each Note has a maturity date that is five months from the issue date. The maturity date of each November Note has been extended to October 31, 2017. The Company recorded interest expense of $430 and $2,973 for the three and nine months ended December 31, 2017, respectively. Accrued interest payable was $4,972 and $2,000 at October 30, 2017 (the date of the exchange of the notes into Series C-1 Convertible Preferred Stock) and March 31, 2017, respectively.

On April 6, 2017, the Company sold an aggregate of $40,000 principal amount of its convertible promissory notes (the “April Notes”) to the holders of the Convertible Note and received $40,000 in gross proceeds. The Notes are convertible, at the option of the holder, into shares of the Company’s common stock, par value $0.001 per share, at a per share price of $0.02, subject to adjustment as provided in the Notes and subject to a total beneficial ownership limitation of 9.99% of the Company’s issued and outstanding common stock. Each April Note has a maturity date that is four months from the issue date. The maturity date of each April Note has been extended to October 31, 2017. The Company recorded interest expense of $345 and $2,322 for the three and nine months ended December 31, 2017. Accrued interest payable was $2,322 and $0 at October 30, 2017 (the date of the exchange of the notes into Series C-1 Convertible Preferred Stock) and March 31, 2017, respectively.

On October 30, 2017, the Investors exchanged the November and April Notes and related accrued interest for 18,839 shares of Series C-1 Convertible Preferred Stock. We recorded a gain of $634,435 as a result of the conversion of the debt and related derivative liabilities during the three and nine months ended December 31, 2017.

NOTE 3 — DERIVATIVES

The Company has identified certain embedded derivatives related to its convertible notes and common stock purchase warrants. Since certain of the notes are convertible into a variable number of shares or have a price reset feature, the conversion features of those debentures are recorded as derivative liabilities. Since the warrants have a price reset feature, they are recorded as derivative liabilities. The accounting treatment of derivative financial instruments requires that the Company record the fair value of the derivatives as of the inception date and to adjust to fair value as of each subsequent balance sheet date. 

Compensation Warrants (issued on September 10, 2013):

On September 10, 2013, the Company issued 50,134 warrants as compensation for consulting services. The warrants had an initial exercise price of $2.50 per shares and a term of three years. The Company identified embedded derivatives related to these warrants, due to the price reset features of these instruments. As a result, we have classified these instruments as derivative liabilities in the financial statements. 

During the year ended March 31, 2016, the warrants were adjusted upon the subsequent issuance of debt in accordance with the terms of the warrants. The number of warrants was increased to a total of 6,266,715 and the exercise price was reduced to $0.02. 

During the three and nine months ended December 31, 2016, the Company recorded income of $0 and $336, respectively, related to the change in the fair value of the derivative. The warrants expired unexercised on September 10, 2016.

November Notes

The Company identified embedded derivatives related to the conversion features of the November 2016 Notes. The accounting treatment of derivative financial instruments requires that the Company record the fair value of the derivatives as of the inception date of the note and to adjust the fair value as of each subsequent balance sheet date. The Company calculated the fair value of the embedded derivative at the inception of the Notes as $951, using the Black Scholes Model based on the following assumptions: (1) risk free interest rate of 0.64%; (2) dividend yield of 0%; (3) volatility factor of the expected market price of our common stock of 247%; and (4) an expected life of 5 months. The initial fair value of the embedded debt derivative was allocated as debt discount, which has been amortized to interest expense over the original term of the Notes. During the three and nine months ended December 31, 2017, $0 and $48 was charged to interest expense, respectively.

We have recorded additions to our derivative conversion liabilities related to the conversion feature attributable to interest accrued during the period.

These additions totaled $2,808 and $4,173 for the three and nine months ended December 31, 2017, respectively, and were charged to interest expense.

During the three and nine months ended December 31, 2017, the Company recorded expense of $301,070 and $320,837 related to the change in the fair value of the derivative. The fair value of the embedded derivative was $358,462 at October 30, 2017 (the date of the exchange of the notes into Series C-1 Convertible Preferred Stock), determined using the Black Scholes Model with the following assumptions: (1) risk free interest rate of 0.97%; (2) dividend yield of 0%; (3) volatility factor of the expected market price of our common stock of 353%; and (4) an expected life of 1 month. 


April Notes

The Company identified embedded derivatives related to the conversion features of the April 2017 Notes. The accounting treatment of derivative financial instruments requires that the Company record the fair value of the derivatives as of the inception date of the note and to adjust the fair value as of each subsequent balance sheet date. The Company calculated the fair value of the embedded derivative at the inception of the Notes as $11,117, using the Black Scholes Model based on the following assumptions: (1) risk free interest rate of 0.838%; (2) dividend yield of 0%; (3) volatility factor of the expected market price of our common stock of 339%; and (4) an expected life of 4 months. The initial fair value of the embedded debt derivative was allocated as debt discount, which has been amortized to interest expense over the term of the Notes. During the three and nine months ended December 31, 2017, $0 and $11,117 was charged to interest expense.

We have recorded additions to our derivative conversion liabilities related to the conversion feature attributable to interest accrued during the period. These additions totaled $2,246 and $3,269 for the three and nine months ended December 31, 2017, respectively, and were charged to interest expense.

During the three and nine months ended December 31, 2017, the Company recorded expense of $231,718 and $261,588 related to the change in the fair value of the derivative. The fair value of the embedded derivative was $275,974 at October 30, 2017 (the date of the exchange of the notes into Series C-1 Convertible Preferred Stock), determined using the Black Scholes Model with the following assumptions: (1) risk free interest rate of 0.97%; (2) dividend yield of 0%; (3) volatility factor of the expected market price of our common stock of 353%; and (4) an expected life of 1 month. 

NOTE 4 — FAIR VALUE OF FINANCIAL INSTRUMENTS

ASC 825-10 defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities required or permitted to be recorded at fair value, the Company considers the principal or most advantageous market in which it would transact and considers assumptions that market participants would use when pricing the asset or liability, such as inherent risk, transfer restrictions, and risk of nonperformance. ASC 825-10 establishes a fair value hierarchy that requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value. ASC 825-10 establishes three levels of inputs that may be used to measure fair value: 

Level 1 - Quoted prices in active markets for identical assets or liabilities.

Level 2 - Observable inputs other than Level 1 prices such as quoted prices for similar assets or liabilities; quoted prices in markets with insufficient volume or infrequent transactions (less active markets); or model-derived valuations in which all significant inputs are observable or can be derived principally from or corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3 - Unobservable inputs to the valuation methodology that are significant to the measurement of fair value of assets or liabilities.

To the extent that valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, for disclosure purposes, the level in the fair value hierarchy within which the fair value measurement is disclosed is determined based on the lowest level input that is significant to the fair value measurement.  

Items recorded or measured at fair value on a recurring basis in the accompanying unaudited condensed consolidated financial statements consistedhave been prepared on a going concern basis which contemplates the realization of assets and the following items assettlement of December 31, 2017:

Fair Value Measurements at
December 31, 2017 using:
December 31,
2017		Quoted
Prices
in Active
Markets for
Identical
Assets
(Level 1)		Significant
Other
Observable
Inputs
(Level 2)		Significant
Unobservable
Inputs
(Level 3)
Liabilities:
Debt Derivative Liabilities$     -$     -$     -$     -

The debt derivative liabilities are measured at fair value using quoted market prices and estimated volatility factors based on historical prices forcommitments in the Company’s common stock and are classified within Level 3normal course of the valuation hierarchy.


The following table provides a summary of changes in fair value of the Company’s Level 3 derivative liabilities for the nine months ended December 31, 2017 and 2016:

  December 31, December 31,
  2017 2016
Balance, beginning of period $33,452  $336 
Additions  18,558   2,018 
Extinguishment of derivative liabilities  (634,435)  - 
Change in fair value of derivative liabilities  582,425   69,832 
  $-  $72,186 

NOTE 5 — GOING CONCERN

business. The Company’s management has evaluated whether there is substantial doubt about the Company’s ability to continue as a going concern and has determined that substantial doubt existed as of the date of the end of the period covered by this Quarterly Report on Form 10-Q.report. This determination was based on the following factors: (i) the Company has a working capital deficit as of March 31, 2021 and the Company’s available cash as of the date of this filing will not be sufficient to fund its anticipated level of operations for the next 12 months; (ii) the Company maywill require additional financing for the remainder of fiscal 2018year ending December 31, 2021 to continue at its expected level of operations; and (iii) if the Company fails to obtain the needed capital, it will be forced to delay, scale back, or eliminate some or all of its development activities or perhaps cease operations. In the opinion of management, these factors, among others, raise substantial doubt about the ability of the Company to continue as a going concern as of the date of the end of the period covered by this Quarterly Report on Form 10-Q. 

Therereport and for one year from the issuance of these unaudited condensed consolidated financial statements.


In January 2021 the Company raised approximately $3 million in gross proceeds through the issuance of convertible debentures and warrants as more fully disclosed in Note 7. The Company also received $250,000 in proceeds from a promissory note in May 2021 as more fully disclosed in Note 13. However, there is no assurance that the Company will be successful in any other capital-raising efforts that it may undertake to fund operations during the next 12 months. The Company anticipates that it will issue equity and/or debt securities as a source of liquidity, until it begins to generate positive cash flow to support its operations. Any future sales of securities to finance operations will dilute existing stockholders'shareholders’ ownership. The Company cannot guarantee when or if it will generate positive cash flow.

In March 2020, the outbreak of COVID-19 (coronavirus) caused by a novel strain of the coronavirus was recognized as a pandemic by the World Health Organization, and the outbreak has become increasingly widespread in the United States, including in each of the areas in which the Company operates. While to date the Company has not been required to stop operating, management is evaluating its use of its office space, virtual meetings and the like. We have reduced certain billing rates to respond to the current economic climate. Additionally, while we have experienced, and could continue to experience, a loss of clients as the result of the pandemic, we expect that the impact of such attrition would be mitigated by the addition of new clients resulting from our continued efforts to adjust the Company’s operations to address changes in the recruitment industry. The extent to which the COVID-19 pandemic will impact our operations, ability to obtain financing or future financial results is uncertain at this time. Due to the effects of COVID-19, the Company took steps to streamline certain expenses, such as temporarily cutting certain executive compensation packages by approximately 20%. Management also worked to reduce unnecessary marketing expenditures and worked to improve staff and human capital expenditures, while maintaining overall workforce levels. The Company is currentlyexpects but cannot guarantee that demand for its recruiting solutions will improve later in negotiations for another round of funding anticipated for2021, as certain clients re-open or accelerate their hiring initiatives, and new clients utilize our services. The Company does not expect reductions made in the fourthsecond quarter of fiscal 2018. However, there2020 due to COVID-19 will inhibit its ability to meet client demand. Overall, management is no assurance thatfocused on effectively positioning the Company willfor a rebound in hiring which we expect later in 2021. Ultimately, the recovery may be successful in this or any other capital-raising efforts that itdelayed and the economic conditions may undertake to fund operations during the next twelve months.worsen. The Company anticipates thatcontinues to closely monitor the confidence of its recruiter users and customers, and their respective job requirement load through offline discussions and the Company’s Recruiter Index survey.
We also depend on raising additional debt or equity capital to stay operational. The economic impact of COVID-19 may make it more difficult for us to raise additional capital when needed. The terms of any financing, if we are able to complete one, will issue equity and/or debt securitieslikely not be favorable to us. If we are unable to raise additional capital, we may not be able to meet our obligations as they come due, raising substantial doubt as to our ability to continue as a source of liquidity, until it begins to generate positive cash flow to support its operations. Any future sales of securities to finance operations will dilute existing stockholders' ownership. The Company cannot guarantee when or if it will generate positive cash flow. 

going concern.

The accompanying unaudited condensed consolidated financial statements do not include any adjustments that might be necessary should the Company be unable to continue as a going concern.

NOTE 3 — INVESTMENT IN AVAILABLE FOR SALE MARKETABLE SECURITIES 
The Company’s investment in marketable equity securities is being held for an indefinite period. Cost basis of marketable securities held as of March 31, 2021 and December 31, 2020 was $42,720 and accumulated unrealized losses were $41,073 and $41,296 as of March 31, 2021 and December 31, 2020, respectively. The fair market value of available for sale marketable securities was $1,647 as of March 31, 2021, based on 178,000 shares of common stock held in one entity with an average per share market price of approximately $0.01.
Net recognized gains (losses) on equity investments were as follows:
 
 
Three Months Ended
 
 
 
March 31,
 
 
 
2021
 
 
2020
 
Net realized gains (losses) on investment sold
 $- 
 $(2,142)
Net unrealized gains (losses) on investments still held
  223 
  (16,644)
 
    
    
Total
 $223 
 $(18,786)

The reconciliation of the investment in marketable securities is as follows for the three months ended March 31, 2021 and 2020:
 
 
March 31,
 
 
March 31,
 
 
 
2021
 
 
2020
 
Balance – December 31
 $1,424 
 $44,766 
Additions
  - 
  - 
Proceeds on sales of securities
  - 
  (14,955)
Recognized gain (loss)
  223 
  (18,786)
Balance – March 31
 $1,647 
 $11,025 

NOTE 4 — GOODWILL AND OTHER INTANGIBLE ASSETS
Goodwill
Goodwill is derived from our 2019 business acquisition. The Company performed its most recent annual goodwill impairment test as of December 31, 2020 using market data and discounted cash flow analysis. Based on that test, we have determined that the carrying value of goodwill was not impaired at December 31, 2020. There were also no indicators of impairment at March 31, 2021.
Intangible Assets
During the three months ended March 31, 2021, we acquired certain intangible assets pursuant to our Scouted and Upsider acquisitions described in Note 12. These intangible assets aggregate approximately $5.9 million and consist primarily of sales and client relationships, contracts, intellectual property, partnership and vendor agreements and certain other assets. We are in the process of completing the accounting and valuations of the assets acquired and, accordingly, the estimated fair values of these intangible assets are provisional pending the final valuations which will not exceed one year in accordance with ASC 805.
Intangible assets are summarized as follows:
 
 
March 31,2021
 
 
December 31,2020
 
Customer contracts
 $233,107 
 $233,107 
License
  1,726,965 
  1,726,965 
Intangible assets, including sales and client relationships, contracts, intellectual property, partnership and vendor agreements and certain other assets acquired pursuant to 2021 business acquisitions (see Note 12)
  5,853,031 
  - 
 
  7,813,103 
  1,960,072 
Less accumulated amortization
  (1,323,381)
  (1,164,208)
Carrying value
 $6,489,722 
 $795,864 
Amortization expense of intangible assets was $159,173 and $159,173 for the three months ended March 31, 2021 and 2020 respectively, related to the intangible assets acquired in business combinations. Future amortization of intangible assets excluding the recently acquired intangibles from the Scouted, Upsider and OneWire acquisitions is expected to be approximately $637,000 for 2021 and $159,000 for 2022. The Company will begin amortizing intangible assets from the three recently acquired acquisitions in the second quarter of 2021 upon completion of the purchase price allocations.
NOTE 5 — LIABILITY FOR SALE OF FUTURE REVENUES
During the three months ended March 31, 2021 our remaining agreement related to the sale of future revenues was paid in full. During the three months ended March 31, 2021, we amortized the remaining $2,719 of discount to interest expense.

NOTE 6 — INTANGIBLE ASSETS

Intangible assets consistLOANS PAYABLE

Lines of Credit
At March 31, 2021 and December 31, 2020 we are party to two lines of credit with outstanding balances of $0. Advances under each of these lines of credit mature within 12 months of the advances. Availability under the two lines was $91,300 at March 30, 2021; however, due to COVID -19 uncertainty (see Note 2), the availability under both lines has been suspended since 2020.
Term Loans
We have outstanding balances of $70,044 and $77,040 pursuant to two term loans as of March 31, 2021 and December 31, 2020, respectively, which mature in 2023. The loans have variable interest rates, with current rates at 6.0% and 7.76%, respectively. Current monthly payments under the loans are $1,691 and $1,008, respectively.
One of the term loans is a LicenseSmall Business Administration (“SBA”) loan. As a result of the COVID-19 uncertainty, the SBA has paid the loan for February and March 2021. The SBA made payments on our behalf of $3,382 during the three months ended March 31, 2021, which have been recorded as grant income in the financial statements. These payments were applied $2,992 to principal and $390 to interest expense for the three months ended March 31, 2021.
The status of these loans as of March 31, 2021 and December 31, 2020 are summarized as follows:
 
 
March 31,
2021
 
 
December 31,
2020
 
Term loans
 $70,044 
 $77,040 
Less current portion
  (28,609)
  (28,249)
Non-current portion (excluding PPP loan discussed below)
 $41,435 
 $48,791 
Future principal payments under the term notes are as follows:
Year Ending December 31,
 
 
 
 
 
 
 
2021
 $21,196 
2022
  30,133 
2023
  18,715 
Total minimum principal payments
 $70,044 
Our Chief Operating Officer, who is also a shareholder, has personally guaranteed the loans described above.
Paycheck Protection Program Loan
During 2021 our remaining loan pursuant to the Paycheck Protection Program under the CARES Act in the amount of $24,750 was forgiven. We recorded forgiveness of debt income of $24,925 for the $24,750 of principal and $175 of related accrued interest forgiven.

NOTE 7 — CONVERTIBLE NOTES PAYABLE
2020 Debentures:
In May and June 2020, the Company entered into a Securities Purchase Agreement, effective May 28, 2020 (the “License”“Purchase Agreement”) with Recruiter.com, Inc. (“Recruiter”several accredited investors (the “Purchasers”), under which Recruiter granted VocaWorks a license. Four of the investors had previously invested in the Company’s preferred stock. Pursuant to use certain of Recruiter’s proprietary software and related intellectual property. In consideration for the License,Purchase Agreement, the Company issuedsold to Recruiter 125,000,000 sharesthe Purchasers a total of (i) $2,953,125 in the aggregate principal amount of 12.5% Original Issue Discount Senior Subordinated Secured Convertible Debentures (the “Debentures”), and (ii) 1,845,703 common stock. We have valuedstock purchase warrants (the “Warrants”), which represents 100% warrant coverage. The Company received a total of $2,226,000 in net proceeds from the licenseoffering, after deducting the 12.5% original issue discount of $328,125, offering expenses and commissions, including the placement agent’s commission and fees of $295,000, reimbursement of the placement agent’s and lead investor’s legal fees and the Company’s legal fees in the aggregate amount of $100,000 and escrow agent fees of $4,000. The Company also agreed to issue to the placement agent, as additional compensation, 369,141 common stock purchase warrants exercisable at $625,000. Recruiter will receive 625,000 shares of Series B Preferred Stock upon$2.00 per share.
The Debentures mature on May 28, 2021, subject to a six-month extension at the launch of a functional software platform and receipt of $10,000 in sales revenue. Recruiter is entitled to receive upCompany’s option. The Debentures bear interest at 8% per annum payable quarterly, subject to an additional 1,250,000 sharesincrease in case of Series B Preferred Stock following the achievementan event of certain milestonesdefault as provided for therein. The Debentures are convertible into shares of Common Stock at any time following the date of issuance at the Purchasers’ option at a conversion price of $1.60 per share, subject to certain adjustments. The Debentures are subject to mandatory conversion in the License. Recruiter shall provide VocaWorksevent the Company closes an equity offering of at least $5,000,000 resulting in the listing of the Company’s common stock on a national securities exchange. The Debentures rank senior to all existing and future indebtedness of the Company and its subsidiaries, except for approximately $508,000 of outstanding senior indebtedness. The Company may prepay the Debentures at any time at a premium as provided for therein.
The Warrants are exercisable for three years from May 28, 2020 at an exercise price of $2.00 per share, subject to certain adjustments.
As of March 31, 2021, there was $2,576,125 outstanding on the Debentures (see Note 8 for conversions) with support services freeunamortized discount and debt costs of charge, which shall include (i)$419,670.
2021 Debentures:
During January 2021, the Company entered into two Securities Purchase Agreements, effective January 5, 2021 and January 20, 2021 (the “Purchase Agreements”), with twenty accredited investors (the “Purchasers”). Pursuant to the Purchase Agreements, the Company agreed to sell to the Purchasers a total of 2,400 hours(i) $2,799,000 in the aggregate principal amount of Technology12.5% Original Issue Discount Senior Subordinated Secured Convertible Debentures (the “Debentures”), and Development Services to be provided by Recruiter personnel during the two year period following the effective Date, with(ii) 1,749,375 common stock purchase warrants (the “Warrants”), which represents 100% warrant coverage. The Company received a total value of $200,000;$2,488,000 in gross proceeds from the offerings, after deducting the 12.5% original issue discount, before deducting offering expenses and (ii) marketingcommissions, including the placement agent’s commission of $241,270 (10% of the gross proceeds less $7,500 paid to its legal counsel) and advertising services, which are available to Recruiter’s general customers, and strategic marketing services, to be provided by Recruiter each year during the four year period following the effective date, with a total value of $500,000.

We also have capitalized software costs of $28,750fees related to the developmentoffering of our websitethe Debentures of $93,530. The Company also agreed to issue to the placement agent, as additional compensation, 349,876 common stock purchase warrants exercisable at $2.00 per share (the “PA Warrants”).

The Debentures mature in January 2022 on the one year anniversary, subject to a six-month extension at the Company’s option. The Debentures bear interest at 8% per annum payable quarterly, subject to an increase in case of an event of default as provided for therein. The Debentures are convertible into shares of the Company’s common stock (the “Common Stock”) at any time following the date of issuance at the Purchasers’ option at a conversion price of $1.60 per share, subject to certain adjustments. The Debentures are subject to mandatory conversion in the event the Company closes an equity offering of at least $5,000,000 resulting in the listing of the Common Stock on a national securities exchange. The Debentures rank senior to all existing and iPhone app, bothfuture indebtedness of the Company and its subsidiaries, except for approximately $95,000 of outstanding senior indebtedness. In addition, the Debentures rank pari-passu with, and amounts owing thereunder shall be paid concurrently with, payments owing pursuant to be usedand in conjunctionconnection with that certain offering by the Company of 12.5% Original Issue Discount Senior Subordinated Secured Convertible Debentures due May 28, 2021 consummated in May and June 2020 in the aggregate principal amount of $2,953,125. The Company may prepay the Debentures at any time at a premium as provided for therein.
The Warrants are exercisable for three years from the dates of the Purchase Agreements at an exercise price of $2.00 per share, subject to certain adjustments.
The Company’s obligations under the Purchase Agreement and the Debentures are secured by a first priority lien on all of the assets of the Company and its subsidiaries pursuant to Security Agreements, dated January 5, 2021 and January 20, 2021 (the “Security Agreements”) by and among the Company, its wholly-owned subsidiaries, and the Purchasers, subject to certain existing senior liens. The Company’s obligations under the Debentures are guaranteed by the Company’s subsidiaries.
The Purchase Agreement contains customary representations, warranties and covenants of the Company, including, among other things and subject to certain exceptions, covenants that restrict the ability of the Company and its subsidiaries, without the prior written consent of the Debenture holders, to incur additional indebtedness, including further advances under a certain preexisting secured loan, and repay outstanding indebtedness, create or permit liens on assets, repurchase stock, pay dividends or enter into transactions with affiliates. The Debentures contain customary events of default, including, but not limited to, failure to observe covenants under the Debentures, defaults on other specified indebtedness, loss of admission to trading on OTCQB or another applicable trading market, and occurrence of certain change of control events. Upon the occurrence of an event of default, an amount equal to 130% of the principal, accrued but unpaid interest, and other amounts owing under each Debenture will immediately come due and payable at the election of each Purchaser, and all amounts due under the Debentures will bear interest at an increased rate.

Pursuant to the Purchase Agreement, the Purchasers have certain participation rights in future equity offerings by the Company or any of its subsidiaries after the closing, subject to customary exceptions. The Debentures and the Warrants also contain certain price protection provisions providing for adjustment of the number of shares of Common Stock issuable upon conversion of the Debentures and/or exercise of the Warrants and the conversion or exercise price in case of future dilutive offerings.
In February 2021, the holder of a $250,000 November 2020 promissory note elected to convert the $250,000 note, plus accrued interest of $2,430, into $283,984 principal amount of Debentures (including 12.5% Original Issue Discount of $31,554) based on the same terms as those issued in January 2021 (described above), plus 177,490 Warrants.
We have incurred a total of $1,254,779 of debt costs related to the issuance of the 2021 Debentures, including commissions, costs and fees of $334,800. We have also recorded a cost related to the fair value of the placement agent warrants of $919,979 (see Note 9). The costs which have been recorded as debt discounts are being amortized over the life of the notes. Amortization expense was $255,793 for the three months ended March 31, 2021. Unamortized debt costs were $998,986 at March 31, 2021.
We have recorded a total of $1,796,651 of debt discount related to the sale of the 2021 Debentures and February 2021 note exchange, including original issue discount of $342,554 and a warrant discount of $1,454,097 at fair value for the warrants issued with the license acquired from Recruiter.

These assets have not been placed in servicedebt (see Note 9). The discount is being amortized over the life of the notes. Amortization expense was $351,207 for the three months ended March 31, 2021. Unamortized debt discount was $1,445,444 at DecemberMarch 31, 2017.

2021.

NOTE 78 — SHAREHOLDERS EQUITY

STOCKHOLDERS’ DEFICIT

Preferred stock

Stock 

The Company is authorized to issue 10,000,000 shares of $0.0001preferred stock, par value preferred stock.$0.0001 per share. As of March 31, 2021 and December 31, 2017 and March 31, 20172020, the Company has 720,938.752had 1,223,279 and no1,324,022 shares of preferred stock issued and outstanding, respectively.

Series A Convertible Redeemable Preferred Stock

On October 24, 2017, the Company filed a Certificate of Designations with the Delaware Secretary of State designating 700,000 No shares of the Company’s authorized preferred stock as were issued during the three months ended March 31, 2021.

Series AD Convertible Preferred Stock (the “Series A”), which is convertible into
In January 2021, the Company issued 113,476 shares of its common stock at $0.005 per share, subjectupon conversion of 9,078 shares of its Series D Preferred Stock.
In February 2021, the Company issued 550,000 shares of its common stock upon conversion of 44,000 shares of its Series D Preferred Stock.
In March 2021, the Company issued 267,188 shares of its common stock upon conversion of 21,375 shares of its Series D Preferred Stock.
Pursuant to adjustment in the event of stock splits, stock dividends or reverse splits and issuances of securities at prices below the prevailing conversion price of the Series A. The Company entered into Securities Purchase Agreements (each a “SPA”)an agreement with the two Investors who converted their Notes into Series C and Series C-1 (described below and in Note 2). Pursuant to the SPAs, the Investors paid the Company a total of $600,000 and purchased in the aggregate 600,000 ofholder, 8,755 shares of Series A and Warrants to purchase 120,000,000 shares of the Company’s common stock.


Dividends accrue on the Series A at a rate of 10% per annum. Holders of Series A are entitled to vote together with holders of the common stock on an as-converted basis, subject to a beneficial ownership limitation of 4.99%. The Series A is redeemable in the same manner as the Series C and C-1. The Series A is senior to all otherD preferred stock and 133,341 Series D warrants were cancelled in January 2021.

Series F Convertible Preferred Stock
In February 2021, the Company issued 202,988 shares of its common stock upon liquidationconversion of the Company. The Warrants have a five year term and an exercise price of $0.01 per share, subject to adjustment in the event of stock splits, stock dividends or reverse splits and issuances of securities at prices below the prevailing exercise price of the Warrants.

Series B Convertible Preferred Stock

On October 24, 2017, the Company filed a Certificate of Designations with the Delaware Secretary of State designating 1,875,000 shares of the Company’s authorized preferred stock as Series B Convertible Preferred Stock (“Series B”) which is convertible into common stock at $0.005 per share, subject to adjustments in the event of stock splits, stock dividends and reverse splits. Recruiter will receive 625,00016,239 shares of Series BF Preferred Stock.

In March 2021, the Company issued 16,197 shares of its common stock upon the launchconversion of a functional software platform and receipt of $10,000 in sales revenue. Recruiter is entitled to receive up to an additional 1,250,0001,296 shares of Series B following the achievement of certain milestones as provided for in the License.

Series C and Series C-1 Convertible RedeemableF Preferred Stock

On October 24, 2017, the Company filed a Certificate of Designations with the Delaware Secretary of State designating 102,100 shares of the Company’s authorized preferred stock as Series C Convertible Preferred Stock (“Series C”) which is convertible into common stock at $0.02 per share, subject to adjustments in the event of stock splits, stock dividends and reverse splits and issuances of securities at prices below the prevailing conversion price of the Series C. In accordance with the terms of the License, on October 30, 2017 holders of the Company’s outstanding 4% Convertible Notes converted their 4% Convertible Notes and accrued interest into 102,099.752 shares of Series C.

Also on October 24, 2017, the Company filed a Certificate of Designations with the Delaware Secretary of State designating 18,839 shares of the Company’s authorized preferred stock as Series C-1 Convertible Preferred Stock (“Series C-1”) which is convertible into common stock at $0.005 per share, subject to adjustments in the event of stock splits, stock dividends and reverse splits and issuances of securities at prices below the prevailing conversion price of the Series C-1. In accordance with the terms of the License, on October 30, 2017 holders of the Company’s 10% Convertible Notes converted their 10% Convertible Notes and accrued interest into 18,839 shares of Series C-1.

Holders of shares of Series C and Series C-1 may cause the Company to redeem in cash the outstanding shares of Series C and C-1 beginning on October 30, 2019, and earlier than that date upon the occurrence of certain triggering events contained in the Certificate of Designations for the Series C and Series C-1, at a redemption price based upon a formula contained in the Certificate of Designations for each series. The total redemption price if redeemed after two years from issuance is equal to the amount of the principal and accrued interest on the 4% Convertible Notes and 10% Convertible Notes due as of the closing date plus potential additional amounts.

Subsequent to December 31, 2017, filed an amendment to the Certificates of Designations for the Series C and Series C-1 extending the redemption date to October 2022 and reducing the redemption amount to $1 million (see Note 12).

Stock.

Common stock

Stock

The Company is authorized to issue 250,000,000 shares of common stock, par value $0.0001 per share. As of March 31, 2021 and December 31, 2017 and March 31, 20172020 the Company had 127,554,1977,275,185 and 2,554,1975,504,008 shares of common stock issued and outstanding, respectively.


Shares issued upon conversion of preferred stock
In considerationJanuary 2021, the Company issued 113,476 shares of its common stock upon conversion of 9,078 shares of its Series D Preferred Stock.
In February 2021, the Company issued 550,000 shares of its common stock upon conversion of 44,000 shares of its Series D Preferred Stock.
In February 2021, the Company issued 202,988 shares of its common stock upon conversion of 16,239 shares of Series F Preferred Stock.
In March 2021, the Company issued 267,188 shares of its common stock upon conversion of 21,375 shares of its Series D Preferred Stock.
In March 2021, the Company issued 16,197 shares of its common stock upon conversion of 1,296 shares of Series F Preferred Stock.
Shares issued for Business Acquisition
In January 2021, we issued a total of 438,553 shares of common stock pursuant to the Scouted acquisition of the license described in Note 6,12.
Shares to be issued for Business Acquisitions
Shares to be issued for acquisitions at March 31, 2021 include 38,978 common shares to be issued for Scouted and 677,883 common shares to be issued for Upsider which is more fully described in Note 12.
Shares granted for services
On June 18, 2020 the Company awarded to Evan Sohn, our Executive Chairman and CEO, 554,000 restricted stock units (the “RSUs”) subject to and issuable upon the listing of the Company’s common stock on the Nasdaq Capital Market or NYSE American, or any successor of the foregoing (the “Uplisting”). The RSUs will vest over a two-year period from the date of the Uplisting in equal quarterly installments on the last day of each calendar quarter, with the first portion vesting on the last day of the calendar quarter during which the Uplisting takes place, subject to Mr. Sohn serving as an executive officer of the Company on each applicable vesting date, provided that the RSUs shall vest in full immediately upon the termination of Mr. Sohn’s employment by the Company without Cause (as defined in the Employment Agreement). The RSU award has been valued at $1,662,000 and compensation expense will be recorded over the estimated vesting period. We recognized compensation expense of $148,836 during the three months ended March 31, 2021. The shares have not been issued at March 31, 2021.
In March 2021, we issued to Mr. Sohn 4,063 shares of common stock as payment for $16,425 of compensation which had been accrued at December 31, 2020.
Shares issued upon conversion of convertible notes 
During the three months ended March 31, 2021, the Company issued 125,000,000178,712 shares of its common stock.

As a resultstock upon conversion of Mr. Solomon’s exercise$283,637 of his optionconvertible notes payable and related accrued interest of $2,302 (see note 7).

NOTE 9 — STOCK OPTIONS AND WARRANTS
Stock Options
On March 9, 2021 the Company granted to purchase TMC, as described in Note 1, the ownership of TMC was transferred to Mr. Solomon on October 31, 2017. We have recorded a credit of $616,719 to additional paid in capital to reflect the net liabilities transferred.

Common stock warrants

In connection with the sale of our Series A preferred stock, we issuedemployees an aggregate of 120,000,000397,500 options to purchase common stock, purchase warrants to the purchasers of the preferred stock. The warrants are immediately exercisable at an exercise price$3.45 per share, under the terms of $0.01 and expire, if unexercised, on October 30, 2022. The exercise price and number of warrants are subject to adjustment in the event of stock splits, stock dividends or reverse splits and issuances of securities at prices below the prevailing conversion price of the warrants.

Stock Option Plan


2017 Equity Incentive Plan

In October 2017, our board of directors and stockholders authorized the 2017 Equity Incentive Plan, which we refer to as the 2017 Plan, covering 38,000,000 shares of common stock.Plan. The purpose of the 2017 Plan is to advance the interests of the Company and our related corporations by enhancing the ability of the Company to attract and retain qualified employees, consultants, officers, and directors, by creating incentives and rewards for their contributions to the success of the Company and its related corporations. The 2017 Plan is administered by our board of directors or by the Compensation Committee. Plan options may either be:

●incentive stock options (ISOs),
●non-qualified options (NSOs),
●awards of our common stock,
●stock appreciation rights (SARs),
●restricted stock units (RSUs),

Any option granted under the 2017 Plan must provide for an exercise price of not less than 100% of the fair market value of the underlying shares on the date of grant and not less than $0.02 per share, but the exercise price of any ISO granted to an eligible employee owning more than 10% of our outstanding common stock must not be less than 110% of fair market value on the date of the grant. The plans further provide that with respect to ISOs the aggregate fair market value of the common stock underlying the options which are exercisable by any option holder during any calendar year cannot exceed $100,000. The exercise price of any NSO granted under the 2017 Plan is determined by the Board at the time of grant, but must be at least equal to fair market value on the date of grant. Thehave a term of each plan option andfive years. The options will vest quarterly over one year, with the manner in which it may be exercised is determined by the board of directors or the compensation committee, provided that no option may be exercisable more than 10 years after the date of its grant and, in the case of an incentive option granted to an eligible employee owning more than 10% of the common stock, no more than five years after the date of the grant.first portion vesting on June 9, 2021. The terms of grants of any other type of award under the 2017 Plan is determined by the Boardoptions have been valued at the time of grant. Subject to the limitation on the aggregate number of shares issuable under the plans, there is no maximum or minimum number of shares as to which a stock grant or plan option may be granted to any person.

NOTE 8 — REDEEMABLE CONVERTIBLE PREFERRED STOCK

As described in Note 7, we have issued shares of Series A, Series C, and Series C-1 convertible preferred stock. Since the convertible preferred stock may ultimately be redeemable at the option of the holder, the carrying value of the preferred stock has been classified as temporary equity on the balance sheet at December 31, 2017.

A portion of the proceeds from the sale of our Series A preferred stock were allocated to the warrants based on their relative fair value, which totaled $580,645$1,371,231 using the Black Scholes option pricing model. Further, we attributed a beneficial conversion featureSholes model and compensation expense will be recorded over the vesting period. We have recorded compensation expense of $34,492,426$85,702 related to the Series A, Series C and Series C-1 preferred shares based uponoptions during the difference between the effective conversion price of those shares and the closing price of our common shares on the date of issuance.three months ended March 31, 2021. The assumptions used in the Black Scholes model are as follows: (1) dividend yield of 0%; (2) expected volatility of 353%346%, (3) risk-free interest rate of 2%0.8%, (4) expected term of 5 years. The amount attributable to the warrants and beneficial conversion feature, aggregating $35,073,071, has been recorded as a deemed dividend to the preferred shareholders and as a charge to additional paid-in capital (since there is a deficit in retained earnings).

For the three months ended December 31, 2017, we have accrued dividends in the amount of $45,603. The accrued dividends have been charged to additional paid-in capital (since there is a deficit in retained earnings) and the net unpaid accrued dividends been added to the carrying value of the preferred stock.


NOTE 9 — ACCOUNTS PAYABLE AND ACCRUED LIABILITIES

As of December 31, 2017 and March 31, 2017, accounts payable and accrued liabilities for the period ending are comprised of the following:

  December 31, March 31,
  2017 2017
Legal and professional fees payable $62,507  $100,782 
Other payables  1,614   59,999 
  $64,121  $160,781 

During the three and nine months ended December 31, 2017, we recorded a gain on reversal of accounts payable and accrued liabilities of $98,593.

NOTE 10 — RELATED PARTY TRANSACTION

Immediately following the closing of the license agreement and issuance of preferred shares described elsewhere, Mr. Solomon, a director of the Company exercised his option, granted to him in September 2016, to purchase the Company’s subsidiary, TMC for $5,000. As a result, cash of $9,040 and payables of $23,658 were transferred with TMC. Additionally, notes and accrued interest due to Mr. Solomon, aggregating $597,101, were also transferred with TMC. We recorded a credit to additional paid in capital of $616,719 as a result of this transaction.

NOTE 11 — COMMITMENTS AND CONTINGENCIES

The Company is subject to legal proceedings and claims from time to time which arise in the ordinary course of its business. Although occasional adverse decisions or settlements may occur, the Company believes that the final disposition of such matters should not have a material adverse effect on its consolidated financial position, results of operations or liquidity. 

Recruiter will receive 625,000 shares of Series B Preferred Stock upon the launch of a functional software platform and receipt of $10,000 in sales revenue. Recruiter is entitled to receive up to an additional 1,250,000 shares of Series B Preferred Stock following the achievement of certain milestones as provided for in the License.

NOTE 12 — SUBSEQUENT EVENTS

Management evaluated all activities of the Company through the issuance date of the Company’s interim unaudited condensed consolidated financial statements and concluded that no subsequent events have occurred that would require adjustments or disclosure into the interim unaudited condensed consolidated financial statements except as described below. 

On February 1, 201810, 2021 the Company issued 4,000,000 shares of common stock upon the conversion of 4,000 shares of Series C preferred stock.

On February 13, 2018, the Company filed an amendment to the Certificates of Designations for the Series C and Series C-1 extending the redemption date to October 2022 and reducing the redemption amount to $1 million. See Note 7.

The Company granted to its chief executive officer 500,000a director 50,000 options to purchase common stock, exercisable at $0.08$2.70 per share, under the terms of the 2017 Equity Incentive Plan. The options vest 41,667 upon grants and the remaininghave a term of five years. The options shallwill vest quarterly in equal amounts over a 33-month periodthree years with the first portion vesting on May 10, 2021. The options have been valued at $134,986 using the Black Sholes model and compensation expense will be recorded over the vesting period. We have recorded compensation expense of $6,300 related to the options during the three months ended March 31, 2021. The assumptions used in the Black Scholes model are as follows: (1) dividend yield of 0%; (2) expected volatility of 354%, (3) risk-free interest rate of 0.8%, (4) expected term of 5 years.

On March 24, 2021 the Company granted to a director 50,000 options to purchase common stock, exercisable at $3.25 per share, under the terms of the 2017 Equity Incentive Plan. The options have a term of five years. The options will vest quarterly over three years, with the first portion vesting on June 24, 2021. The options have been valued at $162,491 using the Black Sholes model and compensation expense will be recorded over the vesting period. We have recorded compensation expense of $1,128 related to the options during the three months ended March 31, 2021. The assumptions used in the Black Scholes model are as follows: (1) dividend yield of 0%; (2) expected volatility of 359%, (3) risk-free interest rate of 0.83%, (4) expected term of 5 years.
During the three months ended March 31, 2021, we recorded $260,440 of compensation expense related to stock options granted in prior years.
Warrants Recorded as Derivative Liabilities
Series D Preferred Stock Warrants
The Company identified embedded features in the warrants issued with Series D Preferred Stock in 2019 and 2020 which caused the warrants to be classified as a derivative liability. These embedded features included the right for the holders to request for the Company to cash settle the warrants to the holder by paying to the holder an amount of cash equal to the Black-Scholes value of the remaining unexercised portion of the warrants on the date of the consummation of a fundamental transaction, as defined in the warrant instrument. The accounting treatment of derivative financial instruments requires that the Company treat the whole instrument as liability and record the fair value of the instrument as a derivative as of the inception date of the instrument and to adjust the fair value of the instrument as of each subsequent balance sheet date.
During the three months ended March 31, 2021, the Company recorded other income of $478,295, respectively, related to the change in the fair value of the derivative. The fair value of the embedded derivative was $3,812,098 as of March 31, 2021, determined using the Black Scholes model based on a risk-free interest rate of 0.35% - 0.635%, an expected term of 3 – 4.1 years, an expected volatility of 209 – 308% and a 0% dividend yield.
On January 5, 2021, pursuant to an agreement with the holder, 133,341 Series D warrants were cancelled. We have reclassified the $373,070 derivative value of the warrants to paid in capital upon extinguishment.
Convertible Debenture Warrants and Placement Agent Warrants
The Company identified embedded features in the warrants issued with the convertible debt and the placement agent warrants in 2020 and 2021 (see Note 7) and which caused the warrants to be classified as a derivative liability. These embedded features included the right for the holders to request for the Company to cash settle the warrants to the holder by paying to the holder an amount of cash equal to the Black-Scholes value of the remaining unexercised portion of the warrants on the date of the consummation of a fundamental transaction, as defined in the warrant instrument. The accounting treatment of derivative financial instruments requires that the Company treat the whole instrument as liability and record the fair value of the instrument as a derivative as of the inception date of the instrument and to adjust the fair value of the instrument as of each subsequent balance sheet date.
As of the issuance date of the 2021 Debenture warrants, the Company determined a fair value of $5,040,080 for the 1,926,865 warrants. The fair value of the warrants was determined using the Black-Scholes Model based on a risk-free interest rate of 0.17% - 0.19%, an expected term of 3 years, an expected volatility of 215% - 216% and a 0% dividend yield. Of this amount, $1,454,097 was recorded as debt discount (see Note 7) and $3,585,983 was charged to expense as initial derivative expense.
As of the issuance date of the 2021 placement agent warrants, the Company determined a fair value of $919,979 for the 349,876 warrants. The fair value of the warrants was determined using the Black-Scholes Model based on a risk-free interest rate of 0.17% - 0.19%, an expected term of 3 years, an expected volatility of 215% and a 0% dividend yield. The value of $919,979 has been recorded as a debt discount for debt cost (see Note 7).
During the three months ended March 31, 2021, the Company recorded other income of $150,326 related to the change in the fair value of the derivative. The fair value of the embedded derivative was $12,684,266 as of March 31, 2021, determined using the Black Scholes model based on a risk-free interest rate of 0.16% - 0.35%, an expected term of 2.16 – 2.85 years, an expected volatility of 212% - 220% and a 0% dividend yield.

NOTE 10 — COMMITMENTS AND CONTINGENCIES
Although not a party to any proceedings or claims at March 31, 2021, the Company may be subject to legal proceedings and claims from time-to-time arising out of our operations in the ordinary course of business.
Leases:
On March 31, 2019, the Company entered into a sublease with a related party (see Note 11) for its current corporate headquarters. The sublease expires in November 2022. Monthly lease payments increased from $7,307 to $7,535 in April 2021 and continue at that rate for the remainder of the lease.
In February 2016, the Financial Accounting Standards Board issued Accounting Standards Update No. 2016-02: “Leases (Topic 842)” whereby lessees need to recognize almost all leases on their balance sheet as a right of use asset and a corresponding lease liability. The Company adopted this standard as of January 1, 2019 using the effective date method. We calculated the present value of the remaining lease payment stream using our incremental effective borrowing rate of 10%. We initially recorded a right to use asset and corresponding lease liability amounting to $269,054 on March 31, 2019. The right to use asset and the corresponding lease liability are being April 30, 2018.

13

equally amortized on a straight-line basis over the remaining term of the lease.

For the three months ended March 31, 2021, lease costs amounted to $37,582 which includes base lease costs of $21,921 and common area and other expenses of $15,661. For the three months ended March 31, 2020, lease costs amounted to $37,910 which includes base lease costs of $21,234 and common area and other expenses of $16,676. All costs were expensed during the periods and included in general and administrative expenses on the accompanying consolidated statements of operations.  
Right-of-use asset (“ROU”) is summarized below:
March 31,2021
Operating office lease
$269,054
Less accumulated reduction
(146,757)
Balance of ROU asset at March 31, 2021
$122,297
Operating lease liability related to the ROU asset is summarized below:
March 31,2021
Total lease liability
$269,054
Reduction of lease liability
(146,757)
Total
122,297
Less short term portion as of March 31, 2021
(73,378)
Long term portion as of March 31, 2021
$48,919
Future base lease payments under the non-cancellable operating lease at March 31, 2021 are as follows:
2021
 $67,815 
2022
  82,885 
Total minimum non-cancellable operating lease payments
  150,700 
Less discount to fair value
  (28,403)
Total fair value of lease payments
 $122,297 


COVID-19 Uncertainty:
In late 2019, an outbreak of COVID-19 was first reported in Wuhan, China. In March 2020, the World Health Organization declared the COVID-19 outbreak a global pandemic. The COVID-19 pandemic has resulted in the implementation of significant governmental measures, including lockdowns, closures, quarantines and travel bans around the world aimed at controlling the spread of the virus. Businesses are also taking precautions, including requiring employees to work remotely or take leave, imposing travel restrictions and temporarily closing their facilities. Initial unemployment numbers have spiked. Uncertainties regarding the impact of COVID-19 on economic conditions are likely to result in sustained market turmoil and reduced demand for employees, which in its turn has had a negative impact on the recruitment and staffing industry. According to a June 2020 report from CEO. Today, the U.S. staffing industry, which previously boasted a market size of $152 billion fell to roughly $119 billion since the COVID-19 outbreak; bringing it down to its lowest level since 2013. This represents a 21% decrease from 2019.
To date the economic impact of COVID-19 has resulted in certain reductions in the Company’s business and the Company has devoted efforts to shifting its focus in areas of hiring. As of the date of this filing, to the Company’s knowledge, no customer of the Company has gone out of business nor have any counterparties attempted to assert the existence of a force majeure clause, which excuses contractual performance. Because we depend on continued demand for recruitment services, a downturn in the recruitment and staffing industry would have a material adverse impact on our business and results of operations.
While to date the Company has not been required to stop operating, management is evaluating its use of its office space, virtual meetings and the like. We have reduced certain billing rates to respond to the current economic climate. Additionally, while we have experienced, and could continue to experience, a loss of clients as the result of the pandemic, we expect that the impact of such attrition would be mitigated by the addition of new clients resulting from our continued efforts to adjust the Company’s operations to address changes in the recruitment industry. The extent to which the COVID-19 pandemic will impact our operations, ability to obtain financing or future financial results is uncertain at this time. Due to the effects of COVID-19, the Company took steps to streamline certain expenses, such as temporarily cutting certain executive compensation packages by approximately 20%. Management also worked to reduce unnecessary marketing expenditures and worked to improve staff and human capital expenditures, while maintaining overall workforce levels. The Company expects but cannot guarantee that demand for its recruiting solutions will improve later in 2021, as certain clients re-open or accelerate their hiring initiatives, and new clients utilize our services. The Company does not expect reductions made in the second quarter of 2020 due to COVID-19 will inhibit its ability to meet client demand. Overall, management is focused on effectively positioning the Company for a rebound in hiring which we expect later in 2021. Ultimately, the recovery may be delayed and the economic conditions may worsen. The Company continues to closely monitor the confidence of its recruiter users and customers, and their respective job requirement load through offline discussions and the Company’s Recruiter Index survey.
We also depend on raising additional debt or equity capital to stay operational. The economic impact of COVID-19 may make it more difficult for us to raise additional capital when needed. The terms of any financing, if we are able to complete one, will likely not be favorable to us. If we are unable to raise additional capital, we may not be able to meet our obligations as they come due, raising substantial doubt as to our ability to continue as a going concern.
NOTE 11 — RELATED PARTY TRANSACTIONS
During 2018 we entered into a marketing agreement with an entity controlled by a consultant (who is also a principal shareholder and former noteholder of the Company). The agreement provides for payment to this entity of 10% of applicable revenue generated through the use of the entities database. The agreement also provides for the payment to us of 10% of the revenue generated by the entity using our social media groups. Through March 31, 2021 no fees were due or payable under this arrangement.
During 2019 we entered into a two year non-exclusive consulting agreement with a principal shareholder to act as Company’s consultant with respect to introducing the Company to potential acquisition and partnership targets. The Company has agreed to pay the consultant a retainer of $10,000 per month as a non-recoverable draw against any finder fees earned. The Company has also agreed to pay the consultant the sum of $5,500 per month for three years ($198,000 total) as a finder’s fee for introducing Genesys to the Company. This payment is included in the $10,000 monthly retainer payment. We have recorded consulting fees expense of $13,500 during each of the three month periods ended March 31, 2021 and 2020. At March 31, 2021, $93,500 of the Genesys finder’s fee and $22,500 of monthly fee expense is included in accrued compensation.
Under a technology services agreement entered into on January 17, 2020, we use a related party firm of the Company, Recruiter.com Mauritius, for software development and maintenance related to our website and the platform underlying our operations. This arrangement was oral prior to January 17, 2020. The initial term of the Services Agreement is five years, whereupon it shall automatically renew for additional successive 12-month terms until terminated by either party by submitting a 90-day prior written notice of non-renewal. The firm was formed outside of the United States solely for the purpose of performing services for the Company and has no other clients. Our Chief Technology Officer is an employee of this firm and exerts control over the firm. Pursuant to the Services Agreement, the Company has agreed to pay Recruiter.com Mauritius fees in the amount equal to the actualized documented costs incurred by Recruiter.com Mauritius in rendering the services pursuant to the Services Agreement. Payments to this firm were $57,988 and $60,979 for the three months ended March 31, 2021 and 2020, respectively, and are included in product development expense in our consolidated statement of operations.

We are a party to that certain license agreement with Genesys. An executive officer of the Company is a significant equity holder and a member of the Board of directors of Genesys. Pursuant to the License Agreement Genesys has granted us an exclusive license to use certain candidate matching software and renders certain related services to us. The Company has agreed to pay to Genesys (now called Opptly) a monthly license fee of $5,000 beginning June 29, 2019 and an annual fee of $1,995 for each recruiter being licensed under the License Agreement along with other fees that might be incurred. The Company has also agreed to pay Opptly monthly sales subscription fees beginning September 5, 2019 when Opptly assists with closing a recruiting program. During the three months ended March 31, 2021 and 2020, we charged to operating expenses $40,114 and $38,477 for services provided by Opptly. As of March 31, 2021, the Company owes Opptly $73,466 in payables.
Icon Information Consultants performs all of the back office and accounting roles for Recruiting Solutions. Icon Information Consultants then charges a fee for the services along with charging for office space. Icon Information Consultants and Icon Industrial Solutions (collectively “Icon”) also provide “Employer of Record” (“EOR”) services to Recruiting Solutions which means that they process all payroll and payroll tax related duties of temporary and contract employees placed at customer sites and is then paid a reimbursement and fee from Recruiting Solutions. A representative of Icon is a member of our board of directors. Icon Canada also acts as an EOR and collects the customer payments and remits the net fee back to Recruiting Solutions. Revenue related to customers processed by Icon Canada is recognized on a gross basis the same as other revenues and was $35,232 and $33,227 for the three months ended March 31, 2021 and 2020, respectively. EOR costs related to customers processed by Icon Canada was $32,944 and $31,070 for the three months ended March 31, 2021 and 2020, respectively. Currently, there is no intercompany agreement for those charges and they are calculated on a best estimate basis. As of March 31, 2021, the Company owes Icon $835,810 in payables and Icon Canada owes $21,431 (included in accounts receivable) to the Company. During the three months ended March 31, 2021 and 2020, we charged to cost of revenue $154,572 and $624,314, respectively, related to services provided by Icon as our employer of record. During the three months ended March 31, 2021 and 2020, we charged to operating expenses $73,018 and $70,941, respectively, related to management fees, rent and other administrative expense. During the three months ended March 31, 2021, we charged to interest expense $12,273, related to finance charges on accounts payable owed to Icon.
We also recorded placement revenue from Icon of $970 and $6,410 during the three months ended March 31, 2021 and 2020, respectively. We have a receivable from Icon of $22,951 which is included in accounts receivable at March 31, 2021.

We use a related party firm of the Company to pay certain recruiting services provided by employees of the firm. During the three months ended March 31, 2021, we charged to cost of revenue $17,745 related to services provided, with no expense in the 2020 three month period. We owed $11,944 to this firm at March 31, 2021.
NOTE 12 — BUSINESS COMBINATIONS
Scouted Asset Purchase
Effective January 31, 2021, the Company, through a wholly-owned subsidiary, acquired all assets of RLJ Talent Consulting, Inc., d/b/a Scouted, (“Scouted”) (the “Scouted Asset Purchase”). As consideration for the Scouted Asset Purchase, Scouted shareholders are entitled to a total of 560,408 shares of our restricted Common Stock (valued at $1,625,183 based on a $2.90 per share acquisition date price), of which 82,877 shares of stock will be held in reserve and are recorded as contingent consideration, a current liability in the accompanying financial statements, and an additional amount of $180,000 in cash consideration for a total purchase price of approximately $1.8 million. The Scouted Asset Purchase will be accounted for as a business acquisition. The assets acquired in the Scouted Asset Purchase consist primarily of sales and client relationships, contracts, intellectual property, partnership and vendor agreements and certain other assets (the “Scouted Assets”), along with a de minimis amount of other assets. The Company will complete the purchase price allocation of the $1.8 million for the acquired intangible assets during 2021. The Company is utilizing the Scouted Assets to expand its video hiring solutions and curated talent solutions, through its Recruiting Solutions subsidiary. 
The acquisition is accounted for by the Company in accordance with the acquisition method of accounting pursuant to ASC 805 “Business Combinations” and pushdown accounting is applied to record the fair value of the assets acquired on Recruiting Solutions. Under this method, the purchase price is allocated to the identifiable assets acquired and liabilities assumed based on their estimated fair values at the date of acquisition. Any excess of the amount paid over the estimated fair values of the identifiable net assets acquired will be allocated to goodwill.
The following is a summary of the estimated fair value of the assets acquired at the date of acquisition:
Intangible assets, including sales and client relationships, contracts, intellectual property, partnership and vendor agreements and certain other assets
$1,805,183
$1,805,183
The Company is in the process of completing its accounting and valuations of the assets acquired and the liabilities assumed and, accordingly, the estimated fair values of assets acquired and the allocation of purchase price noted above is provisional pending the final valuations which will not exceed one year in accordance with ASC 805.

Upsider Asset Purchase
Effective March 25, 2021, the Company, through a wholly-owned subsidiary, entered into an Asset Purchase Agreement and Plan of Reorganization (the “APA”) with Upsider, Inc., (“Upsider”), to acquire all the assets and certain liabilities of Upsider (the “Upsider Purchase”). As consideration for the Upsider Purchase, Upsider’s shareholders will receive net cash of $69,983 and a total of 807,734 shares of our common stock (the “Consideration Shares”) (valued at $2,544,362, based on a $3.15 per share acquisition date price), of which 129,851 of the Consideration Shares will be held in reserve and are recorded as a current liability, contingent consideration in the accompanying financial statements. The shareholders of Upsider may also receive earn-out consideration of up to $1,394,760, based on the attainment of specifictargets during the six months following closing. We have recorded the fair value of the contingent earn-out consideration of $1,325,003 at March 31, 2021. The total purchase price is approximately $3.9 million. The assets acquired in the APA consist primarily of sales and client relationships, contracts, intellectual property, partnership and vendor agreements and a de minimis amount of other assets. The Company is utilizing Upsider’s machine learning artificial intelligence to provide a more predictive and efficient recruiting tool that enhances our current technology.
The Company also entered into a Registration Rights Agreement with Upsider (the “Registration Rights Agreement”). The Registration Rights Agreement provides that following the Six-Month Anniversary (as defined in the Registration Rights Agreement), and for a period of five years thereafter, Upsider shall have the ability, on three occasions, to demand that Company shall file with the Securities and Exchange Commission a registration statement on Form S-1 or Form S-3, pursuant to the terms of the Registration Rights Agreement, to register the Consideration Shares. Additionally, pursuant to the Registration Rights Agreement, for a period of three years following the Six-Month Anniversary, whenever the Company proposes to register the issuance or sale of any of its Common Stock or its own account or otherwise, and the registration form to be used may be used for the registration of the Consideration Shares.
The acquisition is accounted for by the Company in accordance with the acquisition method of accounting pursuant to ASC 805 “Business Combinations” and pushdown accounting is applied to record the fair value of the assets acquired on Recruiting Solutions. Under this method, the purchase price is allocated to the identifiable assets acquired and liabilities assumed based on their estimated fair values at the date of acquisition. Any excess of the amount paid over the estimated fair values of the identifiable net assets acquired will be allocated to goodwill.
The following is a summary of the estimated fair value of the assets acquired and liabilities assumed at the date of acquisition:
Intangible assets, including sales and client relationships, contracts, intellectual property, partnership and vendor agreements and certain other assets
$4,047,848
Accounts payable
(108,500)
$3,939,348
The Company is in the process of completing its accounting and valuations of the assets acquired and the liabilities assumed and, accordingly, the estimated fair values of assets acquired and the allocation of purchase price noted above is provisional pending the final valuations which will not exceed one year in accordance with ASC 805.
Pro Forma Information
The results of operations of Scouted and Upsider are included in the Company’s consolidated financial statements from the dates of acquisition. The following supplemental unaudited pro forma combined financial information assumes that the acquisition had occurred at the beginning of the three months ended March 31, 2021 and 2020:
 
 
March 31,
 
 
March 31,
 
 
 
2021
 
 
2020
 
Revenue
 $3,315,311 
 $2,580,491 
Net Loss
 $(6,250,817)
 $(2,545,822)
Loss per common share, basic and diluted
 $(0.86)
 $(0.48)
The pro forma financial information is not necessarily indicative of the results that would have occurred if the acquisition had occurred on the dates indicated or that result in the future.
NOTE 13 — SUBSEQUENT EVENTS
Common Stock
We issued a total of 853,000 shares of common stock upon the conversion of 68,312 shares of Series D preferred stock.
We issued 677,883 shares of issuable common stock pursuant to the Upsider acquisition described in Note 12.
We issued 50,000 shares of common stock for services valued at $152,500. This amount is included in accrued expenses at March 31, 2021.
Common Stock Options
We granted an aggregate of 126,000 common stock options. The options have an exercise price of $3.25, vest over various periods through May 2023 and expire in five years.
Convertible Debentures
We issued 44,219 shares of common stock upon the conversion of $70,750 principal of convertible debentures.
Promissory Note Payable
We received $250,000 in proceeds from a promissory note dated May 6, 2021. The note bears interest at 12% per year and matures on May 6, 2023.
Business Acquisition
Effective May 10, 2021, we, through a wholly-owned subsidiary, entered into an Asset Purchase Agreement and Plan of Reorganization (the “APA”) with OneWire Holdings, LLC, a Delaware limited liability company (“OneWire”), to acquire all the assets and several liabilities of OneWire (the “OneWire Purchase”). As consideration for the OneWire Purchase, OneWire’s shareholders will receive a total of 388,318 shares (the “Consideration Shares”) of common stock, valued at $1,255,000, based on a price per share of $3.231894, the volume-weighted average price of the common stock for the 30-day period immediately prior to the Closing Date (as defined in the APA). 77,664 of the Consideration Shares are subject to forfeiture pursuant to APA provisions regarding a post-closing working capital adjustment and a revenue true-up and pursuant to OneWire’s indemnity obligations. The assets acquired in the APA consist primarily of sales and client relationships, contracts, intellectual property, partnership and vendor agreements and certain other assets, along with a de minimis amount of other assets. OneWire’s expansive candidate database in financial services and candidate matching service amplify our reach to give employers and recruiters access to an even broader pool of specialized talent.

ITEMITEM 2. MANAGEMENT'SMANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis should be read in conjunction with our unaudited interim condensed consolidated financial statements and related notes appearing elsewhere in this reportQuarterly Report on Form 10-Q.10-Q (this “Quarterly Report”). In addition to historical information, this discussion and analysis contains forward-looking statements that involve risks, uncertainties, and assumptions. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of a certain factors, including but not limited to those set forth under “Risk Factors” in our Annual Report on Form 10-K for the year ended MarchDecember 31, 20172020 as filed with the Securities and Exchange Commission (the “SEC”).
For purposes of this Quarterly Report, “Recruiter.com,” “we,” “our,” “us,” or the SEC.

As used in this report, the terms "Company", "we", "our", "us" and "Truli" refersimilar references refers to Truli MediaRecruiter.com Group, Inc. and its subsidiary, VocaWorks,consolidated subsidiaries, unless the context requires otherwise.

Overview
Recruiter.com Group, Inc. (“we,” “the Company”, “Recruiter.com”, “us”, “our”) operates an on-demand recruiting platform aiming to disrupt the $120 billion recruiting and its former subsidiary TMC.

Corporate Development

staffing industry. We combine an online hiring platform with the world’s largest network of over 28,000 small and independent recruiters. Businesses of all sizes recruit talent faster using the Recruiter.com platform, which is powered by virtual teams of Recruiters On Demand and Video and Artificial Intelligence (“AI”) job-matching technology.

Our website, www.Recruiter.com, provides employees seeking to hire access to over 28,000 independent recruiters and utilizes an innovative web platform, with integrated AI-driven candidate to job matching and video screening software to more easily and quickly source qualified talent.
We help businesses accelerate and streamline their recruiting and hiring processes by providing on-demand recruiting services. We leverage our expert network of recruiters to place recruiters on a project basis, aided by cutting edge AI-based candidate sourcing, and matching and video screening technologies. We operate a cloud-based scalable SaaS-enabled marketplace platform for professional hiring, which provides prospective employers access to a network of thousands of independent recruiters from across the country and worldwide, with a diverse talent sourcing skillset that includes information technology, accounting, finance, sales, marketing, operations and healthcare specializations. 
Through our Recruiting.com Solutions division, we also provide consulting and staffing, and full-time placement services to employers which leverages our platform and rounds out our services.
Our mission is to grow our most collaborative and connective global platform to connect recruiters and employers and become the preferred solution for hiring specialized talent. 
We generate revenue from the following activities:
●Recruiters on Demand: Consists of a consulting and staffing service specifically for the placement of professional recruiters, which we market as Recruiters on Demand. Recruiters on Demand is a flexible, time-based solution that provides businesses of all sizes access to recruiters on an outsourced, virtual basis for help with their hiring needs. As with other consulting and staffing solutions, we procure for our employer clients qualified professional recruiters, and then place them on assignment with our employer clients. Revenue earned through Recruiters on Demand is derived by billing the employer clients for the placed recruiters’ ongoing work at an agreed-upon, time-based rate. We directly source recruiter candidates from our network of recruiters on the Platform, as the recruiter user base of our Platform has the proper skill-set for recruiting and hiring projects. We had previously referred to this service in our revenue disaggregation disclosure in our consolidated financial statements as license and other, but on July 1, 2020, we rebranded as Recruiters on Demand.
●Consulting and Staffing: Consists of providing consulting and staffing personnel services to employers to satisfy their demand for long- and short-term consulting and temporary employee needs. We generate revenue by first referring qualified personnel for the employer’s specific talent needs, then placing that personnel with the employer, but with us or our providers acting as the employer of record, and finally, billing the employer for the time and work of our placed personnel on an ongoing basis. Our process for finding candidates for consulting and staffing engagements largely mirrors our process for full-time placement hiring. This process includes employers informing us of open consulting and temporary staffing opportunities and projects, sourcing qualified candidates through the Platform and other similar means, and, finally, the employer selecting our candidates for placement after a process of review and selection. We bill these employer clients for our placed candidates’ ongoing work at an agreed-upon, time-based rate, typically on a weekly schedule of invoicing.


●Full-time Placement: Consists of providing referrals of qualified candidates to employers to hire staff for full-time positions. We generate full-time placement revenue by earning one-time fees for each time that employers hire one of the candidates that we refer. Employers alert us of their hiring needs through our Platform or other communications. We source qualified candidate referrals for the employers’ available jobs through independent recruiter users that access our Platform and other tools. We support and supplement the independent recruiters’ efforts with dedicated internal employees we call our internal talent delivery team. Our talent delivery team selects and delivers candidate profiles and resumes to our employer clients for their review and ultimate selection. Upon the employer hiring one or more of our candidate referrals, we earn a “full-time placement fee”, an amount separately negotiated with each employer client. The full-time placement fee is typically either a percentage of the referred candidates’ first year’s base salary or an agreed-upon flat fee.

●Marketing Solutions: Our “Marketing Solutions” allow companies to promote their unique brands on our website, the Platform, and our other business-related content and communication. This is accomplished through various forms of online advertising, including sponsorship of digital newsletters, online content promotion, social media distribution, banner advertising, and other branded electronic communications, such as in our quarterly digital publication on recruiting trends and issues. Customers who purchase our Marketing Solutions typically specialize in B2B software and other platform companies that focus on recruitment and human Resources processing. We earn revenue as we complete agreed upon marketing related deliverables and milestones using pricing and terms set by mutual agreement with the customer. In addition to its work with direct clients, the Company categorizes all online advertising and affiliate marketing revenue as Marketing Solutions.
●Career Solutions: We provide services to assist job seekers with their career advancement. These services include a resume distribution service which involves promoting these job seekers’ profiles and resumes to assist with their procuring employment, and upskilling and training. Our resume distribution service allows a job seeker to upload his/her resume to our database, which we then distribute to our network of recruiters on the Platform. We earn revenue from a one-time flat fee for this service. We also offer a recruiter certification program which encompasses our recruitment related training content, which we make accessible through our online learning management system. Customers of the recruiter certification program use a self-managed system to navigate through a digital course of study. Upon completion of the program, we issue a certificate of completion and make available a digital badge to certify their achievement for display on their online recruiter profile on the Platform. For approximately the four months following March 31, 2020, the Company provided the recruiter certification program free in response to COVID-19. We partner with Careerdash, a high-quality training company, to provide Recruiter.com Academy, an immersive training experience for career changers.
The Company was incorporated in Oklahoma in 2008. On March 17, 2015,costs of our revenue primarily consist of employee costs, third-party staffing costs and other fees, outsourced recruiter fees and commissions based on a percentage of Recruiting Solutions gross margin. 
Our results of operations and financial condition may be impacted positively and negatively by certain general macroeconomic and industry wide conditions, such as the Company reincorporated in Delaware.

On September 21, 2016, Michael J. Solomon, the founder and Chairmaneffects of the BoardCOVID-19 pandemic. The consequences of the Company (the “Founder”) sold a convertible note with a principal amount of $1,955,934 previously issued bypandemic and impact on the CompanyU.S. and global economies continue to evolve and the Founder (the “Convertible Note”) to two institutional investors (the “Investors”) in equal amounts in exchange for payment of $102,500 from each investor.

Under the termsfull extent of the Note Purchase Agreement (the “NPA”), the Founder was required to pay all of the liabilitiesimpact is uncertain as of the date of this filing. The pandemic has had a detrimental effect on many recruitment technology companies and on the NPA other thangeneral employment and staffing industry. If the Convertible Noterecovery from the COVID-19 pandemic is not robust, the impact could be prolonged and public company expensessevere. While to date the Company has not been required to stop operating, management is evaluating its use of its office space, virtual meetings and the like. We have reduced certain billing rates to respond to the current economic climate. Additionally, while we have experienced, and could continue to pay all operating liabilities other thanexperience, a loss of clients as the public company liabilities, which were paidresult of the pandemic, we expect that the impact of such attrition would be mitigated by the Investors for one year.addition of new clients resulting from our continued efforts to adjust the Company’s operations to address changes in the recruitment industry. The NPA includes a provision underextent to which the Founder had an optionCOVID-19 pandemic will impact our operations, ability to purchase allobtain financing or future financial results is uncertain at this time. Due to the effects of COVID-19, the Company took steps to streamline certain expenses, such as temporarily cutting certain executive compensation packages by approximately 20%. Management also worked to reduce unnecessary marketing expenditures and worked to improve staff and human capital expenditures, while maintaining overall workforce levels. The Company expects but cannot guarantee that demand for its recruiting solutions will improve later in 2021, as certain clients re-open or accelerate their hiring initiatives, and new clients utilize our services. The Company does not expect reductions made in the second quarter of 2020 due to COVID-19 will inhibit its ability to meet client demand. Overall, management is focused on effectively positioning the Company for a rebound in hiring which we expect later in 2021. Ultimately, the recovery may be delayed and the economic conditions may worsen. The Company continues to closely monitor the confidence of its recruiter users and customers, and their respective job requirement load through offline discussions and the Company’s Recruiter Index survey.

Quarter Overview
During the three months ended March 31, 2021, the Company focused on the continued development of its innovative technology and platform offerings, strategic merger and acquisition opportunities, improving the results of sales and marketing, engagement of its growing network of recruiters, and the development of new, more automated ways to engage its on-demand recruiter community. Company management also focused on developing effective public relations outreach and successfully integrating the staff and assets from its acquisitions.
Our key highlights during the three months ended March 31, 2021, include the following:

Acquiring two technology companies:
●
Upsider.ai, a SaaS (software as a service) platform for employers, which automates recruiting by offering powerful candidate identification and engagement, and a robust database from hundreds of sources and millions of candidates.
●
Scouted.io, a video-powered talent platform, which helps employers identify and engage high-potential talent from curated candidate pools.
Select achievements:
●
Launched Scouted by Recruiter.com, a highly specialized professional talent subscription service starting at $499/month that leverages the power of AI and talent experts to help hiring managers to recruit top talent faster;
●
Achieved 28,570 recruiters on the Platform as of March 31, 2021
●
Appointed Robert Heath, Executive Vice President, RPX Corporation, and Steve Pemberton, Chief Human Resources Officer, Workhuman, as independent directors of the Company’s current operating assetscompany;
●
Launched our Recruiter.com Video solution on the SAP App Center, the digital marketplace for $5,000SAP partner offerings;
●
Established partner program for our video recruiting platform, enabling our network of small and independent recruiters to benefit from the transformation of the recruiting industry into a video-first process;
●
Launched On-Demand Recruiting Academy, an on-demand virtual training program to help career changers break into the world of virtual recruiting;
●
Grew our marketplace partners with the addition of many new partners, including Fundomate, a leading provider for turnkey business funding solutions, to bring automated business funding to its US-based partner companies, and QuickFee, bringing in flexible online payment solutions for recruitment services;
●
National Retail Solutions joined as a Recruit Me campaign partner to bring video interview capabilities to thousands of retail employers nationwide;
●
Received multiple media appearances for the Recruiter Index, Recruiter.com's proprietary survey of recruiter sentiment on the job market, and hiring and recruiting demand. Most notably, Evan Sohn appeared on CNBC on April 1, 2021, to discuss the job market conditions. 
Since March 31, 2021, our key highlights include the following:
●
Announced a partnership with WeWork, which brings on-demand recruiting services to their business members through September 23, 2017. Effective asan exclusiveRecruiter.com Flexprogram and to offer WeWork All Access, a monthly membership that unlocks access to workspace worldwide, to Recruiter.com's customers.
●
Finalized the acquisition of September 23, 2017,OneWire, a financial services recruiting platform, which brings the Company agreed to extend the option held by the Founder through October 31, 2017. On October 30, 2017, immediately following the salea roster of the Series A Convertible Preferred Stockfinancial services clients and Warrants, the Founder exercised the option and acquired TMC.

On October 30, 2017, the Company entered into a License with Recruiter.com, Inc. (“Recruiter”) under which Recruiter granted the Company’s newly created subsidiary, VocaWorks, Inc., a license to use Recruiter’s proprietary software and related intellectual property (the “License”). In consideration for the License, the Company issued Recruiter 125,000,000 sharessignificant database of its common stock. In addition, the Company created a newly designated series of preferred stock known as Series B Convertible Preferred Stock (the “Series B”) which is convertible into common stock at $0.005 per share, subject to adjustments in the event of stock splits, stock dividends and reverse splits. The Company agreed to issue Recruiter 625,000 shares of the Series B upon the launch of a functional software platform and receipt of $10,000 in sales revenue. Recruiter is entitledfinancial services-related candidates.

●
Continued to receive an additional 1,250,000 shares of Series Bnotable media appearances with live interviews with Evan Sohn, our CEO, on the achievement of certain milestones as provided in the License. The Chief Executive Officer of Recruiter was appointed Chief Executive OfficerYahoo Finance, Bloomberg, and a director of the Company in conjunction with entry into the License.

Immediately following the Company’s entering into the License and the Change of Control stemming from the issuance of 125,000,000 shares of common stock to Recruiter, the Company sold $600,000 of Series A Convertible Preferred Stock and Warrants to the Investors. On October 30, 2017, the Investors exchanged the Convertible Notes for shares of Series C Convertible Preferred Stock and other convertible notes for Series C-1 Convertible Preferred Stock.

CNBC.

Subsequent to the end of the quarter ended September 30, 2016, in order to simplify accounting and the potential exercise of the option to acquire the Company’s current operating assets, the Company formed a California corporation, Truli Media Corp. (“TMC”) as a wholly-owned subsidiary of the Company, and thereafter the Company transferred its operating assets to TMC and the Founder assumed the operating liabilities other than the Convertible Notes and public company liabilities. In describing the business of the Company below, the description relates to its historical business of the Company and TMC. Since the Founder acquired TMC on October 30, 2017, the discussion below, except for Liquidity, relates to TMC through October 30, 2017 and to VocaWorks from that point forward.

Business of the Company

The Company is developing a software platform and business under the "VocaWorks" brand name and moving into the rapidly expanding field of online and mobile-enabled staffing and talent acquisition solutions, facilitated in part through its entry into the License with Recruiter. VocaWorks will offer a native mobile iOS app solution, as well as a web-based SaaS platform offering and will facilitate the hiring of personnel, including project-based consultants, focusing initially on specialized technology talent. The initial test launch of the web platform is currently scheduled for release at the end of fiscal 2019 Q1, dependent on software development.

Truli has not generated any revenue from its former or new business strategy and there can be no assurances that we will do so in the future. Except for the period from October 30, 2017, the following discussion relates to TMC and not the Company’s current business.

Results of Operations

The results of operations include TMC through October 30, 2017 and VocaWorks from that date forward.

Three Months Ended DecemberMarch 31, 20172021 Compared to Three Months Ended DecemberMarch 31, 2016:

2020:

Revenue
The Company had norevenue of $3,164,545 for the three-month period ended March 31, 2021, as compared to $2,313,123 for the three-month period ended March 31, 2020, representing an increase of $851,422 or 36.8%. This increase resulted primarily from an increase in our Recruiters on Demand business of 418% due to significant growth in new customers, some of which we acquired, on July 1, 2020. We also had an increase in our Consulting and Staffing business of 8.3% from internal growth from some of our long-term customers. The increase in revenue was offset partially by a decline in revenue from our Permanent Placement business of 71% as hiring demand was slower which we believe reflected some impact from the presidential election and the COVID-19 pandemic. The extent to which the COVID-19 pandemic will impact our revenue in the subsequent future periods is uncertain at this time.
Cost of Revenue
Cost of revenue was $2,254,910 for the three-month period ended March 31, 2021, which included related party costs of $205,261, compared to $1,751,196 for the 2020 three-month period, representing an increase of $503,714 or 28.8% and included related party costs of $655,384. This increase resulted primarily from an increase in compensation expense to support revenue growth. Cost of revenue for the three-month periodsperiod ended DecemberMarch 31, 2017 or 2016. VocaWorks has recently begun to implement its new business plan commencing with the execution of the License agreement with Recruiter. Truli officially launched its website on July 10, 2012 but had not yet generated material revenue through the date of disposition of TMC. Net income (before dividends on preferred stock) of $22,066 and net loss of $178,492 for the three-month periods ended December 31, 2017 and 2016, respectively, resulted from the operational activities described below.

Operating expenses totaled $64,867 and $81,351 during the three-month periods ended December 31, 2017 and 2016, respectively. The increase in operating expenses is the result of the following factors.

The Company incurred marketing, general and administrative expenses of $64,867 and $81,351 for the three-month periods ended December 31, 2017 and 2016, respectively, principally comprised of marketing, website development costs, professional fees and consulting fees. The decrease of 20% in 2017 compared to 20162021 was primarily attributable to decreased marketingthird party staffing costs and other fees related to the recruitment and staffing business acquired from Genesys Talent, LLC (“Genesys”), (currently the Company’s Recruiting Solutions division).

Our gross profit for the three-month period ended March 31, 2021 was $909,635, producing a reversalgross profit margin of accounts payable28.7%. Our gross profit for the corresponding 2020 three-month period was $561,927, producing a gross profit margin of 24.3%. The increase in the gross profit margin from 2020 to 2021 reflects the shift in the mix in sales for the period as our Recruiters on Demand revenue has higher gross margins than our staffing revenue. We also had a higher margin within our Staffing business due to the more profitable mix of clients and accrued expensesservices we provided.

Operating Expenses
We had total operating expense of $98,593,$2,833,281 for the three-month period ended March 31, 2021 compared to $2,416,452 in the 2020 period, an increase of $416,829 or 17.3%. This increase was primarily due to the higher general and administrative expense.
Sales and Marketing
Our sales and marketing expense for the three-month period ended March 31, 2021 was $57,543 compared to $25,243 for the corresponding three-month period in 2020, which reflects an increase in advertising and marketing expense to help drive growth in our business.
Product Development
Our product development expense for the three-months ended March 31, 2021 decreased to $70,660 from $83,093 for the corresponding period in 2020. This decrease is attributable to timing of launching new development projects. The product development expense included $57,988 and $60,979 for the three months ended March 31, 2021 and 2020, respectively paid to Recruiter.com Mauritius, Ltd, a development team employed by Recruiter.com and a related party of the Company.
Amortization of Intangibles and Impairment Expense
For the three-month period ended March 31, 2021, we incurred a non-cash amortization charge of $159,173 as compared to $159,173 for the corresponding period in 2020. The amortization expense relates to the intangible assets acquired from Genesys, now the Company’s Recruiting Solutions division.
General and Administrative
General and administrative expense for the three-month period ended March 31, 2021 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 March 31, 2021, our general and administrative expense was $2,545,905, including $502,407 of non-cash stock-based compensation. In 2020, for the corresponding period, our general and administrative expense was $2,148,943 including $870,722 of non-cash stock-based compensation. This increase is attributable primarily to increases in compensation supporting the growth in our Recruiters on Demand business, investor relations, legal and contractor fees of $976,167 partially offset by the decline in non-cash stock-based compensation of $368,315..
Other Income (Expense)
Other income (expense) for the three-month period ended March 31, 2021 was $4,356,420 compared to a loss of $628,080 in the corresponding 2020 period. The primary reason for the increase of $3,728,340 is due to a non-cash initial derivative expense of $3,585,983 and an increase in professional fees.

Other Income (Expense)

  

Three Months Ended

December 31,

    
  2017  2016  Change 
Interest expense $(14,714) $(26,973) $12,259 
Loss on change in fair value of derivative liability  (532,788)  (70,168)  (462,620)
Gain on extinguishment of debt  634,435   -   634,435 
Total other income (expense) $86,933  $(97,141) $184,074 

Other income (expense) is comprised of interest and financing costs, expense related to the change in fair value of our derivative liabilities, and gain on extinguishment of debt. The decrease innon-cash interest expense inof $1,277,235 reflecting the 2017 three month period compared to the 2016 three month period resultsdebt discount and finance costs from the settlementconvertible note financings completed in May and June of debt in the 2017 period.2020 and January of 2021. The net loss was offset partially by non-cash income of $1,193,709 resulting from a change in the fair value of the derivative liability from our derivative liabilities results primarily from the changes in our stock price and the volatility ofoutstanding warrants. As our common stock during the reported periods. The gain on extinguishment of debt results from the settlement of debt in the 2017 period. 

Nine Months Ended December 31, 2017 Compared to Nine Months Ended December 31, 2016:

The Company had no revenue for the nine-month periods ended December 31, 2017 or 2016. Net loss of $317,251price increases, we incur an expense and $373,625 for the nine-month periods ended December 31, 2017 and 2016, respectively, resulted from the operational activities described below.

Operating expenses totaled $284,875 and $230,732 during the nine-month periods ended December 31, 2017 and 2016, respectively. The increase in operating expenses is the result of the following factors.

The Company incurred marketing, general and administrative expenses of $284,875 and $230,732 for the nine-month periods ended December 31, 2017 and 2016, respectively, principally comprised of marketing, website development costs, professional fees and consulting fees. The increase of 23% in 2017 compared to 2016 was primarily attributable to increased professional and consulting fees partiallyoffset by a reversal of accounts payable and accrued expenses of $98,593.


Other Income (Expense)

  

Nine Months Ended

December 31,

    
  2017  2016  Change 
Interest expense $(84,386) $(73,061) $(11,325)
Loss on change in fair value of derivative liability  (582,425)  (69,832)  (512,593)
Gain on extinguishment of debt  634,435   -   634,435 
Total other expense $(32,376) $(142,893) $110,517 

Other income (expense) is comprised of interest and financing costs, expense related to the change in fair value of our derivative liabilities, and gain on extinguishment of debt. The increase in interest expense in the 2017 nine month period compared to the 2016 nine month period results from the issuance of debt in the 2017 period. The change in the fair value of our derivative liabilities results primarily from the changes in our stock price and the volatility ofcontrarily if our common stock decreases, we recognize other income.

Net Income (Loss)
For the three-months ended March 31, 2021, we had a net loss of $6,280,066 compared to a net loss of $2,482,605 during the reportedcorresponding three-month period in 2020.
Non-GAAP Financial Measures
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 the historical operating results of Recruiter 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.

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. The gain on extinguishmentOur 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 debtthe described excluded items.
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 settlementimpact of debtitems of a non-operational nature that affect comparability.
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 2017 period. 

non-GAAP financial measures, together with the reconciliation to GAAP, helps investors make comparisons between the Company 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.

The following table presents a reconciliation of net loss to Adjusted EBITDA:
 
 
Three months Ended
March 31,
 
 
 
2021
 
 
2020
 
Net loss
 $(6,280,066)
 $(2,482,605)
Interest expense and finance cost, net
  1,427,588 
  44,206 
Depreciation & amortization
  159,461 
  159,461 
EBITDA (loss)
  (4,693,017)
  (2,278,938)
Bad debt expense
  16,963 
  11,250 
Forgiveness of debt income
  (24,925)
  - 
Initial derivative expense
  3,585,983 
  - 
Loss (gain) on change in fair value of derivative
  (628,621)
  565,088 
Stock-based compensation
  502,407 
  870,722 
Accrued stock-based compensation
  152,500 
  70,250 
Adjusted EBITDA (Loss)
 $ (1,088,710)
 $(761,628)
Liquidity and Capital Resources

We expect to continue to incur operating losses for

For the foreseeable future. As of December 31, 2017, we had an accumulated deficit of $6,076,616 compared to $5,759,365 as ofthree months ended March 31, 2017. The increase is attributable to the net loss for the nine-month period ended December 31, 2017.

Our2021, net cash used in operating activities was $236,554 and $269,408$1,324,096, compared to net cash used in operating activities of $93,227 for the nine months ended December 31, 2017 and 2016, respectively.corresponding 2020 period. The decreaseincrease in cash used is primarilyin operating activities was attributable to anthe increase in operating expenses outlined previously supporting the investments to grow our business. For the three months ended March 31, 2021, net loss (after adjusting for non-cash items) of approximately $103,000, which was offset$1,379,764. Accounts receivable increased by an increase$857,781 and prepaid expenses decreased by $28,923. Accounts payable, accrued liabilities, and deferred revenue decreased in accountstotal by $867,563. For the three months ended March 31, 2020, net loss (after adjusting for non-cash items) was $825,322. Accounts receivable and prepaid expenses together increased by $16,147. Accounts payable, accrued liabilities, other liabilities and accrued interest of approximately $136,000. Cashdeferred revenue in total decreased by $748,242.

For the three months ended March 31, 2021, net cash used in investing activities duringwas $249,983 due to cash used for acquisitions, compared to $14,955 of cash provided by investing activities in the ninethree months ended DecemberMarch 31, 2017 consisted2020, which resulted primarily from the sale of expenditures for software development of approximately $29,000 and a transfer of approximately $9,000 uponmarketable securities.
For the exercise of an option to purchase our TMC subsidiary. There were no cash flows from investing activities for the ninethree months ended DecemberMarch 31, 2016. Net2021, net cash provided by financing activities was approximately $636,000 for the nine months ended December 31, 2017, derived primarily$2,136,529. The principal factors were $2,153,200 from the proceedssale of convertible notes, net of original issue discounts and offering costs. In the 2020 period, financing activities provided $73,553, primarily due to $180,778 from advances from the sale of receivables and $25,000 from a deposit from the sale of preferred stock, of approximately $471,000 and funds advanced by the Founder of approximately $115,000. Net cash provided by financing activities was approximately $295,000 for the nine months ended December 31, 2016 with the funding coming primarily from $297,000 advanced by the Founder.

The Company had previously funded its operations primarily through advancespartially offset from the Founder. The Company’s recent funding has come throughrepayments of the sale of convertible preferred stock. future revenue.


As of May 10, 2021, the Company had approximately $521,000 in cash on hand. Based on this cash on hand, the Company does not have the capital resources to meet its working capital needs for the next 12 months. We are also party to two lines of credit with current outstanding balances of $0. Advances under each of these lines of credit mature within 12 months of the advances. Availability under these two lines of credit in the amount of $91,300 at September 30, 2020 has been suspended in 2020 due to COVID-19 uncertainty.
The Company’s managementunaudited 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. The Company has evaluated whether there is substantial doubt aboutincurred net losses and negative operating cash flows annually. For the Company’s abilitythree-months ended March 31, 2021 and the three months ended March 31, 2020, the Company recorded a net loss of $6,280,066 and $2,482,605, respectively. The Company has not yet established an ongoing source of revenue sufficient to cover its operating costs and allow it to continue as a going concern and has determined that substantial doubt existed as of the date of the end of the period covered by this Quarterly Report on Form 10-Q. This determination was based on the following factors: (i) the Company’s available cash as of the date of this filing will not be sufficient to fund its anticipated level of operations for the next 12 months; (ii) the Company may require additional financing for the remainder of fiscal 2018 to continue at its expected level of operations; and (iii) if the Company fails to obtain the needed capital, it will be forced to delay, scale back, or eliminate some or all of its development activities or perhaps cease operations. In the opinion of management, these factors, among others, raise substantial doubt about theconcern. The ability of the Company to continue as a going concern is dependent on the Company obtaining adequate capital to fund operating losses until it becomes profitable.
The Company’s historical operating results indicate substantial doubt exists related to the Company’s ability to continue as a going concern. We can give no assurances that any additional capital that we are able to obtain, if any, will be sufficient to meet our needs, or that any such financing will be obtainable on acceptable terms. If we are unable to obtain adequate capital, we could be forced to cease operations or substantially curtail our commercial activities. These conditions raise substantial doubt as to our ability to continue as a going concern. The accompanying unaudited consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts and classification of liabilities should we be unable to continue as a going concern.
To date, private placement offerings have been our primary source of liquidity and we expect to fund future operations through additional securities offerings. We had also entered into arrangements with factoring companies to receive advances against certain future accounts receivable in order to supplement our liquidity. However, the COVID-19 pandemic and debt covenants under outstanding debt and other financing arrangements have affected the Company’s ability to receive advances against its future accounts receivable as discussed in more detail below.

Financing Arrangements
Lines of Credit
At March 31, 2021 and December 31, 2020 we are party to two lines of credit with outstanding balances of $0. Advances under each of these lines of credit mature within 12 months of the advances. Availability under the two lines was $91,300 at March 31, 2021; however, due to COVID -19 uncertainty (see Note 2), the availability under both lines has been suspended since 2020.
Term Loans
We have outstanding balances of $70,044 and $77,040 pursuant to two term loans as of March 31, 2021 and December 31, 2020, respectively, which mature in 2023. The loans have variable interest rates, with current rates at 6.0% and 7.76.0%, respectively. Current monthly payments under the loans are $1,691 and $1,008, respectively.
Paycheck Protection Program Loan
During 2021 our remaining loan pursuant to the Paycheck Protection Program under the CARES Act in the amount of $24,750 was forgiven. We recorded forgiveness of debt income of $24,925 for the $24,750 of principal and $175 of related accrued interest forgiven.
Senior Subordinated Secured Convertible Debentures
In May and June 2020, the Company entered into a Securities Purchase Agreement, effective May 28, 2020 (the “Purchase Agreement”) with several accredited investors (the “Purchasers”). Four of the investors had previously invested in the Company’s preferred stock. Pursuant to the Purchase Agreement, the Company sold to the Purchasers a total of (i) $2,953,125 in the aggregate principal amount of 12.5% Original Issue Discount Senior Subordinated Secured Convertible Debentures (the “Debentures”), and (ii) 1,845,703 common stock purchase warrants (the “Warrants”), which represents 100% warrant coverage. The Company received a total of $2,226,000 in net proceeds from the offering, after deducting the 12.5% original issue discount of $328,125, offering expenses and commissions, including the placement agent’s commission and fees of $295,000 and reimbursement of the placement agent’s and lead investor’s legal fees and the Company’s legal fees in the aggregate amount of $100,000 and escrow agent fees of $4,000. The Company also agreed to issue to the placement agent, as additional compensation, 369,141 common stock purchase warrants exercisable at $2.00 per share. 

The Debentures mature on May 28, 2021, subject to a six-month extension at the Company’s option. The Debentures bear interest at 8% per annum payable quarterly, subject to an increase in case of an event of default as provided for therein. The Debentures are convertible into shares of the Company’s common stock at any time following the date of issuance at the endpurchasers’ option at a conversion price of $1.60 per share, subject to certain adjustments. The Debentures are subject to mandatory conversion in the event the Company closes an equity offering of at least $5,000,000 resulting in the listing of the period covered by this Quarterly ReportCompany’s common stock on Form 10-Q.

There is no assurance thata national securities exchange. The Debentures rank senior to all existing and future indebtedness of the Company and its subsidiaries, except for approximately $508,000 of outstanding senior indebtedness. The Company may prepay the Debentures at any time at a premium as provided for therein.

The Company’s obligations under the Debentures are secured by a first priority lien on all of the assets of the Company and its subsidiaries, subject to certain existing senior liens. The Company’s obligations under the Debentures are guaranteed by the Company’s subsidiaries.

The Securities Purchase Agreement for the Debentures and Warrants contains customary representations, warranties and covenants of the Company, including, among other things and subject to certain exceptions, covenants that restrict the ability of the Company and its subsidiaries, without the prior written consent of the Debenture holders, to incur additional indebtedness, including further advances under a certain preexisting secured loan, and repay outstanding indebtedness, create or permit liens on assets, repurchase stock, pay dividends or enter into transactions with affiliates. The Debentures contain customary events of default, including, but not limited to, failure to observe covenants under the Debentures, defaults on other specified indebtedness, loss of admission to trading on OTCQB or another applicable trading market, and occurrence of certain change of control events. Upon the occurrence of an event of default, an amount equal to 130% of the principal, accrued but unpaid interest, and other amounts owing under each Debenture will immediately come due and payable at the election of each Purchaser, and all amounts due under the Debentures will bear interest at an increased rate. 
On January 5, 2021, the Company entered into a Securities Purchase Agreement, effective January 5, 2021 (the “Purchase Agreement”), with two accredited investors (the “Purchasers”). Pursuant to the Purchase Agreement, the Company agreed to sell to the Purchasers a total of (i) $562,500 in the aggregate principal amount of 12.5% Original Issue Discount Senior Subordinated Secured Convertible Debentures (the “Debentures”), and (ii) 351,562 common stock purchase warrants (the “Warrants”), which represents 100% warrant coverage. The Company received a total of $500,000 in gross proceeds from the offering, taking into account the 12.5% original issue discount, before deducting offering expenses and commissions, including the placement agent’s commission of $50,000 (10% of the gross proceeds) and fees related to the offering of the Debentures of approximately $40,000. The Company also agreed to issue to the placement agent, as additional compensation, 70,313 common stock purchase warrants exercisable at $2.00 per share (the “PA Warrants”). Gunnar acted as placement agent for the offering of the Debentures.
On January 20, 2021, the Company entered into a Securities Purchase Agreement, (the “Purchase Agreement”) with eighteen accredited investors (the “Purchasers”). Pursuant to the Purchase Agreement, the Company agreed to sell to the Purchasers a total of (i) $2,236,500 in the aggregate principal amount of 12.5% Original Issue Discount Senior Subordinated Secured Convertible Debentures (the “Debentures”), and (ii) 1,397,813 common stock purchase warrants (the “Warrants”), which represents 100% warrant coverage. Gunnar acted as placement agent for the offering of the Debentures. The Company received a total of $1,988,000 in gross proceeds from the offering, taking into account the 12.5% original issue discount, before deducting offering expenses and commissions, including Gunnar’s commission of $191,270 (10% of the gross proceeds minus $7,500 paid to Gunnar’s counsel) and additional fees related to the offering of the Debentures of approximately $50,500. The Company also agreed to issue to Gunnar, as additional compensation, 279,563 common stock purchase warrants exercisable at $2.00 per share (the “PA Warrants”).
The Debentures mature on January 5th and January 20th, 2022 respectively, subject to a six-month extension at the Company’s option. The Debentures bear interest at 8% per annum payable quarterly, subject to an increase in case of an event of default as provided for therein. The Debentures are convertible into shares of the Company’s common stock (the “Common Stock”) at any time following the date of issuance at the Purchasers’ option at a conversion price of $1.60 per share, subject to certain adjustments. The Debentures are subject to mandatory conversion in the event the Company closes an equity offering of at least $5,000,000 resulting in the listing of the Common Stock on a national securities exchange. The Debentures rank senior to all existing and future indebtedness of the Company and its subsidiaries, except for approximately $95,000 of outstanding senior indebtedness. In addition the Debentures rank pari-passu with, and amounts owing thereunder shall be successfulpaid concurrently with, payments owing pursuant to and in connection with that certain offering by the Company of 12.5% Original Issue Discount Senior Subordinated Secured Convertible Debentures due May 28, 2021 consummated in May and June 2020 in the aggregate principal amount of $2,953,125. The Company may prepay the Debentures at any capital-raising effortstime at a premium as provided for therein.
The Warrants are exercisable for three years from January 5th and January 20th, 2021 respectively at an exercise price of $2.00 per share, subject to certain adjustments.
The Company’s obligations under the Purchase Agreement and the Debentures are secured by a first priority lien on all of the assets of the Company and its subsidiaries pursuant to a Security Agreement, dated January 5th and January 20th, 2021 respectively (the “Security Agreement”) by and among the Company, its wholly-owned subsidiaries, and the Purchasers, subject to certain existing senior liens. The Company’s obligations under the Debentures are guaranteed by the Company’s subsidiaries.

The Purchase Agreement contains customary representations, warranties and covenants of the Company, including, among other things and subject to certain exceptions, covenants that it may undertakerestrict the ability of the Company and its subsidiaries, without the prior written consent of the Debenture holders, to fund operations duringincur additional indebtedness, including further advances under a certain preexisting secured loan, and repay outstanding indebtedness, create or permit liens on assets, repurchase stock, pay dividends or enter into transactions with affiliates. The Debentures contain customary events of default, including, but not limited to, failure to observe covenants under the Debentures, defaults on other specified indebtedness, loss of admission to trading on OTCQB or another applicable trading market, and occurrence of certain change of control events. Upon the occurrence of an event of default, an amount equal to 130% of the principal, accrued but unpaid interest, and other amounts owing under each Debenture will immediately come due and payable at the election of each Purchaser, and all amounts due under the Debentures will bear interest at an increased rate.
Pursuant to the Purchase Agreement, the Purchasers have certain participation rights in future equity offerings by the Company or any of its subsidiaries after the closing, subject to customary exceptions. The Debentures and the Warrants also contain certain price protection provisions providing for adjustment of the number of shares of Common Stock issuable upon conversion of the Debentures and/or exercise of the Warrants and the conversion or exercise price in case of future dilutive offerings.
In order to meet our working capital needs for the next 12 months. Themonths, we expect to finance our operations through additional debt or equity offerings. We may not be able to complete these or any other financing transactions on terms acceptable to the Company, anticipates that it will issue equity and/or debt securities as a source of liquidity, until it begins to generate positive cash flow to support its operations. Anyat all. Additionally, any future sales of securities to finance our operations will likely dilute existing stockholders'shareholders’ ownership. The Company cannot guarantee when or if it will generate positive cash flow.

The Company If we are unable to raise sufficient capital to fund our operations, it is currently in negotiations for another round of funding anticipated for the fourth quarter of fiscal 2018. However, there is no assurancelikely that the Companywe will be successful in thisforced to reduce or any other capital-raising efforts that it may undertake to fund operations during the next twelve months. The Company anticipates that it will issue equity and/or debt securities as a source of liquidity, until it begins to generate positive cash flow to support itscease operations. Any future sales of securities to finance operations will dilute existing stockholders' ownership. The Company cannot guarantee when or if it will generate positive cash flow.

The audit report prepared by our independent registered public accounting firm relating to the Company’s consolidated financial statements for the year ended March 31, 2017 included an explanatory paragraph expressing substantial doubt about our ability to continue as a going concern.

Cautionary Note Regarding Forward-Looking Statements

This report includes forward-looking statements including statements regarding our new business, its prospects and our liquidity.

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.

The results anticipated by any or all of these forward-looking statements might not occur. Important factors, uncertainties and risks that may cause actual results to differ materially from these forward-looking statements include the development and functionality of the software we are licensing, competition, our management’s ability to deal with conflicts of interest and events affecting capital markets in general and microcap companies in particular. Further information on our risk factors is contained in our filings with the SEC, including the Form 10-K for the year ended March 31, 2017, except that the risks relating to the TMC business are inapplicable. 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 or revise any forward-looking statements, whether as the result of new information, future events or otherwise.


Off-Balance Sheet Arrangements

None

None. 
Critical Accounting Estimates and Recent Accounting Pronouncements

Critical Accounting Estimates

The preparation of consolidated financial statements in conformity with accounting principles generally accepted accounting principlesin the United States (“GAAP”) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenuerevenues and expenses during the reporting period. Actual results couldand outcomes may differ from those estimates.management’s estimates and assumptions. Included in these estimates are assumptions about inputs used to estimate collection of accounts receivable, fair value of available for sale securities, fair value of assets acquired in an asset acquisition and the estimated useful liveslife of assets acquired, fair value of derivative liabilities, fair value of securities issued for acquisitions, fair value of assets acquired and liabilities assumed in the business combination, fair value of intangible assets calculate beneficial conversionand goodwill, valuation of convertible notes payableinitial right of use assets and convertible preferred stock,corresponding lease liabilities, deferred income tax asset valuation allowances, and valuation of derivative liabilities.

Convertible Instruments

stock based compensation expense.

Revenue Recognition 
Policy
The Company evaluates and accounts for conversion options embedded in its convertible instrumentsrecognizes revenue in accordance with professional standardsthe Financial Accounting Standards Board’s (“FASB”), Accounting Standards Codification (“ASC”) ASC 606, Revenue from Contracts with Customers (“ASC 606”). Revenues are recognized when control is transferred to customers in amounts that reflect the consideration the Company expects to be entitled to receive in exchange for “Accountingthose goods. Revenue recognition is evaluated through the following five steps: (i) identification of the contract, or contracts, with a customer; (ii) identification of the performance obligations in the contract; (iii) determination of the transaction price; (iv) allocation of the transaction price to the performance obligations in the contract; and (v) recognition of revenue when or as a performance obligation is satisfied.

We generate revenue from the following activities:
●Recruiters on Demand: Consists of a consulting and staffing service specifically for the placement of professional recruiters, which we market as Recruiters on Demand. Recruiters on Demand is a flexible, time-based solution that provides businesses of all sizes access to recruiters on an outsourced, virtual basis for help with their hiring needs. As with other consulting and staffing solutions, we procure for our employer clients qualified professional recruiters, and then place them on assignment with our employer clients. Revenue earned through Recruiters on Demand is derived by billing the employer clients for the placed recruiters’ ongoing work at an agreed-upon, time-based rate. We directly source recruiter candidates from our network of recruiters on the Platform, as the recruiter user base of our Platform has the proper skill-set for recruiting and hiring projects. We had previously referred to this service in our revenue disaggregation disclosure in our consolidated financial statements as license and other, but on July 1, 2020, we rebranded as Recruiters on Demand.

●Consulting and Staffing: Consists of providing consulting and staffing personnel services to employers to satisfy their demand for long- and short-term consulting and temporary employee needs. We generate revenue by first referring qualified personnel for the employer’s specific talent needs, then placing that personnel with the employer, but with us or our providers acting as the employer of record, and finally, billing the employer for the time and work of our placed personnel on an ongoing basis. Our process for finding candidates for consulting and staffing engagements largely mirrors our process for full-time placement hiring. This process includes employers informing us of open consulting and temporary staffing opportunities and projects, sourcing qualified candidates through the Platform and other similar means, and, finally, the employer selecting our candidates for placement after a process of review and selection. We bill these employer clients for our placed candidates’ ongoing work at an agreed-upon, time-based rate, typically on a weekly schedule of invoicing.

●Full-time Placement: Consists of providing referrals of qualified candidates to employers to hire staff for full-time positions. We generate full-time placement revenue by earning one-time fees for each time that employers hire one of the candidates that we refer. Employers alert us of their hiring needs through our Platform or other communications. We source qualified candidate referrals for the employers’ available jobs through independent recruiter users that access our Platform and other tools. We support and supplement the independent recruiters’ efforts with dedicated internal employees we call our internal talent delivery team. Our talent delivery team selects and delivers candidate profiles and resumes to our employer clients for their review and ultimate selection. Upon the employer hiring one or more of our candidate referrals, we earn a “full-time placement fee”, an amount separately negotiated with each employer client. The full-time placement fee is typically either a percentage of the referred candidates’ first year’s base salary or an agreed-upon flat fee.

●Marketing Solutions: Our “Marketing Solutions” allow companies to promote their unique brands on our website, the Platform, and our other business-related content and communication. This is accomplished through various forms of online advertising, including sponsorship of digital newsletters, online content promotion, social media distribution, banner advertising, and other branded electronic communications, such as in our quarterly digital publication on recruiting trends and issues. Customers who purchase our Marketing Solutions typically specialize in B2B software and other platform companies that focus on recruitment and human Resources processing. We earn revenue as we complete agreed upon marketing related deliverables and milestones using pricing and terms set by mutual agreement with the customer. In addition to its work with direct clients, the Company categorizes all online advertising and affiliate marketing revenue as Marketing Solutions.
●Career Solutions: We provide services to assist job seekers with their career advancement. These services include a resume distribution service which involves promoting these job seekers’ profiles and resumes to assist with their procuring employment, and upskilling and training. Our resume distribution service allows a job seeker to upload his/her resume to our database, which we then distribute to our network of recruiters on the Platform. We earn revenue from a one-time flat fee for this service. We also offer a recruiter certification program which encompasses our recruitmentrelated training content, which we make accessible through our online learning management system. Customers of the recruiter certification program use a self-managed system to navigate through a digital course of study. Upon completion of the program, we issue a certificate of completion and make available a digital badge to certify their achievement for display on their online recruiter profile on the Platform. For approximately the four months following March 31, 2020, the Company provided the recruiter certification program free in response to COVID-19. We partner with Careerdash, a high-quality training company, to provide Recruiter.com Academy, an immersive training experience for career changers.
We have a sales team and sales partnerships with direct employers as well as Vendor Management System companies and Managed Service companies that help create sales channels for Derivative Instrumentsclients that buy staffing, direct hire, and Hedging Activities”.

Professional standards generallysourcing services. Once we have secured the relationship and contract with the interested Enterprise customer the delivery and product teams will provide three criteriathe service to fulfill any or all of the revenue segments.


Revenues as presented on the statement of operations represent services rendered to customers less sales adjustments and allowances.
Recruiters on Demand services are billed to clients as either monthly subscriptions or time-based billings. Revenues for Recruiters on Demand are recognized on a gross basis when each monthly subscription service is completed.
Consulting and Staffing Services revenues represent services rendered to customers less sales adjustments and allowances. Reimbursements, including those related to travel and out-of-pocket expenses, are also included in the net service revenues and equivalent amounts of reimbursable expenses are included in costs of revenue. We record substantially all revenue on a gross basis as a principal versus on a net basis as an agent in the presentation of this line of revenues and expenses. We have concluded that if met, require companiesgross reporting is appropriate because we have the task of identifying and hiring qualified employees, and our discretion to bifurcate conversion optionsselect the employees and establish their compensation and duties causes us to bear the risk for services that are not fully paid for by customers. Consulting and staffing revenues are recognized when the services are rendered by the temporary employees. Payroll and related taxes of certain employees that are placed on temporary assignment are outsourced to third party payors or related party payors. The payors pay all related costs of employment for these employees, including workers’ compensation insurance, state and federal unemployment taxes, social security and certain fringe benefits. We assume the risk of acceptability of the employees to customers. Payments for consulting and staffing services are typically due within 90 days of completion of services.
Full time placement revenues are recognized on a gross basis when the guarantee period specified in each customer’s contract expires. No fees for direct hire placement services are charged to the employment candidates. Any payments received prior to the expiration of the guarantee period are recorded as a deferred revenue liability. Payments for recruitment services are typically due within 90 days of completion of services.
Marketplace Solutions revenues are recognized either on a gross basis when the advertising is placed and displayed or when lead generation activities and online publications are completed, which is the point at which the performance obligations are satisfied. Payments for marketing and publishing are typically due within 30 days of completion of services.
Career services revenues are recognized on a gross basis upon distribution of resumes or completion of training courses, which is the point at which the performance obligations are satisfied. Payments for career services are typically due upon distribution or completion of services. 
Deferred revenue results from their host instruments and account for them as free-standing derivative financial instruments. These three criteria include circumstancestransactions in which (a) the economic characteristicsCompany has been paid for services by customers, but for which all revenue recognition criteria have not yet been met. Once all revenue recognition criteria have been met, the deferred revenues are recognized.
Sales tax collected is recorded on a net basis and risksis excluded from revenue.
Goodwill
Goodwill is comprised of the embedded derivative instrument are not clearly and closely relatedpurchase price of business combinations in excess of the fair value assigned at acquisition to the economic characteristicsnet tangible and risks of the host contract, (b) the hybrid instrument that embodies both the embedded derivative instrument and the host contractidentifiable intangible assets acquired. Goodwill is not re-measured at fair value under otherwise applicable generally accepted accounting principles with changes in fair value reported in earnings as they occur and (c) a separate instrument with the same terms as the embedded derivative instrument would be considered a derivative instrument. Professional standards also provide an exception to this rule when the host instrument is deemed to be conventional as defined under professional standards as “The Meaning of “Conventional Convertible Debt Instrument”.

amortized. The Company accountstests goodwill for convertible instruments (when it has determined that the embedded conversion options should not be bifurcated from their host instruments) in accordance with professional standardsimpairment for its reporting units on an annual basis, or when “Accounting for Convertible Securities with Beneficial Conversion Features,” as those professional standards pertain to “Certain Convertible Instruments.” Accordingly, the Company records, when necessary, discounts to convertible notes for the intrinsic value of conversion options embedded in debt instruments based upon the differences betweenevents occur or circumstances indicate the fair value of a reporting unit is below its carrying value.

The Company performs its annual goodwill and impairment assessment on December 31st of each year or earlier if facts and circumstances indicate that an impairment may have occurred.
Long-lived assets
Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the underlying common stock at the commitment datebook value of the note transactionasset may not be recoverable. The Company periodically evaluates whether events and circumstances have occurred that indicate possible impairment. When impairment indicators exist, the effective conversion price embedded inCompany estimates the note. Debt discounts under these arrangements are amortized over the termfuture undiscounted net cash flows of the related debt to their earliest date of redemption. The Company also records when necessary deemed dividends forasset or asset group over the intrinsic value of conversion options embedded in preferred shares based upon the differences between the fair valueremaining life of the underlying common stock atasset in measuring whether or not the commitment date of the preferred shares transaction and the effective conversion price embedded in the preferred shares.

ASC 815-40 provides that, among other things, generally, if an event is not within the entity’s control or could require net cash settlement, then the contract shall be classified as an asset or a liability.

values are recoverable.

Derivative Instruments

The Company’s derivative financial instruments consist of embedded derivatives related to the warrants issued with the sale of our preferred stock in 2020 and 2019 and the warrants issued with the sale of convertible debtnotes in 2020 and conversion features embedded within our convertible debt.subsequently in January 2021. The accounting treatment of derivative financial instruments requires that we record the derivatives at their fair values as of the inception date of the debt agreements and at fair value as of each subsequent balance sheet date. Any change in fair value wasis recorded as non-operating, non-cash income or expense at each balance sheet date. If the fair value of the derivatives was higher at the subsequent balance sheet date, we recorded a non-operating, non-cash charge. If the fair value of the derivatives was lower at the subsequent balance sheet date, we recorded non-operating, non-cash income.

Stock-Based Compensation

The Company utilizes Upon the Black-Scholes option-pricing modeldetermination that an instrument is no longer subject to determinederivative accounting, the fair value of optionsthe derivative instrument at the date of such determination will be reclassified to paid in capital.

Stock-Based Compensation
The Company accounts for all stock-based payment awards made to employees, directors and warrants grantedothers based on their fair values and recognizes such awards as compensation expense over the vesting period for employees or service period for non-employees using the straight-line method over the requisite service period for each award as required by FASB ASC Topic No. 718, Compensation-Stock Compensation. If there are any modifications or cancellations of the underlying vested or unvested stock-based awards, we maybe required to accelerate, increase or cancel any remaining unearned stock-based compensation which requires us to make judgments relatingexpense, or record additional expense for vested stock-based awards. Future stock-based compensation expense and unearned stock- based compensation may increase to the inputs required to be included in the model. In this regard, the expected volatility is based on the historical price volatility of the Company’s common stock. The dividend yield represents the Company’s anticipated cash dividend on common stock over the expected life of the stock options. The U.S. Treasury bill rate for the expected life of theextent we grant additional stock options is utilized to determine the risk-free interest rate. The expected term of stock options represents the period of time the stock options granted are expected to be outstanding.

or other stock-based awards.


Recently Issued Accounting Pronouncements

There have not been any recent changes in accounting pronouncements and ASU issued by the FASB that are of significance or potential significance to the Company except as disclosed below.
In May 2017,December 2019, the FASB issued ASU 2017-09, “Compensation – Stock Compensation (Topic 718): Scope of Modification Accounting”, which clarifies when2019-12, “Simplifying the Accounting for Income Taxes.” This guidance, among other provisions, eliminates certain exceptions to account for a changeexisting guidance related to the termsapproach for intraperiod tax allocation, the methodology for calculating income taxes in an interim period and the recognition of deferred tax liabilities for outside basis differences. This guidance also requires an entity to reflect the effect of an enacted change in tax laws or conditionsrates in its effective income tax rate in the first interim period that includes the enactment date of a share-based payment award as a modification. Under the new guidance, modification accounting is required only iflegislation, aligning the fair value, the vesting conditions, or the classificationtiming of recognition of the awardeffects from enacted tax law changes as a resulton the effective income tax rate with the effects on deferred income tax assets and liabilities. Under existing guidance, an entity recognizes the effects of the enacted tax law change on the effective income tax rate in terms or conditions. If an award is not probablethe period that includes the effective date of vesting at the time a change is made, the new guidance clarifies that no new measurement date will be required if there is no change to the fair value, vesting conditions, and classification. Thistax law. ASU will be applied prospectively and2019-12 is effective for fiscal yearsinterim and annual periods beginning after December 15, 2017, and interim periods within those years,2020, with early adoption permitted. The Company doesadoption of ASU 2019-12 did not expect this standard to have a material impact on itsour consolidated financial statements.

In July 2017, the FASB issued Accounting Standards Update No. (“ASU’’) 2017-11, Earnings Per Share (Topic 260), Distinguishing Liabilities from Equity (Topic 480) and Derivatives and Hedging (Topic 815). The amendments in this Update provide guidance about:

1. Accounting for certain financial instruments with down round features

2. Replacement of the indefinite deferral for mandatorily redeemable financial instruments of certain non-public entities and certain non-controlling interests

The amendments in Part

I of this Update change the classification analysis of certain equity-linked financial instruments (or embedded features) with down round features. When determining whether certain financial instruments should be classified as liabilities or equity instruments, a down round feature no longer precludes equity classification when assessing whether the instrument is indexed to an entity’s own stock. The amendments also clarify existing disclosure requirements for equity-classified instruments. As a result, a freestanding equity-linked financial instrument (or embedded conversion option) no longer would be accounted for as a derivative liability at fair value as a result of the existence of a down round feature. For freestanding equity classified financial instruments, the amendments require entities that present earnings per share (EPS) in accordance with Topic 260 to recognize the effect of the down round feature when it is triggered. That effect is treated as a dividend and as a reduction of income available to common shareholders in basic EPS. Convertible instruments with embedded conversion options that have down round features are now subject to the specialized guidance for contingent beneficial conversion features (in Subtopic 470-20, Debt—Debt with Conversion and Other Options), including related EPS guidance (in Topic 260).

The amendments in Part II of this Update recharacterize the indefinite deferral of certain provisions of Topic 480 that now are presented as pending content in the Codification, to a scope exception. Those amendments do not have an accounting effect.


The amendments in Part I of this Update are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. Early adoption is permitted for all entities, including adoption in an interim period. If an entity early adopts the amendments in an interim period, any adjustments should be reflected as of the beginning of the fiscal year that includes that interim period. The amendments in Part 1 of this Update should be applied in either of the following ways: 1. Retrospectively to outstanding financial instruments with a down round feature by means of a cumulative-effect adjustment to the statement of financial position as of the beginning of the first fiscal year and interim period(s) in which the pending content that links to this paragraph is effective 2. Retrospectively to outstanding financial instruments with a down round feature for each prior reporting period presented in accordance with the guidance on accounting changes in paragraphs 250-10-45-5 through 45-10. The Company has adopted this update during the quarter ended December 31, 2017. The Company has retrospectively applied amendments in Part I of ASU 2017-11 to outstanding financial instruments with a down round feature by means of a cumulative-effect adjustment to the statement of financial position as of the beginning of the first fiscal year and interim period(s) in which the pending content that links to this paragraph is effective. On the date of adoption, there were no previously issued outstanding financial instruments with a down round feature.

The amendments in Part II of this Update do not require any transition guidance because those amendments do not have an accounting effect.

ITEMTEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Not applicable as we are a smaller reporting company as defined by Rule 229.10(f) (1).

applicable.

ITEMITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures
(a)       Disclosure Controls and Procedures

We are required to maintain “disclosure

Our principal executive officer and principal financial officer, with the assistance of other members of our management, have evaluated the effectiveness of our disclosure controls and procedures”procedures, as such term is defined in Rule 13a-15(e)Rules 13a – 15(e) and 15d – 15(e) under the Securities Exchange Act of 1934. Based on an evaluation1934, as amended (the “Exchange Act”), as of the end of the period covered by this ReportQuarterly Report. Based on Form 10-Q,such evaluation, our Chief Executive Officer who also serves as our Chief Financial Officer, hasprincipal executive officer and principal financial officer had concluded that our disclosure controls and procedures were not effective due to ensurematerial weaknesses in internal controls over financial reporting.
Although a material weakness identified as of December 31, 2019 (the lack of sufficient independent directors on our Board to maintain audit and other committees consistent with proper corporate governance standards) had been remediated as of December 31, 2020, management has determined that, as of March 31, 2021, there were still material weaknesses in both the information relatingdesign and effectiveness of our internal control over financial reporting. A material weakness in internal controls is a deficiency in internal control, or combination of control deficiencies, that adversely affects our ability to initiate, authorize, record, process, or report external financial data reliably in accordance with GAAP such that there is more than a remote likelihood that a material misstatement of our company, required toannual or interim financial statements that is more than inconsequential will not be disclosed inprevented or detected. In the course of making our Securities and Exchange Commission reports (i) is recorded, processed, summarized and reported withinassessment of the time periods specified in SEC rules and forms, and (ii) is accumulated and communicated to our management to allow timely decisions regarding required disclosure as a resulteffectiveness of internal controls over financial reporting, we identified material weaknesses in our internal control over financial reporting.

  Specifically, we lack a sufficient number of employees to properly segregate duties and provide adequate monitoring during the process leading to and including the preparation of the consolidated financial statements.

The Company anticipates that, prior to December 31, 2021, it will be able to hire a sufficient number of employees to remediate the material weakness identified in the previous paragraph.
Changes in Internal Control over Financial Reporting

There werehas been no changeschange in our internal control over financial reporting (as defined in Rule 13a-15fRules 13a-15(f) and 15d-15(f) of the Exchange Act) that occurred during the three monthsquarter ended DecemberMarch 31, 20172021 that has materially affected, or areis reasonably likely to materially affect, our internal control over financial reporting.




PARTPART II: OTHER INFORMATION

ITEMITEM 1 - LEGAL PROCEEDINGS

As of the date of this Quarterly Report, there are no material pending legal or governmental proceedings relating to our Company or properties to which we are a party, and, to our knowledge, there are no material proceedings to which any of our directors, executive officers or affiliates are a party adverse to us or which have a material interest adverse to us.

ITEMITEM 1A. - RISK FACTORS

Not required.

Factors that could cause or contribute to differences in our future financial and operating results include those discussed in the risk factors set forth in Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2020 along with the “Risk Factors” section of our Form S-1/A dated May 4, 2021. These risks are not the only risks that we face. Additional risks not presently known to us or that we do not currently consider significant may also have an adverse effect on the Company. If any of the risks actually occur, our business, results of operations, cash flows or financial condition could suffer.
ITEMITEM 2 - UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

The Company entered into

There were no unregistered sales of the License under whichCompany’s equity securities during the quarter ended March 31, 2021 that were not previously reported in a Current Report on Form 8-K except as follows:
In January 2021, the Company issued 125,000,000113,476 shares of its common stock upon conversion of 9,078 shares of its Series D Preferred Stock.
In January 2021, the Company issued a total of 438,553 shares of common stock pursuant to Recruiter.

the Scouted acquisition.

In connection with the License and the SPA,February 2021, the Company issued the Investors 600,000550,000 shares of the Company’s Series A Convertible Preferred Stock, 102,100its common stock upon conversion of 44,000 shares of its Series D Preferred Stock.
In February 2021, the Company’s Series C Convertible Preferred Stock and 18,839Company issued 202,988 shares of the Company’sits common stock upon conversion of 16,239 shares of Series C-1 ConvertibleF Preferred Stock.

All

In March 2021, the Company issued 267,188 shares of its common stock upon conversion of 21,375 shares of its Series D Preferred Stock.
In March 2021, the above-mentionedCompany issued 16,197 shares of its common stock upon conversion of 1,296 shares of Series F Preferred Stock.
Shares to be issued for acquisitions at March 31, 2021 include 38,978 common shares to be issued for Scouted and 677,883 common shares to be issued for Upsider.
In March 2021, we issued to our CEO, Evan Sohn, 4,063 shares of common stock as payment for $16,425 of compensation which had been accrued at December 31, 2020.
During the three months ended March 31, 2021, the Company issued 178,712 shares of its common stock upon conversion of $283,637 of convertible notes payable and related accrued interest of $2,302.
The above securities were issued and sold to accredited investors in reliance uponon the exemption from registration contained inunder Section 4(a)(2) of the Securities Act of 1933, and Rule 506 promulgated thereunder. Allas amended. These securities qualified for exemption under Section 4(a)(2) since the issuance by us did not involve a public offering. The offerings were not “public offerings” as defined in 4(a)(2) due to the insubstantial number of persons involved in the transactions, manner of the above-mentionedissuance and number of securities were acquiredissued. We did not undertake an offering in which we sold a high number of securities to a high number of investors. In addition, the investors had the necessary investment intent as required by Section 4(a)(2) since they agreed to and received securities bearing a legend stating that such securities are restricted pursuant to Rule 144 of the Act. This restriction ensures that these securities would not be immediately redistributed into the market and therefore not be part of a “public offering”. Based on an analysis of the above factors, we have met the requirements to qualify for exemption under Section 4(a)(2) of the purpose of investment and not with a view to distribution.

Securities Act for these transactions.

ITEMITEM 3 - DEFAULTS UPON SENIOR SECURITIES

None.

ITEMITEM 4 - MINE SAFETY DISCLOSURES

Not applicable

applicable.

ITEMITEM 5 - OTHER INFORMATION

On February 13, 2018,

The Company entered into an agreement and closed a transaction on May 10, 2021. In lieu of filing a Current Report on Form  8-K regarding this agreement and transaction, the Company filed two Certificatesis providing disclosure in Part II, Item 5 of Amendmentthis Report.
Item 1.01 Entry into a Material Definitive Agreement.

Effective May 10, 2021, we, through a wholly-owned subsidiary, entered into an Asset Purchase Agreement and Plan of Reorganization (the “COD Amendments”“APA”) with OneWire Holdings, LLC, a Delaware limited liability company (“OneWire”), to acquire all the Delaware Secretaryassets and several liabilities of State amendingOneWire (the “OneWire Purchase”). As consideration for the Company’s Series C CertificateOneWire Purchase, OneWire’s shareholders will receive a total of Designations and Series C-1 Certificate388,318 shares (the “Consideration Shares”) of Designations. The COD Amendments extendcommon stock, valued at $1,255,000, based on a price per share of $3.231894, the maturity dates of the Series C and Series C-1 to five years and reduces the redemptionvolume-weighted average price of the Series C and Series C-1 from approximately $2,000,000common stock for the 30-day period immediately prior to $1,000,000. The Formthe Closing Date (as defined in the APA). 77,664 of the COD Amendments forConsideration Shares are subject to forfeiture pursuant to APA provisions regarding a post-closing working capital adjustment and a revenue true-up and pursuant to OneWire’s indemnity obligations. The assets acquired in the Series CAPA consist primarily of sales and Series C-1client relationships, contracts, intellectual property, partnership and vendor agreements and certain other assets, along with a de minimis amount of other assets. OneWire’s expansive candidate database in financial services and candidate matching service amplify our reach to give employers and recruiters access to an even broader pool of specialized talent 

The foregoing provides only brief descriptions of the material terms of the APA, does not purport to be a complete description of the rights and obligations of the parties thereunder, and such descriptions are attached heretoqualified in their entirety by reference to the full text of the form of the APA filed as Exhibit 3.710.8 to this Quarterly Report on Form 10-Q, and Exhibit 3.8, respectfully, and areis incorporated herein by reference.

Item 3.02 Unregistered Sales of Equity Securities.
The information set forth in Item 1.01 above is incorporated herein by reference. The Consideration Shares are not registered under the Securities Act of 1933, as amended (the “Securities Act”) but qualified for exemption under Section 4(a)(2) and/or Regulation D of the Securities Act. The Consideration Shares are exempt from registration under Section 4(a)(2) of the Securities Act because the issuance of such securities by the Company did not involve a “public offering,” as defined in Section 4(a)(2) of the Securities Act, due to the insubstantial number of persons involved in the transaction manner of the issuance, and number of securities issued. The Company did not undertake an offering or issuance in which it issued a high number of securities to a high number of persons. In addition, OneWire did not have the necessary investment intent as required by Section 4(a)(2) of the Securities Act since they agreed to, and received, securities bearing a legend stating that such securities are restricted pursuant to Rule 144 of the Securities Act. This restriction ensures that these securities would not be immediately redistributed into the market and therefore not be part of a “public offering.” Based on an analysis of the above factors, the Company has met the requirements to qualify for exemption under Section 4(a)(2) of the Securities Act.

ITEMITEM 6 – EXHIBITS

The following exhibits are filed as part of this quarterly report on Form 10-Q:

EXHIBITS INDEX

Exhibit   Incorporated by Reference Filed or
Furnished
No. Exhibit Description Form Date Number Herewith
           
3.1 Certificate of Incorporation, as amended 8-K  12/21/15 3.01  
3.2 Bylaws 14C  1/26/15 App C  
3.3 Certificate of Designation, Preferences and Rights of the Series A Convertible Preferred Stock 8-K 10/31/17 3.1  
3.4 Certificate of Designation, Preferences and Rights of the Series B Convertible Preferred Stock 8-K 10/31/17 3.2  
3.5 Certificate of Designation, Preferences and Rights of the Series C Convertible Preferred Stock 8-K 10/31/17 3.3  
3.6 Certificate of Designation, Preferences and Rights of the Series C-1 Convertible Preferred Stock 8-K 10/31/17 3.4  
3.7 Certificate of Amendment of Certificate of Designations, Preferences and Rights of the Series C Convertible Preferred Stock of Truli Media Group, Inc.       

Filed

3.8 Certificate of Amendment of Certificate of Designations, Preferences and Rights of the Series C Convertible Preferred Stock of Truli Media Group, Inc.       

Filed

4.1 Form of Warrant 8-K 10/31/17 4.1  
10.1 Form of Note Extension Agreement dated May 9, 2017 8-K 5/11/17 10.1  
10.2 Form of Note dated April 6, 2017 8-K 4/11/17 10.1  
10.3 Form of Securities Purchase Agreement 8-K 10/31/17 10.1  
10.4 Form of License Agreement 8-K 10/31/17 10.2  
10.5 Form of Employment Agreement 8-K 10/31/17 10.3  
31.1 Certification of Principal Executive and Principal Financial Officer (302)       Filed
32.1 Certification of Principal Executive and Principal Financial Officer (906)       Furnished*
101.INS XBRL Instance Document       Filed
101.SCH XBRL Taxonomy Extension Schema Document       Filed
101.CAL XBRL Taxonomy Extension Calculation Linkbase Document       Filed
101.DEF XBRL Taxonomy Extension Definition Linkbase Document       Filed
101.LAB XBRL Taxonomy Extension Label Linkbase Document       Filed
101.PRE XBRL Taxonomy Extension Presentation Linkbase Document       Filed

21

Quarterly Report:

    Incorporated by Reference Filed or Furnished
Exhibit No. Exhibit Description Form Date Number Herewith
4.1
 
Form of 12.5% Original Issue Discount Senior Subordinated Secured Convertible Debentures issued by the Company on January 5 and 20, 2021
 10-K 3/9/21 4.7  
4.2
 
Form of Warrant issued by the Company on January 5 and 20, 2021
 10-K 3/9/21 4.8  
10.1
 
Form of Securities Purchase Agreement entered into by and between the Company and purchasers on January 5 and 20, 2021+
 10-K 3/9/21 10.12  
10.2
 
Form of Security Agreement entered into by and between the Company and purchasers on January 5 and 20, 2021+
 10-K 3/9/21 10.13  
10.3
 
Amendment 1 to Director Agreement, dated January 13, 2021, by and between the Company and Deborah Leff*.
 8-K 1/21/21 10.1  
10.4
 
Directors Agreement, dated February 12, 2021, between Recruiter.com Group, Inc. and Steve Pemberton*
 8-K 4/2/21 10.1  
10.5
 
Asset Purchase Agreement, dated January 22, 2021, by and among Recruiter.com Group, Inc., Recruiter.com Scouted, Inc., RLJ Talent Consulting, Inc., and Jacqueline Loeb+
   
   X
10.6
 Asset Purchase Agreement and Plan of Reorganization, dated March 25, 2021, by and among Recruiter.com Group, Inc., Recruiter.com Upsider, Inc., Upsider, Inc, the selling shareholders named therein and Josh McBride. 8-K 3/31/21 10.1  
10.7
 Registration Rights Agreement, dated March 25, 2021, between Recruiter.com Group, Inc. and Upsider, Inc. 8-K 3/31/21 10.2  
10.8
 Asset Purchase Agreement, dated May 10, 2021, by and among Recruiter.com Group, Inc., Recruiter.com Onewire, Inc., OneWire Holdings, LLC, and Eric Stutzke       X
31.1
 Certification of Principal Executive Officer (302)       X
31.2
 
Certification of Principal Financial Officer (302)
       X
32.1
 
Certification of Principal Executive and Principal Financial Officer (906)
       X**
101.INS XBRL Instance Document       X
101.SCH XBRL Taxonomy Extension Schema Document       X
101.CAL XBRL Taxonomy Extension Calculation Linkbase Document       X
101.DEF XBRL Taxonomy Extension Definition Linkbase Document       X
101.LAB XBRL Taxonomy Extension Label Linkbase Document       X
101.PRE XBRL Taxonomy Extension Presentation Linkbase Document       X
* Management contract or compensatory plan or arrangement.
** This exhibit is being furnished rather than filed and shall not be deemed incorporated by reference into any filing, in accordance with Item 601 of Regulation S-K.

+ Certain schedules, appendices and exhibits to this agreement have been omitted in accordance with Item 601(a)(5) of Regulation S-K. A copy of any omitted schedule and/or exhibit will be furnished supplemental to the Securities and Exchange Commission staff upon request.

SIGNATURESSIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Dated: February 20, 2018May 14, 2021TRULI MEDIARECRUITER.COM GROUP, INC.
  
 By:/s/ Miles JenningsEvan Sohn
  Miles JenningsEvan Sohn
  Chief Executive Officer
(Officer(Principal Executive Officer)
By:/s/ Judy Krandel
Judy Krandel
Chief Financial Officer(Principal Financial Officer)

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